In this paper we study whether consumers optimally choose between formal and informal credit, using a unique panel dataset with all registered information available on consumers' behavior within the Swedish alternative and mainstream credit markets. Specifically, we analyze to what extent credit...

Using panel data on individual borrowing characteristics and neighborhood income, we assess the impact of relative income on indebtedness and payment delinquencies. We find that a worsening in relative income vis-à-vis similarly aged neighbors leads to higher indebtedness, primarily due to...