Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/113795
Citations | ||
Scopus | Web of Science® | Altmetric |
---|---|---|
?
|
?
|
Type: | Journal article |
Title: | Endogeneity in household mortgage choice |
Author: | Dungey, M. Doko Tchatoka, F. Yanotti, M. |
Citation: | Economic Modelling, 2018; 73:30-44 |
Publisher: | Elsevier BV |
Issue Date: | 2018 |
ISSN: | 0264-9993 1873-6122 |
Statement of Responsibility: | Mardi Dungey, Firmin Doko Tchatoka, María B. Yanotti |
Abstract: | We show that failing to correct for both sample selection and endogeneity bias leads to an under-estimate of the importance of mortgage price in determining the mortgage product a household selects. With proprietary, loan-level data from a major Australian mortgage provider we study interest rate determination, loan size and mortgage product choice. The level of mortgage indebtedness varies with the value and characteristics of the property, while individual mortgage interest rates depend on borrower characteristics. Our results show that borrowers consider the initial interest rate and implicitly the loan amount they can access when choosing a mortgage product. |
Keywords: | Mortgages; interest rate; selection bias; endogeneity; IV |
Description: | Available online 2 April 2018 |
Rights: | Crown Copyright © 2018 Published by Elsevier B.V. All rights reserved. |
DOI: | 10.1016/j.econmod.2018.03.001 |
Grant ID: | http://purl.org/au-research/grants/arc/DP120100842 |
Published version: | http://dx.doi.org/10.1016/j.econmod.2018.03.001 |
Appears in Collections: | Aurora harvest 8 Economics publications |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.