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Title: Essays on the Economics of Space
Citation Type: Dissertation/Thesis
Publication Year: 2016
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Abstract: These essays contribute towards our understanding of the economics of space. This dissertation is composed of three chapters. Chapter one—Is the rent too high? Aggregate implications of local land- use regulation: Highly productive U.S. cities are characterized by high housing prices, low housing stock growth, and restrictive land-use regulations (e.g., San Francisco). While new residents would benefit from housing stock growth due to higher incomes or shorter commutes, existing residents justify strict local land-use regulations on the grounds of congestion and other costs of further development. This paper assesses the welfare implications of these local regulations for income, congestion, and urban sprawl within a general equilibrium model with endogenous regulation. In the model, households choose from locations that vary exogenously by productivity and endogenously according to local externalities of congestion and sharing. Existing residents address these externalities by voting for regulations that limit local housing density. In equilibrium, these regulations bind and house prices compensate for differences across locations. Relative to the planner's optimum, the decentralized model generates spatial misallocation whereby high-productivity locations are settled at too-low densities. The model admits a straightforward calibration based on observed population density, expenditure shares on consumption and local services, and local incomes. Welfare and GDP would be 1.4% and 2.1% higher, respectively, under the planner??Ễs allocation. Abolishing zoning regulations entirely would increase GDP by 6%, but lower welfare by 5.9% due to greater congestion. Chapter two—The impact of emerging climate risks on urban real estate price dynamics: In the typical asset market, an asset featuring uninsurable idiosyn- cratic risk must offer a higher rate of return to compensate risk-averse investors. A home offers a standard asset’s risk and return opportunities, but it also bundles access to its city’s amenities??Ẻand to its climate risks. As climate change research reveals the true nature of these risks, how does the equilibrium real estate pricing gradient change when households can sort into different cities? When the population is homogeneous, the real . . .
Url: https://escholarship.org/uc/item/08j761z8
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Authors: Bunten, Devin
Institution: UCLA
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Data Collections: IPUMS USA
Topics: Land Use/Urban Organization, Other
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