Janet E. Kohlhase

The impact of toxic waste sites on housing values

Abstract This paper analyzes the impact of the Environmental Protection Agency (EPA) announcements and policy actions on housing markets. When the EPA announces that a toxic waste site is on the Superfund list, the findings of this paper show that a new market for “safe” housing is created. A premium to be located farther from a waste site appears only after a site has been added to the Superfund list. Empirical analysis of the housing market calculates the marginal prices in this new market, and importantly, show that the marginal price to avoid a toxic waste site disappears after a site has been cleaned.

The Earnings of Soviet Workers: Evidence from the Soviet Interview Project

Micro data gathered by the Soviet Interview Project provide one of the first opp ortunities for Western researchers to investigate the determinants of Soviet earnings. The data show that Soviet labor markets operate in many respects like U.S. labor markets, yet institutional differences remain. The most striking institutional impact is that Soviet workers are rewarded and penalized for political behavior external to the firm. As in the U.S., education and experience are rewarded; men earn more than women. However the Soviet pattern of returns to education is different, returns to experience are lower and occupational segregation of women is less important. Copyright 1988 by MIT Press.

LABOR SUPPLY AND HOUSING DEMAND FOR ONE- AND TWO-EARNER HOUSEHOLDS

The jointness of labor and housing decisions is explicitly modelled in a consumer demand framework. Behavior of seven demographic groups differentiated by marital status, employment status and the presence of children is estimated from a micro data set. Results indicate that (1) decisions regarding work hours and housing consumption are interdependent choices and (2) responses to market signals differ significantly by demographic group. Results are likely to be superior to single equation studies or studies based on aggregate data.

Chaos Theory and Microeconomics: An Application to Model Specification and Hedonic Estimation

This paper is the first to apply the theory of deterministic chaos to a microeconomic problem. Previous applications of chaos theory to time-series data, while successful in uncovering nonlinearities, have not provided guidelines for resolving uncovered misspecification problems. In contrast, the authors show that a modified test statistic from chaos theory is an extremely valuable tool in microeconomic model specification because it shows when excluded information is correlated with included information. This test, applied to hedonic estimation of marginal housing prices, is able to distinguish among alternative regression specifications and assists in discovering a parsimonious specification devoid of nonlinear effects. Copyright 1991 by MIT Press.

Firm Location in a Polycentric City: The Effects of Taxes and Agglomeration Economies on Location Decisions

The authors explore the determinants of firm location in a polycentric city with the aid of data for the Houston region. Firm location is modeled in a discrete-choice framework, with eight employment centers and outlying areas used as possible choices. Agglomerative and dispersive forces are explicitly treated, as are taxes and other characteristics that vary over space. The findings suggest that property taxes have large deterrent effects on firm locations for the four industrial groups analyzed here: oil and gas; manufacturing; finance, insurance and real estate (FIRE); and services. When agglomeration economies are present, they are weaker than the tax effects and are positive for only the FIRE and services industrial groups.

EMPIRICAL POLYCENTRICITY: THE COMPLEX RELATIONSHIP BETWEEN EMPLOYMENT CENTERS

This paper empirically finds that employment subcenters have the expected connections with the central business district, but additionally have important relationships with each other. Using data from Houston, Texas, USA, we use a new proximity measure to estimate a polycentric density function, and show that the estimated gradient using the total derivative, allowing for the relationship between all subcenters, is much different than the gradient using only the own center coefficients. Further, we model asymmetry in the density function by limiting the employment center influence using commuting data, and testing the influence of over-lapping areas for both population and employment. We find significant asymmetry both within, and even outside of the commuting areas. We conclude that subcenters have important linkages to each other in addition to the CBD, and that therefore the polycentric city is more complex than additional centers mimicking the CBD.

Land, Labour and Product Markets under Spatial Monopoly and Spatial Competition

Two differing approaches have been used to introduce the concept of economic space or distance cost into microeconomic theory. The first approach assumes a ‘point’ market where homogeneous goods are traded at a fixed price under conditions of perfect competition.1 Weber models of firm location, von Thunen models of agricultural land use and related urban models of residential land use employ the concentrated markets paradigm. The second approach assumes an ‘area’ market where spatially differentiated products are shipped under conditions of imperfect competition. A firm subject to spatial competition is able to monopolise part of the spatially differentiated market while simultaneously being constrained by competition from adjacent firms. Models employing the second paradigm are based on the pioneering works of Hotelling ([12]), Losch ([15]) and Greenhut ([8]).2 Many appeals have been made for integrating the two approaches, perhaps starting with Isard’s (ch. 10, [13]) call for a general location theory.

Entrepreneurship and economic development: the relative attraction of employment centres by firm size

Our research empirically explores the relative importance of firm size in fostering economic growth by using cross-sectional variation in the relative location of large and small firms in urban centres of employment. Our method compares the relative location of large and small firms between the older and established centres of employment with the newly emerging employment sub-centres. We conduct our cross-sectional examination of dynamic changes using data from 2010 for the Houston, Texas metropolitan area. We find that large firms are more likely than small to desire a central location not only in the CBD, but in the newly emerging sub-centres as well.

Quality of life and comparative risk in Houston

Houston Environmental Foresight, an urban region comparative risk assessment, demonstrated the importance of process as well as analytic methodology. These features are best illustrated in the work of its Socioeconomic Subpanel, which assessed environmental risks to economic well-being and quality of life. Several issues are raised by the process and methods used by the subpanel. Some of these issues could be addressed through national research on comparative risk methods; other issues are most likely to be addressed through the incremental improvements of future projects.

Löschian Spatial Competition and the Related Labor Market

A single-good Löschian model of spatial pricing is expanded to incorporate elements of the related input market. Technical change in the labor sector induces the entry of new firms. Short-run and long-run impacts of technical change on the spatial product and spatial labor markets are analyzed. The so-called ‘perverse effect’ of spatial competition remains intact in this expanded model under certain conditions. Moreover the labor market is likely to experience a fall in real wages as labor productivity increases.