Internet Reduced Insurance Rates: Similar Impact on Loans?

While browsing for articles for an academic project, I decided to browse academic journals for articles on Prosper Marketplace and related interest rates. I thought someone must have published in a peer reviewed journal something on Prosper, but I did not find any existing articles outside of newspaper fluff pieces on P2P lending.

I broadened the search for other industries and the impact that the internet has made on rates. I found an article with empirical proof that the internet lowered life insurance rates. The article “Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry” by Jeffrey Brown and Austan Goolsbee in the Journal of Political Economy (Vol. 110, No. 3. (Jun., 2002), pp. 481-507.), shows that life insurance rates were reduced by 8-15% by the internet. The authors proved that internet price search services reduced off-line life insurance prices.

Consumers often receive lower interest rates with a peer-to-peer loan than they would with a traditional lending institution. Although, a lower rate is not guaranteed. After reading the above research results on insurance that made me wonder about the impact of P2P lending on regular banking interest rates for consumer banking:

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