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Disaster Lending: "Fair" Prices, but "Unfair" Access

with Taylor Begley, Umit Gurun, and Amiyatosh Purnanandam.
R&R Management Science
Summary: We examine loan decisions in the SBA disaster loan program. We find that under risk-insensitive loan pricing – a feature present in many government programs – marginal credit quality borrowers are less likely to receive credit.
Presentations: AFA, Red Rock, Univ. of KY, FIRS, Finance Down Under, MoFiR, Front Range, CFIC, EBCN, MFA, MD4SG

Uncovering Financial Constraints

with Matt Linn
R&R Journal of Financial and Quantitative Analysis
Main Figures: extended coverage of our measure. Robinhood (& other retail) investors tend to favor equity constrained stocks.
Summary: We classify firms’ financial constraints using a random forest model. We create two versions of our measures: a "Full" model that uses many predictors and an "Exogenous" model using a small set of arguably exogenous predictors. We find institutional ownership is negatively associated with equity-related constraints, while retail investors exhibit a preference for equity-focused constrained firms. Further, we find the equity issuance and investment of equity-constrained firms increase in periods of high investor sentiment.
Extra Resources: [Data] [Internet Appendix]
Presentations: UnivFL ML & Finance, MFA, FMA, NFA, Dolomites

Long-Run Labor Costs of Housing Booms and Busts

with Taylor Begley and Peter Haslag
Main Figure: Relative outcome for realty entrants in "Bubble" MSAs
Summary: We study individual labor market decisions during the house price run-up of the early 2000s using the career paths of nearly 7 million workers. We find severe negative long-run outcomes for individuals that enter realty in areas with higher non-fundamental house price growth.
Presentations: ATL Fed/GSU Real Estate, FDU, RCFS/RAPS, Stockholm LFG, EFA

with Matthew Gustafson, Peter Haslag, and Zihan Ye
Main Figure: Yields and Migration Shock Over Time
Summary: We find the shift towards remote work and households' locational preferences post-COVID have impacted municipalities' cost of borrowing, credit ratings, and issuance behavior. Analyzing yield changes across the term structure, we find yield changes are largest at the 5 to 10 year horizon suggesting heightened risks in the medium-run.
Presentations: AEA*

*scheduled

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