nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒01‒06
three papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Self-Selection and the Returns to Geographic Mobility: What Can Be Learned from the German Reunification "Experiment" By Anzelika Zaiceva
  2. Using survey data to study capitalization of local public services By Fredrik Carlsen; Jørn Rattsø; Bjørg Langset; Lasse Stambøl
  3. Do local authorities set local fiscal variables to influence population flows? By Fredrik Carlsen

  1. By: Anzelika Zaiceva (IZA Bonn)
    Abstract: This paper investigates the causal effect of geographic mobility on income. The returns to German East-West migration and commuting are estimated, exploiting the structure of centrally planned economies and a "natural experiment" of German reunification for identification. I find that the migration premium is insignificantly different from zero, the returns for commuters equal to 40 per cent, and the local average treatment effects for compliers are insignificant. In addition, estimation results suggest no positive self-selection on unobservables for migrants, and some evidence of positive self-selection on unobservables for commuters.
    Keywords: returns to migration, causality, treatment effects
    JEL: F22 J61 R23
    Date: 2006–12
  2. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology); Bjørg Langset (Research Department, Statistics Norway); Lasse Stambøl (Research Department, Statistics Norway)
    Abstract: We use surveys in which respondents evaluate local amenities in Norway to compute proxy variables for the quality of local public services as well as other local amenities relevant to location decisions. Average satisfaction reported by the respondents is computed for each amenity and each municipality, adjusted for sample variation in personal characteristics and included as explanatory variables in a cross-section study of house prices. We find that house prices are increasing in satisfaction with health care, cultural activities and public transportation, suggesting that the quality of local public services indeed affects the attractiveness of a residential site. When the analysis is repeated with input measures of service levels instead of satisfaction variables, we find no effects of local public services on house prices, indicating that traditional Tiebout studies based on input measures may have underestimated the importance of local public services for location decisions.
    Keywords: Capitalization; Local public services; Survey data
    JEL: R23
    Date: 2006–05–18
  3. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology)
    Abstract: The paper presents an empirical test of local fiscal competition in Norway based on the observation that interregional migration during the business cycle creates very different incentives for rural and urban municipalities to influence population movements. Panel-data evidence is presented suggesting that municipalities indeed attempt to control population flows. The sensitivity of municipal spending and revenue decisions to population movements varies between municipalities in a way that is consistent with the municipalities' incentives to influence location decisions of households.
    Keywords: Fiscal competition; Local government
    JEL: H73 R51
    Date: 2006–09–01

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