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on Urban and Real Estate Economics |
| By: | Allen Head (Queen's University); Huw Lloyd-Ellis (Queen's University) |
| Abstract: | The relationships among geographical mobility, unemployment and the value of owner-occupied housing are studied in an economy with heterogeneous locations and search frictions in the markets for both labour and houses. Di¤erences in labour market conditions between cities affect the speed with which houses may be sold--that is, the liquidity of housing. At the same time housing market conditions affect employment decisions and thus the allocation of labour across cities. In equilibrium, unemployment rates for home-owners are higher than for otherwise identical renters. Unemployment and home-ownership rates are, however, negatively correlated across cities. In a parameterized example we find that, although renters are much more mobile than owners, the impact of home-ownership on aggregate unemployment is quantitatively small. |
| Keywords: | liquidity, mobility, home-ownership, unemployment |
| JEL: | J61 J64 R23 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1197&r=ure |
| By: | Lucas W. Davis |
| Abstract: | Current trends in electricity consumption imply that hundreds of new fossil-fuel power plants will be built in the United States over the next several decades. Power plant siting has become increasingly contentious, in part because power plants are a source of numerous negative local externalities including elevated levels of air pollution, haze, noise and traffic. Policymakers attempt to take these local disamenities into account when siting facilities, but little reliable evidence is available about their quantitative importance. This paper examines neighborhoods in the United States where power plants were opened during the 1990s using household-level data from a restricted version of the U.S. decennial census. Compared to neighborhoods farther away,housing values and rents decreased by 3-5% between 1990 and 2000 in neighborhoods near sites. Estimates of household marginal willingness-to-pay to avoid power plants are reported separately for natural gas and other types of plants, large plants and small plants, base load plants and peaker plants, and upwind and downwind households. |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0809&r=ure |
| By: | Cruz, Ana Rita; Pinto, Hugo |
| Abstract: | The urban tourism is a segment with a relevant expansion, assuming an important role in the revitalization and in the promotion of economic development in cities. The following communication tries to explore some crucial issues in the analysis of the urban dimension and its interconnections with the tourism activities. The evolution of growth urban patterns, the representations and concept of city and models of spatial development are synthetically presented. Urban tourism is presented and discussed, the relations with the tourism system and the affirmation of city as a tourism product. The ideas presented in the communication stress the interest of urban tourism to city planning as a set of economic activities capable of promoting the economic development. The communication also underlines the pertinence in studying these phenomena using transdisciplinary theoretical and methodological frameworks that mix contributes from Economics to Sociology, capturing in a richer way the diversity of tourism in urban areas. |
| Keywords: | City; Urban Tourism; Urban Growth; Tourism System; Tourism Product |
| JEL: | P25 L83 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13477&r=ure |
| By: | Martha Poon (University of California, San Diego) |
| Abstract: | Provides original sociological research on the development of consumer credit scoring in the United States and its links to subprime mortgage finance. |
| Keywords: | Science and technology studies, economic sociology, social studies of finance, subprime mortgages, consumer credit, risk |
| JEL: | D81 G21 L15 M30 N22 N32 O33 P16 Z13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:emn:wpaper:014&r=ure |
| By: | Antonio Cabrales; Antoni Calvó-Armengol; Yves Zenou |
| Abstract: | The aim of this paper is to understand the interactions between productive effort and the creation of synergies that are the sources of technological collaboration agreements, agglomeration, and social interactions. We model this interaction in a way that allows us to characterize how agents devote resources to both activities. This permits a full-edged equilibrium/welfare analysis of network formation with endogenous productive efforts, to derive unambiguous comparative statics results and to analyze community sorting by individual traits. In spite of its parsimony the model retains enough richness to replicate a broad range of empirical regularities displayed by social and economic networks, and to relate them to individual and social welfare. Key words: random network, spillovers, network formation, network topology. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2009-06&r=ure |
| By: | Rusche, Karsten |
