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The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums

Lynn Fisher (), Lauren Lambie-Hanson and Paul Willen

No 20080, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same association but located at a different address have an effect that is tightly estimated at zero. Since properties in the same association are close substitutes, we argue that the evidence points against the pecuniary externality of property coming on the market and toward a physical externality as the source of measured foreclosure externalities.

JEL-codes: G12 R3 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-ure
Note: EFG
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Citations: View citations in EconPapers (2)

Published as Lynn M. Fisher & Lauren Lambie-Hanson & Paul Willen, 2015. "The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums," American Economic Journal: Economic Policy, vol 7(1), pages 119-140.

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Related works:
Journal Article: The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums (2015) Downloads
Working Paper: The role of proximity in foreclosure externalities: evidence from condominiums (2013) Downloads
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