nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒08‒02
thirteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Health behaviors and education in Turkey By Tansel, Aysit; Karaoglan, Deniz
  2. Alternative Investment Vehicles on Emerging REIT Markets: The Case of Residential and Commercial REICs in Turkey By Arslanli, Kerem Yavuz; Pekdemir, Dilek
  3. Conditions of Mortgage Market Development in Turkey: A Critical Empirical Review By Coskun, Yener
  4. Macroeconomic Change, Housing Affordability and Public Policies: The Case of Turkey By Coskun, Yener; Watkins, Craig
  5. Planning Istanbul: “Central vs Local� Real Estate Markets By Arslanli, Kerem Yavuz
  6. Politics of Religiously Motivated Lending: An Empirical Analysis of Aid Allocation by the Islamic Development Bank By Hernandez , Diego; Vadlamannati , Krishna Chaitanya
  7. Value of Property: Status Versus Function By Esen, Bugra Kagan
  8. How Robust is the Connection between Exchange Rate Uncertainty and Tunisia’s Exports? By Bouoiyour, Jamal; Selmi, Refk
  9. Predicting bank insolvency in the Middle East and North Africa By Calice, Pietro
  10. Real Estate Risk and Exposure of Banking Institutions to Real Estate By Ong, Seow-Eng; Khairul, Mohd; Ibrahim, Muhammad Faishal; Thao, Le Thi Thanh
  11. Urban Renewal Projects: Set in Stone or Flexible? By Esen, Bugra Kagan
  12. Gelir Hareketliliği Eşitsizlikleri Azaltabilir Mi? Türkiye Örneği By Aytekin Güven; Başak Dalgıç; Aysit Tansel
  13. Banka Rezerv Tutma Egilimleri ve Sistemin Gunluk Fonlama Ihtiyaci By Dilek Kocyigit; Tandogan Polat; M. Emin Bocuoglu

  1. By: Tansel, Aysit; Karaoglan, Deniz
    Abstract: This is the first study which provides empirical analysis of the variation in health behaviors for adult men and women in Turkey which is a developing country. The health behaviors considered are smoking, drinking, fruit and vegetable consumption, exercise and body mass index (BMI). We find that in Turkey education is the most important factor that affects the health behaviors. The results indicate that smoking is positively associated with education at all levels with a decreasing effect with the level of education unlike in the developed countries. This result indicates that smoking is a serious public health problem in Turkey at all levels of education. Further, alcohol consumption and schooling are positively related and it increases by the level of education. Higher educated individuals clearly eat more fruits, vegetables and exercise more and their BMI levels are in the normal range compared to less educated and illiterate. We also highlight the importance of demographic factors, labor market status and household income. We use Health Survey of Turkish Statistical Institute (TURKSTAT) for years 2008, 2010 and 2012. This study will provide a baseline for further studies on the various aspects of health behaviors in Turkey.
    Keywords: Health Behaviors, Education, Demographic Factors, Turkey
    JEL: I10 I12 I2 I20
    Date: 2014–06–20
  2. By: Arslanli, Kerem Yavuz; Pekdemir, Dilek
    Abstract: Turkish REICs background goes back to late 1990s and their portfolio structure diversifies between different assets. Since 2005, REICs became specialized in certain areas, such as retail, residential, logistics and hotel.Residential REICs have a 'develop/sold' strategy while commercial REICs have 'buy/hold' strategy in Turkey. Therefore, residential REICs focus on 'developer's profit' instead of 'rental income and capital gains' and it causes high risk premium due to uncertainty in development projects. Over the period 2005 - 2010, residential investments have delivered higher returns than commercial, while return of commercial investments have been volatile.Turkish REICs present an alternative investment vehicle for both individual and institutional investors. Investors and fund managers search for accurate information on the performance of REITs, so this paper attempt to analyze the underlying drivers of performance of total return for Residential and Commercial REICs of Turkey, over time.This paper is a part of research project titled 'Performance Analysis of Real Estate Investment Companies and Direct Real Estate Investments in Turkey', supported and financed by EPRA.
