Shopping for Mortgage Contracts: Price Discrimination, Bank Mergers, and Negotiation

该奖项资助为一类重要市场开发新的数据分析技术的工作。这项新技术将用于分析有关消费者抵押贷款的非常详细的数据。在许多市场上，价格是通过买卖双方的谈判确定的。卖家张贴或宣布价格，但消费者可以协商折扣。卖家谈判的程度可能取决于顾客的特点。尽管折扣普遍存在，但现有的市场数据分析经验技术忽略了差异化产品市场中的折扣。该研究项目开发并应用了一种新的经验技术，允许贴现。这项技术被用于分析1992年至2004年间在加拿大发行的大量获批抵押贷款的非常详细的数据。这些数据提供了关于抵押贷款特征以及家庭和市场特征的极有价值的信息。抵押贷款是研究这种新方法的一个很好的案例，因为许多消费者都是根据附近金融机构“公布”的价格/利率来协商折扣的。该项目对市场集中度、差异化和信息摩擦的相互作用如何决定银行的市场力量提供了新的见解。第一个目标是对这个市场中的折扣和价格歧视进行描述性分析。第二个目标是了解加拿大银行业的合并如何影响抵押贷款利率。第三个目标是为这个行业开发和估计一个完整的供需模型，并用它来回答有关信贷监管对抵押贷款和住房需求可能产生的影响的几个不同问题。了解消费者如何购物和协商抵押贷款，将使我们对这个市场如何支持房地产市场有新的认识。

This award funds work that develops a new data analysis technique for an important class of markets. The new technique will be used to analyze very detailed data about consumer mortgages.In many markets prices are determined through a negotiation process between buyers and sellers. Sellers post or announce a price, but consumers may be able to negotiate a discount. The extent to which sellers negotiate may depend on customer characteristics. Despite the prevalence of discounting, existing empirical techniques for analyzing market data ignore discounting in differentiated products markets. This research project develops and applies a new empirical technique that allows for discounting.The technique is used to analyze very detailed data on a large set of approved mortgages issued in Canada between 1992 and 2004. These data provide extremely valuable information on features of the mortgage as well as household and market characteristics. Mortgages are a good case study for the new method because many consumers negotiate a discount from the price/interest rate 'posted' by a neighborhood financial institution.The project gives new insight into how the interplay of market concentration, differentiation, and information frictions determine the market power of banks. The first goal is a descriptive analysis of discounting and price discrimination in this market. The second goal is to understand how mergers in the Canadian banking industry affected mortgage interest rates. The third goal is to develop and estimate a full supply and demand model for this industry and use it to answer several different questions about the likely effect of credit regulations on demand for mortgages and housing.Understanding how consumers shop and negotiate for mortgages will give us new insight into how this market functions to support housing markets.