Authors: Donald R. Epley and Alireza Tahai

Start Page: 37
End Page: 51
Volume: 4
Issue Number: 1
Year: 1989
Publication: Journal of Real Estate Research

Abstract: This paper presents a model of mortgagor-revealed preferences for a margin and other associated adjustable-rate mortgage features estimated empirically from a cross-sectional sample of approved mortgage applications in the United States from 1984-87. It builds on the conclusions of others that mortgage menus create clientele effects because different contracts are designed to induce borrowers to reveal information about their preference structure. The pooled OLS model included numerous mortgage characteristics and produced statistical results that generally supported conventional wisdom concerning borrower behavior.