nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒03‒31
28 papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Sources of growth and convergence among Italian regions 1980-2004 By Daniele, Vittorio
  2. Shifts in Economic Geography and their Causes By Anthony J. Venables
  3. Network Circuity and the Location of Home and Work By Ahmed El-Geneidy; David Levinson
  4. Foreign direct investments in the Italian regions: The role of organized crime and infrastructures By Daniele, Vittorio
  5. Search in Cities By Zenou, Yves
  6. Good Governance, Trade and Agglomeration By Candau, Fabien
  7. Congestion Tolling with Agglomeration Externalities By Richard Arnott
  8. A New Regional Geography of Europe? The Labour Market Impact of the EU Enlargements By Floro Ernesto Caroleo; Francesco Pastore
  9. Decomposing the Growth in Residential Land in the United States By Henry G. Overman; Diego Puga; Matthew Turner
  10. Trade Liberalization and Regional Income Convergence in Mexico: a Time-Series Analysis By Manuel Gomez; Daniel Ventosa-Santaularia
  11. The Use of Road Infrastructure Data for Urban Transportation Planning: Issues and Opportunities By David Levinson; Feng Xie
  12. Still Searching for the Wage Curve: Evidence from Germany and Italy By Andreas Ammermueller; Claudio Lucifora; Federica Origo; Thomas Zwick
  13. Location and R&D alliances in the European ICT industry By Narula, Rajneesh; Santangelo, Grazia D.
  14. Place Rank: A New Accessibility Measure By Ahmed El-Geneidy; David Levinson
  15. North-South Regionalism By Claude Grasland; Pierre Beckouche
  16. Determinants of Route Choice By Lei Zhang; David Levinson
  17. The Plant Size-Place Effect: Agglomeration and Monopsony in Labour Markets By Alan Manning
  18. Is the Housing Bubble Collapsing? 10 Economic Indicators to Watch By Dean Baker
  19. Evolution of the Second-Story City: The Minneapolis Skyway System By Michael Corbett; Feng Xie; David Levinson
  20. A model of spatial arbitrage with transport capacity constraints and endogenous transport prices By Andrew Coleman
  21. Innovations in mortgage markets and increased spending on housing By Mark Doms; John Krainer
  22. Matching externalities and inventive productivity By Robert M. Hunt
  23. The Economics of Transportation Network Growth By Lei Zhang; David Levinson
  24. Quality and Public Transport Service Contracts By Valerio Gatta; Edoardo Marcucci
  25. The Political Economy of Private Roads By David Levinson
  26. Resources and Standards in Urban Schools By Stephen Machin; Sandra McNally; Costas Meghir
  27. Economics of Road Network Ownership By Lei Zhang; David Levinson
  28. Measuring the transportation needs of people with developmental disability By Rania Wasfi; Ahmed El-Geneidy; David Levinson

  1. By: Daniele, Vittorio
    Abstract: This paper examines the evolution of regional disparities among Italian regions in the period 1980-2007. A growth accounting exercise offers some evidences on the sources of growth and convergence.
    Keywords: Mezzogiorno; contabilità della crescita; convergenza; divari di sviluppo
    JEL: O49 R11
    Date: 2007–01–25
  2. By: Anthony J. Venables
    Abstract: This paper analyses some of the forces that are changing the spatial distribution of activity inthe world economy. It draws on the 'new economic geography' literature to argue theimportance of increasing returns to scale and cumulative causation processes in shaping theproductivity and comparative advantage of different regions. In the presence of suchincreasing returns there may be persistent spatial disparities in productivity. Economicdevelopment will tend to be 'lumpy', with some regions (countries, or smaller areas such ascities) experiencing rapid growth and others being left behind.
    Keywords: economic geography, urbanisation, world economy, productivity
    JEL: F1 R1
    Date: 2006–12
  3. By: Ahmed El-Geneidy; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: In an urban context people travel between places of residence and work destinations via transportation networks. Transportation studies that involve measurements of distances between residence and work locations tend to use Euclidean distances rather than Network distances. This is due to the historic difficulty in calculating network distances and based on assumptions that differences between Euclidean distance and network distance tend to be constant. This assumption is true only when variation in the network is minor and when self-selection is not present. In this paper we use circuity, the ratio of network to Euclidean distance, as a tool to better understand the choice of residential location relative to work. This is done using two methods of defining origins and destinations in the Twin Cities metropolitan region. The first method of selection is based on actual choice of residence and work locations. The second is based on a randomly selected dataset of origins and destinations in the same region. The findings of the study show circuity measured through randomly selected origins and destinations differ from circuity measured from actual origins and destinations. Workers tend to reside in areas where the circuity is lower, applying intelligence to their location decisions. We posit this because locators wish to achieve the largest residential lot at the shortest commute time. This finding reveals an important issue related to resident choice and location theory and how resident workers tend to locate in an urban context.
