Results

CEP discussion paper

Intergenerational income persistence in the Millennial generation

This paper provides new evidence on intergenerational income persistence for a recent UK cohort. Using Next Steps, a longitudinal study of people born in England in 1989-90 linked to administrative education records, we ...Read more...

CEP discussion paper

Sticky gravity

International trade flows show strong persistence over time. Standard static gravity models cannot rationalize this persistence and lack a micro-foundation for including lagged trade flows as a determinant of current tra...Read more...

Journal article

The Economic Journal:

Train to opportunity: the effect of infrastructure on intergenerational mobility

Can transport infrastructure expand long-term labour opportunities and weaken the occupational link between parents and children? We estimate the causal effect of railway access on occupational attainment and intergenera...Read more...

Blog

The Conversation:

Do petrol retailers really 'price-gouge' during oil price spikes?

Nikhil Datta and Johannes Brinkmann examine petrol retailers' behaviour during oil price fluctuations to judge the validity of profiteering concerns....Read more...

Blog

LSE British Politics and Policy:

What the price-to-rent ratio reveals about Britain's housing crisis

The consensus that Britain's housing crisis stems from the lack of enough houses being built has received intense criticism lately. Christian Hilber and Andreas Mense analyse the price-to-rent ratio of UK homes and argue...Read more...

CEP discussion paper

Mind the lag: using assessed and list prices as proxies for housing market values

Property transaction prices are widely regarded as the best measure of property value, but are sometimes unavailable. Using data from the Netherlands and New York, we analyze whether list prices and assessed values are r...Read more...

CentrePiece article

Cultural exception?

Why book publishing contradicts conventional wisdom about competition....Read more...

Journal article

The Energy Journal:

Natural gas vehicles: consequences for fuel markets and the environment

Policies to adopt cleaner fuels have become increasingly important, but their impacts on incumbent fuel prices and resulting greenhouse gas emissions remain unclear. We use a panel dataset on weekly prices at the gas sta...Read more...

Journal article

The Economic Journal:

Manipulation and selection in unemployment insurance

In this paper, we study the selection patterns of individuals who manage to have their lay-off delayed around an age at lay-off threshold entitling them to four additional months of unemployment insurance, that is, manip...Read more...

CEP discussion paper

Segregation, spillovers and the locus of racial change

We use a discrete choice framework to provide the first nesting of Thomas C. Schelling's canonical models of racial segregation amenable to empirical examination. Using U.S. Census data from 1970-2000, we demonstrate a c...Read more...

CentrePiece article

The benefits of elite universities are more social than academic

From Cambridge and Oxford to Harvard and Yale, elite universities are a feature of many education systems. Andres Barrios Fernandez, Christopher Neilson and Seth Zimmerman ask whether these institutions of higher educati...Read more...

Blog

LSE Europp:

Cultural exception? Why regulating the book market contradicts conventional wisdom about competition

Fixing retail book prices is a common policy in Europe, but how does preventing competition affect booksellers and buyers? Christos Genakos, Lorien Sabatino and Tommaso Valletti find that when the ability to offer custom...Read more...

Blog

Vox EU:

How an oil price crash sparked clean innovation: Insights from Norway

The transition to clean energy will require a significant reallocation of technological investments away from fossil energy sources towards cleaner alternatives. This column investigates whether leveraging the technologi...Read more...

Blog

Vox EU:

Distributional consumer price indices and the measurement of inequality

Differences in consumption patterns between lower- and higher-income households suggest the potential for inflation inequality, but evidence on the scale and drivers of this disparity remains scarce. This column uses 'di...Read more...

Journal article

American Economic Review:

Five facts about MPCs: evidence from a randomized experiment

We present five facts from an experiment on the marginal propensity to consume (MPC) out of transitory transfers: (1) the one-month MPC on a cash-like transfer is 23 percent; (2) it is substantially higher (61 percent) o...Read more...

CEP discussion paper

Measuring quality of life under spatial frictions

Using a quantitative spatial model as a data-generating process, we explore how spatial frictions affect the measurement of quality of life. We find that under a canonical parameterization, mobility frictions - generated...Read more...

