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on Urban and Real Estate Economics |
| By: | Chisato Asahi (Faculty of Urban Liberal Arts, Tokyo Metropolitan University); Satoshi Hikino (Faculty of Economics, University of Tokyo); Yoshitsugu Kanemoto (Faculty of Economics, University of Tokyo) |
| Abstract: | We estimate the consumption values of urban agglomeration economies and social overhead capital for Japanese metropolitan areas. Following the pioneering work of Tabuchi and Yoshida (2000), our approach exploits the fact that consumers tolerate higher living costs if they benefit from urban agglomeration economies and/or better social overhead capital. This living cost approach requires an appropriate measure of the representative living cost in a metropolitan area; however, it is not easy to estimate because housing prices vary widely within a metropolitan area. Tabuchi and Yoshida (2000) choose the average land price for commercial use as a measure of housing costs in a metropolitan area. Because the prices of residential land are typically much lower than those of commercial land, this might have resulted in biased estimates. We estimate bid rent functions for suburban municipalities within metropolitan areas to cope with the aggregation problem. According to our estimation results, the elasticity of the real wage with respect to city size is about -9.3% if we use the land price as the housing price variable and about -7.9% if we use housing rent data. These numbers are comparable to those obtained by Tabuchi and Yoshida (between -7% and -12% depending on the specification). Another finding is that social overhead capital in a municipality has much larger and more significant effects than city size: the elasticity of the real wage with respect to social overhead capital is about -24.4% in the housing rent estimation and about -45.7% in the land price estimation. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2008cf561&r=ure |
| By: | Wouter Vermeulen (CPB Netherlands Bureau for Economic Policy Analysis, The Hague); Jan Rouwendal (VU University Amsterdam) |
| Abstract: | How should urban containment and the diversion of households to nearby residential areas be evaluated from a welfare economic perspective? Assuming the existence of a negative externality of city size, we develop a concise general equilibrium model for a mother city and a satellite. This satellite should be founded if the gain in surplus exceeds the fixed costs of intercity infrastructure provision, and a Pigouvian tax on the conversion of land to urban use in both cities would then attain the first-best allocation. Rising incomes and falling transport costs enhance the surplus gain from ‘clustered deconcentration’, or the accommodation of growth in planned satellites, relative to expansion of the mother city. Nevertheless, plans by the Dutch government to uphold strict growth controls around Amsterdam, while fostering large-scale residential construction projects in the nearby satellite of Almere, are difficult to reconcile with the optimal policy in a calibrated version of our model. |
| Keywords: | land use regulation; growth controls; systems of cities; housing markets; applied general equilibrium |
| JEL: | R52 R13 R14 |
| Date: | 2008–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080043&r=ure |
| By: | Overman, Henry G.; Rice, Patricia; Venables, Anthony J. |
| Abstract: | We develop a diagrammatic framework that can be used to study the economic linkages between regions or cities. Hitherto, such linkages have not been the primary focus of either the theoretical or empirical literatures. We use the framework to analyse the impact of shocks that occur in one region (eg productivity improvements or increases in housing supply) on other regions, highlighting the key adjustment mechanisms and their long run implications for incomes, the cost of living, and the spatial distribution of population. Our general approach provides a framework encompassing both the New Economic Geography and Urban Systems literatures. We link our approach to these literatures and review empirical studies that quantify the key mechanisms that we have identified. |
| Keywords: | New Economic Geography; Spatial linkages; Urban and regional policy; Urban systems |
| JEL: | R00 R58 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6786&r=ure |
| By: | Jan Kregel |
| Abstract: | This paper traces the evolution of housing finance in the United States from the deregulation of the financial system in the 1970s to the breakdown of the savings and loan industry and the development of GSE (government-sponsored enterprise) securitization and the private financial system. The paper provides a background to the forces that have produced the present system of residential housing finance, the reasons for the current crisis in mortgage financing, and the impact of the crisis on the overall financial system. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_530&r=ure |
| By: | Cuberes, David |
