Pawnshop Clientele: An Econometric Approach to Explaining a Segment of Unbanked and Underbanked Households in the United States

Abstract

About seven percent of households in the United States have ever used a pawnshop. This thesis examines a host of characteristics particular to pawnshop users with the intent to illustrate the demographics of this missed market. Using the June 2011 Census Current Population Survey in conjunction with a Federal Deposit Insurance Corporation Survey Supplement, this paper finds a host of significant relationships which predispose a certain population group to use a pawnshop more than others. Specifically, having a low level of education or a low level of income increases the probability that a household uses a pawnshop. Additionally, this paper finds black or Hispanic households predispose individuals to use a pawnshop. These findings have particular ramifications for developing policy in support of this missed financial market.