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on Urban and Real Estate Economics |
| By: | Michael Bentlage; Matthias Dorner; Alain Thierstein |
| Abstract: | Regions in Germany are facing an intensifying structural change towards the knowledge economy which is affecting spatial patterns of growth. . Features of such a change know many facets: fierce competition for skilled, mobile and motivated labor force, unemployment of non-qualified labor, longer commutes, multi-local households, re-concentration of the value chain, increased knowledge intensity of innovations, triple-helix collaborative ventures, structural weakness of public budgets, etcetera. These changes result in uneven spatial development, concentration in polycentric large-scale urban regions and increase in spatial disparities. The question arises how this structural change affects the territory of Germany, where securing equivalent living conditions still counts among the basic constitutional principles. We hypothesize that knowledge intensive employment tends to concentrate in two different spatial environments: (1) urban metropolitan centers and (2) network nodes with specialized knowledge resources. Both spatial configurations qualify by their combination of agglomeration economies and network economies. And both spatial environments tend to provide an optimum of geographical proximity and relational proximity, which eventually enable systematic knowledge creation. We test our hypothesis by analyzing the employment from 1998 to 2010 in 16 branches of the knowledge economy with a shift-share analysis. We argue that structural change and the economic crisis from 2009 intensify regional disparities while inducing relative employment shifts. |
| Keywords: | employment growth; economic crisis; knowledge economy; labor market regions |
| JEL: | R11 R12 O1 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p978&r=ure |
| By: | Selin Ozyurt; Stephane Dees |
| Abstract: | This paper investigates the main determinants of economic growth in the European Union from a regional perspective. The analysis is based on a recently available dataset from the European Cluster Observatory covering 253 European regions over the period 2002-2008. In addition to the traditional determinants of regional growth (such as investment, human capital developments, innovation and infrastructure endowment), the growth analysis accounts for spatial effects related to the existence of externalities from neighbouring regions. The spatial Durbin fixed-effect panel specification captures spatial feedback effects from the neighbours through spatially lagged dependent and independent variables. Social-economic environment and traditional determinants of growth are found to be significant. In particular, investment, infrastructure and human capital endowment, accessibility and innovation capacity explain both growth dynamics and cross regional differences. We do not find evidence of convergence among regions over the study period. By contrast, we detect a regional cluster in the core of Europe specialised in activities with high growth potential. Our findings confirm the significance of spatial spillovers. Specifically, business investment and skilled workforce migration have a positive ? direct and indirect ? impact on economic growth of the European regions. |
| Keywords: | Spatial Durbin Panel Models; Economic Growth; Cluster Analysis; European Union; |
| JEL: | R12 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p242&r=ure |
| By: | Hayden Skilling (Reserve Bank of New Zealand) |
| Abstract: | This paper provides an up-to-date analysis of recent trends in the housing market, using unit-record data from CoreLogic on housing and mortgage transactions in New Zealand. Increased housing market activity in recent months has been driven by strong investor demand, both within and outside of Auckland, as reflected in increased investor purchases and significant growth in investor-related mortgage credit. Increased investor activity is primarily due to small investors, who are generally more reliant on credit. This suggests the incoming changes to the LVR restrictions could have a significant dampening effect on Auckland housing market activity and house price inflation. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nzb:nzbans:2015/06&r=ure |
| By: | Sabina Buczkowska; Nicolas Coulombel; Matthieu de Lapparent |
| Abstract: | While the question of the specification of spatial weight matrix is now largely discussed in the spatial econometrics literature, the definition of distance has attracted less attention. The choice of the distance measure is often glossed over, with the ultimate use of the Euclidean distance. This paper investigates this issue in the case of establishments locating in the Paris region. Indeed, numerous works highlight the importance of transport infrastructure in the location model, which challenges the choice of the Euclidean distance in representing spatial effects. To compare the various distance measures, we develop a probabilistic mixture of hurdle-Poisson models for several activity sectors. Each model class uses a different definition of distance to capture spatial spillovers. The following distance measures are considered: Euclidean distance, two road distances (with and without congestion), public transit distance, and the corresponding travel times. Data were drawn primarily from the Census survey of establishments carried by the French National Institute of Statistics and Economic Studies. Data on the stock of establishments are given for the 1st of January 2007. In our sample, 763 131 pre-existing establishments were registered on the market. The number of newly created establishments in 2007 equals to 87 974. Based on the performed analyses we drew four main conclusions. 1) Overall, the obtained results are in line with the literature regarding the main determinants of establishment location. 2) Based on the Bayesian Information Criteria, we found that the proposed mixture of hurdle-Poisson models that uses two latent classes performs significantly better than the ?pure? hurdle-Poisson models based on a single distance measure, emphasizing the usefulness of our approach. By using the mixture hurdle-Poisson model we considerably decreased the level of BIC up to 42%. 3) From the overall level of estimated probabilities, we observed that for some transport-oriented sectors, such as construction, the peak road travel time is the most likely to correctly capture spatial spillovers. For other sectors, which do not rely so heavily on the transport infrastructure and which search the proximity to the potential client or user, such as real estate, the Euclidean distance tends to perform well to account for the linkage between neighboring areas. This tends to show that spatial spillovers are channeled by different means depending on the activity sector. 4) In addition, by allowing different distance measures to coexist within a hurdle-Poisson mixture model, the hurdle part of the model that uses the appropriate distance matrix significantly improves. |
| Keywords: | location choice; mixture hurdle-Poisson model; spatial spillovers; distance |
| JEL: | C31 C35 L22 R41 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1060&r=ure |
| By: | Moreno Baruffini; Valentina Mini; Luzius Stricker |
