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.
Li, Sihan, "Consumer Rationality of Auto Loan With Respect to Personal Financial Background and Education" (2011). Senior Independent Study Theses. Paper 763.
auto, loan, rationalit, financial literacy, subprime, lifecycle hypothesis
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2011 Sihan Li