Consumer Borrowing after Payday Loan Bans

@article{Bhutta2016ConsumerBA,
  title={Consumer Borrowing after Payday Loan Bans},
  author={Neil Bhutta and Jacob Goldin and Tatiana Alexandra Homonoff},
  journal={The Journal of Law and Economics},
  year={2016},
  volume={59},
  pages={225 - 259}
}
High-interest payday loans have proliferated in recent years; so too have efforts to regulate them. Yet how borrowers respond to such regulations remains largely unknown. Drawing on both administrative and survey data, we exploit variation in payday-lending laws to study the effect of payday loan restrictions on consumer borrowing. We find that although such policies are effective at reducing payday lending, consumers respond by shifting to other forms of high-interest credit (for example… 
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