Showing 1 - 10 of 11,816
This paper studies the linkage between owner-occupied housing and portfolio choice. Using a theoretical simulation model with Finnish asset return data we find that a leveraged position in housing has a clear negative effect on the share of stocks in a mean-variance efficient portfolio. The...
Persistent link: https://www.econbiz.de/10005245012
We analyze households' joint investment decisions for financial wealth and homes. We use a bivariate censored regression model with endogenous switching. Fixed costs or transaction costs are captured by an unobserved nonzero censoring threshold. The model allows for spill-over effects of a...
Persistent link: https://www.econbiz.de/10005642504
Homestead exemptions to personal bankruptcy allow households to retain their home equity up to a limit determined at the state level. Households that may experience bankruptcy thus have an incentive to bias their portfolios towards home equity. Using US household data from the Survey of Income...
Persistent link: https://www.econbiz.de/10009640776
This paper analyses the default option typical to American mortgages. Households borrow to buy durable housing, but future house prices are uncertain, and households find it dvantageous to default on their debt if house prices fall sufficiently. A key assumption of the model is that households...
Persistent link: https://www.econbiz.de/10010285581
We study the link between homeownership and entrepreneurship using a model of occupational choice and housing tenure where homeowners commit a fixed budget to mortgage payments. Our model predicts that: (i) mortgage commitments, by amplifying risk aversion, diminish the likelihood that...
Persistent link: https://www.econbiz.de/10010319567
This paper examines the contributions of population aging, mortgage innovation and historically low interest rates to the sharp rise in U.S. house prices and mortgage debt between 1994 and 2005. I construct an overlapping generations general equilibrium housing model and find that these three...
Persistent link: https://www.econbiz.de/10010319625
We analyze households' joint investment decisions for financial wealth and homes. We use a bivariate censored regression model with endogenous switching. Fixed costs or transaction costs are captured by an unobserved nonzero censoring threshold. The model allows for spill-over effects of a...
Persistent link: https://www.econbiz.de/10010321730
This paper studies the macroeconomic effects of implicit government guarantees of the obligations of government-sponsored enterprises. We construct a model with competitive housing and mortgage markets in which the government provides banks with insurance against aggregate shocks to mortgage...
Persistent link: https://www.econbiz.de/10010397682
We study the link between homeownership, mortgage debt, and entrepreneurship using a model of occupational choice and housing tenure where homeowners commit to mortgage payments. Our model predicts that, as long as mortgage rates exceed the rate of interest on liquid wealth: (i) mortgage debt,...
Persistent link: https://www.econbiz.de/10010435738
This paper examines the welfare cost of rare housing disasters characterized by large drops in house prices. I construct an overlapping generations general equilibrium model with recursive preferences and housing disaster shocks. The likelihood and magnitude of housing disasters are inferred...
Persistent link: https://www.econbiz.de/10011396703