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Migration, Congestion Externalities, and the Evaluation of Spatial Investments
The direct benefits of infrastructure in developing countries can be large, but if new infrastructure induces in-migration, congestion of other local publicly provided goods may offset the direct benefits. Using the example of rural household electrification in South Africa, we demonstrate the importance of accounting for migration when evaluating welfare gains of spatial programs. We also provide a practical approach to computing welfare gains that does not rely on land prices. We develop a location choice model that incorporates missing land markets and allows for congestion in local land. ...
Working Paper
The Rising Cost of Climate Change: Evidence from the Bond Market
The level of the social discount rate (SDR) is a crucial factor for evaluating the costs ofclimate change. We demonstrate that the equilibrium or steady-state real interest rate isthe fundamental anchor for market-based SDRs. Much recent research has pointed to adecrease in the equilibrium real interest rate since the 1990s. Using new estimates of thisdecline, we document a pronounced downward shift in the entire term structure of SDRsin recent decades. This lower new normal for interest rates and SDRs has substantiallyboosted the estimated economic loss from climate change and the social ...
Working Paper
What Determines the Success of Housing Mobility Programs?
This paper studies how design features influence the success of Housing Mobility Programs (HMPs) in reducing racial segregation. Targeting neighborhoods based on previous residents' outcomes does not allow for targeting race-specific outcomes, generates uncertainty when targeting income-specific outcomes, and generates bias in ranking neighborhoods' effects. Moreover, targeting opportunity bargains based on previous residents' outcomes selects tracts with large disagreements in current and previous residents' outcomes, with such disagreements predicted by sorting since 1990. HMP success is ...
Working Paper
What Determines the Success of Housing Mobility Programs?
There is currently interest in crafting public housing policy that combats, rather than contributes to, the residential segregation in American cities. One such policy is the Housing Mobility Program (HMP), which aims to help people move from disinvested neighborhoods to ones with more opportunities. This paper studies how design features influence the success of HMPs in reducing racial segregation. We find that the choice of neighborhood opportunity index used to define the opportunity areas to which participants are encouraged to move has limited influence on HMP success. In contrast, we ...