| Abstract: | There is strong evidence showing that in most countries cities develop sequentially, with the initially largest cities being the first to grow. This paper presents a growth model of optimal city size that rationalizes this growth pattern. Increasing returns to scale is the force that favors agglomeration of resources in a city, and convex costs associated with the stock of installed capital represent the congestion force that limits city size. The key to generate sequential growth is the assumption of irreversible investment in physical capital. The presence of a positive external effect of aggregate city capital on individual firms makes the competitive equilibrium inefficient. |
| Keywords: | City Growth; Increasing Returns; Congestion Costs |
| JEL: | N90 O57 R12 |
| Date: | 2008–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8431&r=ure |
| By: | Berliant, Marcus; Kung, Fan-chin |
| Abstract: | The modern literature on city formation and development, for example the New Economic Geography literature, has studied the agglomeration of agents in size or mass. We investigate agglomeration in sorting or by type of worker, that implies agglomeration in size when worker populations differ by type. This kind of agglomeration can be driven by asymmetric information in the labor market, specifically when firms do not know if a particular worker is of high or low skill. In a model with two types and two regions, workers of different skill levels are offered separating contracts in equilibrium. When mobile low skill worker population rises or there is technological change that favors high skilled workers, integration of both types of workers in the same region at equilibrium becomes unstable, whereas sorting of worker types into different regions in equilibrium remains stable. The instability of integrated equilibria results from firms, in the region to which workers are perturbed, offering attractive contracts to low skill workers when there is a mixture of workers in the region of origin. |
| Keywords: | Adverse Selection; Agglomeration |
| JEL: | R13 R12 D82 |
| Date: | 2008–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8388&r=ure |
| By: | HUD - PD&R |
| Abstract: | This report is intended as a supplement to the Affordable Housing Needs 2005 report, which presented findings on worst case needs for affordable housing. It provides additional analysis and findings about such needs among households with disabilities. The new findings in this supplement indicate that a higher proportion of the 5.99 million households with worst case needs in 2005 included persons with disabilities than previously estimated. |
| JEL: | O22 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39156&r=ure |
| By: | American Planning Association |
| Abstract: | This study furthers the efforts of the U.S. Department of Housing and Urban Development's Regulatory Barriers to Affordable Housing study series, which started with the 1991 report of the President's Commission on Regulatory Barriers to Affordable Housing (also known as the Kemp Commission), "Not in my Backyard: Removing Barriers to Affordable Housing," and the 2005 update "Why Not in Our Community: Removing Barriers to Affordable Housing." As part of the Department's effort to document these regulatory barriers and identify effective approaches to overcoming them, it commissioned this Planning Advisory Service Report from the American Planning Association's Research Department, by Professor Gerrit Knaap of the University of Maryland. |
| JEL: | O20 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39158&r=ure |
| By: | Nobuo Kobayashi (School of Economics, Kwansei Gakuin University) |
| Abstract: | This study mainly investigated two issues: firstly, the existence of a positive relationship between the accumulation of knowledge stocks in regional industries and their value addition, and secondly, the spillover effects of knowledge stocks from the central cities to the surrounding regions, by using patent data as knowledge stock indicators. The empirical result suggests that there are positive impacts of knowledge accumulation to value addition, and there are positive spillover effects to the surrounding regions. The spillover effects are especially clearer when the creators of knowledge stocks are diversified in central cities, and when the industrial structure of surrounding regions is similar to the central cities. |
| Keywords: | knowledge accumulation, patent, spillover effect, regional industry |
| JEL: | O18 O34 R11 R15 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:39&r=ure |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move, generating a Fréchet distribution of city sizes that is empirically competitive with other models. |
| Keywords: | Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory |
| JEL: | R12 |
| Date: | 2008–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8410&r=ure |
| By: | Muellbauer, John |
| Abstract: | Many factors have contributed to the development of credit markets, easing access of households to credit. This paper considers the implications of easier credit for the influence of higher house prices on consumer expenditure. It argues that with poorly developed credit markets, the effect is likely to be negative, but becomes positive as access to housing collateral increases and down-payments for first time home buyers fall in relation to values. The implications for differences between countries and changes in consumer behaviour over time are explored. Previous studies are reviewed: the omission of credit liberalization and other controls has often biased estimates of housing ‘wealth’ effects on consumption. New empirical estimates for the UK and US suggest that there was no housing ‘wealth effect’ before credit market liberalization, but that the housing collateral effect is now significant, larger than the stock market wealth effect, and about twice as large in the US as the UK. |
