housing market responses to transaction taxes evidence from notches and stimulus in the uk we investigate housing market responses to transaction taxes using administrative data on all property transactions in the u k from 2004 to 2012 combined with quasi experimental variation from tax notches and tax stimulus we present two main findings first transaction taxes are highly distortionary across a range of margins causing large distortions to the price volume and timing of property transactions secondly temporary transaction tax cuts are an enormously effective form of fiscal stimulus a temporary elimination of a 1 transaction tax increased housing market activity by 20 in the short run due to both timing and extensive responses and less than half of the stimulus effect was reversed after the tax was reintroduced due to re timing because of the complementarities between moving house and consumer spending these stimulus effects translate into extra spending per dollar of tax cut equal to about 1 we interpret our empirical findings in the context of a housing model with downpayment constraints in which leverage amplifies the effects of transaction taxes

energy efficiency investments in the context of split incentives among french households the residential sector offers considerable potential for reducing energy use and greenhouse gas ghg emissions particularly through energy efficient renovations the objective of this study is twofold first i aim to provide initial empirical evidence of the extent to which split incentives between landlords and tenants may lead to underinvestment second i investigate the influence of tax credits and energy burdens on energy efficiency expenditures given the complexity of studying the decision to invest in energy saving renovations i use a bivariate tobit model to compare decisions about energy efficient works and repair works even when the renovation expenditures seem quite similar the analysis shows that tenants are doubly penalized they have high energy expenditures due to energy inefficient building characteristics and because they are poorer than homeowners they are unable to invest in energy saving systems the results also confirm that tax credits are ineffective in the split incentives context in terms of public policy the government should focus on low income tenants and mandatory measures such as minimum standards seem appropriate financial support from a third party financer also might be a solution

the effect of experience on security analyst underreaction abstract we examine if analysts more fully incorporate prior earnings and returns information in their current quarter forecasts as their experience following a firm increases we measure analyst firm specific forecasting experience as the number of prior quarters for which the analyst has issued an earnings forecast for the firm we find that analysts underreact to prior earnings information less as their experience increases suggesting one reason why analysts become more accurate with experience

time aggregation and the distributional shape of unemployment duration this paper reports empirical evidence on the sensitivity of unemployment duration regression estimates to distributional assumptions and to time aggregation the results indicate that parameter estimates are robust to distributional assumptions while estimates of duration dependence are not time aggregation does not seem to have drastic effects on the estimates in a simple parametric model like the weibull but can produce dramatic changes in the more complicated extended generalized gamma model semiparametric models for grouped data produce stable estimates and perform much better than continuous time models in terms of significance at high levels of time aggregation

gender differences in overeducation a test of the theory of differential overqualification there is little question that substantial labormarket differences exist between men and women among the most researched difference is the male female wage gap many different theories are used to explain why men earn more than women one possible reason is based on the limited geographic mobility of married women robert frank 1978 family mobility is a joint decision in which the needs of the husband and wife are balanced to maximize family welfare job motivated relocations are generally made to benefit the primary earner in the family this leads to a constrained job search for the secondary earner as he or she must search for a job in a limited geographic area since the husband is still the primary wage earner in many families the job search of the wife may suffer individuals who are tied to a certain area are labeled tied stayers while secondary earners who move for the benefit of the family are labeled tied movers jacob mincer 1978 the wages of a tied stayer or tied mover may not be substantially lower if the family lives in or moves to a large city if a large labor market has more vacancies the wife may locate a wage offer near the maximum she would find with a nationwide job search however being a tied stayer or tied mover can lower the wife s wage if the family lives in or moves to a small community a small labor market will reduce the likelihood of her finding a job that utilizes her skills as a result she may accept a job for which she is overqualified and thus earn a lower wage this hypothesized relationship between the likelihood of being overqualified and smsa size is termed differential overqualification frank 1978 and haim ofek and yesook merrill 1994 provide support for the theory of differential overqualification by finding that the malefemale wage gap is greater in smaller smsa s while the results are consistent with the existence of differential overqualification they may also result from other situations as well firms in small labor markets may use their monopsony power to keep wages down 2 local demand shocks are found to be a major source of wage variation both across and within local labor markets robert topel 1986 since large labor markets are generally more diversified a demand shock can have a substantial impact on immobile workers in small labor markets another reason for examining differential overqualification involves the assumption that there are more vacancies in large labor markets while there is little doubt that more vacancies exist in large labor markets there are also likely to be more people searching for jobs in large labor markets if the greater number of vacancies is offset by the larger number of searchers it is unclear whether women will be more likely to be overqualified in small labor markets instead of relying on wages to determine if differential overqualification exists we consider an explicit form of overqualification based on education

