AQR Top Finance Graduate Award goes to HEC PhD candidate Huan Tang

Congratulations to Huan Tang, one of the winners of the 2020 AQR Top Finance Graduate Award. This prestigious prize rewards the six best students in finance in the world selected by a jury of absolutely top academics in the field of financial economics.

Huan Tang works on the value that consumers place on the privacy of information.

Awarded paper title: The Value of Privacy: Evidence from Online Borrowers

Abstract: This paper studies the value of privacy, for individuals, using data from large-scale field experiments that vary disclosure requirements for loan applicants and loan terms on an online peer-to-peer lending platform in China. I find that loan applicants attach positive value to personal data: Lower disclosure requirements significantly increase the rate at which applications are completed. I quantify the monetary value of personal data—and the welfare effect of various disclosure policies—by developing a structural model that links individuals’ disclosure, borrowing, and repayment decisions. Using detailed application-level data, I estimate that social network ID and employer contact are valued at 230 RMB (i.e., $33, or 70% of the average daily salary in China); for successful borrowers, this accounts for 8% of the average net present value of a loan.
Requiring answers to these application questions reduces borrower welfare by 13% and costs the platform $0.50 in expected revenue per applicant.

Huan will defend her dissertation "Three essays on FinTech" under the supervision of Professor Johan Hombert on August 27, 2020 and will join the London School of Economics as Assistant Professor.