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on Urban Economics and Policy |
| By: | Drayton, Elaine; Levell, Peter; Sturrock, David |
| Abstract: | We estimate local housing supply elasticities for 325 local authorities and 6, 788 census tract areas in England. We examine how housing supply responds to price changes across small areas and how this varies according to a rich set of geographic and policy constraints. Our central estimate for the average elasticity of relative local supply with respect to price across local authorities is 0.14 over a period of 25 years between 1996 and 2021. This is low compared to estimates from other countries. Elasticities are lower in areas with less land available for development, greater differences in elevation, higher historical population density and in areas where local planning authorities had a greater historic tendency to reject new developments. We also find that urban density and constraints on the amount of available land have stronger negative effects on the supply of larger properties than properties with fewer bedrooms. |
| JEL: | R12 R31 R38 O18 O20 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19629 |
| By: | Le Blanc, Julia; Slacalek, Jiri; White, Matthew |
| Abstract: | Homeownership rates and holdings of housing wealth differ immensely across countries. We specify and estimate a life cycle model with risky labor income and house prices in which households face a discrete–continuous choice between renting and owning a house, whose sale is subject to transaction costs. The model allows us to quantify three groups of explanatory factors for long-run, structural differences in the extensive and intensive margins of housing: the homeownership rate and the value of housing wealth of homeowners. First, in line with survey evidence, we allow for differences in expectations of house prices. Second, countries differ in the institutional set-up of the housing market: maximum loan–value ratio and costs of renting, maintaining, and selling a house. Third, we allow for differences in household preferences: the dispersion in discount factors, the share of housing expenditure, and the bequest motive. We estimate the model using micro data from five large economies and provide a decomposition to interpret what drives the cross-country differences in housing wealth. We find that all three groups of factors matter, although preferences less so. Differences in homeownership rates are strongly affected by (i) house price beliefs and (ii) the rental wedge, the difference between rents and maintenance costs, which reflects the quality of the rental market. Differences in the value of housing wealth are substantially driven by housing maintenance costs. |
| Keywords: | Housing; Homeownership; House price expectations; Housing market institutions; Cross-country comparisons |
| JEL: | D15 D31 D84 E21 G11 G51 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19838 |
| By: | Pestova, Anna; Popov, Alexander |
| Abstract: | College enrollment typically rises during recessions. This paper demonstrates that housing wealth destruction dampened this countercyclical effect in areas most affected by the U.S. housing bust of 2008-2011. By combining household data with a mortgage credit register and housing price data, we reveal that negative shocks to housing wealth significantly reduced college enrollment among homeowners relative to renters during this period. Up to 2% of the local college-age population did not pursue college enrollment at the height of the bust due to housing wealth destruction. The negative impact of homeownership on college education persists for a decade, contributing to persistently lower incomes among homeowners in the most affected areas. |
| Keywords: | Homeownership |
| JEL: | I24 E32 J24 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19785 |
| By: | Ursula Berresheim; Marina Hoch |
| Abstract: | The United States faces record-low fertility rates amid persistently high housing costs and a con strained housing supply. One factor may be the limited downsizing of empty-nesters and retirees, which concentrates housing among elderly cohorts and restricts access for young families during their prime childbearing years. This paper investigates the link between low fertility and the high elderly housing concentration. In the U.S. context, we document a strong association between low fertility and both high elderly housing concentration and low housing supply elasticity. To quantify the underlying mechanisms, we develop a general equilibrium overlapping generations model with endogenous fertility and housing. In the model, two channels dominate: liquidity constraints among young households, which prevent them from accessing housing large enough to comfortably raise children, and habit formation amongoldercohorts, whichdiscouragesdownsizingandfosterselderly housing concentration. We conduct counterfactual policy analysis aimed at raising fertility through a reduced elderly housing concentration. An increase in property taxation reduces elderly housing concentration, but depresses fertility and welfare. Liquidity-focused interventions are more effective: a targeted transfer to young parents simultaneously raises fertility, reduces concentration, and gener ates large welfare gains. Yet, the cohort-specific welfare decomposition shows that these gains come partly at the expense of older cohorts. |
