nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒10‒06
eleven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Sources of growth and convergence among Italian regions 1980-2004 By Daniele, Vittorio
  2. Initial and Subsequent Location Choices of Immigrants to the Netherlands By Aslan Zorlu; Clara H. Mulder
  3. Product differentiation in a linear city and wage bargaining By Thomas Grandner
  4. Local Distributional Effects of Government Cash Transfers in Chile By Claudio A. Agostini; Philip Brown;
  5. New Housing Supply and the Dilution of Social Capital By Hilber, Christian A. L.
  6. Vertical Industry Relations, Spillovers and Productivity: Evidence from Chilean Plants By Ricardo A. López; Jens Suedekum
  7. Behavioral foundation and agent-based simulation of regional innovation dynamics By Frank Beckenbach; Ramòn Briegel; Maria Daskalakis
  8. The Employment and Earnings of Migrants in Great Britain By Martyn Andrews; Ken Clark; William Whittaker
  9. Explaining the Black-White Homeownership Gap: The Role of Own Wealth, Parental Externalities and Locational Preferences By Hilber, Christian A. L.; Liu, Yingchun
  10. Understanding Recent Trends in House Prices and Home Ownership By Robert J. Shiller
  11. Mortgage contracts and housing tenure decisions By Matthew Chambers; Carlos Garriga; Don Schlagenhauf

  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: Aslan Zorlu (University of Amsterdam and IZA); Clara H. Mulder (University of Amsterdam)
    Abstract: The initial settlement behaviour and the subsequent mobility of immigrants who arrived in the Netherlands in 1999 are examined using rich administrative individual data. The study considers the settlement patterns of immigrants from various countries of origin who entered the country as labour, family or asylum migrants. The evidence suggests distinct settlement trajectories for asylum and other non-western immigrants. The presence of co-ethnics and members of other ethnic minorities, but also socioeconomic neighbourhood characteristics, appear to play an important role in determining location choice. Differences in the settlement and spatial mobility patterns of immigrants with various degrees of distance from the native Dutch in terms of human and financial capital, proficiency in the relevant language(s), and religion confirm the main predictions of spatial assimilation theory.
    Keywords: location choice, immigrants and ethnic residential segregation
    JEL: F22 J15 R23
    Date: 2007–09
  3. By: Thomas Grandner (Department of Economics, Vienna University of Economics & B.A.)
    Abstract: Economides (1986) has shown that within a linear city an equilibrium exists in a two-stage location-price game when the curvature of the transportation cost function is sufficiently high. One important point is that not all of these equilibria are at maximal differentiation. In this paper we include an additional stage with decentralized wage bargaining. This intensifies price competition resulting in locations that are nearer to the extremes of the city. The magnitude of this effect depends on the bargaining power of the unions.
    JEL: L13 J51
    Date: 2007–09
  4. By: Claudio A. Agostini; Philip Brown;
    Abstract: Despite rapid economic growth and poverty reduction, inequality in Chile has remained high and remarkably constant over the last 20 years, prompting academic and public interest in the subject. Due to data limitations, however, research on inequality in Chile has concentrated on the national and regional levels. The impact of cash subsidies to poor households on local inequality is thus not well understood. Using povertymapping methods to asses this impact, we find heterogeneity in the effectiveness of regional and municipal governments in reducing inequality via poverty-reduction transfers, suggesting that alternative targeting regimes may complement current practice in aiding the poor.
    Keywords: Inequality; Poverty Mapping; Subsidies; Targeting; Chile
    JEL: H53 I38 O54
    Date: 2007–05–01
  5. By: Hilber, Christian A. L.
    Abstract: This paper examines the role of local housing market conditions for social capital accumulation and neighborhood club good provision. A model of individual investment decisions predicts that in a setting with high property transaction costs (i) homeowners are more likely to invest in social capital than renters and (ii) the positive link between homeownership and social capital is stronger in more built-up neighborhoods with inelastic supply of new housing. In these neighborhoods homeowners are largely protected from inflows of newcomers that would dilute the net benefit from social capital in the longer run. Empirical evidence from the Social Capital Community Benchmark Survey confirms the model predictions. Instrumental variable estimates suggest that the effects are causal.
    Keywords: House price capitalization; social capital; homeownership; land and housing supply; neighborhood club goods.