| Abstract: | Historically Switzerland is characterized by numerous small towns. During the twentieth century, the image of Swiss cities has changed: the expansion of the city has reached the limits of administrative urban borders, penetrating in peripheral locations. The main reasons concern not only the territorial environment, but also the possibility to support public services and public investments. Currently, urban agglomerations include dozens of municipalities and this is seen as a virtuous strategy to provide basic public services and utilities in peripheral areas. Swiss federalism has fostered the development of a large number of small and medium sized cities. This creates the conditions for polycentric and decentralized settlements. At this stage of the territorial and institutional transformation, the understanding of different municipalities? roles is essential: the ?work? and ?live? functions are spread irregularly throughout the territory. Some core cities are traditionally business locations but the progressive urbanization has enhanced the attractiveness of the belt municipalities, for both residential and business purposes. We try to identify the different functions and relations between 47 agglomerated municipalities in southern Switzerland (Ticino), using a territorial agent based model. The analysis focus on four analytical dimensions: economic competitiveness, attractiveness, openness and social equality. Our research adopts a bottom up approach to urban systems, considering the agglomeration mechanism and effects of different regional and urban policies. Urban residential dynamics are the result of simultaneous household?s choices; thus, no program can be planned, without the ability to understand and predict the individual decisions in the short and long term. Recently, agent based models (ABMs) have been proposed in order to support urban policy makers. Simulating the individual actions of diverse agents on a real city and measuring the resulting system behaviour and outcomes over time, they provide a good test bed for evaluating the impact of different policies Our analysis starts from the micro level at the smallest territorial unit (municipalities). The database is created merging the Swiss official secondary data for one reference year (2011) with Eurostat and OECD Regpat. The model, linking territorial characteristics and agents, simulates the single location choices and formation of urban development patterns, which are influenced by residential and industrial agglomeration forces and policy interventions. The results highlight that the understanding of municipalities? functions on the territory appears to be essential for designing a solid institutional agglomeration (or city). From a methodological point of view, we contribute to improve the application of territorial ABMs. Finally, our results provide a robust base to evaluate in a dynamic way various political interventions, in order to ensure a sustainable development of the agglomeration and the surrounding territories. |
| Keywords: | urban agglomeration; urban policy evaluation; Agent Based Models |
| JEL: | C63 R12 R14 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1251&r=ure |
| By: | Lissy La Paix; Karst Geurs |
| Abstract: | The measures of local and regional accessibility have been developed separately, resulting on a scarcely studied connection between these two. Accessibility evaluation of land-use and transport strategies can be much improved by linkages with more understandable, and local, accessibility measures for research and policy makers. This paper develops a multimodal model to analyse a set of scenarios of chain mobility , i.e. bicycle route quality, BTM frequency and bicycle parking cost . The results reflect the effects on accessibility levels in a national transport model. A detailed bicycle network is implemented and linked to the public transport network. The effect of access and egress penalties is verified by introducing station specific penalties by mode and station type (mode-station constant). The penalties are derived from time valuations (VOT) and willingness to pay (WTP) for transport improvements. The study area covers 54 stations of the Stedenbaan corridor, within the Randstad south wing. A set of transport scenarios are simulated for both 2012 and 2030. A potential job accessibility measure was calculated with the matrices of travel times generated from each scenario. On average the largest travel time reduction is by 15% between 2012 and 2030, when a scenario of better network and connectivity takes place. The results also show the increase in train passengers due to improved bicycle access. We identified that transport measures should be station based. The strongest effects occur in medium and small station types, i.e. 3, 4 and 5. Particularly, station types 3 and 4 are more sensitive to changes in bicycle network than the rest of stations. At the same time, labour force has a strong impact on reaching high job accessibility levels per region and station areas. The job accessibility increased up to 20%. As future research, the behavioural elements of the national transport models can be enriched to produce more user-oriented results. |
| Keywords: | national transport model; train stations; job accessibility |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1310&r=ure |
| By: | Thorsten Martin; Felix Arnold; Ronny Freier |
| Abstract: | Recently, the channels of citizen participation in Germany with regard to governmental processes are subject to change. Classical interaction between politicians and citizens still takes place. However, there are new tools for participation at hand as well. One interesting channel that attracted attention recently consists of citizen initiatives trying to obtain a referendum at a local level. These local referendums received much attention, even at the federal level in Germany. Interestingly, in a referendum on housing construction in a green area in Berlin, proponents were arguing that there is a lack of developable areas in terms of living space and a scarcity of housing areas. The shortage of housing supply became an apparent phenomenon in urbanized areas all over Germany. Therefore, it is worth to explore the interplay of local initiatives and the amount of provided housing areas. This paper contributes to this discussion by estimating the impact of local initiatives on the amount of approved and finished residential areas in Bavaria from 2003 until 2012. Since citizen initiatives were introduced in 1995 in Bavaria, it has become the federal state within Germany where most citizen initiatives took place. We use the introduction and the spatial expansion of initiatives as a natural experiment to obtain a causal effect of initiatives. We suppose two possible theoretical mechanisms how local initiatives affect the urban development process. First, the median voter in the respective municipality might be a homevoter (Fischel (2001)). Briefly, a homevoter is described as an inhabitant that allocated all his investments into his own house. Therefore, homevoters have an incentive to use local initiatives in order to maintain the existing conditions and avoid a potential loss in their home's value. A second mechanism might be the loss of reputation for local politicians with the presence of an initiative. Therefore, local governments that already experienced an initiative might be more hesitant with urban development policies in the future. We start our empirical assessment by thoroughly exploring the time frame where initiatives might have an impact on local land use. It seems that initiatives have an effect on local land use within five to nine years after they took place. Even though there is a negative trend of housing construction in Bavaria during our observational period, a local initiative causes a moderate negative dip of around 10% in finished residential area per capita. Interestingly enough, initiatives only influence the provision of residential areas but do not have any effect at all on the provision of non-residential areas. We consider this as evidence for our hypothesis, since voters are more directly affected by housing construction in their immediate neighborhood. Our results remain robust through a variety of robustness checks. |
| Keywords: | Urban development policies; land use regulations;direct democracy |
| JEL: | D72 D78 Q15 R52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p462&r=ure |
| By: | Christian Hilber; Teemu Lyytikainen |
