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A Study of Payday Loan Borrower Behavior
Last registered on November 23, 2019

Pre-Trial

Trial Information
General Information
Title
A Study of Payday Loan Borrower Behavior
RCT ID
AEARCTR-0003043
Initial registration date
October 20, 2018
Last updated
November 23, 2019 11:01 AM EST
Location(s)
Primary Investigator
Affiliation
Microsoft Research
Other Primary Investigator(s)
PI Affiliation
Stanford
PI Affiliation
Berkeley
PI Affiliation
Dartmouth College
Additional Trial Information
Status
Completed
Start date
2018-10-22
End date
2019-07-15
Secondary IDs
Abstract
It is often argued that payday lending regulations can increase welfare, because people with self-control problems might borrow more than they expect or would like to in the long run. To test this, we ran a field experiment with a large payday lender to elicit borrowers' predictions of their future borrowing and willingness-to-pay for an incentive to avoid future borrowing. We combine the experimental results with a novel sufficient statistic-based approach to estimate a model of partially naive present focus.
External Link(s)
Registration Citation
Citation
Allcott, Hunt et al. 2019. "A Study of Payday Loan Borrower Behavior." AEA RCT Registry. November 23. https://doi.org/10.1257/rct.3043-2.2.
Former Citation
Allcott, Hunt et al. 2019. "A Study of Payday Loan Borrower Behavior." AEA RCT Registry. November 23. http://www.socialscienceregistry.org/trials/3043/history/57663.
Sponsors & Partners

There are documents in this trial unavailable to the public. Use the button below to request access to this information.

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Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2018-10-22
Intervention End Date
2019-07-15
Primary Outcomes
Primary Outcomes (end points)
See pa
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
To avoid the possibility of experimenter demand effects, we are not disclosing further information about the study until data collection is complete.
Experimental Design Details
Do payday loans harm borrowers by exploiting behavioral biases? We examine whether and why borrowers fall into “debt traps” -- failing to anticipate future borrowing and its costs -- by eliciting forecasts and commitment valuations from current borrowers in partnership with a large payday lender and then tracking borrowing behavior with administrative data. Our baseline survey asks borrowers to forecast their borrowing behavior over the next several months, and also gives them incentivized between an unconditional cash transfer and one that is contingent on not taking out a loan. We plan to use the data in several ways. First, we will estimate borrower forecast biases and commitment valuations. Second, we will use the randomized incentives to estimate the price elasticity of demand for payday loans. Third, we will estimate present-bias and sophistication parameters from a beta-delta model. Fourth, we plan to input those parameter estimates into a calibrated model of consumption, savings, and borrowing and use it to simulate the welfare effects of popular regulatory approaches.
Randomization Method
Randomization done by computer survey software.
Randomization Unit
Individual.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
N/A
Sample size: planned number of observations
Uncertain; depends on business conditions.
Sample size (or number of clusters) by treatment arms
Uncertain; depends on business conditions.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Stanford Panel on Non-Medical Human Subjects
IRB Approval Date
2018-10-15
IRB Approval Number
46136
Analysis Plan
Analysis Plan Documents
Exclusion Criteria 1-22-2019

MD5: 423feeaa2bd637726067a0d5858bd3f5

SHA1: 319b2e90eb57dab94f9f659caf08dc40f80e57e2

Uploaded At: January 22, 2019

Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
July 15, 2019, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
July 15, 2019, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication
Data Publication
Is public data available?
No

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Program Files
Program Files
No
Reports, Papers & Other Materials
Relevant Paper(s)
REPORTS & OTHER MATERIALS