House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data
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.
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Copy CitationSari Kerr, William R. Kerr, and Ramana Nanda, "House Prices, Home Equity and Entrepreneurship: Evidence from U.S. Census Micro Data," NBER Working Paper 21458 (2015), https://doi.org/10.3386/w21458.
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Published Versions
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, . citation courtesy of