the demand for housing in sweden equilibrium choice of tenure and type of dwelling abstract most studies of housing demand and tenure choice only identify two modes of tenure owner occupied one family houses and rental apartments furthermore they are typically based on a cross section across all households in this study we use recent swedish data to overcome these weaknesses we identify owner occupied apartments coop shares as a third mode of tenure and show that this should be treated separately we also use information about the household s own assessment of its probability of moving during the next year we demonstrate that it makes a large difference if likely movers are eliminated from the sample

frictionless commerce a comparison of internet and conventional retailers there have been many claims that the internet represents a new nearly frictionless market our research empirically analyzes the characteristics of the internet as a channel for two categories of homogeneous products books and cds using a data set of over 8 500 price observations collected over a period of 15 months we compare pricing behavior at 41 internet and conventional retail outlets we find that prices on the internet are 9 16 lower than prices in conventional outlets depending on whether taxes shipping and shopping costs are included in the price additionally we find that internet retailers price adjustments over time are up to 100 times smaller than conventional retailers price adjustments presumably reflecting lower menu costs in internet channels we also find that levels of price dispersion depend importantly on the measures employed when we compare the prices posted by different internet retailers we find substantial dispersion internet retailer prices differ by an average of 33 for books and 25 for cds however when we weight these prices by proxies for market share we find dispersion is lower in internet channels than in conventional channels reflecting the dominance of certain heavily branded retailers we conclude that while there is lower friction in many dimensions of internet competition branding awareness and trust remain important sources of heterogeneity among internet retailers

the retail price of inequality abstract this paper studies the relation between a city s income distribution and its retail price level using panel data we find that an increase in the presence of lower middle income households relative to poor or upper income households is associated with lower prices our findings suggest that greater income inequality raises the prices that poor households face thus making it harder for them to invest in human capital

an empirical investigation of alternative approaches to estimating the equilibrium demand for housing two approaches to estimating the desired or equilibrium housing demand parameters have been utilized in recent literature one approach commonly referred to as the conventional model assumes that households continuously consume their temporal equilibrium housing services where a temporal equilibrium is defined with respect to the household s current economic and demographic characteristics based upon this assumption conventional demand studies have employed random samples which include a majority of households that have not recently moved see lee and kong 6 or carliner 2 a problem with this approach is its failure to recognize moving costs households must pay to alter their housing service consumption the existence of moving costs suggests that households may not respond rapidly to changes in their desired consumption of housing but instead remain in their dwelling unit until the cost incurred from consuming the non equilibrium level of services exceeds the cost of relocating if so demand samples employed in conventional studies may include a significant number of disequilibrium observations this causes two problems first there exist measurement errors in independent variables that have changed since the household was last in equilibrium second the true equilibrium effect of an independent variable may be incorrectly estimated due to its correlation with either the occurrence of disequilibrium or the length of the housing adjustment lag the second approach to estimating the equilibrium parameters attempts to minimize these problems by restricting the sample to households that have recently moved see hanushek and quigley 3 or aaron l

demand information and competition why do food prices fall at seasonal demand peaks prices for seasonal food products fall at demand peaks price declines are not driven by falling agricultural input prices indeed farm to retail margins narrow sharply i use electronic scanner data from a sample of us supermarkets to show that seasonal price declines are closely linked to market concentration and are much larger in markets with several rivals than where a single brand dominates seasonal demand increases reduce the effective costs of informative advertising and increased informative advertising by retailers and manufacturers in turn may allow for increased market information and greater price sensitivity on the part of buyers

intraurban residential mobility the role of transactions costs market imperfections and household disequilibrium abstract this paper presents a model of household residential search and mobility that focuses on microeconomic elements of household behavior and incorporates housing market features the model is cast explicitly in terms of a rigorous model of housing demand allowing the benefits from moving to be measured as the compensating income variation of the potential change in consumption the empirical results indicate that large changes in economic variables such as income and prices produce only small potential gains from moving and that a major factor in the moving decision is the magnitude of search and moving costs

pricing in a customer market in standard pricing models movements in demand are partially offset by price responses in a customer market however price markups may decrease with high demand thus price may magnify rather than stabilize demand movements i consider a monopolist selling a good of which first time consumers are uncertain repeat customers know that the product works the monopolist trades the objectives of exploiting past customers and attracting new ones in a period with many new potential customers the monopolist gives more weight to attracting and lowers its markup last i examine some evidence on whether expansions are periods with disproportionately many new customers

oligopolistic markets with sequential search and production cost uncertainty this article analyzes a sequential search model where firms face identical but stochastic production costs the realizations of which are unknown to consumers we characterize a perfect bayesian equilibrium satisfying a reservation price property and provide a sufficient condition for such an equilibrium to exist we show that i firms set on average higher prices and make larger profits compared to the scenario where consumers observe production costs ii expected prices and consumer welfare can be non monotonic in the number of firms and iii the impact of production cost uncertainty vanishes as the number of firms becomes very large

life cycle and housing adjustment as explanations of residential mobility the paper develops a typology of reasons for residential mobility and systematises the many survey analyses of reasons for moving the relative importance of life cycle and housing adjustment mecha