an economic analysis of the homeownership decision analysts of the homeownership decision have traditionally asserted that owning makes much greater sense than renting 16 p 359 for families in high tax brackets however empirical studies of homeownership propensities indicate that not all high income families own nor do all low income families rent for example li 8 p 1081 notes that a large number of studies find that a variety of variables such as family size age of the head and race are generally found to be determinants of homeownership even when income or the marginal tax bracket are held constant previous attempts to explain why the marginal tax bracket is not a sufficient statistic for homeownership argue that people differ in their preferences for homeownership either because owning and renting are not perfect substitutes in consumption see for example 13 141 or because of differences in liquidity mobility ability at home repairs and home management and simply peculiar circumstances 4 p 14 this paper develops a general model of the homeownership decision and explores two alternative explanations of why the marginal tax bracket is not a sufficient statistic this is accomplished by incorporating both transaction costs and housing market quality sorting into the model section ii derives a simple parametric statement of the homeownership decision the third section examines the special case which yields a homeownership decision rule which is comparable to existing models an alternative special case is presented in the fourth section which incorporates consumer sorting across quality markets it is demonstrated that the housing market may adjust until

did migration in the 1980s narrow the north south divide this paper integrates empirical analysis of the decision to migrate from a region with that of destination choice thus we are able to study how net migration and not just gross outflows are influenced by regional labour market circumstances the results suggest that relative regional wages rates but not relative unemployment and vacancy rates are effective in reallocating labour from regions experiencing adverse demand shocks we find little evidence that manual labour is migrating from those regions with relatively high manual unemployment but that migration plays a more conventional role in the regional adjustment process for non manual workers

explaining instability in the stability and growth pact the contribution of member state power and euroskepticism to the euro crisis the stability and growth pact clearly failed to prevent the euro crisis we contend that the failure was due largely to the ability of the member states to undermine the pact s operation the european commission served as a watchdog to monitor fiscal performance the member states themselves however collectively had the ability to change the content of the reports for individual states we confirm the expectation that powerful member states had the most success in undermining the role of the commission perhaps more surprisingly we find supporting evidence for our argument that governments with euroskeptic populations behind them were also more successful in weakening the commission s warnings these results have broader theoretical implications concerning which mechanisms explain country specific outcomes under a shared rule another contribution is the creation of a new data set of european commission assessments of member state economic programs and council of minister revisions

transaction taxes in a search model of the housing market abstract we incorporate transaction taxes in a housing market search model with endogeneous house prices and show that these taxes unambiguously create lock in effects that reduce welfare the lock in effects are larger at low vacancy rates seller taxes raise prices and buyer taxes lower them and this asymmetry helps to explain the differences in the welfare effects of the two taxes lock in effects are smaller with a buyer tax since the price reduction dampens the negative effect on search effort caused by the tax

selective hedging information asymmetry and futures prices evidence from hedging practices suggests that firms will hedge only if they expect that unfavorable events will arise in markets with a significant degree of information asymmetry in which hedgers are oligopolists with superior knowledge concerning supply and demand such as oil and gas futures we contend that these companies will selectively hedge price movements causing sharp price adjustments upon resolution of information asymmetry using aggregate analysts surprise as a proxy for the degree of information asymmetry we show that positive aggregate surprises lead to a price decline for futures which indicates that these firms unload their futures when the outlook is favorable

a positive model of earnings forecasts top down versus bottom up this article analyzes the behavior of two groups of corporate earnings forecasters analysts who follow individual company fortunes and market strategists who predict earnings for various company aggregates using data for two market indices the s p 500 and the dow jones industrial average we document that bottom up forecasts are systematically more optimistic than top down forecasts made by strategists this difference is not driven by the difference in the forecast target this finding may be explained by the incentives that analysts face and or by cognitive bias

