the amenity and disamenity impacts of agriculture estimates from a hedonic pricing model the positive and negative externalities from farmland are increasingly a focus of public policy discussion about agriculture and land use a gis based hedonic pricing model shows that agricultural open space increases nearby residential property values but larger scale animal operations and mushroom production have negative impacts animal production facilities with as few as 200 animal equivalent units reduce nearby property values but larger facilities do not necessarily generate larger impacts because they tend to occur together the negative impacts of animal agriculture and the positive impacts of open space must be simultaneously modeled to avoid omitted variable bias

the market value of reducing cancer risk hedonic housing prices with changing information 1 introduction market evidence on the value of a statistical life invariably consists of cross sectional evidence on risks and prices or wages at a point in time if information about the level of risk changes over time and people incorporate this information in a rational manner there will be a corresponding price response on the basis of these temporal changes one can estimate the market price risk tradeoff eliminating many confounding time invariant effects that cannot be controlled for using cross sectional data this paper examines the market response to the release of government information about the level of risk at hazardous waste sites and provides insight into the rationality of this response studies based on experimental evidence and survey data often find that individual beliefs may deviate from objective risk levels 1 people often overestimate highly publicized risks and mortality risks in the case of hazardous waste risks bias in risk beliefs often leads to considerable public reaction and pressure for site cleanups which may be an inefficient outcome by using market data one can examine whether this intense public reaction carries over to contexts in which private money is at stake government agencies frequently use information provision as a regulatory device particularly since the advent of the right to know movement of the 1980s examples of information provision efforts include the food and drug administration s requirement that many prescription drugs indude information inserts the department of housing and urban development s requirement that sellers of houses built before 1950 inform buyers about the presence of lead based paints and the environmental protection agency s epa requirement that manufacturing facilities report their annual releases of chemicals above a threshold amount for a list of over 600 substances such regulations imply a belief that citizens can learn from information about risk and rationally adjust their prior beliefs towards the objective risk level in light of the information this article provides market evidence to bolster the results of some survey studies of information transfer that suggest that individuals revise their risk beliefs in response to new information 2 the u s federal policy dealing with hazardous waste sites is known as the superfund program the most hazardous sites are targeted for cleanup and placed on a government priority roster called the national priorities list npl extension of the classic theory of compensating differentials to the housing market implies that environmental disamenities such as hazardous waste sites will reduce housing prices rosen 1974 the negative impact of hazardous waste sites on the housing prices of nearby residences is well documented for example in a previous study gayer hamilton and viscusi 2000 we used an analysis that focused on the sale of 16 928 houses from 1988 to 1993 that surround superfund sites in greater grand rapids michigan we found that before the epa released its risk report a reduction in the cancer risk from neighborhood superfund sites by the mean level of risk would increase the average value of a house by 238 in 1996 dollars 3 to estimate this willingness of residents to pay to avoid cancer risks before the release of the epa s risk report we assumed that residents prior beliefs were equal to the objectively measured risks suggested by the report thus this analysis was based on the very strong informational assumption that residents could in effect predict the results of the epa s site specific risk assessments before the release of the report the price risk tradeoff implied a value of a statistical cancer case of 51 million once the epa released its risk information the implied value of a statistical cancer case was 4 million these results suggest that after the release of the epa s risk report revealed preferences for avoiding superfund risks were consistent with surveys of the value of a statistical life in the labor market

reevaluation of the employment impact of the 1996 summer olympic games using empirical methods published more recently than our earlier analysis found in this journal we continue to find a statistically significant and substantial employment impact of the 1996 summer olympic games in atlanta post olympics versus pre olympics employment gains in counties affected by the olympics exceeded employment gains in the rest of the counties in georgia by 11 by the end of 2000 in addition olympics affected counties in the metro atlanta area experienced employment gains relative to other major southern metropolitan statistical areas of roughly 5 these results stand up to robustness and falsification tests

the impact of the london olympics announcement on property prices this study estimates the impact of the london 2012 olympics announcement on property prices using a self constructed dataset of a sample of property transactions it is estimated that properties in host boroughs are sold between 2 1 and 3 3 per cent higher depending on the definition of the impact area a similar investigation based on radius rings suggests that properties up to three miles away from the main olympic stadium sell for 5 per cent higher it is estimated that the overall impact on the price of properties in host boroughs amounts to 1 4 billion having substantial social and financial implications for existing residents

internalizing neighborhood externalities the effect of subdivision size and zoning on residential lot prices abstract though land development regulations potentially control neighborhood externalities the developer of a residential subdivision contributes to that control by developing a larger parcel of land this paper reports estimates of the effect of parcel size on the sale price of developed building lots the results indicate that adding an acre to the median development increases lot prices by about 3 amenities appear to be income normal and the return to parcel size is greater in unincorporated areas perhaps due to less intensive governmental control over externalities

do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

private values of risk tradeoffs at superfund sites housing market evidence on learning about risk this paper incorporates a bayesian learning model into a hedonic framework to estimate the value that residents place on avoiding cancer risks from hazardous waste sites we show that residents are

do soccer players play the mixed strategy nash equilibrium mixed strategy nash equilibrium msne is a commonly used solution concept in game theoretic models in various fields in economics management and other disciplines but the experimental results whether the msne predicts well actual play in games is mixed consequently the evidence for naturally occurring games in which the msne predicts the outcome well is of great importance as it can justify the vast use of msne in models the game between the kicker and the goalkeeper in soccer penalty kicks is a real world game that can be used to examine the application of the msne concept or its accuracy because payoffs are a common knowledge the players have huge incentives to play correctly the game is simple enough to analyse its nash equilibrium is in mixed strategies and players actions can be observed we collected and analysed the data on the direction of kicks and jumps in penalty kicks in various top leagues and tournaments our analysis suggests that the msne predictions are the closest to the act

