Improving Survey Questions on Credit Access
A market researcher is designing a survey to determine if small business owners are 'credit constrained'. They propose asking the following question: 'If you were to apply for a $20,000 business loan today, do you think you would be approved?' First, identify and explain the main weakness of using this question to accurately measure credit constraints. Second, propose a new, single survey question that would likely provide more reliable data on the same topic, and briefly justify why your question is an improvement.
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Social Science
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CORE Econ
Economics
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.9 Lenders and borrowers and differences in wealth - The Economy 2.0 Microeconomics @ CORE Econ
Creation in Bloom's Taxonomy
Cognitive Psychology
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A researcher is studying access to credit and includes the following two questions in a survey for individuals:
- 'If you were to apply for a personal loan of $5,000 today, do you think you would be approved?'
- 'Thinking back over the last three years, were you ever turned down for a loan that you applied for?'
Which statement best analyzes the primary limitation associated with each of these questions for accurately measuring who is unable to get credit?
Evaluating a Research Design for Credit Constraints
Critique of a Survey-Based Policy Initiative
Evaluating a Survey Question's Reliability
A survey question asking individuals, 'Were you denied a loan in the past year?' is a more reliable measure of credit constraints than a question asking, 'If you applied for a loan today, do you believe you would be approved?'
An economist is studying credit markets using survey data. Match each type of survey question with the primary limitation it introduces when trying to accurately identify individuals who cannot get credit.
Improving Survey Questions on Credit Access
Critiquing an Economic Report on Credit Access
Analyzing Conflicting Survey Results on Credit Access
A national survey finds that only 5% of respondents report being denied a loan in the past three years. Based on this finding alone, it is safe to conclude that credit constraints are not a significant issue for the vast majority of the population.