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on Urban and Real Estate Economics |
| By: | Elias Oikarinen (Department of Economics, Turku School of Economics) |
| Abstract: | The price of vacant land zoned for housing is expected to be tightly linked to housing prices. In informationally efficient markets, vacant lot price movements should not lag changes in housing prices. In practice, however, the leading role of housing appreciation with respect to vacant lot price growth may be caused by factors such as thin trading and lack of publicly available data on transactions in the lot market. Based on a vector error-correction model employing quarterly data from the Helsinki Metropolitan Area over 1988Q1-2008Q2, this study shows that housing price movements lead price changes in the market for vacant lots and housing prices react to shocks in the demand side fundamentals more rapidly than lot prices. Overall, the empirical results give support to the hypothesis that house prices respond to shocks influencing the value of developed land first, after which the price level of vacant lots reacts to the information revealed by housing prices. Hence, the results indicate that the market for lots is more informationally inefficient than the housing market. Furthermore, the empirical findings suggest that construction costs too react to income and interest rate shocks. |
| Keywords: | Housing, land, lot prices, dynamics, construction costs |
| JEL: | R31 R32 E31 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp53&r=ure |
| By: | Stephen L. Ross (University of Connecticut) |
| Abstract: | Cities and their surrounding suburbs provide the homes, workplaces, and social and educational environments for most individuals and families in developed nations, but these urban areas are typically characterized by substantial stratification across racial, ethnic, and economic groups and associated with substantial levels of inequality. This chapter will examine our knowledge concerning the impact such stratification has on individual outcomes especially through its influence on the social interactions that occur within neighborhoods, schools, workplaces, and other institutions. The largest challenge faced in understanding the causal impact of social interactions arises from the fact that stratification is not an outside event, but rather is the result of individuals making choices that involve segregating themselves from others that differ in some way. The extent to which an individual makes segregating choices is invariably related to that individual's specific opportunities and therefore highly correlated with unobservables that drive that individual's success and life outcomes. Accordingly, the chapter will focus heavily on approaches for obtaining causal estimates of the effect of social interactions and evidence that arises from studies that have a convincing strategy for identifying these causal effects. |
| Keywords: | Neighborhood Effects, Peer Effects, Social Interactions, Friendship Networks |
| JEL: | I2 J1 J6 R2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2009-31&r=ure |
| By: | Robert Bifulco (Syracuse University); Delia Furtado (University of Connecticut); Stephen L. Ross (University of Connecticut) |
| Abstract: | Relative to whites, blacks that reside in highly segregated metropolitan areas have worse educational and labor market outcomes than those that reside in less segregated areas. Using data from the 1990 U.S. Census combined with measures of metropolitan educational environment created from the Common Core of Data (CCD), we test whether the strong empirical relationship between residential segregation and black outcomes can be attributed to the educational environment in those metropolitan areas. We find that our measures of metropolitan educational environment can explain a substantial fraction of the effect of segregation on educational outcomes and idleness. |
| Keywords: | Racial Segregation, School Segregation, Neighborhood Effects, Peer Effects |
| JEL: | I1 R2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2009-30&r=ure |
| By: | Amir E. Khandani (MIT Sloan School of Management and Laboratory for Financial Engineering); Andrew W. Lo (MIT Sloan School of Management and Laboratory for Financial Engineering); Robert C. Merton (Harvard Business School, Finance Unit) |
| Abstract: | The confluence of three trends in the U.S. residential housing market-rising home prices, declining interest rates, and near-frictionless refinancing opportunities-led to vastly increased systemic risk in the financial system. Individually, each of these trends is benign, but when they occur simultaneously, as they did over the past decade, they impose an unintentional synchronization of homeowner leverage. This synchronization, coupled with the indivisibility of residential real estate that prevents homeowners from deleveraging when property values decline and homeowner equity deteriorates, conspire to create a "ratchet" effect in which homeowner leverage is maintained or increased during good times without the ability to decrease leverage during bad times. If refinancing-facilitated homeowner-equity extraction is sufficiently widespread-as it was during the years leading up to the peak of the U.S. residential real-estate market-the inadvertent coordination of leverage during a market rise implies higher correlation of defaults during a market drop. To measure the systemic impact of this ratchet effect, we simulate the U.S. housing market with and without equity extractions, and estimate the losses absorbed by mortgage lenders by valuing the embedded put-option in non-recourse mortgages. Our simulations generate loss estimates of $1.5 trillion from June 2006 to December 2008 under historical market conditions, compared to simulated losses of $280 billion in the absence of equity extractions. |
| Keywords: | Risk; Financial Crisis; Household Finance; Real Estate; Subprime |
| JEL: | G12 G13 G18 G21 E17 E27 E37 E47 R21 R38 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-023&r=ure |
| By: | Campante, Filipe R. (Harvard University); Do, Quoc-Anh (Singapore Management University) |
