- ”Impulsive Consumption and Financial Wellbeing: Evidence from an Increase in the Availability of Alcohol”, The Review of Financial Studies, 2021, Volume 34, Issue 5, May 2021, Pages 2608–2647, Coauthor: Itzhak Ben-David, AbstractIncreased availability of alcohol might harm individuals if they have time-inconsistent preferences and consume more 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 and greater consumer credit demand, default, and negative consequences in the labor market. Our calculation shows that the effects of alcohol consumption on indebtedness could amount to 3.2 times the expenditure on alcohol.
- ”Scarcity and Consumers’ Credit Choice”, Theory and Decisions, 2021, Volume 91, Issue 5, May 2021, Pages, Coauthors: Chloe Le Coq and Peter van Santen, AbstractThis paper documents that high-educated borrowers choose a lower loan to value ratio when their budget constraints are exogenously tighter. In contrast, low-educated borrowers do not respond to temporarily elevated levels of scarcity. This lack of response translates into a significantly higher probability of default and an 11.6 percent increase in borrowing costs. We show that a difference in access to liquidity and/or buffer stocks cannot explain our results. Instead, a framework where the awareness of self-control problems is positively correlated with education explains why high-educated, but not low-educated, consumers choose a lower LTV as a commitment device. Our findings highlight that increased levels of scarcity risk reinforce the conditions of poverty.
- “Bad Times, Good Credit”, Journal of Money, Credit, and Banking, 2020, 52: 107-142. Coauthors: Bo Becker and Kasper Roszbach AbstractBanks’ limited knowledge about borrowers’ creditworthiness constitutes an important friction in credit markets. Is this friction deeper in recessions, thereby contributing to cyclical swings in credit, or is the depth of the friction reduced, as bad times reveal information about firm quality? We test these alternative hypotheses using internal rating data from a large Swedish cross-border bank and credit scores from a credit bureau. The ability to classify corporate borrowers by credit quality is greater during bad times and worse during good times Soft and hard information measures both display countercyclical patterns. Our results suggest that information frictions in corporate credit markets are intrinsically counter-cyclical and not due to cyclical variation in monitoring effort.
- ”Financial Distress and Suicide over the Lifecycle for Individuals with ADHD: A Population Study”, Science Advances, 2020, 6, no. 40: eaba1551. Coauthors: Theodore P. Beauchaine and Itzhak Ben-David. AbstractAttention-deficit/hyperactivity disorder (ADHD) exerts lifelong impairment, including difficulty sustaining employment, poor credit, and suicide risk. To date, however, studies have assessed selected samples, often via self-report. Using mental health data from the entire Swedish population (N = 11.55 million) and a random sample of credit data (N = 189,267), we provide the first study of objective financial outcomes among adults with ADHD, including associations with suicide. Controlling for psychiatric comorbidities, substance use, education, and income, those with ADHD start adulthood with normal credit demand and default rates. However, in middle age, their default rates grow exponentially, yielding poor credit scores and diminished credit access despite high demand. Sympathomimetic prescriptions are unassociated with improved financial behaviors. Last, financial distress is associated with a fourfold higher risk of suicide among those with ADHD. For men but not women with ADHD who suicide, outstanding debt increases in the 3 years prior. No such pattern exists for others who suicide.
- ”The Labor Market Effects of Credit Market Information”, The Review of Financial Studies, June 2018, 31(6), 2005-2037, Editor’s Choice, Michael J. Brennan Best Paper Award 2019, Coauthors: Emily Breza and Andres Liberman. AbstractWe 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 inefficiently borne by those most creditworthy among previous defaulters.
- Listen to an audio recording of our paper at Academic Audios
March 2023: Check out the trailer and the movie ’Sidelined in Science’ ! A short movie about the Science behind roadblocks to women’s academic careers in (financial) economics.
The short movie (20 minutes):
August 2022: our new Swedish House of Finance Women in Finance Database. The website tracks the share of women in the top 100 finance departments of the world (plus the top 50 in the EU).
2019: Our paper: ”The Labor Market Effects of Credit Market Information” together with Emily Breza and Andres Liberman in the Review of Financial Studies, received the Michael J.Brennan Best Paper Award at the SFS Cavalcade.
Upcoming Talks, and Discussions:
November 6, 2023: Finance Seminar University of Manheim Business School, Germany.
August 18, 2023: Discussion, at the EFA, VU Amsterdam Business School, ”Fintech and Gender Discrimination” Yongqiang Chu, Chunxing Sun, Bohui Zhang, and Daxuan Zhao
June 22, 2023, 14.00: Panel participant at the conference: The playing field in academia: Why are women still underrepresented? The Royal Castle, Concert Hall, Warsaw, Poland.
May 9, 2023, 14.00: Discussion, at CEPR CAFFE Seminar series; ”Bank presence and health”, Kim Fe Cramer.
April 20-21, 2023: Discussion, at the Adam Smith Workshop in Asset Pricing & Corporate Finance, Saïd Business School, University of Oxford, United Kingdom: ”How do borrowers respond to a debt moratorium? Experimental evidence from consumer loans in India” S. Fiorin, J. Hall, M. Kanz
April 2-5, 2023: Discussion, at the Gerzensee Swiss Winter Conference on Financial Intermediation: ”Who Pays For Your Rewards? Redistribution in the Credit Card Market” Agarwal, Presbitero, Silva, and Wix.
March 16-18, 2023: Key-Note Presentation at the Midwestern Finance Association Conference, Chicago, USA.
Recent Working Papers:
”How Do Acquisitions Affect the Mental Health of Employees?”, Coauthors: Laurent Bach Ramin Baghai, and Rui Silva.
”The Effects of Diagnosing a Young Adult with a Mental Illness? Evidence from Randomly Assigned Doctors”, Coauthors: Andrew Hertzberg and Andres Liberman. NBER Summer Institute Slides
Work in Progress:
”Growing-up in Debt; Intergenerational Transmission of Debt” with Eline Molin, Erik Plug, Paula Roth, and Kasper Roszbach
”Debt Relief and Children’s Outcomes: Measuring the Effect of Personal Debt Relief Programs” with Eline Molin, Erik Plug, Paula Roth, and Kasper Roszbach
”Dissemination of Research” Evidence from Quasi-Random Conference Slots”, Coauthors Renee Adams and Laurent Bach
”Inflation Literacy and Consumer Choice: Evidence from an RCT with Bank Customers, Coauthors Arna Olafsson, Enrichetta Ravina, and Basit Zafar.
”The Price of Love” Coauthors: Wenli Li and Jenny Säve-Söderbergh
”Loneliness, Alzheimer and Financial Distress” with Andrew Herzberg and Johan Orrenius