Rehabilitation versus surgical reconstruction for non-acute anterior cruciate ligament injury (ACL SNNAP): a pragmatic randomised controlled trial

BackgroundAnterior cruciate ligament (ACL) rupture is a common debilitating injury that can cause instability of the knee. We aimed to investigate the best management strategy between reconstructive surgery and non-surgical treatment for patients with a non-acute ACL injury and persistent symptoms of instability.MethodsWe did a pragmatic, multicentre, superiority, randomised controlled trial in 29 secondary care National Health Service orthopaedic units in the UK. Patients with symptomatic knee problems (instability) consistent with an ACL injury were eligible. We excluded patients with meniscal pathology with characteristics that indicate immediate surgery. Patients were randomly assigned (1:1) by computer to either surgery (reconstruction) or rehabilitation (physiotherapy but with subsequent reconstruction permitted if instability persisted after treatment), stratified by site and baseline Knee Injury and Osteoarthritis Outcome Score—4 domain version (KOOS4). This management design represented normal practice. The primary outcome was KOOS4 at 18 months after randomisation. The principal analyses were intention-to-treat based, with KOOS4 results analysed using linear regression. This trial is registered with ISRCTN, ISRCTN10110685, and ClinicalTrials.gov, NCT02980367.FindingsBetween Feb 1, 2017, and April 12, 2020, we recruited 316 patients. 156 (49%) participants were randomly assigned to the surgical reconstruction group and 160 (51%) to the rehabilitation group. Mean KOOS4 at 18 months was 73·0 (SD 18·3) in the surgical group and 64·6 (21·6) in the rehabilitation group. The adjusted mean difference was 7·9 (95% CI 2·5–13·2; p=0·0053) in favour of surgical management. 65 (41%) of 160 patients allocated to rehabilitation underwent subsequent surgery according to protocol within 18 months. 43 (28%) of 156 patients allocated to surgery did not receive their allocated treatment. We found no differences between groups in the proportion of intervention-related complications.InterpretationSurgical reconstruction as a management strategy for patients with non-acute ACL injury with persistent symptoms of instability was clinically superior and more cost-effective in comparison with rehabilitation management

Essays on housing and mortgage markets.

