Working Papers
[June 2025: New Draft!] Liquidity Based Contracting: A Path to Greater Efficiency in Payday Lending [Job Market Paper]
Presented at: Columbia Business School ● Consumer Finance Protection Bureau x2 ● Federal Reserve Bank of Philadelphia x2 ● Federal Reserve Board x2 ● Georgia Tech, Scheller ● Stockholm School of Economics ● Office of Financial Research, Treasury ● Federal Deposit Insurance Corporation ● AFFECT ● Federal Reserve Bank of Atlanta ● WFA 2024: Early Career Women in Finance Conference ● Junior Household Finance Seminar Series x2● Morehouse College Research Colloquium
The \$15 billion payday loan market is criticized for high prices and frequent renewals. I study how borrower welfare can improve by examining these criticisms. Using transaction data, I show borrowers use payday loans to smooth income shocks and often renew to cover essentials, not fund discretionary spending. These facts motivate a short-term lending model where the equilibrium contract endogenously replicates real payday loans when borrowers have low expected income and high volatility, and lenders gain ex-post pricing power in an ex-ante competitive market. A counterfactual contract with lower rollover and higher final fees increases borrower welfare without reducing profit.
[June 2025: New!] Stacked and Matched DiDs: An Application to Bank Fees and Household Financial Well-Being (joint with Michaela Pagel and Emily Williams)
We introduce a new event study estimator for settings with multiple treatments of varying intensity. We use stacked regressions that, for each treatment event, match the intensity distribution of prior treatments between treated and control groups. Beyond establishing the theoretical foundation of our estimator, we apply it in a setting looking at U.S. bank-initiated changes in depositor fee policies. We first use simulated data to show that our estimator outperforms staggered designs and other common stacked approaches that use never- or not-yet-treated units as the control group. We then show the differences in the estimated effects on household financial well-being.
Social Funding of Emergency Healthcare to Uninsured Patients (joint with Ujjal Mukherjee and Sridhar Seshadri)
[previously circulated as Efficient Mechanism for Joint Allocation of Social Funding of Emergency and Primary Healthcare Delivery to Uninsured Patient Populations]
Presented at: Purdue University ● Columbia Business School ● UIUC
For the past 35 years, uninsured emergency care has been primarily federally funded through Medicaid's Disproportionate Share Hospital (DSH) payments, which totaled $16b in 2023. This paper models and estimates the inefficiencies of the competitive DSH mechanism. We find that the number of patients that receive emergency care is tied to the funding through the marginal cost of care inflated by the share of all other hospitals. Hospitals make relatively smaller capacity increases per additional dollar received, while more efficient and more profitable hospitals get more DSH funds. Less profitable hospitals are disfavored in a spiraling manner: receiving less DSH compensation limits their ability to expand capacity, which in turn further reduces their share of future DSH payments. After calibrating and validating our model with hospital-level financial and operations data, our counterfactual analysis shows that an alternative direct reimbursement mechanism, based on actual costs, reduces the loss of social welfare by 15% to 30%, equivalent to between $80m and $700m in savings. Finally, we find DSH savings come from exactly those more profitable hospitals.
Work-in-progress
Introducing Installment Loans: Low-Income Borrower Behavior and Welfare (joint with Robert A. Farrokhnia and Michaela Pagel)
Presented at: Columbia Business School
How does low-income borrower behavior and welfare vary with the design and duration of a short term, small dollar contact? In the U.S. there is a recent trend of traditional payday lenders newly offering installment loans, which have higher principal amounts, and a higher frequency of smaller payments over a longer contract term. However, even given the controversial nature of payday lending, the impact of this shift on borrowers has not been studied. For identifi cation, we use a 2019 policy change in Florida, which allows payday lenders to offer installment loans as a new product. Using daily transaction level data of U.S. households, provided by a non-pro t Fintech app, we utilize a differences-in-differences (DID) methodology. We find that after the policy is enacted, there are a higher number of repayments, per loan extended, and when given the option, borrowers are choosing installment lending over traditional payday loans.
Bank Fees and Household Financial Well Being (joint with Michaela Pagel and Emily Williams) [Draft upon request]
Presented at: Junior Household Finance Seminar Series ● Georgia Tech, Scheller ● 2025 Boulder Colorado Consumer Finance Conference (Poster)