Localized
Jonathan Rothwell
American Law and Economics Review, forthcoming
Abstract:
Previous research on segregation stresses things like urban form and racial preferences as primary causes. The author finds that an institutional force is more important: local land regulation. Using two datasets of land regulations for the largest U.S. metropolitan areas, the results indicate that anti-density regulations are responsible for large portions of the levels and changes in segregation from 1990 to 2000. A hypothetical switch in zoning regimes from the most exclusionary to the most liberal would reduce the equilibrium gap between the most and least segregated Metropolitan Statistical Areas by at least 35% for the ordinary least squares estimates.
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White Suburbanization and African-American Home Ownership, 1940-1980
Leah Platt Boustan & Robert Margo
NBER Working Paper, January 2011
Abstract:
Between 1940 and 1980, the rate of homeownership among African-American households increased by close to 40 percentage points. Most of this increase occurred in central cities. We show that rising black homeownership was facilitated by the filtering of the urban housing stock as white households moved to the suburbs, particularly in the slower growing cities of the Northeast and Midwest. Our OLS and IV estimates imply that up to one half of the national increase in black homeownership over the period can be attributed to white suburbanization.
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Franz Huber
Journal of Economic Geography, forthcoming
Abstract:
A widespread assumption in economic geography and the economics of innovation is that firms located in clusters benefit from territorial learning and knowledge spillovers. However, it remains unclear to what extent these benefits actually occur. This article aims to address this issue and examines to what extent research and development workers in the Cambridge Information Technology Cluster benefit from being located in the Cluster. The study shows why many do not believe that their work benefits from being located in the Cluster. The results suggest that academics as well as policy makers need to be more careful with the assumption of technological knowledge spillovers in innovative clusters. The significant advantages of the Cambridge IT Cluster seem to be of a different nature; in particular they concern labour market advantages and benefits from the global 'brand' of Cambridge.
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Anthony Braga, David Hureau & Andrew Papachristos
Journal of Research in Crime and Delinquency, February 2011, Pages 7-32
Abstract:
Robbery, and the fear it inspires, has a profound effect on the quality of life in certain urban neighborhoods. Recent advances in criminological research suggest that there is significant clustering of crime in micro places, or ''hot spots,'' that generate a disproportionate amount of criminal events in a city. In this article, the authors use growth curve regression models to uncover distinctive developmental trends in robbery incidents at street segments and intersections in Boston over a 29-year period. The authors find that robberies are highly concentrated at a small number of street segments and intersections rather than spread evenly across the urban landscape over the study time period. Roughly 1 percent and 8 percent of street segments and intersections in Boston are responsible for nearly 50 percent of all commercial robberies and 66 percent of all street robberies, respectively, between 1980 and 2008. Our findings suggest that citywide robbery trends may be best understood by examining micro-level trends at a relatively small number of places in urban environments.
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Negative Equity Does Not Reduce Homeowners' Mobility
Sam Schulhofer-Wohl
NBER Working Paper, January 2011
Abstract:
Some commentators have argued that the housing crisis may harm labor markets because homeowners who owe more than their homes are worth are less likely to move to places that have productive job opportunities. I show that, in the available data, negative equity does not make homeowners less mobile. In fact, homeowners who have negative equity are slightly more likely to move than homeowners who have positive equity. Ferreira, Gyourko and Tracy's (2010) contrasting result that negative equity reduces mobility arises because they systematically drop some negative-equity homeowners' moves from the data.
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House Prices and City Revenues
William Doerner & Keith Ihlanfeldt
Regional Science and Urban Economics, forthcoming
Abstract:
Very little is known about what impact recent large upward and downward swings in single-family home values have had on local government budgets. Using a unique 15-year panel of Florida cities that includes both detailed revenue and house price data, we investigate the pathways whereby a change in house price may affect city revenue per capita and test for symmetric effects during housing booms and busts. For the median-sized city, we find that while increases in house price raise revenues, decreases in price have no effect on revenues. In addition, the former impact is small in magnitude. While the strongest pathway is through assessed values, our results illustrate that a change in house price can also affect other sources of revenue besides ad valorem taxes. The overall conclusion is that movements in Florida housing markets are only weakly related to a city's property taxes and total revenues per capita, which fails to support the argument portrayed in the popular press that house price changes strongly impact local budgets.
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Housing Mobility and Downsizing at Older Ages in Britain and the USA
James Banks et al.
