Reverse mortgages and aircraft parts: The arcane referendum and the limits of citizen competence

It is widely assumed that a representative democracy requires an enlightened citizenry in order to function properly. The competence of citizens has been studied extensively and the sociodemographic determinants of political sophistication are particularly well known. Much less is known about whether and how citizen competence affects electoral behaviour and outcomes. This article reviews the existing literature on these topics. Despite the widespread consensus that, generally speaking, citizen competence matters for electoral outcomes, the review produced a mixed result: some studies suggest that the political left would benefit from a better-informed electorate, while other studies suggest the opposite. Although the majoritarian electoral context is overrepresented in the evidence, the review shows that at the individual level, political knowledge greatly increases a person’s ability to match personal preferences with the right candidate or party in an election. The article also identifies several gaps in existing knowledge, thereby suggesting future research questions.

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

Journal of Pension Economics and Finance ◽

10.1017/s1474747215000013 ◽

2015 ◽

Vol 15 (2) ◽

pp. 180-202 ◽

Cited By ~ 18

Author(s):

ELSA FORNERO ◽

MARIACRISTINA ROSSI ◽

MARIA CESIRA URZÍ BRANCATI

Keyword(s):

Economic Analysis ◽

Risk Aversion ◽

Women Elderly ◽

Individual Characteristics ◽

Standard Of Living ◽

Reverse Mortgages ◽

Negative Expectations

AbstractWe 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.

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