benefits and ancillary costs of natural infrastructure evidence from the new jersey coast abstract this paper empirically estimates the economic impacts of a large scale public investment in natural infrastructure aimed at adapting to climate change and increasing coastal resilience i utilize temporal and spatial variation in investment in dunes to provide a hedonic property value estimate of the economic benefits i identify the net effect of treatment utilizing the doubly robust oaxaca blinder estimator and show that coastal housing price increases attributable to constructed dunes are approximately 3 6 a decomposition of the average impact suggests that the policy intervention generates ancillary costs related to impaired ocean views and privacy concerns that partially offset large protection benefits

identifying the impacts of rail transit stations on residential property values abstract prior studies that have empirically investigated the impact of rail station proximity on property values have not fully investigated the factors that may account for this relationship stations may raise the value of nearby properties by reducing commuting costs or by attracting retail activity to the neighborhood possibly countering these positive effects are negative externalities emitted by stations and the access to neighborhoods that stations provide to criminals this paper sorts out these effects by presenting the results from estimating a hedonic price model and auxiliary models for neighborhood crime and retail activity results show that all four effects play a role in defining the relationship between property values and rail stations but the relative importance of these effects varies with distance from downtown and the median income of the neighborhood

china s competitive performance a threat to east asian manufactured exports there is growing concern in southeast and east asia about the competitive threat posed by china s burgeoning exports exacerbated by its accession to the wto the threat is not confined to labourintensive products but spans the whole technological and skill range at the same time china is rapidly raising its imports from the region and it is not clear whether its burgeoning exports will damage its neighbours we examine the dimensions of china s competitive threat in the 1990s benchmarking competitive performance by technology and market and finds that market share losses are so far mainly in low technology products with japan being the most vulnerable market we analyse market share changes and highlight product groups that are directly or indirectly exposed to a competitive threat we examine intra regional trade and find that china and its neighbours are raising high technology exports in tandem the nature of the international production systems involved lead to complementari ty rather than confrontation china is thus acting as an engine of export growth for its neighbours in terms of direct trade however this will change as china moves up the value chain and takes on the activities that have driven east asian export growth

welfare measurement for environmental improvements using the hedonic model the case of nonparametric marginal prices abstract research in environmental and natural resource economics frequently requires the use of hedonic models because of the differentiated products involved this is true for studies of the relationship between environmental quality and property values or wages or between the characteristics of a recreation site and the demand for its services an obvious use of such studies is in estimating willingness to pay for improvements with differentiated products there are usually nonlinear hedonic price schedules and thus nonlinear budget constraints this makes welfare analysis difficult because standard duality results no longer hold this paper develops a technique for estimating a psuedo demand system that can be used to derive exact measures of consumer welfare change similar techniques are developed for producers with a psuedo profit function that can be converted to an exact measure of the change in quasi rents or rents the paper also shows that the distance function can be used to develop an ex ante measure of welfare change

state responses to fiscal crises the effects of budgetary institutions and politics this paper explores the dynamics of state taxes and spending during the late 1980s when regional economic downturns and increased expenditure demands led to substantial state budget deficits more restrictive state fiscal institutions such as no deficit carryover rules and tax and expenditure limitations are correlated with more rapid fiscal adjustment to unexpected deficits political factors are also important when a single party controls the state house and the governorship deficit adjustment is much faster than when party control is divided in gubernatorial election years tax increases and spending cuts are both significantly smaller than at other times

homes and castles should we care about idiosyncratic risk we consider a novel set of data comprising every transaction in the netherlands housing market between 1995 and 2011 and take a closer look at the idiosyncratic risk as it played out in those years shiller and weiss 1999 proposed a home equity insurance policy that eliminates systematic risk we use their insurance scheme as an analytical tool to add detail to the comovement of individual transactions and the market we are particularly interested in the policy s loss coverage efficiency and payout probability at best protection against market risk is only around the half way mark to risk elimination

is the glass steagall act justified a study of the u s experience with universal banking before the glass steagall act of 1933 removed commercial banks from the securities underwriting business we evaluate the argument for the separation of commercial and investment banking that conflicts of interest induce commercial banks to fool the public into investing in securities which turn out to be of low quality a comparison of the performance of securities underwritten by commercial and investment banks prior to the act shows no evidence of this instead the public appears to have rationally accounted for the possibility of conflicts of interest and this appears to have constrained the banks to underwrite high quality securities jel g21 g24 n22

the economic consequences of professional sports strikes and lockouts post evaluation of the effects of the lockout an examination of the impact of past work stoppages in professional football and basketball can shed some light on the potential impact of the nba lockout as well as the viability of professional sports as engines of economic growth in cities the parameter estimates from a reduced form empirical model of the determination of real per capita income in 37 standard metropolitan statistical areas smsas over the period 1969 1996 suggest that prior work stoppages in professional football and baseball had no impact on the economies of cities with franchises further the departure of professional basketball from cities had no impact on their economies in the following years these results refute the idea that attracting professional sports franchises represents a viable economic development strategy

the world financial crisis the world financial crisis of 2008 is a consequence of new financial technologies new accounting methods and new international linkages these developments have come at a time when governments have returned to an old fashioned freemarket philosophy this paper links the systemic financial economic crisis of 2008 to the new economy developments globalisation and policy philosophy perspectives of recent decades it raises the question of how to re establish confidence once traditional thinking has been questioned

