Tuesday, July 22, 2008

The Scholarship of Location, Location, Location....

Real Estate Roundup, for KPC readers!

Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence

Oded Galor, Omer Moav & Dietrich Vollrathy
Review of Economic Studies, forthcoming

This paper suggests that inequality in the distribution of land ownership adversely affected the emergence of human capital promoting institutions (e.g., public schooling) and thus the pace and the nature of the transition from an agricultural to an industrial economy, contributing to the emergence of the great divergence in income per capita across countries. The prediction of the theory regarding the adverse effect of the concentration of land ownership on education expenditure is established empirically based on evidence from the beginning of the 20th century in the US.

Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program

Michael Greenstone & Justin Gallagher
Quarterly Journal of Economics, August 2008, Pages 951-1003

This paper uses the housing market to develop estimates of the local welfare impacts of Superfund-sponsored cleanups of hazardous waste sites. We show that if consumers value the cleanups, then the hedonic model predicts that they will lead to increases in local housing prices and new home construction, as well as the migration of individuals that place a high value on environmental quality to the areas near the improved sites. We compare housing market outcomes in the areas surrounding the first 400 hazardous waste sites chosen for Superfund cleanups to the areas surrounding
the 290 sites that narrowly missed qualifying for these cleanups. We find that Superfund cleanups are associated with economically small and statistically insignificant changes in residential property values, property rental rates, housing supply, total population, and types of individuals living near the sites. These findings are robust to a series of specification checks, including the application of a regression discontinuity design based on knowledge of the selection rule. Overall, the preferred estimates suggest that the local benefits of Superfund cleanups
are small and appear to be substantially lower than the $43 million mean cost of Superfund cleanups.


Estimates of the Impact of Crime Risk on Property Values from Megan's Laws

Leigh Linden & Jonah Rockoff
American Economic Review, June 2008, Pages 1103-1127

"Using very detailed data on the locations of convicted sex offenders (whose identities and residential locations are made public on the North Carolina Sex Offender Registry) and the dates on which they move into a neighborhood, we estimate that, on average, the values of homes within 0.1 miles of an offender fall by roughly 4 percent. This effect dissipates quickly with distance of homes from the offender; homes between 0.1 and 0.3 miles away show no effect...Our estimates suggest that individuals have a strong distaste for living in close proximity to a sex offender. We estimate that a single offender depresses property values in the immediate vicinity by about $5,500 per home. If we aggregate these effects across all homes affected and all offenders, we find that the presence of sex offenders depresses property values in Mecklenburg County by about $60 million. This suggests that
households would be willing to pay a high cost for policies that remove sexual offenders from their neighborhoods."


Making Property Productive: Reorganizing Rights to Real and Equitable Estates in Britain, 1660 to 1830

Dan Bogart & Gary Richardson
NBER Working Paper, June 2008

Between 1660 and 1830, Parliament passed thousands of acts restructuring rights to real and equitable estates. These estate acts enabled individuals and families to sell, mortgage, lease, exchange, and improve land previously bound by inheritance rules and other legal legacies. The loosening of these legal constraints facilitated the reallocation of land and resources towards higher-value uses. Data reveals correlations between estate acts, urbanization, and economic development during the decades surrounding the Industrial Revolution.


Lessons from Strange Cases: Democracy, Development, and the Resource Curse in the U.S. States

Ellis Goldberg, Erik Wibbels & Eric Mvukiyehe
Comparative Political Studies, April 2008, Pages 477-514

The work linking natural resource wealth to authoritarianism and under-development suffers from several shortcomings. In this article, the authors outline those shortcomings and address them in a new empirical setting. Using a new data set for the U.S. states spanning 73 years and case studies of Texas and Louisiana, the authors are able to more carefully examine both the diachronic nature and comparative legs of the resource curse hypothesis than previous research has. They provide evidence that natural resource dependence contributes to slower economic growth, poorer developmental performance, and less competitive politics. Using this
empirical setting, they also begin parsing the mechanisms that might explain the negative association between resource wealth and political and economic development. They draw implications from intranational findings for resource abundant countries across the world and suggest directions for future cross-national and cross-state work.

(Mega-nod to KL. All praise be unto him)