Income Volatility and Residential Mortgage Delinquency: Evidence from 12 EU countries
We investigate the socio-economic determinants of mortgage delinquency in 12 EU countries and observe that income volatility significantly increases the mortgage delinquency risk. This pattern even holds for borrowers with higher-income profiles if volatility in income is high enough. From this result we can draw the following conclusions i) mortgage protection insurance policies might be failing to cover those borrowers most in need ii) the existence of credit market imperfections, and iii) the inability for a number of borrowers most at income risk to accumulate precautionary savings in order to meet mortgage payments when shocks in income arise.
|Date of creation:||Feb 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.maynoothuniversity.ie/economics-finance-and-accounting
More information through EDIRC
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.:
- Diaz-Serrano, Luis, 2005. "Labor income uncertainty, skewness and homeownership: A panel data study for Germany and Spain," Journal of Urban Economics, Elsevier, vol. 58(1), pages 156-176, July.
- Jappelli, Tullio & Pagano, Marco, 1988.
"Consumption and Capital Market Imperfection: An International Comparison,"
CEPR Discussion Papers
244, C.E.P.R. Discussion Papers.
- Jappelli, Tullio & Pagano, Marco, 1989. "Consumption and Capital Market Imperfections: An International Comparison," American Economic Review, American Economic Association, vol. 79(5), pages 1088-1105, December.
- Hartog, Joop & Vijverberg, Wim P., 2002. "Do Wages Really Compensate for Risk Aversion and Skewness Affection?," IZA Discussion Papers 426, Institute for the Study of Labor (IZA).
- Kau, James B. & Keenan, Donald C., 1999. "Patterns of rational default," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 765-785, November.
- Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992.
"Earnings Uncertainty and Precautionary Saving,"
CEPR Discussion Papers
699, C.E.P.R. Discussion Papers.
- Arrondel, Luc, 2002.
"Risk management and wealth accumulation behavior in France,"
Elsevier, vol. 74(2), pages 187-194, January.
- Arrondel, L., 2000. "Risk Management and Wealth Accumulation Behavior in France," DELTA Working Papers 2000-18, DELTA (Ecole normale supérieure).
- Joop Hartog & Erik Plug & Luis Diaz Serrano & Jose Vieira, 2003. "Risk compensation in wages – a replication," Empirical Economics, Springer, vol. 28(3), pages 639-647, July.
- Skinner, Jonathan, 1988.
"Risky income, life cycle consumption, and precautionary savings,"
Journal of Monetary Economics,
Elsevier, vol. 22(2), pages 237-255, September.
- Jonathan S. Skinner, 1987. "Risky Income, Life Cycle Consumption, and Precautionary Savings," NBER Working Papers 2336, National Bureau of Economic Research, Inc.
- Pryce, Gwilym, 2002. "Theory and Estimation of the Mortgage Payment Protection Insurance Decision," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(2), pages 216-34, May.
- Stephen L Ross, 2000. "Mortgage Lending, Sample Selection and Default," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(4), pages 581-621.
- Stephen L. Ross & Geoffrey M. B. Tootell, 2000.
"Redlining, the Community Reinvestment Act, and Private Mortgage Insurance,"
2000-04, University of Connecticut, Department of Economics.
- Ross, Stephen L. & Tootell, Geoffrey M. B., 2004. "Redlining, the Community Reinvestment Act, and private mortgage insurance," Journal of Urban Economics, Elsevier, vol. 55(2), pages 278-297, March.
- Yongheng Deng & John M. Quigley & Robert Van Order, 1995.
"Mortgage Default and Low Downpayment Loans: The Costs of Public Subsidy,"
NBER Working Papers
5184, National Bureau of Economic Research, Inc.
- Deng, Yongheng & Quigley, John M. & Van Order, Robert & Mac, Freddie, 1996. "Mortgage default and low downpayment loans: The costs of public subsidy," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 263-285, June.
- Richard Anderson & James VanderHoff, 1999. "Mortgage Default Rates and Borrower Race," Journal of Real Estate Research, American Real Estate Society, vol. 18(2), pages 279-290.
- Robst, John & Deitz, Richard & McGoldrick, KimMarie, 1999. "Income variability, uncertainty and housing tenure choice1," Regional Science and Urban Economics, Elsevier, vol. 29(2), pages 219-229, March.
- Diaz-Serrano, Luis, 2004.
"On the Negative Relationship between Labor Income Uncertainty and Homeownership: Risk Aversion vs. Credit Constraints,"
IZA Discussion Papers
1208, Institute for the Study of Labor (IZA).
- Diaz-Serrano, Luis, 2005. "On the negative relationship between labor income uncertainty and homeownership: Risk-aversion vs. credit constraints," Journal of Housing Economics, Elsevier, vol. 14(2), pages 109-126, June.
- Luis Diaz-Serrano, 2005. "On the Negative Relationship between Labor Income Uncertainty and Homeownership: Risk Aversion vs. Credit Constraints," Economics, Finance and Accounting Department Working Paper Series n1460105, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- Piet M.A. Eichholtz, 1995. "Regional Economic Stability and Mortgage Default Risk in the Netherlands," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 421-439.
- Peter Chinloy, 1995. "Privatized Default Risk and Real Estate Recessions: The U.K. Mortgage Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(4), pages 401-420.
- Kerry D. Vandell & Thomas Thibodeau, 1985. "Estimation of Mortgage Defaults Using Disaggregate Loan History Data," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(3), pages 292-316.
- Gwilym Pryce & Margaret Keoghan, 2002. "Unemployment insurance for mortgage borrowers: is it viable and does it cover those most in need?," European Journal of Housing Policy, Taylor and Francis Journals, vol. 2(1), pages 87-114, April.
When requesting a correction, please mention this item's handle: RePEc:may:mayecw:n1530205. 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: ()
If references are entirely missing, you can add them using this form.