Paige Skiba, assistant professor of law and economics, is spending the summer as a Visiting Scholar in the Managerial Economics and Strategy Group of the London School of Economics, where she is researching factors that drive demand for pawnshops, which offer high-interest collateralized loans to low-income consumers.
“For the first time in decades, pawnshops are growing in popularity in the U.S.,” Skiba said. “They have always been prevalent in England, going back 1,000 years. Today, you can pawn anything from a CD or DVD for a $2 loan to electronics, jewelry, dentures and prosthetic limbs. As a result, people often pawn small things just to get enough gas to get to work for the day. The typical pawn loan is small, about $50. I’m looking at how people trade off using pawnshops versus other kinds of credit. It turns out that pawnshops are actually less expensive than many other forms of credit available to the typical customer, like payday loans.”
Professor Skiba, who studies the ways in which self-control and procrastination affect financial decision making, has published a number of articles focusing on the causes and consequences of borrowing on high-interest credit, such as payday loans and pawnshops, as well as the regulation of these industries.
Professor Skiba earned her Ph.D. at the University of California-Berkeley. She has been the recipient of numerous research grants and fellowships from institutions such as National Institute on Aging, the National Science Foundation, the Federal Reserve Board of Governors, the Burch Center for Tax Policy and Public Finance and the Horowitz Foundation for Social Policy. She was a senior research associate of the Federal Reserve Bank of Saint Louis from 1999 to 2001, where she conducted research on monetary policy and regional and urban economics. She earned