Judicial Costs and Household Debt
Abstract
This 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.Download Info
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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 65.Length:
Date of creation: 01 Aug 2001
Date of revision:
Publication status: Published in Journal of Banking and Finance, 2004 vol. 28, pages 2369-97
Handle: RePEc:sef:csefwp:65
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Related research
Keywords: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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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Alberto Zazzaro, 2005.
"Should Courts Enforce Credit Contracts Strictly?,"
Economic Journal,
Royal Economic Society, vol. 115(500), pages 166-184, 01.
- Alberto ZAZZARO, 2003. "Should Courts Enforce Credit Contracts Strictly ?," Working Papers 181, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- 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.
- 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.
- 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.
- Issam Hallak, 2003. "Courts and Sovereign Eurobonds: Credibility of the Judicial Enforcement of Repayment," CFS Working Paper Series 2003/34, Center for Financial Studies.
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