Federal Reserve Bank of Philadelphia
10 Independence Mall
Philadelphia, PA 19106
Institutional Affiliation: Federal Reserve Bank of Philadelphia
Information about this author at RePEc
NBER Working Papers and Publications
|March 2019||Capitalization as a Two-Part Tariff: The Role of Zoning|
with H. Spencer Banzhaf: w25699
This paper shows that the capitalization of local amenities is effectively priced into land via a two-part pricing formula: a “ticket” price paid regardless of the amount of housing service consumed and a “slope” price paid per unit of services. We first show theoretically how tickets arise as an extensive margin price when there are binding constraints on the number of households admitted to a neighborhood. We use a large national dataset of housing transactions, property characteristics, and neighborhood attributes to measure the extent to which local amenities are capitalized in ticket prices vis-a-vis slopes. We find that in most U.S. cities, the majority of neighborhood variation in pricing occurs via tickets, although the importance of tickets rises sharply in the stringency of land ...
|March 2016||Speculative Fever: Investor Contagion in the Housing Bubble|
with Patrick Bayer, James W. Roberts: w22065
Historical anecdotes of new investors being drawn into a booming asset market, only to suffer when the market turns, abound. While the role of investor contagion in asset bubbles has been explored extensively in the theoretical literature, causal empirical evidence on the topic is virtually non-existent. This paper studies the recent boom and bust in the U.S. housing market, establishing that many novice investors entered the market as a direct result of observing investing activity of multiple forms in their own neighborhoods and that these “infected” investors performed poorly relative to other investors along several dimensions.
|February 2011||Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market|
with Patrick Bayer, Christopher Geissler, James W. Roberts: w16784
Housing market transactions are a matter of public record and thus provide a rare opportunity to analyze the behavior, performance, and strategies of individual investors. Using data for all housing transactions in the Los Angeles area from 1988-2009, this paper provides empirical evidence on investor behavior that is consistent with several rationales for speculative investment in the finance literature, including the roles of middlemen and naïve speculators. Speculative activity by novice investors increased sharply in the recent housing boom. These investors earned little more than the market rate of appreciation and demonstrated no ability to foresee market price movements.