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The Impact of Financial Development on Homeownership and Housing in Emerging Economies: Evidence from Turkey

Listed author(s):
  • Yilmazer Tansel

    (Ohio State University)

  • Adaman Fikret

    (Boğaziçi University)

  • Kaytaz Mehmet

    (Işik University)

This paper aims to investigate the role of financial development on homeownership and housing in emerging economies. We construct a measure of regional financial development using data from the Survey of Consumer Finances in Turkey. Specifically, we estimate regional effects on the probability that a household does not have access to credit (i.e., are discouraged from applying for credit or their application was denied), and use these estimates to create an indicator of financial development. We find that homeownership increases with financial development in metropolitan areas. Home values, however, increase with financial development in both metropolitan and non-metropolitan areas. Our findings are robust to correction of potential endogeneity of our financial development measure. Our results are also robust to using the variation in the supply of credit across provinces as another measure of financial development.

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Article provided by De Gruyter in its journal Review of Middle East Economics and Finance.

Volume (Year): 8 (2012)
Issue (Month): 2 (October)
Pages: 1-29

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Handle: RePEc:bpj:rmeecf:v:8:y:2012:i:2:n:3
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  1. Tullio Jappelli, 1990. "Who is Credit Constrained in the U. S. Economy?," The Quarterly Journal of Economics, Oxford University Press, vol. 105(1), pages 219-234.
  2. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
  3. Veronica Cacdac Warnock & Francis E. Warnock, 2007. "Markets and Housing Finance," NBER Working Papers 13081, National Bureau of Economic Research, Inc.
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  7. Dietz, Robert D. & Haurin, Donald R., 2003. "The social and private micro-level consequences of homeownership," Journal of Urban Economics, Elsevier, vol. 54(3), pages 401-450, November.
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  14. Sugato Chakravarty & Tansel Yilmazer, 2009. "A Multistage Model of Loans and the Role of Relationships," Financial Management, Financial Management Association International, vol. 38(4), pages 781-816, December.
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