| Keywords: | Fertility, Housing Markets, Housing Wealth Concentration, Demographic Change, Housing Affordability, Taxation |
| JEL: | J13 R31 E21 R21 J11 R38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_771 |
| By: | Fuad, Syed; Adisa, Abidemi; Farmer, Michael |
| Abstract: | This paper presents a proof-of-concept comparison of two approaches for delineating intra-urban housing submarkets, using Atlanta, Georgia as an illustrative case. The first approach applies the hierarchical model of Goodman and Thibodeau, which defines submarkets as spatially contiguous areas nested within high school districts. The second employs a fully endogenized finite mixture model (FMM) that partitions home sales into latent groups of households with similar preferences, independent of geographic location. Using approximately 5, 000 home sales from 2015-2016, a relatively stable period in the local housing market, we examine how each approach organizes house price variation and residential sorting, rather than attempting to identify a single optimal submarket structure. Both models generate efficient hedonic price estimates, but they differ fundamentally in the economic insights they provide. The hierarchical model offers a stable spatial framework for estimating the in situ capitalization of neighborhood amenities and public goods such as school quality. By contrast, the FMM reveals latent preference structures and highlights household sorting across potentially non-adjacent neighborhoods. Taken together, the results illustrate the complementary roles of spatially contiguous and preference-based submarket definitions in housing market analysis. Rather than advocating one approach over the other, the paper clarifies how different submarket strategies serve distinct analytical and policy objectives. |
| Keywords: | Research Methods/ Statistical Methods |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404729 |
| By: | Benos, Nikolaos (Department of Economics, University of Ioannina); Conti, Maurizio (University of Genoa); Papazoglou, Michail (European Centre for the Development of Vocational Training); Tsoumaris, Stamatis (Università degli Studi Guglielmo Marconi)) |
| Abstract: | We examine universities and urban growth in pre-industrial Europe using a panel of 2, 247 cities from 1000 to 1800 and a staggered difference-in-differences design. Under the maintained identifying assumptions, university establishment is associated with approximately 20 percent higher city population, but estimates are highly heterogeneous. Population gains are strongest in earlier centuries and weaken as universities diffuse, while after 1500 they are concentrated among high-quality universities and commercially connected cities, especially near Atlantic and North Sea trade routes. University establishment is also followed by improved local market access. Overall, universities matter most where academic quality and commercial opportunities are greatest. |
| Keywords: | universities, urban growth, upper-tail human capital, market access, pre-industrial Europe |
| JEL: | N33 O15 O18 R11 I23 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18781 |
| By: | Chandhini Anbalagan (Research Scholar, Madras School of Economics, Chennai, India.); Zareena Begum Irfan (Professor, Madras School of Economics, Chennai, India.) |
| Keywords: | Housing deprivation ; Multiple Correspondence Analysis ; Housing Adequacy ; Urbanisation. Classification-JEL: : R21, R31, I32, C38Abstract: Despite a significant decline in extreme poverty rates, the rising inequalities and rapid urbanization in mega cities of India have exacerbated the problems of inadequate housing, overcrowding, and the proliferation of informal settlements. Given the multidimensional nature of housing deprivation, the study employed 18 key indicators of housing deprivation from the 76th National Sample Survey on Drinking Water, Housing, and Sanitation to develop the “Housing Deprivation Index” at the household level for the year 2018. Multiple Correspondence Analysis (MCA) was employed to endogenously weight the 18 housing quality indicators, with the first dimension explaining 73% as a latent construct of the housing deprivation level. State level estimates of housing deprivation reveal stark interstate disparities. Housing deprivation in India is shaped by social, spatial and economic inequality with disadvantaged caste, rural households and poorer households experiencing significantly high deprivation. These findings underscore the need for housing policy to occupy a central position in India amid rapid urbanization and persistent spatial and socio-economic inequalities in adequate housingLength: 34 pages |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2026-308 |
