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Estimating Credit Constraints among US Households

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  • Charles GRANT

Abstract

Households are constrained if they want to borrow, but banks restrict their lending. This paper separately identifies (using appropriate exclusion restrictions) the demand for debt, and the maximum amount agents can borrow when it is unknown which consumers are constrained. Using data from the CEX, it estimates that between 26 percent and 31 percent of households are constrained: and that poorly educated, ethnic minority, low income, men, and (among the educated) older households are less often constrained. On average, households would like to borrow up to $4,000 dollars more. But it does not test whether constraints are never binding

Suggested Citation

  • Charles GRANT, 2003. "Estimating Credit Constraints among US Households," Economics Working Papers ECO2003/14, European University Institute.
    • Handle: RePEc:eui:euiwps:eco2003/14
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    Citations

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    Cited by:

    1. repec:spo:wpecon:info:hdl:2441/8805 is not listed on IDEAS
    2. Yann Algan & Xavier Ragot, 2005. "Monetary policy with heterogenous agents and credit constraints," PSE Working Papers halshs-00590565, HAL.
    3. Yann Algan & Xavier Ragot, 2005. "Monetary Policy with Heterogenous Agents and Credit Constraints," Sciences Po publications 2005 - 45, Sciences Po.
    4. repec:hal:spmain:info:hdl:2441/8805 is not listed on IDEAS
    5. Christopher Allsopp & David Vines, 2008. "Fiscal Policy, intercountry adjustment and the real exchange rate within Europe," European Economy - Economic Papers 2008 - 2015 344, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    6. repec:hal:wpspec:info:hdl:2441/8805 is not listed on IDEAS
    7. Jessica Holmes & Jonathan Isham & Ryan Petersen & Paul M. Sommers, 2007. "Does Relationship Lending Still Matter in the Consumer Banking Sector? Evidence from the Automobile Loan Market," Social Science Quarterly, Southwestern Social Science Association, vol. 88(2), pages 585-597, June.
    8. Marion Leturcq, 2011. "Do bankers prefer married couples?," Working Papers halshs-00655584, HAL.
    9. Jessica Holmes & Jonathan Isham & Ryan Petersen & Paul Sommers, 2005. "Does Relationship Lending Still Matter in the Consumer Banking Sector? Evidence from Two Financial Service Organizations in Vermont," Middlebury College Working Paper Series 0511, Middlebury College, Department of Economics.
    10. Stefano Cosma & Francesco Pattarin, 2012. "Attitudes, personality factors and household debt decisions: A study of consumer credit," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0031, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".

    More about this item

    Keywords

    credit constraints; consumers; debt;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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