Housing policy and the social benefits of home ownership.

In the second article, "Housing Policy and the Social Benefits of Homeownership," Ed Coulson states that the major subsidies to homeownership arise from the U.S. tax code, and the costs of these subsidies are high. Coulson asks whether the social benefits from homeownership are sufficient to warrant such subsidies. To answer the question, he reviews the research on the social benefits of ownership and some related issues. The evidence indicates that homeownership does carry substantial social benefits, but their dollar value remains uncertain.Housing

Optimal Drug Policy in Low-Income Neighborhoods

Part of the debate over the control of drug activity in cities is concerned with the effectiveness of implementing demand- versus supply-side drug policies. This paper is motivated by the relative lack of research providing formal economic underpinning for the implementation of either policy. We construct a simple model of drug activity, in which the drug price and the distribution of population in a community are determined according to a career choice rule and a predetermined drug demand. Three potential government objectives are considered. We find that both demand- and supply-side policies have theoretical support under different community conditions. While the demand-side policy discourages active drug sellers, the supply-side policy has an additional drug-dealing replacement effect on inducing potential entry of drug dealers. In low-income neighborhoods, demand-side policy is more effective if the drug problem is more sever or if the government objective is to deter dealer entry or to promote community's aggregate income rather than minimizing active drug selling.

Non-Cointegration and Econometric Evaluation of Models of Regional Shift and Share

This paper tests for cointegration between regional output of an industry and national output of the same industry. An equilibrium economic theory is presented to argue for the plausibility of cointegration, however, regional economic forecasting using the shift and share framework often acts as if cointegration does not exist. Data analysis on broad industrial sectors for 20 states finds very little evidence for cointegration. Forecasting models with and without imposing cointegration are than constructed and used to forecast out of sample. The simplest, non-cointegrating models are the best.

On the Hybrid Nature of REITs

The consensus that emerges from the current research on the linkage between securitized and direct investment in real estate is that direct (private) real estate returns play a relatively minor role in the real estate investment trust (REIT) return generating process. However, this result may at least partially be due to the coarseness of the measures of direct real estate returns or the relatively short return horizons used in previous studies. This study takes a different and unique perspective. Unlike earlier studies we do not use aggregated, average appraisal based returns on direct real estate investment. Instead, we use the MIT TBI indexes, which are transaction based price indexes, available both on the aggregate and sub-index levels. We find that the relation between REIT and direct real estate returns appears to be stronger at longer horizons. More specifically, using a cointegration framework, we find robust evidence that REITs and the underlying real estate are related and that they share a long run equilibrium. Interestingly, we find that both REITs and direct real estate returns adjust towards this long run relationship. When we examine property type level data we find similar results

Geology and Wine 13. Geographic Information System Characterization of Four Appellations in West Texas, USA

Texas produces approximately 90 000 hl of wine annually from more than 200 wineries and 1214 ha of vineyards. Eight wine grape production regions are officially recognized as American Viticultural Areas (AVAs) in Texas. Improved understanding of the growing conditions within each AVA facilitates selection of well-adapted cultivars that is critical for continued success and expansion of the wine industry. A geographic information system (GIS) was developed to enable enhanced characterization of the climatic, geologic and edaphic conditions of Texas AVAs. The GIS contains datasets describing climatic variables, geology, soils, elevation and topography, all of significance to grape production. This paper characterizes the four viticultural areas (AVAs) of west Texas: Texas High Plains AVA, Escondido Valley AVA, Texas Davis Mountains AVA, and Mesilla Valley AVA. Common features of the four AVAs are relatively high elevation, warm to very warm growing-season temperatures, mild winter temperatures, and low annual precipitation. Local differences in elevation and topography modify climatic conditions among AVAs, providing variations in growing degree-days and ripening-period mean temperatures that influence the performance of grape cultivars. The Texas High Plains and Texas Davis Mountains AVAs have the lowest growing degree-days and coolest ripening-period mean temperatures; Escondido Valley and Mesilla Valley AVAs are drier and warmer, resulting in fruit ripening earlier than in the High Plains and Davis Mountains AVAs. Variable underlying geology leads to differing soil types planted to vineyards in each AVA; predominantly loamy fine sands and fine sandy loam in Texas High Plains, silty clay loam and loam in Escondido Valley, loam and clay loam in Texas Davis Mountains, and clay loam and sandy loam in Mesilla Valley. West Texas produces red wines from Cabernet Sauvignon and Merlot cultivars, which are notable for good tannin and excellent colour; recent planting trends to warm-climate cultivars, including Tempranillo, Sangiovese, Mourvèdre, and Grenache, are producing blended wines of great promise. Similarly, a solid reputation for white wines from Chenin blanc and Chardonnay is being enhanced by increased production of Viognier, Vermentino, and other warm-climate varietal wines. Sommaire Texas produit environ 90 000 hectolitres de vin par année provenant de plus de 200 établissements vinicoles et 1214 ha de vignes. Huit régions de productions de raisins de cuve sont officiellement reconnues comme zones viticoles américaines (AVA) en Texas. Une meilleure compréhension des conditions de croissance au sein de chacune AVA facilite le choix des variétés, (cultivars) adaptées pour le succès et l’expansion continue de l’industrie viticole. Un système d’information géographique (SIG) a été développé pour permettre la caractérisation améliorée des conditions climatiques, géologiques et édaphiques de l’AVA de Texas. Le SIG contient les ensembles de données décrivant les variables climatiques, la géologie, les sols, l’altitude, et topographie d’importances pour la production viticole. Ce document caractérise les quatre Zones viticoles de l’Ouest Texas: Texas High Plains, Escondido Valley, Texas Davis Mountains, et Mesilla Valley. Les caractéristiques communes entre des quatre AVA sont relativement haute altitude, très chaudes températures de saison de croissance, les températures de l’hiver doux et faibles précipitations annuelles. Les variations locales en altitude et topographie modifient les conditions climatiques entre les zones viticoles américaines et entraînent des variations des degrés-jour de croissance (GDD) et la température moyenne de mûrissement (RPMT), ce qui exercent une influence sur rendement des cultivars de raisin. Le Texas High Plains et le Texas Davis Mountains zones viticoles ont les GDD les plus bas et une RPMT froide; le Escondido Valley et Mesilla Valley zones viticoles sont plus secs et plus chauds, ce qui entraine le mûrissement de fruit plus tôt que dans le High Plains et Davis Mountains AVAs. Variable géologie sous-jacente conduit à une variation des types de sol plantés aux vignobles dans chaque AVA ; principalement loam sableux et le loam sablo-argileux dans Texas High Plains, loam limoneux et loam dans Escondido Valley, loam et loam argileux dans Texas Davis Mountains, et loam argileux et loam sableux dans Mesilla Valley. Ouest Texas produit des vins rouges de Cabernet Sauvignon et le Merlot qui se distinguent par le tanin et une couleur excellente, les tendances récentes à la plantation de climat chaud cultivars, y compris le Tempranillo, le Sangiovese, Mourvèdre, et Grenache, produisent des vins d’assemblages de grandes promesses. De même, une solide réputation pour les vins blancs de Chenin blanc et le Chardonnay est améliorer par l’augmentation de la production de Viognier, Vermentino, et d’autres vins de climat chaud cépages