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

following the leader a study of individual analysts earnings forecasts abstract this paper develops and tests procedures for ranking the performance of security analysts based on the timeliness of their earnings forecasts the abnormal trading volume associated with these forecasts and forecast accuracy our framework provides an objective assessment of analyst quality that differs from the standard approach which uses survey evidence to rate analysts we find that lead analysts identified by our measure of forecast timeliness have a greater impact on stock prices than follower analysts further we find that performance rankings based on forecast timeliness are more informative than rankings based on abnormal trading volume and forecast accuracy we also present evidence that analyst s forecast revisions are correlated with recent stock price performance suggesting that security analysts use publicly available information to revise their earnings forecasts

housing tenure and labor market impacts the search goes on abstract we develop two search theoretic models emphasizing firm entry to examine the oswald hypothesis the idea that homeownership is linked to inferior labor market outcomes and compare their predictions to three extant theories the five models have surprisingly different predictions about the labor market at both the aggregate and micro levels using a suitable instrumental variable strategy we estimate both micro and aggregate level regression models of wages and unemployment and compare the estimates to those predictions we find that while homeowners are less likely to be unemployed they also have lower wages all else equal compared to renters in addition higher regional homeownership rates are associated with a greater probability of individual worker unemployment and higher wages the outcome of a horserace between our new search theoretic models is mixed the wage posting model predicts observed unemployment impacts while a bargaining variant does a better job explaining observed wages and aggregate labor market outcomes overall we conclude that firm behavior is important for understanding the labor market impacts of homeownership because this is the case regional homeownership rates are not good instruments for individual tenure choice in empirical work and while individual homeowners may have inferior labor market outcomes as compared to renters from the viewpoint of society higher homeownership rates may result in greater job creation and overall production among other benefits

migration and foreign aid when it comes to linkages between migration and the global allocation of foreign development assistance the size of the immigrant population from a recipient country residing in a donor country is an important determinant of dyadic aid commitments two complementary hypotheses probe this relationship first donors use foreign aid to achieve their broader immigration goals targeting migrant sending areas to increase development and decrease the demand for entry into the donor country second migrants already residing in the donor country mobilize to lobby for additional aid for their homeland empirical tests on a large sample of country pairs made up of twenty two donors and more than 150 recipients over the period 1993 to 2008 show robust support for these hypotheses

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

analyzing the analysts career concerns and biased earnings forecasts this paper examines the career concerns of security analysts we relate long histories of their earnings forecasts to job separations we find that relatively accurate past forecasts lead to favorable career outcomes such as remaining at or moving up to a high status large prestigious brokerage house controlling for accuracy optimistic forecasts relative to the consensus increase the chances of favorable job separations job separations depend much less on accuracy for analysts who cover stocks that are underwritten by their brokerage houses such analysts are also much more likely to be rewarded for optimistic forecasts than other analysts furthermore job separations were much less sensitive to accuracy and somewhat more sensitive to optimism during the stock market mania of the late 1990s these findings suggest that the well documented analyst forecast optimism bias is likely due to incentives to promote stocks

