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BEGIN:VEVENT
UID:a755bd43e258595098a70e842d2643a3
CATEGORIES:Seminars
CREATED:20150211T143230
SUMMARY:Lunch Seminar: Luigi Guiso - EIEF
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p style="line-height: normal;"><strong><span style="font-size: 12pt; font-
 family: 'Times New Roman','serif';">The Supply Side of Household Finance</s
 pan></strong></p><p style="line-height: normal;"><span style="font-size: 12
 pt; font-family: 'Times New Roman','serif';">Abstract:</span></p><p style="
 text-align: justify;">We propose a new, data-based test for the presence of
  biased financial advice when households choose between Fixed Rate Mortgage
 s (FRM) and Adjustable Rate Mortgages (ARM). If households are wary, the re
 lative cost of FRM and ARM should be a sufficient statistics for a househol
 d contract choice: the identity of the bank originating the loan should pla
 y no role. If households rely on banks advice to guide their choice, banks 
 may be tempted to bias advice in a direction that is most convenient to the
 m, so that bank-specific characteristics play a role. We test this implicat
 ion on the sample of 1.6 million mortgages originated in Italy between 2004
  and 2010. We find that the choice between ARM and FRM is significantly aff
 ected by banks’ characteristics, especially over intervals of time during w
 hich banks do not adjust the relative price of the two mortgage types. This
  supports the view that banks are able to affect household mortgage choices
  not only through a price but also through an advice channel.</p>
DTSTAMP:20260421T164904Z
DTSTART:20141001T130000Z
DTEND:20141001T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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