scholarly journals Does Collateral Value Affect Asset Prices? Evidence from a Natural Experiment in Texas

Author(s):  
Albert A. Zevelev
2004 ◽  
Vol 59 (3) ◽  
pp. 1295-1324 ◽  
Author(s):  
Anusha Chari ◽  
Peter Blair Henry

Author(s):  
Albert Alex Zevelev

Abstract Does the ability to pledge an asset as collateral, after purchase, affect its price? This paper identifies the impact of collateral service flows on house prices, exploiting a plausibly exogenous constitutional amendment in Texas that legalized home equity loans in 1998. The law change increased Texas house prices 4%; this is price-based evidence that households are credit-constrained and value home equity loans to facilitate consumption smoothing. Prices rose more in locations with inelastic supply, higher prelaw house prices, higher income, and lower unemployment. These estimates reveal that richer households value the option to pledge their home as collateral more strongly.


Author(s):  
William Viney

Stephen Jay Gould, the biologist and author, once joked that were he an identical twin raised separately from his brother they could ‘hire ourselves out to a host of social scientists and practically name our fee’. In order to monetise Gould’s fantasy, one would want a form of twinship that could operate according to evidential, experimental, somatic and circumstantial ideals. And Gould admits that he and his brother would need to be viewed as ‘the only really adequate natural experiment for separating genetic from environmental effects in humans’. This chapter seeks to interrogate the evidential and experimental circumstances that may underpin the comic quips that guide modern biology. In human genetics, twins are used as experimental bodies that are made to matter in particular ways and for particular people; they become newly ‘animate’ for being enrolled into scientific research. Raised in cultures assumed to be alike or dissimilar, isolated by researchers for being valuable in the measured disentanglement of assembled molecular agents (which are sometimes distinguished from an assemblage referred to as an ‘environment’), twins achieve a status of experimental significance not just for what they do but also for what they are taken to be.


Sign in / Sign up

Export Citation Format

Share Document