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on Urban and Real Estate Economics |
| By: | Thissen, M.J.P.M.; Burger, M.J.; Oort, F.G. van |
| Abstract: | We build a theoretical model that relates house price, city size and the expected future growth of demand for housing. Our model combines the Alonso-Mills model on urban economics with insights from financial economics on house prices. Estimating the model for cities in the US, we empirically validate the positive effect of city size on urban house prices. Moreover, our estimations confirm that an (unrealistic) increase in the expected growth of demand fuelled by the widespread availability of credit provides a better explanation for the recent bubble than inelastic housing supply that explained earlier bubbles. |
| Keywords: | house prices;bubbles;city size |
| Date: | 2010–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765020380&r=ure |
| By: | Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Theories in regional science predict that related establishments benefit from their mutual proximity due to forward-backward linkages, labor market pooling and knowledge spillovers (the Marshallian forces). While the existence of these externalities as a whole is well supported by the empirical literature, there are few studies that discriminate between separate explanations. This paper introduces a new approach to assess the importance and magnitude of each of the Marshallian forces separately. Instead of measuring external economies of scale that take place within single industries, it models spillovers that happen between co-located industries. To this end, methods of spatial econometrics are adopted to measure interindustry relationships in employment growth between 55 industries of the manufacturing and service sectors in the labor market regions of the five largest cities in western Germany in the years 1989 to 2006. In this context, the strength of these relations is determined by economic closeness rather than by geography. The results suggest that each of the three Marshallian forces help to explain agglomeration externalities." (author's abstract, IAB-Doku) ((en)) |
| JEL: | O47 R11 R12 |
| Date: | 2010–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201015&r=ure |
| By: | Oded Hochman (Department of Economics, Ben-Gurion University of the Negev, Israel) |
| Abstract: | We investigate here the agglomeration of spatial clubs in an efficient allocation of a club economy. The literature on agglomeration has focused largely on a primary agglomeration caused by direct attraction forces. We concentrate mainly on secondary and tertiary agglomerations caused by a primary agglomeration. Initially, scale economies in the provision of club goods (CGs) lead each CG to agglomerate in facilities of its club. This primary agglomeration causes a secondary concentration of population around these facilities, which in turn brings about a tertiary agglomeration of facilities of different clubs into centers in the midst of population concentration. The agglomeration of facilities occurs only if a secondary concentration of population takes place. We analyze in detail two specific patterns of agglomeration. One is the central location pattern in which the facilities of all clubs agglomerate perfectly in the middle of the complex. The second is a triple-centered complex in which the center in the middle of the complex consists of perfectly agglomerated facilities of different clubs, each with a single facility per complex. The remaining two centers also consist of facilities of different clubs, but cubs in these centers each have two facilities per complex, one in each center. Each of these two centers is located between a boundary and the middle of the complex closer to the middle of the complex than to the boundary. The facilities in these two centers form condensed clusters of facilities that may contain residential land in between the facilities. We then show that these agglomeration patterns also characterize agglomerations in general. The literature maintains that an efficiently behaving municipality increases its tax-base. This implies that it is in the municipality’s interest to achieve efficiency. The best way for a local government to achieve this desired efficiency is by partially intervening in market operations in order to internalize local externalities. We argue that it suffices for such an intervention to be limited to providing the city’s infrastructure, to taxing only residential land rents and clubs’ profits, to subsidizing the basic industry of the city, and to partially regulating land uses. Consequently, if the local governments of all complexes behave properly the decentralization of the efficient allocation of the club economy should be attained. |
| Keywords: | effective or ineffective agglomeration, spatial clubs, complex, configuration, collective goods, local public goods, facilities, direct and indirect attraction, primary and tertiary agglomerations, secondary population concentration. |
| JEL: | R1 H4 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:1005&r=ure |
| By: | Funke, Michael (BOFIT); Yu, Hao (BOFIT) |
| Abstract: | Seaports have historically played a key role in facilitating trade and growth. This paper is the first attempt in the literature to analyse the formation of Chinese seaport cities and the dynamics that drives it. First, we aim to identify theoretically the emergence of urbanized seaports with the help of a formal economic geography model. Second, employing an empirically plausible parameterisation of the model, we calibrate the evolutionary process and spatial distribution of seaports along the Chinese coastline. |
| Keywords: | seaports; cities; economic growth; China |
| JEL: | R11 R12 R41 |
| Date: | 2010–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2010_011&r=ure |
| By: | Dmytro Hryshko (University of Alberta); María José Luengo-Prado (IMDEA Social Sciences); Bent E. Sørensen (University of Houston) |
| Abstract: | Homeowners in the Panel Study of Income Dynamics are able to maintain a high level of consumption following job loss (or disability) in periods of rising local house prices while the consumption drop for homeowners who lose their job in times of lower house prices is substantial. These results are consistent with homeowners being able to access wealth gains when housing appreciates as witnessed by their ability to smooth consumption more than renters. A calibrated model of endogenous homeownership and consumption is able to reproduce the patterns in the data quite well and provides an interpretation of the empirical results. |
