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The impact of housing supply restrictions

Summary:
I calibrate the [spatial] model to the U.S. economy and find that the rise in regulation accounts for 23% of the increase in wage dispersion and 85% of the increase in house price dispersion across metro areas from 1980 to 2007. I find that if regulation had not increased, more workers would live in productive areas and output would be 2% higher. I also show that policy interventions that weaken incentives of local governments to restrict supply could reduce wage and house price dispersion, and boost productivity. That is from Andrii Parkhomenko (pdf), a recent job candidate, there are 62 pp. at the link, and for the pointer I thank Tyler Ransom. Here is a related column by Noah Smith. The post The impact of housing supply restrictions appeared first on Marginal REVOLUTION.

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I calibrate the [spatial] model to the U.S. economy and find that the rise in regulation accounts for 23% of the increase in wage dispersion and 85% of the increase in house price dispersion across metro areas from 1980 to 2007. I find that if regulation had not increased, more workers would live in productive areas and output would be 2% higher. I also show that policy interventions that weaken incentives of local governments to restrict supply could reduce wage and house price dispersion, and boost productivity.

That is from Andrii Parkhomenko (pdf), a recent job candidate, there are 62 pp. at the link, and for the pointer I thank Tyler Ransom.

Here is a related column by Noah Smith.

The post The impact of housing supply restrictions appeared first on Marginal REVOLUTION.

Tyler Cowen
Tyler Cowen is an American economist, academic, and writer. He occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. Cowen and Tabarrok have also ventured into online education by starting Marginal Revolution University. He currently writes the "Economic Scene" column for the New York Times, and he also writes for such publications as The New Republic, the Wall Street Journal, Forbes, Newsweek, and the Wilson Quarterly.

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