Incentives to Borrow and the Demand for Mortgage Debt: An Analysis of Tax Reforms
AbstractBefore 1992 mortgage interest in Italy was fully tax deductible up to 3,500 euro (7,000 for two cosigners). Between 1992-94 the government implemented a series of tax reforms whose ultimate effect was to cancel the relation between the after-tax mortgage rate and the marginal tax rate. Using data from the 1987-2000 Survey of Household Income and Wealth we test if the cancellation of incentives has reduced the propensity to borrow of high-income taxpayers relative to the other population groups. Difference-in-differences estimates and regression analysis indicate that tax considerations have not affected the demand for mortgage debt, either at the extensive or intensive margin.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3903.
Date of creation: May 2004
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Tullio Jappelli & Luigi Pistaferri, 2002. "Incentives to Borrow and the Demand for Mortgage Debt: An Analysis of Tax Reforms," CSEF Working Papers 90, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-13 (All new papers)
- NEP-MIC-2004-06-13 (Microeconomics)
- NEP-URE-2004-06-13 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Scholz, J.K., 1993. "Tax Progressivity and Household Portfolio: Descriptive Evidence from the Surveys of Consumer Finances," Working papers 9304, Wisconsin Madison - Social Systems.
- Luigi Guiso & Tullio Jappelli, 2000.
"Household Portfolios in Italy,"
CSEF Working Papers
43, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- James M. Poterba, 2001. "Taxation and Portfolio Structure: Issues and Implications," NBER Working Papers 8223, National Bureau of Economic Research, Inc.
- Patric H. Hendershott & Dr. Gwilyn Pryce & Dr. Michael White, 2002. "Household Leverage and the Deductibility of Home Mortgage Interest: Evidence from UK House Purchasers," NBER Working Papers 9207, National Bureau of Economic Research, Inc.
- Paiella, Monica & Pozzolo, Alberto Franco, 2007. "Choosing Between Fixed and Adjustable Rate Mortgages," Economics & Statistics Discussion Papers esdp07033, University of Molise, Dept. SEGeS.
- Jonathan Crook & Stefan Hochguertel, 2007. "US and European Household Debt and Credit Constraints," Tinbergen Institute Discussion Papers 07-087/3, Tinbergen Institute.
- Nuno C. Martins & Ernesto Villanueva, 2003.
"The Impact of Interest-rate Subsidies on Long-term Household Debt: Evidence from a Large Program,"
w200314, Banco de Portugal, Economics and Research Department.
- Nuno C. Martins & Ernesto Villanueva, 2003. "The impact of interest-rate subsidies on long-term household debt: Evidence from a large program," Economics Working Papers 713, Department of Economics and Business, Universitat Pompeu Fabra.
- Nuno Martins & Ernesto Villanueva, 2005. "The impact of interest-rate subsidies on long-term household debt: evidence from a large program," DNB Working Papers 026, Netherlands Central Bank, Research Department.
- repec:dgr:uvatin:2007087 is not listed on IDEAS
- Martins, Nuno C. & Villanueva, Ernesto, 2006. "The impact of mortgage interest-rate subsidies on household borrowing," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1601-1623, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.