#06-01 One-sided Elasticities and Technical Efficiency in Multi-Output Production: A Theoretical Framework
#06-02 Well ARMed and FiRM: Diversification of Mortgage Loans for Homeowners
#06-03 On Recent Changes of Debts of Cyprus Households: The 1999 and 2002 Cyprus Surveys of Consumer Finances
Abstracts and downloadables
One-sided Elasticities and Technical Efficiency in Multi-Output Production: A Theoretical Framework
Petros Hadjicostas and Andreas C.Soteriou, 2006
Abstract One of the concepts that have sparked considerable interest in the theory of production and efficiency is that of returns to scale (RTS). Economics researchers typically define RTS using the notion of elasticity. Considerable research activity on RTS has also been observed by management science researchers, who utilize the methodology of Data Envelopment Analysis (DEA) to gain insights on RTS. In this paper, we present a theoretical framework that integrates existing economics and management science literature on RTS, and provides a solid foundation for research work in this area. Our framework defines, discusses, and proposes an approach to measure input- and output-oriented elasticities, and one-sided RTS. We demonstrate how the work done in DEA is a special case of our framework, and discuss the conditions under which the resulting two left-hand, and the two right-hand elasticities can be equal. Future research directions are also discussed.
Well ARMed and FiRM: Diversification of Mortgage Loans for Homeowners
Kourosh M. Rasmussen and Stavros A. Zenios, 2006
Abstract Individual owners are offered today a wide range of mortgage options for financing the purchase of a house. Usually, homeowners are also granted an option to repay the mortgage loan, and in some countries –such as Denmark – it is particularly efficient to do so as market conditions change or the homeowner's situation warrants it. And while, traditionally, a single mortgage loan would serve borrower needs, today it appears that a portfolio of loans may satisfy much better the mortgage needs of the individual and his or her appetite for risk. In this paper we develop a model for the diversification of mortgage loans of a homeowner and apply it to data from the Danish market. Even in the presence of mortgage origination costs it is shown that most risk averse homeowners will do well to consider a diversified portfolio of both fixed (FRM) and adjustable (ARM) rate mortgages. This is particularly so if one takes, unavoidably, a long term perspective in financing the purchase of a home through a mortgage loan.
On Recent Changes of Debts of Cyprus Household: The 1999 and 2002 Surveys of Consumer Finances
Michael Haliassos, Alex Karagrigoriou, Costas Ktoris, and George Syrichas, 2006
Abstract This paper describes and compares participation of Cyprus households in various types of debts using data from the first (1999) and second (2002) Cyprus Surveys of Consumer Finances. It complements our previous papers that separately described household participation in various types of assets (Haliassos et al., 2001) and of debts (Haliassos et al., 2003). We consider a wide range of debts that encompass personal unsecured loans, including credit card debt, as well as loans secured by housing collateral, mainly mortgage debt. Findings are of considerable policy interest, as they show how various demographic groups changed their participation and exposure to various loans between the unparalleled stock market boom of 1999 and the period following the stock market downturn, as captured by 2002 data.