    Keywords: Network structure, travel behavior, transport geography, commuting, circuity
    JEL: R40 R11 R14
    Date: 2007
  4. By: Daniele, Vittorio
    Abstract: In Italy, as in other European Countries, FDI inflows show an high degree of spatial concentration. For instance, in the period 2000-05, the all eight Northern Italian regions received about the 75% of total FDI inflows; on the contrary, the all eight Southern ones, included in the Mezzogiorno area, attracted less than the 1% of FDI inflows in Italy. What are the causes of a such high degree of territorial concentration of FDI? Why the attractiveness of the Mezzogiorno area is so low? Several empirical studies show as the main determinants of FDI in the Italian regions concern with the market potential dimension. At the regional level, other factors, as the presence of “marshallian” agglomeration economies, and the previous localization of foreign enterprises, seem to play an important role in the attraction of FDI. The Mezzogiorno regions benefited of some localization factors that could potentially incentive the localization of foreign investments. In the Mezzogiorno, there are financial grants for investments provided by European, National and Regional funds; the labour cost is, on average, lower than in the North; not congested industrial areas are available. Nevertheless, these factors seem not able to provide some competitive advantages to these regions. Objective of this paper is to examine the impact of some “competitive disadvantages” of the Mezzogiorno. In particular, the analysis focuses on the role of organized crime and infrastructural endowment. The main interpretative hypothesis is based on the idea that a lack in some fundamental public goods – such as legality and public infrastructures – can substantially reduce the effect of policies for promoting and supporting FDI. The empirical analysis – based on OLS e WLS regressions – show as the presence of organized crime has a strong negative effect on FDI inflows in Italian provinces. The inclusions of the provinces in the Objective 1 of the EU has a weak negative effect; the infrastructural endowment influences positively – but not significantly – FDI.
    Keywords: FDI; Italy; Italian Mezzogiorno; Organized crime; Regional Competitiveness
    JEL: R38 F23 R30
    Date: 2006–10
  5. By: Zenou, Yves
    Abstract: We develop different spatial search models in which a land market is embedded into a standard search matching framework. The link between the land and the labour market is realized through the average search intensity of unemployed workers. We first develop a simple model where search intensity is exogenous. Because of this assumption, only one urban pattern emerges in which the employed reside close to jobs and the unemployed at the periphery of the city. We then extend this benchmark model by assuming that workers' search intensity negatively depends on their residential distance to jobs. This leads to two urban-land use patterns where the unemployed workers either reside close to or far away from jobs. Finally, we consider the case where the unemployed workers endogenously choose their search intensity and we show that they search less, the further away they reside from jobs. Apart from the two previous urban patterns, there is a third equilibrium that emerges, which has a core-periphery structure. In each model, we explore the labour market outcomes (job creation, unemployment and wages) of the different urban land use patterns.
    Keywords: job search; search intensity; spatial mismatch; urban land use
    JEL: D83 J15 J41 R14
    Date: 2007–03
  6. By: Candau, Fabien
    Abstract: We develop a model for developing countries that investigates the factors behind agglomeration of activities in urban giants. Firstly we show that relatively easier market access to external demand provided by the urban giant tends to attract entrepreneurs to this place. Secondly we find that the attractive power of the urban giant can be linked to a lack of democracy. Indeed we demonstrate that democracy acts as a dispersive force in the sense that by reversing the cost of living effect, it allows to reduce the spatial inequality and then the tendency of agglomeration. Lastly we analyse how the funds embezzled by a bad government vary according to internal and external trade liberalisation. We show that a decrease in the disadvantage of the periphery to trade with the external market can limit the funds embezzled by a Leviathan.
    Keywords: Economic geography; Cities; Trade; Corruption.
    JEL: R12 H25
    Date: 2006–05–31
  7. By: Richard Arnott (Boston College)
    Abstract: Consider an urban economy with two types of externalities, negative traffic congestion externalities and positive agglomeration externalities deriving from non-market interaction. Suppose that urban travel can be tolled, that non-market interaction cannot be subsidized, and that non-market interaction is stimulated by a reduction in travel costs. Then the optimal toll is below the congestion externality cost. This paper explores this line of reasoning.
