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We unearthed that 72% of our participants received notably less relief than their total debts that are eligible

We unearthed that 72% of our participants received notably less relief than their total debts that are eligible

Reverse causality is yet another confound that is potential since specific actions such as for example risk aversion and time choices could figure out indebtedness, as opposed to the reverse. We are able to rule down reverse causality since the noticeable alterations in financial obligation we learned resulted from exogenously provided credit card debt relief. But, our estimate of this aftereffects of debt settlement may be biased if debt settlement is strongly correlated with initial debts.

To address this, To address this show that is we the debt relief choices produced by social employees lead to significant variation, in order that more indebted individuals would not always get more relief. We discovered that 72% of y our participants received much less relief than their total debts that are eligible and, general, credit card debt relief quantities had been just reasonably correlated (0.55) with initial financial obligation amounts. On average, relief given had been SGD 3,709 significantly less than total debts that are eligible while the SD of this huge difference was SGD 7,293. As an additional robustness check, we excluded individuals who’d all qualified debts relieved (SI Appendix, Table S9) and discovered broadly similar outcomes.

Next, we considered liquidity constraints as an explanation that is alternative Highly indebted individuals may show current bias and danger aversion because having cash at your fingertips is more essential if it is hard to borrow (13).

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