Joachim Zietz

Sustainable Building Certification and the Rent Premium: A Panel Data Approach

This paper investigates whether obtaining sustainable building certification entails a rental premium for commercial office buildings and tracks its development over time. To this aim, both a difference-in-differences and a fixed-effects model approach are applied to a large panel dataset of office buildings in the United States in the 2000–2010 period. The results indicate a significant rental premium for both ENERGY STAR and LEED certified buildings. Controlling for confounding factors, this premium is shown to have increased steadily from 2006 to 2008, followed by a moderate decline in the subsequent periods. The results also show a significant positive relationship between ENERGY STAR labeling and building occupancy rates.

The U. S. Budget and Trade Deficits: A Simultaneous Equation Model

The large and apparently persistent U.S. trade deficit has sparked a considerable amount of research into its determinants and the proper policy responses. At least two key questions can be identified in this context, a general one and a more specific one. First, to what extent can the trade deficit be explained by changes in macroeconomic fundamentals as opposed to microeconomic explanations, such as quality deterioration of U.S. goods and the like? Second, to what extent and through which channels does the federal budget deficit affect the trade deficit, if at all? Most recent macroeconomic studies on the U.S. trade deficit have focused on mono-causal

Distortions in world food markets in the wake of GATT: Evidence and policy implications

Abstract Although the principle of trade liberalization has gained wide acceptance in recent years, many policy makers in developing countries, especially in Latin America, are exploring temporary import restrictions in the form of additional tariff protection to insulate domestic farmers from the impact of depressed prices until the Uruguay Round accord leads to higher world market prices for agricultural products. The paper argues that there is little reason to believe that current world market prices will rise substantially in real terms, even with the Uruguay Round accord fully implemented. This finding suggests that additional tariff protection would not make economic sense.

Birth Cohort and the Specialization Gap Between Same-Sex and Different-Sex Couples

We examine differences in household specialization between same-sex and different-sex couples within and across three birth cohorts: Baby Boomers, Generation X, and Generation Y. Using three measures of household specialization, we find that same-sex couples are less likely than their different-sex counterparts to exhibit a high degree of specialization. However, the “specialization gap” between same-sex and different-sex couples narrows across birth cohorts. These findings are indicative of a cohort effect. Our results are largely robust to the inclusion of a control for the presence of children and for subsets of couples with and without children. We provide three potential explanations for why the specialization gap narrows across cohorts. First, different-sex couples from more recent birth cohorts may have become more like same-sex couples in terms of household specialization. Second, social and legal changes may have prompted a greater degree of specialization within same-sex couples relative to different-sex couples. Last, the advent of reproductive technologies, which made having children easier for same-sex couples from more recent birth cohorts, could result in more specialization in such couples relative to different-sex couples.

Parameter instability in aggregate US import demand functions

Abstract The paper examines parameter stability in aggregate US import demand functions for the time period 1972–1990. We identify in particular whether parameter stability depends upon the definitions used to represent the dependent and independent variables. Significant instability is found for 1974/75 in all models tested. For the 1975–1990 period, parameter stability depends on the definition of the relative price term employed in the model. Equations which exclude computer imports tend to have fewer stability problems than non-oil import demand models. We also find that the most stable models generate the best out-of-sample forecasts.

