|
on Urban and Real Estate Economics |
| By: | Boeing-Reicher, Claire; Pinto, David |
| Abstract: | We identify the effects of the supply of mortgage credit on house prices, using the politicallydirected credit-targeting regime of Venezuela as quasi-natural experiment. We find a large effect of the supply of housing credit on time path of house prices (or housing Markups), with an elasticity of housing markups with respect to credit of about 0.23 under our baseline specification, and similar results under a set of alternative specifications. These estimates are close to previous panel estimates for the United States, which suggests that these estimates capture similar phenomena. |
| Keywords: | house prices,credit supply,Venezuela,credit targeting |
| JEL: | E51 E65 R31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2066&r=ure |
| By: | Ortega, Francesc (Queens College, CUNY); Taspinar, Süleyman (Queens College, CUNY) |
| Abstract: | Are coastal cities adjusting to rising sea levels? This paper argues that large-scale events have the potential to ignite the process. We examine the effects of hurricane Sandy on the New York City housing market. We assemble a large plot-level dataset with rich geographic data on housing sales in New York City for the period 2003-2015, along with information on which building structures were damaged by the hurricane, and to what degree. Our difference-in-difference estimates provide robust evidence of a negative impact on the price trajectories of houses that were directly affected by Sandy. Interestingly, this is also the case for houses that were not damaged but face high risk of coastal flooding. Our results suggest that Sandy has increased the perceived risk of living in those neighborhoods. We also show that the negative effects on housing prices appear to be highly persistent. |
| Keywords: | climate change, real estate, cities, Hurricane Sandy |
| JEL: | H56 K42 R33 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10374&r=ure |
| By: | KONDO Keisuke |
| Abstract: | This study explores why firms, on average, are more productive in larger cities. One major explanation is that the higher firm productivity in larger cities is the result of agglomeration economies. However, recent studies have proposed an alternative mechanism of selection; namely, tougher competition in larger cities forces less-productive firms to exit and, as a result, more-productive firms operate in such locations. To distinguish agglomeration economies from firm selection, this study applies a newly suggested quantile approach to the Japanese manufacturing sector. Overall, the empirical results show that agglomeration economies, rather than stronger selection in larger cities, better explain spatial productivity differences in the Japanese manufacturing sector. The findings also show that benefits from agglomeration economies in this sector have decreased as interregional accessibility has increased. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16098&r=ure |
| By: | Desmet, Klaus; Gomes, Joseph; Ortuño-Ortín, Ignacio |
| Abstract: | This paper theoretically analyzes and empirically investigates the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. Depending on whether local interaction mitigates or reinforces antagonism towards other groups, the micro-founded theory we develop predicts that a country's provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups. After constructing a 5 km by 5 km geographic dataset on language use for 223 countries, we compute measures of overall fractionalization and local learning, and investigate their relation to public good provision at the country level. While overall fractionalization worsens outcomes, we find a positive causal relation between local learning and public goods. Local mixing therefore mitigates the negative impact of a country's overall linguistic fractionalization. An IV strategy shows that this result is not driven by the possible endogenous spatial distribution of language speakers within countries. |
| Keywords: | contact theory; linguistic diversity; local learning; Public Goods; spatial distribution of diversity |
| JEL: | D7 H4 H5 R1 Z10 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11683&r=ure |
| By: | Parkhomenko, Andrii |
| Abstract: | The unemployment insurance system in the U.S. does not provide incentives to look for jobs outside local labor markets. In this paper I introduce relocation subsidies as a supplement to unemployment benefits, and study their effects on unemployment, productivity and welfare. I build a job search model with heterogeneous workers and multiple locations, in which migration is impeded by moving expenses, cross-location search frictions, borrowing constraints, and utility costs. I calibrate the model to the U.S. economy, and then introduce a subsidy that reimburses a part of the moving expenses to the unemployed and is financed by labor income taxes. During the Great Recession, a relocation subsidy that pays half of the moving expenses would lower unemployment rate by 0.36 percentage points (or 4.8%) and increase productivity by 1%. Importantly, the subsidies cost nothing to the taxpayer: the additional spending on the subsidies is offset by the reduction in spending on unemployment benefits. Unemployment insurance which combines unemployment benefits with relocation subsidies appears to be more effective than the insurance based on the benefits only. |
| Keywords: | unemployment insurance, relocation subsidies and vouchers, local labor markets, moving costs, geographic mobility, internal migration |
| JEL: | E24 J61 J64 J65 R23 |
| Date: | 2016–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75256&r=ure |
| By: | Bayar, Mehmet |
| Abstract: | This paper documents a positive impact of cultural diversity and cultural similarity on rental prices of the German districts for the years between 2004 and 2013. On the one hand, an increase of the Herfindahl index as a measure for cultural diversity of 0.1 would increase rents by over 12 percent after controlling for relevant explanatory variables and city and time fixed effects. On the other hand, an increase in the share of foreign-born individuals is associated with a decrease in rents. These results suggest an economic impact that is an order of magnitude bigger than that found in labor markets. Consequently, cultural diversity can be considered as a city-specific consumption amenity. The positive impact of cultural diversity on the local housing market mirrors the fact that inhabitants are willing to pay higher rents in cities with a high level of diversity. Natives prefer to live in culturally diverse areas, but they avoid to reside in areas where the share of foreigners is too high. These findings show that amenity considerations play a role in residential location decisions. |
| Abstract: | Die vorliegende Studie identifiziert einen positiven Effekt der kulturellen Vielfalt und der kulturellen Nähe auf die Mietpreise der deutschen Kreise und kreisfreien Städte für die Jahre zwischen 2004 und 2013. Ein Anstieg des Herfindahl-Index, als Maß für die kulturelle Vielfalt, von 0,1 würde die Mieten um mehr als 12 Prozent erhöhen, wenn für relevante erklärende Variablen und unbeobachtete zeitinvariante Effekte kontrolliert wird. Auf der anderen Seite ist ein Anstieg des Ausländeranteils als homogene Gruppe mit einem Rückgang der Mieten verbunden. Diese Ergebnisse deuten auf eine ökonomische Auswirkung hin, die von der Größenordnung her von Effekten der Einwanderung auf den Arbeitsmärkten abweichen. Folglich kann die kulturelle Vielfalt als eine stadtspezifische Annehmlichkeit betrachtet werden. Die positive Auswirkung der kulturellen Vielfalt auf den lokalen Wohnungsmärkten spiegelt die Tatsache wider, dass die Bewohner bereit sind, höhere Mieten in Städten mit einem hohen Maß an Vielfalt zu zahlen. Die Einheimischen ziehen es vor, in kulturell diverzifizierten Gebieten zu leben, aber sie vermeiden, in Gebieten zu wohnen, in denen der Ausländeranteil zu hoch ist. Diese Ergebnisse zeigen, dass Annehmlichkeiten der Städte eine Rolle bei der Wohnortentscheidung spielen. |
| Keywords: | Housing market,immigration,cultural background,Germany |
