winners and losers in housing markets this paper is a quantitatively oriented theoretical study into the interaction between housing prices aggregate production and household behaviour over a lifetime we develop a life cycle model of a production economy in which land and capital are used to build residential and commercial structures we find that in an economy where the share of land in the value of structures is large housing prices react more to an exogenous change in expected productivity or the world interest rate causing large redistribution effects between net buyers and net sellers of houses changing the financing constraint however has limited effects on housing prices

calculating and using second order accurate solutions of discrete time dynamic equilibrium models we describe an algorithm for calculating second order approximations to the solutions to nonlinear stochastic rational expectations models the paper also explains methods for using such an approximate solution to generate forecasts simulated time paths for the model and evaluations of expected welfare differences across different versions of a model the paper gives conditions for local validity of the approximation that allow for disturbance distributions with unbounded support and allow for non stationarity of the solution process

the role of demand in land re development abstract vacant previously developed land in cities can generate negative externalities on surrounding areas and is often the target of policies to promote re development this paper provides estimates of the price sensitivity of land re development a crucial parameter for the success of these policies my estimates measure how prices affect long run conversion of unused or underused previously developed land in england the empirical strategy uses school test scores and admission district boundaries in a boundary discontinuity design to generate variation in housing demand that is orthogonal to re development costs results show that the probability of re development is effectively sensitive to housing prices estimates indicate that a 1 increase in prices leads to a 0 07 percentage point reduction in the fraction of hectares containing brownfield land price differences or substantial subsidies could lead to a significant amount of re development in the long run this is confirmed by observed land use changes between 2007 and 2011 being disproportionately concentrated in high price areas

distinctively different a new approach to valuing architectural amenities we propose a method to estimate the capitalized value of the architectural design quality of a neighbourhood our economic design premium is identified by spatially differentiating property prices and design quality within neighbourhoods and comparing the differences across neighbourhoods we apply our method to 47 conservation area neighbourhoods in england in which we analyse around 7900 property transactions and interview more than 500 residents we find a capitalization effect of about 25 4 38 7k associated with a one step increase on a five step scale ranging from not at all distinctive to very distinctive our results suggest that this effect is at least partially driven by an architectural externality

spatial competition among multi store firms abstract the paper analyzes spatial cournot competition among multi store firms it demonstrates that the complex problem of determining equilibrium store locations for competing multi store firms can be approximated by a simple one in which each firm behaves as a multi store monopolist in choosing its store locations a firm s equilibrium store locations often coincide with its monopoly locations and in general converge to its monopoly locations as the demand grows larger when the firms have an equal number of stores the stores belonging to competing firms agglomerate at discrete points that coincide with each firm s monopoly store locations

research on the motion picture industry state of the art and new directions off the beaten track away from theatrical release the motion picture industry has been subject of extensive academic research over the last decades however most scholars focused on the u s theatrical motion picture market the number of research activities regarding even more profitable release windows such as home video or television has been substantially lower although international distribution is essential for a motion picture project to break even there has been little significant re search on most other markets this paper aims at summarizing the current state of research on the motion picture industry particularly from marketing and management perspective revealing research gaps and proposing recommendations for future research endeavors therefore a three pillar scheme is developed to systemize previous findings research on intraorganizational decision making contractual relationships between national stakeholders and international market competition are differentiated since these insights are mainly derived from u s theatrical exhibition they can hardly be applied to other markets and exhibition windows thus potential research areas are identified to expand knowledge of posttheatrical and international markets

the impact of supply constraints on house prices in england we test the theoretical prediction that house prices respond more strongly to changes in local earnings in places with tight supply constraints using a unique panel dataset of 353 local planning authorities in england between 1974 and 2008 exploiting exogenous variation from a policy reform vote shares and historical density to identify the endogenous constraints measures we find that regulatory constraints have a substantive positive impact on the house price earnings elasticity the effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas and uneven topography has a quantitatively less meaningful impact

