“Do Households Value Lower Density:Theory, Evidence, and Implications for Cities” (Job market paper)
Abstract: A substantial literature demonstrates that zoning restrictions on building height or density lower supply and increase housing prices. However, negative externalities due to household preferences for lower neighborhood density could justify restrictions on private developers. Thus building density in a laissez-faire city may be above the welfare maximizing level. The potential external costs of height and density are tested here and found to be substantial. Increased building separation appears to mitigate the external cost of height. This implies that some level of density or floor regulation (FAR) regulation is welfare-enhancing, and that the gap between price and marginal construction cost overstates the social cost of zoning because households value lower density.
“Is Additive Independence a Valid Assumption When Testing the Eﬀects of Gun Laws on Crime?”
The effects of gun control legislation on crime have been studied extensively. However, the literature has generally considered one law at a time under the implicit assumption that the relation between regulation and crime is additive independent. For example, regulations that target potential victims such as concealed carry weapon laws (CCW) and castle doctrine laws (CD) have been examined separately. Similarly, regulations that target potential oﬀenders, including add-on gun laws (AOG) and universal background check requirements (UBC) have also been examined independently. The theoretical model developed here predicts that the eﬀect of a given type of gun law on crime depends on the character of other gun laws. Using comparable data and estimation approach as studies of single regulations, the empirical results show that the eﬀect of CCW on the robbery rate depends on CD, and the effect of AOG depends on UBC. This illustrates that the practice of relating individual regulation to crime may be problematic because the effects of regulations are not additive independent.
“Using Land values to Identify the Optimal Level of Planning in Large Cities” (with Nathaniel Harris)
Abstract: Previous research has demonstrated empirically that indexes of urban planning restrictions increase housing prices. Many economists argue that this relation is caused by a decrease in the supply of housing compared to a laissez-faire city. Planners, on the other hand, argue that this relation is caused by an increase in the attractiveness of a city. This paper demonstrates theoretically that, in the presence of building density externalities, both are correct, and that the optimality of planning regulations cannot be determined by the relation between housing price and regulation. Consequently, this research explores the optimality of urban planning using aggregate land value rather than housing price. Aggregate land value provides a measure of the welfare effects of urban planning, because it internalizes externalities associated with both externalities present in laissez-faire development and gains or losses due to regulatory restrictions on that development. Empirical tests indicate that the relation between past patterns of planning regulation and aggregate land rent is positive, implying that planning is a solution for problems of overbuilding under laissez-faire land development.
“Evaluating the Effects of a Financial Education Program in an Online Setting” (with Robert L. Clark, Annamaria Lusardi, Olivia S. Mitchell, Andrea Sticha)
Abstract: This paper analyzes whether a low-cost, online, and scalable financial education program can help increase older participants’ financial knowledge and behaviors. We tested our program using a field experiment that included short stories covering three fundamental financial education topics: compound interest, risk diversification, and inflation. Two surveys were administered eight months apart to measure the effects of those short stories on participants’ short-term and long-term knowledge and behaviors. We found that the risk diversification story was the most effective at improving participants’ knowledge, in both the short and long term. The compound interest and inflation stories were able to significantly increase participants’ knowledge in the short term, but these effects faded
after eight months. Even though effective in increasing financial knowledge, the program seemed to be too short in nature to have an out enduring effect on financial behavior.
Work in progress:
“Did Investors Price Housing Bubbles? A Tale of Two Markets” (With Daniel Broxterman and Tian Luan)