housing tenure job mobility and unemployment in the uk this article examines the effects of housing tenure on individuals job and unemployment durations in the uk we examine job to job transitions and transitions from unemployment we take account of whether or not the arrival of a job was synonymous with a non local residential move tenure endogeneity and unobserved heterogeneity we find that home ownership is a constraint for the employed and public renting is more of a constraint for the unemployed employed home owners have a lower transition into employment with a distant move and unemployed public renters have a lower probability of gaining employment in more distant labour markets the nature of housing tenure has long been blamed for discouraging spatial mobility and thereby having an impact upon labour market outcomes in the early 1980s in the uk the main culprit was deemed to be local authority housing mccormick 1983 hughes and mccormick 1981 1987 examined the longer distance migration rates of those in local authority housing and found that they had lower longer distance migration rates compared to both owner occupiers and those in private rented accommodation although the latest research suggests that these effects may have lessened hughes and mccormick 2000 the relative immobility of public renters may stem from public housing rents being below market rates the restricted transferability within public housing high waiting lists and security of tenure public renters are then locked in and face higher costs if they accept a job that involves a long distance move more recently the blame has been pinned on private home ownership oswald 1996 1999 in a series of papers using macro time series and cross section data for oecd countries and regions within a number of those countries has argued that home own ership causes unemployment one explanation revolves around the reduced mobility of home owners relative to private renters owing to the costs of buying and selling homes subsequent and arguably more sophisticated micro econometric tests have placed doubt upon the alleged relationship coulson and fisher 2002 for the us find that unemployment duration is shorter for home owners relative to renters though neither is unobserved heterogeneity nor the endogenous nature of housing tenure accounted for van leuvensteijn and koning 2004 do account for the endogeneity of home ownership and find using dutch data that employed home owners are less likely to become unemployed relative to employed renters more recently munch et al 2006a using danish data find shorter unemployment spells amongst home owners compared to renters after controlling for the endogeneity of home ownership

benchmarking across borders electoral accountability and the necessity of comparison when the economy in a single country contracts voters often punish the government when many economies contract voters turn against their governments much less frequently this suggests that the international context matters for the domestic vote yet most research on electoral accountability assumes that voters treat their national economies as autarkic we decompose two key economic aggregates growth in real gross domestic product and unemployment into their international and domestic components and demonstrate that voters hold incumbents more electorally accountable for the domestic than for the international component of growth voters in a wide variety of democracies benchmark national economic growth against that abroad punishing rewarding incumbents for national outcomes that underperform outperform an international comparison tests suggest that this effect arises not from highly informed voters making direct comparisons but from pre benchmarking by the media when reporting on the economy the effect of benchmarked growth exceeds that of aggregate national growth by up to a factor of two and outstrips the international component of growth by an even larger margin implying that previous research may have underestimated the strength of the economy on the vote

the forecast accuracy of individual analysts evidence of systematic optimism and pessimism o brien 1990 examines the annual earnings forecast accuracy of individual analysts reporting to the institutional brokers estimate system ibes of lynch jones and ryan during july 1975 september 1982 using a regression model which adjusts for average firm and year effects o brien finds no evidence of differential forecast accuracy comparing individual analysts earnings forecasts to median consensus forecasts during 1983 86 we also find no statistically significant evidence of differential analyst forecast accuracy our result however does not mean that one analyst s forecasts are much like another s we find that analysts are persistently optimistic or pessimistic relative to consensus forecasts we examine this persistent behavior and its effect on measures of forecast accuracy over a sample

the incidence of transaction taxes evidence from a stamp duty holiday this paper exploits the 2008 09 stamp duty holiday in the united kingdom to estimate the incidence of a transaction tax on housing the average reduction in the after tax sale price is found to be around 900 against the backdrop of an average tax reduction of about 1500 while we estimate an increase in transactions of properties affected by the tax holiday around 8 most of this effect appears to have reversed rapidly after the policy was withdrawn suggesting mostly a short term retiming of transactions the findings are calibrated to a simple bargaining model to show they imply that about sixty percent of the surplus generated by the holiday accrued to buyers

