Financial decisions of households
Author(s)
Jambulapati, Vikram
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Other Contributors
Sloan School of Management.
Advisor
Antoinette Schoar.
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Left-digit bias refers to the tendency of individuals to focus attention on the leftmost digit of numerical information when making decisions. This paper tests for the existence of left-digit bias in the consumer credit card market. Using a regression-discontinuity design, I find sharp increases in credit card repayments around $1,000 monthly balance thresholds. The estimated effect, an approximately $20 increase in repayment, translates to about 4.35 percent of the average payment. However, I find smaller effects on future repayment behavior and the amount of future purchases. Finally, I find the effect to be stronger in higher self-reported income groups..
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2017. Cataloged from PDF version of thesis. Includes bibliographical references (pages 22-23).
Date issued
2017Department
Sloan School of ManagementPublisher
Massachusetts Institute of Technology
Keywords
Sloan School of Management.