European Journal of Scientific Research. Vol. 69, No.2 (2012), 218-223
Suggested Citation
Pandej Chintrakarn, Paan Jindapon A Dynamic Analysis of Market Power in the U.S. Mortgage Lending Market.. European Journal of Scientific Research. Vol. 69, No.2 (2012), 218-223. Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/10973
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A Dynamic Analysis of Market Power in the U.S. Mortgage Lending Market.
This paper examines market power in mortgage lending market in the U.S., applying a dynamic reformulation of the Bresnahan-Lau model in an error correcting framework. The most common motivation for using this model is to solve the inference problem when using non-tationary data, and to incorporate dynamic factors such as habit formation from the demand side and adjustment costs for the producer. The results suggest that commercial banks exercise market power in mortgage loan market in the long run. The estimated markup of 82% is statistically significant at the 1% level.
