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Prof Olmo Silva CKK.4.30

This course is compulsory on the BSc in Geography with Economics. This course is available on the BA in Geography, BSc in Economic History and Geography, BSc in Environment and Sustainable Development with Economics and BSc in Environmental Policy with Economics. This course is available with permission as an outside option to students on other programmes where regulations permit and to General Course students.

Students should have normally taken Economics A (EC100) or Economics B (EC102) or Microeconomics I (EC1A1 or EC1A3 or EC1A5) in combination with Macroeconomics I (EC1B1 or EC1B3 or EC1B5), and one or more of GY209, GY210, GY222, EC201, EC202, EC2A1, EC2A3 or EC2A5.

The main aim of this course is to analyse how decisions made by individuals influence the distribution of economic activities across space. The lectures will focus on how people sort across areas; on how they express their demand and preferences for specific locations and spatial attributes; and on how individual decisions carry important implications for the urban/regional economies and their labour markets. The emphasis will be on quantitative aspects and the lectures will cover both economic theories and related empirical methodology/applications. The course will be split into two interrelated blocks. One will concentrate on residential markets and study decisions made by individuals in relation to tenure choice and demand for housing space. Some time will be devoted to analysing how these processes affect the neighbourhoods where individuals live in terms of social stratification and externalities. The other part of the course will analyse the dynamics of local labour markets, geographical mobility, national and international migration and their effects on the local economy.

Topics covered:

1. Housing markets: the own vs. rent decision

2. Housing markets: the elasticity of supply and demand of space

3. Housing markets: real estate cycles, price fluctuations and real estate trends after Covid19

4. Housing markets: hedonics to uncover “what people want”

5. Neighbourhood effects: do places matter?

6. The externalities of homeownership and the public policy debates

7. Mobility, migration and the spatial equilibrium framework

8. Local labour markets, spatial mismatch and the Work-From-Home (WFH) 'revolution'

9. The local economic effects of migration: labour markets

10. The local economic effects of migration: innovation and entrepreneurship

In the Department of Geography and Environment, teaching will be delivered through a combination of classes/seminars, pre-recorded lectures, live online lectures, in-person lectures and other supplementary interactive live activities.

This course is delivered through a combination of classes and lectures across the Winter Term.

This course includes a reading week in Week 6 of Winter Term.

Students will be expected to prepare for group discussion of some readings and hand in short essays and/or problem sets.

Hilber, C. (2005): “Neighborhood Externality Risk and the Homeownership Status of Properties”, Journal of Urban Economics, 57(2), 213-241.

Mayer, C. and T. Somerville (2000): “Residential Construction: Using the Urban Growth Model to Estimate Housing Supply”, Journal of Urban Economics 48, 85-109.

Gibbons, S., S. Machin and O. Silva (2013): “Valuing School Quality Using Boundary Discontinuities”, Journal of Urban Economics, 75(1), 15-28.

Gibbons, S., O. Silva and F. Weinhardt (2013): “Everybody Needs Good Neighbours? Evidence from Students’ Outcomes in England”, Economic Journal, 123, 831-874.

Bracke, P., C. Hilber and O. Silva (2017): “Mortgage Debt and Entrepreneurship”, Journal of Urban Economics, 103(1), 52-66.

Hatton, T. (2005): “Explaining Trends in UK Immigration”, Journal of Population Economics, 18, 719-740.

Card, D. (2005): “Is the New Immigration Really So Bad?”, Economic Journal, F300-F323.

Hunt, J. and M. Gauthier-Loiselle (2010): “How Much Does Immigration Boost Innovation?” American Economic Journal: Macroeconomics, 2, 31–56.

Exam (100%, duration: 2 hours) in the spring exam period.