Implosion Appendix

Appendix 6A:

Logit Analysis

An ordinary linear regression equation is of the form:

 

Y = a + b X

 

Here Y is the dependent variable and X is the independent variable. In a logit analysis the regression equation takes the form:

 

log (P/(1-P) = a + b log(X)

 

Here P is some probability, e.g. the probability of a borrower defaulting and log is the natural logarithm.

 

 

  

Appendix 6B:

Home Mortgages ($ billions)

1970          292

1971          318
1972          357
1973          400
1974          435
1975          474
1976          535
1977          628
1978          738
1979          856
1980          958
1981      1,030
1982      1,070
1983      1,186
1984      1,321
1985      1,526
1986      1,729
1987      1,928
1988      2,162
1989      2,387
1990      2,623
1991      2,790
1992      2,956
1993      3,115
1994      3,293
1995      3,461
1996      3,684
1997      3,919
1998      4,276
1999      4,702
2000      5,129
2001      5,681
2002      6,437
2003      7,231
2004      8,272
2005      9,387
2006    10,434
2007    11,122
2008    11,030

 

 

Board of Governors of the Federal Reserve System: Flow of Funds Accounts of the United States