house prices home equity based borrowing and the u s household leverage crisis us household leverage sharply increased in the years preceding the 2007 eco nomic recession the top panel of figure 1 shows the steady rise in household debt since 1975 which accelerated beginning in 2002 in just five years the household sector doubled its debt balance in comparison the contemporaneous increase in corporate debt was modest the middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt to income ratio during the same time period corporate leverage declined the dramatic absolute and relative rise in us household leverage from 2002 to 2007 is unprecedented compared to the last 25 years one reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers mian and sufi 2009 strong house price appreciation from 2002 to 2006 however which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers could also have had an important feedback effect on household lever age through existing homeowners given that 65 percent of us households already owned their primary residence before the acceleration in house prices the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively we examine this home equity based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency we follow a random sample of over 74 000 us homeowners who owned their homes as of 1997 at an annual frequency from the end of 1997 until the end of 2008 the bottom panel of figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006 while the aggregate trend is suggestive

linking economic complexity institutions and income inequality summary a country s mix of products predicts its subsequent pattern of diversification and economic growth but does this product mix also predict income inequality here we combine methods from econometrics network science and economic complexity to show that countries exporting complex products as measured by the economic complexity index have lower levels of income inequality than countries exporting simpler products using multivariate regression analysis we show that economic complexity is a significant and negative predictor of income inequality and that this relationship is robust to controlling for aggregate measures of income institutions export concentration and human capital moreover we introduce a measure that associates a product to a level of income inequality equal to the average gini of the countries exporting that product weighted by the share the product represents in that country s export basket we use this measure together with the network of related products or product space to illustrate how the development of new products is associated with changes in income inequality these findings show that economic complexity captures information about an economy s level of development that is relevant to the ways an economy generates and distributes its income moreover these findings suggest that a country s productive structure may limit its range of income inequality finally we make our results available through an online resource that allows for its users to visualize the structural transformation of over 150 countries and their associated changes in income inequality during 1963 2008

paying for quietness the impact of noise on geneva rents using the hedonic approach this paper analyses housing market data to infer the impact of noise on rents in geneva switzerland using three different databases including a geographical information system gis structural accessibility and environmental variables were obtained for a large proportion of apartments rented in geneva the paper is thus in line with the new generation hedonic models which exploit the vast potential of gis to obtain large databases including detailed characteristics of the apartments in addition different and original measures of noise were used in order to assess possible differences of the noise impact on rents while existing studies typically refer to a single noise index this paper assesses the impacts of noise related to all sources but also to airport noise only while existing studies usually refer to road or aircraft noise the results can be summarised as follows first it is shown that the impact of all sources of noise on rents at the level of the whole ca

the sophistication of exports a new trade measure summary trade data are often classified by product characteristics we propose a new classification sophistication as a means of distinguishing between products we construct a sophistication index based on the income levels of exporting economies sophistication captures a range of factors including technology ease of product fragmentation natural resource availability and marketing we calculate sophistication scores at the 3 and 4 digit levels and test how far the index relates to existing technological classifications of products we use the index to examine trade patterns and illustrate how it can be applied in the analysis of export performance of individual economies

how does a new sports stadium affect housing values the case of fedex field this study investigates how the construction of a sports stadium affects residential housing values hedonic analyses are conducted to assess the price differentials between housing units in close proximity to fedex field home of the washington redskins and comparable units away from it using a difference in difference approach the study finds that properties near fedex field sold at a discount however this price differential was narrowed after the completion of the stadium contrary to neighborhood activists concern that sports venues adversely affect property values the findings of this study indicate that a new stadium improves housing values in the surrounding area

regional income and employment effects of the 1972 munich olympic summer games jasmand s and maennig w regional income and employment effects of the 1972 munich summer olympic games regional studies olympic games may have impacts on income and employment in the host city but no ex post study has been carried out for european olympic host cities to date the present study closes this gap by using the 1972 munich summer olympic games the data period examined in this study allows for analysis of long term effects in addition the methodology avoids overestimating the significance of the effects finally results are reported for all possible combinations of pre and post olympic periods the results were that income in olympic regions grew significantly faster than in other german regions but in contrast no employment effects were identified jasmand s et maennig w incidences des jeux olympiques d ete de 1972 a munich sur les revenus et l emploi regional studies il est possible que les jeux olympiques aient des incidences sur les revenus et l emploi dans la ville hote or

simultaneous monetary policy announcements and international stock markets response an intraday analysis abstract this paper investigates the return and volatility response of major european and us equity indices to monetary policy surprises by utilizing extensive intraday data on 5 min price quotes along with a comprehensive dataset on monetary policy decisions and macroeconomic news announcements the results indicate that the monetary policy decisions generally exert immediate and significant influence on stock index returns and volatilities in both european and the us markets the findings also show that press conferences held by the european central bank ecb that follow monetary policy decisions on the same day have a clear impact on european index return volatilities this implies that they convey additional important information to market participants overall our analysis suggests that the use of high frequency data is critical to separate the effect of monetary policy actions from those of macroeconomic news announcements on stock index returns and volatilities

the value of water as an urban club good a matching approach to community provided lakes abstract community provided urban lakes located in arid environments provide significant amenities to residents but require large quantities of water to maintain lake levels we use matching techniques to recover the average capitalized value of lakes above the costs of maintenance by comparing transactions in lake communities to observationally similar transactions in surrounding communities we differentiate between adjacent and non adjacent houses to recover heterogeneous treatment effects and allow estimates to vary across communities importantly we consider the role of imperfect matching on spatially and temporally varying unobservable variables in our choice of estimator and the appropriate set of potential control properties our results suggest that the capitalized value of lakes is heterogeneous with a mean estimate of 6500 an acre foot our results provide estimates of the changes in water prices that would make this form of development unprofitable illustrating the linkage between water pricing policy and the water intensity of development

