Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: May, 2024, Volume 92, Issue 3

A Demand Curve for Disaster Recovery Loans
p. 713-748

Benjamin Collier, Cameron Ellis

We estimate and trace a credit demand curve for households that recently experienced damage to their homes from a natural disaster. Our administrative data include over one million applicants to a federal recovery loan program for households. We estimate extensive‐margin demand over a large range of interest rates. Our identification strategy exploits 24 natural experiments, leveraging exogenous, time‐based variation in the program's offered interest rate. Interest rates meaningfully affect consumer demand throughout the distribution of rates. On average, a 1 percentage point increase in the interest rate reduces loan take‐up by 26%. We find a large impact of applicants' credit quality on demand and evidence of monthly payment targeting. Using our estimated demand curve and information on program costs, we find that the program generates an average social surplus of $2900 per borrower.

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Supplemental Material

Supplement to "A Demand Curve for Disaster Recovery Loans"

Benjamin L. Collier and Cameron M. Ellis

This supplemental appendix contains material not found within the manuscript.

Supplement to "A Demand Curve for Disaster Recovery Loans"

Benjamin L. Collier and Cameron M. Ellis

The replication package for this paper is available at The authors were granted an exemption to publish their data because either access to the data is restricted or the authors do not have the right to republish them. However, the authors included in the package a simulated or synthetic dataset that allows running their codes. The Journal checked the synthetic/simulated data and the codes for their ability to generate all tables and figures in the paper and approved online appendices. However, the synthetic/simulated data are not designed to reproduce the same results.

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