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@article{Andersen:2020:10.1257/aer.20180865,
author = {Andersen, S and Campbell, JY and Nielsen, KM and Ramadorai, T},
doi = {10.1257/aer.20180865},
journal = {The American Economic Review},
pages = {3184--3230},
title = {Sources of inaction in household finance: evidence from the Danish mortgage markets},
url = {http://dx.doi.org/10.1257/aer.20180865},
volume = {110},
year = {2020}
}

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TY  - JOUR
AB  - We build an empirical model to attribute delays in mortgage refinancing to psychological costs inhibiting refinancing until incentives are sufficiently strong; and behavior, potentially attributable to information-gathering costs, lowering the probability of household refinancing per unit time at any incentive. We estimate the model on administrative panel data from Denmark, where mortgage refinancing without cash-out is unconstrained. Middle-aged and wealthy households act as if they have high psychological refinancing costs; but older, poorer, and less-educated households refinance with lower probability irrespective of incentives, thereby achieving lower savings. We use the model to understand frictions in the mortgage channel of monetary policy transmission.
AU  - Andersen,S
AU  - Campbell,JY
AU  - Nielsen,KM
AU  - Ramadorai,T
DO  - 10.1257/aer.20180865
EP  - 3230
PY  - 2020///
SN  - 0002-8282
SP  - 3184
TI  - Sources of inaction in household finance: evidence from the Danish mortgage markets
T2  - The American Economic Review
UR  - http://dx.doi.org/10.1257/aer.20180865
UR  - http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000576053700006&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=1ba7043ffcc86c417c072aa74d649202
UR  - https://www.aeaweb.org/articles?id=10.1257/aer.20180865
UR  - http://hdl.handle.net/10044/1/86202
VL  - 110
ER  -

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