nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2005‒01‒02
43 papers chosen by
Steve Ross
University of Connecticut

  1. Schools in Disadvantaged Areas: Recognising context and raising quality By Ruth Lupton
  2. Neighbourhood Management and the Future of Urban Areas By Anne Power
  3. Intergenerational and Life-Course Transmission of Social Exclusion in the 1970 British Cohort Study By Wendy Sigle-Rushton
  4. Ethnic Segretation in Englands Schools By Simon Burgess; Deborah Wilson
  5. Urban Social Exclusion in Transitional China By Bingqin Li
  6. Social Mobility, Life Chances, and the Early Years By Jane Waldfogel
  7. Public Education for the Minority,Private Education for the Majority By Gilat Levy
  8. Significance and Determination of Fees for Municipal Finance By Peter Friedrich; Anita Kaltschuetz; Chang Woon Nam
  9. Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management By Véronique Flambard; Pierre Lasserre; Pierre Mohnen
  10. Tax Evasion and Social Interactions By Bernard Fortin; Guy Lacroix; Marie-Claire Villeval
  11. Gatekeepers of knowledge within industrial districts:who they are, how they interact. By Andrea Morrison
  12. Equilibrium and the core in Alonso's discrete population model of land use By Berliant,M.; Raa,M.H. ten
  13. The Impact of the School Year on Student Performance and Earnings: Evidence from the German short school years By Jörn-Steffen Pischke
  14. Evolving Cityscapes: Agglomeration and Specialization with Mobile Labor and Vertical Linkages By Souleymane Coulibaly
  15. Parental Education and Childs Education: A Natural Experiment By Arnaud Chevalier
  16. Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain By Jo Blanden; Paul Gregg
  17. Communication Externalities in Cities By Sylvie Charlot; Gilles Duranton
  18. Spatial Disparities in Developing Countries: Cities, Regions and International Trade By Anthony J. Venables
  19. Economic Geography: Real or Hype? By Jun Koo; Somik V. Lall
  20. The Incidence of UK Housing Benefit: Evidence from the 1990s Reforms By Steve Gibbons; Alan Manning
  21. Buzz: Face-to-Face Contact and the Urban Economy By Michael Storper; Anthony J. Venables
  22. Revealed Preference for Car Tax Cuts: An Empirical Study of Perceived Fiscal Incidence By Samuel A. Baker; David H. Feldman
  23. Social Isolation and Inequality By Andrew Postlewaite; Dan Silverman
  24. The Production of Cognitive Achievement in Children: Home, School and Racial Test Score Gaps By Petra E. Todd; Kenneth I. Wolpin
  25. Bargaining over Residential Real Estate: Evidence from England (Third Version) By Antonio Merlo; François Ortalo-Magné
  26. Transport tax reform, commuting and endogenous values of time By De Borger Bruno; Van Dender Katrien
  27. Mode choice modelling. A literature review on the role of Quality of Service attributes and their monetary valuation in freight demand models By De Maeyer Jan; Pauwels Tom
  28. Improvement of infrastructure: Spatial effects and how to finance By Van De Vooren F. W. C. J.; Pauwels Tom
  29. Congestion and tax competition in a parallel network By De Borger B.; Proost S.; Van Dender K.
  30. Valuing Rail Access Using Transport Innovations By Steve Gibbons; Stephen Machin
  31. Taxation of car-ownership, car use and public transport: insight derived from a discrete choice numerical optimisation model By De Borger B.; Mayeres I.
  32. Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion By Emek Basker
  33. Race, Bureaucratic Discretion, and the Implementation of Welfare Reform By Peter R. Mueser; Lael R. Keiser; Carolyn J. Heinrich
  34. Relative Wage Variation and Industry Location By Andrew B. Bernard; Stephen Redding; Peter K. Schott; Helen Simpson
  35. Welfare and Work in the 1990s: Experiences in Six Cities By Peter R. Mueser; Christopher T. King
  36. An Evaluation of Missouri's A+ Schools' Program By Peter R. Mueser; Myoung Lee; Michael Podgursky
  37. Optimality of the Friedman Rule in Overlapping Generations Model with Spatial Separation By Joe Haslag; Antoine Martin
  38. Is There an Impact of Household Computer Ownership on Childrens Educational Attainment in Britain? By John Schmitt; Jonathan Wadsworth
  39. Zipfs Law for Cities: A Cross Country Investigation By Kwok Tong Soo
  40. Spatial Determinants of Productivity: Analysis for the Regions of Great Britain By Patricia Rice; Anthony J. Venables
  41. Crime and Benefit Sanctions By Stephen Machin; Olivier Marie
  42. Cities, Matching and the Productivity Gains of Agglomeration By Fredrik Andersson; Simon Burgess; Julia Lane
  43. Evaluating Urban Transport Improvements: Cost Benefit Analysis in the Presence of Agglomeration and Income Taxation By Anthony J. Venables

  1. By: Ruth Lupton
    Abstract: Both educational attainment and school quality are typically lower in disadvantaged areas than others and much recent policy attention has been focused on each. This paper looks at the quality problem, exploring the relationships between disadvantaged contexts, what schools do, and the quality of schooling that they provide. The findings suggest that disadvantaged contexts impact on the organisation and processes of schools and that these effects differ significantly from one area to another, in ways that are not reflected by the usual indicators of disadvantage. School managers respond by adapting organisational design and processes. They are, however, constrained in these responses by the limited and short-life funding available, by the lack of evidence of good practice in specific contexts, and by lack of flexibility over major issues of organisation design and curriculum. Challenging contexts and the constraints on school responses together exert a downward pressure on quality. The paper argues that because school processes and quality are affected by context, school improvement in disadvantaged areas will not be achieved by generic measures, but only by policies tailored to disadvantaged areas and sensitive to differences between these areas. It suggests ways in which school improvement policies could be contextualised in order to raise quality in the poorest areas.
