Substitutes are everywhere

By Tyler Cowen.

• The typical plasma donor was younger than 35, did not hold a bachelor’s degree, earned a lower income and had a lower credit score than most Americans. Donors sold plasma primarily to earn income to cover day-to-day expenses or emergencies.
• When a plasma center opened in a community, there were fewer inquiries to installment or payday lenders. Inquires fell most among young (age 35 or younger) would-be borrowers.
• Four years after a plasma center opened, young people in the area were 13.1% and 15.7% less likely to apply for a payday and installment loan, respectively.
• Similarly, the probability of having a payday loan declined by 18% among young would-be borrowers in the community. That’s an effect on payday loan borrowing roughly equivalent to a $1 increase in the state minimum hourly wage.

Here is the St. Louis Fed study, via the excellent Kevin Lewis.