government intervention in the mortgage market a study of anti redlining regulations abstract this paper addresses the question of whether economic incentives exist for mortgage lenders to avoid or to minimize mortgage originations in neighborhoods inhabited primarily by low income racial minorities the option pricing model is utilized to determine what mortgage borrower characteristics affect the market value of the mortgage contracts it is found that existing laws do not enable mortgage lenders to vary either origination prices or mortgage terms so as to adjust for differences in the market values of mortgages as a result incentives are created for both the mortgage lender and the mortgage insurer to avoid originations and underwritings in areas with relatively high default probabilities various changes in mortgage lending regulations are suggested to eliminate these incentives and the effects of alternative programs to subsidize mortgage borrowers with relatively high default probabilities are considered

user cost changes unemployment and home ownership evidence from spain this paper develops a macroeconomic model that permits analysis of the relationship between unemployment and home ownership rates using aggregate data at the provincial level within spain besides other influential variables such as the changes of the relative user costs of owning and renting or household life cycle attributes the model constructed permits the authors to question the evidence of oswald nickell and layard and partially of green and hendershott that home ownership leads to higher unemployment the results point out that taking into account the simultaneity determination issue and reducing the omitted variable bias a higher unemployment discourages home ownership

the ins and outs of mortgage debt during the housing boom and bust from 1999 to 2013 u s mortgage debt doubled before contracting sharply i estimate mortgage inflows and outflows that shed light on the sources of volatility during the boom inflows from real estate investors tripled far outpacing other segments such as first time homebuyers during the bust a collapse in inflows keyed the debt decline while an expansion of outflows due to defaults played a more minor role inflow declines partly reflect a dramatic falloff in first time homebuying especially for low credit score individuals further analysis helps support the notion that the differential decline by credit score reflects markedly tightened credit supply

safe and satisfied external effects of homeownership in rotterdam the article analyses the impact of homeownership on neighbourhood safety and neighbourhood satisfaction using a unique panel dataset for the city of rotterdam the results show that there are significant but economically small effects of homeownership on safety and satisfaction moreover the relation between ownership and satisfaction is significantly moderated by neighbourhood safety the paper examines whether the marginal impact of increases in homeownership on external effects diminish once ownership levels are higher according to the data this seems to be the case the results are robust to alternative specifications the findings provide insights for the evaluation of housing market policies that subsidise or stimulate homeownership

what happens when food marketers require restrictive farming practices the dimensions that define a food product have expanded rapidly to include characteristics of the production process marketing arrangements and implications that production and consumption of the product have for the environment some market intermediaries have responded by requiring that their suppliers abide by restrictive production practices we examine the economic effects of such restrictions and apply this analysis to limitations on the use of antibiotics in u s pork production results from conceptual and simulation analyses show that in the absence of demand growth less pork is sold due to higher costs in the restricted segment and both pork consumers on average and producers are harmed demand growth of between 6 11 from adding new consumers who will consume the restricted antibiotic free product but not the conventional product is needed to return consumer surplus to the level in the base case and between 2 4 demand growth was required to return producer surplus to base when restricted and conventional products are modeled using a vertical differentiation framework results depend importantly on the ease with which consumers can switch to a seller who offers their desired product type significant distributional impacts among consumers are present when switching costs are prohibitive

race ethnicity and credit card marketing there is a vast literature on discrepancies in consumer credit related to race and ethnicity i explore a pattern that was first identified in aggregate data by han keys and li 2011 in their study of credit access blacks were approximately 27 less likely to receive offers from credit card lenders during the sample period even after controlling for variables such as credit history household income and local economic conditions hispanics were 17 less likely to receive an offer after including controls the discrepancy is robust to lender specific regressions and the inclusion of a large number of explanatory variables my findings imply that marketing is an important area for analysis of discrimination in consumer credit due to the likely need for confidential information in further analysis investigation by an appropriate regulatory agency such as the consumer financial protection bureau would be useful

