Research

Working papers and work in progress

Housing Search And Liquidity in Spatial Equilibrium Working paper
Coauthored with Thierry Magnac
Revise and Resubmit, International Economic Review

Local housing markets differ in their liquidity, the ease of transacting. Using Finnish data and a new measure for local market tightness, we document cross-sectional observations regarding housing liquidity: i) across locations, association between liquidity and prices is positive - selling is easier in more expensive locations, ii) within a location but across unit types, association between liquidity and prices is negative - selling smaller units is easier than selling larger units, and iii) better liquidity is closely tied with higher tightness. To rationalize these observations, we set up a model of housing search in the cross-section of multiple interconnected local markets. Markets vary in structural characteristics, which affects the allocation of searchers across local markets and the resulting tightness. Taking the model to data, we find that the value of housing services and the efficiency of the meeting technology explain most of the cross-sectional variation in liquidity.

House Prices and Rents in a Dynamic Spatial Equilibrium Draft
Honorable mention (finalist) for the Best Student Paper Award at Urban Economics Association 2023 European Meeting

House prices and rents do not always comove across locations and over time. To study the causes and welfare consequences of rent and price variation, I set up a quantitative dynamic spatial equilibrium model of housing demand and supply. In the model, price-to-rent ratios can vary because of differences in expected rental growth or discounting, and data on prices, rents, migration and construction contain identifying power to separate the two. I take the model to data in the case of Finland, where house prices have been diverging across regions, even if rents have not. Through the lens of the model, the rapid price divergence between big and small cities can be rationalized as the combination of an increase in the value of living in cities and regionally diverging discount rates. These changes have led to an important regional divergence in both renter welfare and housing wealth across smaller and larger cities.

Published

The Incidence of Rent Subsidies: Evidence on Rents, Housing Choices and Supply
Coauthored with Essi Eerola, Teemu Lyytikäinen, Tuukka Saarimaa
Journal of Public Economics, 2026, Article (open-access on journal website), code

This paper asks whether, and under which circumstances, rent subsidies to low-income households increase rents. We study a reform of the Finnish housing allowance system that caused large quasi-random variation in housing allowances. Using register data spanning five years before and after the reform, we find that large increases in allowances for affected housing units had little or no effect on their rents relative to other units. The effect of a one-euro increase in housing allowance on rent is roughly 0.036 euros with a standard error of 0.028. We provide novel evidence on the underlying demand- and supply-side responses that drive the rent effects. The reform led to only small changes in recipients’ housing choices, and at most modest changes in rental supply. Our interpretation is that rent subsidies can be effective in helping recipient households even in supply-constrained contexts, if recipients’ housing choices are unresponsive to the subsidy.

Teaching

I teach Real Estate Economics and Finance (postgraduate M.Sc.) and Introductory Statistics for Economists (undergraduate). Please check out the webpage of my Phd student Dehua Li.