Economica, forthcoming
Abstract:
This paper examines geographic mobility and housing downsizing at older ages in Britain and the USA. Americans downsize housing much more than the British largely because Americans are much more mobile. The principal reasons for greater mobility among older Americans are twofold: (1) greater spatial distribution of geographic distribution of amenities (such as warm weather) and housing costs; (2) greater institutional rigidities in subsidized British rental housing providing stronger incentives for British renters not to move. This relatively flat British housing consumption with age may have significant implications for the form and amount of consumption smoothing at older ages.
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Estimating the Effects of Casinos and of Lotteries on Bankruptcy: A Panel Data Set Approach
Bogdan Daraban & Clifford Thies
Journal of Gambling Studies, March 2011, Pages 145-154
Abstract:
Using newly-constructed estimates of state revenue or its equivalent from casino-type and lottery gambling and panel data set regression techniques, a small but statistically significant bankruptcy effect is found. Assuming a linear relationship between gambling and the rate of personal bankruptcies, casino-type gambling increases bankruptcies by about 2%. Lottery gambling, while less potent per dollar of revenue generated, has about the same total effect.
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Vicki Been et al.
Regional Science and Urban Economics, forthcoming
Abstract:
In the last few years, millions of homes around the country have entered foreclosure, pushing many families out of their homes and potentially forcing their children to move to new schools. Unfortunately, despite considerable attention to the causes and consequences of mortgage defaults, we understand little about the distribution and severity of these impacts on children. This paper takes a step toward filling that gap through studying how foreclosures in New York City affect the mobility of public school children across schools, and the quality of schools attended. The results are disturbing, indicating that the foreclosure crisis induced students to switch schools, frequently to schools offering academically weaker peers, suggesting a negative impact on the academic performance of the affected students. Further, the results point to the potential for collateral affects on students in the destination schools which are, effectively, charged with ameliorating the effects of foreclosure, mobility and instability on all of their students and their peers.
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The Diffusion of Wal-Mart and Economies of Density
Thomas Holmes
Econometrica, January 2011, Pages 253-302
Abstract:
The rollout of Wal-Mart store openings followed a pattern that radiated from the center outward, with Wal-Mart maintaining high store density and a contiguous store network all along the way. This paper estimates the benefits of such a strategy to Wal-Mart, focusing on the savings in distribution costs afforded by a dense network of stores. The paper takes a revealed preference approach, inferring the magnitude of density economies from how much sales cannibalization of closely packed stores Wal-Mart is willing to suffer to achieve density economies. The model is dynamic with rich geographic detail on the locations of stores and distribution centers. Given the enormous number of possible combinations of store-opening sequences, it is difficult to directly solve Wal-Mart's problem, making conventional approaches infeasible. The moment inequality approach is used instead and works well. The estimates show the benefits to Wal-Mart of high store density are substantial and likely extend significantly beyond savings in trucking costs.
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Making friends with your neighbors? Agglomeration and tacit collusion in the lodging industry
Li Gan & Manuel Hernandez
NBER Working Paper, January 2011
Abstract:
Agglomeration is a location pattern frequently observed in service industries such as hotels. This paper empirically examines if agglomeration facilitates tacit collusion in the lodging industry using a quarterly dataset of hotels that operated in rural areas across Texas between 2003 and 2005. We jointly model a price and occupancy rate equation under a switching regression model to endogenously identify a collusive and non-collusive regime. The estimation results indicate that clustered hotels have a higher probability of being in the potential collusive regime than isolated properties in the same town. The identification of a collusive regime is also consistent with other factors considered to affect the sustainability of collusion like cluster size, seasonality and firm size, and the results are robust to alternative cluster definitions.
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Deven Carlson, Robert Haveman, Thomas Kaplan & Barbara Wolfe
Journal of Policy Analysis and Management, Spring 2011, Pages 233-255
Abstract:
This paper provides estimates for a comprehensive set of social benefits and costs associated with the federal Housing Choice Voucher ( Section 8) program. The impact categories for which we provide empirical estimates include the value of the voucher to recipients; additional services and public benefits induced by voucher receipt; improvements in children's health, education, and criminal behaviors; the costs of voucher provision; the labor supply impacts on voucher recipients; and community effects. These estimates rest largely on empirical analyses of the effect of voucher receipt on several recipient and taxpayer behaviors and outcomes that occur in the first year of voucher receipt. The analysis distinguishes benefits and costs accruing to program participants, nonparticipants-including taxpayers and property owners-and society as a whole. Our analysis suggests that the program is likely to meet the efficiency standard of positive net social benefits.
