Reminders to Pay Property Tax Payments: A Field Experiment of Older Adults with Reverse Mortgages

27 Pages Posted: 6 Sep 2019

See all articles by Stephanie Moulton

Stephanie Moulton

Ohio State University- John Glenn College of Public Affairs

J. Michael Collins

University of Wisconsin - Madison

Cäzilia Loibl

The Ohio State University - Department of Human Sciences

Donald R. Haurin

Ohio State University (OSU) - Economics

Julia Brown

University of Maryland - Department of Economics

Date Written: August 30, 2019

Abstract

One of the risks to financial security among older homeowners is the failure to pay property taxes. Tax bills are often due in lump sums, and if the homeowner has a failure of prospective memory, they may neglect to make a payment. This field study tests if reminders to plan ahead and to pay property taxes are effective with an especially liquidity constrained population, older adults who take out a reverse mortgage to extract home equity. Letters mailed to remind homeowners about their obligations reduce the rate of defaults on property taxes, as well as increase timely payments for homeowners’ insurance premiums. These effects are concentrated among subgroups of homeowners who are likely to be the most vulnerable, such as homeowners with no liquid assets, and single households, but also those with more capacity to take actions, such as relatively younger and healthier homeowners.

Keywords: property taxes, seniors, reverse mortgages, reminders

JEL Classification: D1, D14, J14, D91

Suggested Citation

Moulton, Stephanie and Collins, J. Michael and Loibl, Cäzilia and Haurin, Donald R. and Brown, Julia, Reminders to Pay Property Tax Payments: A Field Experiment of Older Adults with Reverse Mortgages (August 30, 2019). Available at SSRN: https://ssrn.com/abstract=3445419 or http://dx.doi.org/10.2139/ssrn.3445419

Stephanie Moulton (Contact Author)

Ohio State University- John Glenn College of Public Affairs ( email )

110 Page Hall
1810 College Road
Columbus, OH 43210
United States

J. Michael Collins

University of Wisconsin - Madison ( email )

United States
6086160369 (Phone)

Cäzilia Loibl

The Ohio State University - Department of Human Sciences ( email )

1787 Neil Avenue
265K Campbell Hall
Columbus, OH 43210
United States
614-292-4226 (Phone)

Donald R. Haurin

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
1010G Derby Hall
Columbus, OH 43210-1172
United States
614-292-0482 (Phone)
614-292-9530 (Fax)

Julia Brown

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

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