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Consumer financial literacy and the efficiency of mortgage‐related decisions: New evidence from the Panel Study of Income dynamics

cris.lastimport.scopus2024-11-11T02:30:23Z
dc.abstract.enThis study evaluated the link between financial literacy and household mortgage decisions. To this end, the longitudinal data set for the U.S. population from the Panel Study of Income Dynamics (PSID) was used. Evidence for links between financial literacy levels and (1) mortgage uptake, (2) mortgage interest rates and (3) mortgage refinancing decisions were examined using the two waves (2015 and 2017) of PSID data, combined with the 2016 PSID supplementary questionnaire examining the measured financial literacy of household members. Our results revealed a positive link between financial literacy and mortgage possession and, additionally, between financial literacy and the subsequent decision to take out a mortgage. Moreover, higher financial literacy scores were associated with lower mortgage interests and a greater likelihood of mortgage refinancing. On average, a household that refinanced its mortgage was able to reduce its interest rate by almost 0.7 percentage points, providing evidence of the positive role of financial literacy in securing better mortgage terms.
dc.affiliationAdministracji i Nauk Społecznych
dc.contributor.authorPiotr Bialowolski
dc.contributor.authorAndrzej Cwynar
dc.contributor.authorJing Jian Xiao
dc.contributor.authorDorota Weziak‐Bialowolska
dc.date.accessioned2024-07-09T12:19:56Z
dc.date.available2024-07-09T12:19:56Z
dc.date.issued2021
dc.identifier.doi10.1111/ijcs.12646
dc.identifier.issn1470-6423
dc.identifier.issn1470-6431
dc.identifier.urihttps://repo.akademiawsei.eu/handle/item/435
dc.languageen
dc.pbn.affiliationeconomics and finance
dc.relation.ispartofInternational Journal of Consumer Studies
dc.rightsCC-BY-NC-ND
dc.subject.enfinancial literacy
dc.subject.eninterest rate
dc.subject.enmortgage debt
dc.subject.enPanel Study of Income Dynamics
dc.subject.enrefinancing decisions
dc.titleConsumer financial literacy and the efficiency of mortgage‐related decisions: New evidence from the Panel Study of Income dynamics
dc.typeReviewArticle
dspace.entity.typePublication
oaire.citation.issue1
oaire.citation.volume46