House prices, home equity and entrepreneurship: Evidence from U.S. census micro data

Sari Pekkala Kerr, William Kerr and Ramana Nanda

Journal of Monetary Economics, 2022, vol. 130, issue C, 103-119

Abstract: 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 first 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.

Keywords: House prices; Mortgages; Collateral channel; Entrepreneurship; Entry (search for similar items in EconPapers)
JEL-codes: E44 G21 L26 M13 R12 R31 R32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:130:y:2022:i:c:p:103-119

DOI: 10.1016/j.jmoneco.2022.06.002

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