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Household Finance

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May 2023

A Housing Portfolio Channel of QE Transmission

Alessandro REBUCCI , Daniel MARCEL TE KAAT, Chang MA , Dominik BODDIN
We document and quantify a housing portfolio channel of quantitative easing (QE) transmission. We identify this channel using household-level and regional data from Germany. We show that QE induces households with larger initial bond holdings to rebalance more their portfolios toward housing and par...
Keywords: Asset Market Segmentation, Buy-to-let, Germany, Housing Returns, Household Portfolio Rebalancing, Qu
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Annual Conference

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Household Finance, Senior Fellows/Fellows

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May 2023

How Costly Are Cultural Biases? Evidence from FinTech

Pulak GHOSH, Francesco DACUNTO, Alberto G. ROSSI, Rajiv JAIN
We propose a revealed-preferences approach to assess the costs of cultural biases faced by discriminators by comparing peer-to-peer loans the same lenders make alone and after observing suggestions by an automated robo-advisor in India. Discrimination across religions and against low-caste borrowers...
Keywords: Trust, Social Capital, Discrimination, Cultural Norms, Subjective Expectations, Robo-Advising, FinTech, Inter-ethnic Conflict, Social Conditioning, Religion, Caste.
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Annual Conference

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Household Finance

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May 2023

Countercyclical Income Risk and Portfolio Choices: Evidence from Sweden

Sylvain CATHERINE, Paolo SODINI, Yapei ZHANG
Using Swedish administrative panel data, we document that workers facing higher left-tail income risk when equity markets perform poorly are less likely to participate in the stock market and, conditional on participation, have lower equity shares. In line with theory, the relationship between cycli...
Keywords: Household finance, Asset pricing, Disaster risk, Labor income risk, Portfolio choices
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Annual Conference

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Household Finance

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May 2023

Are Borrowers Paid to Repay? Payday Effect in FinTech Lending

Jianfeng HU, Changcheng SONG, Yang (Gloria) YU
We conduct a field experiment to investigate how payday loan contracts design affects loan outcomes. Using a FinTech lending platform in Indonesia, we randomly extend the loan term by one or two days to align the loan due date with borrowers’ salary payday after the loan has been approved. Differe...
Keywords: FinTech, Household Finance, Payday
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Annual Conference

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Household Finance

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May 2023

The Effect of Principal Reduction on Household Distress: Evidence from Mortgage Cramdown

Clemens SIALM, Jacelly CESPEDES, Carlos PARRA
Mortgage cramdown enabled bankruptcy judges to discharge the underwater portion of a mortgage during Chapter 13 bankruptcy until the Supreme Court disallowed this practice in 1993. We investigate the impact of mortgage cramdown on household distress exploiting the random assignment of cases to judge...
Keywords: Debt Relief, Principal Reduction, Debt Overhang, Foreclosures, Consumer Bankruptcy, Housing Policies
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