| By: | Frigon, Anthony; Storper, Michael |
| Abstract: | Advanced economies have undergone enormous structural change in work, income distribution, and the skills of the working population over the past half century. These changes have driven changing geographies of people and households, which are sorted across regions according to their work and incomes. A key previous finding is that high-skill workers have been increasingly concentrating in large metropolitan areas, earning significant wage premiums, while returns to low-skill, lower-wage work shows less spatial variation and tends to be tied to local demand for nontradable services. However, this bipartite division loses considerable information. In this paper, we therefore use a tripartite division (high-, medium-, and low-skilled) to shed additional light on the changing spatial reality of population sorting. Our research generates robust evidence that medium-skill workers have been increasingly spatially separated away from high-skill workers. The middle-skilled and the high-skilled are much less exposed to one another than was the case in the past, a reality that is lost when using only two groups. In addition, we show how spatial sorting of the three groups has affected their relative economic welfare, by documenting shifting real incomes for the three groups in the places where they are dominant. This reflects systematic differences in how their housing costs and their wages evolve relative to each other, an effect of occupational wage differences, on one hand, and spatial sorting on the other. Even though sorting of the middle group in the direction of smaller noncoastal areas does reduce the gap in real incomes relative to the gap when such workers remain in high-skilled |
| JEL: | J1 |
| Date: | 2026–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140478 |
| By: | Ahlfeldt, Gabriel; Bald, Fabian; Roth, Duncan; Seidel, Tobias |
| Abstract: | Using a quantitative spatial model as a data-generating process, we explore how spatial frictions affect the measurement of quality of life. We find that under a canonical parameterization, mobility frictions---generated by idiosyncratic tastes and local ties---dominate trade frictions---generated by trade costs and non-tradable services---as a source of measurement error in the Rosen-Roback framework. This non-classical measurement error leads to a downward bias in estimates of the urban quality-of-life premium. Our application to Germany reveals that accounting for spatial frictions results in larger quality-of-life differences, different quality-of-life rankings, and an urban quality-of-life premium that exceeds the urban wage premium. |
| Keywords: | Housing |
| JEL: | J3 R2 R3 R5 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19769 |
| By: | Tatiana Kirsanova; Oyvind Masst; Charles Nolan |
| Abstract: | This paper studies interactions between labour and housing markets in the United Kingdom. We estimate a New Keynesian DSGE model with search frictions in both markets, cross-market spillovers, and regime-switching monetary policy using UK quarterly data from 1971 to 2025. The estimates imply strong two-way interactions: housing-market disturbances affect unemployment, job creation and labour-market tightness, while labour-market shocks propagate into house prices, rents and housing activity. We use the model to study the major structural changes associated with the Thatcher era, including falling public housing construction, rising owner occupation and declining worker bargaining power. The results suggest that the largest effects operated through the labour market: lower bargaining power reduced unemployment substantially, while housing reforms increased owner occupation but did not generate a large lasting improvement in affordability. |
| Keywords: | estimated New Keynesian DSGE model, monetary policy, search-and-matching frictions, labour and housing markets, Thatcher times |
| JEL: | E32 E24 E52 E65 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2026-66 |
| By: | Mathias Dolls; Clemens Fuest; David Gstrein; Carla Krolage; Florian Neumeier |