    Keywords: education, schools, poverty, area deprivation, neighbourhoods, quality, OFSTED, educational attainment, context
    JEL: I28 R00
    Date: 2004–01
  2. By: Anne Power
    Abstract: This paper is about low-income neighbourhoods, their organisation and management. It is not a study in deprivation, but is about problem-solving, about the reforms in delivery underway in Britain, about long run attempts to change neighbourhood conditions and environments, about the central role of local government and housing organisations in tackling ground-level problems. It addresses environmental and social problems within neighbourhoods as part of a wider understanding of social exclusion, sustainable development and the need for greater care of our urban communities. Although its perspective is shaped by British examples, many of the issues are relevant to other countries. Although its focus is on low-income urban neighbourhoods of predominantly rented housing, the ideas can be applied to any neighbourhood of whatever tenure, size or location. This revised up-dated edition takes account of the ODPM's Neighbourhood Renewal Unit, and the Neighbourhood Management and Neighbourhood Warden Schemes they are supporting.
    Keywords: social housing, neighbourhoods, area regeneration
    JEL: I30
    Date: 2004–01
  3. By: Wendy Sigle-Rushton
    Abstract: This study used data from the British Cohort Study to examine the relationships between childhood background experiences and a variety of indicators of adult well-being. Similar to an earlier study that analyses the National Child Development Study, we use a rich array of childhood background information and examine the associations for men and women separately. Similar to findings for the earlier cohort, there is evidence of inter-generational transmission of certain outcomes. Cohort members who lived in social housing as children are more likely to live in social housing as adults. Those with fathers who were manually employed are more likely to be manually employed themselves, and those whose families were poor are more likely to have low incomes. Academic test scores and parental housing tenure stand out as two of the strongest and most consistent correlates of adult disadvantage. For males, in particular, evidence of childhood aggression is also a consistent and fairly strong predictor of poor outcomes.
    Keywords: Disadvantage, social exclusion, longitudinal, inter-generational
    JEL: I30 J10
    Date: 2004–02
  4. By: Simon Burgess; Deborah Wilson
    Abstract: We document ethnic segregation in secondary schools in England in 2001 in order to contribute to the debate on the degree of ethnic group social integration. We use indices of dissimilarity and isolation to compare the patterns of segregation across nine ethnic groups. We find that levels of ethnic segregation in England¿s schools are high, with considerable variation both across LEAs and across different minority ethnic groups. By combining the two indices we are able to identify areas of particular concern as scoring highly on both. Finally, we show that ethnic segregation is only weakly related to income segregation.
    Keywords: England, ethnic segregation, segregation indices, schools, minority group differences, spatial income clustering
    JEL: J78 J15 J24
    Date: 2004–02
  5. By: Bingqin Li
    Abstract: This paper demonstrates that urban social exclusion in China does not only include restricted participation by the ¿underclass¿ in urban life, but also the deprivation of certain political, social and economic rights. In addition, the paper describes how the character of urban social exclusion has changed over time. The author also examines the social exclusion of rural workers living and working in urban areas. The paper concludes by arguing that urban social exclusion in China needs coordinated reforms that target the whole set of problems in the urban ¿underclass¿ lacking political rights, social protection and economic opportunities.
    Keywords: social exclusion, urban China, rural to urban migrants
    JEL: J43 R23 I30
    Date: 2004–03
  6. By: Jane Waldfogel
    Abstract: It is widely agreed that the early years are a particularly important time for efforts to increase social mobility, because a good deal of inequality is already apparent by the time children start school, and because children's development may be less amenable to change after they enter school. But it is less clear how much policies can reduce inequality in the early years, or what policies might be most effective, given the multiple influences on development in the early years and given the complex effects of policies. In this paper, I review what we know from research about what affects development in the early years and examine the current UK policy framework in light of that research. I then make recommendations for priorities for next steps to improve social mobility and other desired outcomes in the early years and thereafter. We know a good deal from research about what quality means, and about what types of experiences are best for children. The research points to some clear next steps in early years policy. These include: extending paid parental leave to 12 months; offering a more flexible package of supports to families with children under the age of 2 or 3; providing high-quality centre-based care to 2 year olds, starting with the most disadvantaged; and providing a more integrated system of high-quality care and education for 3 to 5 year olds.
