3 ms·

"The authors explore several competing explanations to the joint declines in residential and labor market mobility, including changes within the housing market,

by pash 12y ago

"The authors explore several competing explanations to the joint declines in residential and labor market mobility, including changes within the housing market, the decline in higher paying manufacturing jobs, the polarization of the job market, and the rise of dual-career households, but find little empirical support for them."

001sky 12y ago
This intuitively is flawed. If you offer me more money in a place with expensive housing, the decision is based on the joint NPV(x|y) wher x is an income vector and y is a cost vector. Likewise, a single job offer is going to be only 1/2 of the x vector. On its faces, a new job offer for a two income household stream would be 1/2 as implactful as under a 1 income scenario. That is not even counting doing the joint probability of x=xa+xb when xb has to change because xa'=/=xa. These variables are also non-observable, so without actually reading the study its implausible to consider them well accounted for IMHO. Similarly, there is a lot of technical overhead when dealing with housing costs in relation to work opportunities. Each opportunity has to be considered in relation to the balance sheet, not the income stream. Most 100k jobs lose 30k to taxes and 30k to expenses each year (at a minimum) netting 30k of savings. But many US metro's where 100K jobs are prevealent have homes with average prices edging north of 10x 100k. So, that is 30 years of net saving--a hugely consequential trajectory for a NAV calculation. So, if you have assets invested in a hot housing market, it will take more than just a good job offer in another area to get you to move. because moving reduces your exposure to a market that is equally if not more consequential to your NAV than your Job. Unlike the stock market, you can't just keep the same portfolio of residential RE as you move about.
danieltillett 12y ago
How do they control for this - is this a case of no evidence = not important?

by pash 12y ago

001sky 12y ago

This intuitively is flawed. If you offer me more money in a place with expensive housing, the decision is based on the joint NPV(x|y) wher x is an income vector and y is a cost vector. Likewise, a single job offer is going to be only 1/2 of the x vector. On its faces, a new job offer for a two income household stream would be 1/2 as implactful as under a 1 income scenario. That is not even counting doing the joint probability of x=xa+xb when xb has to change because xa'=/=xa. These variables are also non-observable, so without actually reading the study its implausible to consider them well accounted for IMHO. Similarly, there is a lot of technical overhead when dealing with housing costs in relation to work opportunities. Each opportunity has to be considered in relation to the balance sheet, not the income stream. Most 100k jobs lose 30k to taxes and 30k to expenses each year (at a minimum) netting 30k of savings. But many US metro's where 100K jobs are prevealent have homes with average prices edging north of 10x 100k. So, that is 30 years of net saving--a hugely consequential trajectory for a NAV calculation. So, if you have assets invested in a hot housing market, it will take more than just a good job offer in another area to get you to move. because moving reduces your exposure to a market that is equally if not more consequential to your NAV than your Job. Unlike the stock market, you can't just keep the same portfolio of residential RE as you move about.

danieltillett 12y ago

How do they control for this - is this a case of no evidence = not important?