Dealing with an anchoring bias in the mortgage market: a regulatory approach

Nelson Camanho; Ronit Levine-Schnur; Tal Farber

doi:10.1007/978-3-030-35622-4_10

Dealing with an anchoring bias in the mortgage market: a regulatory approach

Nelson Camanho, Ronit Levine-Schnur^*, Tal Farber

^*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

2 Citations (Scopus)

Abstract

This chapter investigates whether mortgage regulation assures proper decision-making by borrowers. It offers regulatory responses to mitigate a “mortgage illusion” phenomenon revealed in recent experimental studies. According to these experiments, buyers are influenced by the comparison between the monthly rental payment and the monthly mortgage installment for fixed-rate mortgages. Therefore, consumers are more likely to buy a house when the rent is higher than the mortgage installment. The chapter suggests that regulators account for this phenomenon when designing mortgage policies.

Original language	English
Title of host publication	Measuring the effectiveness of real estate regulation
Subtitle of host publication	interdisciplinary perspectives
Editors	Ronit Levine-Schnur
Place of Publication	Cham
Publisher	Springer International Publishing
Pages	191-204
Number of pages	14
ISBN (Electronic)	9783030356224
ISBN (Print)	9783030356217
DOIs	https://doi.org/10.1007/978-3-030-35622-4_10
Publication status	Published - 1 Jan 2020
Externally published	Yes

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10.1007/978-3-030-35622-4_10

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Dealing with an anchoring bias in the mortgage market: a regulatory approach. / Camanho, Nelson; Levine-Schnur, Ronit; Farber, Tal.
Measuring the effectiveness of real estate regulation: interdisciplinary perspectives. ed. / Ronit Levine-Schnur. Cham: Springer International Publishing, 2020. p. 191-204.

Research output: Chapter in Book/Report/Conference proceeding › Chapter › peer-review

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Dealing with an anchoring bias in the mortgage market: a regulatory approach

Abstract

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