TY  - RPRT
        AU  - Hintermaier, Thomas
AU  - Koeniger, Winfried
        TI  - Debt Portfolios
        PY  - 2011/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5653
        UR  - https://www.iza.org/index.php/publications/dp5653
        AB  - We provide a model with endogenous portfolios of secured and unsecured household debt. Secured debt is collateralized by owner-occupied housing whereas unsecured debt can be discharged according to bankruptcy regulations. We show that the calibrated model matches important quantitative characteristics of observed wealth and debt portfolios for prime-age consumers in the U.S. We then establish the quantitative result that home equity does not serve as informal collateral for unsecured debt since, as in the data, unsecured debtors hold small amounts of home equity in equilibrium. Thus, observed variations in homestead exemptions, which are an important part of U.S. bankruptcy regulation, have a small effect on the quantity and price of unsecured debt.
        KW  - commitment
KW  - bankruptcy
KW  - collateral
KW  - housing
KW  - household debt portfolios
KW  - income risk
        ER  -