Benjamin Keys

Benjamin Keys
  • Rowan Family Foundation Professor
  • Professor of Real Estate
  • Professor of Finance

Contact Information

  • office Address:

    432 Dinan Hall
    3733 Spruce Street
    Philadelphia, PA 19104-6301

Research Interests: household finance, real estate, applied econometrics, labor economics, urban economics.

Links: CV, Personal Website

Overview

Education

Ph.D. in Economics, University of Michigan, 2009.

M.A. in Economics, University of Michigan, 2005.

B.A. in Economics and Political Science, Swarthmore College, 2001.

 

Academic Positions Held

Professor of Real Estate, Wharton School, University of Pennsylvania, 2021-present.

Professor of Finance (secondary), Wharton School, University of Pennsylvania, 2020-present.

Associate Professor of Real Estate, Wharton School, University of Pennsylvania, 2019-2021.

Assistant Professor of Real Estate, Wharton School, University of Pennsylvania, 2016 – 2019.

Assistant Professor, Harris School of Public Policy, University of Chicago, 2011 – 2016.

 

Other Positions

Research Associate, National Bureau of Economic Research, 2023 – present.

Fellow, Center for Financial Security, University of Wisconsin-Madison, 2015 – present.

Co-Director, Kreisman Initiative on Housing Law and Policy, University of Chicago, 2014 – 2016.

Visiting Assistant Professor, Stern School of Business, New York University, Spring 2016.

Economist, Division of Research and Statistics, Federal Reserve Board, Washington, DC, 2009 – 2011.

 

Professional Leadership

Associate Editor, Journal of Finance, 2022 – present.

Associate Editor, American Economic Journal: Applied Economics, 2022 – present.

Associate Editor, Journal of Financial Economics, 2021 – present.

Associate Editor, Management Science, 2016 – 2021.

Associate Editor, Review of Financial Studies, 2016 – 2019.

Member, Academic Research Council, Housing Finance Policy Center, Urban Institute, 2015 – present.

Member, Consumer Financial Protection Bureau (CFPB) Academic Research Council, 2023 – present.

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Research

  • Erica Blom, Brian Cadena, Benjamin Keys (2021), Investment over the Business Cycle: Insights from College Major Choice, Journal of Labor Economics, 39 (4).

    Abstract: How does personal exposure to economic conditions affect individual human capital investment choices? Focusing on bachelor’s degree recipients, we find that cohorts exposed to higher unemployment rates during typical schooling years select majors that earn higher wages, have better employment prospects, and lead to work in a related field. Conditional on expected earnings, recessions also encourage women to enter male-dominated fields, and students of both genders pursue more difficult majors. We conclude that economic environments change how students select majors, and we find evidence that students who respond to the business cycle enjoy earnings typical of their new majors.

  • Gene Amromin, Neil Bhutta, Benjamin Keys (2020), Refinancing, Monetary Policy, and the Credit Cycle, Annual Review of Financial Economics, 12 (), pp. 67-93.

    Abstract: We assess the complicated reality of monetary policy transmission through mortgage markets by synthesizing the existing literature on the role of refinancing in policy implementation. After briefly reviewing mortgage market institutions in the USA and documenting refinance activity over time, we summarize the links between refinancing and consumption and describe the frictions impeding the refinancing channel. The review draws heavily on research emerging from the experience of the financial crisis of 2008–2009, as it highlights a combination of market, institutional, and policy-making factors that dulled the transmission mechanism. We conclude with a discussion of potential mortgage market innovations and the applicability of lessons learned to the ongoing stresses induced by the COVID-19 pandemic.

  • Caitlin Gorback and Benjamin Keys (Draft), Global Capital and Local Assets: House Prices, Quantities, and Elasticities.

    Abstract: Interconnected capital markets allow liquid global capital to flow into illiquid local assets. This paper documents how international capital impacts U.S. housing markets. Other countries introduced foreign-buyer taxes meant to deter Chinese housing investment beginning in 2011. We first show house prices grew 8 percentage points more in U.S. zipcodes with high foreign-born Chinese populations after 2011. Second, we use the international tax policy changes as a U.S. housing demand shock and estimate local house price and quantity elasticities with respect to international capital. We find that a 1% increase in instrumented foreign capital raises house prices at the zip code level by 0.55%, and housing supply by 0.005%. Finally, we use the two elasticities to construct a local house price elasticity of supply. We find that among the largest 100 CBSAs, supply elasticities vary between 0.01 and 0.5, suggesting that local housing markets are highly inelastic in the short run.

  • Benjamin Keys and Jialan Wang (2019), Minimum Payments and Debt Paydown in Consumer Credit Cards, Journal of Financial Economics, 131 (3), pp. 528-548.

    Abstract: Using a data set covering one quarter of the U.S. general-purpose credit card market, we document that 29% of accounts regularly make payments at or near the minimum payment. To explain the prevalence of low payment amounts, we exploit changes in issuers’ minimum payment formulas to quantify the explanatory power of two potential theories: liquidity constraints and anchoring. At least 22% of near-minimum payers (and 9% of all accounts) respond to the formula changes in a manner consistent with anchoring as opposed to liquidity constraints alone. Our results show that anchoring to a salient contractual term has a significant impact on household repayment decisions.

  • Benjamin Keys (2018), The Credit Market Consequences of Job Displacement, Review of Economics and Statistics, Review of Economics and Statistics, 100 (3), pp. 405-415.

    Abstract: This paper studies the role of job displacement in the house- hold bankruptcy decision. Using an event-study methodology, I find that NLSY respondents are over three times more likely to file for bankruptcy immediately following a job loss. Using county-level data, I find similar magnitudes in the aggregate, with significant effects lasting two to three years. The results suggest that unemployment spells can have significant long-term consequences on households’ credit market outcomes.

  • Benjamin Keys, Marco DiMaggio, Amir Kermani, Tomasz Piskorski, Rodney Ramcharan, Amit Seru, Vincent W. Yao (2018), Monetary Policy Pass-Through: Mortgage Rates, Household Consumption, and Voluntary De-Leveraging, Prior Version (Keys, Piskorski, Seru, Yao) featured in NBER Digest, March 2015.

  • Benjamin Keys, Devin G Pope, Jaren C Pope (2016), Failure to Refinance, Journal of Financial Economics, 122 (3), pp. 482-499.

    Abstract: Households that fail to refinance their mortgage when interest rates decline lose out on substantial savings. Using a random sample of outstanding US mortgages in December 2010, we estimate that approximately 20% of unconstrained households for whom refinancing was optimal had not done so. The median household would save $160/month over the remaining life of the loan, for a total present-discounted value of forgone savings of $11,500, a particularly large consumer financial mistake. To shed light on possible mechanisms, we also provide results from a mail campaign targeted at a sample of homeowners who could benefit from refinancing.

  • Erik Hurst, Benjamin Keys, Amit Seru, Joseph S. Vavra (2016), Regional Redistribution through the US Mortgage Market, American Economic Review, 106 (10), pp. 2982-3028.

    Abstract: Regional shocks are an important feature of the US economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the United States, most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSE). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions.  

  • Neil Bhutta and Benjamin Keys (2016), Interest Rates and Equity Extraction during the Housing Boom, American Economic Review, 106 (7), pp. 1742-1774.

    Abstract: Credit record panel data from 1999-2010 indicates that the likelihood of home equity extraction (borrowing, on average, about $40,000 against one's home) peaked in 2003 when mortgage rates reached historic lows. We estimate a 27 percent rise in extraction in response to a 100 basis point rate decline, and that house price growth amplifies this relationship. Differential responses to interest rates and home price appreciation by borrower age and credit score provide new evidence of financial frictions. Finally, equity extractions are associated with higher default risk, consistent with the use of borrowed funds for consumption or illiquid investment.

Teaching

All Courses

  • FNCE2090 - Real Estate Investments

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two midterms, (depending on instructor).

  • FNCE7210 - Real Estate Investments

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. Lecture with discussion required.

  • REAL2090 - Real Estate Investments

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two midterms, (depending on instructor).

  • REAL3700 - Real Estate Data Analytics

    In real estate investment, data is used in a variety of ways to inform decision-making. The purpose of this course is to gain familiarity with analytical tools and techniques as they relate to guiding investment in primary real estate markets and capital markets. Students will learn statistical methods, data manipulation, data visualization, and apply business analytics tools to data on properties, mortgages, and macroeconomic indicators. A series of guest speakers will demonstrate how analytics is used in the industry, and the strengths and limitations of using data to guide investment decisions. The course will use data analytics to connect economics and finance concepts with real-world applications. The course will primarily use the R software package, but relevant materials will be provided and no prior coding experience is necessary.

  • REAL3990 - Independent Study

    All independent studies must be arranged and approved by a Real Estate department faculty member.

  • REAL7210 - Real Estate Investments

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. Lecture with discussion required.

  • REAL8700 - Real Estate Data Analytics

    In real estate investment, data is used in a variety of ways to inform decision-making. The purpose of this course is to gain familiarity with analytical tools and techniques as they relate to guiding investment in primary real estate markets and capital markets. Students will learn statistical methods, data manipulation, data visualization, and apply business analytics tools to data on properties, mortgages, and macroeconomic indicators. A series of guest speakers will demonstrate how analytics is used in the industry, and the strengths and limitations of using data to guide investment decisions. The course will use data analytics to connect economics and finance concepts with real-world applications. The course will use the R software package, but relevant materials will be provided and no prior coding experience is necessary.

  • REAL8990 - Independent Study

    All independent studies must be arranged and approved by a Real Estate Department faculty member.

  • REAL9460 - Adv Topic in Urban Econ

    This course addresses advanced topics in urban and real estate economics. The course will mix theory and empirics and will cover a broad range of topics including the modeling and estimation of agglomeration economies, land use and urban costs, transportation in cities, urban growth, migration between cities etc. The classes will mix formal presentations made by the instructor and student-led discussions of recent academic papers. In addition to presentations, students will be expected to complete a series of assignments including a short original research paper. PhD students will be expected to complete a research paper in addition to the successful completion of the course examination requirements. Prerequisites: The course assumes that students have familiarity with standard first year econometrics and microeconomics.

  • REAL9480 - House Real Est Decision

    In this course we will study theory and evidence of how households make decisions surrounding real estate, how they interact with the financial sector, and how housing and mortgage choices influence urban markets and household balance sheets. We will examine real estate decisions from both supply and demand perspectives. There will be a special focus on the tools of modern empirical research, emphasizing the many challenges to causal identification and popular methodologies to overcome and address these challenges. The course will cover topics in mortgage choice, refinancing, renegotiation, default and foreclosure, discrimination, housing search, and market segmentation. Prerequisites: The course assumes that students have familiarity with standard first year econometrics and microeconomics.

  • REAL9950 - Dissertation

    Dissertation

Awards and Honors

  • Wharton Teaching Excellence Award, 2020
  • Wharton Teaching Excellence Award, 2019
  • Wharton Teaching Excellence Award, 2018

In the News

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Erica Blom, Brian Cadena, Benjamin Keys (2021), Investment over the Business Cycle: Insights from College Major Choice, Journal of Labor Economics, 39 (4).
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