How does working in a finance profession affect mortgage delinquency?

Agarwal, Sumit; Chomsisengphet, Souphala; Zhang, Yunqi

doi:10.1016/j.jbankfin.2017.01.019

Cited by 24 publications

(14 citation statements)

References 30 publications

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“…Relative to those in work, persons unemployed or not in the labour force have lower levels of financial literacy (Agnew et al, 2013). There is also a related literature which shows that industry of employment can affect personal finance decisions (Agarwal et al, 2017).…”

Section: Previous Researchmentioning

confidence: 99%

Understanding the Gender Gap in Financial Literacy: Evidence from Australia

Preston

Wright

2019

Economic Record

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Using micro‐data from the Household, Income and Labour Dynamics in Australia Survey, and the Oaxaca–Blinder decomposition technique, this paper examines the determinants of the gender gap in financial literacy. The analysis suggests that human capital variables, such as age and education, are not important in explaining the gender gap in financial literacy. Labour market variables, such as sector, occupation, industry, union membership and labour market status, are important and explain around 16 per cent of the gap. This finding is dependent on the assumption that these variables are exogenous. There is a large unexplained gap, suggesting that the main determinants are neither human capital nor labour market factors.

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Section: Previous Researchmentioning

confidence: 99%

Understanding the Gender Gap in Financial Literacy: Evidence from Australia

Preston

Wright

2019

Economic Record

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“…To summarize, this section provides evidence for the heterogeneity in borrowers’ curtailment responses to interest rate changes dependent on borrower and mortgage characteristics. Similarly, Agarwal, Chomsisengphet and Zhang (2017) also document significant variation in the effect of working in a financial profession on mortgage delinquency probabilities across different types of borrowers. Our findings show that there might not be a one‐size‐fits‐all solution when designing a strategy to control and manage the curtailment risk associated with exogenous interest rate shocks.…”

Section: Resultsmentioning

confidence: 85%

“…In this article, we fill the gap in both strands of literature by exploring and quantifying the effect of interest rate changes on mortgage curtailments. This study also attempts to extend the mortgage literature on the impact of heterogeneous borrower characteristics from the perspective of delinquency risk ( e.g ., Agarwal, Chomsisengphet and Zhang 2017) to the perspective of curtailment risk.…”

Section: Introductionmentioning

confidence: 99%

How do Interest Rate Changes Affect Mortgage Curtailments? Evidence from China

Kuang

Liu

et al. 2019

Real Estate Economics

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This study uses a unique data set of adjustable‐rate mortgages in China to investigate the effect of interest rate changes on mortgage curtailments. A distributed lag model shows that on average, the cumulative curtailment over four months increases by about RMB 1,856 in response to a 1 percentage point increase in interest rates. Further analyses show that the degree of responsiveness of mortgage curtailments depends on the direction of the interest rate changes: curtailments are more responsive to interest rate increases than to decreases. We also find significant heterogeneity in borrowers’ curtailment responses.

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“…Higher levels of financial literacy are also positively associated with more accurate self-assessment of one's own mortgage contracts (Courchane et al, 2008 ) and a greater ability to better match loan products to one's own situation (Fornero et al, 2011 ; Smith et al, 2012 ; Gathergood and Weber, 2017 ). Finally, more financially literate debtors are less likely to default on their debts (Gerardi et al, 2010 ; Fornero et al, 2011 ; Agarwal et al, 2017 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Improving Debt Literacy by 2/3 Through Four Simple Infographics Requires Numeracy and Not Focusing on Negatives of Debt

Porzak

Cwynar

2021

Front. Psychol.

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Borrowing behavior may be more resistant to formal educational treatments than other financial behaviors. In order to study the process and results of infographics-based debt education, we used eye tracking technology (SMI RED 500 Hz) to monitor the oculomotor behavior of 108 participants (68 females) aged 18 to 60 who were shown 4 infographics. The study used an experimental design with repeated measures and an internal comparison group. We also used scales of debt literacy and a set of information literacy scales: numerical, graph, and linguistic. The results confirm that short-term infographics-based debt education can improve debt literacy significantly. The difference in processing the educational contents that were not known to participants before the educational session suggests that participants with better information literacy make more considerable debt literacy progress. Specifically, we found that numerical literacy is a significant mediator of debt education results, depending on the initial level of debt literacy; this relation is moderated by the focus of visual attention on negatives of debt. We found no significant relationship between debt literacy education results and those of graph and linguistic literacy.

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How does working in a finance profession affect mortgage delinquency?

Cited by 24 publications

References 30 publications

Understanding the Gender Gap in Financial Literacy: Evidence from Australia

Understanding the Gender Gap in Financial Literacy: Evidence from Australia

How do Interest Rate Changes Affect Mortgage Curtailments? Evidence from China

Improving Debt Literacy by 2/3 Through Four Simple Infographics Requires Numeracy and Not Focusing on Negatives of Debt

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