Household Credit Usage

The field of household finance seeks to understand how households use financial instruments.  Financial economists have long studied how corporations utilize financial instruments, yet relatively little is understood about how individual consumers and households utilize various credit alternatives in managing their consumption and savings objectives.  However, with the increasing interest in issues surrounding behavioral finance, research into household financial decision making processes is becoming increasingly important. In response to the growing interest in household finance, this book contains a collection of essays by leading researchers studying issues involving household and consumer use of credit instruments.  This collection, featuring a foreword by John Y. Campbell, will provide readers with a greater understanding of what is currently known about household credit utilization and suggest possible areas for future research. 

Sumit Agarwal, Ph.D.  is a financial economist in the research department at the Federal Reserve Bank of Chicago.  His research interests include issues relating to household finance, as well as corporate finance, financial institutions and capital markets.  His research has been published in the Journal of Money, Credit and Banking, Journal of Financial Intermediation, Journal of Housing Economics and Real Estate Economics.  Prior to joining the Chicago Fed in July 2006, Agarwal was a Senior Vice President and Credit Risk Management Executive in the Small Business Risk Solutions Group of Bank of America. He also served as an adjunct professor in the finance department at the George Washington University. Agarwal received a Ph.D. from the University of Wisconsin-Milwaukee.
 
Brent W. Ambrose, Ph.D.  is the Jeffery L. and Cindy M. King Faculty Fellow in Business and Professor of Real Estate at the Pennsylvania State University.  Prior to joining Penn State University, Dr. Ambrose was the Director of the Center for Real Estate Studies and Professor of Finance at the University of Kentucky where he held the Kentucky Real Estate Professorship.  In addition, Dr. Ambrose was an Associate Professor at the University of Wisconsin-Milwaukee where he directed the UWM real estate program and from 1997 to 1998 he was a Visiting Associate Professor and Research Fellow at the University of Pennsylvania Wharton School of Business. Dr. Ambrose served as the Executive Vice President of the American Real Estate and Urban Economics Association from 1996 to 2003 and in 2003 was elected a Fellow of the Weimer School of Advanced Studies in Real Estate and Land Economics at the Homer Hoyt Advanced Studies Institute. In 2004, he was elected a Fellow of the Real Estate Research Institute and in 2006 he was appointed a Fellow of the FDIC Center for Financial Research.  Currently, Dr. Ambrose serves on the editorial boards of the Journal of Real Estate Finance and Economics, the Journal of Real Estate Research, and Real Estate Economics, and is a member of the board of directors for the Real Estate Research Institute and the American Real Estate and Urban Economics Association.

Foreword by John Y. Campbell * PART I: INTRODUCTION * Household Finance and the Financial Decision-Making Process–Sumit Agarwal and Brent W. Ambrose * PART II: HOUSEHOLD CREDIT: DEMAND AND SUPPLY * Recent Developments in the Credit Card Market and the Financial Obligations Ratio–Kathleen Johnson * Household Credit Counseling–Robert Hunt * Household Bankruptcy Decision–Andreas Lehnert and Dean Maki * PART III: HOUSEHOLD USE OF PERSONAL CREDIT * Consumer Lines of Credit: The Choice between Credit Cards and Home Equity Lines of Credit–Subhasis Dey and Lucia Dunn * Automobile Loans and Information Asymmetry–Sumit Agarwal, Brent W. Ambrose, and Souphala Chomsisengphet * Introductory Credit Card Interest Rates and Balance Switching Behavior of Cardholders–Tufan Ekici and Lucia Dunn * Do Personal and Business Credit Mix? An Examination of Family Owned Businesses–Grace Kim * Debit Cards and Consumer Credit and Debt–Marc Fusaro * Linkages between Consumer Payments and Credit–Sujit Chakravorti * Payday Lending: Industry Structure and Policy Implications–Katherine Samolyk * PART IV: HOUSEHOLD USE OF MORTGAGE DEBT * Is Buying Really Better than Renting?–Tsur Somerville and Paulina Teller * Choosing between Fixed and Adjustable Rate Mortgages–Monica Paiella and Alberto Pozzolo * Sub-Prime Borrowers and Interest Rates–Souphala Chomsisengphet and Anthony Pennington-Cross * Synthesis of Issues Surrounding Borrower Prepayment and Default in Residential Mortgages–Michael LaCour-Little * PART V: REGULATORS’ PROSPECTIVE OF CONSUMER CREDIT * Statistical Analysis and Modeling for Fair Lending and Compliance: The OCC’s Perspective–Mark Pocock, Irene Fang and Jason Dietrich