| Abstract: | We study how regulatory risk affects housing markets in the aftermath of rent control. Our setting is Berlin, where a stringent rent cap introduced in 2020 was repealed in 2021, but was followed by continued political debate over expropriation of housing companies and further intervention. Using micro-level listing data and a hedonic difference-in-differences design comparing Berlin to other major German cities, we show that Berlin’s price-rent ratio remained 10–15 percent below its pre-intervention trend three years after repeal. To interpret this persistence, we develop a simple model in which institutional investors face greater exposure to future regulation. The model predicts lower asset prices, reduced institutional ownership, and partial crowding-in of private investors. Consistent with these predictions, we document a sharp rise in housing policy uncertainty after repeal and show that large housing companies reduced their Berlin portfolios, accepted lower sale prices, and sharply cut construction activity. The results imply that credible threats of future intervention can depress housing valuations and reshape market structure even in the absence of binding regulation. |
| Keywords: | housing markets, rent regulation, policy uncertainty, asset pricing, institutional investors, property rights |
| JEL: | R31 R38 D84 G12 P48 H13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12851 |
| By: | Desiraju, Naga Lavanya; Delgado, Michael |
| Abstract: | In this paper, we explore the roles of migration frictions, land constraints, and international agricultural trade in uneven wage growth across districts in India. To answer this question, the paper combines reduced-form econometric methods with a quantitative spatial equilibrium model calibrated to a district-level monthly panel for 2010–2022. There are two stages to the empirical strategy. First, we estimate a Spatial Durbin model (SDM) to quantify the effects of local and neighboring districts’ conditions on district-level agricultural wages. These reduced-form estimates provide evidence of spatial spillovers and give elasticities that will be used in calibrations in the next step. In the second stage, we calibrate a quantitative spatial equilibrium model with costly labor migration, fixed land endowments, and heterogeneous productivity across districts. The calibration is performed using a simulated method of moments to match observed wage dispersion, spatial autocorrelation, and the responsiveness of wages to weather and trade shocks. This approach helps decompose the relative contributions of migration frictions, land scarcity, climate variability, and trade exposure to the divergence in wages. Finally, we also conduct counterfactual simulations measuring how changes in mobility barriers, export demand, or climate risk could alter the distribution of agricultural wages in India. |
| Keywords: | International Development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404637 |
| By: | Bruns, Daniel (Leibniz University of Hannover); Thomsen, Stephan (Leibniz University of Hannover) |
| Abstract: | How do residential real estate markets value large-scale climate policies? We study how Germany’s coal phase-out affects residential property values near decommissioned power plants. Combining detailed residential property listing data from 2007 to 2023 with the staggered timing of plant closures, we estimate dynamic spatial DiD models. Nearby residential property values decline by 8.2%, implying aggregate homeowner wealth losses of approximately €1.9 billion. To distinguish economic from environmental adjustment, we examine changes in employment, population, purchasing power, and air pollution. Declines in population, employment and purchasing power coincide with falling residential property values, whereas improvements in air quality do not seem to offset these losses. Our findings show that residential real estate markets primarily capitalize the deterioration of local economic fundamentals rather than improvements in environmental quality, implying that climate policy generates substantial localized household wealth effects through residential real estate markets – a distributional channel that complements conventional evaluations focused on aggregate environmental benefits and macroeconomic adjustment. |
| Keywords: | asset pricing, housing prices, climate policy, wealth effects, real estate |
| JEL: | Q40 Q48 R12 R31 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18865 |
| By: | Ma, Zhiyao; Sexton, Richard J.; Zhong, Zhen |
| Abstract: | Inefficient land allocation between rural and urban areas persists in China under rigid land-use regulations and sustained rural outmigration. In 2008, the central government authorized Chongqing, a municipality with provincial-level authority, to pilot Dipiao, the Land Coupon Program (LCP), a market-based mechanism allowing rural construction quotas to be traded for urban expansion, with the stated goals of advancing urban–rural integration and raising rural household incomes. We examine whether the LCP narrowed the urban–rural income gap. Exploiting staggered county-level adoption across 37 counties between 2009 and 2017, we apply heterogeneity-robust difference-in-differences estimators, complemented by provincial-level synthetic control analysis. The LCP lowered Chongqing’s urban–rural income ratio by 0.21 (6.0%) on average, with the effect growing monotonically to 0.29 (8.3%) after nine years. Most convergence occurred within counties, driven by rising rural incomes rather than falling urban ones. Participation tracked baseline disadvantage: poorer, more rural, and more unequal counties adopted the LCP earlier and traded more intensively. A multiplier analysis further suggests that land coupon revenues flowing to rural households and collectives amplified local economic impacts, reducing inequality in a progressive and compounding manner. More broadly, our findings show how government-facilitated market mechanisms can promote inclusive growth and reduce spatial inequality in economies where private landholding is constrained, contributing to debates on transferable rights in transitional and developing settings. |
