Your PDF has successfully downloaded.
You are not currently logged in.
Access JSTOR through your library or other institution:
Relationships and Rationing in Consumer Loans
Sugato Chakravarty and James S. Scott
The Journal of Business
Vol. 72, No. 4 (October 1999), pp. 523-544
Published by: The University of Chicago Press
Stable URL: http://www.jstor.org/stable/10.1086/209626
Page Count: 22
You can always find the topics here!Topics: Mortgage loans, Lenders, Loan rates, Bank loans, Loans, P values, Rationing, Consumer loans, Credit rationing, Business structures
Were these topics helpful?See something inaccurate? Let us know!
Select the topics that are inaccurate.
We empirically examine how relationships between individual households and their creditors affect the probability of being credit‐rationed. Using a data set where the credit‐rationing of individual households is observed directly, we show that relationship duration and the number of activities between a family and a potential lender significantly lower the probability of being credit‐rationed. Additionally, we examine the relative role of relationships in determining the interest rates of two consumer loans—a mortgage loan and a “special purposes” loan—and show that mortgage loan rates are driven less by relationship factors than the special purposes loan rates.
© 1999 by The University of Chicago. All rights reserved.