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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jue.2008.12.003 Byline: N. Edward Coulson (a), Lynn M. Fisher (b) Keywords: Homeownership; Immobility; Unemployment; Search theory Abstract: We develop two search-theoretic models emphasizing firm entry to examine the Oswald hypothesis, the idea that homeownership is linked to inferior labor market outcomes, and compare their predictions to three extant theories. The five models have surprisingly different predictions about the labor market at both the aggregate and micro levels. Using a suitable instrumental variable strategy, we estimate both micro and aggregate level regression models of wages and unemployment and compare the estimates to those predictions. We find that while homeowners are less likely to be unemployed, they also have lower wages, all else equal, compared to renters. In addition, higher regional homeownership rates are associated with a greater probability of individual worker unemployment and higher wages. The outcome of a horserace between our new search-theoretic models is mixed -- the wage-posting model predicts observed unemployment impacts while a bargaining variant does a better job explaining observed wages and aggregate labor market outcomes. Overall, we conclude that firm behavior is important for understanding the labor market impacts of homeownership. Because this is the case, regional homeownership rates are not good instruments for individual tenure choice in empirical work. And while individual homeowners may have inferior labor market outcomes as compared to renters, from the viewpoint of society, higher homeownership rates may result in greater job creation and overall production, among other benefits. Author Affiliation: (a) Department of Economics, Penn State University, United States (b) Department of Urban Studies and Planning, Massachusetts Institute of Technology, United States Article History: Received 17 March 2008; Revised 3 December 2008

This article presents a model of urban and central employment, taking into account fluctuations in sectoral movements. Results reveal little feedback between suburban and central city employment; the most significant influence comes from local shocks of supply and/or demand.

Sources of fluctuations in the economy of Boston, MA, from 1951 to 1971 are examined. For this purpose, vector autoregression models are developed to identify structural disturbances which may have affected aggregate or sectoral fluctuations in the city. Results show that the aggregate economy has been primarily shaped by both national and local shocks, but not by other fluctuation sources commonly perceived as the driver of economic growth in Boston. Defense spending is found to have minimal impact in most sectors. The findings suggest that the economic turnaround, referred to as the Massachusetts Miracle, can actually be traced to non-defense technology shocks. The subsequent downturn, on the other hand, is caused by negative demand shocks as well as factors unique to Boston.

Sources of employment growth differentials among industries in metropolitan Philadephia are examined using the shift-share model. These sources are national, industrial, regional and idiosyncratic factors that can be estimated using an autoregressive vector semistructure. Derived from standard supply and demand analysis, the shift-share model decomposes regional industrial growth into metropolitan industry employment, national industry employment and national employment figures. However, more general specifications outperform this restrictive model, which understates the effects of local industry shocks on sectoral employment. The results imply that local shocks are a major determinant of regional employment trends.

A base multiplier model is developed and analyzed. The model can be theoretically justified and derived from mutiplier model properties. The base multiplier is presented as a basic model of regional economics. For the base model to be useful in analysis, it should clearly define the base as a portion of regional economic supply prepared for exports. The model cointegrates regional economic base and total employment under long-term equilibrium conditions.

Claims data from the Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) program indicates a marked persistence in annual prescription drug use among members. Heavy pharmaceutical users tended to remain as such for a much longer period than low users. The similarity of the situation in PACE to other Medigap programs indicates that the high level of temporal persistence in precription utilization among beneficiaries subsequent to enrollment will also apply to the latter.

Hedonic rent and wage equations are used to measure compensating differential in central cities and metropolitan areas with franchises of the National Football League (NFL). If the quality-of-life benefits are included in the calculations, the larger public expenditure on sports franchise will prove a good investment for the cities and their residents.

A model of neighborhood change is proposed which integrates the effects of an influx of low-income households into a neighborhood combined with effects of aging housing units. An analysis of the model indicates that as housing gets older, the filtering of housing down to low-income groups may be unstable because the value of housing is positively related to the percentage of high-income households in a neighborhood. Results also suggest that if old housing is replaced by new housing on a steady basis, a neighborhood may be able to sustain a mixed-neighborhood equilibrium.

Spatial distribution housing price models typically show that transportation costs have a major role. Increased transit costs would therefore increase the hedonic price of centrally located residences. Empirical work confirms this analysis, but in unexpected ways. Changes in costs other than for gasoline appear to have been capitalized more or less correctly into housing costs, but time and gasoline cost changes have been overcapitalized. It is suggested that overcapitalization of gasoline costs was associated with unstable gasoline price expectations during the 1970s that were associated with boycotts and other trends of that time period. Time costs appear to have an extremely large effect, possibly due to the strong lack of utility of commuting time.

A hypothesis is examined which suggests that the existence of arbitrage and repackagability in a market is indicated by the presence of a 'more linear' hedonic price index. Results indicate that the rental hedonic price linearity is not caused by the differing types of structures in the rental versus the owner-occupier markets, and that linearity as repackaging does have some content because landlords can combine and divide multiple units.

The orthogonalization scheme concept offers an effective tool for utilizing vector autoregression models, particularly in evaluating the role played by industrial sectors on metropolitan growth. This shift-share principle-based approach allows researchers to identify industry shocks prevalent in the national and local levels. Among these shocks, public sector and manufacturing employment have been found to create the most profound impact on metropolitan growth.

A study was conducted to explain the low homeownership rate for Hispanic-Americans and Asian-Americans. This analysis focused on the possible effect of immigrant status and other factors on the likelihood of becoming homeowners. The study follows a series of probit models of homeownership using data culled from the Mar 1996 Current Population Survey. Findings revealed that immigration status indeed has an explanatory role in the lower homeownership rates among these ethnic groups. The length of stay in the US was found to have a positive relationship with homeownership. However, immigration status is not the only factor affecting homeownership. Location in areas with expensive homeownership rates is a contributing factor, particularly among Asian-Americans. The lower educational achievement of Hispanic-Americans is also responsible for homeownership. Finally, young household heads were also found to have an impact.