Empirical Analyses of Markets for Consumer Financial Products and their Effects

This proposal presents three broad projects on information frictions in households' credit markets and on theconsequences of these frictions for durable good markets. Specifically, an influential theoretical literature ininformation economics has shown that borrowing constraints can arise in equilibrium when borrowers andlenders have asymmetric information about borrowers' risks. Hence, the first project aims to provide the firstempirical analyses of markets (i.e., demand and supply) with asymmetric information and nonexclusivetrades---i.e., markets in which households can purchase multiple insurance contracts, such as in lifeinsurance markets, or can open multiple credit lines, such as in credit card markets. The second project aimsto study recent regulations of fees and prices in markets for consumer financial products, such as mortgages,that could have the unintended consequences of increasing households' cost of credit and, thus, of tighteningtheir borrowing constraints. Finally, the third project aims to study the role of borrowing constraints indurable goods markets, with a special focus on car markets during the Great Recession.All these projects aim to develop and estimate structural models using data from different markets. I furtherplan to use the estimated structural parameters to perform counterfactual policy analyses in each of thespecific markets analyzed in these projects.