AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Resilient Finance, Stratified Costs: Unmasking Racial Disparities in Disaster-Induced Bank Closures
AEA Papers and Proceedings
(pp. 670–678)
Abstract
Climate disasters and bank branch closures can reshape mortgage credit without obvious changes in headline approval rates. Using Home Mortgage Disclosure Act applications matched to county disasters (SHELDUS) and branch closures (S&P Global), we estimate race-specific difference-in-differences and dynamic responses. In disaster counties, closures shift tightening for Black borrowers toward nonprice margins—higher debt-to-income ratios and liquidity flags—rather than higher denials. In adjacent counties, spillovers operate through tighter selection and longer maturities. Branch-network resilience appears central to equitable postdisaster recovery.Citation
Marcelin, Isaac, Wei Sun, and Gaye-Del Lo. 2026. "Resilient Finance, Stratified Costs: Unmasking Racial Disparities in Disaster-Induced Bank Closures." AEA Papers and Proceedings 116: 670–678. DOI: 10.1257/pandp.20261130Additional Materials
JEL Classification
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G33 Bankruptcy; Liquidation
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- Q54 Climate; Natural Disasters and Their Management; Global Warming