Andrii Parkhomenko
Assistant Professor | University of Southern California - Marshall School of Business

Research Interests

Spatial Economics, Urban Economics, Macroeconomics, Housing

Working Papers

Publications

  • Local Causes and Aggregate Implications of Land Use Regulation, by Andrii Parkhomenko
    Journal of Urban Economics, 138, 2023: 103605

    I study why some cities have strict land use regulation, how regulation affects the U.S. economy, and how policymakers can mitigate its negative consequences. I develop a quantitative spatial equilibrium model where local regulation is determined endogenously, by voting. Homeowners in productive cities with attractive amenities vote for strict regulation. The model accounts for 40% of the observed differences in regulation across cities. Quantitative experiments show that excessive local regulation reduces aggregate productivity, but not necessarily welfare because, unlike renters, homeowners benefit from regulation. I propose federal policies that raise productivity and welfare by weakening incentives to regulate land use.

    Media: New York Times, Marginal Revolution, Noahpinion
    Awards: Kraks Fond prize for the Best Student Paper at the 7th European Meeting of the Urban Economics Association, Copenhagen 2017

  • Work from Home and Urban Structure by Matt Delventhal, Eunjee Kwon, and Andrii Parkhomenko
    Built Environment, 49(3), 2023: 503-524

    The sustained increase in working from home in the wake of Covid has the potential to reshape the US urban landscape. This article describes the big picture of pre-2020 remote work in the US and summarizes how that picture changed during the subsequent three years. It then introduces a mathematical model designed to calculate the possible long-run impacts of increased remote work on where and how Americans work and live. This model predicts that the increased prevalence of remote and hybrid work arrangements will induce workers with remote-capable jobs to find housing farther away from their job locations, increasing the length of the average commute while cutting the time actually spent commuting. Jobs that produce goods and services which must be consumed locally will follow the bulk of the population to suburbs and smaller cities, while jobs producing tradable output will increase both in low-cost and high-productivity locations, at the expense of the middle. In the long run, the reallocation of demand to lower density locations with fewer legal restrictions on housing development should reduce the real price of housing by at least 1 per cent, but these changes depend on adjustments to the housing stock, both through new construction and through re-purposing commercial real estate in city centres. The model predicts a partial reversal of the decades-long concentration of talent and income in the centres of the biggest cities. Data on changes 2019-2022 suggest that some of this reversal is already happening.

  • JUE Insight: How Do Cities Change When We Work from Home? by Matt Delventhal, Eunjee Kwon, and Andrii Parkhomenko
    Journal of Urban Economics, 127, 2022: 103331

    How would the shape of our cities change if there were a permanent increase in working from home? We study this question using a quantitative model of the Los Angeles metropolitan area featuring local agglomeration externalities and endogenous traffic congestion. We find three important effects: (1) Jobs move to the core of the city, while residents move to the periphery. (2) Traffic congestion eases and travel times drop. (3) Average real estate prices fall, with declines in core locations and increases in the periphery.  Workers who are able to switch to telecommuting enjoy large welfare gains by saving commute time and moving to more affordable neighborhoods. Workers who continue to work on-site enjoy modest welfare gains due to lower commute times, improved access to jobs, and the fall in average real estate prices.

    Media: LA Times, Time magazine, The Conversation, USC Tommy Talks, USC News, Academic Times, Skift, Fast Company, Spectrum News (21:47)

  • Managers and Productivity Differences, by Nezih Guner, Andrii Parkhomenko, and Gustavo Ventura
    Review of Economic Dynamics     29, 2018: 256-282

    We document that for a group of high-income countries the life-cycle earnings growth of managers relative to non-managers is positively correlated with output per worker. We interpret this evidence through the lens of an equilibrium life-cycle, span-of-control model where managers invest in their skills. We use the model to quantify the importance of exogenous productivity differences and the size-dependent distortions emphasized in the misallocation literature. Our findings indicate that such distortions are critical to generate the observed differences in the growth of relative managerial earnings across countries. Distortions that halve the growth of relative managerial earnings, a move from the U.S. to Italy in our data, lead to a reduction in managerial quality of 27% and to a reduction in output of about nearly 7% – more than half of the observed gap between the U.S. and Italy. Cross-country variation in distortions accounts for about 42% of the cross-country variation in output per worker gap with the U.S.

    Media:     VOX

Selected Work in Progress

Policy and Other Non-Peer Reviewed Publications

Inactive Working Papers