Psychological and cultural factors in the choice of mortgage products: a behavioral investigation

Mori, M., Diaz III, J., Ziobrowski, A. J. and Rottke, N. B. (2010) Psychological and cultural factors in the choice of mortgage products: a behavioral investigation. Journal of Behavioral Finance, 11 (2). pp. 82-91. ISSN 1542-7560 doi: 10.1080/15427560.2010.481981

Abstract/Summary

Using data from three countries that differ economically, culturally, and geographically, this study examines the role of Prospect Theory's reflection effect, a psychological factor, in combination with Uncertainty Avoidance (UA), a cultural factor, on the choice of mortgage products. Experiments were conducted using business professionals in the United States, Germany, and Japan. The results suggest that risk-averse people tend to become more risk seeking, leaning more toward adjustable-rate mortgages (ARMs) when choosing a mortgage type, and that this psychological effect may underlie the mortgage choices of people who tend to choose ARMs, even across countries with different cultures.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/79277
Identification Number/DOI	10.1080/15427560.2010.481981
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Taylor & Francis
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