Calendrier du 17 octobre 2018
Development Economics Seminar
Du 17/10/2018 de 16:30 à 18:00
Salle R2.01, 48 Bd Jourdan 75014 Paris
KREMER Michael (Harvard University)
The Endowment Effect and Collateralized Loans
écrit avec Kevin Carney, Xinyue Lin, and Gautam Rao
This project tests a novel theoretical mechanism for low take-up of collateralized credit. Using a field experiment with a lender in Kenya, we vary whether already-owned assets serve as collateral, or whether instead the new asset being financed by the loan itself serves as collateral, as in mortgages or car loans. The experimental design holds everything except existing ownership of the collateral constant. We find that borrowers display an endowment effect over their existing assets, and thus dislike loans that place existing assets at risk of loss by providing them as collateral. They are willing to pay 8% per month higher interest to instead collateralize using the new asset being financed by the loan itself. We next show that borrowers systematically under-predict their future attachment to new assets. After taking a loan collateralized with a new asset, borrowers become attached to the new asset, and exert similar repayment effort to loans collateralized with existing assets. We develop and estimate a structural model to provide behavioral parameters and to better understand the welfare consequences of such loans.
Economic History Seminar
Du 17/10/2018 de 12:30 à 14:00
Salle R1.13, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
CHEN Kevin (SIEPR)
Entitlement, Property, and Social Stratification in Agrarian China: A Nineteenth-century. Case from Northeast China
In her recent book, State-Sponsored Inequality: The Banner System and Social Stratification in Northeast China (Stanford University, 2017), Shuang CHEN provides a comprehensive view on how state policies, market forces, and demographic processes interacted with one another to produce inequality under state domination in nineteenth century rural northeast China. The Qing state (1644-1911) settled and classified immigrants there into distinct categories, each associated with different land entitlements. The resulting patterns of wealth stratification and social hierarchy were then simultaneously challenged and reinforced by these settlers and their descendants. Eventually the tension built into the unequal land entitlements shaped the identities of immigrant groups, and this social hierarchy persisted even after the institution of unequal state entitlements was removed. Drawing on the China Multi-Generational Panel Dataset-Shuangcheng (CMGPD-SC), which contains 1,346,826 annual observations of 107,890 individuals living between 1866 and 1913 and 37,187 plot inventories, and a large number of court cases, official correspondence, and memorials, Shuang CHEN shows how government policies and market forces may be responsible for social differentiation and social stratification in general, but the socioeconomic processes of inequality in any given society are closely associated with specific political and social institutions. In a power-based society such as China, such political entitlements constitute one of the most important factors of wealth stratification and social grouping.