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Arpit Gupta

Bio: Arpit Gupta is an academic researcher from New York University. The author has contributed to research in topics: Medicine & Real estate. The author has an hindex of 8, co-authored 26 publications receiving 391 citations. Previous affiliations of Arpit Gupta include Boston Children's Hospital & Indian Institute of Foreign Trade.

Papers
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Journal ArticleDOI
TL;DR: This paper investigated whether homeowners respond strategically to news of mortgage modification programs by defaulting on their mortgages by exploiting plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with mortgages throughout the country.
Abstract: We investigate whether homeowners respond strategically to news of mortgage modification programs by defaulting on their mortgages. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with mortgages throughout the country. Using a difference-in-difference framework, we find that Countrywide's relative delinquency rate increased more than ten percent per month immediately after the program's announcement. The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios. These results suggest that strategic behavior of borrowers should be an important consideration in designing mortgage modification programs.

170 citations

Journal ArticleDOI
TL;DR: The authors investigated whether homeowners respond strategically to news of mortgage modification programs and found that the increase in default rates is largest among borrowers least likely to default otherwise, suggesting that strategic behavior should be an important consideration in designing mortgage modification program.
Abstract: We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by settlement of US state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers. Using a difference-in-differences framework, we find that Countrywide's monthly delinquency rate increased more than 0.54 percentage points—a 10 percent relative increase—immediately after the settlement's announcement. The estimated increase in default rates is largest among borrowers least likely to default otherwise. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs. (JEL D14, G21, K22, R31)

110 citations

ReportDOI
TL;DR: In this article, the authors show that the COVID-19 pandemic brought house price and rent declines in city centers, and price increases away from the center, thereby flattening the bid-rent curve in most U.S. metropolitan areas.

52 citations

Journal ArticleDOI
TL;DR: In this paper, the authors developed a method to quantify neighborhood activity behaviors at high spatial and temporal resolutions and test whether, and to what extent, behavioral responses to social-distancing policies vary with socioeconomic and demographic characteristics.
Abstract: Although there is increasing awareness of disparities in COVID-19 infection risk among vulnerable communities, the effect of behavioral interventions at the scale of individual neighborhoods has not been fully studied. We develop a method to quantify neighborhood activity behaviors at high spatial and temporal resolutions and test whether, and to what extent, behavioral responses to social-distancing policies vary with socioeconomic and demographic characteristics. We define exposure density ([Formula: see text]) as a measure of both the localized volume of activity in a defined area and the proportion of activity occurring in distinct land-use types. Using detailed neighborhood data for New York City, we quantify neighborhood exposure density using anonymized smartphone geolocation data over a 3-mo period covering more than 12 million unique devices and rasterize granular land-use information to contextualize observed activity. Next, we analyze disparities in community social distancing by estimating variations in neighborhood activity by land-use type before and after a mandated stay-at-home order. Finally, we evaluate the effects of localized demographic, socioeconomic, and built-environment density characteristics on infection rates and deaths in order to identify disparities in health outcomes related to exposure risk. Our findings demonstrate distinct behavioral patterns across neighborhoods after the stay-at-home order and that these variations in exposure density had a direct and measurable impact on the risk of infection. Notably, we find that an additional 10% reduction in exposure density city-wide could have saved between 1,849 and 4,068 lives during the study period, predominantly in lower-income and minority communities.

52 citations

Posted Content
TL;DR: This work develops a method to quantify neighborhood activity behaviors at high spatial and temporal resolutions and test whether, and to what extent, behavioral responses to social-distancing policies vary with socioeconomic and demographic characteristics and evaluates the effects of localized demographic, socioeconomic, and built-environment density characteristics on infection rates and deaths.
Abstract: This study develops a new method to quantify neighborhood activity levels at high spatial and temporal resolutions and test whether, and to what extent, behavioral responses to social distancing policies vary with socioeconomic and demographic characteristics. We define exposure density as a measure of both the localized volume of activity in a defined area and the proportion of activity occurring in non-residential and outdoor land uses. We utilize this approach to capture inflows/outflows of people as a result of the pandemic and changes in mobility behavior for those that remain. First, we develop a generalizable method for assessing neighborhood activity levels by land use type using smartphone geolocation data over a three-month period covering more than 12 million unique users within the Greater New York area. Second, we measure and analyze disparities in community social distancing by identifying patterns in neighborhood activity levels and characteristics before and after the stay-at-home order. Finally, we evaluate the effect of social distancing in neighborhoods on COVID-19 infection rates and outcomes associated with localized demographic, socioeconomic, and infrastructure characteristics in order to identify disparities in health outcomes related to exposure risk. Our findings provide insight into the timely evaluation of the effectiveness of social distancing for individual neighborhoods and support a more equitable allocation of resources to support vulnerable and at-risk communities. Our findings demonstrate distinct patterns of activity pre- and post-COVID across neighborhoods. The variation in exposure density has a direct and measurable impact on the risk of infection.