On the Hybrid Nature of REITs

The consensus that emerges from the current research on the linkage between securitized and direct investment in real estate is that direct (private) real estate returns play a relatively minor role in the real estate investment trust (REIT) return generating process. However, this result may at least partially be due to the coarseness of the measures of direct real estate returns or the relatively short return horizons used in previous studies. This study takes a different and unique perspective. Unlike earlier studies we do not use aggregated, average appraisal based returns on direct real estate investment. Instead, we use the MIT TBI indexes, which are transaction based price indexes, available both on the aggregate and sub-index levels. We find that the relation between REIT and direct real estate returns appears to be stronger at longer horizons. More specifically, using a cointegration framework, we find robust evidence that REITs and the underlying real estate are related and that they share a long run equilibrium. Interestingly, we find that both REITs and direct real estate estate returns adjust towards this long run relationship. When we examine property-type level data we find similar results

On Indexing Commercial Real Estate Properties and Portfolios

Commercial real estate indices play an important role in performance evaluation and overall investment strategy. However, the issue of how representative they are of the returns on portfolios of commercial properties is an open issue. Our study addresses this topic by analyzing a sample of 12,427 repeat sales transactions between Q4 2000 and Q2 2011. We find that the aggregate real estate indices (Moody’s REAL CPPI) do a good job of tracking real returns when portfolios of more than 20 properties are considered. At this level, tracking is somewhat less effective than our benchmark of the S&P500 and its component stocks. Compared to the average root mean squared deviation (RMSD) from one asset, randomly selected portfolios with 20 assets reduce the RMSD by 75% for the S&P500 compared to 66% for the aggregate index. These results suggest that the aggregate indices can be effective in hedging and evaluating the performance of direct real estate investment. We further find that tracking at the property type level provides little benefit over using an aggregate index. However, indexing using a property type and location matched index provides lower tracking error for any level of diversification

“What Do Commercial Real Estate Price Indices Really Measure?”

Commercial real estate indices play an important role in performance evaluation and overall investment strategy. However, the issue of how representative they are of the price appreciation on individual commercial real estate properties is an open issue. Our study addresses this topic by analyzing a sample of 8864 repeat sales transactions between 1998 and 2010. We find that aggregate real estate indices do a modest job of explaining individual property price appreciation. We find some evidence that this performance is improved by very tightly focused indices. However, controlling for property level cash flow, nearly half the variation in property price appreciation is still unexplained. Our findings cast some doubt on the applicability of these indices for performance evaluation and as a vehicle to hedge commercial real estate

Cause of Cambrian Explosion - Terrestrial or Cosmic?

We review the salient evidence consistent with or predicted by the Hoyle-Wickramasinghe (H-W) thesis of Cometary (Cosmic) Biology. Much of this physical and biological evidence is multifactorial. One particular focus are the recent studies which date the emergence of the complex retroviruses of vertebrate lines at or just before the Cambrian Explosion of ∼500 Ma. Such viruses are known to be plausibly associated with major evolutionary genomic processes. We believe this coincidence is not fortuitous but is consistent with a key prediction of H-W theory whereby major extinction-diversification evolutionary boundaries coincide with virus-bearing cometary-bolide bombardment events. A second focus is the remarkable evolution of intelligent complexity (Cephalopods) culminating in the emergence of the Octopus. A third focus concerns the micro-organism fossil evidence contained within meteorites as well as the detection in the upper atmosphere of apparent incoming life-bearing particles from space. In our view the totality of the multifactorial data and critical analyses assembled by Fred Hoyle, Chandra Wickramasinghe and their many colleagues since the 1960s leads to a very plausible conclusion - life may have been seeded here on Earth by life-bearing comets as soon as conditions on Earth allowed it to flourish (about or just before 4.1 Billion years ago); and living organisms such as space-resistant and space-hardy bacteria, viruses, more complex eukaryotic cells, fertilised ova and seeds have been continuously delivered ever since to Earth so being one important driver of further terrestrial evolution which has resulted in considerable genetic diversity and which has led to the emergence of mankind