| Abstract: | We construct an axiomatic index of spatial concentration around a center or capital point of interest, a concept with wide applicability from urban economics, economic geography and trade, to political economy and industrial organization. We propose basic axioms (decomposability and monotonicity) and refinement axioms (order preservation, convexity, and local monotonicity) for how the index should respond to changes in the underlying distribution. We obtain a unique class of functions satisfying all these properties, defined over any n-dimensional Euclidian space: the sum of a decreasing, isoelastic function of individual distances to the capital point of interest, with specific boundaries for the elasticity coefficient that depend on n. We apply our index to measure the concentration of population around capital cities across countries and US states, and also in US metropolitan areas. We show its advantages over alternative measures, and explore its correlations with many economic and political variables of interest. |
| JEL: | C43 F10 R23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp09-005&r=ure |
| By: | Tomoya Mori (Institute of Economic Research, Kyoto University); Tony E. Smith (Department of Electrical and Systems Engineering, University of Pennsylvania) |
| Abstract: | Dating from the seminal work of Ellison and Glaeser [17] in 1997, a wealth of evidence for the ubiquity of industrial agglomerations has been published. However, most of these results are based on analyses of single (scalar) indices of agglomeration. Hence it is not surprising that industries deemed to be similar by such indices can often exhibit very different patterns of agglomeration – with respect to the number, size, and spatial extent of individual agglomerations. The purpose of this paper is thus to propose a more detailed spatial analysis of agglomeration in terms of multiple-cluster patterns, where each cluster represents a (roughly) convex set of contiguous regions within which the density of establishments is relatively uniform. The key idea is to develop a simple probability model of multiple clusters, called cluster schemes, and then to seek a “best” cluster scheme for each industry by employing a standard model-selection criterion. Our ultimate objective is to provide a richer characterization of spatial agglomeration patterns that will allow more meaningful comparisons of these patterns across industries. |
| Keywords: | Industrial Agglomeration, Cluster Analysis, Geodesic Convexity, Bayesian Information Criterion |
| JEL: | C49 L60 R12 R14 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:682&r=ure |
| By: | Nuno Crespo (ISCTE – Lisbon University Institute, Department of Economics and ERC/UNIDE); Maria Paula Fontoura (ISEG (School of Economics and Management), Technical University of Lisbon and UECE (Research Unit on Complexity and Economics)) |
| Abstract: | Considering the case of Portugal over the period 1995-2000, this paper analyses whether the location of market services is explained by the geographical proximity of the industrial sectors that use these services as intermediate inputs. A rather detailed level of regional disaggregation is used, namely the county level (275 counties). This influence is confirmed by the results of some location indices and by the regressions made for each sector. An alternative spatial unit is also used, consisting of the county itself combined with those with which it shares boundaries, showing the relevance of the level of regional disaggregation for the results obtained. |
| Keywords: | Services, Manufacturing Industry, Location of Economic Activity, Portugal. |
| JEL: | R11 R12 R30 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0018&r=ure |
| By: | Diego Puga (IMDEA Social Sciences, Universidad Carlos III de Madrid and, CEPR) |
| Abstract: | Firms and workers are much more productive in large and dense urban environments. There is substantial evidence of such agglomeration economies based on three aproaches. First, on a clustering of production beyond what can be explained by chance or comparative advantage. Second, on spatial patterns in wages and rents. Third, on systematic variations in productivity with the urban environment. However, more needs to be learned about the causes of agglomeration economies. We have good models of agglomeration through sharing and matching, but not a deep enough understanding of learning in cities. Despite recent progress, more work is needed to distinguish empirically between alternative causes. |
| Keywords: | agglomeration economies |
| JEL: | R30 |
| Date: | 2009–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2009-09&r=ure |
| By: | Berliant, Marcus; Yu, Chia-Ming |
| Abstract: | Canonical analysis of the classical general equilibrium model demonstrates the existence of an open and dense subset of standard economies that possess fully-revealing rational expectations equilibria. This paper shows that the analogous result is not true in urban economies. An open subset of economies where none of the rational expectations equilibria fully reveal private information is found. There are two important pieces. First, there can be information about a location known by a consumer who does not live in that location in equilibrium, and thus the equilibrium rent does not reflect this information. Second, if a consumer’s utility depends only on information about their (endogenous) location of residence, perturbations of utility naturally do not incorporate information about other locations conditional on their location of residence. Existence of a rational expectations equilibrium is proved. Space can prevent housing prices from transmitting information from informed to uninformed households, resulting in an inefficient outcome. |
| Keywords: | Urban Economics; General Equilibrium; Private Information; Rational Expectations |
| JEL: | R13 D82 D51 |
| Date: | 2009–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17327&r=ure |
| By: | Pierre Lefebvre; Philip Merrigan |
| Abstract: | Selection into private schools is the principal cause of bias when estimating the effect of private schooling on academic achievement. By exploiting the generous public subsidizing of private high schools in the province of Québec, the second most populous province in Canada, we identify the causal impact of attendance in a private high school on achievement in mathematics. Because the supply of highly subsidized spaces is much higher at the high school level than at the grade school level, 60% of transitions from the public to private sector occur at the end of grade school, we assume that these transitions are exogenous with respect to changes in transitory unobserved variables affecting math scores conditional on variables such as changes in income and child fixed effects. Using data from Statistics Canada’s National Longitudinal Survey on Children and Youth (NLSCY), we estimate the effect of attending a private high school on the percentile rank and a standardized math test score with different models (child fixed-effect, random-effect and a pooled OLS) and restricted samples to control for the degree of selection. The results, interpreted as a treatment on the treated effect show that the effect of changing schools, from a public grade school to a private high school, increases the percentile rank of the math score between 5 and 10 points and by between .13 to .35 of a standard deviation depending on the specifications and samples. |
