|
on Urban and Real Estate Economics |
| By: | Jaison R. Abel (Federal Reserve Bank of New York); Ishita Dey (University at Buffalo); Todd M. Gabe (University of Maine) |
| Abstract: | We estimate a model of urban productivity in which the agglomeration effect of density is enhanced by a metropolitan area’s stock of human capital. Estimation accounts for potential biases due to the endogeneity of density and industrial composition effects. Using new information on output per worker for U.S. metropolitan areas along with a measure of density that accounts for the spatial distribution of population, we find that a doubling of density increases productivity by 2 to 4 percent. Consistent with theories of learning and knowledge spillovers in cities, we demonstrate that the elasticity of average labor productivity with respect to density increases with human capital. Metropolitan areas with a human capital stock one standard deviation below the mean realize no productivity gain, while doubling density in metropolitan areas with a human capital stock one standard deviation above the mean yields productivity benefits that are about twice the average. |
| Keywords: | Agglomeration, productivity, density, knowledge spillovers |
| JEL: | R12 R30 J24 O40 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-30&r=ure |
| By: | Raven Molloy (Federal Reserve Board); Hui Shan (Federal Reserve Board) |
| Abstract: | By raising commuting costs, an increase in gasoline prices should reduce the demand for housing in areas far from employment centers relative to locations closer to jobs. Using annual panel data on a large number of ZIP codes and municipalities from 1981 to 2008, we find that a 10 percent increase in gas prices leads to a 10 percent decrease in construction in locations with a long average commute relative to other locations, but to no significant change in house prices. Thus, the supply response may prevent the change in housing demand from capitalizing in house prices. |
| Keywords: | Gasoline price, household location, housing, commuting |
| JEL: | Q31 R21 R23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-28&r=ure |
| By: | William Cochrane (University of Waikato); Arthur Grimes (Motu Economic and Public Policy Research; and University of Waikato); Phillip McCann (University of Groningen); Jacques Poot (University of Waikato) |
| Abstract: | In this paper we estimate the impact of local authority infrastructure spending in New Zealand using spatial econometric modelling, with the infrastructure spending itself endogenously determined. Utilizing data from the New Zealand Census and Local Authorities Finance data (1991-2008), aggregated to functional labour market areas, we formulate a simultaneous equations growth model of real income, population, land rent and public infrastructure investment. Estimation is conducted using a spatial 3SLS procedure. We find that an increase in local infrastructure spending increases population growth, real income and land values, but is itself endogenous and spatially correlated. |
| Keywords: | local infrastructure, economic growth, migration, land value, spatial spillover |
| JEL: | H54 J21 R12 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:10_12&r=ure |
| By: | Pilon, André Francisco / A. F. |
| Abstract: | Urbanism is a focus on cities and urban areas, their geography, economies, politics, social characteristics, as well as the effects on, and caused by, the built environment; it is linked to various aspects of quality of life: education, culture, justice, labour, environment, health, safety, housing, leisure, transport, consumption. This year, the United Nations proposed the following questions for the citizens of the world: What is the best thing about your city? What's the worst thing about your city? What do you want the authorities to do about it? What can you do about it? It is a clear attempt to foster civic participation and personal engagement, but to make things happen it is necessary to create active socio-cultural niches at many societal levels. |
| Keywords: | Urbanism; politics; education; culture; justice |
| JEL: | D73 I31 H11 Q48 Q56 D02 I18 O21 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25572&r=ure |
| By: | Michiel Gerritse (VU University of Amsterdam) |
| Abstract: | This paper presents a model of local government policy competition in an New Economic Geography-setting. To maximize welfare, local governments can subsidize a mobile factor or provide public goods. In the local perspective, firms’ vertical linkages promote colocation and policy (subsidy) setting is simultaneous, giving rise to mixed profiles. Agglomeration benefits lead larger regions to set higher subsidies, preventing a race to the top. We show the results numerically as well as in an analytical case. In contrast to related literature, policy harmonization can be welfare-improving, mainly due simultaneous policy-setting with a (local) utilitarian objective. |
| Keywords: | Spatial general equilibrium, local policy competition |
| JEL: | R38 R50 R53 F12 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-31&r=ure |
| By: | Nathaniel Baum-Snow (Brown University); Ronni Pavan (University of Rochester) |
| Abstract: | In 2000, wages of full time full year workers were more than 30 percent higher in metropolitan areas of over 1.5 million people than rural areas. The monotonic relationship between wages and city size is robust to controls for age, schooling and labor market experience. In this paper, we decompose the city size wage gap into various components. We propose an on-the-job search model that incorporates latent ability, search frictions, firm-worker match quality, human capital accumulation and endogenous migration between large, medium and small cities. Counterfactual simulations of the model indicate that variation in returns to experience and differences in wage intercepts across location type are the most important mechanisms contributing to the overall city size wage premium. Steeper returns to experience in larger cities is more important for college graduates while differences in wage intercepts is more important for high school graduates. Sorting on unobserved ability within education group and differences in labor market search frictions and distributions of firm-worker match quality contribute little or slightly negatively to observed city size wage premia in both samples. |
