Estimating Credit Constraints among US Households

Charles Grant

No ECO2003/14, Economics Working Papers from European University Institute

Abstract: Households are constrained if they want to borrow, but banks restrict their lending. This paper separately identifies (using appropriate exclusion restrictions) the demand for debt, and the maximum amount agents can borrow when it is unknown which consumers are constrained. Using data from the CEX, it estimates that between 26 percent and 31 percent of households are constrained: and that poorly educated, ethnic minority, low income, men, and (among the educated) older households are less often constrained. On average, households would like to borrow up to $4,000 dollars more. But it does not test whether constraints are never binding

Keywords: credit constraints; consumers; debt (search for similar items in EconPapers)
JEL-codes: C51 D12 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (12)

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