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  • September 2022
  • Article
  • Journal of Monetary Economics

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

By: Sari Pekkala Kerr, William R. Kerr and Ramana Nanda
  • Format:Print
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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.

Keywords

House Prices; Collateral Channel; Entry; Entrepreneurship; Housing; Real Estate Industry; Construction Industry

Citation

Kerr, Sari Pekkala, William R. Kerr, and Ramana Nanda. "House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data." Journal of Monetary Economics 130 (September 2022): 103–119.
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About The Authors

William R. Kerr

Entrepreneurial Management
→More Publications

Ramana Nanda

Entrepreneurial Management
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More from the Authors
  • ELCA's Series A By: Anke Becker, Ray Kluender and William R. Kerr
  • Social Networks, Ethnicity, and Entrepreneurship By: William R. Kerr and Martin Mandorff
  • Note on Cyberattacks and Regulatory Regimes By: Frank Nagle, George A. Riedel, William R. Kerr and David Lane
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