| Keywords: | Test scores, private high schools, subsidies, longitudinal data |
| JEL: | I28 I21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0935&r=ure |
| By: | William R. Kerr (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | We investigate the speed at which clusters of invention for a technology migrate spatially following breakthrough inventions. We identify breakthrough inventions as the top one percent of US inventions for a technology during 1975-1984 in terms of subsequent citations. Patenting growth is significantly higher in cities and technologies where breakthrough inventions occur after 1984 relative to peer locations that do not experience breakthrough inventions. This growth differential in turn depends on the mobility of the technology's labor force, which we model through the extent that technologies depend upon immigrant scientists and engineers. Spatial adjustments are faster for technologies that depend heavily on immigrant inventors. The results qualitatively con.rm the mechanism of industry migration proposed in models like [Duranton, G., 2007. Urban evolutions: The fast, the slow, and the still. American Economic Review 97, 197.221]. |
| Keywords: | Agglomeration, Clusters, Entrepreneurship, Invention, Mobility, Reallocation, R&D, Patents, Scientists, Engineers, Immigration. |
| JEL: | F2 J4 J6 O3 O4 R1 R3 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-020&r=ure |
| By: | Gilles Duranton; Matthew A. Turner |
| Abstract: | We investigate the relationship between interstate highways and highway vehicle kilometers traveled (VKT) in US cities. We find that VKT increases proportionately to highways and identify three important sources for this extra VKT: an increase in driving by current residents; an increase in transportation intensive production activity; and an inflow of new residents. The provision of public transportation has no impact on VKT. We also estimate the aggregate city level demand for VKT and find it to be very elastic. We conclude that an increased provision of roads or public transit is unlikely to relieve congestion. |
| JEL: | L91 R41 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15376&r=ure |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia); Julian R. Betts; Lorien A. Rice; Andrew C. Zau |
| Abstract: | We evaluate the integrating and segregating effects of school choice in a large, urban school district. Our findings, based on applications for fall 2001, suggest that open enrollment, a school-choice program that does not have explicit integrative objectives and does not provide busing, segregates students along three socioeconomic dimensions – race/ethnicity, student achievement and parental-education status. Using information on expenditures to promote integration at the district, we back out estimates of the social cost of open enrollment realized in terms of student segregation. Our social-cost estimates range widely depending on the weights that we place on the different dimensions of integration. However, even using conservative valuations of the different integrative measures suggests a social cost at this single district of over 3.4 million dollars (in year-2000 dollars). When considered in the context of the nation as a whole, where open-enrollment programs are commonplace, this estimate from a single district is substantial. However, we also note that there may be benefits not related to integration that counterbalance some or all of these costs. |
| Keywords: | school choice, open enrollment, integration, segregation, segregation costs |
| JEL: | I20 J15 R23 |
| Date: | 2009–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0910&r=ure |
| By: | Hayakawa, Kazunobu; JI, Zheng; Obashi, Ayako |
| Abstract: | Inspired by the observed contrasting patterns of industrial distribution in East Asia and Europe, this paper conducts an empirical clarification of the difference in spatial relationships among countries within a region for the electric machinery industry by use of spatial econometric analysis. The results indicate that, while production in the electric machinery industry in a country is positively correlated with that of neighboring countries in East Asia, there is no significant spatial correlation in Europe. Such a difference in spatial interdependence has important implications for economic development in those regions. |
| Keywords: | Agglomeration, Fragmentation, East Asia, Europe, Local industry, Electric industries |
| JEL: | N64 N65 R11 R12 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper212&r=ure |
| By: | Stefania Vitali (ETH Zurich); Mauro Napoletano (Observatoire Français des Conjonctures Économiques); Giorgio Fagiolo (Sant’Anna School of Advanced Studies) |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0907&r=ure |
| By: | Sami Bibi; Paul Makdissi; Myra Yazbeck |
| Abstract: | Housing deprivation orderings raise challenges as far as measurement is concerned. The first challenge resides in the identification of an adequate variable that characterizes housing services consumed by households. Another challenge may arise in the comparisons of housing services consumption between households of different sizes and composition. The last challenge may arise in the choice of a deprivation threshold and of a deprivation index. In this paper we address theoretically those challenges. An empirical illustration is offered using Lebanese data. |
| Keywords: | Housing, Deprivation, Stochastic dominance, Equivalence scales, Lebanon |
| JEL: | I31 I32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0939&r=ure |
| By: | Yamauchi, Futoshi; Muto, Megumi; Chowdhury, Shyamal; Dewina, Reno; Sumaryanto, Sony |
| Abstract: | "This paper uses household panel and village census data from Indonesia to examine the impact of spatial connectivity (road) development on household income growth and nonagricultural labor supply. The empirical results show that the impacts of improvements in local road quality (which positively correlate with transportation speed) on income growth and the transition to nonagricultural labor markets depend on the distance to economic centers and the household education level. In particular, postprimary education significantly increases the benefit from local spatial connectivity improvement in remote areas and promotes labor transition to nonagricultural sectors. Education and local road quality are complementary, mutually increasing income growth and nonagricultural labor income in remote areas. The gain from improvements in local connectivity (measured by average road quality) depends on village remoteness and initial household-level endowments." from authors' abstract |
