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Mortgages, Subways and Automobiles

Author

Listed:
  • Agarwal, Sumit
  • Chua, Yeow Hwee
  • Ghosh, Pulak
  • Ghosh, Soumya Kanti
  • She, Liuyang

Abstract

We examine how sustainable infrastructure investments affect household financial outcomes by studying the impact of subway expansions on mortgage repayment behavior in Delhi, India. Using administrative data from one of India’s largest mortgage lenders, we find that households in postal codes with newly opened stations experience a 4.42% decline in mortgage delinquency rate and a 1.38% increase in prepayment rate. Evidence from vehicle registration records suggests that these improvements are driven by reduced automobile reliance, with vehicle spending falling by 6.52%. The effects are most pronounced among financially constrained households, who cut back on low-quality vehicle purchases and exhibit the greatest gains in repayment performance.

Suggested Citation

  • Agarwal, Sumit & Chua, Yeow Hwee & Ghosh, Pulak & Ghosh, Soumya Kanti & She, Liuyang, 2025. "Mortgages, Subways and Automobiles," Journal of Public Economics, Elsevier, vol. 252(C).
    • Handle: RePEc:eee:pubeco:v:252:y:2025:i:c:s004727272500221x
    DOI: 10.1016/j.jpubeco.2025.105522
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    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • G2 - Financial Economics - - Financial Institutions and Services
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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