The Rose‐Tinted Spectacles of Homeowners

The Rose‐Tinted Spectacles of Homeowners Based on annual household surveys between 2011 and 2014 and additional evidence from a customized survey in 2013, we document that a sizable group of homeowners in the Netherlands has a rosy picture of the value of their house. Even homeowners who are arguably well informed tend to overestimate the value of their house. Multivariate regression analyses suggest that this overestimation is positively related to the mortgage loan‐to‐value ratio and the tenure of the owner‐occupier. Moreover, homeowners tend to overestimate the value of the house when the actual value falls below the purchase price of the house. We discuss rational interpretations of these findings as well as psychological explanations such as loss aversion or an endowment effect. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Consumer Affairs Wiley

The Rose‐Tinted Spectacles of Homeowners

Loading next page...
 
/lp/wiley/the-rose-tinted-spectacles-of-homeowners-zKJr4JE0nr
Publisher
Wiley
Copyright
Copyright 2018 by The American Council on Consumer Interests
ISSN
0022-0078
eISSN
1745-6606
D.O.I.
10.1111/joca.12134
Publisher site
See Article on Publisher Site

Abstract

Based on annual household surveys between 2011 and 2014 and additional evidence from a customized survey in 2013, we document that a sizable group of homeowners in the Netherlands has a rosy picture of the value of their house. Even homeowners who are arguably well informed tend to overestimate the value of their house. Multivariate regression analyses suggest that this overestimation is positively related to the mortgage loan‐to‐value ratio and the tenure of the owner‐occupier. Moreover, homeowners tend to overestimate the value of the house when the actual value falls below the purchase price of the house. We discuss rational interpretations of these findings as well as psychological explanations such as loss aversion or an endowment effect.

Journal

Journal of Consumer AffairsWiley

Published: Jan 1, 2018

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off