Economics and Public Policy Abstracts

"Economic Diversification and The Resiliency Hypothesis: Evidence from the Impact of Natural Disasters on Regional Housing Values"

Professor(s): Professor Edward Coulson
Co-author(s): Shawn McCoy and Ian McDonough
Accepted at: : Regional Science and Urban Economics

We estimate the effect regional economic diversification has on the resiliency of the U.S. housing market, treating the spatial and temporal variation in natural disasters as exogenous shocks to regional economies. Our study demonstrates that diversity dampens both the magnitude and the duration of the effects of a disaster on local real estate values. Implications of our findings for the potential benefits of diversification in regional economies are discussed.

“Housing Supply Elasticity, Gasoline Prices, and Residential Property Values”

Professor(s): Professor Edward Coulson
Co-author(s): Adele Morris, Helen Neill
Accepted at: : Journal of Housing Economics

We revise the standard monocentric city model to incorporate differential assumptions about the elasticity of housing supply in response to changes in transportation costs. We test the implications of the model with data from the Las Vegas metropolitan area and find that housing markets respond roughly the same in the face of increases and decreases in gas prices. Supply elasticity is evidently relatively elastic in response to both expansions and contractions, despite expectations that supply is much more inelastic when markets contract when gas prices increase. Simulating the effect of a 10% increase in gas prices from a carbon tax, we find that homes near the center of town rise on average $532 while homes beyond 5 miles fall on average $1,064

"Housing Wealth, Fertility, and Child Quality"

Professor(s): Professor Edward Coulson
Co-Author(s): Ming-zhe Tang
Accepted at: International Real Estate Review
Award: GSSI Best Paper award at the Asian Real Estate Association/American Real Estate and Urban Economics Association International Meeting in July

We use changes in wealth due to house price changes to test the effect of wealth on fertility and child quality in the context of Chinese fertility policies. We find, even in those situations where the one-child policy is not in effect, that wealth increases do not lead to increased fertility in urban areas, and have only a tiny effect in rural. However, a rise in housing wealth does lead to increased expenditure on a child’s education for households in both rural and urban areas (although of different types of expenditure) and increased child’s height in rural areas. In terms of Becker (1960), increased wealth tilts the tradeoff between child quality and quantity in favor of the former.

"The Selfish Brain: A Layperson’s Guide to a New Way of Economic Thinking"

Professor(s): Professor Emeritus Richard McKenzie

In The Selfish Brain, which has been written with non-economists in mind, expands on Richard McKenzie’s development of “brain-centric economics,” which provides a new way of assessing and reconciling (albeit partially) the growing conflict between conventional or neoclassical economics (represented by the work of Nobel Laureates Milton Friedman and Gary Becker) and behavioral economics (represented by the work of Nobel Laureates Daniel Kahneman and Richard Thaler).