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A Bayesian analysis of payday loans and their regulation


  • Li, Mingliang
  • Mumford, Kevin J.
  • Tobias, Justin L.


Payday loans are small short-term loans that a borrower must repay or renew on his/her next payday. In states where payday lending is legal, many terms of these loans are regulated, ostensibly to protect the consumer from excessively burdensome lending practices.

Suggested Citation

  • Li, Mingliang & Mumford, Kevin J. & Tobias, Justin L., 2012. "A Bayesian analysis of payday loans and their regulation," Journal of Econometrics, Elsevier, vol. 171(2), pages 205-216.
  • Handle: RePEc:eee:econom:v:171:y:2012:i:2:p:205-216 DOI: 10.1016/j.jeconom.2012.06.010

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    References listed on IDEAS

    1. Brian T. Melzer, 2011. "The Real Costs of Credit Access: Evidence from the Payday Lending Market," The Quarterly Journal of Economics, Oxford University Press, vol. 126(1), pages 517-555.
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    6. Kleibergen, Frank & van Dijk, Herman K., 1998. "Bayesian Simultaneous Equations Analysis Using Reduced Rank Structures," Econometric Theory, Cambridge University Press, vol. 14(06), pages 701-743, December.
    7. McCulloch, Robert E. & Polson, Nicholas G. & Rossi, Peter E., 2000. "A Bayesian analysis of the multinomial probit model with fully identified parameters," Journal of Econometrics, Elsevier, vol. 99(1), pages 173-193, November.
    8. L. Randall Wray & Stephanie Bell, 2004. "Introduction," Chapters,in: Credit and State Theories of Money, chapter 1 Edward Elgar Publishing.
    9. Nobile, Agostino, 2000. "Comment: Bayesian multinomial probit models with a normalization constraint," Journal of Econometrics, Elsevier, vol. 99(2), pages 335-345, December.
    10. Li, Mingliang & Tobias, Justin, 2008. "Bayesian Analysis of Treatment Effects in an Ordered Potential Outcomes Model," Staff General Research Papers Archive 12429, Iowa State University, Department of Economics.
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    13. Mark J. Flannery & Katherine A. Samolyk, 2005. "Payday lending: do the costs justify the price?," Proceedings 949, Federal Reserve Bank of Chicago.
    14. Morse, Adair, 2011. "Payday lenders: Heroes or villains?," Journal of Financial Economics, Elsevier, vol. 102(1), pages 28-44, October.
    15. Fruhwirth-Schnatter S., 2001. "Markov Chain Monte Carlo Estimation of Classical and Dynamic Switching and Mixture Models," Journal of the American Statistical Association, American Statistical Association, vol. 96, pages 194-209, March.
    16. Zellner, Arnold & Bauwens, Luc & Van Dijk, Herman K., 1988. "Bayesian specification analysis and estimation of simultaneous equation models using Monte Carlo methods," Journal of Econometrics, Elsevier, vol. 38(1-2), pages 39-72.
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    19. Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL.
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    Cited by:

    1. Susan Payne Carter, 2015. "Payday Loan and Pawnshop Usage: The Impact of Allowing Payday Loan Rollovers," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(2), pages 436-456, July.
    2. Robert Mayer, 2013. "When and Why Usury Should be Prohibited," Journal of Business Ethics, Springer, vol. 116(3), pages 513-527, September.

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