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ERIC Number: EJ871941
Record Type: Journal
Publication Date: 2010
Pages: 30
Abstractor: As Provided
Reference Count: 60
ISSN: ISSN-0276-8739
Credit Scores, Race, and Residential Sorting
Nelson, Ashlyn Aiko
Journal of Policy Analysis and Management, v29 n1 p39-68 Win 2010
Credit scores have a profound impact on home purchasing power and mortgage pricing, yet little is known about how credit scores influence households' residential location decisions. This study estimates the effects of credit scores on residential sorting behavior using a novel mortgage industry data set combining household demographic, credit, and financial data with property location information and detailed community attribute data. I employ the data set to estimate a discrete-choice residential sorting model. I find that credit scores significantly predict residential sorting behavior and models that do not account for credit score provide biased estimates of housing utilities for black households in particular. Simulation results show that increases in credit score are associated with increases in the consumption of higher-priced homes in more expensive school districts, higher-quality public schools, and proximity to urban/metropolitan areas. (Contains 7 tables and 30 footnotes.)
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Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A