| Abstract: | Which of Germanys regions is the most attractive? Where is it best to live and work - on objective grounds? These questions are summed up in the concept “quality of life”. This paper uses recent research projects that determine this parameter to examine the spatial distribution of quality of life in Germany. For this purpose, an Exploratory Spatial Data Analysis is conducted which focuses on identifying statistically significant (dis-)similarities in space. An initial result of this research is that it is important to choose the aggregation level of administrative units carefully when considering a spatial analysis. The level plays a crucial role in the strength and impact of spatial effects. In concentrating on various labor market areas, this paper identifies a significant spatial autocorrelation in the quality of life, which seems to be characterized by a North-Mid-South divide. In addition, the ESDA results are used to augment the regression specifications, which helps to avoid the occurrence of spatial dependencies in the residuals. |
| Keywords: | Quality of Life; Exploratory Spatial Data Analysis; Functional Economic Areas; Spatial Econometrics; LISA Dummies |
| JEL: | R10 R50 D63 R12 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13459&r=ure |
| By: | Giuseppe Arbia; Giuseppe Espa; Diego Giuliani; Andrea Mazzitelli |
| Abstract: | The use of the K-functions (Ripley, 1977) has become recently popular in the analysis of the spatial pattern of firms. It was first introduced in the economic literature by Arbia and Espa (1996) and then popularized by Marcon and Puech (2003), Quah and Simpson (2003), Duranton and Overman (2005) and Arbia et al. (2008). In particular in Arbia et al. (2008) we used Ripley’s K-functions as instruments to study the inter-sectoral co-agglomeration pattern of firms in a single moment of time. All this researches have followed a static approach, disregarding the time dimension. Temporal dynamics, on the other hand, play a crucial role in understanding the economic and social phenomena, particularly when referring to the analysis of the individual choices leading to the observed clusters of economic activities. With respect to the contributions previously appeared in the literature, this paper uncovers the process of firm demography by studying the dynamics of localization through space-time K-functions. The empirical part of the paper will focus on the study of the long run localization of firms in the area of Rome (Italy), by concentrating on the ICT sector data collected by the Italian Industrial Union in the period 1920- 2005. |
| Keywords: | Agglomeration, Non-parametric measures; Space-time K-functions, Spatial clusters, Spatial econometrics. |
| JEL: | C21 D92 L60 O18 R12 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0902&r=ure |
| By: | Stephan Litschig |
| Abstract: | Whether providing additional resources to local communities leads to improved public services and better outcomes more generally, given existing management capacity and incentive and accountability structures, is an unresolved yet important question for public policy. This paper uses a regression-discontinuity design to evaluate the effect of unrestricted fiscal transfers on local spending (including on education), schooling and learning in Brazil. Results show that transfers increase local public spending almost one for one with no evidence of crowding out own revenue or other revenue sources. Extra per capita transfers of 1000 Reais lead to about 0.42 additional years of elementary schooling and student literacy rates increase by about 5.6 percentage points on average. Part of this effect arises through higher teacher-student ratios in municipal elementary school systems. Results also suggest that additional resources have stronger effects in more rural and less developed parts of Brazil. |
| Keywords: | Intergovernmental grants, school finance, foreign aid effectiveness |
| JEL: | H7 I2 O15 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1142&r=ure |
| By: | Oleksandr Shepotylo (Kyiv School of Economics and Kyiv Economics Institute) |
| Abstract: | This paper applies a nonparametric heteroskedasticity and autocorrelation consistent (HAC) estimator of error terms in the context of the spatial autoregressive model of GDP per capita convergence of European regions at NUTS 2 level. By introducing the spatial dimension, it looks at how the equilibrium distribution of GDP per capita of EU regions evolves both in time and space dimensions. Results demonstrate that the global spatial spillovers of growth rates make an important contribution to the process of convergence by reinforcing the economic growth of neighboring regions. Results are even more pronounced when the convergence in wage per worker is considered. The choice of kernel functions does not significantly affect the estimation of the variance-covariance matrix, while the choice of the bandwidth parameter is quite important. Finally, results are sensitive to the weighting matrix specification, and further research is needed to give a more rigorous justification for the selection of the weighting matrix. |
| Keywords: | Convergence, spatial econometrics, regional economics, EU |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:15&r=ure |
