Consumer Welfare Implications of Regulating Rent-to-Own Transactions

52 Pages Posted: 18 May 2012  

Howard Beales

George Washington University - School of Business

Jeffrey A. Eisenach

American Enterprise Institute; NERA Economic Consulting

Robert E. Litan

Ewing Marion Kauffman Foundation; AEI-Brookings Joint Center for Regulatory Studies

Date Written: May 16, 2012

Abstract

In this study, we analyze the consumer welfare implications of regulating Rent-to-Own (RTO) transactions. We conclude that the benefits and costs of mandatory disclosure and labeling regulations currently imposed by most states are likely small, and that the effects of imposing a Federal baseline for such regulations would also be relatively small. On the other hand, we conclude that regulations imposed by a handful of states which treat RTO agreements as credit sales, or directly regulate RTO prices, substantially reduce consumer welfare, and should be repealed.

Suggested Citation

Beales, Howard and Eisenach, Jeffrey A. and Litan, Robert E., Consumer Welfare Implications of Regulating Rent-to-Own Transactions (May 16, 2012). Available at SSRN: https://ssrn.com/abstract=2060984 or http://dx.doi.org/10.2139/ssrn.2060984

Howard Beales

George Washington University - School of Business ( email )

Washington, DC 20052
United States

Jeffrey A. Eisenach (Contact Author)

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

NERA Economic Consulting

1255 23rd Street, NW, Suite 600
Washington, DC 20037
United States
202-466-3510 (Phone)
202-466-3605 (Fax)

HOME PAGE: http://www.nera.com

Robert E. Litan

Ewing Marion Kauffman Foundation ( email )

4801 Rockhill Road
Kansas City, MO 64110
United States

AEI-Brookings Joint Center for Regulatory Studies

1150 17th Street, N.W.
Washington, DC 20036
United States

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