Banking deregulation and consumption of home durables

Abstract

We exploit the introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables and energy use. Using the American Housing Survey, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find evidence that low-income households are more likely to purchase new appliances after the deregulation; however, this did not increase energy consumption. The results are informative for policymakers who would like households to purchase new durable goods that use less energy.