multiple equilibria in markets with screening this paper adds endogenous screening to broecker 1990 and shows the possibility of multiple screening equilibria a high intensity of screening by a bank decreases average quality of firms applying to other banks which in turn have further incentives to screen the link between the degree of concentration of the banking industry and the extension of credit is also discussed

new evidence on the link between housing environment and children s educational attainments abstract there is extensive literature that posits the hypothesis that a better housing environment enhances a child s educational attainment however there is little causal evidence demonstrating the presence of this effect in this study we examine the effect of housing environment on a child s educational attainment using census files covering the entire population of taiwan because the taiwan census data contains unique address information for every household we try to control the neighborhood effect and unobserved family heterogeneity by comparing a child with his peers of the same age cohort in the same neighborhood after accounting for tens of thousand area dummies the chance of high school enrollment for teens aged 16 and 17 and college enrollment for young adults aged 19 and 20 is found to be positively correlated with an increase in floor space an increase in residential stability and with homeownership but negatively correlated to an increase in housing crowdedness and an increase in building age among these housing variables residential stability and homeownership are the ones generating the largest positive effects on the child s schooling

the community reinvestment act and mortgage lending to lower income borrowers and neighborhoods abstractthis paper evaluates the community reinvestment act cra a law mandating that banks help meet the credit needs of lower income households and neighborhoods to measure the effect of the law on lending to targeted groups since 1994 i take advantage of discontinuous targeting rules and abrupt changes in target status on average the cra appears to have had little impact on mortgage lending even during the mid 2000s when lending to lower income areas nevertheless soared i do find a significant effect during the late 1990s and early 2000s in large metropolitan areas when and where the cra may have been most binding i use this episode to test the effect of the cra on overall mortgage availability that is lending by both regulated and unregulated institutions the results are consistent with the notion that government intervention in credit markets may be justified on the grounds that information externalities exist and can depress credit supply

the dynamics of credit markets in a model with learning abstract a dynamic credit market is modeled in which the production and processing of information leads to alternating and persistent periods of growth and contraction in the model the number of projects engaged in determines the precision of estimates of future returns obtained from current investment shocks to underlying returns to risky projects are magnified and prolonged by the learning process multiple equilibria may exist and the magnification effect may be even larger since shocks can move the credit market to a new equilibrium the allocation of credit is generally not a constrained pareto efficient allocation

racial disparities in bank specific mortgage lending models abstract we consider several methods of combining estimates of unexplained racial disparities in regulatory models of mortgage lending although models for individual banks do not provide statistically significant evidence of discrimination effects for blacks are statistically and economically significant when combining data

the importance of lender heterogeneity in mortgage lending abstract previous studies of the mortgage lending process which fail to adequately account for inter lender differences suffer from a potentially serious omitted variables bias using a sample of 23 094 home purchase mortgage applications from pinellas county st petersburg florida over the 1993 1995 interval i demonstrate that the inclusion of lender characteristics enhances the predictive power of accept reject decision models of mortgage origination in addition the inclusion of lender attributes is shown to substantially influence the coefficient estimates of additional model parameters of interest such as the applicant race and neighborhood racial composition variables finally this study provides unique and supportive evidence regarding the existence and persistence of information externalities in home purchase mortgage markets

mortgage lending in boston interpreting hmda data the home mortgage disclosure act was enacted to monitor minority and low income access to the mortgage market the data collected for this purpose show that minorities are more than twice as likely to be denied a mortgage as whites yet variables correlated with both race and creditworthiness were omitted from these data making any conclusion about race s role in mortgage lending impossible the federal reserve bank of boston collected additional variables important to the mortgage lending decision and found that race continued to play an important though significantly diminished role in the decision to grant a mortgage copyright 1996 by american economic association

waking up from the american dream on the experience of young americans during the housing boom of the 2000s we exploit regional variations in house price fluctuations in the united states during the early to mid 2000s to study the impact of the housing boom on young americans choices related to home ownership household formation and fertility we also introduce a novel instrument for changes in house prices based on the predetermined industrial structure of the local economy we find that in regions that experienced large increases in house prices between 2001 and 2006 the youngest households were substantially less likely to purchase residential property to be married and to have a child both in 2006 and in 2011