| By: | Janet Currie; Stefano DellaVigna; Enrico Moretti; Vikram Pathania |
| Abstract: | We investigate the health consequences of changes in the supply of fast food using the exact geographical location of fast food restaurants. Specifically, we ask how the supply of fast food affects the obesity rates of 3 million school children and the weight gain of over 1 million pregnant women. We find that among 9th grade children, a fast food restaurant within a tenth of a mile of a school is associated with at least a 5.2 percent increase in obesity rates. There is no discernable effect at .25 miles and at .5 miles. Among pregnant women, models with mother fixed effects indicate that a fast food restaurant within a half mile of her residence results in a 2.5 percent increase in the probability of gaining over 20 kilos. The effect is larger, but less precisely estimated at .1 miles. In contrast, the presence of non-fast food restaurants is uncorrelated with obesity and weight gain. Moreover, proximity to future fast food restaurants is uncorrelated with current obesity and weight gain, conditional on current proximity to fast food. The implied effects of fast-food on caloric intake are at least one order of magnitude smaller for mothers, which suggests that they are less constrained by travel costs than school children. Our results imply that policies restricting access to fast food near schools could have significant effects on obesity among school children, but similar policies restricting the availability of fast food in residential areas are unlikely to have large effects on adults. |
| JEL: | I1 I18 J0 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14721&r=ure |
| By: | Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier) |
| Abstract: | Inspired by the literature on the importance of career networks for the quality of labor market matches we investigate whether human capital externalities arise from higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany, we find that increasing the regional share of highly qualified workers by one standard deviation raises wages on the incidence of job change by up to three percent, pointing to the importance of improved job matching opportunities in human capital rich regions as a microeconomic source of human capital externalities. Evidence on regional differences in job change behavior suggests that human capital networks enable young workers to change jobs more easily and to thereby increase matching efficiency, which in turn reduces the overall number of job changes needed until an efficient match is reached. Benefits from improved matching opportunities predominantly arise from human capital networks enabling workers in skilled regions to change jobs within an industry and, thus, to capitalize on their industry-specific human capital. |
| Keywords: | Human Capital Externalities, Job Matching, Agglomeration Economies |
| JEL: | D62 J24 J31 R11 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:wpaper:200901&r=ure |
| By: | Chollete, Lorán (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | What drives extreme economic events? Motivated by recent theory, and events in US subprime markets, we begin to open the black box of extremes. Specifically, we extend standard economic analysis of extreme risk, allowing for dynamics and endogeneity. We explain how endogenous extremes may arise in an economy of individuals who engage in resource transfers. Our model suggests that susceptibility to extremes depends on differences in marginal substitution rates. Using over a century of daily stock price data, we construct empirical probabilities of extremes, and document interesting dynamic behavior. We find evidence that extremes are endogenous. This latter finding raises the possibility that control of extremes is a public good, and that extreme events may be an important market failure for regulators and central banks to correct. |
| Keywords: | Extreme Event; Subprime Market; Dynamics; Endogeneity; Public Good; Central Bank Policy |
| JEL: | C10 D62 E44 E51 G18 H23 H41 |
| Date: | 2009–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2008_025&r=ure |
| By: | Aki Koponen (Institute for Competition Policy Studies, Turku School of Economics) |
| Abstract: | Structural changes in retail banking markets and development of remote access technologies have reduced the number of bank branches in many developed countries. That makes close-downs of bank branches and service accessibility in rural/peripheral regions interesting topics of public discussion. This paper uses an empirical entry approach in order to analyze whether the peripheral regions have suffered from the development branch networks in general, or are some specific regions faced more closedowns that one can expect? The analysis shows that there are some differences between the regions in accessibility of the services measured both by the number of bank groups and number of branches located in the municipality. Commutation directed to the municipality increased the accessibility as well as the increase in average taxable income. These characteristics are typically related to the local centers but also the administrative city-status had additional positive effect. When it comes to the development of accessibility, the analysis shows no differences between the regions. |