| Keywords: | Agglomeration, wage growth, urban wage premium |
| JEL: | J24 J31 R12 R23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-27&r=ure |
| By: | Christian A. L. Hilber (London School of Economics); Teemu Lyytikäinen (London School of Economics); Wouter Vermeulen (CPB Netherlands Bureau of Economic Policy Analysis & VU University) |
| Abstract: | We explore the impact of central government grants on local house prices in England using a panel data set of local authorities (LAs) from 2001 to 2008. Electoral targeting of grants to LAs by the incumbent national government provides an exogenous source of variation in grants that we exploit to identify their causal effect on house prices. Our results indicate substantial or even full capitalization. We also find that house prices respond more strongly in locations in which new construction is constrained by physical barriers. Our results imply that (i) during our sample period grants were largely used in a way that is valued by the marginal homebuyer and (ii) increases in grants to a LA may mainly benefit the typically better off property owners (homeowners and absentee landlords) in that LA. |
| Keywords: | Local public finance, house prices, supply constraints, central government grants |
| JEL: | H2 H3 H7 H81 R21 R31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-32&r=ure |
| By: | Marie-Laure Breuillé; Skerdilajda Zanaj |
| Abstract: | This paper analyzes mergers of regions in a two-tier setting with both horizontal and vertical tax competition. The merger of regions induces three e¤ects on regional and local tax policies, which are transmitted both horizontally and vertically: i) an alleviation of tax competition at the regional level, ii) a rise in the regional tax base, and iii) a larger internalization of tax externalities generated by cities. It is shown that the merger of regions increases regional tax rates while decreasing local tax rates. This Nash equilibrium with mergers is then compared with the Nash equilibrium with coalitions of regions. |
| Keywords: | Mergers, Tax Competition, Fiscal Federalism |
| JEL: | H73 H25 |
| Date: | 2010–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:ceo:wpaper:24&r=ure |
| By: | Christian A. L. Hilber (London School of Economics); Frédéric Robert-Nicoud (University of Geneva & Centre for Economic Policy Research (CEPR)) |
| Abstract: | We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group (via increasing property prices) but hurt the latter (via increasing development costs). More desirable locations are more developed and, as a consequence of political economy forces, more regulated. Using OLS as well as an IV approach that directly follows from our model we find strong and robust support for our predictions at the US metro area level. We conclude from our analysis that land use regulations are suboptimal. |
| Keywords: | Land use regulations, zoning, land ownership, housing supply |
| JEL: | H7 Q15 R52 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-33&r=ure |
| By: | Mercedes Delgado; Michael Porter; Scott Stern |
| Abstract: | This paper examines the role of regional clusters in regional entrepreneurship. We focus on the distinct influences of convergence and agglomeration on growth in the number of start-up firms as well as in employment in these new firms in a given region-industry. While reversion to the mean and diminishing returns to entrepreneurship at the region-industry level can result in a convergence effect, the presence of complementary economic activity creates externalities that enhance incentives and reduce barriers for new business creation. Clusters are a particularly important way through which location-based complementarities are realized. The empirical analysis uses a novel panel dataset from the Longitudinal Business Database of the Census Bureau and the U.S. Cluster Mapping Project (Porter, 2003). Using this dataset, there is significant evidence of the positive impact of clusters on entrepreneurship. After controlling for convergence in start-up activity at the region-industry level, industries located in regions with strong clusters (i.e. a large presence of other related industries) experience higher growth in new business formation and start-up employment. Strong clusters are also associated with the formation of new establishments of existing firms, thus influencing the location decision of multiestablishment firms. Finally, strong clusters contribute to start-up firm survival. |
| Keywords: | Entrepreneurship, Industry Clusters, Dynamic Economies of Agglomeration |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-31&r=ure |
| By: | Marko Koethenbuerger (University of Copenhagen & CESifo) |
| Abstract: | Previous literature widely assumes that taxes are optimized in local public finance while expenditures adjust residually. This paper endogenizes the choice of the optimization variable. In particular, it analyzes how federal policy toward local governments influences the way local governments decide on public policy. Unlike the presumption, the paper shows that local governments may choose to optimize over expenditures. The result most notably prevails when federal policy subsidizes local taxation. The results offer a new perspective of the efficiency implications of federal policy toward local governments and, thereby, enable a more precise characterization of local government behaviour in fiscal federalism. |