    JEL: R21 R31 D71
    Date: 2007–08–02
  6. By: Ricardo A. López (Indiana University, Bloomington); Jens Suedekum (University of Konstanz and IZA)
    Abstract: We use disaggregated data on Chilean plants, and the Chilean input-output table to examine the impact of agglomeration spillovers on total factor productivity (TFP). In common with previous studies, we find evidence of intra-industry spillovers, but no evidence of crossindustry spillovers in general. This picture changes, however, when we take vertical industry relations into account. We find important productivity spillover effects from plants in upstream industries. Interestingly, a similar effect cannot be found from plants in downstream industries. The number of plants in these sectors has no effect on firm level TFP, just as the number of plants in other industries that are neither important upstream suppliers nor downstream customers also has no effect. Agglomeration effects are stronger for small than for large plants.
    Keywords: vertical linkages, agglomeration, productivity, Chile
    JEL: R11 R15 O18 O54
    Date: 2007–09
  7. By: Frank Beckenbach (Department of Economics, University of Kassel); Ramòn Briegel (Department of Economics, University of Kassel); Maria Daskalakis (Department of Economics, University of Kassel)
    Abstract: Starting from the observation that there exists a broad variety for the level as well as for the connectedness of innovation activities in a regional context, we try to figure out a behavioral approach for explaining such a variety. This approach is composed of (i)conceptual and theoretical reflections about the micro-foundation of innovation activities, (ii)an agent-based simulation model for these activities and (iii)empirical regional survey studies as a measuring rod for such an approach. Such a composition can fill the explanatory gap between external conditions for regional innovation activities on one side and the observable innovation outcome by specifying plausible internal conditions for novelty creating activities on the other side. Furthermore the emergence of regional innovation networks can be explained.
    Keywords: Regional Innovation Networks, Multi-Agent-System, Behavioral Economics, Evolutionary Economics
    Date: 2007–08
  8. By: Martyn Andrews (University of Manchester); Ken Clark (University of Manchester and IZA); William Whittaker (University of Manchester)
    Abstract: Using nationally representative, longitudinal data from the first 14 waves of the British Household Panel Survey we examine the labour market returns to inter-regional migration in Great Britain. Controlling for endogeneity, heterogeneity and self-selection, we find substantial long-run wage premiums associated with migration for both males and females who move for job-related reasons. There is, however, no evidence that moving across regions increases the probability of employment for males and females; in fact, some female movers experience a long-run employment penalty.
    Keywords: migration, wages, employment, sample selection
    JEL: C33 J31 J61 J64 R23
    Date: 2007–09
  9. By: Hilber, Christian A. L.; Liu, Yingchun
    Abstract: African Americans in the United States are considerably less likely to own their homes compared to Whites. Differences in household income and other socio-economic and demographic characteristics can only partially explain this gap and previous studies suggest that the ‘unexplained’ gap has increased over time. In this paper we use the Panel Study of Income Dynamics (PSID) intergenerational data, which provides information on household wealth, parental characteristics and macro-location choice. We find that African-American households are 6.5 percent less likely to own if only traditional explanatory variables are controlled for. However, the black-white homeownership gap disappears if differences in own and parental wealth and in the preferred macro-location type are accounted for.
    Keywords: Homeownership; housing tenure choice; location choice; wealth effects; intergenerational effects.
    JEL: R21 R31
    Date: 2007–08–10
  10. By: Robert J. Shiller (Cowles Foundation, Yale University)
    Abstract: This paper looks at a broad array of evidence concerning the recent boom in home prices, and considers what this means for future home prices and the economy. It does not appear possible to explain the boom in terms of fundamentals such as rents or construction costs. A psychological theory, that represents the boom as taking place because of a feedback mechanism or social epidemic that encourages a view of housing as an important investment opportunity, fits the evidence better. Three case studies of past booms are considered for comparison: the US housing boom of 1950, the US farmland boom of the 1970s, and the temporary interruption 2004-5 of the UK housing boom. The paper concludes that while it is possible that prices will continue to go up as is commonly expected, there is a high probability of steady and substantial real home price declines extending over years to come.
    Keywords: Home prices, Residential investment, Mortgage, Subprime crisis, Business cycle, Recession, Boom, Bubble, Monetary policy
    JEL: R21
    Date: 2007–09
  11. By: Matthew Chambers; Carlos Garriga; Don Schlagenhauf
    Abstract: In this paper, we analyze various mortgage contracts and their implications for housing tenure and investment decisions using a model with heterogeneous consumers and liquidity constraints. We find that different types of mortgage contracts influence these decisions through three dimensions: the downpayment constraint, the payment schedule, and the amortization schedule. Contracts with lower downpayment requirements allow younger and lower income households to enter the housing market earlier. Mortgage contracts with increasing payment schedules increase the participation of first-time buyers, but can generate lower homeownership later in the life cycle. We find that adjusting the amortization schedule of a contract can be important. Mortgage contracts which allow the quick accumulation of home equity increase homeownership across the entire life cycle.
    Date: 2007

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