The result of Cash Advance Bans on Cash Advance Utilize
Before presenting our primary results, we measure the comparability associated with therapy and control states. State policy toward pay day loans is certainly not determined arbitrarily; the choices of legislatures or courts to permit or ban loans that are payday be determined by facets which are correlated aided by the behavior of borrowers into the state. As an example, growing loan that is anti-AFS in a situation may simultaneously cause borrowers to end making use of such loans and politicians to pass through legislation against them. 18
One good way to investigate this problem is through taking a look at preperiod styles within the two categories of states. It might suggest that the changes in policy are confounded by secular trends in AFS usage if we observe that demand for AFS borrowing in prior years increases or decreases in the treatment states relative to the control states.