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

the economic impact of syrian refugees on host countries quasi experimental evidence from turkey abstract the syrian conflict generated forced immigration from northern syria to southeastern turkey arrival of refugees resembles a natural experiment which offers good opportunities to study the economic impact of immigration i study three main outcomes labor markets consumer prices and housing rents i document moderate employment losses among native informal workers which suggests that they are partly substituted by refugees prices of the items produced in informal labor intensive sectors declined due to labor cost advantages generated by refugee inflows finally refugee inflows increased the rents of higher quality housing units while there is no effect on lower quality units

buying less but shopping more the use of nonmarket labor during a crisis households allocating time between market and non market uses should respond to income variations by adjusting the time devoted to shopping search and other home production activities in this paper we exploit high frequency household expenditure data to examine the use of changes in shopping intensity as a method of mitigating the effects of the 2002 argentine economic crisis although the total quantity and real value of goods purchased fell during the crisis consumers are found to be doing more shopping search this increase in shopping is shown to enable households to seek out lower prices and locate substitutes allowing a given level of expenditure to buy more goods the magnitude and prevalence of these effects suggest that this non market use of labor can be an important coping strategy for households during a recession

prices and price dispersion on the web evidence from the online book industry using data collected between august 1999 and january 2000 covering 399 books we examine pricing by thirty two online united states based bookstores at the aggregate level we find that both advertising and competitive structure had the predicted effects more competition led to lower prices and to lower price dispersion holding competitive structure constant more widely advertised items also had lower prices at the firm level we observe considerable heterogeneity in behavior firms had differentiated or attempted to differentiate on dimensions such as brand price and selection

immigration and prices this paper examines the behavior of prices following the unexpected arrival of a large number of immigrants from the former soviet union fsu to israel during 1990 i use store level price data on 915 consumer price index products to show that the increase in aggregate demand prompted by the arrival of the fsu immigration significantly reduced prices during 1990 when one controls for native population size and city and month effects a one percentage point increase in the ratio of immigrants to natives in a city decreases prices by 0 5 percentage point on average it is argued that this negative immigration effect is consistent with fsu immigrants the new consumers having higher price elasticities and lower search costs than the native population thus immigration can have a moderating effect on inflation through its direct effect on product markets and not only by increasing the supply of labor

the timing and magnitude of retail store markdowns evidence from weekends and holidays we examine daily prices of eight goods at seventeen retail stores collected in ann arbor michigan over a four month period from november 1 to february 28 we focus on weekly and seasonal price patterns and on the frequency of price markdowns or sales there were frequent markdowns in the intensive shopping period prior to christmas and a tendency for such sales to occur on weekends we interpret these findings as evidence that a significant number of markdowns are timed to occur when shopping intensity is exogenously high we complement the imperfect information based motives for sales in the literature by contributing an additional element based on the role of bulk shopping and increasing returns in the shopping technology

durable goods monopoly with varying demand this paper solves for the proflt maximising strategy of a durable goods monopolist when incoming demand varies over time each period additional consumers enter the market these consumers can then choose whether and when to purchase we flrst characterise the consumer s utility maximisation problem and under a monotonicity condition show the proflt maximising allocation can be solved through a myopic algorithm which has an intuitive marginal revenue interpretation consumers ability to delay creates an asymmetry in the optimal price path which exhibits fast increases and slow declines this asymmetry pushes the price level above that charged by a flrm facing the average level of demand applications of this framework include deterministic demand cycles one ofi shocks and iid demand draws the optimal policy outperforms renting and can be implemented by a time consistent best price provision

inelastic buyers and competition we precisely measure how competition limits the capacity of sellers to appropriate surplus from less elastic consumers the evidence originates from pricing strategies of italian pharmacists in response to exogenous inflows of parents of newborn babies among their buyers population based laws allow us to use a rdd to compare different competitive environments while more newborn babies have no effect on the price of hygiene products under intense competition we observe a price increase when competition is low this effect is not driven by increasing costs because for diapers demanded by newborns only we see no effect independently of competition this article is protected by copyright all rights reserved

taxation of capital gains on owner occupied homes the paper compares taxation on realization with taxation on accrual in the context of owner occupied housing it considers a model where the utility a household derives from housing relative to other consumption varies over the life cycle as there are sizeable transaction costs housing consumption will not even in the absence of taxes be adjusted continuously but at discrete intervals the focus of the paper is on tax effects on the length of these intervals the following results are shown u taxing true economic appreciation at the same rate as imputed rental income and other capital income will lead to a shortening of the intervals if the capital gains are taxed on accrual an increase in this tax rate holding other rates constant will lead to a shortening of the intervals if the capital gains are taxed only as they are realized an increase in this tax rate holding other rates constant may either lead to a lengthening or a shortening of the holding period shortening is more likely if transaction costs are large whereas lengthening will occur if the rate of price increase is high

moving and housing expenditure transaction costs and disequilibrium abstract this paper specifies and estimates a model of rental housing expenditure that explicitly incorporates moving transaction costs parameter estimates reveal low income elasticities and substantial moving costs which vary considerably among families the model is employed to evaluate the effects of proposed subsidy schemes simulated responses indicate that high moving costs deter many families from adjusting current rental expenditure to higher levels in response to subsidies an additional dollar of unconstrained subsidy payment will on average increase rental expenditures by only 2 7 cents schemes with minimum rent requirements are also quite ineffective and involve substantial deadweight loss comparisons of the model predictions with estimated program effects based on experimental data are also included