| Keywords: | income growth, Spatial connectivity, Rural economy, Education, Social protection, Human capital, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:897&r=ure |
| By: | André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, IUF - Institut Universitaire de France); Robin Lindsey (University of Alberta - University of Alberta) |
| Abstract: | This paper reviews the methods and technologies for congestion pricing of roads. Congestion tolls can be implemented at scales ranging from individual lanes on single links to national road networks. Tolls can be differentiated by time of day, road type and vehicle characteristics, and even set in real time according to current traffic conditions. Conventional toll booths have largely given way to electronic toll collection technologies. The main technology categories are roadside-only systems employing digital photography, tag and beacon systems that use short-range microwave technology, and in vehicle-only systems based on either satellite or cellular network communications. The best technology choice depends on the application. The rate at which congestion pricing is implemented, and its ultimate scope, will depend on what technology is used and on what other functions and services it can perform. Since congestion pricing calls for the greatest overall degree of toll differentiation, congestion pricing is likely to drive the technology choice. |
| Keywords: | Road pricing; Congestion pricing; Electronic Toll Collection technology |
| Date: | 2009–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00414526_v1&r=ure |
| By: | Maurice Dalton; Jeffrey Zabel |
| Abstract: | There has been an increasing focus on exclusionary zoning; particularly in suburban areas, as a cause of the high house prices in many metropolitan areas in the United States. Most of the recent evidence, though, is indirect given the difficulty of isolating the direct causal impact of zoning on house prices. One main problem to overcome is that zoning is not exogenous but is rather the result of economically rational behavior on the part of residents. Another problem is the lack of good data on land use regulations. One further complication is that the ability of a town to sustain a price increase from zoning depends on its monopoly zoning power; that is, the lack of towns that are close substitutes. this study seeks to bridge this gap by investigating the regulatory price effect of minimum lot size zoning on house prices through the use of several excellent data sources which provide parcel level housing and geocoded regulatory data. We have data on all transactions ofsingle-family homes in the greater Boston area from 1987 to 2006, unit characteristics, and changes in minimum lot size zoing over this period. We estimate a model of house prices that include changes in minimum lot size at the zoning-district level, variables that account for possible spillover effects in the same town and in nearby towns, and zoning district fixed effects. The latter will control, to a large extent, the endogeneity bias due to land use regulations. We also account for monopoly zoning power through the use of town fixed effects. We find thta the price effect is highly nonlinear in monopoly zoning power with price increases of more than 20% at the upper tail of the monopoly power distribution. We also find evidence of significant spillover effects within and across towns; though not as large as those in the zoning districts where the minimum lot size changes. Finally, we find that the impact increases over time. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0732&r=ure |
| By: | Nadir Altinok (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I); Geeta Kingdon (Institute of education - University of London) |
| Abstract: | The impact of class size on student achievement remains a thorny question for educational decision makers. Meta-analyses of empirical studies emphasise the absence of class-size effects but detractors have argued against such pessimistic conclusions because many of the underlying studies have not paid attention to the endogeneity of class-size. This paper uses a stringent method to address the endogeneity problem using TIMSS data on 45 countries. We measure the class size effect by relating the difference in a student's achievement across subjects to the difference in his/her class-size across subjects. This (subject-differenced) within-pupil achievement production function avoids the problem of the non-random matching of children to specific schools, and to classes within schools. The results show a statistically significant effect of class size for 16 countries but in only 10 of them is the effect negative, and the effect size is very small in most cases. Several robustness tests are carried out, including control for students' subject-specific ability and subject-specific teacher characteristics, and correction for possible measurement error. Thus, our stringent approach to addressing the problem endogeneity confirms the findings of meta-analyses that find little support for class size effects. We find that class-size effects are smaller in resource-rich countries than in developing countries, supporting the idea that the adverse effect of larger classes increases with class-size. We also find that class size effects are smaller in regions with higher teacher quality. |
| Keywords: | Class size effects ; Student achievement ; Government Expenditures and Education ; Analysis of Education |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00417229_v1&r=ure |
| By: | UCLG Committee on Local Finance and Development UCLG |
| Abstract: | The Policy Paper seeks to give voice to a local government vision on financing and stems from a shared understanding of the challenges we face. The Policy Paper contains 25 concrete recom- mendations for increasing local government access to infrastructure financing, particular- ly in developing country cities where infrastructure planning and construction have not kept pace with rapid urbanisation. At the global level, UCLG advocates that a fixed proportion of development aid and debt relief be allocated directly to local governments to enable them to address poverty reduction through public infrastructure provision. |