    Date: 2013
  3. By: Coskun, Yener
    Abstract: The objective of the paper is to define conditions of mortgage market development in Turkey by presenting the findings of dynamic causal relationships between housing loans and selected socio/macro-economic indicators for the term 2005/01-2011/09. By using monthly time series, we employ granger causality tests, co-integration analysis and vector error correction model (VECM) in the research. The paper specifically aims to analyze the impacts of financial stability, financial risks, monetary policy, households' income/net wealth and housing demand to mortgage credits. We conclude based on the co-integration analysis that housing credit, interest rates, occupancy permits, real GDP per person and monetary aggregate (M2) have long term relationship with housing credits in Turkey. In the paper, we argue that the outcome has important policy implications for both Turkey and emerging economies. In this context, we underline that mortgage market policies in emerging economies should have a balanced approach between market economy and social needs.
    Date: 2013
  4. By: Coskun, Yener; Watkins, Craig
    Abstract: Notions of housing affordability concept are at the heart of debates about access to home ownership, housing finance and social policies globally. The existing housing affordability literature mostly focuses mainly on developed countries. Housing affordability problem in emerging countries are starting to attract increasing attention. This paper seeks to contribute to this emergent literature by analysing housing affordability in Turkey. The paper explores market trends, the nature of the affordability problem and makes some tentative policy suggestions. The paper develops a theoretically informed model to assess affordability using data from 2005 to 2012 on house price to income ratios, the housing affordability index of Turkey (HAIT), and a variety of social and economic indicators. The Turkish results are contrasted with similar measures for other countries.
    Date: 2013
  5. By: Arslanli, Kerem Yavuz
    Abstract: After 2002 economic restructuring encouraged the growth in Turkey. Between the years 2002 and 2006, Turkish economy has grown by 7.5%. Consequently, private consumption expenditure have increased by 8% annually, by 6% per capita and private sector investments in fixed assets have increased by 23%. In parallel, the housing and commercial real estate sectors have also demonstrated a considerable growth. Foreign capital investments and the shares of international investors in commercial real estates have also increased. In this paper multi-centre development of Istanbul is investigated with respect to Office, Retail and Residential markets. The Central Business District of Istanbul begins with the Barbaros Boulevard, continues along the Büyükdere Avenue and reaches to Maslak. The high-rise plaza type offices on the Esentepe-Zincirlikuyu-Levent-Maslak direction have contributed to the development of this central business district. This paper investigates and models the possible outcomes of additional 3 million population among districts of Istanbul as the local planning authority predicts.
    Date: 2014
  6. By: Hernandez , Diego; Vadlamannati , Krishna Chaitanya
    Abstract: We investigate whether lending by the Islamic Development Bank mirrors Saudi Arabia’s political interests based on religious affinity using panel data for its 56 member countries over the 1970 to 2007 period. Our results indicate that Sunni regime countries receive favorable treatment in terms of loan allocation, as well as Shia majority populated countries in exceptional occasions of conflict with other religious minority groups, while non-Muslim countries are the least favored. There is also evidence that lending by the World Bank to the same group of countries and over the same time frame does not respond to the political stance of Saudi Arabia founded on religion. These findings reveal the advantage that Saudi Arabia gains by assuming the leadership of a Regional Development Bank in contrast to coordinating common strategies in a global International Financial Institution with other large shareholders for whom religion might not be essential for political alliances.
    Keywords: Development aid; Arab aid; Islamic Development Bank; Sunni-Shia politics.
    Date: 2014–07–17
  7. By: Esen, Bugra Kagan
    Abstract: It has been more than a decade now, since the inflow of foreign money has created a real estate boom in Turkey, which was a globally safe harbor. In addition with the lower rate mortgage loans, Turkey’s property values have skyrocketed. Many independent research works show that real estate is by far the best investment choice of the Turkish people. As they become wealthier, they tend to buy more and more properties. It is interesting to analyze; what is the motivation of buyers when they consider such a property purchase and what kind of properties do the Turkish people demand as they obtain surplus money?The two questions may have some many answers, which can be reduced to two: function and status. For single property owners, function generally means a larger, safer, warmer, living place with better features. Function, for multiple property owners, also means a money flow from monthly rent.Status, however, is a more interesting issue. Some properties in major cities are purchased for prestige, where their values cannot be justified by functionality or rent inflow. This is also because some properties are limited in quantity or may not be available at once. Waterside residences in Istanbul for instance, may be sold for up to tens of millions of Dollars. Every major Turkish city has such extremes, which are also high in number. This Paper’s contribution to the real estate sciences may be twofold: It questions the property valuation parameters in a more macroeconomic awareness and it may theoretically help well-off individuals find different ways of investment.