| Abstract: | We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. The UK (until 2014) provided an ideal setting to explore the impact of housing transfer taxes on mobility decisions. This is partly because the stamp duty liability is quite substantial, at least for more expensive housing (the top rate is currently 7 percent of the purchase price), and partly because the stamp duty liability, until December 3 of 2014, jumped sharply at various cut-off values, providing various ?discontinuities? that can be exploited empirically. Our analysis focuses on a discontinuity where the stamp duty jumps particularly strongly from 1 percent to 3 percent of the purchase price. This discontinuity allows us to isolate the impact of the stamp duty from other determinants of mobility. In our core analysis we use data from the British Household Panel Survey (BHPS) and compare homeowners with self-assessed house values on either side of the cut-off, while controlling for flexible but smooth functions of house values. We find that the stamp duty has a significant negative effect on household mobility and that this effect is confined to short-distance moves and to moves that are housing- rather than job-related. Our core estimates indicate that the 2 percentage-point increase in the stamp duty reduces the annual rate of mobility by between 2 and 3 percentage points. This is a very substantive effect given that in the UK about 5 percent of all owner-occupier households move each year. To further assess the validity and quantitative significance of the response of households to the stamp duty, we turn our attention to a different dataset from the Land Registry that consists of actual transaction prices. Analysing the distribution of transaction prices of all housing sales in England and Wales, we find additional evidence of a strong behavioural response. We document bunching of observed transaction prices at the cut-offs where the tax rate increases and, consistent with the results of our core analysis, we find that a 2 percentage point increase in the tax rate decreases the volume of sales by roughly 30 percent. The contribution of our study to the existing literature is twofold. Firstly, we identify the long-term (equilibrium) effects of the stamp duty on actual household mobility. Secondly, we are able to distinguish between different types of moves. In particular, our analysis distinguishes between short- and long-distance moves and between housing- and job-related moves. This paper is to our knowledge the first quasi-experimental study that directly evaluates the effect of a real estate transfer tax on actual household mobility. |
| Keywords: | Stamp duty; housing transfer taxes; transaction costs; homeownership; mobility |
| JEL: | D23 H21 H27 J61 R21 R31 R38 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1491&r=ure |
| By: | Nathaniel Baum-Snow; J. Vernon Henderson; Matthew Turner; Loren Brandt; Qinghua Zhang |
| Abstract: | This paper quantifies the causal effects of various types of investments in the road and railroad networks on economic growth in Chinese cities and regions. We separate out the influences of changes in access to markets that have come through better inter-regional and international transport links from the more direct effects of transport infrastructure on city level productivity, which may operate through various channels. We find strong evidence that improved integration with nearby markets significantly promoted local growth in China since 1990. In particular, expansions of road infrastructure leading to a 10 percent increase in economic activity within a six hours' travel time led to an estimated 1.4 percent more rapid prefecture GDP growth and 1.1 percent more rapid prefecture city GDP growth. Expansions of road infrastructure leading to a 10 percent increase in population within six hours caused an estimated 1.6 percent increase in prefecture GDP growth and an imprecisely estimated 1.3 percent increase in prefecture city GDP growth. Estimated causal effects of more theoretically grounded measures of market access on local growth are consistent with these effects of more reduced form market potential measures. While we find that improved regional integration promoted local GDP growth in China, we find no significant effects of regional integration on prefecture or city population growth. Instead, we find evidence that improved access to international ports promoted population growth. A 10 percent decline in travel time to an international port caused a 0.6 to 0.7 percent increase in prefecture and city population growth. The context of severe migration restrictions in many cities and policies promoting foreign investment in other cities is important for interpreting these results. Our investigation of the effects of highways and railroads serving prefecture cities is less conclusive. While point estimates tend to be positive, they are generally imprecise. This study innovates on the existing literature about the effects of reduced domestic trade costs on local growth in several ways. First, we consider both highways and railroads. Second we primarily examine cities, rather than rural counties or small towns. Third we examine the effects of transport infrastructure on the growth and redistribution output and population simultaneously, rather than on inferred income or the output of specific commodities. Finally, we examine the responses to various measures of the composition of output in the regions surrounding cities in various distance and travel time bands. Critical to this evaluation is the use of pseudo-random variation in the allocation of transport networks to cities and their surrounding regions. |
| Keywords: | transportation; market access |
| JEL: | R12 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1177&r=ure |
| By: | Matthias Wrede; Rainald Borck |
| Abstract: | This paper analyzes the relationship between spatial mobility and social mobility. It develops a two-skill-type spatial equilibrium model of two regions with location preferences where each region consists of an urban area which is home to workplaces and residences and an exclusively residential suburban area. The paper demonstrates that both segregation and regional income inequality are negatively correlated with relative regional social mobility. In the model, segregation is driven by differences between urban and residential areas in commuting cost differences between high-skilled and low-skilled workers, whereas regional income inequality also depends on the magnitude of the productivity gap of low-skilled workers. A larger productivity gap does not affect segregation, but causes higher income inequality and lower relative mobility in the respective region. |
| Keywords: | social mobility; spatial mobility; segregation; inequality |
| JEL: | J62 R13 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p610&r=ure |
| By: | Jacob Macdonald; Sofia Franco |
| Abstract: | Real estate prices in cities, especially in historic central areas, are influenced by the quality and character of their neighbourhoods. Many cities are identifiable by iconic historic features such as their buildings or monuments. This paper examines the impact of historic amenities on residential housing prices in the city of Lisbon, Portugal. Our study is directed towards identifying spatial variation of amenity values for churches, palaces, lithic (stone) architecture, and other amenities through the housing market. We develop a theoretical model to guide the empirical specification and establish a bid price function allowing for a spatial pattern of housing prices more complex than the monocentric city model. As such the willingness to pay may no longer be a monotonically decreasing function of distance to the CBD. A novel feature of our model is the introduction of herd behaviour in the housing market to capture underlying spatial interaction between property values. Empirically we estimate two global spatial hedonic models, a spatial lag and spatial error, to capture the effect of concentration of historic amenities on residential prices and correct spatial dependence. A locally weighted regression model investigates spatial non-stationarity and generates local estimates for individual historic landmarks. Results show significant spatial autocorrelation and there are benefits to modeling this behaviour through spatial hedonic models with reduced SSE up to 4% relative to OLS models. Direct proximity to any type of monument yield premiums of around 2% on housing prices however increased landmarks overall decrease prices by 0.7%, and different types of historic and individual landmark amenities induce varying housing premiums. Higher concentrations of non-landmark churches within 1,000 meters yield negative effects of 0.1% on housing prices with landmark churches having a larger impact around 4%. In contrast, lithic structures and palaces have positive effects with premiums in the order of 5% and 12% respectively and stronger effects for historic amenities located near open spaces. The impact of these historic amenities are assumed different since they are primarily aesthetic whereas churches provide services and a congregation point for the community. Our results highlight the capacity of the LWR model in explaining price differentials for proximity to individual landmarks. We see localized effects for being located near specific landmarks from approximately 130 ? to be further from the Castle and Church of Saint Anthony in downtown to 200 ? and 800 ? respectively to be located closer to the Palace of Necessidades and Monastery of Jeronimos - both characterized by large gardens. From a policy perspective, these findings highlight the importance of conceptualizing the amenity value not just in terms of structural characteristics but how those characteristics interact with or are conditioned by social, economic and other local contextual features. |