| Keywords: | banking, accessibility, regional differences, technological development, concentration |
| JEL: | G21 R12 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp42&r=ure |
| By: | Volodymir BilotKach; Xavier Fageda; Ricardo Flores-Fillol |
| Abstract: | This paper presents a theoretical and empirical analysis of the relationship between frequency of scheduled transportation services and their substitutability with personal transportation (using distance as a proxy). We study the interaction between a monopoly firm providing a high speed Scheduled service and private transportation (i.e., car). Interestingly, the carrier chooses to increase the frequency of service on longer routes when competing with personal transportation because by providing higher frequency (at extra cost) it can also charge higher fares which can boost its profits. However, in line with the results of earlier studies, frequency decreases for longer flights when driving is not a viable option. An empirical application of our analysis to the European airline industry confirms the predictions of our theoretical model. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2009-10&r=ure |
| By: | Tuomas A. Peltonen (European Central Bank); Ricardo M. Sousa (Universidade do Minho - NIPE); Isabel S. Vansteenkiste (European Central Bank) |
| Abstract: | We build a panel of 14 emerging economies to estimate the magnitude of housing, stock market, and money wealth effects on consumption. Using modern panel data econometric techniques and quarterly data for the period 1990/1-2008/2, we show that; (i) wealth effects are statistically significant and relatively large in magnitude; (ii) housing wealth effects tend to be smaller for Asian emerging markets while stock markets wealth effects are, in general, smaller for Latin American countries; (iii) housing wealth effects have increased for Asian countries in recent years; and (iv) consumption reacts stronger to negative than to positive shocks in housing and financial wealth. |
| Keywords: | wealth effects, consumption, emerging markets. |
| JEL: | E21 E44 D12 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:4/2009&r=ure |
| By: | Maximilian J. B. Hall (Dept of Economics, Loughborough University) |
| Abstract: | On 14 September 2007, after failing to find a 'White Knight' to take over its business, Northern Rock bank turned to the Bank of England ('the Bank') for a liquidity lifeline. This was duly provided but failed to quell the financial panic, which manifested itself in the first fully-blown nationwide deposit run on a UK bank for 140 years. Subsequent provision of a blanket deposit guarantee duly led to the (eventual) disappearance of the depositor queues from outside the bank's branches but only served to heighten the sense of panic in policymaking circles. Following the Government's failed attempt to find an appropriate private sector buyer, the bank was then nationalised in February 2008. Inevitably, post mortems ensued, the most transparent of which was that conducted by the all-party House of Commons' Treasury Select Committee. And a variety of reform proposals are currently being deliberated at fora around the globe with a view to patching up the global financial system to prevent a recurrence of the events which precipitated the bank's illiquidity and the wider financial instability which set in towards the end of 2008. This article briefly explains the background to these extraordinary events before setting out, in some detail, the tensions and flaws in UK arrangements which allowed the Northern Rock spectacle to occur. None of the interested parties – the Bank, the Financial Services Authority (FSA) and the Treasury – emerges with their reputation intact, and the policy areas requiring immediate attention, at both the domestic and international level, are highlighted. A review and assessment of both the House of Commons Treasury Committee's Report on Northern Rock and the Tripartite Authorities' proposals for reform are also provided before analysis of the subsequent measures taken to stabilise the UK financial sector – involving further nationalisation of banks, the brokering of takeover rescues of banks and building societies, a £400 billion bailout of the deposit-taking sector and a subsequent bank bailout scheme – is undertaken. Accordingly, this paper represents an update, covering developments until end-January 2009, of my earlier paper on the Northern Rock affair (Working Paper No. WP 2008-09), which was published in September 2008. Specifically, it covers the latest domestic (i.e. UK) developments on a number of fronts. The text, for example, provides updates on the reform proposals of the Tripartite Authorities, amendments to deposit protection arrangements, and the emergency funding initiatives adopted by the Bank of England. Table 2 (where, along with Table 1, most of the new material is located), meanwhile, provides updates and analysis of the following: the latest developments in the UK housing market; the latest developments in the real