My Research Statement is available here.
Consumer Search Costs in Mortgage Markets (Job Market Paper)
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Abstract: Mortgage borrowers in the United States face considerable search costs and as a result, tend to consider very few lenders despite a high dispersion in mortgage prices. I adapt the Hortaçsu and Syverson (2004) search model to the mortgage market and employ data on fully insured mortgages, ensuring that observed price dispersion is not due to variations in default risks. I estimate the distribution of consumer search costs in each U.S. state, finding that nationally a median borrower faces a monthly search cost of about $40. At the state-level, search costs vary positively with average age and household income, and negatively with years of education. Counterfactual simulations predict a non-monotonic relationship between search costs and price dispersion, and a positive relationship between search cost reductions and social welfare. Compared to the full information scenario, the presence of costly consumer search reduces market welfare by almost $35 million each month.
Price Discrimination in Mortgage Markets (Research in Progress)
Consumer Search Costs in Mortgage Markets (Job Market Paper)
Download here.
Abstract: Mortgage borrowers in the United States face considerable search costs and as a result, tend to consider very few lenders despite a high dispersion in mortgage prices. I adapt the Hortaçsu and Syverson (2004) search model to the mortgage market and employ data on fully insured mortgages, ensuring that observed price dispersion is not due to variations in default risks. I estimate the distribution of consumer search costs in each U.S. state, finding that nationally a median borrower faces a monthly search cost of about $40. At the state-level, search costs vary positively with average age and household income, and negatively with years of education. Counterfactual simulations predict a non-monotonic relationship between search costs and price dispersion, and a positive relationship between search cost reductions and social welfare. Compared to the full information scenario, the presence of costly consumer search reduces market welfare by almost $35 million each month.
Price Discrimination in Mortgage Markets (Research in Progress)