Abstract

http://ssrn.com/abstract=1623004
 
 

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The Political Economy of the Subprime Mortgage Credit Expansion


Atif R. Mian


Princeton University - Department of Economics; Princeton University - Woodrow Wilson School of Public and International Affairs; NBER

Amir Sufi


University of Chicago - Booth School of Business; NBER

Francesco Trebbi


University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

June 9, 2010

Chicago Booth Research Paper No. 10-21

Abstract:     
We examine how special interests, measured by campaign contributions from the mortgage industry, and constituent interests, measured by the share of subprime borrowers in a congressional district, may have influenced U.S. government policy toward the housing sector during the subprime mortgage credit expansion from 2002 to 2007. Beginning in 2002, mortgage industry campaign contributions increasingly targeted U.S. representatives from districts with a large fraction of subprime borrowers. During the expansion years, mortgage industry campaign contributions and the share of subprime borrowers in a congressional district increasingly predicted congressional voting behavior on housing related legislation. The evidence suggests that both subprime mortgage lenders and subprime mortgage borrowers influenced government policy toward housing finance during the subprime mortgage credit expansion.

Number of Pages in PDF File: 43

Keywords: subprime, politics, campaign contributions, lobbying

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Date posted: June 9, 2010 ; Last revised: June 15, 2010

Suggested Citation

Mian, Atif R. and Sufi, Amir and Trebbi, Francesco, The Political Economy of the Subprime Mortgage Credit Expansion (June 9, 2010). Chicago Booth Research Paper No. 10-21. Available at SSRN: http://ssrn.com/abstract=1623004 or http://dx.doi.org/10.2139/ssrn.1623004

Contact Information

Atif R. Mian
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States
Princeton University - Woodrow Wilson School of Public and International Affairs ( email )
Princeton University
Princeton, NJ 08544-1021
United States
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Amir Sufi (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Francesco Trebbi
University of British Columbia (UBC) - Department of Economics ( email )
997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
HOME PAGE: http://faculty.arts.ubc.ca/ftrebbi/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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