| JEL: | F22 J61 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:662&r=ure |
| By: | Rainald BORCK; TABUCHI Takatoshi |
| Abstract: | We study the optimal and equilibrium size of cities in a city system model with environmental pollution. Pollution is related to city size through the effect of population on production, commuting, and housing consumption. With symmetric cities, if pollution is local or per capita pollution increases with population, we find that equilibrium cities are too large. When pollution is global and per capita pollution declines with city size, however, equilibrium cities may be too small. With asymmetric cities, the largest cities are too large and the smallest too small when pollution is local or per capita pollution increases with population; when pollution is global and per capita pollution decreases with population, the largest cities are too small and the smallest too large. We also calibrate the model to US cities and find that the largest cities may be undersized by 3-4%. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16094&r=ure |
| By: | McCann, Fergal (Central Bank of Ireland) |
| Abstract: | The Irish rental market has been characterised by rapid price growth in recent years, particularly in urban areas. This growth has occurred at the same time as the lowest levels of supply since 2006 in many areas. In this Letter I present a model in which rents across eight Irish regions between 2006Q1 and 2016Q1 are explained by local employment rates, population, house prices, rental supply and an estimate of the vacancy rate. High unemployment, higher numbers of properties supplied and higher vacancy rates are all associated with lower rents, while higher house prices and a larger population are both associated with higher rents. These effects are robust to modelling in levels and lagged growth rates. finally, I provide estimates of misalignment of rental markets using model residuals, with a focus on the period surrounding the recent introduction of macroprudential mortgage market regulations by the Central Bank of Ireland. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:13/el/16&r=ure |
| By: | Joe Regan-Stansfield |
| Abstract: | A current English education policy is to encourage all state primary schools to become academies: state-funded, non-selective, and highly autonomous establishments. Primary schools have been able to opt-in to academy status since 2010 and academies now account for twenty-one per-cent of the primary sector. This paper investigates the causal effect of voluntary academy conversion on primary school assessment outcomes, and on entry-year intake composition. Unlike existing evidence focused on earlier academies formed from failing secondary schools, no evidence is found of an academy conversion effect on attainment for the average pupil, although pupils with special educational needs do perform better in reading tests after academy conversion. There is no evidence that academy conversion affects the composition of the entry-year intake. |
| Keywords: | School Type, School Autonomy, Primary Education |
| JEL: | I20 I21 I28 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:141167564&r=ure |
| By: | Paolo Sodini; Stijn Van Nieuwerburgh; Roine Vestman; Ulf von Lilienfeld-Toal |
| Abstract: | This paper studies the economic benefits of home ownership. Exploiting a quasi-experiment surrounding privatization decisions of municipally-owned apartment buildings, we obtain random variation in home ownership for otherwise similar buildings with similar tenants. We link the tenants to their tax records to obtain information on demographics, income, mobility patterns, housing wealth, financial wealth, and debt. These data allow us to construct high-quality measures of consumption expenditures. Home ownership causes households to move up the housing ladder, work harder, and save more. Consumption increases out of housing wealth are concentrated among the home owners who sell subsequent to privatization and among those who receive negative income shocks, evidencing a collateral effect. |
| JEL: | D12 D31 E21 G11 H31 J22 R21 R23 R51 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22882&r=ure |
| By: | Andrew Eyles; Stephen Machin; Sandra McNally |
| Abstract: | Attendance at a primary academy leads to no discernible improvement in pupils' test scores, according to research by Andrew Eyles, Stephen Machin and Sandra McNally. This suggests that further extension of the academies programme into primary schools is unlikely to improve education in England. The researchers note that since a majority of secondary schools in England are now academies, any further 'academisation' will be concentrated in the primary sector. So the time is ripe for this first comprehensive evaluation of primary academies' effectiveness at raising pupils' achievement. The evidence suggests that primary academies have been less effective than the disadvantaged secondary schools that thrived in the first wave of academies. |
| Keywords: | academies, pupil performance, primary education |
| JEL: | I20 I21 I28 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:490&r=ure |
| By: | Bracke, Philippe (Bank of England); Tenreyro, Silvana (London School of Economics, Centre for Macroeconomics, and CEPR.) |
| Abstract: | Using the universe of housing transactions in England and Wales in the last 20 years, we document a robust pattern of history dependence in housing markets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring. |
| Keywords: | Housing market; fluctuations; down-payment effects; reference dependence; anchoring; loss aversion |
| JEL: | D03 E32 R31 |
| Date: | 2016–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0630&r=ure |
| By: | Combes, Pierre-Philippe (GATE, University of Lyon); Duranton, Gilles (University of Pennsylvania); Gobillon, Laurent (Paris School of Economics) |
| Abstract: | We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on the first-order condition for profit maximisation with respect to non-land inputs by competitive house builders. For parcels of a given size, we compute housing by summing across the marginal products of non-land inputs. Differences in non-land inputs are caused by differences in land prices that reflect differences in the demand for housing across locations. We implement our methodology on newly-built single-family homes in France. We find that the production function for housing is reasonably well, though not perfectly, approximated by a Cobb-Douglas function and close to constant returns. After correcting for differences in user costs between land and non-land inputs and taking care of some estimation concerns, we estimate an elasticity of housing production with respect to non-land inputs of about 0.80. |
| Keywords: | housing, production function |
| JEL: | R14 R31 R32 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10373&r=ure |
| By: | Sergei Shibaev (Queen's University) |
| Abstract: | This paper develops a statistical model for measuring spatial interactions when estimating macroeconomic regimes and regime shifts. The model is applied to study the contagion and propagation of recessions in small regional economies in the United States from 1990 to 2015. The empirical analysis identifies two geographical concentrations (or clusters) where small regional economies were affected by recessions in similar ways. These clusters are interpreted as groups of regions that are potentially at-risk to collective economic distress, which is useful for national and regional policy makers. The first identified cluster is characterized by regional economies with important roles in the financial sector, while the second cluster is characterized by the oil and gas extraction sector. The empirical findings uncover an important propagation dynamic that would be overlooked if one were to apply the model without the spatial extension developed in this paper. Specifically, the evidence shows significant spatial spillovers between small regional economies, meaning that shocks to regions are expected to be higher, when shocks to neighboring regions are high on average. The magnitude of this effect is amplified for the period spanning and following the Great Recession. |