| Keywords: | urban finance, local finance, municipal finance, UNHABITAT, economics, infrastructure, urban infrastructure, public funding, urban development |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2206&r=ure |
| By: | Åslund, Olof (IFAU - Institute for Labour Market Policy Evaluation); Edin, Per-Anders (IFAU - Institute for Labour Market Policy Evaluation); Fredriksson, Peter (IFAU - Institute for Labour Market Policy Evaluation); Grönqvist, Hans (SOFI, Stockholm University) |
| Abstract: | Immigrants typically perform worse than other students in the OECD countries. We examine to what extent this is due to the population characteristics of the neighborhoods that immigrants grow up in. We address this issue using a governmental refugee placement policy which provides exogenous variation in the initial place of residence in Sweden. The main result is that, for a given share of immigrants in a neighborhood, immigrant school performance is increasing in the number of highly educated adults sharing the subject’s ethnicity. A standard deviation increase in the fraction of highly educated adults in the assigned neighborhood increases compulsory school GPA by 0.9 percentile ranks. This magnitude corresponds to a tenth of the gap in student performance between refugee immigrant and native-born children. We also provide tentative evidence that the overall share of immigrants in the neighborhood has a negative effect on GPA. |
| Keywords: | Peer effects; Ethnic enclaves; Immigration; School performance |
| JEL: | I20 J15 Z13 |
| Date: | 2009–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_020&r=ure |
| By: | Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México) |
| Abstract: | This study explores the influence of street markets in urban geo-demographic settings and analyzes vending patterns with ethnic values enhancing the consumer satisfaction. Interrelationship among urban dwellers, marketplace ambiance, and conventional shopping wisdom of customers and interactive customer relations are also addressed in the study based on empirical survey. Research on street markets is very limited though some studies are available on street vendors with focus on spatial planning, political interventions, and legal rights. This study on street markets contributes significantly to the existing literature in reference to shopping behavior and perceptional values of urban consumers.. |
| Keywords: | Street markets, consumer behavior, ethnic markets, sales differentiation, market attractiveness, consumer satisfaction |
| JEL: | M31 O18 R12 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:ega:wpaper:200903&r=ure |
| By: | David A. Weiner; Byron F. Lutz; Jens Ludwig |
| Abstract: | One of the most striking features of crime in America is its disproportionate concentration in disadvantaged, racially segregated communities. In this paper we estimate the effects of court-ordered school desegregation on crime by exploiting plausibly random variation in the timing of when these orders go into effect across the set of large urban school districts ever subject to such orders. For black youth, we find that homicide victimization declines by around 25 percent when court orders are implemented and homicide arrests also decline significantly, which seem to be due at least in part to increased schooling attainment. We also find positive spillover effects to other groups, with beneficial changes in homicide involvement for black adults and perhaps whites as well. Our estimates imply that imposition of these court orders in the nation’s largest school districts lowered the homicide rate to black teens and young adults nationwide by around 13 percent, and might account for around one-quarter of the convergence in black-white homicide rates over the period from 1970 to 1980. |
| JEL: | I2 J15 J18 K42 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15380&r=ure |
| By: | Didier Sornette; Ryan Woodard |
| Abstract: | The financial crisis of 2008, which started with an initially well-defined epicenter focused on mortgage backed securities (MBS), has been cascading into a global economic recession, whose increasing severity and uncertain duration has led and is continuing to lead to massive losses and damage for billions of people. Heavy central bank interventions and government spending programs have been launched worldwide and especially in the USA and Europe, with the hope to unfreeze credit and boltster consumption. Here, we present evidence and articulate a general framework that allows one to diagnose the fundamental cause of the unfolding financial and economic crisis: the accumulation of several bubbles and their interplay and mutual reinforcement has led to an illusion of a "perpetual money machine" allowing financial institutions to extract wealth from an unsustainable artificial process. Taking stock of this diagnostic, we conclude that many of the interventions to address the so-called liquidity crisis and to encourage more consumption are ill-advised and even dangerous, given that precautionary reserves were not accumulated in the "good times" but that huge liabilities were. The most "interesting" present times constitute unique opportunities but also great challenges, for which we offer a few recommendations. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:0905.0220&r=ure |
| By: | Yannis M. Ioannides; Giorgio Topa |
| Abstract: | The paper addresses the empirical significance of the social context in economic decisions. Decisions of individuals who share spatial and social milieus are likely to be interdependent, and econometric identification of social effects poses intricate data and methodological problems, including dealing with self-selection in spatial and socail groups. It uses a simple empirical framework to introduce social interactions effects at different levels of aggregation, and examines estimation problems into linear models, the impact of self-selection and of non linearities. It also examines neighborhood effects in job matching and proposes a research agenda that offers new techniques and data sources. |
| Keywords: | Neighborhood effects, social interactions, social networks, social effects, self-selection, neighborhood choice, social multiplier, spatial effects |
| JEL: | C00 C81 J6 R22 Z13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0736&r=ure |
| By: | Edward L. Glaeser (Harvard University, Faculty of Arts and Sciences; Harvard Kennedy School); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Giacomo A. M. Ponzetto (CREI and Universitat Pompeu Fabra) |