| Keywords: | Tax vs. expenditure optimization, federalism, endogenous commitment, fiscal incentives, policy interaction |
| JEL: | H7 H3 H1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/9/doc2010-29&r=ure |
| By: | Robert Baumann (Department of Economics, College of the Holy Cross); Bryan Engelhardt (Department of Economics, College of the Holy Cross); Victor Matheson; Taylor Ciavarra (Department of Economics, College of the Holy Cross) |
| Abstract: | We estimate the impact sporting events have on local crime rates using the technique developed in Arellano and Bond (2001). For events, we consider the presence of MLB, NBA, NFL, and NHL franchises as well as whether a city held one of the respective championships, the Olympics, or World Cup matches. We find little to no evidence that sporting events are correlated with either property or violent crime. |
| Keywords: | Crime, Sports Economics, Economic Impact |
| JEL: | L83 O18 R53 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0911&r=ure |
| By: | Gagnepain, Philippe (Paris School of Economics-Université Paris 1 and CEPR); Ivaldi, Marc (Toulouse School of Economics); Martimort, David (Paris School of Economics-EHESS) |
| Abstract: | The renegotiation of regulatory contracts is known to prevent regulators from achieving the full commitment efficient outcome in dynamic contexts. However, assessing the cost of such renegotiation remains an open issue from an empirical viewpoint. To address this question, we fit a structural principal-agent model with renegotiation on a set of urban transport service contracts. The model captures two important features of the industry. First, only two types of contracts are used in practice (fixed-price and cost-plus). Second, subsidies increase over time. We compare a scenario with renegotiation and a hypothetical situation with full commitment. We conclude that the welfare gains from improving commitment would be significant but would accrue mostly to operators. |
| JEL: | D86 L51 |
| Date: | 2010–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:23209&r=ure |
| By: | Gagnepain, Philippe (Paris School of Economics-Université Paris 1 and CEPR); Ivaldi, Marc (Toulouse School of Economics); Martimort, David (Paris School of Economics-EHESS) |
| Abstract: | The renegotiation of regulatory contracts is known to prevent regulators from achieving the full commitment efficient outcome in dynamic contexts. However, assessing the cost of such renegotiation remains an open issue from an empirical viewpoint. To address this question, we fit a structural principal-agent model with renegotiation on a set of urban transport service contracts. The model captures two important features of the industry. First, only two types of contracts are used in practice (fixed-price and cost-plus). Second, subsidies increase over time. We compare a scenario with renegotiation and a hypothetical situation with full commitment. We conclude that the welfare gains from improving commitment would be significant but would accrue mostly to operators. |
| JEL: | D86 L51 |
| Date: | 2010–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:23193&r=ure |
| By: | Stephan Whitaker |
| Abstract: | State governments allocate authority, under a federally imposed cap, to issue tax-exempt bonds that fund “private activities” such as industrial expansion, student loans, and low-income housing. This paper presents political economy models of the allocation process and an empirical analysis. Due to an idiosyncrasy of the tax code, the annual per capita volume cap varies widely across states. I estimate that, on average, there is an additional $0.80 per capita per year of borrowing for each additional dollar per capita of volume cap. This confirms that the cap is a binding constraint in most cases, and authority to issue tax-exempt bonds is a scarce resource. I find that mortgage revenue bonds and student loan bonds are the most responsive to differences in the cap. The gross state product and employment in manufacturing and utilities drive allocations to industrial development bonds and utilities bonds. While controlling for the size of the education sector, I find campaign contributions from educational interests are associated with higher authorizations for student loans. One result runs counter to the theoretical models. Higher campaign contributions from utilities interests are associated with lower utilities borrowing. Unions do not have an independent effect on allocations. |
| Keywords: | Municipal bonds ; Tax exemption |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1013&r=ure |
| By: | Belderbos, Rene; van Olffen, Woody; Zou, Jianglei |
| Abstract: | We combine economic and institutional theories of clustering in foreign entry location choice in an overarching social learning conceptualisation. Prospective entrants learn about the attractiveness of alternative locations by observing the entry choices of previous investors („models‟). We distinguish two types of learning which differ in observational focus width but can and do operate simultaneously. With assessment learning, firms judge the economic feasibility and agglomeration benefits of entering a location by observing and following a broad set of models. With bandwagon learning, firm-level uncertainty narrows attention to, and prompts the following of, specific models, with recentness of model behavior an important moderator. We find broad support for our conceptualization in an analysis of 692 Japanese electronics firms‟ entries into Chinese provinces during 1979-2001. |
| Keywords: | foreign entry; multinational firms; location choice; agglomeration; |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/275952&r=ure |
| By: | Ryuji Kutsuzawa (Regional and Land Planning Bureau, Ministry of Land, Infrastructure, Transport and Tourism); Noriko Mizutani (Faculty of Economics, Toyo University); Fumio Ohtake (Institute of Social and Economic Research, Osaka University); Hisaki Yamaga (School of Economics, Kwansei Gakuin University) |
