Abstract: Home builders fund projects primarily through bank loans and presale. Thus, presale timing and pricing is relevant for credit frictions, housing supply and affordability. Presale funding in 2010s Israel carries a median premium of 4.2% relative to bank loans. I develop and calibrate a model of housing supply with time-to-build and borrowing limits. Relaxed loan caps increase housing supply and lower prices. A cap on presales reduces supply and raises prices.
Slides, July 2025. WP version coming soon.
Abstract: In many markets, the division of surplus in bargaining depends on agents' beliefs about uncertain outside options. These beliefs evolve through public information, personal search experiences, and successful matches. Unlike prior studies that impose uncertainty on only one side of the market, I study bilateral uncertainty and find that, across a wide range of circumstances, prices are poor indicators of market conditions, while the distribution of search durations is highly informative. I characterize a class of equilibria with full trade and identical outcomes, allowing for tractable for comparative statics. In equilibrium, higher uncertainty generally improves welfare by encouraging faster quitting among agents on the long side of the market, relieving congestion externalities. Additionally, higher uncertainty reduces price dispersion, a result that depends on the meeting rate and relative uncertainty across sides. Analysis is facilitated by a novel use of the Beta distribution that allows for closed form characterizations of posteriors. The continuous state space allows variation in uncertainty without changing other key distributional features, isolating the effects of uncertainty on welfare and price dispersion. These findings have implications for statistical agencies and market designers deciding how much information to release, and for market analysts interpreting price distributions.Â
January 2023, Journal of Spatial Econometrics
Abstract: We suggest the use of outdegrees from graph theory to rank locations in terms of their contagiousness. We show that outdegrees are equal to the column sums of spatial autoregressive matrices, which may be estimated using econometric methods for spatial panel data. In contrast to outdegree, R is invalid for 'traffic light' shading because it fails to distinguish between the export and import of contagion between sub-national locations. Simulation methods are used to illustrate the concept of outdegrees and its structural determinants in terms of centrality, indigenous contagion and spatial contagion. An empirical illustration is presented for Israel. A secondary criterion for traffic light shading involves the stochastic structure of morbidity shocks, which induce 'spiking' through their autoregressive persistence, conditional heteroscedasticity and diffusion jump parameters.
March 2018
Abstract: This work investigates how the amount of information available for a given transaction affects the price distribution and seller time on the market in that transaction. Novel measures of transaction level information are constructed based on random omission in records of previous transactions in similar apartments. Some of the ex ante more reliable information measures yield strong evidence that more information can lead to shorter seller time on the market. Other information measures either have no effect, have an unstable effect or are not credible. The evidence regarding the effect on the price distribution (price levels and variance) is inconclusive. The evidence regarding time on the market is consistent with previous evidence and with theoretical predictions.