Replication data for: Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending
Principal Investigator(s): View help for Principal Investigator(s) Will Dobbie; Paige Marta Skiba
Version: View help for Version V1
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LICENSE.txt | text/plain | 14.6 KB | 12/07/2019 09:03:AM |
Project Citation:
Dobbie, Will, and Skiba, Paige Marta. Replication data for: Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116383V1
Project Description
Summary:
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Information asymmetries are prominent in theory but difficult to estimate.
This paper exploits discontinuities in loan eligibility to test
for moral hazard and adverse selection in the payday loan market.
Regression discontinuity and regression kink approaches suggest that
payday borrowers are less likely to default on larger loans. A $50
larger payday loan leads to a 17 to 33 percent drop in the probability
of default. Conversely, there is economically and statistically significant
adverse selection into larger payday loans when loan eligibility
is held constant. Payday borrowers who choose a $50 larger loan are
16 to 47 percent more likely to default.
Scope of Project
JEL Classification:
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D14 Household Saving; Personal Finance
D82 Asymmetric and Private Information; Mechanism Design
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
D14 Household Saving; Personal Finance
D82 Asymmetric and Private Information; Mechanism Design
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
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