| Abstract: | Many people now fear crime in Japan, which has had the image of being a safe country, because the crime rate has increased dramatically and the rate of crime detection has decreased at the same time. As demand for low-crime residential areas becomes stronger, low-crime rates may affect land prices in Japan. High levels of land prices may reflect the high economic value of low-crime neighborhoods. However, the Ordinary Least Square (OLS) estimate may cause a bias because the crime rate is not necessarily an exogenous determinant of land price. Therefore, in this study, we adopt the instrumental variable (IV) method, and use instrumental variables such as distance from police boxes and existence of voluntary anti-crime groups, and analyze the effects of property crime rates on residential land prices. The results show that a 10% decrease in the rate of burglaries causes an average rise in residential land prices of 1%. |
| Keywords: | Property Crime, Police box, Voluntary crime-prevention group, Instrumental Variable, Propensity Score Matching |
| JEL: | R21 R22 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:60&r=ure |
| By: | Susan Stone; Anna Strutt; Thomas Hertel |
| Abstract: | This study attempts to quantify the links between infrastructure investment and poverty reduction using a multi-region general equilibrium model, supplemented with household survey data for the Greater Mekong Subregion (GMS). Infrastructure investment is an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, for example by significantly reducing travel times and costs. In this study, we concentrate on quantifying the effects of some of the key linkages between upgraded infrastructure, economic growth, and poverty reduction. We model the impact of both reducing transport costs and improving trade facilitation in the GMS. Our findings suggest strong gains to the GMS countries as a result of infrastructure development and trade facilitation with national poverty reduced throughout the region. However, the impact on various segments of these populations differs, depending in part on factor returns. [ADBI Working Paper 234] |
| Keywords: | infrastructure investment, poverty reduction, Greater Mekong Subregion (GMS), economic growth, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2959&r=ure |
| By: | Van der Loo, Saskia |
| Keywords: | Transport Economics; |
| Date: | 2010–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/276633&r=ure |
| By: | Joan R. Rosés; Daniel A. Tirado; Julio Martínez-Galarraga |
| Abstract: | This paper studies the evolution of Spanish regional inequality from 1860 to 2000. The results point to the coexistence of two basic forces behind changes in regional economic inequality: differences in economic structure and labor productivity across regions. In the Spanish case, the initial expansion of industrialization during the period 1860-1900, in a context of growing economic integration of regions, promoted the spatial concentration of manufacturing in certain regions, which also benefited from the greatest advances in terms of labor productivity. Since 1900 and until 1985, the diffusion of manufacturing and services production to a greater number of locations generated the emulation of production structures and a process of catching-up in labor productivity and wages. So, in these first 125 years, national market integration and economic growth has been followed by a Ushaped evolution of regional incomes inequality. Nevertheless, some productivity differentials remained and, from 1985 on, the Spanish entry in the UE generated a new upsurge of divergence in productivity across Spanish regions that could be in the base of a new phase of regional income divergence. |
| Keywords: | Industrialization, Market integration, Heckscher-Ohlin Model, New economic geography |
| JEL: | N93 N94 R11 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp10-08&r=ure |
| By: | Ana Fostel; John Geanakoplos |
| Abstract: | The literature on leverage until now shows how an increase in volatility reduces leverage. However, in order to explain pro-cyclical leverage it assumes that bad news increases volatility. This paper suggests a reason why bad news is more often than not associated with higher future volatility. We show that, in a model with endogenous leverage and heterogeneous beliefs, agents have the incentive to invest mostly in technologies that become volatile in bad times. Together with the old literature this explains pro-cyclical leverage. The result also gives rationale to the pattern of volatility smiles observed in the stock options since 1987. Finally, the paper presents for the first time a dynamic model in which an asset is endogenously traded simultaneously at different margin requirements in equilibrium. |
| Keywords: | Asset prices , Business cycles , Debt , Economic models , External shocks , Financial crisis , Housing , Housing prices , Price elasticity , |
| Date: | 2010–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/206&r=ure |
| By: | Shamena Anwar (Carnegie Mellon University); Patrick Bayer (Duke University); Randi Hjalmarsson (Queen Mary, University of London) |
| Abstract: | This paper examines the impact of jury racial composition on trial outcomes using a unique dataset of all felony trials in Sarasota County, Florida between 2004 and 2009. We utilize a research design that exploits day-to-day variation in the composition of the jury pool to isolate quasi-random variation in the composition of the seated jury. We find strong evidence that all-white juries acquit whites more often and are less favorable to black versus white defendants when compared to juries with at least one black member. Using the Anwar-Fang rank order test, we find strong statistical evidence of discrimination on the basis of defendant race. These results are consistent with racial prejudice on the part of white jurors, black jurors, or both. Using a simple model of jury selection and decision-making, we replicate the entire set of empirical regularities observed in the data, including the fact that blacks in the jury pool are just as likely as whites to be seated. Simulations of the model suggest that jurors of each race are heterogeneous in the standards of evidence that they require to convict and that both black and white defendants would prefer to face jurors of the same race. |