Affordability and Germany's low homeownership rate

Purpose - Relative to comparable industrialized countries, Germany stands out in terms of its low homeownership rate (43 percent). For Germany, it is unknown so far to what extent the low rate of homeownership can be related to housing being unaffordable. One reason for the lack of evidence is the apparent lack of data. The purpose of this paper is to fill this gap. Design/methodology/approach - Based on a regional dataset of 3.9 million asking prices of housing units collected by a real estate listing engine, the paper applies internationally established affordability concepts to the German housing market. The authors then run a number of cross-section regressions at the level of the 16 German federal states, using the affordability measures as explanatory variables of the rate of homeownership. Findings - The results show that the average German household would have to sacrifice a large part of its non-housing consumption to afford homeownership, especially of single-family homes. As the regional analysis reveals, certain types of household can even be considered excluded from the ownership market in some particularly unaffordable states with cost burdens of over 50 percent, such as Bavaria. The cross-section regression results for the 16 federal states affirm the importance of affordability as a determinant of the homeownership rate. Research limitations/implications - The official data on ownership rates are rather spotty over time and only available for a single year (2006) for the time frame that is considered for the affordability analysis (2005-2010). Given the data limitations, the regression analysis has to be confined to a single cross section least squares regression for 2006. The authors are aware that to obtain truly convincing results, it would be necessary to capture the development of ownership rates in different localities in Germany, such as the 16 federal states, over time and to check to what extent the affordability measures can explain any of the variation in ownership rates in a panel data framework with fixed effects for federal states and time. However, the authors feel that the regression results may serve as a starting point; they are better than a set of simple correlations, even if they constitute not a conclusive causal analysis. Practical implications - Any public policy initiative to raise Germanys homeownership rate will have to address the question of how to make housing more affordable. The recent elimination of homeowner subsidies is working in exactly the opposite direction. Originality/value - The affordability approach used is technically not new or challenging, but it offers a basis for comparison that has been conspicuously lacking so far for the fourth largest economy of the world. By applying affordability concepts that are well accepted and in use internationally, the authors believe that they can provide at least some suggestive evidence that can further spur research into the affordability issue. While the authors do not break new methodological ground with their paper, they do provide a basis of comparison for policy discussion and for further research. Germany provides a unique environment for affordability research, due to its reunification history, observations from which may thus yield insights valuable to the international research community.

Heteroskedasticity and Neglected Parameter Heterogeneity

The paper studies the consequences of neglecting parameter heterogeneity for the linear regression model and cross-sectional data. Monte-Carlo experiments are used to illustrate that neglected parameter heterogeneity typically leads to (a) regression coefficients that are economically meaningless and (b)significant test statistics for heteroskedasticity and, possibly non-normality. The paper concludes that evidence for heteroskedasticity should not routinely lead to the use of Whites well-known heteroskedasticity-consistent variance covariance matrix estimator. If heteroskedasticity is caused by neglected parameter heterogeneity or other causes of heteroskedasticity, such as wrong functional form, Whites estimator will not serve any useful purpose. Copyright 2001 by Blackwell Publishing Ltd

Corporate Governance and the Leverage of REITs: The Impact of the Advisor Structure

The paper examines the impact of the advisor structure on the leverage of 265 US real estate investment trusts (REITs). The study employs panel data for the period 1994 to 2010. Externally advised REITs tend to choose lower leverage, a result which differs from that of Capozza and Seguin (2000) for the old REIT era (1985-1992). We find no evidence for an agency problem related to the choice of leverage for more recent data. The lower leverage makes economic sense since externally advised REITs bear higher costs of debt than their internally advised counterparts.

Dynamic Programming: An Introduction by Example

The author introduces some basic dynamic programming techniques, using examples, with the help of the computer algebra system Maple. The emphasis is on building confidence and intuition for the solution of dynamic problems in economics. To integrate the material better, the same examples are used to introduce different techniques. One covers the optimal extraction of a natural resource, another uses consumer utility maximization, and the final example solves a simple real business cycle model. Every example is accompanied by Maple computer code to allow for replication.

The impact of exchange rate changes on investment in research and development

Abstract Panel data on 360 U.S. manufacturing firms over the years 1975 to 1987 are used to identify the response of R&D spending to exchange rate changes. Only firms in industries with average R&D spending of at least 3 percent of sales revenue react to an exchange rate appreciation with increased R&D spending. Firms in industries with lower levels of R&D intensity do not. This finding can be interpreted to mean that only R&D intensive firms react to an increase in competitive pressure with more R&D effort.