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Solved by verified expert:it should include the following parts: A summary of the paper, which discusses the main research question(s), the methodology used by the authors, and the conclusions and contributions of the paper.A discussion of whether the question or questions asked are important (or not) and whether you find the paper convincing or not (and why?) A discussion of the concerns you have with the paper. These concerns could be related to the data being used, the empirical methods, sample selection issues (do the data seem to be a representative sample?), possible alternative explanations for the results that the authors do not consider (or do not consider sufficiently), and any other weaknesses of the paper.Finally, a referee report is meant to be constructive criticism, so, whenever possible, provide possible suggestions for improvement.


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Economics 111B
Referee Report Assignment
(Due Tuesday, June 4 at the beginning of class)
Department of Economics
UC Davis
Professor Siegler
Spring 2019
The purpose of this assignment is to introduce you to published research in economic
history. While a textbook summarizes the main results of thousands of published
articles and books, it is important to see how economic history research is actually done.
The referee report assignment is due in paper form at the beginning of class on
Tuesday, June 4. It is worth 75 points (15 percent of your course grade). If you miss the
deadline at the beginning of class, but provide a hard copy of the report to me later in
the period or via e‐mail as a PDF file (e‐mailed to at any time on
June 4, then there will be an automatic 15‐point deduction (60 possible points). The
deduction will increase to 30 points on June 5, 45 points on June 6, 60 points on June 7,
and reports will not be accepted after June 7 (the day of the final exam). Details on the
composition and length of the report are described below.
What is a Referee Report?
A referee report is a critical part of the peer‐review process in academic research. When
an article is submitted to an academic journal for possible publication, the editor of the
journal sends out the paper to several experts who are familiar with the topic and who
can evaluate the contributions and limitations of the submitted article. Each referee
writes a report, which is the basis for a recommendation to the editor on whether to
accept the paper for publication, to suggest that the authors revise and later resubmit
the paper for publication, or to reject the paper for publication.
Since each paper below has already been published, you do not need to provide this
summary recommendation, but your report should consist of all of other aspects of a
referee report. Your report is intended for the authors of the paper. It should be
approximately three double‐spaced pages in length, and it should include the following

A summary of the paper, which discusses the main research question(s), the
methodology used by the authors, and the conclusions and contributions of the
A discussion of whether the question or questions asked are important (or not)
and whether you find the paper convincing or not (and why?)
A discussion of the concerns you have with the paper. These concerns could be
related to the data being used, the empirical methods, sample selection issues (do
the data seem to be a representative sample?), possible alternative explanations
for the results that the authors do not consider (or do not consider sufficiently),
and any other weaknesses of the paper.
Finally, a referee report is meant to be constructive criticism, so, whenever
possible, provide possible suggestions for improvement.
For more detailed guidelines on writing a referee report, see:

Berk, Jonathan B., Campbell R. Harvey, and David Hirshleifer, 2015, “Preparing
a Referee Report: Guidelines and Perspectives,” available at SSRN: or
Possible Articles to Review
As is discussed in the Preface of the textbook, the course is organized around four main
themes: economic growth, distributional issues, economic fluctuations, and the
relationship between markets and government. The articles listed below have been
recently published in either Explorations in Economic History or The Journal of Economic
History, which are the two leading journals in the discipline, and each article (or articles)
fits into one of these main themes. All of the articles below can be found in Canvas by
the author’s or authors’ last name(s). Please select one of the following four themes for
your referee report:
Theme 1: Economic Growth
There has been substantial debate and concern about the future of economic growth.
The two papers below are written by two experts: Robert J. Gordon and Joel Mokyr:

Gordon, Robert J., 2018, “Declining American Growth despite Ongoing
Innovation, Explorations in Economic History 69, 1‐12.
Mokyr, Joel, 2018, “The Past and the Future of Innovation: Some Lessons from
Economic History,” Explorations in Economic History 69, 13‐26.
In this case, your report on this this theme will cover both papers in a “compare‐and‐
contrast” manner, but it must still include your reasoned judgements described in the
bullet points on the top of page 2.
Theme 2: Distributional Issues
The paper below is international and comparative in scope, and it examines the causes
of long‐run economic inequality in the United States and other economies:

