Author Abstract
This article describes the consumer finance sector in the US since World War II. We first define the sector in terms of the functions delivered by firms (payments, savings/investing, borrowing, managing risk, and providing advice). We provide time series evidence on major trends in consumption, savings, and borrowing. Examining consumer decisions, changes in regulation, and business practices, we identify four major themes that characterize the sector: (1) innovation that increased the choices available to consumers; (2) enhanced access in the form of broadening consumer participation in financial activities; (3) do-it-yourself consumer finance, which allowed and forced consumers to take greater responsibility for their own financial lives; and (4) the resultant increase in household risk taking.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: December 2010
- HBS Working Paper Number: 11-058
- Faculty Unit(s): Business, Government and International Economy; Finance