Consumer Credit: Evidence from Italian Micro Data

43 Pages Posted: 8 Dec 2001

See all articles by Rob Alessie

Rob Alessie

Utrecht University - School of Economics; VU University Amsterdam - Department of Economics

Stefan Hochguertel

VU University Amsterdam; Tinbergen Institute

Guglielmo Weber

University of Padua - Department of Economics; Centre for Economic Policy Research (CEPR); Institute for Fiscal Studies (IFS)

Date Written: November 2001


In this Paper we analyse unique data on credit applications received by the leading provider of consumer credit in Italy (Findomestic). The data set covers a five year period (1995-99) during which the consumer credit market rapidly expanded in Italy and a new law came into force that set a limit to interest rates charged to consumers (the usury law). We investigate ways in which the law may have affected the consumer credit market and show how the applicants' pool has changed over time in comparison to a representative sample of the Italian population. We compute behavioural changes by controlling for changes in the observable characteristics of the Findomestic clientele and argue that, under suitable identifying assumptions, these changes can be given a structural interpretation. If the usury shock is assumed to have affected credit supply but not credit demand, that is if the usury law had a differential impact on the supply of various types of credit but a uniform impact on demand, we can identify and estimate a demand equation. Our key finding is that demand is interest rate elastic, particularly in the North, where the consumer credit market is more competitive.

Keywords: Consumer credit, choice-based sample, usury

JEL Classification: D12, E21

Suggested Citation

Alessie, R.J.M. (Rob) and Hochguertel, Stefan and Weber, Guglielmo, Consumer Credit: Evidence from Italian Micro Data (November 2001). Available at SSRN:

R.J.M. (Rob) Alessie (Contact Author)

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
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Utrecht, 3584 EC
31 30 253 9814 (Phone)
31 30 253 7373 (Fax)


VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
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+31 20 444 6047 (Phone)
+31 20 444 6005 (Fax)

Stefan Hochguertel

VU University Amsterdam ( email )

Dept Econ (FEWEB)
De Boelelaan 1105
1081HV Amsterdam
+31 20 59 86033 (Phone)
+31 20 59 89870 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS

Guglielmo Weber

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
+39 049 827 4271 (Phone)
+39 049 827 4221 (Fax)

Centre for Economic Policy Research (CEPR)

United Kingdom

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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