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Wednesday, November 09, 2016

Did California Zoning Cause the Trump Win? A Counter-Factual of My State's Electoral Count if Housing Supply is Elastic

The Trump Win means that some great economists (I'm thinking of Summers, Krueger, Goolsbee etc) will return to academic research since they won't be joining the new administration.   Given how many top academic economists were  primed to go to Washington, the Trump win should actually accelerate discoveries in academic economics!  Unfortunately, I don't believe that the Trump win will lead to that many econ stars joining his squad.

Switching gears, I have a new explanation for Trump's win that does not involve Weiner or talking about Deplorables or emails.   California's zoning codes caused the win.  If California had Texas style housing regulations, then 80 million people would live in California and the state would have 100 electoral votes.  The state would still vote Democrat (because of the composition of these new voters) and Clinton would have won.  Why would so many people move here? It is heaven.   With Hong Kong style density and water markets, the state could accommodate such growth.

Ironically, as I show in this 2011 paper,  California's progressive cities have blocked housing supply and thus rationed out the middle class from moving here.   Such individuals have to live somewhere and the net result was more electoral votes in the Midwest.

Note that the same point can be made for Oregon and Washington state. These progressive states could pack in millions of more people and thus have more  electoral votes but they have chosen to be "inelastic".