High‐Cost Credit and Consumption Smoothing. This paper ended up being previously circulated as “For Better and for even worse?

We thank the editor, Robert DeYoung, an anonymous referee, Todd Gormley, Mark Jenkins, Paul Landefeld, Donald Morgan, Nick Roussanov, Luke Taylor, and Jeremy Tobacman for helpful reviews, along with seminar participants during the Wharton class, the GW/FRB/GFLEC Financial Literacy Seminar while the Consumer Expenditure Survey Microdata Workshop. I will be grateful to Jimmy Lee, Ryan Pfirrmann‐Powell, Geoffrey Paulin, Arcenis Rojas, as well as others into the Division of this Consumer Expenditure Survey during the Bureau of Labor Statistics for support accessing the private Consumer Expenditure Survey files, and I also am grateful to Paul Amos of this Wharton GIS lab for help with GIS. The Jay H. Baker Retailing Center during the Wharton class supplied large support that is financial the task before the writer’s work using the Federal Reserve. Aftereffects of Usage Of High‐Cost Credit Rating.” The analysis and conclusions expressed in this paper are the ones regarding the writer and don’t always mirror the views for the Board of Governors associated with Federal Reserve System, its users, or its staff. This research ended up being carried out with limited usage of Bureau of Labor Statistics (BLS) information. The views right here never always mirror the views associated with the BLS.


In this paper, We reveal that high‐cost credit helps households smooth usage after durations of short-term economic stress. After experiencing distress—that is, extreme climate events—I realize that access to high‐cost payday lending mitigates declines in general investing and nondurable products investing generally speaking. The outcomes are especially concentrated among households with a greater tendency to utilize payday credit or that have actually restricted alternatives: low income households, households with lower than a college level, and households with lower levels of preserving. These outcomes highlight the consumption‐smoothing part that high‐cost credit plays for households with restricted use of other kinds of credit.

Amount of times cited relating to CrossRef: 4

  • Kabir Dasgupta, Brenden J. Mason, the result of Interest Rate Caps on Bankruptcy: https://www.speedyloan.net/payday-loans-mt/ Synthetic Control proof from Recent Payday Lending Bans, Journal of Banking & Finance, 10.1016/j.jbankfin.2020.105917, (105917), (2020).

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