is the experimental auction a dynamic market experimental auctions are generally thought of as static markets this paper presents the results of an experimental auction designed to test whether participants perceptions regarding the relative difficulty of delaying or reversing a transaction outside the experimental market systematically affect their willingness to pay bids the results show that auction participants perceptions significantly impact their bids in a manner that is consistent with real option theory these results suggest that economists must be careful to consider the existence of outside markets when designing experimental auctions

information neighborhood characteristics and home mortgage lending abstract this study explores the role of information externalities and neighborhood characteristics in mortgage lending it assumes that a lender s knowledge about a neighborhood depends on its physical distance to that neighborhood in addition this paper proposes a measure of correlation in outcomes of loans made for neighboring properties to assess the effect of neighborhood attributes the empirical results reveal that loan rejection rates rise with increases in the lender property distance for applications received by small institutions furthermore the effect of neighborhood attributes is modest conditional on loan applicant and lender characteristics further exploration indicates group disparities in these effects

education economic growth and measured income inequality in this paper education simultaneously affects growth and income inequality more education does not necessarily decrease inequality when the latter is assessed by the lorenz dominance criterion increases in education first increase and then decrease growth as well as income inequality when measured by the gini coefficient there is no clear functional relationship between growth and measured income inequality the model identifies regimes of this relationship which depend crucially on the production and schooling technology conventional growth regressions with human capital and inequality as regressors may miss the richness of the underlying nonlinearities but viewed as approximations may still provide important information on the nonlinear relationship between growth and education

measuring inequality change in an economy with income growth abstract this paper reassesses an article by fields which criticizes using standard income inequality indices for the evaluation of high income sector enlargement growth this paper dissents in three ways the intuition that motivated fields paper is found to only partially account for the changes occurring during growth the inequality index that fields developed is shown to incorporate the concept of symmetry and the concept of inequality as the expected experience of income differences is shown to support the use of the standard indices

measuring the external benefits of homeownership abstract the subsidization of homeownership is justified on efficiency grounds only to the extent that it provides benefits to people other than the homeowner we use the clustered neighborhoods subsample in the american housing survey to measure that benefit in the form of higher housing prices in neighborhoods with higher ownership rates and lower vacancies we attempt to account for unobservable neighborhood and house attributes that may be correlated with occupancy and ownership through instrumental variables switching regressions and panel methods estimates indicate that a housing transition from renting to owning creates approximately 1300 in measured benefits

mobility and redistribution the ability of individuals to move freely from one jurisdiction to another is generally seen as a constraint on the amount of redistribution that each jurisdiction within a system of governments can undertake in this paper we look at this proposition by developing a positive analysis of income redistribution by local governments in a federal system we ask how much redistribution occurs when only local governments can have tax transfer instruments individuals can move freely among jurisdictions and voters in each jurisdiction are fully aware of the migration effects of redistributive policies local redistribution is shown to induce sorting of the population with the poorest households located in the communities that provide the most redistribution while the threat of out migration affects the potential for redistribution our results suggest that significant local redistribution is nonetheless feasible numerical computations indicate that the proportion of residents who are renters is a major factor affecting the local choice of level of redistribution

homeownership neighbourhood characteristics and children s positive behaviours among low and moderate income households using data on low to moderate income households in the us community advantage program survey this paper examines homeownership neighbourhood characteristics and the interaction between the two on

residential mobility and social capital abstract this paper empirically investigates the role of social capital in households residential mobility behavior by considering its spatial dimension this study focuses on a household s social ties with people living nearby which we refer to as its local social capital local social capital may deter residential mobility because the resources stemming from them are location specific and will be less valuable if a household moves we conjecture that a household s possession of local social capital has a negative effect on its residential mobility and this negative effect of local social capital may be stronger on long distance mobility than on short distance mobility our empirical investigation is based on data from the panel study of income dynamics we obtain evidence which is supportive of these conjectures

