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Demand for Home Pension and Reverse Mortgage: An Information Provision Survey Experiment

Author

Listed:
  • Duk Gyoo Kim

    (Yonsei University)

  • In Do Hwang

    (Bank of Korea)

Abstract

Elderly poverty remains a critical issue in South Korea, despite widespread homeownership among older adults. Although the home pension program allows retirees to unlock housing wealth, uptake remains below 2% as of 2024. Using a large-scale survey of adults aged 55-79, we conduct an information provision experiment to assess how policy reforms and belief corrections affect demand. We find that enrollment intention rises by 6 percentage points when monthly pension payments are adjusted with house price changes, and by 5 percentage points when bequest conditions are made more flexible. Notably, merely informing that the fixed monthly payments-often perceived as disadvantageous during housing price increases-do not result in a loss when house prices rise because the amount bequeathed to their children increases accordingly, led to a 7%p increase in enrollment intention. Our results suggest that addressing informational barriers may be as effective as structural reforms in increasing program uptake.

Suggested Citation

  • Duk Gyoo Kim & In Do Hwang, 2025. "Demand for Home Pension and Reverse Mortgage: An Information Provision Survey Experiment," Working papers 2025rwp-273, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2025rwp-273
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    References listed on IDEAS

    as
    1. Kyung-Jin Choi & HeuiJu Chun & Dong-Hwa Lee, 2023. "Determinants of Households’ Intention to Take Out or Convert to a Trust-Type Home Pension: Evidence from South Korea," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(5), pages 1538-1553, April.
    2. Hanewald, Katja & Bateman, Hazel & Fang, Hanming & Wu, Shang, 2020. "Is there a demand for reverse mortgages in China? Evidence from two online surveys," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 19-37.
    3. Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2023. "Designing Information Provision Experiments," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 3-40, March.
    4. Kadir Atalay & Garry F. Barrett & Peter Siminski, 2019. "Pension incentives and the joint retirement of couples: evidence from two natural experiments," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(3), pages 735-767, July.
    5. Hwang, In Do, 2021. "Prospect theory and insurance demand: Empirical evidence on the role of loss aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    6. Wei Han & Bo Zhang, 2024. "Analysis of the transformation of demand willingness for housing reverse mortgages in China based on a scenario simulation experiment," Asian Economic Journal, East Asian Economic Association, vol. 38(3), pages 371-403, September.
    7. David Danz & Lise Vesterlund & Alistair J. Wilson, 2022. "Belief Elicitation and Behavioral Incentive Compatibility," American Economic Review, American Economic Association, vol. 112(9), pages 2851-2883, September.
    8. Simon Gächter & Eric J. Johnson & Andreas Herrmann, 2022. "Individual-level loss aversion in riskless and risky choices," Theory and Decision, Springer, vol. 92(3), pages 599-624, April.
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    Keywords

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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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