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on Urban and Real Estate Economics |
| By: | Juan Carmona Pidal (Universidad Carlos III de Madrid); Markus Lampe (Universidad Carlos III de Madrid); Joan Ramón Rosés (Universidad Carlos III de Madrid) |
| Abstract: | This paper discusses how Spain’s urban housing markets reacted to the far-reaching changes that affected the demand for dwellings during the first phase of the ruralurban transition process. To this end, we construct a new hedonic index of real housing prices and assemble a cross-regional panel dataset of price fundamentals. The results of our econometric analysis suggest that urban housing markets did not face supply constraints and responded swiftly to the growing demand for accommodation. In light of this new evidence, we conclude that housing markets were not a burden for Spanish economic development and that Spain’s urban infrastructure and institutional framework and were suitable for the housing needs at the time. |
| Keywords: | Hedonic prices; Demand and Supply of Housing; Regulation in Housing Markets. |
| JEL: | N93 N94 R30 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0030&r=ure |
| By: | Evangelista, Rui; Santos, Daniel |
| Abstract: | Housing co-operatives, also known as “tenant-owner co-operative housing”, provide an alternative to both renting and owning a dwelling. As an indirect form of ownership, it poses some conceptual and practical issues to anyone aiming at compiling a price index covering all forms of own-occupied housing. Starting from the position that these co-operatives provide a type of tenure similar to owner- occupied housing, this paper provides some practical guidance on the way they can be treated in the compilation of a house price index. An empirical bootstrap study, based on advertised co-operative flats in Oslo, supports the proposals done in this paper. To our knowledge, this is the first time such a study is carried out in this context. |
| Keywords: | Housing co-ops; House Price Indexes; Owner-occupied housing; Bootstrap |
| JEL: | C43 E31 |
| Date: | 2012–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42200&r=ure |
| By: | Satyajit Chatterjee; Burcu Eyigungor |
| Abstract: | A tractable production-externality-based circular city model in which both firms and workers choose location as well as intensity of land use is presented. The equilibrium structure of the city has either (i) no commuting ("mixed-use" form) or (ii) a central business district (CBD) of positive radius and a surrounding residential ring. Regardless of which form prevails, the intra-city variation in all endogenous variables displays the negative exponential form: x(r) = x(0)e¯Øxr (where r is the distance from the city center and Øx depends only on preference and technology parameters). An application is presented wherein it is shown that population growth may lead to a smaller increase in land rents in cities that cannot expand physically because these cities are less able to exploit the external effect of greater employment density. |
| Keywords: | Land use |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:12-25&r=ure |
| By: | Rafael Henrique Moraes Pereira; Vanessa Nadalin; Leonardo Monasterio; Pedro Henrique Melo Albuquerque |
| Abstract: | This study introduces a new measure of urban centrality. It identifies distinct urban structures from different spatial patterns of jobs and resident population. The proposed urban centrality index constitutes an extension of the spatial separation index (MIDELFART-KNARVIK et al., 2000). It is suggested that urban structure should be more accurately analyzed by considering a centrality scale (varying from extreme monocentricity to extreme polycentricity) rather than a binary variable (monocentric or polycentric). The proposed index controls for differences in size and shape of the geographic areas for which data is available, and can be calculated using different variables, such as employment and population densities and trip generation rates. The properties of the index are illustrated in simulated artificial data sets. Simulation results for hypothesized urban forms are compared to other similar measures proposed by previous literature. The index is then applied to the urban structure of four different metropolitan areas: Pittsburgh and Los Angeles in the United States; São Paulo, Brazil; and Paris, France, The index is compared to other traditional spatial agglomeration measures, such as global and local Moran`s I, and density gradient estimations. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1675&r=ure |
| By: | Böhlmark, Anders (SOFI, Stockholm University); Lindahl, Mikael (Department of Economics, Uppsala University) |