| Keywords: | Discrimination, Race, Jury, Felony trials, Verdicts |
| JEL: | K14 K4 J15 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp671&r=ure |
| By: | Emmanuel Frenod (Lab-STICC - Laboratoire des sciences et techniques de l'information, de la communication et de la connaissance - CNRS : UMR3192 - Université de Bretagne Occidentale - Brest - Université de Bretagne Sud - Institut Télécom - Télécom Bretagne - Université européenne de Bretagne - Institut Supérieur des Sciences et Technologies de Brest (ISSTB), INRIA Lorraine / IECN / LSIIT / IRMA - CALVI - CNRS : UMR7502 - CNRS : UMR7005 - CNRS : UMR7501 - INRIA - Université Henri Poincaré - Nancy I - Université de Strasbourg, IRMA - Institut de Recherche Mathématique Avancée - CNRS : UMR7501 - Université de Strasbourg); Wilfried Despagne (Lab-STICC - Laboratoire des sciences et techniques de l'information, de la communication et de la connaissance - CNRS : UMR3192 - Université de Bretagne Occidentale - Brest - Université de Bretagne Sud - Institut Télécom - Télécom Bretagne - Université européenne de Bretagne - Institut Supérieur des Sciences et Technologies de Brest (ISSTB)) |
| Abstract: | Purpose: The purpose of this paper is to investigate the road freight haulage activity. Using the physical and data flow information from a freight forwarder, we intend to model the flow of inbound and outbound goods in a freight transport hub. Approach: This paper presents the operation of a road haulage group. To deliver goods within two days to any location in France, a haulage contractor needs to be part of a network. This network handles the processing of both physical goods and data. We will also explore the ways in which goods and data flows are connected. We then build a first model based on Ordinary Differential Equations which decrypt the flow of goods inside the hub and which is consistent with available data. This first model is designed to work at a fine-scale level. A second model which aggregates factors of the fine scale one is also built and a way to couple hub models to build a hub network is depicted. Tests are carried out to show the accuracy of the models. Finally, an explanation on how to use the models for industrial process optimizing is given. |
| Keywords: | Mathematical Modelling; Ordinary Differential Equations; Haulage Activity; Hub, Express; Supply Chain Modelling |
| Date: | 2010–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00522938_v1&r=ure |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Dirk Schilder |
| Abstract: | We investigate whether the supply of venture capital (VC) is driven by spatial proximity between a VC company and the portfolio firm. Our analysis is based on information about VC investments in Germany between 2004 and 2009. We find that possible problems caused by the geographic distance to a portfolio firm seem to be overcome by syndication of investments with one of the VC firms located close to the investment. Our analysis does, however, suggest that short geographic distance between an investor and the investment has an increasing effeon the probability for syndication as well as on the number of firms that join the syndicate. Hence, local VC suppliers may assume a role of an 'anchor' connecting the regional economy to more distant parts of the industry. |
| Keywords: | Venture Capital, syndication, geographic proximity, start-up financing, equity gap |
| JEL: | G24 O16 D21 M13 R12 |
| Date: | 2010–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-069&r=ure |
| By: | Peter McHenry (Department of Economics, College of William and Mary) |
| Abstract: | This paper investigates how the geographic distribution of human capital evolves over time. With U.S. data, I decompose generation-to-generation changes in local human capital into three factors: the previous generation’s human capital, intergenerational transmission of skills from parents to their children, and migration of the children. I find evidence of regression to the mean of local skills at the state level and divergence at the commuting zone level. Labor market size, climate, local colleges, and taxes affect local skill measures. Skills move from urban to rural labor markets through intergenerational transmission but from rural to urban labor markets through migration. |
| Keywords: | Migration, Intergenerational transmission, Regional labor markets |
| JEL: | R23 J61 J11 |
| Date: | 2010–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:92&r=ure |
| By: | Bryony Reich (Department of Economics, University of Cambridge) |
| Abstract: | I develop a framework to explain why identity divides some communities and not others. An identity group is defined as a group of individuals with the same `culture'. A community is divided when different identities are socially segregated; a community is integrated when there is no social segregation between different identities. I find three possible outcomes for a community: assimilation, where groups socially integrate and one group conforms to the culture of another; non-assimilative integration, where groups integrate but individuals retain their own identity; and segregation, where groups socially segregate and retain their own culture. I find that certain community environments encourage segregation: (i) communities with similar sized identity groups; (ii) larger communities; (iii) communities with greater cultural distance between identities. Further, when segregation occurs, the cultural divide between the two groups can increase endogenously beyond ex-ante differences. |