| Abstract: | Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people. |
| Keywords: | Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities. |
| JEL: | J2 L0 L1 L2 L6 O3 R2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-019&r=ure |
| By: | Litzel, Nicole (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Möller, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Economic integration typically goes along with disintegration of production through outsourcing and offshoring (Feenstra 1998). As horizontal and vertical links between firms become more and more pronounced, value chains within regions are increasingly organized by production and innovation clusters. On the basis of a literature overview, we argue that in a world of economic integration clusters can be expected to play a prominent role. Therefore clusters can also be seen as a key element in the European Metropolitan Region concept. Within such an economic space, localisation economies according to the 'Marshallian trinity' (knowledge spillovers, input sharing and labour market pooling (Rosenthal/Strange 2003)) can be realized. The paper builds on a comprehensive company survey for the core of the European Metropolitan Region Nuremberg that includes customer-supplier relationships and various forms of cooperation. As indicated by numerous empirical studies, the characteristics of clusters differ substantially. In order to overcome the fuzziness of the concept we suggest a bottom-up methodology of cluster identification using a set of qualitative and quantitative indicators. Given that many kinds of barriers to interregional and international trade are becoming less and less important and transport cost are falling, modern production clusters tend to have a higher geographical extension than traditional ones. We therefore raise the question of whether clustering is relevant for economic integration on the regional, national and supra-national level." (author's abstract, IAB-Doku) ((en)) |
| JEL: | R11 R12 |
| Date: | 2009–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200922&r=ure |
| By: | Constant Tra (Department of Economics, University of Nevada, Las Vegas) |
| Abstract: | This study develops a discrete choice locational equilibrium model to evaluate the benefits of the air quality improvements that occurred in the Los Angeles area following the 1990 Clean Air Act Amendments (CAAA). The discrete choice equilibrium approach accounts for the fact that air quality improvements brought about by the 1990 CAAA will change housing choices and prices. The study also provides new evidence for the distributional welfare impacts of the 1990 CAAA in the Los Angeles area. Findings suggest that the air quality improvements that occurred in the Los Angeles area between 1990 and 2000 provided substantial general equilibrium benefits to households. The analysis reveals noticeable differences between partial and general equilibrium welfare gains, demonstrating that ignoring equilibrium effects will likely misrepresent the benefits of large environmental changes. In addition, we find that the equilibrium welfare impacts of the 1990 CAAA in the Los Angeles area varied significantly across income groups. |
| Keywords: | benefit analysis, ozone improvement, locational equilibrium, discrete choice |
| JEL: | H0 Q28 R13 R21 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0922&r=ure |
| By: | Martijn I. Dröes; Wolter H.J. Hassink |
| Abstract: | This paper investigates why the homeowner's expectation about the sale price of a house deviates from its market price. This paper has two distinct contributions. First, we argue that sale price expectations are individual specific. Omitting this individual effect leads to biased hedonic estimates. As a result, hedonic estimates conditional on individual characteristics are preferred. Second, we economically interpret the individual effect in terms of inaccuracy of homeowners and a specific type of price setting behaviour ("fishing for a relatively high selling price"). In particular, we focus on the role of mortgage commitment, which is measured by the loan-to-income ratio. We argue that homeowners with a higher loan-to-income ratio are less likely to move. Consequently, they incur a low opportunity cost of fishing. They are also less inclined to search. As a result, homeowners with a higher loan-toincome ratio might have more incentive to fish for a higher sale price, but they may also be less accurate with regard to the market price. Our estimates confirm these two hypotheses. |
| Keywords: | house price, sale price expectation, mark-up, mortgage |
| JEL: | D83 D84 G12 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0924&r=ure |
| By: | Basu, Kaushik (Cornell University) |
| Abstract: | The financial crisis of 2007-09 began as a local problem in the mortgage finance market in the United States and Europe but, within months, escalated into a general global financial crisis, resulting in collapsing investment not just in developed nations but also in Shanghai, Rio and Mumbai, and has led to a general recession worldwide. The paper builds a rational-expectations, microeconomic model of why the local crisis escalated into a general freeze in credit flows. It then isolates two very different kinds of interventions needed to restore the economy back to health, arguing that government stimulus policy has not had enough impact because a failure to understand the need for the dual intervention. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:corcae:09-11&r=ure |
| By: | Giorgia Giovannetti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Giorgio Ricchiuti (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Margherita Velucchi (Università degli Studi di Firenze, Dipartimento di Statistica “G. Parenti”) |
| Abstract: | Competition is increasingly crossing borders. However, location still matters: the most successful competitors in an industry often cluster in the same geographic areas and companies use the advantages of location to compete at a global level. When competing across borders, firms can coordinate among different activities in a variety of ways to harness network advantages. This paper analyses how Italian firms’ performance, proxied by their propensity to export, depends both on geographical and institutional context and on individual characteristics. Using a multilevel model, we estimate and distinguish the effect of individual (firm level) and context variables (province level) on the performance of internationalized Italian firms. |