| Abstract: | This paper evaluates average educational performance effects of an expanding independent- school sector at the compulsory level by assessing a radical voucher reform that was implemented in Sweden in 1992. Starting from a situation where all public schools were essentially local monopolists, the degree of independent schools has developed very differently across municipalities over time as a result of this reform. We regress the change in educational performance outcomes on the increase in the share of independent-school students between Swedish municipalities. We find that an increase in the share of independent-school students improves average performance at the end of compulsory school as well as long-run educational outcomes. We show that these effects are very robust with respect to a number of potential issues, such as grade inflation and pre-reform trends. However, for most outcomes, we do not detect positive and statistically significant effects until approximately a decade after the reform. This is notable, but not surprising given that it took time for independent schools to become more than a marginal phenomenon in Sweden. We do not find positive effects on school expenditures. Hence, the educational performance effects are interpretable as positive effects on school productivity. We further find that the average effects primarily are due to external effects (e.g., school competition), and not that independent-school students gain significantly more than public-school students. |
| Keywords: | School choice; independent schools; educational performance; external effects |
| JEL: | H40 I21 |
| Date: | 2012–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2012_019&r=ure |
| By: | Dirk Krueger (University of Pennsylvania) |
| Abstract: | This paper evaluates the macroeconomic and distributional effects of government bailout guarantees for Government Sponsored Enterprises (such as Fannie Mae and Freddy Mac) in the mortgage market. In order to do so we construct a model with heterogeneous, infinitely lived households and competitive housing and mortgage markets. Households have the option to default on their mortgages, with the consequence of having their homes foreclosed. We model the bailout guarantee as a government provided and tax-financed mortgage interest rate subsidy. We find that eliminating this subsidy leads to substantially lower equilibrium mortgage origination and increases aggregate welfare, but has little effect on foreclosure rates and housing investment. The interest rate subsidy is a regressive policy: eliminating it benefits low-income and low-asset households who did not own homes or had small mortgages, while lowering the welfare of high-income, high-asset households. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:102&r=ure |
| By: | Belit Saka |
| Abstract: | This paper deals with long distance internal migration patterns of the immigrant population in Germany and addresses the question whether immigrants are more mobile than native Germans and to what extent the differences in spatial mobility behavior between immi-grants and native Germans are influenced by a) individual level characteristics, b) macro level regional economic characteristics and c) regional ties. The analysis shows in general a very low rate of long distance internal migration in Germany for native Germans as well as for immigrants. Even after controlling for individual and regional level characteristics, the immigrant population is half as mobile as native Germans. The results are more robust for the 2nd generation immigrants. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp495&r=ure |
| By: | Jeffrey Brinkman; Daniele Coen-Pirani; Holger Sieg |
| Abstract: | We develop a new dynamic general equilibrium model to explain firm entry, exit, and relocation decisions in an urban economy with multiple locations and agglomeration externalities. We characterize the stationary distribution of firms that arises in equilibrium. We estimate the parameters of the model using a method of moments estimator. Using unique panel data collected by Dun and Bradstreet, we find that our model fits the moments used in estimation as well as a set of moments that we use for model validation. Agglomeration externalities increase the productivity of firms by about 8 percent. Economic policies that subsidize firm relocations to the central business district increase agglomeration externalities in that area. They also increase economic welfare in the urban economy. |
| Keywords: | Externalities (Economics) ; Urban economics ; Equilibrium (Economics) ; Estimation theory |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:12-26&r=ure |
| By: | Ricardo A. Madeira |
