The Effect of Credit Availability on House Prices: An Instrumental Variable and Difference-in-Differences Approach
2014/07/29
研討會日期 : 2014-07-29
時間 : 14:30
主講人 : Professor Edward Kung
地點 : Conference Room B110
演講者簡介 : Professor Kung received his Ph.D. in Economics from Duke University at 2012. He is currently an Assistant Professor in Economics at UCLA, Los Angeles. His research fields are Applied Microeconomics, Urban and Real Estate Economics, Public Economics.
演講摘要 : The Economic Stimulus Act of 2008 increased conforming loan limits (CLLs) for certain high priced areas starting in 2008. Using a matched dataset on housing transactions and listings from four major U.S. cities, I estimate the effect of the new CLLs on house prices using a difference-in-differences approach. The original asking price of a home is used as a non-parametric instrumental variable for the likelihood that the house will be purchased by a loan in the affected range. I find that the new CLLs increased the prices of homes likely to be affected in San Francisco and Los Angeles by 12.7% and 6.7% respectively. Most of this effect can be attributed to a reduction in interest rates for loans in the affected range. The implied semi-elasticities of house prices with respect to mortgage interest rates are 32.6 for San Francisco and 16.5 in Los Angeles. In contrast, I do not find any positive effects in Seattle or Chicago, which did not receive large CLL increases.
