March Editor’s Choice: The cost of steering in financial markets: Evidence from the mortgage market Mar 1 Written By Toni Whited Luigi Guiso, Andrea Pozzi, Anton Tsoy, Leonardo Gambacorta, Paolo Emilio Mistrullie Banks steer customers into mortgages. The welfare costs are large. The average cost of the distortion is equivalent to 16% of the annual mortgage payment. A financial literacy campaign is beneficial for naive households, but hurts sophisticated ones. Toni Whited
March Editor’s Choice: The cost of steering in financial markets: Evidence from the mortgage market Mar 1 Written By Toni Whited Luigi Guiso, Andrea Pozzi, Anton Tsoy, Leonardo Gambacorta, Paolo Emilio Mistrullie Banks steer customers into mortgages. The welfare costs are large. The average cost of the distortion is equivalent to 16% of the annual mortgage payment. A financial literacy campaign is beneficial for naive households, but hurts sophisticated ones. Toni Whited