Albert Saiz’s research while affiliated with Massachusetts Institute of Technology and other places

We use Spain’s Equality Law to test for the existence of agency problems between party leaders and their constituents. The law mandates a 40 percent female quota on electoral lists in towns with populations above 5,000. Using pre- and postquota data by party and municipality, we implement a triple-difference design. We find that female quotas resulted in slightly better electoral results for the parties that weremost affected by the quota. Our evidence shows that party leaders were not maximizing electoral results prior to the quota, suggesting the existence of agency problems that hinder female representation in political institutions.

How has immigration and the associated growth in the Hispanic population affected the evolution of housing prices and rents in the United States? The answer to this question depends on the scale of the local housing demand shock associated with immigration and the growth in the Hispanic population in a city. This chapter reviews the existing literature on the issue and introduces a number of new facts. Cities that received immigrants experienced faster housing price and rent appreciation during the last two decades of the 20th century. Hispanic-dense metropolitan areas have more expensive housing. Part of the price differential is due to the growth in the Hispanic population, and we derive a statistical causal link between Hispanic growth and average housing price growth. However, within metropolitan areas it is precisely those neighborhoods with increasing Hispanic share where relatively slower housing price and rent appreciation took place. The facts are consistent with immigrant and Hispanic population growth generally driving up the demand for living in a city, but with increasing ethnic segregation within the city.

How does changing from an assembly to a town-council form of government affect the way in which cities are run? Previous empirical research on this question has not found much of an impact of assemblies on aggregate outcomes such as local public expenditures or taxation. Nevertheless, the specific role of organized insiders may be important to understand how cities and towns governed by citizens' assemblies work. Existing surveys point to local workers as an important pressure group in local assemblies. Using data from local governments in New England I find that municipalities governed by assemblies pay around 4% to 10% higher salaries to their employees. This wage premium is bigger in assemblies with lower attendance, and increasing with the employees' voting power. I prove my results robust to the inclusion of an exogenous representative-government comparison group: municipalities in New York State that lie within 40 miles of the border with New England. The results demonstrate how insider groups derive some advantages from an assembly form of government. More broadly, the potential capture of assemblies by insider groups can be an important risk faced by municipalities with low citizen participation, which provides a rationale for the widespread adoption of representative government at the local level.

We develop a model that nests previous explanations for women under-representation in positions of power. Focusing on democratic electoral dynamics, our framework delineates the three types of mechanisms that may be at play: consumer demand, candidate supply, and internal party dynamics beyond electoral markets. We use Spain's Equality Law, requiring a 40 percent female quota in electoral lists, to test the alternative theories. The law was enacted by the social-democratic party after the surprise parliamentary electoral results following the Madrid terrorist bombings, and was therefore completely unexpected by regional political machines. The law only applied to towns with populations above 5000, so we can use a treatment-control, before-and-after discontinuity design to learn about the impact of female politicians in local elections. Our evidence is most consistent with the existence of entrenched male-dominated political machines capturing influential power positions within the parties.

Fluctuations in housing prices are relevant to wealth accumulation, labor mobility, consumption, macroeconomic volatility, and financial market stability. However, it is ex ante difficult to know when housing price movements are due to fundamentals, such as changes in the user cost of capital, versus irrational exuberance. I propose combining the canonical urban economics Alonso-Muth-Mills model and Poterba (1984, 1990) asset pricing equation to form grounded theoretical expectations about the impact of changes in the user cost of capital on home values. In this framework, I show rental prices and rental expenditures to be endogenous to interest rates, which limits the applicability of conventional price-to-rent ratios. Concretely, rental prices should decrease when interest rates go down. Using the model I can express expected changes in home values that result from changes in user costs as simple functions of the demand elasticity for space, the supply elasticity of housing, and the initial share of land relative to prices in a city. The simple formula can be used to diagnose and underwrite home valuations under the null hypothesis of a common shock in the user cost of capital and to benchmark the plausibility of local deviations from the theory based on idiosyncratic demand shocks. Empirically, I find that housing supply elasticities (as calculated by Saiz, 2009) and land shares as of 1990 predicted 50% of the variance in price growth during the boom period (2000-2005). Expected relative home price growth, based on the fundamental parameters, was largely consolidated and insensitive to the subsequent bust cycle (2005-2008). However, deviations from expected growth mean-reverted dramatically during the bust period.