the impact of transaction costs and the expected length of stay on homeownership abstract economic theory suggests that an increase in the expected length of stay in a dwelling increases the probability of a household choosing to own a house rather than rent this hypothesis is derived from recognition that there are substantial transaction costs associated with homeownership and increased expected time in the home reduces the annualized transaction cost using a military data set we confirm that expected length of stay in a dwelling and the transaction costs of selling are very important to the ownership decision our best estimate of the transaction costs of selling a home are the sum of 3 of house value and 4 of household earnings

neighborhood externality risk and the homeownership status of properties in contrast to corporate and institutional investors single owner occupiers cannot adequately diversify housing investment risk consequently homeownership should be relatively less likely in places with higher housing investment risk using the american housing survey it is documented that neighborhood externality risk a major component of housing investment risk substantially reduces the probability that a housing unit is owner occupied even when controlling for housing type and numerous location and household specific characteristics the effects are quantitatively meaningful and change in change estimates suggest that the effects are causal

product competition in microprocessors there have been some striking recent developments in the theory of spatial and product competition but relatively few empirical studies see however shaw 1982 a and b this paper is an attempt to assess the empirical usefulness of these developments drawing on the history of product competition in microprocessors over the period 1971 81 in particular our interest centres on attempts to introduce a role for what have been called agglomeration economies 1 that is mutual external economies accruing to two or more producers selling similar products in a recent survey graitson 1982 suggested that this particular development would provide theoretical models of special empirical relevance and the evidence presented here though by no means conclusive tends to support that view the paper is in five parts section i gives a brief review of some of the relevant developments in spatial and product competition theory section ii gives a brief account of how the wide variety of microprocessors will be classified for the purposes of this study section iii describes the history of developments in microprocessors over the period 1971 to 1981 and section iv assesses the theoretical developments in the light of this evidence finally section v summarises the main points of the paper

skilled immigration and the employment structures of u s firms we study the impact of skilled immigrants on the employment structures of us firms using matched employer employee data unlike most previous work we use the firm as the lens of analysis to account for greater heterogeneity and the fact that many skilled immigrant admissions are driven by firms themselves e g the h 1b visa ols and iv specifications show rising overall employment of skilled workers with increased skilled immigrant employment by the firm employment expansion is greater for young natives than for their older counterparts the departure rates for older workers relative to younger workers appear highest for those in stem occupations

immigration search and loss of skill this article develops and estimates an on the job search model of the entry of highly skilled immigrants from the former soviet union into the israeli labor market the estimated parameters of the model together with information on the wages of immigrants from earlier waves imply that on average immigrants can expect lifetime earnings to fall short of the lifetime earnings of comparable natives by 57 of this figure 14 percentage points reflect frictions associated with nonemployment and job distribution mismatch and 43 percentage points reflect the gradual adaptation of imported schooling and experience to the local labor market

the effect of immigration on unskilled native workers evidence from a natural experiment this study exploits the natural experiment provided by the start of the second intifada to measure the effect of immigration on the wage and employment of unskilled native workers it finds that immigration has no effect on the wage or employment of unskilled jewish workers the wage and employment of the least skilled israeli arab workers with zero to five years of schooling are adversely affected by immigration the slightly more skilled arab workers with six to 11 years of schooling in contrast are positively affected by immigration suggesting a complementarity effect with this group different explanations are proposed

immigration and international prices an initial assessment abstract using prices from a number of cities across the world during 1990 2006 this paper shows that there exists a negative impact of immigration on prices the estimated absolute elasticity of prices with respect to immigration is around 14 across specifications

rent control and misallocation rent control is still an important type of government regulation of housing markets in many countries and numerous researchers have studied its implications for allocation welfare and investments in housing the present paper aims to improve our understanding of the effect of second generation rent control when it is applied only to one sector of the rental market it is diagrammatically shown that the welfare effects are very different between a universal and a limited application of rent control studying the danish case of second generation rent control lower rents are found in controlled sectors and a minor increase of the rent in the uncontrolled sector using the area of living space in the dwelling as a measure for housing consumption evidence is also produced of both overallocation and underallocation of housing in the rent controlled sectors as envisaged by economic theory

working less and bargain hunting more macro implications of sales during japan s lost decades standard new keynesian models have often neglected temporary sales in this paper we ask whether this treatment is appropriate in the empirical part of the paper we provide evidence using japanese scanner data covering the last two decades that the frequency of sales was closely related with macroeconomic developments specifically we find that the frequency of sales and hours worked move in opposite directions in response to technology shocks producing a negative correlation between the two we then construct a dynamic stochastic general equilibrium model that takes households decisions regarding their allocation of time for work leisure and bargain hunting into account using this model we show that the rise in the frequency of sales which is observed in the data can be accounted for by the decline in hours worked during japan s lost decades we also find that the real effect of monetary policy shocks weakens by around 40 due to the presence of temporary sales but monetary policy still matters