    Keywords: congestion, congestion toll, agglomeration, externalities
    JEL: D60 H20 R40
    Date: 2007–03–26
  8. By: Floro Ernesto Caroleo (University of Naples Parthenope); Francesco Pastore (Seconda Università di Napoli and IZA)
    Abstract: This paper provides a critical overview and a detailed research agenda for scholars interested in regional studies with a special focus on old and new European Union member states. The focus is on the microeconomic foundations of structural change and its spatially asymmetric impact on labour markets. Structural change has been long neglected, but the availability of new data and the specific nature of economic transition in new member states has brought again this issue to the fore, suggesting that it might provide an explanation also of several typical features of regional imbalances in old member states. The literature provides theoretical reasoning and empirical evidence to confirm this.
    Keywords: regional unemployment, structural change, labour turnover, optimal speed of transition, EU enlargement
    JEL: J6 P2 R1 R23
    Date: 2007–02
  9. By: Henry G. Overman; Diego Puga; Matthew Turner
    Abstract: This paper decomposes the growth in land occupied by residences in the United States to give therelative contributions of changing demographics versus increases in the land area used by individualhouseholds. Between 1976 and 1992 the amount of residential land in the United States grew 47.5%while population only grew 17.8%. At first glance, this suggests an important role for per-householdincreases.However, the calculations in this paper show that only 24.3% of the growth in residential landarea can be attributed to State level changes in land per household. 37.5% is due to overall populationgrowth, 5.9% to the shift of population towards States with larger houses, 22.7% to an increase in thenumber of households over this period, and the remaining 9.5% to interactions between these changes.There are large differences across states and metropolitan areas in the relative importance of thesecomponents.
    Keywords: land use, population growth
    JEL: R14 O51
    Date: 2007–02
  10. By: Manuel Gomez (School of Economics, Universidad de Guanajuato); Daniel Ventosa-Santaularia (School of Economics, Universidad de Guanajuato)
    Abstract: We study the hypothesis of convergence amongst Mexican regions since 1940 with special interest in the post-trade liberalization period. A standard time-series convergence test shows that per capita income levels between the capital and the rest of the regions tend to narrow over time. Using the concept of deterministic and stochastic convergence, we describe the specific characteristics of the growth pattern for each of the regions. We find evidence that supports the hypothesis that trade reforms reversed the convergence process of some regions, especially those less developed. Results further suggest that trade liberalization did not contribute to per capita income convergence between the U.S. and Mexico border regions.
    Keywords: Catching-up, Convergence, Deterministic Trend, Unit Root
    JEL: O10 O40 R1
  11. By: David Levinson; Feng Xie (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: In order to maintain and improve road infrastructure in their respective jurisdictions, the state (the Minnesota DOT), region (the Metropolitan Council), and seven counties in the Twin Cities Metropolitan area develop their respective decision making (investment) processes in which federal or local funding are periodically allocated to road projects, prioritized according to their funding needs based on measured road infrastructure conditions such as pavement quality, level of service, and safety. Including such an investment process in urban transportation planning enables forecasting changes to road infrastructure in the future. Periodic road infrastructure reporting provides standards the jurisdictions maintain, as well as the measures they adopt for the management of road conditions. These measures, developed and maintained by engineers, however, are inconsistent with transportation planning models, causing difficulties in fully using infrastructure reports in planning practice. This paper addresses the issues we encountered with regard to the use of road infrastructure reports in planning practice and identifies the opportunity to improve the inter-operability and integration of infrastructure reporting with urban transportation planning.
    JEL: R41 R42 R48 R53
    Date: 2007
  12. By: Andreas Ammermueller (ZEW Mannheim); Claudio Lucifora (Catholic University of Milan and IZA); Federica Origo (University of Bergamo); Thomas Zwick (ZEW Mannheim)
    Abstract: This paper investigates the functioning of regional labour markets in Italy and Germany for different employee groups. In the light of high and persistent differences in unemployment and wage rates between the North and South of Italy and the West and East of Germany, we first derive theoretical hypotheses on group specific correlations between regional unemployment and individual wages. Using micro data on hourly wages properly matched to local unemployment rates, we specify and empirically test different wage equations. On the basis of our results, we find no evidence for the existence of a "wage curve" in Italy. In the case of Germany, results are quite sensitive to the model specification and the employee group considered. In both countries, the reaction of wages to local unemployment varies significantly along the wage distribution, being more sensitive around the median quantiles. We conclude that there is no uniform wage curve and call for a differentiated analysis for various groups, taking into account the respective institutional setting.
