The Pawn Industry and Its Customers: The United States and Europe

29 Pages Posted: 21 Sep 2012 Last revised: 12 Oct 2012

Marieke Bos

Swedish House of Finance - Stockholm School of Economics

Susan Carter

United States Military Academy

Paige Marta Skiba

Vanderbilt University - Law School

Date Written: September 20, 2012

Abstract

As humankind’s oldest financial institution, pawnbroking has served the financial needs of low-income families for centuries. Recently, and especially in the last five years, an increasing number of consumers have relied on pawnbrokers to help them meet daily financial needs. Seven percent of all U.S. and four percent of all Swedish households have used pawn credit at one time or another. Despite the general public’s increased interest in the pawn industry, evidenced by the popularity of reality television shows like “Pawn Stars” and “Hard Core Pawn,” economists have paid surprisingly little attention to the pawnbroking industry and pawnshop borrowers. We start by reviewing the history of pawn credit and the sparse economic literature on pawnbroking, and then present unique U.S. transaction data and Swedish register data to, first, show aggregate trends, and, second, shed light on the social and financial background of pawnshop borrowers and their behavior within the pawnbroking industry in both countries. We find that the pawnbroking industry and pawnshop borrowers are unexpectedly similar in the United States and Sweden.

Keywords: pawnshops, consumer finance, fringe banking, subprime lending

Suggested Citation

Bos, Marieke and Carter, Susan and Skiba, Paige Marta, The Pawn Industry and Its Customers: The United States and Europe (September 20, 2012). Vanderbilt Law and Economics Research Paper No. 12-26. Available at SSRN: https://ssrn.com/abstract=2149575 or http://dx.doi.org/10.2139/ssrn.2149575

Marieke Bos

Swedish House of Finance - Stockholm School of Economics ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

HOME PAGE: http://www.mariekebos.org

Susan Carter

United States Military Academy ( email )

600 Thayer Rd
West Point, NY 10996
United States

Paige Marta Skiba (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-322-1958 (Phone)

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