Drive ‘Til You Qualify: Credit Quality and Household Location

Authors

Andrew Hanson, Marquette UniversityFollow
Kurt Schnier, Georgia State University
Geoffrey K. Turnbull, University of Central Florida

Document Type

Article

Language

eng

Format of Original

15 p.

Publication Date

1-2012

Publisher

Elsevier

Source Publication

Regional Science and Urban Economics

Source ISSN

0166-0462

Original Item ID

doi: 10.1016/j.regsciurbeco.2011.06.001

Abstract

A deeper understanding of the credit-sorting process is essential when considering the extent to which home foreclosures are driven by price contagion or an underlying spatial pattern of mortgage quality. Adapting household location theory, we find that credit constrained households follow “drive-'til-you-qualify” behavior leading to rising credit quality with distance from the CBD while unconstrained households exhibit declining credit quality. Individual level mortgage loan-to-income data for the 100 largest MSAs show credit constrained behavior either throughout the urban area or concentrated in the suburbs. Meta analysis of the credit sorting estimates identify MSA characteristics associated with each pattern.

Comments

Accepted version. Regional Science and Urban Economics, Vol. 42, No. 1-2 (January 2012): 63-77. DOI. Published under Creative Commons license Attribution-NonCommercial-NoDerivatives 4.0 International.

Andrew Hanson was affiliated with Georgia State University at the time of publication.

Recommended Citation

Hanson, Andrew; Schnier, Kurt; and Turnbull, Geoffrey K., "Drive ‘Til You Qualify: Credit Quality and Household Location" (2012). Economics Faculty Research and Publications. 134.
https://epublications.marquette.edu/econ_fac/134