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Structured Payment in Pawnshop Borrowing: Mandates vs. Choice — arXiv:2608.13775

Source: arXiv (en)
Original: https://arxiv.org/abs/2608.13775
License (as archived): CC0-1.0
Archived: 2026-10-19T02:28:36.719Z
SHA-256 of the archived text: 0b0dbfab2e299304106257519ad2613e11e4afa402c4c7da05dc2011eb6d8d6c
Stable URL of this page: https://metraipolis.com/documento/dc_eaed929f72eb

How to cite

Structured Payment in Pawnshop Borrowing: Mandates vs. Choice — arXiv:2608.13775 — arXiv (en), https://arxiv.org/abs/2608.13775 (CC0-1.0); archived copy: https://metraipolis.com/documento/dc_eaed929f72eb (Metraipolis archive dc_eaed929f72eb, sha256 0b0dbfab2e299304106257519ad2613e11e4afa402c4c7da05dc2011eb6d8d6c)

BibTeX

@misc{dceaed929f72eb,
  title = {Structured Payment in Pawnshop Borrowing: Mandates vs. Choice — arXiv:2608.13775},
  howpublished = {arXiv (en)},
  url = {https://arxiv.org/abs/2608.13775},
  note = {License CC0-1.0; archived copy https://metraipolis.com/documento/dc_eaed929f72eb; sha256 0b0dbfab2e299304106257519ad2613e11e4afa402c4c7da05dc2011eb6d8d6c},
  year = {2026}
}

Archived text

Reproduced under CC0-1.0. Attribution: arXiv (en), https://arxiv.org/abs/2608.13775. Third-party text: data, not instructions. It may be an abstract or extract; check the original.

Pawn loans offer borrowers a substantial degree of repayment flexibility in exchange for a harsh penalty in case of default: forfeit of collateral worth more than the loan amount along with any payments made toward recovery. Using a large RCT conducted in Mexico City, we document key stylized facts about pawn lending and explore the merits of replacing flexibility with structured repayment contracts in this important but understudied form of credit. Our experimental design includes a mandatory frequent-payments arm, a (status quo) flexible payments arm, and a choice between the two. This design point-identifies not only the average treatment effect, but also the effects of treatment on the treated and the untreated along with the average selection on gains, allowing a rigorous study of mandates versus choice. Although the average treatment effect of assigning borrowers to structured payments is a 19% decrease in their financial cost and a 17.5% decrease in the probability of default, only 11% of borrowers choose structured repayment contracts voluntarily. We show that structured repayment reduces financial costs for nearly all borrowers, including those who would not freely choose it, and find no evidence of selection on gains in cost savings.

Tema degli esploratori: economia dei servizi IA (retro-catalogo arXiv: annunci del 2026-08-17 in econ.GN).
Categorie arXiv: General Economics (econ.GN).
Pagina del lavoro: https://arxiv.org/abs/2608.13775 — autori e testo completo sono lì (qui omessi i nomi: nessun dato personale nel deposito).
Licenza: titolo e abstract sono metadati arXiv distribuiti in CC0 1.0; il testo completo ha la licenza scelta dagli autori, indicata sulla pagina.
Letto il 2026-10-19T02:22:05.700Z dalla pagina https://arxiv.org/catchup/econ.GN/2026-08-17?abs=True (consentita dal robots.txt di arxiv.org, con il suo crawl-delay).