Quarterly Journal of Political Science > Vol 8 > Issue 4

The Political Economy of the Subprime Mortgage Credit Expansion

Atif Mian, Princeton University and NBER, atif@princeton.edu Amir Sufi, University of Chicago Booth School of Business and NBER, amir.sufi@chicagobooth.edu Francesco Trebbi, University of British Columbia, CIFAR, and NBER, ftrebbi@mail.ubc.ca
Suggested Citation
Atif Mian, Amir Sufi and Francesco Trebbi (2013), "The Political Economy of the Subprime Mortgage Credit Expansion", Quarterly Journal of Political Science: Vol. 8: No. 4, pp 373-408. http://dx.doi.org/10.1561/100.00012036

Published: 15 Oct 2013
© 2013 A. Mian, A. Sufi, and F. Trebbi
Political economy,  Elections,  Bureaucracy,  Congress

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In this article:
1. Introduction
2. Public Policy and Subprime Mortgages
3. Data and Summary Statistics
4. Campaign Contribution Trends
5. Constituent and Special Interest Effects on Roll Call Votes
6. Analysis of Mortgage-Related Legislation
7. Conclusions


We examine how special interests, measured by campaign contributions from the mortgage industry, and constituent interests, measured by the share of subprime borrowers in a congressional district, may have influenced U.S. government policy toward subprime mortgage credit expansion from 2002 to 2007. Beginning in 2002, mortgage industry campaign contributions increasingly targeted U.S. representatives from districts with a large fraction of subprime borrowers. During the expansion years, mortgage industry campaign contributions and the share of subprime borrowers in a congressional district increasingly predicted congressional voting behavior on housing related legislation. Such patterns do not hold for non-mortgage financial industry. The evidence suggests that both subprime mortgage lenders and subprime mortgage borrowers influenced government policy toward subprime mortgage credit expansion.


Replication Data | 100.00012036_supp.zip (ZIP).

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DOI: 10.1561/100.00012036_supp

Online Appendix | 100.00012036_app.zip (ZIP).

This is the article's accompanying appendix.

DOI: 10.1561/100.00012036_app