the price of victory the impact of the olympic games on residential real estate markets the olympic games have come to be viewed as an unprecedented opportunity to leverage a short term event into a long term positive legacy although the olympics are assumed to yield economic benefits there has been no rigorous analysis of the impact of hosting on residential real estate markets utilising a substantial dataset for six host cities and comparable cities between 1984 and 2000 this paper employs an adjusted interrupted time series approach to estimate the house price impacts of hosting the olympic games the results suggest that the olympics are not a one size fits all economic development strategy and that potential outcomes are dependent on a number of factors including the co ordination of planning and olympic related development and the relative scale of the total olympic investment

do budget maximizing public officials increase the probability of property reassessment county governments in pennsylvania face non binding limits on their property tax rates these are considered non binding because they do not place a limit on tax levies or expenditures assuming local public officials have monopoly power tax rate limits can be circumvented by reassessing the property tax base a two stage process was hypothesized in which the probability of reaching tax rate limits first was determined and the probability of reassessment then was determined the effect of budget maximizing government officials at each stage was tested for 66 pennsylvania counties over the 1970 1995 period the empirical results showed that variables associated with budget maximizing behaviour influenced the choice in each stage public expenditure growth increased the probability of reaching the tax rate limit in the first stage while reaching the tax rate limit increased the probability of reassessment in the second stage the estimates also showed that economic fiscal and taste variables were signific

does hazardous waste matter evidence from the housing market and the superfund program this paper uses the housing market to develop estimates of the local welfare impacts of superfund sponsored cleanups of hazardous waste sites we show that if consumers value the cleanups then the hedonic model predicts that they will lead to increases in local housing prices and new home construction as well as the migration of individuals that place a high value on environmental quality to the areas near the improved sites we compare housing market outcomes in the areas surrounding the first 400 hazardous waste sites chosen for superfund cleanups to the areas surrounding the 290 sites that narrowly missed qualifying for these cleanups we find that superfund cleanups are associated with economically small and statistically insignificant changes in residential property values property rental rates housing supply total population and types of individuals living near the sites these findings are robust to a series of specification checks including the application of a regression discontinuity design based on knowledge of the selection rule overall the preferred estimates suggest that the local benefits of superfund cleanups are small and appear to be substantially lower than the 43 million mean cost of superfund cleanups

compensating differentials and the social benefits of the nfl abstract we use hedonic rent and wage equations to measure compensating differentials in central cities and metropolitan areas with franchises of the national football league rents are about 8 percent higher in the central cities but this impact may not carry over to broader geographical areas wages are about 2 percent lower in areas with teams but the standard error on this parameter is large the central city results indicate that sports franchises appear to be a public good once these quality of life benefits are included in the calculus the large public expenditure on new stadiums appears to be a good investment for cities and their residents

the effect of the tipped minimum wage on employees in the u s restaurant industry according to federal law in 2013 employers can take a credit of up to 5 12 for tips received by workers in satisfying the minimum wage requirement of 7 25 this article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment hours and earnings in the u s restaurant industry using data from the quarterly census of employment and wages and the current population survey we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full service restaurant industry and for tipped workers the results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests

new hampshire s tax base limits an example of the leviathan model this study views the lack of an income tax on wages and salaries and a general sales tax in new hampshire as tax base limits i use the leviathan model to analyze the differences between the fiscal system in new hampshire and the fiscal systems in vermont maine and massachusetts vermont maine and massachusetts do not have the tax base limits that new hampshire has from 1957 to 1989 new hampshire had lower state and local government tax and expenditure levels than the other three states more rapid population growth lower welfare expenditures but comparable levels of expenditures for several of the major public services and a more competitive structure of state and local government

a direct test of the homevoter hypothesis abstract we propose a methodology that facilitates a direct test of the homevoter hypothesis which posits that homeowners vote in favor of public projects they perceive increase residential property values and against those that do not first we estimate how pre referendum events that signal a higher probability that the public project will be undertaken impact local residential property values before the referendum is held these pre referendum impacts are considered noisy signals to homeowners about the market s assessment of the net marginal benefits of the project second we aggregate these market signals to the precinct level and relate them to precinct level voting results concerning the proposed project we apply this two step approach to the 2004 referendum in arlington texas for a publicly subsidized stadium for the nfl dallas cowboys the analysis supports the homevoter hypothesis and establishes a possible methodology for future evaluations in this small but growing empirical literature

do capitalization effects for public goods reveal the public s willingness to pay this article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets we extend rosen s hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities the model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these capitalization effects and welfare changes we test this hypothesis in the context of changes in measures of school quality in five metropolitan areas results from boundary discontinuity designs suggest that capitalization effects understate parents willingness to pay for public school improvements by as much as 75

using stochastic frontier models to mitigate omitted variable bias in hedonic pricing models a case study for air quality in bogota colombia hedonic pricing models use property value differentials to value changes in environmental quality if unmeasured quality attributes of residential properties are correlated with an environmental quality measure of interest conventional methods for estimating implicit prices will be biased because many unmeasured quality measures tend to be asymmetrically distributed across properties it may be possible to mitigate this bias by estimating a heteroskedastic frontier regression model this approach is demonstrated for a hedonic price function that values air quality in bogota colombia

