Category Archives: Uncategorized

Accepted by the RFS: The Labor Market Effects of Credit Market Information

Our paper entitled “The Labor Market Effects of Credit Market Information” together with Emily Breza and Andres Liberman was accepted for publication in The Review of Financial Studies.

The Labor Market Effects of Credit Information, Review of Financial Studies, Forthcoming. 
Coauthors: Andres Liberman and Emily Breza.
Paper | NBER Working Paper | Abstract

 We exploit a natural experiment to provide one of the first measurements of the causal effect of negative credit information on employment and earnings. We estimate that one additional year of negative credit information reduces employment by 3 percentage points and wage earnings by $1,000. In comparison, the decrease in credit is only one-fourth as large. Negative credit information also causes an increase in self-employment and a decrease in mobility. Further evidence suggests this cost of default is borne inefficiently by the relatively more creditworthy individuals among previous defaulters

AEA, January, 2018, Session accepted titled ‘The Demand for Commitment Devices’.

  • AEA, January, 2018, Session accepted titled ‘The Demand for Commitment Devices’. 

    Session Title: The Demand for Commitment Devices

    Session Organizer: Marieke Bos, Stockholm School of Economics, Swedish House of Finance

    Presiding Chair: Douglas Bernheim – Stanford University

    Paper 1 title: LOOSE KNOTS: STRONG VERSUS WEAK COMMITMENTS TO SAVE FOR EDUCATION IN UGANDA Dean Karlan, Yale University, Leigh Linden, The University of Texas at Austin

    Paper 2 title: MYOPIA AND DISCOUNTING
    Xavier Gabaix, Harvard University, David Laibson, Harvard University

    Paper 3 title: Impulsive Consumption and Financial Wellbeing: Evidence from an Expansion in the Supply of Alcohol
    Itzhak Ben-David, The Ohio State University, Fisher College of Business, Marieke Bos (marieke.bos@hhs.se) – Stockholm School of Economics, Swedish House of Finance

    Paper 4 title: Do Cues Trigger the Use of Addictive Goods? Evidence from the Removal of Slot Machines from Bars
    Vyacheslav Mikhed Federal Reserve Bank of Philadelphia, Barry Scholnick, Alberta School of Business, University of Alberta, Hyungsuk Byun Government of Alberta


    Discussant #1: Emily Breza – Harvard University Discussant #2: Frank Schilbach, MIT, Discussant #3: Bruce Carlin – University of California, Los Angeles (UCLA) – Anderson School of Management, Discussant #4: Brigitte Madrian- Harvard University, Kennedy School

FEB 2017: New WP: Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol

I have a new working paper out

Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol 

together with Itzhak Ben-David , Ohio State University – Fisher College of Business, Finance Department; National Bureau of Economic Research (NBER)

Abstract

Increased availability of temptation goods might harm individuals if they have time-inconsistent preferences and consume more in the present than planned before. We study this idea by examining the credit behavior of low-income households around the expansion of the opening hours of retail liquor stores during a nationwide experiment in Sweden. Consistent with store closures serving as commitment devices, expanded operating hours led to higher alcohol consumption (Nordström and Skog 2003) and greater consumer credit uptake and default. Thus, our results show that limiting the availability of temptation goods can improve the financial wellbeing of individuals with inconsistent-time preferences.

Keywords: household finance, behavioral finance, time inconsistent preferences, commitment mechanisms, alcohol, consumer credit

JEL Classification: D03, D12, I18, L51, L66

Ben-David, Itzhak and Bos, Marieke, Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol (February 21, 2017). Fisher College of Business Working Paper No. 2017-03-006. Available at SSRN: https://ssrn.com/abstract=2921237