The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: We study how consumers allocate debt across credit cards they already hold using new data on credit card activity for a representative sample of consumers with two homogeneous cards in Mexico. We find that relative prices are a very weak predictor of the allocation of debt, purchases, and payments. On average, consumers pay 31 % above their minimum financing cost. Evidence on cross-card debt elasticities with respect to interest rates and credit limits show no substitution in the price margin. Our findings offer evidence against the cost-minimizing hypothesis and provide support to behavioral explanations. Keywords: Credit cards, household finance, consumer behavior, Mexico. JEL Classification: D12 D14, D40, G02, G20, G28. Terms of use: Documents inResumen: Estudiamos cómo los consumidores distribuyen su deuda entre las tarjetas de crédito que ya tienen usando datos nuevos de actividad en tarjetas de crédito para una muestra representativa de consumidores con dos tarjetas homogéneas en México. Encontramos que los precios relativos son un predictor muy débil de la distribución de deuda, compras y pagos. En promedio los consumidores pagan 31 % por encima de su costo mínimo de financiamiento. La evidencia sobre la elasticidad cruzada entre tarjetas con respecto a las tasas de interés y los límites de crédito muestra nula sustitución en el margen de precio. Nuestros resultados ofrecen evidencia en contra de la hipótesis de minimización de costos y apoyan explicaciones basadas en economía del comportamiento. Palabras Clave: Tarjetas de crédito, financiamiento de hogares, comportamiento del consumidor, México.* We are grateful to Jon Levin and Liran Einav, for numerous discussions and comments. We thank Susan

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Better educated countries have better governments, an empirical regularity that holds in both dictatorships and democracies. A possible reason for this fact is that educated people are more likely to complain about misconduct by government officials and that more frequent complaints encourage better behavior from officials. Newly assembled individual-level survey data from the World Justice Project show that, within countries, better educated people are more likely to report official misconduct. The results are confirmed using other survey data on reporting crime and corruption. Citizen complaints might thus be an operative mechanism that explains the link between education and the quality of government.

for helpful comments. We thank Transparency International for sharing the TI Global Barometer 2009 data. Ponce and Botero thank the Bill & Melinda Gates Foundation and the Ewing Marion Kauffman Foundation for their support of the WJP. Shleifer thanks the Kauffman Foundation for the support of his research. The views expressed in this article are those of the authors and do not necessarily represent the views of the World Justice Project, its board of directors, or its honorary chairs. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.