Montebruno, Piero;
Silva, Olmo;
Szumilo, Nikodem;
(2025)
Judge Dread: Court severity, repossession risk and demand in mortgage and housing markets.
The Economic Journal
, Article ueaf006. 10.1093/ej/ueaf006.
(In press).
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Abstract
We study the impact of borrower protection on mortgage and housing demand using variation in the likelihood that houses are repossessed coming from heterogeneity in preferences of local judges. We develop a framework that provides conditions to identify the impact of repossession risk on housing and credit demand – holding supply fixed. Empirically, we exploit exogenous variation in risk created by boundaries of courts’ catchment areas. We find that one standard deviation decrease in borrower protection decreases borrowing and house prices by 4.5%.
| Type: | Article |
|---|---|
| Title: | Judge Dread: Court severity, repossession risk and demand in mortgage and housing markets |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1093/ej/ueaf006 |
| Publisher version: | https://doi.org/10.1093/ej/ueaf006 |
| Language: | English |
| Additional information: | Copyright © The Author(s) 2025. Published by Oxford University Press on behalf of Royal Economic Society. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. |
| Keywords: | G21 - Banks; Depository Institutions; Micro Finance Institutions; MortgagesG51 - Household Saving, Borrowing, Debt, and WealthR21 - Housing Demand |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10204588 |
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