Bengtsson, Erik, and Daniel Waldenstrom, 2018, “Capital Shares and Income
Inequality: Evidence from the Long Run,” Journal of Economic History 78(3), 712‐
Theme 3: Economic Fluctuations
While much has been written about the “Quantitative Easing” conducted by the Federal
Reserve after the Great Recession, which began in December 2007, there was another
period of Quantitative Easing during the Great Depression of the 1930s as described in
the following paper:

Jaremski, Matthew, and Gabriel Mathy, 2018, “How was the Quantitative Easing
Program of the 1930s Unwound?,” Explorations in Economic History 69, 27‐49.
Theme 4: The Relationship between Markets and Governments
After the 1906 earthquake devastated San Francisco, city planners were largely able to
“start from scratch” in terms of city planning. This paper provided an example of a
“natural experiment”:

Siodla, James, 2017, “Clean slate: Land‐use Changes in San Francisco after the
1906 Disaster,” Explorations in Economic History 68, 1‐16.
Explorations in Economic History 65 (2017) 1–16
Contents lists available at ScienceDirect
Explorations in Economic History
journal homepage:
Clean slate: Land-use changes in San Francisco after the 1906
James Siodla
Department of Economics, Colby College, 5245 Mayflower Hill, Waterville, ME 04901, United States
JEL classification:
The 1906 San Francisco fire, which destroyed thousands of buildings, provided a blank canvas
upon which to reshape the city. After reconstruction, and at a time of immense growth in the city,
developers shifted land out of residential uses and into nonresidential uses in burned areas
relative to unburned areas. They facilitated this transition by rebuilding far fewer single-family
dwellings compared to other types of housing, which suggests that houses inhibited the
conversion of land to nonresidential uses before the fire. Aside from these broad effects, the
fire also released new economic potential in areas that had shown little indication of shifting into
nonresidential land uses before 1906, thereby creating new clusters of business activity. These
impacts of the fire are still evident today—in roughly the same magnitudes and places—which
suggests that the economic benefits realized upon reconstruction continue to drive the city’s
land-use patterns.
Land use
Natural experiment
San Francisco
1. Introduction
In any city, the past can constrain the present. Old buildings, for instance, reflect decisions made in a bygone era and act as
anchors to the moving vessel of change. While these buildings reflect the economic conditions of their day and developers’
expectations for the future, they nonetheless could miss the mark. But a catastrophic event can provide an opportunity to revisit
these past decisions and make changes more in line with contemporary needs. One of the largest catastrophes in U.S. history
occurred in San Francisco in 1906 when an earthquake jolted the city and ignited a massive fire. The fire itself razed thousands of
buildings, thereby creating an enormous amount of vacant land at a crucial time in the city’s history. With this clean slate, developers
could more easily adjust land use as they rebuilt from the devastation. The impact of the fire thus provides insight into how large
shocks can reshape urban settings and the degree to which old buildings stand in the way of change.
Cities often burned in the nineteenth and early twentieth centuries. While destructive, urban fires also provided new
opportunities in rebuilding. In San Francisco, residential density increased significantly in burned areas relative to unburned areas
after the fire in 1906 (Siodla, 2015). Anecdotal evidence suggests that the spatial patterns of businesses and residents changed after
major fires in Chicago, Boston, and Baltimore (Rosen, 1986). After Boston’s fire in 1872, land values rose significantly, reflecting the
value of vacant urban land and the positive spillovers generated by newer and better buildings (Hornbeck and Keniston, 2016). In
Chicago, industrial and commercial interests established a foothold in prime areas after the 1871 fire (Fales and Moses, 1972).1
Large fires often resulted in significantly altered urban environments.
Big shocks can also impact city systems, if only temporarily. World War II bombing in Japanese cities impacted population
growth and industrial employment in the short-term (Davis and Weinstein, 2002, 2008), and the same holds for city populations in
E-mail addresses:
Fales and Moses (1972) do not consider pre-fire land-use patterns, and thus there is no relative comparison to a period before the fire.
Received 26 February 2016; Received in revised form 20 January 2017; Accepted 3 April 2017
Available online 12 April 2017
0014-4983/ © 2017 Elsevier Inc. All rights reserved.
Explorations in Economic History 65 (2017) 1–16
J. Siodla
West Germany after the war (Brakman et al., 2004). In Vietnam, U.S. bombing did not permanently impact urban poverty levels or