| Abstract: | Decentralization of the delivery of public services provision is an important governance reform recently witnessed in many developing countries. Public education has been one of the key public services devolved to lower level governments. This paper uses an exclusive and rich longitudinal data on primary schools to evaluate the effects of the decentralization reform implemented on the State of Sao Paulo, Brazil, on several indicators of school performance and school resources. Specific aspects of the Sao Paulo’s State education reform combined with the data available allow me to deal with some common identification issues encountered by previous empirical studies on the subject. I find conflicting results for different school quality measures; decentralization increased dropout rates and failure rates across all primary school grades but improved several school resources. Further empirical investigation suggests that the worsening of these school performance indicators for the two first grades was partially driven by the democratization of the school access promoted by the education reform. Evaluation of the distributive outcome of the reform suggests that its effects were more perverse for schools located on rural and poor areas. I also find evidence that decentralization widened the gap between the “good” and “bad” schools. Moreover, I find no evidence that the municipalities’ administrative experience affected the program’s outcome. |
| Keywords: | Decentralization of Public Services, Education Economics, School Quality and |
| JEL: | I2 I28 H43 H7 C21 |
| Date: | 2012–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2012wpecon26&r=ure |
| By: | Sergio Rebelo (Northwestern University); Martin Eichenbaum (Northwestern University); Craig Burnside (Duke University) |
| Abstract: | Some booms in housing prices are followed by busts. Others are not. In either case it is difficult to find observable fundamentals that are correlated with price movements. We develop a model consistent with these observations. Agents have heterogeneous expectations about long-run fundamentals but change their views because of "social dynamics." Agents meet randomly. Those with tighter priors are more likely to convert others to their beliefs. The model generates a "fad": the fraction of the population with a particular view rises and then falls. Depending on which agent is correct about fundamentals, these fads generate boom-busts or protracted booms. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed012:114&r=ure |
| By: | Fosgerau, Mogens; de Palma, André |
| Abstract: | We consider dynamic congestion in an urban setting where trip origins are spatially distributed. All travelers must pass through a downtown bottleneck in order to reach their destination in the CBD. Each traveler chooses departure time to maximize general concave scheduling utility. We find that, at equilibrium, travelers sort according to their distance to the destination; the queue is always unimodal regardless of the spatial distribution of trip origins. We construct a welfare maximizing tolling regime, which eliminates congestion. All travelers located beyond a critical distance from the CBD gain from tolling, even when toll revenues are not redistributed, while nearby travelers lose. We discuss our results in the context of acceptability of tolling policies. |
| Keywords: | Dynamic model; Toll policy; Spatial differentiation; Acceptability |
| JEL: | D11 R41 R14 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42270&r=ure |
| By: | Sawako Maruyama (Graduate School of Economics, Kobe University) |
| Abstract: | This paper aims to analyze the similarities and differences between Kansai region in Japan and Vastra Gotaland regionin Sweden. We investigate the regional economies,the frameworks of regional coordination, and the degree of internationalization.Main findings of the analysis are summarized as follows. Firstly, the two regions have similar industrial structures and have experienced similar economic stagnation over a long period. Similar problems led to similar solutions requiring local autonomy and regional coordination. Secondly, the two regions both want local discretionary authority over the region. Regional coordination is one way to achieve this. However, the framework of regional coordination is different in both countries. The adopted framework in each region is related to the system of local governance at the country/prefectural level. Unlike Vastra Gotaland, Kansai is facing problems coordinating tasks between prefectures, and is unable to define the geographical identity of the administrative districts involved. Thirdly, the extent of internationalization in both public and private sectors is different in both regions. Firms and local governments in Kansai are not as internationalized as Vastra Gotaland which has the support of the EU structural fund.These facts suggest that while both regions are moving in the same direction towards regional coordination, they are at different levels of achievement. The achievements of regional coordination are affected by the differences in local governance. Simple adaptation of the same system as Vastra Gotaland would not necessarily result in good governance in Kansai, where prefectures have already a lot of tasks, therefore, Kansai has to find an appropriate, efficient and feasible framework on their own. |
| Keywords: | Regional coordination, Regional development policy |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1222&r=ure |
| By: | Ahmad, Mahyudin; Hall, Stephen G. |
