The Environmental Cost of Easy Credit: The Housing Channel

Manuel Adelino and David Robinson

No 31769, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Heating, cooling, and powering the residential housing stock accounts for about one-fifth of total annual greenhouse gas emissions in the US. Home size is a key determinant of energy intensity. The average newly built single-family home is 50% larger than in the 1950s. Using distinct identification strategies spanning the last four decades of banking history, we show that more abundant credit increases average new home size. It also facilitates more construction but does not produce offsetting increases in home quality or durability. These results highlight potential environmental costs associated with monetary policies that expand access to credit.

JEL-codes: G30 Q43 R21 R31 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-ban, nep-ene, nep-env, nep-fdg and nep-ure
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