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Sources of Inaction in Household Finance: Evidence from the Danish Mortgage Market / Steffen Andersen, John Y. Campbell, Kasper Meisner Nielsen, Tarun Ramadorai.
- Format:
- Book
- Author/Creator:
- Andersen, Steffen.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w21386.
- NBER working paper series no. w21386
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Sources of Inaction in Household Finance
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2015.
- Summary:
- We build an empirical model to decompose delays in mortgage refinancing into time-dependent inaction (a low probability of responding to a refinancing incentive in a given quarter) and state- dependent inaction (a psychological addition to the financial cost of refinancing). We estimate the model on high-quality administrative panel data from Denmark, where mortgage refinancing without cash-out is unconstrained. Middle-aged and wealthy households exhibit state-dependent inaction; but older, poorer, and less-educated households exhibit strong time-dependent inaction and thereby achieve lower savings. We use the model to understand frictions in the mortgage channel of monetary policy transmission.
- Notes:
- Print version record
- July 2015.
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