Open AccessInternational Real Estate Review
Author(s) -
Jenny Schuetz
Publication year - 2008
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100095
Subject(s) - subsidy , politics , loan , real estate , economics , finance , subsidized housing , quality (philosophy) , baseline (sea) , business , demographic economics , public economics , political science , market economy , philosophy , epistemology , law
This paper tests for evidence of political manipulation in the allocation of subsidized mortgage loans in Mexico during the 1990’s. First, I develop a baseline model of loan allocation across states as a function of housing need, eligibility for lending programs, and administrative capacity to deliver housing. Then, I add measures of political competitiveness to the model. Empirical results suggest that the two largest lenders generally allocated loans according to their eligibility criteria, granting more loans to states with more income- and employment-eligible households and poorer quality housing. Tests for political manipulation suggest that more loans were, in fact, granted in federal election years and in states where the ruling party did not perform well in the previous election. However, the numbers lack statistical significance. As a result, it can be assumed that political motivation played a relatively small role in the allocation of loans.