Essays in Urban Economics

Description

This dissertation uses various empirical techniques to analyze economic outcomes within cities. The first chapter considers the effect that demolishing public housing has on crime and property values. The second chapter examines the effect of residential home foreclosure on nearby property values. The third chapter focuses on how neighborhood home prices respond housing demand shocks. The theme that unifies the three chapters is a focus on economic factors and outcomes that operate within cites. I first consider the effect of public housing demolition on crime and property values. Despite popular accounts that link public housing demolitions to spatial redistribution of crime, and possible increases in crime, little systematic research has analyzed the neighborhood or city-wide impact of demolitions on crime. In Chicago, which has conducted the largest public housing demolition program in the United States, I find that public housing demolitions are associated with a 20% to 50% reduction in violent crime in neighborhoods where the demolitions occurred. I also find evidence of increases in residential construction and home prices in these neighborhoods. Furthermore, homes close to large public housing developments exhibit larger price growth than those located further from public housing, during the period when these developments are being demolished. Finally, using a panel of cities that demolished public housing, I find that public housing demolitions are associated with a drop of about 10% in a city's murder rate. I interpret these findings as evidence that while public housing demolitions may push crime into other parts of a city, crime reductions in neighborhoods where public housing is demolished are larger than crime increases elsewhere. The next chapter examines the effect of residential home foreclosures on nearby property values. Several studies have measured negative price effects of foreclosed residential properties on nearby property sales. However, these studies do not address which mechanism is responsible for these effects. I decompose the effects of foreclosures on nearby home prices into a component that is due to additional available housing supply and a component that is due to dis-amenity stemming from deferred maintenance or vacancy. I find measurable effects on home prices within 250 feet of a foreclosure auction that occurred within the past year. In census tracts with low vacancy rates, the supply effect is roughly -1.3% per foreclosure and the dis-amenity effect is roughly -1% per foreclosure. In census tracts with high vacancy rates, the supply effect falls to about zero, while the dis-amenity effect remains near -1% per foreclosure. Finally, I consider optimal liquidation strategies for lenders with foreclosed properties within 250 feet of one another, and under what conditions Pareto-improving policies could exist. In the final chapter Veronica Guerrieri, Erik Hurst, and I focus on how neighborhood home prices respond to city-level demand shocks. A number of studies have explored housing price dynamics at the level of cities or metropolitan areas. However, far less is known about neighborhood housing price dynamics. How do low price neighborhoods fair relative to high price neighborhoods in times of boom and bust? This paper examines those questions. We document a stylized fact. On average, low-price neighborhoods appreciate more during city-wide housing booms than high-price neighborhoods (price convergence during booms). This pattern is robust across different data sets, time periods, and city boundary definitions. We also find somewhat weaker evidence suggesting that low-price neighborhoods...

Details

Author(s)
Daniel Aaron Hartley
Format
Paperback | 182 pages
Dimensions
189 x 246 x 10mm | 336g
Publication date
01 Sep 2011
Publisher
Proquest, Umi Dissertation Publishing
Publication City/Country
Charleston SC, United States
Language
English
ISBN10
1243770058
ISBN13
9781243770059