Theory and Decision ( IF 0.802 ) Pub Date : 2021-05-27 , DOI: 10.1007/s11238-021-09815-2 Marieke Bos , Chloé Le Coq , Peter van Santen
We study the effect of scarcity on decision making by low income Swedes. We exploit the random assignment of welfare payments to study their borrowing decisions within the pawn and mainstream credit market. We document that higher educated borrowers borrow less frequently and choose lower loan to value ratios when their budget constraints are exogenously tighter. In contrast, low-educated borrowers do not respond to temporary elevated levels of scarcity. This lack of response translates into a significantly higher probability to default and an 11.6% increase in borrowing cost. We show that a difference in access to liquidity and/or buffer stocks cannot explain our results. Instead a framework, where the awareness of self-control problems is positively correlated with education can explain that high-educated consumers choose a lower LTV as a commitment device to increase their likelihood to repay. Analogously, low-educated with less awareness of their future self-control problems, do not tie themselves to the mast and thus ignore the consequences of their credit decisions when focusing on solving acute liquidity problems. Our findings highlight that increased levels of scarcity risk reinforcing the conditions of poverty through overborrowing.
中文翻译:
稀缺性和消费者的信用选择
我们研究了稀缺性对低收入瑞典人决策的影响。我们利用福利支付的随机分配来研究它们在典当行和主流信贷市场中的借款决策。我们记录到,受过良好教育的借款人借贷的频率降低了,而当他们的预算约束更加严格时,他们选择了较低的贷款与价值比率。相反,受过低教育的借款人对暂时的稀缺性水平没有反应。这种缺乏回应意味着违约的可能性大大增加,借贷成本增加了11.6%。我们表明,在获得流动性和/或缓冲库存方面的差异无法解释我们的结果。取而代之的是框架 自我控制问题的意识与教育呈正相关的情况可以解释,受过高等教育的消费者选择较低的LTV作为承诺工具,以增加他们的还款可能性。类似地,低学历的人对他们未来的自我控制问题认识不足,他们不会束手无策,因此在专注于解决严重的流动性问题时,他们不会理会其信用决策的后果。我们的研究结果突出表明,稀缺程度的增加有可能因过度借贷而加剧贫困状况。