IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

A Nation Of Gamblers: Real Estate Speculation And American History

Listed author(s):
  • Edward L. Glaeser

The great housing convulsion that buffeted America between 2000 and 2010 has historical precedents, from the frontier land boom of the 1790s to the skyscraper craze of the 1920s. But this time was different. There was far less real uncertainty about fundamental economic and geographic trends, making the convulsion even more puzzling. During historic and recent booms, sensible models could justify high prices on the basis of seemingly reasonable projections about stable or growing prices. The recurring error appears to be a failure to anticipate the impact that elastic supply will eventually have on prices, whether for cotton in Alabama in 1820 or land in Las Vegas in 2006. Buyers don't appear to be irrational but rather cognitively limited investors who work with simple heuristic models, instead of a comprehensive general equilibrium framework. Low interest rates rarely seem to drive price growth; under-priced default options are a more common contributor to high prices. The primary cost of booms has not typically been overbuilding, but rather the financial chaos that accompanies housing downturns.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w18825.pdf
Download Restriction: no

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18825.

as
in new window

Length:
Date of creation: Feb 2013
Publication status: published as Glaeser, Edward L. 2013. "A Nation of Gamblers: Real Estate Speculation and American History." American Economic Review, 103(3): 1-42.
Handle: RePEc:nbr:nberwo:18825
Note: EFG
Contact details of provider: Postal:
National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

