Bounds on repayment behavior: evidence for the consumer credit market
How does the punishment for default affect repayment behavior? We use administrative data, provided by the leading Italian lender of unsecured credit to the household sector, to analyze households repayment behavior. Administrative data are particularly well suited to study what factors are responsible for default, but raise a fundamental econometric problem, since they identify the determinants of repayment behavior only for those who are granted credit. To overcome this problem, we provide upper and lower bounds on the determinants of repayment behavior. Moreover, we show how to use the restrictions from the theory to narrow the bounds.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Cannaregio, S. Giobbe no 873 , 30121 Venezia|
Web page: http://www.unive.it/dip.economia
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rob Alessie & Stefan Hochguertel & Guglielmo Weber, 2005.
"Consumer Credit: Evidence From Italian Micro Data,"
Journal of the European Economic Association,
MIT Press, vol. 3(1), pages 144-178, 03.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Alena Bicakova, 2007.
"Does the Good Matter? Evidence on Moral Hazard and Adverse Selection from Consumer Credit Market,"
Giornale degli Economisti,
GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 66(1), pages 29-66, March.
- Alena Bicakova, 2007. "Does the Good Matter? Evidence on Moral Hazard and Adverse Selection from Consumer Credit Market," Economics Working Papers ECO2007/02, European University Institute.
- Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
- Wendy Edelberg, 2003. "Risk-based pricing of interest rates in household loan markets," Finance and Economics Discussion Series 2003-62, Board of Governors of the Federal Reserve System (U.S.).
- Narayana Kocherlakota, 2010.
"Implications of Efficient Risk Sharing Without Commitment,"
Levine's Working Paper Archive
2053, David K. Levine.
- Narayana R. Kocherlakota, 1996. "Implications of Efficient Risk Sharing without Commitment," Review of Economic Studies, Oxford University Press, vol. 63(4), pages 595-609.
- Daniela FABBRI & Mario PADULA, 2003.
"Does Poor Legal Enforcement Make Households Credit-Constrained?,"
FAME Research Paper Series
rp81, International Center for Financial Asset Management and Engineering.
- Fabbri, Daniela & Padula, Mario, 2004. "Does poor legal enforcement make households credit-constrained?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2369-2397, October.
When requesting a correction, please mention this item's handle: RePEc:ven:wpaper:2007_26. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Geraldine Ludbrook)
If references are entirely missing, you can add them using this form.