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AN NBER PUBLICATION ISSUE: No. 3, March 2004

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
Because prices of existing homes rise when new construction is constrained, existing residents have a strong incentive to manipulate political and regulatory processes to limit new construction. In recent years, Manhattan condominiums have been selling for about $600 a square foot, more than double the cost of "building up," that is, adding additional floors to new Manhattan apartment buildings. In Why is Manhattan So Expensive? Regulation and the Rise in House Prices...

Research Summaries

Article
The company cost of stock options is often higher than the value that risk-averse and undiversified workers place on their options. Stock options have become contentious. The root of the problem lies in widely held misperceptions concerning the cost of granting such options, according to Brian Hall and Kevin Murphy writing in The Trouble with Stock Options (NBER Working Paper No. 9784). Stock options are compensation that give employees the right to buy shares at a...
Article
Although they are more likely to buy insurance, ... cautious individuals are actually less likely to use a nursing home. People who have private long-term care insurance are no more likely to enter a nursing home than people without this insurance, according to NBER researchers Amy Finkelstein and Kathleen McGarry. On the surface, this finding is surprising. One might think that individuals who know that they have a high risk of using a nursing home would be more...
Article
States that passed unilateral divorce laws saw total female suicide decline by around 20 percent in the long run. In 1969, then Governor Ronald Reagan signed a bill creating unilateral divorce in California. Following California's lead, many states subsequently increased access to divorce, making it possible for a married person to seek a divorce without the consent of his or her spouse. Earlier divorce laws typically required either the consent of both parties or a...

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