| Keywords: | Exports, Multilevel Model, Heterogeneity |
| JEL: | C1 F1 F2 L1 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2009_09.rdf&r=ure |
| By: | Uchimura, Hiroko; Suzuki, Yurika |
| Abstract: | This paper focuses on the fiscal decentralization in the Philippines after the 1991 Local Government Code. It first examines the intergovernmental fiscal relationship between central and local governments by using fiscal decentralization indicators, and then investigates its impact on local finance. After fiscal decentralization, the local expenditure responsibility is expanded while the local fiscal capacity is not strengthened in the Philippines. Local governments consequently comes to depend heavily on fiscal transfers from the central government, internal revenue allotments (IRAs), which has a substantial influence on local finance. The heavy dependence on IRAs makes local finance unpredictable and unstable. The distribution of IRAs also affects the horizontal balance between provincial governments. |
| Keywords: | Fiscal Decentralization, Fiscal Decentralization Indicators, Horizontal Balance, The Philippines, Philippines, Decentralization, Local Finance |
| JEL: | H77 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper209&r=ure |
| By: | Westerlund, Joakim (Department of Economics, School of Business, Economics and Law, Göteborg University); Mahdavi, Saeid (University of Texas at San Antonio) |
| Abstract: | We re-examine the tax-spending nexus using a panel of 50 US state-local government units between 1963 and 1997. We find that, unlike tax revenues, expenditures adjust to revert back to a long-term equilibrium relationship. The evidence on the short-term dynamics is also consistent with the tax-and-spend hypothesis. One implication of this finding is that the size of the government at the state-local level is not determined by expenditure demand, but rather by resource supply. This is consistent with the fact that many US state and local governments operate under constitutional or legislative limitations that seek to constrain deficits.<p> |
| Keywords: | Tax-spend; State and local government; Public finance; Panel unit root; Panel cointegration |
| JEL: | C33 H71 H72 |
| Date: | 2009–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0378&r=ure |
| By: | Giulio Cainelli (Dipartimento per lo Studio delle Società Mediterranee, Università degli Studi di Bari); Donato Iacobucci (Dipartimento di Ingegneria Informatica, Gestionale e dell’Automazione, Università Politecnica delle Marche) |
| Abstract: | The aim of this paper is to analyse the role of technology and spatial agglomeration in decisions about vertical integration. It starts from the hypotheses that the business group, defined as a set of firms under common ownership and control, is the appropriate unit to delimit the firm’s boundary. We use information drawn from input-output tables to detect the presence of positive inter-industry exchanges and whether or not activities in a group are vertically related. Accounting for endogeneity problems, we estimate Probit and Linear Probability models to empirically investigate the role of technology and spatial agglomeration on vertical integration decisions. Consistent with property rights theory, our results show that the technology intensity of acquirers matters for backward integration choices and moreover, that agglomeration plays a role in vertical integration only when it operates jointly with technology. |
| Keywords: | Business groups, spatial agglomeration, technology, vertical integration |
| JEL: | L22 R12 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cme:wpaper:0903&r=ure |
| By: | K. Rajaratnam |
| Abstract: | The credit crisis of 2007 and 2008 has thrown much focus on the models used to price mortgage backed securities. Many institutions have relied heavily on the credit ratings provided by credit agency. The relationships between management of credit agencies and debt issuers may have resulted in conflict of interest when pricing these securities which has lead to incorrect risk assumptions and value expectations from institutional buyers. Despite the existence of sophisticated models, institutional buyers have relied on these ratings when considering the risks involved with these products. Institutional investors interested in non-agency MBS are particularly vulnerable due to both the credit risks as well as prepayment risks. This paper describes a simple simulation model that model non-agency MBS and CMO. The simulation model builds on existing models for agency MBS. It incorporates credit risks of mortgage buyers using existing models used in capital requirements as specified by the Basel II Accord. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:0903.1643&r=ure |
| By: | Martin Dooley; Cesar Furtado |
| Abstract: | ESL instruction is an important issue in Canada due to the large number of immigrants and has potentially impacts on both student academic progress and educational expenditures. In 1999, the province of British Columbia limited funding for ESL to five years per student but increased the annual ESL supplement. We explore the educational impact of these reforms using the results of standardized tests of numeracy, reading and writing proficiency for Grade 7 students. We compare differences in test scores, both before and after the policy change, among the following groups of Grade 7 students in the GVA: students with 5 or more years of ESL (those constrained by the new policy); students with one to four years of ESL; non-ESL students with a non-official home language; and non-ESL students with an official home language. No group of students experiences large changes in test scores due to the reform. The changes we do observe are usually increases for ESL students, and the few decreases are very small. Moreover, both before and after the reform, score differences between groups of students with different experiences of ESL, different neighbourhood socio-economic characteristics, and different home languages are modest in size. |
| Keywords: | English Second Language; Educational Funding |
| JEL: | I |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2009-11&r=ure |
| By: | Dan Black; Natalia Kolesnikova; Seth G. Sanders; Lowell J. Taylor |
