IDEAS home Printed from https://ideas.repec.org/p/idb/brikps/2908.html
   My bibliography  Save this paper

Incapacity to Pay or Moral Hazard?: Public Mortgage Delinquency Rates in Chile

Author

Listed:
  • Marcano, Luis
  • Ruprah, Inder J.

Abstract

High delinquency rate of publicly provided mortgages in social housing programs are often interpreted to be due to moral hazard. In this working paper, the authors show that the typically used parametric approaches give misleading results due to overlooked confounding and selection biases. As evidenced by using the more appropriate impact or treatment non-parametric approach the problem of high delinquency rate in publicly provided mortgages is due to the incapacity to pay and not due to moral hazard. The results caution against public policies to encourage private mortgage providers to move down market, and suggest eliminating mortgages and correspondingly increasing the grant component of the programs.

Suggested Citation

  • Marcano, Luis & Ruprah, Inder J., 2008. "Incapacity to Pay or Moral Hazard?: Public Mortgage Delinquency Rates in Chile," IDB Publications (Working Papers) 2908, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:2908
    as

    Download full text from publisher

    File URL: https://publications.iadb.org/publications/english/document/Incapacity-to-Pay-or-Moral-Hazard-Public-Mortgage-Delinquency-Rates-in-Chile.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    2. García, Carlos & Morandé, Felipe, 2004. "Financiamiento de la Vivienda en Chile," IDB Publications (Working Papers) 2164, Inter-American Development Bank.
    3. Carlos García & Felipe Morandé, 2004. "Financiamiento de la Vivienda en Chile," IDB Publications (Working Papers) 7644, Inter-American Development Bank.
    4. Inder J. Ruprah & Luis Marcano, 2007. "A Meta-Impact Evaluation of Social Housing Programs: The Chilean Case," IDB Publications (Working Papers) 33418, Inter-American Development Bank.
    5. Inder J Ruprah & Luis T Marcano, 2007. "A Meta-Impact Evaluation of Social Housing Programs: The Chilean Case," OVE Working Papers 0207, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcano, Luis & Ruprah, Inder J., 2008. "An Impact Evaluation of Chile's Progressive Housing Program," IDB Publications (Working Papers) 2896, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luis Marcano & Inder J. Ruprah, 2008. "An Impact Evaluation of Chile’s Progressive Housing Program," OVE Working Papers 0608, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    2. Kaiji Chen, 2010. "A Life-Cycle Analysis of Social Security with Housing," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 597-615, July.
    3. Francisca Henriquez, 2009. "Microcrédito y su Impacto: Un Acercamiento con Datos Chilenos," OVE Working Papers 0309, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    4. Foliano, Francesca & Tonei, Valentina & Sevilla, Almudena, 2024. "Social restrictions, leisure and well-being," Labour Economics, Elsevier, vol. 87(C).
    5. Alexander Hijzen & Sébastien Jean & Thierry Mayer, 2011. "The effects at home of initiating production abroad: evidence from matched French firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(3), pages 457-483, September.
    6. Jan Fałkowski & Maciej Jakubowski & Paweł Strawiński, 2014. "Returns from income strategies in rural Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 139-178, January.
    7. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(7), pages 777-795, October.
    8. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    9. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2019. "Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy," European Economic Review, Elsevier, vol. 113(C), pages 63-76.
    10. Magda Iga & Kiełczewska Aneta & Brandt Nicola, 2020. "The effect of child benefit on female labor supply," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-18, March.
    11. Michael Pfaffermayr & Michael Wild & Christian Bellak, 2005. "Effekte ausländischer Übernahmen," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 31(1), pages 113-124.
    12. Cain Polidano & Justin van de Ven & Sarah Voitchovsky, 2017. "The Power of Self-Interest: Effects of Education and Training Entitlements in Later-Life," Melbourne Institute Working Paper Series wp2017n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    13. Marusca De Castris & Guido Pellegrini, 2015. "Neighborhood Effects On The Propensity Score Matching," Working Papers 0515, CREI Università degli Studi Roma Tre, revised 2015.
    14. Marco Caliendo & Stefan Tübbicke, 2020. "New evidence on long-term effects of start-up subsidies: matching estimates and their robustness," Empirical Economics, Springer, vol. 59(4), pages 1605-1631, October.
    15. Mardones, Cristian, 2021. "Ex-post evaluation and cost-benefit analysis of a heater replacement program implemented in southern Chile," Energy, Elsevier, vol. 227(C).
    16. Joseph A. Clougherty & Klaus Gugler & Lars Sørgard, 2012. "Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects," Department of Economics Working Papers wuwp136, Vienna University of Economics and Business, Department of Economics.
    17. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    18. Sansone, Dario, 2019. "Pink work: Same-sex marriage, employment and discrimination," Journal of Public Economics, Elsevier, vol. 180(C).
    19. Slottje, Daniel J. & Millimet, Daniel L. & Buchanan, Michael J., 2007. "Econometric analysis of copyrights," Journal of Econometrics, Elsevier, vol. 139(2), pages 303-317, August.
    20. Dalsgaard, Søren & Nielsen, Helena Skyt & Simonsen, Marianne, 2014. "Consequences of ADHD medication use for children's outcomes," Journal of Health Economics, Elsevier, vol. 37(C), pages 137-151.

    More about this item

    Keywords

    WP-03/08;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idb:brikps:2908. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Felipe Herrera Library (email available below). General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.