Master’s Thesis Award Winners 2014

In their thesis, Bystrøm and Almaas ask to what extent Norwegian households has increased borrowing in response to increases in housing values Norwegian households on average have “cash-out refinancing”.

In their thesis, Bystrøm and Almaas examine home-equity based borrowing by analyzing cross-sectional survey data on households` housing and credit conditions. The data is based on the survey of living conditions conducted annually by Statistics Norway, for the years 2001, 2004, 2007 and 2012.

Bystrøm and Almaas provide evidence of a strong link between self-predicted growth in housing prices, and home-equity extraction among Norwegian home owners. Further, they find that the “cash-out" tendency is not uniform across households. The propensity to extract home equity increase with household size, age, and duration of ownership. Further, they find no statistically significant differences in the “cash-out" behaviour across income quartiles.

In addition to the winning thesis, the NFI Master’s Thesis Award Committee also named the following runners-up to the award for 2014:

• Frederic André Asheim (NTNU): “Hedge-Fund Manager-Investor Conflicts of Interest: A Numerical Analysis with Loss-Aversion”
• Kenneth Østnes and Håkon Hafskjær (BI): “The Low Volatility Puzzle: Norwegian Evidence”

The NFI Master’s Thesis Award Committee consisted of the following members: Øyvind Norli (BI), Svein-Arne Persson (NHH), Xunhua Su (NTNU), Bernt Arne Ødegaard (UiS) and Espen Henriksen (coordinator).

NFI shall support our mission to safeguard and build financial wealth for future generations, by strengthening financial economic research and education in areas relevant to the long-term management of the Government Pension Fund Global.

The NFI Master’s Thesis Award was established to provide incentives for outstanding Master’s theses in financial economics by students at universities and equivalent institutions in Norway. This is the third year that we have awarded the price.