Explaining why, right or wrong, (Italian) households do not like reverse mortgages

ELSA FORNERO, MARIACRISTINA ROSSI, MARIA CESIRA URZÍ BRANCATI
2015 Journal of Pension Economics and Finance  
AbstractWe investigate the determinants of interest in reverse mortgages (RM) for a sample of Italian homeowners and find that the majority of individuals belonging to categories identified, on the basis of economic analysis, as the main potential beneficiaries (i.e., women, elderly and 'house rich–cash poor' individuals) are, in fact, less likely to express an interest. When allowing for individual characteristics, we find that most results remain robust and notice that risk aversion and
more » ... aversion and negative expectations on one's standard of living after retirement predict higher interest in the product. These results suggest that RM is perceived not so much as an ordinary instrument to achieve a better standard of living, but rather as a remedy against poor consumption.
doi:10.1017/s1474747215000013 fatcat:tx4e2qea6fhy3e2lvxcx37vrle