bank branch presence and access to credit in low to moderate income neighborhoods banks specialize in lending to informationally opaque borrowers by collecting soft information about them some researchers claim that this process requires a physical presence in the market to lower information collection costs the author provides evidence in support of this argument in the mortgage market for low income borrowers mortgage originations increase and interest spreads decline when there is a bank branch located in a low to moderate income neighborhood

a calibrated auction conjoint valuation method valuing pork and eggs produced under differing animal welfare conditions this paper develops a valuation method which generates consistent and systematic estimates of people s preferences for complex multi attribute goods by inextricably linking auction bids with conjoint ratings the advantage of the valuation approach is that it permits the estimation of people s values for many potential goods allows one to decompose people s values for a good into its sub components and permits the study of preference heterogeneity without distributional assumptions we apply the method to an important and increasingly controversial topic animal welfare the method is used to determine people s preferences for eggs and pork produced from different production systems data from experiments conducted in three diverse u s locations chicago il dallas tx and wilmington nc indicates that people are on average willing to pay 0 95 more for a dozen eggs raised in an aviary pasture system vs a cage system and are willing to pay 2 02 more for two pounds of pork chops raised in a pasture system as opposed to a crate system

a model of redlining abstract we develop a model of mortgage redlining which captures the dynamic information gathering which is implied by the use of appraisals in mortgage granting in our model the precision of appraisals depends on the quantity of previous home sales in turn the precision of appraisals influences current home sales since when appraisals are inaccurate lenders require larger down payments there is thus a dynamic information externality in which past purchases influence current purchases as a consequence differential mortgage lending behavior will be sub optimal and the appearance of redlining may be justifiably subject to corrective action

racial discrimination and redlining in cities we propose a model where employers have two types of prejudices racial and spatial discriminations because of the rst one black workers have less chance than white workers to nd a job because of the second one workers living closer to the city center have less chances than suburban workers to nd a job in this context we show that depending on the importance of access costs to employment centers two urban equilibria may emerge in equilibrium 1 the access cost for blacks is quite large black and white workers are totally separated while in equilibrium 2 the access cost for blacks is relatively small workers are separated by their employment status the unemployed versus the employed we then study the labor market equilibrium and its interactions with the land market we show in particular that both race and space matter to explain high unemployment rates among blacks

the valuation effects of the 1977 community reinvestment act and its enforcement abstract we examine the wealth effects of the passage of the community reinvestment act cra of 1977 for commercial banks and savings and loan associations we find significantly negative average excess returns for small nyse amex banks and sl in contrast there is no evidence that large nyse amex institutions or nasdaq institutions experience wealth losses we also study the effects of individual cra protests against institutions and find they produce significantly negative excess returns which are not reversed when the protests are resolved our results have implications for proposed changes to cra and for the future consolidation of the financial services industry the results also demonstrate the difficulties associated with studying returns from the early years of the nasdaq market

a note on the benefits of homeownership abstract this brief note adds to recent work that attempts to identify externalities associated with homeownership the results suggest that some of the homeownership effect found by green and white is driven by family characteristics associated with homeownership especially residential stability however as much as homeownership increases residential stability it appears to be correlated with higher school attainment attempts to control for endogeneity cannot eliminate this finding