| Keywords: | consumer expenditure; credit channel; housing wealth |
| JEL: | E21 E51 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6782&r=ure |
| By: | Frankel, David M.; Volij, Oscar |
| Abstract: | This paper gives an axiomatic characterization of the multigroup Atkinson indices of segregation relying entirely on ordinal axioms. We show that the Symmetric Atkinson index represents the unique ordering that treats ethnic groups symmetrically, that is invariant to population growth rates that differ among ethnic groups, that regards school districts as more segregated when schools in them are subdivided (unless the new schools have the exact same ethnic distribution), and that satisfy an independence property. If symmetry among ethnic groups is dropped, one obtains the family of orderings that are represented by the Asymmetric Atkinson indices. The latter result requires the addition of a continuity axiom. |
| Keywords: | Segregation, schools, education, diversity |
| JEL: | D6 |
| Date: | 2008–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12902&r=ure |
| By: | Colin Vance; Rich Iovanna |
| Abstract: | The confluence of factors driving urban growth is highly complex, resulting from a combination of ecological and social determinants that co-evolve over time and space. Identifying these factors and quantifying their impact necessitates models that capture both why urbanization happens as well as where and when it happens. Using a database that links five satellite images spanning 1976–2001 to a suite of socioeconomic, ecological and GIS created explanatory variables, this study develops a spatial-temporal model of the determinants of built-up area across a 25,900 square kilometer swath across central North Carolina. Extensive conversion of forest and agricultural land over the last decades is modeled using the complementary log-log derivation of the proportional hazards model, thereby affording a means for modeling continuous- time landscape change using discrete-time satellite data. To control for unobserved heterogeneity, the model specification includes an error component that is Gamma distributed. Results confirm the hypothesis that the landscape pattern surrounding a pixel has a major influence on the likelihood of its conversion and, moreover, that the omission of external spatial effects can lead to biased inferences regarding the influence of other covariates, such as proximity to road. Cartographic and nonparametric validation exercises illustrate the utility of the model for policy simulation. |
| Keywords: | Urban growth, landscape pattern, satellite imagery, hazard model,North Carolina |
| JEL: | C41 Q15 R14 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0043&r=ure |
| By: | Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten |
| Abstract: | Due to economic and population growth farmland and to a lesser extend other undeveloped areas are under pressure in the urban-rural fringe in British Columbia, Canada. The objectives of this paper are to determine if residential property values near Victoria, BC include open-space premiums for farmland, parks or golf courses, and to determine if using assessed values instead of market prices of the property result in the same findings. We estimate a Seemingly Unrelated Regression (SUR) model with two hedonic pricing equations, one with actual market values as the dependent variable and one with assessed property values, and compare the resulting estimates of shadow prices for open space amenities. Furthermore, we take account of spatial autocorrelation and combine Method of Moment estimates of the spatial parameters in both equations. |
| Keywords: | Hedonic pricing models, spatial dependence, assessed property values, open space. |
| JEL: | R14 R52 C21 Q20 H23 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2008-06&r=ure |
| By: | Sandra E. Black; Paul J. Devereux; Kjell G. Salvanes |
| Abstract: | Does it matter when a child starts school? While the popular press seems to suggest it does, there is limited evidence of a long-run effect of school starting age on student outcomes. This paper uses data on the population of Norway to examine the role of school starting age on longer-run outcomes such as IQ scores at age 18, educational attainment, teenage pregnancy, and earnings. Unlike much of the recent literature, we are able to separate school starting age from test age effects using scores from IQ tests taken outside of school, at the time of military enrolment, and measured when students are around age 18. Importantly, there is variation in the mapping between year and month of birth and the year the test is taken, allowing us to distinguish the effects of school starting age from pure age effects. We find evidence for a small positive effect of starting school younger on IQ scores measured at age 18. In contrast, we find evidence of much larger positive effects of age at test, and these results are very robust. We also find that starting school younger has a significant positive effect on the probability of teenage pregnancy, but has little effect on educational attainment of boys or girls. There appears to be a short-run positive effect on earnings of beginning school at a younger age; however, this effect has essentially disappeared by age 30. This pattern is consistent with the idea that starting school later reduces potential labor market experience at a given age for a given level of education; however, this becomes less important as individuals age. |
