Credit Constraints in the Market for Consumer Durables: Evidence from Micro Data on Car Loans

43 Pages Posted: 17 May 2000 Last revised: 17 Oct 2010

See all articles by Orazio Attanasio

Orazio Attanasio

University College London - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Pinelopi Goldberg

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Ekaterini Kyriazidou

University of California, Los Angeles (UCLA) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2000

Abstract

We investigate the empirical significance of borrowing constraints in the market for consumer loans. We set up a theoretical model of consumer loan demand, which in the presence of credit rationing implies restrictions on the elasticities of loan demand with respect to the interest rate and the maturity of the loan. We estimate these elasticities and test the theoretical implications using micro data from the Consumer Expenditure Survey (1984-1995) on auto loan contracts. The econometric specification that we employ accounts for important features of the data: selection, censoring, and simultaneity. Our results suggest that credit constraints are binding for some groups in the population, in particular for young and low-income households.

Suggested Citation

Attanasio, Orazio and Goldberg, Pinelopi (Penny) and Kyriazidou, Ekaterini (Katerina), Credit Constraints in the Market for Consumer Durables: Evidence from Micro Data on Car Loans (May 2000). NBER Working Paper No. w7694. Available at SSRN: https://ssrn.com/abstract=228987

Orazio Attanasio (Contact Author)

University College London - Department of Economics ( email )

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Institute for Fiscal Studies (IFS)

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Pinelopi (Penny) Goldberg

Yale University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Yale University - Cowles Foundation

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Ekaterini (Katerina) Kyriazidou

University of California, Los Angeles (UCLA) - Department of Economics

Box 951477
Los Angeles, CA 90095-1477
United States

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