Measuring Potential GSE Funding Advantages

Brent Ambrose and Arthur Warga

The Journal of Real Estate Finance and Economics, 2002, vol. 25, issue 2-3, 129-50

Abstract: As the size of government sponsored enterprises (GSE) has grown, attention has focused on the relationship between the federal government and the GSEs, with particular attention focused on estimating the impact of this relationship on GSE debt costs. Quantifying the GSEs' cost advantage is a controversial exercise with several competing methodologies providing divergent values. Thus, this paper reviews the methods that have been utilized in previous studies and recommends an alternative approach that overcomes many of the criticisms of previous work. By using offering yields on GSE debt, we find that the three housing GSEs enjoyed an average advantage of between 25 and 29 basis points over "AA" banking sector bonds, between 43 and 47 basis points over "A" rated bonds, and between 76 and 80 basis points over "BBB" rated banking issues. We find that our results are robust to both the basic approach taken as well as to model specification. Copyright 2002 by Kluwer Academic Publishers

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://journals.kluweronline.com/issn/0895-5638/contents link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jrefec:v:25:y:2002:i:2-3:p:129-50

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11146/PS2

Access Statistics for this article

The Journal of Real Estate Finance and Economics is currently edited by Steven R. Grenadier, James B. Kau and C.F. Sirmans

More articles in The Journal of Real Estate Finance and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().