This study highlights the importance of financial background risks in consumers' demand for coverage against insurable risks, considering the bankruptcy option. We explore three cases that are overlooked in theoretical literature, although found to be highly relevant in empirical studies: (1) the joint realization of the two financial risks is bankrupting, (2) the insurable risk is bankrupting and the background risk is not, and (3) each financial risk is bankrupting on its own. Our new results highlight the potential role of the background risk in decreasing demand for insurance (and thus insurance take‐up) and yield novel non‐monotonic relationships between the magnitude of the background risk and the demand for insurance coverage, given consumers' initial wealth. Our results align with recent empirical work that highlights the role of consumer bankruptcy as a substitute to formal health insurance, and thereby its significant negative effects on insurance take up among working‐age Americans.
{"title":"Background risk and consumers' demand for insurance under limited liability","authors":"G. Sorek, T. Beard","doi":"10.1002/soej.12651","DOIUrl":"https://doi.org/10.1002/soej.12651","url":null,"abstract":"This study highlights the importance of financial background risks in consumers' demand for coverage against insurable risks, considering the bankruptcy option. We explore three cases that are overlooked in theoretical literature, although found to be highly relevant in empirical studies: (1) the joint realization of the two financial risks is bankrupting, (2) the insurable risk is bankrupting and the background risk is not, and (3) each financial risk is bankrupting on its own. Our new results highlight the potential role of the background risk in decreasing demand for insurance (and thus insurance take‐up) and yield novel non‐monotonic relationships between the magnitude of the background risk and the demand for insurance coverage, given consumers' initial wealth. Our results align with recent empirical work that highlights the role of consumer bankruptcy as a substitute to formal health insurance, and thereby its significant negative effects on insurance take up among working‐age Americans.","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":"1 1","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41744329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Housing and financial market shocks affect frictional labor markets. We structurally estimate a model of job search with accumulation of liquid and residential wealth and randomly persistent house prices. Using NLSY data from 1978 to 2000, we show that reservation wages and nonemployment increase in total wealth and respond to the composition of wealth, home prices and financial markets' tightness. We cluster counties of residence by HPI growth and find a residential wealth effect on labor markets that erodes with fast home price growth. When we counterfactually fix downpayment rates above observed trajectories, nonemployment becomes one percentage point higher in counties of average or fast home price growth and 1.2 percentage points lower where home prices are stagnant. Fixing interest rates at 2% generates a 0.5 percentage point decline in nonemployment in counties with no home price growth, but no changes where price growth is average or fast.
{"title":"Interactions between job search and housing decisions: A structural estimation","authors":"Sílvio Rendon, Núria Quella‐Isla","doi":"10.1002/soej.12650","DOIUrl":"https://doi.org/10.1002/soej.12650","url":null,"abstract":"Abstract Housing and financial market shocks affect frictional labor markets. We structurally estimate a model of job search with accumulation of liquid and residential wealth and randomly persistent house prices. Using NLSY data from 1978 to 2000, we show that reservation wages and nonemployment increase in total wealth and respond to the composition of wealth, home prices and financial markets' tightness. We cluster counties of residence by HPI growth and find a residential wealth effect on labor markets that erodes with fast home price growth. When we counterfactually fix downpayment rates above observed trajectories, nonemployment becomes one percentage point higher in counties of average or fast home price growth and 1.2 percentage points lower where home prices are stagnant. Fixing interest rates at 2% generates a 0.5 percentage point decline in nonemployment in counties with no home price growth, but no changes where price growth is average or fast.","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135553892","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sebastain Awondo, Harris Hollans, Lawrence Powell, Chip Wade
Abstract We empirically estimate the effects of windstorm loss mitigation features on the value of coastal homes using fixed‐effects and spatial regression hedonic models. We use housing data from the “Fortified Home” program, which prescribes and certifies windstorm resilience features for residential property. We test the extent to which Fortified construction and the location of a house relative to the coast act as mitigation complements or substitutes. We find that on average homebuyers located at median distance to the coast pay a 6%–7% premium for Fortified homes, which exceeds the typical cost of building or retrofitting houses to the Fortified standard. Fortified construction and distance of the house from the coast are mitigation substitutes. The premium is highest for homes nearest the coast. Our findings are robust under various specifications of spatial hedonic models.