credit rationing race and the mortgage market abstract this study applies microdata from the 1983 survey of consumer finances to evaluate the effects of borrower race and default risk in mortgage lending the empirical analysis is based on a probit model of whether borrowers obtain fha or conventional mortgages the former are fully insured and are characterized by easier downpayment constraints but are typically more expensive hence households borrowing through the fha will tend to be credit constrained in the conventional market results of the analysis indicate that variables which proxy lender concerns about default risk and cost have an important effect on the type of loan borrowers obtain empirical estimates also suggest that minority households are significantly less likely to obtain conventional financing than whites even after controlling for various proxies of default risk these results suggest that race effects in mortgage lending may persist for reasons unrelated to borrower default risk

measuring the external benefits of homeownership abstract the subsidization of homeownership is justified on efficiency grounds only to the extent that it provides benefits to people other than the homeowner we use the clustered neighborhoods subsample in the american housing survey to measure that benefit in the form of higher housing prices in neighborhoods with higher ownership rates and lower vacancies we attempt to account for unobservable neighborhood and house attributes that may be correlated with occupancy and ownership through instrumental variables switching regressions and panel methods estimates indicate that a housing transition from renting to owning creates approximately 1300 in measured benefits

combining revealed and stated data to examine housing decisions using discrete choice analysis abstract this paper uses stated preference and revealed preference data separately and jointly to examine individuals housing choices in particular it combines an established revealed preference approach discrete choice analysis of actual housing purchases and a relatively new stated preference approach choice based conjoint analysis of hypothetical housing purchases to provide us with a better understanding of the factors driving housing decisions these methods are appropriately combined since they reflect the same decision process households select the dwelling that provides the best combination of attributes from the feasible set of alternatives in total this paper analyzes three data sets only actual housing purchases only hypothetical housing purchases and both types of purchases combined analysis finds that actual and hypothetical housing purchases are similar decision processes with respect to some attributes yet are dissimilar with respect to other attributes nevertheless combining the two types of data improves identification of both categories of attributes journal of economic literature classification number r21

getting at systemic risk via an agent based model of the housing market systemic risk must include the housing market though economists have not generally focused on it we begin construction of an agent based model of the housing market with individual data from washington dc twenty years of success with agent based models of mortgage prepayments give us hope that such a model could be useful preliminary analysis suggests that the housing boom and bust of 1997 2007 was due in large part to changes in leverage rather than interest rates

financial and world economic crisis what did economists contribute in this paper we deal with two questions 1 what are the origins of the current financial crisis and 2 what did economists contribute or why did economists fail to provide a convincing answer for the origins of the crisis and possible solutions to overcome it the economics profession apparently was unaware of the looming worldwide financial and economic crisis and significantly underestimated its global dimensions and consequences a first and preliminary analysis is undertaken to explore reasons for these failures we conclude by pointing to some consequences for economics as well as for economic policy

the impact of china on latin america and the caribbean summary the rapid growth of china and its increased integration with the global economy is having both direct and indirect effects on the latin american and caribbean region the paper focuses on the impacts of china on latin american trade and foreign direct investment flows it identifies the main channels through which china s growth is affecting the region and undertakes a preliminary analysis of the impacts on development it is shown that there are winners and losers in the region both at the country and sector level

household location and race estimates of a multinomial logit model a multinomial logit model of household location choice in which families choose from a number of mutually exclusive residential location is estimated regression results indicate that the locational choices of white and black households are importantly but differently affected by their socioeconomic characteristics in that regard black suburbanization patterns are little influenced by large simulated changes in household characteristics findings suggest that policies which focus on the educational and earnings opportunities of blacks would likely be largely ineffectual in fostering the integration of predominantly white suburban communities copyright 1989 by mit press

the church versus the mall what happens when religion faces increased secular competition recently economists have begun to consider the causes and consequences of religious participation an unanswered question in this literature is the effect upon individuals of changes in the opportunity cost of religious participation in this paper we identify a policy driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on sunday known as blue laws many states have repealed these laws in recent years raising the opportunity cost of religious participation we use a variety of data sets to show that when a state repeals its blue laws religious attendance falls and that church donations and spending fall as well these results do not seem to be driven by declines in religiosity prior to the law change nor do we see comparable declines in membership in or giving to nonreligious organizations after a state repeals its laws we then assess the effects of changes in these laws on drinking and drug use behavior in the nlsy we find that repealing blue laws leads to an increase in drinking and drug use and that this increase is found only among the initially religious individuals who were affected by the blue laws the effect is economically significant for example the gap in heavy drinking between religious and nonreligious individuals falls by about half after the laws are repealed

quasi experiments hedonic models and estimating trade offs for local amenities this paper evaluates whether the property value capitalization effects measured with quasi experimental methods offer reliable estimates of willingness to pay for changes in amenities we propose the use of a market simulation as a robustness check two applications establish the method s relevance the first examines the conversion of land cover from desert to wet landscape the second examines cleanup of hazardous waste sites we find that even when quasi experimental methods have access to ideal instruments their performance in measuring general equilibrium willingness to pay cannot be assumed ideal it needs to be evaluated considering the specific features of each application jel q51

a test of prohibition s effect on alcohol production and consumption using crop yields the effect of alcohol prohibition in the united states has been the subject of continuing debate due to a lack of data one question that remains unanswered is the effect prohibition had on the actual production of alcohol this article attempts to answer this question by estimating prohibition s impact on the yields of grains that constitute the principal inputs in alcohol production using a variety of data sources and exploiting the variation in timing of state prohibition law adoption we estimate the effect of prohibition on several measures of crop production our preferred identification strategy compares contiguous counties in states with differing prohibition laws our findings suggest that state prohibition laws decreased the production of barley and may have increased the production of corn using these estimates we calculate that prohibition decreased alcohol production and by extension consumption by at least 18 gallons per adult per year

