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- Description is exactly "This paper studies the long-term effects of redlining policies that restricted access to credit in urban
communities. For empirical identification, we use a regression discontinuity design that exploits
boundaries from maps created by the Home Owners Loan Corporation (HOLC) in 1940. We find
that “redlined” neighborhoods have 4.8% lower home prices in 1990 relative to adjacent areas. This
finding is robust to the exclusion of boundaries that coincide with the physical features of cities
(e.g., rivers, landmarks). Moreover, we show that housing characteristics varied smoothly at the
boundaries when the maps were created. Evidence suggests lower property values may be driven
by negative externalities associated with fewer owner-occupied homes and more vacant structures.
Overall, our results indicate the effects of discriminatory credit rationing can persist decades after
such practices are formally discontinued.
"
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