NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Luis Opazo

Chilean Banking Association

E-Mail: Lopazo@abif.cl
Institutional Affiliation: Chilean Banking Association

NBER Working Papers and Publications

September 2018The Equilibrium Effects of Information Deletion: Evidence from Consumer Credit Markets
with Andres Liberman, Christopher Neilson, Seth Zimmerman: w25097
This paper studies the equilibrium effects of information restrictions in credit markets using a large-scale natural experiment. In 2012, Chilean credit bureaus were forced to stop reporting defaults for 2.8 million individuals (21% of the adult population). Using panel data on the universe of bank borrowers in Chile combined with the deleted registry information, we implement machine learning techniques to measure changes in the predictions lenders can make about default rates following deletion. Deletion lowers (raises) predicted default the most for poorer defaulters (non-defaulters) with limited borrowing histories. Using a difference-in-differences design, we show that individuals exposed to increases in predicted default reduce borrowing by 6.4% following deletion, while those expose...
 
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