| JEL: | I2 J1 J3 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13969&r=ure |
| By: | Rainer Schulz; Markus Staiber; Martin Wersing; Axel Werwatz |
| Abstract: | By using a unique data set of single-family house transactions, we examine the accuracy of the cost and sales comparison approach over different forecast horizons. We find that sales comparison values provide better long-term forecasts than cost values if the economic loss function is symmetric. A weighted average of both sales comparison value and cost value can reduce this loss even further. If the economic loss function is asymmetric, however, cost values might provide better long-term forecasts. |
| Keywords: | prediction accuracy, mortgage underwriting, risk management |
| JEL: | C52 C53 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2008-019&r=ure |
| By: | Ethan Cohen-Cole |
| Abstract: | This paper evaluates the presence of racial disparities in the issuance of consumer credit. Using a unique and proprietary database of credit histories from a major credit bureau, this paper links location-based information on race with individual credit files. After controlling for the influence of such other place-specific factors as crime, housing vacancy rates, and general population demographics, the paper finds qualitatively large differences in the amount of credit offered to similarly qualified applicants living in Black versus White areas. An instrumental variables approach allows the paper to distinguish between issuer-provided credit (supply) and utilization of credit (demand), where instruments for demand are derived from social theory à la Veblen (i.e., `keeping up with the Joneses'). The results suggest that the observed differences in credit lines by racial composition of neighborhood are largely driven by issuer decisions rather than by demand. |
| Keywords: | Discrimination in consumer credit |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbqu:qau08-1&r=ure |
| By: | Ethan Cohen-Cole; Giulio Zanella |
| Abstract: | Empirical research has shown that social interactions affect the use of public benefits, thus providing evidence in favor of the idea of “welfare cultures.” In this paper we take the next crucial step by separately identifying the role of social stigma and information sharing in welfare participation, using Census data. We argue that the stigma vs. information distinction has possibly important consequences. Separate identification exploits the asymmetry between association and mere spatial proximity: we asume that while information is transmitted within groups, stigma works across groups as well. We also allow for heterogeneity of social effects across different race-ethnic groups and find non-trivial differences. We find that while the information channel is more important than stigma, White Americans appear to perceive stigma more from otherWhite Americans than by other races, and Black and Hispanic Americans appear to respond principally to stigma from external groups |
| Keywords: | social interactions, neighborhood effects, welfare stigma |
| JEL: | I30 Z13 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:531&r=ure |
| By: | Robert J. Shiller |
| Abstract: | The establishment recently of risk management vehicles for home prices is described. The potential value of such vehicles, once they become established, is seen in consideration of the inefficiency of the market for single family homes. Institutional changes that might derive from the establishment of these new markets are described. An important reason for these beginnings of real estate derivative markets is the advance in home price index construction methods, notably the repeat sales method, that have appeared over the last twenty years. Psychological barriers to the full success of such markets are discussed. |
| JEL: | G13 R31 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13962&r=ure |
| By: | Anna Matas (GEAP, Universitat Autònoma de Barcelona (SPAIN).); José-Luís Raymond (GEAP; Universitat Autònoma de Barcelona (SPAIN).); José-Luís Roig (GEAP, Univesitat Autònoma de Barcelona (SPAIN).) |
| Abstract: | This study analyses the impact that job accessibility in public transport has on car ownership. An ordered probit explaining the number of cars per household is estimated as a function of head of household characteristics, household characteristics and job accessibility. The data used in the analysis come from the Microcensus of year 2001 of the Spanish Institute of Statistics for the areas of Barcelona and Madrid. Our results show a significant effect of accessibility on car ownership. Additionally, we carried out simulation exercises in which the expected number of vehicles decreases as accessibility improves. For instance, in the case of households living outside the central city, an improvement of accessibility up to the average level of the central city would offset the effect of the number of working adults on the expected number of vehicles. |
