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Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines / Dean Karlan, Sendhil Mullainathan, Benjamin N. Roth.
- Format:
- Book
- Author/Creator:
- Karlan, Dean.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w24272.
- NBER working paper series no. w24272
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- A debt trap occurs when someone takes on a high-interest rate loan and is barely able to pay back the interest, and thus perpetually finds themselves in debt (often by re-financing). Studying such practices is important for understanding financial decision-making of households in dire circumstances, and also for setting appropriate consumer protection policies. We conduct a simple experiment in three sites in which we paid off high-interest moneylender debt of individuals. Most borrowers returned to debt within six weeks. One to two years .after intervention, treatment individuals were borrowing at the same rate as control households.
- Notes:
- Print version record
- February 2018.
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