Hong Yu Xiao

Hong Yu Xiao
  • Applied Economics Doctoral Student

Contact Information

  • office Address:

    419A Vance Hall, 3733 Spruce Street, Philadelphia, PA 19104-6302

Research Interests: Applied Microeconomics, Urban Economics, Housing and Real Estate, Economics of Innovation, Industrial Organization

Links: CV


Hongyu Xiao is a doctoral candidate in Applied Economics at the Wharton School, University of Pennsylvania. He is an applied microeconomist with research interests in urban economics, housing and real estate, economics of innovation and industrial organization. His research focuses on exploring how geography and housing markets affect economic outcomes at the individual, firm and industry levels, both within and across cities.

He graduated from Cornell University in 2011 with a B.A. in Astronomy and Economics. He then completed a Masters in Applied Statistics at Cornell University in 2012. He worked as a research assistant in the Financial Stability department at the Bank of Canada between 2012 and 2014.

Hongyu will be on the job market 2019-2020 and available for interviews at the 2020 ASSA Annual Meeting in San Diego.


His dissertation committee includes:

Gilles Duranton (Dissertation Chair), (215) 898-2859, duranton@wharton.upenn.edu

Joseph Gyourko, (215) 898-3003, gyourko@wharton.upenn.edu

Todd Sinai, (215) 898-5390, sinai@wharton.upenn.edu


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  • Hong Yu Xiao and Andy Wu (Under Revision), Commuting and Innovation: Are Closer Inventors More Productive? (Job Market Paper).

    Abstract: We examine the effects of workplace-home distance on inventor productivity. We construct a novel panel of U.S. inventors with precisely measured workplace-home distances and a direct measure of productivity via patents. Our identification strategy relies upon within-city firm office relocation events as exogenous shocks to workplace-home distance. We find a significant negative causal effect from distance on inventor productivity: every ten kilometer increase in distance is associated with a 5% decrease in patents and a 10% decrease in scaled citations per inventor-firm pair per year.

  • Hong Yu Xiao Indirect Effects of Local Housing Price Shocks via Product Market Competition (Work in Progress).

  • Hong Yu Xiao and Hector Perez-Saiz (Under Revision), Cultural Affinity, Regulation and Market Structure: Evidence from the Canadian Retail Banking Industry.

    Abstract: We estimate a perfect information static entry game to study how cultural entry barriers affect firm entry and competition in the retail banking industry. Canada provides a good setting for analysis due to its high linguistic diversity, concentrated market, and regulatory entry barriers. We find that cultural affinity plays an important role in explaining the significant comparative advantages some credit unions and banks have relative to other financial institutions. Using several counterfactual experiments and additional empirical evidence, we show that the effectiveness of certain market strategies and regulations intended to foster competition are significantly limited by the cultural barriers, which is a key determinant that shapes the competitive landscape of the industry.

  • Hong Yu Xiao and Fuchun Li, Early Warning of Financial Stress Events: A Credit-Regime-Switching Approach (Working Paper).

    Abstract: We propose an early warning model for predicting the likelihood of a financial stress event for a given future time, and examine whether credit plays an important role in the model as a non-linear propagator of shocks. This propagation takes the form of a threshold regression in which a regime change occurs if credit conditions cross a critical threshold. The in-sample and out-of-sample forecasting performances are encouraging. In particular, the out-of-sample forecasting results suggest that the model based on the credit-regime-switching approach outperforms the benchmark models based on a linear regression and signal extraction approach across all forecasting horizons and all criteria considered.



This course is designed for students interested in the economics and operations of housing markets. It is primarily a U.S. focused course, but does include a limited amount of international material for comparative purposes. The class is divided into four sections: (1) supply and demand for housing, including the operations of homebuilders and rental landlords; (2) house prices, including cycles and price dynamics; (3) international comparisons; and (4) public policy and analysis applied to a current housing markets-related issue. This course presumes knowledge of intermediate economics, as we will apply that knowledge throughout the semester. For Wharton students, this means you must have passed BEPP 250 (undergrads) or MGEC 611 and 612 for MBA’s. Non-Wharton students should have taken the equivalent course in the College.

Past Courses


    This course will introduce you to "managerial economics" which is the application of microeconomic theory to managerial decision-making. Microeconomic theory is a remarkably useful body of ideas for understanding and analyzing the behavior of individuals and firms in a variety of economic settings. The goal of the course is for you to understand this body of theory well enough so that you can effectively analyze managerial (and other) problems in an economic framework. While this is a "tools" course, we will cover many real-world applications, particularly business applications, so that you can witness the usefulness of these tools and acquire the skills to use them yourself. We will depart from the usual microeconomic theory course by giving more emphasis to prescription: What should a manager do in order to achieve some objective? That course deliverable is to compare with description: Why do firms and consumers act the way they do? The latter will still be quite prominent in this course because only by understanding how other firms and customers behave can a manager determine what is beswt for him or her to do. Strategic interaction is explored both in product markets and auctions. Finally, the challenges created by asymmetric information - both in the market and within the firm - are investigated.

Awards and Honors

2018                Mack Institute for Innovation Management Research Grant

2017                Mack Institute for Innovation Management Research Grant

2016                Kleinman Center for Energy Policy Research Grant

2016                IWFSAS 2016 Best Paper Award

2016                Mack Institute for Innovation Management Research Grant

2016                Wharton Doctoral Travel Grant

2015                Amy Morse Prize

2014                Wharton Public Policy Initiative Fellowship

2014                Wharton Doctoral Program Fellowship


    Latest Research

    Hong Yu Xiao and Andy Wu (Under Revision), Commuting and Innovation: Are Closer Inventors More Productive? (Job Market Paper).
    All Research