an embarrassment of riches confronting omitted variable bias and multiscale capitalization in hedonic price models abstract many researchers have addressed concerns of omitted variable bias in hedonic price models through the use of spatial fixed effects we argue that this approach does not consider the biases introduced by effects that overlap the zone of capitalization for nonmarket goods we show this bias can dominate the usual omitted variable bias using data on developer provided open space we control for multiscale capitalization and omitted variables simultaneously by extending the hausman taylor estimator where the panel component of the estimator is defined over repeated transactions within neighborhoods rather than the traditional definition following a unique cross sectional unit through time

the effects of party competition on budget outcomes empirical evidence from local governments in spain this paper investigates the link between local budget outcomes and the intensity of party competition measured as the margin of victory obtained by the incumbent in the previous local election i e the difference between the vote share and 50 two competing hypotheses are tested in the paper on the one hand the leviathan government hypothesis suggests that the lower the intensity of party competition is the greater is the increase in the size of the local public sector irrespective of the ideology of the party in power on the other hand the partisan government hypothesis suggests that the incumbent will find it easier to advance its platform when intensity of competition is low i e parties on the left right will increase decrease the size of the local public sector when the intensity of the challenge from the opposition is low these hypotheses are tested with information on spending own revenues and deficit for more than 500 spanish local governments over 8 years 1992 1999 and information on the results of two local electoral contests 1991 and 1995 the evidence favors the partisan hypothesis over the leviathan one we found that for left wing governments spending taxes and deficits increased as the electoral margin increases whereas for right wing governments a greater margin of victory led to reductions in all these variables

fear and greed in financial markets a clinical study of day traders we investigate several possible links between psychological factors and trading performance in a sample of 80 anonymous day traders using daily emotional state surveys over a five week period as well as personality inventory surveys we construct measures of personality traits and emotional states for each subject and correlate these measures with daily normalized profits and losses records we find that subjects whose emotional reaction to monetary gains and losses was more intense on both the positive and negative side exhibited significantly worse trading performance psychological traits derived from a standardized personality inventory survey do not reveal any specific trader personality profile raising the possibility that trading skills may not necessarily be innate and that different personality types may be able to perform trading functions equally well after proper instruction and practice this abstract was borrowed from another version of this item

the effect of professional sports on the earnings of individuals evidence from microeconomic data this article examines the impact of professional sports franchises in labour markets using data from the march supplement to the current population survey cps for workers employed in specific occupational groups in all large us cities from 1983 to 2002 results from a standard wage model suggest that professional football franchises increase average hourly and weekly earnings of males employed in these occupations but professional baseball franchises reduce them these results support growing evidence that professional sports affect labour markets however the mixed nature of the association between sport and earnings provides little economic justification for government subsidies for professional sport

spillover effects of human service facilities in a racially segmented housing market abstract previous studies of human service facility spillovers on residential property values have been inconclusive and have failed to take into account the effects of racial segmentation of housing markets likewise studies of racial discrimination in urban housing markets and price differentials between white and nonwhite areas of the city have failed to consider the impacts of service facilities on prices this study develops an hedonic price model of housing services in a racially segmented housing market which considers a variety of human service facilities and their spillover effects model results for oakland california in 1976 indicate that facilities significantly affect housing prices both positively and negatively and that these effects vary by racial submarket implications of these findings for the interpretation of past discrimination studies facility impact studies and social policy are considered

new hedonic estimates of regional constant quality house prices abstract this paper employs a new national data set to estimate constant quality dwelling prices for four regions of the country the data set collected by the national association of realtors provides sale prices locations and characteristics of 5581 dwellings sold during the years 1986 1992 inclusive the paper provides the first national hedonic analysis based upon transaction prices of sample dwellings the estimated equation implies that more than half of dwelling price increases during the period resulted from quality improvements in dwellings

property tax revaluation and tax levy growth abstract jurisdiction wide property revaluation like many administrative reforms may have unintended consequences this paper examines one such potential consequence by pooling 18 year time series for each of 39 massachusetts cities 17 of which revalued and 270 massachusetts towns 202 of which revalued we examine the hypothesis that politicians take advantage of the confusion generated by revaluation and raise property taxes by more than they otherwise would have we observe such a response in cities but not in towns and attribute this difference to differences in their governmental structures

major league soccer expansion and property values do sports franchises generate amenities or disamenities while amenity effects generated by sports stadiums or facilities have been studied extensively for housing markets there has been significantly less attention focused on team effects generated by

are neighbourhoods self stabilising exploring endogenous dynamics summary this study investigates how neighbourhoods respond when they are upset by transient exogenous shock s do they quickly revert to their original stable state gradually return to this stable state permanently settle into another stable state diverge progressively from any steady state or evince no discernable pattern of response a self regulating adjustment process promoting stability appears the norm based on econometric investigations of multiple annually measured indicators from census tracts in five us cities stability quickly re established at the original state characterises most of the indicators analysed rates of tax delinquency low weight births teenage births and home sales volumes violent and property crime rates also evince endogenous stability at the original state but take considerably longer than the other indicators to return to it when the exogenous shock is sizeable moreover this crime adjustment process is considerably slower in neighbourhoods with higher poverty rates

the structure of urban land prices abstract recognition of the existence of nonlinear land prices has an impact on the measurement of the rate at which land price declines with distance from the urban center it is hypothesized that concave parcel prices have given rise to overly large estimates of the rate of price decline with distance because parcel sizes increase with distance and increased parcel sizes would be associated with lower unit prices as a result of the concavity of the land price function this hypothesis is empirically tested using vacant residential commercial and industrial land sales from within cook county illinois an important finding is that allowing for concavity greatly reduces although it does not eliminate measured rates of price decline with distance

