The Cost of Consumer Collateral: Evidence From Bunching

• 成果类型: Article
• 署名作者: Collier, Benjamin L.; Ellis, Cameron M.; Keys, Benjamin J.
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University; University of Iowa; University of Pennsylvania; National Bureau of Economic Research
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA22303
• 发表日期: 2025
• 页码: 779-819
• 关键词: Household finance; moral hazard; default; determinants; elasticities; selection; disaster; MARKETS; POLICY

摘要

How do collateral requirements impact consumer borrowing behavior? Using administrative loan application and performance data from the U.S. Federal Disaster Loan Program, we exploit a loan amount threshold above which households must post their residence as collateral. Our bunching estimates suggest that the median borrower is willing to give up 40% of their loan amount to avoid posting collateral. Exploiting time variation in the threshold, we estimate collateral causally reduces default rates by 36%. Finally, we structurally estimate households' attachment to their homes, net of any equity, and find a median value of $11,000. Attachment creates a wedge between lender and borrower valuation of collateral of 15%. Our results explain high perceived default costs in the mortgage market, and document the importance of collateral for reducing moral hazard in consumer credit markets.