Phone: 617-868-3900
Web page: http://www.nber.org
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Harding, John P. & Rosenthal, Stuart S. & Sirmans, C.F., 2007. "Depreciation of housing capital, maintenance, and house price inflation: Estimates from a repeat sales model," Journal of Urban Economics, Elsevier, vol. 61(2), pages 193-217, March.
  2. Albert Saiz, 2003. "Room in the Kitchen for the Melting Pot: Immigration and Rental Prices," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 502-521, August.
  3. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 577-599.
  4. Fernando Ferreira, 2008. "You Can Take it With You: Proposition 13 Tax Benefits, Residential Mobility, and Willingness to Pay for Housing Amenities," Working Papers 08-15, Center for Economic Studies, U.S. Census Bureau.
  5. Hoyt Bleakley & Jeffrey Lin, 2011. "Portage and path dependence," Working Papers 11-38, Federal Reserve Bank of Philadelphia.
  6. Edward L. Glaeser, Jed Kolko, and Albert Saiz, 2001. "Consumer city," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 27-50, January.
  7. Glaeser, Edward & Saiz, Albert & Gyourko, Joseph, 2008. "Housing Supply and Housing Bubbles," Scholarly Articles 2962640, Harvard University Department of Economics.
  8. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, Oxford University Press, vol. 122(2), pages 775-805.
  9. Farley Grubb, 2009. "Land Policy: Founding Choices and Outcomes, 1781-1802," NBER Working Papers 15028, National Bureau of Economic Research, Inc.
  10. Atif Mian & Amir Sufi, 2009. "The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1449-1496.
  11. Glaeser, Edward L & Gyourko, Joseph & Saks, Raven, 2005. "Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 331-369, October.
  12. William N. Goetzmann & Frank Newman, 2010. "Securitization in the 1920's," NBER Working Papers 15650, National Bureau of Economic Research, Inc.
  13. Jason Barr, 2010. "Skyscrapers and the Skyline: Manhattan, 1895-2004," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 567-597.
  14. Officer, Lawrence H., 1983. "Dollar-Sterling Mint Parity and Exchange Rates, 1791–1834," The Journal of Economic History, Cambridge University Press, vol. 43(03), pages 579-616, September.
  15. Atack, Jeremy & Margo, Robert A, 1998. ""Location, Location, Location!" The Price Gradient for Vacant Urban Land: New York, 1835 to 1900," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 151-172, March.
  16. Quigley, John M., 2006. "Federal Credit and Insurance Programs: Housing," Berkeley Program on Housing and Urban Policy, Working Paper Series qt41d5k3bd, Berkeley Program on Housing and Urban Policy.
  17. Herbert J Gans, 1969. "Planning for people, not buildings," Environment and Planning A, Pion Ltd, London, vol. 1(1), pages 33-46, January.
  18. Edward L. Glaeser & Matthew E. Kahn, 2003. "Sprawl and Urban Growth," NBER Working Papers 9733, National Bureau of Economic Research, Inc.
  19. Jackson, Jerry R., 1979. "Intraurban variation in the price of housing," Journal of Urban Economics, Elsevier, vol. 6(4), pages 464-479, October.
  20. Harley, C. Knick, 1978. "Western Settlement and the Price of Wheat, 1872–1913," The Journal of Economic History, Cambridge University Press, vol. 38(04), pages 865-878, December.
  21. Glaeser, Edward L., 2006. "Paternalism and Psychology," Working Paper Series rwp06-006, Harvard University, John F. Kennedy School of Government.
  22. Robert J. Shiller, 2007. "Historic Turning Points in Real Estate," Cowles Foundation Discussion Papers 1610, Cowles Foundation for Research in Economics, Yale University.
  23. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  24. Edward L. Glaeser & Kristina Tobio, 2008. "The Rise of the Sunbelt," Southern Economic Journal, Southern Economic Association, vol. 74(3), pages 610-643, January.
  25. Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 1253-1296.
  26. Joseph Gyourko & Eduardo Morales & Charles Nathanson & Edward Glaeser, 2011. "Housing Dynamics," 2011 Meeting Papers 307, Society for Economic Dynamics.
  27. Alston Lee J. & Grove Wayne A. & Wheelock David C., 1994. "Why Do Banks Fail? Evidence from the 1920s," Explorations in Economic History, Elsevier, vol. 31(4), pages 409-431, October.
  28. A. E. Holmans, 1964. "The Derived Demand Curve Fora Productive Factor And The Industry Supply Curve," Oxford Economic Papers, Oxford University Press, vol. 16(2), pages 235-261.
  29. Hoyt Bleakley & Jeffrey Lin, 2010. "Portage: Path Dependence and Increasing Returns in U.S. History," NBER Working Papers 16314, National Bureau of Economic Research, Inc.
  30. Fernando Ferreira & Joseph Gyourko, 2011. "Anatomy of the Beginning of the Housing Boom: U.S. Neighborhoods and Metropolitan Areas, 1993-2009," NBER Working Papers 17374, National Bureau of Economic Research, Inc.
  31. Alan L. Olmstead & Paul W. Rhode, 2002. "The Red Queen and the Hard Reds: Productivity Growth in American Wheat, 1800-1940," NBER Working Papers 8863, National Bureau of Economic Research, Inc.
  32. Field, Alexander James, 1992. "Uncontrolled Land Development and the Duration of the Depression in the United States," The Journal of Economic History, Cambridge University Press, vol. 52(04), pages 785-805, December.
  33. Shleifer, Andrei & Summers, Lawrence H, 1990. "The Noise Trader Approach to Finance," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 19-33, Spring.
  34. Peter Temin, 1968. "The Economic Consequences of the Bank War," Journal of Political Economy, University of Chicago Press, vol. 76, pages 257-257.
  35. Goodman, John Jr. & Ittner, John B., 1992. "The accuracy of home owners' estimates of house value," Journal of Housing Economics, Elsevier, vol. 2(4), pages 339-357, December.
  36. Bruce E. Hansen, 2007. "Least Squares Model Averaging," Econometrica, Econometric Society, vol. 75(4), pages 1175-1189, 07.
  37. Richard T. Ely, 1920. "Land Speculation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 2(3), pages 121-135.
  38. Alfred H. Conrad & John R. Meyer, 1958. "The Economics of Slavery in the Ante Bellum South: Reply," Journal of Political Economy, University of Chicago Press, vol. 66, pages 442-442.
  39. Herbert J. Gans, 1969. "Planning for People, Not Buildings," Environment and Planning A, , vol. 1(1), pages 33-46, June.
  40. Graves, Philip E., 1980. "Migration and climate," MPRA Paper 19916, University Library of Munich, Germany.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:18825. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.