(2022) Does local technological specialisation, diversity and dynamic competition enhance firm creation?

with Jungho Kim, Alfons Palangkaraya and Elizabeth Webster in Research Policy

Does the presence of specialist technological expertise, diversity across industries and the intensity of competition among existing firms in a location affect the rate at which new firms are attracted to an agglomeration? We construct three measures of these explanators including a novel measure of competitive dynamics and estimate a region-industry panel fixed-effects model using data on a national census of firms over a 15-year period. This extensive panel dataset of firms and regions, enables us to move beyond the comparative static analysis which has dominated the agglomeration literature for so long. We find local competitive intensity has a large positive effect on firm creation. Competition attracts, not repels. Technological specialisation is a moderate attractee, but diversity may merely lead to local congestion.

(2021) Social interactions, residential segregation and the dynamics of tipping

with Simone Marsiglio, Sandy Suardi, and Marco Tolotti in Journal of Evolutionary Economics

We develop an analytically tractable population dynamics model of heterogeneous agents to characterize how social interactions within a neighborhood determine the dynamic evolution of its ethnic composition. We characterize the conditions under which integration or segregation will occur, which depends on the majority’s social externality parameter and net benefit from leaving, and the minority’s leaving probability. Minority segregation may result from the process of tipping, which may arise from three possible channels: two are related to exogenous shocks (migration flows and changes in tipping points) and one is related to the endogenous probabilistic features of our framework (endogenous polarization). This characterization of integration and segregation conditions yields interesting policy implications for social and urban planning policies to mitigate segregation.

(2018) Racial segregation in the United States since the Great Depression

with Simone Marsiglio and Sandy Suardi in Journal of Housing Economics

Racial segregation is a salient feature of cities in the United States. Models like Schelling (1971) show that segregation can arise through white preferences for residing near minorities. Once the threshold or “tipping point” is passed, the models predict that all whites will leave. Our paper uses census-tract data for six cities in the United States from the 1930s and 1970–2010 to measure decadal, city-specific tipping points. We use a structural break procedure to estimate the tipping points and incorporate these in a regression-discontinuity design to estimate the impact on population trends for neighborhoods that exceed that threshold while controlling for city-specific trends in migration. We find that the magnitude of white flight for neighborhoods that have tipped in 2000 has fallen to between 23% and 36% of the level seen in 1970. There was no discontinuity in white flight after accounting for migration trends during the Great Depression. Finally, we show that in-migration of minorities in tipped neighborhoods do not fill in the gap left by white flight.

(2014) New Multi-City Estimates of the Changes in Home Values, 1920-1940

with Price Fishback in Housing and Mortgage Markets in Historical Perspective

Robert Shiller created the most commonly cited time series for nonfarm home values and prices between 1920 and 1940 by splicing a series developed by Grebler, Blank, and Winnick (1956) for 1890 to 1934 with a new series based on 30 asking prices per year in five major cities to extend the series from 1934 to 1953. We develop and examine several alternative measures of housing prices over the period 1920 to 1940. All series show that nominal housing prices fell by 20-30 percent from a peak in the late 1920s to a trough around 1933 and 1934. However, there is substantial disagreement about the values circa 1920 and 1940. For 1920 the Shiller Hybrid suggests that housing values were 5-7 percent higher than in 1930. In contrast, all alternative series show that housing values in 1920 were 6-20 percent lower than in 1930. For 1940 the Shiller Hybrid index rises within 5 percent of the 1930 value. In contrast, all of the other series have 1940 values that are 18.7 to 35.6 percent lower than in 1930. In summary, the alternative measures suggest much stronger growth in nonfarm house prices between 1920 and 1930 and much less recovery by 1940 than the Shiller Hybrid series.

(2011) The New Deal, Race, and Home Ownership in the 1920s and 1930s

with Price Fishback in American Economic Review: Papers and Proceedings

Many federal government housing policies began during the New Deal of the 1930s. Many claim that minorities benefited less from these policies than whites. We estimate the relationships between policies in the 1920s and 1930s and black and white home ownership in farm and nonfarm settings using a pseudo-panel of repeated cross-sections of households in 1920, 1930, and 1940 matched with policy measures in 460 state economic areas. The policies examined include FHA mortgage insurance, HOLC loan refinancing, state mortgage moratoria, farm loan programs, public housing, public works and relief, and payments to farmers to take land out of production.

(2011) Information and the Impact of Climate and Weather on Mortality Rates during the Great Depression

with Price Fishback, Werner Troesken, Michael Haines, Paul Rhode, and Melissa Thomasson in the Economics of Climate Change

Global warming has become a watchword for environmental policy over the past three decades. Daily temperature highs were thought to have reached the highest levels in recorded history within the past decade. Each month, there are reports of new studies of melting glaciers, thinning of ice caps on mountains, and warming in various areas throughout the world. Al Gore shared an Academy Award for his association with the movie An Inconvenient Truth, a film warning of global warming and its potential dire consequences. He then shared a Nobel Peace Prize with a group of scientists warning of the dangers of global warming. Much of the force of Gore’s warnings about global warming comes from his predictions about the impact of warming on human populations and the economy. Yet the large volume of studies of climate change has not been matched by nearly as many studies of the impact of climate and weather on populations and economies or how populations and economies will respond. If the claims that global temperatures will warm over the next few decades no matter what policy steps we take today are true, such studies are invaluable.