Congratulations to Hao Feng, Chengyling Luo and Siqiang Yang for being awarded the Andrew Mellon Predoctoral Fellowship for the 2016-2017 academic year.
Chengying’s Mellon proposal explores the link between housing and financial markets. She will examine the causal effect of initial public offerings (IPOs) on housing prices by comparing areas adjacent and distant to the company’s headquarters. The research will combine IPOs data with detailed housing market data. The analysis will also shed light on how homebuyers form their expectations on housing prices.
Siqiang’s proposed research will significantly expand the sovereign default literature by studying default at the level of localities within a country. The latter class of models requires including the possibility that individuals are free to move across localities. When cities like Detroit raise taxes in order to balance their budgets or meet their debt obligations, it risks losing its tax base due to labor mobility. The research will shed light on the design of bailout packages contemplated under the law.
Hao’s research seeks to document the effects of environmental regulations on air pollution enacted in China since 2003. When localities are given incentives to reduce pollution levels, they may strategically act by dumping pollution on other neighboring localities. Using a novel dataset on wind direction, Hao has documented that localities indeed set up factories downwind from their territories and closer to neighboring jurisdictions. The Mellon proposal builds on this result by analyzing how non-polluting industries are affected by the reallocation of polluting industries downwind in localities.