| Keywords: | International Development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404632 |
| By: | Fang, Jo; Speer, Jessie |
| Abstract: | England today is embroiled in a housing crisis resulting from decades of policy choices that have eroded affordability. Simultaneously, political parties and popular media have constructed a so-called ‘migrant crisis’ based in the misplaced perception that increasing rates of migration have overburdened public budgets. Though often discussed separately, the housing crisis and the perceived crisis of migration are deeply intertwined outcomes of the same ideological, historical, and economic processes. In this article, we trace a critical history of English housing policy in light of contemporary anti-migrant narratives. Building on work from theorist Stuart Hall, who contended that moral panics around mugging in 1970s Britain served to distract from economic crisis and justify policing agendas, we argue that contemporary anti-migrant narratives have similarly taken root because of widespread economic anxiety in the face of strained public resources and escalating housing costs. We show how the scapegoat produced by contemporary migration panics is not only empirically unclear and conceptually oversimplistic but diverts attention away from longer-term political choices that have exposed large segments of the population to housing insecurity. |
| Keywords: | crisis;home;housing;migration;moral panic |
| JEL: | R14 J01 |
| Date: | 2026–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140441 |
| By: | Christopher Gresh; Andrew F. Haughwout; Eungik Lee; Wilbert Van der Klaauw |
| Abstract: | Americans are moving less than they used to. Moving rates have declined steadily for decades, falling from close to 20 percent annually in the mid-1980s to below 10 percent by 2019. This decline has persisted through business cycles and has been evident across all regions, and has affected a broad range of demographic groups. Falling mobility matters because moving helps households access job opportunities, adjust to changing circumstances, and improve their housing situations. In this post, we show that the decline in mobility also holds for renters, with growing challenges to owning a home being an important contributing factor. We use data from the annual New York Fed SCE Housing Survey to study renters’ expected mobility and the factors that shape it. Renter mobility is important as renters account for roughly a third of U.S. households and, unlike homeowners, are not subject to mortgage rate lock-in. Since expected mobility predicts actual moving behavior, it provides an early signal of where residential mobility is headed before moves occur. |
| Keywords: | residential mobility; renters; moving expectations |
| JEL: | R23 R21 D84 |
| Date: | 2026–08–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:103611 |
| By: | Aguilar-Bohorquez, Joseph; Akee, Randall; Mykerezi, Elton |
| Abstract: | American Indian reservations face long-standing barriers to private-sector development. The Indian Gaming Regulatory Act of 1988, which enabled the establishment of casino operations on American Indian tribal lands is one of the most consequential sovereignty-driven, place-based interventions in Native communities. We study its impact on local business revenues and job creation by linking geocoded establishment-level microdata to federally recognized reservation boundaries and a panel of tribal casino openings from 1990 to 2019, using a staggered-adoption event study with never-treated reservation controls. Casino openings lead to economically meaningful and persistent growth in reservation business activity: average establishment sales increase by 47% and employment increases by 50% after opening. Importantly, incumbent establishments also expand, with sales increasing by 17% and employment increasing by 26%, indicating that development benefits extend beyond new entry and beyond the casino itself. When excluding gaming-adjacent industries, employment effects remain positive while sales effects attenuate and are less precisely estimated. Overall, the results provide evidence that tribal casino development leads to sustained private-sector expansion inside reservation boundaries, consistent with local demand, business-to-business spending, and visitor-spending spillovers, and highlight a mechanism through which Indigenous self-determined enterprise can contribute to long-run economic development. |
