Cities theme and CDR Seminar: Alycia Chin - "A longitudinal field experiment with prospective homebuyers"

Abstract:

Buying a home and getting a mortgage are often considered to be the largest financial decisions that consumers make. Despite the importance of these decisions, almost half of U.S. homebuyers seek only one mortgage offer before selecting a mortgage. Homebuyers who fail to comparison shop may end up with mortgage loans that are unnecessarily expensive.

To test whether comparison shopping helps homebuyers achieve better outcomes, we designed a field experiment with actual prospective homebuyers in the spring and summer of 2016. Participants answered surveys about their home and mortgage search every two weeks until the study ended or until they bought a home, whichever came first. To find prospective homebuyers, we emailed approximately 5.2 million individuals who had created accounts on a leading real estate website. Almost 99,000 people responded, of which approximately 23,000 were eligible and 19,000 decided to participate.

We present work from two papers related to this experiment.  In the first paper, we explore questions about participant attrition, examining (1) demographic and psychological correlates of attrition and (2) research methods that can reduce attrition. In the second paper, we study the impact of shopping interventions on consumers’ outcomes. Specifically, over the course of the study, some consumers were randomly assigned to informational interventions that encouraged them to comparison shop, while those in a control group only answered surveys. We assess the impact of our shopping interventions on consumers’ self-reported shopping behavior, confidence in searching for a mortgage, and mortgage market knowledge, finding positive results for all outcomes.

About the speaker:

Dr Alycia Chin is a Research Scientist in the Office of Research at the Consumer Financial Protection Bureau (Washington, DC). She studies consumer judgments and decisions across a range of topics, including information disclosure, stock market expectations, moral judgments of consumer bankruptcy, and mortgage choice.  In addition, she is interested in research methods, including understanding decisions to participate in research and developing new experimental tasks. Chin was previously a research assistant at the Federal Reserve Board in Washington, DC, where she contributed to research on residential real estate values, money market funds, and the Great Depression. She holds a B.A. in Economics and Politics, magna cum laude, from Scripps College and a M.S. and Ph.D. in Behavioral Decision Research from Carnegie Mellon University.