NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Sources of Inaction in Household Finance: Evidence from the Danish Mortgage Market

Steffen Andersen, John Y. Campbell, Kasper Meisner Nielsen, Tarun Ramadorai

NBER Working Paper No. 21386
Issued in July 2015, Revised in July 2019
NBER Program(s):The Asset Pricing Program, The Monetary Economics Program

We build an empirical model to decompose delays in mortgage refinancing into time-dependent inaction (a low probability of responding to a refinancing incentive in a given quarter) and state- dependent inaction (a psychological addition to the financial cost of refinancing). We estimate the model on high-quality administrative panel data from Denmark, where mortgage refinancing without cash-out is unconstrained. Middle-aged and wealthy households exhibit state-dependent inaction; but older, poorer, and less-educated households exhibit strong time-dependent inaction and thereby achieve lower savings. We use the model to understand frictions in the mortgage channel of monetary policy transmission.

download in pdf format
   (1334 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21386

Users who downloaded this paper also downloaded* these:
Badarinza, Campbell, and Ramadorai w22066 International Comparative Household Finance
Agarwal, Amromin, Chomsisengphet, Landvoigt, Piskorski, Seru, and Yao w21512 Mortgage Refinancing, Consumer Spending, and Competition: Evidence from the Home Affordable Refinancing Program
Scheuer and Werning w21323 The Taxation of Superstars
Keys, Pope, and Pope w20401 Failure to Refinance
Reinhart and Santos w21333 From Financial Repression to External Distress: The Case of Venezuela
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us