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

an empirical study of uniform and differential pricing in the movie theatrical market abstractmovies vary widely in appeal star power cost and other elements and therefore each might be expected to charge a different price multiplexes however typically charge the same price for all movies except for such premium formats as 3d a choice that has puzzled managers and researchers because of data limitations minimal empirical work has directly addressed this issue in hong kong however prices vary both within and across multiplexes using daily ticket prices and attendance by theater and movie the authors empirically examine the potential gains from differentiated movie specific pricing as well as the increasingly common two tier 2d 3d uniform pricing as compared with a full uniform pricing strategy in which a theater charges the same price for all its movies their results show that differential pricing leads to higher profits than the two tier uniform pricing practice but that the improvement is limited in contrast the gains are substantial when compared with the full uni

why do households without children support local public schools linking house price capitalization to school spending while residents receive similar benefits from many local government programs only about one third of all households have children in public schools we argue that capitalization of school spending into house prices can encourage even childless residents to support spending on schools we identify a proxy for the extent of capitalization the supply of land available for new development and show that towns in massachusetts with little undeveloped land have larger changes in house prices in response to a plausibly exogenous spending shock towns with little available land also spend more on schools we extend these results using data from school districts in 46 states showing that per pupil spending is positively related to the percentage of developed land this positive correlation persists only in districts where the median resident is a homeowner and is stronger in districts with more elderly residents who do not use school services and have a shorter expected duration in their home our findings support models in which capitalization encourages the provision of durable local public goods and provides an additional reason why some elderly support local school spending

booms and busts in the uk housing market the often volatile behaviour of uk house prices between 1957 and 1994 is analysed in an annual econometric model theory suggests that financial liberalisation of mortgage markets in the 1980s should have led to notable shifts in house price behaviour the evidence supports the predictions of theory suggesting shifts took place in wealth effects as in the consumption function and that real interest rates and income expectations became more important the presence of transactions costs suggests important nonlinearities in house price dynamics the paper also contains an explicit econometric treatment of expectations demography supply spillovers from the rented sector and of composition biases in the official house price index

causes of sprawl a portrait from space we study the extent to which u s urban development is sprawling and what determines differences in sprawl across space using remote sensing data to track the evolution of land use on a grid of 8 7 billion 30 30 meter cells we measure sprawl as the amount of undeveloped land surrounding an average urban dwelling the extent of sprawl remained roughly unchanged between 1976 and 1992 although it varied dramatically across metropolitan areas ground water availability temperate climate rugged terrain decentralized employment early public transport infrastructure uncertainty about metropolitan growth and unincorporated land in the urban fringe all increase sprawl

urban decline and durable housing urban decline is not the mirror image of growth and durable housing is the primary reason the nature of decline is so different this paper presents a model of urban decline with durable housing and verifies these implications of the model 1 city growth rates are skewed so that cities grow more quickly than they decline 2 urban decline is highly persistent 3 positive shocks increase population more than they increase housing prices 4 negative shocks decrease housing prices more than they decrease population 5 if housing prices are below construction costs then the city declines and 6 the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities

financial slack strategy and competition in movie distribution organizations that enjoy some slack are believed to make good use of it in their strategic decisions using panel data on firms in the u s film distribution industry between 1985 and 2007 this article examines how financial slack affects the volume of new product introductions the competitive strategies for those releases and their economic performance unexpectedly successful sleeper films are exploited as a source of exogenous financial slack in the econometric analysis the results suggest that unexpected financial slack leads to more product introductions less marketing support for the new products and no improvement in performance these findings are consistent with an attribution process in which managers attempt to replicate extraordinary success even if it is largely random providing real world evidence of a mechanism recently developed in theory and laboratory research

drawing inferences about housing supply elasticity from house price responses to income shocks abstract the purpose of this paper is to provide information about the price elasticity of the supply of housing i examine the relationship between the average price of single family housing and the amount of personal income a two equation vector error correction system is estimated using a panel data set consisting of 76 msas from 1980 to 1998 the results suggest an elastic long run supply function but a relatively slow pace of adjustment to long run equilibrium hence a major demand shock can be expected to impact housing prices for several years following the shock differences in the responsiveness among subgroups of msas are examined and found to be generally minor

bose einstein dynamics and adaptive contracting in the motion picture industry audiences discover what films they like and spread the word information feedback produces bose einstein dynamics in the motion picture box office revenue distribution information cascades generate box office hits and flops the revenue distribution evolves recursively over the run as a mixture of the opening and a stochastic competition among films the motion picture run is decentralized adaptive and self organizing semistationary admission prices local information and contingency rich contracts match the film rental price and the supply of theatrical engagements to demand copyright 1996 by royal economic society