| Abstract: | Do institutions spatially affect growth? By employing a neoclassical growth model with institutional controls and augmenting the model with a formal spatial framework, this study finds evidence that institutions has spatial spillover effect on economic growth based on a panel observation from 58 developing countries for the period between 1985-2008. This study also shows that the spatial lag model is the most appropriate to model the spillover effect. |
| Keywords: | Institutions; economic growth; spatial dependence; spillover effect; spatial lag model; |
| JEL: | R10 O43 C31 |
| Date: | 2012–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42360&r=ure |
| By: | Agnese Sacchi; Giuseppe Di Giacomo; Aline Pennisi |
| Abstract: | The education sector in Italy is mainly public and highly centralized concerning both financial and regulatory aspects. However, there are significant disparities in school spending and students’ performance across regions. This heterogeneity is also relevant in relation to the ongoing fiscal decentralization process, which could imply the assignment of responsibility for education to sub-central governments or, even more directly, to schools. The aim of the paper is to estimate the standard financial requirement for a sample of about 1,000 primary schools for the year 2009/2010, based on the demand of service (e.g., the number of students, the type of school), and compare it with the current endowment in order to evaluate whether a better allocation of available resources can be obtained. Results suggest that the actual spending is quite far from the standard for all schools; most of them should get a positive correction, receiving more resources to accomplish their tasks. |
| Keywords: | standard financial requiremente, school spending, fiscal decentralization reform, resource allocation, Italy |
| JEL: | H52 H70 I22 I28 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0165&r=ure |
| By: | Alberto Alesina; Stelios Michalopoulos; Elias Papaioannou |
| Abstract: | This study explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. We construct measures of ethnic inequality combining ethnolinguistic maps on the spatial distribution of groups with satellite images of light density at night. Ethnic inequality is strongly inversely related to per capita income; this pattern holds when we condition on the overall degree of spatial inequality -that is also associated with underdevelopment. We further show that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeplyrooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development. We also show that ethnic inequality goes in tandem with lower levels development also within countries. Using micro-level data from the Afrobarometer surveys we show that individuals from the same ethnic group are worse off when they reside in districts with a high degree of ethnic inequality. |
| Keywords: | Ethnicity, Diversity, Inequality, Development, Geography |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2012-14&r=ure |
| By: | Dethier, Jean-Jacques; Morrill, Curtis |
| Abstract: | This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section 1 summarizes how the crisis was triggered and how it unfolded in the US, then spread to the rest of world -- highlighting the links between financial sector and housing sector. Section 2 discusses the impact of the crisis on urban revenue and expenditure, and the stimulus programs and recovery plans devised as a short term response by cities around the world. Section 3 then discusses longer term strategies to ensure the financial, social and environmental sustainability of cities. The authors make the point -- and back up our assertions with specific examples -- that urban decision-makers must take a long view and find ways to create opportunities for their citizens, making sure that their decisions are financially sustainable in the long term. Today's decisions should not lock cities out of options tomorrow, and cities must be managed with flexibility so as to adapt to unforeseen new circumstances. The authors also argue that, while there has been a lot of talk about"smart cities"and new technologies among urban specialists and urban planners, it is ultimately the focus on basic economics (sustainable financing, providing good services to consumers and incentives for providers), good governance and good institutions that will create sustainable, dynamic and livable cities. |
| Keywords: | Banks&Banking Reform,Debt Markets,Access to Finance,Municipal Financial Management,Subnational Economic Development |
| Date: | 2012–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6256&r=ure |
| By: | Mathias Sinning (Australian National University, RWI and IZA); Steve Stillman (Department of Economics, University of Otago, New Zealand) |