    Keywords: wage curve, local labour markets, quantile regressions
    JEL: J3 J6 R1
    Date: 2007–03
  13. By: Narula, Rajneesh (University of Reading Business School); Santangelo, Grazia D. (Facoltà di Scienze Politiche, Università degli Studi di Catania)
    Abstract: This paper shows empirically that in an intra-industry oligopolistic scenario the location of a firm's innovative activities plays an important role in determining its partner selection in R&D alliances. Such a role is mainly attributed to a strategic use of R&D alliances as a means to limit knowledge flows and protect competences, rather than to promote knowledge flows. By drawing on a novel dataset matching alliances and patent data for the European ICT industry, the econometric analysis shows that partners' prior co-location (at both national and sub-national regional level), previous ties and technological overlap matter in the choice of partner, while common nationality has a negative impact on alliance formation.
    Keywords: alliances, strategy, efficiency, R&D location
    JEL: D23 F23 O18 O32 R3
    Date: 2008
  14. By: Ahmed El-Geneidy; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Accessibility is the potential of opportunities for interaction in an urban context. The widely used accessibility measure consists of the number of opportunities that can be reached within a region or a period of time multiplied by a cost or impedance function for reaching these opportunities. This measure assumes that all people living within a region will follow a certain impedance function and will equally evaluate the opportunities. This paper proposes a new accessibility measure, “place rank.” Knowing people’s origins and destinations is a key to develop this new measure. Both impedance and value of opportunities are embedded in the dataset that includes origins and estination of each person utilizing the studied region. Level of accessibility in a zone is determined based on the number of people coming to this zone to reach an opportunity. Each person contributes to the accessibility level in the zone where he is commuting to with a different power. The power of the contribution of this person depends on the attractiveness of his zone of his origin. In this paper we discuss the place rank measure and compare it to the traditional gravity based measure. Since this measure is based on people’s actual choices of origins and destinations it is more comprehensive and accurate than previous accessibility measures in terms of impedances and opportunity calculations.
    Keywords: Accessibility, Mobility, Gravity Based, Cumulative Opportunity, Land Use, Place Rank
    JEL: R40 R11 R14
    Date: 2007
  15. By: Claude Grasland (GC - Géographie-cités - [CNRS : UMR8504] - [Université Panthéon-Sorbonne - Paris I][Université Denis Diderot - Paris VII] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Pierre Beckouche (LADYSS - Laboratoire dynamiques sociales et recomposition des espaces - [CNRS : UMR7533] - [Université Panthéon-Sorbonne - Paris I][Université Paris VIII Vincennes-Saint Denis][Université de Paris X - Nanterre])
    Abstract: 1. Introduction. <br />1.1. How the vision of the World influence the future of the Europe and territory<br />1.2. How the European Concepts of territorial planning help us to understand the actual situation of Europe in the World<br />1.3. Modernity and accuracy of an old notion : the region<br />2. The three prominent visions of the place of Europe in the World and their impact on European planning<br />2.1. The “continent" vision <br />2.2. The “centre-periphery” vision<br />2.3. The “archipelago” vision<br />3. The strategic vision of Europe as the main part of a Global Region<br />3.1. The need for new geographical categories<br />3.2. The rise of “North-South Regions”<br />3.3. North-South regionalism and European economic stakes<br />3.4. Political stakes<br />3.5. Territorial stakes<br />3.6. Territorial impacts<br />4. Conclusion about policies: the role of territories in the Euromediterranean economic development implies coordination between DG Relex and DG Regio<br />4.1. Four principles of common action <br />4.2. The need for crossing DG Relex and DG Regio<br />4.3 Fifty years ago ...