precaution and liquidity in the demand for housing we exploit cross sectional mortgage data to investigate the importance of liquidity constraints and a precautionary motive in the demand for housing households that are not liquidity constrained consume housing services essentially as the life cycle hypothesis suggests but with a significant precautionary component households that are liquidity constrained in terms of not meeting standard loan to value or payments to income constraints are similar to unconstrained households in most respects including the precautionary motive but they respond somewhat less to fluctuations in their lifetime income suggesting some influence of bank induced liquidity constraints we additionally find however that banks enforce liquidity constraints only weakly jel d91 d12 r21 i introduction the benchmark theory in the economics of consumption is the life cycle or permanent income hypothesis lcpi based on the work of modigliani and brumberg 1954 and friedman 1957 its empirical validity is sometimes questionable especially when compared against alternatives that incorporate liquidity constraints or the precautionary motive for saving see for instance deaton 1992 for a survey rejection of the lcpi may however be just a manifestation of the poor quality of consumption data at the micro level these data are typically subject to the reporting biases and omissions inherent in consumer surveys there are further difficulties in measuring a desired stream of consumption services nondurable consumption goods are a small fraction of total consumption and in the case of food essentials hardly a consumer choice variable durable consumption goods have the feature that they are lumpy and that the consumption services at any point in time are hard to measure we propose to test the lcpi at the micro level with a quite different type of data the data are obtained from the residential mortgage finance database collected by the national association of realtors they are based on actual home purchases and the associated mortgage transactions reported by realtors and thus avoid some of the reporting biases of the consumer surveys more important they allow us to accurately identify households that in principle have instantaneous access to additional liquidity by lowering the down payment for the house purchase or increasing the size of the loan further the purchase of a house provides an accurate measure of a relatively large fraction of consumption services obtained for a medium to long horizon and measured at the time of the consumption decision although our data also have some serious shortcomings they allow a look at the lcpi from an unconventional vantage point perhaps the most influential study employing the standard consumer survey in testing the lcpi at the micro level is that of hall and mishkin 1982 it examines food expenditure from the panel study of income dynamics one of their key results is that consumption tracks income more closely than would be expected under the lcpi they demonstrate that this result could be explained by assuming a group of liquidity constrained consumers consuming their income at each point in time of 20 of the total sample some of the drawbacks of this study are the use of food expenditures to represent consumption the underreporting of income and absence of proper wealth data inherent in the consumer survey and the associated inability to individually separate liquidity constrained consumers from the rest of the sample several previous studies have attempted to improve on this way of testing the lcpi by examining other data sets bernanke 1984 used data on durable consumption goods automobiles to overcome the drawbacks of using food consumption in the hall and mishkin study his results support the lcpi but are still suspect because of possible reporting biases and the lack of good wealth and savings observations

portfolio choices for homeowners abstract in this paper i show that introducing frictions associated with housing into standard life cycle models can partially resolve the portfolio choice puzzle i calibrate a model in which a representative household endogenously transits from renting to mortgage financed homeownership the household can later adjust housing status either voluntarily or because of a forced move by paying transaction costs it is shown that homeownership crowds out stock market participation risky owner occupied housing substitutes for stocks while bonds provide liquidity young and middle aged households regardless of whether they are currently homeowners hold much less stock than predicted by traditional models without housing

food aid and child nutrition in rural ethiopia abstract this paper uses a unique panel data set from ethiopia to examine the determinants of participation in and receipts of food aid through free distribution fd and food for work ffw results show that aggregate rainfall and livestock shocks increase household participation in both fd and ffw ffw also seems well targeted to asset poor households the probability of receiving fd does not appear to be targeted based on household wealth but fd receipts are lower for wealthier households the effects of fd and ffw on child nutritional status differ depending on the modality of food aid and the gender of the child both ffw and fd have a positive direct impact on weight for height households invest proceeds from fd in girls nutrition while earnings from ffw are manifested in better nutrition for boys the effects of the gender of the aid recipient are not conclusive