| Keywords: | car ownership, job accessibility, public transport. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2008-03&r=ure |
| By: | Nazif Catik (Department of Economics, Ege University); Mehmet Guclu (Department of Economics, Ege University) |
| Abstract: | In this study we analyze the regional development process in Turkey by using the two traditional regional empirical growth models, Neoclassical convergence equations and Post-Keynesian Verdoorn’s Law, for the period from 1990 to 2000 at the NUTS 3 level under the spatial effects. Evidence obtained from the convergence equations with non-spatial effects rejects the validity of both absolute and conditional convergence hypotheses, while spatial econometric models taking into account the interaction between the regions in the growth process reveal existence of a weak convergence between the regions of Turkey. The results indicate that regional development disparities and location significantly affect the growth process of the regions in Turkey. Verdoorn’s Law indicates that there is a strong positive relation between manufacturing productivity growth and output growth and hence, manufacturing industries are also subject to increasing returns to scale. However, spatial econometric models of Verdoorn equations show that there is no significant spillover effect to accelerate productivity growth in the regions. According to the results obtained from both specifications, interaction between the regions is so weak and limited. Therefore, we argue that it is inevitable to review regional policies in Turkey to reduce regional development disparities. |
| Keywords: | Spatial Econometrics, Regional Growth, Convergence, Verdoorn’s Law, Spillover Effects |
| JEL: | C51 R11 R15 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ege:wpaper:0710&r=ure |
| By: | Richard F. Dye |
| Abstract: | This working paper was written for the New England Public Policy Center’s third annual conference: “The Dynamic between Municipal Revenue Sources and the State-Local Relationship in New England”. It relies on data from the U.S. Census to examine the dynamic between municipal revenues and the state-local relationship in New England. The analysis shows that—compared with the nation as a whole—municipal governments in New England rely very heavily on the property tax. They also have limited or no access to local-option revenues such as sales taxes, and they rely less on fees and other nontax sources. ; Although some research has shown that the local property tax can help counter fluctuations in state aid, Massachusetts, Rhode Island, and Maine all limit the percent by which local governments may increase their property tax collections from one year to the next. Municipalities in these states are more vulnerable to changes in state aid, and more bound by constraints on other revenue sources. ; New England states and municipal governments will face enormous fiscal pressures as their populations age dramatically and they face higher pension and health care costs. This analysis suggests the need for policymakers to consider new local revenue sources and state aid formulas. |
| Keywords: | Municipal finance - New England ; Property tax - New England |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcw:08-1&r=ure |
| By: | D. Moccero |
| Abstract: | The Chilean authorities plan to raise budgetary allocations over the medium term for a variety of social programmes, including education, health care and housing. This incremental spending will need to be carried out in a cost-efficient manner to make sure that it yields commensurate improvements in social outcomes. Chile’s health indicators show that it fares relatively well in relation to comparator countries in the OECD area and in Latin America. But this is less so in the case of education, where secondary and tertiary educational attainment remain low, despite a significant increase over the years, and performance is poor on the basis of standardised test scores, such as PISA. Even though comparison with countries in the OECD area is difficult, a sizeable housing deficit has yet to be closed in Chile. To meet these various challenges, efforts will need to be stepped up to: i) narrow the disparities in performance that currently exist among schools with students from varying backgrounds through use of the “differentiated” voucher scheme and additional measures to improve the quality of teaching and management; ii) improve risk sharing among private and public health insurers, while increasing the coverage of health insurance to a broader variety of pathologies under AUGE; and iii) continue to tackle the shortage of housing, while enhancing the quality of subsidised housing units and their surrounding neighbourhoods for the poorest segments of society. This paper relates to the 2007 Economic Survey of Chile (www.oecd.org/eco/surveys/chile). <P>Pour des services publics efficients dans le domaine des soins de santé, de l’éducation et du logement au Chili <BR>Les autorités prévoient d’augmenter les dotations budgétaires à