| Date: | 2010–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2010-17&r=ure |
| By: | van Ham, Maarten (University of St. Andrews); Williamson, Lee (University of St. Andrews); Feijten, Peteke (University of St. Andrews); Boyle, Paul (University of St. Andrews) |
| Abstract: | One of the goals of the Right to Buy (RTB) was to stimulate labour migration by removing the debilitating effect of social housing on geographical mobility. This is the first study to examine rigorously whether the Right to Buy legislation did indeed 'free-up' those in social housing who bought their homes. Using longitudinal data from the British Household Panel Survey (BHPS) and panel regression models we show that the probability of a RTB-owner making a long distance move falls between that of social renters and owner occupiers. However, the difference between RTB-owners and neither homeowners nor social renters is significant. Social renters are significantly less likely to move over long distances than traditional owners. The results also suggest that RTB-owners are less likely than traditional owners to move for job related reasons, but more likely than social renters. |
| Keywords: | Right to Buy, residential mobility, migration, moving reasons, longitudinal data, United Kingdom |
| JEL: | J60 J61 R23 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5115&r=ure |
| By: | Virginie Piguet; Sonia Paty; Sylvie Charlot |
| Abstract: | The main purpose of this paper is to assess the effects of fiscal cooperation on local taxation in a decentralized country, using the French experience. We estimate a model of tax setting for local business tax using spatial and dynamic econometric techniques, for the period 1993-2003. We find first that reducing the number of municipalities is likely to limit tax competition and increase local business tax rates as a consequence. Second, we find that tax rates are higher when groups of localities set a single business tax rate rather than applying an additional rate of business tax, suggesting that horizontal tax competition constrains the level of tax rate increase generated by tax-base sharing. |
| Keywords: | Consolidation, Tax competition, Vertical externalities, Local business tax |
| JEL: | H2 H3 H7 |
| Date: | 2010–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:ceo:wpaper:2&r=ure |
| By: | Narayana, M. R. |
| Abstract: | This paper aims at economic analysis of economic globalization and urban growth of Bangalore, the Silicon Valley of India, as they are related to ICT sector. Overall analyses offer new insights and evidences for ICT sector as a major contributor for degree of economic globalization and urban economic growth, mainly driven by ICT services. Bangalore’s performance is remarkable compared to all-India level and OECD averages. These results offer empirical justification for continuing with and strengthening of public policies for promotion of globalizing and growth-oriented ICT sector in Bangalore with implications for comparable Indian and Asian cities. |
| Keywords: | globalization, ICT sector, urbanization, urban economic growth, Bangalore |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-80&r=ure |
| By: | Aparicio Fenoll, Ainhoa (Universitat Pompeu Fabra) |
| Abstract: | This paper addresses the implications of transitory changes in labor market conditions for low versus high educated workers on the decision to acquire education. To identify this effect, I use the improvement in the labor market prospects of low educated workers motivated by the increases in employment and wages in the construction sector during the recent housing boom. The estimation strategy is based on the fact that changes in the labor market driven by the construction sector affect only men. Increases in construction activity are found to increase men's propensity to drop out of high-school, relative to women. According to this finding, policies promoting education should strengthen when in the presence of transitory shocks in the labor market that make dropping out more attractive. |
| Keywords: | high-school dropout, housing boom, Spain |
| JEL: | J24 J22 I20 L74 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5139&r=ure |
| By: | Paul M. Sommers; Alyssa A. Chong |
| JEL: | L83 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:1028&r=ure |
| By: | Rune M. Vejlin (School of Economics and Management, Aarhus University, Denmark) |
| Abstract: | I develop a stylized partial on-the-job equilibrium search model which incorporate a spatial dimension. Workers reside on a circle and can move at a cost. Each point on the circle has a wage distribution. Implications about wages and job mobility are drawn from the model and tested on Danish matched employer-employee data. The model predictions hold true. I find that workers working farther away from their residence earn higher wages. When a worker is making a job-to-job transition where he changes workplace location he experiences a higher wage change than a worker making a job-to-job transition without changing workplace location. However, workers making a job-to-job transition which makes the workplace location closer to the residence experiences a wage drop. Furthermore, low wage workers and workers with high transportation costs are more likely to make job-to-job transitions, but also residential moves. |
| Keywords: | ob mobility, residential mobility, wage dynamics, search |
| JEL: | J6 J3 R3 |
| Date: | 2010–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2010-14&r=ure |
| By: | Morgan J. Rose (UMBC) |
| Abstract: | This paper presents evidence that for most types of subprime mortgages, broker-originated loans have a higher probability of foreclosure than bank-originated loans, but only for loans with prepayment penalties. Possible explanations include less careful underwriting on the part of brokers relative to banks when originating loans with multiple risk factors including prepayment penalties, and a greater propensity on the part of brokers to originate loans with prepayment penalties in locales with less financially sophisticated borrowers. State anti-predatory lending law provisions restricting the use of prepayment penalties eliminate the elevated foreclosure risk of broker originations relative to bank originations. |