| Keywords: | Hedonic; Spatial analysis; Historic amenities |
| JEL: | C21 H23 P25 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p657&r=ure |
| By: | Wenjie Wu; Jianghao Wang |
| Abstract: | Location-based social media data is, increasingly, an important facilitator of exploring the movement of goods and people in and between countries across the globe. Typical examples include Twitter, Facebook, Foursquare. As with all social media data outputs, the fundamental value of location-based social media data is for sensing users? space?time trajectories, and thus, makes social media data a new platform for understanding business and social interactions in the spatial context. In large developing and emerging economies with massive social media users via computers and mobile phones, real-time ?geo-tagged? human mobility information from social media data sources are clearly potentially large. In these settings, cyberspaces are often built and expanded with the explicit aim of stimulating digital socioeconomic activities and balancing regional disparities. However, despite intense policy and public enthusiasms, there is virtually no direct evidence on exploring the configuration of urban network patterns by using social media users? mobility flows within a large developing country context. The scarcity of empirical evidence is not surprising, given that mining location-based social media data faces serious identification challenges. First, location-based social media data, as a type of big data resource, are often featured by the dynamic, massive information generated by billions of users across space. In truth, despite of the recent development of intensive-computational geographic information system (GIS) modeling programs, social media data with precise individual-level location information is still extremely large to proceed by using the GIS techniques at multiple geographical scales. Furthermore, conventional GIS-based computational methods cannot directly read the unstructured social media datasets (e.g. words, pictures, videos). Additional big data mining methods are often needed to transform social media data information from unstructured data formats to structured, and ready-to-use spatial datasets. In this paper, we tackle these problems by analysing the configuration of intercity connection patterns in China to provide new evidence to the applications of location-based social media data in urban and regional studies. Our examination of changes in human mobility patterns by months by city-pairs throughout China by months involves many potential stages of big data mining analysis. We stratify cities by core-periphery urban systems, by regions and by calendar months, finding that human mobility flows are not distributed evenly over time and across space. We find larger human mobility flows around the Chinese New Year month and the summer months. Our evidence suggests the significantly heterogeneity patterns of core-periphery urban systems as reflected from real-time human mobility flows. As a baseline, this paper is?for the first time in the literature?to comprehensively measure urban network patterns at a detailed spatial degree (the city-pair level) based on location-based social media data from a large developing country context. |
| Keywords: | Big data; Social media; Urban network; China |
| JEL: | P25 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p798&r=ure |
| By: | Atuhurra, Julius |
| Abstract: | While the school participation impacts of the Universal Primary Education policies in Sub-Saharan Africa have been impressive, learning impacts’ assessment has received little attention. This study measures and explains the initial achievement impacts of the Free Primary Education (FPE) policy in Kenya using grade six pupils’ reading and math standardized test scores. We find large achievement declines, spillover effects to private schools and heterogeneous impacts by gender and socioeconomic status. The declines are associated with decreased teacher efforts and local community disengagement. Policy studies on pathways to increased local community involvement in public schools will lead to improved learning. |
| Keywords: | Educational policy Learning achievement Teacher Effort Community involvement |
| JEL: | H44 I20 I21 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67506&r=ure |
| By: | Arzu Taylan; Elif Gunduz; Mehmet Akif Sag; Kubra Karkin |
| Abstract: | This paper will evaluate the outcomes of the economic and sectoral development policies of Turkey in terms of investigating the socio-economic and spatial resilience of Kayseri city-region. In Turkey, economic development was mainly based on the manufacturing sector with a significant rise during the period of 1980-1990s. In recent decade, however, the main economic activity has shifted toward the construction sector. Depending on the limitations of the construction industry in the near future, however, the cities need to develop ?resilience plans?, which consider the sectoral potentials and challenges as well as their influences on physical development and/or settlement patterns by comprising both the urban and rural areas of their regions. In this context, this paper focused on the Kayseri city-region. Indeed, Kayseri, which is known with its innovative entrepreneurship in business, has witnessed certain developments in the manufacture industry, i.e. automotive and furniture sectors during 1980-1990s. Although this change addressed a significant shift toward the new regional policies that can lead success in the competitiveness and global integration, there is seen a sectoral decline in the automotive industry since 2000s. Simultaneously, the construction and service sectors increased, when Kayseri has experienced a significant rural-to-urban migration. That is, the influence of the rise in the construction sector does not only lead a decline in the urban manufacturing sectors, but also a decrease in the rural sectors that accompany to the migration. Moreover, the peripheries of Kayseri metropolitan area that had agricultural character with a contribution into the industry have also been threatened with the speculative activities of the construction industry. Regarding the limitations of the construction industry in the next years, Kayseri needs to define the way of resilient development by means of economic sectors. Thus, the paper will evaluate the resilience of Kayseri city-region in terms of Multi-Criteria Analysis Approach, which provides using several criteria, i.e. limits and potentials in the economic sectors as well as in the social and physical development, and different scales, i.e. regional and metropolitan levels. The data on the economic sectors and spatial development of Kayseri are obtained from local authorities such as regional development agency and metropolitan and district municipalities. Regarding both the characteristics of urban and rural areas, the paper will present firstly a sub-regional zoning, which is based on the existing and potential economic activities with the reasons of migration, proposals for rural development and integration of rural sectors into metropolitan sectors. Then, the paper will focus on the metropolitan area by investigating the potentials of urban economic sectors in association with rural sectors? integration, urban growth patterns and main macro-form decisions. |
| Keywords: | sectoral changes; socio-spatial resilience; urban growth; regional development |
| JEL: | R1 R11 R12 R14 R58 N5 N6 N9 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1007&r=ure |
| By: | Hildegunn Stokke; Jørn Rattsø |