impacts of the malawi social cash transfer program on household food and nutrition security abstract this study uses panel data for 3290 households to analyze the effect of an unconditional cash transfer on food and nutrition security among ultra poor and vulnerable households study data are from an impact evaluation of the government of malawi s social cash transfer program a cluster randomized control trial that employs both random selection and random assignment we use the difference in differences specification to estimate average treatment effects of the program on three components of food and nutrition security current economic vulnerability diet quantity and diet quality results show protective program impacts during the lean season on diet quantity as beneficiary households are 11 percentage points more likely to consume multiple meals per day than control households p 001 have a higher level of apparent caloric availability 267 49 kcal p 05 are 10 percentage points less likely to be food energy deficient p 05 and have a reduced hunger depth 111 11 kcal p 05 however study findings indicate that after one year of program exposure beneficiary households have experienced little improvement in diet quality or current economic vulnerability to food insecurity clear policy and program implications emerge related to the purchasing power of the cash transfer particularly during the lean season and the importance of integrated social protection initiatives

relocation of public sector workers evaluating a place based policy this paper investigates the local labor market impact of a uk relocation initiative the 2004 lyons review the review resulted in the dispersal of about 25 000 civil service jobs out of london and the south east towards other uk destinations this study aims to detect whether the inflow of public sector jobs crowded out private sector activity or stimulated the local provision of jobs in the private sector focusing on short term effects i find that the relocation initiative raised private sector employment in receiving areas and changed the sectoral distribution of local employment towards services i also find evidence of displacement i e a tendency for private businesses to locate closer to a relocation site moving out of areas at 1 2km and 2 3km distances into areas at 0 1km distance these agglomeration effects appear highly localized the largest policy impact is found in areas that received the relocated jobs with spillover effects reducing sharply over distance

housing booms and local spending abstract this paper examines how local governments adjust their spending in response to a temporary revenue windfall generated by a housing boom we focus on spanish local governments because of the intensity of the last housing boom bust experienced there and the large share of construction related revenues they obtain we find that windfall revenues were mostly used to increase expenditures above all current we seek to determine whether this behaviour was due to political myopia incumbents in contested elections increasing expenditures to convince uninformed voters about their competence or to extrapolation bias leading to the overstatement of the persistence of revenue shocks we find evidence for both mechanisms the propensity to spend is higher where local incumbents were elected by a narrow vote margin and lower in places with past volatility experience finally we also examine what happens during the bust and find that governments enjoying large windfalls during the boom had to cut their spending abruptly above all capital and raise taxes the adjustment during the bust was actually greater in those places that overspent more during the crisis

the energy costs of historic preservation we explore the impact of historic preservation policies on domestic energy consumption using panel data for england from 2006 to 2013 and employing a fixed effects strategy we document that i rising national energy prices induce an increase in home energy efficiency installations and a corresponding reduction in energy consumption and ii this energy saving effect is significantly less pronounced in conservation areas and in places with high concentrations of listed buildings where the adoption of energy efficiency installations is typically more costly and sometimes legally prevented altogether historic preservation policies increase private energy costs and the social cost of carbon per designated dwelling by around 11 600 19 100 and 2 400 4 000 respectively these costs ought to be weighed against any benefits of preservation

the welfare economics of land use planning abstract this paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning the technique is applied in the context of the town and country planning system of the uk and examines the gross and net benefits of land use regulation and their distribution across income groups the results show that the welfare and distributional impacts can be large

a model of housing in the presence of adjustment costs a structural interpretation of habit persistence building on the model of sanford j grossman and guy laroque 1990 this paper provides a model of household consumption and portfolio allocation which incorporates the role of housing as both a consumption good and as a component of wealth the model captures the following features of the household s problem a utility depends probably nonseparably on two distinct goods nondurable consumption and housing b nondurable consumption can be adjusted cost lessly but housing is subject to an adjustment cost c households face housing price risk in the sense that the relative price of housing varies over time and d in addition to the house the household can invest in a wide variety of financial assets this single reasonably tractable model generates testable implications for portfolio allocation risk aversion asset pricing and the dynamics of nondurable consumption because the original grossman and laroque model considers a utility function in which the durable good is the sole argument and thus abstracts completely from nondurable consump tion their analysis cannot address either the potential spillover effects of the adjustment costs of the durable good on the dynamics of nondurable consumption or the implications for portfolio allocation of housing risk arising from variation in the relative price of housing in addition to generating implications for issues on which the original grossman and laroque model was silent the housing model delivers a strikingly different message concerning asset pricing that is in contrast to the grossman and laroque result that the consumption based capital asset pricing model consumption capm fails the housing model implies that the consumptioncapm holds we assume that the household incurs an adjustment cost when altering the holding of the dura ble good or house although financial assets can be bought and sold costlessly consumption of the nondurable good can also be adjusted costlessly when choosing a new house the consumer takes into account the fact that the consumption of housing services will be constant at the new level until the subsequent stopping time when it is again worthwhile to incur the adjustment cost thus the home purchase decision is endogenous and fully rational but because of the adjustment cost infrequent in this continuous time setting the household s decision process has a recursive structure at each instant the household first decides whether it is optimal to sell the house immediately on those rare occasions that it is optimal to incur the adjustment cost the household sells the old house and buys a new one instantaneously if the household decides that it is not optimal to sell the house immediately it then determines its optimal holdings of financial assets and optimal level of nondurable consumption conditional on the current housing stock in essence because of the adjustment costs associated with the durable good the current