    Date: 2014
  8. By: Bouoiyour, Jamal; Selmi, Refk
    Abstract: This study addresses the robustness of the connection between exchange rate uncertainty and Tunisia’s exports along several econometric methods, acknowledging the complexity of this relationship. To this end, we apply conventional methods (OLS by threshold, instrumental variable by threshold and ARDL Bounds testing approach) and new methods (evolutionary co-spectral analysis and wavelet decomposition). Both methods appear complementary. We find that the exchange rate uncertainty is always more detrimental to exports in the short term or when reaching certain thresholds. These outcomes clearly indicate that Tunisia was headed in the right direction and therefore the continuation of the policies already being pursued seem beneficial, while paying proper attention to short-run disturbances.
    Keywords: Exchange rate uncertainty; exports; conventional methods; new methods.
    JEL: C13 C4 C6 F14
    Date: 2014–07
  9. By: Calice, Pietro
    Abstract: This paper uses a panel of annual observations for 198 banks in 19 Middle East and North Africa countries over 2001-12 to develop an early warning system for forecasting bank insolvency based on a multivariate logistic regression framework. The results show that the traditional CAMEL indicators are significant predictors of bank insolvency in the region. The predictive power of the model, both in-sample and out-of-sample, is reasonably good, as measured by the receiver operating characteristic curve. The findings of the paper suggest that banking supervision in the Middle East and North Africa could be strengthened by introducing a fundamentals-based, off-site monitoring system to assess the soundness of financial institutions.
    Keywords: Banks&Banking Reform,Bankruptcy and Resolution of Financial Distress,Access to Finance,Financial Crisis Management&Restructuring,Debt Markets
    Date: 2014–07–01
  10. By: Ong, Seow-Eng; Khairul, Mohd; Ibrahim, Muhammad Faishal; Thao, Le Thi Thanh
    Abstract: Analyzing the real estate risk sensitivity of GCC banking institutions, we found that both real estate loan and equity exposure of conventional and Islamic banks positively increases its real estate beta risk. The results persist across different subsamples. As expected, the effect is more persistent during time periods when bank's real estate exposure is elevated. Generally, due to the greater real estate exposure of Islamic banks, they possess greater real estate beta risk than conventional banks. However there is no evidence that Islamic banks real estate exposure has a differential effect on real estate risk vis-à-vis conventional banks. With limited Shariah compliant real estate hedging capabilities, improving the management of real estate risk in Islamic banks could be a potential foray for regulators and product structurers.
    Date: 2013
  11. By: Esen, Bugra Kagan
    Abstract: In the last couple of years, urban renewal practices in Turkey, has become a more interesting topic for researchers than ever. One reason is that, the evidences of these decade-lasting projects have now become physically tangible and thus, subject to a spectrum of concerns. The other reason, however, relates more to the top-down style that these projects are implemented. Most of the time, it is argued that, the decision making process heavily depends on the local or central governmental authorities, which lack the participation of the people as well as the academic or civil parties. In light of these facts, this paper questions in what extend it is possible to modify –or flex- urban renewal projects according to changing times and conditions, which represent a timeline of administrative, legal, technical, social, political and financial aspects. On one hand, from the authorities viewpoint, it is seen crucial to make solid decisions and comply with these projects without hesitation. On the other hand, it is not always possible to foresee what time would bring and make decisions to cover this fourth dimension. In this paper, one real-life example from the capital city, the New Mamak Urban Renewal Project including 18.000 dwellings, has been analyzed to show how things may get out of hand due to changing conditions in time and how modifications may be needed in the half way. This paper aims to contribute to the real estate sciences in the sense that; complicated and long lasting urban renewal projects can be better accomplished if some flexibility techniques, as suggested in the paper, can be taken into consideration in a well established way.