The housing market depends critically on credit market conditions and the link between housing and credit has recently attracted considerable interest in empirical papers. The strong interlinkage between both markets raises numerous question: How do borrowers choose between different mortgage products? How do households make reinvestment decision for their largest single component of household wealth? How are housing and mortgage markets interlinked? What are long-run fundamentals in house prices? In this dissertation we study these household choices on the housing and mortgage market and the resulting market outcomes. We now briefly summarize the research in the different chapters. Even after the crisis, house prices are overvalued according to price-to-income ratios in many countries. As unsustainable house prices may raise concerns about financial stability, it is important to understand the factors behind the evolution of house prices. In the first chapter, we introduce the borrower’s ability to pay (ATP) as a new long-run house price fundamental. ATP represents the borrowing capacity of a household, given a fixed fraction of income that goes to mortgage payments. An important contribution is that ATP also incorporates specific mortgage characteristics and the mortgage interest deduction (MID). Therefore, ATP takes into account the effect of changes in interest rates, fiscal rules and mortgage product innovation. We apply the model to the United States of America, United Kingdom, Belgium, the Netherlands, Sweden, Norway, Finland and Denmark. Conventional and panel cointegration tests indicate that house prices and our measure of ATP adjusted for the MID and mortgage characteristics are cointegrated in a statistically significant fraction of the countries. When the mortgage product innovations and the MID are excluded from the measure of ATP, the null hypothesis of no cointegration in all countries is not rejected. This confirms our hypothesis that it is necessary to model the changes in mortgage characteristics and tax rules. Other evidence indicates that the elasticity of house prices with respect to changes in ATP is close to one and Granger-causality tests indicate that the measure of ATP Granger causes house prices. Evidence in the other direction is much weaker. Finally, we test the ATP model against more conventional user cost models and find evidence that the speed-of-adjustment from disequilibrium is faster in the ATP model. Therefore, the ATP framework provides an intuitive alternative to standard house price models. As the first chapter indicates that mortgage characteristics have important implications for house price evolutions, we study the mortgage choices that individuals make in the subsequent chapters. In the second chapter, we study the choice between fixed rate mortgages (FRM) and adjustable rate mortgages (ARM) using data from Belgium and its Flemish region. For many households, the choice between fixed and adjustable rate mortgages is probably the most important choice with respect to the mortgage contract. In the aggregate, the individual mortgage choices have important policy implications for the transmission mechanism of monetary policy through the effect of mortgage payments on household budgets. The dominant share of adjustable rate mortgages in the UK was mentioned as an important reason by the United Kingdom’s economics and finance ministry (HM Treasury 2003a, 2003b) for opting out in the third stage of the Economic Monetary Union to introduce the euro. Notwithstanding the different ways monetary policy shocks are propagated, there still remains large cross-country variation in mortgage shares within the Eurozone. Whereas the variation in market share over time is small in most countries, the structure of the Belgian mortgage market varied significantly during the last decade. In this paper we seek to understand this variation in the mortgage structure over time. The results indicate that households base their decision on initial mortgage payments and do not consider expected changes in ARM rates. This results in a remarkable large variation in mortgage structure over time in comparison to other countries. Borrowers who expect to move in the near future are more likely to choose the FRM. As all mortgages are portable by law, mobile borrowers prefer to reduce variability in mortgage payments, which was not observed in previous empirical studies. Survey evidence suggests that many American and European consumers do not spend a lot of time comparing mortgage products. Indeed, many American consumers spend the same amount of time choosing where they want to go on vacation and more time researching the next car they want to buy (Finkelstein, 2010). In Europe, mortgage shopping does not appear to be fun either. Survey evidence from the Eurobarometer suggests that 21 percent of respondents in the 27 member states of the European Union did not compare mortgage products and took the first mortgage that they looked at. In the third chapter we show, however, that mortgage shopping is associated with a substantial monetary payoff. Therefore, we bring a unique dataset in the discussion from a website where borrowers (not the lenders) can post their complete set of received mortgage rate offers. A borrower who shops for 5 mortgage offers, is able to save 7000 euro in net present value on average. The results indicate that the decision to continue shopping is not much affected by the savings from mortgage shopping, but rather by the time spent comparing prices. Indeed, the time spent between the first and fifth offer is only 13 days for the median borrower. The potential savings suggest sub-optimal mortgage shopping as the opportunity cost of time to renegotiate additional quotes is unlikely to be that high. In the fourth chapter we study how the interaction between house prices and mortgage debt may influence reinvestment and mobility decisions. The severe drop in US house prices in 2006-2007, led to a large increase in the number of households facing an outstanding mortgage debt that exceeded the value of their house. The increase in negative equity has increased concern that underwater households are less mobile and decrease housing reinvestment. The large costs associated with the reinvestment and move decisions urge households to consider future expectations. Although this forward-looking behavior may affect reinvestment and mobility decisions, previous studies have often ignored to take them into account. Therefore, we bridge the gap between the reinvestment, mobility and dynamic literature and estimate a dynamic discrete choice model in which an owner-occupier can either reinvest, move or do nothing. Our findings indicate that negative equity reduces reinvestment and mobility among young households, but not among senior citizens. Furthermore, negative equity decreases reinvestment in non-recourse states, but not in recourse states.status: publishe

Mortgage shoppers: how much do they save?

© 2016 American Real Estate and Urban Economics Association Survey evidence suggests that many U.S. and European consumers do not spend a lot of time comparing mortgage products. We show, however, that mortgage shopping is associated with a substantial monetary payoff, using a unique data set from a website where borrowers (not the lenders) can post their complete set of received mortgage rate offers. A borrower who shops for five mortgage offers is able to save 7,078 euros in net present value on average. The potential savings suggest suboptimal mortgage shopping as the opportunity cost of time to renegotiate additional quotes is unlikely to be that high.status: publishe

The myopic choice between fixed and adjustable rate mortgages in Flanders

Many households have only one major asset, a house, which is usually financed through a mortgage contract. One of the most important financial decisions a household has to make is therefore the choice of mortgage type. These can be broadly described as falling into one of two categories: the fixed rate mortgage (FRM) and the adjustable rate mortgage (ARM). We use data from Flanders (Belgium) to study the choice between FRMs and ARMs. Belgium is of special interest as the structure of the Belgian mortgage market varied significantly during the last decade. From 2003 to 2012, the Belgian share of mortgages with an initial rate fixation period up to one year fell from 62% in 2004 to 8% in 2006, recovered to 58% in 2010, and fell again to 5% in 2012. This is a remarkably large variation in comparison to other countries. The results indicate that the FRM-ARM interest rate spread explains almost all the variation of the ARM share from 2003:01 to 2012:12. However, households do not distinguish between changes in the premium that lenders demand for holding the riskier long-term FRM or expected changes in the ARM rate. Mortgage choices can thus be described as short-sighted decisions, based on initial mortgage payments. We furthermore find evidence that high and low income households in Flanders choose an ARM for different reasons. Whereas the high income segment chooses an ARM if they can afford changes in interest payments, the low income households prefer an ARM if they are financially constrained.status: publishe

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