dynamic aspects of consumer decisions in housing markets abstract in this study we estimate a model of the joint tenure length of stay and consumption level choices of families in the housing market this is the first attempt we know of to do this type of estimation the data pertain to a single residence spell per household from the panel study of income dynamics wealthier and better educated families were found to be more mobile in terms of housing consumption after accounting for tenure choice and controlling for planned length of stay renters and owners were found to have similar demand function relationships in terms of the impacts of socioeconomic variables this confirms the notion that renters and owners are not differentiated by housing choice but simply in life cycle circumstances as to when it is optimal to own or rent

the income elasticity of demand for single family owner occupied housing an empirical reconciliation abstract past studies estimate the permanent income elasticity of demand for single family owner occupied housing to range from 0 14 to 1 5 a range much too broad to be of any use for solving policy questions data from the panel study of income dynamics are used herein to test the sensitivity of this income elasticity to several factors the results suggest that differences in sample population with respect to duration of housing tenure explain a large portion of the variation in the estimates of this elasticity the paper concludes that for short run applications the probable value of this elasticity is approximately 0 70 and for long run applications the probable value of this elasticity might best be taken as approximately 1 00

menu costs and the neutrality of money a model of endogenous price adjustment under money growth is presented firms follow s s pricing policies and price revisions are imperfectly synchronized in the aggregate price stickiness disappears and money is neutral the connection between firm price adjustment and relative price variability in the presence of monetary growth is also investigated the results contrast with those obtained in models with exogenous fixed timing of price adjustment

number of sellers average prices and price dispersion abstract a variety of models provide differing predictions regarding the effect of an increase in the number of competitors in a market seller density on prices and price dispersion we review different approaches to generating equilibrium price dispersion and then empirically estimate the relationship between seller density average product price and price dispersion in the retail gasoline industry using four unique gasoline price data sets controlling for station level characteristics we find that an increase in station density consistently decreases both price levels and price dispersion across four geographical areas

existence and persistence of price dispersion an empirical analysis the hebrew university of jerusalem and nber using a unique data set on store level monthly prices of four homogenous products sold in israel i study the existence and characteristics of the dispersion of prices across stores as well as its persistence over time i find that price dispersion prevails even after controlling for observed and unobserved product heterogeneity moreover intra distribution mobility is significant stores move up and down the cross sectional price distribution thus consumers cannot learn about stores that consistently post low prices as a consequence price dispersion does not disappear and persists over time as predicted by varian s 1980 model of sales

capital gains taxation and residential mobility in sweden abstract theoretical studies have shown that capital gains taxes in the housing market may create lock in effects but so far no empirical evidence has been presented regarding the size of these effects for a panel of swedish house owners in 1984 1990 we show that lock in effects only appear for households with income reductions the size of these lock in effects crucially depends on the magnitude of the income loss the theoretical model and features of the swedish tax system imply that lock in effects depend on the degree of mismatch in the current residence and whether the households buy up or buy down

displaced populations humanitarian assistance and hosts a framework for analyzing impacts on semi urban households summary this paper presents a framework for understanding the impacts of civil war displaced populations and humanitarian assistance on host populations in semi urban areas our model shows that under conditions of conflict where populations flow from rural to urban areas and food aid follows changes in food housing and labor markets result in changes to local prices which will potentially impoverish consumers but provide earning opportunities for property owners and suppliers of non tradable goods and that the price dynamics are likely to induce significant land use change we combine satellite price aid delivery and population inflow data with qualitative interviews from nyala darfur the data confirm the hypotheses and the paper discusses possible policy responses

the demand for housing in britain and population ageing microeconometric evidence the paper estimates a household s demand function for housing using household data esti mates of the price and current income elasticities are robust at about 0 4 and 0 5 respec tively independent of price and income effects there is a strong age pattern to household demand in conjunction with the age profile of household formation this pattern implies that changes in the age distribution of the population have important effects on aggregate housing demand although economic growth dominates in determining its rate of growth during the 1980s there was a dramatic boom in british house prices followed by large declines in the early 1990s while financial deregulation and rapid growth in real incomes for people in non manual occupations contributed to the rise in housing demand and prices changes in the population s age distribu tion also played a role ermisch 1990 in particular the number of people in the prime ages for first house purchase increased as a consequence of the baby boom of the 1960s the fall in birth rates during the 1970s and continued low fertility during the 1980s entail smaller numbers in these prime ages and an ageing of the population more generally what effect will these changes in the age distribution of the population in britain have on housing demand and house prices it may be possible to use aggregate data to answer this question e g in fair and dominguez 1991 but as recently stressed by stoker 1993 the most informative assessments of such distributional effects on demand come from studying individual level cross section or panel data a recent study in this vein by mankiw and weil 1989 of the us housing market experience has attracted a great deal of attention because it suggests that house prices are going to fall dramatically in the coming years because of the ageing of the population while their study estimates an age pattern of housing demand from micro data they admit it is a biased estimate and their conclusions concerning the impact of age distribution on house prices are based on a simple aggregate time series equation which omits income and other housing demand and sup ply shifters this paper takes a microeconometric approach it estimates a demand func tion for housing in britain and then examines the implications of prospective changes in the age distribution for housing demand an important by product in estimating the demand function is an estimate of the price elasticity of housing demand despite the importance of this parameter in assessing the impact of policy changes estimates of it for britain are few and existing ones are questionable because of the absence of appropriate data for its estimation

