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Using Bounds to Investigate Household Debt Repayment Behaviour

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  • Charles Grant

    ()

  • Mario Padula

    ()

Abstract

Understanding the factors that influence arrears is crucial if policy makers wish to alleviate the problems caused by debt. But conventional estimates of repayment behaviour impose implausible assumptions about lender behaviour. However, an upper and lower bound for the effect of the determinants of repayment behaviour can be estimated. Reasonable assumptions about the behaviour of economic agents narrows these bands. We use administrative data from a leading Italian lender to the household sector to demonstrate the methodology.

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Bibliographic Info

Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number 12-06.

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Length: 46 pages
Date of creation: Sep 2012
Date of revision:
Handle: RePEc:edb:cedidp:12-06

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