do council housing policies reduce migration between regions data from the 1973 general household survey of great britain are used to examine whether the council house system which currently provides a dwelling for one british family in every three tends to discourage long distance migration controls are introduced for various socioeconomic variables and the importance of occupation sector of employment age and education in explaining migration is discussed comparisons are also made between local movements and long distance migration the findings indicate that over longer distances council tenants have much lower migration rates than owner occupiers

does the welfare state affect individual attitudes toward immigrants evidence across countries abstract this paper analyzes welfare state determinants of individual attitudes toward immigrants within and across countries and their interaction with labor market drivers of preferences we consider two mechanisms through which a redistributive welfare system might adjust as a result of immigration under the first model immigration has a larger impact on high income individuals while under the second one low income individuals are those most affected individual attitudes are consistent with the first welfare state model and with labor market determinants in countries where immigration is unskilled income is negatively correlated with pro immigration preferences while skill is positively correlated with them these relationships are reversed in economies characterized by skilled migration

sovereign debt migration pressure and government survival as soon as the sovereign debt crisis began it was widely understood that germany s response would dictate its ultimate resolution whereas the initial round of bailouts stabilized markets and pres

the relative and complementary performance of analyst and security price based measures of expected earnings abstract this paper evaluates the relative performance of ibes consensus financial analyst forecasts and forecasts based upon the anticipatory behaviour of security prices according to two criteria a the accuracy of earnings growth predictions and b the contemporaneous association between unexpected earnings and security returns during the forecast year results are presented for firms in differing size groups measured here by market capitalization the results indicate that neither forecast source is superior to the other in terms of either criterion there is however significant complementarity of financial analyst and price based forecasts

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

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

fixed rate mortgages labor markets and efficiency the paper studies the effects of mortgage choices between fixed rate mortgages frms and adjustable rate mortgages arms on labor market efficiency frms provide insurance for risk averse borrowers in the sense that they pay the same rate over time and are not subject to uncertain spot market rates frms however discourage borrowers from moving to other regions despite better employment opportunities as they terminate the frm contracts in order to move and their new loan interests may be higher as frm borrowers do not move to other regions due to the interest lock ins entrepreneurs in other regions lose the potential surpluses from productive matches that would have occurred between borrowers workers and entrepreneurs borrowers ignore this negative externality they impose on the entrepreneurs when choosing their mortgages and too many borrowers choose frms relative to the efficient level if frms are eliminated and arm insurance that protects arm borrowers against uncertain adjustable interest rates is created it will improve efficiency the paper also assesses quantitatively the welfare effects of eliminating frms and providing arm insurance

houses and or jobs ownership and the labour market in belgian districts isebaert d heylen f and smolders c houses and or jobs ownership and the labour market in belgian districts regional studies a j oswald argues that high rates of homeownership may imply inferior labour market outcomes using a panel of forty two belgian districts since the 1970s and accounting for other key determinants of employment this paper confirms the oswald hypothesis a 1 percentage point rise in the rate of ownership in a district implies a statistically significant fall in the employment rate by about 0 35 percentage points this negative effect declines in the fraction of the high skilled in a district the results underscore the importance of controlling for unobserved district specific fixed effects and common time effects and of appropriately dealing with endogeneity

failing forward the euro crisis and the incomplete nature of european integration the european union eu project of combining a single market with a common currency was incomplete from its inception this article shows that the incompleteness of the governance architecture of e

the effect of home ownership on labor mobility in the netherlands abstract in various macro studies home ownership is found to hamper job mobility and to increase unemployment this paper addresses similar issues but uses a micro econometric framework where both individual job mobility as well as the probability of being homeowner are modeled simultaneously using a panel of individual labor and housing market histories for the period 1989 1998 we estimate a nonparametric model of both job durations and home ownership we do not find homeowners to change less from jobs than tenants instead our results suggest that the housing decision is driven by job commitment and not the reverse we do however find homeowners to be less vulnerable to unemployment