| Keywords: | identity, culture, segregation, immigration, immigrants, networks, network formation, coordination, stochastic stability. |
| JEL: | J15 D85 D74 A14 C73 H00 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1010&r=ure |
| By: | Robert Baumann (Department of Economics, College of the Holy Cross); Bryan Engelhardt (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross) |
| Keywords: | Olympics, impact analysis, mega-event, tourism |
| JEL: | L83 O18 R53 J21 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1002&r=ure |
| By: | Keld Laursen; Francesca Masciarelli; Toke Reichstein |
| Abstract: | External knowledge acquisition represents a precondition for firms’ competitive advantage. However, young firms find it particularly difficult to gain access to external sources of knowledge: young firms suffer from a liability of newness by exhibiting significantly lower propensities to invest in external R&D than their older counterparts. We explore the role of geographically bound social capital in moderating this liability. By employing a Nested Logit approach, our findings show that geographically bound social capital moderates the liability of newness related to R&D acquisition, suggesting that the liability exists only in regions associated with low levels of social capital. |
| Keywords: | Research and development; social capital; liability of newness; geography |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:10-25&r=ure |
| By: | Tarun Sabarwal (Department of Economics, University of Kansas); Randal Watson (Department of Economics, University of Texas) |
| Abstract: | We analyze the contracting problem between a shopping mall and potential anchors (large stores) in a market where consumers with high search costs must choose shopping destinations prior to learning prices. Our model incorporates the interaction between contracting and asymmetric firm sizes into a framework of competing platforms. The mall is but one of three potential destinations in the market, complemented by a stand-alone location for a large store, and a competitive ‘downtown’ centre occupied by small retailers. As in Dudey’s (1990) homogeneousgood framework, consumers choose to visit only one of these locations, based on expected prices at each site. A game of sequential contracting for slots at the mall determines the equilibrium distribution of firms across locations based on their costs and relative bargaining power. We analyze the effects of three policies. First, prohibition of the stand-alone site can increase social welfare, by alleviating excess entry and countering inefficiencies in contracting between the mall owner and potential anchors. Second, subsidies for downtown may push prices at the mall closer to socially efficient levels, but can never increase welfare if the market is initially dominated by a stand-alone big store. A subsidy’s effect on the equilibrium size distribution of mall tenants depends on the concavity of demand. Third, a merger between two big stores can increase social welfare, in part by ameliorating a problem of externalities on non-traders in the contracting with the mall owner. Merged anchor stores that operate at stand-alone sites may retain occupancy of mall space for purely strategic reasons, in order to deter entry. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:201007&r=ure |
| By: | Michael Ash (University of Massachusetts Amherst); James K. Boyce (University of Massachusetts Amherst); Grace Chang (University of Massachusetts Amherst); Helen Scharber (University of Massachusetts Amherst) |
| Abstract: | This paper examines spatial variations in exposure to toxic air pollution from industrial facilities in urban areas of the United States, using geographic microdata from the U.S. Environmental Protection Agency’s Risk-Screening Environmental Indicators project. We find that average exposure in an urban area is positively correlated with the extent of racial and ethnic disparity in the distribution of the exposure burden. This correlation could arise from causal linkages in either or both directions: the ability to displace pollution onto minorities may lower the effective cost of pollution for industrial firms; and higher average pollution burdens may induce whites to invest more political capital in efforts to influence firms’ siting decisions. Furthermore, we find that in urban areas with higher minority pollution-exposure discrepancies, average exposures tend to be higher for all population subgroups, including whites. In other words, improvements in environmental justice in the United States could benefit not only minorities but also whites. JEL Categories: P16, Q53, Q56, R3. |
| Keywords: | Environmental justice; air pollution; industrial toxics; Risk-Screening Environmental Indicators. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2010-05&r=ure |
| By: | Thomas A. Garrett; Natalia Kolesnikova |
| Abstract: | This paper explores the seemingly innocuous practice of ignoring the local price vector in empirical models of lottery demand. We argue using consumer theory that local consumption prices should be included and that the failure to consider local prices results in income elasticity of lottery demand estimates that are biased downward. Using a sample of MSAs, we find that, in accordance with our theory, local prices are a significant determinant of lottery sales and the income elasticity of demand for lotteries is greater in magnitude when the local price vector is considered. The degree of lottery regressivity is thus overstated when local prices are omitted. One notable finding is that the tax incidence of lotteries changes from regressive to progressive once the local price vector is included. |
