Friday, Jan. 5, 2024 8:00 AM - 10:00 AM (CST)
- Chair: Lyndsey Anne Rolheiser, University of Connecticut
A Rising Tide Lifts All Homes? Poverty and the Evolution of Housing Quality
AbstractThis study analyzes patterns of housing consumption and expenditures among social safety net recipients since 1985 using the American Housing Survey (AHS). Housing is a core component of consumption and is positively associated with well-being and health. Social safety net recipients, including those receiving Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP) and cash welfare (AFDC/TANF), spend half of their income on housing and average monthly housing expenditures have risen from $692 to $1,341. Increased expenditures reflect, in part, improvements to housing quantity, including more square footage, more rooms, and larger lot sizes. Among these households show a marked reduction in poor-quality housing conditions, such as fewer sagging roofs, broken appliances, rodents, and peeling paint and quality improved across all 35 of our poor housing quality indicators. Combined, we find that these housing improvements equate to between a 35 and 44 percent increase in housing consumption and the average safety net recipient in 2021 enjoys housing consumption equivalent to the average national household in 1985. While relative levels of housing consumption have remained similar for safety net recipients, the ``rising tide'' of housing quality implies long-run benefits for families and children in terms of health and well-being.
Financial Literacy and Mortgage Stress
AbstractThis paper examines the effect of financial literacy on mortgage stress. Using data from the Panel Study of Income Dynamics (PSID), we find that borrowers with high levels of financial literacy are 60.3 percent less likely to suffer from mortgage stress than borrowers with low levels of financial literacy, after controlling for household characteristics, loan features, geographic effects, and working in the financial industry. Our estimated results are robust to potential sample selection bias and functional misspecification. In addition, we also find that the effect of financial literacy varies across borrowers of different ages. Further analysis reveals strong cross effects of financial literacy and quantitative reasoning on mortgage stress.
Estimation of Welfare Effects in Hedonic Difference-in-Differences: The Case in School Redistricting
AbstractThe difference-in-differences approach that identifies the capitalization of amenities through changes in housing prices has been widely used in the literature of hedonic estimation in the past decade. However, concerns have been raised about how to interpret the estimated capitalization effects as changes in welfare. Following an approach developed by Banzhaf (2021), we estimate the capitalization of school redistricting in a generalized difference-in-differences framework that incorporates general equilibrium effects. When comparing estimates from our generalized DID model to the conventional DID model, we find significant differences in both the capitalization effects and welfare changes associated with the school redistricting.
- G2 - Financial Institutions and Services
- R2 - Household Analysis