| Keywords: | Community/Rural/Urban Development |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea26:404771 |
| By: | Treb Allen; Simon Fuchs; Woan Foong Wong |
| Abstract: | How do we evaluate the welfare gains from transport infrastructure investment? We present a quantitative spatial framework that integrates traffic and economic responses to infrastructure improvements and derives the elasticity of aggregate welfare to changes in the transportation network. The resulting formula extends the traditional “social savings” method to incorporate route and mode choice, agglomeration and dispersion externalities, and traffic congestion. We apply the formula to the U.S. freight network and assess the benefits of reducing costs on each segment of the U.S. Interstate Highway System. The traditional and extended measures are closely related overall, but they differ in the level of estimated gains and in the ranking of some highly valued links. Where the rankings differ, network position determines how congestion and spatial adjustment alter a link’s measured benefit. |
| Keywords: | transportation networks, infrastructure, social savings, quantitative spatial models |
| JEL: | H54 R12 R13 R41 R42 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12901 |
| By: | Elass, Kenza; García-Peñalosa, Cecilia; Schluter, Christian |
| Abstract: | We examine the economic geography of gender wage gaps to understand the role that location plays in gender earning differences. Using panelised administrative data for the universe of French workers, our findings indicate that women benefit relatively more from density than men, with an urban wage premium (return to urban density) 48% higher than for men. We identify a number of factors that explain this gap, with a large share being explained by the structure of the local labour market, notably, the extent of occupational segregation. Another important factor is commuting patterns, while childcare availability plays only a moderate role. |
| Keywords: | Gender wage gap; Agglomeration economies |
| JEL: | J31 J16 R10 R23 R12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19592 |
| By: | Van Doornik, Bernardus; Fazio, Dimas; Ramadorai, Tarun; Skrastiņš, JÄ nis |
| Abstract: | This paper examines the impact of access to housing on fertility rates using random variation from housing credit lotteries in Brazil. We find that obtaining housing increases the average probability of having a child by 3.8% and the number of children by 3.2%. For 20 to 25-year-olds, the corresponding effects are 32% and 33%, with no increase in fertility for people above age 40. The lifetime fertility increase for a 20-year old is twice as large from obtaining housing immediately relative to obtaining it at age 30. The increase in fertility is stronger for households in areas with lower quality housing, greater rental expenses relative to income, and those with lower household income and lower female income share. These results suggest that alleviating housing credit and physical space constraints can significantly increase fertility. |
| JEL: | D14 G23 J62 R20 R23 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19805 |
| By: | Rodríguez-Pose, Andrés; Bartalucci, Federico; Lozano Gracia, Nancy; Dávalos, María |
| Abstract: | Territorial development theory and practice have witnessed significant change in recent times. This change has increasingly put the spatial dimension at the centre of development policies. Where agglomeration-focused policies derived from urbanization and agglomeration economics were once prominent, their empirical limitations have become increasingly apparent. Greater territorial polarization and pervasive left-behindedness has underscored the need for a more inclusive territorial development approach prompting increased interest in understanding and addressing regional disparities to ensure more equitable economic growth. This article synthesizes the growing interest in territorial development, which has driven to the adoption of what are increasingly place-based and place-sensitive approaches to development. The article also emphasises the need for complementarity between efficiency-driven and equity-focused interventions, while highlighting emerging topics in regional economics research, including the role of institutions, agency, and external megatrends such as the green transition. We conclude by advocating a place-sensitive approach that tailors policies to regional challenges, promoting economic potential, diversification, and inclusivity across all regions. |
| Keywords: | Q56 |
| JEL: | R11 O18 R58 Q56 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19623 |