moyen terme pour divers programmes sociaux touchant notamment aux secteurs de l’éducation, de la santé et du logement. Elles doivent faire preuve d’efficience dans l’utilisation de ce surcroît de dépenses, de façon à s’assurer que les résultats sociaux s’améliorent de manière proportionnelle. Les indicateurs de santé de la population montrent que la situation est relativement bonne au Chili par rapport aux pays pris comme comparaison dans la zone OCDE et en Amérique latine. Elle est moins favorable dans le secteur de l’éducation, où les résultats dans le secondaire et le supérieur restent faibles, malgré une progression sensible au fil des années, et où la performance telle que la mesurent les notes obtenues à des tests normalisés du type PISA est peu satisfaisante. Même s’il est difficile de faire des comparaisons avec les pays de l’OCDE, le Chili doit encore faire face à une importante pénurie de logements. Pour relever ces différents défis, il lui faudra redoubler d’effort afin de : i) réduire les disparités de résultats qui existent actuellement entre les établissements publics, privés subventionnés et totalement privés grâce à l’utilisation du dispositif de chèques-éducation « différenciés » ; ii) mieux partager les risques entre les assureurs publics et les assureurs privés, tout en élargissant la couverture de l’assurance maladie à des pathologies plus diverses ; et iii) continuer à faire face à la pénurie de logements tout en améliorant la qualité des logements subventionnés au profit des catégories les plus pauvres de la société. Ce document se rapporte à l’Étude économique du Chili 2007 (www.oecd.org/eco/etudes/chili). |
| Keywords: | health, santé, education, éducation, Chile, Chili, Public spending efficiency, data envelopment analysis, social housing, logement social |
| JEL: | C6 I1 I2 |
| Date: | 2008–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:606-en&r=ure |
| By: | Germà Bel (PPRE-IREA, Universitat de Barcelona (SPAIN).); Xavier Fageda (PPRE-IREA, Universitat de Barcelona (SPAIN).) |
| Abstract: | This paper empirically analyses the hypothesis of the existence of a dual market for contracts in local services. Large firms that operate on a national basis control the contracts for delivery in the most populated and/or urban municipalities, whereas small firms that operate at a local level have the contracts in the least populated and/or rural municipalities. The dual market implies the high concentration and dominance of major firms in large municipalities, and local monopolies in the smaller ones. This market structure is harmful to competition for the market as the effective number of competitors is low across all municipalities. Thus, it damages the likelihood of obtaining cost savings from privatization. |
| Keywords: | Competition, Concentration, Local Services, Privatization. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2008-04&r=ure |
| By: | Jens Kratzmann; Thorsten Schneider |
| Abstract: | Although in Germany, there is a regular age of school entry, some children start school later than usual and some children start ahead of schedule. While there has been some decrease in delayed school entries in the last years, the rate of premature school entry has increased substantially. Paradoxically, while the delayed entry is primarily because professionals rate a child as not ready for school, the premature entry is mainly based on parents¿ choice. The first aim of the paper is to discover whether kindergarten attendance can reduce the risk of a delayed entry. The arguments and hypotheses are mainly based on the theory on the ecology of human development of Bronfenbrenner. The empirical analyses demonstrate that low educated families profit most by kindergarten attendance, but only if the child begins attending the care institution before reaching age four. The second aim concerns theoretical and empirical considerations in regard to the decision of prematurely entering school. Therefore, we apply common sociological models on educational choice to the situation of school entry. Socio-economic conditions are not as important at this point as compared with a delay in school entry. However, there are some income effects indicating that higher income parents try to avoid further payments for kindergarten by fostering a premature entry to elementary schools, which is free of fees. The analyses are based on over 1.400 children in the relevant age group and their parents taking part in the large nationwide German Socio-Economic Panel Study (SOEP). |
| Keywords: | child care, school entry, educational inequality, educational choice |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp100&r=ure |
| By: | Jan Kranich (Leuphana Universität Lüneburg) |
| Abstract: | This paper discusses a model of the New Economic Geography, in which the seminal core-periphery model of Krugman (1991) is extended by endogenous research activities. Beyond the common ’anonymous’ consideration of R&D expenditures within fixed costs, this model introduces vertical product dierentiation, which requires services provided by an additional R&D sector. In the context of international factor mobility, the destabilizing eects of a mobile scientific workforce are analyzed. In combination with a welfare analysis and a consideration of R&D promoting policy instruments and their spatial implications, this paper makes a contribution to the so-called brain drain debate. |
