UC San Diego
Mortgage default and student outcomes, the solar home price premium, and the magnitude of housing price declines
- Author(s): Dastrup, Samuel R.
- et al.
This dissertation presents three studies related to housing. The first quantifies the effect of mortgage default on elementary student's academic outcomes. We first document socioeconomic differences between students experiencing default and those that did not in San Diego Unified School District in the aftermath of the housing market crash that began in 2006. We identify the impact of default using student-level fixed effects to compare the same student before and after default. Students experiencing default have lower math scores and greater absenteeism in the year of the default. We also find that classroom and neighborhood mortgage default rates are negatively related to education outcomes. The second study uses a large sample of homes in the San Diego and Sacramento, California areas to provide some of the first capitalization estimates of the sales value of homes with solar panels relative to comparable homes without solar panels. Using both hedonics and a repeat sales index approach we find that solar panels are capitalized at roughly a 3.5% premium. This premium is larger in communities with a greater share of college graduates and of registered Prius hybrid vehicles. The final study examines differences in the magnitude of recent housing price decreases across metropolitan areas. A relatively small number of housing market variables observable before the fall are capable of explaining over 70% of the considerable variation in price declines. An additional nonparametric analysis suggests that exceeding particular thresholds for some of the key predictors is associated with much larger price drops. These findings are consistent with historical price patterns, which raises questions about the validity of mortgage pricing policy and risk diversification norms in the US. The analysis points to a set of stylized facts concerning the housing price bubble that need to be explained and suggests fruitful hypotheses for understanding the dramatic housing price declines