Abstract
We provide evidence that the boom in housing prices occurred in the early 2000 distorted the selection of individuals that opened a business. A simple model of collateral financing predicts an increase in entry into entrepreneurship for house-owners and, particularly, for individuals with lower entrepreneurial ability and higher probability of failure. We support the predictions of the model using panel data at the individual level including restricted access information on the MSA of residence of an individual. We combine this data with geographic information about house prices at the MSA level. We confirm that the increase in house prices had a larger impact on the decision of becoming an entrepreneur for lower ability house-owners.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