| Keywords: | R&D, New Economic Geography, Vertical Dierentiation |
| JEL: | F12 F14 F17 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:83&r=ure |
| By: | Barnett, Richard C; Bhattacharya, Joydeep; Bunzel, Helle |
| Abstract: | This note studies a model in which heterogeneous income agents get a utility jolt only when their consumption catches up with the Joneses'. The resulting utility function is non-concave. In this setup, participation in a fair lottery has the potential to make some agents better off in an ex-ante sense even as it makes them financially vulnerable. More income-diverse people join the lottery pool when the `kick' from catching up increases. Worsening income inequality may increase the number of financially vulnerable people. The analysis sheds light on some aspects of the ongoing sub-prime mortgage crisis. |
| Keywords: | catching up with the Joneses, housing crisis, consumption externalities, non-concave utility, lotteries, inequality |
| JEL: | D0 |
| Date: | 2008–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12909&r=ure |
| By: | Atila Abdulkadiroglu; Parag A Pathak; Alvin E Roth |
| Date: | 2008–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:122247000000002108&r=ure |
| By: | Philippe Widmer (Socioeconomic Institute, University of Zurich); Peter Zweifel (Socioeconomic Institute, University of Zurich) |
| Abstract: | The purpose of this paper is to analyze the efficiency of the 26 Swiss cantons over the period 2000 to 2004 applying Data Envelopment Analysis (DEA). A Total Public Sector Performance (TPSP) indicator for eight local government activities (administration, public safety, education, culture and sport, health, transportation, environment and spatial planning, and public economy) is calculated to measure technical efficiency. Efficiency scores are then related to the fiscal equalization scheme designed to reduce disparities between cantons with the expectation to find a negative relationship. Results show the existing scheme to indeed have a negative influence on the performance of financially advantaged cantons. Surprisingly, however, earmarked transfers from the confederation to the cantons are not found to have a stronger negative influence on cantonal performance, contradicting the rationale for their suppression in a recent reform. Most public services fail to exhibit economies of scale, undermining quests for centralization of public good provision and suggesting the possibility of Tiebout competition. |
| Keywords: | DEA, efficiency measurement, federalism, fiscal equalization, public finance, Switzerland, Tiebout competition |
| JEL: | C14 C67 H11 H72 H83 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:soz:wpaper:0804&r=ure |
| By: | Banerjee, Abhijit; Banerji, Rukmini; Duflo, Esther; Glennerster, Rachel; Khemani, Stuti |
| Abstract: | Participation of beneficiaries in the monitoring of public services is increasingly seen as a key to improving their efficiency. In India, the current government flagship program on universal primary education organizes both locally elected leaders and parents of children enrolled in public schools into committees and gives these groups powers over resource allocation, and monitoring and management of school performance. However, in a baseline survey we found that people were not aware of the existence of these committees and their potential for improving education. This paper evaluates three different interventions to encourage beneficiaries’ participation through these committees: providing information, training community members in a new testing tool, and training and organizing volunteers to hold remedial reading camps for illiterate children. We find that these interventions had no impact on community involvement in public schools, and no impact on teacher effort or learning outcomes in those schools. However, we do find that the intervention that trained volunteers to teach children to read had a large impact on activity outside public schools—local youths volunteered to be trained to teach, and children who attended these camps substantially improved their reading skills. These results suggest that citizens face substantial constraints in participating to improve the public education system, even when they care about education and are willing to do something to improve it. |
| Keywords: | community participation; development economics; educational economics |
| JEL: | I21 O12 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6781&r=ure |
| By: | Piacentini, Mario |
| Abstract: | This paper investigates the presence of a network externality which might explain the persistence of low schooling achievements among internal migrants. A simple analytical framework is presented to show how an initial human capital disparity between migrants and non migrants can translate into persistent skill inequality if origin shapes the composition of social networks. We test empirically whether young migrantsschooling decisions are affected by the presence of covillagers at destination, using data on life-time histories of migration and education choices from a rural region of Thailand. Different modelling approaches are used to account for the self-selection of young migrants, for potential endogeneity of the network size, and for unobserved heterogeneity in individual preferences. The size of the migrant network is found to negatively affect the propensity of young migrants to pursue schooling while in the city. This fi nding suggests that policies seeking to minimising strati cation in enclaves might have a socially multiplied impact on schooling participation, and, ultimately, affect the socio-economic mobility of the rural born. |
