Are High-Interest Loans Predatory? Theory and Evidence from Payday Lending

We thank Xavier Gabaix, David Laibson, Adair Morse, Manisha Padi, Paige Skiba, Jeremy Tobacman, and seminar participants at Berkeley, the California Department of Financial Protection and Innovation, the CFPB Research Conference, Cornerstone Research, Harvard, Harvard Business School, the IPA Financial Inclusion Conference, the London School of Economics, NBER Public Economics Meeting, Northwestern, Opportunity Insights, Stanford, Stanford Institute for Theoretical Economics, Stockholm University, the UK Financial Conduct Authority, University of Copenhagen, and Uppsala for helpful feedback. We thank the Sloan Foundation for grant funding. We are grateful to Raj Bhargava, Surya Ierokomos, Eric Koepcke, and Afras Sial for outstanding research assistance, to Melissa Horste and Innovations for Poverty Action for dedicated project management, and to employees of the partner payday lender for their collaboration on the project. Our Memorandum of Understanding with the lender allowed us to publish this research without prior review by the lender and granted zero editorial control to the lender. The experiment was registered in the American Economic Association Registry for randomized trials (trial ID AEARCTR-0003043, available from www.socialscienceregistry.org/trials/3043) and was approved by Institutional Review Boards at NYU (protocol number FY2018-1997), Stanford (#46136), and IPA (#14663). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• online appendix and replication files