Estimating Credit Constraints among US Households
AbstractHouseholds 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
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Bibliographic InfoPaper provided by European University Institute in its series Economics Working Papers with number ECO2003/14.
Date of creation: 2003
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credit constraints; consumers; debt;
Find related papers by 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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- Jessica A. Holmes & Jonathan T. Isham & Paul M. Sommers, 2007. "Is George Bailey Dead?," Applied Financial Economics Letters, Taylor and Francis Journals, Taylor and Francis Journals, vol. 3(1), pages 19-24, January.
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PSE Working Papers
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- 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.
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