NYU Furman Center Fall Speaker Series: Arpit Gupta

Please join the NYU Furman Center for a lunchtime presentation:

Financial Constraints and the Racial Wealth Gap

with

Dr. Arpit Gupta, Associate Professor at the NYU Stern School of Business

Tuesday, December 7th from 12:00 - 1:00 p.m. ET

Please register using this link.

Financial constraints can lead to persistent disparities in wealth across demographic groups and geographies. We begin by documenting large differences in housing leverage across racial groups, corresponding to differences in pre-existing wealth and family assistance through bequests. Financial constraints in LTV lead minority borrowers to specific mortgage channels—especially Federal Housing Administration (FHA) mortgages, which limit access to high-opportunity areas through loan caps. 

We use a structural model to highlight the persistent impact of these initial conditions for asset purchases on spatial misallocation and long-term wealth accumulation for minority borrowers. We also highlight tensions in policies to address racial wealth gaps across leverage and homeownership. Highly effective policies for addressing the racial wealth gap—for example via direct transfers—have relatively little impact on the homeownership-gap, as most households adjust their leverage or location choice but not the decision to buy. Our results highlight important inequalities in accessing the housing ladder as a means of wealth accumulation, and difficult tradeoffs and tensions in policies intended to address these disparities.

About the Presenter: Arpit Gupta joined New York University Stern School of Business as an Assistant Professor of Finance in September 2016.

Professor Gupta's research interests focus on using large datasets to understand default dynamics in household finance, real estate, and corporate finance. Recent papers examine the role of foreclosure contagion in mortgage markets and estimate the impact of adverse health events on foreclosures and bankruptcies. He is the recipient of the 2016 Top Finance Graduate Award at Copenhagen Business School.

He received his B.S. in Mathematics and Economics at the University of Chicago and his Ph.D. in Finance and Economics from Columbia Business School.

This event is open to members of the NYU community. Please register by clicking this RSVP link.