housing and location choices of retiring households evidence from france in this paper a study is made of the mobility and housing choices of the elderly when retiring using household data collected in france from a theoretical viewpoint individuals are likely to decrease their housing quantity because of an income loss when retiring but they may also increase it to benefit from more housing comfort for leisure using the 1992 trois generations survey it is first shown that housing mobility at retirement is substantial in france with a variety of self reported motives then using the 1994 2001 french europanel survey evidence is found of both upsizing and downsizing for mobile recent retirees in many cases housing adjustments lead to a correction of the initial disequilibrium between the number of rooms and the number of occupants however a significant proportion of mobile recent retirees improve the quality of their dwelling

new housing supply and the dilution of social capital this paper examines the role of local housing supply conditions for social capital investment using an instrumental variables approach and data from the social capital community benchmark survey it is documented that the positive link between homeownership and individual social capital investment is largely confined to more built up neighborhoods with more inelastic supply of new housing the empirical findings provide support for the proposition that in these localities house price capitalization provides additional incentives for homeowners to invest in social capital the findings are also largely consistent with the proposition that built up neighborhoods provide protection from inflows of newcomers that could upset a mutually beneficial equilibrium involving reciprocal cooperation however the results do not appear to be driven by selection based on inherent differences in social aptitudes or by tiebout sorting

the economic effects of density a synthesis abstract this paper synthesises the state of knowledge on the economic effects of density we consider 347 estimates of density elasticities of a broad range of outcomes ranging from wages innovation rents various amenities the cost of providing public services transport and environment related outcomes to health and wellbeing more than 100 of these estimates have not been previously published and have been provided by authors on request or inferred from published results in auxiliary analyses we contribute original estimates of density elasticities of 16 distinct outcome variables that belong to categories where the evidence base is thin inconsistent or non existent along with a critical discussion of the quality and the quantity of the evidence base we present a set of recommended elasticities applying them to a scenario that roughly corresponds to an average high income city we find that density seems to be a net amenity that is associated with positive external welfare effects densification policies may be welfare enhancing but the distributional effects may be regressive especially if residents are immobile and housing supply is inelastic

does entry regulation hinder job creation evidence from the french retail industry are product market and entry regulation key sources of low employment growth in many european countries we investigate this question in the context of the french retail trade industry since 1974 approval by regional zoning boards has been required for the creation or extension of any large retain store in france we exploit a unique database that provides time and region specific variation in boards approval decisions we show that stronger deterrence of entry by the boards increased retailer concentration and slowed down employment growth in france

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

understanding preferences for income redistribution abstract recent research suggests that income redistribution preferences vary across identity groups we employ statistical learning methods that emphasize pattern recognition classification and regression trees cart and random forests randomforests to uncover what these groups are using data from the general social survey we find that out of a large set of identity markers only race gender age and socioeconomic class are important classifiers for income redistribution preferences further the uncovered identity groupings are characterized by complex patterns of interaction amongst these salient classifiers we explore the extent to which existing theories of income redistribution can explain our results but conclude that current approaches do not fully explain the findings

tenure neutral and equitable housing taxation equity and neutrality are distinct concepts in housing taxation and weak and strong tenure neutrality should be distinguished when a tax system is tested for those criteria the taxes paid by landlords must be included as they affect the rents renters pay this paper defines appropriate tests applies them to a stylised tax system and proposes tax changes designed to restore tenure equity and or neutrality it shows how the homeowner s implicit income should be computed for taxes to be fundamentally tenure neutral or equitable or both it also shows the key role played by the cost differential in producing housing services under owner occupation and renting

