Publications
Publications
- September 2022
- 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
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.