moving costs and housing demand abstract several recent housing demand studies use samples of recent movers based on the presumption that only such households are on their demand curves we find contrary to this presumption that the absolute values of the residuals from a standard housing demand equation fall with duration in the present dwelling this shows that the correlation pattern between housing and the explanatory variables at the moving date does not correspond to the average pattern over a typical housing spell we interpret this as evidence of forward looking behavior and show how it may be handled in econometric work with cross section samples

immigration and international prices abstract this paper considers the relation between immigration and prices in a number of countries across the world over the period from 1990 to 2006 immigration is shown to have a negative impact on international relative prices a 10 increase in the share of immigrant workers in total employment decreases the prices of final products by as much as 3 our results suggest that the tendency of this factor of production to relocate to relatively expensive high wage countries exerts downward pressure on prices of tradeables and non tradeables there relative to other locations the effect of immigration on prices is more evident for goods consumed by immigrants as compared to goods produced by immigrants

oligopolistic pricing with sequential consumer search n identical stores compete by choosing prices for a homogeneous good with constant marginal costs consumers search sequentially with perfect recall for the lowest price one class of consumers called shoppers have zero search costs while all other consumers have a positive search cost c there is a unique symmetric nash equilibrium price distribution with the property that it changes smoothly from marginal cost pricing when all consumers are shoppers and or c 0 and monopoly pricing when no consumers are shoppers remarkably as the number of stores increases the nash equilibrium becomes more monopolistic copyright 1989 by american economic association

the impact of mass migration on the israeli labor market mass migration from the former soviet union increased the israeli population by 12 in the first half of the 1990s this exodus was precipitated by the lifting of emigration restrictions in an unstable ussr and by the open immigration policy of israel toward soviet jews who faced more restrictive entry policies elsewhere i use this natural experiment to study the impact of immigration on the labor market outcomes of native israelis ols yields significant reductions in wages and small reductions in employment however ols is biased if the distribution of immigrants across occupations in israel was not exogenous to relative wage and employment conditions i instrument for the entry of russians into an occupation in israel using information on their former occupations in the ussr there is a significant positive correlation between the former presence of the immigrants in an occupation in the ussr and their presence in that occupation in israel but the previous occupational choices of russians abroad were independent of israeli wage and employment growth subsequent to their migration iv estimates indicate that immigration did not have an adverse impact on native israeli labor market outcomes

not just a work permit eu citizenship and the consumption behavior of documented and undocumented immigrants this paper explores the impact of the 2007 european union enlargement on the consumption behavior of immigrant households using data from a unique italian survey and a difference in differences approach we find that the enlargement induced a significant consumption increase for the immigrant households from new member states both in the short and in the medium run this enlargement effect cannot be attributed to the mere legalization as it concerns both undocumented and documented immigrants albeit through different channels detailed information on immigrants legal status undocumented documented and sector of employment informal formal allows us to shed light on the exact mechanisms following the enlargement previously undocumented immigrants experienced an increase in the labor income by moving from the informal towards the formal economy whereas immigrants who were already working legally in italy benefitted from the increased probability of getting a permanent contract enhanced employment stability in turn reduced the uncertainty about future labor income leading to an increase in documented immigrants consumption expenditure

the impact of forced displacement on host communities a review of the empirical literature in economics the paper reviews 49 empirical studies that estimate the impact of forced displacement on host communities a review of the empirical models used by these studies and a meta analysis of 762 separate results collected from them are the main contributions of the paper coverage extends to 17 major forced displacement crises that occurred between 1922 and 2015 to host countries at different levels of economic development and different types of forced migrants the focus is on outcomes related to household well being prices employment and wages all studies can be classified as ex post quasi natural experiments the analysis on empirical modeling shows a preference for partial equilibrium modeling differences in differences evaluation methods and cross section econometrics with all these choices largely dependent on the type of data available the meta analysis on household well being shows that between 45 and 52 percent of the results are positive and significant indicating a net improvement in household well being an additional 34 to 42 percent of the results are found to be nonsignificant and 6 to 20 percent show a decrease in household well being the analyses on employment and wages show positive and significant improvements for 12 to 20 percent of the results nonsignificant results in 63 percent of the cases and negative and significant results for 22 to 25 percent of the results negative results on employment and wages relate to young and informal workers in middle income countries the results on prices show asymmetric behavior across types of products overall the probability of having a negative outcome for host communities in the consumer and labor markets is below 20 percent

housing demand and disequilibrium abstract researchers have recently begun relying heavily on samples of recent movers to estimate housing demand parameters estimates from mover equilibrium and disequilibrium samples are compared to determine whether significant differences exist the results suggest that income elasticities are not affected by the sample distinctions but demographic effects vary across the different subsamples

