Savings and Loan Demand for Liquid Assets: Theory,Evidence and Implications for Policy*

In this study a model of liquid asset management for individual savings and loan associations is developed. The model combines features of portfolio theory and inventory theory and is used to draw hypotheses on the relationship between the demand for excess liquidity and a variety of independent variables. Pooled cross section-time series equations are estimated for the demand for excess liquidity of 198 S & Ls over the period 1974–1978. In addition to conclusions on the role of individual variables, the estimated equations reveal that the FHLBB can affect the portfolios of some, but not all, S & Ls. This implies that FHLBB liquidity policy can have an effect on the mortgage market.     

Home Equity Conversion Instruments with Fixed Term to Maturity: Alternatives to End of Term Pay-Off

Standard reverse annuity mortgages obligate the lender to take on the risk that an elderly homeowner will desire to remain in a residence after the RAM has reached maturity. In this case, the best the lender can hope for is that the property will have appreciated sufficiently that the loan can be carried at interest only. There is a possibility for lender loss but not gain over contracted return.
Alternatives to the standard RAM are explored in this paper with most attention devoted to shared appreciation and shared equity RAMs. These alternative instruments appear to solve the problem of maturity risk.     

Natural hazards and deposit behavior at financial institutions: A note

There have been few studies of the effect of natural disasters upon either individual economic units or financial institutions. The present paper is concerned with the question of the evidence as to the deposit experience of financial institutions following a sizeable natural disaster. The deposit data we use consist of observations from seven individual savings and loan associations and eight commercial banks in four sizeable 1970s U.S. natural disasters. Basically, there is no evidence of a run. In most cases, there is a significant increase in deposits.     

HOUSEHOLD PRODUCTION AND NATIONAL PRODUCTION: AN IMPROVEMENT OF THE RECORD

1 By no means is the home based production of housewives the only or even the most important aspect of nonmarket production. The entire question of work vs. leisure, and the distinction between leisure and nonmarket oriented production, are currently under intensive scrutiny. See for instance the work of Nordhaus and Tobin [7, especially appendix section A.3], Gronau [2] and items cited in Gronau. The omission from the national income accounts of work performed at home by males, non-married females, and “working wives” is extremely important. This paper is concerned only with married females because (1) they are the subject of what must be one of the oldest jokes in the subject of social accounting, and (2) the relationship of production by housewives to total production has changed in the past ten years or so, and that deserves some attention even if it is not the most important thing which has been happening with respect to the GNP.
Specifically, we will present estimates of the value of home based nonmarket production by housewives. These estimates will then be used to supplement various national product aggregates in order to calculate more accurate growth rates for the U.S. economy. We find that the value of nonmarket production by married women during the 1960's has averaged approximately thirty percent of the GNP and close to 40 percent of the national income. The inclusion of the nonmarket work of housewives in GNP would reduce the measured rate of growth of real GNP per potential worker by about ten percent, the exact amount depending on how the value of nonmarket work is estimated. Our estimates indicate a reduction in the absolute rate of growth of almost 0.25 percent.     

An Analysis of Home Equity Conversion in the RAM Program

Home equity conversion by elderly homeowners is described and analyzed. The transactions were completed under the California RAM Program. One hundred twenty-six of 345 applicants elected to enter into reverse mortgages or sale-leasebacks. Data from interviews conducted as part of the application/counseling process are analyzed to discern the most important variables in the equity conversion decision.     

Citibank; Citibank,Nader and The Facts

This paper aims to understand how Internet users may improve their social capital by investing in online social activities. We argue that the Internet can be a convenient and efficient means of maintaining existing social ties and/or of creating new ties. We seek to identify the determinants of online investments in social capital and the nature of the interaction with traditional forms of investment in social capital. Using a Luxembourg household survey, the econometric results reveal a significant positive impact of volunteer activities and trust (two measures of social capital) on online investments to maintain social capital, but more ambiguous results are found between online investments and face-to-face contacts with friends. By contrast, online investments to create new ties are poorly related to the Internet users' existing social capital, but depend on the opportunity cost of time.     

Mortgage Default Risks and the 1971 San Fernando Earthquake

The paper is based on a study of mortgage default risks associated with natural disasters. These risks are faced by holders of mortgages when forced by default to acquire damaged properties. A sample of residential mortgage properties damaged in the 1971 San Fernando, California earthquake is studied. Some of the mortgagors defaulted while others did not. The paper identifies and analyzes those variables associated with default using discriminant and probit regression analysis. The study concentrates on earthquake exposures in California, but has implications for all major disasters.