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Randomized Debt Restructuring Experiment
Last registered on November 15, 2019

Pre-Trial

Trial Information
General Information
Title
Randomized Debt Restructuring Experiment
RCT ID
AEARCTR-0005045
Initial registration date
November 15, 2019
Last updated
November 15, 2019 11:53 AM EST
Location(s)
Region
Primary Investigator
Affiliation
Other Primary Investigator(s)
PI Affiliation
Money Management International
Additional Trial Information
Status
Completed
Start date
2003-01-01
End date
2019-11-01
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.
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)
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
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers