Obituaries

Karl Case, 69; helped develop an invaluable house price index

Dr. Case and his wife hosted dozens of international students at Wellesley College, where he taught economics for 34 years.

David L. Ryan/Globe Staff/file 2009

Dr. Case and his wife hosted dozens of international students at Wellesley College, where he taught economics for 34 years.

Karl “Chip” Case, a former Wellesley College economics professor who helped create the Case-Shiller Index, a widely used measure of housing market trends, died Friday in hospice care.

Dr. Case, who was 69 and lived in Wellesley, had been diagnosed with Parkinson’s disease and multiple myeloma, which in recent years limited his activities and economics work, said his wife, Susan.

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In the mid-1980s, Dr. Case developed the index with Robert Shiller, a Yale University economist. Over the decades the index has been used by Wall Street investors, realtors, and researchers to gauge the health of the nation’s housing market, anticipate bubbles, and evaluate prices in different regions of the country.

“It would be hard to imagine the world without those indices,” said Lawrence Summers, a former Harvard University president who served as US Treasury secretary during the Clinton administration. “In all of economics, I can’t think of five data construction efforts in the last quarter-century that were larger contributions than the Case-Shiller index.”

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Dr. Case could wax as fluently about his Wellesley students as he could about adjustable rate mortgages and Federal Reserve policy. A constant presence at Wellesley College sports events, he was known as “Mr. Wellesley,” his wife recalled, and colleagues and students always knew he was in the office if they heard the crooning of country music inside.

He went to dinner with his students’ parents when they visited the college and later attended the weddings of some former students, presenting them with limericks he wrote for each occasion, said Kristin Butcher, who chairs Wellesley’s economics department and is a former student of Dr. Case.

“He wasn’t worried about doing too much or being too involved,” Butcher said. “He published in the best journals and he taught his heart out.”

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Dr. Case became interested in housing prices in 1985, when real-estate values in Massachusetts — fueled by a high-tech boom — skyrocketed and climbed as much as 40 percent in the span of a year.

David L. Ryan/Globe Staff/File 2009

Dr. Case helped create what’s now called the S&P/Case-Shiller Home Price Indices.

“It was the topic of conversation at every cocktail party,” he told the Globe in 2000.

Dr. Case, who also was a visiting scholar at the Federal Reserve Bank of Boston, set out to explain the phenomenon. He developed a method of comparing repeat sales of the same home, which continues to serve as the underpinning of the Case-Shiller Index.

“I created a good [economic] model, but it broke down when it came to the Boston area, where people, I discovered, were adding their expectations of capital gains to the selling prices of their homes,” he said in the Globe interview. “In short, expectations were fulfilled by forming them.”

At the suggestion of another economist, he began working with Shiller, who was doing research on the behavioral aspects of economic bubbles, to fine-tune the model. Their collaboration led to the Case-Shiller index in 1987.

“We sat down at my dining room table and he figured out how to do a repeat-sales index,” Dr. Case told Fortune magazine in 2009. “I’d done a crude version. But he added weighting and other things that made it much better.”

The index tracks repeat sales for the majority of the housing stock in the country and is now called the S&P/Case-Shiller Home Price Indices.

‘He was grounded in reality and concerned that markets work the way they were supposed to work. . . . He focused on how to help people.’

Robert Shiller on Dr. Karl Case, with whom he created the Case-Shiller Index 
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In 2000, Dr. Case worried about the increase in sub-prime lending, which within eight years would contribute to the collapse of the housing market and a financial crisis. He was always concerned about how economics touched the lives of ordinary people, Shiller said.

Dr. Case was driven to study housing prices in part by his concern about how the run-up in values could widen income inequality, when certain communities benefited as their initial investment in their home grew, Shiller said.

“He was grounded in reality and concerned that markets work the way they were supposed to work,” he said. “He was more sensitive to people. He focused on how to help people.”

Shiller, who coauthored about a dozen papers with Dr. Case, mostly about housing, said he “was like a brother.”

At a 2014 conference honoring Shiller, who had been awarded the Nobel Prize in economics, Dr. Case presented a poem he had written that described the impact on the housing crash of easy lending and low interest rates.

That free markets work to provide what we want

Is a notion that’s not in dispute

The problem is that once in a while

Markets overshoot

And when they do in a market so large

A lot of people feel pain

In the blink of an eye many gave back

What it took 10 years to gain

Dr. Case graduated from Miami University in Ohio with a bachelor’s degree in 1968 and served in the Army for three years, including a tour of duty in Vietnam. In 1969, he married Susan Galbraith.

He received a doctorate in economics from Harvard University in 1976 and joined the faculty of Wellesley College, where he taught for 34 years.

Dr. Case stood out at Harvard, having just served in Vietnam, said Edward Lazear, a Stanford University professor and former chairman of the Council of Economic Advisers under President George W. Bush. “He wasn’t a sherry-sipping Harvard professor type,” said Lazear, a longtime friend who added that Dr. Case was gregarious and included everybody in events and dinners.

“This is a guy in graduate school who always thought of himself as the dumbest guy in the class, which wasn’t true,” Lazear said. “He wasn’t interested in being rich or famous. He became famous, quite successful, and a leading thinker. . . . I wish had an index named after me.”

A service will be announced for Dr. Case, who in addition to his wife, Susan, leaves their daughter, Kristen, an assistant professor of English at the University of Maine in Farmington; his half-brother, George Calnan of Petaluma, Calif.; and two grandchildren.

Even after retiring in 2010 from Wellesley, where he held the Katharine Coman and A. Barton Hepburn chair in economics, Dr. Case continued to invite friends and colleagues to his home for dinners and conversations, Susan said. The couple hosted 37 international students during his time at Wellesley, offering them a home-away-from-home while they attended the college.

“Every morning,” Susan recalled, “he would ask, ‘Who’s coming to dinner tonight?’ He was a total social being.”

Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.

Correction: Because of incomplete information provided to the Globe, an earlier version of this obituary left out one survivor. Karl Case also leaves his half-brother, George Calnan of Petaluma, Calif.

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