Abstract

The lifecycle hypothesis is employed in this study to examine the consumer rationality of automobile buyers. Rationality of individual decision on each auto loan contractual attribute, including down payment, interest rate and loan maturity is studied with respect to personal financial background and education level. Consumers are responsive to not only current income, but also financial assets and expected income respectively as well when they make auto loan choices. Liquidity constrained consumers have different preference pattern of loan choices. Education improves consumer rationality by raising their awareness of important contract terms.

Advisor

Verdon, Lisa

Department

Business Economics

Publication Date

2011

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2011 Sihan Li