| Keywords: | Bayesian statistics, business cycles, endogenous clustering, regime-switching, regional economic analysis, spatial econometrics, time series econometrics |
| JEL: | C11 C31 C34 E32 R10 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1369&r=ure |
| By: | Yusuki Narita (Cowles Foundation, Yale University) |
| Abstract: | In centralized school admissions systems, rationing at oversubscribed schools often uses lotteries in addition to preferences. This partly random assignment is used by empirical researchers to identify the effect of entering a school on outcomes like test scores. This paper formally studies if the two most popular empirical research designs successfully extract a random assignment. For a class of data-generating mechanisms containing those used in practice, I show: One research design extracts a random assignment under a mechanism if and almost only if the mechanism is strategy-proof for schools. In contrast, the other research design does not necessarily extract a random assignment under any mechanism. |
| Keywords: | Matching Market Design, Natural Experiment, Program Evaluation, Random Assignment, Quasi-Experimental Research Design, School Eectiveness |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2056&r=ure |
| By: | Raphael Auer; Steven Ongena |
| Abstract: | Do macroprudential regulations on residential lending influence commercial lending behavior too? To answer this question, we identify the compositional changes in banks' supply of credit using the variation in their holdings of residential mortgages on which extra capital requirements were uniformly imposed by the countercyclical capital buffer (CCB) introduced in Switzerland in 2012. We find that the CCB's introduction led to higher growth in commercial lending, in particular to small firms, although this was unrelated to conditions in regional housing markets. The interest rates and fees charged to these firms concurrently increased. We rationalize these findings in a model featuring both private and firm-specific collateral. The corresponding imperfect substitutability between private and commercial credit for the entrepreneur's relationship bank is then shown to give rise to the compositional patterns we empirically document. |
| Keywords: | macroprudential policy, spillovers, credit, bank capital, systemic risk |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:593&r=ure |
| By: | Kennedy, Gerard (Central Bank of Ireland); Stuart, Rebecca (Central Bank of Ireland) |
| Abstract: | The scarcity of housing units is one of the main issues facing the Irish residential property market at present. Much attention has focussed on the shortage of new home completions, which declined dramatically in the wake of the financial crisis. This Letter draws together information on housing supply in Ireland from a number of sources to place current developments in the context of economic theory and international comparison. In doing so, both the impact of the financial crisis on housing supply, and the more recent introduction of macroprudential measures by the Central Bank are considered. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:12/el/16&r=ure |
| By: | Majda Benzidia (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Michel Lubrano (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Paolo Melindi-Ghidi (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales) |
| Abstract: | Do communities with the same level of inequality but a different level of income polarisation perform differently in terms of public schooling? To answer this question, we extend the theoretical model of schooling choice and voting developed by de la Croix and Doepke (2009), introducing a more general income distribution characterised by a three-member mixture instead of a single uniform distribution. We show that not only income inequality, but also income polarisation, matters in explaining disparities in public education quality across communities. Public schooling is an important issue for the middle class, which is more inclined to pay higher taxes in return for better public schools. Contrastingly, poorer households may be less concerned about public education, while rich parents are more willing to opt-out of the public system, sending their children to private schools. Using micro-data covering 724 school districts of California and introducing a new measure of income polarisation, we find that school quality in low-income districts depends mainly on income polarisation, while in richer districts it depends mainly on income inequality. |
| Keywords: | schooling choice,income polarisation,probabilistic voting,education politics,Bayesian inference |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01405622&r=ure |
| By: | Julie Berry Cullen; Eric A. Hanushek; Gregory Phelan; Steven G. Rivkin |
| Abstract: | Firms and other organizations establish the criteria under which employees will be judged and the performance measures made available to supervisors, the board of directors and other stakeholders, and these structures almost certainly influence behavior and organization outcomes. Any divergence of the chosen performance metric from an ideal measurement of productivity may lead to suboptimal outcomes, particularly in the public sector where outside interest groups may rely more heavily on easily accessible ratings than better-informed insiders. In the case of public education, federal and state accountability systems provide considerable information about student outcomes and rate schools on that basis. However, the No Child Left Behind accountability legislation’s focus on pass rates rather than learning and achievement growth introduces the possibility that inadequate information and a flawed structure each compromise public school quality. This study of school principal labor market outcomes investigates the relationship between principal labor market success and a set of performance measures that differ on the basis of accessibility to stakeholders and link with true principal productivity. The results from the empirical analysis provide evidence that information and design deficiencies introduce a lack of alignment between incentives and principal productivity and adversely affect the quality of education in Texas public schools. |
| JEL: | H75 I20 I21 I28 J18 J45 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22881&r=ure |
| By: | Fairlie, Robert W. (University of California, Santa Cruz); Kalil, Ariel (University of Chicago) |
| Abstract: | Concerns over the perceived negative impacts of computers on social development among children are prevalent but largely uninformed by plausibly causal evidence. We provide the first test of this hypothesis using a large-scale randomized control experiment in which more than one thousand children attending grades 6-10 across 15 different schools and 5 school districts in California were randomly given computers to use at home. Children in the treatment group are more likely to report having a social networking site, but also report spending more time communicating with their friends and interacting with their friends in person. There is no evidence that computer ownership displaces participation in after-school activities such as sports teams or clubs or reduces school participation and engagement. |
| Keywords: | computers, ICT, education, social development, school participation, experiment |
| JEL: | I20 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10398&r=ure |
| By: | Bertola, Giuseppe (University of Turin) |
| Abstract: | This paper uses a large and detailed dataset to characterize the enrolment and educational performance of regulated and subsidized French private schools. Individual ability reduces the probability of private secondary schooling. Structural models indeed find that both observable and unobservable initial ability matter less in private than in State schools for successful secondary school completion and access to tertiary education. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201622&r=ure |
| By: | Josh Kinsler (University of Georgia); Ronni Pavan (Rochester University) |
