
handle: 11250/2496937 , 10419/209998
We report evidence that salience may have economically significant effects on homeowners' borrowing behavior, through a bias in favour of less salient but more costly loans. Survey evidence corroborates the existence of such a bias. We outline a simple model in which some consumers are biased and show that under plausible assumptions this affects prices in equilibrium. Market data support the predictions of the model.
capital structure, VDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212, ddc:330, G14, salience, co-op, JEL: D12, housing market, D12, G21, G32, JEL: G14, debt, JEL: G21, JEL: G32
capital structure, VDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212, ddc:330, G14, salience, co-op, JEL: D12, housing market, D12, G21, G32, JEL: G14, debt, JEL: G21, JEL: G32
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