Ongoing research

Extrapolation and Anchoring in Housing Markets: Evidence from Boom-Bust Belief Dynamics
Summary: I study how homeowners form beliefs about house values during boom-bust cycles, and how those beliefs shape price discovery. Linking self-reported home values from the 1930 and 1940 U.S. Censuses with historical real estate records, I show that in high-volume neighborhoods, beliefs extrapolate trends, while in illiquid markets, they anchor to realized transaction prices. I propose a recursive model in which beliefs are updated combining momentum and anchoring, with the relative weight on each channel endogenously determined by local trading volume. This reflects homeowners’ interpretation of volume as a signal of upward mobility among equity-constrained peers. I estimate the causal effect of volume on belief updating using two instruments: neighborhood demographic composition in the 1920s (e.g., national origin, age structure) as a source of non-price-driven mobility, and pre-Depression mortgage maturity as a source of forced sales in the 1930s. The findings reconcile behavioral and structural models of expectations and inform debates on housing market stability and policy.

Housing Shortages and the Labor-Leisure Trade-off
Summary: Why do some high-income economies face skilled labor shortages when their skilled workers are supplying relatively little labor? I examine this puzzle through the lens of consumer choice by looking at the local and time-specific availability of housing services. I detect household-level encounters with house price and rental rate discontinuities in household panel data from several OECD countries, indicating local housing shortages. Bunching estimation reveals that these price discontinuities deter households from consuming more housing services and lead them to choose considerably more leisure instead. The findings suggest that better-functioning housing markets could help alleviate labor shortages in several European economies.