Abstract:

This dissertation consists of three microeconomic studies involving housing and labor markets. Chapter one uses the Hong Kong Severe Acute Respiratory Syndrome (SARS) epidemic in 2003 as a natural experiment to provide new evidence on how housing markets react to adverse shocks. I exploit the cross-sectional variation in the SARS infection risk and utilize five different measures of the impact of SARS. I find that residential housing prices dropped by 1-2 percent in response to SARS, consistent with the standard asset pricing model in the event of a severe but transitory averse shock; no signs of overreaction in terms of prices are found. I also find significant volume decreases of 20-40 percent, which persisted after the SARS infection rate declined, suggesting that SARS led to both increases in search costs and "fishing" behavior on the part of sellers.

Chapter two investigates the relationship between socioeconomic status (SES) and the spread of SARS. I focus on the SARS infection rates in 295 large-scale Hong Kong housing complexes. Using pre-SARS property values as indicators of SES, I identify a negative SES-SARS link. I also find that density, proximity to the city centers and availability of communal facilities increase the spread of SARS. Building age, flat size, proximity to medical establishments, formation of residents' association or whether the housing complex is public are not significantly associated with the SARS infection rate. The SES-SARS relationship remains robust after controlling for living conditions. I provide evidence that household income is likely to be an important component of the SES-SARS link.

Chapter three, jointly authored with James P. Vere, studies the relationship between occupation before marriage and subsequent work decisions of married women in Taiwan. We estimate a linear probability model of labor force participation on factors including initial occupation and time since marriage. Women in white-collar occupations before marriage are more likely to remain in the labor force after marriage or childbirth than their blue-collar counterparts. Changes in occupational structure account for 30 percent of the increase in the female labor force participation rate from 1979 to 1998.