| Abstract: | This paper exploits the existence of the trans-Tasman travel agreement and the availability of comparable census data in Australia and New Zealand to examine the extent to which individuals respond to different labour market conditions in the two countries (and their subregions), as well as measures of local amenities and cost of living when deciding where to live. Our findings suggest that the trans-Tasman travel agreement did contribute to a mutual exchange of migrants with many similarities regarding the size and human capital endowment of migration flows in both directions. However, considerable differences between the two countries remain with regard to internal, trans-Tasman and other international migration. |
| Keywords: | International Migration; International Agreements; Regional Labour Markets |
| JEL: | F22 F55 R23 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:otg:wpaper:1204&r=ure |
| By: | Greg Kaplan; Sam Schulhofer-Wohl |
| Abstract: | We analyze the secular decline in interstate migration in the United States between 1991 and 2011. Gross flows of people across states are about 10 times larger than net flows, yet have declined by around 50 percent over the past 20 years. We argue that the fall in migration is due to a decline in the geographic specificity of returns to occupations, together with an increase in workers' ability to learn about other locations before moving there, through information technology and inexpensive travel. These explanations find support in micro data on the distribution of earnings and occupations across space and on rates of repeat migration. Other explanations, including compositional changes, regional changes, and the rise in real incomes, do not fit the data. We develop a model to formalize the geographic-specificity and information mechanisms and show that a calibrated version is consistent with cross-sectional and time-series patterns of migration, occupations, and incomes. Our mechanisms can explain at least one-third and possibly all of the decline in gross migration since 1991. |
| JEL: | D83 J11 J24 J61 R12 R23 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18507&r=ure |
| By: | Stephens, Thomas A; Tyran, Jean-Robert |
| Abstract: | Loss aversion is one of the most robust findings to have emerged from behavioral economics. Surprisingly little attention, however, has been devoted to nominal loss aversion, the interaction of loss aversion and money illusion. People tend to think of transactions in terms of their nominal (monetary) values. Real losses may therefore loom larger in people’s minds when they lose money than when real losses are hidden by purely nominal gains. Using a survey experiment with a large and heterogeneous sample, we show that evaluations of housing transactions are systematically biased by purely nominal gains versus losses. |
| Keywords: | bounded rationality; housing transactions; loss aversion; money illusion |
| JEL: | A10 C91 D00 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9198&r=ure |
| By: | Ahmad, Mahyudin; Hall, Stephen G. |
| Abstract: | This study augments a standard growth model with institutional controls, and models the spatial dependence using geographical and institutional weight matrices. Spatial Durbin model is shown to be the most appropriate to describe the data and political institutions weight matrix best explains the institutional distance concept since it produces identical results to the exogenous geographical-based distance matrix. Overall, the findings give evidence to the institutional quality effects, particularly the security of property rights, on economic growth in the developing countries. We also find evidence of an indirect route of institutions spillover where institutions in a country lead to economic improvement in that country and generate positive effects on the neighbouring countries’ income growth. Furthermore, our study is able to show that countries with similar political institutional settings have an increased spatial dependence and converge to a similar level of growth. |
| Keywords: | Growth; institutions; spillover effects; institutional distance; spatial Durbin model; |
| JEL: | R10 O43 C21 |
| Date: | 2012–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42294&r=ure |
| By: | Marika Cabral; Caroline Hoxby |
| Abstract: | Because of the manner in which it is normally paid, the property tax is almost certainly the most salient major tax in the U.S. The property tax is also the least popular tax and the only major tax whose revenues have declined as a share of income. We hypothesize that high salience explains the unpopularity of the property tax, the level of the property tax, and prevalence of property tax revolts. To identify variation in the salience of the property tax over local jurisdictions and over time, we exploit conditionally random variation in tax escrow. Tax escrow is a method of paying the property tax that makes it much less salient–as we demonstrate using survey evidence. We find that areas in which the property tax is less salient are areas in which property taxes are higher and property tax revolts are less likely to occur. We present several specification tests, including spatial correlation tests and instruments based on bank branches, that suggest that our results are valid. An implication of our results is that voters facing a non-benevolent government may wish to keep taxes' salience high even if, as a result, they hate their highly salient taxes. |