| Keywords: | human capital; schooling; networks; migration; inequality |
| JEL: | O1 O10 O15 |
| Date: | 2008–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8376&r=ure |
| By: | Tripathi Sanjeev; Sinha P.K. |
| Abstract: | The literature on store choice has mainly studied the store attributes, and ignored the consumer attributes in store choice. Even when, the consumer attributes have been incorporated the strength of relationship has been weak. Also, the literature on store choice has completely ignored format choice, when studying store choice. The paper argues for incorporating both the shopper attributes in store choice, and the store formats. Shopper attributes can be captured through the demographic variables, as they can be objectively measured, and these also capture a considerable amount of attitudinal and behavioural variables. The paper proposes to link store choice, format choice and consumer demographic variables, through a hierarchical logistic choice model in which the consumers first choose a store format and then a particular store within that format. A nested logit model is developed, and the variables predicting the choice probabilities are identified. The requirement of data for the empirical analysis is specified, the model has not been verified in the absence of empirical data but the operationalization of variables is done. |
| Date: | 2008–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:2008-04-03&r=ure |
| By: | Olga Lazareva (New Economic School (NES), Center for Economic and Financial Research (CEFIR), Center for Economic Policy Research (CEPR)); Konstantin Sonin (Stockholm School of Economics, Stockholm; Centre for Economic and Financial Research (CEFIR), Moscow) |
| Abstract: | The move of five million Russian and Russian-speaking people from the former Soviet Union countries to Russia which took place during 1990s has been studied by demographers, sociologists and to a lesser extent by economists. This paper presents a study of the labor market outcomes for the Russian migrants to Russia, using the data from a representative survey of the Russian population in 2004 and 2005. Author focuses on the location choice by Russian immigrants and tests the hypothesis of skill sorting across regions. It is shown that in the regions with low fraction of immigrant population immigrants are doing better in terms of employment opportunities than local population while in the regions with high fraction of immigrants they are doing worse than locals. This result is consistent with the hypothesis that immigrants choose regions where the demand for their skills is high and compete for the jobs with fellow immigrants rather than with locals. Wage premiums for the migrants are found in some occupations but not in others. The results of the analysis indicate that the Russian migration to Russia has played some equilibrating role in the regional labor markets in presence of high barriers for internal labor migration. |
| Keywords: | migration, regional labor markets, wages, employment |
| JEL: | J61 J31 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0117&r=ure |
| By: | Bryan Engelhardt (Department of Economics, College of the Holy Cross) |
| Abstract: | I investigate how long it takes for released inmates to find a job, and when they find a job, how their incarceration rate changes. An on-the-job search model with crime is used to model criminal behavior, derive the estimation method and analyze several policies including a job placement program. The results show the unemployed are incarcerated twice as fast as the employed and take on average four months to find a job. Combining these results, it is demonstrated that reducing the average unemployment spell of criminals by two months reduces crime and recidivism by more than five percent. |
| Keywords: | crime, search, unemployment, wage dispersion |
| JEL: | C41 E24 J0 J64 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0805&r=ure |
| By: | Ethan Cohen-Cole; Jason M. Fletcher |
| Abstract: | This note’s aim is to investigate the sensitivity of Christakis and Fowler’s claim (NEJM July 26, 2007) that obesity has spread through social networks. It is well known in the economics literature that failure to include contextual effects can lead to spurious inference on “social network effects.” We replicate the NEJM results using their specification and a complementary dataset. We find that point estimates of the “social network effect” are reduced and become statistically indistinguishable from zero once standard econometric techniques are implemented. We further note the presence of estimation bias resulting from use of an incorrectly specified dynamic model. |
| Keywords: | Obesity |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbqu:qau08-2&r=ure |