Essays on city size distribution and real estate bubbles

This is a dissertation about urban systems; within this broad subject I tackle three issues, one that focuses on an observed inter-city relationship and two that focus on an intra-city phenomenon. In Chapter II I adapt a model of random emergence of economic opportunities from the firm growth literature to the urban dynamics situation and present several predictions for urban system dynamics. One of these predictions is that the older the city the larger and more diversified it is going to be on average, which I proceed to verify empirically using two distinct datasets. In Chapter III I analyze the Residential Real Estate Bubble that took place in Miami-Dade County from 1999 to 2006. I adopt a Spatial-Economic model developed for the Paris Bubble episode of 1984–1993 and formulate an innovative test of the results in terms of speculative intensity on the basis of proxies of investor activity available in my dataset. My results support the idea that the best or more expensive areas are also where the greatest speculative activity takes place and where the rapid increase in prices begins. The most significant departure from previous studies that emerges in my results is the absence of a wider gap between high priced areas and low priced areas in the peak year. I develop a measure of dispersion in value among areas and contrast the Miami-Dade and Paris episodes. In Chapter IV I analyze the impact on tax equity of a Florida tax-limiting legislation known as Save Our Homes. I first compare homesteaded and non-homesteaded properties, and second, look within the subset of homesteaded properties. I find that non-homesteaded properties increase their share of taxes paid relative to homesteaded properties during an up market, but that this is reversed during a down market. For the subset of homesteaded properties I find that the impact on tax equity of SOH will depend on differential growth rates among higher and lower valued homes, but during times of rapid home price appreciation, in a scenario of no differential growth rates in property values, SOH increases progressivity relative to the prior system.

Measuring House Price Bubbles

We thank John Clapp, Martijn Dröes, Mika Kortelainen, and Song Shi for helpful comments. Financial support from the Academy of Finland, the OP‐Pohjola Group Research Foundation, the Kluuvi Foundation, and the Emil Aaltonen Foundation is gratefully acknowledged.

Efficient and Selectable Production of Reactive Species Using a Nanosecond Pulsed Discharge in Gas Bubbles in Liquid

A plasma gas bubble-in-liquid method for high production of selectable reactive species using a nanosecond pulse generator has been developed. The gas of choice is fed through a hollow needle in a point-to-plate bubble discharge, enabling improved selection of reactive species. The increased interface reactions, between the gas-plasma and water through bubbles, give higher productivity. H₂O₂ was the predominant species produced using Ar plasma, while predominantly  and NO₂ were generated using air plasma, in good agreement with the observed emission spectra. This method has nearly 100% selectivity for H₂O₂, with seven times higher production, and 92% selectivity for , with nearly twice the production, compared with a plasma above the water.

A STUDY OF HEAT TRANSFER AND FLOW CHARACTERISTICS OF RISING TAYLOR BUBBLES

Practical application of flow boiling to ground- and space-based thermal management systems hinges on the ability to predict the system’s heat removal capabilities under expected operating conditions. Research in this field has shown that the heat transfer coefficient within two-phase heat exchangers can be largely dependent on the experienced flow regime. This finding has inspired an effort to develop mechanistic heat transfer models for each flow pattern which are likely to outperform traditional empirical correlations. As a contribution to the effort, this work aimed to identify the heat transfer mechanisms for the slug flow regime through analysis of individual Taylor bubbles. An experimental apparatus was developed to inject single vapor Taylor bubbles into co-currently flowing liquid HFE 7100. The heat transfer was measured as the bubble rose through a 6 mm inner diameter heated tube using an infrared thermography technique. High-speed flow visualization was obtained and the bubble film thickness measured in an adiabatic section. Experiments were conducted at various liquid mass fluxes (43-200 kg/m2s) and gravity levels (0.01g-1.8g) to characterize the effect of bubble drift velocity on the heat transfer mechanisms. Variable gravity testing was conducted during a NASA parabolic flight campaign. Results from the experiments showed that the drift velocity strongly affects the hydrodynamics and heat transfer of single elongated bubbles. At low gravity levels, bubbles exhibited shapes characteristic of capillary flows and the heat transfer enhancement due to the bubble was dominated by conduction through the thin film. At moderate to high gravity, traditional Taylor bubbles provided small values of enhancement within the film, but large peaks in the wake heat transfer occurred due to turbulent vortices induced by the film plunging into the trailing liquid slug. Characteristics of the wake heat transfer profiles were analyzed and related to the predicted velocity field. Results were compared and shown to agree with numerical simulations of colleagues from EPFL, Switzerland. In addition, a preliminary study was completed on the effect of a Taylor bubble passing through nucleate flow boiling, showing that the thinning thermal boundary layer within the film suppressed nucleation, thereby decreasing the heat transfer coefficient.

