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Research

Current working papers and recent publications by academics affiliated with CRE

Research at the Centre for Real Estate and Urban Economics seeks to advance the understanding of some of the world’s most important real estate and urban economic issues.

Real Estate

Real estate is a very important part of the larger economy. New construction is more than 8% of GDP.  Adding in the values of other real estate activity leads to a figure of more than 10%.  Although it is difficult to obtain an accurate estimate of real estate wealth, by all estimates, real estate is very important.  Most estimates are that real estate wealth is at least 40% of aggregate wealth.  Furthermore, real estate activity is closely linked to the business cycle.  The consequences of the recent real estate bubble's burst for the U.S. and world macro-economies have been dire.

Real estate is also directly important for business decision-makers. Real estate is clearly important for banking and asset management.  Understanding real estate is also crucial for general managers, since they make important location decisions and because businesses frequently own significant real estate, and are therefore accidentally in the real estate business.

Real estate is an area where there is pressing need for advances in knowledge.  The recent sub-prime mortgage debacle is the most obvious example of a situation where very costly mistakes have been made.  There are others.  For instance, real estate issues are central is also to understanding sprawl and other environmental issues.  

Urban Economics

A salient characteristic of developed economies is that they are highly urbanized.   Roughly eighty percent of Canadians live in cities, with more than half in the region centered around Toronto, Montreal, Vancouver, and the Calgary-Edmonton corridor.  In addition, individual industries are also well-known to be concentrated, with banking disproportionately located in Toronto, while Ottawa has a significant share of software production. 

Cities are crucial institutions for a number of reasons.  First, they are both highly productive and highly innovative. Wages, which reflect productivity, are much higher in large cities.  So are rates of patenting.  Second, many social problems are fundamentally spatial in the sense that they are most serious in cities.  Housing affordability, crime, and education are examples.  Understanding these issues is clearly important for advancing prosperity at the national level.  

Recent Publications

  • Han, L., “Understanding the Puzzling Risk-Return Relationship for Housing,” Review of Financial Studies, 2013, 26(4), 877-928.
  • Han, L. and W. Strange, “Bidding Wars for Houses,” Real Estate Economics, 2013, 41(3).
  • Genesove, D. and L. Han, “Search and Matching in the Housing Markets,” Journal of Urban Economics, 2012, 72, 31-45.
  • Han, L. and S.H. Hong, “Testing Cost Inefficiency under Free Entry in the Real Estate Brokerage Industry,” Journal of Business and Economic Statistics, 2011, 29(4), 564-578.
  • Han, L. “The Effects of House Price Uncertainty on the Life-Cycle Housing Demand,” Review of Financial Studies, 2010, 23, (lead article), 3889-3928.
  • Han, L. “Hedging House Price Risk in the Presence of Lumpy Transaction Costs,” Journal of Urban Economics, 2008, 64, 270-287.
  • Genesove, D. and L. Han, “A Spatial Look at Housing Boom and Bust Cycles,” forthcoming in Edward Glaeser and Todd Sinai (eds.), Housing Markets and the Financial Crisis, University of Chicago Press.
  • Rosenthal, Stuart S. and William C. Strange, "Agglomeration and Hours Worked," Review of Economics and Statistics,  2008, 90(1): 105–118.
  • Helsley, Robert W. and William C. Strange, "A Game-Theoretic Analysis of Skyscrapers,” Journal of Urban Economics, 64 (1),  2008, 49-64.
  • Rosenthal, Stuart S. and William C. Strange, "The Attenuation of Human Capital Spillovers," Journal of Urban Economics 64 (2), 2008, 373-389.
  • William C. Strange, "Agglomeration Research in the Age of Disaggregation," Canadian Journal of Economics 42(1), 2009, 1-27.
  • Bacolod, Marigee, Bernardo Blum, and William C. Strange, "Skills in the City," Journal of Urban Economics 65(2), 2009, 127-135.
  • Bacolod, Marigee, Bernardo Blum, and William C. Strange,  "Urban Interactions:  Soft Skills vs. Specialization,"  Journal of Economic Geography 9(2), 2009, 227-262.
  • Bacolod, Marigee, Bernardo Blum, and William C. Strange,  "Elements of Skill:  Traits, Intelligences, Education, and Agglomeration,"  Journal of Regional Science 50(1), 2010, 245-280.
  • Glaeser, Edward L., Stuart S. Rosenthal, and William C. Strange, "Urban Economics and Entrepreneurship," Journal of Urban Economics 67(1), 2010, 1-14.
  • Helsley, Robert W. and William C. Strange, "Entrepreneurs and Cities:  Complexity, Thickness, and Balance ." Regional Science and Urban Economics , 44 (6), 2011, 550-559.
  • Brooks, Leah and William C. Strange, "The Micro-Empirics of Collective Action:  The Case of Business Improvement Districts." Journal of Public Economics 95, 2011, 1358-1372.
  • Decoster, Gregory P. and William C. Strange, "Developers, Herding, and Overbuilding." Journal of Real Estate Finance and Economics 44, 2012, 7-35.
  • Rosenthal, Stuart S. and William C. Strange, "Female Entrepreneurship, Agglomeration, and a New Spatial Mismatch, " Review of Economics and Statistics 94 (3), 2012,  764-788.
  • Andini, Monica, Guido de Blasio, Gilles Duranton, and William C. Strange, "Marshall’s Labor Market Pooling:  Evidence from Italy," Regional Science and Urban Economics , forthcoming, 2013.

Working Papers

  • Lu Han and William Strange, “What is the Role of the Asking Price for a House?”, 2013
  • David Genesove and L. Han, “Measuring the Thinness of Real Estate Markets”
  • Lu Han and Seung-hyun Hong, “In-House Transactions in the Real Estate Brokerage Market: Matching Outcome or Strategic Promotion?”
  • Giulia Faggio, Olmo Silva, and William Strange, “Heterogeneous Agglomeration,” 2013
  • Robert Helsley and William Strange, “Coagglomeration and the Scale and Composition of Clusters,” 2013
  • Heski Bar-Isaac and Alessandro Gavazza, “Brokers’ Contractual Arrangements in the Manhattan Residential Rental Market.”
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