How Do Payday Loans Affect Borrowers? Evidence from the UK Market

• 成果类型: Article
• 署名作者: Gathergood, John; Guttman-Kenney, Benedict; Hunt, Stefan
• 署名单位: University of Nottingham; University of Chicago
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy090
• 发表日期: 2019
• 页码: 496
• 关键词: access

摘要

Payday loans are controversial high-cost, short-term lending products, banned in many U.S. states. But debates surrounding their benefits to consumers continue. We analyze the effects of payday loans on consumers by using a unique data set including 99% of loans approved in the United Kingdom over a two-year period matched to credit files. Using a regression discontinuity research design, our results show that payday loans provide short-lived liquidity gains and encourage consumers to take on additional credit. However, in the following months, payday loans cause persistent increases in defaults and cause consumers to exceed their bank overdraft limits.