a comment on zoning returns to scale and the value of undeveloped land this paper revisits the relationship between land value and parcel size the authors demonstrate that using a simple arbitrage equilibrium argument the value size relationship is convex concave whenever land assembly subdivision is possible they also explore further the impact of zoning on market outcomes copyright 1993 by mit press

on the economic impact of international sport events microevidence from survey data at the euro 2008 using firm level data for more than 700 swiss hotels and restaurants we evaluate the economic impact of the euro 2008 soccer championship in switzerland although aggregated macrodata do not reveal any sizable economic impact we report an overall negative effect based on the surveyed companies notably the reported effects of the individual firms are very heterogeneous for instance hotels in cities benefitted from the tournament as they were able to raise prices and thereby increase sales looking at the long run impact only a small fraction of companies do believe in a positive effect interestingly this outlook does not depend on realized sales but on the guest structure

infrequent assessments distort property taxes theory and evidence abstract economists have long recognized that lags in property reassessment benefit infrequent movers because it reduces their property taxes but in addition reassessment lags can influence the level of property taxes selected under majority rule i show that short delays in community wide reassessment increase property tax collections because it reduces the tax price for a majority of voters however longer delays reduce property tax collections because the aggregate assessed base and thus the tax yield declines so much i formally characterize the cutoff between these regimes and show tax collections are generally above their socially optimal level this theory can help explain why many people believe property taxes are excessive and it also suggests that the american system of taxing capital gains at realization rather than on accrual might result in excessive rates i test this theory on a sample of pennsylvania municipalities in the philadelphia suburbs this is a suitable crucible for such an evaluation because community wide reassessments are infrequently performed in pennsylvania it is not possible to reject the theory s basic predictions and numerical estimates suggest that a 5 year delay in community wide reassessment increases government revenues by 6 however reassessment delays do not impose statistically significant social losses because they benefit infrequent movers

is all space created equal uncovering the relationship between competing land uses in subdivisions abstract evaluating the importance of different forms of open space to households requires an evaluation of the service flows provided by each type of open space for many non market goods these flows occur over multiple spatial scales and require analysis that simultaneously accounts for capitalization at each scale to meet this often overlooked need we apply a newly developed extension to the hausman taylor model that treats multiple housing transactions occurring in a spatial location as a panel this methodology allows us to account for omitted variables within a subdivision while instrumenting for variables identified through differences between subdivisions we measure capitalization of open space at three distinct spatial extents adjacency walkability and subdivision wide we find that the interactions between subdivision open space and private open space in the form of lot size change from complementarity at small scales to substitutability at large scales these results confirm much of the intuition developed by ecologists and public planners on the likely service flows associated with open space and show how our approach to accounting for multiple spatial scales of capitalization in the evaluation of non market goods could be beneficial to other areas of applied research

does the world cup get the economic ball rolling evidence from a synthetic control approach abstract in this paper we analyze the impact of hosting the fifa soccer world cup on gdp per capita in a worldwide sample of countries using a transparent statistical methodology for data driven case studies the synthetic control method using country level annual data covering all events occurring in the period between 1978 argentina and 2006 germany we show that the estimated average treatment effect was either zero or negative for all but one of the countries analyzed our results therefore support the general claim that world cups are not statistically associated to development and economic growth

evidence of the effects of water quality on residential land prices we use hedonic techniques to show that water quality has a significant effect on property values along the chesapeake bay we calculate the potential benefits from an illustrative but limited water quality improvement and we calculate an upper bound to the benefits from a more widespread improvement many environmental hedonic studies have almost entirely ignored the potential for omitted variables bias the possibility that pollution sources in addition to emitting undesirable substances are likely to be unpleasant neighbors we discuss the implications of this oversight and we provide an application that addresses this potential problem o 2000 acadcmic prcss

impact of allowing sunday alcohol sales in georgia on employment and hours differential timing across counties of the removal of restrictions on sunday alcohol sales in the state of georgia is used to determine whether the change had an impact on employment and hours in the beer wine and liquor retail sales industry a triple difference ddd analysis finds significant relative increases in average weekly hours in the treated industry but no significant impact on employment we speculate regarding the forces behind the positive ddd result and conclude that the change in regulation likely lowered profits for affected liquor stores this would explain why store owners were vocal opponents to restriction removal

hedonic prices property values and measuring environmental benefits a survey of the issues this paper provides a review of the theoretical basis and the assumptions required in order to use hedonic price equations derived from property value data to obtain measures of the prices and the inverse demand functions for environmental amenities such as air quality it also includes a review and assessment of existing empirical applications of the technique to problems of air and water quality and urban noise

organization structure and credibility evidence from commercial bank securities activities before the glass steagall act we examine the two ways in which us commercial banks organized their investment banking operations before the 1933 glass steagall act forced the banks to leave the securities business as an internal securities department within the bank and as a separately incorporated affiliate with its own board of directors while departments underwrote seemingly higher quality firms and securities than did comparable affiliates the departments obtained lower prices for the issues they underwrote the higher risk premium associated with the internal department is consistent with investors discounting for the greater likelihood of conflicts of interest when lending and underwriting are within the same structure as a result commercial banks evolved toward choosing the separate affiliate structure our results suggest that internal structure is an effective commitment mechanism and absent other distortions market pressures would propel banks to adopt an internal structure that would address regulators concerns about conflicts of interest

variety complexity and economic development abstract we propose a combinatorial model of economic development an economy develops by acquiring new capabilities allowing for the production of an ever greater variety of products with an increasing complexity taking into account that economies abandon the least complex products as they develop over time we show that variety first increases and then decreases in the course of economic development this is consistent with the empirical pattern known as the hump our results question the common association of variety with complexity we further discuss the implications of our model for future research

