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Ivan Petkov

We design business and personal web sites including other things.

I am an Assistant Professor of Economics at Northeastern University, Department of Economics

My work focuses on: Local Financial Markets, Banking, Economic Growth, Local Labor Markets, Cultural Economics, Political Economy, Natural Disasters, and Resilience

Current Projects and Working Papers

Abstract: This paper studies how expectations of future flood risk in communities within the U.S. change once they experience a flood. Focusing on small events, I examine if population and housing values change in a way consistent with higher flood risk. To do this, I compile a new measure of insured and uninsured losses for 4,147 locations and identify small flood events at places with different flood history. I show that flood history determines the extent to which events are anticipated and covered by insurance. Only flood surprises cause declines in population. These occur in attractive communities with high pre-flood growth where housing prices do not compensate for higher  risk. Flood surprises in communities where housing prices decrease and compensate for higher risk have stable population.



General Discussion: The results in this paper help us understand how flooding, the most significant source of impact from natural disasters, affects where people live and how its risk is reflected in house values. They allow us to interpret the effect of possible climate change across the country and how many people will remain in relatively risky locations over time. Expectations about flood risk are critical and more important than overall level of damage. As a result population and real estate effects only emerge after flood surprises -- in the rest of the cases flood events appear to already be incorporated in these variables and only generate insurance payouts. This is an interesting result given the wide availability of flood insurance which can minimize the upward revision of risk after flood surprises. It further implies that natural disasters are not necessarily exogenous events in all locations, only the actual timing is.

Weather Shocks, Housing Prices and Population: the Role of Expectation Revisions

Working Paper

This picture shows how different the population impact of Hurricane Irene and Sandy was at communities that have had history of flooding (where the flood is not a surprise) and communities where the flood was a surprise (very low historical flooding). Milfrod CT experienced a flood in line with expectations and was not impacted at all while New Haven and Bridgeport experience flood surprises and saw declines in population.

The pictures above are from the paper. It shows that when zip codes were served by banks that experienced higher deposits from fracking they saw an increase in economic activity measured by establishment growth. This effect holds for locations at varying distance suggesting that geographical spillovers are not at play.


Small Business Lending and the Bank-Branch Network

Working Paper (under review)

Abstract: I tests whether the market for small business lending is integrated by examining the exposure of different credit markets to localized economic shocks when they host the same bank network. In a unified approach I quantify the effect of a positive and a negative credit-supply on local activity. I show that the market for business loans provided by smaller banks is locally segmented. Businesses in areas with increased credit were not able to expand earlier with funds from other banks and were forced to wait for funding from their local banker. Businesses in areas with reduced credit were forced to lower their activity unable to substitute funding lost to more profitable projects elsewhere.


General Discussion: The paper emphasizes the importance of smaller banks, defined as having less than 30 branches, in the deviation from efficient credit markets theory. Not surprisingly, smaller banks tend to be more funding-constrained and therefore change the amount of credit supplied to small businesses when exposed to each shock. Importantly, the evidence suggests that when the amount of credit supplied changes real activity is also affected. The two shocks provide evidence that credit supply can reduce as well as increase real activity. This shows that businesses in areas with increased credit were not able to expand earlier using funds from other banks and were forced to wait for funding opportunities from their local banker. Similarly, in areas with reduced credit businesses were forced to lower their activity as they lost funding because they were not as profitable to lend to as construction projects elsewhere. While this is optimal from the bank's perspective it is not obvious whether other distant banks may not find it optimal to lend to these businesses. Since credit and activity fall the evidence suggests that businesses are not able to access other sources of credit.

The picture shows the aggregate ancestry shares in the U.S. over time. Ancestry shares are created by summing the share in each county weighted by county population

Does it matter where you came from? Ancestry composition and economic

performance of U.S. counties, 1850 - 2010

with Fabio Schiantarelli and Scott Fulford

Abstract: What impact will immigrants and their descendants have in their new homes in the short and long term? We develop the first measures of the country-of-ancestry composition and GDP per worker of each US county from 1850 to 2010. We show that ancestry groups have different impacts on county productivity. Groups from countries with higher economic development, with cultural traits that favor cooperation, and with a long history of a centralized state have a greater positive impact on county GDP. Origin diversity is positively related to county GDP, while diversity in origin culture or economic development is negatively related.


General Discussion: Our work shows unequivocally that groups have different economic impacts and these impacts are closely related to characteristics in the origin country. We show that ancestry groups have different effects on county GDP per worker, even after after we control for county-specific fixed effects, race, and other observables. The effects of different groups are correlated with characteristics of the country of origin. The relationship between origin GDP and county GDP shows that there must be be something important for economic development that is transportable and in- heritable. We examine possible origin characteristics that might explain the relationship. What appears to matter most for local economic development are cultural characteristics that capture the ability of people to productively interact with others.

This picture is form the paper. We compute convergence for each of the attitudes in our sample by comparing the ratio of the deviation from the norm in the first generation immigrant from a particular country to the deviation from the norm in the forth generation of an immigrant from the same country. Here we plot on the x-axis the deviation in the first generation and on the y-axis the deviation in the forth generation.

Culture: Persistence and Evolution

with Francesco Giavazzi and Fabio Schiantarelli

Abstract: This paper documents the speed of evolution (or lack thereof) of a range of values and beliefs of different generations of US immigrants, and interprets the evidence in the light of a model of socialization and identity choice. Convergence to the norm differs greatly across cultural attitudes. Moreover, results obtained studying higher generation immigrants differ from those found when the analysis is limited to the second generation and imply a lesser degree of persistence than previously thought. Persistence is also country specific, in the sense that the country of origin of one’s ancestors matters for the pattern of generational convergence.


General Discussion: We find that the beliefs that shape trust of second generation immigrants towards other members of society remain different from the prevailing US norm and still bear strongly the mark of the country of origin. However, such differences become smaller when one considers fourth or higher-generation immigrants. We find, for instance, that attitudes towards cooperation (the trustworthiness, helpfulness and fairness of others) display the highest degree of convergence by the fourth generation, as successive generations adapt to the norms of the new society in which they live. Attitudes towards politics and the role of government, sexual morality and abortion exhibit the lowest degree of convergence, followed by religious attitudes. Attitudes towards gender roles occupy an intermediate position, with attitudes towards the role of women in the labor market converging faster than those related to the role of women in politics. Family attitudes also display on average an intermediate level of convergence, but there is substantial heterogeneity among them.









Ivan Petkov


Northeastern University

Department of Economics

316 Lake Hall

Boston, MA 02115


Telephone: +1 (857) 869 5353

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