Jay Lu wins Winter 2018 Scoville Teaching Award

We would like to congratulate Jay Lu for winning the Scoville Award for best undergraduate teaching in Winter 2018 for his class Econ 148 on Behavioral Economics.

Jay Lu

Behavioral economics is a subfield of economics that incorporates insights from psychology and other social sciences. The broad goal is to improve the realism of economic models by incorporating features such as aversion for losses, problems with self-control, or concern for others. The class reviews some of the standard assumptions made in economics, examines evidence on how human behavior systematically departs from these assumptions and explores alternative models of human decision-making in order to help improve economic analyses. This is Jay Lu’s third time winning this award.  Congratulations!

The Sharing Economy and Housing Affordability

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Edward Kung

The sharing economy represents a set of peer-to-peer online marketplaces that facilitate matching between demanders and suppliers of various goods and services.  The suppliers in these markets are often small (mostly individuals), and they often share excess capacity that might otherwise go unutilized.  Economic theory would suggest that the sharing economy improves economic efficiency by reducing frictions that cause capacity to go underutilized, and the explosive growth of sharing platforms like Uber and Airbnb testify to the underlying demand for such markets.  The growth in the sharing economy has caused great disruption to traditional markets, leading to contentious policy debates about how best to balance individual participants’ rights to freely transact, the efficiency gains from sharing economies, the disruption caused to traditional markets, and the role of the platforms themselves in the regulatory process.

Home-sharing in particular has been subject to intense scrutiny.  Namely, critics argue that home-sharing platforms like Airbnb raise the cost of living for local renters.  It is easy to see the economic argument: by reducing frictions in the peer-to-peer market for short-term rentals, home-sharing platforms cause some landlords to switch from supplying the market for long-term rentals—in which residents are more likely to participate—to the market for short-term rentals—in which non-residents are more likely to participate.  Because the total supply of housing is fixed or inelastic in the short run, this drives up rental rates in the long-term market.

In a new paper, titled “The Sharing Economy and Housing Affordability: Evidence from Airbnb,” Professors Edward Kung (UCLA), Davide Proserpio (USC), and former UCLA student Kyle Barron, empirically investigate whether or not the rise in home-sharing has raised housing costs.  Using 5 years of listings data scraped from Airbnb, the researchers show that a 1% increase in Airbnb listings is causally associated with a 0.018% increase in rental rates and a 0.026% increase in house prices.  In aggregate, the growth in home-sharing through Airbnb can explain 0.59% in annual rent growth and 0.82% in annual price growth.

Two additional results shed light on the underlying economics of home-sharing.  First, the researchers show that the effect of Airbnb on rents and prices is decreasing in the owner-occupancy rate of the neighborhood.  This is because non-owner-occupiers are the homeowners who are on the margin of switching from supplying the long-term rental market to the short-term rental market.  Owner-occupiers are always in the long-term market (they rent to themselves), and primarily use Airbnb to rent out excess capacity, but this action does not reduce supply in the long-term market.  Second, the researchers show that the effect of Airbnb on house prices is generally stronger than the effect on rents.  This is because the effect of home-sharing on prices happens through two channels.  First, prices increase because the increase in rents gets capitalized into the house price.  Second, prices increase because home-sharing increases the ability for homeowners to utilize their excess capcacity, such as unused rooms, or time in which they are away from the house on vacation.

The results of the paper should help inform policymakers as they debate how to best regulate home-sharing.  For example, the results suggest that concerns about Airbnb raising housing costs for local residents are not unfounded.  However, the results also suggest that Airbnb improves the efficient use of housing by helping homeowners better utilize their excess housing capacity.  One policy implication would be that home-sharing regulations should at most seek to limit the reallocation of housing stock from the long-term to the short-term markets, but it should not discourage the sharing of primary residences by owner-occupiers.

Steven Laub

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Steven Laub

Like many of our Bruins, former alumni Steven Laub embodies the traits of passion, determination, and resilience. These are the very same traits that shaped his illustrious career as a former consultant and top executive at numerous public semiconductor companies such as Lattice Semiconductor, Silicon Image and until recently, the Atmel Corporation where Laub served as President and CEO for a decade. Unlike many UCLA graduates, what makes Laub’s story unique was his background and unusual foray into the technology industry.

Upon graduating UCLA in 1980 with a B.A. in Economics, a subject that captivated him since junior high, Laub attended the Harvard Law School to pursue his initial career interest in the field of law. It took him two years, however, to realize that this was not his true calling and immediately after graduating, he switched gears and began to work as a management consultant for Bain and Company. When pressed why, Laub recalled how management consulting allowed him to gain exposure to a multitude of industries while picking up vital skills along the way, which he best described as “almost like acquiring an MBA education without going to business school”.