CEP discussion paper

Trade and intergenerational income mobility: theory and evidence from the US

This paper studies how globalization influences intergenerational income mobility. We develop a dynamic economic geography model with overlapping generations, migration costs, and sectoral persistence. The model shows th...Read more...

Journal article

PNAS:

How working from home reshapes cities

In recent decades, economic activity has become increasingly concentrated in major global metropolises. Yet, the rise of working from home threatens this dominance of cities. Using multiple high-frequency datasets on spe...Read more...

Journal article

Journal of International Economics:

New dawn fades: Trade, labour and the Brexit exchange rate depreciation

This paper studies consequences of the large exchange rate depreciation occurring when the UK electorate unexpectedly voted to leave the European Union. Sterling plummeted, recording the biggest one-day depreciation of a...Read more...

Blog

VOX EU:

The housing consumption channel of mortgage demand

Many housing markets have experienced a dramatic rise in house prices and mortgage debt over recent decades that has outpaced average income growth. Increased wealth and increased collateral values have been cited as pos...Read more...

Blog

The Conversation:

Why building new towns isn't the answer to the UK's housing crisis

The UK's new government is intent on building 1.5 million homes over the next five years. It's all part of the plan to address the housing supply and affordability crisis. Many of these homes are to be built in the form...Read more...

CEP discussion paper

Valuing consumption services as technology transforms accessibility: Evidence from Beijing

Home delivery reduced the value of cities as locations to access variety in durable consumption goods. Food delivery services (FDS) are doing the same for restaurants. Home-streaming of sports or home-delivered restauran...Read more...

Journal article

Journal of Economic Geography:

On the productivity advantage of cities

Agglomeration externalities are the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of total factor producti...Read more...

Journal article

Research in Transportation Economics:

Housing prices, buses and trams in Medellin (Colombia)

This paper aims to establish the impact of two medium-capacity transportation systems (MCTS) on housing prices in Medellin (Colombia): Metroplus, a bus rapid transit (BRT) system, and Tranvia, a tramway system. Using rep...Read more...

CEP discussion paper

Elite universities and the intergenerational transmission of human and social capital

Do elite colleges help talented students join the social elite, or help incumbent elites retain their positions? We combine intergenerationally-linked data from Chile with a regression discontinuity design to show that, ...Read more...

CEP discussion paper

Paternity leave and child development

We study the effect of paternity leave on early child development. We collect survey data on 5,000 children under age six in Spain and exploit several extensions of paternity leave that took place between 2017 and 2021. ...Read more...

CEP discussion paper

Housing-consumption channel of mortgage demand

We quantify the housing-consumption channel in mortgage demand according to which households borrow more following house-price increases since housing and non-housing consumption are imperfect substitutes. To identify th...Read more...

Journal article

Journal of International Economics:

Accounting for trade patterns

We develop a quantitative framework for decomposing trade patterns. We derive price indexes that determine comparative advantage and the aggregate cost of living. If firms and products are imperfect substitutes, we show ...Read more...

CEP discussion paper

Land use regulation, homeownership and wealth inequality

We examine the role that housing market regulatory restrictiveness plays in differentially affecting the net wealth of owners and renters over time, and its contribution to wealth inequality. In tightly regulated desirab...Read more...

Journal article

Energy Economics:

Are friends electric? Valuing the social costs of power lines using house prices

Overhead electrical power lines and pylons have long raised concerns regarding the effects of electromagnetic fields on health, noise pollution and the visual impact on rural landscapes. These issues are once again salie...Read more...

Journal article

Journal of Urban Economics:

On the economic impacts of mortgage credit expansion policies: evidence from help to buy

We take advantage of two spatial discontinuities in Britain's Help to Buy (HtB) scheme to explore the effectiveness and distributional implications of mortgage credit expansion policies. Employing a Difference-in-Discont...Read more...

CEP discussion paper

Are friends electric? Valuing the social costs of power lines using house prices

Overhead electrical power lines and pylons have long raised concerns regarding the effects of electromagnetic fields on health, noise pollution and the visual impact on rural landscapes. These issues are once again salie...Read more...