the mortgage interest deduction and its impact on homeownership decisions abstract this paper examines the impact of the combined u s state and federal mortgage interest deduction mid on homeownership attainment using data from 1984 to 2007 and exploiting variation in the subsidy arising from changes in the mid within and across states over time we test whether capitalization of the mid into house prices offsets the positive effect on homeownership we find that the mid boosts homeownership attainment only of higher income households in less tightly regulated housing markets in more restrictive places an adverse effect exists the mid is an ineffective policy to promote homeownership and improve social welfare

using notches to uncover optimization frictions and structural elasticities theory and evidence from pakistan we develop a framework for nonparametrically identifying optimization frictions and structural elasticities using notches discontinuities in the choice sets of agents introduced by tax and transfer policies notches create excess bunching on the low tax side and missing mass on the high tax side of a cutoff and they are often associated with a region of strictly dominated choice that would have zero mass in a frictionless world by combining excess bunching observed response attenuated by frictions with missing mass in the dominated region frictions it is possible to uncover the structural elasticity that would govern behavior in the absence of frictions and arguably capture long run behavior we apply our framework to tax notches in pakistan using rich administrative data while observed bunching is large and sharp optimization frictions are also very large as the majority of taxpayers in dominated ranges are unresponsive to tax incentives the combination of large observed bunching and large frictions implies that the frictionless behavioral response to notches is extremely large but the underlying structural elasticity driving this response is nevertheless modest this highlights the inefficiency of notches by creating extremely strong price distortions they induce large behavioral responses even when structural elasticities are small

transaction costs capital gains taxes and housing demand abstract the paper considers the effect of transaction costs particularly in the form of capital gains taxes on the aggregate demand for owner occupied housing the framework is an overlapping generations model where consumers can avoid the transaction costs taxes by keeping the same house for both periods of life the first part of the paper analyzes the consumer s choice problem it distinguishes between costs that are fixed irrespective of the size of the house bought or sold and costs such as capital gains taxes that are related to the house value it is shown that higher transaction costs have lock in effects inducing consumers to keep the same house for both periods also it is found that under a wide variety of circumstances the amount of housing demanded will increase as the household is being locked in finally the paper looks at the effects on aggregate demand from an increase in capital gains taxes it is shown that an increased rate of taxation decreases demand for low tax rates but for high tax rates when lock in effects become important one generally gets the opposite effect high tax rates tend to increase housing demand

home ownership unemployed s job search behavior and post unemployment outcomes using detailed german survey data we show that home owners freshly entering unemployment are less geographically mobile than their renting counterparts however they do not compensate their restricted mobility by more intensive or different search behavior and do not face negative effects on labor market outcomes one year later

the misallocation of housing under rent control the standard analysis of price controls assumes that goods are efficiently allocated even when there are shortages but if shortages mean that goods are randomly allocated across the consumers that want them the welfare costs from misallocation may be greater than the undersupply costs we develop a framework to empirically test for misallocation the methodology compares consumption patterns for demographic subgroups in rent controlled and free market places we find that in new york city which is rent controlled an economically and statistically significant fraction of apartments appears to be misallocated across demographic subgroups jel c25 d12 d61 r20

owner occupied housing capital gains and the tax reform act of 1986 abstract previous homeowners face a nonlinear kinked budget constraint because they can avoid paying tax on the capital gain from the sale of their home if they purchase a more expensive home when they move simulation results suggest that the tax reform act of 1986 tra86 has enhanced the importance of the capital gains kink by raising the after tax cost of housing through lower marginal income tax rates while increasing the tax rate on capital gains as a result a reduction in the capital gains tax rate would reduce housing demand as some families currently at the kink would buy a less expensive home our findings also indicate that the level of excess burden increases with the capital gains tax rate but that tra86 reduced the size of implicit price subsidies received by owner occupiers and related deadweight loss by roughly one half however the distribution of benefits and deadweight loss from the favorable tax treatment of housing remains heavily weighted to higher income families in addition the size of the implicit housing subsidy and related distortion is sensitive to the level of mortgage rates

comparing the point predictions and subjective probability distributions of professional forecasters we use data from the survey of professional forecasters spf to compare point predictions of gross domestic product gdp growth and inflation with the subjective probability distributions held by forecasters we find that most spf point predictions are quite close to the central tendencies of forecasters subjective distributions tend to be asymmetric with spf forecasters tending to report point predictions that give a more favorable view of the economy than do their subjective means medians modes