{"title":"Estimating the effects of wind loss mitigation on home value","authors":"Sebastain Awondo, Harris Hollans, Lawrence Powell, Chip Wade","doi":"10.1002/soej.12648","DOIUrl":"https://doi.org/10.1002/soej.12648","url":null,"abstract":"Abstract We empirically estimate the effects of windstorm loss mitigation features on the value of coastal homes using fixed‐effects and spatial regression hedonic models. We use housing data from the “Fortified Home” program, which prescribes and certifies windstorm resilience features for residential property. We test the extent to which Fortified construction and the location of a house relative to the coast act as mitigation complements or substitutes. We find that on average homebuyers located at median distance to the coast pay a 6%–7% premium for Fortified homes, which exceeds the typical cost of building or retrofitting houses to the Fortified standard. Fortified construction and distance of the house from the coast are mitigation substitutes. The premium is highest for homes nearest the coast. Our findings are robust under various specifications of spatial hedonic models.","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":"248 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135336429","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Do sovereign credit rating events affect the foreign exchange market? Evidence from a treatment effect analysis","authors":"H. Balima, A. Minea, Cezara Vinturis","doi":"10.1002/soej.12633","DOIUrl":"https://doi.org/10.1002/soej.12633","url":null,"abstract":"","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43079875","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Gerrymandering in the laboratory","authors":"S. An, Michael Anderson, Cary A. Deck","doi":"10.1002/soej.12638","DOIUrl":"https://doi.org/10.1002/soej.12638","url":null,"abstract":"","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44275719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Innovation offshoring and reshoring with fully endogenous growth","authors":"C. Davis, K. Hashimoto","doi":"10.1002/soej.12637","DOIUrl":"https://doi.org/10.1002/soej.12637","url":null,"abstract":"","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44823234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Southern gains and northern losses: Regional variation in the evolution of black/white earnings differences in the United States, 1976–2017","authors":"Charles L. Ballard, J. Goddeeris","doi":"10.1002/soej.12636","DOIUrl":"https://doi.org/10.1002/soej.12636","url":null,"abstract":"","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43744839","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
COVID-19 required many professors to switch from in-person teaching to online instruction, allowing exploration of a pivotal question in education: are learning outcomes better when instruction takes place in-person or online? We compare student performance across two semesters of the same large introductory economics course-one taught in-person in 2019, the other taught online in 2020. We analyze test scores from over 2000 students for exam questions common to both instructional formats. At the aggregate level, we find no difference in student performance between online and in-person instruction. When dividing questions by required reasoning skills, we find that online instruction improves student performance on questions requiring knowledge of a definition or formula. Additionally, student course evaluations rated the online course over in-person pedagogy.
{"title":"In‐person\u0000 versus online instruction: Evidence from principles of economics","authors":"K. Elzinga, Daniel Q. Harper","doi":"10.1002/soej.12635","DOIUrl":"https://doi.org/10.1002/soej.12635","url":null,"abstract":"COVID-19 required many professors to switch from in-person teaching to online instruction, allowing exploration of a pivotal question in education: are learning outcomes better when instruction takes place in-person or online? We compare student performance across two semesters of the same large introductory economics course-one taught in-person in 2019, the other taught online in 2020. We analyze test scores from over 2000 students for exam questions common to both instructional formats. At the aggregate level, we find no difference in student performance between online and in-person instruction. When dividing questions by required reasoning skills, we find that online instruction improves student performance on questions requiring knowledge of a definition or formula. Additionally, student course evaluations rated the online course over in-person pedagogy.","PeriodicalId":47946,"journal":{"name":"Southern Economic Journal","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44424155","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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