Did Pandemic Relief Fraud Inflate House Prices?

117 Pages Posted: 30 Jun 2023 Last revised: 30 May 2024

See all articles by John M. Griffin

John M. Griffin

University of Texas at Austin - Department of Finance

Samuel Kruger

University of Texas at Austin - Department of Finance

Prateek Mahajan

University of Texas at Austin - Department of Finance

Date Written: May 28, 2024

Abstract

Pandemic fraud is geographically concentrated and stimulated local purchases with effects on prices. Fraudulent PPP loan recipients significantly increased their home purchase rate after receiving a loan compared to non-fraudulent PPP recipients, and house prices in high fraud zip codes increased 5.8 percentage points more than in low fraud zip codes within the same county, with similar effects after controlling for other explanations for house price appreciation during COVID. Zip codes with fraud also experience heightened vehicle purchases and consumer spending in 2020 and 2021, with a return to normal in 2022.

Keywords: Fraud, House Price Growth, Government Spending

JEL Classification: G21, G23, G28, H12, R21

Suggested Citation

Griffin, John M. and Kruger, Samuel and Mahajan, Prateek, Did Pandemic Relief Fraud Inflate House Prices? (May 28, 2024). Available at SSRN: https://ssrn.com/abstract=4487877 or http://dx.doi.org/10.2139/ssrn.4487877

John M. Griffin

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-6621 (Phone)

HOME PAGE: http://www.jgriffin.info

Samuel Kruger (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

Prateek Mahajan

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX
United States

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