nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒09‒05
eight papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Suburbanization and homeownership rates By Wolfgang R. Köhler
  2. Whither a flat ladscape? Regional differences in Entrepreneurship in the Netherlands By Niels Bosma; Kashifa Suddle; Veronique Schutjens
  3. Analyzing spatial autoregressive models in Stata By David Drukker
  4. City business cycles and crime By Thomas A. Garrett; Lesli S. Ott
  5. The Entrepreneurial Advantage of World Cities By Niels Bosma; R. Sternberg; Zoltan Acs
  6. Community-based Targeting and Initial Local Conditions: Evidence from Indonesia’s IDT Program By Chikako Yamauchi
  7. Does distance matter in banking? By Kenneth P. Brevoort; John D. Wolken
  8. Migration, Relationship Capital and International Travel: Theory and Evidence* By Philip McCann; Jacques Poot; Lynda Sanderson

  1. By: Wolfgang R. Köhler
    Abstract: Homeownership rates in suburbs are much higher than in central cities. This paper shows that the systematic difference between homeownership rates causes suburbanization. We consider an economy with several regions: the central city, where most households rent, and the suburbs, where most own. Households migrate and vote on local policies. Renters do not consider the effect of policies on house prices. Therefore, renter dominated central cities provide public goods inefficiently and have high taxes and high debt. Since house prices are lower in the central city, few houses are built and households migrate to the suburbs as houses depreciate. The durability of houses has two effects: it provides owners with incentives to vote for efficient policies and it makes inefficient policies sustainable.
    Keywords: Suburbanization, homeownership, migration, local public debt, local public goods, house prices
    JEL: H41 H73
    Date: 2008–07
  2. By: Niels Bosma; Kashifa Suddle; Veronique Schutjens
    Abstract: In this paper we contribute to the set of studies that focus on explanations of regional differences in entrepreneurship by taking into account the entrepreneurial processes at the individual level. We investigate entrepreneurial attitudes and entrepreneurial activity in three contrasting labour market regions in the Netherlands in two stages. In the first stage we extensively explore regional differences in entrepreneurial activity by looking at several types of entrepreneurs and phases in the entrepreneurial process. In the second stage we investigate to what extent the observed regional differences in perceptions to entrepreneurship and involvement in entrepreneurial activity change when controlling for determinants at the individual level. We find that the observed regional differences in levels of early-stage entrepreneurial activity can to large extent be explained by these individual characteristics. Furthermore we find the regional pattern of overall early-stage entrepreneurial activity to be different from the pattern of ambitious early-stage entrepreneurial activity.
    Date: 2008–06–09
  3. By: David Drukker (StataCorp)
    Abstract: In this talk, I will provide a quick introduction to estimators for the parameters of spatial-autoregressive models and a quick introduction to a suite of user-written Stata commands for managing spatial data and parameter estimation.
    Date: 2008–07–29
  4. By: Thomas A. Garrett; Lesli S. Ott
    Abstract: We explore the influence of city-level business cycle fluctuations on crime in 20 large cities in the United States. Our monthly time series analysis considers seven crimes over an approximately 20-year period: murder, rape, assault, robbery, burglary, larceny, and motor vehicle theft. Short-run changes in economic conditions, as measured by changes in unemployment and wages, are found to have little effect on city crime across many cities, but property crimes were more likely to be influenced by changes in economic conditions than were more violent crimes. Contrary to the deterrence hypothesis, we find strong evidence that in many cities more arrests follow from an increase in crime rather than arrests leading to a decrease in crime. This is true especially for the more visible crimes of robbery and vehicle theft and suggests that city officials desire to remove these crimes from the public's view.
    Keywords: Business cycles ; Cities and towns ; Crime
    Date: 2008
  5. By: Niels Bosma; R. Sternberg; Zoltan Acs
    Abstract: De vergelijkende studie The 'Entrepreneurial Advantage of World Cities'  is de eerste in zijn soort en gebaseerd op de gecombineerde data van de Global Entrepreneurship Monitor (GEM) tussen 2001 en 2006. De verscheidene indices hebben betrekking op de periode 2001-2006. Hierbij gaat het om zowel het actief bezig zijn met het oprichten van een nieuwe eigen onderneming ('nascent' ondernemers), als het runnen van een eigen onderneming die minder dan 42 maanden oud is (ondernemers van nieuwe bedrijven).
    Date: 2008–08–06
  6. By: Chikako Yamauchi
    Abstract: Community-based selection of social program recipients has the potential to benefit from local knowledge about individuals in need. This informational advantage however might be offset by local elite capture and administrative incompetency. Using Indonesia's anti-poverty program, this paper investigates which pre-program conditions are associated with community-based targeting outcomes. Results show that wealthier and more unequal villages constantly target better. This suggests that, though there is much concern about local capture in communities with large inequality, the ease of identifying the poor could overwhelm the possibly larger political influence of local elites. Also, villages headed by young, educated persons initially exhibit better targeting, but lose this advantage over time, as the monitoring of loan disbursement becomes more difficult for village heads. I explore Indonesia's political context, which provides insight into these findings.
    Keywords: targeting, community, inequality, IDT, Indonesia
    JEL: D73 H11 H75 O17
    Date: 2008–08
  7. By: Kenneth P. Brevoort; John D. Wolken
    Abstract: Deregulation and technological change have reduced the transactions costs that led to the dominance of local financial service suppliers, leading some to question if distance still matters in banking. This debate has been particularly acute in small business banking, where transactions costs are believed to be particularly high. This paper provides a detailed review of the literature on distance in banking markets, highlighting the reasons why geographic proximity is believed to be important and examining the changes that may have affected its importance. Relying on new data from the 2003 Survey of Small Business Finances, we examine how distances between small firms and their financial service suppliers changed over the 1993-2003 decade. Our analysis reveals that distances increased, though the extent varied substantially across financial services and supplier types. Generally, increases were observed in the early half of the decade, while distances declined in the following five years. There was also a trend towards less in person interaction between small firms and their suppliers of financial services. Nevertheless, most relationships remained local, with a median distance of 5 miles in 2003. The results suggest that distance, while perhaps not as tyrannical as in the past, remains an important factor in banking.
    Date: 2008
  8. By: Philip McCann (University of Waikato and University of Reading); Jacques Poot (Population Studies Centre, University of Waikato); Lynda Sanderson (Reserve Bank of New Zealand)
    Abstract: In this paper we consider how international migration is related to the frequency and duration of trips to the home country. For many migrants, international migration triggers a series of trips to visit the home country that allow for a replenishment of the depleted relationship capital with family and friends back home, but these trips incur travel costs and foregone earnings. Given plausible assumptions about the depreciation and replenishment of home country relationship capital, a steady-state level of average maintained relationship capital implies that the optimized travel frequency is inversely related to the distance and the transportation costs, and positively related to the psychological costs of separation. The total time spent at home is increasing in the trip frequency, but with an elasticity that is decreasing in cultural proximity. Empirical evidence in support of these theoretical predictions is found in a unique longitudinal sample of international travel of 13,674 New Zealand citizens and 6,882 UK citizens who migrated to Australia between 1 August 1999 and 31 July 2000.
    Keywords: International Migration; Trip Frequency, Relationship Capital
    JEL: F22 J61 R23 Z13
    Date: 2008–08

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