Strategic Exploitation of a Common Resource under Environmental Risk

We study the effect of environmental risk on the extraction of a common resource. Using a dynamic and non-cooperative game in which an environmental event impacts both the renewability (the future quantity) and the quality of the resource, we show that the anticipation of such an event has an ambiguous effect on present extraction and the tragedy of the commons. On the one hand, a risk of a reduction in the renewability induces the agents to extract less in the present. On the other hand, a risk of a deterioration in the quality of the resource induces the agents to extract more in the present. We then establish a negative relation between conservative behavior and the tragedy of the commons. In particular, when environmental risk induces conservation (when the risk of less renewability is more important than the risk of quality deterioration), there is a larger decrease in present harvesting under social planning than in the non-cooperative game, and the tragedy of the commons is worsened. The reason is that in a non-cooperative game agents do not internalize the risk that too much extraction creates for others, and, thus, decrease their own extraction too little. The social planner does internalize the effect of conservation on all agents, and decreases harvesting more than in the non-cooperative game, which reduces the risk for the whole group of agents. This disparity in conservation leads to a worsening of the tragedy of the commons in addition to overexposure to the risk of less renewability in the non-cooperative game.Common resource, Conservation, Dynamic games, Environmental risk, Non-cooperative games, Renewable resource exploitation, Stochastic games, Strategic interactions, Tragedy of the Commons, Uncertainty.

A Reconsideration of Arrow-Lind: Risk Aversion, Risk Sharing, and Agent Choice

We consider the original Arrow-Lind framework in which a government undertakes a risky project to be shared among many taxpayers. In our model, the taxpayers decide the level of participation in the risky project. Moreover, the amount of taxes collected by the government fully finances the public project. In this case, we show that projects cannot be evaluated only on the basis of expected benefits since the resulting tax determined by the model is incompatible with any risk sharing.Arrow-Lind Theorem, Risk aversion, Risk sharing, Choice

Differences in household income and other socioeconomic factors have been more important than subprime lending in explaining the growing gap in homeownership between blacks and whites

The consequences of the post 2006 housing bust disproportionately affected black households; rates of black homeownership are now 26 percentage points lower compared to whites. In new research, Kiat Ying Seah, Eric Fesselmeyer, and Kien T. Le examine some of the causes of this homeownership gap by focusing on socio-economic factors. They find that rather than being due to discrimination and subprime lending, the gap is mostly explained by changes in household income, whether the household earned dividend, interest, or rental income, and by marital status

The Time Value of Housing: Historical Evidence on Discount Rates

Most London housing transactions involve trading long leases of varying lengths. We exploit this to estimate the time value of housing – the relationship between the price of a property and the term of ownership – over a 100 years and derive implied discount rates. For our empirical analysis, we compile a unique historical data set (1987–92) to abstract from the right to extend leases currently enjoyed by tenants. Across a variety of specifications and samples, we find that leasehold prices are consistent with a time declining schedule and low long‐term discount rates in housing markets

Green housing transition in the Chinese housing market : a behavioural analysis of real estate enterprises

The concept of green housing has been introduced in China to deal with climate issues in the housing sector. Green housing development requires a complex socio-technical transition based not just on green materials or technologies, but also, and most importantly, on the behavioural transition of housing market actors. Little is known about how Chinese real estate enterprises are responding to the green housing transition within a Chinese context. Addressing this gap, our research aims to determine whether, and to what, extent Chinese real estate enterprises are transitioning toward greener housing practices and what constraints may exist. This research gap is particularly pressing given the Chinese government’s ambitions to promote energy efficiency in the new urban building sector by requiring 50% of urban new buildings to be green buildings by 2020 (NDRC, 2016). Our research reveals Chinese real estate enterprises face a dilemma of ‘going green’ and a range of institutional constraints that currently frustrate their uptake of green housing practices. Our research furthers knowledge on environmental and housing market governance within non-western and non-liberal contexts