Research
Research
"Does Homeownership Matter? The Long-Term Consequences of Losing a House during the Great Recession" with Patrick Bayer (Duke), Fernando Ferreira (Wharton), and Stephen Ross (UConn)
Abstract: This paper examines the long-term impact of keeping versus losing one’s home following a mortgage delinquency in the aftermath of the Great Recession, studying the trajectory of homeownership, consumption, and financial well-being over the subsequent decade. Our research design leverages the substantial number of households that experienced temporary income shocks and the turbulence of the foreclosure crisis — we focus on individuals who were seriously delinquent on their mortgages and compare outcomes between those who received a mortgage modification and those who did not. These two groups exhibit highly similar pre-trends in financial outcomes prior and during the Great Recession but diverge by 36 percentage points in their short-term likelihood of retaining homeownership. More than half of this disparity persists nearly a decade later, translating into an average capital gain of $83,000 in the housing market. Despite these significant differences in homeownership and wealth accumulation, keeping a home does not appear to influence the path of creditworthiness, proxies for consumption, and the income rank of one's residential neighborhood. NBER working paper 33692.
"Work from Home and the Geography of House Prices"
Abstract: I quantify the impact of remote work on the geography of house prices. I overcome challenges in measurement and endogeneity using an instrumental variables strategy paired with pre- and post-COVID data on remote work. I find that a one-percentage-point increase in metro remote work results in $10,500 of additional price growth for a median-distance suburb over a central neighborhood of average initial price, which represents $126,000 at average remote work growth. This profound shift in the distribution of home value stands to increase wealth inequality. Draft version.
"The Push of Big City Prices and the Pull of Small Town Amenities" with Jeffrey Brinkman (Philadelphia Fed) and Svyatoslav Karnasevych (Princeton)
Abstract: As house prices rise in large, supply-constrained cities, what are the implications for other places that have room to grow? We explore how location amenities have differentially driven population and price dynamics in small towns versus big cities. We provide theory and evidence that demand for high-amenity locations has increased. High-amenity counties in large metropolitan areas have experienced price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. High-income and college-educated workers sort into large and high-amenity places, while retirees and other households detached from local productivity gravitate to high-amenity small towns. Draft version.
"The principal problem with principal components regression" with Gary Smith (Pomona), Cogent Mathematics and Statistics, May 2019, DOI:10.1080/25742558.2019.1622190
Abstract: Principal components regression (PCR) reduces a large number of explanatory variables in a regression model down to a small number of principal components. PCR is thought to be more useful, the more numerous the potential explanatory variables. The reality is that a large number of candidate explanatory variables does not make PCR more valuable; instead, it magnifies the failings of PCR. Link here.
"Another Look at Dollar Cost Averaging" with Gary Smith (Pomona), Journal of Investing, May 2018, DOI:10.3905/joi.2018.27.2.066
Abstract: Dollar cost averaging—spreading an investor’s stock purchases evenly over time—is widely touted in the popular press because of the mathematical fact that the average cost per share is less than the average price. The academic press has generally been skeptical, and attributes dollar cost averaging’s popularity to investor naiveté and cognitive errors. Yet, dollar cost averaging continues to be recommended by knowledgeable investors as a sensible way to avoid ill-timed purchases. We argue that dollar cost averaging is, in fact, an imperfect, but helpful strategy for diversifying investment decisions across time. Link here.
"Job Access and Low-Income Suburbanization"
"College Alumni Networks and Mobility Across Local Labor Markets" with Richard Jin (Berkeley)