Prof. Alessandro Gavazza of London School of Economics on mortgages, cars and market friction
Scientific Sense ®
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Is This Differentiating the Market?
Higher income individuals, because they take larger loans, benefit from paying at these origination fees upfront with the idea of getting a lower interest rate. And so that's the segmentation that we are really studying in our paper. In the United Kingdom, pricing of mortgages is a little bit different from the way it is done in the U.S.
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