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Annuities, long-term care insurance (LTCI), and reverse mortgages appear to offer important consumption smoothing benefits to the elderly, yet private markets for these products are small. A prominent idea is to combine LTCI and annuities to alleviate both supply (selection) and demand...
Persistent link: https://www.econbiz.de/10012725832
Long term care is one of the few observable triggers for home sale among the elderly. Combined with a thin reverse mortgage market, this helps rationalize weak demand for Long Term Care Insurance (LTCI). Home equity typically tapped primarily in the event of long term care reduces the gain to...
Persistent link: https://www.econbiz.de/10012726336
Advancing annuity demand theory, we present sufficient conditions for the optimality of full annuitization under market completeness that are substantially less restrictive than those used by Yaari (1965). We examine demand with market incompleteness, finding that positive annuitization remains...
Persistent link: https://www.econbiz.de/10012727984
This paper explains why selection in the US reverse mortgage market to date has been advantageous rather than adverse. Reverse mortgages let quot;house rich, cash poorquot; older homeowners transfer wealth from the wealthy period after their home is sold to the impoverished period before. Near...
Persistent link: https://www.econbiz.de/10012737838
Economists have long puzzled over the apparent failure of older homeowners to cash out home equity. Casual observation, however, suggests that older homeowners under-maintain their homes. Estimated home equity reduction may thus be biased downward if self-reported home values do not incorporate...
Persistent link: https://www.econbiz.de/10012738488
This paper analyzes the effects of land use constraints on housing prices. We provide a new framework for evaluating policy when mobility across regions is allowed but limited. A key result is that loosening regulatory constraints within individual regions would have little effect on prices for...
Persistent link: https://www.econbiz.de/10012780064
This paper advances the theory of annuity demand. First, we derive sufficient conditions under which complete annuitization is optimal, showing that this well-known result holds true in a more general setting than in Yaari (1965). Specifically, when markets are complete, sufficient conditions...
Persistent link: https://www.econbiz.de/10012762823
Housing Supply in Manhattan has fallen relative to total US housing supply over the last 45 years. This time trend is entirely explained away by a combination of the fall of Robert Moses's urban renewal empire and the decreasing national share of construction that is multifamily. Similar results...
Persistent link: https://www.econbiz.de/10012709459
For most US households, labor income is the most important source of wealth and housing is the most important risky asset. A natural intuition is thus that households whose incomes covary relatively strongly with housing prices should own relatively little housing. Under plausible assumptions on...
Persistent link: https://www.econbiz.de/10012739728
We analyze the effects of supply constraints on housing prices. For plausible parameterizations, loosening regulatory constraints in individual jurisdictions would have little effect on prices, while coordinated loosening across markets could have large price effects.
Persistent link: https://www.econbiz.de/10005297207