Consumer expertise or credit risk?an empirical analysis of mortgage pricing

  1. José María Barrutia 1
  2. María Paz Espinosa 1
  1. 1 Universidad del País Vasco/Euskal Herriko Unibertsitatea
    info

    Universidad del País Vasco/Euskal Herriko Unibertsitatea

    Lejona, España

    ROR https://ror.org/000xsnr85

Book:
XXII Congreso Nacional de Marketing: Oviedo, del 22 al 24 septiembre de 2010

Publisher: ESIC Editorial

ISBN: 978-84-7356-711-4

Year of publication: 2010

Pages: 127

Type: Book chapter

DIALNET GOOGLE SCHOLAR

Abstract

Loan mortgage interest rates are usually the result of a bank-customer negotiation process. We argue that, since mortgage loan is a complex product, consumer expertise could influence the customer bargaining power in the negotiation. Thus far, consumer expertise has not been considered as a relevant factor for mortgage pricing. Using data on mortgage loan prices for a sample of 1092 households for the year 2005 (Bank of Spain Survey of Household Finances, EFF-2005), and including credit risk, costs, potential capacity of the consumer to generate future business and bank competition variables, the regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan spreads.

Data source: Dialnet