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Homelessness has been a persistent social concern in the United States. A combination of political and economic events since the 1960s has driven increases in poverty that, by 1991, had surpassed 1928 depression era levels in some accounts. This paper explores how the emerging field of behavioral economics can use machine learning and data science methods to explore preventative responses to homelessness. In this study, machine learning data mining strategies, specifically K-means cluster analysis and later, decision trees, were used to understand how environmental factors and resultant behaviors can contribute to the experience of homelessness. Prevention of the first homeless event is especially important as studies show that if a person has experienced homelessness once, they are 2.6 times more likely to have another homeless episode. Study findings demonstrate that when someone is at risk for not being able to pay utility bills at the same time as they experience challenges with two or more of the other social determinants of health, the individual is statistically significantly more likely to have their first homeless event. Additionally, for men over 50 who are not in the workforce, have a health hardship, and experience two or more other social determinants of health hardships at the same time, the individual has a high statistically significant probability of experiencing homelessness for the first time.

Using K-Means Cluster Analysis and Decision Trees to Highlight Significant Factors Leading to Homelessness