Abstract

http://ssrn.com/abstract=2373179
 


 



Sand States and the US Housing Crisis


Hyun-Soo Choi


Singapore Management University

Harrison G. Hong


Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Jeffrey D. Kubik


Syracuse University - Department of Economics

Jeffrey P. Thompson


Federal Reserve Board; University of Massachusetts Amherst

April 11, 2016


Abstract:     
The excesses of the historic US housing cycle of the 2000s were concentrated in the Metropolitan Statistical Areas (MSAs) of Arizona, California, Florida and Nevada. Even controlling for leading explanations of this housing cycle, these Sand State MSAs had more than double the mortgage originations, defaults and price fluctuations than other MSAs. We show that these excesses can be explained by Sand State MSAs having an abnormally low supply of publicly traded firms headquartered there relative to total income. Households in these MSAs are more likely to purchase investment homes nearby rather than stocks, amplifying the housing cycle there.

Number of Pages in PDF File: 56

Keywords: Sand States, US Housing Crisis, Investment Homes, Local Bias, Household Portfolio

JEL Classification: G1, G11, R2


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Date posted: December 31, 2013 ; Last revised: April 13, 2016

Suggested Citation

Choi, Hyun-Soo and Hong, Harrison G. and Kubik, Jeffrey D. and Thompson, Jeffrey P., Sand States and the US Housing Crisis (April 11, 2016). Available at SSRN: http://ssrn.com/abstract=2373179 or http://dx.doi.org/10.2139/ssrn.2373179

Contact Information

Hyun-Soo Choi (Contact Author)
Singapore Management University ( email )
Lee Kong Chian School of Business
50 Stamford Road
Singapore 178899, 178899
Singapore
Harrison G. Hong
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jeffrey D. Kubik
Syracuse University - Department of Economics ( email )
426 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-9063 (Phone)
315-443-1081 (Fax)
Jeffrey P. Thompson
Federal Reserve Board ( email )
Washington, DC
United States
University of Massachusetts Amherst ( email )
Department of Operations and Information Managemen
Amherst, MA 01003
United States
Feedback to SSRN


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