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

buying a home with a resale value location location location we develop a dynamic multiregion model where a household s choice of housing location depends on its current wealth and its current type and involves both consumption and investment considerations the relative strength of the consumption motive and the investment motive determines the equilibrium pattern of residential sorting a strong investment consumption motive implies sorting according to household type wealth the model predicts that large house price fluctuations are associated with a low degree of sorting by type this prediction is consistent with evidence from us metropolitan areas when income education and age are used as proxies for household type

homeownership in the 1980s and 1990s aggregate trends and racial gaps abstract housing policy under the clinton and bush administrations has sought to boost homeownership while also narrowing racial gaps in owner occupancy rates against that backdrop homeownership rose sharply in the 1990s but white minority gaps remain in excess of 25 percentage points we analyze these patterns using data from the 1983 to 2001 survey of consumer finances results indicate that household characteristics explain most of the increase in homeownership and roughly two thirds of the white minority homeownership gap credit barriers account for no more than 5 percentage points of the remaining gap this suggests that policy makers will need to look beyond innovations in mortgage finance if their goal is to further expand homeownership

when to exit a product evidence from the u s motion picture exhibition market when is it optimal for a multi product firm to exit a product we analyze strategic product exit using data on motion pictures exhibition choices in a major metropolitan first run market to estimate the survivor function for films at a given theatre this analysis indicates that a film s survival at a particular theatre is affected by intra firm relative performance and interfirm competitive pressures we find that theatres within chains avoid business stealing preliminary analysis further suggests that theatres compete for market share with neighboring theatres by increasing the time to exit when the competing theatre is owned by a different chain this abstract was borrowed from another version of this item

house price responses to a national property tax reform abstract we show that house prices in general did not respond to a substantial cut in the national property tax in sweden the estimates are based on rich register data covering more than 100 000 sales over a time period of two and a half years because the swedish property tax is national and thus unrelated to local public goods our setting is ideal for causal identification of the property tax on house prices we observe price increases only in a small segment of the market containing properties with very high tax values we discuss but can admittedly not empirically discriminate between several potential explanations for why we find no evidence of capitalization except for the top segment of the market

income taxes sorting and the costs of housing evidence from municipal boundaries in switzerland this paper provides novel evidence on the role of income taxes for residential rents and spatial sorting drawing on comprehensive apartment level data we identify the effects of tax differentials across municipal boundaries in switzerland the boundary discontinuity design bdd corrects for unobservable location characteristics such as environmental amenities or the access to public goods and thereby reduces the estimated response of housing prices by one half compared to conventional estimates we identify an income tax elasticity of rents of about 0 26 we complement this approach with census data on local sociodemographic characteristics and show that about one third of this effect can be traced back to a sorting of high income households into low tax municipalities these findings are robust to a matching approach mbdd which compares identical residences on opposite sides of the boundary and a number of further sensitivity checks

house prices wealth effects and labour supply we examine the impact of house prices on labour supply decisions using uk microdata we combine household survey data with local level house price measures and controls for local labour demand our microdata also allow us to control for individual level income expectations we find significant house price effects on labour supply consistent with leisure being a normal good labour supply responses to house prices are concentrated among young married female owners and older owners this finding suggests that house prices affect the decisions of marginal workers in the economy our estimates imply that house prices are economically important in the participation decisions for these workers

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

the dynamic connectedness of uk regional property returns in this study we examine the network topology of uk regional property returns over the period 1973q4 2014q4 using a dynamic measure of connectedness developed by diebold and yilmaz 2014 overall

social networking and individual outcomes beyond the mean field case we study individually optimized continuous outcomes in a dynamic environment in the presence of social interactions and where the interaction topology may be either exogenous and time varying or endogenous the model accommodates more general social effects than those of the mean field type we address endogenous networking by assuming that each individual chooses the weights she attaches to the characteristics and the decisions of other agents this amounts to choosing the elements of a row of a weighted adjacency matrix endogenous social networking thus involves simultaneity between decisions and patterns of directed social interactions

empty homes longer commutes the unintended consequences of more restrictive local planning abstract we investigate the impact of land use regulation on housing vacancy rates using a 30 year panel dataset on land use regulation for 350 english local authorities las and addressing potential reverse causation and other endogeneity concerns we find that tighter local planning constraints increase local housing vacancy rates a one standard deviation increase in restrictiveness causes the local vacancy rate to increase by 0 9 percentage points 23 the same increase in local restrictiveness also causes a 6 1 rise in commuting distances the results underline the interdependence of local housing and labour markets and the unintended adverse impact of more restrictive planning policies

