Essays on the economics of housing markets
Abstract/Contents
- Abstract
- This dissertation consists of two essays that examine households' behavior in housing markets. The first chapter studies the effects on rental markets of providing tax-funded legal representation ("Right to Counsel") to tenants facing an eviction process. Stronger tenant protections provide greater insurance to household who benefit from accruing larger amounts of debt and paying lower monetary costs when defaulting on rent. However, stronger tenant protections translate into higher default costs for landlords and, in equilibrium, higher rental rates, that limit renters' ability to pay affordable houses and can potentially push them to homelessness. To quantitatively measure the welfare implications of providing legal representation to tenants, we develop and solve a heterogenous agent life cycle model of the rental markets where households can default on rent and face different exogenous risk factors. We find that "Right to Counsel" causes rental rates to increase due to greater default risk faced by landlords. As a consequence, housing quality allocation falls for riskier tenants. While eviction-filing rates increase due to lower default costs, evictions are less likely, resulting in similar eviction rates before and after implementing the policy. Quantitatively, results suggest positive effects on young and low-income households that benefit from greater insurance provided by a more lenient eviction regime. The second chapter introduces a new measure of self-assessed financial literacy that plays an important role in understanding household behavior in housing markets. Households who self-assess themselves to be more financially literate are more likely to own a house and lever more. We solve a heterogeneous agent portfolio choice model to understand how self-assessed financial literacy affects mortgage terms and expectations on housing returns to generate the cross-sectional patterns. Our results show that households with higher levels of self-assessed financial literacy face better credit conditions and expect higher risk-adjusted returns on their housing asset. In particular, we find that financially knowledgeable households access better mortgage terms when they are young and higher risk-adjusted returns on the housing asset when they are old. Finally we estimate and compare housing demand elasticity with respect to wealth in models with and without financial literacy. We find that housing demand elasticity is approximately 40% lower when taking self-assessed financial literacy into account.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2020; ©2020 |
| Publication date | 2020; 2020 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Yany Anich, Andres J |
|---|---|
| Degree supervisor | Piazzesi, Monika |
| Degree supervisor | Schneider, Martin, (Professor of economics) |
| Thesis advisor | Piazzesi, Monika |
| Thesis advisor | Schneider, Martin, (Professor of economics) |
| Thesis advisor | Auclert, Adrien |
| Degree committee member | Auclert, Adrien |
| Associated with | Stanford University, Department of Economics |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Andres Yany Anich. |
|---|---|
| Note | Submitted to the Department of Economics. |
| Thesis | Thesis Ph.D. Stanford University 2020. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2020 by Andres J Yany Anich
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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