Without question, this exposure certainly paid off. After having several technology companies including a few semiconductor firms as consulting clients, he was offered a job with Lattice Semiconductor Corporation. The young consultant initially turned down the offer, only to later be offered the position as Vice President and General Manager at the same company. He knew if there was ever an opportunity to get involved in the tech business world, this was it.

Although it is highly unusual for someone with a non-technical background to head a technology-based firm, this notion never impeded Steven Laub. When his CEO sought to hire him, the company’s board of directors questioned why a man with a legal background and no prior engineering or technological experience was a good fit for the role of a VP at a semiconductor company. His CEO replied by describing Laub as highly intelligent, ambitious and willing to work very hard – an identity that Laub believes fits several of our Bruins. He believes that individuals who are passionate and determined to work hard will attract mentors and be given the opportunity to do more. Working to forge these relationships are of the utmost importance.

That said, even with valiance and an excellent work ethic, his transition into the industry was not one of ease. Despite not being acclimatized to the technology sector, early on he was advised to spend two thirds of his first two years at the company in the engineering division. He attributes his sudden immersion in the engineering department as a key part in overcoming the steep learning curve ahead of him. Although this may seem radical, Laub believes that this is one of the most efficient ways to assimilate into new career environments; by working in the departments or roles that push you out of your comfort zone and force you to think.

The qualities that Laub possesses which have enabled him to achieve his tremendous degree of accomplishments are similar to those he looks for in hiring individuals. Aside from being effective team players, Laub looks for people that are capable of putting the needs and goals of the firm ahead of themselves. Most importantly, high integrity and character are absolutely necessary to succeed at every company he has led. He contends that truly passionate individuals who are hungry to accomplish goals for the greater good will leave a mark.

Given his success, it is easy to see that Laub was comfortable in not allowing his degree to solely determine the trajectory of his career. However, several students face the overwhelming concern of how important their major is in determining their career opportunities. Laub contends that most students either enter college not knowing what major to pursue or they pursue a major in order to break into an industry they envision themselves working in. He says that while picking a best fit major is important, it is by no means the only determinant of your future career – especially since many people, including himself, end up changing their careers at some point.

Due to the manner in which UCLA influenced his career, Laub would not have done much differently. He received what he believes to be an outstanding education at UCLA under the tutelage of notable professors like John Riley of the UCLA Economics Department. Despite an engaging and rewarding academic experience, Laub looks back and believes that he could have involved himself more in the breadth of courses and events UCLA offered, especially in the theatre and arts. Although back then he had little desire for those areas, he reflects upon it conceding that with age grows an appreciation for such forms of creative expression.

These days, what initially motivated Mr. Laub to wake up every morning remains the same. He lives for challenge, the opportunity to learn and the chance to give back to his communities. While the stresses of running firms and managing people can seem unappealing to some, these are aspects he thoroughly enjoys. Far from having retired, he continues to challenge himself and to advise others. Laub currently serves on the board of a semiconductor company, the advisory board of a tech-focused private equity company and the board of a public charter high school in the Bay Area. He is now at a point in his life where he can focus on giving back and aiding others with his wisdom.

Mr. Laub leaves us with advice regarding tackling change – a topic all too familiar for him. Most people will graduate, find a career, realize it is not their passion and will have to confront the possibility of a change. Mr. Laub adds that by taking ownership of your actions and finding the courage to make life-changing decisions, you open yourself to a potentially better path. One might have a steady income, a marriage to sustain and a family to support, so change will not come easily. However, the Bruin champions the belief that “having the courage to live the life you desire” will make the ultimate difference.

by Adithya Kumar and Marcella Pensamiento

Rosa Matzkin elected to American Academy of Arts and Sciences

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Rosa Matzkin

UCLA professor of economics Rosa Matzkin is among 213 individuals from a wide range of disciplines and professions to be elected as members of the American Academy of Arts and Sciences in 2018.

Founded in 1780, the academy honors exceptional scholars, leaders, artists and innovators and engages them in sharing knowledge and addressing challenges facing the world.

Matzkin is the Charles E. Davidson Professor of Economics. Her research has been aimed at creating a tight connection between econometrics and economic theory. Econometrics is a field that harnesses mathematics and statistical methods to quantify economic phenomena into empirical data, turning theoretical models into useful tools for economic policymaking.

Her methods can be used to test whether data is consistent with any particular model, to estimate unobservable functions and distributions, and to predict behavior and economic outcomes when economic structures change.

Her work has been published in Econometrica, Journal of the American Statistical Association, Journal of Economic Theory and Journal of Econometrics, among others.

Matzkin, who is a fellow of the Econometric Society, was a member of the executive committees of the American Economic Association and of the Econometric Society. Matzkin was also editor of Quantitative Economics, co-editor of the research monograph series of the Econometric Society and associate editor of Econometrica and Journal of Econometrics. She is currently committee member for the Annual Review of Economics

Before joining UCLA, Matzkin held positions at Northwestern and Yale.

