House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data
Abstrak
During 1992-2007, house price growth is strongly correlated with local entrepreneurship. We show with Census Bureau data that most of this entry is related to construction and real estate; these entrants tend to be small and short-lived. Using a 1998 Texas reform that allowed home equity lending for the (cid:133)rst time in the state, we isolate that entrepreneurship through the collateral channel tends to be longer-lived and more balanced across sectors. The collateral channel is a tenth or less of the entry associated with house price increases, driven by a small share of homeowners who are constrained without price growth. those related to real estate. On the other hand, entrepreneurs entering due to unlocked collateral are longer-lived and more balanced across sectors. These results align with home equity loan data from the SBO. We conclude that unlocked home equity due to house price increases can be very important for a small share of constrained potential entrepreneurs, and result in meaningful businesses being started, but that this channel is a small share of the total entry linked to house price run-ups.
Penulis (3)
Sari Pekkala Kerr
W. Kerr
Ramana Nanda
Akses Cepat
- Tahun Terbit
- 2022
- Bahasa
- en
- Total Sitasi
- 27×
- Sumber Database
- Semantic Scholar
- DOI
- 10.1016/j.jmoneco.2022.06.002
- Akses
- Open Access ✓