Abstract
We contribute to the modest amount of existing empirical research on the fringe banking industry by examining the effects of two jurisdiction-specific restrictive regulations on the supply of pawn loans. Controlling for poverty levels, education levels, and population density, state-by-state data presented in this paper from the 51 political jurisdictions in the United States suggests considerable effects in expected ways on five aspects of supply from the two regulations. More specifically, the study provides support for the suggestion that interest rate ceilings and a requirement to return excess proceeds from the sale of collateral items tend to reduce the number of store hours, loan/value ratios, the number of very small loans made, and the number of existing pawnshops.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bastiat, F (1964) Selected essays on political economy (S. Cain, Trans), Irvington-on-Hudson, New York: Foundation for Economic Education, (Original work published in 1845)
Benson, B (2002, June) Regulatory disequilibrium and inefficiency: The case of interstate trucking. Rev Austr Econ 15:229–255
Caskey, JP (1991, February) Pawnbroking in america: the economics of a forgotten credit market. J Money, Credit and Bank 23:85–99
Caskey, JP (1994) Fringe banking: check-cashing outlets, pawnshops, and the poor, New York: Russell Sage Foundation
Caskey, JP (1997) Lower income americans, Higher cost financial services, Madison, Wisconsin: Fil Res Ins
Johnson, RW, Johnson, DP (1998) Pawnbroking in the U.S.: A profile of customers, Washington, District of Columbia: Georgetown University School Business, Credit Research Center
Kirzner, IM (1985) Discovery and the capitalist process, Chicago: University of Chicago
Obrien-Strain, M, MaCurdy, T (2000) Increasing the minimum wage: California’s winners and losers, San Francisco: Public Policy Institute of California
Staten, ME, Johnson, RW (1995) The Case for deregulating interest rates on consumer credit, West Lafayette, Indiana: Purdue University Krannert Graduate School of Management Credit Research Center
Tucker, W (1990) The excluded americans: homelessness and housing policy, Chicago: Regnery
US Pawnshop Directory (2003) Retrieved June 1, 2003 from http://www.uspawnshopdirectory.com/maillist.php
Vedder, R, Gallaway, L (1993) Out of work: unemployment and government in twentieth-century America, New York: Holmes and Meier
Author information
Authors and Affiliations
Corresponding author
Additional information
An erratum to this article is available at http://dx.doi.org/10.1007/s10693-006-0125-2.
Rights and permissions
About this article
Cite this article
Shackman, J.D., Tenney, G. The Effects of Government Regulations on the Supply of Pawn Loans: Evidence from 51 Jurisdictions in the U.S.. J Finan Serv Res 30, 69–91 (2006). https://doi.org/10.1007/s10693-006-8740-5
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10693-006-8740-5