| Abstract: | Parental investments in early childhood have been shown to have a large impact on skill acquisition. In this paper, we examine how beliefs about a child's relative skill influences investment and how these beliefs are determined. Using data from the ECLS-K, we first show that parental beliefs about a child's skill relative to children of the same age is distorted by a child's skill relative to children in the same school. In other words, parents of children attending schools with high (low) average skills tend to believe their child is lower (higher) in the overall skill distribution. We then show that beliefs about a child's skill relative to children of the same age affects parental investments such as helping with homework or hiring a tutor. Thus, parents are making important investment decisions using inaccurate information. Building off our descriptive findings, we develop a model of parental investment that incorporates uncertainty about the average skill level of similarly aged children. We estimate the model using indirect inference and perform a set of counterfactuals where parents are fully informed about the average skill level in the population. We find that investment and achievement rise by a considerable amount for students at the bottom of the skill distribution. The mechanism behind this result is that parents of children in relatively low achieving schools revise upward their beliefs about the average child in the population, inducing an investment response. |
| Keywords: | parental investments, skill development, parental bias |
| JEL: | J13 D10 J24 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-029&r=ure |
| By: | Wagner, Gary A. (Federal Reserve Bank of Cleveland); Komarek, Timothy (Old Dominion University); Martin, Julia (Old Dominion University) |
| Abstract: | In this paper we examine the effect of light rail transit on the residential real estate market in Hampton Roads, Virginia. The Norfolk Tide light rail began operations in August 2011 and has experienced disappointing levels of ridership over its first four years of operations. We estimate the effect of the Tide using a difference-in-differences model and consider several outcome variables for the residential housing market, including sales price, sales-list price spread and the time-on-market. Our identification strategy exploits a proposed rail line in neighboring Virginia Beach, Virginia, that was rejected by a referendum in 1999. Overall, the results show negative consequences from the constructed light rail line. Properties within 1,500 meters experienced a decline in sales price of nearly 8 percent, while the sale-list price spread declined by approximately 2 percent. Our results highlight the potential negative effects of light rail, when potential accessibility benefits do not outweigh apparent local costs. |
| Keywords: | light rail transit; housing market; difference-in-difference; |
| JEL: | R3 R4 |
| Date: | 2016–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1626&r=ure |
| By: | Marianne Sensier; Michael Artis |
| Abstract: | This paper dates the classical business cycle of quarterly UK GDP, unemployment, aggregate and regional employment to assess turning points in the economic cycle. We analyse synchronisation of the regions with UK employment and investigate which regions lead into recession. We perform the McNemar Test on groups of regions and arrive at Northern and Southern regional clusters. We find that the northern regions have had a greater incidence of recession with southern regions suffering more severe recessions (in terms of total jobs lost). Finally we compare the resilience of the regional employment cycle to UK employment. This most resilient region to the 2008 recession was London from our Southern grouping and the least resilient has been the Northern Ireland in our northern grouping. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:man:cgbcrp:229&r=ure |
| By: | Craig, Ben R. (Federal Reserve Bank of Cleveland); Saldias Zambrana, Martin (International Monetary Fund) |
| Abstract: | This paper computes data-driven correlation networks based on the stock returns of international banks and conducts a comprehensive analysis of their topological properties. We first apply spatial-dependence methods to filter the effects of strong common factors and a thresholding procedure to select the significant bilateral correlations. The analysis of topological characteristics of the resulting correlation networks shows many common features that have been documented in the recent literature but were obtained with private information on banks’ exposures. Our analysis validates these market-based adjacency matrices as inputs for the spatio-temporal analysis of shocks in the banking system. |
| Keywords: | Network analysis; spatial dependence; banking; |
| JEL: | C21 C23 C45 G21 |
| Date: | 2016–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1627&r=ure |
| By: | Kinghan, Christina (Central Bank of Ireland); Lyons, Paul (Central Bank of Ireland); McCarthy, Yvonne (Central Bank of Ireland); O'Toole, Conor (Central Bank of Ireland) |
| Abstract: | This Economic Letter provides an overview of residential mortgage lending that took place in Ireland from the 1st of January to the 30th of June 2016. A total of €2.3bn of mortgage loans was covered by the data for the five main mortgage providers in the Irish market in the first half of 2016, with 93 per cent in-scope of the measures. With the exception of loan and property sizes, which were both higher in H1 2016, the characteristics of in-scope lending were broadly similar to those observed in 2015 for both FTBs and SSBs. The average LTV for in-scope FTBs in H1 2016 was 78.6 per cent while the average LTI was 2.9. Among SSBs, the average LTV and LTI were 66.2 per cent and 2.4 respectively. Regarding lending in excess of the limits of the Regulations, at end-June 2016, 11 per cent of the value of new PDH lending exceeded the LTV cap, while 12 per cent exceeded the LTI Cap. SSBs accounted for a larger share of the value of lending above the LTV limit (63 per cent against the remaining 37 per cent accounted for by FTBs) while FTBs accounted for a larger share of the value of lending that exceeded the LTI limits (72 per cent against 28 per cent for SSBs). Among both FTBs and SSBs with an allowance to exceed the LTV cap, we find a higher share of couples, a larger share of Dublin-based borrowers, a higher average income and a larger average loan size relative to the group without an LTV allowance. Regarding the LTI allowance, we find a larger share of Dublin-based and single borrowers among the group with an allowance. The average borrower with an LTI allowance has had lower income, was younger took a larger loan and bought a more expensive property than those without an allowance. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:06/el/16&r=ure |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Abstract We analyse the effect of massive migration particularly from the Western Balkans and the Central and Eastern European countries on human capital and growth. In our analysis, we use a system of three equations to estimate simultaneously the effect of migration on human capital and on growth. An important driver of migration is chain migration, as well as the unemployment and income differentials between developing and developed countries. Overall, our findings suggest that migration of highly skilled from the Western Balkan and Central Eastern European countries has been beneficial to economic growth and income convergence of these countries. Our analysis supports the positive impact of low-skilled migration on the composition of human capital in the source countries. |
| Keywords: | migration, brain drain, brain gain, economic growth, human capital |
| JEL: | F22 J24 O15 O40 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:124&r=ure |
| By: | Sekou KEITA; Jérome VALETTE |
