PIYUSH GADE

BAILOUT TO BREAKOUT: DOES DEBT RELIEF LIFT THE POOR OUT OF ADVERSITY?

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
i j k l i1 j1 k1 l1 i2 j2 k2 l2
Variables Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of
durable durable durable durable durable durable durable durable durable durable durable durable
consum consum consump consump consump consump consump consumpti consump consum consump consump
ption ption tion tion tion tion tion on tion ption tion tion
treated 0.00 0.246 0.250 0.129 -0.358 0.285 0.266 0.320 0.00689 0.403 0.405 -0.0789
(0.32) (0.423) (0.424) (0.568) (0.408) (0.455) (0.467) (0.590) (0.536) (0.710) (0.714) (0.940)
Observat 1,294 1,999 1,999 1,999 802 1,236 1,236 1,236 756 798 798 798
ions

R- 0.394 0.443 0.443 0.443 0.385 0.455 0.455 0.456 0.432 0.467 0.467 0.467
squared
Number 26 17 17 17 26 17 17 17 24 15 15 15
of
groups
B. Non-durable consumption- last 30 days

Robust standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
e f g h e1 f1 g1 h1 e2 f2 g2 h2

Variables Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of Log of
Non Non Non Non Non Non Non Non Non Non Non Non
durable durable durable durable durable durable durable durable durable durable durable durable
Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt Cosumpt
ion ion ion ion ion ion ion ion ion ion ion ion

treated 0.0718 -0.0275 -0.0298 0.0362 -0.0286 -0.0608 -0.0645 0.00998 0.116 -0.0432 -0.0453 -0.0580
(0.06) (0.026) (0.027) (0.073) (0.089) (0.049) (0.054) (0.101) (0.086) (0.066) (0.065) (0.131)
Observatio 1,294 1,999 1,999 1,999 802 1,236 1,236 1,236 756 798 798 798
ns
R-squared 0.230 0.404 0.404 0.405 0.277 0.417 0.417 0.418 0.237 0.435 0.435 0.435
C. Durable consumption last 1 year

Robust standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

Table 4: Investment and Productivity

A. Investment

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

a b c d a1 b1 c1 d1 a2 b2 c2 d2
Variables Log Log Log Log Log Log Log Log Log Log Log Log
Investm Investm Investm Investm Investm Investm Investm Investm Investm Investm Investm Investm
ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a ent p.a
Treated -0.027 -0.037 -0.043 0.178 0.0834 0.0719 0.0788 0.408** -0.018 -0.124 -0.118 -0.054
*
(0.074) (0.092) (0.090) (0.119) (0.078) (0.105) (0.098) (0.123) (0.098) (0.125) (0.120) (0.178)
Observations 1,104 1,780 1,780 1,780 686 1,104 1,104 1,104 656 698 698 698
R-squared 0.161 0.254 0.254 0.257 0.178 0.274 0.274 0.279 0.206 0.293 0.294 0.297

Number of 26 17 17 17 26 17 17 17 24 15 15 15
groups
Robust standard errors in parentheses

18
 PIYUSH GADE
BAILOUT TO BREAKOUT: DOES DEBT RELIEF LIFT THE POOR OUT OF ADVERSITY?

*** p<0.01, ** p<0.05, * p<0.1

B. Productivity

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
e f g h e1 f1 g1 h1 e2 f2 g2 h2
Variables Log Log Log Log Log Log Log Log Log Log Log Log
Product Product Product Product Product Product Product Product Product Product Product Product
ivity ivity ivity ivity ivity ivity ivity ivity ivity ivity ivity ivity
treated 0.0274 -0.122 -0.128 0.0372 0.115 -0.216 -0.220* 0.0376 -0.036 -0.367 -0.367 -0.484
(0.093) (0.153) (0.151) (0.224) (0.112) (0.127) (0.124) (0.200) (0.126) (0.218) (0.218) (0.280)
Obs 1,095 1,760 1,760 1,760 683 1,097 1,097 1,097 654 697 697 697
R-squared 0.171 0.209 0.210 0.211 0.174 0.221 0.221 0.224 0.188 0.241 0.241 0.242
Number of 26 17 17 17 26 17 17 17 24 15 15 15
groups
Robust standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1

TABLE 5 – Expectations about Reputational consequences of default and access to Credit

A. Expectations about reputational consequences of default

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)

a b c d a1 b1 c1 d1 a2 b2 c2 d2

VARIABLES Expecta Expecta Expecta Expecta Expecta Expecta Expecta Expecta Expecta Expecta Expecta Expecta
tions tions tions tions tions tions tions tions tions tions tions tions
about about about about about about about about about about about about
Reputati Reputati Reputati Reputati Reputati Reputati Reputati Reputati Reputati Reputati Reputati Reputati
onal onal onal onal onal onal onal onal onal onal onal onal
Consequ Consequ Consequ Consequ Consequ Consequ Consequ Consequ Consequ Consequ Consequ Consequ
ences ences ences ences ences ences ences ences ences ences ences ences
Treated 0.0158 -0.133* -0.130* -0.046 0.0293 -0.011 0.0007 -0.003 0.0297 -0.107 -0.106 -0.036

(0.172) (0.066) (0.066) (0.136) (0.165) (0.099) (0.097) (0.190) (0.160) (0.112) (0.112) (0.166)

Observations 1,094 2,279 2,279 2,279 672 1,439 1,439 1,439 559 1,056 1,056 1,056

R-squared 0.507 0.448 0.448 0.448 0.539 0.465 0.465 0.466 0.516 0.487 0.487 0.487

Number of 22 22 22 22 22 22 22 22 20 20 20 20
bankdistrictid
Robust standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
B. Expectations about future access to credit

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
e f g h e1 f1 g1 h1 e2 f2 g2 h2
VARIABLES Expectat Expectat Expectat Expectat Expectat Expectat Expectat Expectat Expectat Expectat Expectat Expectat
ions ions ions ions ions ions ions ions ions ions ions ions
about about about about about about about about about about about about
access access access access access access access access access access access access
to to to to to to to to to to to to future
future future future future future future future future future future future credit
credit credit credit credit credit credit credit credit credit credit credit
treated 0.172 0.221** 0.222** 0.186* 0.177 0.305** 0.307** 0.137 0.206 0.270 0.270 0.178
(0.124) (0.100) (0.101) (0.101) (0.159) (0.115) (0.116) (0.112) (0.246) (0.162) (0.163) (0.194)
Observations 1,082 2,257 2,257 2,257 668 1,430 1,430 1,430 556 1,048 1,048 1,048
R-squared 0.495 0.416 0.416 0.418 0.512 0.429 0.429 0.432 0.555 0.495 0.495 0.499
Number of 22 22 22 22 22 22 22 22 20 20 20 20
Groups
Robust standard errors in parentheses

19
 PIYUSH GADE
BAILOUT TO BREAKOUT: DOES DEBT RELIEF LIFT THE POOR OUT OF ADVERSITY?

*** p<0.01, ** p<0.05, * p<0.1

Local Polynomial Regression Discontinuity Estimation with Robust Bias-Corrected Confidence Intervals and Inference Procedures.

These are additional robustness checks using Local Polynomial Regression Discontinuity Estimation with Robust Bias-Corrected Confidence Intervals
and Inference Procedures as given in Calonico, Cattaneo, Farrell and Titiunik (2018)

TABLE 6 – rdrobust results

A. Intention to treat – Treating as Sharp RDD

(1) (2) (3) (4) (5) (6)

d_td newloan~p credit_~m credit_~f lnsavings lnconsu~s

RD_Estim~e -13.12 -0.10 0.19 -18.64** 0.58 0.01

(50.95) (0.13) (12.66) (9.47) (0.75) (0.20)

N 2175 2746 2606 2605 2275 5311

R-sq

Standard errors in parentheses

* p<0.10, ** p<0.05, *** p<0.01

(1) (2) (3) (4) (5)

lnconsu~s lninves~a lnagrevpa expect_~s expect_~p

RD_Estim~e 0.15 0.24 0.55 -0.12 0.16

(1.11) (0.26) (0.35) (0.26) (0.28)

N 2749 2391 2363 2714 2739

R-sq

Standard errors in parentheses

* p<0.10, ** p<0.05, *** p<0.01

B. Treating it as fuzzy RDD

Fuzzy RDD estimates with kink

(1) (2) (3) (4) (5) (6)

d_td newloan~p credit_~m credit_~f lnsavings lnconsu~s

RD_Estim~e 21.77 -0.00 11.03 -11.45** 0.39 0.07

(27.84) (0.08) (6.76) (4.75) (0.47) (0.12)

N 2175 2746 2606 2605 2275 5311

R-sq

Standard errors in parentheses

* p<0.10, ** p<0.05, *** p<0.01

20
 PIYUSH GADE
BAILOUT TO BREAKOUT: DOES DEBT RELIEF LIFT THE POOR OUT OF ADVERSITY?

(1) (2) (3) (4) (5)

lnconsu~s lninves~a lnagrevpa expect_~s expect_~p

RD_Estim~e 0.14 -0.04 0.07 -0.16 0.11

(0.58) (0.14) (0.16) (0.13) (0.18)

N 2749 2391 2363 2714 2739

R-sq

Standard errors in parentheses

* p<0.10, ** p<0.05, *** p<0.01

The estimates from Local Polynomial Regression Discontinuity Estimation with Robust Bias-Corrected Confidence Intervals and Inference Procedures,
treating the case as Sharp RDD more or less complies with out previous estimations. Mostly, the results don’t show any significant impact of the
treatment. Similarly, with Fuzzy RDD, things more or less remain the same, except for one. The shift to Informal Credit was decisively positive in the
previous estimations. However, in Local Polynomial Regression Discontinuity Estimation with Robust Bias-Corrected Confidence Intervals and
Inference Procedures, the estimation results show the opposite effect i.e Treated households have lesser share of informal credit than the control group-
bv 18 percentage points in Sharp and 11 percentage points in Fuzzy.

Table 7 – 2SLS IV REGRESSION RESULTS

(1) (2) (3) (4) (5)

VARIABLES Number of Log Log consumption Log consumption Log Investment
New loan savings of of per annum
applications Non-durables durables

Effective 0.0209* -0.0363 -0.0553*** -0.0642 0.0113

Debt Relief
(0.0110) (0.0727) (0.0150) (0.105) (0.0268)
Constant 1.750*** 6.392*** 8.798*** 3.961*** 8.015***
(0.0103) (0.0681) (0.0140) (0.0982) (0.0233)

Observations 2,679 2,217 2,681 2,681 2,335

R-squared 0.001 0.000 0.005 0.000 0.000
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
(1) (2) (3) (4)
VARIABLES Effective Effective Debt Effective Debt Effective Debt Relief
Debt Relief Relief Relief

Treated 0.786*** 0.851*** 0.853*** 0.820***

(0.0959) (0.0784) (0.0794) (0.115)
Constant 0.164*** 0.0460 -0.0115 -0.00850
(0.0421) (0.0705) (0.0823) (0.0772)

Observations 1,257 2,642 2,642 2,642

R-squared 0.339 0.371 0.371 0.371
Number of groups 26 26 26 26
(bankdistrictid)
Robust standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1

The results are pretty much consistent with the previous results. Hardly any of the results are statistically significant. Yet they convey almost similar
things. As the effective debt relief increases, all the outcome variables show a slight fall. The one especially significant is the Investment, which shows a
95 percent confidence level, which implies that in this case, investment declined for sure. Similarly, there is a slight increase in the expectations about
the future access to credit after default with 90 percent confidence level. However, this is even though not significant, there is a slight increase in the
perception about the reputational consequences of default.

____________________________________________________________________________________________________________________________________________________________________________

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 PIYUSH GADE
BAILOUT TO BREAKOUT: DOES DEBT RELIEF LIFT THE POOR OUT OF ADVERSITY?

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