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Do Evictions Cause Income Changes? An Instrumental Variables Approach

By Grace Mok

Evictions are an important aspect of the affordable housing crisis facing low-income American renters. However, there has been little research quantifying the causal impact of evictions, which poses challenges for academics interested in understanding inequality and policy-makers interested in reducing it. Merging two datasets both new to the literature, I address this gap in the causal literature by using an instrumental variables strategy to examine the impact of evictions on household income over time in Durham, North Carolina. Exploiting gentrification-related evictions as an instrument, I find a 2.5% decrease in household income after eviction. This is a small, but significant decrease in income given that median household income for households at time of eviction is about $15,000.

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Advisors: Professor Christopher Timmins, Professor Michelle Connolly | JEL Codes: I32, R29

Is Inclusionary Zoning a Proper Remedy for the Affordable Housing Crisis? —A Case Study of IZ Programs in New Jersey and North Carolina

By Xinchen Li

The recent decade witnessed a worsening of the affordable housing crisis across the
country. Inclusionary zoning (IZ) has been a popular municipal remedy for the crisis.
However, it is unclear whether IZ actually adds to the affordable housing stock, and
whether it achieves its goal at the expense of average homeowners. Through a case
study of New Jersey and North Carolina, this paper aims to address these two questions.The results suggest that there is no statistically significant positive relationship between the presence of IZ and the housing price in the two states, but its beneficiary effects are also debatable.

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Advisors: Professor Christopher Timmins | JEL Codes: D10 ; R2; R21

Landlords and Evictions: Changes in the Ownership of Multi-Family Rental Properties and Its Impact on Housing Stability in Durham, NC

By Ekim Buyuk

This thesis investigates the changes in the ownership of multi-family rental complexes in
Durham between 2000 and 2018 and their subsequent impact on housing stability. Specifically, I model and compare the likelihood that an eviction filing is issued by corporate and individual landlords in the periods before and after a transaction. Since the early 2000s, institutional investor share in all property sizes has increased dramatically in the United States. In 2013, the Blackstone Group released the first-ever rated bond backed by single-family securitized rental payments, and since then, numerous firms have followed with similar security offerings, which as of 2018 include bonds backed by multi family rental income. The surge of institutional investment in multi-family rental properties and its impacts on communities have remained largely ignored in academic literature. Durham County currently holds one of the highest eviction rates in North Carolina and ranks in the top 40 of highest evicting large cities in the United States. In my thesis, I uncover how ownership of rental properties in Durham has changed since the early 2000s and investigate whether the behaviors of “corporate landlords” differ significantly from those of individual investors (or “mom and pop” landlords”). I find that the proportion of properties under corporate ownership has increased across all property sizes since 2000, and the proportion of corporate owners that are based out-of-state has also increased. I also find evidence to suggest that different sizes of multi-family properties should be examined distinctly, as I uncover different trends across property sizes in both ownership and eviction rates. Using a fixed effects model, I find that overall, individuals appear to have a higher likelihood of filing an eviction against a tenant compared to institutional landlords in the months before and after a transaction. Finally, I find that large investors amongst both corporates and individuals, defined as investors that own more than 15 properties in Durham, are significantly more likely to evict than smaller investors are.

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Advisors: Professor Christopher Timmins, Professor Colin Rundel | JEL Codes: R3, R31

Responses to EU Carbon Pricing: The Effect of Carbon Emissions Allowances on Renewable Energy Development in Advanced and Transitional EU Members

By John Dearing

Using electricity price, generation, installed capacity, and carbon price data from the European Union from January 2015 to December 2018, this study finds that the carbon pricing in the European Union Emissions Trading Scheme (EU ETS) incentivizes electricity sector carbon emission reductions through renewable energy deployment only for economically advanced EU members. Transitional economies show a weak to modest carbon emission increase despite a common carbon price. This study estimates an electricity supply curve, or merit order, for 24 EU ETS members using a Tobit regression model and analyzes changes in this curve using a linear bspline. These shifts provide insight into how carbon pricing affected energy generation, price, and CO2 emissions for two distinct categories of EU member states. The advanced category as a whole saw a strong electricity sector decrease in carbon emissions, both over time and from carbon pricing, while the transitional category as a whole saw a weak increase. This indicates that advanced EU members in Northern, Western, and Central Europe likely sold permits to transitional ones in Southern and Eastern Europe. While these findings may initially reflect the gains from trade of carbon emissions, permits inherent in the European Union Emissions Trading Scheme’s design, the implications of how these two distinct groups have changed electricity generation present challenges to the ultimate long-term goal of EU-wide carbon neutrality by 2050, particularly in transitional economies’ electricity sectors.

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Advisors: Dr. Lincoln Pratson, Professor Christopher Timmins | JEL Codes: Q4, Q43, Q48, Q5, Q52, Q56, Q58

Durham and Gentrification: Assessing the Impact of Displacement in the Bull City

By Armin Hakimzadeh Ameri

In this paper, I look to Durham, North Carolina, to demonstrate potential harms from gentrification. Using an expansive proprietary dataset, I come to two main conclusions: first, there is a significant link between gentrification and displacement, as low-income renters are constrained by increased prices and are forced to leave their neighborhoods. Second, displaced renters are significantly more likely to move into communities with higher crime rates, worse schools, and increased rates of poverty. These results suggest that the Durham government should enact policies protecting low-income renters and other at-risk groups while also balancing the benefits of gentrification.

