Time Preferences, Mortgage Choice and Strategic Default

Eric Johnson, Columbia University, USA
Stephen Atlas, Columbia University, USA
John Payne, Duke University, USA
This paper investigates how individual differences affect mortgage choices that lead to negative home equity and the consumers‘ intentions to walk away. Our survey of 244 mortgaged households measures two components of individual time preferences: both a present bias and an exponential discount rate.
[ to cite ]:
Eric Johnson, Stephen Atlas, and John Payne (2011) ,"Time Preferences, Mortgage Choice and Strategic Default", in NA - Advances in Consumer Research Volume 39, eds. Rohini Ahluwalia, Tanya L. Chartrand, and Rebecca K. Ratner, Duluth, MN : Association for Consumer Research, Pages: 178-179.