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| Author: | Zikmund-Fisher, B. Parker, A. |
| Title: | Demand for rent-to-own contracts: a behavioral economic explanation |
| Journal: | Journal of Economic Behavior and Organization
1999 : FEB, VOL. 38:2, p. 199-216 |
| Index terms: | ECONOMIC BEHAVIOUR ORGANIZATION DEMAND |
| Language: | eng |
| Abstract: | Rental purchase contracts for consumer durables, often described as "renting-to-own", typically require total payments two to four times greater than retail prices. Under such conditions, why do lower income consumers ever select this option? Within several low-income samples, the authors consider liquidity constraints, time preferences and risk attitudes as possible explanations for this demand. Use of these services appears to be a risk-averse response to the income and expense shocks faced by low-income shareholders. |
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