safety and soundness and the cra is there a conflict i introduction financial problems often pose a dilemma regarding the appropriate nature and timing of any regulatory response banks and the financial intermediation services they perform generally are viewed as crucial to economic growth and the intermediary role of banks entails potential negative economic consequences of reducing permissible lending activities in response to an adverse financial shock as in bernanke and gertler 1987 equally well known however are the perverse incentives associated with allowing thinly capitalized banks to operate with federally guaranteed deposits as in kaufman 1987 to the extent both views are correct they point to a potential trade off between enhancing the supply of bank credit and promoting safe and sound banking practices in periods of financial difficulty although this type of trade off has been debated and clarified in the context of banking crises its implications for banking regulation more generally are underappreciated in particular limited attention has been given to the potential trade off between the general credit enhancement objective of the community reinvestment act cra and the risk constraining objectives of safety and soundness standards in october 1977 the u s congress passed the cra as title viii of the housing and community development act the legislation is designed to encourage commercial banks and savings associations to help meet the credit needs of their communities in a manner consistent with safe and sound banking practices the cra is often associated with the specific objective of enhancing the availability of credit for low income neighborhoods in a bank s service area however the implementing regulations in accordance with the general nature of the statute also prominently feature general guidelines related to the total volume of lending activity conducted in an institution s market area irrespective of neighborhood income levels at its most fundamental level the cra is concerned with the credit needs of the communities in which banks are chartered that is federal regulators are to use their supervisory authority to encourage institutions to help meet local credit needs as in garwood and smith 1993 since july 1 990 cra ratings have had four levels 1 outstanding 2 satisfactory 3 needs to improve and 4 substantial noncompliance 55 fr 18163 the cra s specific and general credit enhancement objectives are qualified by reference to safe and sound banking practices but the possibility nevertheless arises that favorable cra ratings might reflect aggressive financial strategies designed to support an expansion of lending activity in contrast bank regulators use very different criteria in assigning safety and soundness ratings in 1979 federal agencies adopted the uniform financial institutions rating system the resulting overall or composite safety and soundness ratings originally were derived from the onsite evaluation and rating of five separate factors capital adequacy c asset quality a management m earnings e and liquidity l this camel rating system was amended on 1 january 1997 to include a sixth component 61 fr 67021 the new s component focuses on sensitivity to market risk such as the risk arising from changes in interest rates like the earlier camel rating the camels overall rating has five levels 1 basically sound in every respect 2 fundamentally sound but with modest weaknesses 3 financial operational or compliance weaknesses that cause supervisory concern 4 serious financial weaknesses that could impair future viability and 5 critical financial weaknesses that render the probability of near term failure extremely high for simplicity this study applies the term camel to both camel and camels ratings in contrast to cra ratings the camel rating system clearly is directed at containing risk given the opposing perspectives on bank credit underlying cra and safety and soundness ratings in addition to the bank level costs associated with cra compliance efforts current regulatory policies entail a potential conflict

the becker degroot marschak mechanism is not necessarily incentive compatible even for non random goods abstract this paper uses results from karni e safra z 1987 preference reversals and the observability of preferences by experimental methods econometrica 55 675 685 and karni e 1989 generalized expected utility analysis of multivariate risk aversion international economic review 30 297 305 to show that the becker degroot marschak mechanism is not always incentive compatible even when the item to be valued involves no uncertainty contrary to several recent assertions

