Fracking Disclosure, Collateral Value, and the Mortgage Market

The Accounting Review (TAR), Forthcoming

51 Pages Posted: 20 Apr 2019 Last revised: 28 Dec 2021

See all articles by Kirti Sinha

Kirti Sinha

Naveen Jindal School of Management, UT Dallas

Date Written: November 3, 2021


This paper examines whether laws requiring oil and gas firms to disclose the chemicals used in their fracking operations affect the mortgage lending activity for properties located in nearby areas. I hypothesize and find that the disclosure mandate reduces uncertainty about the value of housing collateral and subsequently increases 1) the probability of obtaining a mortgage by 2.5 percentage points (pp) and 2) loan-to-value by 2.2 pp. My main analyses exploit the variation in the location of properties relative to fracking wells. Cross-sectional tests that exploit heterogeneity in drinking water sources and the content of firm disclosures further substantiate my inferences and mitigate endogeneity concerns. These findings suggest that disclosure regulation for oil and gas firms affects housing collateral values, thereby impacting the mortgage market.

Keywords: Real Effects; Disclosure Regulation; Mortgage Market; Collateral; Fracking

JEL Classification: G14, G21, G32, G38, K22, L71, M41, M48

Suggested Citation

Sinha, Kirti, Fracking Disclosure, Collateral Value, and the Mortgage Market (November 3, 2021). The Accounting Review (TAR), Forthcoming, Available at SSRN: or

Kirti Sinha (Contact Author)

Naveen Jindal School of Management, UT Dallas ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States
9728835869 (Phone)

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