Browsing by Subject "Housing market"
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Item Austin housing and the critical workforce(2011-05) Connor, Patrick Thayer; Kahn, Terry D.; Cahoon, JosephThis professional report is a study of urban housing market forces, housing opportunities of the critical workforce population, Austin’s housing market and an analysis of the apartment market in Austin between 2000 and 2010. The report analyzes the supply and demand of property, its influence on the costs of development and how cities intervene into the market to create housing opportunities for the critical workforce. The income levels of the critical workforce in Austin are related to the current market conditions of the apartment market.Item Essays in entry and exit, social inefficiency and commission rates in housing market(2010-05) Gheblealivand, Seyed Parviz; Hendricks, KennethIn the first paper, using a dataset of the records of Texas Real Estate Agents, I reexamine the findings of Hsieh and Moretti (2003) regarding the inefficiency of free entry in real estate industry: first, I point out one important source of misidentification in that paper's analysis of the relationship between home prices and the number of real estate agents in a city. This misidentification stems from not including the ratio of houses sold in a city to its labor force size as an explanatory variable. Failure to account for this variable will result in inflated coefficient for the effect of home prices on the percentage of real estate agents in a city's labor force. Second, I analyze the effect of home prices on productivity of real estate agents. Empirical evidence supports theory prediction of inverse relationship between home prices and productivity of its real estate agents (measured as the number of houses sold per agent) and the empirical results in Hsieh and Moretti (2003). Third, I investigate the relationship between the extra wages of real estate agents (defined as average earning net of agents' outside option) and home prices in a city. In support for free entry, I find no evidence of any such relationship. In theory, free entry potentially leads to social inefficiency. This paper finds strong empirical evidence consistent with excess entry into Texas Residential Real Estate Brokerage Industry and studies the effects of heterogeneity and future uncertainty on such inefficiencies. I develop a dynamic model of entry and exit with heterogeneous agents and modify the predictions of the earlier literature. I show that the heterogeneity among (real estate) agents results in a weaker relationship between the real estate commission fees and the number of real estate agents. I also show that the models developed for static cases in the previous papers are special cases of the more general model in this paper. The model allows us to explain the lower business stealing effect compared to static and homogeneous models that is observed in the data. To address the issue of excess entry, I separate the business stealing effect from demand driven entry and find that on average 75 percent of entry is due to business stealing. To evaluate free entry, I control for agents' outside options and find that the extra wages of the real estate agents do not vary with housing prices. The objective of the third paper is to study the determinants of commission rates in the two-sided market of real estate brokerage industry and explain the emergence of the MLS and its impact on commission rates. In addition to their commission rates, real estate agencies decide on their MLS policies as well: they can either list the property with the MLS and share information about it, or not list the property with the MLS. If a property is listed with the MLS, all MLS subscribers can see the listing and send their potential buyers to see that property. Potential buyers can go to any agency to purchase such a property. If the property is \textit{not} listed with the MLS, to buy a house, a buyer must go to the same agency that the seller has signed up with. Since sellers pay the commission fees, and buyers no longer have to go to the same agency, with MLS listing, buyers choose the closest agency regardless of the commission rates charged by the agencies. Therefore, changes in the commission rates only change the affiliation of the sellers and not that of the buyers. This leads to a softer competition under MLS listing as agencies compete only in the seller side of the market. The softer competition and resulting higher commission rates are desirable to the agencies. They prefer the MLS listing outcome and given the optimal strategies after observing each other's listing decisions, agencies weakly prefer listing to no listing. I show that the one period game has two Nash Equilibria in which either both real estate agencies choose to list their houses with the MLS, or both decide not to list their houses with the MLS. The no listing equilibrium forces buyers to work through that agency's agents and effectively ties the both sides of the market. The higher commission rate equilibrium of the game allows buyers to choose either agency and reduces the competition to the sellers side. Softer competition in turn, results in higher equilibrium commission rates and higher profits along the equilibrium path.Item Essays on subprime lending, present bias, and risk salience(2017-05) Fekrazad, Amir; Geruso, Michael; Abrevaya, Jason; Oettinger, Gerald S.; Ward, Adrian F.In chapter 1, I examine the consequences of a policy change in Rhode Island that lowered the cap on payday loan fees (interest rates) from 15% of the principal to 10%. I use a difference-in-difference framework and a unique proprietary dataset of payday loan transactions to estimate the impact on market outcomes. I find that the lenders always charge the prevailing cap, creating a strong first stage. I also find that demand for payday loans increases both at the extensive and intensive margins. I show that debt cycles become longer and more likely to end with default. Moreover, I find that no lenders exit the market after the policy change, implying that they had substantial market power. The increase in affordability of the loans increases consumer surplus by about 44%. Many consumer rights advocates believe that subprime consumers tend to be time-inconsistent. With this assumption, welfare implications of a fee cap are not straightforward, because the gain from higher affordability can be dominated by the loss from amplified time-inconsistent behavior. To address this issue, in chapter 2 I develop a dynamic model of payday loan usage with naïve hyperbolic discounting. I calibrate the model in such a way that the simulated means are as close as possible to empirical means for Rhode Island under both regulation regimes (10% and 15% fees). Using simulations of the model, I show that a tighter fee cap is welfare-improving for all consumers, regardless of their degree of time-inconsistency. Furthermore, I find that a ban is more beneficial than a fee cap to highly time-inconsistent consumers but harms time-consistent consumers. In chapter 3, I examine whether earthquake risk salience increases in an area in response to the news of earthquakes in other parts of the world. Using 20 years of housing and earthquake data, I show that disastrous earthquakes happening in other parts of the world decrease home prices in high-risk zip codes relative to low-risk zip codes. Moreover, I find that higher casualties are associated with higher price effects. I also show that the price effects decay after one month.Item The strange consequences of cyclical instability : housing in Austin, Texas, 1983-90(1990) Lupton, Jonathan Jarman, 1960-; Not available