CInSt Research Seminar "Measuring the welfare effects of adverse selection in consumer credit markets": Constantine Yannelis (University of Chicago)

Abstract
Adverse selection is known in theory to lead to inefficiently low credit provision, yet empirical estimates of the resulting welfare losses are scarce. This paper leverages a randomized experiment conducted by a large fintech lending platform to estimate the welfare losses arising from selection in the market for online consumer credit. We show how simple methods from the insurance literature can be adapted to the case of credit markets and apply those methods to estimate welfare losses in this market. While adverse selection leads to large equilibrium price distortions, we find only small overall welfare losses, particularly for high-credit-score borrowers.

​Time: 18:10-19:30 (UTC+3).  
Location:  Online in Zoom
Working language: English.    
The link to join   Zoom:  https://zoom.us/j/7488279147
Here is the instruction about how to join the seminar in    Zoom: https://cinst.hse.ru/en/news/350230570.html

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