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on Urban and Real Estate Economics |
| By: | Sophocles N. Brissimis (Bank of Greece and University of Piraeus); Thomas Vlassopoulos (European Central Bank) |
| Abstract: | Although the close empirical relationship between the evolution of mortgage lending and housing prices is well established in the literature, the direction of causation is less clear from a theoretical standpoint. We apply multivariate cointegration techniques in order to address this issue empirically for the Greek economy. Our results, based on a cointegration relationship that we identify as a mortgage loan demand equation, indicate that housing prices do not adjust to disequilibria in the market for housing loans. This suggests that in the long run the causation does not run from mortgage lending to housing prices. In the short run we find evidence of a contemporaneous bi-directional dependence. |
| Keywords: | Housing loans; Housing prices; Multivariate cointegration |
| JEL: | G21 R21 C32 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:58&r=ure |
| By: | Szulkin, Ryszard (Stockholm University Linnaeus Center for Integration Studies - SULCIS); Jonsson, Jan O. (Institutet för Social Forskning (SOFI)) |
| Abstract: | We ask whether ethnic density in Swedish comprehensive schools affect teacher-assigned school grades in ninth grade (age 16). The data, based on two entire cohorts who graduated in 1998 and 1999 (188,000 pupils and 1,043 schools), link school information with Census data on social origin, and enable us to distinguish first- from second generation immigrants. Using multilevel analysis we find the proportion of first, but not the second, generation immigrant pupils in a school to depress grades in general, but particularly for (first generation) immigrant pupils. Passing a threshold of more than 40 percent immigrants reduces grades with around a fifth of a standard deviation, affecting fourteen percent of immigrant children. Our main results are robust to model specifications which address omitted variable bias both at individual- and school-level. One policy implication of our results is that desegregation policies which concentrated on the two per cent most segregated schools would probably improve school results and reduce ethnic inequality. |
| Keywords: | Ethnic inequality; Immigrant schooling; Educational attainment; Contextual effects; Ethnic inequality; Immigrant schooling |
| JEL: | I21 J15 |
| Date: | 2007–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sulcis:2007_002&r=ure |
| By: | David Card; Alexandre Mas; Jesse Rothstein |
| Abstract: | In a classic paper, Schelling (1971) showed that extreme segregation can arise from social interactions in white preferences: once the minority share in a neighborhood exceeds a critical "tipping point," all the whites leave. We use regression discontinuity methods and Census tract data from 1970 through 2000 to test for discontinuities in the dynamics of neighborhood racial composition. White population flows exhibit tipping-like behavior in most cities, with a distribution of tipping points ranging from 5% to 20% minority share. The estimated discontinuities are robust to controls for a wide variety of neighborhood characteristics, and are as strong in the suburbs as in tracts close to high-minority neighborhoods, ruling out the main alternative explanations for apparent tipping behavior. In contrast to white population flows, there is no systematic evidence that rents or housing prices exhibit non-linearities around the tipping point. Finally, we relate the location of the estimated tipping points in different cities to measures of the racial attitudes of whites, and find that cities with more tolerant whites have higher tipping points. |
| JEL: | J15 R21 R31 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13052&r=ure |
| By: | Anna Piil Damm (CAM and Department of Economics, Aarhus School of Business) |
| Abstract: | This study investigates empirically how residence in ethnic enclaves affects labour market outcomes of refugees. Self-selection into ethnic enclaves in terms of unobservable characteristics is taken into account by exploitation of a Danish spatial dispersal policy which randomly disperses new refugees across locations conditional on six individual-specific characteristics. The results show that refugees with unfavourable unobserved characteristics are found to self-select into ethnic enclaves. Furthermore, taking account of negative self-selection, a relative standard deviation increase in ethnic group size on average increases the employment probability of refugees by 4 percentage points and earnings by 21 percent. I argue that in case of heterogenous treatment effects, the estimated effects are local average treatment effects. |
| Keywords: | Migration, |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0607&r=ure |
| By: | Himmler, Oliver; Schwager, Robert |
| Abstract: | A simple model of decentralised graduation standards is presented. It is shown that a school whose students are disadvantaged on the labour market applies less demanding standards because such students have less incentives to graduate. The model's predictions are tested using Dutch school-level data. Since students in the Netherlands have to participate both in a central and in a school specific examination, we can identify the grading policy of individual schools. We find that schools which harbour greater shares of disadvantaged students tend to set lower standards. This effect is largest in the branch of secondary schooling preparing for university. |
| Keywords: | education, grading, social status, schools, Netherlands |
| JEL: | I21 J15 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5504&r=ure |
| By: | Calza, Alessandro; Monacelli, Tommaso; Stracca, Livio |
| Abstract: | We study the role of institutional characteristics of mortgage markets in affecting the strength and timing of the effects of monetary policy shocks on house prices and consumption in a sample of OECD countries. With frictionless credit markets, those characteristics should in principle be immaterial for the transmission of monetary impulses. We document three facts: (1) there is significant divergence in the structure of mortgage markets across the main industrialized countries; (2) at the business cycle frequency, the correlation between consumption and house prices increases with the degree of flexibility/development of mortgage markets; (3) the transmission of monetary policy shocks on consumption and house prices is stronger in countries with more flexible/developed mortgage markets. We then build a two-sector dynamic general equilibrium model with price stickiness and collateral constraints, where the ability of borrowing is endogenously linked to the nominal value of a durable asset (housing). We study how the response of consumption to monetary policy shocks is affected by alternative values of three key institutional parameters: (i) down-payment rate; (ii) mortgage repayment rate; (iii) interest rate mortgage structure (variable vs. fixed interest rate). In line with our empirical evidence, the sensitivity of consumption to monetary policy shocks increases with lower values of (i) and (ii), and is larger under a variable-rate mortgage structure. |
| Keywords: | collateral constraint; house prices; monetary policy; mortgage markets |
| JEL: | E21 E44 E52 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6231&r=ure |
| By: | André MEUNIE (GREThA-GRES); Guillaume POUYANNE (GREThA-GRES) |
| Abstract: | The Environmental Kuznets Curve (EKC) has given rise to a flourishing literature since the beginning of the 90’s. The EKC postulates an inverted U-shaped relationship between income and polluting emissions: there would be a level of wealth beyond which polluting emissions would decrease. Surprisingly, this issue has rarely been applied to the cities. Yet we consider such a question as a pertinent one. This article aims at analyzing the Urban EKC (UEKC) hypothesis. It tests it with a sample of 37 cities in the world. Previous studies on the UEKC hypothesis are very scarce. They are the ground for us, to define a specific methodological posture. First, we use polluting emissions per capita instead of pollutants concentrations: thus we control for the influence of urban size. Second, we only take in account pollutants due to a unique source, which is daily mobility. This makes the explanation of the income-polluting emissions relation easier, as our comments are based on a specific, well constituted literature about factors of daily mobility. We expose the theoretical mechanisms by which the UEKC due to daily mobility could be validated. The impact of income on polluting emissions is threefold : behavioural, with a direct effect and an indirect one ; technical (the environmental efficiency of the vehicles increases) ; political (planning authorities wish to evolve towards a « sustainable mobility »). The empirical part of the paper is a test of the UEKC on a sample of 37 cities in the world. We present three important results. First, the estimation of quadratic regressions gives an inverted U-shaped relationship for most of the pollutants, which doesn’t permit to invalidate the UEKC hypothesis. Second, we show that the explanation of such curves is linked to two sets of factors: individual behaviours (e.g. modal choice) and collective choices (e.g. transit supply). Third, we discuss the validity of the UEKC hypothesis, that is we seek to explain the level of polluting emissions. As many factors are entangled, we use a principal components analysis to show that the influence of income may in fact reflect the influence of both urban form and consumers’ habits on polluting emissions due to daily mobility. |
| Keywords: | Environmental Kuznets Curve, daily mobility, urban, polluting emissions |
| JEL: | Q53 Q56 R12 R14 R41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2007-10&r=ure |
| By: | Titiunik, Rocio; Martinez, Sebastian; Gertler, Paul J.; Galiano, Sebastian; Cattaneo, Matias D. |
| Abstract: | Despite the importance of housing for people ' s well-being, there has been little work done to assess the causal impact of housing and housing improvement programs on health and welfare. In this paper the authors help fill this gap by investigating the impact of a large-scale effort by the Mexican government to replace dirt floors with cement floors on child health and adult happiness. They find that replacing dirt floors with cement floors significantly reduces parasitic infestations in young children, reduces diarrhea, reduces anemia, and improves cognitive development. Finally, they also find that this program leave adults substantially better off, as measured by satisfaction with their housing and quality of life and by their significantly lower rates of depression and perceived stress. |
| Keywords: | Health Monitoring & Evaluation,Disease Control & Prevention,Housing & Human Habitats,Construction Industry,Economic Theory & Research |
| Date: | 2007–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4214&r=ure |
| By: | Christopher C. Klein |
| Abstract: | To gain analytical insight into whether input resources matter in public education, a Becker/Peltzman/Stigler model of the determination of local educational budgets and outputs by political authorities is constructed. The model results are consistent with empirical findings that resources don’t matter, even when all schools are efficient, if errors in measurement and specification occur. When all outputs are not observed, one cannot distinguish an inefficient school district from one that chooses an idiosyncratic output mix. Blind application of efficiency measurement techniques in this context yields perverse or counterintuitive findings. Interpretation of feasible approaches to education production studies are discussed. |
| Keywords: | Education, Efficiency, Productivity. |
| JEL: | I12 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200703&r=ure |
| By: | Carole Carlson; Prabal Chakrabarti |
| Abstract: | Venture capital has been one of the major drivers of the U.S. economy. Using the State of the Inner City Economies database of the Initiative for a Competitive Inner City, we found that secondary cities – which we have defined as cities outside the 40 largest U.S. metro areas – have received far less than their proportionate share of private equity deals and dollars. By failing to attract capital at similar rates to larger cities, secondary cities are missing a major engine of job and wage growth. Notably, however, a number of secondary cities have managed to assemble the right combination of factors to significantly outperform their peers. To understand this better, we interviewed the leaders of 17 venture capital firms (including both national firms and regional firms and firms representing more than one-half of the top 10 investors in secondary markets). We also interviewed and surveyed 53 companies in secondary markets that successfully received venture capital investment funds, as well as industry experts and venture funding facilitators. Based on these interviews and surveys, our research posits six plausible factors that enable successful secondary cities to attract more venture capital than their peers. |
| Keywords: | Venture capital ; Cities and towns |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpc:07-3&r=ure |
| By: | Richard Arnott (Boston College); Elizaveta Shevyakhova |
| Abstract: | Under tenancy rent control, rents are regulated within a tenancy but not between tenancies. This paper investigates the effects of tenancy rent control on housing quality, maintenance, and rehabilitation. Since the discounted revenue received over a fixed-duration tenancy depends only on the starting rent, intuitively the landlord has an incentive to spruce up the unit between tenancies in order to 'show' it well, but little incentive to maintain the unit well during the tenancy. The paper formalizes this intuition, and presents numerical examples illustrating the efficiency loss from this effect. |
| Keywords: | tenancy rent control, rent control, maintenance, housing quality, rehabilitation, credible commitment |
| JEL: | R21 R38 |
| Date: | 2007–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:661&r=ure |
| By: | David Wildasin (Martin School of Public Policy and Administration and Department of Economics, University of Kentucky) |
| Abstract: | This is a time of increased interest in local government finance in Kentucky, as evidenced by the creation of a Task Force on Local Taxation, established by the General Assembly. The final report of the Task Force offers significant recommendations, including an amendment of the state constitution that would provide the General Assembly with the flexibility to institute new instruments of local government finance. The present paper reviews the status of local government finance in Kentucky and discusses some of the key findings and recommendations of the Task Force. As the Task Force report clearly recognizes, informed analysis of local tax policy in Kentucky is hampered by inadequate data on local government finances. This paper identifies some of these deficiencies and a number of important policy issues that require further policy analysis, particularly if the General Assembly entertains significant reforms of local taxation. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ifr:wpaper:2007-02&r=ure |
| By: | Kwangwoo Park; George Pennacchi |
| Abstract: | A model of multimarket spatial competition is developed where small, single-market banks compete with large, multimarket banks (LMBs) for retail loans and deposits. Consistent with empirical evidence, LMBs are assumed to have different operating costs, set retail interest rates that are uniform across markets, and have access to wholesale funding. If LMBs have significant funding advantages that offset any loan operating cost disadvantages, then market-extension mergers by LMBs promote loan competition, especially in concentrated markets. However, such mergers reduce retail deposit competition, especially in less concentrated markets. Prior empirical research and our own analysis of retail deposit rates support the model’s predictions. |
| Keywords: | Bank mergers |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0704&r=ure |
| By: | Yoonsoo Lee |
| Abstract: | This paper summarizes relocation patterns in the U.S. manufacturing industry over the period 1972-1992, using plant- and firm-level data from the U.S. Census of Manufactures. This study contributes to the existing literature on firm dynamics by distinguishing entry due to relocation from entry by new firms, and exit due to relocation from permanent exit. In contrast to previous studies which report that entering plants experience relatively lower productivity, I find that some entering plants—specifically, those that are not new but merely relocated—have higher productivity. I also find a pattern of relocation that suggests that plants tend to be relocated to areas that are becoming new centers for the industry; namely, plants are moved out of areas in which the industry is heavily concentrated to areas where it is not, but these areas also have higher employment growth rates than other areas. |
| Keywords: | Manufacturing industries ; Industrial location |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0624&r=ure |
| By: | John Quiggin (Department of Economics, University of Queensland) |
| Abstract: | Recent developments in the global system of cities present a curious paradox. With the cost of communications declining almost to zero and substantial, though less dramatic reductions in transport costs, there is now little technical requirement for most kinds of production to be undertaken in any particular location, or for elements of production chains to be located close to each other. This fact has had dramatic consequences for the organisation of manufacturing industry. Simple production chains involving the import of raw materials, usually from developing countries, for processing in a specialised centre, have been replaced by far more complex structures. Yet, in important respects, the dominance of a small number of Òglobal citiesÓ has never been greater. In this paper, it is argued that the dominance of global cities reflects a desire for clustering on the part of finance sector professionals and corporate executives. It seems likely that such clustering provides private benefits by enhancing the value of personal contacts, but reduces the efficiency and profitability of the corporate sector. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:pubpol:p06_3&r=ure |
| By: | Gomes, Orlando |
| Abstract: | Recent literature has been able to include into standard optimal growth models some hypotheses that allow for the generation of endogenous long run fluctuations. This paper contributes to this endogenous business cycles literature by considering social interactions. In the proposed model, individuals can choose, under a discrete choice rule, to which social group they prefer to belong to. This selection process is constrained essentially by the dimension of the group, which is the main determinant regarding the utility individuals withdraw from social interaction. The proposed setup implies the presence of cycles and chaotic motion describing the evolution of group dimension over time. Because being member of a group involves costs to households, the inclusion of these costs in a standard Ramsey growth model will imply that endogenous cycles might arise in the time trajectory of the growth rate of output. |
| Keywords: | Social interaction; Business cycles; Growth models; Nonlinear dynamics and Chaos; Discrete choice. |
| JEL: | C61 Z13 E32 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2848&r=ure |
| By: | Claudio A. Piga (Dept of Economics, Loughborough University); Enrico Bachis (Business School, Nottingham University) |
