9 April 2013

Real Estate Speculation and American History

Ed Glaeser points out that the 2000-2010 U.S. housing crisis was not unprecedented and that there have been many other episodes of home and land price run-ups, and declines, in U.S. history. However, the recent experience differed from other historical events, such as the frontier land boom of the 1790s and the skyscraper craze of the 1920s, because it occurred at a time of less uncertainty about fundamental economic and geographic trends. In any of these situations, high house and land prices could be justified if buyers projected strong future demand and stable or rising prices. For many historical episodes of price decline, it appears that buyers underestimated both the long-term elasticity of land supply and new construction and the effect of expanded supply on rents, and ultimately on prices.

8 April 2013

Estimating the Benefits from University-Level Diversity

Barbara Wolfe and Jason Fletcher use national data on the racial and ethnic characteristics of students who were attending college during the 2001-2 academic year to create an "index of diversity" for various colleges and universities. They then relate the students’ subsequent earnings – in the period from 2007-8 – to this index of diversity, and find a positive link between attending a college with greater diversity and higher earnings and family income.

5 April 2013

The Choice of Country for PhD and Postdoctoral Study

Analyzing data from a survey of scientists working in four fields who come from 16 different countries, Paula Stephan, Chiara Franzoni, and Giuseppe Scellato find that these individuals may be drawn to training programs in the United States because of the prestige and the career prospects they present, but are discouraged from coming by what they perceive to be the U.S. lifestyle. The researchers present some evidence that potential Ph.D. students and post-docs are increasingly choosing to pursue their training in other nations, including Australia, Germany, and Switzerland.

4 April 2013

Limited Partner Performance in the Maturing Private Equity Industry

Berk Sensoy, Yingdi Wang, and Michael Weisbach study a sample of over 14,000 investments by nearly 2,000 limited partners (LPs) in 1,250 buyout-and-venture funds that were started between 1991 and 2006. They find that the superior performance of these endowment investors in 1991-8 -- which has been documented -- was mainly due to their greater access to the top-performing venture capital partnerships. From 1999-2006, endowments no longer outperformed other investments, perhaps because LPs did not have unique access to restricted funds, or because they did not choose better investments than other types of institutional investors.

3 April 2013

Electricity Consumption in Commercial Buildings

Analyzing data from a California utility, Matthew Kahn, Nils Kok, and John Quigley show that since 1970 there has been an inverse relationship between a commercial building's vintage (and quality) and electricity consumption. For example, they find that newer, high-quality buildings respond faster to changes in outdoor temperature than older buildings, which leads to increased energy consumption. These findings stand in contrast with evidence on energy consumption trends for residential structures. Technological progress in a commercial building's design may reduce the energy demand from heating, cooling, and ventilation, but the behavior of the building tenants and their adoption of appliances can more than offset these savings.

2 April 2013

Location Choices of Foreign-Born Ph.D.s

Using NSF survey data on foreign-born students receiving their Ph.D.s in science and engineering from U.S. universities between 1960 and 2008, Jeffrey Grogger and Gordon Hanson find that 77 percent of them said that they planned to stay in the United States. Those who were most likely to stay had more highly educated parents and were more successful in obtaining graduate fellowships than their peers. Foreign students were less likely to stay in the United States if they were from countries with higher average income levels, or countries that had recently democratized

1 April 2013

Effects of Bicycle Helmet Laws on Children's Injuries

Pinka Chatterji and Sara Markowitz find that bicycle helmet laws are associated with fewer bicycle-related head injuries, and non-head injuries, among children. However, these same laws are associated with increases in head injuries from other wheeled sports. Therefore, the observed reduction in bicycle-related head injuries may be attributable to less bicycle riding because of the helmet laws.

29 March 2013

Long-Term Effects of Moving to Opportunity on Low-Income Families

The Moving to Opportunity (MTO) program randomly selected some families living in public housing and gave them a chance to move to a less-disadvantaged neighborhood. Jens Ludwig, Greg Duncan, Lisa Gennetian, Lawrence Katz, Ronald Kessler, Jeffrey Kling, and Lisa Sanbonmatsu show that after 10-15 years, the adults in these families had better physical and mental health, although MTO was not associated with increased economic self-sufficiency. These researchers also find that MTO did not seem to affect the physical heath of the children in these families, or lead to changes in their educational achievement. In terms of risky youthful behavior and young people's health, the results of MTO were mixed: girls did better in some ways and boys did worse.

28 March 2013

Are Government Spending Multipliers Larger During Periods of Slack?

Analyzing new quarterly data for a period that included multiple wars and depressions in the United States and Canada, Michael Owyang, Valerie Ramey, and Sarah Zubairy find that the "spending multiplier" -- the impact of additional government spending on national income -- is no greater during periods of high unemployment in the United States than at other times. They also find that the multiplier is always less than one. For Canada, however, they find some evidence of higher multipliers during periods of slack, as well as some multipliers greater than one.

27 March 2013

Gold Returns

Robert Barro and Sanjay Misra estimate that between 1836 and 2011 the average real rate of price change for gold in the United States was 1.1 percent per year. Based on the relationship between gold prices, consumption, and GDP, they further estimate that gold’s expected real rate of return -- which includes an unobserved dividend yield -- is around 1 percent.
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