Email
s.moktan@lse.ac.uk

Office Address
Department of Economics
London School of Economics and Political Science
Houghton Street, London WC2A 2AE

Placement Officer
Matthias Doepke

Supervisors
Alessandro Gavazza
Daniel Sturm

References
Alessandro Gavazza
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
a.gavazza@lse.ac.uk

Daniel Sturm
Department of Economics
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
d.sturm@lse.ac.uk

Christian Hilber
Department of Geography and Environment
London School of Economics and Political Sciences
Houghton St, London WC2A 2AE
c.hilber@lse.ac.uk

Download Sidharth's c.v.

An Empirical Equilibrium Model of the Markets for Rental and Owner-Occupied Housing.
A large and growing share of households rent from private landlords. I empirically analyze how landlords affect welfare and housing affordability by influencing rents, prices, and the allocation of houses between the rental and owner-occupied sectors in the presence of household borrowing constraints. I begin by documenting three key facts that highlight the potential impact of landlords on the housing market: (i) housing quality is segmented between the rental and owner-occupied sectors, with rentals generally offering lower quality, (ii) cities with more pronounced quality segmentation tend to have higher rent-to-price ratios, and (iii) cities with less pronounced quality segmentation and smaller rent-to-price ratios exhibit larger asset differences between landlords and households. To quantify the effect of landlords on the housing market, I develop and estimate a two-sided assignment model which features households' optimal choice of housing quality and tenure (i.e., the choice to rent or own) in the presence of borrowing constraints, landlords' profit-maximizing choice of quality to rent out, and endogenous quality segmentation and rent-to-price ratios which are determined in equilibrium. I conduct counterfactual experiments on the estimated model to derive two main insights. First, I show that differences in the distributions of landlords across cities explain much of the variation in quality segmentation and rent-to-price ratios observed across cities. Second, I demonstrate that, due to market clearing forces in the model, within-city differences between landlord and household endowments naturally causes the rent-to-price function to decline with prices within a city, a pattern that has previously been documented by several papers across different settings. I Link to paper.

Publications

Risk Differentials between Green and Brown Assets, with Benjamin Guin and Perttu Korhonen. Economics Letters, April 2022.

Publishing and Promotion in Economics: The Tyranny of the Top Five, with James J. Heckman. Journal of Economic Literature, June 2020.

Evaluation of the Reggio Approach to Early Education, with Heckman, J. J., Biroli, P., Del Boca, D., Heckman, L. P., Koh, Y. K., Kuperman, S., Pronzato, C. D., and Ziff, A. L. Research in Economics, 2017.

Works in Progress

Learning When Young: The Decline in Returns to Working in Big Cities with Age of Experience. 
It is well-documented that much of the benefit from working in large cities is due to dynamic benefits from greater skill accumulation. This paper considers differences in these dynamic payoffs by the age at which the experience is accumulated. Using an administrative longitudinal employer-employee matched dataset covering 1% of full-time workers in the UK from 1980 to 2020, I find that the dynamic returns to working in big cities like London decline with the age at which the experience is accumulated in big cities. The age gradient in returns to experience persists after including worker and city fixed effects, as well as fixed effects for the age and city of pay. These results help explain why net migration into large cities is positive at younger ages and negative for older workers.

The Impact of Local Housing Markets on Worker Sorting Across Local Labour Markets.
Young workers stand to gain the most from working in large cities. However, they are least-able to own homes in large cities due to borrowing constraints. This paper studies how the rental market facilitates labor market sorting by resolving the mismatch between the benefits of living/working in large cities and the resources required to do so. I am currently developing a spatial sorting model in which workers of varying ages and abilities with heterogeneous endowments choose the optimal city to reside and work in given moving costs. Cities differ in terms of: (i) the dynamic labor market returns they provide to workers of varying ages and abilities; and (ii) the quality of housing accessible through renting and owning for workers with varying income and assets. Cross-city differences in housing and labor markets induces sorting of workers across cities based on age, ability and endowments. The model will be used to quantify how differences across and within local housing markets impact the sorting of workers to opportunity in different cities. Additionally the model will be used to study the effect on sorting of homeownership borrrowing constraints and housing policies which impact the functioning of the rental sector.

Welfare and Distributional Consequences of Constrained College Admissions Under Uncertainty, with Rebecca Rose. 
In the UK, college applicants can apply to a maximum of five courses using predicted high school grades. However, the final admission decision is contingent on realized high school grades which are unknown at the time of application. This paper studies how the uncertainty introduced by the reliance on both predicted and realized grades at different stages of the application process impacts students' choices. We develop a model in which students with varying levels of risk aversion choose the portfolio of university courses to apply to given their predicted grades. Risk aversion impacts the mix of safety, reach, and target schools in the portfolio. We estimate the model using rich administrative data covering the universe of college applications and admission decisions in the UK starting from 2011. The estimation allows the distribution of risk aversion to vary by observed student characteristics. This allows us to explore the role of uncertainty and risk aversion in generating heterogeneity in college choices by race, gender, and socioeconomic status. To quantify the effect of uncertainty on college choice, we consider two counterfactuals: (i) lifting the cap on the number of applications; and (ii) switching entirely to predicted grades.

Working Paper

The Anatomy of a Shock to Residential Real Estate, with Benjamin Guin and Liam Clark (draft to follow).