Working Papers

Spatially Heterogeneous Effects of Publicity: Evidence from the Restaurant Industry in New York City (Revise&Resubmit, Journal of Economics & Management Strategy)

A traditional way to increase store visibility in the brick-and-mortar retail industry is to pick a location that grants a retail establishment the best visibility for a given budget. Yet recent years have witnessed increasing attention to “information visibility” in this industry because of the rapid growth in the use of information technologies. If the economic effects of information diffusion were homogeneous across locations, then it would become less optimal for retail entrepreneurs to choose traditionally favored locations. However, I find that diner responses to New York Times restaurant reviews, although significant on average, are insignificant unless the focal business is situated in a central location characterized by high customer or competitor density. These results indicate that publicity is likely to complement, but is not a substitute for, locational centrality. So for retailers offering non-tradable goods or services, an improving information environment is likely to make favored retail locations more favorable.

Homebuyers' Geographic Proximity as a Predictor of Future Housing Price Growth (Revise&Resubmit, Real Estate Economics)

Given that housing markets are informationally asymmetric, this paper shows that homebuyers’ geographic proximity has predictive power for future housing price growth. At the ZIP-code level, a 10 percentage point larger fraction of local homebuyers is associated with a 1.1 percentage point higher increase in housing prices during the two subsequent years. At the individual level, a 100-mile longer moving distance yields about 0.3 percentage point lower annualized capital gains during the holding period. Distant buyers’ inferior investment outcomes are at least partly attributable to their neighborhood choices. On average, compared to local buyers, out-of-town buyers realize 0.64 percentage point lower returns per year within a metropolitan area yet 0.52 percentage point lower returns within a ZIP code, implying that out-of-town buyers tend to choose ZIP codes that will experience lower housing price growth rates. These results suggest not only that geographically proximate buyers have strong information advantages, but also that their neighborhood choices reflect information that has not yet been capitalized into current-period transaction prices. Therefore, examining informationally privileged buyers’ revealed preferences for neighborhoods has the potential to alleviate information asymmetries in housing markets by providing informationally disadvantaged buyers with hints about which neighborhoods are improving.

Housing Prices and Consumption: The Role of News Media (Reject&Resubmit, Information Economics and Policy)

The observed relationships between housing prices and consumption are highly inconsistent over time. By exploiting local newspaper contents in the U.S., I find that more newspaper articles conveying information on past house prices are associated with more elastic household consumption with respect to regional housing prices. The regression results are statistically significant only for homeowners and only when a housing news article includes real estate terms in its headline. The findings suggest that lagged house price information is a main source of housing wealth effects, highlighting the importance of information agents or information interventions in shaping household behaviors.

Work in progress

Place-based Policy, Displacement, and Spillovers in the Housing Market

News-driven House Price Momentum

Expert Reviews and Congestion Problems (with T.J. Yoon)