I process satellite-generated data on terrain elevation and presence of water bodies to precisely estimate the amount of developable land in U.S. metropolitan areas. The data show that residential development is effectively curtailed by the presence of steep-sloped terrain. I also find that most areas in which housing supply is regarded as inelastic are severely land-constrained by their geography. Econometrically, supply elasticities can be well characterized as functions of both physical and regulatory constraints, which in turn are endogenous to prices and demographic growth. Geography is a key factor in the contemporaneous urban development of the United States.

We develop a legal contract enforcement theory of the decision to own or lease. The allocation of ownership rights will minimize enforcement costs when the legal system is inefficient. In particular, when legal enforcement of contracts is costly, there will be a shift from arrangements that rely on such enforcement (such as a rental agreement) toward other forms that do not (such as direct ownership). We then test this prediction and show that costly enforcement of rental contracts hampers the development of the rental housing market in a cross section of countries. We argue that this association is not the result of reverse causation from a developed rental market to more investor protective enforcement and is not driven by alternative institutional channels. The results provide supportive evidence for the importance of legal contract enforcement for market development and the optimal allocation of property rights. (c) 2010 by The University of Chicago. All rights reserved..

Modern urban economic theory and policymakers are coming to see the provision of consumer leisure amenities as a way to attract population, especially the highly skilled and their employers. However, past studies have only provided indirect evidence of the importance of leisure amenities for urban development. In this paper we propose and validate the number of leisure trips to MSAs as a measure of consumer revealed preferences for local leisure-oriented amenities. Population and employment growth in the 1990s was about 2 percent higher in an MSA with twice as many leisure visits: the third most important predictor of recent population growth in standardized terms. Moreover, this variable does a good job at forecasting out-of-sample growth for the period 2000-2006. "Beautiful cities" disproportionally attracted highly-educated individuals, and experienced faster housing price appreciation, especially in supply-inelastic markets. Investment by local government in new public recreational areas within an MSA was positively associated with higher subsequent city attractiveness. In contrast to the generally declining trends in the American central city, neighborhoods that were close to "central recreational districts" have experienced economic growth, albeit at the cost of minority displacement.

The city beautiful movement, which in the early 20th Century advocated city beautification as a way to improve the living conditions and civic virtues of the urban dweller, had languished by the Great Depression. Today, new urban economic theory and policymakers are coming to see the provision of consumer leisure amenities as a way to attract population, especially the highly skilled and their employers. However, past studies have only provided indirect evidence of the importance of leisure amenities for urban development. In this paper we propose and validate the number of leisure trips to MSAs as a measure of consumer revealed preferences for local leisure-oriented amenities. Population and employment growth in the 1990s was about 2 percent higher in an MSA with twice as many leisure visits: the third most important predictor of recent population growth in standardized terms. Moreover, this variable does a good job at forecasting out-of-sample growth for the period 2000–2006. "Beautiful cities" disproportionally attracted highly-educated individuals, and experienced faster housing price appreciation, especially in supply-inelastic markets. Investment by local government in new public recreational areas within an MSA was positively associated with higher subsequent city attractiveness. In contrast to the generally declining trends in the American central city, neighborhoods that were close to "central recreational districts" have experienced economic growth, albeit at the cost of minority displacement.

The internet and other large textual databases contain billions of documents: is there useful information in the number of documents written about different topics? We propose, based on the premise that the occurrence of a phenomenon increases the likelihood that people write about it, that the relative frequency of documents discussing a phenomenon can be used to proxy for the corresponding occurrence-frequency. After establishing the conditions under which such proxying is likely to be successful, we construct proxies for a number of demographic variables in the US and for corruption across countries and US states and cities, obtaining average correlations with occurrence-frequencies of 0.47 and 0.61 respectively. We also replicate results from two separate published papers establishing the correlates of corruption at both the state and country level. Finally, we construct the first index of corruption in US cities and study its correlates.