Vacancy chains in urban housing

 Vacancy chains occur not just in labor markets, but also in housing markets. (Earlier this week I wrote about housing chains for hermit crabs that result from evictions.)  A vacancy chain in a housing market can be thought of as a moving chain: someone moves into a vacant house or apartment (perhaps a newly constructed one), and someone else moves into the home they vacated, and so on, until the chain ends when a person who was in some different market (e.g. in rental housing, or in a distant location) moves into the last identifiable home in the chain.

Here are two papers that explore what happens when newly constructed housing is relatively expensive. They find that the chain often reaches much more moderately priced housing, i.e. adding to the stock of expensive housing also makes more affordable, existing housing available to new occupants.

The first paper draws on data from a dozen American cities (from Atlanta to San Francisco):

The effect of new market-rate housing construction on the low-income housing market, by Evan Mast, Journal of Urban Economics, Available online 27 July 2021, https://doi.org/10.1016/j.jue.2021.103383

Abstract: I illustrate how new market-rate construction loosens the market for lower-quality housing through a series of moves. First, I use address history data to identify 52,000 residents of new multifamily buildings in large cities, their previous address, the current residents of those addresses, and so on for six rounds. The sequence quickly reaches units in below-median income neighborhoods, which account for nearly 40 percent of the sixth round, and similar patterns appear for neighborhoods in the bottom quintile of income or percent white. Next, I use a simple simulation model to roughly quantify these migratory connections under a range of assumptions. Constructing a new market-rate building that houses 100 people ultimately leads 45 to 70 people to move out of below-median income neighborhoods, with most of the effect occurring within three years. These results suggest that the migration ripple effects of new housing will affect a wide spectrum of neighborhoods and loosen the low-income housing market.

%%%%%%%%%%%

A more recent working paper draws on data from metropolitan Helsinki and reaches similar conclusions:

Bratu, Cristina and Harjunen, Oskari and Saarimaa, Tuukka, City-wide Effects of New Housing Supply: Evidence from Moving Chains (August 31, 2021). VATT Institute for Economic Research Working Papers 146, Available at SSRN: https://ssrn.com/abstract=3929243 or http://dx.doi.org/10.2139/ssrn.3929243

Abstract: We study the city-wide effects of new, centrally-located market-rate supply using geo-coded total population register data from the Helsinki Metropolitan Area. The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run. Market-rate supply is likely to improve affordability outside the sub-markets where new construction occurs and to benefit low-income people.

**********

Earlier:

Vacancy chains in housing for hermit crabs   

Blum, Y., A.E. Roth, and U.G. Rothblum "Vacancy Chains and Equilibration in Senior-Level Labor Markets," Journal of Economic Theory, 76, 2, October 1997, 362-411.

Dialysis provider DaVita enters the transplant space

 Here's the press release:

DaVita Acquires MedSleuth, Deepens Efforts to Improve Transplant Experience. Transplant software company helps DaVita bolster its presence along the kidney care journey

" DaVita Inc. today announced its acquisition of transplant software company MedSleuth. Working with transplant centers across the U.S., MedSleuth aims to create greater connectivity among transplant candidates, transplant centers, physicians and care teams to help improve the experience and outcomes for kidney and liver transplant patients.

"With this acquisition, DaVita deepens its efforts to fuel transplant innovation, underscoring its commitment to improve care at every stage and setting along a patient's kidney care journey.

"Kidney transplantation is a life-changing option for most people with kidney failure, one that's limited today by supply and complexity," said Javier Rodriguez, CEO for DaVita. "MedSleuth has built a powerful platform that can help increase patients' access to transplantation. We're looking forward to supporting the team to accelerate innovation and help streamline the transplant process for transplant candidates, transplant centers, physicians and care teams."

"From lack of supply to meet the demand to understanding and staying on top of the complex process from workup to wait list to transplant, the U.S. transplant system can be complicated to navigate.

"MedSleuth's innovative software can help not only streamline the process of evaluating candidates and keep them active on the waitlist but may also help increase the rate of transplantation through living donation. The software can also make it easier for transplant candidates' doctors and care teams to help support them along the transplant journey.

"BREEZE™, MedSleuth's flagship product, helps remove certain barriers for potential kidney and liver donors and recipients by remotely gathering relevant clinical and demographic information and sharing it with participating transplant centers—effectively streamlining the transplant process, from candidate evaluation through donor and recipient follow-up.