Journal article

The Economic Journal:

Individual consequences of occupational decline

We assess the career earnings losses that individual Swedish workers suffered when their occupations' employment declined. High-quality data allow us to overcome sorting into declining occupations on various attributes, ...Read more...

CEP Insights

Social mobility

How much of an individual's success depends on their own hard work and how much on what their parents do for a living? A country where children from poor families are likely to be poor as adults and elite positions in so...Read more...

CEP discussion paper

The dynamics of the 'Great Gatsby Curve' and a look at the curve during the Great Gatsby era

We use linked historical US censuses to study the empirical relationship between inequality and intergenerational mobility. We first confirm that the 'Great Gatsby Curve' already existed in the early 20th century. We the...Read more...

Journal article

Journal of Human Resources:

Parental education and the responses to higher SAT scores

Using discontinuities within the Swedish SAT system, we study the causal impact of additional admission opportunities on participation in higher education among high-ability students. Students with low-educated parents w...Read more...

CEP discussion paper

Firming up price inflation

We use data from a large panel survey of UK firms to analyze the economic drivers of price setting since the start of the Covid pandemic. Inflation responded asymmetrically to movements in demand. This helps to explain w...Read more...

Journal article

The Journal of Economic Inequality:

Intergenerational home ownership

This paper studies intergenerational links in home ownership, an increasingly important wealth marker and a measure of economic status in itself. Repeated cross sectional UK data show that home ownership rates have falle...Read more...

Blog

Vox EU:

Flight from Russia

In addition to the human tragedy in Ukraine, Russia's invasion has led to a series of economic, social, and political events in Russia itself. This column uses outgoing flight prices before and after the invasion on 24 F...Read more...

Journal article

Scandinavian Journal of Economics:

Where is the land of hope and glory? The geography of intergenerational mobility in England and Wales

This paper presents a new analysis of intergenerational mobility across three cohorts in England and Wales using linked decennial census microdata focusing on occupation, home ownership, and education. Four main results ...Read more...

Blog

Vox EU:

Firm inflation expectations in quantitative and text data

Inflation rates and short-term inflation expectations in the UK have increased significantly since 2021. This column uses quantitative and text data from the Decision Maker Panel to analyse the factors affecting inflatio...Read more...

CEP discussion paper

New dawn fades: trade, labour and the Brexit exchange rate depreciation

This paper studies consequences of the very large exchange rate depreciation occurring in June 2016 due to the UK electorate unexpectedly voting to leave the European Union. As news of a leave vote came in, the value of ...Read more...

Government consultation

Submission to the independent review of the UK Government's approach to net zero

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CentrePiece article

Supporting the UK's self-employed

Two years after the Covid-19 crisis began, incomes of the UK?s self-employed remain well below their pre-pandemic levels. Robert Blackburn and Maria Ventura explain why the solo self-employed, who represent about 85% of ...Read more...

Blog

Vox EU:

Firming up price inflation

Inflation rates in the UK and US are currently at their highest levels in over 30 years. This column uses firm-level data from the Decision Maker Panel to study inflation dynamics in the UK, and in particular since the s...Read more...

Blog

Economics Observatory:

Are wages keeping up with the cost of living?

There is currently much debate about whether pay should keep pace with either productivity or inflation. How we measure price growth has a big influence on what we observe, shedding light on how different parts of the ec...Read more...

CEP Covid-19 analysis

Covid-19 and the self-employed - A two year update

The fifth LSE-CEP survey of the self-employed of May 2022 provides an up to date picture of how Covid-19 and its aftermath keep affecting the self-employed. The findings show that, although working on average a little mo...Read more...

Blog

Economics Observatory:

Inflation update: what's driving the cost of living crisis?

Prices in the UK continue to rise, with the Consumer Price Index up 9.4% in June. A closer look at the underlying data shows that more items are going up in price than are going down, suggesting high inflation could be h...Read more...