| Abstract: | Income taxation may affect the regional allocation of population when prices vary over space. Our contribution is to compare different income tax systems in a migration equilibrium model for Norway using improved measure of regional wage differences. We apply register data of individual wages for the entire population to identify wage differences, while controlling for both observable and unobservable worker characteristics and allowing for dynamic learning effects on wages. We estimate regional differences in cost of living based on detailed data on housing prices. The model is calibrated to the current nominal income tax system and compared to an undistorted equilibrium without income tax. We investigate two alternative tax systems: Real income taxation where the real tax burden is proportional to real wages and equal real taxes across regions motivated by taxation of amenities. The numerical simulations document large shifts in the regional distribution of the population as the result of income taxation. The elasticity of population with respect to tax payments comes out with a value of -2.64. Nominal income taxation creates a disincentive to locate in productive high-wage regions, and generates a deadweight loss due to locational inefficiencies equal to 0.028% of income. Real income taxation gives a geographic distribution of the population closer to the undistorted equilibrium, and hence with lower deadweight loss, while equal real taxes is the least efficient tax system. |
| Keywords: | Income taxation; regional taxation; cost of living; amenities |
| JEL: | H24 H77 J61 R23 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p305&r=ure |
| By: | Henri Busson |
| Abstract: | The relationship income / distance to CBD is basically nonlinear and its form varies a lot across the world. We often consider classic forms such as the typical US city one, where rich people live in the suburbs and the European city where they live downtown. Nevertheless, more complex patterns could be observed like in New York City. In this city, the area which is the closest to the city center is very rich; poor people live further away from CBD and the middle class lives in the suburbs. To explain these stylized facts, we use a model inspired by Turnbull (1997). Instead of employing the classical utility functions, this model applies the revealed preference theory. In his original paper, Turnbull established several propositions that made his model consistent with the main results obtained in urban economics (for instance that the prices decrease in relation to the distance from the CBD). Despite its consistence, the model gives different predictions than the main studies regarding the relationship between income and distance to CBD. This model allows us to deal with a great heterogeneity among the households (regarding incomes, tastes, transportation modes, amenities consumption) and thus enables many different potential equilibria. This diversity of equilibria permits to represent in a more accurate way cities and patterns and thus justifies the use of this model. Moreover, we try to take into account every parameter that could influence location choice in a single framework. Some model focuses on access to public transportation (Glaeser et al. (2008), other on amenities (Brueckner et al. (1999)). But no model has ever succeeded in giving a complete framework for studying the income sorting. Utility functions are usually used because the revealed preferences method is highly complex. But our model is quite simple because we demonstrated that the GARP axiom used in the revealed preference theory is equivalent to a simple equation. In our paper, several differences are found when comparing our results to the classic method using utility functions. Firstly, the ratio commuting costs per mile over demand land for rent is found constant between income groups, which is consistent with Wheaton (1977). As this variable is no longer supposed to explain the income sorting, the model focuses on other variables to explain it: income elasticity of housing demand, commuting time or amenity consumption. Moreover, in our model, some of the richer households will locate closer from CBD than a poorer one while other rich households will locate further away. This leads to an overlapping of the different income groups unlike the utility functions models that often predict complete segregation (except in De Bartolome and Ross (2003)). |
| Keywords: | income sorting; revealed preferences; segregation; |
| JEL: | R20 D01 D11 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p944&r=ure |
| By: | Guo Ji (Beijing Normal University) |
| Abstract: | Cities, especially those with cultural heritage, attract a large proportion of the world’s tourists each year. A large body of literature studies the sustainability of cultural tourism. It is shown that the excessive visitation of heritage cities strongly affects sensitive urban areas (Russo 2002). The costs of congestion caused by tourism include pressure and damage on urban facilities and premises, typically, historically and culturally important buildings, monuments and artifacts which have variable degrees of “non-excludability” and “non-rivalry” and thus are, at least partly, public goods. Furthermore, the congestion drives citizens and firms to abandon central locations, hampering local development. Spatially differentiated taxation aimed at visitors and tourists is adopted in parts of the world which may promote a more equitable allocation of costs of tourism. However, there is a surprising lack of analytical analysis on either the impacts of tourism on heritage cities or the efficiency of tourist taxation.This paper studies the interactions between tourist tax, local public good provision, which includes protection and restoration of urban facilities/cultural heritage, and the number of tourists in a scenario of multi-regional tax competition between governments of cultural heritage cities. On the one hand, tourism has a positive effect on private income in the heritage cities, as well as government tax revenue. On the other hand however, there is a tourism-related social cost which is equivalent to “congestion” of regular public goods. We believe that the efficiency of tourist taxation is the key to balancing the income and costs brought about by tourism. |
| Keywords: | tourist tax; city infrastructure; tourism externalities; tax competition |
| JEL: | H21 H23 R00 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:3104783&r=ure |
| By: | Hernandez-Murillo, Ruben (Federal Reserve Bank of Cleveland); Owyang, Michael T. (Federal Reserve Bank of St. Louis); Rubio, Margarita (University of Nottingham) |
| Abstract: | Using a panel of U.S. city-level building permits data, we estimate a Markov-switching model of housing cycles that allows for idiosyncratic departures from a national housing cycle. These departures occur for clusters of cities that experience simultaneous housing contractions. We find that cities do not form housing regions in the traditional geographic sense. Instead, similarities in factors affecting the demand for housing (such as average winter temperature and the unemployment rate) appear to be more important determinants of cyclical comovements than similarities in factors affecting the supply for housing (such as housing density and the availability of developable land). |
| Keywords: | clustered Markov switching; business cycles; building permits; comovements |
| JEL: | C11 C32 E32 R31 |
| Date: | 2015–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1524&r=ure |
| By: | Stephen Taylor (Department of Economics and Department of Basic Education); Patricia Watson (Department of Basic Education) |
