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Working Papers

Research Department Working Paper 1204

Reentering Asset Poverty after an Exit: Evidence from the PSID
Tammy Leonard and Wenhua Di
Abstract: In order to be successful at improving household's financial self-sufficiency and stability, asset-building policies must be designed to prevent households from falling back into asset poverty once they exit it. This paper uses the Panel Study of Income Dynamics data from 1994 to 2007 to analyze the influence of life events, demographics and financial behaviors on the duration out of asset poverty. We find evidence that suggests there are structural barriers to asset acquisition. Asset accumulation at levels equal to nine months worth of income at the income poverty level or greater is important for improving a family's odds of permanently escaping asset poverty. Additionally, minimizing debt and diversifying the asset portfolio to include more productive assets are important for maintaining assets. This paper provides some insights on policies to help individuals more successfully transition out of asset poverty.

Research Department Working Paper 1006

The Impact of LIHTC Program on Local Schools
Wenhua Di and James C. Murdoch
Abstract: The low-income housing tax credit (LIHTC) program has developed over two million rental homes for low-income households since 1986. The perception of deterioration in school quality has been a main reason for community opposition to LIHTC projects in middle-and upper-income areas. In this paper, we examine the impact of LIHTC projects on the nearby school performance. The LIHTC projects tend to have positive and statistically significant impacts on school performance the year they are placed in service and this finding is robust to various specifications. Offsetting these, the one year lag effects are negative and of similar or smaller magnitude.

Research Department Working Paper 1001

An Analysis of the Neighborhood Impacts of a Mortgage Assistance Program: A Spatial Hedonic Model
Wenhua Di, Jielai Ma, James C. Murdoch
Abstract: Down-payment or closing-cost assistance is an effective program in addressing the wealth constraints of low- and moderate-income homebuyers. However, the spillover effect of such programs on the neighborhood is unknown. This paper estimates the impact of the City of Dallas Mortgage Assistance Program (MAP) on nearby home values using a hedonic model of home sales from 1990 to 2006. We define neighborhoods of 1,000 feet around each sale and estimate the average differences in sales prices between neighborhoods with various numbers of MAP properties before and after their appearance. We find that MAP properties tend to locate in neighborhoods with lower property values; however, unless a concentration of MAP properties forms, the infusion of MAP properties has little detrimental impact on neighboring property values. Moreover, low concentration of MAP properties has a modest positive impact on surrounding property values.

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