Jessie Handbury

Jessie Handbury
  • Assistant Professor of Real Estate

Contact Information

  • office Address:

    1463 Steinberg-Dietrich Hall, 3620 Locust Walk
    Philadelphia, PA 19104-6302

Research Interests: international trade, urban economics, industrial organization

Links: CV, Personal Website

Overview

Education

Ph.D. in Economics: Columbia University, 2013

B.A. in Economics-Mathematics: Columbia University, 2005

Academic Positions Held

Assistant Professor, The Wharton School: 2012-present

NBER Faculty Research Fellow, International Trade and Investment (ITI), 2014-

Penn IUR Faculty Fellow, 2014-

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Research

  • Jessie Handbury, Ilya Rahkovsky, Molly Schnell, Hunt Allcott, Rebecca Diamond, Jean-Pierre Dube (Working), Food Deserts and the Causes of Nutritional Inequality.

    Abstract: We study the causes of "nutritional inequality": why the wealthy eat more healthfully than the poor in the United States. Exploiting supermarket entry, household moves to healthier neighborhoods, and purchasing patterns among households with identical local supply, we reject that neighborhood environments contribute meaningfully to nutritional inequality. Using a structural demand model, we find that exposing low-income households to the same products and prices available to high-income households reduces nutritional inequality by only nine percent, while the remaining 91 percent is driven by differences in demand. These findings counter the common notion that policies to reduce supply inequities, such as "food deserts," could play an important role in reducing nutritional inequality. By contrast, the structural results predict that means-tested subsidies for healthy food could eliminate nutritional inequality at a scale cost of about 15 percent of the annual budget for the U.S. Supplemental Nutrition Assistance Program.

  • Jessie Handbury, Victor Couture, Cecile Gaubert, Erik Hurst, Income Growth and the Distributional Effects of Urban Spatial Sorting.

    Abstract: We explore the link between rising nominal incomes at the top of the income distribution, within-city spatial sorting, and real income inequality. We develop and quantify a spatial model of a city with heterogeneous agents and non-homothetic preferences for endogenous differentiated private neighborhood amenities (e.g., restaurants and entertainment). As the rich get richer, their increased demand for such luxury amenities drives housing prices up in downtown areas, where amenity development is fueled by economies of density. The poor are made worse off, either being displaced or paying higher rents for amenities that they do not value as much. Using our model, we find that the neighborhood change within urban areas during the last two decades increased the welfare of richer households relative to that of poorer households by an additional two percentage points above and beyond the differential income growth. We conclude that welfare estimates of increased income inequality are understated if within-city spatial sorting responses are ignored.

  • Jessie Handbury (Work In Progress), Urban Revival in America, 2000 to 2010.

  • Jessie Handbury and David E. Weinstein (2014), Goods Prices and Availability in Cities, The Review of Economic Studies.

  • Jessie Handbury, David E. Weinstein, Tsutomu Watanabe (Working), How Much Do Official Price Indexes Tell Us About Inflation?.

    Abstract: Official price indexes, such as the CPI, are imperfect indicators of inflation calculated using ad hoc price formulae different from the theoretically well-founded inflation indexes favored by economists. This paper provides the first estimate of how accurately the CPI informs us about “true” inflation. We use the largest price and quantity dataset ever employed in economics to build a Törnqvist inflation index for Japan between 1989 and 2010. Our comparison of this true inflation index with the CPI indicates that the CPI bias is not constant but depends on the level of inflation. We show the informativeness of the CPI rises with inflation. When measured inflation is low (less than 2.4% per year) the CPI is a poor predictor of true inflation even over 12-month periods. Outside this range, the CPI is a much better measure of inflation. We find that the U.S. PCE Deflator methodology is superior to the Japanese CPI methodology but still exhibits substantial measurement error and biases rendering it a problematic predictor of inflation in low inflation regimes as well.

  • Jessie Handbury (Under Revision), Are Poor Cities Cheap for Everyone? Non-Homotheticity and the Cost of Living Across U.S. Cities.

    Abstract: Standard cost-of-living indexes assume that preferences are homothetic, ignoring the well-established fact that tastes vary with income. This paper considers how assuming homotheticity biases our estimates of spatial price indexes for consumers at different income levels. I use Nielsen household-level purchase data in over 500 categories of food products to calculate micro-founded income- and city-specific price indexes that account for non-homotheticity, as well as city-specific price indexes that do not. I find that the income-specific cross-city price indexes vary widely across income groups. Grocery costs are 20 percent lower in a poor city relative to a wealthy city for a low-income household, but they are 20 percent higher in the poor city for a high-income household. The homothetic price indexes perform well in predicting the cross-city variation in prices for low- and middle-income households, but poorly for high-income households. These results suggest that using homothetic cost-of-living indexes understate the relative price level in poor locations for rich households.. 

Teaching

Past Courses

  • FNCE209 - Real Estate Investment: Analysis and Financing

    This course provides a broad introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital market tools used in real estate. There are case studies and two midterms, depending on instructor.

  • FNCE721 - Real Estate Investment: Analysis and Financing

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two mid-terms, (depending on instructor). Cross-listed with REAL 721.

  • REAL209 - Real Estate Investment: Analysis and Financing

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two midterms, (depending on instructor).

  • REAL399 - Independent Study

    All independent studies must be arranged and approved by a Real Estate department faculty member.

  • REAL721 - Real Estate Investment: Analysis and Financing

    This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two mid-terms, (depending on instructor). Cross-listed with FNCE 721.

In the News

Knowledge @ Wharton

Activity

Latest Research

Jessie Handbury, Ilya Rahkovsky, Molly Schnell, Hunt Allcott, Rebecca Diamond, Jean-Pierre Dube (Working), Food Deserts and the Causes of Nutritional Inequality.
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In the News

Will Angus Deaton’s Nobel Help Change Our Approach to Poverty?

This year’s economics Nobel Prize for Angus Deaton puts the spotlight on how governments grapple with consumption, poverty and welfare issues.

Knowledge @ Wharton - 2015/10/15
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