“This class of 2018 is a testament to the academy’s ability to both uphold our 238-year commitment to honor exceptional individuals and to recognize new expertise,” said Nancy Andrews, the chair of the board of the academy. “John Adams, James Bowdoin and other founders did not imagine climatology, econometrics, gene regulation, nanostructures or Netflix. They did, however, have a vision that the academy would be dedicated to new knowledge — and these new members help us achieve that goal.”

The new class will be inducted at a ceremony in October 2018 in Cambridge, Massachusetts at which the newly elected members will sign the Book of Members, and their signatures will be added to the academy members who came before them, including Benjamin Franklin (1781) and Alexander Hamilton (elected 1791) in the 18th century; Ralph Waldo Emerson, (1864), Maria Mitchell (1848), and Charles Darwin (1874) in the 19th; and Albert Einstein (1924), Robert Frost (1931), Margaret Mead (1948), Milton Friedman (1959) and Martin Luther King Jr. (1966) in the 20th.

Jim Heckman gives MAE Distinguished Lecture

James J. Heckman

Yesterday, Nobel Prize winner, Professor Heckman, gave a MAE distinguished speaker lecture on “Policies to Promote Social Mobility”.

Professor Heckman is the Henry Schultz Distinguished Service Professor of Economics at the University of Chicago. He has conducted groundbreaking work with a consortium of economists, psychologists, sociologists, statisticians and neuroscientists showing that quality early childhood development heavily influences health, economic and social outcomes for individuals and society at large.

 

Sule Ozler Publishes New Book

Professor Sule Ozler has published a new book with Routledge Press titled “Psychoanalytic Studies of the Work of Adam Smith: Towards a Theory of Moral Development and Social Relations.”  Congratulations Sule!

Wettbewerb und Wirtschaft interviews Volker Nocke

In its latest issue, the leading German antitrust law journal “Wettbewerb und Wirtschaft” is interviewing UCLA-professor Volker Nocke. The interview centers around the usefulness of the “as-efficient competitor test” for predation and foreclosure, which the European Court of Justice appears to endorse in its judgment in the Intel case; the role of economics in antitrust practice; the difficulties of market delineation in platform markets; and the appeal of the top U.S. universities to European academics.

Stephanie Dong

2017 John. J. Peterson Scholarship Recipient

Biography: Stephanie Dong is a junior pursuing a major in business economics and minors in accounting and statistics. She is also an Achievement Scholar and college honors student. She is currently involved in undergraduate research under Professor Mark Grinblatt (UCLA Anderson School of Management), investigating factors that affect stock market cycles. As her diverse interests range from psychology, to computer science, to finance, she enjoys interdisciplinary research and is especially interested in the fields of behavioral economics/finance. Outside her academics, she is Managing Editor of Aleph Undergraduate Journal for Humanities and Social Sciences, a member of various undergraduate business clubs, and an avid table tennis player.

Future plans: While at UCLA, Stephanie hopes to continue partaking in quantitative research projects that combine her diverse interests, as well as further develop her own start-up projects. She also aims to apply her business/economics knowledge and data analysis skills in her upcoming summer internship. In the long run, she aspires to pursue a career that will allow her to integrate knowledge and skills from multiple disciplines to solve crucial problems in business/economics.

What does this scholarship mean to me?: I am incredibly honored and delighted to be a recipient of this award. This scholarship is an enormous encouragement and confirmation of my efforts to continuously work toward my goals. I am grateful for the abundant resources UCLA has provided me to make the most of my college education and experience. I look forward to truly applying my knowledge and skills to the real world in the coming years, and hope that one day I can give back to the school I esteem.

Haoran Zhang

2017 Professor Harry Simons Endowed Undergraduate Scholarship for the Study of Accounting Recipient

Biography: Haoran Zhang is a senior student at UCLA with a major in Business Economics and minor in Accounting. As a transfer student from Santa Monica College, she believes that university education further enhances her capability and lead she toward the right direction in the field of business and economics. She takes active part in volunteer work in organizations such as the Alpha Gamma Sigma and Phi Theta Kappa during the weekends. In Haoran’s spare time, she enjoys reading, biking and traveling. She also has a strong passion to translate beautiful English articles and poems into Chinese.

Future Plans: After graduation, Haoran intends to pursue a career in an accounting firm and takes the CPA exam. In the next few year, she hopes to seek a position for account manager. And if needed, she will apply to graduate school to improve her professional skills and pursue her interests in more depth.

What does the scholarship mean to me?: I am honored to be one of the recipients of the Professor Harry Simons Endowed Undergraduate Scholarship. Receiving this scholarship means a lot to me and my family who have supported me from the beginning. This award also relieves my financial stress. As proof of my efforts, this scholarship empowers me to approach my education with more confidence. Thanks again and I promise to do my best to make my educational dream come true.