Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Angela Vossmeyer

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© 2022 Someswar R Amujala


This paper investigates the relationship between the Paycheck Protec- tion Program (PPP) and real estate price increases. The Paycheck Protection Program was established by the Small Business Association in 2020 to pro- vide forgivable loans to businesses to aid with potential losses from COVID- 19 impacts. I leverage zip code level data across the United States and a fixed effects panel data model to quantitatively measure the PPP’s influence on housing and rental prices. I find a positive and significant relationship between the number of PPP loans disbursed and housing and rental rates. Specifically, a 1% change in the number of PPP loans in a zip code is associ- ated with a 0.02731% change in house prices and 0.0016% change in rental prices. This signals that the large increase in liquidity from PPP funds is as- sociated with investments or discretionary spending, leading to an increase in inflation, and thus as a byproduct, real estate inflation. Furthermore, this relationship is stronger in higher income areas, suggesting that spending habits that differ by income levels influences real estate prices. I conclude by showing how these findings relate to policy decisions, especially those made during times of economic shocks.