Mental Accounting in the Housing Market

Johan Almenberg and Artashes Karapetyan

No 718, Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: We report evidence that salience may have economically significant effects on homeowners' borrowing behavior, through a bias in favour of less salient but more costly loans. We outline a simple model in which some consumers are biased. Under plausible assumptions, the bias may affect prices in equilibrium. Market data support the predictions of the model.

Keywords: salience; housing market; household finance; co-op; capital structure (search for similar items in EconPapers)
JEL-codes: D12 G14 G21 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-ure
Date: 2009-05-10, Revised 2010-08-28
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Related works:
Working Paper: Mental accounting in the housing market (2010)
Working Paper: Mental Accounting in the Housing Market (2009)
Working Paper: Mental accounting in the housing market (2009)
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