蝌蚪网 Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending
蝌蚪网 Journal: Applied Economics
vol. 5,
no. 4, October 2013
(pp. 256–82)
Abstract
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.Citation
Dobbie, Will, and Paige Marta Skiba. 2013. "Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending." 蝌蚪网 Journal: Applied Economics 5 (4): 256–82. DOI: 10.1257/app.5.4.256Additional Materials
JEL Classification
- D14 Household Saving; Personal Finance
- D82 Asymmetric and Private Information; Mechanism Design
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages