CIRJE-F-534 "Joint Liability Borrowing and Suicide"
Author Name Chen, Joe, Yun Jeong Choi and Yasuyuki Sawada
Date December 2007
Full Paper PDF file
Remarks @Economics Letters 109 (2), November 2010, Pages 69-71.
Abstract

This paper shows that joint liability borrowing may put too much pressure on the borrower, mainly through the stigma in case of repayment failure, and leads to a vexing outcome|the suicide of the borrower. We provide a model of joint liabil- ity borrowing which facilitates credit market transaction ex ante but may induce suicides ex post in the bad state. We introduce some supportive evidence from a suicide survey in Japan.