Research
Is there crowd out in mortgage refinance? (with Ryan Goodstein)
We examine whether supply-side capacity constraints contribute to the well- documented “failure to refinance” among certain borrowers who would benefit financially from doing so. Using comprehensive loan-level data from the National Mortgage Database (NMDB), we show that marginal borrowers (e.g., lower credit score; lower income) have substantially lower mortgage prepayment rates during refinance booms compared to periods of lower refinancing activity. In contrast, among non-marginal borrowers, prepayment rates are higher when markets are operating at or near full capacity. These patterns hold after controlling for a rich set of observable characteristics and among borrowers that are likely able to qualify for a conventional refinance loan, indicating that some borrowers are crowded out from refinancing when capacity constraints bind. Overall our findings suggest that in addition to demand-side explanations for differences in refinancing highlighted in previous literature, supply-side factors also play an important role.
Synergy, Scale, and Competition in Bank Mergers (with Jeremy Fox)
Hesitating at the Altar: An Update on Taxes and the Timing of Marriage (with Margaret McKeehan)
This paper provides evidence that U.S. tax codes dependence on marital status continues to generate an implicit marriage tax and distort marital decisions. By looking at the timing of marriage rather than the decision to marry (see Alm and Whittington (1997)) we capture a specific distortion while allowing for
heterogeneity in other costs of marriage. Using data on couples from the Panel Study on Income Dynamics between 1986 and 2011, we find that a one percent rise in the size of the marriage tax relative to a couple’s income increases the probability of delay by 1.2 percentage points. We further demonstrate the robustness of this result across a variety of alternative specifications and assumptions regarding tax-filing behavior. (2018, Public Finance Review)
Code available on Github