Schools utilize an array of strategies to match curricula and instruction to students’ heterogeneous skills. While generations of scholars have debated “tracking” and its consequences, the literature fails to account for diversity of school-level sorting practices. In this paper we draw...

Debt pricing models typically ignore the bankruptcy process by specifying recovery rates as an exogenous function of the state space. I develop a parsimonious model in which corporate default induces a transfer of bond ownership away from traditional diversified holders toward risk-averse...

U.S. state pensions are underfunded by trillions of dollars, but their economic burden is unclear. In a model of inefficient taxation, real estate fully reflects the cost of these shortfalls when it is the only form of immobile capital. We study the effect of pension shortfalls on real estate...

This paper examines the effects of post-trade price transparency on the allocation of trading surplus in the corporate bond market. Using the introduction of TRACE as a natural experiment, we show that dealer profits are unconditionally lower when trade prices are disseminated. However,...

Climate models predict that many natural hazards will become increasingly damaging and costly to insure as the effects of climate change manifest. We study how the cost of hedging disaster risk changes home prices by utilizing a 2012 law that mandated flood insurance premium increases for...

Is climate change partisanship reflected in residential decisions? Comparing individual properties in the same zip code with similar elevation and proximity to the coast, houses exposed to sea level rise (SLR) are increasingly more likely to be owned by Republicans and less likely to be owned by...

Investors’ return on their portfolios, as proxied by the market, is a theoretically appealing but empirically unsuccessful asset pricing factor. In practice, many institutional investors choose to deviate substantially from the market portfolio. We propose a simple model in the spirit of...

Consistent with a simple model of market segmentation, we document rating-based clientele effects in the corporate bond market. Supply shocks arising from idiosyncratic firm upgrades and downgrades cause significant price movements for the other bonds in both the affected rating bucket and...