"MATCHGRID™, MedSleuth's paired exchange platform, uses optimization algorithms to find chains for paired donation. This helps transplant center clinicians rapidly match living organ donors with recipients who have willing, healthy but incompatible donors."

HT; Martha Gershun

Evictions and coalitions in the housing market of hermit crabs--shell trafficking in the wild

 I've previously blogged about the observation that hermit crabs, who live in the shells of other animals and have to get new shells as they grow, sometimes engage in chains of exchange, that resemble kidney exchange chains, or vacancy chains in labor markets.

In particular, they resemble kidney exchange chains initiated by a deceased donor, in this case initiated by an empty shell.

 Here's a new article about hermit crabs which reports that they also engage in something that looks like organ trafficking, with a hermit crab being forcibly removed from its shell by two smaller crabs acting in concert, so that one of them may occupy the now vacant shell while the other moves into the shell of its partner in crime.

Laidre, Mark E. "The Architecture of Cooperation Among Non-kin: Coalitions to Move Up in Nature’s Housing Market." Frontiers in Ecology and Evolution (2021): 928.

"Coalitions typically involve two individuals (a pair), with a third individual being the target that the two-member coalition seeks to evict from its shell (Figure 1). Both members of the coalition have shells of their own, but these individuals and their shells are virtually always smaller than that of the target individual and its shell. Sometimes, based on the commotion and struggle generated during an attempted eviction, additional individuals—beyond the target and the core two-member coalition—are attracted to the area. These additional individuals—referred to as “third parties” or “bystanders”—are not part of the actual coalition, since they do not help at all to evict the target. Generally, third parties simply wait in the vicinity and sometimes position themselves in a social chain, which emanates from the back of the shell of one or both of the coalition members (Figure 2). This positioning in a social chain enables third parties to indirectly benefit, since in the event an eviction succeeds, it can catalyze a succession of back-to-back shell swaps (see Laidre, 2019a). Third parties are thus, in effect, “free riders” (Sigmund, 2010), since their positioning around the coalition offers no advantage whatsoever to the coalition itself as it works to evict the target. Indeed, whether third parties are positioned in a chain or not, they merely wait, performing no pulling actions and never adding any strength or providing any help to the two-member coalition. Interestingly, based on precisely where third parties position themselves, some may potentially even undermine the coalition (see below), effectively acting not merely as “free riders” but as “cheaters” (Sigmund, 2010). Finally, if too many bystanders accumulate, it can lead to chaotic jockeying and repositioning, with the original coalition separating.

"Whether with third parties present or not, the two members of the coalition attempt to physically evict the target. The target remains flipped on its back (i.e., with the dorsal side of its shell on the ground) and the opening of the target’s shell faces upward, allowing both coalition members to use their claws and legs to grab at and pull the anterior portion of the target’s body. As the coalition forcibly pulls, the target attempts to resist by clinging inside its shell. Typically, the two coalition members both pull simultaneously; though at times the two may alternate attempts at pulling, each doing so sequentially as one or the other member briefly rests. Both members of a coalition appear strongly involved, in terms of time and effort. Yet coalitions are not always successful. In some cases, one or both coalition members may give up; or the target individual may manage to flip itself over, escape from being pinned down, and run away. If a coalition is successful at evicting the target, the time till eviction occurs can vary widely, from just minutes up to hours (Laidre, personal observation). Once a coalition is successful and the target individual is evicted from its shell, then the evictee is pushed to the side and remains naked and shell-less as one of the coalition members moves into its now empty shell."

************

Earlier:

Saturday, July 21, 2012

Hermit Crab Vacancy Chains

Thursday, January 16, 2020

Vacancy chains and hermit crab housing, revisited

Honoring Milgrom and Wilson at the ASSA meetings in January (video)

 The video is at the link, there are four ten minute discussions, followed by brief responses by Paul and Bob. 

My discussion of Bob Wilson begins at around 27:20, and my final words to him were "Bob: you saw and demonstrated the future of game theory in economics, earlier and more clearly than anyone else.  We’re all lucky to know you."

