Understanding recent trends in house prices and homeownership: commentary

Housing ; Housing - Prices

Commentary on two papers on the affordability of housing for young and poor families

Housing - Finance ; Income

Does location matter?

Wages

IDEF5 Ontology Description Capture Method: Concept Paper

The results of research towards an ontology capture method referred to as IDEF5 are presented. Viewed simply as the study of what exists in a domain, ontology is an activity that can be understood to be at work across the full range of human inquiry prompted by the persistent effort to understand the world in which it has found itself - and which it has helped to shape. In the contest of information management, ontology is the task of extracting the structure of a given engineering, manufacturing, business, or logistical domain and storing it in an usable representational medium. A key to effective integration is a system ontology that can be accessed and modified across domains and which captures common features of the overall system relevant to the goals of the disparate domains. If the focus is on information integration, then the strongest motivation for ontology comes from the need to support data sharing and function interoperability. In the correct architecture, an enterprise ontology base would allow th e construction of an integrated environment in which legacy systems appear to be open architecture integrated resources. If the focus is on system/software development, then support for the rapid acquisition of reliable systems is perhaps the strongest motivation for ontology. Finally, ontological analysis was demonstrated to be an effective first step in the construction of robust knowledge based systems

Reverse mortgages and the liquidity of housing wealth

The article is organized as follows: Section I briefly describes the features of various types of reverse mortgages offered in the private and public sectors. Section II surveys the ~elevant literature that has focused on the savings patterns of the elderly and their demand for reverse mortgage products. Section III describes the sample of the elderly drawn from the Survey of Income and Program Participation (SIPP). Section IV analyzes the potential demand for reverse mortgages on the basis of age, fertility history, income, housing wealth, liquid wealth, and debt. Section V discusses the difficulties in developing an established market for reverse mortgages, including legal and regulatory barriers, as well as issues of appropriate pricing and risk. Section VI concludes the paper.Mortgages

What Can We Learn About the Sensitivity of Investment to Stock Prices with a Better Measure of Tobin's q?

This paper examines the responsiveness of investment to q (i.e., the ratio of a firm's market value to the replacement cost of its assets) using data on a unique type of firm: Real Estate Investment Trusts (REITs). For REITs, we have high quality estimates of the net asset value of the firm that we use to create relatively accurate measures of Tobin's q. In addition, REITs have institutional features that mitigate some of the complications faced by previous studies. We have three main results. First, there is little evidence of a statistical link between REIT investment and a traditional accounting-based measure of q. Second, REIT investment is highly sensitive to estimates of q that are based on analysts' appraisals of asset value. A REIT whose NAV-based q ratio rises from 1.0 to 1.1 will increase its assets by 4.3 percent in the next year. Third, the difference between the appraisal-based measure of q and the traditional accounting based measure typically increases with the age of the firm's assets and varies across types of properties. These results suggest that measurement error in q can lead to appreciable downward biases in investment sensitivities, even in an industry that seems to meet many of the assumptions in Tobin's original paper, but that Tobin's investment model performs well with a better measure of q.Investment; Tobin's q; Real Estate Investment Trusts

Theoretical foundations for information representation and constraint specification

Research accomplished at the Knowledge Based Systems Laboratory of the Department of Industrial Engineering at Texas A&M University is described. Outlined here are the theoretical foundations necessary to construct a Neutral Information Representation Scheme (NIRS), which will allow for automated data transfer and translation between model languages, procedural programming languages, database languages, transaction and process languages, and knowledge representation and reasoning control languages for information system specification

Housing Price Dynamics Within a Metropolitan Area

This paper analyzes the pattern of cross-sectional house price appreciation in the Boston metropolitan area from 1982 to 1994. The empirical results are consistent with many of the predictions of a standard urban model in which towns have a fixed set of locational attributes and amenities. In particular, the evidence suggests that house prices in towns with a large share of residents working in the manufacturing sector in 1980 grew less quickly in the ensuing years when aggregate manufacturing employment fell. As baby boomers moved into middle age, house values appreciated faster in towns with a larger initial percentage of middle-aged residents. Housing values rose more slowly in towns that allowed additional construction, and values rose faster in towns closer to Boston. Finally, as fewer families had children who attended public schools statewide, the price premium associated with housing in towns with good schools fell. All of these findings support the view that town amenities and public services are not easily replicated or quickly adaptable to shifts in demand, even within a metropolitan area.

What Can We Learn About the Sensitivity of Investment to Stock Prices with a Better Measure of Tobin's q?

This paper examines the responsiveness of investment to q (i.e., the ratio of a firm's market value to the replacement cost of its assets) using data on a unique type of firm: Real Estate Investment Trusts (REITs). For REITs, we have high quality estimates of the net asset value of the firm that we use to create relatively accurate measures of Tobin's q. In addition, REITs have institutional features that mitigate some of the complications faced by previous studies. We have three main results. First, there is little evidence of a statistical link between REIT investment and a traditional accounting-based measure of q. Second, REIT investment is highly sensitive to estimates of q that are based on analysts' appraisals of asset value. A REIT whose NAV-based q ratio rises from 1.0 to 1.1 will increase its assets by 4.3 percent in the next year. Third, the difference between the appraisal-based measure of q and the traditional accounting based measure typically increases with the age of the firm's assets and varies across types of properties. These results suggest that measurement error in q can lead to appreciable downward biases in investment sensitivities, even in an industry that seems to meet many of the assumptions in Tobin's original paper, but that Tobin's investment model performs well with a better measure of q.Investment; Tobin's q; Real Estate Investment Trusts

Research accomplished at the Knowledge Based Systems Lab: IDEF3, version 1.0

An overview is presented of the foundations and content of the evolving IDEF3 process flow and object state description capture method. This method is currently in beta test. Ongoing efforts in the formulation of formal semantics models for descriptions captured in the outlined form and in the actual application of this method can be expected to cause an evolution in the method language. A language is described for the representation of process and object state centered system description. IDEF3 is a scenario driven process flow modeling methodology created specifically for these types of descriptive activities