The purpose of this study was to investigate the long-tenn relation between household leverage through the use of mortgages, and changes in household weallh using the theoretical framework of the life cycle income hypothesis. The results of this sltldy are relevant to current positions regarding household leverage via mortgages. This study used the 1992 through 2002 waves of the Health and Retirement Study. The characteristics of leveraged and unleveraged households were compared in 1992 and 2002 as were changes during that period. The relation between household leverage and changes in assets and total resources over the period was modeled using robust regression analysis. Based on the results of independent 1 tests and chi-square tests, there were statistically significant differences between leveraged and unleveraged The general difference between the two groups was that greater proportions of leveraged households were working in 1992 and 2002 than unleveraged households. This observation was supported by differences in household income, work status trends, age of household head, total resources, and changes in total resources. Unleveraged households had statistically significantly higher assets than leveraged households; however, there was no statistically significant difference in the change in assets between the two groups. households. Retained or incurred mortgage debt during the study period, relative to not having mortgage debt, had a consistent negative effect on changes in assets and total resources. The initial leverage ratio and square of the initial leverage ratio were not statistically significant in either of the estimated regression models. The effect of eliminating mortgage debt, relative to not having mortgage debt, on changes in assets and total resources was not statistically different from zero. From the standpoint of maximizing resources, maintaining mortgage debt did not appear to be the best altemative for most households. However, for high-income and more risk-tolerant households, mortgage debt was beneficial and enhanced increases in assets and total resources. While the use of mortgage debt for investment capital had the potential to increase total resources, households may have derived greater satisfaction from using the mortgage proceeds for consumption, given their preferences and expectations. Implications for consumers, financial professionals, educators, and tax policymakers were drawn from the resu lts of the study.

Made available in DSpace on 2010-04-20T21:00:09Z (GMT). No. of bitstreams: 4 Roberta Cardim Geyer.pdf.jpg: 50109 bytes, checksum: 17360d1565984b98377af09e99259b17 (MD5) Roberta Cardim Geyer.pdf.txt: 39031 bytes, checksum: 1c5647e853c916a21de4977887b19b5d (MD5) Roberta Cardim Geyer.pdf: 121342 bytes, checksum: 4713b946e4198241bc90a44fcd409ff0 (MD5) license.txt: 4886 bytes, checksum: 94d66dc6376195a94715754a4815db07 (MD5) Previous issue date: 2009-02-09T00:00:00Z / The main aim of this paper is to examine which factors are determinants of the mortgage debt system depth. Using data on legal creditor rights, credit information systems, constraints on executive and macroeconomic stability in 93 countries from 1996 to 2007, I found that countries with strong legal rights for borrowers and lenders, deeper credit information systems and more stable macroeconomic environment have deeper mortgage debt system. / O objetivo deste trabalho é analisar os fatores que determinam o desenvolvimento do crédito imobiliário nos países. Com dados de crédito imobiliário de 93 países de 1996 a 2007, estudo em que medida um ambiente macroeconômico estável, fortes direitos legais (através de leis de falência), sistemas de informação de crédito mais profundos e restrições ao poder do executivo influenciam a expansão do crédito imobiliário. Analisando países desenvolvidos e em desenvolvimento, controlando pelo tamanho do país, concluí que países com baixa volatilidade da inflação e do crescimento do PIB, com leis de qualidade e alta restrição ao poder executivo têm crédito habitacional mais desenvolvido.