08 September 2010 12:00AM
Davies Fellow Caitlin Gorback, a rising senior, spent part of the summer expanding her research work from the Spring term on trailer parks. Her work will be expanded into an honors thesis this year. Here Gorback shares about her summer experience:
This past summer I have been busy working on an “Explanation of Trailer Parks” which, in the long term, will help shed light on the economic reasons why renters and land owners contract in such a unique fashion. My work this summer began expanding upon the theoretical models developed last semester, approaching the question through another additional model, data collection, and developing computational skills to enhance the quantitative methods in my research.
I posit that it is in the land owner’s best interest to require tenants to purchase their own housing units to avoid maintenance costs, and it is in the tenant community’s best interest to push the burden of eviction costs onto the owner, incentivizing a land-rental system. For “Capital Constraints”, through basic constrained optimization, it is in the best interest of the landowners to only rent plots of land, and allow tenants to be responsible for securing their own homes.
On the other side, it is optimal for tenants to purchase only their housing structure and leave land ownership and maintenance to the landowner. Considering “Risk-Sharing and Uncertain Growth” we assume that the investor/landowner is risk averse and gets less utility from profits than he does disutility from losses. Because the owner faces an uncertain future, he will hope to minimize his future costs. Thus it is the owner’s best choice to share some of the burden of risk with the tenants, whom he views as flight risks. Lastly, for “Short versus Long Run Urban Growth”, we hypothesize that in areas that will grow in the near future, trailer parks will arise instead of stick-built housing. In the event that the property value is set to increase quickly, we should see trailer parks placed on the land because stick-built housing will not have depreciated adequately to justify their destruction.
In addition to further developing the theoretical models, I have begun data collection using ten sample states. Starting at the bloc group level (about 2,000 people), I collect housing data for each bloc group in the state, namely the number of manufactured homes, and number of total housing units in the bloc group. This provides a ratio of manufactured homes to other forms of housing, useful in identifying where trailer parks may be located.
All in all, the Fellowship enabled me to continue working into the summer, and to stay on campus for part of it. This made it possible for me to stay in close contact and discussion with my advisor for the time spent at Duke, but also gave me great flexibility to go out and accomplish an internship while keeping my project in mind and developing skills to enhance it.
By Caitlin Gorback, Davies Fellow Summer 2010
Economics Department