| Abstract: | A standard object of empirical analysis in labor economics is a modified Mincer wage function in which an individual's log wage is specified to be a function of education, experience, and an indicator variable identifying race. Researchers hope that estimates from this exercise can be informative about the impact of minority status on labor market success. Here we set out a theoretical justification for this regression in a context in which individuals live and work in different locations. Our model leads to the traditional approach, but with the important caveat that the regression should include location-specific fixed effects. Given this insight, we reevaluate evidence about the black-white wage disparity in the United States. |
| Keywords: | Income distribution ; Wages ; Discrimination in employment |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2009-043&r=ure |
| By: | Zhang, Ying (UNU-MERIT); Rajabzadeh, Iman (UNU-MERIT); Lauterbach, Rodolfo (UNU-MERIT) |
| Abstract: | In this paper we empirically studied the relationship between network centrality and academic performance among a group of 47 PhD students from UNU-MERIT institute. We conducted an independent email survey and relied on social networks theory as well as standard econometric procedures to analyse the data. We found a significant reversed U-shaped relation between network centrality and students' academic performance. We controlled our results by several node's characteristics such as age, academic background, and research area. Additional evidence shows that there is a negative impact of age on academic performance at PhD student level. Contributions of this paper can refer to the input into studies that aim to explore peereffect. Also it contributes to the methodological approach by combining elements of network analysis and econometric theories. This study demonstrates that when evaluating the impact of network centrality on performance, there is no significant difference between various network centrality measurements. |
| Keywords: | Networks analysis, Network centrality, Peer-effect, Academic performance |
| JEL: | D85 I21 I23 L14 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009034&r=ure |
| By: | Ian Galloway |
| Abstract: | Peer-to-peer (P2P) networks directly connect computer users online. Popular P2P platforms include eBay and Craigslist, for example, which have transformed the market for used consumer goods in recent years. Increasingly popular, however, are P2P lending sites that facilitate debt transactions by directly connecting borrowers and lenders on the Internet. In the summer of 2008, the Center for Community Development Investments assembled a working group of community development leaders, investors, and Prosper Marketplace, the largest P2P lending platform in the world, to discuss the potential community development implications of the innovation. This working paper documents this discussion and explores P2P lending in greater detail. Part I offers background on P2P and the state of the P2P lending industry; Part II outlines the potential community development finance implications of P2P; and Part III discusses the working group and next steps necessary to successfully marry P2P technology and community development finance. |
| Keywords: | Loans ; Internet |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfcw:2009-06&r=ure |
| By: | Ryo Nakajima; Ryuichi Tamura; Nobuyuki Hanaki |
| Abstract: | It has been argued in the economic literature that job search through informal job networks improves the employer-employee match quality. This paper argues that inventors' research collaboration networks reduce the uncertainty of firms about the match qualities of inventors prior to hiring. We estimate the effect of inventors' collaboration networks on their productivity and mobility using the U.S. patent application database. It is found that network- recruited inventors are more productive and have longer tenure than publicly recruited inventors. The evidence from fixed-effect regressions shows that the higher productivity and longer tenure of network-recruited inventors are not solely attributable to their unobserved ability. These results are consistent with the job match hypothesis between inventors and firms through their collaboration networks. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2009-001&r=ure |
| By: | Robert Hassink; Claudia Klaerding |
| Abstract: | Economic geographers have recently been confronted with attempts to constitute both relational and evolutionary economic geography. The two proposed paradigms have much in common, such as the perception of space as being socially constructed instead of a pre-given entity with causal powers. Until now, however, astonishingly little has been written about the differences between these proposed paradigms. By comparatively focussing on three research issues, the paper concludes that the conceptual differences are rather subtle and that the relational approach seems to include a wider and therefore, more unspecific perspective to explain the distribution of economic activities over space. |
| Keywords: | trade network, knowledge network, social network analysis, wine sector |
| JEL: | B52 O18 R11 R12 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0911&r=ure |
| By: | Arora, Saurabh (School of Innovation Sciences, Eindhoven University of Technology); Sanditov, Bulat (UNU-MERIT, Maastricht University) |
| Abstract: | We examine three theories of caste and community using new data on social networks among residents of a south Indian village. The first theory treats individual caste groups as separated communities driven by the Brahmanical ideology of hierarchy based on purity and pollution. The second theory departs from the first by placing kings and landlords at the centre of rural (primeval) social structure. Here ritual giving by kings provides the glue that holds a community together by transferring inauspiciousness to gift-recipients and ensuring community welfare. The third theory, that may be treated as a corollary of the second, argues that powerful leaders in the religious and political domains act as patrons of people in their constituencies and forge a sense of community. The resulting community may be single or multi-caste. Using a community structure algorithm from social network analysis, we divide the network of the village into thirteen tight-knit clusters. We find that no cluster or community in the social network has exactly the same boundaries as a caste group in the village. Barring three exceptions, all clusters are multi-caste. Our results are most consistent with the third theory: each cluster has a patron/leader who represents the interests of his constituency at village-level fora and bridges caste and community divides. |
| Keywords: | Social networks, culture, caste, social change, community development, rural India |
| JEL: | Z13 O10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009037&r=ure |