The consequence of Cash Advance Bans on Cash Advance Utilize
Before presenting our results that are main we measure the comparability of this therapy and control states. State policy toward payday advances is certainly not determined arbitrarily; the choices of legislatures or courts to permit or ban loans that are payday be determined by facets which can be correlated with all the behavior of borrowers when you look at the state. As an example, growing anti-AFS loan belief in a situation may simultaneously cause borrowers to avoid making use of such loans and politicians to pass through legislation against them. 18
One good way to investigate this presssing problem is through taking a look at preperiod styles within the two groups of states. It might suggest that the changes in policy are confounded by secular trends in AFS usage if we observe that demand for AFS borrowing in prior years increases or decreases in the treatment states relative to the control states. Although we can’t straight gauge the parallel-trends presumption by which our difference-in-differences design relies, watching differences that are important the pretreatment styles might claim that the styles differed into the therapy duration aswell. Continue reading