Three Essays on Foreclosure Spillover Effects

Bibliographic Details
Main Author:	Chun, Yung
Language:	English
Published:	The Ohio State University / OhioLINK 2019
Subjects:	Public Policy
Online Access:	http://rave.ohiolink.edu/etdc/view?acc_num=osu1565885020669629

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spelling	ndltd-OhioLink-oai-etd.ohiolink.edu-osu15658850206696292021-08-03T07:12:25Z Three Essays on Foreclosure Spillover Effects Chun, Yung Public Policy Mortgage foreclosures are costly not only to individuals, but also to society as a whole as the effects of foreclosures spill over into neighborhoods. The increasing volume of research on foreclosure spillover effects during and after the recent mortgage crisis reveals two limitations. First, empirical studies yield different evidence regarding the effect sizes of foreclosures on the house prices of neighboring properties. Second, the literature has not yet sufficiently dealt with foreclosure contagion, which posits that each foreclosure in a neighborhood increases the probability of additional foreclosures in the neighborhood.This dissertation aims to address these limitations by empirically estimating foreclosure spillover effects in the U.S. housing market during and after the recent housing market recession. The first two empirical chapters (Chapters 2 and 3) explore varying spillover effect estimates across different empirical specifications. Chapter 2 posits that varying estimates are due to inconsistent foreclosure variable constructions across studies. In particular, the chapter compares three conventional model specifications— i.e., log-linear specification, a long-term time interval, and the concentric-rings approach— with alternative specifications— i.e., log-log specification, a short-term time interval, and the administrative boundary approach. The chapter concludes that log-log specification, a short-term time interval, and concentric-rings approach is more accurate than other specifications. Chapter 3’s analysis assumes that varying foreclosure estimates reflect the nature of spatially varying foreclosure effects. The chapter finds heterogeneous foreclosure spillover effects across metropolitan statistical areas (MSAs) and within a given MSA. The findings imply that the spillover effect is not universal; its dynamics are highly sensitive to local housing market contexts, which not only vary across geographic space but also change over time. To explore the spatial variation of the spillover within a given MSA, this chapter employs a spatially local econometric model— geographically weighted regression (GWR)— which has been rarely utilized in public policy research. The GWR model is expected to provide new insights for scholars and practitioners of public policy when they explore social phenomena which vary across locations and neighborhoods.Lastly, Chapter 4 aims to identify foreclosure contagion in a federal foreclosure program— the Hardest Hit Fund (HHF) program. Specifically, it evaluates the extent to which reducing foreclosures of HHF beneficiaries reduces the probability of foreclosure for neighboring non-participating homeowners. Using a Border Discontinuity Design (BDD), this chapter finds that the HHF program reduces foreclosures among neighboring distressed homeowners who do not participate in the program; an additional HHF recipient in a given period and neighborhood reduced the risk of foreclosure of non-HHF assisted homeowners by 0.3 percentage points. This positive externality of the HHF program implies foreclosure contagion, as the program reduces the foreclosure risk of non-participating homeowners through and only through preventing foreclosures of program participants. Accounting for this positive externality using the BDD approach provides a more complete policy analysis of HHF program effects. 2019 English text The Ohio State University / OhioLINK http://rave.ohiolink.edu/etdc/view?acc_num=osu1565885020669629 http://rave.ohiolink.edu/etdc/view?acc_num=osu1565885020669629 unrestricted This thesis or dissertation is protected by copyright: all rights reserved. It may not be copied or redistributed beyond the terms of applicable copyright laws.
collection	NDLTD
language	English
sources	NDLTD
topic	Public Policy
spellingShingle	Public Policy Chun, Yung Three Essays on Foreclosure Spillover Effects
author	Chun, Yung
author_facet	Chun, Yung
author_sort	Chun, Yung
title	Three Essays on Foreclosure Spillover Effects
title_short	Three Essays on Foreclosure Spillover Effects
title_full	Three Essays on Foreclosure Spillover Effects
title_fullStr	Three Essays on Foreclosure Spillover Effects
title_full_unstemmed	Three Essays on Foreclosure Spillover Effects
title_sort	three essays on foreclosure spillover effects
publisher	The Ohio State University / OhioLINK
publishDate	2019
url	http://rave.ohiolink.edu/etdc/view?acc_num=osu1565885020669629
work_keys_str_mv	AT chunyung threeessaysonforeclosurespillovereffects
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Three Essays on Foreclosure Spillover Effects

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