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Mortgages and Financial Expectations: A Household Level Analysis

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Author Info
Sarah Brown ()
Gaia Garino ()
Karl Taylor ()

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Abstract

We contribute to the literature on household mortgage debt by exploring one particular influence on mortgage debt at the household level, namely the financial expectations of the individuals within the household. Our theoretical model predicts a positive association between the quantity of mortgage debt and optimistic financial expectations. Our empirical findings based on household level data provide convincing support for our theoretical priors in that optimistic financial expectations are positively associated with the level of outstanding mortgage debt.

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File URL: http://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp05-9.pdf
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Publisher Info
Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 05/9.

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Date of creation: Apr 2005
Date of revision: Dec 2006
Handle: RePEc:lec:leecon:05/9

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Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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Fax: +44 (0)116 252 2908
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Related research
Keywords: Financial Expectations Housing Tenure Inter-temporal Consumption Mortgage Debt

Other versions of this item:

Find related papers by JEL classification:
D18 - Microeconomics - - Household Behavior - - - Consumer Protection
D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving

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References listed on IDEAS
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    Other versions:
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    Other versions:
  6. Sarah Brown & Karl Taylor & Gaia Garino & Stephen Wheatley Price, 2003. "Debt and financial expectations: an individual and household level analysis," Discussion Papers in Economics 03/5, Department of Economics, University of Leicester, revised Feb 2004. [Downloadable!]
    Other versions:
  7. Fortin, N.M., 1992. "Allocation Inflexibilities , Female Labor Supply and Housing Assets Accumulation: Are Women Working to Pay the Mortagage," Cahiers de recherche 9204, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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