Essays in asset price bubbles

This thesis studies the field of asset price bubbles. It is comprised of three independent chapters. Each of these chapters either directly or indirectly analyse the existence or implications of asset price bubbles. The type of bubbles assumed in each of these chapters is consistent with rational expectations. Thus, the kind of price bubbles investigated here are known as rational bubbles in the literature. The following describes the three chapters. Chapter 1: This chapter attempts to explain the recent US housing price bubble by developing a heterogeneous agent endowment economy asset pricing model with risky housing, endogenous collateral and defaults. Investment in housing is subject to an idiosyncratic risk and some mortgages are defaulted in equilibrium. We analytically derive the leverage or the endogenous loan to value ratio. This variable comes from a limited participation constraint in a one period mortgage contract with monitoring costs. Our results show that low values of housing investment risk produces a credit easing effect encouraging excess leverage and generates credit driven rational price bubbles in the housing good. Conversely, high values of housing investment risk produces a credit crunch characterized by tight borrowing constraints, low leverage and low house prices. Furthermore, the leverage ratio was found to be procyclical and the rate of defaults countercyclical consistent with empirical evidence. Chapter 2: It is widely believed that financial assets have considerable persistence and are susceptible to bubbles. However, identification of this persistence and potential bubbles is not straightforward. This chapter tests for price bubbles in the United States housing market accounting for long memory and structural breaks. The intuition is that the presence of long memory negates price bubbles while the presence of breaks could artificially induce bubble behaviour. Hence, we use procedures namely semi-parametric Whittle and parametric ARFIMA procedures that are consistent for a variety of residual biases to estimate the value of the long memory parameter, d, of the log rent-price ratio. We find that the semi-parametric estimation procedures robust to non-normality and heteroskedasticity errors found far more bubble regions than parametric ones. A structural break was identified in the mean and trend of all the series which when accounted for removed bubble behaviour in a number of regions. Importantly, the United States housing market showed evidence for rational bubbles at both the aggregate and regional levels. In the third and final chapter, we attempt to answer the following question: To what extend should individuals participate in the stock market and hold risky assets over their lifecycle? We answer this question by employing a lifecycle consumption-portfolio choice model with housing, labour income and time varying predictable returns where the agents are constrained in the level of their borrowing. We first analytically characterize and then numerically solve for the optimal asset allocation on the risky asset comparing the return predictability case with that of IID returns. We successfully resolve the puzzles and find equity holding and participation rates close to the data. We also find that return predictability substantially alter both the level of risky portfolio allocation and the rate of stock market participation. High factor (dividend-price ratio) realization and high persistence of factor process indicative of stock market bubbles raise the amount of wealth invested in risky assets and the level of stock market participation, respectively. Conversely, rare disasters were found to bring down these rates, the change being severe for investors in the later years of the life-cycle. Furthermore, investors following time varying returns (return predictability) hedged background risks significantly better than the IID ones.

Automatic dynamic mask extraction for PIV images containing an unsteady interface, bubbles, and a moving structure

When performing Particle Image Velocimetry (PIV) measurements in complex fluid flows with moving interfaces and a two-phase flow, it is necessary to develop a mask to remove non-physical measurements. This is the case when studying, for example, the complex bubble sweep-down phenomenon observed in oceanographic research vessels. Indeed, in such a configuration, the presence of an unsteady free surface, of a solid–liquid interface and of bubbles in the PIV frame, leads to generate numerous laser reflections and therefore spurious velocity vectors. In this note, an image masking process is developed to successively identify the boundaries of the ship and the free surface interface. As the presence of the solid hull surface induces laser reflections, the hull edge contours are simply detected in the first PIV frame and dynamically estimated for consecutive ones. As for the unsteady surface determination, a specific process is implemented like the following: i) the edge detection of the gradient magnitude in the PIV frame, ii) the extraction of the particles by filtering high-intensity large areas related to the bubbles and/or hull reflections, iii) the extraction of the rough region containing these particles and their reflections, iv) the removal of these reflections. The unsteady surface is finally obtained with a fifth-order polynomial interpolation. The resulted free surface is successfully validated from the Fourier analysis and by visualizing selected PIV images containing numerous spurious high intensity areas. This paper demonstrates how this data analysis process leads to PIV images database without reflections and an automatic detection of both the free surface and the rigid body. An application of this new mask is finally detailed, allowing a preliminary analysis of the hydrodynamic flow.