46 citations


Cited by
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Journal ArticleDOI
TL;DR: This article showed that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the rise in U.S. household leverage from 2002 to 2006 and increase in defaults from 2006 to 2008.
Abstract: Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the rise in U.S. household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Employing land topology-based housing supply elasticity as an instrument for house price growth, we estimate that the average homeowner extracts 25 cents for every dollar increase in home equity. Home equity-based borrowing is stronger for younger households, households with low credit scores, and households with high initial credit card utilization rates. Money extracted from increased home equity is not used to purchase new real estate or pay down high credit card balances, which suggests that borrowed funds may be used for real outlays. Lower credit quality households living in high house price appreciation areas experience a relative decline in default rates from 2002 to 2006 as they borrow heavily against their home equity, but experience very high default rates from 2006 to 2008. Our conservative estimates suggest that home equity-based borrowing added $1.25 trillion in household debt, and accounts for at least 39% of new defaults from 2006 to 2008.

997 citations

Posted Content
TL;DR: In this paper, the authors used data on house transactions in the state of Massachusetts over the last 20 years to show that houses sold after foreclosure, or close in time to the death or bankruptcy of at least one seller, are sold at lower prices than other houses.
Abstract: This paper uses data on house transactions in the state of Massachusetts over the last 20 years to show that houses sold after foreclosure, or close in time to the death or bankruptcy of at least one seller, are sold at lower prices than other houses. Foreclosure discounts are particularly large on average at 28% of the value of a house. The pattern of death-related discounts suggests that they may result from poor home maintenance by older sellers, while foreclosure discounts appear to be related to the threat of vandalism in low-priced neighborhoods. After aggregating to the zipcode level and controlling for regional price trends, the prices of forced sales are mean-reverting, while the prices of unforced sales are close to a random walk. At the zipcode level, this suggests that unforced sales take place at approximately efficient prices, while forced-sales prices reflect time-varying illiquidity in neighborhood housing markets. At a more local level, however, we find that foreclosures that take place within a quarter of a mile, and particularly within a tenth of a mile, of a house lower the price at which it is sold. Our preferred estimate of this effect is that a foreclosure at a distance of 0.05 miles lowers the price of a house by about 1%.

700 citations

Journal ArticleDOI
TL;DR: Mian and Sufi as mentioned in this paper examined the home equity-based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency and showed that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006.
Abstract: US household leverage sharply increased in the years preceding the 2007 eco nomic recession. The top panel of Figure 1 shows the steady rise in household debt since 1975, which accelerated beginning in 2002. In just five years, the household sector doubled its debt balance. In comparison, the contemporaneous increase in corporate debt was modest. The middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt-to-income ratio. During the same time period, corporate leverage declined. The dramatic absolute and relative rise in US household leverage from 2002 to 2007 is unprecedented compared to the last 25 years. One reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers (Mian and Sufi 2009). Strong house price appreciation from 2002 to 2006, however, which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers, could also have had an important feedback effect on household lever age through existing homeowners. Given that 65 percent of US households already owned their primary residence before the acceleration in house prices, the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn. Our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively. We examine this home equity-based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency. We follow a random sample of over 74,000 US homeowners (who owned their homes as of 1997) at an annual frequency from the end of 1997 until the end of 2008. The bottom panel of Figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006. While the aggregate trend is suggestive

672 citations

Journal ArticleDOI
TL;DR: In this article, the authors study how two forces, regulatory differences and technological advantages, contributed to the growth of shadow banks in residential mortgage origination, concluding that traditional banks contracted in markets where they faced more regulatory constraints; shadow banks partially filled these gaps.

584 citations

Journal ArticleDOI
TL;DR: The market for housing differs in several important ways from the textbook model of a liquid asset market with exogenous fundamentals as mentioned in this paper, which implies that the price at which a house is sold can be influenced not only by general supply and demand conditions, but also by idiosyncratic factors, including the urgency of the sale and the effects of ownership transfer on the physical quality of the house.
Abstract: The market for housing differs in several important ways from the textbook model of a liquid asset market with exogenous fundamentals. This implies that the price at which a house is sold can be influenced not only by general supply and demand conditions, but also by idiosyncratic factors, including the urgency of the sale and the effects of the ownership transfer on the physical quality of the house. First, houses are productive only when people are living in them. Owning an empty house is equivalent to throwing away the dividend on a financial asset. Second, houses are fragile assets that need maintenance, and are vulnerable to van dalism. Unoccupied houses are particularly vulnerable and expensive to protect. Third, short-term rental contracts involve high transactions costs, resulting from the moving costs of renters and the need of homeowners to protect their property against damage. Fourth, houses are expensive, indivisible, and heterogeneous assets. Each house has certain unique characteristics which are likely to appeal to certain poten tial buyers and not to others, so selling a house requires matching it with an appro priate buyer. Because of the high costs of intermediation in housing, this task is normally undertaken by a real estate broker rather than a dealer. Fifth, most home owners must finance their purchases using mortgages, collateralized debt contracts that transfer home ownership to the mortgage lender through a foreclosure process if the homeowner defaults. The expansion of mortgage credit in the early 2000s and the recent decline in house prices have led to an unprecedented increase in foreclosures since 2006. Foreclosures transfer houses to financial institutions which must maintain and pro tect them until they can be sold. Foreclosed houses are likely to sell at low prices, both because they may have been physically damaged during the foreclosure pro cess, and because financial institutions have an incentive to sell them quickly. In a liquid market, an asset can be sold rapidly with a minimal impact on its price, but

528 citations