| Abstract: | Which factors determine the performance of immigrants in the destination country labor market? Evidence in the literature suggests that discrimination may be a barrier to the economic assimilation of immigrants. However, depending on their country of origin, immigrants are heterogeneous with respect to the discrimination they face. This paper investigates how the attitude of natives affects immigrants’ unemployment duration in Germany. Using individual level panel data from the German Socio Economic Panel from 1984 to 2012, we employ survival analysis methods to model immigrants’ unemployment duration. We find that lower trust levels of natives towards the citizens of a given country, measured using Eurobarometer surveys, positively influence the unemployment duration of immigrants originating from this country. We show that this result is not driven by origin-specific unobserved heterogeneity, and that it is robust to different definitions of unemployment and different specifications. The results of our paper highlight the fact that immigrants face different obstacles depending on their origin when it comes to integrating destination country labor markets. |
| Keywords: | Immigrant workers, Unemployment duration, Discrimination. |
| JEL: | J71 J64 J61 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1836&r=ure |
| By: | Kennedy, Gerard (Central Bank of Ireland); Sheenan, Lisa (Central Bank of Ireland); Woods, Maria (Central Bank of Ireland) |
| Abstract: | In recent years Ireland experienced strong growth in residential rents. To characterise current conditions in this market, this Letter investigates the dynamic behaviour of real Irish rents by applying two models to data from the 1980s/1990s. First, employing a univariate non-linear approach, average quarterly growth rates are benchmarked relative to historical trends. The results show that national rents move between high-growth and low-growth periods from the 1990s. From 2013 to 2016Q1, Irish rents are found to be in a high-growth regime. This Letter also models national real rents using quarterly data from 1985Q1 to 2016Q1. Employment and housing stock per capita are found to influence long-run rents over the sample. From end-2013, rents are found to be higher that would be expected by these long-run relationships. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:14/el/16&r=ure |
| By: | McCann, Fergal (Central Bank of Ireland); Ryan, Ellen (Central Bank of Ireland) |
| Abstract: | It is widely acknowledged that mortgage lending with lower Loan to Value (LTV) ratios is expected to have a lower probability of default, which will increase the resilience of a bank's mortgage portfolio to adverse events. This Letter focuses on another channel through which lower-LTV lending can lead to improvements in bank balance sheet resilience: the lowering of losses in the event of a default (Loss Given Liquidation, LGL). Using data from three major mortgage lenders in Ireland on loans for property purchase, we focus on originating LTVs on mortgages issued between 2003 and 2016 to make a number of observations on the evolution of mortgage portfolio resilience. Firstly, aggregate hypothetical losses experienced in the event of a common shock are at the lowest level since 2003 among the cohorts of loans issued since the introduction of recent Central Bank of Ireland mortgage market regulations. Secondly, the correlation between originating LTV and loan size has been falling steadily since 2006, reflecting a decreased tendency for banks to make their largest loans also their most highly leveraged, which leads directly to improvements in portfolio-level resilience. Finally, we show that improvements in the resilience of mortgages to adverse house price shocks are most pronounced at the right tail of the LTV distribution, where the highest-risk lending has reduced significantly over the 2008-2016 period. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:10/el/16&r=ure |
| By: | Kennedy, Gerard (Central Bank of Ireland); O'Brien, Eoin (Central Bank of Ireland); Woods, Maria (Central Bank of Ireland) |
| Abstract: | Developing indicators to assess the sustainability of house price movements is a key priority for macroprudential policy makers. Using historical data from the 1980s and cross-country comparisons, this Letter presents a number of indicators to support this requirement. The first approach uses a recursive unit root methodology to identify emerging explosive behaviour in prices based on the historical time series properties of the data and the asset-pricing literature. The second approach uses a simple reduced form model and the empirical housing literature to identify a fundamental house price series against which actual developments can be benchmarked. Such approaches can be used to complement traditional statistical indicators of price misalignments such as deviations of the price- to-rent ratio and the price-to-income ratio from their respective historical averages. Both approaches have some success in identifying "bubble" behaviour or overvaluation in the Irish market prior to the Irish crisis. The recovery in Irish house prices since 2013 has meant that the statistical indicators are currently above long-term averages. As at 2016Q2 prices are assessed to remain just below fundamental values using a suite of valuation models and are not suggestive of emerging bubble-like behaviour. Close monitoring of this market is required given the uncertainty associated with house price movements. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:11/el/16&r=ure |
| By: | González-Pampillón, Nicolás; Jofre-Monseny, Jordi; Viladecans-Marsal, Elisabet |
| Abstract: | This paper assesses the impact on neighborhood population dynamics of a major urban renewal policy implemented in Catalonia Spain) between 2004 and 2010. Some of the most deprived neighborhoods in the region received large investments in their public spaces and facilities with the aim of attracting natives and high income individuals and of reducing the concentration of poverty and immigration. The control group comprises rejected projects and projects accepted towards the end of the program that, due to a fall in public tax revenues, were never executed. The results suggest that the urban renewal projects had little (if any) effects on population dynamics, suggesting that substantial investment in deprived neighborhoods is insufficient to attract natives and/or high income households. Interestingly, the sole exception were the interventions made in Barcelona's historic districts, where the policy seems to have augmented ongoing processes of urban revival into its most deprived neighborhoods furthering processes of gentrification. |
| Keywords: | incomemixing; neighborhood segregation; Place-based policies |
| JEL: | R23 R30 R58 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11676&r=ure |
| By: | Fumarco, Luca |
| Abstract: | In this study, I show that with the appropriate experimental strategy, a correspondence test can be adapted to investigate disability discrimination in the rental housing market. I focus on discrimination against blind tenants assisted by guide dogs in Italy and obtain very robust results. The utilization of three fictitious household tenants (that is, a married couple, a married couple with a blind wife who owns a guide dog, and a married couple where the wife is normal sighted and owns a pet dog) allows me to investigate whether discrimination is due to the blindness or to the guide dog. I find that apartment owners discriminate blind tenants because of the presence of the guide dog alone. According to the Italian law, this is indirect discrimination, which in the US corresponds to the refusal to provide reasonable accommodation. |
| Keywords: | Disability; Discrimination; Housing Market; Field Experiment |
| JEL: | C93 I12 J14 R21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63899&r=ure |
| By: | Joyce, John (Central Bank of Ireland); McCann, Fergal (Central Bank of Ireland) |
