I find no evidence that payday loans alleviate hardship. On the contrary, the results indicate that loan access leads to increased incidence of difficulty paying mortgage, rent and utilities bills; moving out of one's home due to financial troubles; and delaying needed medical care, dental care and prescription drug purchases. I also find strong evidence that bounced check prices are higher when payday loans are available, as well as weak support for the conclusion that overdraft fees rise when loans become available. Finally, the results indicate that depositories expand their short-term credit offerings by initiating overdraft lending in response to payday loan prohibitions.On the contrary, Morse (2006) finds that in periods after natural disasters, payday loan availability benefits communities by increasing birth rates, and reducing mortgage foreclosures, death rates, and drug and alcohol clinic admissions.
|Title||:||Essays on Consumer Finance|
|Author||:||Brian T. Melzer|
|Publisher||:||ProQuest - 2008|