Regressive Interest Rate Expectations and Mortgage Instrument Choice in the United Kingdom Housing Market. From: Real Estate Economics | Date: December 22, 2001| Author: Leece, David | COPYRIGHT 2001 American Real Estate & Economics Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

David Leece (*)

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 depend...