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The Effect of Government Regulations on Personal Loan Markets: A Tobit Estimation of a Microeconomic Model
Author(s) -
BARTH JAMES R.,
GOTUR PADMA,
MANAGE NEELA,
YEZER ANTHONY M. J.
Publication year - 1983
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1983.tb02293.x
Subject(s) - tobit model , loan , government (linguistics) , estimation , economics , econometrics , aggregate data , aggregate (composite) , actuarial science , public economics , business , macroeconomics , statistics , mathematics , linguistics , philosophy , materials science , management , composite material
The purpose of this paper is to analyze both theoretically and empirically the effect of selected government regulations on a high‐risk personal loan market. Unlike previous studies, which have generally relied on a loosely specified theory and then tested this theory with statewide aggregate data, our analysis is based on a more tightly specified model for individual loans which is then tested using statewide disaggregated data. The empirical results indicate that the regulatory effects are not only significant but consistent with our theoretical microeconomic model.