Brown Bag Seminar - Hamed Ghoddusi

Wir freuen uns, für Mitt­woch, 14. März 2018, ein Brown Bag Seminar mit Hamed Ghod­dusi (Stevens Insti­tute of Tech­no­logy) ankün­digen zu können.


Hamed Ghod­dusi wird sein Paper "Mort­gage Inte­rest Tax Deduc­ti­bi­lity under Uncer­tainty", (gemeinsam mit Mohamad Afkhami (Stevens Insti­tute of Tech­no­logy) vorstellen.

Die Veran­stal­tung findet in Raum D5.1.003 von 12:00-13:00 statt.

Abstract: The effec­tive tax shield value of the mort­gage inte­rest deduc­ti­bi­lity (MID) can be signi­fi­cantly lower than what it may seem in the presence of stan­dard deduc­tions. We use a conti­nuous-­time contin­gent clai­ming frame­work to quan­tify the tax shield value of MID under uncer­tainty. Our pay-off model iden­ti­fies conve­xi­ties and conca­vi­ties in the rela­ti­onship between the effec­tive mort­gage inte­rest tax deduc­tion and a set of the under­lying varia­bles inclu­ding the level and vola­ti­li­ties of house­hold income, house price, and local and state tax rates. The model is simu­lated for a range of realistic house­hold charac­te­ris­tics. Using the quan­ti­ta­tive model we compare the rela­tive attrac­tiveness of an Adjus­table Rate Mort­gage (ARM) versus a Fixed Rate Mort­gage (FRM), and demons­trate an inverse U-shape rela­tion between the tax shield of the two types of mort­gages and the house­hold income. We find several inver­se-U rela­ti­ons­hips between the vola­ti­lity of under­lying varia­bles and the present value of the MID. We also offer some preli­mi­nary empi­rical results supporting the theo­re­tical model.

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