    Date: 2013
  12. By: Aytekin Güven (Abant İzzet Baysal Üniversitesi, İktisat Bölümü, Turkey); Başak Dalgıç (Hacettepe Üniversitesi, Maliye Bölümü, Turkey); Aysit Tansel (Orta Doğu Teknik Üniversitesi, İktisat Bölümü, Turkey)
    Abstract: Son dönemlerde dünya genelinde artan gelir eşitsizlikleri, iktisatçıların dikkatlerini eşitsizlikleri dengeleyici faktörlerden biri olarak görülen bireylerin gelir durumlarını daha üst ya da daha alt gelir gruplarına taşıyabilmeleri olarak adlandırılan gelir hareketliliği konusuna çevirmelerine neden olmuştur. Gelir hareketliliği ve eşitsizlikler üzerindeki etkileri 2000’li yıllardan sonra ve daha çok gelişmiş ülkeler için incelenmeye başlanmış ve genel bir sonuca ulaşmak için henüz yeterli sayıda çalışma yapılmamıştır. Bu çalışma gelir dağılımı en adaletsiz ülkeler arasında yer alan Türkiye için bir gelir eşitsizliği ve gelir hareketliliği analizi yaparak gelişmekte olan ülke örneği ile literatüre katkı sunmayı amaçlamaktadır. Çalışmadan elde edilen sonuçlar özetle şöyledir: i) Ele alınan dönem uzadıkça gelir hareketliliği atmaktadır ancak bu hareketlilik gelir eşitsizliğini azaltıcı nitelikte değildir. ii) Gelir dağılımının an alt ve en üst grupları diğer gruplara göre daha hareketlidir. iii) Ele alından alt dönemlerde en alt gelir grubundaki bireylerin %30’u işsiz durumuna düşerken, yalnızca %1,5’i en üst gelir grubuna yükselebilmiştir.
    Date: 2014
  13. By: Dilek Kocyigit; Tandogan Polat; M. Emin Bocuoglu
    Abstract: [TR] Bu notla, sistemin gunluk fonlama ihtiyacinin onemli bir bileseni olan bankacilik kesimi rezerv tutma egilimini etkileyen faktorlerin belirlenmesi amaclanmaktadir. Bu dogrultuda, oncelikle bankalarin rezerv tutma egilimleri betimsel olarak resmedilmis, daha sonra panel veri analizi ile bu egilimi belirleyen faktorler tespit edilmeye calisilmistir. Panel veri analizi kullanilarak, Merkez Bankasi likidite durusu, kisa vadeli faiz beklentileri, Hazine kaynakli likidite hareketleri, tatil arifeleri, bilanco donemi, ek parasal sikilastirma uygulanan donemler ve rezerv opsiyonu mekanizmasi kullanim oraninin bankacilik kesimi rezerv tutma egilimleri uzerindeki etkileri analiz edilmistir. Model sonuclarina göre, soz konusu aciklayici degiskenlerin anlamliligi ortaya koyulmustur. Notta yer alan bulgularin bankacilik kesimi rezerv davranisi ongorulebilirligini artirarak, Merkez Bankasi likidite yonetiminin etkinligine katki sagladigi dusunulmektedir. [EN] In this note, we aim to identify the factors that affect the banking sector’s reserve maintaining behavior, which is an essential component of the daily funding need of the banking system. In this regard, we first make a descriptive analysis of the reserve maintaining behavior of the banking sector and then we conduct a panel data analysis to determine the factors affecting this behavior. The impacts of the liquidity stance of the Central Bank, short term interest rate expectations, The Treasury’s cash flows, holiday eves, balance sheet periods, the periods of additional monetary tightening, and the usage ratio of Reserve Option Mechanism, on the behaviors of reserve maintaining of the banking sector are analyzed by applying panel data. The mentioned explanatory variables are found statistically significant according to the results of the model. The findings of this note are believed to enhance the effectiveness of the Central Bank’s liquidity management by contributing to the predictability of the reserve maintaining behavior of the banking sector.
    Date: 2014

This nep-ara issue is ©2014 by Paul Makdissi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.