Working Paper: NBER ID: w31769
Authors: Manuel Adelino; David T. Robinson
Abstract: Heating, cooling, and powering the residential housing stock accounts for about one-fifth of total annual greenhouse gas emissions in the US. Home size is a key determinant of energy intensity. The average newly built single-family home is 50% larger than in the 1950s. Using distinct identification strategies spanning the last four decades of banking history, we show that more abundant credit increases average new home size. It also facilitates more construction but does not produce offsetting increases in home quality or durability. These results highlight potential environmental costs associated with monetary policies that expand access to credit.
Keywords: credit availability; housing; environmental impact; carbon emissions; banking deregulation
JEL Codes: G30; Q43; R21; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| easier mortgage credit (G21) | larger homes (R21) |
| easier mortgage credit (G21) | home quality improvement (L15) |
| pre-1994 interstate banking deregulation (G28) | average new home size (R31) |
| credit expansion (E51) | construction volume of single-family homes (L74) |
| credit availability (G21) | carbon emissions due to larger homes (R21) |