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Deepwater Horizon and Mortgage Lending

Author

Listed:
  • Robert Forster
  • Destan Kirimhan
  • Xiaojin Sun

Abstract

This paper investigates the Deepwater Horizon oil spill and its mortgage lending implications for the affected Gulf coast areas. We construct a unique dataset by using information from the Shoreline Cleanup Assessment Technique program and mapping those observations to the Home Mortgage Disclosure Act lending dataset. Our difference-in-differences estimation results show that denial rates of mortgage applications rise between 2 and 6% as a result of the Deepwater Horizon oil spill, whilst accounting for fixed effects at the lender and census tract levels. We also find that the effect is larger on refinance mortgages compared to home purchase mortgages, and national banks respond more aggressively compared to other mortgage lenders.

Suggested Citation

  • Robert Forster & Destan Kirimhan & Xiaojin Sun, 2022. "Deepwater Horizon and Mortgage Lending," Working Papers 202219, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:202219
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    File URL: https://www.liverpool.ac.uk/media/livacuk/schoolofmanagement/docs/Deepwater,Horizon,and,Mortgage,Lending.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Mortgage Lending; Environmental Damage; Oil Spill; Difference-in-Differences;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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