TY - JOUR
T1 - Housing, Mortgages, and Self-control
AU - Schlafmann, Kathrin
N1 - Epub ahead of print. Published online: 16 September 2020
PY - 2020/9/16
Y1 - 2020/9/16
N2 - Using a quantitative theoretical framework this paper analyzes how problems of self-control influence housing and mortgage decisions. The results show that people with stronger problems of self-control are less likely to become homeowners, even though houses serve as commitment for saving. The paper then investigates the welfare effects of regulating mortgage products if people differ in their degree of self-control. Holding house prices fixed, higher down payment requirements and restrictions on refinancing turn out to be beneficial to people with sufficiently strong problems of self-control, even though these policies restrict access to the commitment device.
AB - Using a quantitative theoretical framework this paper analyzes how problems of self-control influence housing and mortgage decisions. The results show that people with stronger problems of self-control are less likely to become homeowners, even though houses serve as commitment for saving. The paper then investigates the welfare effects of regulating mortgage products if people differ in their degree of self-control. Holding house prices fixed, higher down payment requirements and restrictions on refinancing turn out to be beneficial to people with sufficiently strong problems of self-control, even though these policies restrict access to the commitment device.
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M3 - Journal article
JO - Review of Financial Studies
JF - Review of Financial Studies
SN - 0893-9454
ER -