CEP discussion paper

Nonparametric measurement of long-run growth in consumer welfare

How should we measure long-run changes in consumer welfare? This paper proposes a nonparametric approach that is valid under arbitrary preferences that depend on observable consumer characteristics, e.g. when expenditure...Read more...

Chapter

Post-Brexit imports, supply chains, and the effect on consumer prices

in The Economics of Brexit: What Have We Learned?

Read more...

Blog

Vox EU:

The economics of Brexit: a new eBook

What has Brexit meant for the UK economy? Six years on from the referendum, and over a year since the implementation of the UK-EU Trade and Cooperation Agreement, this column introduces a new eBook which brings together ...Read more...

CentrePiece article

How Brexit has raised UK food prices

Some products imported to the UK from the European Union have been more affected by the post-Brexit trading rules than others. Jan David Bakker, Nikhil Datta, Josh De Lyon, Luisa Opitz and Dilan Yang find that leaving th...Read more...

External report

Post-Brexit imports, supply chains, and the effect on consumer prices

This report documents the decrease in imports and shows how the patterns of imports vary across sectors following the UK's departure from the Single Market and Customs Union at the end of 2020. The authors, Jan David Bak...Read more...

Journal article

Journal of Economic History:

The long shadow of slavery: the persistence of slave owners in southern lawmaking

This paper documents the persistence of Southern slave owners in political power after the American Civil War. Using data from Texas, we show that former slave owners made up more than half of all state legislators until...Read more...

Blog

VoxEU:

Inflation, market power, and price controls: views of leading economists

With sharply rising US inflation prompting debate about the potential role of powerful firms in driving up prices and whether antitrust interventions and/or price controls may be an effective policy response, the IGM For...Read more...

CEP discussion paper

Expecting Brexit

The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendu...Read more...

CEP discussion paper

Local retail prices, product varieties and neighborhood change

We study how local grocery prices within a city are affected by changes in housing markets. Our empirical strategy is based on an exogenous shift in the spatial distribution of construction activity induced by a large-sc...Read more...

Journal article

Journal of Participation and Employee Ownership:

Footsie, yeah! Share prices and worker wellbeing

A small literature has shown that individual wellbeing varies with the price of company stock, but it is unclear whether this is due to wealth effects amongst those holding stock, or more general effects on sentiment, wi...Read more...

Journal article

Land Economics:

Valuing the environmental benefits of canals and canal restoration using house prices

This article values the environmental benefits of historic, navigable canals using property values. We improve on standard methods by controlling for microgeographic fixed effects and applying a difference-in-differences...Read more...

Journal article

Journal of Political Economy:

Discrimination, managers, and firm performance: evidence from ?Aryanizations? in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

Journal article

Oxford Research Encyclopedia of Economics and Finance:

The effects of parental job loss on children's outcomes

Severe economic downturns are typically characterized by a high incidence of job losses. The available evidence suggests that job losers suffer short-run earning losses that persist in the long run, are more likely to re...Read more...

CentrePiece article

UK house prices in Covid-19 times

The pandemic lead to increased demand for bigger homes and gardens. With housing supply limited by strict UK planning regulations and the market propped up by a stamp duty waiver and the furlough scheme, prices of detach...Read more...

CEP discussion paper

Judge dread: court severity, repossession risk and demand in mortgage and housing markets

We study the impact of borrower protection on mortgage and housing demand. We focus on variation in the likelihood that a house is repossessed - conditional on the mortgage being in arrears and taken to court - coming fr...Read more...

Journal article

Journal of the European Economic Association:

Parents, schools and human capital differences across countries

This paper studies the contribution of parental influence in accounting for cross-country gaps in human capital achievements. We argue that the cross-country variation in unobserved parental characteristics is at least a...Read more...

CEP discussion paper

Trends in intergenerational home ownership and wealth transmission

Prior research on trends in intergenerational mobility in economic status has focused chiefly on income and earnings. There is hardly any research on trends in intergenerational wealth transmission, at least in part beca...Read more...

Blog

LSE Covid-19:

Why central London has seen the biggest rises in house prices, despite Covid

As many predicted, the pandemic led to a demand for bigger homes and gardens. But with supply limited by Britain's strict planning regulations, and the market propped up by a stamp duty waiver and the furlough scheme, pr...Read more...