population densities (Miguel and Roland, 2011). These results suggest that urban growth patterns are often determined by locational
fundamentals, or geography.
But self-reinforcing agglomeration economies, or increasing returns, can also play a role in determining urban outcomes (Bosker
et al., 2007, 2008; Redding et al., 2011; Ahlfeldt et al., 2015; Imaizumi et al., 2016). Cities still exist in areas where the initial driver
of settlement no longer matters, such as along old portage sites in the U.S. (Bleakley and Lin, 2012), and near historical railroad
investments in Africa (Jedwab and Moradi, 2016; Jedwab et al., 2017) and Sweden (Berger and Enflo, 2017). Path dependence is
also seen within cities. For example, areas near defunct streetcar stops are still very densely built in Los Angeles (Brooks and Lutz,
2014), and the housing density gap that emerged in San Francisco after the 1906 fire still largely exists (Siodla, 2015). The age of the
housing stock can also influence neighborhood development cycles and thus contribute to the long-lasting location patterns of the
urban rich and poor (Rosenthal, 2008; Brueckner and Rosenthal, 2009). All this suggests that history matters in the study of cities.
This paper adds to the literature on shocks, persistence, and urban settings by estimating the 1906 fire’s short- and long-run
impacts on land use in San Francisco. Using burned and unburned city blocks at the boundary of the fire—which were otherwise
similar except for the fire’s impact—the study employs a border-discontinuity approach and differences-in-differences (DID)
methodology to estimate changes in land use over the years 1900, 1905, 1914, 1931, and 2011. Overall, relative to unburned blocks,
residential land shares on burned blocks fell while nonresidential land shares rose by 1931. The study also provides insight into what
held the city back from making these changes before 1906: the presence of old residential buildings. In reconstruction, developers
built relatively fewer of these buildings, and the majority of the reduction came through single-family houses. Also, aside from
merely expanding nonresidential uses in many neighborhoods, the fire created economic opportunities in new areas, resulting in
clusters of business activity that emerged only in the wake of the disaster. These effects of the fire still remain today, and thus large
shocks can be sufficient catalysts for permanently reshaping urban settings.
2. Historical background
2.1. Land use in San Francisco before 1906
Migrants stormed San Francisco in the nineteenth century in search of economic opportunity (Stewart, 2012; Walker, 2000).
With this foundation, the city flourished. San Francisco’s population grew 15 percent between 1890 and 1900, making it the eighthlargest city in the U.S. as the twentieth century began (Issel and Cherny, 1986, pp. 23–24, Table 1). This growth in residents was
matched by an expansion of the workforce, which rose by 11 percent in that decade (Issel and Cherny, 1986, p. 54, Table 3).2
Manufacturing, in particular, was strong between 1899 and 1904, a time in which the number of factories increased nearly 30
percent (Douty, 1977, p. 366, Table 29). As a consequence of all this growth, assessed real estate values—a barometer of a city’s
economic activity—rose steadily between 1900 and 1906 (SFMR (1904–1916)).3
Leading up to the fire, the real estate market was experiencing historically high prices and unprecedented transaction volumes
(San Francisco Real Estate Circular, December 1906, p. 4). The rise in real estate values was greatest for properties useful for retail
and wholesale business in 1903 (San Francisco Real Estate Circular, November 1903, p. 3).4 And by 1905, while in high demand,
these properties were scarcely for sale in desirable areas (San Francisco Real Estate Circular, February 1905, p. 1). Buyers in these
markets were prevalent while sellers were not, thus indicating a need to allocate more land to uses other than housing. This need was
so great that investors in business property began going to parts of the city outside the central core at this time (San Francisco Real
Estate Circular, December 1903, p. 2).
As in many old cities, firms and industries in San Francisco preferred central locations for the benefits of agglomeration and
access to transport terminals to save on the cost of shipping and moving goods. But consumers also demanded locations near the
center of the city to save on commuting costs. Thus, for firms and residents, land rent—or willingness to pay—falls with distance to
the city’s center. Since it is relatively more expensive to move goods than move people, land rent for firms falls faster with distance to
the center than it does for consumers, a feature that helps explain central area business clustering and distant housing in old cities
(Moses and Williamson, 1967).5 In San Francisco, heavy investment in electric streetcar lines began changing the landscape before