| Abstract: | Most international literature on the impact of textbooks on educational achievement suggests that this is a relatively cost-effective intervention. However, recent experimental evidence from developing countries has called this into question, suggesting that resources alone are unlikely to impact on performance and that changes in school organisation, pedagogical methods or incentives facing teachers are more effective. South African studies, using observational data, typically show weak associations between achievement and additional resources, though in some studies textbooks emerge as an exception. Some argue that school management is a key mediating variable. This paper evaluates the impact of providing study guides to pupils shortly before their secondary school leaving examination (the “matric” exam). From a sampling frame of 318 schools in the Mpumalanga province, 79 schools were randomly selected to receive study guides, leaving 239 control schools. These study guides were developed by the National Department of Basic Education and distributed to treatment schools for four subjects – accounting, economics, geography and life sciences – resulting in four distinct treatments per school. The impact of the study guides was estimated using matric results from 2011 (baseline) and 2012 (endline). The accounting and economics guides did not have a significant impact on performance. However, the geography and life sciences guides improved scores in those subjects by approximately two percentage points. Treatment heterogeneity was apparent for geography where students in better-performing schools gained more from the guides than students in low-performing schools. This may relate to other studies suggesting that additional school resources matter conditionally upon overall school functionality, particularly management. A simulation indicated that distributing the geography and life science at scale could increase the overall matric pass rate by roughly one percentage point. A cost-benefit analysis calculating the standard deviations of impact on test scores per $100 spent indicates that this intervention is amongst the most cost-effective of educational interventions internationally that have been tested using randomised experiments. Possible reasons why the guides were effective in two subjects but not the other two are discussed. |
| Keywords: | South Africa, education, educational achievement, study guides, Randomised Controlled Trial |
| JEL: | I20 I21 I28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers246&r=ure |
| By: | Stuetzer, Michael; Obschonka, Martin; Audretsch, David B.; Wyrwich, Michael; Rentfrow, Peter J.; Coombes, Mike; Shaw-Taylor, Leigh; Satchell, Max |
| Abstract: | There is mounting evidence demonstrating that entrepreneurship is spatially clustered and that these spatial differences are quite persistent over long periods of time. However, especially the sources of that persistence are not yet well-understood, and it is largely unclear whether persistent differences in entrepreneurship are reflected in differences in entrepreneurship culture across space as it is often argued in the literature. We approach the cluster phenomenon by theorizing that a historically high regional presence of large-scale firms negatively affects entrepreneurship, due to low levels of human capital and entrepreneurial skills, fewer opportunities for entry and entrepreneurship inhibiting formal and informal institutions. These effects can become self-perpetuating over time, ultimately resulting in persistent low levels of entrepreneurship activity and entrepreneurship culture. Using data from Great Britain, we analyze this long-term imprinting effect by using the distance to coalfields as an exogenous instrument for the regional presence of large-scale industries. IV regressions show that British regions with high employment shares of large-scale industries in the 19th century, due to spatial proximity to coalfields, have lower entrepreneurship rates and weaker entrepreneurship culture today. We control for an array of competing hypotheses like agglomeration forces, the regional knowledge stock, climate, and soil quality. Our main results are robust with respect to inclusion of these control variables and various other modifications which demonstrates the credibility of our empirical identification strategy. A mediation analysis reveals that a substantial part of the impact of large-scale industries on entrepreneurship is through human capital. |
| Keywords: | Entrepreneurship; entrepreneurship culture; Industrial Revolution; industry structure; personality |
| JEL: | L26 L64 N13 N53 N94 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67425&r=ure |
| By: | Aaron Hedlund (University of Missouri) |
| Abstract: | Can in?ating away nominal mortgage liabilities cure debt overhang and combat a severe housing bust? With a focus on the Great Recession, I address this question using a structural macroeconomic model of illiquid housing, endogenous credit supply, and equilibrium default. First, I show that the model successfully replicates and provides insight into the dynamics of the U.S. economy since 2006. Second, I show that temporarily raising the in?ation target would have cut foreclosures by over 60% and led to a more robust recovery in real economic variables. Price-level targeting that promises to o?set this temporary in?ation with future disin?ation has more modest positive e?ects. In short, forward guidance matters. Higher in?ation loses its potency in the counterfactual where all homeowners have adjustable rate mortgages, which highlights the importance of nominal rigidities for the e?ectiveness of these policies. Lastly, in?ation proves e?ective even if wages exhibit substantial nominal stickiness. |
| Keywords: | Housing, Liquidity, Mortgage Debt, Foreclosure, In?ation |
| JEL: | D31 D83 E21 E22 G11 G12 G21 R21 R31 |
| Date: | 2015–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1515&r=ure |
| By: | Miki Miyaki (Rikkyo University, College of Business) |
| Abstract: | With the social demand for childcare service diversifying and local governments becoming increasingly cash-strapped, the proportion of public nursery schools in the childcare sector has been shrinking in recent years. The funding reforms of 2004, which abolished the national subsidy to public nursery schools, are seen as one of the triggers of this phenomenon. Using a panel dataset of 983 municipalities across the nation, this paper investigates the impact of the reforms on the operating costs of public nursery schools. We found that different municipalities responded differently to the reforms. In areas with relatively large populations, fiscally stronger municipalities were likely to spend less on public nursery schools in the wake of the reforms, while municipalities in smaller cities spent more. Besides, municipalities that were not compensated for the loss of the national subsidy reduced expenditures in large cities. In small cities, on the other hand, such municipalities actually increased expenditures. |
| Keywords: | operating cost, public nursery school, funding reform, difference-in-differences approach |
| JEL: | H71 H75 H77 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1527&r=ure |
| By: | Takashi Akamatsu (Graduate School of Information Sciences, Tohoku University); Tomoya Mori (Institute of Economic Research, Kyoto University); Yuki Takayama (Graduate School of Engineering, Tohoku University) |
| Abstract: | Agglomeration externalities have been recognized as major sources of lumpy spatial distributions of industries and population. While the abstraction of interregional space has been a common exercise, recent increasing availability of disaggregated geographical data and more sophisticated computational techniques have promoted counterfactual analyses based on many-region models of agglomeration externalities with explicit interregional space (e.g., Redding and Sturm, 2008; Allen and Arkolakis, 2014). A caveat is that incorporating interregional space to a many-region model with agglomeration externalities does not by itself warrant the formation of polycentric agglomerations in stable equilibria—a crucial property in order to replicate the observed geography of agglomerations. We elaborate this point by comparing a pair of new economic geography models, Forslid and Ottaviano (2003) and Helpman (1998). In a two-region economy, these models exhibit both “agglomeration” (i.e., a relative concentration of mobile agents in one of the regions) and “dispersion” (i.e., a uniform distribution of mobile agents across the two regions). But, if the location space were more disaggregated, only the former admits poly-centric agglomerations in stable equilibria, while in the latter, only a mono-centric agglomeration can occur if any. |
| Keywords: | new economic geography model, many-region model, multiple agglomerations, stability, bifurcation |
| JEL: | R12 R13 F15 F22 C62 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:929&r=ure |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (Dept. of Business Administration and CIRCLE, Lund University) |
