The real cost of credit constraints: Evidence from micro-finance
In December 2010, the Indian state of Andhra Pradesh passed a law that severely restricted the operations of micro-finance institutions and brought the micro-finance industry to an abrupt halt. We measure the impact of micro-credit withdrawal in this unique natural experiment and find that average household expenditure dropped by 19 percent relative to a control group after the ban. The largest decrease was observed in expenditure on food. There is some evidence of higher volatility in consumption after the ban. All households were affected and not just the borrower households, which may suggest general equilibrium effects.
|Date of creation:||Jul 2013|
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- Francisco J. Buera & Joseph P. Kaboski & Yongseok Shin, 2012.
"The Macroeconomics of Microfinance,"
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17905, National Bureau of Economic Research, Inc.
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"Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?,"
University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers
20035, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
- A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
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- repec:oup:qjecon:v:127:y:2012:i:3:p:1469-1513 is not listed on IDEAS
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