Thomas M. Carroll

The Economic Impact of a Transient Hazard on Property Values: The 1988 PEPCON Explosion in Henderson, Nevada

This article investigates the effect of the May 1988 explosion of a chemical plant in Henderson, Nevada on residential property values (1) before the explosion (anticipation), (2) between the time of the explosion and an announcement of relocation, and (3) subsequent to an announcement in July 1988 that the plant would be rebuilt 100 miles away in Cedar City, Utah. This article uses the conventional hedonic model wherein the real prices of residential houses are related to the characteristics of the property (age, size, and amenities); the timing of the sale; and distance from the site of the explosion, rounded to the nearest mile. A quadratic specification of the model showed that the model was sensitive to the mean distance from the hazard. In a sample of properties throughout the Las Vegas Valley, property values decreased with distance from the explosion, indicating the presence of other hazards. The quadratic specification was stable only for properties within six miles of the explosion site, which included the communities of old Henderson (to the east) and the master planned community of Green Valley (to the west). A discontinuous specification of the model, in which distance was measured by a set of dummy variables (i.e., within two miles, within three miles, etc.) proved to be much more stable. Property within two miles of the hazard were depressed both before and after the explosion, although after the relocation announcement, property values rebounded to reflect the reduction in the number of hazardous plants. This article lends weight to the accumulating body of evidence that real estate markets do behave efficiently.

Organizational Form and Nursing Home Behavior

The authors identify differences in performance among for-profit, nonprofit, and government-owned nursing homes in Minnesota. They investigate whether homes of diverse ownership types distribute their surpluses differently, if those differences narrow over time, and if the various ownership types react differently to changes in the regulatory environment. Government-owned and nonprofit homes spend more per resident day for nursing care costs than do independent for-profit homes. Chain affiliation is important in explaining persistent spending differences. There is an agency problem: Nursing homes belonging to chains behave differently from their independent counterparts. Secular non-profits belonging to national chains spend less of their surplus on nursing care costs after regulations allowed more of this form of spending to be recouped in rates charged to the residents. The secular firms affiliated with national chains spend less on nursing care than the control group. As the predicted surpluses of for-profit chains increase, the owners’ compensation falls.

A Note on the Earnings of Real Estate Salespersons and Others in the Financial Services Industry

The earnings of females in various sales professions are less than their male counterparts. By expanding on the set of variables used by Jud and Winkler we were able to explain a large portion of this differential for most professions. Child rearing and marriage explain much of the differential in income in business sales outside of real estate. These variables fail to explain the remaining large gap in real estate sales, however.

Why it Pays to Major in Economics

In this article, the authors use a large, recent, and accessible data set to examine the effect of economics major on individual earnings. They find a significant positive earnings gain for economics majors relative to other majors, and this advantage increases with the level of education. Their findings are consistent with Black, Sanders, and Taylor (2003), documenting that about two-thirds of the bachelors degree premium for economics majors can be attributed to the type of job economics majors perform, and about one-third is a premium that economics majors earn over other workers within the same job.

What Do Economics Majors Do and What Do They Earn When They Do it

This paper uses a recent and rich data set to examine the effect of economics major on individual earnings controlling for personal, occupation, and industry characteristics. We found a pronounced positive earnings gain for economics major relative to other majors; this advantage increases as the major’s level of education increases. We document that roughly half of the earnings advantage can be attributed to access to higher paying occupations and half of the advantage reflects higher pay for economics majors within occupations. Overall, these findings concur with Black et al. (2003).