| Abstract: | This paper challenges one of the fundamental propositions within economic geography; that location in knowledge regions contributes to firm performance in general and especially for knowledge intensive firms that compete on the basis of knowledge. Our analysis of Swedish micro-data on 32,535 firms from 2004-2011 provides evidence that knowledge intensive firms benefit less from local knowledge spillovers than firms with comparably low in-house knowledge. This suggests that firms with high internal competencies can compensate for a lack of local knowledge spillovers and that negative knowledge externalities may make location outside knowledge centers more beneficial for such firms. |
| Keywords: | periphery; firm performance; spillovers; agglomeration |
| JEL: | O30 R10 R11 |
| Date: | 2015–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_040&r=ure |
| By: | David C Maré (Motu Economic and Public Policy Research); Ruth M Pinkerton (Department of Premier and Cabinet); Jacques Poot (National Institute of Demographic and Economic Analysis) |
| Abstract: | This paper measures the process of residential assimilation for three cohorts of immigrants from each of five countries of birth entering Auckland, New Zealand between 1991 and 2006. It tracks, and compares, the changes in spatial segregation, isolation, and autocorrelation for these cohorts over time, using index measures adjusted for random location variation. We find evidence of residential assimilation, whereby immigrants become less spatially concentrated in the years following arrival. Overall concentration has nevertheless been increasing over time, with successive cohorts entering with higher levels of initial concentration. By examining the spatial location patterns of arrival cohorts, we show that entering cohorts are attracted to the current rather than initial locations occupied by the previous cohort of their compatriots. Despite differences across cohorts and over time, there is nevertheless a high degree of stability in the ‘residential footprint’ of different immigrant groups within Auckland. |
| Keywords: | immigration, segregation, residential location, ethnic diversity |
| JEL: | J61 R23 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:15_20&r=ure |
| By: | Fredin , Sabrina (CIRCLE, Lund University and Department of Industrial Economics, Blekinge Institute of Technology); Jogmark , Marina (Centre for Business Studies, Kristianstad University and Department of Industrial Economics, Blekinge Institute of Technology) |
| Abstract: | This paper examines how industrial legacy leads to the formation of a distinct local culture and how the culture’s survival influences subsequent entrepreneurial activities in new local industries. The discussion about culture as a key driver of entrepreneurship and regional economic growth is well established in the academic debate. However, we know little about how an entrepreneurial culture is formed. Through a qualitative case study of two polar Swedish cities, the study highlights four key factors which are instrumental in the formation of local culture: initial conditions, characteristics of key players, network activities and composition of newcomers. Drawing on in-depth interviews with entrepreneurs and other local actors, we show how the local entrepreneurs responded to the underlying assumptions of the two different cultures. The study also highlights how two distinct culture did emerge in neighbouring cities within the same region and suggests that further insights might be gained through an additional new level of analysis when studying entrepreneurial culture. |
| Keywords: | culture; entrepreneurship; economic development; social networks; regions |
| JEL: | A13 O18 |
| Date: | 2015–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_037&r=ure |
| By: | Jonathan D. Hall |
| Abstract: | This paper shows that a judiciously designed toll applied to a portion of the lanes of a highway can generate a Pareto improvement even before the resulting revenue is spent. I obtain this new result by extending a standard dynamic congestion model to reflect an important additional traffic externality recently identified by transportation engineers: additional traffic does not simply increase travel times, but also introduces frictions that reduce throughput. In particular, I show that as long as some rich drivers use the highway at the peak of rush hour, then adding tolls to a portion of the lanes yields a Pareto improvement. To confirm the relevance of this theoretical possibility in practice, I use survey and travel time data to estimate the joint distribution of driver preferences over arrival time, travel time, and tolls, and use these results to estimate the effects of adding optimal time-varying tolls. I find that adding tolls on up to half of the lanes yields a Pareto improvement, and that the social welfare gains of doing so are substantial—up to $1,740 per road user per year. |
| Keywords: | Congestion pricing, Value pricing, Pareto improvement |
| JEL: | R41 R48 D62 |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-548&r=ure |
| By: | Gabrielle Fack (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Julien Grenet (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Yinghua He (TSE - Toulouse School of Economics - Toulouse School of Economics) |
| Abstract: | We propose novel approaches and tests for estimating student preferences with data from school choice mechanisms, e.g., the Gale-Shapley Deferred Acceptance. Without requiring truth-telling to be the unique equilibrium, we show that the matching is (asymptotically) stable, or justified-envy-free, implying that every student is assigned to her favorite school among those she is qualified for ex post. Having validated the methods in simulations, we apply them to data from Paris and reject truth-telling but not stability. Our estimates are then used to compare the sorting and welfare effects of alternative admission criteria prescribing how schools rank students in centralized mechanisms. |
| Keywords: | Gale-Shapley Deferred Acceptance Mechanism,School Choice,Stable Matching,Student Preferences,Admission Criteria,C78, D47, D50, D61, I21 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01215998&r=ure |
| By: | Börjesson, Maria (CTS); Eliasson, Jonas (CTS) |
| Abstract: | Purpose: This chapter provides a thinkpiece on economic evaluation and policy for cycling. Bicycle investments are often motivated by a desire to improve health, the environment and congestion conditions. However, we argue that since the bicycle is a part of the transport system, it should be evaluated as such. Focusing on implications for cycling appraisal in general, we also discuss two conflicting trends in Stockholm: a sharp decrease in cycling in the outer areas, and a sharp increase in the inner parts. Methodology: We use i) travel survey data to analyze the potential to reduce congestion through improvements for cyclists, ii) travel survey data from 19861987 and 2004 and bicycle counts over 25 years and iii) a value of time survey of Stockholm cyclists including questions of exercise habits. Findings Additional benefits in appraisal from reduced car traffic and improved health seem to be small. Given bicyclists’ high values of time and low investment costs, bicycling investments are still likely to be socially beneficial. The conflicting bicycling trends can be explained by i) increased road congestion and improved bicycle infrastructure, ii) increased visibility of bicyclists generating a ‘positive spiral’ iii) increased interest in physical fitness and changes in the relative prices of cars versus central residences turn cycling into a highstatus mode, iv) in peripheral areas, increasing distances and less dense land use patterns decrease cycling levels. Practical implications: The results underscore the need for dense, mixeduse spatial planning and ‘smart’ marketing using the effects of cyclist visibility to reinforce the ‘status’ of cycling. |
| Keywords: | Appraisal; Value of time; Determinants of bicycling; Trends; Bicycle; Cost benefit analysis |
| JEL: | R41 R48 |
| Date: | 2015–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_017&r=ure |
| By: | Rowena Crawford (Institute for Fiscal Studies and Institute for Fiscal Studies); Richard Disney (Institute for Fiscal Studies and University of Sussex) |
