Advantageous Selection with Intermediaries: A Study of GSE-Securitized Mortgage Loans
| Autor: | Hsin-Tien Tsai |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
History
Polymers and Plastics media_common.quotation_subject Financial intermediary Vertical market Subsidy Monetary economics Industrial and Manufacturing Engineering Interest rate Intermediary Economics Deadweight loss Market power Business and International Management Imperfect competition media_common |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| Popis: | This paper studies the effects of mortgage subsidies and imperfect competition in the U.S. mortgage market. I exploit discontinuities in interest rates generated by pricing rules and find evidence of advantageous selection. I estimate an industry model that highlights the relationship between mortgage subsidies, intermediary lenders' market power, and borrower's advantageous selection. The model shows that mortgage subsidies enable advantageous selection, creating a deadweight loss of 7.90 billion. Counterfactual analysis reveals that a 50% decrease in lender concentration reduces efficiency by 1.39 billion if mortgages are subsidized, and conversely, increases efficiency by 750.07 million if mortgages are not subsidized. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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