Foreclosures, House Prices, and the Real Economy

Mian, Atif; Sufi, Amir; Trebbi, Francesco

doi:10.1111/jofi.12310

Cited by 287 publications

(137 citation statements)

References 39 publications

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“…The collapse in home prices in particular was much more dramatic than had been seen in the previous six recessions (Gascon 2009), and home foreclosures tripled from 2006 to 2009, to almost 2.5 million per year (Mian, Sufi and Trebbi 2011). The housing crisis contributed to economic stress in millions more households than were directly affected by job loss.…”

Section: Recession and Divorcementioning

confidence: 99%

Recession and Divorce in the United States, 2008–2011

Cohen

2014

Popul Res Policy Rev

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Recession may increase divorce through a stress mechanism, or reduce divorce by exacerbating cost barriers or strengthening family bonds. After establishing an individual-level model predicting U.S. women's divorce, the paper tests period effects, and whether unemployment and foreclosures are associated with the odds of divorce using the 2008-2011 American Community Survey. Results show a downward spike in the divorce rate after 2008, almost recovering to the expected level by 2011, which suggests a negative recession effect. On the other hand, state foreclosure rates are positively associated with the odds of divorce with individual controls, although this effect is not significant when state fixed effects are introduced. State unemployment rates show no effect on odds of divorce. Future research will have to determine why national divorce odds fell during the recession while state-level economic indicators were not strongly associated with divorce. Exploratory analysis which shows unemployment decreasing divorce odds for those with college degrees, while foreclosures have the opposite effect, provides one possible avenue for such research.

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Section: Recession and Divorcementioning

confidence: 99%

Recession and Divorce in the United States, 2008–2011

Cohen

2014

Popul Res Policy Rev

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“…properties in the foreclosure process). [44, 45] A count of the number of foreclosures within a ¼-mile Euclidean buffer around each MESA participant's residence was calculated for each year between exams 4 and 5 using ESRI ArcGIS 10.1 (Redlands, CA).…”

Section: The Characterization Of Neighborhood Environments In Mesamentioning

confidence: 99%

The Impact of Neighborhoods on CV Risk

et al. 2016

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Cardiovascular disease (CVD) continues to be the leading cause of death and a major source of health disparities in the Unites States and globally. Efforts to reduce CVD risk and eliminate cardiovascular health disparities have increasingly emphasized the importance of the social determinants of health. Neighborhood environments have emerged as a possible target for prevention and policy efforts. Hence there is a need to better understand the role of neighborhood environments in shaping cardiovascular risk. The Multi-Ethnic Study of Atherosclerosis Neighborhood Study provided a unique opportunity to build a comprehensive place-based resource for investigations of associations between specific features of neighborhood physical and social environments and cardiovascular risk factors and outcomes. This manuscript summarizes the approaches used to characterize residential neighborhood environments in the MESA cohort, provides an overview of key findings to date, and discusses challenges and opportunities in neighborhood health effects research. Results to date suggest that neighborhood physical and social environments are related to behavioral and biomedical risk factors for CVD and that cardiovascular prevention efforts might benefit from taking neighborhood context into account.

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“…Finally, they offer empirical support for their model by examining the spatial variation in MSA prime mortgage default rates correlated with the level of subprime mortgage activity. Chen et al (2011), Mian et al (2011, Kiefer andKiefer (2009) andFollain et al (2012) are other examples of work designed to capture the interplay between house prices and foreclosure activity.…”

Section: Ijhma 64mentioning

confidence: 99%

The search for capital adequacy in the mortgage market: a case of black swan blindness

Follain

2013

Int J of Hous Markts and Analy

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Purpose -The primary purpose of this paper is to review and critique Taleb's notion of black swan blindness for a subset of the broader field of financial economics -the search for capital adequacy rules for financial institutions who invest in residential mortgages. This search entails the analysis and prediction of extreme events in housing and mortgage markets. Design/methodology/approach -The focus of this paper concerns efforts to assess the likelihood and consequences of extreme and consequential economic events prior to their occurrence. The goal is to assess the criticism offered by Taleb that economists overstate the understanding of extreme events. One piece of evidence consists of a case study of the literature and policies regarding capital adequacy for financial institutions who invest in residential mortgages. The other is a review of recent literature about the crisis that offers similar conclusions. Findings -The evidence suggests that the criticism is valid. The case study reviews a number of areas in which the search for capital adequacy reflected the traits of black swan blindness as described by Taleb. The review of the recent literature about the crisis highlights a number of papers that reach similar conclusions. These include high level overviews of the literature on the crisis, e.g. Lo, a number of papers that specifically focus on housing and mortgage markets, and some very recent work about agent based modeling and complexity theory presented at the 2012 ARES meetings.Research limitations/implications -The conclusion suggests a number of ways in which economists can combat the potential of black swan blindness is our search for extreme events. One suggestion is to combat the error of confirmation with ongoing testing. Combating overly simplistic narratives can also be addressed by listening more carefully to the criticisms by people outside the field. Pay more attention to silent evidence by having more substantial and ongoing consumer testing of new products, more work to identify best practices, and more resources to enforce lending laws. Finally, more attention needs to be focused upon assumptions in the models that are based upon limited empirical evidence and, if found later to be false, may lead to dire outcomes. Practical implications -These include more and ongoing evaluation of stress tests. New rules to adjust capital requirements over the business cycle are consistent with the suggestions of the paper. Economists need to spend more time exploring and learning from outliers in the models. Social implications -The recent crisis has been driven by a wide variety of factors from within many sectors and agents. The outcome has been a major problem for people in many sectors and regions of the economy. The hope is that economists can do a better job in the future to help policymakers and others be more prepared for the potential of extreme events in the hopes of avoiding them in the future or at least reducing their likelihood and damage caused by them. Originality/value -The paper ...

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Foreclosures, House Prices, and the Real Economy

Cited by 287 publications

References 39 publications

Recession and Divorce in the United States, 2008–2011

Recession and Divorce in the United States, 2008–2011

The Impact of Neighborhoods on CV Risk

The search for capital adequacy in the mortgage market: a case of black swan blindness

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