| Abstract: | The paper analyses the impact of centrally regulated pay on the quality of applicants to be police officers in England and Wales using a unique dataset of individual test scores from the national assessment that is required of all applicants. It provides empirical evidence of two distinct channels through which centrally regulated pay induces variation in the quality of applicants. First, national wage setting implies that relative wages between the police and other occupations vary spatially. We show that higher outside wages are associated with lower quality applicants, using several spatially-varying measures of outside wages. Second, nationally-set wages cannot adjust to reflect spatial variation in the disamenity of an occupation. We demonstrate that a greater disamenity of policing (as measured primarily by area differences in crime rates and in the proportion of crime that is violent) is also associated with lower quality police applicants. |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:15/19&r=ure |
| By: | Charles Nathanson (Kellogg School of Management, Northweste); Edward Glaeser (Harvard University) |
| Abstract: | A modest approximation by homebuyers leads house prices to display three attributes that are present in the data but usually missing from perfectly rational models of housing dynamics: momentum at one-year horizons, mean reversion at five-year horizons, and excess longer-term volatility relative to fundamentals. Valuing a house involves forecasting the current and future demand to live in the surrounding area. Buyers forecast using the history of transaction prices. Approximating buyers do not adjust for the expectations of past buyers, and instead assume that past prices reflect only contemporaneous demand. Consistent with survey evidence, this approximation leads buyers to expect increases in the market value of their homes after recent house price increases, to fail to anticipate the price busts that follow booms, and to be overconfident in their assessments of the housing market. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1108&r=ure |
| By: | Hintermaier, Thomas; Koeniger, Winfried |
| Abstract: | We show that the size of collateralized household debt determines an economy's vulnerability to crises of confidence. The house price feeds back on itself by contributing to a liquidity effect, which operates through the value of housing in a collateral constraint. Over a specific range of debt levels this liquidity feedback effect is strong enough to give rise to multiplicity of house prices. In a dynamic setup, we conceptualize confidence as a realization of rationally entertainable belief-weightings of multiple future prices. This delivers debt-level-dependent bounds on the extent to which confidence may drive house prices and aggregate consumption. |
| Keywords: | Household debt,Consumer confidence,Collateral constraints,Multiple equilibria |
| JEL: | E21 E32 D91 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:519&r=ure |
| By: | Todd Stinebrickner (University of Western Ontario and NBER); Ralph Stinebrickner; Nirav Mehta (University of Western Ontario); Timothy Conley (Western Ontario) |
| Abstract: | Due to data limitations, few papers documenting the existence of peer effects explore the mechanisms through which they operate. This paper develops and estimates an equilibrium model of study time choices made by students, given a social network. The model is designed to exploit unique data collected in the Berea Panel Study (BPS). The study time data allow us to quantify an intuitive mechanism for social interactions: one's own study time may depend on friends' study time. The detailed social network data allow us to embed these individual study time choices in an equilibrium framework, allowing for feedback effects. We find evidence of both the direct and indirect effects of friend study time. Not taking into account equilibrium behavior would understate the effect of peers on achievement by 20-30% of a standard deviation. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1175&r=ure |
| By: | Beata Bierut,; Tomasz Chmielewski; Adam Głogowski,; Sławomir Zajączkowski; Andrzej Stopczyński |
| Abstract: | Starting from the mid-2000s, Poland experienced a period of rapid growth in mortgage lending, with banks offering foreign-currency, high-LTV housing loans, which exposed the sector to rising credit risk and funding challenges. Later, a surge in consumer lending led to a threat of rising credit risk in this segment. These supervisory challenges were addressed through three main instruments: guidelines related to the assessment of a borrower’s creditworthiness as well as LTV and DTI limits. The regulation has been successful from both microprudential and financial stability perspectives, as it has contributed to better risk management by banks and to the reduction of FX mortgage lending. |
| Keywords: | financial stability, macroprudential policy, loan-to-value ratios, debt-service-to -income ratios, house prices, credit growth. |
| JEL: | E44 E58 G21 G28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:212&r=ure |
| By: | Marius Brulhart; Celine Carrere |
| Abstract: | We study the effects of changes in trade openness on wages and employment of different-sized towns. To this end, we develop a multi-region model of intra-national adjustment to trade shocks. In equilibrium, small towns have more elastic labor-force responses than large towns. We test this prediction using fine-grained regional data for Austria and the fall of the Iron Curtain as a quasi-experimental setting for the exploration of trade-induced spatial effects. We find improved access to foreign markets to boost both employment and nominal wages, but large towns tend to have larger wage responses and smaller employment responses than small towns. The welfare gains of immobile factors are estimated to be 40% higher in border towns compared to interior towns. |
| Keywords: | trade liberalization, city size, spatial adjustment, natural experiment |
| JEL: | F15 R11 R12 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:15.07&r=ure |
| By: | Tao Zha (Federal Reserve Bank of Atlanta); Jianjun Miao (Boston University); Zheng Liu (Federal Reserve Bank of San Francisco) |
| Abstract: | We integrate the housing market and the labor market in a dynamic general equilibrium model with credit and search frictions. The model is confronted with the U.S. macroeconomic time series. Our estimated model can account for two prominent facts observed in the data. First, the land price and the unemployment rate tend to move in opposite directions over the business cycle. Second, a shock that moves the land price is capable of generating large volatility in unemployment. Our estimation indicates that a 10 percent drop in the land price leads to a 0.34 percentage point increase of the unemployment rate (relative to its steady state). |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1118&r=ure |
| By: | Serena Rhee (University of Hawaii at Manoa); Fatih Karahan (Federal Reserve Bank of New York) |
| Abstract: | Interstate migration in the United States has declined by 50 percent since the mid-1980s. This paper studies the role of the aging population in this long-run decline. We argue that demographic changes trigger a general equilibrium effect in the labor market, which affects the migration rate of all workers. We document that an increase in the share of middle-aged workers (40-60) in the working age population in one state causes a large fall in the migration rate of all workers in that state, regardless of their age. To understand this finding, we develop an equilibrium search model of many locations populated by workers whose moving costs differ. Firms prefer hiring local workers with high moving costs as they command lower wages due to their lower outside option. An increase in the share of middle-aged workers causes firms to recruit more from the local labor market instead of hiring from other locations, which increases the local job-finding rate and reduces everyone's migration rate ('migration spillovers'). Our model reproduces remarkably well several cross-sectional facts between population flows and the age structure of the labor force. Our quantitative analysis suggests that population aging accounts for about half of the observed decline, of which 75 percent is attributable to the general equilibrium effect. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1177&r=ure |