Graaskamp Center Hours

The scene outside the windows of the Graaskamp Center in Grainger Hall is a winter wonderland. Plenty of snow on the ground and more predicted for the holiday weekend.

Please note that our office will be closed Thursday and Friday December 24-25 and Wednesday through Friday December 30-January 1 for holidays and furlough time.

We wish you a happy holiday season and an amazing start to 2010!

Photo by Jeff Miller © UW-Madison University Communications

Remembrance for Arthur Goldberger

Within the last week, we have lost the greatest economic theorist of the past 70 years Paul Samuelson. Samuelson was justly famous as the first American winner of the economics Nobel (and many, many other things). Every major newspaper ran large obituaries, as they should have. But just two days earlier, we lost one of economics’ greatest empiricists, Arthur S. Goldberger. Strangely, despite Goldberger’s huge influence on generations of economists and other social scientists, his passing has gone largely unnoticed outside of his friends and family, and fellow empiricists.

One of the privileges of my time in Madison has been to know Art Goldberger--I can't claim to have known him well, but to know him at all was my pleasure.

Our paths first crossed when I met him during my first week in Madison at the urging of my friend and World Bank colleague Kyu Sik Lee, who was his former student. Another of Art's students and a colleague of mine, Richard Green also often spoke of his econometrics teacher, I would say with awe. Most of my brief meetings with Art after that were at economics seminars of various kinds, where I noticed he didn't say a lot, but what he said was always on the mark. In later years I knew him in a different way, because in retirement he met daily with an informal kaffeeklatsch with my next door neighbor who was a little surprised to learn that I and many other empiricists thought Goldberger deserved the economics Nobel as much as anyone who's ever received it (and more than some!). I put that down to a bias away from empirics, but then I would.

The paper of Art's that I most use and cite is a little gem called "Interpretation and Estimation of Cobb-Douglas Production Functions" (Econometrica 1968) which highlights his ability to find really useful insights about a well-known tool all economists use, but haven't thought about as deeply as he had.

He had the ability to see the big picture, too, and knew the literature in a wide range of social sciences, see "Structural equation methods in the social sciences", Econometrica 1972, or either of his two well-known econometric textbooks.

Want to learn how to read social science critically? See his review of "The Bell Curve," Herrnstein and Murray’s controversial commentary on supposed links between race, cognitive ability, and economic success. Art’s review in Journal of Economic Literature, 1995 (with Charles Manski) is a masterpiece.

Something tells me I'll be reading a few papers by Goldberger, and by Samuelson, over the break. There's a lot of great new literature out there, but some of the classics still have much to teach us.

Stephen Malpezzi is the Lorin and Marjorie Tiefenthaler Professor in the Wisconsin School of Business’s Department of Real Estate and Urban Land Economics at the University of Wisconsin. Professor Malpezzi is the Academic Director of UW’s James A. Graaskamp Center for Real Estate.

Happy holidays from the Graaskamp Center staff!

Integrated Company Analysis

Today we have the next installment in our continuing series: Meet Our Current Students.

In the last week of this academic semester, the persistent flurries at Madison offered opportunities for students on campus to enjoy some snow ball fights. While nothing is as beautiful as the sun glistening on the fresh-fallen snow, students at the Wisconsin MBA program are all busy in completing the 10-page report and presentation on their Integrated Company Analysis (ICA) project. It is certainly the most exciting moment in the first year Wisconsin MBA program.

The ICA project is an important part of the first year curriculum at the Wisconsin MBA program. In this project, your five-member team chooses a publicly traded company to analyze. This project requires the team to analyze the firm from different angles, apply knowledge learned during your first semester, and offer strategic recommendations to the company. In the final week, each team presents in front of professors of the core courses, communication experts, and executives of the company analyzed. Much of the learning from the ICA project will be beneficial to students’ career life-long.

Kan Zuo is a first year MBA student in the James A. Graaskamp Center for Real Estate. Originally from China, he completed his undergraduate education at Beloit College in 2006 with a double major in Economics and Management and International Relations. As an undergraduate, he interned with the U.S. Senate Committee on Health, Education, Labor and Pensions.

Best of?

Nearing the end of the year and the end of the decade, there are a lot of "best of" lists out there. Although some argue that the decade isn't done until the end of 2010, that's been about as successful as arguing that the millennium didn't start until 2001.

You can find lists of the best books, best music, even the best (or worst, depending on your point of view) political scandals.

It's been an eventful decade for the real estate industry to be sure. What are your thoughts on the industry--best reads, best experts, best trends? Let us know what you think in the comments.

And since it's the season for giving, we'll even giveaway a free Wisconsin Real Estate hat to the first person to leave a comment. So don't be shy, let us know your thoughts on the year and the decade that (almost) was.

Celebrate the holidays in Denver with Wisconsin alumni!

Join your fellow Badgers for great conversation, networking and merriment to celebrate the holiday season! On Wednesday December 16th, the Wisconsin Real Estate Alumni Association is hosting a holiday gathering for alumni members and guests in Denver. The event will take place 5:00-7:30 pm at the Washington Park Grill. Register online until December 15th.

Photo by bjearwicke, stock.xchng

Climate change (or not): impact on foundations of real estate in France. What about U.S.?

Some background: The extent to which the climate is changing is subject to lots of scientific and popular debate. While the scientists and the press fight it out, policy-makers must decide how to move forward. In France, the government put together a number of groups from the ministries of agriculture, health, the environment and ecology, and the prime minister’s office with the mandate to agree on a set of projections to be used by all government agencies for policymaking.