economy; the latest financial statements of the major banks; the latest nationalisation moves;* the latest inflation figures and interest rate decisions of the MPC; the latest government bailout plans for deposit-takers; the latest official support packages introduced for the housing market, mortgage borrowers and small businesses; the latest fiscal stimulus plans (e.g. as contained in the Pre-Budget Report of November 2008); and the latest domestic financial and regulatory developments. Meanwhile, Table 1 provides up-to-date information on: emergency funding initiatives undertaken by the Fed, the ECB and other major central banks; financial institution takeovers/bailouts in the US and Europe; interest rate developments in the major economies; financial and regulatory developments in the US and Europe; developments in the real economies of the US and Europe; the financial statements of banks in the USA and Europe; the evolution of official bailout plans in the US ('TARP') and Europe; deposit protection developments in the US and Europe; fiscal stimulus packages adopted in the US, Europe and the wider international community; G7/EU plans to tackle the worsening financial crisis; IMF 'bailouts' of beleaguered countries; and the Basel Committee's proposals for revamping Basel II in the light of the crisis. *A more detailed discussion of these developments is provided in Hall (2008). |
| Keywords: | Sub-prime crisis; credit crunch; banking regulation and supervision; failure resolution; central banking; deposit protection. |
| JEL: | E53 E58 G21 G28 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2009_03&r=ure |
| By: | Lan Shi; Christina Tapia |
| Abstract: | Using the future residence of home sellers, we compare a seller who will relocate to another state and thus will likely not provide referrals with a seller who remains in the state and thus might bring referrals. We find that moving-out-of-state sellers' residences take more days to sell than staying-in-state sellers yet without any price benefits. Moreover, among moving-out-of-state sellers, an uninformed moving-out-of-state seller's residence stays on the market for fewer days and is sold at a lower price than an informed moving-out-of-state seller. We also find that a senior seller's house sells faster and for less. We interpret these findings together as supporting that i) a concern for referrals provides discipline to both shirking and manipulation of information by agents and ii) it is important that the client be informed in protecting her own interests in one-shot transactions. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:udb:wpaper:uwec-2009-06&r=ure |
| By: | Samuel Bowles (Santa Fe Institute and University of Siena); Glenn C. Loury (Department of Economics, Brown University); Rajiv Sethi (Department of Economics, Barnard College, Columbia University and the Institute for Advanced Study) |
| Abstract: | This paper explores conditions under which inequality across social groups can emerge from initially group-egalitarian distributions and persist across generations despite equality of eco- nomic opportunity. These conditions arise from interactions among three factors: the extent of segregation in social networks, the strength of interpersonal spillovers in human capital accumu- lation, and the responsiveness of relative wages to the skill composition in production. Social segregation is critical in generating these results: group inequality cannot emerge or persist un- der conditions of equal opportunity unless segregation su¢ ciently great. We also show that if an initially disadvantaged group is su¢ ciently small, integration above a threshold level can induce both groups to invest more in human capital, while the opposite holds if the disadvantaged group is large. |
| Keywords: | segregation, networks, group inequality, human capital |
| JEL: | D31 Z13 J71 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:ads:wpaper:0088&r=ure |
| By: | Douglas W. Diamond; Raghuram Rajan |
| Abstract: | What caused the financial crisis that is sweeping across the world? What keeps asset prices and lending depressed? What can be done to remedy matters? While it is too early to arrive at definite answers to these questions, it is certainly time to offer informed conjectures, and these are the focus of this paper. |
| JEL: | E52 F33 G21 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14739&r=ure |
| By: | Patricia Cubí (Universidad de Alicante) |
| Abstract: | The objective of this paper is to evaluate the effect of a road crash on the health-related quality of life of injured people. A new approach based on the cardinalization of different categorical measures of ill-health, such as TTO and VAS indexes, is suggested and used for assessing the robustness of the results. The methodology is based on the existing literature about treatment effects. Our main contribution focuses on evaluating the chronic loss oh health, that would allow to properly estimate the health losses in quality-of-life terms. |
| Keywords: | Health-related quality of life; Health measurement; Road crashes |
| JEL: | C25 I10 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2009-05&r=ure |