Essays on Mortgage Rates, Mortgage Fees, and Merger Price Effects

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Authors

Auger, Ludovic

Date

2024-12-12

Type

thesis

Language

eng

Keyword

Economics , Monetary Policy , Racial gap , Gender gap , Merger

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This dissertation is a series of essays that focus on studying mortgage rates, mortgage fees and merger price effects. The first essay investigates the relationship between monetary policy and mortgage rates along the business cycle. Using a large dataset of U.S. mortgage loans, we document that, following a regulatory change to payments on excess reserve, the business cycle is less related to mortgage rates, monetary policy is being transmitted more overall, and the amplification of the transmission of monetary policy to mortgage rates along the business cycle is being reduced compared to before the regulatory change. To understand the last two results, we build a theoretical banking model, where banks are subject to monetary policy through reserve requirements, and show that the empirical results could have been caused by this regulatory change. The second essay looks at heterogeneity in the fees for originating a mortgage in the U.S. Using data of millions of mortgages, I document a racial and a gender gap, for both singles and couples, in the fees for originating a mortgage. I also find that there seems to be selection into high origination fee lenders for some minority groups, male/male couples and female/female couples, which might explain some of the racial and gender gaps found. Finally, the last essay examines the price effects of mergers between cooperative firms that value both profits and a social component and standard firms that only value profits. Using a theoretical model, I show that the shape of the social component matters for the sign and magnitude of the price effects, which can include a decrease in prices.

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