Household mortgage refinancing decisions are neighbor influenced, especially along racial lines

《Household mortgage refinancing decisions are neighbor influenced, especially along racial lines》

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关键字: Household finance;Refinancing;Peer effects;Neighborhoods;D12;D14;D71;H31;R23

作者单位: Krannert School of Management, Purdue University, United States;University of Toronto, Canada;Krannert School of Management, Purdue University, United States;University of Toronto, Canada

摘要: Neighborhood peer effects have been shown to affect households publicly observable decisions, but how they affect private decisions, like mortgage refinancing, remains unclear. Using precisely geolocated data and a nearest-neighbor research design, we find that households are 7% more likely to refinance if a neighbor within 50 m has recently refinanced. Consistent with a word-of-mouth mechanism, social influence effects are stronger when neighbors live especially nearby, weaker when owners are non-occupants, and stronger when neighbors and owners are of the same race. Our results suggest an important role for neighborhood peer effects in explaining regional variation in refinancing activity.