    Keywords: Europe, neighbourhood policy, north-south, prospective, spatial planning, Mediterranean
    Date: 2007–03–28
  16. By: Lei Zhang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: A major strategy of federal ITS initiatives and state departments of transportation is to provide traveler information to motorists through various means, including variable message signs, the internet, telephone services like 511, in-vehicle guidance systems, and TV and radio reports. This is relatively uncontroversial, but its effectiveness is unknown. Drivers receive value from traveler information in several ways, including the ability to save time, but perhaps more importantly, other personal, social, safety, or psychological impacts from certainty. This information can be economically valued. The benefits of reduction in driver uncertainty when information is provided at the beginning of the trip by various means is the main variable we aim to measure in this research, in which we assess user preferences for routes as a function of the presence and accuracy of information, while controlling for other trip and route attributes, such as trip purpose, travel time, distance, number of stops, delay, esthetics, level of commercial development, and individual characteristics. Data is collected in a field experiment in which more than 100 drivers, given real-time travel time information with varying degrees of accuracy, drove four of five alternative routes between a pre-selected OD pair in the Twin Cities metro area. Ordinary regression, multinomial, and rank-ordered logit models produce estimates of the value of information with some variation. In general, results show that travelers are willing to pay up to $1 per trip for pre-trip travel time information. The value of information is higher for commute and event trips and when congestion on the usual route is heavier. The accuracy of the traveler information is also a crucial factor. In fact, there do not seem be incentives for travelers to use traveler information at all unless they perceive it to be accurate. Finally, most travelers (70%) prefer that such information should be provided for free by the public sector, while some (19%) believe that it is better for the private sector to provide such service at a charge. Over 35% of subjects are willing to pay for OD-customized pre-trip travel time information.
    Keywords: Value of Information, Advanced Traveler Information System (ATIS), Real-Time Traffic Operations, Travel Behavior, Spatial behavior, Wayfinding Behavior, Route Choice.
    JEL: R41 R48 D10 D83 D85 C93 C91
    Date: 2006
  17. By: Alan Manning
    Abstract: This paper shows, using data from both the US and the UK, that average plant size is larger indenser markets. However, many popular theories of agglomeration - spillovers, costadvantages and improved match quality - predict that establishments should be smaller incities. The paper proposes a theory based on monopsony in labour markets that can explainthe stylized fact - that firms in all labour markets have some market power but that they haveless market power in cities. It also presents evidence that the labour supply curve toindividual firms is more elastic in larger markets.
    Keywords: Agglomeration, Labour Markets, Monopsony
    JEL: J21 J42 R23
    Date: 2007–01
  18. By: Dean Baker
    Abstract: This report describes the key economic indicators that indicate the state of the housing market. It gives up-to-date analysis of the available data sources, such as home sales, mortgage applications, vacancy rates and construction.
    Date: 2006–06
  19. By: Michael Corbett; Feng Xie; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper describes and explains the growth of the Minneapolis Skyway network. Accessibility is used as a major factor in understanding that growth (i.e. does the network connect to the location(s) with the highest accessibility, followed by the second highest, and so on). First, employment opportunities are used as the measure of activity and are based off of the square footage of buildings and/or ITE trip generation rates. Using information about the buildings located downtown for each year since the first skyway was built, the accessibilities of each of the connected and adjacent unconnected blocks were calculated for every time period the skyway system expanded. The purpose is to determine how often the expansion connected the block with the highest accessibility. The results show that though important, accessibility was rarely maximized, except in the early stages of development. A connect-choice logit model relating the probability of joining the network (in a given year) to accessibility and network size was employed. The results show accessibility does remain an important factor in predicting which links are connected. Physical difficulties in making connections may have played a role, as well as the potential for adverse economic impacts.
    Keywords: Network growth, Transport economics, Incremental connection, Skyways, Minneapolis
    JEL: R41 R42 R48 O33
    Date: 2007
  20. By: Andrew Coleman (Reserve Bank of New Zealand)
    Abstract: This article solves a high frequency model of price arbitrage incorporating storage and trade when the amount of trade is limited by transport capacity constraints. In equilibrium there is considerable variation in transport costs, because transport costs rise when the demand to ship goods exceeds the capacity limit. This variation is necessary to attract shipping capacity into the industry. In turn, prices in different locations differ by a time varying amount. Thus while the law of one price holds, it holds because of endogenous variation in transport costs.
