Advertising Expensive Mortgages

• 成果类型: Article
• 署名作者: Gurun, Umit G.; Matvos, Gregor; Seru, Amit
• 署名单位: University of Texas System; University of Texas Dallas; University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12423
• 发表日期: 2016
• 页码: 2371-2416
• 关键词: information; securitization; attention; search; prices; CRISIS; media; MODEL

摘要

Using information on advertising and mortgages originated by subprime lenders, we study whether advertising helped consumers find cheaper mortgages. Lenders that advertise more within a region sell more expensive mortgages, measured as the excess rate of a mortgage after accounting for borrower, contract, and regional characteristics. These effects are stronger for mortgages sold to less sophisticated consumers. We exploit regional variation in mortgage advertising induced by the entry of Craigslist and other tests to demonstrate that these findings are not spurious. Analyzing advertising content reveals that initial/introductory rates are frequently advertised in a salient fashion, where reset rates are not.