Estimating Price Elasticities on the Hungarian Consumer Lending and Deposit Markets: Demand Effects and Their Possible Consequences
In this paper, we use bank product and consumer level data and estimate a random coefficient logit model (RCL) to calculate price elasticities on the Hungarian consumer lending and retail deposit markets in line with the most recent developments in the literature on discrete choice demand estimation. The findings indicate that, on average, demand for domestic currency-denominated loans is more price sensitive than demand for foreign currency loans. The results also suggest that there is an asymmetric substitution effect toward foreign currency- denominated loans as a result of a price increase of domestic currency-denominated loans (i.e. a rise in interest rates on HUF-denominated loans increases the demand for foreign currency loans more than a rise in interest rates on foreign currency loans increases the demand for HUF-denominated loans). Finally, as the substitution effect toward foreign currencydenominated loans is stronger, it might weaken the effectiveness of the interest and exchange rate channels of monetary transmission.
Volume (Year): (2010)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: |
Phone: +43/1/404 20 7405
Fax: +43/1/404 20 7499
Web page: http://www.oenb.at
More information through EDIRC
|Order Information:|| Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria|
When requesting a correction, please mention this item's handle: RePEc:onb:oenbfi:y:2010:i:1:b:5. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Birgit Riedler)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.