| Keywords: | Gambling industry ; Taxation |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2010-035&r=ure |
| By: | Van Puyenbroeck, Tom; De Bruyne, Karolien; Sels, Luc |
| Abstract: | We build on the Information Theory foundations of the Mutual Information Index of Segregation [Mora and Ruiz-Castillo, 2003; Frankel and Volij, 2007] to analyze two horizontal dimensions of gender segregation on the labour market. We provide a novel, three-way additive decomposition of their effects on overall segregation. Using survey data from 41,712 Flemish employees, we .find that choice of study field has a larger effect on overall segregation than sectoral choice. Their mutual interaction is negative, indicating that sectoral segregation, although low, is still partly explained by educational choices. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/277091&r=ure |
| By: | M. Ege Yazgan (Department of Economics, Istanbul Bilgi University); Hakan Yilmazkuday (Department of Economics, Temple University) |
| Abstract: | This paper tests the bilateral price-level convergence among 52 U.S. cities at the good level. We employ a new approach which is free of problems that arise when using an arbitrary benchmark, cross-section dependence, and heterogeneity. We find quite strong evidence in favor of convergence with significantly quick rates. This finding is surprising as the estimated median half lives are far below the half lives found in the corresponding studies for the U.S. |
| Keywords: | Convergence, Micro-Level Prices, PPP Puzzle. |
| JEL: | E31 F41 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1011&r=ure |
| By: | Alberto Bisin (New York University, Department of Economics; and NBER); Eleonora Patacchini (Universita’ di Roma "La Sapienza," CEPR, and IZA); Thierry Verdier (Paris School of Economics and CEPR); Yves Zenou (Stockholm University, Research Institute of Industrial Economics, CEPR, and CREAM) |
| Abstract: | We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by neighborhood integration, which weakens group loyalties and prejudices. On the contrary, under cultural distinction, ethnic minorities are more motivated in retaining their own distinctive cultural heritage the more integrated are the neighborhoods where they reside and work. Data on ethnic preferences and attitudes provided by the Fourth National Survey of Ethnic Minorities in the UK enables us to test the relative significance of these two identity processes. We find evidence consistent with intense ethnic and religious identity mostly formed as a cultural distinction mechanism. Consistently, we document that ethnic identities are more intense in mixed than in segregated neighborhoods. |
| Keywords: | Ethnicity, identity, intermarriage, cultural transmission. |
| JEL: | A14 J15 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201025&r=ure |
| By: | Randy Becker |
| Abstract: | This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb-Douglas production functions that include a measure of the stringency of environmental regulation faced by manufacturing plants. In contrast to previous studies, this paper examines effects on plants in all manufacturing industries, not just those in “dirty” industries. Further, this paper employs spatial-temporal variation in environmental compliance costs to identify effects, using a time-varying county-level index that is based on multiple years of establishment-level data from the Pollution Abatement Costs and Expenditures survey and the Annual Survey of Manufactures. Results suggest that, for the average manufacturing plant, the effect on productivity of being in a county with higher environmental compliance costs is relatively small and often not statistically significant. For the average plant, the main effect of environmental regulation may not be in the spatial and temporal dimensions. |
| Keywords: | environmental regulation, productivity, U.S. manufacturing |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-30&r=ure |
| By: | Henry Hyatt; Sang Nguyen |
| Abstract: | Numerous studies have documented a positive association between information technology (IT) investments and business- and establishment-level productivity, but these studies usually pay sole or disporportionate attention to small- or medium-sized entities. In this paper, we revisit the evidence for manufacturing plants presented in Atrostic and Nguyen (2005) and show that the positive relationship between computer networks and labor productivity is only found among small- and medium-sized plants. Indeed, for larger plants the relationship is negative, and employment-weighted estimates indicate computer networks have a negative relationship with the productivity of employees, on average. These findings indicate that computer network investments may have an ambiguous relationship with aggregate labor productivity growth. |
| JEL: | L6 O3 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-25&r=ure |
| By: | Brad R. Humphreys (Department of Economics, University of Alberta); Yang Seung Lee (Department of Economics, College of the Holy Cross) |
| Abstract: | The paper develops a quality adjusted professional sports franchise price index for North America based on a repeat sale method. This index reflects trends in the general price of sports franchises holding local market, facility, and team characteristics constant. The price index exhibits considerable volatility but no upward trend over time, unlike previous quality adjusted price indexes based on hedonic models in the literature. The lack of an upward trend in this quality adjusted price index indicates that specific franchise characteristics drives observed increases in prices over the past forty years. |
| Keywords: | repeat sales method, sports franchise, quality adjusted price index |
| JEL: | G12 L83 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0914&r=ure |
