CAN SELF-CONTROL EXPLAIN AVOIDING FREE MONEY? EVIDENCE FROM INTEREST- FREE STUDENT LOANS

• 成果类型: Article
• 署名作者: Cadena, Brian C.; Keys, Benjamin J.
• 署名单位: University of Colorado System; University of Colorado Boulder; University of Chicago
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00321
• 发表日期: 2013-10
• 页码: 1117-1129
• 关键词: financial-aid; college enrollment; anomalies; savings

摘要

This paper uses insights from behavioral economics to explain a particularly surprising borrowing phenomenon: one in six undergraduate students offered interest-free loans turns them down. Models of impulse control predict that students may optimally reject subsidized loans to avoid excessive consumption during school. Using the National Postsecondary Student Aid Study, we investigate students' take-up decisions and identify a group of students for whom the loans create an especially tempting liquidity increase. Students who would receive the loan in cash are significantly more likely to turn it down, suggesting that consumers choose to limit their liquidity in economically meaningful situations.