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Author: Viktar Fedaseyeu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Viktar Fedaseyeu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Hui Wang
Publisher:
ISBN:
Category : Commercial loans
Languages : en
Pages :
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This dissertation has two essays which lie at the intersection of household finance and corporate finance. The topics include household leverage and human capital investment, and cross-holding and corporate borrowing. The essays hope to provide empirical analysis to better understand the economic decision made by both individuals and firms in practice. The first essay is “Household Financial Leverage and Human Capital Investment”. In this study, I find that household leverage has a hump-shaped effect on individual’s incentive to invest in human capital. Using the comprehensive information from the National Longitudinal Survey of Youth, I identify human capital investment decision based on whether an individual requests and participates in on-career skill acquisition training, and estimate household leverage based on the detailed debt and asset information. To strengthen causal inferences, I construct an instrumental variable based on changes in household’s mortgage burden relative to home value resulting from plausibly exogenous housing price fluctuations across regions and over time. Overall, this study highlights the effect of household leverage on human capital investment, which provides valuable implications for decisions of both individuals and macro policymakers. The second essay is “Networking Behind the Scenes: Institutional Cross-industry Holdings and Information Frictions in Corporate Loans”, joint with Jie He, Lantian Liang, and Han Xia. In this research, we study the role played by institutional investors in shaping firms’ cost of borrowing through affecting borrowers’ information friction in corporate loan market. We find that borrowers linked to banks other than the existing lenders through cross-holdings enjoy significantly lower loan spreads. This finding is mostly driven by institutions transmitting information between portfolio firms and banks, which mitigates information frictions and thereby reduces firms’ borrowing costs. For identification, we adopt a difference-in-differences method based on the quasi-natural experiment of financial institution mergers. Our evidence highlights an important effect of institutions’ cross-industry holdings on the corporate loan market.
Author: Madelaine Reid L'Esperance
Publisher:
ISBN:
Category :
Languages : en
Pages : 144
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Many US adults have difficulty managing their financial lives. Financial capability, the knowledge, skills, and access to resources to handle finances effectively, is essential to promoting financial well-being. However, the pathways to improve financial capability remain unclear. Traditional approaches, including financial education, counseling and coaching as well as safety net programs and safe, affordable financial services, are well explored by researchers. However, there are also non-traditional channels which have received less attention. In this dissertation, these approaches are examined, specifically learning by doing, learning from others, and behavioral interventions. First, the influence of repeated experiences in the financial market on financial capability is explored. Using a panel of US couples, the study reveals that relative income is a key determinant of financial responsibility in couples, and partners who defer responsibility are less likely to know their credit score. The second essay examines the effect of youth employment, an experience that may build financial capability, on financial well-being in young adulthood using several approaches to deal with selection into youth employment. Working in high school may provide youth with an opportunity to learn how to effectively manage their finances through experiences and information sharing. The analysis reveals that those who work as youth are not more financial capable in young adulthood than their counterparts who were not employed. Finally, the third essay investigates the role of reminders for encouraging consumers to attend to information about their finances. This study uses a field experiment to test whether reminding credit union members that they have access to a free credit monitoring service motivates them to check their credit score and report. Despite the promise of this low-cost approach to improving accuracy of beliefs about creditworthiness, those who receive the message are no more likely to check their credit than a control group who receives no message. Overall, these essays contribute new evidence on the potential role of non-traditional pathways to financial capability that inform the design of programs and financial services that aim to better inform consumers and improve financial well-being. A roadmap for future research is offered.