Effects of bubbles, cracks, and volcanic tephra on the spectral albedo of bare ice near the Transantarctic Mountains: Implications for sea glaciers on Snowball Earth

Spectral albedo was measured along a 6 km transect near the Allan Hills in East Antarctica. The transect traversed the sequence from new snow through old snow, firn, and white ice, to blue ice, showing a systematic progression of decreasing albedo at all wavelengths, as well as decreasing specific surface area (SSA) and increasing density. Broadband albedos under clear-sky range from 0.80 for snow to 0.57 for blue ice, and from 0.87 to 0.65 under cloud. Both air bubbles and cracks scatter sunlight; their contributions to SSA were determined by microcomputed tomography on core samples of the ice. Although albedo is governed primarily by the SSA (and secondarily by the shape) of bubbles or snow grains, albedo also correlates highly with porosity, which, as a proxy variable, would be easier for ice sheet models to predict than bubble sizes. Albedo parameterizations are therefore developed as a function of density for three broad wavelength bands commonly used in general circulation models: visible, near-infrared, and total solar. Relevance to Snowball Earth events derives from the likelihood that sublimation of equatorward-flowing sea glaciers during those events progressively exposed the same sequence of surface materials that we measured at Allan Hills, with our short 6 km transect representing a transect across many degrees of latitude on the Snowball ocean. At the equator of Snowball Earth, climate models predict thick ice, or thin ice, or open water, depending largely on their albedo parameterizations; our measured albedos appear to be within the range that favors ice hundreds of meters thick. Citation:

On the efficiency of impingers with fritted nozzle tip for collection of ultrafine particles

The aim of this study was to determine the collection efficiency of ultrafine particles into an impinger fitted with a fritted nozzle tip as a means to increase contact surface area between the aerosol and the liquid. The influence of liquid sampling volume, frit porosity and the nature of the sampling liquid was explored and it was shown that all impact on the collection efficiency of particles smaller than 220 nm. Obtained values for overall collection efficiency were substantially higher (~30–95%) than have been previously reported, mainly due to the high deposition of particles in the fritted nozzle tip, especially in case of finer porosity frits and smaller particles. Values for the capture efficiency of the solvent alone ranged from 20 to 45%, depending on the type and the volume of solvent. Additionally, our results show that airstream dispersion into bubbles improves particle trapping by the liquid and that there is a difference in collection efficiencies based on the nature and volume of the solvent used.

Micro-structure differences in kaolinite suspensions

SEM observations of the aqueous suspensions of kaolinite from Birdwood (South Australia) and Georgia (USA) show noticeable differences in number of physical behaviour which has been explained by different microstructure constitution.. Birdwood kaolinite dispersion gels are observed at very low solid loadings in comparison with Georgia KGa-1 kaolinite dispersions which remain fluid at higher solids loading. To explain this behaviour, the specific particle interactions of Birdwood kaolinite, different from interaction in Georgia kaolinite have been proposed. These interactions may be brought about by the presence of nano-bubbles on clay crystal edges and may force clay particles to aggregate by bubble coalescence. This explains the predominance of stair step edge-edge like (EE) contacts in suspension of Birdwood kaolinite. Such EE linked particles build long strings that form a spacious cell structure. Hydrocarbon contamination of colloidal kaolinite particles and low aspect ratio are discussed as possible explanations of this unusual behaviour of Birdwood kaolinite. In Georgia KGa-1 kaolinite dispersions instead of EE contact between platelets displayed in Birdwood kaolinite, most particles have edge to face (EF) contacts building a cardhouse structure. Such an arrangement is much less voluminous in comparison with the Birdwood kaolinite cellular honeycomb structure observed previously in smectite aqueous suspensions. Such structural characteristics of KGa-1 kaolinite particles enable higher solid volume fractions pulps to form before significantly networked gel consistency is attained.

Bubble geometry and chaotic pricing behaviour

This paper is a deductive theoretical enquiry into the flow of effects from the geometry of price bubbles/busts, to price indices, to pricing behaviours of sellers and buyers, and back to price bubbles/busts. The intent of the analysis is to suggest analytical approaches to identify the presence, maturity, and/or sustainability of a price bubble. We present a pricing model to emulate market behaviour, including numeric examples and charts of the interaction of supply and demand. The model extends into dynamic market solutions myopic (single- and multi-period) backward looking rational expectations to demonstrate how buyers and sellers interact to affect supply and demand and to show how capital gain expectations can be a destabilising influence – i.e. the lagged effects of past price gains can drive the market price away from long-run market-worth. Investing based on the outputs of past price-based valuation models appear to be more of a game-of-chance than a sound investment strategy.