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

do security analysts improve their performance with experience we investigate if sell side security analysts generate more accurate quarterly earnings forecasts and more profitable stock recommendations as their experience following a specific firm increases we measure firmspecific experience as the number of prior quarters for which the analyst has issued an earnings forecast for the firm if analysts improve their forecasting performance with repetition as suggested by the learning by doing lbd model an analyst s earnings forecasts will become more accurate with experience prior empirical work provides mixed evidence on whether analysts exhibit individual forecasting performance differences e g butler and

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

predicting forecast errors through joint observation of earnings and revenue forecasts abstract we propose a simple method to infer the forecast error associated with quarterly estimates of earnings and revenue before the firm announces realized earnings and revenue the method uses estimates of the profit margin implied by an analyst s forecasts of both earnings and revenue to identify forecasts that are likely to be optimistic or pessimistic the ability to anticipate forecast error permits a trading strategy that exploits the average market reaction following positive and negative earnings and revenue surprises

transfer taxes and household mobility distortion on the housing or labor market we estimate the effect of the uk stamp duty land tax sdlt a transfer tax on the purchase price of property or land on different types of household mobility using micro data exploiting a discontinuity in the tax schedule we isolate the impact of the tax from other determinants of mobility we compare homeowners with self assessed house values on either sides of a cut off value where the tax rate jumps from 1 to 3 percent we find that a higher sdlt has a strong negative impact on housing related and short distance moves but does not adversely affect job induced or long distance mobility overall our results suggest that transfer taxes may mainly distort housing rather than labor markets

chronic bias in earnings forecasts whatever the source or explanation of bias in forecasts of company earnings if such bias persists it is potentially discoverable and exploitable by investors this research addresses 1 whether characterizing forecasts as if they were a homogeneous group with respect to bias is accurate or useful and 2 whether a long term record of forecast errors contains information useful in predicting subsequent errors we found that earnings forecasts are heterogeneous with respect to direction and degree of bias we also found evidence of extremes in optimism and pessimism and that extreme errors tend to persist in the same direction which suggests certain potentially profitable trading strategies

career migration self selection and the earnings of married men and women in the netherlands 1981 93 the relationship between career migration and earnings is studied for married men and women in the netherlands the hourly wages of married men and women who made a recent long distance move are found to be higher than those of married men and women who did not move or who moved only over a small distance this earning difference between migrants and non migrants seems to be due completely to the fact that the migrants are a favorable self selected group both with regard to their measured characteristics and with regard to their unmeasured characteristics if this favorable self selection is taken into account the male and female migrants turn out to earn significantly less than their non migrating counterparts for the males this finding suggests that before the move they were in relatively unfavorable labor market situations compared with the non migrants with the same measured and unmeasured characteristics for the females the negative effect of migration merely indicates that most long distance moves are still made for the career of their husband authors

life cycle and housing decisions a comparison by age cohorts the use of decomposition methodologies when the involved variable is continuous is not common in the literature this article uses this methodology together with other decomposition methodologies to explain how age can influence on housing decisions in particular we use spanish data to study whether the age of the householder plays a significant role in influencing household decisions with respect to housing tenure and demand from the comparison of housing decisions between different groups of households classified by the age of the householders we conclude that age plays the primary role in explaining the gap between households regarding tenure choice while it shares its importance with other covariates of the model in the housing demand decision