product proliferation in characteristics space the uk fertiliser industry in recent years a number of theoretical papers have addressed both the positive and normative aspects of the problem of how competitive products may be located in characteristics space the major theoretical antecedents have been hotelling s analysis of spatial competition 6 chamberlin s analysis of product differentiation 1 2 and lancaster s goods characteristics theory of demand 7 unfortunately there has been little corresponding empirical analysis two approaches in the theoretical analysis seem to have predominated firstly the examination of the welfare implications of product variety offered in equilibrium conditions 2 and secondly the dynamics of product competition using the spatial competition analogy 3 this paper which adopts the second approach uses an adaptation of lancaster s goods characteristics framework it examines the process of product competition in the uk agricultural fertiliser market the first and second sections briefly outline the main features of the goods characteristics and spatial competition theories and the uk fertiliser market respectively the third section contains the empirical analysis

the effect of low skilled immigration on u s prices evidence from cpi data i exploit the large variation across u s cities and through time in the relative size of the low skilled immigrant population to estimate the causal effect of immigration on prices of nontraded goods and services using an instrumental variables strategy i find that at current immigration levels a 10 percent increase in the share of low skilled immigrants in the labor force decreases the price of immigrant intensive services such as housekeeping and gardening by 2 percent wage equations suggest that lower wages are a likely channel through which these effects take place however wage effects are significantly larger for low skilled immigrants than for low skilled natives implying that the two are imperfect substitutes

the economics of product variety a survey demand for variety may arise from a taste for diversity in individual consumption and or from diversity in tastes even when each consumer chooses a single variant the full degree of variety potentially demanded will not in general be supplied because scale economies even to a small degree mean that the potential welfare or revenue gain from greater variety must be balanced against the lower unit production costs with fewer variants the economics of product variety consists essentially in analysing the effect of this balance in different situations and comparing the degree of product variety for different market structures with each other and with the optimum the survey commences with the work on market structures with single product firms generalized monopolistic competition tracing modern developments in both the chamberlinian and hotelling traditions the latter has been particularly fruitful due to the expansion of the original locational ideas into virtual spaces in product characteristics the emphasis in recent work on product variety has been on multiproduct firms in both monopolistic and oligopolistic structures including strategic market preemption although most work has been in a full information context there have been advances in product variety under imperfect information either by consumers to properties of the firms products or firms as to consumers demands

limit qualities and entry deterrence in this article we investigate how the interplay of competition among incumbents and the magnitude of a potential entrant s setup cost determines the configuration of the array of products to be offered in a perfect nash equilibrium we show that incumbents can use limit qualities to deter entry we also demonstrate that rivalry among incumbents may lead to excessive entry deterrence our analysis generates predictions about the correlation between the degree of product differentiation and the size of the entrant s setup costs

staggering and synchronization in price setting evidence from multiproduct firms theoretical work on price setting behavior focuses on the single product case while in reality a single price setter sells many products the authors use retail store level multiproduct pricing data to learn about price dynamics they find that while the timing of a product s price changes is staggered across stores selling the same product the timing of the price changes of different products sold within the same store is highly synchronized this finding validates the usual assumption that decisions are staggered across price setters and suggests that price rigidity is due mostly to mechanical reasons and not to informational asymmetries copyright 1996 by american economic association

equilibrium price dispersion in retail markets for prescription drugs this study seeks to establish the empirical importance of price dispersion due to costly consumer search by examining retail prices for prescription drugs posted prices in two geographically distinct markets are shown to vary considerably across pharmacies within the same market even after one controls for variation due to pharmacy differences pharmacy heterogeneity accounts for at most one third of the observed price dispersion the empirical analysis hinges on the observation that consumers incentives to price shop depend on characteristics of the drug therapy cross sectional patterns in price distributions across drugs are consistent with the predictions of a search model prices for repeatedly purchased prescriptions for which the expected benefits of search are highest exhibit significant reductions in both dispersion and price cost margins

immigration and domestic wage an empirical study on competition among immigrants abstractwhile studies on the wage effects of immigration focus on native workers there is significantly less information on the wage effects of immigration on domestic foreign born workers in addition to analysing the impact of immigration on wages of native workers in this article we estimate the internal competition among foreign born workers in the united states firstly using data from the current population survey we find no empirical evidence supporting the substitutability of native workers for immigrants secondly there is no statistical difference between skilled and unskilled immigrants on the influence of the domestic labour market outcomes finally there is no internal competition among immigrants the income of non citizen workers mainly depends on state and national levels of economic situations not the number of non citizen workers available in the labour market