exploring the logic behind southern africa s food crises summary government action during food crises in southern africa frequently exacerbates the problems driving food staple prices well beyond import parity we argue that an inability to make credible commitments due largely to a lack of trust between public and private sectors contributes to this dynamic empirical policy analysis can facilitate resolution only within a consultative process involving a broad range of stakeholders the policies emerging from such a process are not likely to approximate first best recommendations yet the precise policies may be less important than the fact that they exist and that main stakeholders find them credible

the transition to home ownership and the black white wealth gap this paper analyzes differences in the likelihood that black and white families become homeowners by following a sample of black and white renters over time we are able to separately study racial differences in the likelihood of applying for a mortgage and in the likelihood that a mortgage application is accepted although its effect on the race gap in housing transitions is small we find strong evidence that black applicants are almost twice as likely as comparable white households to be rejected even when credit history proxies and measures of household wealth are accounted for we show that the housing transition gap exists primarily because blacks are less likely to apply for mortgages in the first place the analysis suggests that differences in income family structure and in the ability and willingness of parents to provide down payment assistance are the primary reasons for this applications gap we speculate that the portion of the gap that remains unexplained after controlling for income d

house prices and job losses why are house prices 80 correlated with job losses over the uk business cycle my paper studies this striking fact together with the strong comovements between house prices and labour market variables in general first a regional panel is estimated to quantify the impact of house prices on the unemployment job finding and job separation rates whereby rejection rates of planning applications are used as instruments to find exogenous variation in house prices second an orthogonalised var is used to estimate the aggregate impact of house price shocks both methods confirm the large impact of house price shocks on labour market variables and credit supply to understand the mechanism a general equilibrium model with collateral constraints endogenous job separation and housing shocks is confronted with macroeconomic data via bayesian methods the results suggest that shocks to house prices i explain about 10 of output fluctuations and about 20 of fluctuations in corporate credit unemployment and job separation rates via the collateral channel over the forecast horizon and ii were a major cause in triggering the 1990 and 2008 recessions in the uk

british planning policy and access to housing some empirical estimates there is evidence that the implementation of the planning system creates scarcity rents for land in different uses by acting as a constraint on land supply this paper provides for 1984 estimat

the impact of mortgage interest rate subsidies on household borrowing abstract the responsiveness of household borrowing to changes in the interest rate is a crucial parameter for assessing public policies aimed at promoting saving we estimate the effect on household borrowing of a reform of a program that subsidized interest rates on mortgages signed by medium and low income households the reform established a ceiling in the price of the house that could be financed with the program first we use triple difference estimators exploiting the fact that the reform should affect most the borrowing behavior of eligible individuals living in high price areas and estimate that the elasticity of the probability getting a loan to the interest rate lies between 2 8 and 1 3 second we document that after the reform the distribution of loan sizes became more concentrated at the discontinuity point of the budget constraint of eligible individuals both findings are consistent with a negative response of household borrowing to increases in interest rates

ease vs noise long run changes in the value of transport dis amenities for a complete cost benefit analysis of durable infrastructures it is important to understand how the value of non market goods such as transit time and environmental quality changes as incomes rise in the long run we use difference in differences and spatial differencing to estimate the land price capitalization effects of metro rail in berlin germany today and a century ago over this period the negative implicit hedonic price of rail noise tripled our results imply income elasticities of the value of noise reduction and transport access of 2 2 and 1 4 substantially exceeding cross sectional contingent valuation estimates

the impact of droughts and floods on food security and policy options to alleviate negative effects this article introduces an analytical framework for understanding the impacts of droughts and floods on rural livelihoods based on sen s entitlement approach and applies the framework to the recent food crises in malawi weather shocks trigger a sequence of entitlement failures which can result in a famine unless public action intervenes to mitigate these impacts policy responses can compensate for failures of production based entitlement free or subsidized input distribution labor based entitlement public works programs or employment based safety nets trade based entitlement grain reserve management or food pricing policies and transfer based entitlement food aid or cash transfers

