How Lending Decisions Affect Consumer Behavior

21 Pages Posted: 18 Sep 2019 Last revised: 15 Oct 2019

See all articles by Valentin Burg

Valentin Burg

Humboldt University of Berlin

Jan Keil

Humboldt Universit├Ąt zu Berlin

Date Written: September 9, 2019


To understand how the supply of loans affects consumer behavior we track website visitors of an online furniture retailer offering short-term loans. For a regression discontinuity design we exploit different sets of cut-off rules in the lending function that shifted experimentally over time. Short-term loan offers induce interested window shoppers to finalize purchases, increasing the likelihood of a purchase by 19%, but not to spend more money by adding items. The effect of loan offers on inclinations to finalize purchases is more pronounced for consumers with lower credit scores that are less creditworthy and presumably more credit constrained.

Keywords: consumer credit, lending decisions, household behavior

JEL Classification: G00, G40, D12, D90

Suggested Citation

Burg, Valentin and Keil, Jan, How Lending Decisions Affect Consumer Behavior (September 9, 2019). Available at SSRN: or

Valentin Burg

Humboldt University of Berlin ( email )

Unter den Linden 6
Berlin, AK Berlin 10099

Jan Keil (Contact Author)

Humboldt Universit├Ąt zu Berlin ( email )



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