Fuzzy math, disclosure regulation, and market outcomes: Evidence from truth-in-lending reform

Review of Financial Studies

Volumn 24, Issue 2, 2011, Pages 506-534

  Stango, Victor ^a   Zinman, Jonathan ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b Dartmouth College   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79251486031     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/rfs/hhq089     Document Type: Article

References (57)

1. Adams,W., L. Einav, and J. Levin. 2009. Liquidity Constraints and Imperfect Information in Subprime Lending. American Economic Review 99:49-84.
2. Angell, F. 1971. Some Effects of the Truth-in-Lending Legislation. Journal of Business 44:78-85.
3. Arnott, D. R. 2006. Cognitive Biases and Decision Support Systems Development: A Design Science Approach. Information Systems Journal 16:55-78.
4. Attanasio, O. P., P. K. Goldberg, and E. Kyriazidou. 2008. Credit Constraints in the Market for Consumer Durables: Evidence from Micro Data on Car Loans. International Economic Review 49:401-436.
5. Avery, R., G. Canner, G. Elliehausen, and T. Gustafson. 1984. Survey of Consumer Finances 1973: A Second Report. Federal Reserve Bulletin 70:857-68.
6. Barefoot, J. A. 1990. Watch Out for Number One. ABA Banking Journal 82:71-80.
7. Bernheim, D. 1995. Do Households Appreciate Their Financial Vulnerabilities? An Analysis of Actions, Perceptions, and Public Policy. Tax Policy and Economic Growth. Washington, D.C., American Council for Capital Formation.
8. -. 1998. Financial Illiteracy, Education, and Retirement Saving. In Living with Defined Contribution Pensions, ed. O. Mitchell and S. Schieber. Philadelphia: University of Pennsylvania Press.
9. Bertrand, M., D. Karlan, S. Mullainathan, E. Shafir, and J. Zinman. 2010. What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment. Quarterly Journal of Economics 125:263-305.
10. Bertrand, M., and A. Morse. 2009. Information Disclosure, Cognitive Biases, and Payday Borrowing. Chicago Booth Research Paper No. 10-01.
11. Borenstein, S. 1985. Price Discrimination in Free-entry Markets. Rand Journal of Economics 16:380-97.
12. -. 1991. Selling Costs and Switching Costs: Explaining Retail Gasoline Margins. RAND Journal of Economics 22:354-69.
13. Boyd, W. 1981. The Truth-in-Lending Simplification and Reform Act-A Much-needed Revision Whose Time Has Finally Come-Part II." Arizona Law Review 23:549-79.
14. Brown, J., T. Hossain, and J. Morgan 2007. Shrouded Attributes and Information Suppression: Evidence from the Field. Working Paper, UC, Berkeley.
15. Busse, M., D. Simester, and F. Zettelmeyer. 2010. "The Best Price You'll Ever Get": The 2005 Employee Discount Pricing Promotions and the U.S. Automobile Industry. Marketing Science 29:268-90.
16. Cohen, M. 2007. Imperfect Competition in Auto Lending: Subjective Markup, Racial Disparity, and Class Action Litigation. Vanderbilt University Law School, Law and Economics Working Paper Number 07-01.
17. Day, G. S., and W. Brandt. 1974. Consumer Research and the Evaluation of Information Disclosure Requirements: The Case of Truth in Lending. Journal of Consumer Research 1:21-33.
18. Due, J. M. 1955. Consumer Knowledge of Installment Credit Charges. Journal of Marketing 20:162-66.
19. Durkin, T. 1975. Consumer Awareness of Credit Terms: Review and New Evidence. Journal of Business 48: 253-63.
20. Eisenstein, E., and S. Hoch. 2005. Intuitive Compounding: Framing, Temporal Perspective, and Expertise.Working Paper, Temple University. December. http://eric-eisenstein.com/papers/Eisenstein&Hoch-Compounding.pdf.
21. Elliehausen, G., and R. Kurtz. 1988. Scale Economies in Compliance Costs for Federal Consumer Credit Regulations. Journal of Financial Services Research 1:147-59.
22. Federal Reserve Board. 1981. Regulatory Analysis of Revised Regulation Z. Federal Register 46:20941-49.
23. Federal Trade Commission (various years). Annual Report.
24. Fonseca, J., and P. Fonseca. 1986. Handling Consumer Credit Cases, 3rd ed. Commercial Law Library, Thomson West.
25. Fortney, A. 1986. Consumer Credit Compliance and the Federal Trade Commission: Continuing the Process of Education and Enforcement. Business Lawyer 41:1013-22.
26. Fox, J., and E. Guy. 2005. Driven into Debt: CFA Car Title Loan Store and Online Survey. Consumer Federation of America. November.
