Liquidity Constraints and Imperfect Information in Subprime Lending

We present new evidence on consumer liquidity constraints and the credit market conditions that might give rise to them. Our analysis is based on unique data from a large auto sales company that serves the subprime market. We first document the role of short-term liquidity in driving purchasing behavior, including sharp increases in demand during tax rebate season and a high sensitivity to minimum down payment requirements. We then explore the informational problems facing subprime lenders. We find that default rates rise significantly with loan size, providing a rationale for lenders to impose loan caps because of moral hazard. We also find that borrowers at the highest risk of default demand the largest loans, but the degree of adverse selection is mitigated substantially by effective risk-based pricing.

Learning from Seller Experiements in Online Markets

The internet has dramatically reduced the cost of varying prices, dis- plays and information provided to consumers, facilitating both active and passive experimentation. We document the prevalence of targeted pricing and auction design variation on eBay, and identify hundreds of thousands of experiments con- ducted by sellers across a wide array of retail products. We show how this type of data can be used to address questions about consumer behavior and market outcomes, and provide illustrative results on price dispersion, the frequency of over-bidding, the choice of reserve prices, ?buy now?options and other auction design parameters, and on consumer sensitivity to shipping fees. We argue that leveraging the experiments of market participants takes advantage of the scale and heterogeneity of online markets and can be a powerful approach for testing and measurement.

Empirical Industrial Organization: A Progress Report

The field of Industrial Organization has made dramatic advances over the last few decades in developing empirical methods for analyzing imperfect competition and the organization of markets. We describe the motivation for these developments and some of the successes. We also discuss the relative emphasis that applied work in the field has placed on economic theory relative to statistical research design, and the possibility that a focus on methodological innovation has crowded out applications. We offer some suggestions about how the field may progress in coming years.

Contract Pricing in Consumer Credit Markets

We analyze subprime consumer lending and the role played by down payment requirements in screening high-risk borrowers and limiting defaults. To do this, we develop an empirical model of the demand for financed purchases that incorporates both adverse selection and repayment incentives. We estimate the model using detailed transaction-level data on subprime auto loans. We show how different elements of loan contracts affect the quality of the borrower pool and subsequent loan performance. We also evaluate the returns to credit scoring that allows sellers to customize financing terms to individual applicants. Our approach shows how standard econometric tools for analyzing demand and supply under imperfect competition extend to settings in which firms care about the identity of their customers and their postpurchase behavior

Beyond Testing: Empirical Models of Insurance Markets

We describe recent advances in the empirical analysis of insurance markets. This new research proposes ways to estimate individual demand for insurance and the relationship between prices and insurer costs in the presence of adverse and advantageous selection. We discuss how these models permit the measurement of welfare distortions arising from asymmetric information and the welfare consequences of potential government policy responses. We also discuss some challenges in modeling imperfect competition between insurers, and outline a series of open research questions.

Consumer behavior in online shopping is affected by sales tax

Profits from the sales tax make up a large percentage of overall revenues in many states, making the estimated $10 billion lost each year to tax-free internet purchases particularly concerning. Liran Einav, Dan Knoepfle, Jonathan Levin, and Neel Sundaresan examine just how much the presence (or lack thereof) of a sales tax influences consumer behavior. He finds that online purchasing goes up by 1-2 percent for each percentage point increase in the state sales tax, and that an online sales tax does lead to a decline in purchases

The rise of mobile devices has done little to change how we shop online, at least for now

In recent years, smartphones have changed the way that we interact with the web – and each other. But have they changed the way that we shop online? In a recent study of internet and mobile eBay transactions, Liran Einav, John Levin, Igor Popov and Neel Sundaresan, find that mobile adopters tended to be heavy eBay users, and tended to buy more using their mobiles, while their non-mobile purchases stayed largely the same. They also find that their mobile shopping behaviors in terms of prices and products are little different to those on eBay’s internet site

Learning from Seller Experiments in Online Markets

The internet has dramatically reduced the cost of varying prices, displays and information provided to consumers, facilitating both active and passive experimentation. We document the prevalence of targeted pricing and auction design variation on eBay, and identify hundreds of thousands of experiments conducted by sellers across a wide array of retail products. We show how this type of data can be used to address questions about consumer behavior and market outcomes, and provide illustrative results on price dispersion, the frequency of over-bidding, the choice of reserve prices, "buy now" options and other auction design parameters, and on consumer sensitivity to shipping fees. We argue that leveraging the experiments of market participants takes advantage of the scale and heterogeneity of online markets and can be a powerful approach for testing and measurement.

Periodontal status among adolescents in Georgia. A pathfinder study

Objectives. The aim of the present pathfinder study was to screen and map the periodontal status of Georgian population in accordance with the guidelines of the World Health Organization for population based surveys. Methods. During 2012, a pathfinder study was conducted to collect this data. For the periodontal portion of the study, 15-year-old school children were examined in the capital city of Tbilisi as well as in two other large cities and 4 smaller villages. All participants were examined by a trained dental team in a classroom using a dental mirror and a periodontal probe. Periodontal examination included plaque scores, calculus scores, probing depth measurements and bleeding on probing. These measurements were recorded for the Ramfjord index teeth. Results. A total of 397 15-year-old participants were examined in this pathfinder study. There were 240 females (60.45%) and 157 males (39.55%). Of the total participants 196 (49.37%) were urban adolescents while 201 (50.63%) were from rural communities. Mean probing depth was 3.34 ± 0.57 mm with a range of 1 to 10 mm; a relatively high proportion (34.26%) of these subjects presented with at least one site with pockets of 5 mm or deeper. Males presented with greater plaque, calculus and probing depths than females. When urban and rural populations were compared, urban participants presented with more plaque, probing depths and bleeding on probing. Greater pocket depths were found to be related to the presence of plaque calculus and bleeding on probing. Conclusions. Overall, rather high incidences of periodontal pockets ≥ 5 mm were detected in this population. This data should serve to prepare further more detailed epidemiological studies that will serve to plan and implement prevent and treat strategies for periodontal diseases in Georgia and also help make manpower decisions