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Advisors: Dr. Christopher Timmins, and Dr. Grace Kim | JEL Codes: R2, R3

The Impact of Environmental Disamenities on Property Values: Evaluating the Municipal Fringe

By Ryan B. Hoecker

This paper analyzes the municipal fringe of cities in Eastern North Carolina between 2006-2016, and how the values of individual properties on the outskirts can fluctuate after they are
incorporated within a city. A large portion of the research process consisted of manually recreating annexation ordinances from scanned photocopies on ArcGIS, creating the first geographic archive of annexations in North Carolina compatible with digital software. As environmental nuisances, such as landfills and hazardous waste sites, are often located on town borders, this study pays specific attention to how their presence affects the change in property values before and after annexation. Results show that incorporation brings with it higher property values, and that the impact of annexation is greater in the presence of nuisances that threaten water quality for private wells.

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Advisor: Christopher Timmins | JEL Codes: H79, Q53, R31

Low-Income Residential Solar: A SASH Evaluation

By Jeff Knaide

In this paper, I examine the impacts of California’s Single-Family Affordable Solar Housing (SASH) subsidy on the rate of adoption of residential solar power. The SASH program looks to provide low-income families with a sizeable subsidy to install residential solar panels. Eligibility for the program depends on income, among a few other factors. This work represents part of a small body of energy justice literature, and the only existing evaluation of SASH. Zip-codes with higher eligibility (based on income levels) showed a significantly higher number of adoptions when controlling for important characteristics, specifically median income. While this policy did generate low-income adoptions, it does not offer a strong carbon abatement strategy – low-income households require greater financial support than might higher-income households.

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Advisor: Chris Timmins | JEL Codes: Q29

Segregation, Bargaining Power and Environmental Justice

By Kai Yu Lee

Under efficient Coasian bargaining, the recipients of an environmental harm are compensated by the polluter for every unit of the nuisance that they bear. When those doing the negotiation are also those bearing the costs of the environmental harm, this will lead to an efficient outcome in which the benefits and social costs of the polluting activity are equalized on the margin. Transaction costs frequently lead to bargaining being conducted by government representatives on behalf of their constituents; e.g., county officials may bargain with polluting firms over payments in exchange for siting facilities within their borders. When populations are highly segregated, representatives can more easily target the costs of polluting facilities to a politically weak minority while the majority enjoys the Coasian compensation. We test this theory using information on three decades of county-level polluting employment and
a measure of racial/ethnic dissimilarity. Results confirm the hypothesis that segregation facilitates the siting of polluting facilities, suggesting an important source of procedural environmental injustice.

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Advisor: Chris Timmins | JEL codes: Q52, Q53, Q56, R3, R58

The Link between Gentrification and Displacement and the Effects of Displacement on Residents in Los Angeles County

By Ashley Qiang

Over the past decades, gentrification has accelerated across the country. Along with this phenomenon comes growing concern about displacement, although limited research has been dedicated to examining gentrification’s impact on displacement. This paper studies the link between gentrification and displacement, as well as who is more likely to be displaced and the effects on the displaced. The results show that lower-income renters are significantly more likely to be displaced from gentrifying neighborhoods, and they tend to move to worse neighborhoods with lower education quality and higher crime rates.

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Advisor: Chis Timmins | JEL Codes: R1, R21, R23

The Effect of Minority History on Racial Disparities in the Mortgage Market: A Case Study of Durham and New Haven

By Jisoo Yoon

In the aftermath of the housing market crash, the concentration of subprime mortgage loans in minority neighborhoods is a current and long-standing issue. This study investigates the presence of racial disparities in mortgage markets by examining two cities with contrasting histories of African American and Hispanic establishment: Durham, North Carolina and New Haven, Connecticut. This study examines data by the Home Mortgage Disclosure Act (HMDA), and distills the effect of minority legacy on the perception of racial risk by using econometric instruments to separate the behavior of national lenders and local lenders. The econometric methods allow national lenders to reflect objective risk measures and neighborhood race dynamics, while local lenders reflect subjective attitudes towards certain races. With its longer history of African American presence, Durham shows a positive attitude towards Black borrowers at the local level, while New Haven shows a more favorable attitude towards its Hispanic residents. Nonetheless, racial legacy also materializes as a negative factor in the form of increased residential segregation and spillover effects. Furthermore, a temporal variation analysis of pre- and post-mortgage market reform data affirms the disappearance of racial bias and continued presence of spillover risk in Durham.

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Advisor: Christopher Timmins | JEL Codes: C01, G21, J15, R21, R23, R31 | Tagged: Econometrics, Mortgages, Economics of Minorities, Races, Census, Migration, Population, Neighborhood Characteristics, Housing Supply and Market

Questions?

Undergraduate Program Assistant
Jennifer Becker
dus_asst@econ.duke.edu

Director of the Honors Program
Michelle P. Connolly
michelle.connolly@duke.edu