Shaking Off Burdens – Debt Relief and Moral Intuitions

32 Pages Posted: 16 Nov 2015 Last revised: 2 Jul 2016

See all articles by David Chavanne

David Chavanne

Connecticut College - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: June 15, 2016

Abstract

Motivated by the prevalence of debt crises and the resulting policy debates, this study uses a vignette-based survey to examine the moral intuitions that underlie debt-related policy preferences. After reading a hypothetical scenario involving a debtor and a lender, survey respondents rate the degree of fairness that they attach to a third party’s decision to allow debt relief. The experimental design varies (1) the responsibility of lenders and debtors in terms of whether their situations stem from bad luck or poor choices, (2) the salience of a lender’s profit motive and (3) whether the debtor and the lender are individuals or corporations. The results show that debt relief is more likely to be found fair in a corporate context compared to a personalized context and that the factors that drive the perceived fairness of debt relief differ across corporate and personalized contexts. With corporate debt, debtor and lender responsibility are strongly, and consistently, linked to the perceived fairness of debt relief. With personalized debt, lender responsibility is never a significant driver of the perceived fairness of debt relief, and debtor responsibility only matters if the lender’s profit motive is made salient.

Keywords: debt, debt relief, moral intuitions, responsibility, self-interest

JEL Classification: C83, D04, D31, D63, H63

Suggested Citation

Chavanne, David, Shaking Off Burdens – Debt Relief and Moral Intuitions (June 15, 2016). Available at SSRN: https://ssrn.com/abstract=2691532 or http://dx.doi.org/10.2139/ssrn.2691532

David Chavanne (Contact Author)

Connecticut College - Economics Department ( email )

New London, CT 06320
United States

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