AEA Nobel Laureate Address Honoring the 2020 Nobel Laureates Paul R. Milgrom (Stanford University) and Robert B. Wilson (Stanford University)
January 8, 2022 at 2:30 PM ET
View Recording

Presiding: Christina D. Romer, University of California-Berkeley

Susan Athey

, 

Stanford University

Topic: Honoring Paul R. Milgrom

Bengt Holmstrom

, 

Massachusetts Institute of Technology

Topic: Honoring Paul R. Milgrom

Alvin Roth

, 

Stanford University

Topic: Honoring Robert B. Wilson

Srihari Govindan

, 

University of Rochester

Topic: Honoring Robert B. Wilson

Centralized Student Choice and Assignment Systems around the world

 Christopher Neilson at Princeton has launched a web site aimed at organizing information on school choice around the world. The site opens with an ambitious world map, and it looks like there is still plenty of room for contributions from people with information on school choice systems wherever they are.

Centralized Student Choice and Assignment Systems

"Centralized Choice and Assignment Systems have been implemented in many countries and different settings, in an adoption trend that is likely to continue.

"With support from the Industrial Relations Sector at the Economics Faculty of Princeton University, this project aims to document the adoption trend and the large heterogeneity in implementation practices, with the objective of fostering further research into the different systems and identifying best practices for different contexts.

"The team has worked intensively in collecting and organizing the data. Nonetheless, the project is very ambitious and information about the different systems can be improved and needs to be updated. Therefore, with this challenge in mind, this webpage has been created to be able to share the data with the research and policy making communities around the world, and to invite everyone to contribute to the effort, suggesting edits and additional information that will improve upon the data collected."

Neighborhoods matter in school choice

 Here's a working paper that observes that assignments of places to pre-kindergarten students remains strongly influenced by where the children live, even in the presence of a school choice system.  I.e. many pre-kindergarten students go to neighborhood schools.

Distance to Schools and Equal Access in School Choice Systems, by Mariana Laverde

 Abstract: This paper studies the limits of school choice policies in the presence of residential segregation. Using data from the Boston Public Schools choice system, I show that white prekindergarteners are assigned to higher-achieving schools than minority students, and that cross-race school achievement gaps under choice are no lower than would be generated by a neighborhood assignment rule. To understand why choicebased assignments do not reduce gaps in school achievement, I use data on applicants’ rank-order choices to estimate preferences over schools, and consider a series of counterfactual assignments. I find that half of the gap in school achievement between white and Black or Hispanic students is explained by minorities’ longer travel distance to high-performing schools. Differences in demand parameters explain a smaller fraction of the gap, while algorithm rules have no effect."

From the conclusions:

"The salience of travel costs shows a first-order channel for why neighborhoods matter, highlighting how the effective provision of public goods can be affected by geography at very granular levels. In some way these results are not surprising. Most, if not all, of the papers that study school demand agree that distance is a key factor in parental choices. This paper takes this observation one step further and quantifies how much this cost limits the effectiveness of school choice policies in equalizing access to high-achieving schools. The results show that even in a generous choice environment where parents face minimal restrictions to their choices and free transportation is provided, distance can contribute greatly to inequity and that the design of the assignment algorithm can do little to break structural place-based inequities. This finding is not only relevant for the pre-kindergarten population. Not only we know that early investments can have lasting impacts on adult outcomes, but also, choice systems are typically designed to grandfather students into subsequent grades within a school. Then, even if travel costs are lower for older children, early assignments are held for several years after. In consequence, inequities in pre-kindergarten extend well after that period."

Experimental Economics in the Tradition of John Kagel (video)

 In October there was an in-person celebration of John Kagel, which I was delighted to participate in, in Tucson, Arizona. (It was my first in-person conference since the beginning of the Covid pandemic, during a brief window of optimism.) Now it's been posted on YouTube by the hosts, at the Economic Science Lab of the University of Arizona:

Keynote lecture of Professor Alvin Roth at the Workshop in Honor of John Kagel, Tucson, Arizona, October 2021

My talk was called Experimental Economics in the Tradition of John Kagel, and I began by explaining this photograph, which has John in the middle.

I eventually focused on how the following experiment helped shape a good deal of practical market design:

Kagel, John H. and A.E. Roth, "The dynamics of reorganization in matching markets: A laboratory experiment motivated by a natural experiment," Quarterly Journal of Economics, February, 2000, 201-235.

And I concluded by giving John some unnecessary advice as he embarks on his tenth decade.

**********

You can see more from the 2021 North-American Economic Science Association Conference (including the above video) here.