Manuel A. Hernandez

Markets, Trade, and Institutions Division
Washington, DC 20006-1002

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NBER Working Papers and Publications

October 2013Do People Overreact? Evidence from the Housing Market After the Wenchuan Earthquake
with Guoying Deng, Li Gan: w19515
This paper uses the 2008 Wenchuan earthquake in China as a natural experiment to examine how the housing market reacted to this unforeseen, extreme event. We use a unique transaction dataset for new (under construction) apartment units to analyze the pricing behavior of units in lower versus upper floors before and after the earthquake. We observe that average housing prices decreased after the tremor. However, the relative price of low to high floor units, particularly units located in the first and second floor, considerably increased for several months after the earthquake. This relative pricing pattern is in line with a higher risk perception and fear, triggered after the tremor, of living in upper floors. Additional robustness checks support the apparent overreaction of individuals to...

Published: Journal of Urban Economics Volume 90, November 2015, Pages 79–89 Cover image Do natural disasters cause an excessive fear of heights? Evidence from the Wenchuan earthquake Guoying Denga, , Li Ganb, , Manuel A. Hernandezc, ,

February 2013Group Lending with Heterogeneous Types
with Li Gan, Yanyan Liu: w18847
Group lending has been widely adopted in the past thirty years by many microfinance institutions as a means to mitigate information asymmetries when delivering credit to the poor. This paper proposes an empirical method to address the potential omitted variable problem resulting from unobserved group types when modeling the repayment behavior of group members. We estimate the model using a rich dataset from a group lending program in India. The estimation results support our model specification and show the advantages of relying on a type-varying method when analyzing the probability of default of group members.
January 2011Making friends with your neighbors? Agglomeration and tacit collusion in the lodging industry
with Li Gan: w16739
Agglomeration is a location pattern frequently observed in service industries such as hotels. This paper empirically examines if agglomeration facilitates tacit collusion in the lodging industry using a quarterly dataset of hotels that operated in rural areas across Texas between 2003 and 2005. We jointly model a price and occupancy rate equation under a switching regression model to endogenously identify a collusive and non-collusive regime. The estimation results indicate that clustered hotels have a higher probability of being in the potential collusive regime than isolated properties in the same town. The identification of a collusive regime is also consistent with other factors considered to affect the sustainability of collusion like cluster size, seasonality and firm size, and the r...

Published: Li Gan & Manuel A. Hernandez, 2013. "Making Friends with Your Neighbors? Agglomeration and Tacit Collusion in The Lodging Industry," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1002-1017, July. citation courtesy of

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