upgrades switching costs and the leverage theory of tying this article investigates the role of product upgrades and consumer switching costs in the tying of complementary products previous analyses have found that a monopolist of one product will not increase its profits and reduce social welfare by tying and leveraging its monopoly position into a complementary market if the initial monopolised product is essential where essential means that all uses of the complementary good require the initial monopolised product we show that this is not true in settings characterised by product upgrades and consumer switching costs we also discuss various extensions including the role of the reversibility of tying

spatial housing economics a survey this introduction to the virtual special issue surveys the development of spatial housing economics from its roots in neoclassical theory through more recent developments in social interactions modelling and touching on the role of institutions path dependence and economic history the survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature the survey covers elements of hedonic models spatial econometrics neighbourhood models housing market areas housing supply models of segregation migration housing tenure subnational house price modelling including the so called ripple effect and agent based models possible future directions are set in the context of a selection of recent papers that have appeared in urban studies nevertheless there are still important gaps in the literature that merit further attention arising at least partly from emerging policy problems these include more research on housing and biodiversity

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

the market for motion pictures rank revenue and survival i introduction on any given day in every major city there may from 50 to 100 motion pictures playing on theater screens each is unique and its producer hopes it will catch that bit of magic that lights up the screen and the box office yet few achieve this feat and most lead brief unpredictable lives each film competes for screens and audiences during its brief life against a changing array of imperfect and equally unique substitutes how is one to understand this market is there any sense in which this market could be called competitive and how is it organized what institutions and contracts are adapted to this market environment and how do they shape the results we seek to answer some of these questions by examining the relationship between contractual practices and motion picture hazard and survival distributions our modeling is based on a large sample of motion picture revenues and theater bookings during their theatrical runs our detailed sample of motion picture lifetimes is a rare look at this fascinating industry whose unusual and complex features challenge economic theory in interesting ways as smith and smith 1986 506 observe given the interesting characteristics of movies as ideal examples of differentiated products and of the institutional arrangements governing their production and distribution such increased data availability would make this an exceptionally attractive area for applied micro economic research much of the empirical work on the motion picture industry has focused on the attributes of successful movies smith and smith 1986 examined the impact of oscar awards on the cumulative rentals of movies released from the 1950s through the 1970s in more recent work nelson et al undated have quantified the value of an oscar award on movie revenues using a large panel of data and an event study methodology in a somewhat broader empirical study prag and cassavant 1994 examined the determinants of movie revenues and marketing expenditures they found that marketing expenditures and quality are important determinants of a film s success and that production cost star actors and awards are positively related to marketing expenses in the present paper we attempt to account for the dynamic patterns in the data because each film is unique and plays in its own way its life as a commercial product in the theatrical market is hazardous indeed most motion pictures have short and unpredictable lives because audiences must discover what they like and films compete against an ever changing cast of competitors for these reasons it is productive to use evolutionary models of survival and death to model the data 1 we model competition among films in the theatrical market as an evolving rank tournament of survival 2 motion pictures live and die in the box office tournament as they are challenged during their run by a randomly evolving cast of new competitors the challengers come from films previously released and from newly released films the contending films are ranked by film goers and those with high rank survive and are carried over to the next week low ranked films fail and are replaced by new contenders these attributes of the motion picture market contribute to increasing returns and give the box office revenue distribution the distinctive convex shape of a tournament prize distribution 3 the leading products command a disproportionate share of the market and they have longer runs even then a film s rank in the tournament is ephemeral and its life unpredictable in fact of any 10 major theatrical films produced on the average 6 or 7 are unprofitable and 1 will break even vogel 1990 29 ii the motion picture exhibition market once a film is produced it is distributed to theaters who exhibit it for audiences the distributor chooses a release pattern the number and location of theaters in which the film is booked or licensed to play

on the price of land and the value of amenities a house represents not only a bundle of structural characteristics but also a set of location specific characteristics adding locational coordinates and site area to other house characteristics makes it possible to estimate a land rent surface as well as thle hedonic prices attached to local patterns of land use and other neighbourhood characteristics one can then estimate how the value of such location specific characteristics are capitalized into land prices this analysis illustrated with estimates based on data from two british towns has a number of wider implications it generates a more parsimonious method of estimating amenity values it also reveals likely systematic biases produced by conventional hedonic studies which exclude land and location finally it clarifies the conceptual definition of land and suggests that monocentric models can perform well despite recent criticism