Household debt and credit : economic issues and data problems

We survey contributions to the analysis of household liabilities, highlighting relevant theoretical aspects and outlining how data sources may support empirical testing and measurement efforts. Specifically, we classify aspects of household debt, discussing the theoretical and policy relevance of heterogeneity across individual and country dimensions. Aiming to illustrate conceptual and measurement issues, we refer to the approaches and results of some recent relevant country-specific work on administrative and survey data, and we argue that research in this area would greatly benefit from availability of appropriately classified household liabilities data and of cross-country institutional information. JEL Classification: G1, E2

Strategic interaction between inter vivos gifts and housing acquisition

This paper models the interdependence of parental inter vivos gifts and children\u27s home purchases when informal care affects decision making. We use data from Japanese households who purchased a detached house in an urban area to test this strategic interaction. Considering both censoring and endogeneity of inter vivos gifts, which are identified by information on formal care, our preferred results demonstrate that inter vivos gifts do not significantly increase the purchase price of housing. Theory suggests that this occurs when informal care tends to be a heavy burden for children. However, subsample analysis of young home buyers indicates that the empirical results are consistent with the literature: children who receive parental gifts tend to purchase a higher-priced dwelling. One potential explanation is that relatively young adult children are less likely to take charge of care obligations, and accordingly, parental gifts are only expected to relax their liquidity constraints. Subsample analysis appears to indicate that the underlying motivation of parental gifts is influenced by the timing of children\u27s home purchase decisions

Entanglement between Demand and Supply in Markets with Bandwagon Goods

Whenever customers' choices (e.g. to buy or not a given good) depend on others choices (cases coined 'positive externalities' or 'bandwagon effect' in the economic literature), the demand may be multiply valued: for a same posted price, there is either a small number of buyers, or a large one -- in which case one says that the customers coordinate. This leads to a dilemma for the seller: should he sell at a high price, targeting a small number of buyers, or at low price targeting a large number of buyers? In this paper we show that the interaction between demand and supply is even more complex than expected, leading to what we call the curse of coordination: the pricing strategy for the seller which aimed at maximizing his profit corresponds to posting a price which, not only assumes that the customers will coordinate, but also lies very near the critical price value at which such high demand no more exists. This is obtained by the detailed mathematical analysis of a particular model formally related to the Random Field Ising Model and to a model introduced in social sciences by T C Schelling in the 70's.Comment: Updated version, accepted for publication, Journal of Statistical Physics, online Dec 201

Studies in the structure of the Stockholm economy : towards a framework for projecting metropolitan community development [Elektronisk resurs]

The purpose of the present study is mainly exploratory. It is founded upon a belief that many tools and concepts developed in economic theory, and hitherto applied almost exclusively to the study of nationaleconomies, may be fruitfully applied also in the study of the economics of metropolitan areas and other large cities. A logical consequence of the lack of such applications is that the organized body of economic data pertaining to metropolitan areas, etc., is extremely limited. The present investigation of the Stockholm area aims to make a contribution in this field of metropolitan area research. It will explore the possibilities of application, and adaptation, of the theoretical scheme used by Leontief in his studies in the structure of the American economy….. The present application of these tools and concepts represents an attempt to uncover relationships, by means of which some light may be thrown on the very functioning of a metropolitan economy. Seen from a different point of view, this study aims to comprehend a great mass of phenomena and events in such a way that one of the outcomes of the study will consist of an organized set of economic data, pertaining to the Stockholm area. Again, seen from a practical point of view, it is my hope that the theoretical framework to be provided here may help to throw some light on the future developmental possibilities of the economy of the Stockholm area, and, further, that the findings to be presented here may be of some interest to city planners…