Housing Markets, Local Constraints, and Monetary Policy in England
The UK housing market features some of the most expensive, yet smallest dwellings in Europe. Nonetheless, historically low policy rates fuel housing demand. But because incomes, regulatory and physical constraints differ across regions, so does the transmission of an aggregate policy shock. This paper investigates the response of English house prices and property sizes to a monetary policy shock, and analyzes the role of local constraints in the transmission mechanism. Using data for all residential property sales between 1995 and 2015, I present 3 main results. First, prices and transactions rise following an unanticipated cut in the policy rate, with more pronounced results for re-sales compared to first-time sales. Second, I show that the income channel plays no role in determining local differences in housing market dynamics. Finally, local planning regulations create a trade-off between higher prices and preserving property size. Thus, local policy can affect the distributional impact of monetary policy on the housing market.
Cuff, Cuff, Pass? The Deterrent and Displacement Effects of Cannabis Dispensaries on Crime (Joint with Rhet Smith and Justin Roush)
We pair exact dispensary location with city block-level crimes to examine the effect of medical cannabis dispensaries on crime throughout the state of Florida. We incorporate foot-traffic data from anonymized smartphones use a geo-spatial difference-in-differences approach to find that dispensaries with high customer volume deter street-level crimes such as larceny, burglary from vehicles, and motor vehicle theft. We do not find evidence of similar reductions near low volume dispensaries. Because security measures will be similar across high- and low-volume dispensaries, the non-monotonic effects suggest that foot traffic and additional bystanders play a crucial role in crime deterrence near dispensaries.
Road Infrastructure and the Skill Premium: Evidence from Indian Manufacturing (Joint with Santanu Chatterjee and Abhinav Narayanan)
We examine the relationship between new road infrastructure and local labor markets in India's manufacturing sector by exploiting the variation in completion times of a major highway construction project. Using firm and individual-level data, we find that the skill premium increases in districts that are on a completed section of the highway project. This effect is driven by large firms, especially those with a large share of transportation assets, indicating the presence of capital-skill complementarity. On the other hand, the skill composition at the firm level remains unchanged, pointing to labor market imperfections: the skill premium increases in districts with a larger than average share of under-qualified workers. Further, completion of a highway segment reduces the monopsony power of local firms, enabling high skilled workers to bargain for higher wages.
Work in Progress
Understanding the Aggregate and Distributional Impact of Remittances (Joint with Santanu Chatterjee and John Gibson)
Optimal Public Debt in a Small Open Economy (Joint with Santanu Chatterjee and John Gibson)
Dispensary openings and Changes to Policing - Evidence from Chicago (Joint with Xiuming Dong and Rhet Smith)
Infrastructure and Market Power - Evidence from Indian Formal and Informal Manufacturing (Joint with Santanu Chatterjee and Abhinav Narayanan)
Williams College of Business
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