strategic pricing consumer search and the number of firms discover prices there are three distinct price dispersed equilibria characterized by low moderate and high search intensity the effects of an increase in the number of firms on search behaviour expected prices price dispersion and welfare are sensitive i to the equilibrium consumers search intensity and ii to the status quo number of firms for instance when consumers search with low intensity an increase in the number of firms reduces search does not affect expected price leads to greater price dispersion and reduces welfare in contrast when consumers search with high intensity increased competition results in more search and lower prices when the number of competitors in the market is low to begin with but in less search and higher prices when the number of competitors is large duopoly yields identical expected price and price dispersion but higher welfare than an infinite number of firms a question that has received much attention in economic theory is how the number of competitors and market outcomes are related despite the existence of work showing the contrary see e g satterthwaite 1979 rosenthal 1980 the prediction that emerges from a market where firms interact in a cournot fashion has come to dominate economic thought namely that an increase in the number of competitors leads to larger aggregate production lower market price and improved market performance measured in terms of some social welfare criterion ruffin 1971 this paper challenges the generality of this belief by presenting an oligopoly model with consumer search where the equilibrium expected price may be constant increasing or nonmonotonic in the number of firms we present an economy with two types of consumers consumers who search for prices at no cost fully informed and consumers who must pay a fixed search cost for each price quotation they observe less informed 1 all buyers have the same willingness to pay for the good and buy either a single unit or nothing at all on the supply side of the market there are n firms producing a homogeneous good at constant marginal cost we analyse a one shot simultaneous move game firms set prices and consumers decide how many prices to search for at the same moment in time our model is essentially an oligopolistic version of burdett and judd 1983 where some consumers search costlessly in this model consumers search using a fixed sample size search strategy i e they choose the number of prices to observe before receiving any offer nonsequential search is appealing when consumers find it more advantageous to gather price information quickly morgan and manning 1985 this occurs when the search outcome is observed with delay and delay is costly for instance an mba graduate looking for a job 1 the presence in the model of consumers who search costlessly captures the fact that some people have a

immigration and wages evidence from construction to identify relative wage impacts of immigration we make use of certification and licensing requirements in the norwegian construction sector that give rise to exogenous variation in immigrant employment shares across trades individual panel data reveal substantially lower wage growth for workers in trades with rising immigrant employment than for other workers selective attrition from the sector masks the causal wage impact unless accounted for by individual fixed effects for low and semi skilled workers effects of new immigration are comparable for natives and older immigrant cohorts consistent with perfect substitutability between native and immigrant labor within trade finally we present evidence that immigration reduces price inflation as price increases over the sample period were significantly lower in activities with growth in the immigrant share than in activities with no or small change in immigrant employment

moving and improving strategies for attaining housing equilibrium the concept of equilibrium consumption is central to much housing market analysis yet analysts must contend with the likelihood that many housing consumers are not at an exact equilibrium level of

does investment risk affect the housing decisions of families i introduction the purpose of this article is to investigate the effect of heightened price volatility in housing markets on homeownership and housing demand the literature on housing markets has recognized that buying a home involves consumption and investment motives as in ranney 1981 henderson and ioannides 1983 and fu 1995 purchasing a home requires a concentrated investment in housing stock that for most families is not easily diversified caplin et al 1997 indeed in 1995 the typical american household had most of its gross assets in real estate and held no corporate equity and only households in the top 10 of the wealth distribution held portfolios that were diversified tracy et al 1999 in 1998 despite strong stock market gains home equity was a dominant investment for most households although roughly two thirds owned their homes less than half of all households held stock of those households owning both stocks and homes 60 had more wealth in home equity than in stocks di 2001 nominal house prices in u s cities have generally risen over time with some cities experiencing periods of steep house price appreciation however homeowners in many cities have been exposed to considerable downside risk according to repeat sales price indexes published by the federal home loan mortgage corporation freddie mac significant one year declines in home prices are not uncommon for example nominal declines of 15 5 and 9 occurred in san antonio in 1985 denver in 1987 and boston in 1990 respectively sustained house price declines have occurred in texas california and the eastern states for example in the long beach los angeles metropolitan area the nominal price of single family homes declined 22 from 1990 to 1996 1 furthermore there is evidence that losses at the time of sale are surprisingly common 2 what is not clearly understood is the extent to which families are responsive to such house price risk the investment literature has demonstrated that risk averse households prefer to hold less risk at a given expected rate of return when house prices are uncertain homeownership and demand relationships depend on the distribution of the random price variable 3 fu 1991 characterizes the price distribution by its first and second moments and shows that the likelihood of homeownersbip and the demand for owner occupied housing are increasing in the expected rate of house price appreciation and decreasing in house price volatility these results do not hold however for liquidity constrained households when households cannot borrow against the expected future gains of housing investment for current consumption the theoretical effects on housing choices of the expected rate of return and house price uncertainty are ambiguous fu 1995 thus the effect of price volatility on housing choices remains to be determined empirically the empirical research on housing markets includes a number of micro level econometric studies on the determinants of homeownership and housing demand these studies provide a framework for the present study and have shown that a household s after tax relative cost of homeownership permanent and transitory income and family composition are important in explaining housing decisions e g see rosen 1979 dynarski and sheffrin 1985 henderson and ioannides 1987 1989 in addition homeownership is negatively impacted by income uncertainty haurin 1991 and by an inability to generate savings for a down payment as in henderson and ioannides 1987 linneman and wachter 1989 haurin et al 1994 and gyourko et al 1999 nevertheless despite the importance of owner occupied housing in the portfolios of homeowners surprisingly little empirical work exists on the housing choices of families in the presence of house price uncertainty rosen et al 1984 provide some empirical evidence on the question of housing choices and risk

