Patricia M. Rudolph

Does retirement planning affect the level of retirement satisfaction

Abstract This paper analyzes the relationship between retirement planning and retirement satisfaction. Do individuals think about and plan for retirement? If they do, do they utilize financial planning services? If they plan, are they more satisfied with retirement than those who did not? Data for 1,781 retired individuals from the first wave of the Health and Retirement Study (HRS) are analyzed using an ordered probit model. The results indicate that thinking about retirement and attending planning meetings have a significant positive impact on satisfaction even when income, wealth, marital status and health are included as explanatory variables.

An Analysis of Post-Deregulation Savings-and-Loan Failures

A number of studies have looked at the financial characteristics of problem or failed savings and loans but none have used data taken exclusively from the post-deregulation period. In this paper, the financial characteristics of savings and loan associations that failed during the period 1984-II to 1985-I are analyzed, using both univariate difference in means tests and multivariate logistic regression. Both the known unequal population prior probabilities and the estimated unequal misclassification costs are taken into account in the logistic regression. The empirical results are compared to those of recent studies by Benston [7] and Barth, Brumbaugh, Sauerhaft and Wang [5]. The financial ratios that significantly affect the probability of failure are different in the three studies. Copyright American Real Estate and Urban Economics Association.

The Performance of White-Knight Management

This paper finds that, on average, white-knight managers have previously made bad investment decisions and their value-decreasing bids are thus part of a pattern of bad investment decisions, but that there is almost no tendency for shareholders to replace these inefficient managers.

Credit card possesion and use: Changes over time

Abstract Changes over time in the consumers decision to possess and to use credit cards are examined using samples drawn from the Atlanta, Georgia area. Comparisons across time are made possible by a unique data set, which was generated by conducting surveys using the same instrument in 1971 and 1983. The decisions to hold bank, store, gasoline, general, or any credit card are examined separately. The decision to use a credit card is studied within the context of four types of purchases: gasoline, furniture, household goods, and clothing. Given the values of the explanatory variables, probit analysis is used to estimate the conditional probabilities of possession and use. Descriptive statistics for both the population and the sample indicate that the portion of those holding credit cards has increased over the period (with the exception of gasoline cards). However, the probit results indicate that the probability of holding a credit card in 1983 is lower than the probability in 1971 if the financial and demographic explanatory variables are held constant. This finding is consistent with the concept that credit cards are approaching their saturation point. While the growth in credit-card holders is declining, the use of credit cards has increased for furniture, clothing, and household goods purchases, but not for gasoline. Looking only at those who have a credit card, the intensity of use has increased for all purchases including gasoline.

Beliefs and actions: expectations and savings decisions by older Americans

Abstract To understand the interaction of savings behavior, pension fund participation and expectations of retirement well being, we ask two questions. Are expected pension benefits a substitute for accumulated savings in replacing preretirement income? Are individuals’ expectations concerning their retirement standard of living realistic based on their accumulated savings and pension plan participation? First-wave data from the Health and Retirement Study (HRS) are analyzed using a probit regression. The results are consistent with the idea that pension benefits are substitutes for saving and that accumulated savings have a significant impact on the expected standard of living but pension plan participation does not.

Strategies and Performance in the Thrift Industry: 1979-1987

From the late seventies until 1989, the regulatory environment of the thrift industry was changed from one that permitted little managerial discretion to one in which managers were allowed to choose from a wide variety of lending and borrowing activities. In this article, cluster analysis is used to separate thrifts into strategic groups based on the extent to which they utilized their new powers. Differences among the groups and the relationship between group membership and performance is tested over the period 1979-1987 using analysis of variance. Copyright American Real Estate and Urban Economics Association.

The Insolvent Thrifts of 1982: Where Are They Now?

In 1982, 237 thrifts were GAAP (Generally Accepted Accounting Principle) insolvent. By 1987, 92 of these were either merged or closed and 77 remained insolvent. The remaining 68 were GAAP solvent with an average GAAP-to-total-assets ratio of 5.6%. The purpose of this paper is to identify the factors that affected the probability of solvency for the 1982-insolvent thrifts over the period 1983-1987.To identify these factors, the probability of insolvency is modeled in each year between 1983 and 1987 using logistic regression. Because a thrift can earn its way out of insolvency or raise outside capital, the probability of solvency is a function of the infusion of outside capital along with balance sheet and income statement ratios reflecting the thrifts earning ability. The only variable consistently significant in each year is the variable reflecting the raising of outside capital. Copyright American Real Estate and Urban Economics Association.

The Demand and Supply of Mortgage Funds and Mortgage Loan Terms

The supply of and demand for residential mortgages has been the subject of much discussion in the literature. Many of these studies have used single equation, partial adjustment models with the price specified as the contract rate. In this study, two of the assumptions that underlie these previous studies are tested empirically. First, the proper specification of the price of mortgage funds is tested by using both the contract rate alone and all of the terms of the mortgage as the price. Second, the speed of adjustment in the mortgage market is examined by estimating the model in both the instantaneous adjustment and partial adjustment forms. Both of these tests are carried out using a simultaneous equation rather than a single equation model. The empirical results indicate that the contract rate along with the loan initiation fees, the loan-to-value ratio and the maturity is the better specification of price and that the partial adjustment model performs better than the instantaneous model in the mortgage market. Copyright American Real Estate and Urban Economics Association.

The impact of changing conditions on international resort returns: a case study in a developing country

Abstract The economic and internal rates of return are frequently used to assess the acceptability of investments in tourist resorts for developing countries. If the cost of debt, the debt-equity mix or the number of tourists change, then the projected rates of return will change. Here, projected cash flows from a typical case study are presented and the rates of return are calculated under several different assumptions. Given the uncertainty attached to cash flow forecasts, the sensitivity of the anticipated rates of return to changes in the underlying assumptions is as important as the projected rates themselves in making investment decisions.

Mortgage Markets and Inter-Regional Differences in Conventional Mortgage Terms

One of the purposes of the secondary mortgage market is to move funds from areas of capital surplus to areas of capital shortage. If mortgage funds move freely throughout the economy then the price of mortgage funds (the terms of the mortgage) should be the same everywhere. Thus, if the secondary mortgage market is efficient, mortgage terms should show less geographic variation after the secondary market began in 1970 than they showed before. In this paper, the efficiency of the market is tested in two stages. In the first, the average terms of mortgage loans in 1968 and 1978 are examined to determine whether they became more homogeneous after the secondary market was begun. In the second stage, the terms are modeled as a function of region, year by region interaction variables, foreclosure rates, the usury ceiling and the average cost of funds. This model is estimated and analyzed using a multivariate multiple regression technique. Copyright American Real Estate and Urban Economics Association.