How important are peer effects in group lending?: Estimating a static game of incomplete information
We quantify the importance of peer effects in group lending by estimating a static game of incomplete information. In our model, group members make their repayment decisions simultaneously based on their household and loan characteristics as well as their expectations of other members’ repayment dec...
| Main Authors: | , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2009
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/161876 |
| _version_ | 1855536023906287616 |
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| author | Li, Shanjun Liu, Yanyan Deininger, Klaus |
| author_browse | Deininger, Klaus Li, Shanjun Liu, Yanyan |
| author_facet | Li, Shanjun Liu, Yanyan Deininger, Klaus |
| author_sort | Li, Shanjun |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | We quantify the importance of peer effects in group lending by estimating a static game of incomplete information. In our model, group members make their repayment decisions simultaneously based on their household and loan characteristics as well as their expectations of other members’ repayment decisions. By exploiting a rich data set of a group lending program in India, our estimation results suggest that the probability of a member’s making a full repayment would be 15 percentage points higher if all the fellow members were to make full repayment, compared with a scenario in which none of the fellow members were to repay in full. We also find that large inconsistencies exist in the estimated effects of other variables in models that do not incorporate peer effects and control for unobserved group heterogeneity. |
| format | Artículo preliminar |
| id | CGSpace161876 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2009 |
| publishDateRange | 2009 |
| publishDateSort | 2009 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1618762025-11-06T07:18:08Z How important are peer effects in group lending?: Estimating a static game of incomplete information Li, Shanjun Liu, Yanyan Deininger, Klaus lending microfinance debt servicing We quantify the importance of peer effects in group lending by estimating a static game of incomplete information. In our model, group members make their repayment decisions simultaneously based on their household and loan characteristics as well as their expectations of other members’ repayment decisions. By exploiting a rich data set of a group lending program in India, our estimation results suggest that the probability of a member’s making a full repayment would be 15 percentage points higher if all the fellow members were to make full repayment, compared with a scenario in which none of the fellow members were to repay in full. We also find that large inconsistencies exist in the estimated effects of other variables in models that do not incorporate peer effects and control for unobserved group heterogeneity. 2009 2024-11-21T09:59:02Z 2024-11-21T09:59:02Z Working Paper https://hdl.handle.net/10568/161876 en Open Access application/pdf International Food Policy Research Institute Li, Shanjun; Liu, Yanyan; Deininger, Klaus. 2009. How important are peer effects in group lending? IFPRI Discussion Paper 940. https://hdl.handle.net/10568/161876 |
| spellingShingle | lending microfinance debt servicing Li, Shanjun Liu, Yanyan Deininger, Klaus How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title | How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title_full | How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title_fullStr | How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title_full_unstemmed | How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title_short | How important are peer effects in group lending?: Estimating a static game of incomplete information |
| title_sort | how important are peer effects in group lending estimating a static game of incomplete information |
| topic | lending microfinance debt servicing |
| url | https://hdl.handle.net/10568/161876 |
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