testing the determinants of income distribution in major league baseball i introduction income of professional athletes is a frequent topic of discussion of fans sportscasters and the general public economists have also increasingly been attracted to this topic because the distribution of income of these players has both policy and business implications as a consequence the report of major league baseball s mlb blue ribbon panel formed in 1998 by mlb commissioner bud selig received quite a lot of attention this panel was charged with describing and explaining the economic condition of mlb comprised of such dignitaries as former federal reserve chairman paul volker senator george mitchell yale university president richard levin and columnist george will this panel reported that team payrolls have become increasingly disparate the gap between rich and poor teams is not only wide but is growing levin et al 2000 a case in point is the fact that the salary of the highest paid player in the 2000 season los angeles kevin brown at 15 7 million was 95 of the entire payroll of the poorest team the minnesota twins the effect according to the panel s report is a dramatic decline in parity and competitiveness of mlb since 1994 a team in the top payroll quartile has won every world series game in 1999 the teams with the five largest payrolls had an average winning percentage of 0 557 whereas the five poorest teams had a comparable figure of 0 444 the report discusses various recommendations that may narrow this gap leading to what one might call convergence in team payrolls this article examines the distribution of income in mlb for 1985 to 2000 we revive and extend a technique first suggested by thurow 1970 and show how it can be used to test for time trends versus cross sectional demographic and economic aspects influencing income distribution thurow 1970 discusses the impact of various measures on median income in the present case by calculating the gini coefficient we can discuss the impact that the explanatory variables have on income inequality in the context of mlb we attempt to shed light on the reasons why teams have greater or lesser payroll disparity we leave the question of the effect of between team payroll inequality on team wins and team revenues for future research the issue of whether to use an inequality measure that is based on a particular distribution or one that is distribution free has been widely discussed in the income distribution literature silber 1999 ryu and slottje 1999 in advocating the use of parametric distributions point to several benefits of estimating the lorenz curve in this manner these benefits include the ability to summarize thousands of observation points with a few parameters the ability to estimate the density function at any point an enhanced ability to construct inequality measures and the ability to formulate possible laws that would otherwise not be possible to detect however there are problems associated with the use of a parametric lorenz curve such as the choice of a suitable distribution the problem is compounded by the fact that income data are often grouped and have an open ended highest income category making it difficult to obtain accurate estimates one advantage of using professional sports data is the fact that the salary is available per individual and is not grouped consequently an actual number is available for the highest income this study analyzes payroll inequality in a professional sport by team that is for each year we calculate a measure of inequality for each mlb team and consider the characteristic differences in within team payroll distributions our study is not however the first to consider income inequality within professional team sports depken 2000 and jewell and molina 2004 find that mlb teams with greater wage disparity have fewer wins furthermore sommers 1998 finds a negative relationship between team success and within team payroll inequality using national hockey league data

redlining in boston do mortgage lenders discriminate against neighborhoods historically lenders have been accused of redlining minority neighborhoods as well as refusing to lend to minority applicants considerable bank regulation is designed to prevent both actions however the strong correlation between race and neighborhood makes it difficult to distinguish the impact of geographic discrimination from the effects of racial discrimination previous studies have failed to untangle these two influences in part because of severe omitted variable bias the data set in this paper allows the distinct effects of race and geography to be identified and it shows that the evidence for redlining is weak

is food and drug administration policy governing artisan cheese consistent with consumers preferences abstract united states government policy prohibits the sale of cheese made from unpasteurized milk aged less than 60 days despite contested science behind the policy we use experimental auctions for artisan cheese to estimate the value of pasteurization and age as food safety attributes which is the rationale for the policy we also look at consumers perception of the tradeoff between safety and quality a survey was conducted with participants at farmers markets including experimental auctions and sensory analysis of pasteurized and unpasteurized cheese and questions concerning attitudes about food safety there is no evidence of positive demand for pasteurization and there is no evidence of a tradeoff between safety and quality on average artisan cheese consumers make purchasing decisions based on taste not their attitude toward food safety the results of this study raise questions about the possible extension of a minimum aging period for cheese made from unpasteurized milk

the socioeconomic impact of shared appreciation mortgages on borrowers empirical evidence from south australia shared appreciation mortgages sams realign traditional incentives in the lender borrower relationship by substituting future capital gains for interest income this makes them a potentially innovative solution to affordability and other homeownership crises taxation and regulatory barriers have impeded sam development limiting empirical studies of their impact on households this has not been the case in south australia where state government implementation of sams has made available a unique and detailed dataset of low income sam financed households examining this population it is found that sam borrowers benefit from increased budgetary expenditure on discretionary items following take up while simultaneously saving on some non discretionary items relative to a control sample furthermore sam homeownership also seems associated with increased borrower levels of neighbourhood satisfaction and community involvement overall these results indicate that sam financed homeownership leads to changes in borrower behaviour and deserves further consideration by the housing industry and research community

demand for farm animal welfare and producer implications results from a field experiment in michigan abstract this study utilizes a becker degroot marschak bdm mechanism to assess michigan consumer demand for animal welfare practices results are examined in the context of changing farm production costs and producer marketing margins we find that while consumers are willing to pay significant premiums for animal welfare standards failing to account for the costs associated with producing the entire animal under the new system could lead to suboptimal policy that negatively affects producer welfare our results suggest that consumer premiums for animal welfare are product specific and that wtp estimates should not be generalized to the entire animal we discuss policy implications of our findings and highlight the importance of considering producer costs when evaluating consumer demand for farm animal welfare practices

