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Pricing Efficiency in the Mortgage Market
Author(s) -
Edmister Robert O.,
Merriken Harry E.
Publication year - 1988
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00443
Subject(s) - inefficiency , economics , loan , market efficiency , financial economics , security market , variety (cybernetics) , monetary economics , microeconomics , finance , artificial intelligence , computer science
Traditionally, the presence of serial correlation has been presumed to indicate an inefficient market for financial assets. As Latham [15] discusses, while the absence of serial correlation implies market efficiency, its mere presence does not imply inefficiency. Rather, market efficiency is a characteristic of security pricing. This study investigates pricing efficiency in the mortgage market. Using mortgage loan quotations for 343 institutions over a 71‐week period, the empirical findings show that a wide variety of mortgage contracts are efficiently priced.
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