| Abstract: | Using a probability of default model estimated over the period 2008-2015 for Irish mortgages, this Letter provides model-based estimates of the resilience of mortgages at origination. Cohorts of loans issued with lower aggregate probabilities of default based on their originating characteristics are deemed to have been more resilient at origination. We compare each annual cohort of loans issued from 2003 to 2016, differentiating between loans issued in 2015 that were within and outside the scope of Central Bank of Ireland mortgage market regulations. The results suggest that at-origination resilience was deteriorating in the Irish mortgage market from 2003 to 2008, before improving significantly in 2009 and 2010. The post-crisis period was characterised by increases in portfolio probability of default for the 2011 to 2014 cohorts, while the model suggests that resilience has improved relative to previous years for mortgages issued in 2015 and 2016. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:09/el/16&r=ure |
| By: | Delgado Montes, Juan Gabriel (Amherst College); Corrales, Javier (Amherst College); Singh, Prakarsh (Amherst College) |
| Abstract: | Discrimination in formal labor markets can push discriminated groups into labor informality, where wages are lower and pensions scarce. In this paper, we explore whether education offsets discrimination by empowering discriminated groups to successfully compete for formal jobs. Specifically, we calculate the returns to education on formal employment for a discriminated group (indigenous Peruvians). We find that certain education levels –primary and tertiary–allow indigenous workers equal access to formal jobs. But, for indigenous workers with only secondary education, we find an "informality trap" where returns to secondary education are 6.7 percentage points lower, a difference larger than the net returns of primary education. We find that differences in education quality across districts, more than migration and industry-specific patterns, are the main drivers of this effect. These findings have policy implications suggesting improvements to quality are essential for secondary education to empower discriminated groups to successfully compete in labor markets. |
| Keywords: | exclusion, social security, informal labor markets, education, Latin America |
| JEL: | E26 J46 I26 H55 J71 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10389&r=ure |
| By: | Pérez-Cervantes Fernando |
| Abstract: | I slightly modify the model of Monte et al. (2015) to estimate how workers in Mexican municipalities choose the location of their workplace based on the income gains from commuting to another municipality. Estimates are in line with the intuition: Static estimates for both 2010 and 2015 suggest that those who commute earn an average 30 percent more than their non-commuting counterparts, and that commutes tend to be to municipalities located close to the place of residence. Comparing both years suggests that a reduction in local productivity both decreases the number of workers that come from other municipalities and increases the number of local residents that decide to work somewhere else, mitigating the negative effect of the reduction in local wages with higher earnings from the new work destinations. I find that some municipalities were not able to mitigate the negative productivity shocks on their income. |
| Keywords: | Commuting;Economic Geography;Mexico |
| JEL: | F1 R1 J6 O2 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2016-19&r=ure |
| By: | Fertő, Imre; Bakucs, Zoltán; Varga, Ágnes |
| Abstract: | In recent years, we experienced a growing interest in the evaluation of EU co-funded programmes. The paper is a first attempt to analyse the impacts of such support on the wellbeing of Hungarian rural areas between 2002 and 2008, employing a two stages approach. In the first step, we construct a multi-dimensional RDI (Rural Development Index) measuring the overall level of regional development and quality of life in Hungarian small regions. In the second step we apply propensity score matching approach to evaluate the impact of the regional subsidies on the RDI. Estimations reveal four main findings. First, calculations suggest that concentration in the EU support grows with increasing amount of subsidies. Second, the convergence of support can be also observed. Third, we find considerable mobility in terms of the level of subsidies during analysed period. This indicates that there has been chance for poorly subsidised regions to improve their relative position and vice versa. Finally, our results imply that it is very difficult to identify any impacts of subsidies, because estimations are highly sensitive to the chosen indicators. The size of identified effects is rather small and its direction may equally be positive or negative. However, we can conclude that irrespective to the sign of estimated coefficients the size of impact of regional subsidies is negligible. Consequently, further research is needed to explore impacts mechanisms of subsidies. |
| Keywords: | EU supports, impact evaluation, sub-region, Community/Rural/Urban Development, Labor and Human Capital, Political Economy, Public Economics, Research Methods/ Statistical Methods, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa160:249826&r=ure |
| By: | Nandi, Alita; Luthra, Renee Reichl; Benzeval, Michaela |
| Date: | 2016–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2016-14&r=ure |
| By: | Jeffrey Penney (Pontificia Universidad Javeriana); Erin Tolley (University of Toronto); Elizabeth Goodyear-Grant (Queen's University) |
| Abstract: | We analyze the results of a large-scale experiment wherein subjects participate in a hypothetical primary election and must choose between two fictional candidates who vary by sex and race. We find evidence of affinities along these dimensions in voting behaviour. A number of phenomena regarding these affinities and their interactions are detailed and explored. We find that they compete with each other on the basis of race and gender. Neuroeconomic metrics suggest that people who vote for own race candidates tend to rely more on heuristics than those who do not. |
| Keywords: | Gender, Prejudice, Race, Voting |
| JEL: | D72 C90 J15 J16 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1370&r=ure |
| By: | Marta De Philippis |
| Abstract: | An educational reform in England in 2004 that entitled higher ability school students to take the so-called 'triple science'course contributed a third of the increased share of STEM graduates in England 2005-10. That is the central finding of research by Marta De Philippis, which explores whether greater exposure to science at secondary school can encourage more young people to study for degrees in STEM subjects. She finds that taking more science courses at school does indeed encourage students to enrol in STEM degrees. But the effect of stronger school science preparation on STEM degrees is concentrated among boys. |
| Keywords: | university education, high school curriculum, stem |
| JEL: | J16 J24 I28 I21 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:493&r=ure |
| By: | Brijesh C. Purohit (Madras School of Economics) |
| Abstract: | Increasing literacy in the Indian states is possible by increasing enrolments in elementary education. This study explores the later by primary and upper primary enrolments for nineteen major Indian states for the year 2012-13. Using a non-parametric approach, namely DEA, the results for urban primary and upper primary enrolments indicate that many of the states may be able to improve efficiency of input usage or maximize enrolments more efficiently provided that an adequate infrastructure could be expanded which keeps pace with rising population growths in the states. In rural areas an additional supportive input, namely, electricity supply for villages may also help in enhancing the objective of increasing elementary education in the states. |
| Keywords: | Efficiency; DEA; Education; IndiaClassification-JEL: C14 ; H52 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2015-113&r=ure |
| By: | Skuras, Dimitris; Psaltopoulos, Demetrios |
