Replication data for: Liquidity Constraints and Imperfect Information in Subprime Lending

Principal Investigator(s): View help for Principal Investigator(s) William Adams; Liran Einav; Jonathan Levin

Name	File Type	Size	Last Modified
LICENSE.txt	text/plain	14.6 KB	12/07/2019 07:49:AM
Liquidity_Bootstrap.do	text/plain	10.9 KB	12/07/2019 07:49:AM
Liquidity_Figures.do	text/plain	10 KB	12/07/2019 07:49:AM
Liquidity_Tables_Default.do	text/plain	7.4 KB	12/07/2019 07:49:AM
Liquidity_Tables_Demand.do	text/plain	12.8 KB	12/07/2019 07:49:AM
Liquidity_Tobit.m	text/plain	23.5 KB	12/07/2019 07:49:AM
Online_Appendix.pdf	application/pdf	85.6 KB	12/07/2019 07:49:AM
Readme.pdf	application/pdf	25.5 KB	12/07/2019 07:49:AM

Project Citation:

Adams, William, Einav, Liran, and Levin, Jonathan. Replication data for: Liquidity Constraints and Imperfect Information in Subprime Lending. Nashville, TN: American Economic Association [publisher], 2009. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116303V1

Project Description

Summary: We present new evidence on consumer liquidity constraints and the credit market conditions that might give rise to them. We analyze unique data from a large auto sales company serving the subprime market. Short-term liquidity appears to be a key driver of consumer behavior. Demand increases sharply during tax rebate season and purchases are highly sensitive to down-payment requirements. Lenders also face substantial informational problems. Default rates rise significantly with loan size, providing a rationale for loan caps, and higher-risk borrowers demand larger loans. This adverse selection is mitigated, however, by risk-based pricing. (JEL D14, D82, D83, G21)

Scope of Project

JEL Classification:
      D14 Household Saving; Personal Finance
      D82 Asymmetric and Private Information; Mechanism Design
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages

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Published Versions

V1 [2019-12-07]

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DDI 2.5

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