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Credit constraints in the market for consumer durables: evidence from micro data on car loans

Attanasio, O.; Goldberg, P.K.; Kyriazidou, E.; (2000) Credit constraints in the market for consumer durables: evidence from micro data on car loans. (NBER Working Papers 7694 ). National Bureau of Economic Research: Cambridge, US. Green open access

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Abstract

We investigate the empirical significance of borrowing constraints in the market for consumer loans. We set up a theoretical model of consumer loan demand, which in the presence of credit rationing implies restrictions on the elasticities of loan demand with respect to the interest rate and the maturity of the loan. We estimate these elasticities and test the theoretical implications using micro data from the Consumer Expenditure Survey (1984-1995) on auto loan contracts. The econometric specification that we employ accounts for important features of the data: selection, censoring, and simultaneity. Our results suggest that credit constraints are binding for some groups in the population, in particular for young and low-income households.

Type: Report
Title: Credit constraints in the market for consumer durables: evidence from micro data on car loans
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.nber.org/papers/w7694
Language: English
Additional information: Please also see http://eprints.ucl.ac.uk/15199
Keywords: D0, E0, G2, H0, L0
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/15197
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