    JEL: F15 N71 L92
    Date: 2007–03
  21. By: Mark Doms; John Krainer
    Abstract: Over the past several decades, innovations in the mortgage market have benefited consumers through a variety of channels. Innovations include the lowering of down payment requirements, increased flexibility in repayment schedules, and the reduction of costs associated with extracting equity from homes. To ascertain the ways in which these innovations would alter spending on housing, we develop a model of the home buying and mortgage choice decision that produces a number of testable implications. For instance, the lowering of down payment requirements should result in homeownership rates increasing, especially for households that are traditionally cash constrained. In fact, we show that between 1994 and 2004, the homeownership rate for young and low-income households rose sharply. Increased flexibility of repayment schedules should assist households in smoothing their housing consumption choices. Empirically, we document that households have increased the share of their income spent on housing by a substantial margin. The result is robust to the changing composition of households and also to regional location. Households that have been traditionally cash constrained have increased their housing expenditures but tend to have low mortgage rates, suggesting that these households may be financing their increased housing consumption with alternative, flexible mortgage products.
    Keywords: Mortgages ; Housing - Finance
    Date: 2007
  22. By: Robert M. Hunt
    Abstract: This paper generalizes and extends the labor market search and matching model of Berliant, Reed, and Wang (2006). In this model, the density of cities is determined endogenously, but the matching process becomes more efficient as density increases. As a result, workers become more selective in their matches, and this raises average productivity (the intensive margin). Despite being more selective, the search process is more rapid so that workers spend more time in productive matches (the extensive margin). The effect of an exogenous increase in land area on productivity depends on the sensitivity of the matching function and congestion costs to changes in density.
    Date: 2007
  23. By: Lei Zhang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: A number of factors influence the efficiency, productivity, and welfare of a transportation network. Travel demand, user costs, and facility supply costs equilibrate on various time scales under a set of pricing (taxes and tolls), investment and ownership policies. Two types of equilibria exist in a transportation network, short-run traffic equilibrium and long-run supply-demand equilibrium. The phenomenon of traffic equilibrium is explored with a fixed transportation network where the capacity of links is given. Even though investment- and ownership-related policies are not of major concern for studies on traffic equilibrium, it is still a complex problem due to network congestion effects, variations of pricing rules, and multidimensionality of user choices. In order to understand the long-run supply-demand equilibrium in a transportation network, one has to consider all above-mentioned factors in a coherent analytical framework. We refer to this research problem as the transportation network growth problem, because the network evolves and link capacity is not fixed in the long run. Most previous studies have considered network pricing, investment, and ownership structures separately, which are reviewed. The paper considers choices of prices, capacity, and ownership simultaneously on small parallel, serial, and parallel-serial networks, and develops an analytical network model. We discuss properties of long-run network equilibria with different network layouts and ownership regimes, and the implications on network efficiency.
    Keywords: Network economics, Modeling network dynamics, Road pricing, Transportation financing, Privatization.
    JEL: R41 R42 R48 D21 D24 D81 D83 C72
    Date: 2006
  24. By: Valerio Gatta (Facoltà di Scienze Statistiche ed Economiche, Università di Roma "La Sapienza"); Edoardo Marcucci (Department of Economics, Università di Urbino "Carlo Bo")
    Abstract: Public authorities and transport operators are both involved in the provision of public transport services. There is a contrast between the social goals of the former and the private ones of the latter. Regulation plays an important role especially failing competition. Service contracts are the natural method to set bilateral After a brief description of the most important regulatory procedures, we focus our attention on the quality framework in service contracts. In recent years the inclusion of quality requirements in contracts is becoming common practice, especially when adopting price cap regulation. This paper suggests a criterion for service quality definition, measurement and integration in contracts for the production of socially valuable transport services. Using stated preferences methods and choice-based conjoint analysis to analyse customer preferences we estimate the passengers’ evaluation of different service features and calculate a service quality index. A case study demonstrates the procedure to follow for measuring service quality in local public transport.
    Keywords: service quality, stated preferences, service contract.
    JEL: R40 R41
    Date: 2007–03
  25. By: David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper first briefly reviews the history of private roads. Then the functional and economic classification of roadways is presented. Three different classes of roads (local, linking, and limited access) need to be treated in very different ways. The ideology of private roads is then presented. The political factors constraining this ideology from taking root are then presented. Distributional effects associated with privatization are described, and means for using the proceeds from the sale of roads to compensate losers are presented. Prospects for the future of private roads are discussed in the conclusions.
    Keywords: Network economics, Modeling network dynamics, Road pricing, Transportation financing, Privatization.