the social and private micro level consequences of homeownership abstract this paper reviews the literature that describes the micro level economic and social consequences of homeownership we adopt an interdisciplinary approach and include studies from economics sociology geography political science psychology and other disciplines our focus is on the set of consequences of homeownership in developed countries our list of potential outcomes of homeownership includes the impact on household wealth and portfolio choice mobility labor force participation urban structure and segregation home maintenance political and social activities health demographics self esteem and child outcomes there is substantial evidence that homeownership has important effects on some household behaviors and outcomes however we find that much of the past 30 year s literature on consequences of homeowning is deficient from a theoretical or econometric perspective we suggest solutions and identify research gaps present in the literature

immigration and socioeconomic gaps theory and applications during the first decade of israel s existence large waves of immigrants came from europe and the middle east this paper introduces an empirical study which compares the occupational socioeconomic score differentials between ethnic groups within and outside the kibbutz the three groups examined are from asia and africa from europe and america and the native born population it is found that the occupational socioeconomic score differentials after migration are lower in the kibbutz than outside it and that socioeconomic gaps outside the kibbutz increase after migration in this paper a model is presented which explains the empirical results it compares the effects of migration inside the kibbutz organized as a labour managed firm with the effects of migration inside the city assumed to be organized as a perfectly competitive firm the model also develops a gap function that quantifies the socioeconomic gaps and uses iso gap curves to compare the premigration and postmigration gaps

do urban neighborhoods benefit from homeowners evidence from housing prices homeownership is heavily subsidized in most countries the adverse effects of this policy on economic efficiency and income distribution are well documented in the economics literature the main argument in favor of subsidizing homeownership is that it creates positive externalities that offset these adverse effects in this paper we test whether homeowners create positive externalities that capitalize into housing prices in multi storey buildings using semi parametric hedonic regressions with and without instrumental variables we find no evidence of positive externalities although the results with instrumental variables are somewhat imprecise this result is robust to several sensitivity checks and to a relaxation of the identification assumptions of our instrument using set identification

what are the social benefits of homeownership experimental evidence for low income households abstract we estimate the social benefits of homeownership using an exogenous instrument based on randomly assigned treatment status from a field experiment that subsidized saving for home purchase for low income renters through individual development accounts idas this approach attempts to eliminate the potential correlation present in previous analyses between unobserved individual characteristics leading to homeownership and traits leading to provision of social capital or local amenities consistent with previous work we show that homeownership positively affects political engagement in simple probits instrumental variable probits however show no impact of homeownership on political involvement iv results for other social outcomes are less conclusive the analysis suggests that with the use of an exogenous instrument it is possible to generate results that are different from the previous literature our results also suggest that being eligible to open an ida did not spur households to provide more social capital or local amenities

credit card redlining abstract this paper evaluates the presence of racial disparities in the issuance of consumer credit using a database of credit histories i link location based information on race with individual credit files after controlling for place specific factors such as housing vacancy rates and general population demographics i find qualitatively large differences in the amount of credit offered to similarly qualified applicants living in black versus white areas high data quality allows distinguishing between issuer provision supply and utilization of credit demand additional estimates using information on payday lending provide support for idea that issuers condition lending on location

