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- Title
Explaining why, right or wrong, (Italian) households do not like reverse mortgages.
- Authors
FORNERO, ELSA; ROSSI, MARIACRISTINA; URZÍ BRANCATI, MARIA CESIRA
- Abstract
We investigate the determinants of interest in reverse mortgages (RM) for a sample of Italian homeowners and find that the majority of individuals belonging to categories identified, on the basis of economic analysis, as the main potential beneficiaries (i.e., women, elderly and ‘house rich–cash poor’ individuals) are, in fact, less likely to express an interest. When allowing for individual characteristics, we find that most results remain robust and notice that risk aversion and negative expectations on one's standard of living after retirement predict higher interest in the product. These results suggest that RM is perceived not so much as an ordinary instrument to achieve a better standard of living, but rather as a remedy against poor consumption.
- Subjects
REVERSE mortgage loans; HOUSING research; INTERTEMPORAL choice; RISK aversion
- Publication
Journal of Pension Economics & Finance, 2016, Vol 15, Issue 2, p180
- ISSN
1474-7472
- Publication type
Article
- DOI
10.1017/S1474747215000013