A Simple Model of Credit Rationing with Information Externalities

Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.

Developing a Geographic Information System Index for Historical Aerial Photographs

This paper describes the creation of a GIS database index to the collection of historical aerial photographs of Connecticut housed in the Map and Geographic Information Center in the Homer Babbidge Library at the University of Connecticut. The index allows patrons to search for scanned aerial photograph images for a specific location across multiple years and to retrieve digital scans from the Library server. Procedures for scanning and georeferencing the images, preparing metadata for the images, and creating the GIS database index are described.