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Explaining why, right or wrong, (Italian) households do not like reverse mortgages*

Published online by Cambridge University Press:  13 March 2015

University of Turin, CeRP-Collegio Carlo Alberto, IZA and Netspar (e-mail:,
University of Turin and CeRP-Collegio Carlo Alberto Liser and Netsapr (e-mail:
University of Modena and Reggio Emilia and CeRP-Collegio Carlo Alberto, Via Real Collegio 30 – 10024 Moncalieri (TO)Italy (e-mail:


We investigate the determinants of interest in reverse mortgages (RM) for a sample of Italian homeowners and find that the majority of individuals belonging to categories identified, on the basis of economic analysis, as the main potential beneficiaries (i.e., women, elderly and ‘house rich–cash poor’ individuals) are, in fact, less likely to express an interest. When allowing for individual characteristics, we find that most results remain robust and notice that risk aversion and negative expectations on one's standard of living after retirement predict higher interest in the product. These results suggest that RM is perceived not so much as an ordinary instrument to achieve a better standard of living, but rather as a remedy against poor consumption.

Copyright © Cambridge University Press 2015 

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We wish to thank Giancarlo Marini, Pasquale Scaramozzino, Riccardo Calcagno, Chiara Monticone, Flavia Coda-Moscarola, Claudio Pacella and the participants to the XX Tor Vergata International Conference on Money, Banking and Finance, to the Netspar International Pension Workshop 2012 and to the Save – PHF conference 2012 for the helpful comments; we thank Dimitris Christelis and Michele Fratianni for the useful discussions. We are also very grateful to Collegio Carlo Alberto, the Observatoire de L'Epargne Européenne (OEE) and the European Seventh Framework Program WERSA for funding, and to UniCredit for the data. Finally, we are deeply indebted to the two anonymous referees and the Editor of Monika Buetler for the precious comments and suggestions which provided substantial help to improve this article.


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