    JEL: R41 R42 R48 D21 D24 D81 D83 C72
    Date: 2006
  26. By: Stephen Machin (University College London, CEE, CEP, London School of Economics and IZA); Sandra McNally (CEE, CEP, London School of Economics and IZA); Costas Meghir (University College London, CEE, Institute for Fiscal Studies and IZA)
    Abstract: Despite being central to government education policy in many countries, there remains considerable debate about whether resources matter for pupil outcomes. In this paper we look at this question by considering an English education policy initiative - Excellence in Cities - which has been a flagship policy aimed at raising standards in inner-city secondary schools. We report results showing a positive impact of the extra resources on school attendance and performance in Mathematics (though not for English) but, interestingly, there is a marked heterogeneity in the effectiveness of the policy. Its greatest impact has been in more disadvantaged schools and on the performance of middle and high ability students within these schools. A back-of-envelope cost-benefit calculation suggests the policy to be cost-effective. We conclude that additional resources can matter for children in the poorest secondary schools, particularly when building on a solid educational or ability background. However, small changes in resources have little or no effect on the ‘hard to reach’ children who have not achieved a sufficiently strong prior level.
    Keywords: education, resources, evaluation, disadvantage
    JEL: I21 H52 C52
    Date: 2007–03
  27. By: Lei Zhang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper seeks to understand the economic impact of centralized and decentralized ownership structures and their corresponding pricing and investment strategies on transportation network performance and social welfare for travelers. In a decentralized network economic system, roads are owned by many agencies or companies that are responsible for pricing and investment strategies. The motivation of this study is two-fold. First, the question of which ownership structure, or industrial organization, is optimal for transportation networks has yet to be resolved. Despite several books devoted to this research issue, quantitative methods that translate ownership-related policy variables into short- and long-run network performance are lacking. Second, the U.S. and many other countries have recently seen a slowly but steadily increasing popularity of road pricing as an alternative to traditional fuel taxes. Not only is the private sector encouraged to finance new roads, this transition in revenue mechanism also makes it possible for lower-level government agencies and smaller jurisdictions to participate in network pricing and investment practice. The issue of optimal ownership is no longer a purely theoretical debate, but bears practical importance. This research adopts an agent-based simulator of network dynamics to explore the implications of centralized and decentralized ownership on mobility and social welfare, as well as potential financial issues and regulatory needs. Components of the simulator: the travel demand model, cost functions, and key variables of pricing and investment strategies, are empirically estimated and validated. Results suggest that road network is a market with imperfect competition. While there is a significant performance lag between the optimal strategy and the current network financing practice in the U.S. (characterized by centralized control, fuel taxes, and budget-balancing investment), a completely decentralized network suffers from issues such as higher-than-optimal tolls and over-investment. For the decentralized ownership structure, appropriate regulation on pricing and investment practices is necessary. Further analysis based on simulation comparisons suggests that with appropriate price regulation, a decentralized road economy consisting of profit-seeking road owners could outperform the existing centralized control, achieve net social benefits close to the theoretical optimum, and distribute a high percentage of welfare gains to travelers. Decentralized control is especially valuable in rapidly changing environments because it promptly responds to travel demand. These results seem to favor the idea of privatizing or decentralizing road ownership on congested networks. Further tests on real-world transportation networks are necessary and should make an interesting future study.
    Keywords: Network economics, Modeling network dynamics, Road pricing, Transportation financing, Privatization.
    JEL: R41 R42 R48 D21 D24 D81 D83 C72
    Date: 2006
  28. By: Rania Wasfi; Ahmed El-Geneidy; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The US Department of Health and Human Services Administration on Development Disabilities estimates the number of people diagnosed with a developmental disability in the United States as 4.5 million persons, which would translate to about 17,000 residents of Hennepin County, Minnesota. This research paper examines the transportation needs of adults with developmental disabilities either residing or working in Hennepin County through a survey of their existing travel behavior and their unmet transportation needs. The survey had both demographic and attitude questions as well as a travel diary to record both actual and desired but untaken trips. In this paper we report and discuss the main findings of the survey. It was clear from observing the returned sample that almost the entire surveyed population does not live independently. More than half of the surveyed population worked every day, while recreation occurred at least once a week for about two-thirds of the population, and more than half undertook social trips weekly. About 30% reported being unable to make trips they want to make and 46% unable to make trips they need to make. Public transit poses difficulties for this population both physically and intellectually. There were also specific complaints about the lack of transit service in addition to concerns regarding paratransit services. Community service providers received praise.
    Keywords: Developmental disability, disadvantaged population, disability, transportation needs, Transportation Disadvantaged, Equity, Distribution, Minnesota
    JEL: R40 D30
    Date: 2007

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