RDP 2014-13: Mortgage-related Financial Difficulties: Evidence from Australian Micro-level Data Appendix A: Literature Review

Matthew Read, Chris Stewart and Gianni La Cava

November 2014 – ISSN 1320-7229 (Print), ISSN 1448-5109 (Online)

Table A1: Recent Studies of Home Mortgage Default
Study
 		 Equity
 		 Ability to pay (ATP) Equity or
ATP?		 Methodology
 		 Unit of analysis Country
 
Fuster and
Willen (2013)		 LVR; Gearing Interest rate; Unemployment Both Competing risks Loan US
Palmer (2013) Gearing DSR Equity Discrete-time hazard Loan US
Krainer and Laderman (2011) Gearing Interest rate; Unemployment ATP Competing risks Loan US
Bhutta et al (2010) Gearing Unemployment Both Discrete-time hazard Loan US
Elul et al (2010) LVR; Gearing Unemployment Both Dynamic logit Loan US
Bajari, Chu and
Park (2008)		 LVR; Gearing Mortgage payments Both Competing risks Loan US
Gerardi et al (2008) Gearing Interest rate Equity Probit Loan US
Foote, Gerardi and Willen (2008) LVR Unemployment; Household income Both Cox proportional hazard Loan US
Deng et al (2000) LVR; Gearing Unemployment Both Competing risks Loan US
Gerardi et al (2013) Gearing Unemployment; Liquid assets Both Probit and logit Household US
May and
Tudela (2005)		 Gearing DSR; Unemployment ATP Random effects probit Household UK
Lydon and
McCarthy (2013)		 Gearing DSR; Unemployment ATP Panel regressions Regional Ireland
Aron and
Muellbauer (2010)		 Housing debt to equity ratio DSR; Unemployment Both Error correction model Aggregate UK
Whitely, Windram and Cox (2004) Net housing wealth ratio DSR; Unemployment ATP Error correction model Aggregate UK
Note: LVR denotes LVR at origination