Journal article

Journal of Urban Economics:

Market tremors: Shale gas exploration, earthquakes, and their impact on house prices

Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks from hydraulic ...Read more...

CentrePiece article

In brief... The long shadow of slavery

The politics and economy of the antebellum American South were dominated by those who practiced forced enslavement. Research by Luna Bellani, Anselm Hager and Stephan Maurer, which examines a database of Texas legislator...Read more...

CEP occasional paper

Prices and inflation in the UK - A new dataset

This paper presents a new dataset of 41 million UK consumer prices, providing facts on the frequency, size and timing of price changes between 1988 and 2020. The micro data are the `price quotes? of individual consumer p...Read more...

CEP discussion paper

Why have house prices risen so much more than rents in superstar cities?

In most countries ? particularly in supply constrained superstar cities ? house prices have risen much more strongly than rents over the last two decades. We provide an explanation that does not rely on falling interest ...Read more...

Journal article

The Economic Journal:

Trapped factors and China?s impact on global growth

After a recent increase in Chinese import competition, European firms increased innovation. We present and rationalise these patterns using `trapped factors? at the micro level within a stylised equilibrium model of prod...Read more...

CEP discussion paper

The UK's great demand and supply recession

We revisit UK?s poor productivity performance since the Great Recession by means of both a suitable theoretical framework and firm-level prices and quantities data for detailed products allowing us to both measure demand...Read more...

CentrePiece article

Where is the land of hope and glory?

Children?s chances of doing well at school, going to university, getting a good job and owning a house are strongly influenced by their parents? education, occupation and home ownership ? but what about the impact of whe...Read more...

Journal article

Economic Policy:

School choice during a period of radical school reform. Evidence from academy conversion in England

We study how demand responds to the rebranding of existing state schools as autonomous 'academies' in the context of a radical and large-scale reform to the English education system. The academy programme encouraged scho...Read more...

Journal article

Labour Economics:

Job polarization and the declining quality of knowledge workers: evidence from the UK and Germany

Across the developed world, employment has polarized clearly by occupation, but changes to the wage structure have been harder to interpret. We examine changes to the wage structure in the UK and Germany, two countries w...Read more...

CEP discussion paper

The long shadow of slavery: the persistence of slave owners in Southern law-making

This paper documents the persistence of the Southern slave owning elite in political power after the end of the American Civil War. We draw on a database of Texan state legislators between 1860 and 1900 and link them to ...Read more...

CEP discussion paper

Family background and the responses to higher SAT scores

Using discontinuities within the Swedish SAT system, we show that additional admission opportunities causally affect college choices. Students with high-educated parents change timing, colleges, and fields in ways that a...Read more...

CEP discussion paper

On the productivity advantage of cities

Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities str...Read more...

CEP discussion paper

On the economic impacts of mortgage credit expansion policies: evidence from help to buy

Mortgage credit expansion policies - such as UK's Help to Buy (HtB) - aim to increase access to and affordability of owner-occupied housing and are widespread around the world. We take advantage of spatial discontinuitie...Read more...

CentrePiece article

The cost of being young: measuring intergenerational consumer prices

The UK's young adults are navigating a very different economic landscape to earlier generations, including low real wage growth, lower likelihood of owning their own home and the uncertain prospects of Brexit. Rahat Sidd...Read more...

Journal article

Quarterly Journal of Economics:

Measuring aggregate price indices with taste shocks: theory and evidence for CES preferences

We develop an approach to measuring the cost of living for CES preferences that treats demand shocks as taste shocks that are equivalent to price shocks. In the presence of relative taste shocks, the Sato-Vartia price in...Read more...

Journal article

Labour Economics:

Intergenerational effects of employment protection reforms

Job insecurity has worsened in most OECD countries in the aftermath of the Great Recession. Using Labour Force Survey data, I estimate the link between parental job insecurity (as measured by the contract type held by pa...Read more...

