Are Foreclosures Contagious?: An Exploratory Space-Time Analysis of Franklin County, Ohio, 2001-2008

Alan T. Murray, Julia Koschinsky, Yin Liu, Sergio J. Rey and Lawrence A. Brown
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Alan T. Murray: Arizona State University, Tempe, AZ, USA
Julia Koschinsky: Arizona State University, Tempe, AZ, USA
Yin Liu: Sichuan Normal University, China
Sergio J. Rey: Arizona State University, Tempe, AZ, USA
Lawrence A. Brown: The Ohio State University, Columbus, OH, USA

International Journal of Applied Geospatial Research (IJAGR), 2013, vol. 4, issue 4, 19-36

Abstract: Significant foreclosure activity in a weak housing market area is a sign of trouble, suggesting potential subsequent neighborhood decline. This article focuses on an under-researched question of whether higher foreclosure rates in a neighborhood tend to spill over into adjacent neighborhoods. The authors detail exploratory spatial methods to identify where potential spillover effects occur: kernel density surfaces, space-time local indicators of spatial association (LISA) and LISA Markov. Using data for Franklin County, Ohio the authors find that foreclosure rate hotspots are concentrated in lower-income, more African-American central city areas. The majority of hotspots (around 90%) persist over time and space but about 10% of all hotspots are consistent with contagion effects between neighboring areas. Only 1-3% of neighborhoods experience spillovers as below-average to above-average cluster transitions. In general, contagion effects occur in areas with higher rates of African-Americans, poverty and lower median home values and incomes. However, the authors also observe a sub-trend suggesting possibly accelerated hotspot growth in otherwise comparable Caucasian areas.

Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jagr00:v:4:y:2013:i:4:p:19-36

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