Segmented Housing Search

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractInterstate migration in the United States has declined by 50 percent since the mid-1980s. This paper studies the role of the aging population in this long-run decline. We argue that demographic changes trigger a general equilibrium effect in the labor market, which affects the migration rate of all workers. We document that an increase in the share of middle-aged workers (those ages 40 to 60) in the working-age population in one state causes a large fall in the migration rate of all workers in that state, regardless of their age. To understand this finding, we develop an equilibrium search model of many locations populated by workers whose moving costs differ. Firms prefer hiring local workers with high moving costs as they command lower wages due to their lower outside option. An increase in the share of middle-aged workers causes firms to recruit more from the local labor market instead of hiring from other locations, which increases the local job-finding rate and reduces everyone's migration rate ("migration spillovers"). Our model reproduces remarkably well several cross-sectional facts between population flows and the age structure of the labor force. Our quantitative analysis suggests that population aging accounts for about half of the observed decline, of which 75 percent is attributable to the general equilibrium effect.

Section: Introductionmentioning

confidence: 99%

Population Aging, Migration Spillovers, and the Decline in Interstate Migration

Karahan

Rhee

2014

“…This confirms that there is a cascade effect in housing prices, with new buyers willing to pay more if the previous buyers were willing to pay more (Banerjee 1993, Piazzesi et al 2015). 29 The coefficient of previous price increases is negative, -0.32, but statistically insignificant.…”

Section: Hedonic Regression Of Pricesmentioning

confidence: 66%

“…Recent empirical evidence supports this prediction. For example, Piazzesi et al (2015) find that in each market segment, consumers are willing to pay higher prices for houses located in neighborhoods where most houses are too expensive for them.…”

Section: The Markets For Luxury Vs Non-luxury Homesmentioning

confidence: 99%

Here Lives a Wealthy Man: Price Rigidity and Predictability in Luxury Housing Markets

Lévy

Snir

2018

We use novel and unique data to study the effect of price changes in the market for luxury and middle class homes. We find that luxury home sales respond less to price changes than the middle-class home sales; in the market for luxury homes, past prices affect current prices; luxury home prices persist; and prices of luxury homes are stickier than prices of middle-class homes. Recent macroeconomic models predict that housing markets can have counter-cyclical effect, if home prices are flexible. Our findings imply that home prices, especially luxury home prices, may not be flexible enough to generate such effect.

“…Fourth, the same tension is isomorphic to that between a creditor/minority shareholder and a majority stockholder who can tunnel resources out of the firm through a complaisant management (Johnson et al, 2000). Finally, the very same interaction is strategically similar to that setting an agent against a principal in a segmented labor, financial or housing market with 1 − γ gaging the principal's capacity to lawfully operate in the secondary segment (Piazzesi, Schneider, and Stroebel, 2017).…”

Section: Property Rights and Exogenous Transaction Costsmentioning

confidence: 96%

“…Third, exhaustion of intellectual property rights has been mainly implemented in high-transaction costs developing countries (Ghosh, 2014), whereas the Article 31 of the TRIPS agreement allows the participants to impose compulsory licensing if the commercial terms for a voluntary license are "unreasonable" (Bond and Saggi, 2017). Finally, Piazzesi, Schneider, and Stroebel (2017) conclude that financial costs explain 14 percent of the price gap between first and secondary housing market segments.…”

mentioning

confidence: 99%

Property Rights, Transaction Costs, and the Limits of the Market.

Guerriero

2017

Although the relevance of property rights and transaction costs for trade and innovation are well-known, we still lack a formal framework to think about their origins and interplay. Within trade interactions, fully protecting the original owners' property implies that some high-valuation potential buyers inefficiently refuse to buy it because of transaction costs. When instead property rights are weak, low-valuation potential buyers inefficiently expropriate the original owners' property. The trade-off between these two misallocations entails that property rights will be weaker the larger transaction costs are regardless of whether they are driven by frictions outside the control of traders or determined by the mix of the dispersion in their valuation and either the original owners' market power or their privileged information. A similar conclusion holds true for an upstream firm's property rights on an input necessary to a downstream firm to introduce a new technology and whose cost is random and ex ante non contractible. This time, transaction costs rise with the likelihood of a more productive technology. All these implications survive when a group of traders/innovators has a larger political influence on institutional design and when the disincentive to effort effect of weak property rights is taken into account. Crucially, the model predictions are consistent with the negative effects of proxies for market frictions and failures on measures of the protection of personal, intellectual, and financial property for a panel of 135 countries spanning the 2006-2015 period. Evidence from several identification strategies suggests that these relationships are indeed causal.