Browsing by Subject "Urban economics"
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Item Open Access Do Evictions Cause Income Changes? An Instrumental Variables Approach(2019-04) Mok, GraceEvictions are an important aspect of the affordable housing crisis facing low-income American renters. However, there has been little research quantifying the causal impact of evictions, which poses challenges for academics interested in understanding inequality and policy-makers interested in reducing it. Merging two datasets both new to the literature, I address this gap in the causal literature by using an instrumental variables strategy to examine the impact of evictions on household income over time in Durham, North Carolina. Exploiting gentrification-related evictions as an instrument, I find a 2.5% decrease in household income after eviction. This is a small, but significant decrease in income given that median household income for households at time of eviction is about $15,000.Item Open Access Dynamic Models of Human Capital Accumulation(2015) Ransom, TylerThis dissertation consists of three separate essays that use dynamic models to better understand the human capital accumulation process. First, I analyze the role of migration in human capital accumulation and how migration varies over the business cycle. An interesting trend in the data is that, over the period of the Great Recession, overall migration rates in the US remained close to their respective long-term trends. However, migration evolved differently by employment status: unemployed workers were more likely to migrate during the recession and employed workers less likely. To isolate mechanisms explaining this divergence, I estimate a dynamic, non-stationary search model of migration using a national longitudinal survey from 2004-2013. I focus on the role of employment frictions on migration decisions in addition to other explanations in the literature. My results show that a divergence in job offer and job destruction rates caused differing migration incentives by employment status. I also find that migration rates were muted because of the national scope of the Great Recession. Model simulations show that spatial unemployment insurance in the form of a moving subsidy can help workers move to more favorable markets.
In the second essay, my coauthors and I explore the role of information frictions in the acquisition of human capital. Specifically, we investigate the determinants of college attrition in a setting where individuals have imperfect information about their schooling ability and labor market productivity. We estimate a dynamic structural model of schooling and work decisions, where high school graduates choose a bundle of education and work combinations. We take into account the heterogeneity in schooling investments by distinguishing between two- and four-year colleges and graduate school, as well as science and non-science majors for four-year colleges. Individuals may also choose whether to work full-time, part-time, or not at all. A key feature of our approach is to account for correlated learning through college grades and wages, thus implying that individuals may leave or re-enter college as a result of the arrival of new information on their ability and/or productivity. We use our results to quantify the importance of informational frictions in explaining the observed school-to-work transitions and to examine sorting patterns.
In the third essay, my coauthors and I investigate the evolution over the last two decades in the wage returns to schooling and early work experience.
Using data from the 1979 and 1997 panels of the National Longitudinal Survey of Youth, we isolate changes in skill prices from changes in composition by estimating a dynamic model of schooling and work decisions. Importantly, this allows us to account for the endogenous nature of the changes in educational and accumulated work experience over this time period. We find an increase over this period in the returns to working in high school, but a decrease in the returns to working while in college. We also find an increase in the incidence of working in college, but that any detrimental impact of in-college work experience is offset by changes in other observable characteristics. Overall, our decomposition of the evolution in skill premia suggests that both price and composition effects play an important role. The role of unobserved ability is also important.
Item Open Access Essays in Applied Microeconomics With Policy Implications(2013) Geissler, Christopher ScottMy dissertation focuses on employing microeconomic techniques to study markets and questions that are important and complex, and also have potential policy implications. Two of my chapters analyze the health industry with an emphasis on hospitals, patient welfare, and regulation. The remaining chapter focuses on the housing market in Los Angeles and explores real estate flipping.
The second chapter of my dissertation studies the impact of state level regulations on hospital bed capacity decisions. The regulations are intended to decrease hospital investments without diminishing patient access. I find that the regulation decreases total hospital investment in bed capacity as expected. When running simulations to estimate how hospitals would behave differently were the regulatory policy changed, I find that total patient utility is negatively affected by the presence of the regulation as many patients get turned away from their preferred hospital due to overcrowding. This analysis has important policy implications as it suggests that the regulation has been ineffective in ensuring that patient welfare was unharmed by the restrictions.
The third chapter is based on joint research with Patrick Bayer and James W. Roberts and studies the housing market in the Los Angeles metropolitan area from 1988 to 2009. Using novel data, I identify which housing transactions involve flippers who aim not to live in the house, but rather to quickly resell it for financial gain. I find that flipper behavior varies based on how frequently I observe the individual engage in such behavior. Experienced flippers, who are observed to flip many houses in the data, target homes being sold at below market value and earn their returns from buying them at a discount. Their effect on long term prices in the neighborhood is negligable. Inexperienced flippers who are less active, seek to earn their profits by timing the market and are more active when house prices were rapidly appreciating from 1999 to 2005. Their activity increases housing prices in the neighborhood in the short term, but decreases them in the long term. Such results are consistent with the claim that real estate flipping contributed to the housing bubble.