supportive housing and neighborhood property value externalities we analyzed impacts on single fam institutional settings as part of the nationily home prices of eleven small scale supportive wide deinstitutionalization movement housing facilities announced in denver during beginning in the 1970s chronically men 1989 1995 using a difference in differences econo tally ill developmentally and physically dis metric specification we found that these facilities abled non violent produced a positive impact on house prices within offenders recovering 1 001 to 2 000 feet we attributed this effect to coun substance abusers and frail elderly inditervailing externalities building rehabilitation vs viduals have increasingly been domiciled resident behaviors that vary in their spatial extent in small scale facilities located in residen supportive housing facilities were systematically tial neighborhoods this normalization sited in neighborhoods with declining relative of residential environment coupled with prices compared to elsewhere in the census tract on site and on call specialized care is seen this location bias led a conventional econometric as therapeutic bymany policy makers new specification to erroneously estimate a negative property value impact from supportive housing

large sport events and unemployment the case of the 2006 soccer world cup in germany this study analyses on the basis of a multivariate analysis ex post the effects on the jobs market of a soccer world cup in this case the 2006 world cup held in germany in addition to three methods already used for other analyses in studies of sporting events an extended difference in difference estimate is used in order to compare the development of the numbers of unemployed in the 12 world cup venues with the development of the numbers of unemployed in 63 other german cities the results demonstrate that in none of the respective match venues did the effect of the sporting event on unemployment differ significantly from zero

changing trade structure and its implications for growth there is a long tradition in the development literature that what a country exports matters for its growth prospects recent work has refocused on this issue by attempting to produce numerical scores for different types of product to identify the complexity or sophistication of a country s export basket based on the insight that the type of product an economy exports can have important implications for its economic performance and that goods exported predominantly by rich countries will have different characteristics from those exported by poor countries lall et al 2006 put forward a means of classifying commodities based on the income levels of a product s main exporters at around the same time hausmann et al 2006 following a similar approach put forward a slightly different form of product classification and rodrik 2006 applied this specifically to an analysis of china this paper highlights the difference between the approaches and its implications for the analysis of china which appears less special using the approach of lall et al it argues that the classification of products at a disaggregate level is a helpful starting point for assessing issues of trade competitiveness and that further work using either or both forms of classification is justified

zoning returns to scale and the value of undeveloped land when land markets are incomplete parcels can be scaled to make control compatible with use and to internalize externalities the authors show that an arbitrage proof equilibrium implies an increasing and strictly concave relationship between the value and size of land parcels undeveloped land sales in southern california strongly confirm the theoretical relationship the authors find that zoning primarily restricts the conversion of land from agriculture to residential and industrial uses relative to the competitive equilibrium the scale of land units is an effective private instrument for providing compatible land use even in the presence of strong zoning copyright 1991 by mit press

supply constraints and housing market dynamics abstract although the volatility of house prices is often ascribed to demand side factors constraints on housing supply have important and little studied implications for housing dynamics i illustrate the strong relationship between the volatility of house prices and the regulation of new housing supply i then employ a dynamic structural model of housing investment to investigate the mechanisms underlying this relationship i find that supply constraints increase volatility through two channels first regulation lowers the elasticity of new housing supply by increasing lags in the permit process and adding to the cost of supplying new houses on the margin second geographic limitations on the area available for building houses such as steep slopes and water bodies lead to less investment on average relative to the size of the existing housing stock leaving less scope for the supply response to attenuate the effects of a demand shock my estimates and simulations confirm that regulation and geographic constraints play critical and complementary roles in decreasing the responsiveness of investment to demand shocks which in turn amplifies house price volatility

the effects of price risk on housing demand empirical evidence from u s markets this article examines how price risk affects housing demand it identifies two relevant channels a financial risk effect that reduces demand and a hedging effect that increases demand since current homes may hedge future housing costs the latter dominates when hedging incentives are strong namely when the likelihood of moving up the housing ladder is high and the tendency to move across markets is low for households with weak hedging incentives the article finds negative effects of price risk on the timing and size of home purchases but positive effects for households with strong hedging incentives

revisiting the revisited terms of trade will china make a difference in challenging the conventional wisdom at the time singer and prebisch posited a number of explanations for declining terms of trade of developing economies including both country and product specific factors over the past decade we have begun to witness a simultaneous process of price differentiation within commodities with the prices of some commodities increasing and within manufacturing with the price of many manufactures falling these price changes may reverse the decline in the terms of trade of commodity producers the entry of china into the global market has played an important role in this augmenting the demand for many hard commodities its role as an exporter of manufactures coupled with concentration in global buying may undermine the prices of many manufactures

assessing the olympic games the economic impact and beyond this study reviews the literature on the evaluation of the olympic games within the broader framework of their significance as cultural assets and opportunities for endogenous growth and sustainable development of the host city the study reviews the main approaches to the economic assessment of the games from the point of view of the underlying economic concepts and methodologies as well as of the empirical results obtained it focuses on the effects that are measured and on those which even though important are generally neglected the methodologies utilized for the quantitative assessments of the games are reviewed with special emphasis on impact and cost benefit analysis both on ex ante and ex post basis the studies surveyed are analysed from the point of view of different sets of effects on the host city and for a limited number of cases on the host country while the major focus is on hosting the summer olympics some attention is also paid to the bidding cities the winter olympics and the paralympics the general findings appear to be controversial with some hints of positive overall effects but also with a well documented tendency to exaggerate the benefits and underestimate the costs of holding the games in the ex ante versus the ex post studies the survey finally suggests that ex post cross country econometric studies tend to catch sizable differential and persistent benefits ignored by individual studies especially on macroeconomic and trade variables