measuring inequality change in an economy with income growth abstract this paper analyzes how to measure changes in inequality in an economy with income growth the discussion distinguishes three stylized kinds of economic growth 1 1 high income sector enrichment 2 2 low income sector enrichment 3 3 high income sector enlargement in which the high income sector expands and absorbs persons from the low income sector th e two enrichment types pose no problem for assessing inequality change in the course of economic growth for high income sector enrichment growth inequality might reasonably be said to increase whereas for low income sector enrichment inequality might be said to decrease these adjustments are non controversial and non problematical where problems arise is in the case of high income sector enlargement growth in that case the two alternative approaches have been shown in this paper to yield markedly results 1 1 the traditional inequality indices generate an inverted u pattern of inequality that is inequality rises in the early stages of high income sector enlargement growth and falls thereafter 2 2 the new approach suggested here based on axioms of gap inequality and numerical inequality generates a u pattern of inequality that is inequality falls in the early stages of high income sector enlargement growth and rises thereafter the discrepancy between the familiar indices and the alternative approach based on axioms of gap inequality and numerical inequality bears further scrutiny two courses of action are possible one might try to axiomatize inequality in ways that generate an inverted u pattern in high income sector enlargement growth thereby rationalizing the continued use of the usual inequality indices with the inverted u property alternatively one might retain the axioms proposed here embed them into a more formal structure and construct a family of inequality indices consistent with them others might wish to pursue the first course i am at work on the second

inequality measurement an axiomatic approach the theory of inequality measurement is examined using some basic axioms which extend the pigou dalton principle of transfers from these basic axioms various inequality indices may be derived as an alternative to ad hoc methods or to methods involving prior specification of a social welfare function the key idea is the concept of distance between two income shares conventional inequality indices are analysed in terms of their implied distance functions

house price growth when children are teenagers a path to higher earnings abstract this paper examines whether rising house prices immediately prior to children entering college have an impact on their earnings as adults higher house prices provide homeowners with additional funding to invest in their children s human capital but also raise housing costs the results show that a 1 percentage point increase in house prices when children are 17 years old results in roughly 0 9 percent higher annual income for the children of homeowners and 1 5 percent lower annual income for the children of renters house price appreciation at age 17 also leads to higher college enrollment rates at age 19 and an increased likelihood of attendance at higher ranked post secondary institutions for children of homeowners as well as lower college enrollment rates for children of renters

estimating and decomposing changes in the white black homeownership gap from 2005 to 2011 this study evaluates the effects of the recent us housing bust on the white black homeownership gap by estimating and decomposing the changes in the distribution of the gap between 2005 and 2011 our analysis shows that the housing bust did not affect the homeownership gap uniformly in fact we find that the gap decreased for households that were the least likely to own and remained unchanged for households that were the most likely to own and that black households with around a 50 probability of homeownership were especially vulnerable to the crisis we also find that the contribution of the residual gap was modest changes in the white black homeownership gap over the sample period are mainly attributed to changes in household income whether the household earned dividend interest or rental income and marital status with the extent of their respective influences varying over the homeownership distribution our empirical approach reveals distributional information on the determinants of the changes

measuring changes in local house prices an empirical investigation of alternative methodologies abstract this paper investigates whether reliable house price indices can be constructed using a limited set of descriptive variables on a large number of observations four primary index methods are compared 1 median sale price 2 restricted hedonic 3 repeat sales and 4 the assessed value technique the paper examines the precision and accuracy of each of the alternative indices

homeownership social capital and satisfaction with local government prior studies suggest that homeownership positively impacts on social capital formation however many studies find it difficult to control adequately for selection effects in the form of factors some of which may be unobserved that encourage both homeownership and investment in social capital by households a biennial survey conducted in new zealand cities provides data that enable the control of such selection effects with propensity score matching methods while also benchmarking the results by means of regression methods the results confirm that homeownership exerts positive impacts on the formation of social capital at the same time homeownership demands greater accountability of local government and leads to reduced satisfaction with local government performance thereby negatively impacting on community social capital hence these two dimensions of housing related social capital work in opposite directions from each other a finding which has not been previously observed

the role of information externalities and scale economies in home mortgage lending decisions abstract theories of rational redlining suggest a low volume of sales should lead to greater uncertainty in house price appraisals making the mortgage loan less attractive to lenders this paper represents the first test of this information externality theory using a well specified model of lending in our preferred model information externalities are relevant but the marginal effect diminishes quickly with only about 10 percent of applications materially disadvantaged by a low volume of sales our results also support the presence of bank level economies of scale to reviewing applications in a given area with increased bank level applications associated with higher acceptance rates