Peter Ganong

Why Has Regional Income Convergence in the U.S. Declined

The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.

The Incidence of Housing Voucher Generosity

Most housing voucher recipients live in low-quality neighborhoods. We study how changes in voucher generosity affect neighborhood poverty, unit-quality and rents using administrative data. We examine a policy making vouchers more generous across a metro area. This policy had no impact on neighborhood poverty, little impact on observed quality, and increased rents. A second policy, which indexed rent ceilings to neighborhood rents, led voucher recipients to move to higher quality neighborhoods with lower crime, poverty and unemployment. These results are consistent with a model where the first policy acts as an income effect and the second as a substitution effect.US housing voucher holders pay their landlord a fraction of household income and the government pays the rest, up to a rent ceiling. We study how two types of changes to the rent ceiling affect landlords and tenants. A policy that makes vouchers more generous across a metro area benefits landlords through increased rents, with minimal impact on neighborhood and unit quality. A second policy that indexes rent ceilings to neighborhood rents leads voucher holders to move into higher quality neighborhoods with lower crime, poverty, and unemployment.

How Do Changes In Housing Voucher Design Affect Rent and Neighborhood Quality

US housing voucher holders pay their landlord a fraction of household income and the government pays the rest, up to a rent ceiling. We study how two types of changes to the rent ceiling affect landlords and tenants. A policy that makes vouchers more generous across a metro area benefits landlords through increased rents, with minimal impact on neighborhood and unit quality. A second policy that indexes rent ceilings to neighborhood rents leads voucher holders to move into higher quality neighborhoods with lower crime, poverty, and unemployment.

Liquidity vs. Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession

We use variation in mortgage modifications to disentangle the impact of reducing long-term obligations with no change in short-term payments (“wealth�?), and reducing short-term payments with approximately no change in long-term obligations (“liquidity�?). Using regression discontinuity and difference-in-differences research designs with administrative data measuring default and consumption, we find that principal reductions that increase housing wealth without affecting liquidity have no effect, while maturity extensions that increase only liquidity have large effects. Our results suggest that liquidity drives borrower default and consumption decisions, and that distressed debt restructurings can be redesigned with substantial gains to borrowers, lenders, and taxpayers.