Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions

Agents are often better informed than the clients who hire them and may exploit this informational advantage. Real-estate agents, who know much more about the housing market than the typical homeowner, are one example. Because real estate agents receive only a small share of the incremental profit when a house sells for a higher value, there is an incentive for them to convince their clients to sell their houses too cheaply and too quickly. We test these predictions by comparing home sales in which real estate agents are hired by others to sell a home to instances in which a real estate agent sells his or her own home. In the former case, the agent has distorted incentives; in the latter case, the agent wants to pursue the first-best. Consistent with the theory, we find homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics. Situations in which the agent's informational advantage is larger lead to even greater distortions.

A Spatial Approach to Addressing Weather Derivative Basis Risk: A Drought Insurance Example

Risk and Uncertainty,

The national defense boost in rural America

Rural areas ; Rural development ; Defense contracts

Booms and busts in household wealth: implications for Tenth District states

The U.S. stock market and housing market--the two largest sources of U.S. household wealth--have had sizable booms and busts in recent years. This volatility has influenced national consumption trends and had important consequences for states. Some states have become relatively wealthier, affecting both the short- and long-term consumption spending potential of their residents. ; Understanding how wealth changes affect state economies could be especially important in 2011 and 2012 given the recent resumption of home price declines in much of the country. Research has shown that consumption can be more sensitive to changes in housing wealth than other types of wealth. While the home price collapse in 2007-09 hurt the Tenth District less than the nation, home price fundamentals in several District states may be more similar to the nation over the next couple of years. ; Wilkerson and Williams examine recent changes in household wealth in Tenth District states and explore how the region is positioned heading forward.

The Tenth District's defining industries: how are they changing?

The economy of the Tenth Federal Reserve District has become increasingly more services-based in recent years. While this transformation has lessened many of the historical differences with the rest of the nation, the regional economy still remains distinct, especially in some states. Wyoming, for instance, still has the most unique industrial structure in the country. And Nebraska, New Mexico, and Oklahoma still rank among the top third of states with economies that differ from the rest of the nation. ; What industries make the Tenth District so different, and what can they tell us about the future of the regional economy? ; Wilkerson and Williams examine the “defining” industries of the region. They find that the performance of a relatively small group of these industries track closely with overall job growth in each state. In other words, states whose defining industries have prospered in recent years have grown quickly overall, while states whose defining industries have struggled have grown sluggishly. Thus, identifying a state’s defining industries and understanding how they are changing can provide vital context for policymakers seeking to improve prospects for growth—as well as help identify the types of economic shocks that might threaten the region in the future.Federal Reserve District, 10th

The export potential of Tenth District states

After collapsing during the financial and economic crisis, exports have grown rapidly in the nation and across much of the Tenth Federal Reserve District. Despite some risks, most economic forecasts for national exports point to continued robust growth. An export boom, however, could have disparate effects across the country, given sizable differences in the volume, composition, and trends of state exports. ; Wilkerson and Williams assess the export potential of the Tenth District. They find that future export growth in the district is likely to be strong, although most states are likely to benefit less from the expected boom than the nation as a whole. Most states in the district have smaller export sectors than the nation and slightly less favorable export industry mixes. There are exceptions, though, and most district states have an adequate mix of trading partners. And, as in the past, other factors will play a role in the district’s export potential.

Minorities in the Tenth District: are they ready for the jobs of the future?

Employment ; Minorities - Employment ; Federal Reserve District, 10th

Evaluating the success of seed sowing in a New England grassland

Grassland habitat is declining in the northeastern United States, leading to a decline in associated native species. Consequently, there is considerable interest by land managers in conserving and restoring grassland habitats in the Northeast. However, unlike the Great Plains and Europe, quantitative monitoring of restoration sites is uncommon, making it difficult to improve new restoration projects. Here we evaluate a grassland restoration in Waterford, Connecticut to determine if mechanical clearing of woody vegetation combined with sowing 23 native grasses and forbs led to successful establishment of these species. We also compared cover, diversity, and colonization by exotic and woody species in planted and unplanted areas over time. In the third and fifth growing seasons after planting in 2006, we sampled the vegetation in the planted site, an unplanted zone within the planted grassland, and an adjacent unplanted grassland. Twenty of the 23 sown species established by 2010, and sown species dominated the planted area (70% of total cover). Despite the successful establishment of most sown species, species richness and diversity were no higher in the sown grassland than in adjacent unseeded areas. However, the sown grassland contained lower cover of non-native and invasive species. Big bluestem (Andropogon gerardii Vitman) established aggressively, potentially reducing both exotic colonization and native diversity. This study shows that sowing native grassland species can lead to the successful development of native-dominated grasslands. Results can inform future grassland restoration efforts in the Northeast and show that seeding with aggressive grass species may greatly impact restored plant communities

Anisotropic evolution of D-dimensional FRW spacetime

We examine the time evolution of the D=d+4 dimensional Einstein field equations subjected to a flat Robertson-Walker metric where the 3D and higher-dimensional scale factors are allowed to evolve at different rates. We find the exact solution to these equations for a single fluid component, which yields two limiting regimes offering the 3D scale factor as a function of the time. The fluid regime solution closely mimics that described by 4D FRW cosmology, offering a late-time behavior for the 3D scale factor after becoming valid in the early universe, and can give rise to a late-time accelerated expansion driven by vacuum energy. This is shown to be preceded by an earlier volume regime solution, which offers a very early-time epoch of accelerated expansion for a radiation-dominated universe for d=1. The time scales describing these phenomena, including the transition from volume to fluid regime, are shown to fall within a small fraction of the first second when the fundamental constants of the theory are aligned with the Planck time. This model potentially offers a higher-dimensional alternative to scalar-field inflationary theory and a consistent cosmological theory, yielding a unified description of early- and late-time accelerated expansions via a 5D spacetime scenario.Comment: Title changed from "A possible higher-dimensional alternative to scalar-field inflationary theory". Several new results have been added including a predicted lower- and upper-bound on the time scales marking the end of an early-time inflationary epoch and the beginning of an FRW epoch for d=