Author: Fernando Lopez (Professor of finance)
Publisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages : 121
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This dissertation consists of three essays that examine the determinants of individual financial decision making and the welfare implications of those decisions. In the first essay, I consider an important dimension of individual welfare, namely mental health, to study whether the use of different financial services helped to withstand the damage caused by a large earthquake that hit Chile in February 2010. Using a rich nationally representative panel data set and geographic differences in ground shaking caused by the earthquake as an exogenous source of damage, I find that earthquake insurance reduced the incidence of post-traumatic stress disorder (PTSD) by more than 50% among individuals who lived in properties that were damaged by the earthquake. However, I find no significant effects for the amount of savings and bank relationships. Overall, these results suggest that the welfare impact of financial services is driven by the ability to transfer resources across states of the world, but not through time. In the second essay, I study the extent to which low income students in the U.S. understand and take into consideration the financial aspects of their higher education. Using a rich data set from a large U.S. non-profit organization, I find that low income post-secondary students are poorly informed about three main financial aspects of their higher education: expected income, financing costs and opportunity cost of being enrolled. This result holds for students who are academically talented, have been exposed to financial education (including a semester-long personal finance class) and relevant financial experiences. Furthermore, preliminary results of a randomized controlled trial (N=117) suggest that an hour-long financial education workshop on the main financial aspects of college increases students' GPA by 0.2 points (p-value=0.15) and their ability to receive financial aid from the non-profit organization by 11.4 percentage points (p-value=0.25). Overall, these results suggest that (lack of) financial literacy can affect both educational attainment and financial outcomes of low income post-secondary students. In the third essay, I study if civic capital, defined as the set of values and beliefs within a community that promote cooperation for socially valuable purposes (Guiso, Sapienza and Zingales, 2011), affects the use of deposit accounts among Chilean households. Using an institutional setting of limited supply side barriers for access to deposit accounts and a rich household data set, I find that households from areas with higher levels of civic capital, measured as the rate of registration to vote, are more likely to have savings accounts and hold larger amounts in those accounts. This association is stronger for households that are less educated and less intensive users of communication and information devices such as phone, computer and the internet. These results are consistent with the idea that civic capital helps to overcome educational and informational barriers that limit the demand for deposit accounts.
Author: Bruno Ferman
Publisher:
ISBN:
Category :
Languages : en
Pages : 126
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This dissertation consists of three essays. The first chapter studies whether credit demand is sensitive to interest rates, to the prominence of interest rate disclosure, and to nudges. Consumer credit regulations usually require that lenders disclose interest rates. However, lenders can evade the spirit of these regulations by concealing rates in the fine print and highlighting low monthly payments. I explore the importance of such evasion in Brazil, where consumer credit for lower and middle income borrowers is expanding rapidly, despite particularly high interest rates. By randomizing contract interest rates and the degree of interest rate disclosure, I show that most borrowers are highly rate-sensitive, whether or not interest rates are prominently disclosed in marketing materials. An exception is high-risk borrowers, for whom rate disclosure matters. These clients are rate-sensitive only when disclosure is prominent. I also show that borrowers who choose this type of financing are responsive to nudges that favor longer-term plans. Despite this evidence, the financial consequences of information disclosure, even for high-risk borrowers, are relatively modest, and clients are less susceptible to nudges when the stakes are higher. Together, these results suggest that consumers in Brazil are surprisingly adept at decoding information even when lenders try to obfuscate the interest rate information, suggesting a fair amount of sophistication in this population. The second chapter (co-authored with Leonardo Bursztyn, Florian Ederer, and Noam Yuchtman) studies the importance of peer effects in financial decisions. Using a field experiment conducted with a financial brokerage, we attempt to disentangle channels through which a person's financial decisions affect his peers'. When someone purchases an asset, his peers may also want to purchase it because they learn from his choice ("social learning") and because his possession of the asset directly affects others' utility of owning the same asset ("social utility"). We randomize whether one member of a peer pair who chose to purchase an asset has that choice implemented, thus randomizing possession of the asset. Then, we randomize whether the second member of the pair: 1) receives no information about his peer, or 2) is informed of his peer's desire to purchase the asset and the result of the randomization determining possession. We thus estimate the effects of: (a) learning plus possession, and (b) learning alone, relative to a control group. In the control group, 42% of individuals purchased the asset, increasing to 71% in the "social learning only" group, and to 93% in the "social learning and social utility" group. These results suggest that herding behavior in financial markets may result from social learning, and also from a desire to own the same assets as one's peers. The third chapter (co-authored with Pedro Daniel Tavares) uses data on checking and savings accounts for a sample of clients from a large bank in Brazil to calculate the prevalence and cost of "borrowing high and lending low" behavior in a setting where the spread between the borrowing and saving rates is on the order of 150% per year. We find that most clients maintain an overdrawn account at least one day a year while having liquid assets. However, the yearly amount of avoidable financial charges would only correspond, on average, to less than 0.5% of clients' yearly earnings. We also show that consumers are less likely to engage in such behavior when the costs of doing so are higher. These results suggest that the spread between the borrowing and saving rates is a key determinant of this behavior.