1906, connecting outlying residential neighborhoods with the center of the city (Issel and Cherny, 1986, p. 30). Along with old cable
cars, streetcars lowered the cost of commuting, allowing residents to live farther from downtown and thus encouraging steady
suburban growth in the early 1900s. Consequently, outlying areas experienced heightened real estate activity just before the fire (San
Francisco Real Estate Circular, April 1905, p. 1). Meanwhile, land nearer the city center was still highly developed with buildings and
uses that might otherwise serve a better purpose.
Talk of better purposes for land was prevalent in San Francisco before 1906. An illustrative example concerns the changes
proposed by Daniel Burnham, an architect and urban planner, in an ambitious plan presented to the city just days before the fire.
The workforce consists of those employed in professional services, domestic and personal services, trade and transportation, and manufacturing and mechanical
As Siodla (2015) shows, higher land values encouraged housing developers to begin building denser forms of housing (i.e., apartment buildings) in these years.
This move toward density in housing was a national trend in the early twentieth century (Barrows, 1983).
While it is not clear whether the price appreciation of retail and wholesale properties was for plots with buildings used for these purposes, or for properties located
in areas advantageous for these types of businesses, it nonetheless suggests a strong overall demand for more nonresidential space in the city.
See Chapter 5 in DiPasquale and Wheaton (1996) for a detailed discussion of the model described here in the context of old cities.
Explorations in Economic History 65 (2017) 1–16
J. Siodla
The plan was inspired by the progressive City Beautiful movement that was sweeping the nation, which held the belief that proper
planning and urban aesthetics can enhance residents’ quality of life and promote a virtuous living environment. The plan called for a
significant rejiggering of San Francisco’s land use, including widening and creating new streets, which would mean the loss of land
for many property owners (Fradkin, 2005, p. 227). Recognizing the immense costs of such an endeavor, Burnham himself said, “It
will take more years than we will live; it will take more millions than we can guess!” (Sunset Magazine, 1905, p. 120). The plan was
never implemented, even with the well-timed opportunity the fire provided. Another prominent case concerns Baker Street. In 1900,
the mayor of the city, backed by the majority of voters, tried to issue bonds to purchase a mile of residential blocks along Baker in
order to create a pleasant thoroughfare befitting its popular use as a gateway into the Presidio public park. However, the courts ruled
that it was an illegal use of authority and nullified the attempt (Sunset Magazine, 1905). While these examples concern the use of
public authority, land use was also inhibited for private developers.
In order to convert a residential lot into nonresidential use, a developer must alter an existing structure to fit business needs or
tear it down and build a suitable building. Many different factors could have inhibited this change in San Francisco. Renovation and
redevelopment costs may have been very high. An observer wrote of Market Street, “The shanties rent without difficulty on that
street, and a lower rent pays the landlord as well as a much higher one plus the added cost of a modern brick building” (San
Francisco Real Estate Circular, February 1898, p. 2). Property owners in an area could have held out in a land assembly case (Brooks
and Lutz, 2016), although there is no anecdotal evidence to suggest that this was a significant problem in San Francisco at the time.
Nonresidential property developers may have been reluctant to erect business buildings in predominantly residential neighborhoods. However, even largely residential neighborhoods in the city were introducing more nonresidential uses before 1906.6 But
another friction suggested by contemporaries in San Francisco was the presence of old housing that owners simply had no desire to
improve. In 1899, one journalist presciently wrote about downtown areas, “Tumble down shanties, decay and rottenness more
completely characterize the buildings there now than they did in ’49 and ’50. A sweeping fire would be of great benefit to that
portion of the city [emphasis added]. Owners seem determined not to improve” (San Francisco Real Estate Circular, March 1899, p.
2). Owners and residents of these properties may have derived significant utility from the structures themselves, the neighborhoods
in which they were located, or even from the spatial concentration of people similar to them, thereby prohibiting changes in land use
by maintaining the status quo (Rosen, 1986). Repurposing old residential properties woul …
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