| Abstract: | This paper presents the analytical properties of Social Accounting Analyses methods, especially models based on simple and extended Social Accounting Matrices (SAM) and their application to the investigation of spatial economic interactions and flows patterns, including those associated with the spatial employment impacts of the CAP. Section 2 presents the structure, assumptions and characteristics of interregional SAMs and deals with their modeling properties, which make possible the investigation of spatial economic interactions. Section 3 presents recent developments in SAM construction and model applications relevant to the analysis of such issues, including that of CAP employment impacts. Finally, the Chapter concludes with a short critical evaluation of advantages and shortcomings of the SAM approach to analyze and interpret the determinants of the spatial distribution of economic activity and suggests future research directions. |
| Keywords: | Impact Assessment, General Equilibrium, Common Agricultural Policy, Rural Employment, Community/Rural/Urban Development, Labor and Human Capital, Political Economy, Public Economics, Research Methods/ Statistical Methods, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa160:249760&r=ure |
| By: | Gustavo Adolfo Caballero Orozco |
| Abstract: | Can social segregation explain differences in beliefs regarding the role of effort in determining high incomes? I develop a model of lineages of agents learning about the effect of effort on the probability of receiving a high income based on their own experience (effort chosen and income received) and the experiences of agents in their networks. Simulating economies of these agents, only two conditions are needed for the existence of long-run differences in beliefs: (i) agents assume their networks are representative of the whole economy, and (ii) they are more likely to meet others with similar life experiencesâas under social segregation. For my analysis, I also consider (iii) imperfect intergenerational transmission of beliefs, in the form of partial confidence about parentâs beliefs, to account for sizable changes in beliefs due to single mobility experiences. I find a positive relationship between the degree of social segregation and the level of long-run differences in beliefs. Moreover, high levels of social segregation can lead agents to make inefficient effort choices while average beliefs drift away from real parameters. High levels of social segregation generate groups of agents who persistently exert (no) effort coexisting with agents choosing depending on their cost of effort. And, mobility experiences resulting from luck decrease the belief about the role of effort. |
| JEL: | D83 J24 Z18 D63 |
| Date: | 2016–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2016:pca706&r=ure |
| By: | Naveen Srinivasan (Madras School of Economics); Vidya Mahambare (Madras School of Economics); Francesco Perugini (Department of Economics, Society, and Politics, University of Urbino, Italy) |
| Abstract: | This paper examines the concept of monetary policy credibility from both the theoretical and practical viewpoints. It also discusses the advantages of high credibility and explains measures that can be taken to enhance it. The article reviews a number of studies that have examined the credibility of monetary policy making over the past decade. Our main conclusion is that credibility is an elusive thing. The only way to be sure of acquiring it is to earn it by deeds. The existing theoretical literature would benefit a great deal by taking this into consideration. |
| Keywords: | Monetary Policy, Credibility, InstitutionsClassification-JEL: E31, E52, E58 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2015-108&r=ure |
| By: | Blom Västberg, Oskar; Karlström, Anders; Jonsson, Daniel; Sundberg, Marcus |
| Abstract: | Activity based travel demand models are based on the idea that travel is derived from the demand to participate in different activities. Predicting travel demand should therefore include the prediction of demand for activity participation. Time-space constraints, such as working hours, restricts when and where different activities can be conducted, and plays an important role in determining how people choose to travel. Travelling is seen as a possibly costly link between different activities, that also implicitly leads to missed opportunities for activity participation. With a microeconomic foundation, activity based models can further be used for appraisal and for accessibility measures. However, most models up to date lack some dynamic consistency that, e.g., might make it hard to capture the trade-off between activity decisions at different times of the day. In this paper, we show how dynamic discrete choice theory can be used to formulate a travel demand model which includes choice of departure time for all trips, as well as number of trips, location, purpose and mode of transport. We estimate the model on travel diaries and show that the it is able to reproduce the distribution of, e.g., number of trips per day, departure times and travel time distributions. |
| Keywords: | Travel demand, Discrete choice, Dynamic discrete choice, Activity based modelling, |
| JEL: | R41 |
| Date: | 2016–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75336&r=ure |
| By: | Grażyna Bukowska (Faculty of Economic Sciences, University of Warsaw); Joanna Siwińska-Gorzelak (Faculty of Economic Sciences, University of Warsaw) |
| Abstract: | The aim of this paper is to study the impact of fiscal decentralisation on fiscal discipline. We use annual data for more than 2400 Polish municipalities, over the years 2002-2014. We introduce the distinction between “de facto” and “de jure” fiscal decentralisation, what is the first novelty of this study. The second novelty is that we control for the characteristics of the political scene and include interactions of decentralisation and political variables. We show that higher decentralisation is associated with higher fiscal discipline and that this result is robust for all our decentralisation measures. We also show that the impact of decentralisation is different, depending on the characteristics of the local political scene. Therefore, its overall effect on fiscal balance is not necessarily straightforward. |
| Keywords: | deficit, fiscal decentralization, political competition |
| JEL: | D72 H72 H77 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2016-35&r=ure |
| By: | LIU Yang |
| Abstract: | This study examines the determinants of binary choice with respect to the migration decisions of foreign students in Japan (i.e., whether they choose to remain in the country following graduation). A binary choice model of qualitative choice analysis was employed based on individual-level data obtained from a survey that was distributed to seven Japanese universities. Four groups of determinants regarding migration decisions among foreign students were examined; these addressed economic factors, culture and language, motivation to study abroad, and personal characteristics. Significant effects were not identified for economic factors (i.e., income, living conditions); in contrast, culture contributed significantly to students' migration decisions. Moreover, low levels of Japanese language proficiency proved to be a barrier to retaining foreign students. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16097&r=ure |
| By: | Koetter, Michael; Noth, Felix; Rehbein, Oliver |
| Abstract: | We test if and how banks adjust their lending in response to disaster risk in the form of a natural catastrophe striking its customers: the 2013 Elbe flooding. The flood affected firms in East and South Germany, and we identify shocked banks based on bank-firm relationships gathered for more than a million firms. Banks with relationships to flooded firms lend 13-23% more than banks without such customers compared to the preflooding period. This lending hike is associated with higher protability and reduced risk. Our results suggest that local banks are an effective mechanism to mitigate rare disaster shocks faced especially by small and medium firms. |
| Keywords: | disaster risk,credit demand,natural disaster,relationship lenders |
| JEL: | G21 G29 O16 Q54 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:312016&r=ure |
| By: | Sherry, Erin S.; Wu, Ziping |
