Replication data for: The Contagion Effect of Neighboring Foreclosures

Principal Investigator(s):  View help for Principal Investigator(s) Charles Towe; Chad Lawley

Version:  View help for Version V1

Name File Type Size Last Modified
2011-0169_data.dta application/octet-stream 1.5 GB 10/13/2019 03:33:AM
2011-0169_dofile.do text/plain 3.4 KB 10/13/2019 03:33:AM
2011-0169_readme.docx application/vnd.openxmlformats-officedocument.wordprocessingml.document 15.6 KB 10/13/2019 03:33:AM
2011-0169_readme.pdf application/pdf 226.4 KB 10/13/2019 03:33:AM

Project Description

Summary:  View help for Summary We examine the contagion effect of residential foreclosures and find strong evidence of a social interactions influence on default decisions where the interaction is based on neighbors’ behavior in a previous period. Using a unique spatially explicit parcel-level dataset documenting residential foreclosures in Maryland for the years 2006-2009 and a highly localized neighborhood definition, based on 13 nearest neighbors, we find that a neighbor in foreclosure increases the hazard of additional defaults by 18 percent. This feedback effect goes beyond a temporary reduction in local house prices and implies a negative social multiplier effect of foreclosures. (JEL R23, R31)

Scope of Project

JEL Classification:  View help for JEL Classification
      R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
      R31 Housing Supply and Markets


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V1 [2019-10-13]

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