Debt Portfolios and Homestead Exemptions

• 成果类型: Article
• 署名作者: Hintermaier, Thomas; Koeniger, Winfried
• 署名单位: University of Bonn; University of St Gallen
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20120151
• 发表日期: 2016
• 页码: 103-141
• 关键词: personal bankruptcy; quantitative theory; life-cycle; consumption; insurance; credit; taxation; equity

摘要

This paper investigates the economic relevance of the large differences in homestead exemptions across US states. We build a structural model for an equilibrium analysis of debt-portfolio choices over the life cycle. Our analysis captures key patterns from the observed cross-sectional distributions of secured debt, unsecured debt, and of home equity. The model predicts that harmonizing the amount of home equity exempt in bankruptcy procedures has quantitatively negligible effects on the interest rate of unsecured debt and on welfare, unless the exemption is eliminated. The small welfare effect may rationalize why the differences in homestead exemptions are so persistent.