This paper explores potential ways to develop experimental estimates of the value of U.S. imports of illegal drugs. It builds on the initial exploration of this topic by the Bureau of Economic Analysis (BEA) in Soloveichik (2019), which presents experimental estimates of U.S. domestic consumption of illegal drugs and of import of illegal drugs into the United States. In this paper, I extend Soloveichik’s research by exploring the feasibility of developing estimates of imports of methamphetamines and marijuana using seizure data, and I evaluate the extent to which source data allow us to estimate heroin and cocaine imports by geography. International guidelines for national economic accounts (the System of National Accounts 2008, or SNA) and international economic accounts (the Balance of Payments and International Investment Position Manual, sixth edition) explicitly recommend that some illegal market activity should be included in measured output. Soloveichik suggests that illegal drugs comprise the largest share of imports of this activity for the United States and would have added $111 billion to U.S. GDP in 2017.
Property markets do not fully price the public’s value for historic homes to correct the intergenerational externality associated with historical preservation. While preservation for future generations often provides the primary motivation for Pigovian subsidies, historical preservation or restoration policies may also have significant contemporary amenity effects. This study exploits unique data on the use of rehabilitative tax credits (RTCs) in Virginia to estimate the extent to which historic property investment generates market externalities for nearby nonhistoric properties. Using a difference-in-differences approach, the results indicate that homes in close proximity to RTCs sell at a premium, with only modest liquidity effects. (JEL H23, R38)
Land Economics, Vol. 95(2)
We study the external impact of foreclosures, exploring how foreclosed properties affect the liquidity of nearby homes. Empirically, we find a foreclosure increases a nearby home's time‐on‐market by approximately 30% on average, which is primarily driven by a disamenity effect. There is evidence that this delay comes from surprises or information shocks to nearby sellers, as foreclosures that come on and/or leave the market after a nearby home's listing date have the largest adverse liquidity effects. However, when there is no surprise and a nearby foreclosure remains through the entire marketing period, sellers discount list prices more steeply, effectively counteracting these liquidity effects. The results suggest that information, pricing and expectations play key roles in how this externality is absorbed by the real estate market.
Real Estate Economics, Forthcoming