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Product differentiation and consumption efficiency in mortgage markets

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  • Ward, Damian Robert

Abstract

This study evaluates the outcome of non-price competition in the UK mortgage market. Developing a novel application of data envelopment analysis, DEA, within the banking literature, this study finds evidence of high consumption efficiency. Employing cluster analysis, the study provides additional evidence that efficient mortgages are available for borrowers across a broad range of market segments. The study also shows that these beneficial aspects of non-price competition are only available to borrowers who select mortgages based on rational measures of price. The discussion closes with guidance for policymakers.

Suggested Citation

  • Ward, Damian Robert, 2009. "Product differentiation and consumption efficiency in mortgage markets," Journal of Business Research, Elsevier, vol. 62(8), pages 805-809, August.
    • Handle: RePEc:eee:jbrese:v:62:y:2009:i:8:p:805-809
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    References listed on IDEAS

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    9. Maria Silva Portela & Pedro Borges & Emmanuel Thanassoulis, 2003. "Finding Closest Targets in Non-Oriented DEA Models: The Case of Convex and Non-Convex Technologies," Journal of Productivity Analysis, Springer, vol. 19(2), pages 251-269, April.
    10. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
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    14. David Miles, 2005. "Incentives Information and Efficiency in the UK Mortgage Market," Economic Journal, Royal Economic Society, vol. 115(502), pages 82-98, March.
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    Cited by:

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    3. Avkiran, Necmi K. & Goto, Mika, 2011. "A tool for scrutinizing bank bailouts based on multi-period peer benchmarking," Pacific-Basin Finance Journal, Elsevier, vol. 19(5), pages 447-469, November.

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