Judicial Costs and Household Debt
AbstractThis paper investigates the effect of judicial costs on households debt, merging data drawn from a representative Italian sample, the Survey of Household Income and Wealth, with data on the performance of judicial districts. We estimate a probit model to test the hypothesis that th working of courts affects the probability that households are credit constrained. Moreover, we estimate a tobit model for the amount of debt to investigate if borrowing by those who are not rationed in the credit market is also sensitive to judicial costs. We find that the working of the judicial system impacts on probability of being credit constrained and that the amount of debt held by non-constrained households decreases when the quality of the judicial enforcement worsen.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 65.
Date of creation: 01 Aug 2001
Date of revision:
Publication status: Published in Journal of Banking and Finance, 2004 vol. 28, pages 2369-97
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-05 (All new papers)
- NEP-LAW-2001-11-05 (Law & Economics)
- NEP-MFD-2001-11-05 (Microfinance)
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- Jappelli, Tullio & Pagano, Marco & Bianco, Magda, 2005.
"Courts and Banks: Effects of Judicial Enforcement on Credit Markets,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 37(2), pages 223-44, April.
- Bianco, Magda & Jappelli, Tullio & Pagano, Marco, 2002. "Courts and Banks: Effects of Judicial Enforcement on Credit Markets," CEPR Discussion Papers 3347, C.E.P.R. Discussion Papers.
- Magda Bianco & Tullio Jappelli & Marco Pagano, 2001. "Courts and Banks: Effects of Judicial Enforcement on Credit Markets," CSEF Working Papers 58, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Apr 2002.
- Luca Casolaro & Leonardo Gambacorta & Luigi Guiso, 2005. "Regulation, formal and informal enforcement and the development of the household loan market. Lessons from Italy," Temi di discussione (Economic working papers) 560, Bank of Italy, Economic Research and International Relations Area.
- repec:cfs:cfswop:wp200334 is not listed on IDEAS
- Alberto Zazzaro, 2005.
"Should Courts Enforce Credit Contracts Strictly?,"
Royal Economic Society, vol. 115(500), pages 166-184, 01.
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