Tara Watson

Marriage Meets the Joneses: Relative Income, Identity, and Marital Status

This paper investigates the effect of relative income on marriage. Accounting flexibly for absolute income, the ratio between a mans income and a local reference group median is a strong predictor of marital status, but only for low-income men. Relative income affects marriage even among those living with a partner. A 10 percent higher reference group income is associated with a 2 percent reduction in marriage. We propose an identity model to explain the results.

Fundamental flaws of social regulation: The case of airplane noise

This article provides an economic assessment of federal regulatory policy toward airplane noise as encapsulated in the 1990 Airport Noise and Capacity Act (ANCA). This act mandated the elimination of certain aircraft, such as the Boeing 727 and DC‐9, from all U.S. airports by the end of 1999 to meet quieter noise requirements. We find that the present discounted benefits of the ANCA, reflected in higher property values for homeowners, fall

Metropolitan Growth, Inequality, and Neighborhood Segregation by Income

5 billion short of the ANCAs cost to airlines, reflected in the reduced economic life of their capital stock. More fundamentally, we find that the net benefits that could have been generated by an economically optimal airplane noise tax amount to only

Local Fiscal Policies and Urban Wage Structures

0.2 billion (present value). It appears that noise regulations have generated substantial costs to society when, in fact, there was little justification on efficiency grounds for regulatory intervention in the first place.

Inequality and the Measurement of Residential Segregation by Income in American Neighborhoods

This paper investigates the relationship between metropolitan area growth, inequality, and segregation by income across neighborhoods. I propose a simple model based on the notion that rising income inequality creates housing market pressure leading to residential segregation by income. However, because different income groups live in different types of houses, the housing stock must change if income resorting across neighborhoods is to take place. In rapidly growing areas, housing markets easily accommodate changing preferences induced by changes in the income distribution. Rising inequality translates into homogenous housing and residential segregation. On the other hand, because housing is durable, slow growth areas experience changes in segregation only if market pressure is sufficient to overcome retrofitting or construction costs. Several implications of the model are supported empirically. First, higher levels of income inequality are associated with higher levels of residential segregation by income. Second, inequality (though only at the top of the distribution) has a bigger effect on segregation in rapidly growing areas than in slowly growing areas. Third, large increases in segregation are coupled with higher than expected housing construction in distressed areas, but not rapid-growth areas. Finally, income segregation levels are persistent, and the persistence is more pronounced in cities with older housing stocks. The model helps to explain the U-shaped relationship between residential segregation by income and metropolitan area growth. __________ *Williams College. The author is grateful to participants in the Williams College Economics department research seminar and participants in the Brookings-Wharton Conference on Urban Affairs for their insights, especially Gary Burtless, Jerry Carlino, Ingrid Gould Ellen, and Janet Rothenberg Pack. The author is also indebted to Larry Katz, Cliff Winston, and many others for helpful suggestions on earlier related work. Metropolitan Growth, Inequality, and Neighborhood Segregation by Income

Public health investments and the infant mortality gap: Evidence from federal sanitation interventions on U.S. Indian reservations

It has long been recognized that average wages vary strikingly across regions and urban areas in part due to differences in local amenities and fiscal policies. However, analogous differences in wage dispersion remain relatively unexplored. The authors develop a model suggesting that, after accounting for individual characteristics, wage dispersion across income groups should reflect differences in the relative valuation of local amenities and fiscal policies. The authors empirically investigate whether there is a link between local taxes and expenditures and the degree of dispersion in the wage structure and find evidence that such a relationship exists.