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Abstract

In cross-sectional data sets from ten credit markets, we find that middle-aged adults borrow at lower interest rates and pay fewer fees relative to younger and older adults. Fee and interest payments are minimized around age 53. The measured effects are not explained by observed risk characteristics. We discuss several leading factors that may contribute to these effects, including age-related changes in experience and cognitive function, selection effects, and cohort effects.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13191.

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Date of creation: Jun 2007
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Handle: RePEc:nbr:nberwo:13191

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Find related papers by JEL classification:

• D1 - Microeconomics - - Household Behavior
• D8 - Microeconomics - - Information, Knowledge, and Uncertainty
• G2 - Financial Economics - - Financial Institutions and Services
• J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

This paper has been announced in the following NEP Reports:

• NEP-AGE-2007-07-07 (Economics of Ageing)
• NEP-ALL-2007-07-07 (All new papers)
• NEP-BEC-2007-07-07 (Business Economics)

References

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