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Banking deregulation and household consumption of durables

Author

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  • Damar, H. Evren
  • Lange, Ian
  • McKennie, Caitlin
  • Moro, Mirko

Abstract

We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1993, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find robust evidence that households are more likely to purchase new appliances and invest in home renovations and modifications after the deregulation. These durable goods allowed households to consume less electricity and spend less time in domestic activities after the reforms.

Suggested Citation

  • Damar, H. Evren & Lange, Ian & McKennie, Caitlin & Moro, Mirko, 2020. "Banking deregulation and household consumption of durables," IWH Discussion Papers 18/2020, Halle Institute for Economic Research (IWH).
  • Handle: RePEc:zbw:iwhdps:182020
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    References listed on IDEAS

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    More about this item

    Keywords

    banking deregulation; credit constraints; energy consumption; durable goods;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G2 - Financial Economics - - Financial Institutions and Services
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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