The issue: The document points to some issues already affecting French real estate. Here is one I wanted to highlight: changes in weather pattern are affecting the depth at which clay soils move during the year (contracts when drying and expands with water). The level at which contractions and expansions take place has reached deep enough to affect the foundations of some homes, in particular in the south of France. Today, the reported damage is estimated in the hundreds of millions of euros.

Is anyone aware of any such issue/damage in the U.S.?

François Ortalo-Magné is the Robert E. Wangard Chair of Real Estate at Wisconsin. With expertise in housing, agricultural land markets and policies, and international real estate, he has done extensive research on fluctuations of housing transactions and prices.

Financial assistance options for your MBA

I know there are probably many of you out there considering submitting an application to the wonderful MBA program here at UW who are wondering how you can afford to take two years off to further your education. Well, you are in luck as I am about to tell you.

There are, of course, a variety of need-based financial aid programs at UW. However, if you don’t qualify for those, there is another option. UW offers a variety of Project Assistantships (PAs) which provide a student with a full scholarship and a stipend for living expenses. These PA positions consist of 13 hours of work per week, typically with one of your professors or your center staff, a small price to pay for your education.

I am currently working as a PA, and I can tell you it has been a great experience for me. This program has allowed me to continue to help support my family while gaining valuable knowledge to move forward in my career. For all those students just finishing up those applications over the next week, take a look into PA positions and make sure to express your interest to the admissions staff. I promise you won’t regret it.

Jeff Swhier is a first year MBA student in the James A. Graaskamp Center for Real Estate at the Wisconsin School of Business. He moved back to the Midwest from NYC to pursue take a position in a property management company and plans to return there after completing his degree.

Visit the Wisconsin Real Estate MBA website for more information on financing your MBA and other assistance available.

Photo by Jeff Miller © UW-Madison University Communications

What costs more: foreclosures or loan modifications?

Yesterday, NPR reported on increased government pressure on the mortgage industry to speed up permanent loan modifications for homeowners under the Obama Administration's 10-month old $75 billion foreclosure prevention effort. UW's Morris Davis responds:

We don’t need mortgage modifications to stop foreclosures. According to a recent Freddie Mac survey, 57% of foreclosures are related to unemployment – only 20% are related to “excessive obligation”, which could also be unemployment related.

What the unemployed need is temporary assistance. The right kind of temporary assistance for the unemployed – either the WI-FUR plan or the Boston Fed plan – will stop foreclosures.

The most costly thing we can do right now is to offer permanent mortgage modifications to the unemployed. On average, modifications to the unemployed cost U.S. taxpayers about $18,000. If we do nothing, each unemployed person with a mortgage costs U.S. taxpayers about $7,000 (because some unemployed households go into foreclosure, and foreclosures are costly when the mortgage is backed by the U.S. government). The total cost of WI-FUR or the Boston Fed plan is less than $6,000 per unemployed person with a mortgage – these plans prevent foreclosures and foreclosures are costly!

Morris A. Davis is Assistant Professor, Real Estate and Urban Land Economics at Wisconsin. Often cited in the national media for his expertise in current housing and macroeconomic issues, he is a fellow at the Lincoln Institute of Land Policy, is on the academic advisory council of the Federal Reserve Bank of Chicago, and worked at the Federal Reserve Board before coming to the Wisconsin School of Business in 2007.

The Wisconsin Foreclosure and Unemployment Relief Plan (WI-FUR) is a proposal by Wisconsin Real Estate faculty to address unemployed homeowners' risk of foreclosure by supplementing unemployment benefits with an additional housing "voucher" payment. Learn more about the WI-FUR plan.

Retail Mood Lifts at MAPIC

The global footprint of the Wisconsin Real Estate Program continues to make an impact around the world. While Department Chair François Ortalo-Magné, was in Hong Kong presenting at the MIPIM ASIA Conference (see previous posts), Faculty Associate Joe Walsh traveled to Cannes, France to participate in the annual MAPIC Conference. With over 6,500 attendees, MAPIC focuses on the retail sector of the global real estate market.

During the conference closing session, Walsh presented the findings of a survey of MAPIC attendees which was conducted and compiled by him, with assistance from several students from HEC Paris, the #1 business school in Europe (FT). (The selected HEC students studied real estate finance in France under Ortalo-Magné and Tim Riddiough last spring through a unique partnership between HEC and the Wisconsin Real Estate Program.)

Survey results confirmed a renewed sense of optimism in the international retail market. For example, results showed 53% of those polled felt more optimistic at the end of MAPIC than they did at the start. Asked how they felt the market perspectives had changed over the past 12 months, over 65% of retailers expressed optimism, while 35% of developers said they felt an improvement in the retail real estate sector. International retailers polled before and during MAPIC 2009, report that they believe the market has bottomed out and that 2010 will see a significant recovery in certain retail sectors and territories.

Chris Igwe of CB Richard Ellis, who also presented during the closing session, noted, “There is a future. There is hope. What’s been interesting here in Cannes is the mood, which is clearly positive.” He advised developers that understanding retailers’ needs is increasingly important. “In our industry, a lot has been said about ‘build it and they will come.’ You can’t just build anything today, because nobody will necessarily buy it up. We need to dialogue more to understand what has worked and what hasn’t.”

Wisconsin’s involvement in MAPIC builds on a long history of collaboration with REED MIDEM, the coordinators of the annual MIPIM Conference in Cannes, France, as well as a unique partnership with HEC for the Global Real Estate Master (GREM) degree program. This innovative program brings together students from HKUST, HEC Paris and INCAE for a semester of intensive real estate training at Wisconsin. The first class will commence in Spring 2011. Visit the GREM program website at bus.wisc.edu/grem.