Loan forbearance takeup in the Covid-era - the role of time preferences and locus of control

Berlinger, Edina ORCID: https://orcid.org/0000-0002-8264-0823, Kiss, Hubert János and Khayouti, Sára (2022) Loan forbearance takeup in the Covid-era - the role of time preferences and locus of control. Finance Research Letters, 50 . DOI https://doi.org/10.1016/j.frl.2022.103250

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Official URL: https://doi.org/10.1016/j.frl.2022.103250

Open access

Abstract

During the COVID-19 pandemic, many countries eased the burden on borrowers through loan forbearance. Using a representative sample of the Hungarian adult population, we investigate whether time preferences and locus of control are associated with loan forbearance takeup. We find evidence that time discounting correlates with the resort to forbearance: ceteris paribus, more patient individuals are less likely to take up forbearance, even after controlling for their present/future bias, risk aversion, locus of control, demographic characteristics, educational level, financial status, and the effects of the pandemic. However, present bias and locus of control are not significantly associated with loan forbearance.

Item Type:

Article

Uncontrolled Keywords:

loan forbearance, locus of control, present bias, time discounting, time preferences

JEL classification:

G41 - Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
G51 - Household Saving, Borrowing, Debt, and Wealth

Subjects:

Finance

DOI:

https://doi.org/10.1016/j.frl.2022.103250

ID Code:

7576

Deposited By:

MTMT SWORD

Deposited On:

23 Aug 2022 13:04

Last Modified:

23 Aug 2022 13:04