Replication data for: Diagnosing Consumer Confusion and Sub-optimal Shopping Effort: Theory and Mortgage-Market Evidence
Principal Investigator(s): View help for Principal Investigator(s) Susan E. Woodward; Robert E. Hall
Version: View help for Version V1
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Project Citation:
Woodward, Susan E., and Hall, Robert E. Replication data for: Diagnosing Consumer Confusion and Sub-optimal Shopping Effort: Theory and Mortgage-Market Evidence. Nashville, TN: American Economic Association [publisher], 2012. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116111V1
Project Description
Summary:
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Mortgage loans are leading examples of transactions where experts
on one side of the market take advantage of consumers' lack of knowledge and experience. We study the compensation that borrowers pay to mortgage brokers for assistance from application to closing. Two findings support the conclusion that confused borrowers overpay for brokers' services: (i ) A model of effective shopping shows that borrowers sacrifice at least $1,000 by shopping from too few brokers. (ii ) Borrowers who compensate their brokers with both cash and a commission from the lender pay twice as much as similar borrowers who pay no cash. (JEL D12, D14, G21)
Scope of Project
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
D12 Consumer Economics: Empirical Analysis
D14 Household Saving; Personal Finance
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
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