| Keywords: | foreclosure; prepayment penalties; mortgage brokers; financial regulation; anti-predatory lending laws. |
| JEL: | G21 G28 D18 L85 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:umb:econwp:10124&r=ure |
| By: | Tu, Jiong (Human Resources and Skills Development Canada - Labour Program) |
| Abstract: | Although immigration has become a major growth factor for Canadian labour force, there is little economic research on the effect of immigration on native-born Canadians' labour market performance. This paper examines the relationship between changes in the share of immigrants by sub-labour markets (categorized by skill types and geographic areas) and changes in native wage growth by a two-stage regression analysis, using 1991, 1996 and 2001 Canadian Census data files. After accounting for biases due to native mobility, endogenous location of immigrants and labour demand shifts, the estimated effects of immigration are consistently insignificant or significantly positive. The results are robust to various specifications of sub-labour markets at city, provincial and national levels, suggesting that there is no evidence for a negative impact on native wage growth rate from the large immigrant influx during the 1990s. |
| Keywords: | immigrant, wages, labour market, Canada |
| JEL: | F22 J15 J31 J61 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5129&r=ure |
| By: | Dirk Fornahl; Tom Broekel; Ron Boschma |
| Abstract: | This paper aims to explain whether firm-specific features, their engagement in collaboration networks and their location influence patent activity of biotech firms in Germany in the period 1997-2004. First, we demonstrate that non-collaborative R&D subsidies do not increase patent intensity of biotech firms. Second, the number of knowledge links biotech firms is also not influencing their patent performance. However, strong and robust evidence is found that some but not too much cognitive distance between actors involved in R&D collaborations increases patent performance of firms. Third, being located in a biotech cluster does positively impact on patent performance. |
| Keywords: | relatedness, R&D subsidies, biotechnology, knowledge networks, proximity paradox |
| JEL: | O33 O38 R58 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1009&r=ure |
| By: | Hensvik, Lena (IFAU - Institute for Labour Market Policy Evaluation); Nilsson, Peter (Uppsala University) |
| Abstract: | We examine the influence that co-workers’ have on each other’s fertility decisions. Using linked employer employee panel data for Sweden we show that female individual fertility increases if a co-worker recently had a child. The timing of births among co-workers of the same sex, educational level and co workers who are close in age is even more influential. Consistent with models of social learning we find that the peer effect for first time mothers is similar irrespective of the birth order of the co-worker’s child, while for higher order births within-parity peer effects are strong but cross-parity peer effects are entirely absent. A causal interpretation of our estimates is strengthened by several falsification tests showing that neither unobserved common shocks at the workplace level, nor sorting of workers between workplaces are likely to explain the observed peer effect. We also provide evidence suggesting that peers not only affect timing of births but potentially also completed fertility, and that fertility peer influences spills over across multiple networks. Our results forward the understandings of how individual fertility timing decisions are made and suggest that social interactions could be an important factor behind the strong inter-temporal fluctuations in total fertility rates observed in many countries. |
| Keywords: | Peer effects; social preferences; co-workers |
| JEL: | J13 |
| Date: | 2010–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2010_009&r=ure |
| By: | Lambais, Guilherme B. R. |
| Abstract: | The objective of this paper is to analyze a set of technology-based enterprises connected to incubators and the University of Campinas, both located in the Metropolitan Region of Campinas, Brazil. We call these, respectively, “induced” and “spontaneous” companies. A survey was conducted directly with the companies and reveled an answer rate of 31% for our population connected to incubators and 24% for those connected with the university. We propose a discussion of firm’s endogenous and exogenous characteristics, as well as their relations with the geographic space. Our main conclusions are as follows: 1) the space emerges as fundamental in the creation and development of technology-based endeavors, 2) both groups of companies do not differ substantially in successful growth potential, 3) differences emerge with the level of integration with the university and network access, and 4) their main limitation is connected with financing access. |
| Keywords: | Regional and urban economics; New economic geography; Technology-based enterprises; Metropolitan Region of Campinas; Technopolis |
| JEL: | L20 R00 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24449&r=ure |
| By: | Beladi, Hamid; Chakrabarti, Avik; Marjit, Sugata |
| Abstract: | This analysis is a natural follow up of continued efforts to assess the consequences of cross-border mergers in industries with a vertical structure. Absent free trade, in a vertically related industry, the downstream firms will not choose the social optimum under spatial price discrimination when none of the downstream firms produce all the varieties that consumers demand. We show that free trade will induce the downstream firms to gravitate toward the social optimum but an upstream merger across borders, under free trade, will pull the downstream firms away from the social optimum back to their autarkic positions. |
| Keywords: | Product-differentiation; Price-discrimination; Spatialcompetition; Firm-location; Cross-border Merger |
| JEL: | L13 F12 D43 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24474&r=ure |
| By: | Paul M. Sommers; Mark B. Whelan |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:1032&r=ure |