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13 posts from July 2012

July 09, 2012

Location, Location, and Pacification: The Effect of Crime Reduction on Residential Property Value

Claudio Frischtak* and Benjamin R. Mandel

In this post, we document the relationship between crime and house prices in the city of Rio de Janeiro, Brazil. One fully expects crime, as a public “bad,” to exert a downward force on prices; indeed, this is a common finding in the literature on amenity valuation. Our recent study quantifying this relationship is novel in its: (i) use of extremely detailed property price data for a large number of neighborhoods, (ii) application to a developing economy, and (iii) examination of the link between crime and reduced house-price inequality. We focus on the extent to which prices are responsive to crime-related outcomes, as demonstrated by a recent policy experiment and with the use of detailed offer-price data from the online classified website ZAP (www.ZAP.com.br). We find that prices are quite sensitive to falling crime, which implies large welfare gains due to crime reduction.

Continue reading "Location, Location, and Pacification: The Effect of Crime Reduction on Residential Property Value" »

Posted by Blog Author at 7:00 AM in Euro Area, Housing, Regional Analysis | Permalink | Comments (0)

July 06, 2012

Historical Echoes: The Creation of the Contemporary U.S. Mortgage

Megan Cohen, New York Fed Research Library

Residential mortgages, as they are known in the United States, are fairly modern creatures. Their origins lie in medieval England, but they have contemporary roots in the Great Depression.

Continue reading "Historical Echoes: The Creation of the Contemporary U.S. Mortgage" »

Posted by Blog Author at 7:00 AM in Historical Echoes, Mortgages | Permalink | Comments (0)

July 02, 2012

CCAR: More than a Stress Test

Beverly Hirtle

The Federal Reserve recently released the results of its latest stress test of large bank holding companies (BHCs). While the stress test results have received a lot of attention, they are just one part of a much larger effort by the Federal Reserve to ensure that these large BHCs have robust processes for determining how much capital they need to maintain access to funding and continue to serve as credit intermediaries, even under stressed conditions. In this post, I describe these larger efforts and the role that the stress test plays in them.

Continue reading "CCAR: More than a Stress Test" »

Posted by Blog Author at 7:00 AM in Bank Capital, Financial Institutions | Permalink | Comments (0)

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