EconPapers    
Economics at your fingertips  
 

The Hidden Costs of Hidden Debt

Johan Almenberg and Artashes Karepetian ()
Additional contact information
Johan Almenberg: Regeringskansliet, Finansdepartementet
Artashes Karepetian: Norges Bank, Oslo

No 1206, Working Papers from Departament Empresa, Universitat Autònoma de Barcelona

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. Survey evidence corroborates the existence of such a bias. We outline a simple model in which some consumers are biased and show that under plausible assumptions this a§ects prices in equilibrium. Market data support the predictions of the model.

Keywords: salience; debt; housing market; co-op; capital tructure (search for similar items in EconPapers)
JEL-codes: D12 G14 G21 G32 (search for similar items in EconPapers)
Date: 2011-10, Revised 2011-10
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Published in Working Papers at the Department of Business, January pages 1-41

Downloads: (external link)
http://www.uab.cat/doc/DOC_WP_12_06 Revised version, 2011 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bbe:wpaper:1206

Access Statistics for this paper

More papers in Working Papers from Departament Empresa, Universitat Autònoma de Barcelona
Series data maintained by Departament Empresa ().

 
Page updated 2017-11-10
Handle: RePEc:bbe:wpaper:1206