The fourth chapter of my dissertation again focuses on the hospital industry and looks at the question of how patient composition changes as a hospital becomes busier and has to turn patients away. I develop a theoretical model which predicts that hospitals are more likely to turn away less profitable patients. As a result, when a hospital becomes more full and therefore is more likely to have to turn patients away, its composition of patients will change and become more profitable on the whole. I test this theory by empirically analyzing the effect of hospital congestion on the composition of hospital patients using hospital discharge data. The findings are consistent with my theoretical model as when hospitals become more crowded, the fraction of uninsured patients and mental health patients (who are typically not profitable to a hospital) decreases. This result suggests that hospitals are more likely to turn away unprofitable patients while continuing to admit more profitable patients.
Item Open Access Gentrification in the Wake of the Subprime Mortgage Crisis(2012-04-27) Coleman, CandaceFrom the late 1990s until the mid-2000s, real residential property prices increased by more than 80 percent in the U.S. housing market. After U.S. home prices peaked in 2006, the demand for home purchases and construction fell sharply. During the Subprime Mortgage Crisis, more than 60 million Americans experienced foreclosure while overall home prices declined nearly 31 percent since 2006. This paper explores the short-term effects of the subprime crisis on the urban housing market. More specifically, my thesis seeks to answer the policy question: In the wake of the subprime mortgage crisis, what happened to gentrification in American cities? To better understand the relationship between the housing crisis and urban development, I will examine how the landscape of gentrification changed as a result of the collapsing U.S. housing market. From 2000 to 2006, gentrification became a mainstay of the American housing landscape. Researchers define gentrification as the process of rehabilitating depressed commercial and residential spaces in geographically urban areas. Many young, white, and college-educated homeowners purchased housing stock in urban neighborhoods for economic and aesthetic purposes. Although gentrification emerged in the 1960s, this phenomenon continued to grow during periods of economic decline. Many real estate experts believed that the subprime mortgage crisis would slow gentrification rather than stop the current trend indefinitely. Economists argue that an economic downturn forces capital to withdraw and retreat from land use possibilities in gentrifying urban areas. On the other hand, analysts argue that value-priced homes in center cities encourage investment from young urban-pioneers looking to purchase when the market has bottomed out. If “bargain hunters” are willing to invest now, they will benefit from lower home prices in neighborhoods driven by increases in the supply of single-family homes. In light of the Subprime Mortgage Crisis, this paper examines: • The effect of the subprime mortgage crisis on gentrification trends in 14 major metropolitan cities; and • Whether gentrification is driven by preferences for affordable housing stock, or preferences for historic and/or luxury builds in periods of economic decline. The key findings of the paper are: Gentrification Increased in Most Cities -- Overall, gentrification did not slow down in the U.S. in the wake of the recession. In most cities gentrification increased despite economic pressures in the housing and financial markets. Only a small number of cities experienced little or no changes in gentrification levels. Detroit was the only city with declining levels of gentrification. In Williamsburg and Greenpoint, strong preferences for certain neighborhood amenities helped maintain demand for housing after 2008. Increased median rents and home values show that the Subprime Mortgage Crisis did not deter interest in these up and coming neighborhoods. Gentrification is thriving and quickly expanding to other parts of the borough, mostly because these neighborhoods are well served by public transport to Manhattan. Despite the economic downturn, Washington, DC’s Columbia Heights neighborhood experienced an increase in home and rental prices. From 2000 to 2006, income-driven preferences fueled gentrification patterns in Columbia Heights. Additionally, the share of the white college educated population continued to grow between 2006 and 2009. Low unemployment in the District helped to maintain and expand gentrification patterns in the area. While de-industrialization is the main contributor to Detroit’s collapse, the Subprime Mortgage Crisis has only worsened city conditions. The city’s core gentrifying demographic of college educated professionals left the city in search of better employment opportunities. Detroit’s downtown areas are still plagued by high vacancy rates, poverty, and chronic unemployment. However, early-stage re-gentrifiers are looking to create a Williamsburg effect. Detroit’s ability to successfully re-gentrify in the future is very much dependent on a healthy job economy.