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The result of Cash Advance Regulations on Financial Well-Being

By |octobre 12th, 2020|

The result of Cash Advance Regulations on Financial Well-Being

The effect of access to payday loans on economic well-being is ambiguous from a theoretical perspective. Neoclassical models claim that customers utilize payday advances if they are better than the available options. Such models mean that restricting access would make consumers worse necessarily off. Having said that, behavioral types of pay day loan usage mean that current bias, overoptimism, or other cognitive biases can cause customers to obtain pay day loans even though doing this is suboptimal, as judged by their very own choices. If such models accurately describe behavior, restricting use of payday advances will make consumers best off. […]