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Speculators and Middlemen: The Role of Flippers in the Housing Market
Patrick Bayer, Christopher Geissler & James Roberts
NBER Working Paper, February 2011
Abstract:
In thinly traded markets for heterogenous, durable goods, such as housing, intermediaries may play especially important roles. Using a unique micro-level dataset of housing transactions in Los Angeles from 1988-2008 and a novel research design, we identify and measure the importance of two very distinct types of intermediaries, also known as "flippers". The first type act as middlemen who quickly match sellers and buyers, operate throughout housing market cycles and earn above average returns when they buy and sell. The second type act as speculators who attempt to time markets by holding assets for longer periods of time, perform relatively poorly when buying and selling and are strongly associated with price instability in their targeted areas. The presence of these unsophisticated speculators and positive feedback trading contribute the first pieces of evidence from the housing market to a growing body of work in other financial markets that questions whether speculators always act to stabilize prices.
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From Minor to Major Player: The Geography of FHA Lending During the U.S. Mortgage Crisis
Dan Immergluck
Journal of Urban Affairs, February 2011, Pages 1-20
Abstract:
At various points in its history, the Federal Housing Administration (FHA) has had particularly large impacts on mortgage and housing markets in the United States. During the early to middle 2000s, FHA lending dwindled to historically low shares of the mortgage market as subprime lending boomed, with some questioning the need for the agency's continued existence. After the subprime crisis in 2007 and pullbacks by conventional lenders, however, the FHA played one of its historic roles - the mortgage lender of last resort - and its lending surged, reaching approximately 40% of home purchase lending by the end of 2008, a level not seen since World War II. This article examines the differences in FHA activity across and, especially, within U.S. metropolitan areas in late 2008, a peak period of the crisis. The focus is on loans with moderate loan-to-value ratios, among which FHA status varies the most. Factors that affect the likelihood of such loans being FHA-insured include credit score, regional housing price trends, neighborhood demographics (including racial composition), and a variety of other factors. Controlling for many other loan-level and zip code characteristics, the odds of a loan being FHA-insured increase substantially when going from a predominantly white to an otherwise similar predominantly black zip code.
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How low income neighborhoods change: Entry, exit, and enhancement
Ingrid Gould Ellen & Katherine O'Regan
Regional Science and Urban Economics, March 2011, Pages 89-97
Abstract:
This paper examines whether the economic gains experienced by low-income neighborhoods in the 1990s followed patterns of classic gentrification (as frequently assumed) - that is, through the in migration of higher income white, households, and out migration (or displacement) of the original lower income, usually minority residents, spurring racial transition in the process. Using the internal Census version of the American Housing Survey, we find no evidence of heightened displacement, even among the most vulnerable, original residents. While the entrance of higher income homeowners was an important source of income gains, so too was the selective exit of lower income homeowners. Original residents also experienced differential gains in income and reported greater increases in their satisfaction with their neighborhood than found in other low-income neighborhoods. Finally, gaining neighborhoods were able to avoid the losses of white households that non-gaining low income tracts experienced, and were thereby more racially stable rather than less.
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Urban Wages: Does City Size Matter?
Elsie Echeverri-Carroll & Sofia Ayala
Urban Studies, February 2011, Pages 253-271
Abstract:
The literature on the relationship between city size and urban wages argues that productivity and wages are higher in larger cities. Indeed, a doubling of city size is associated with a 4-8 per cent increase in wages. The human capital externalities literature finds evidence of higher wages in cities with an abundant supply of human capital where knowledge spillovers are plentiful. Interestingly, cities with a large supply of human capital are not themselves large. They have a population of fewer than 1.5 million inhabitants. In view of this evidence, this paper questions whether city size has lost its importance as a determinant of high wages. In other words, is city size necessary to explain wage variations, after controlling for knowledge spillovers? Using a large sample from the 5 per cent PUMS of the 2000 US Census, this paper presents econometric evidence for city size and learning spillover effects on productivity. According to the estimates presented, every additional 100 000 inhabitants in the local labour market raises individual hourly wages by 0.12 per cent. Moreover, a doubling of the human capital density in a metropolitan area results in approximately a 2 per cent increase in average individual hourly wages.