a residence time model of housing markets abstract this paper estimates a semi markov model of housing markets in which families move from one home to another spend a random amount of time in each home and choose whether to own or to rent at each move limiting conditions of the semi markov process are used to characterize the steady state frequency of owner occupied housing and to simulate the impact of changes in housing tax policy this approach differs markedly from previous studies of housing tax policy which focus on the entire population as opposed to the movers and ignore the effect of household residence times see king 1980 rosen 1979 white and white 1977 or laidler 1969 residence times further influence the analysis by affecting the relative cost of owning to renting in the tenure choice model homeowners pay legal and realtor fees at the time they move out of their homes which renters do not have to pay the discounted value of these fees declines with length of stay and provides a structural explanation of why families with longer residence times have a greater propensity to own results from the empirical analysis suggest that the semi markov model closely predicts conditions in the united states and provide important insights into the effects of housing tax policy residence times are also found to influence household tenure choice through their impact on the discounted legal and realtor fees paid by homeowners

imperfect capital markets and the monetarist black box liquidity constraints inflation and the asymmetric effects of interest rate policy in this paper we examine the effects of unanticipated changes in interest rates on consumers expenditure in a model in which capital markets are imperfect we show that where constraints exist on the amounts individuals can borrow individuals may rationally choose to borrow up to the limits of such constraints over part of their lifetimes such liquidity constrained individuals in general have a higher marginal propensity to consume out of changes in current income than is the case with liquidity unconstrained individuals changes in interest rates which have the effect of redistributing income between liquidity constrained monetary debtors and liquidity unconstrained creditors will thus have a net effect on aggregate consumption we further show that this effect operates asymmetrically in the sense that an increase in interest rates will have a larger net impact than a fall formally we examine the impact of a change in the interest rate which we assume exogenous on the behaviour of an individual consumer the analysis is thus independent of the source of the interest rate shock 2 but we believe an important application of the model concerns the transmission mechanism through which monetary policy operates in this paper we do not consider the relationship between the supply of money and interest rates but simnply follow standard economic theory in assuming that monetary policy operates through the impact of interest rates on expenditure it is the mechanism linking interest rate changes to expenditure that has proved hard to identify and it is in this respect that our analysis may be relevant in suggesting a process through which interest rates can affect expenditure which appears to have been neglected hitherto the model provides a possible channel of transmission of monetary policy different from those usually considered 3 in so doing the model may offer some insight into the transmission processes within the monetarist black box and indeed suggests that the efficacy of monetary policy may in part depend on the existence of capital market imperfections

cluster sample methods in applied econometrics inference methods that recognize the clustering of individual observations have been available for more than 25 years brent moulton 1990 caught the attention of economists when he demonstrated the serious biases that can result in estimating the effects of aggregate explanatory variables on individual specific response variables the source of the downward bias in the usual ordinary least squares ols standard errors is the presence of an unobserved state level effect in the error term more recently john pepper 2002 showed how accounting for multi level clustering can have dramatic effects on t statistics while adjusting for clustering is much more common than it was 10 years ago inference methods robust to cluster correlation are not used routinely across all relevant settings in this paper i provide an overview of applications of cluster sample methods both to cluster samples and to panel data sets

moving costs and the dynamics of housing demand it is well established that moving costs make households adjust their housing consumption far less frequently than they would have done in a world in which relocation was costless this paper adds

monopolistic competition and a firm s product range abstract a model is presented which assumes that firms maximise profits with respect to both the number of varieties supplied as well as the output level of a typical variety the incentive to produce more than one variety comes from a cost advantage due to inter product economies it is found that in a long run free entry equilibrium the industry is characterised by too few product varieties and each variety is over supplied compared to the welfare maximum for any conjectural variation elasticity the former result also holds if the number of firms is held fixed

networks in the modern economy mexican migrants in the u s labor market this paper attempts to identify job networks among mexican migrants in the u s labor market the empirical analysis uses data on migration patterns and labor market outcomes based on a sample of individuals belonging to multiple origin communities in mexico over a long period of time each community s network is measured by the proportion of the sampled individuals who are located at the destination the united states in any year we verify that the same individual is more likely to be employed and to hold a higher paying nonagricultural job when his network is exogenously larger by including individual fixed effects in the employment and occupation regressions and by using rainfall in the origin community as an instrument for the size of the network at the destination

the labour market impact of immigration in the first part of this paper we present a stylized model of the labour market impact of immigra tion we then discuss mechanisms through which an economy can adjust to immigration changes in factor prices output mix and production technology in the second part we explain the problems of empirically estimating how immigration affects labour market outcomes of the resident population and review some strategies to address these we then summarize some recent empirical studies for the uk and other countries we conclude with an outlook on what we believe are important avenues for future research

residential mobility and the housing market in a two sector neoclassical growth model the impact of residential mobility and competitive housing markets on long run growth is examined using a two sector general equilibrium overlapping generations model in continuous time there is an infinity of agents with finite lives who adjust their housing consumption by moving which is costly we explore the model s steady state properties first with a free housing market then under rent control when the market clears through restrictions on the frequency of moves rent controls do not just reduce welfare they may increase the steadystate capital labor ratio

estimating equilibrium housing demand for stayers abstract this study models demand by owner occupied housing stayers most consumers do not move routinely in response to small changes in income or housing price so the own rent and move stay decisions are modeled as multiperiod optimization in the presence of transaction costs the empirical section uses the american housing survey to provide a panel of household stayers for a metropolitan area results indicate that income and value rent measures in different years have separable and significant impacts on housing demand estimated conditional income elasticities are between 0 40 and 0 45