Friday, March 28, 2014

Who Really Benefits From The Mortgage Tax Break?

See Mortgage Tax Break Said to Trickle Up by Nick Timiraos of the WSJ.Excerpts:
"Federal tax benefits for homeowners primarily help wealthier people borrow more money to buy larger houses rather than boost homeownership, according to a new study."

" preferences, particularly the mortgage-interest deduction, have helped drive up the size of houses by as much as 18% in the nation's most affluent areas while not broadly encouraging people to buy homes."

"...a growing body of economic research that suggests Americans don't benefit broadly from the tax preferences, which the study estimates cost the government $175 billion annually in forgone revenue."

"... tax subsidies for housing "don't encourage homeownership in any meaningful way. People just end up buying larger homes," said Andrew Hanson, an associate professor of economics at Marquette University who conducted the study along with two other economists."

" benefits have contributed to the average home size being about 1,400 square feet larger than if the benefits didn't exist."

"... owners benefit from capital-gains avoidance when realizing a $250,000 gain from a home sale, a provision that benefits households in coastal markets with greater home-price appreciation."

" Robert Dietz, an economist at the National Association of Home Builders, said tax filings also show larger families tend to take larger deductions, and larger families need more space."

"... tax benefits for owner-occupied homes generally accrue to a minority of households. Homeowners with incomes above $100,000 were between three and four times as likely to claim the tax benefit as those earning less than $100,000."

"The average annual savings for households claiming housing tax benefits are $12,300 in San Francisco and $10,700 in Los Angeles, compared with $1,600 in Detroit and $2,900 in Dallas, the study found.

Meantime, residents in San Francisco who earn more than $100,000 save $8,000 annually from the mortgage-interest deduction, compared with savings of $3,700 for residents who earn less than $100,000. In Detroit, higher earners save more than $4,000, while those earning less than $100,000 save $1,600."

Wednesday, March 19, 2014

Better Looking Real Estate Agents Make More Money

In Real Estate, Looks Can Sell: Attractive agents both list and sell homes for more money than average-looking agents, say researchers studying the effect of beauty on sales. From the WSJ, 5-31-2013. By Sanette Tanaka. Excerpts:
"When selling real estate, beauty pays off, says Sean Salter, associate professor of finance at Middle Tennessee State University and co-author of a study on how an agent's looks affect property sales. Attractive real-estate agents list homes for $20,275 more and sell for $15,622 more than average-looking agents, researchers found.

"When you see a more attractive person, you think 'Superman.' They're going to be good at whatever they do. You think they're attractive, they're smarter, they're funnier—they're probably a better real-estate agent," Prof. Salter says."

"The findings: Every one-point increase in a listing agent's attractiveness score added $10,989, on average, to the home's list price. Every one-point increase in a selling agent's score added $8,467 to the home's sale price.

"All else being equal, we give attractive people a little bump," Prof. Salter says."

"Over time, though, the price differences evened out. Although they made more money per transaction, attractive agents carried 17 fewer listings and made 11 fewer sales, on average, during the seven-year period. It also takes attractive agents longer to sell a property. That means that agents who are considered beautiful "actually are using their beauty to supplement other productive characteristics," Prof. Salter says."

Friday, March 07, 2014

Obesity And The Benefit Of Losing Weight

See The Magic Number That Could Fix America’s Weight Problem by Dan Kloeffler of ABC/Yahoo News.
"First, the average American male weighs a little more than 195 pounds, the average American female, weighs about 166 pounds. Based on these averages, and the CDC’s table for Body Mass Index if average American Joe’s and Jane’s dropped 20 pounds, they would no longer border obesity, but rather border what is considered normal weight.

Ever tried dropping a few pounds? Then you know that 20 can seem like a ton. It’s not, actually. It’s about the weight of a spare tire or a case of beer; interesting to note that one is the namesake for a belly, while the other is often the cause of its existence.

If we did lose 20, white women might find themselves with a little extra cash, according to Dr. John Cawley, economics professor at Cornell University. He examined 30 years of data, collected on a cross-section of the U.S. population. About 70,000 people were observed from different economic situations, educational levels, and races. As the subjects were monitored over three decades, Cawley noticed a pattern among white women; those that were heavier, tended to earn less money. In most cases, the wage difference was between 2.8 percent and 5.6 percent.

Keep in mind, this study did not come to the conclusion that weight gain automatically causes a drop in wages, or that lower wages causes weight gain. However, the observation is worth attention, considering that changing your figure, could change some figures.

But even without pay raise, if we lost 20 pounds, we’d have more money to spend, thanks to saving billions on healthcare costs. According the Cawley’s number crunching, those Americans considered obese spend about $2,700 a year on healthcare, over someone classified as normal weight. If we eliminated these bills by losing 20 pounds, the country as a whole, would save about $190 Billion dollars in healthcare costs associated with obesity."