Date of Award

2020

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Graduate Group

Applied Economics

First Advisor

Joseph Gyourko

Abstract

This dissertation studies how the built environment responds to increasingly interconnected markets. The first chapter studies how improvements in local accessibility influence cities' distributions of economic activity. Exploiting UberX's entry interacted with a location's prior accessibility, I measure how local economic activity responds to changes in access. After ridesharing's entry, restaurant net creation doubles in previously inaccessible locations, from 5% to 10%. As these areas open up, the median house price rises by 4% and rent by 1%. I quantify the impacts of these changes on welfare using a spatial equilibrium framework. Resident welfare depends on the trade-off between accessibility and amenity benefits versus housing costs. In the post-period, all residents benefit from ridesharing's entry. Homeowners are willing to pay $1,060 per year for ridesharing's entry, while renters are willing to pay $430, as they do not realize equity gains. The second chapter studies how interconnected capital markets allow mobile global capital to flow into immobile local assets. We document how international capital impacts U.S. housing markets. Other countries introduced foreign-buyer taxes meant to deter Chinese housing investment beginning in 2011. We first show house prices grew 8pp more in U.S. zipcodes with high foreign-born Chinese populations after 2011. Second, we use the international tax policy changes as a U.S. housing demand shock and estimate local house price and quantity elasticities with respect to international capital. We find that a 1% increase in foreign capital raises house prices by 0.6%, and housing supply by 0.004%. Finally, we use the two elasticities to construct a new local house price elasticity of supply. We find that for the largest 100 CBSAs, supply elasticities average 0.1 and vary between 0.02 and 0.7, suggesting that local housing markets are inelastic in the short run with substantial spatial heterogeneity.

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