Friday, May 15, 2009

Behavioural Economics and Mortgage Arrears

As people begin in Ireland to lose their jobs in areas where properties are overvalued and perhaps unlikely to recover, we need to think further about the behavioural effects of such sharp declines in wealth. An abundance of behavioural evidence would suggest that people may not be handling this optimally and given the potential for stressful emotions to distort judgment and decision-making even further, it is worth thinking about potential failures in this market.

Its worth also looking at the financial advice from the two main places that people might go to. Behavioural economics reading would lead me to be somewhat sceptical of the role of pure information like this in helping people make decisions.


Money Advice Page

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