| JEL: | B12 H2 H24 H3 H71 P16 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18514&r=ure |
| By: | Ivo Bischoff (University of Kassel); Stefan Krabel (University of Kassel) |
| Abstract: | We analyze the impact of large firms on business tax rates using data from German mu-nicipalities in Hesse in 1998-2005. Results suggest that business tax rates decrease with tax-payers’ concentration, indicating strong local lobbying power of large firms. |
| Keywords: | tax competition, yardstick competition, local business taxation, large firms, Germany |
| JEL: | F1 F16 H2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201245&r=ure |
| By: | Alexis Anagnostopoulos (Department of Economics, Stony Brook University); Orhan Erem Atesagaoglu (Department of Economics, Stony Brook University); Eva Carceles-Poveda (Department of Economics, Stony Brook University) |
| Abstract: | In the United States, the residential housing market went through important changes over the period from the 1970s to the mid-1990s. Although the aggregate homeownership rate was relatively constant during that period, the distribution of homeownership rates by age changed in remarkable ways. While younger households saw substantial declines in homeownership rates, the opposite happened for older households. In this paper, we argue that the skill-biased technological change (SBTC) that began during the 1970s has been an important factor behind the observed change in the distribution of homeownership rates by age. We build a life cycle model in which skills are accumulated on-the-job through experience: learning by doing. Early in life, households have lower levels of skills and therefore lower earnings. SBTC increases the returns to skill, widening the wage gap between young and old ages. As a consequence, it takes more time for young households to become homeowners given frictions in financial markets (e.g. downpayment requirements) and housing markets (e.g. large and indivisible houses), in line with consumption smoothing behaviour. On the other hand, older households that could not afford a house before may now become homeowners, given higher returns to skill. Our analysis confirms this conjecture, namely, that SBTC shifts the distribution of homeownership from the young to the old. |
| Keywords: | Homeownership, Incomplete Markets, Skill-Biased Technological Change. |
| JEL: | E2 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nys:sunysb:12-09&r=ure |
| By: | Karaçuka, Mehmet; Çatik, A. Nazif; Haucap, Justus |
| Abstract: | Turkish consumer survey data is used to analyze the main factors that affect consumers' choice of different mobile telecommunications networks. The analysis shows that consumers' choice is significantly affected by the choices of other consumers with whom the consumer is more likely to interact. The results show that local network effects exist and consumer characteristics have significant effects on consumer choice. This finding means that consumers are more likely to be affected by the choices of other people within their local area than by the overall size of a network. The results also suggest that local effects may outweigh macro network effects at least in Turkey. -- |
| Keywords: | mobile telecommunications,network effects,discrete choice analysis |
| JEL: | C23 L13 L9 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:70&r=ure |
| By: | Sergei Guriev (New Economic School); Elena Vakulenko (National Research University Higher School of Economics) |
| Abstract: | In this paper we study convergence among Russian regions. We find that while there was no convergence in 1990s, the situation changed dramatically in 2000s. While interregional GDP per capita gaps still persist, the differentials in incomes and wages decreased substantially. We show that fiscal redistribution did not play a major role in convergence. We therefore try to understand the phenomenon of recent convergence using panel data on the interregional reallocation of capital and labor. We find that capital market in Russian regions is integrated in a sense that local investment does not depend on local savings. We also show that economic growth and financial development has substantially decreased the barriers to labor mobility. We find that in 1990s many poor Russian regions were in a poverty trap: potential workers wanted to leave those regions but could not afford to finance the move. In 2000s (especially in late 2000s), these barriers were no longer binding. Overall economic development allowed even poorest Russian regions to grow out of the poverty traps. This resulted in convergence in Russian labor market; the interregional gaps in incomes, wages and unemployment rates are now below those in Europe. The results imply that economic growth and development of financial and real estate markets eventually result in interregional convergence. |
