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If You Build It, Will They Come? A Simulation of Financial Product Holdings Among Low-to-Moderate Income Households

If You Build It, Will They Come? A Simulation of Financial Product Holdings Among Low-to-Moderate... The 1995 Survey of Consumer Finances was used to determine holdings of selected financial products by low-to-moderate income households, defined as households with incomes less than or equal to 80% of median household income for their region. First, we estimated determinants of holding bank accounts. Next, we estimated determinants of holding other selected products, contingent on holding a transaction account. Finally, we estimated the potential demand for these other products by households without accounts, should they become account holders. We found that if non-account holding households were to obtain accounts, they would increase their demand for credit cards, first mortgages, car loans, consumer loans, certificates of deposit, and IRA/Keogh accounts. The implications for financial institutions, policy makers, and consumer educators are presented. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Consumer Policy Springer Journals

If You Build It, Will They Come? A Simulation of Financial Product Holdings Among Low-to-Moderate Income Households

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References (42)

Publisher
Springer Journals
Copyright
Copyright © 2000 by Kluwer Academic Publishers
Subject
Law; Commercial Law; Economic Policy; Marketing
ISSN
0168-7034
eISSN
1573-0700
DOI
10.1023/A:1007222700931
Publisher site
See Article on Publisher Site

Abstract

The 1995 Survey of Consumer Finances was used to determine holdings of selected financial products by low-to-moderate income households, defined as households with incomes less than or equal to 80% of median household income for their region. First, we estimated determinants of holding bank accounts. Next, we estimated determinants of holding other selected products, contingent on holding a transaction account. Finally, we estimated the potential demand for these other products by households without accounts, should they become account holders. We found that if non-account holding households were to obtain accounts, they would increase their demand for credit cards, first mortgages, car loans, consumer loans, certificates of deposit, and IRA/Keogh accounts. The implications for financial institutions, policy makers, and consumer educators are presented.

Journal

Journal of Consumer Policy – Springer Journals

Published: Oct 9, 2004

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