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Unit Labor Costs and Inflation in the Non-Housing Service Sector
Inflation remains high, and it is critical to understand the components of inflation. Inflation in core goods has declined over much of the past year. Inflation in housing services remains high, but the growth in rental rates of units available for rent has fallen in recent months. This suggests measured inflation in housing services, which includes rents on both occupied and vacant units, is likely to moderate over the coming year as rents on occupied units catch up to those of vacant units.
Working Paper
Determinants of Differential Rent Changes: Mean Reversion versus the Usual Suspects
We study 2001-2004 and 2004-2007 rent growth of 18,000 rental units, ending our study prior to the Great Recession. Which variables correlate with rent growth: Location? Age? Rent level? Occupancy duration? Structure type? The answers deepen understanding of the rental market, help statistical agencies make decisions about sample stratification and substitution, and expose coverage problems. We document significant rent stickiness. Initial relative rent level is the best predictor, though mainly due to mean reversion. "Location" comes in second, though often not statistically significantly: ...
Working Paper
Exploring Online and Offline Informal Work : Findings from the Enterprising and Informal Work Activities (EIWA) Survey
The growing prevalence of alternative work arrangements has accelerated with the rapidly evolving digital platform transformations in local and global markets (Kenny and Zysman, 2015 and 2016). Although traditional (offline) informal paid work has always been a part of the labor sector (BLS-Contingent Worker Survey, 2005; GAO, 2015 and Katz and Krueger, 2016), the rise of online enabled paid work activities requires new approaches to measure this growing trend (Farrell and Greig, 2016; Gray et al, 2016; Sundararajan, 2016 and Schor, 2015). In the fourth quarter of 2015, the Federal Reserve ...
Working Paper
Real Estate Commissions and Homebuying
We construct a model of home search and buying in the U.S. housing market and evaluate the commission paid to homebuyers' agents. In the model, as in reality, homebuyers enjoy free house showings without having to pay their agents out of pocket. Buyers' agents receive a commission equal to 3% of the house price only after a home is purchased. We show this compensation structure deviates from cost basis and may lead to elevated home prices, overused agent services, and prolonged home searches. Based on the model, we discuss policy interventions that may improve housing search efficiency and ...