| Keywords: | Convergence, economic growth, Russian regions, financial development, migration. |
| JEL: | J61 R23 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0180&r=ure |
| By: | Anna Kovner; Josh Lerner |
| Abstract: | This paper examines the investments and performance of community development venture capital (CDVC). We find substantial differences between CDVC and traditional venture capital (VC) investments: CDVC investments are far more likely to be in nonmetropolitan regions and in regions with little prior venture capital activity. Moreover, CDVC is likely to be in earlier-stage investments and in industries outside the venture capital mainstream that have lower probabilities of successful exit. Even after we control for this unattractive transaction mix, the probability of a CDVC investment being successfully exited is lower. One benefit of CDVCs may be their effect in bringing traditional VC investment to underserved regions: When we control for the presence of traditional VC investments, each additional CDVC investment results in an additional 0.06 new traditional VC firm in a region. |
| Keywords: | Community development ; Venture capital ; Investments |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:572&r=ure |
| By: | Schürenberg-Frosch, Hannah |
| Abstract: | The author shows with pooled OLS estimations based on transport margins from international social accounting data that investments in improved road infrastructure have the potential to significantly reduce transport costs. However, this result can only be clearly confirmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries, in contrast, the author finds other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. Very high corruption has the potential to prevent positive effects from road infrastructure on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. The author concludes that investments in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if specific additional conditions are given. -- |
| Keywords: | infrastructure,transport networks,transport costs,agriculture,public investment,development |
| JEL: | O18 O11 R42 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201254&r=ure |
| By: | Grembi, Veronica (Catholic University Milan); Nannicini, Tommaso (Bocconi University); Troiano, Ugo (Harvard University) |
| Abstract: | We evaluate the effect of relaxing fiscal rules on policy outcomes applying a quasi-experimental research design. In 1999, the Italian central government introduced fiscal rules aimed at imposing fiscal discipline on municipal governments, and in 2001 the rules were relaxed for municipalities below 5,000 inhabitants. This institutional change allows us to implement a "difference-in-discontinuities" design by combining the before/after with the discontinuous policy variation. Our estimates show that relaxing fiscal rules triggers a substantial deficit bias, captured by a shift from a balanced budget to a deficit that amounts to 2 percent of the total budget. The deficit comes primarily from reduced revenues as unconstrained municipalities have lower real estate and income tax rates. Finally, we investigate the heterogeneity in policy responses across municipalities to provide new evidence about the costs and benefits of restricting fiscal policy. The impact is larger if the mayor can run for reelection, the number of political parties seated in the city council is higher, voters are older, the performance of the mayor in providing public good is lower, and cities are characterized by historical deficit, consistently with models on the political economy of fiscal adjustment. |
| Keywords: | fiscal rules, local government finance, difference-in-discontinuities |
| JEL: | C21 C23 H62 H72 H77 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6952&r=ure |
| By: | Christoph Höglinger; Tanja Sinozic; Franz Tödtling |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwsre:sre-disc-2012_07&r=ure |
| By: | Eleonora Lorenzini (Department of Economics and Management, University of Pavia) |
| Abstract: | This paper draws on the literature on innovation in clusters and e-commerce to investigate how a particular kind of innovation project, the establishment of a regional e-marketplace (REM), may contribute to regional development. Using a firm-centred perspective, the role of geographical and cognitive proximity, absorptive capacity and other firm characteristics in the adoption and development of this particular type of innovation project is assessed. Hypotheses are tested with reference to the case of an REM recently established in the Italian area of Valtellina. The policy implications of the study are that REMs deserve support as an instrument of territorial development both in the establishment and in the implementation phase, more with “soft policies” than with “hard policies”. |
| Keywords: | clusters, innovation policy, e-commerce, proximity, Italy |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0003&r=ure |
| By: | Rajashri Chakrabarti; Sarah Sutherland |