Bubble rise velocity and trajectory in xanthan gum crystal suspension

An experimental set-up was used to visually observe the characteristics of bubbles as they moved up a column holding xanthan gum crystal suspensions. The bubble rise characteristics in xanthan gum solutions with crystal suspension are presented in this paper. The suspensions were made by using different concentrations of xanthan gum solutions with 0.23 mm mean diameter polystyrene crystal particles. The influence of the dimensionless quantities; namely the Reynolds number, Re, the Weber number, We, and the drag co-efficient, cd, are identified for the determination of the bubble rise velocity. The effect of these dimensionless groups together with the Eötvös number, Eo, the Froude number, Fr, and the bubble deformation parameter, D, on the bubble rise velocity and bubble trajectory are analysed. The experimental results show that the average bubble velocity increases with the increase in bubble volume for xanthan gum crystal suspensions. At high We, Eo and Re, bubbles are spherical-capped and their velocities are found to be very high. At low We and Eo, the surface tension force is significant compared to the inertia force. The viscous forces were shown to have no substantial effect on the bubble rise velocity for 45 < Re < 299. The results show that the drag co-efficient decreases with the increase in bubble velocity and Re. The trajectory analysis showed that small bubbles followed a zigzag motion while larger bubbles followed a spiral motion. The smaller bubbles experienced less horizontal motion in crystal suspended xanthan gum solutions while larger bubbles exhibited a greater degree of spiral motion than those seen in the previous studies on the bubble rise in xanthan gum solutions without crystal.

Drag coefficient in a crystal suspension

A single air bubble rising in xanthan gum crystal suspension has been studied experimentally. The suspension was made by different concentrations of xanthan gum solutions with 0.23 mm polystyrene crystal particles. Drag co-efficient data and a new correlation of drag coefficient is presented for spherical and nonspherical bubbles in non-Newtonian crystal suspension. The correlation is developed in terms of the Reynolds number, Re and the bubble shape factor, � (the ratio between the surface equivalent sphere diameter to the volume equivalent sphere diameter). The experimental drag coefficient was found to be consistent with this new predicted correlation and published data over the ranges, 0.1

Adam Smith's dinner

In 1961, the East German government erected what they claimed was an anti-capitalist barricade. In 1989, this barricade was dismantled by those whom it was supposed to keep apart: the forces it was intended to contain had overwhelmed it. In the aftermath, the victims of Stalinist oppression and the planned economy opted for radical change. Some might have hoped that they would intellectually march resolutely westwards towards the forms of social democracy that had proven so successful in their nearest neighbours – Scandinavia, Germany and Austria – and stop when they had reached a point on the political spectrum with which they felt comfortable, and which worked for them. Unfortunately, they went to the opposite end of political economy. That choice was celebrated by those theorists who wanted our own countries to move in the same direction. Eastern Europe suffered a decline of 50% in its GDP. Much earlier in 1653, Peter Stuyvesant had erected an earth and wooden wall to protect the westernmost settlement of a great commercial nation from those they imagined to be barbarians. In 1699 Stuyvesant’s barrier was dismantled by the British, who replaced it with a street named after the wall. So it came to be that one of the most inconsequential walls in history became one of history’s most famous streets. I am not sure if the Dutch had left some tulip bulbs on either side of the wall, perhaps as a reminder of capitalism’s first bubble, and an inspiration to later bubbles. However, many of the victims of the latest burst bubble are pretty keen to tear down that Wall.1 As in 1989, they want to take action against the guardians of the system that failed them. And the more they suffer, the more likely it is that they will demand radical change, and the more likely that the resulting change will go too far – as seems to have been the case in Eastern Europe after the terminal crisis of communism, and in the majority of democracies that fell in the dozen years following the Great Crash. The current reaction is so strong that some are even wondering what role there will be for markets. I was invited to address a conference in the EU Parliament last November on the topic ‘Capitalism: Quo Vadis?’, where I apologized to the international audience that the topic was posed in a dead European language because the answer to this question is not going to be determined by the west alone. The problems we have been addressing emerged in the west and have affected the rest. However, the answers will not come, solely from the west, and may even come primarily from the south and the east.

Wilkins Hill : on the cusp of meaning

If contemporary artworks are often considered to be puzzles or riddles, then Wilkins Hill take this to a new level. Their recent exhibition Windows impersonating other windows, confronts viewers with an extremely ludic configuration: a spa bath full of almonds, towel racks placed before photos of Martin Heidegger distorted in neat grids, a video of a water tower in a Hamburg park, wooden cut-out speech bubbles and monitors that continuously play interviews with the artists themselves. What does it all mean?