We analyze Korean households’ demand for the reverse mortgage loans by
using the Surveys for Housing Finance and Bogeumjari(mortgage) Loan
conducted nationally in 2010 and 2012 by Korean Housing Finance
Corporation. To allow for sufficient flexibility, we use the generalized ordered
probit model that assumes individual heterogeneity in cut-off values. We find
that the generalized ordered probit model fits the data better than standard
ordered probit model. We also find that the demand for the reverse mortgage
grew between 2000 and 2010 and that the demand increases as household
income decreases, as the age of household head increases, and as the number
of children decreases.