October 20, 2015
One of the best kept secrets of the 21st Century is how large a role Diversity (in its various manifestations) played in housing bubble and bust of the last decade. So I’ve been slowly collecting studies by economists of the subject, such as how much worse the default rate was among minorities and immigrants. Last week in “Immigrants Delinquent on Mortgages 3.6 Times as Often as Natives,” I wrote about a recent study published in Real Estate Economics entitled “Immigrants and Mortgage Delinquency” and written by Zhenguo Lin, Yingchun Liu and Jia Xie.
Although Lin, Liu, and Xie toss in some boilerplate at the end about how obviously immigrants aren’t to blame for the bubble and bust, they had clearly read up on this question that fascinates me, citing Michelle Malkin as representative of the “media” and asserting that George W. Bush had “famously” said something at his 2002 White House Conference on Increasing Minority Homeownership, which is famous mostly to my readers. It was a good study, showing a much greater curiosity about this crucial question than is considered seemly these days.
And it made me wish economists did more studies of the impact of immigration. Instead, we mostly see big name economists just dogmatically endorsing immigration as obviously something that all smart people know is Good.
Why, you may ask? Because immigration is Good. If you were smart, you’d know that.
So why are famous white American economists so publicly stupid on immigration? I’m using the word stupid not to mean “disagree with me,” but to mean “ignorant,” “poorly read in the literature,” “using obvious logical fallacies,” and “incurious.”
It strikes me that one big reason for the shameful behavior of most brand name economists on the analysis of immigration is the demographics of the economics profession at present, with white American economists at the top of the pyramid lording it over a lot of immigrants. The wealthy old white guys seem to assume that their immigrant underlings don’t want the immigration question studied honestly, so they discourage intelligent discussion.
But who knows? Maybe the immigrants would actually like to study immigration? Perhaps in the future when all the old white American professors have been put out to pasture and people with names like Lin, Liu, and Xie completely dominate the American economics profession, discussion of immigration won’t be so intellectually stilted.
To give some sense of the demographics of the economics profession, here is the table of contents of that recent issue of Real Estate Economics that includes that Lin, Liu, and Xie paper. I’ve put in bold all the economists with names that, judging by the first and last names, don’t sound American: e.g., Leonard Nakamura is assumed to be American and Morten Sorensen to be immigrant. I count 40 immigrant-sounding names and 36 American-sounding names. I didn’t look up the individuals (other than watching a video of Morten Sorensen, who indeed has a Scandinavian accent), so don’t take the precise numbers too seriously, but take the roughly 50-50 split as pretty indicative of the demographics.
Cover image for Vol. 43 Issue 3
Edited By: Sumit Agarwal, Brent W. Ambrose & Abdullah Yavas
Investor Confidence as a Determinant of China’s Urban Housing Market Dynamics
Siqi Zheng, Weizeng Sun and Matthew E. Kahn
Is the FHA Creating Sustainable Homeownership?
Andrew Caplin, Anna Cororaton and Joseph Tracy
Introduction to Special Issue: Government Involvement in Residential Mortgage Markets
W. Scott Frame
How Does the Federal Reserve’s Large-Scale Asset Purchases (LSAPs) Influence Mortgage-Backed Securities (MBS) Yields and U.S. Mortgage Rates?
Diana Hancock and Wayne Passmore
A Spatiotemporal Solution for the Simultaneous Sale Price and Time-on-the-Market Problem
Jean Dubé and Diègo Legros
Mortgage Loan Characteristics, Unobserved Heterogeneity and the Performance of United Kingdom Securitized Subprime Loans
Gauthier Lanot and David Leece
The Effect of Mortgage Payment Reduction on Default: Evidence from the Home Affordable Refinance Program
Jun Zhu, Jared Janowiak, Lu Ji, Kadiri Karamon and Douglas McManus
The Cost of Foreclosure Delay
Larry Cordell, Liang Geng, Laurie S. Goodman and Lidan Yang
The Subprime Virus
Sumit Agarwal, Brent W. Ambrose and Yildiray Yildirim
A Tale of Two Tensions: Balancing Access to Credit and Credit Risk in Mortgage Underwriting
Marsha J. Courchane, Leonard C. Kiefer and Peter M. Zorn
Do Conspicuous Consumers Pay Higher Housing Premiums? Spatial and Temporal Variation in the United States
Kwan Ok Lee and Masaki Mori
How Do Land Auction Formats Influence the Market Structure and Aggregate Surplus of Real Estate Development?
Zhi Dong and Tien Foo Sing
The Impact of the Home Valuation Code of Conduct on Appraisal and Mortgage Outcomes
Lei Ding and Leonard Nakamura
Did Affordable Housing Legislation Contribute to the Subprime Securities Boom?
Andra C. Ghent, Rubén Hernández-Murillo and Michael T. Owyang
Do Homeowners Mark to Market? A Comparison of Self-Reported and Estimated Market Home Values During the Housing Boom and Bust
Sewin Chan, Samuel Dastrup and Ingrid Gould Ellen
Is Timing Everything? Race, Homeownership and Net Worth in the Tumultuous 2000s
Sandra J. Newman and C. Scott Holupka
The Borrower’s Perceived Risk in Mortgage Choice
Dongshin Kim and Alan J. Ziobrowski
–Nonrecourse Mortgage and Housing Price Boom, Bust, and Rebound
Te Bao and Li Ding
The Risk and Return of Commercial Real Estate: A Property Level Analysis
Corporate Real Estate Ownership and Productivity Uncertainty
Daxuan Zhao and Tien Foo Sing
The Cap Rate Spread: A New Metric for Commercial Underwriting
Philip A. Seagraves and Jonathan A. Wiley
Servicers and Mortgage-Backed Securities Default: Theory and Evidence
Brent W. Ambrose, Anthony B. Sanders and Abdullah Yavas
The Disciplining Effect of Concern for Referrals: Evidence from Real Estate Agents
Lan Shi and Christina Tapia
Commercial Real Estate Rental Index: A Dynamic Panel Data Model Estimation
Xudong An, Yongheng Deng, Jeffrey D. Fisher and Maggie Rong Hu
Down Payment Saving in the United States: Evidence from the Panel Study of Income Dynamics
A. Talha Yalta
Wages, Housing Prices and Commutes
House Price Expectations: Unbiasedness and Efficiency of Forecasters
Estimating Loan-to-Value Distributions
Arthur Korteweg and Morten Sorensen
Commuting with Lost Housing Services as the Opportunity Cost
How Subprime Borrowers and Mortgage Brokers Shared the Pie
Antje Berndt, Burton Hollifield and Patrik Sandås
Immigrants and Mortgage Delinquency
Zhenguo Lin, Yingchun Liu and Jia Xie
The Long and the Short of Household Formation