COVID-19 Economic Displacement and AFS Use: Evidence from the 2020 Collaborative Multiracial Post-Election Survey

Round 1

Reviewer 1 Report

The manuscript employs a robust statistical approach, leveraging OLS regression to analyze data from the 2020 Collaborative Multiracial Post-election Survey (CMPS). The study’s findings contribute to understanding financial coping mechanisms during economic crises, particularly for marginalized groups, and align with existing literature on AFS reliance. However, several critical weaknesses undermine its scholarly rigor and clarity, necessitating substantial revisions. For the mentioned-above reason, I would suggets a minor revision. 

Weaknesses:

1. Ambiguous Title: The title fails to encapsulate the study’s specific focus on AFS use and its socioeconomic correlates during the pandemic, reducing its discoverability and precision. How to improve it: Refine the Title: Craft a title that clearly reflects the study’s scope and context. For example: “Socioeconomic Predictors of Alternative Financial Service Use During the COVID-19 Pandemic: Evidence from the 2020 CMPS.”
2. Inadequate Introduction: The introduction lacks a comprehensive synthesis of prior research, omitting key studies on AFS and economic stressors. This limits the manuscript’s ability to establish its research gap and theoretical foundation. how to improve it: Provide a concise literature review that situates the study within the AFS and economic hardship scholarship. For instance: “Prior research (e.g., Brevoort et al., 2015; Kochar & Sochopoulos, 2022) indicates that low-income and minority households disproportionately rely on AFS during economic downturns, yet the role of demographic and attitudinal factors post-COVID remains underexplored.
3. Insufficient Visual Representation: The manuscript does not adequately utilize figures or tables to present regression results or demographic breakdowns, making it difficult to interpret complex findings at a glance. How to improve it: Include well-designed tables or figures to summarize key findings, such as a table displaying OLS regression coefficients, standard errors, and p-values for each dependent variable (e.g., Credit Cards, Payday Loans). Ensure captions are descriptive and align with journal formatting guidelines.
4. Limited Contextualization of Results: While the results are statistically supported, the discussion does not sufficiently connect findings to broader theoretical frameworks or policy implications, weakening the study’s impact. How to improve: Expand the discussion to link results to theoretical models groand propose actionable policy recommendations, such as targeted financial literacy programs for urban communities.

 

Author Response

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Reviewer 2 Report

This is an interesting paper which examines financial coping strategies in the context of the economic displacement of the Covid-19 pandemic. The paper is based on regression analyses of the CMPS dataset constructed from a survey in the US between April and August 2021. The core finding from the study is that borrowing money from friends and family was the only statistically significant predictor.

In many ways this paper appears to be sound. The dataset seems extensive and appropriate, and the analysis rigorous. Yet some aspects of the narrative could be clarified or extended, especially in relation to the literature review.

I therefore suggest that the authors address the following points in the next box.

• The start of the paper would benefit from a more explicit discussion of the research problem and its significance. I think the research problem is “financial coping strategies” (sometimes also phrased as “financial coping mechanisms”). What does this mean and why is it an important phenomenon to research? This should be addressed in more detail in the Introduction, and also perhaps mentioned briefly in the abstract.
• The abstract should mention the contribution made by this paper to the academic literature.
• The introduction should emphasise more the novelty of this study by comparison to prior work on the topic.
• Section 2, and particularly the material from lines 67-168, would benefit from being more *international* in the focus of discussion. While the study has clearly been conducted in the USA, this does not mean that the literature review should also focus specifically on the USA. The text should be redrafted so that it focusses on a range of settings, of which the USA is merely one example among many.
• These lines (67-168) should be drawn together at the end with some critical comments about the strengths and weaknesses of current research knowledge on this topic, in a way that serves to justify the need for the present study.
• In section 2.4, the three hypotheses need to be justified rather than merely stated. How were they arrived at? Was the framework and/or the literature review influential on their formulation?
• The reason for choosing the four specific outcome variables should also be explained in this section.
• In section 3 we need more information about the CMPS dataset. Explain the purpose for which the dataset was constructed, and who compiled it.
• Section 4 would benefit from some signposting at the beginning. What will be covered, in what order, and why?
• Section 5 needs to more explicitly identify what are the main contributions made by the present paper. There are several places in which the authors notice that their findings contradict earlier works, but the nature of the contribution is not made very explicit. Why are the results of this study important for other researchers?
• Towards the end of the paper, the authors need to revisit and address the hypotheses.
• Section 8 would benefit from establishing what future work is suggested by the analysis and contributions they are putting forward in this paper.

Author Response

Thank you for your comments. Please see the attachment for a detailed response.

Author Response File: Author Response.pdf

Reviewer 3 Report

The article is interesting, well-structured, and has a well-articulated background.

It should be accepted, with minor revisions, to focus more on clarifying the methodology and results. It is a good contribution to the literature on financial resilience and AFS use during crises.

The study is relevant from both economic and social perspectives, as it addresses the financial consequences of the pandemic, with a focus on the use of alternative financial services.

However, the title of the work could be improved; it could be made more academic and objective, highlighting the model used, perhaps for example:"COVID-19 Economic Displacement and the Use of Alternative Financial Services: Evidence from the ABC-X Model."

Regarding the Abstract, it is well-structured, but I think it would be richer if some details were considered, such as the sample size, the method used, and even specific results, such as: "Borrowing from family/friends was the strongest predictor of payday loan use (β = 0.25, p < 0.001)."

As for the Introduction, it is well-founded and structured, although it contains some redundant data on economic vulnerability.

The literature review is well-founded; however, a summary table of previous studies on predictors of AFS use would be beneficial, enabling the reader to gain a clear understanding of the concepts.

This work highlights the good explanation and application of the ABC-X model.

Regarding the methodology, despite its sound structure, the choice of OLS (instead of logistic models) should be explained at this point, given that the dependent variables are Likert scales. This should also include an explanation of how multicollinearity between predictors was handled.

The Results chapter is relatively straightforward and organized; however, the caption for Figure 1 seems exaggerated and could be more descriptive, for example: COVID-19 impact categories on the X-axis.

The Discussion section highlights the work developed and the authors' articulation; however, it is suggested that the theoretical contributions and policy implications be more clearly highlighted.

The conclusion is also very well-founded, but I would particularly emphasize the practical implications for applying the results both nationally and internationally.

Finally, the References are current; however, they need to be checked for APA standards, e.g., "Kim, K. T., Lee, J., & Lee, J. M." appears differently from other entries.

Author Response

Thank you for your comments. Please see the attachment for a detailed response.

Author Response File: Author Response.pdf