Выбор редакции

Do Neighborhoods Affect Credit Market Decisions of Low-Income Borrowers? Evidence from the Moving to Opportunity Experiment -- by Sarah Miller, Cindy K. Soo

This paper provides new evidence on the role of neighborhood in the financial decisions and outcomes of low-income borrowers. We link participants in the Moving to Opportunity experiment to credit reports and "alternative" credit bureau data that tracks payday loan usage. We find that participants who were randomly selected to receive a voucher experienced better access to credit in adulthood; we also find evidence that, among some subgroups, moving to a lower poverty neighborhood reduced payday loan usage and delinquency behavior. We explore the mechanisms underlying our results by investigating the credit market behavior of peers, the presence of banks and payday loan stores, and approval rates in the neighborhoods in which MTO participants live as adults. Our analysis suggests that the presence of payday loan stores and peer behavior play an important role in the observed improvements in credit market outcomes.