| Abstract: | Rural development policy has a broad remit, in that it seeks to address social, environmental and economic objectives. A key economic objective that is common across rural development approaches is to improve employment outcomes in rural areas. Rural schemes and policies targeting employment directly or indirectly manifest within a wider context of national schemes and policies. Employment policies can roughly be divided into demand-side (such as cluster development) and supply-side (such as education and training) approaches. This paper explores the possibilities and limitations for national demand-side policies to improve employment outcomes in sub-national regions away from metropolitan centres due to systematic differences in economic structure. Particular attention is given to the interactions between regional and gender employment convergence. The approach developed can be used to develop ‘reactionary’ rural development schemes to compensate for differential impacts of national schemes in rural regions. |
| Keywords: | Regional employment, industry clusters, rural development, Community/Rural/Urban Development, Labor and Human Capital, Political Economy, Public Economics, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa160:249761&r=ure |
| By: | Kinghan, Christina (Central Bank of Ireland); McCarthy, Yvonne (Central Bank of Ireland); O'Toole, Conor (Central Bank of Ireland) |
| Abstract: | This Economic Letter explores the effects of the recent macroprudential measures in the mortgage market on the leverage of Irish borrowers. Using loan-by-loan data from before and after the measures, we test how loan-to-income (LTI) and loan-to-value (LTV) ratios have changed for First Time Buyers (FTBs) and Second and Subsequent Buyers (SSBs). A number of findings emerge. The average (mean) LTV and LTI ratios increased slightly after the introduction of the regulations for both FTBs and SSBs. However, the opposite pattern is observed for high leverage borrowers. For FTBs with an LTV of 80 per cent or above, the average borrower registered a small reduction in their LTV after the regulations. This result was only present for higher income borrowers, i.e. FTBs at the lower end of the income distribution had the same average. LTV pre- and post-regulations. SSBs with an LTV of 80 per cent and above also had a lower LTV after the regulations, but the effect was more pronounced than for FTBs. Few borrowers experienced a tightening of LTIs following the measures; we find only a limited effect among high leverage SSB borrowers. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:08/el/16&r=ure |
| By: | Afridi, Farzana (Indian Statistical Institute); Dhillon, Amrita (King's College London); Solan, Eilon (Tel Aviv University) |
| Abstract: | In developing countries with weak institutions, there is implicitly a large reliance on elections to instill norms of accountability and reduce corruption. In this paper we show that electoral discipline may be ineffective in reducing corruption when political competition is too high or too low. We first build a simple game theoretic model to capture the effect of electoral competition on corruption. We show that in equilibrium, corruption has a U-shaped relationship with electoral competition. If the election is safe for the incumbent (low competition) or if it is extremely fragile (high competition) then corruption is higher, and for intermediate levels of competition, corruption is lower. We also predict that when there are different types of corruption, then incumbents increase corruption in the components that voters care less about regardless of competition. We test the model's predictions using data gathered on audit findings of leakages from a large public program in Indian villages belonging to the state of Andhra Pradesh during 2006-10 and on elections to the village council headship in 2006. Our results largely confirm the theoretical results that competition has a non-linear effect on corruption, and that the impact of electoral competition varies by whether theft is from the public or private component of the service delivery. Overall, our results suggest that over-reliance on elections to discipline politicians is misplaced. |
| Keywords: | audit, electoral competition, corruption, social accountability |
| JEL: | D72 D82 H75 O43 C72 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10396&r=ure |
| By: | Jin, Wei; Zhang, ZhongXiang |
| Abstract: | There is a growing body of literature mentioning the slow pace of energy technological progress as compared to other technologies like information technology (IT), but the reasons why energy sector is perplexed by slow innovation remain unexplained. Based on a variety-expanding endogenous technological change model, this paper provides a rigorous economic exposition of the mechanism that underlies the slow progress of energy technological innovation. We show that in decentralized market equilibrium the growth rate of energy technology variety is lower than that of IT variety. This stems from both market fundamentals where the homogeneity of end-use energy goods is less likely to harness the pecuniary externality embedded in the household’s love-for-variety preference, and technology fundamentals where the capital-intensiveness of energy technology inhibits the non-pecuniary technological externality due to knowledge spillovers. We further show that a social planner solution can promote energy technological progress, yet still cannot achieve an outcome in which energy technology variety grows faster than IT variety. By targeting subsidies on energy technology R&D and the use of intermediate primary energy inputs by secondary energy producers, the decentralized market equilibrium can achieve an outcome in which energy technology grows faster than IT. |
| Keywords: | Energy Technological Innovation, Product Homogeneity, Knowledge Spillovers, Love-for-variety Effect, Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession, Q55, Q58, Q41, Q43, Q48, O31, |
| URL: | http://d.repec.org/n?u=RePEc:ags:ancewp:249504&r=ure |
| By: | Brahmachari, Deborshi |
| Abstract: | Using the panel data for 15 large Indian states over the period of 3 years: 2005-2006 to 2007-08, this analysis employs pooled panel data models to estimate the average (normative) levels of expenditure on primary, secondary and higher education. Pooled panel data regression allows comparison between heterogeneous units. The inclusion of cross section data adds variability there by, reducing collinearity among variables and degrees of freedom are also enhanced. Pooling of time series and cross section data helps estimation of average responses underlining a given relationship. (Dielman, 1989; Rao 2000). The paper proceeds from the supply side (cost) and attempts to estimate the average / normative expenditure levels. |
| Keywords: | Education Expenditure, Expenditure Function, Pooled regression models |
| JEL: | H52 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75339&r=ure |
| By: | Chenarides, Lauren; Jaenicke, Edward C. |
| Abstract: | While food access is an increasingly studied component of research related to diet and health, consumer behavior and store choice have been relatively overlooked in understanding the dietary health-food access relationship. Especially in areas with high poverty rates, where the proportion of low-access and low-income population persists over time, consumers are faced with shopping at non-traditional stores, which may augment the negative welfare impacts of residing in these areas. Using IRI's Consumer Network Panel, IRI's InfoScan, and Nielsen's TDLinx store characteristics data, this paper develops a structural model of store choice that frames Pinkse, Slade, and Brett's (2002) distance metric (DM) method inside a demand system to model what behaviors drive consumers' store choice decisions, highlighting underserved communities. While the DM method has been used previously to model brand choice, this paper is the first to use it to investigate store choice. Because the store-choice model is based on demand for store attributes (such as relative prices, product assortment measures, store services, and distance between stores), it reveals consumer preferences for store types and provides insight into policy prescriptions that attempt to improve food access. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa17:250118&r=ure |