Household Choice of Fixed Versus Floating Rate Debt: A Binomial Probit Model With Correction For Classification Error

Leece, David

doi:10.1111/1468-0084.00160

Cited by 28 publications

(38 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Econometric work concerned with U.K. mortgage choices is sparse (Leece 1995a(Leece , 2000a(Leece , 2000b. The research that is reported in this paper significantly extends previous U.K. work on mortgage choices, both methodologically and empirically.…”

supporting

confidence: 56%

Regressive Interest Rate Expectations and Mortgage Instrument Choice in the United Kingdom Housing Market

Leece

2001

Real Estate Economics

Self Cite

View full text Add to dashboard Cite

The paper considers the choice of mortgage instrument when the rate of interest is fixed for a short duration, with reversion to a variable (bullet) rate mortgage contract. The research is the first direct test for regressive interest rate expectations using United Kingdom data while testing for wealth and portfolio effects. The econometric modeling uses a variety of nonparametric and parametric techniques to control for classification error in the dependent variable. There is evidence that households adopt regressive interest rate expectations. The lack of statistical significance of wealth and portfolio effects confirms the short run cash flow perspective of United Kingdom mortgage choices. Copyright 2001 by the American Real Estate and Urban Economics Association.

show abstract

supporting

confidence: 56%

Regressive Interest Rate Expectations and Mortgage Instrument Choice in the United Kingdom Housing Market

Leece

2001

Real Estate Economics

Self Cite

View full text Add to dashboard Cite

show abstract

“…(10) with respect to α 0 , α 1 , and λ provides consistent and efficient estimates of λ as well as the probabilities of misclassification. This approach has been used in studies by Bollinger and David [1], Caudill and Mixon [3], Dustman and Van Soest [4,5], Fay, Hurst, and White [6], Frazis and Loewenstein [7], Kenkel, Lillard, and Mathios [11], and Leece [12]. The misclassification does not affect the conditional expectations for the hedonic price functions, which are based on actual teardown status.…”

Section: A Hedonic Model Of House Prices Land Values and Teardownsmentioning

confidence: 99%

Teardowns and land values in the Chicago metropolitan area

Dye

McMillen

2007

Journal of Urban Economics

113

View full text Add to dashboard Cite

“…Hausman et al (1998), who proposed this model, discuss its properties in detail. Previous studies that have applied this model include Hausman et al (1998) who studied job change, Leece (2000) who studied household debt choice, Artı´s et al (2002) who studied automobile insurance fraud, Kenkel et al (2004) who studied smoking participation, Caudill and Mixon (2005) who used a logit model with misclassification to study student cheating behaviour and de Coulon and Wolff (2007) who studied language proficiency.…”

Section: Methodsmentioning

confidence: 99%

Misclassification of the dependent variable in binary choice models: evidence from five Latin American countries

Falaris

2009

Applied Economics

View full text Add to dashboard Cite

Misclassification of the dependent variable in binary choice models can result in inconsistency of the parameter estimates. I estimate probit models that treat misclassification probabilities as estimable parameters for three labour market outcomes: formal sector employment, pension contribution and job change. I use Living Standards Measurement Study (LSMS) data from Nicaragua, Peru, Brazil, Guatemala and Panama. I find that there is a significant misclassification in 11 of the 16 cases that I investigate. If misclassification is present but is ignored, estimates of the probit parameters and their SEs are biased toward zero. In most cases, predicted probabilities of the outcomes are significantly affected by misclassification of the dependent variable. Even a moderate degree of misclassification can have substantial effects on the estimated parameters and on many of the predictions.

show abstract

Household Choice of Fixed Versus Floating Rate Debt: A Binomial Probit Model With Correction For Classification Error

Cited by 28 publications

References 15 publications

Regressive Interest Rate Expectations and Mortgage Instrument Choice in the United Kingdom Housing Market

Regressive Interest Rate Expectations and Mortgage Instrument Choice in the United Kingdom Housing Market

Teardowns and land values in the Chicago metropolitan area

Misclassification of the dependent variable in binary choice models: evidence from five Latin American countries

Contact Info

Product

Resources

About