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Place-based policies that allocate resources to specific areas inadvertently also designate these areas as needing assistance, potentially leading to the development of neighborhood stigma. The common coupling of resource allocation and area designation makes it difficult to measure the stigma effect. However, the Swedish police’s listing of “vulnerable” neighborhoods, initially introduced in 2015, lacked accompanying resources, offering a unique opportunity to examine the isolated impact of place-based policies on stigma. We study the stigma associated with unfavorable area labels through an analysis of how police listings affect housing prices — a reliable measure of location value. Employing the synthetic control method, we find that the list resulted in an average price decrease of 3.6% within one year and 6.5% within six years in the designated neighborhoods. In line with ideas of racial stigma, we also find that areas with a higher proportion of minority residents prior to classification experienced more pronounced negative effects.

Water is an increasingly scarce resource. However, in many multifamily buildings, water is included in the rent, and tenants can consume an unlimited amount at a fixed cost, with no monetary incentives for saving water. Using high-frequency data over multiple years and a staggered implementation of apartment-level billing, we investigate the effects of volumetric pricing on hot water use. Our results show that individual billing decreases consumption by approximately 18%. The response is rather immediate and appears to be permanent. Additionally, estimated effects are remarkably homogeneous across different consumption quartiles, apartments with varying characteristics, and days of the week, and evenly distributed between bathroom and kitchen usage. Our cost-benefit analysis indicates that price interventions can cost-effectively reduce the consumption of hot water. Moreover, the effect of individual billing is of an order of magnitude higher than previously estimated effects of nonpecuniary incentives and providing more information about water consumption.

This paper is about the nonparametric regression of a choice variable on a nonlinear budget set under utility maximization with general heterogeneity, i.e. in the random utility model (RUM). We show that utility maximization and convex budget sets make this regression three dimensional with a more parsimonious specification than previously derived. We show that nonconvexities in the budget set will have little effect on these results in important cases. We characterize all the restrictions of utility maximization on the budget set regression and show how to check these restrictions in applications. We formulate budget set effects that can be identified by this regression and give automatic debiased machine learners of these effects. We consider use of control functions to allow for endogeneity. Throughout we take as the main example the effect of taxes on taxable income including accounting for productivity growth. In an application to Swedish data we find the taxable income elasticity of a change in the slope of each segment to be .52, that the regression satisfies the restrictions of utility maximization at the values chosen for over 95% of observations, and that a productivity growth rate we estimate is close to other estimates.

An Analysis of the Geographic Income Inequality in Sweden 1991–2017 This article studies the income polarisation between urban and rural areas in Sweden and how this polarisation has changed between 1991 and 2017. Using indi-vidual-level data covering the entire population over the entire period, we find that income differences are mainly driven by differences between municipalities with varying degrees of urbanisation rather than differences between urban and rural areas within municipalities. Rural municipalities have lower incomes than the more urban municipalities, and the income gap has increased over time. A higher degree of urbanisation in the municipality is associated with higher incomes and better income development in both the more urban parts of the municipality and its rural areas. When we compare the income development between urban and rural areas within municipalities, we find that while income levels were indeed lower in rural areas in 1991, the entire gap had been closed by 2017. The findings suggest that studies about the urban-rural cleavage lines are geography-sensitive, and that equalising policies should aim for differences between regions and municipalities rather than differences within municipalities.

We exploit the 1997 and 2003 constitutional amendments in Texas- allowing home equity loans and lines of credit for nonhousing purposes-as natural experiments to estimate the effect of easier credit access on the labor market. Using state-level as well as micro data, we find that easier access to housing credit led to a notably lower labor force participation rate between 1997 and 2007. Our findings are remarkably robust to improved synthetic control methods based on insights from machine learning. Our research shows that negative labor market effects of easier credit access are important for assessing its stimulative impact on overall growth. ( JEL C45, G21, G51, J16, J22)

Sedan hösten 2015 har polisen publicerat en serie rapporter som listar ett sextiotal bostadsområden i Sverige som "utsatta". Dessa listor har fått stort genomslag såväl i media som i den politiska debatten. I denna artikel presenterar vi resultat som ger stöd åt hypotesen att polisens beslut att peka ut "utsatta områden" har påverkat uppfattningen om de utpekade områdena. Vi påvisar en negativ effekt på bostadspriserna av att bli upptagen på polisens lista, både på kort och längre sikt (inom sex år), vilket vi tolkar som en minskad efterfråga på att bo i dessa områden.

Living in low-income neighborhoods can have adverse effects. Public policies that reduce income inequality might prevent residential segregation by income. However, previously documented associations between income inequality and residential segregation may not reflect residential sorting effects. We use rich full-population data for Sweden 1990-2017 and take advantage of how in-moving residents change the municipal income composition to rule out the influence of reverse causation and mechanical effects. We find that changing taxes and transfers has limited residential sorting effects on segregation. However, our results strongly suggest that raising the education levels of low-income residents is effective for fighting segregation.

The elasticity of taxable income is vital when predicting the effect of taxes. Bunching at kinks/notches has been used to estimate this elasticity. We show that when the preference distribution is unrestricted, bunching at a kink or a notch is not informative about the size of the elasticity, and neither is the entire distribution of taxable income. Bunching identifies the taxable income elasticity when the preference distribution is correctly specified across the kink and provides bounds under restrictions on the preference distribution. We find wide bounds in an empirical example based on upper and lower bounds for the preference density.

We explore elasticity heterogeneity in the estimation of the elasticity of taxable income (ETI) and propose potentially valid instruments. We show that previously used instruments are not valid and yield weighted averages of ETIs of different taxpayers plus a bias. Using the NBER tax panel for 1979-1990, we find a weighted average ETI of 0.57 when using all available variation in budget set changes provided by the tax reforms in the data. Our results also demonstrate that elasticity heterogeneity is an important explanation for the remarkable divergence of estimates in the previous literature.