| By: | Nina Drange and Kjetil Telle (Statistics Norway) |
| Abstract: | Two districts of Oslo started to offer five-year-old children free preschool four hours a day. We analyze the effect of this intervention on the school performance of the children from immigrant families 10 years later (age 16). Our difference-in-difference approach takes advantage of the variation caused by the intervention being implemented in two districts in Oslo, leaving other similar districts unaffected. The grade point average of girls increases substantially more in the intervention districts than in the comparison districts; resulting in an effect estimate of more than a quarter of a standard deviation. There is no significant change in boys’ performance, and no support for disadvantageous effects on non-cognitive outcomes. |
| Keywords: | preschool; immigrants; early intervention; school performance |
| JEL: | J13 J15 H52 I28 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:631&r=ure |
| By: | GOTO Yasuo |
| Abstract: | In order to explore the impact of financial factors on the real economy, many researchers are analyzing the relationship between finance and real economic activity using new theories and approaches. This paper focuses on the relationship between financial soundness and corporate R&D activities on a regional scale. By measuring regional financial performance using data series including periods of financial crisis and recovery (from the end of the 1990s to the middle of the 2000s), this paper statistically examines the correlation with factors such as corporate R&D expenditure. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10047&r=ure |
| By: | Peter J. Rimmer; Howard Dick |
| Abstract: | This study addresses three questions that arise in Asia when formulating, financing, implementing, and maintaining transnational linkages versus purely domestic connections. [ADBI Working Paper 237] |
| Keywords: | Asia, formulating, financing, implementing, maintaining |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2946&r=ure |
| By: | Robert S. Chirinko; Daniel J. Wilson |
| Abstract: | This paper studies the effects of Job Creation Tax Credits (JCTCs) enacted by U.S. states over the past 20 years. First, we investigate whether JCTCs stimulate within-state job growth. Second, we assess from where any increased employment comes from – in-state or out-of-state? Third, we evaluate when JCTCs' effects occur. In particular, we test for negative anticipation effects between JCTC enactment and when legislation goes into effect. We investigate these questions using a difference-in-differences estimator applied to monthly panel data on employment, the JCTC value, the JCTC effective and legislative dates, and various controls. |
| Keywords: | Tax credits ; Tax incentives ; Public policy |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2010-25&r=ure |
| By: | Eyal Carmi (Tel Aviv University); Gal OEstreicher-Singer (Tel Aviv University); Arun Sundararajan (New York University) |
| Abstract: | We study the online contagion of exogenous demand shocks generated by book reviews featured on the Oprah Winfrey TV show and published in the New York Times, through the co-purchase recommendation network on Amazon.com. These exogenous events may ripple through and affect the demand for a “network” of related books that were not explicitly mentioned in a review but were located “close” to reviewed books in this network. Using a difference-in-differences matched-sample approach, we identify the extent of the variations caused by the visibility of the online network and distinguish this effect from variation caused by hidden product complementarities. Our results show that the demand shock diffuses to books that are up to five links away from the reviewed book, and that this diffused shock persists for a substantial number of days, although the depth and the magnitude of diffusion varies widely across books at the same network distance from the focal product. We then analyze how product characteristics, assortative mixing and local network structure, play a role in explaining this variation in the depth and persistence of the contagion. Specifically, more clustered local networks “trap” the diffused demand shocks and cause it to be more intense and of a greater duration but restrict the distance of its spread, while less clustered networks lead to wider contagion of a lower magnitude and duration. Our results provide new evidence of the interplay between a firm’s online and offline media strategies and we contribute methods for modeling and analyzing contagion in networks. |
| Keywords: | networks, product networks, electronic commerce, ecommerce, recommender systems, identification, exogenous shocks |
| JEL: | L11 L81 M31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1018&r=ure |
| By: | Melissa Bjelland; Bruce Fallick; John Haltiwanger; Erika McEntarfer |
| Abstract: | We use administrative data linking workers and firms to study employer-to-employer flows. After discussing how to identify such flows in quarterly data, we investigate their basic empirical patterns. We find that the pace of employer-to-employer flows is high, representing about 4 percent of employment and 30 percent of separations each quarter. The pace of employer-to-employer flows is highly procyclical, and varies systematically across worker, job and employer characteristics. Our findings regarding job tenure and earnings dynamics suggest that for those workers moving directly to new jobs, the new jobs are generally better jobs; however, this pattern is highly procyclical. There are rich patterns in terms of origin and destination of industries. We find somewhat surprisingly that more than half of the workers making employer-to-employer transitions switch even broadly-defined industries (NAICS supersectors). |
| JEL: | E24 J62 J63 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-26&r=ure |