The impact of mortgage interest-rate subsidies on household borrowing

• 成果类型: Article
• 署名作者: Martins, Nuno C.; Villanueva, Ernesto
• 署名单位: Pompeu Fabra University; Banco de Espana; Banco de Portugal; Universidade Nova de Lisboa
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2005.09.007
• 发表日期: 2006
• 页码: 1601-1623
• 关键词: consumer borrowing; mortgage interest-rate subsidies; quasi-natural experiment

摘要

The responsiveness of household borrowing to changes in the interest rate is a crucial parameter for assessing public policies aimed at promoting saving. We estimate the effect on household borrowing of a reform of a program that subsidized interest rates on mortgages signed by medium- and low-income households. The reform established a ceiling in the price of the house that could be financed with the program. First, we use triple difference estimators exploiting the fact that the reform should affect most the borrowing behavior of eligible individuals living in high-price areas, and estimate that the elasticity of the probability getting a loan to the interest rate lies between -2.8 and -1.3. Second, we document that after the reform, the distribution of loan sizes became more concentrated at the discontinuity point of the budget constraint of eligible individuals. Both findings are consistent with a negative response of household borrowing to increases in interest rates. (c) 2005 Elsevier B.V. All rights reserved.