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Estimating credit constraints among US households

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  • Charles Grant
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    Abstract

    We investigate the issue of pervasive credit constraints among US households. There is considerable debate about the incidence of constraints and whether the observed low borrowing in some groups of the population arises from low demand or from denial of credit. Using information on unsecured borrowing from the Consumer Expenditure Survey for (1988-1993), the paper estimates credit constraints and shows how these differ with household characteristics. It finds that around 31% of households are constrained, with young college educated households being the most constrained. Moreover, the low level of borrowing observed among black households is shown to be a demand rather than a supply effect. Copyright 2007 , Oxford University Press.

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    File URL: http://hdl.handle.net/10.1093/oep/gpm024
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    Bibliographic Info

    Article provided by Oxford University Press in its journal Oxford Economic Papers.

    Volume (Year): 59 (2007)
    Issue (Month): 4 (October)
    Pages: 583-605

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    Handle: RePEc:oup:oxecpp:v:59:y:2007:i:4:p:583-605

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    Cited by:
    1. Harrison, Teresa & Laincz, Chris, 2013. "Nonprofits, Crowd-Out, and Credit Constraints," School of Economics Working Paper Series 2013-5, LeBow College of Business, Drexel University.
    2. Tomura, Hajime, 2013. "Heterogeneous beliefs and housing-market boom-bust cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 37(4), pages 735-755.
    3. Umar Faruqui & Samah Torchani, 2012. "How Important Are Liquidity Constraints for Canadian Households? Evidence from Micro-Data," Discussion Papers 12-9, Bank of Canada.
    4. Dobromil Serwa, 2011. "Identifying multiple regimes in the model of credit to households," National Bank of Poland Working Papers 99, National Bank of Poland, Economic Institute.
    5. Lopez, Ramon E. & Islam, Asif M., 2008. "When Government Spending Serves the Elites: Consequences for Economic Growth in a Context of Market Imperfections," Working Papers 45875, University of Maryland, Department of Agricultural and Resource Economics.
    6. Jaime Ruiz-Tagle & Francis Vella, 2010. "Borrowing Constraints and Credit Demand," Working Papers Central Bank of Chile 578, Central Bank of Chile.
    7. López, Ramón & Palacios, Amparo, 2011. "Why Europe has become environmentally cleaner: Decomposing the roles of fiscal, trade and environmental policies," CEPR Discussion Papers 8551, C.E.P.R. Discussion Papers.
    8. Lopez, Ramon, 2009. "Natural disasters and the dynamics of intangible assets," Policy Research Working Paper Series 4874, The World Bank.
    9. Islam, Asif & López, Ramón, 2011. "Fiscal spending for economic growth in the presence of imperfect markets," CEPR Discussion Papers 8709, C.E.P.R. Discussion Papers.
    10. Lopez, Ramon E. & Galinato, Gregmar I. & Islam, Asif M., 2009. "Pollution and the State: The Role of the Structure of Government," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48055, Australian Agricultural and Resource Economics Society.
    11. Barbara Cavalletti & Corrado Lagazio & Daniela Vandone & Elena Lagomarsino, 2012. "The role of financial position on consumer indebted-ness. An empirical analysis in Italy," DEP - series of economic working papers 8/2012, University of Genoa, Research Doctorate in Public Economics.
    12. Islam, Asif M. & López, Ramón E., 2013. "Government Spending and Air Pollution in the US," Working Papers 144406, University of Maryland, Department of Agricultural and Resource Economics.

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