Sumedh Ambokar

Sumedh Ambokar
Job Market Paper

Mortgage Search Heterogeneity, Statistical Discrimination and Monetary Policy Transmission to Consumption (with Kian Samaee)

In the US, half of all mortgage borrowers consider only one lender when refinancing. We investigate how statistical discrimination by lenders, a tool that separates borrowers who differ in search intensity, affects welfare and monetary policy transmission to consumption. We build and calibrate a general equilibrium model of the mortgage market with two types of borrowers who differ in the number of lenders they meet. Statistical discrimination based on the relative mass of the two types at any observable current mortgage rate and home equity level results in relatively higher offer rates for non-shoppers. Higher offer rates reduce the incentive to refinance. Repeated refinancing increases the separation between the two types, reinforcing the mechanism. Statistical discrimination carries a significant welfare cost ($3,300) for a borrower, accounting for two-thirds of the total difference in welfare between the two types. Two ways of increasing mortgage search, an explicit goal of the CFPB, have opposite effects on welfare. If every third non-shopper meets one more lender, the welfare cost becomes two-thirds. However, this cost quadruples if, instead, every shopper meets one more lender. Statistical discrimination halves non-shoppers’ consumption response to a monetary policy shock but does not increase shoppers’ response. Thus, it reduces aggregate consumption response by a third. Hence, the subtle ability to statistically discriminate is highly relevant for policymaking.

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Other Research

Inaction, Search Costs, and Market Power in the US Mortgage Market (with Kian Samaee)

Many US mortgage borrowers do not refinance, despite seemingly having financial incentives to do so. We explore the role of search costs in explaining this inaction, focusing on the 2009-2015 period when mortgage rates declined significantly. We estimate a (dynamic) discrete choice model of refinancing and search decisions using a proprietary panel data set, which includes information on the sequence of refinancing decisions and search intensity (the number of mortgage inquiries). On the supply side of the equilibrium model, loan originators take into account the search friction of the borrowers when they offer rates. We find that search costs significantly inhibit refinancing through two channels. First, higher search costs directly increase the cost of refinancing. Second, they also indirectly increase loan originators’ market power and thus raise the offered refinance rates. We find that the indirect market power effect dominates. We use our model to study an alternative market design, in which loan originators post interest rates to a centralized market, and borrowers can lock in posted rates by choosing to refinance. We find, under specific assumptions, a centralized market for the refinance market can significantly increase refinancing activity by eliminating market power, even if we keep the refinancing costs unchanged.

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Effect of Coalition Governments on Public Investment

Based on a panel data of 80 countries, I find that during an election cycle, public investment is a concave function of the months to election. Also, the post-election increase in public investment is smaller if the share of the coalition partners in the government is higher and that a government perceived to be corrupt does less public investment. I write a model of coalition governments where parties in government divert a fraction of the imperfectly observed public investment for private benefit and the smaller party in government can call an early election hoping to become the bigger party post-election. This model adds endogenous early elections to models of political competition. Coalition governments invest less to signal honesty and thus avoid an early election. Strong governments invest less as election approaches to signal honesty whereas weak governments invest more as election approaches as the incentive of smaller party to call an early election reduces as the scheduled election is nearer; thus public investment is concave during an election cycle. For optimal growth-inducing public investment, winner-takes-all systems are better than proportional systems to reduce these distortions.

Teaching Experience


Macroeconomic Theory I, University of Pennsylvania, Teaching Assistant for Prof. Jose-Victor Rios-Rull (Spring 2017), for Prof. Dirk Kruger (Spring 2016)

Network Security, Indian Institute of Technology, Bombay, Teaching Assistant for Prof. Bernard Menezes (Fall 2009)


Fiscal and Monetary Policy, University of Pennsylvania, Teaching Assistant for Prof. Harold Cole (Spring 2018)

Introduction to Microeconomics and Macroeconomics, University of Pennsylvania, Teaching Assistant for Prof. Saka (Fall 2018 (Head TA), Fall 2017), Prof. Saka and Prof. Duchene (Fall 2016, Fall 2015)

Cryptography and Network Security, Indian Institute of Technology, Bombay, Teaching Assistant for Prof. Bernard Menezes (Spring 2010)

Other Information

Professional Experience:

AQR Capital Management, PhD Research Intern (2019)

Goldman Sachs, Quantitative Strategist (2014)

Oracle, Member Technical Staff (2010-12)


Computational Skills: Python, Matlab, Stata, R, C++, Java, SQL, C



“An Architecture for regulatory compliant database management”, Proceedings of the 2009 IEEE International Conference on Data Engineering, IEEE Computer Society, 2009. (with Soumyadeb Mitra, Marianne Winslett, Richard T. Snodgrass and Shashank Yaduvanshi)


Immigration Status:

Visa: F-1 (Eligible for 24-month STEM OPT extension)

Citizenship: India


Languages: English (Fluent), Hindi (Native), Marathi (Native)


Macroeconomics, Mortgage Markets, Monetary Economics


Department of Economics
University of Pennsylvania
133 South 36th Street, Office 548
Philadelphia, PA 19104


+1 (917) 624-7663


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Harold L. Cole


Professor Harold Cole (Advisor)

Department of Economics

University of Pennsylvania

+1 (215) 898-7788


Professor Aviv Nevo

Department of Economics

University of Pennsylvania

+1 (215) 898-0499


Professor Benjamin Keys

Wharton Real Estate Department

University of Pennsylvania

+1 (215) 746-1253


Job Market Candidate Status
I am on the job market and I will be available for interviews at the 2020 ASSA Annual Meeting in San Diego