Joint Liability Borrowing and Suicide
This paper shows that joint liability borrowing may put too much pressure on the borrower, mainly through the stigma in case of repayment failure, and leads to a vexing outcome|the suicide of the borrower. We provide a model of joint liability borrowing which facilitates credit market transaction ex ante but may induce suicides ex post in the bad state. We introduce some supportive evidence from a suicide survey in Japan.
|Date of creation:||Dec 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033|
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- Hisaki Kono, 2006.
"Is group lending a good enforcement scheme for achieving high repayment rates? Evidence from field experiments in vietnam,"
Artefactual Field Experiments
00075, The Field Experiments Website.
- Kono, Hisaki, 2006. "Is Group Lending A Good Enforcement Scheme for Achieving High Repayment Rates?: Evidence from Field Experiments in Vietnam," IDE Discussion Papers 61, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- Stiglitz, Joseph E, 1990. "Peer Monitoring and Credit Markets," World Bank Economic Review, World Bank Group, vol. 4(3), pages 351-66, September.
- Ghatak, Maitreesh, 2000. "Screening by the Company You Keep: Joint Liability Lending and the Peer Selection Effect," Economic Journal, Royal Economic Society, vol. 110(465), pages 601-31, July.
- Besley, Timothy & Coate, Stephen, 1995.
"Group lending, repayment incentives and social collateral,"
Journal of Development Economics,
Elsevier, vol. 46(1), pages 1-18, February.
- Besley, T. & Coate, S., 1991. "Group Lending, Repayment Incentives And Social Collateral," Papers 152, Princeton, Woodrow Wilson School - Development Studies.
- Ryoichi Watanabe & Masakazu Furukawa & Ryota Nakamura & Yoshiaki Ogura, 2006. "Analysis of the Socioeconomic Difficulties Affecting the Suicide Rate in Japan," KIER Working Papers 626, Kyoto University, Institute of Economic Research.
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