Randomized Debt Restructuring Experiment

Last registered on November 15, 2019
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Pre-Trial

Trial Information

General Information

Title
Randomized Debt Restructuring Experiment
RCT ID
AEARCTR-0005045
Initial registration date
November 15, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 15, 2019, 11:53 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Will Dobbie
Affiliation
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Ann Woods
PI Affiliation
Money Management International
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2003-01-01
End date
2019-11-01
Keywords
Finance & Microfinance
Additional Keywords
JEL code(s)
D14 Household Saving, Personal Finance; J22 Time Allocation and Labor Supply; J31 Wage Level and Structure, Wage Differentials
Secondary IDs
openicpsr-114987
Abstract
A large-scale field experiment that offered randomly selected borrowers a combination of (i) immediate payment reductions to target short-run liquidity constraints and (ii) delayed interest write-downs to target long-run
debt constraints.
External Link(s)

Registration Citation

Citation
Dobbie, Will and Ann Woods. 2019. "Randomized Debt Restructuring Experiment." AEA RCT Registry. November 15. https://doi.org/10.1257/rct.5045-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2005-01-01
Intervention End Date
2006-08-31

Primary Outcomes

Primary Outcomes (end points)
Debt management plan enrollment
Debt management plan completion rate
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment was designed and implemented by Money Management International (MMI), a large non-profit credit counseling organization. Will Dobbie and Jae Song analyze this experiment in their paper “Targeted Debt Relief and the Origins of Financial Distress: Experimental Evidence from Distressed Credit Card Borrowers.”

MMI and eleven large credit card issuers agreed to offer generous minimum payment reductions and interest write-downs to a subset of borrowers interested in a structured repayment program. None of the card issuers were directly involved with the day-to-day management of the experiment. The purpose of the experiment was to evaluate the effect of more generous debt relief on repayment rates, particularly for the most financially distressed borrowers.

During the experiment, borrowers in both the treatment and control groups were offered a repayment program. While control borrowers were offered the status quo repayment program that had been offered to all borrowers prior to the randomized trial, treated borrowers were offered a much more generous repayment program that included a combination of two different types of targeted debt relief: (i) immediate minimum payment reductions meant to address short-run liquidity constraints and (ii) delayed interest write-downs meant to address longer-run debt overhang.
Experimental Design Details
Randomization Method
Computer
Randomization Unit
Client-level
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
78,438 borrowers assigned to 1,099 different counselors
Sample size: planned number of observations
78,438 borrowers assigned to 1,099 different counselors
Sample size (or number of clusters) by treatment arms
Treatment: 38,583 borrowers
Control: 39,855 borrowers
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Study has received IRB approval. Details not available.
IRB Approval Date
Details not available
IRB Approval Number
Details not available
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials