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Date: 2024-03-03 Page is: DBtxt001.php txt00000016

Country ... USA
Education

What should be the top priorities? ... An example of how brainpower and money get wasted? ... With so many big issues ... why this?

Some accounting and finance academics from the Univeristy of Alabama have studied the impact of the BP oil spil on foreclosutes and real estate values ... but why? There is a lot of education and brain power, but does much of it get used in useful way? These researchers may have done something interesting to themselves, but do foreclosures get caused by events like the BP oil spill or the disgusting behavior of theoretically repectable banks!

What should be the top priorities? ... An example of how brainpower and money get wasted? ... With so many big issues ... why this?

Accounting & Finance assistant professors Stephanie Rauterkus, Ph.D., Lary Cowart, Ph.D., and Andreas Rauterkus, Ph.D., spent most of this past fall studying the affect of the spill on foreclosure rates and residential real estate values in Gulf Coast communities. Both of those research proposals have been accepted to the American Real Estate Society Conference in Seattle April 14-17, and Rauterkus presented early findings at a Federal Reserve conference in Montgomery earlier this year.

Rauterkus was particularly interested in examining the oil spill’s affect on foreclosures along the coast in the wake of the American housing crisis during the past two years.

Significant regional differences exist in foreclosure rates, and some studies have shown that these differences are due to the degree to which an area experienced housing price run-up and other economic indicators such as unemployment. Anecdotal evidence showed that the Deepwater Horizon spill exacerbated the negative effects of the recent recession for Gulf Coast residents. Rauterkus’ proposed research to determine if foreclosure rates rose in the affected areas more than in other parts of the state, but the results were surprising.

“When you think about people affected by the oil spill, you think about people who have income due to tourism, fishing or any marine-related industry,” Rauterkus says. “But as I talked to people in those counties, many of those folks don’t own homes. They rent. Now you have to figure out from whom are they renting and how they are affected. These are questions and nuances of the housing crisis that we didn’t think about initially. It’s going to be difficult to tie the spill to a housing outcome.”

Rauterkus says the acceptance of both of her research projects for the conference shows the topic is popular in the industry. She still is concerned whether enough time has passed to make a truly accurate assessment, particularly on the foreclosure research.

“For example, we were trying to compare it to other natural disasters that had an impact on housing. In California, you’ve got earthquakes,” Rauterkus says. “They’ve found that it takes 12 to 18 months before you really see an increase in foreclosures and significant economic distress.

“We might be a little bit early trying to tie the spill to economic distress, but we’ve got some interesting things happening so far,” she says.

Rauterkus says the important part of Gulf oil spill-related research projects is to gather information to help plan for future disasters.

“The thing we have to capitalize on when we have any kind of disaster is what can we learn from it so when the next bad thing happens we are prepared,” Rauterkus says. “What really stinks is when we’re caught off guard and we don’t know what to do or how to help. We want to think about how this compares to a natural disaster, what other types of man-made disasters can have these same affects and how we mitigate them.”


University of Alabama website
Early 2010
The text being discussed is available at
http://www.uab.edu/news/reporter/news/item/1020-oil-spill-projects-reveal-unexpected-economic-findings
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