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Extreme weather and low-income household finance: evidence from payday loans
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| Authors and Corporations: | , , |
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| Other Authors: | Xie, Victoria Wenxin [Author] • Zhang, Xu [Author] |
| Edition: | Last updated: January 8, 2024 |
| Type of Resource: | E-Book |
| Language: | English |
| published: | |
| Series: |
Bank of Canada: Staff working paper ; 2024, 1
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| Subjects: | |
| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Summary: | This paper explores the impact of extreme weather exposures on the financial outcomes of low-income households. Using a novel dataset comprising individual-level payday loan applications and loan-level information, we find that extreme temperature days-both hot and cold-lead to surges in demand for payday loans. An increase in the number of days with extreme heat results in an increase in delinquency and default rates and a reduction of total credit issued, indicating a contraction in loan supply. These effects are especially noticeable for online payday loans. Our findings highlight the heightened financial vulnerability of low-income households to environmental shocks and underscore the need for targeted policies. |
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| Physical Description: | 1 Online-Ressource (circa 61 Seiten); Illustrationen |
| DOI: | 10.34989/swp-2024-1 |