Narrow Results

We calculate there are 8.1% more houses in Allegheny County, PA (Pittsburgh) due to flood insurance subsidies. Conversely, if/when National Flood Insurance Program (NFIP) premiums rise by 50% to equal expected damages, property values will decrease by 8.8% in the short-term, with about half of that recuperated in the long run (4.7%) as quality-adjusted housing stocks contract by 7.5% over decades. This analysis informs community planning and current NFIP revisions that strive to balance solvency and social consequences. Furthermore, our extension of Poterba’s (1984) dynamic user-cost of housing model can be used in integrated assessment models of climate change adaptation.

The reconstruction of Gaza after the latest war between Israel and Hamas creates an opportunity to approach the problem from a purely economic viewpoint. The vision of CEESMENA is to treat internal MENA problems from a purely economic perspective. In that light, the solution to the Gaza problem can be found by focusing narrowly on the investment solution to a failed experiment. This is a common approach that economists address in a post-bankruptcy situation. The Hamas experiment, since Israel’s unilateral withdrawal in 2005, has proven to be a complete failure. It has left Gaza in a devastating bankruptcy. To solve this bankruptcy problem, we suggest an approach based on the classic build–operate–transfer (BOT) framework. The countries that invest in this project will become equity shareholders with a 50-year lease. The civil administrators that will be brought into Gaza will develop an economic model based on the principle of “private provision of public services”. It will also create the common law principles known as the “rule of law” as it is applied to property, contract, criminal and tort law under a market system. The sovereignty of the residents will be addressed only after the 50-year lease arrangement is complete along with the formation of a robust civil administration (e-Government) and common law paradigm referred to as “rule of law” is finalized. A revitalized education system will be instituted based on a reformed UAE, Bahrain and Saudi Arabian curriculum. A computable general equilibrium (CGE) model presented in the paper will be used to track a three-sector Gaza economy (tourism, agriculture and high-tech) and will be implemented to address alternative pathways for the development of this sovereign non-militarized green economy. The approach presented in this paper is a continuation of innovative thinking which was manifest when former President Trump perused the groundbreaking and successful “Abraham Accords” in complete rejection of the outdated and unsuccessful “Washington Consensus”.

To examine the impact of housing prices on urban competitiveness, we first sort out the relevant literature on the compositions and performances of urban competitiveness. The internal compositions of urban competitiveness include factor endowments and industrial development. The external manifestations include market size, economic growth and productivity. Additionally, from the perspectives of urban economics and new economic geography, the theoretical basis of housing price’s impact on urban competitiveness is analyzed. On this basis, we analyze the mechanism and direction of housing price’s impact on urban competitiveness. The results show that most of the existing researches pay attention to the impact of housing prices on urban competitiveness through economic growth, industrial structure or production factors. However, there are differences in the specific direction of influence, and there is no research that considers the relationship of multiple influences.

In this work, we proposed a theoretical framework inspired by physical thermodynamics to explain the housing price distributions in monocentric cities. In the same spirit as the Alonso–Muth–Mills (AMM) model, we assume that the disposable income $C=W-R(x)-Q(x)$ after renting a home a distance $x$ from the center of a city is determined by the wage $W$ generated at the point-like Central Business District (CBD), the rent $R(x)$, and the transportation cost $Q(x)$. Unlike in the AMM model, where the scaling exponents are phenomenological, we admitted only physically reasonable exponents for the scaling of various quantities with distance $x$ from the CBD. We then determine the equilibrium rent $R(x)$ by requiring $dU∕dx=0$, where we assumed for simplicity the utility function $U=lnC$ (representing the demand side) has diminishing return in $C$. In the simplest model, the equilibrium rent is given by $R(x)=R_0-Q(x)$, i.e., the scaling of $R(x)$ with $x$ is entirely determined by $Q(x)$. We then introduce additional home availability $S(x)$ (representing the supply side) into the simple theory in the form of an entropic correction, $F=U-TS$. The equilibrium rent then becomes $R(x)=R_0-Q(x)+C_0[1-exp(TS(x))]$. This allows us to treat additional availability due to the two-dimensional nature of cities, as well as that due to high-rise buildings on equal footing. Finally, we compare the equilibrium theory against urban data in Singapore, London and Philadelphia. For Singapore, we find quantitative agreement between theory and data. For London, we find only qualitative agreement between theory and data because the transportation cost is zone based. For Philadelphia, the home price distribution is very different from Singapore and London, and shows clear signs of economic segregation, which is difficult to treat in our equilibrium theory.

What are the economic consequences to U.S. natives of the growing diversity of American cities? Is their productivity or utility affected by cultural diversity as measured by diversity of countries of birth of U.S. residents? We document in this paper a very robust correlation: US-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990, experienced a significant increase in their wage and in the rental price of their housing. Such finding is economically significant and survives omitted variable bias and endogeneity bias. As people and firms are mobile across cities in the long run we argue that, in equilibrium, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.

What are the economic consequences to U.S. natives of the growing diversity of American cities? Is their productivity or utility affected by cultural diversity as measured by diversity of countries of birth of U.S. residents? We document in this paper a very robust correlation: US-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990, experienced a significant increase in their wage and in the rental price of their housing. Such finding is economically significant and survives omitted variable bias and endogeneity bias. As people and firms are mobile across cities in the long run we argue that, in equilibrium, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.