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Financial contracts are complicated and consumers often do not grasp them in their entirety. This may lead to financial mistakes. We develop a quantitative theory of unsecured credit and equilibrium default in a market with sophisticated and näive borrowers who sometimes misunderstand their...
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What is the role of heterogenous house-price expectations for boom-bust cycles in the housing market? We exploit a unique Dutch panel data set on households' house price expectations and their consumption, savings and housing choices for the period 2003-2016. This period was characterized by a...
Persistent link: https://www.econbiz.de/10012099078
We analyze whether culture affects the saving behavior of households and which cultural channels matter for this household decision. To disentangle cultural effects from economic and institutional factors, we study how the saving behavior of second-generation immigrants relates to the attitudes...
Persistent link: https://www.econbiz.de/10011527981
following stylized facts: (i) Real mortgage debt, (ii) debt-service-to-income ratios and (iii) house sizes (in sqft) have …
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China has experienced a rapid boom in real estate prices in the last few decades, leading to a substantial increase in living costs and heavy financial burdens on households. Using an instrumental variable approach, this paper exploits spatial and temporal variation in housing price appreciation...
Persistent link: https://www.econbiz.de/10012287858
This paper uses new household survey data to study expectation formation during the recent housing boom in Germany. The cross section of forecasts depends on only two household characteristics: location and tenure. The average household in a region responds to local conditions but underpredicts...
Persistent link: https://www.econbiz.de/10012623132
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