CITY EQUILIBRIUM WITH BORROWING CONSTRAINTS: STRUCTURAL ESTIMATION AND GENERAL EQUILIBRIUM EFFECTS

• 成果类型: Article
• 署名作者: Ouazad, Amine; Ranciere, Romain
• 署名单位: Universite de Montreal; HEC Montreal; University of Southern California
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12366
• 发表日期: 2019
• 页码: 721-749
• 关键词: models; benefits

摘要

This article develops a general equilibrium model of location choice where mortgage approval rates determine household-specific choice sets. Estimation of the model using San Francisco Bay area data reveals that the price sensitivity of borrowing constraints explains about two-thirds of the price elasticity of neighborhood demand. General equilibrium analysis of the 2000-2006 relaxation of lending standards predicts the following impacts on prices and neighborhood demographics: (i) an increase in house prices accompanied by a compression of the price distribution and (ii) a reduction in the isolation of Whites reflecting gentrification. Both predictions are supported by empirical observation.