Institutional Affiliation: London Business School
|Mortgage Financing in the Housing Boom and Bust|
with Benjamin J. Keys, Tomasz Piskorski, Amit Seru
in Housing and the Financial Crisis, Edward L. Glaeser and Todd Sinai, editors
This chapter traces the rapid evolution of mortgage financing from boom to bust and explores two crucial questions surrounding the market's rise and fall. First, why did the lending boom occur in the size and form that it did? Second, why has the foreclosure crisis been both cataclysmic and heterogeneous across geography and loan types? The chapter is organized as follows. Section 4.2 presents a broad set of descriptive statistics and facts regarding the rise and fall of the subprime mortgage market. Section 4.3 addresses the question of why there was a lending boom of this sort. Section 4.4 discusses the "prolonged" foreclosure crisis that prompted a number of policy responses by the government. The chapter concludes with a broad perspective on the future of mortgage finance and lessons l...
|Private Returns to Public Office|
with Raymond Fisman, Florian Schulz: w18095
We study the wealth accumulation of Indian parliamentarians using public disclosures required of all candidates since 2003. Annual asset growth of winners is on average 3 to 6 percentage points higher than runners-up. By performing a within-constituency comparison where both runner-up and winner run in consecutive elections, and by looking at the subsample of very close elections, we rule out a range of alternative explanations for differential earnings of politicians and a relevant control group. The ``winner's premium" comes from parliamentarians holding positions in the Council of Ministers, with asset returns 13 to 29 percentage points higher than non-winners. The benefit of winning is also concentrated among incumbents, because of low asset growth for incumbent non-winners.
Published: Raymond Fisman & Florian Schulz & Vikrant Vig, 2014. "The Private Returns to Public Office," Journal of Political Economy, vol 122(4), pages 806-862.
|Cultural Proximity and Loan Outcomes|
with Raymond Fisman, Daniel Paravisini: w18096
We present evidence that shared codes, religious beliefs, ethnicity - cultural proximity - between lenders and borrowers improves the efficiency of credit allocation. We identify in-group preferential treatment using dyadic data on the religion and caste of bank officers and borrowers from a bank in India, and a rotation policy that induces exogenous matching between officers and borrowers. Cultural proximity increases lending on both intensive and extensive margins and improves repayment performance, even after the in-group officer is replaced by an out-group one. Further, cultural proximity increases loan dispersion and reduces loan to collateral ratios. Our results imply that cultural proximity mitigates informational problems that adversely affect lending, which in turn relaxes financi...
Published: Raymond Fisman & Daniel Paravisini & Vikrant Vig, 2017. "Cultural Proximity and Loan Outcomes," American Economic Review, American Economic Association, vol. 107(2), pages 457-492, February.