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Working Paper
Late Payment Fees and Nonpayment in Rental Markets, and Implications for Inflation Measurement: Theoretical Considerations and Evidence
Accurate rent measurement is essential for constructing a consumer price index (CPI) and for measuring household welfare. Late payment fees and nonpayment of rent are common components of rental expenditures and thus belong in CPIs. Late payment fees are often excluded; we offer a novel critique. In the US CPI, nonpayment is ostensibly included, but, we show, severely undermeasured. Moreover, the manner of its inclusion renders the CPI extremely sensitive to nonpayment variations; we show how to fix this. Nonpayment undermeasurement suggests at least a +1 ppt overestimate in 2020 CPI shelter ...
Working Paper
How Centralized is U.S. Metropolitan Employment?
Centralized employment remains a benchmark stylization of metropolitan land use.To address its empirical relevance, we delineate "central employment zones" (CEZs)- central business districts together with nearby concentrated employment|for 183 metropolitan areas in 2000. To do so, we first subjectively classify which census tracts in a training sample of metros belong to their metro's CEZ and then use a learning algorithm to construct a function that predicts our judgment. {{p}} Applying this prediction function to the full cross section of metros estimates the probability we would judge ...
Working Paper
Why Are Wal-Mart and Target Next-Door Neighbors?
One of the most notable changes in the U.S. retail market over the past twenty years has been the rise of Big Box stores, retail chains characterized by physically large stores selling a wide range of consumer goods at discount prices. A growing literature has examined the impacts of Big Box stores on other retailers and consumers, but relatively little is known about how Big Box stores choose locations. Because Big Box stores offer highly standardized products and compete primarily on price, it is likely that they will seek to establish spatial monopolies, far from competitor stores. In this ...
Working Paper
Spatially Mapping Banks' Commercial & Industrial Loan Exposures: Including an Application to Climate-Related Risks
The correlation of the spatial distribution of banking exposures with changes in spatial patterns of economic activity (e.g., internal migration, changes in agglomeration patterns, climate change, etc.) may have financial stability implications. We therefore study the spatial distribution of large U.S. banks' commercial and industrial (C&I) lending portfolios. We construct a novel dataset that augments FR Y-14Q regulatory data with borrower microdata for a more granular understanding of where banks' exposures are located by looking beyond headquarters to the location of facilities. We find ...
Working Paper
The Effects of Competition in the Retail Gasoline Industry
We estimate the effect of competition on incumbent firm pricing by using high frequency price data and the precise geographic location for all gas stations in California. Using an event study design, we find that the entry of a new station is associated with a 2.5 cent decrease in prices at incumbent stores, which equates to a 7 percent reduction in estimated retail markups. The effects are immediate, persistent and show no sign of deterrence or limit pricing behavior. In contrast, nearby exit results in precisely estimated null effects on prices with no evidence of predatory pricing in the ...