Replication data for: Predators and Prey: Segregation's Effect on Subprime Lending and the Housing Crisis

Jacob Rugh and Douglas Massey's (2010) article, "Racial Segregation and the American Foreclosure Crisis," argues that segregation was a key cause of the foreclosure crisis by creating niche subprime markets of minority clients who were dierentially targeted by predatory lending. Their analytical model fails to demonstrate the role of segregation in the housing crisis. By using an inappropriate outcome variable, having post-treatment bias, and overfitting, their model does not capture the process described in their theory. We improve their analysis using an index of predatory l ending as the outcome variable and demonstrate how subprime lending did indeed concentrate in clusters of high minority areas. We more accurately assess the causal role of segregation using matching techniques. Our findings support their theoretical claim of the important role of segregation in impacting the foreclosure crisis and suggest that segregation had a key role in facilitating the housing bubble burst.