Abstract
How does the punishment for default affect repayment behavior? We use administrative data, provided by the leading Italian lender of unsecured credit to the household sector, to analyze households repayment behavior. Administrative data are particularly well suited to study what factors are responsible for default, but raise a fundamental econometric problem, since they identify the determinants of repayment behavior only for those who are granted credit. To overcome this problem, we provide upper and lower bounds on the determinants of repayment behavior. Moreover, we show how to use the restrictions from the theory to narrow the bounds. Mario Padula gratefulyl acknowledges financial support of the Finance and Consumption Chairin the European Community which enabled this project to be completed. We would like to thank for comments and suggestions at various stages of this project Alberto Bennardo, Giuseppe Bertola, Agar Brugiavini, Richard Disney, John Duca, Burcu Duygan, Luigi Guiso, Michael Haliassos, Stefan Hochguertel, Winfried Koeninger, Tullio Jappelli, Theresa Osborne, Frank Vella and Guglielmo Weber,and many other seminar participants. All remaining errors, are of course our own.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
