Two-Dimensional Self-Selection of Borrowers
- 주제(키워드) Self-Selection , Mortgage Choice , ARM , Gamma Distribution
- 주제(기타) Economics
- 설명문(일반) [Kim, Sung Hyun] Ewha Womans Univ, Dept Econ, Seoul 03760, South Korea
- 등재 SSCI, SCOPUS, KCI등재
- OA유형 Green Submitted
- 발행기관 KOREAN ECONOMIC ASSOCIATION
- 발행년도 2019
- URI http://www.dcollection.net/handler/ewha/000000156050
- 본문언어 영어
- Published As http://dx.doi.org/10.1057/978-1-349-95121-5
- 저작권 이화여자대학교 논문은 저작권에 의해 보호받습니다.
초록/요약
The multi-dimensional heterogeneity of agents can provide interesting insights. To illustrate this point in the loan market context, we examine the borrowers' decision to switch from a variable rate loan to a fixed rate loan, using a model of two-dimensional borrower types (risk aversion and riskiness). Among high risk borrowers, more risk averse ones are selected out of the loan market and less risk averse ones are not tempted by the fixed rate loan. Switchers are more risk averse but have lower default risk. The Financial Services Commission's 2015 Mortgage Refinancing Program in Korea is discussed under our model's framework.
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