a european cross country comparison of the impact of homeownership and transaction costs on job tenure de graaff t and van leuvensteijn m a european cross country comparison of the impact of homeownership and transaction costs on job tenure regional studies this paper looks at the impacts across european countries of homeownership and transaction costs on job tenure the analysis is based on a representative household sample of fourteen european countries covering the period 1994 2001 these data are merged with country specific transaction tax data and aggregate homeownership rates similar to previous microeconomic studies the results indicate that homeownership reduces job mobility as well as the probability of becoming unemployed or economically inactive it is found however that this effect is severely mitigated by two factors first it decreases when aggregate homeownership rates are higher thus homeowners have larger job tenures but more so in countries with low homeownership rates second transaction costs on the housing market are positively associated with the probability of becoming

home ownership job duration and wages we investigate the impact of home ownership on individual job mobility and wages in denmark we find that home ownership has a negative impact on job to job mobility both in terms of transition into new local jobs and new jobs outside the local labor market in addition there is a clear negative effect of home ownership on the unemployment risk and a positive impact on wages these results are robust to different strategies for correcting for the possible endogeneity of the home owner variable

inefficiency in analysts earnings forecasts systematic misreaction or systematic optimism a rational analysis of analyst behavior predicts that analysts immediately and without bias incorporate information into their forecasts several studies document analysts tendency to systematically underreact to information underreaction is inconsistent with rationality other studies indicate that analysts systematically overreact to new information or that they are systematically optimistic this study discriminates between these three hypotheses by examining the interaction between the nature of information and the type of reaction by analysts the evidence indicates that analysts underreact to negative information but overreact to positive information these results are consistent with systematic optimism in response to information the literature on financial analysts defines the phrase forecast inefficiency to mean forecasts that fail to accurately incorporate new information on a timely basis and or that are biased these forecasts have also been described as irrational or suboptimal prior studies report inefficiency in analysts forecasts finding that they are upwardly biased and inaccurately reflect available information some studies conclude from this that analysts underreact to information other studies conclude that analysts overreact if markets treat analysts forecasts as both rational and statistically optimal then inefficient forecasts could have important implications for the efficiency of pricing in securities markets in this paper we reexamine the apparent tendency of analysts to misinterpret earnings information the intent of this study is to discriminate between three hypotheses 1 that analysts systematically underreact to new earnings information 2 that analysts systematically overreact to new earnings information and 3 that analysts are systematically optimistic in their reactions for hypotheses 1 and 2 the direction of the misinterpretation i e underor overreaction is independent of the nature of the information received in contrast hypothesis 3 predicts that analysts are optimistic in interpreting

catalytic finance when does it work in a model of debt crisis caused partly by creditor coordination failure we show that bailouts that reduce ex post inefficiency will sometimes enhance the incentives for governments to take costly adjustment effort this model helps us understand a debate about the role of the imf in catalyzing lending to developing countries

defying the law of gravity the political economy of international migration bilateral flows of international migrants exhibit tremendous variance both across destination countries and over time to explain this variance studies of international migration tend to focus on economic determinants such as income differentials or on social conditions such as the presence of coethnics in certain destination countries the authors argue that migration is driven not solely by economic or social determinants rather the political environment across destinations plays a substantively large role in influencing bilateral migration flows they test the importance of the political environment citizenship rights and the prominence of right wing parties using data on migration flows from 178 origin countries into 18 destination countries over the period 1980 2006 they find even after controlling for a variety of economic social policy and international variables that variation in political environments across time and destination plays a key role in observed patterns of international migration

the changing geography of privately rented housing in england and wales since the beginning of the 1990s growth in privately rented housing in england and wales began to reverse a prolonged period of decline in high cost housing areas the sector is increasingly acting as a stop gap for those seeking to enter owner occupation while in less economically buoyant areas it is accommodating households who would previously have been more likely to live in social housing this paper reveals that some of the strongest proportional growth in the sector has been in less prosperous areas where it has traditionally been under represented and that the sector is housing an increasing proportion of economically inactive tenants however in key cities particularly london the sector s growth has been influenced by increasing numbers of mobile workers and students more recently growth has been influenced by buy to let mortgages borrowing constraints and homeowners unable to sell