Table 5.

Estimates of the Effect of Residential Segregation on 2006–2008 Foreclosure Rates via Black-white and Hispanic-White Adjusted Differentials in the Likelihood of Obtaining a Subprime Loan in 2004–2006.

	Black Segregation				Hispanic Segregation
	OLS		IV		OLS		IV
	B	SE	B	SE	B	SE	B	SE
Dissimilarity Index
African Americans	3.84***	0.63	4.64***	0.89
Hispanics					0.81	0.66	1.12†	0.79
Selected Control Variables
Housing Starts Ratio	2.58***	0.77	2.73***	0.71	1.87**	0.94	1.90**	0.83
Ratio of pre- to post-2000 HPI	0.09***	0.02	0.08***	0.02	0.10***	0.03	0.10***	0.03
Wharton Land Use Index	0.22**	0.08	0.23***	0.08	0.18**	0.09	0.18**	0.08
Subprime Loan Share, 2004–06	2.57*	1.40	2.09††	1.29	4.89**	1.89	4.96***	1.65
MSA Credit Score Index	−0.015**	0.007	−0.015***	0.006	−0.014*	0.008	−0.014*	0.007
Change in Unemployment Rate	0.24***	0.04	0.25***	0.04	0.20***	0.06	0.20***	0.05
% Black, 2000	−1.65**	0.69	−1.83***	0.60	−0.80	0.91	−0.88	0.81
% Hispanic, 2000	−0.75	0.54	−0.64	0.49	−1.31	0.74	−1.44**	0.70
% College Degree, 2006	−1.96*	1.16	−2.27**	1.15	−0.48	1.70	−0.45	1.52
Region
Midwest	0.39**	0.19	0.30*	0.15	0.81***	0.21	0.84***	0.20
South	−0.07	0.22	−0.01	0.19	0.01	0.29	0.06	0.28
West	0.50	0.33	0.53*	0.29	0.38	0.40	0.42	0.37
R2	0.77		0.76		0.65		0.65
F	27.40				10.65
Wald χ2			534.72				257.27
[F, 2SLS 1st stage]			[38.89]				[27.08]
Tests of Endogeneity (Null: Instrument is Exogenous)
Robust χ2 (p-value)			1.18 (0.27)				0.45 (0.50)
Robust F (p-value)			0.99 (0.32)				0.35 (0.56)
Covariance (Instrument, εIV)			−0.00001				−0.0041
N	99		99		99		99

Ordinary Least Squares (OLS) and Indirect Least Squares or Instrumental Variables (IV) estimates with robust standard errors. Additional covariates included in model but not shown here are listed in Table 2 excluding log of 2008 population, 2006 unemployment rate, borders Rio Grande, age of housing stock. See text for detailed description of adjusted racial and ethnic differences in subprime lending instrument.

^†p=.15

^††p=.11

^*p<.10

^**p<.05

^***p<.01