| Abstract: | Using evidence from an original dataset of more than 12 million fares, this study sheds light on two issues relating to the pricing behaviour of the main European airlines: 1) the extent to which an airline’s dominant position at the origin airport, at the route and the city-pair level affects the airlines’ market power; 2) whether fares follow a monotonic time path consistent with the pursuing of an inter-temporal price discrimination strategy. Our estimates reveal that enjoying a dominant position within a route is conducive to higher fares, possibly because of the limited size of many “natural monopoly” routes that facilitate the incumbent’s engagement in a limit pricing strategy. On the contrary, a larger share within a city-pair does not seem to facilitate the exercise of market power, thereby suggesting the existence of a large degree of substitutability between the routes in a city-pair. |
| Keywords: | on-line pricing; price discrimination; dispersion; yield management. |
| JEL: | L11 L13 L93 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_11&r=ure |
| By: | Robert Baade (Department of Economics and Business, Lake Forest College); Victor Matheson (Department of Economics, College of the Holy Cross) |
| Abstract: | Prior to 2005, New Orleans had struggled to retain its NFL franchise. The Saints remained in the city, despite an outdated stadium and small media market, only through generous direct public subsidies to the team. Paradoxically, the devastation wrought by Hurricane Katrina in September 2005 actually improved the short-term viability of the franchise by spurring an outpouring of local support for the team and by making relocation of the Saints politically untenable for the league. The long-term outlook for the team, however, appears grim. Already a small market, New Orleans’ population and business community has declined considerably due to Katrina. The NFL’s G-3 loan program for stadium construction is tapped out. Finally, the financial success of other NFL franchises has both raised the cost of fielding a competitive team and increased the value of the Saints as a target of relocation. |
| Keywords: | sports, NFL Governance, New Orleans, Hurricane Katrina, football |
| JEL: | L83 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0703&r=ure |
| By: | Gugushvili, Alexi |
| Abstract: | This paper examines employment policies in urban areas of developing world. We follow traditional economic analysis and present the urban unemployment problem as an inequality of labour supply and demand on labour markets. The effects of demand-side and supply-side policies on informal urban employment are investigated through econometrical models. One or several variables are employed as crude proxies for every policy option. The dependent variable is informal urban employment as a per cent of total urban employment, with the data on eighteen developing countries from different parts of the world. |
| Keywords: | Developing countries; Urban unemployment; Employment policies |
| JEL: | D72 J38 C20 E24 O57 |
| Date: | 2006–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2862&r=ure |
| By: | Tiago Neves Sequeira (Departamento de Gestão e Economia, Universidade da Beira Interior) |
| Abstract: | Using a panel data approach we investigate whether schooling cause health or health cause schooling. We found evidence that supports the influence of the level of health in increases in education and the influence of education growth in health improvements. Both effects are present in poor countries but not in rich ones. |
| Keywords: | Education, Health |
| JEL: | I00 J24 O15 O50 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:csh:wpecon:e01/2007&r=ure |
| By: | Albrecht Glitz (Centre for Research and Analysis of Migration, Department of Economics, University College London) |
| Abstract: | After the fall of the Berlin Wall, ethnic Germans living in the former Soviet Union and the Warsaw Pact countries had the possibility to migrate to Germany. Within 15 years, 2.8 million individuals moved. Upon arrival these immigrants were exogenously allocated to different regions by the administration in order to ensure an even distribution across the country. Their inflows can therefore be seen as a natural experiment of immigration, avoiding the typical endogeneity problem of immigrant inflows with regard to local labour market conditions. We analyse the effect of these exogenous inflows on relative skill-specific employment and wage rates of the resident population in different geographical areas between 1996 and 2001. The variation we exploit in the empirical estimations arises primarily from differences in the initial skill composition across regions. Skill groups are defined either based on occupations or educational attainment. For both skill definitions, our results indicate a displacement effect of around 4 unemployed resident workers for every 10 immigrants that find a job. We do not find evidence for any detrimental effect on average wages. |
| Keywords: | Immigration, Labour Market Impact, Skill Groups, Germany |
| JEL: | J21 J31 J61 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0612&r=ure |