Author: Olivia S. Kim (Scientist in business management)
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ISBN:
Category :
Languages : en
Pages : 0
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Chapter 1 examines whether closing disparities in credit access between spouses can help reduce consumption inequality in the household. The 2013 reversal of the Truth-in-Lending Act increased the borrowing capacity of secondary earners in equitable-distribution states but not in community-property states, where division-of-property laws superseded the policy change. Using a matched difference-in-differences design and administrative financial-transaction records measuring the credit and consumption of each spouse, I show that this reversal closed the credit gap between spouses by increasing secondary earners' credit card limits. In turn, spouses shared consumption more equally, reducing their pre-reversal consumption gap. Delinquency rates were not measurably impacted, suggesting that household financial standing did not worsen. These results are consistent with a model of joint decision-making under limited commitment, in which credit causes a shift in marital bargaining power. Chapter 2 explores the investment decisions of small business owners when their child goes to college using the linked financial accounts of small businesses and their owners. By comparing small business owner households with college-entering aged children to otherwise similar households with near college-entering aged children, I show that small business owners respond to the increase in education spending by downsizing business production and liquidating the business. These results suggest that business owners' family financial decisions affect the real economy as business owners struggle to separate business capital demands from personal finances. Joint work with Natalie Cox and Constantine Yannelis in Chapter 3 uses notches in the loan guarantee rate schedule for Small Business Administration loans to estimate the elasticity of bank lending volume to loan guarantees. We show significant bunching in the loan distribution on the side of the size threshold that carries a more generous loan guarantee. The excess mass implies that increasing guarantee generosity by one percentage point of loan principal would increase per-loan lending volume by $19,000. Placebo results indicate that bunching disappears when the guarantee notch is eliminated. We conclude that lending is highly sensitive to loan guarantees, and thus, federal guarantee programs have the potential to increase lending levels when borrowing is inefficiently low.
Author: Andreas Fagereng
Publisher:
ISBN:
Category : Families
Languages : en
Pages : 101
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This thesis contains three chapters relating to the field of household finance. In the first chapter household life cycle investment behaviour is investigated using a panel of Norwegian administrative data and tax records. Dealing with selection and identification issues, the data suggests a double adjustment as people age: a rebalancing of the portfolio away from stocks as households approach retirement, and a peak in stock market participation around the time when they reach retirement. A theoretical model predicting these life cycle patterns of investment behavior is then provided. This is achieved by extending existing models with a per period participation cost in risky asset markets and a small perceived probability of being cheated. In the second chapter the relation between household financial asset holdings and unemployment is investigated. Consistent with a simple theoretical model, the data shows increased savings and a shift towards safer assets in the years leading up to unemployment, and depletion of savings during unemployment. This suggests that at least some households can foresee and prepare for upcoming unemployment, which indicates that private savings can complement publicly provided unemployment insurance. The final chapter identifies the causal effect of lump-sum severance payments on non-employment duration in Norway by exploiting a discontinuity in eligibility at age 50. A severance payment worth 1.2 months' earnings lowers the fraction re-employed after one year by six percentage points. This effect is decreasing in wealth, which supports the view that the effect of severance pay should be interpreted as evidence of liquidity constraints. Finding liquidity constraints in Norway, despite its equitable wealth distribution and generous welfare state, suggests they are likely to exist also in other countries.
Author: Tobin Hanspal
Publisher:
ISBN: 9788793483873
Category :
Languages : en
Pages : 280
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Author: Steffen Meyer
Publisher:
ISBN: 9783868059854
Category : Haushalt - Investitionsentscheidung
Languages : en
Pages : 106
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Author: M. Angrisani
Publisher:
ISBN:
Category :
Languages : en
Pages :
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