Journal article

Journal of Regional Science:

Direct democracy and intergenerational conflicts in ageing societies

To evaluate the potential effects of population ageing on the outcomes of direct democracy, we analyze the effect of age on voting decisions in public referendums. In a case study of the Stuttgart 21 referendum on one of...Read more...

CEP election analysis

Social mobility

Debates over how to improve life prospects for people irrespective of their family background promise to be a key theme in the run-up to the 2019 General Election. This briefing summarises evidence on social mobility fro...Read more...

CEP discussion paper

Spillover effects from new housing supply

I estimate spillovers from new housing supply on house prices, crime rates, and household income. To estimate these effects, I use exogenous variation in supply induced by a housing subsidy implemented in middle-income n...Read more...

CentrePiece article

Generation gap: young Brits less likely to 'do better' than their parents

Doing better financially than your parents is an important marker of success, and for much of the last half century, real earnings growth in the UK was strong enough that most young people achieved this milestone. But re...Read more...

Journal article

American Economic Review:

The effect of house prices on household borrowing: a new approach

We investigate the effect of house prices on household borrowing using administrative mortgage data from the United Kingdom and a new empirical approach. The data contain household-level information on house prices and b...Read more...

CEP discussion paper

Valuing the environmental benefits of canals using house prices

The canal and waterway network in Britain provides a potentially valuable recreational and environmental amenity. In this paper, we estimate the value of this amenity based on how much households are willing to pay throu...Read more...

Journal article

Journal of Urban Economics:

Why does birthplace matter so much?

We consider the link between birthplace and wages. Using a unique panel dataset, we estimate a raw elasticity of wages with respect to birthplace size of 4.2%, two thirds of the 6.8% raw elasticity with respect to city s...Read more...

CentrePiece article

Measuring the economic costs of discrimination: insights from Nazi Germany

Kilian Huber and colleagues analyse the effects of the Nazis' purge of Jewish managers from German firms....Read more...

CEP discussion paper

Discrimination, managers, and firm performance: evidence from ?Aryanizations? in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

Journal article

IZA World of Labor:

Intergenerational income persistence

A strong association between incomes across generations?with children from poor families likely to be poor as adults?is frequently considered an indicator of insufficient equality of opportunity. Studies of such ?interge...Read more...

CEP discussion paper

Where is the Land of Hope and Glory? The geography of intergenerational mobility in England and Wales

Does the importance of your family background on how far you get in adulthood also depend on where you grow up? For England and Wales, a paucity of data has made this a difficult question to reliably answer. This paper p...Read more...

Government consultation

Intergenerational Fairness and Provision Committee

Intergenerational fairness is an increasingly pressing concern for both policy makers and the public. It is exacerbated by an ageing population, the global financial crisis and successive government policies that have fa...Read more...

Journal article

Urban Studies:

Does the law of one price hold for hedonic prices?

Hedonic prices of locational attributes in urban land markets are determined by a process of spatial arbitrage that is similar to that which underpins the law of one price. If hedonic prices deviate from their spatial eq...Read more...

CEP discussion paper

The economic impacts of constraining home investments

We investigate how political backlash against wealthy investors in high-amenity places affects local residents. We exploit a quasi-natural experiment: the `Swiss Second Home Initiative?, which banned the construction of ...Read more...

CentrePiece article

Metal crime: the impact of prices, policing and policy

Metal prices are strong drivers of metal crime, according to research by Tom Kirchmaier and colleagues. Their study traces how, over the past ten years, big rises in commodity prices led to a boom in metal crime in the U...Read more...

CEP discussion paper

Prices, policing and policy: the dynamics of crime booms and busts

In many historical episodes, the extent of criminal activity has displayed booms and busts. One very clear example is the case of metal crime, where in the face of big increases in value driven by world commodity prices,...Read more...

Journal article

The Economic Journal:

Locus of control and its intergenerational implications for early childhood skill formation

This article builds upon Cunha's (2015) subjective rationality model in which parents have a subjective belief about the impact of their investment on their children's early skill formation. We propose that this subjecti...Read more...

Journal article

Economic Policy:

Evaluating market consolidation in mobile communications

We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators' prices and accounting i...Read more...