House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data

Sari Pekkala Kerr, William Kerr and Ramana Nanda

No 21458, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E44 G21 L26 M13 R12 R31 R32 (search for similar items in EconPapers)
Date: 2015-08
New Economics Papers: this item is included in nep-ent, nep-geo, nep-ger, nep-mac, nep-sbm and nep-ure
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Published as Sari Pekkala Kerr & William R. Kerr & Ramana Nanda, 2022. "House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data," Journal of Monetary Economics, .

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Journal Article: House prices, home equity and entrepreneurship: Evidence from U.S. census micro data (2022)
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