| Abstract: | In the State of New Jersey, any child between the age of five and eighteen has the constitutional right to a thorough and efficient education. The State of New Jersey also has one of the country’s most rigid policies regarding a balanced budget come fiscal end. When state and local revenues took a big hit in the most recent recession, officials had to make tough decisions about education spending. This paper exploits rich panel data and trend-shift analysis to analyze how school finances in the Abbott and Bacon School Districts, as well as the high-poverty districts in general, were affected during the Great Recession and the American Recovery and Reinvestment Act (ARRA) federal stimulus period. For these groups of districts, the debate over the meaning of thorough and efficient has become a perennial courtroom discussion. Our analysis shows downward shifts in revenue and expenditure per pupil during the post-recession era in all three groups of districts. However, the Abbott Districts showed the sharpest declines in both revenue and expenditure relative to preexisting trends. Of importance, the Abbott Districts were the only group in our analysis to show statistically significant negative shifts in instructional expenditure (the expenditure category most closely related to student learning), even with the federal stimulus. Declines in noninstructional categories were also the most prominent in the Abbott Districts. With comparably less declines in state and federal aid, the Bacon Districts maintained spending across the board at higher levels than the other groups. Given the unique role of the Abbott and Bacon Districts in the history of New Jersey education policy, the findings of this paper contribute valuable insight regarding the experience of these high-poverty districts during recessions. |
| Keywords: | Education - Economic aspects ; Government spending policy ; Poverty ; Recessions ; Federal Reserve District, 2nd |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:573&r=ure |
| By: | Gabriel E. Kreindler; H. Peyton Young |
| Abstract: | The diffusion of an innovation can be represented by a stochastic process in which agents choose noisy best responses to what their neighbors are currently doing. Diffusion is said to be fast if the expected time until a majority of agents play the stochastically stable (risk-dominant) equilibrium scales with the size of the network. Previous work has identified specific topological properties of networks that result in fast diffusion. Here we derive topology-free bounds such that diffusion is fast in any network with a given degree distribution (and no restriction on the topology), so long as the payoff gain from the innovation is sufficiently high and the response function is moderately noisy. In particular for the logit response function it suffices that the error rate be on the order of 5% and the payoff gain on the order of 80% to achieve fast diffusion in any regular network. |
| Keywords: | Innovation diffusion, Convergence time, Local Interaction |
| JEL: | C72 C73 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:626&r=ure |
| By: | Masashi Yamamoto (Center for Far Eastern Studies, University of Toyama); Yuichiro Yoshida (National Graduate Institute for Policy Studies) |
| Abstract: | NIMBY (not in my backyard) is the word used to describe the human behavior whereby a person agrees on an issue but refuses to accept it when it happens ‘in his own back yard’. This paper analyzes this type of NIMBY activity and, using evidence from England’s waste management policy, determines that NIMBY decisions are not necessarily the result of personal self-interest. If people disagree with building a nuisance facility, such as a site for waste and recyclables, in their own backyard, the result is an increase in illegal dumping rather than the legal and proper disposal of waste materials at an official facility. Using the spatial econometrics approach, we further provide evidence that the broken window theory is also applicable to illegal dumping. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:12-13&r=ure |
| By: | Andrew J. Cassey; Ben O. Smith (School of Economic Sciences, Washington State University) |
| Abstract: | The Ellison-Glaeser (1997) index is an unbiased statistic of industrial localization. Though the expected value of the index is known, ad hoc values are used to interpret the extent of localization. We improve on the interpretation of the index by simulating condence intervals while varying the underlying parameters of the lognormal distribution of plant employment size and the number of plants in the industry. In the data, we nd cases whose index value is above the ad hoc threshold that are not statistically signicant. We nd many cases below the ad hoc threshold that are statistically signicant. |
| Keywords: | Ellison-Glaeser, localization, herfindahl, simulation, confidence interval |
| JEL: | C63 L11 R14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:cassey-7&r=ure |