27. Gabaix, X. and D. Laibson. 2006. Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets. Quarterly Journal of Economics 121:505-40.
28. General Accounting Office. 2004. Consumer Protection: Federal and State Agencies Face Challenges in Combating Predatory Lending. GAO-04-280. January.
29. Hastings, J., and J. Weinstein. 2008. Information, School Choice, and Academic Achievement: Evidence from Two Experiments. Quarterly Journal of Economics 123:1373-414.
30. Holmes, T. 1989. The Effects of Third-degree Price Discrimination in Oligopoly. American Economic Review 79:244-50.
31. Jackins, D., and C. Gates. 1990. How to Avoid TiL Reimbursements. ABA Banking Journal 82:34-37.
32. Jin, G., and P. Leslie. 2003. The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards. Quarterly Journal of Economics 118:409-51.
33. Jolls, C., and C. Sunstein. 2006. Strastegies for Debiasing Through Law. Journal of Legal Studies 35:199-241.
34. Juster, F. T., and R. Shay. 1964. Consumer Sensitivity to Finance Rates: An Empirical and Analytical Investigation. National Bureau of Economic Research Occasional Paper no. 88.
35. Karlan, D., and J. Zinman. 2008. Credit Elasticities in Less Developed Economies: Implications for Microfinance. American Economic Review 98:1040-1068.
36. Keest, K., and G. Klein. 1995. Truth in Lending, 3rd ed. The Consumer Credit and Sales Legal Practice Series. Boston, MA: National Consumer Law Center.
37. Kinsey, J., and R. McAlister. 1981. Consumer Knowledge of the Costs of Open-end Credit. Journal of Consumer Research 15:249-70.
38. Kroszner, R. 2007. Creating More Effective Consumer Disclosures. Speech at George Washington University. May 23.
39. Lusardi, A., and P. Tufano. 2009. Debt Literacy, Financial Experience, and Overindebtedness. March.
40. Mandell, L. 1971. Consumer Perception of Incurred Interest Rates: An Empirical Test of the Efficacy of the Truth-in-Lending Law. Journal of Finance 26:1143-53.
41. -. 1973. Knowledge and Understanding of Consumer Credit. Journal of Consumer Affairs 7:23-36.
42. Mathios, A. 2000. The Impact of Mandatory Disclosure Laws on Product Choices: An Analysis of the Salad Dressing Market. Journal of Law and Economics 43:651-77.
43. Moore, D. 2003. Survey of Financial Literacy inWashington State: Knowledge, Behavior, Attitudes, and Experiences. Technical Report 03-39, Social and Economic Sciences Research Center, Washington State University.
44. National Commission on Consumer Finance. 1972. Consumer Credit in the United States. Washington, D.C.: U.S. Government Printing Office.
45. Nelson, Phillip. 1970. Information and Consumer Behavior. Journal of Political Economy 78:311-29.
46. Parker, G., and R. Shay. 1974. Some Factors Affecting Awareness of Annual Percentage Rates in Consumer Installment Credit Transactions. Journal of Finance 29:217-25.
47. Peterson, C. 2003. Truth, Understanding, and High-cost Consumer Credit: The Historical Context of the Truth in Lending Act. Florida Law Review 55:807-903.
48. Pridgen, D. 1990. Consumer Credit and the Law. New York: Thomson West.
49. Rubin, E. 1991. Legislative Methodology: Some Lessons from the Truth-in-Lending Act. Georgetown Law Journal 80:233-307.
50. Salop, S., and J. Stiglitz. 1977. Bargains and Ripoffs: A Model of Monopolistically Competitive Price Dispersion. Review of Economic Studies 44:493-510.
51. Shaffer, S. 1999. The Competitive Impact of Disclosure Requirements in the Credit Card Industry. Journal of Regulatory Economics 15:183-98.
52. Shepherd, A. 1991. Price Discrimination and Retail Configuration. Journal of Political Economy 99:30-53.
53. Simmons, C., and J. Lynch Jr. 1991. Inference Effects Without Inference Making? Effects of Missing Information on Discounting and Use of Presented Information. Journal of Consumer Research 17:477-91.
54. Stango, V., and J. Zinman. 2009. Exponential Growth Bias and Household Finance. Journal of Finance 64: 2807-49.
55. Surowiecki, J. 2005. The Wisdom of Crowds. New York: Random House.
56. Walter, J. 1995. The Fair Lending Laws and Their Enforcement. Federal Reserve Bank of Richmond Economic Quarterly 81:61-77.
57. Willenzik, D., and E. Schmelzer. 1981. Truth in Lending Activities During 1980. Business Lawyer 36:1133-60.