    Keywords: Social mobility, parental leave, child care, early years
    JEL: D1 J1 J2
    Date: 2004–11
  7. By: Gilat Levy
    Abstract: Public provision of private goods such as education is usually viewed as a form of redistribution in kind. However, does it arise when income redistribution is feasible as well? In this paper I analyse a two-dimensional model of political decision making. Society has to choose both the tax rate and the allocation of the revenues between income redistribution and public provision of education. The political process that I analyse involves endogenous parties. Parties have a unique role in the model; I assume that parties increase the commitment ability of politicians and, as a result, increase the ability of different groups in society to compromise with one another. I find that public provision of education arises as an anti-majoritarian outcome; public provision of education arises only when those who benefit from education, e.g., voters with children, are a minority. The reason is that when education is consumed only by a minority, such redistribution in kind is 'cheap' relative to universal income redistribution, i.e., it can be effectively provided even with low taxes. Public provision of education arises then as a political compromise offered by the party of the poor who benefit from education and the rich voters who prefer low taxes. Thus, when those who benefit from education are a minority, it is publicly provided. When those who benefit from education are a majority, they have to buy private education, since there is no public provision of this good.
    Keywords: Education, redistribution, political parties.
    Date: 2004–03
  8. By: Peter Friedrich; Anita Kaltschuetz; Chang Woon Nam
    Abstract: The idea of fiscal decentralisation has become increasingly fashionable world-wide. But every country has unique features of the intergovernmental fiscal system. In general municipal expenditures are rapidly growing in European countries. On the other hand local tax increases are not easily enforceable at present, whereas the local fiscal autonomy is unlikely to be guaranteed as long as municipalities are strongly dependent on down-flow grants. In such a fiscal-stress situation an improvement of local fiscal capacity can be achieved from the increase of fees. Four European countries were chosen to survey the recent development of municipal finance: Britain, Germany, Poland and Switzerland. This paper firstly identifies and highlights the similarities and differences in municipal finance in an international context. Secondly it theoretically examines the possibility of enhancing fiscal autonomy of local governments through determining optimal fee level which leads to an increase of revenues from this revenue item.
    Keywords: fiscal decentralisation, local expenditures and taxes, fees, shared taxes, intergovernmental transfers, municipal borrowings, Poland, Britain, Switzerland, Germany
    JEL: H20 H40 H60 H70 H80
    Date: 2004
  9. By: Véronique Flambard; Pierre Lasserre; Pierre Mohnen
    Abstract: Using nonparametric estimation techniques adapted from Guerre et al. [2000], we infer cost distributions and informational rents, from 666 snow removal contracts offered for tender by the City of Montreal. Our results are compatible with standard received theory of competitive auctions: there is a positive correlation between costs and bids; rents increase with the variance of costs and decrease with the number of bidders. Bids and costs have decreased over the sample period, while informational rents remained stable. The City deserves credit for these results. It has succeeded in exploiting economies of scale while maintaining competition; and it was instrumental in promoting above Canadian average technological progress by its design of snow-removal territories. <P>Par des méthodes non paramétriques adaptées de Guerre et al. [2000], nous évaluons la distribution des coûts et les rentes informationnelles correspondant à 666 contrats de déneigement mis aux enchères par la Ville de Montréal. Les résultats sont conformes à la théorie des enchères concurrentielles : corrélation positive entre soumissions et coûts; rentes croissantes avec la variance des coûts et décroissantes avec le nombre d’enchérisseurs. Tant les soumissions que les coûts diminuent au cours de la période, tandis que les rentes sont stables. Ces résultats sont à mettre au crédit de la Ville : elle a su exploiter les économies d’échelle sans réduire la concurrence, et susciter un progrès technologique plus élevé que la moyenne nationale grâce au découpage des territoires.
    Keywords: procurement auction, nonparametric estimation, informational rents, task design, municipal contracts, enchères d’approvisionnement, estimation non paramétrique, rentes d’information, conception des tâches, contrats municipaux
    JEL: D44 H40
    Date: 2004–12–01
  10. By: Bernard Fortin; Guy Lacroix; Marie-Claire Villeval
    Abstract: The paper extends the standard tax evasion model by allowing for social interactions. In Manski’s (1993) nomenclature, our model takes into account social conformity effects (i.e., endogenous interactions), fairness effects (i.e., exogenous interactions) and sorting effects (i.e., correlated effects). Our model is tested using experimental data. Participants must decide how much income to report given their tax rate and audit probability, and given those faced by the other members of their group as well as their mean reported income. The estimation is based on a two-limit simultaneous tobit with fixed group effects. A unique social equilibrium exists when the model satisfies coherency conditions. In line with Brock and Durlauf (2001b), the intrinsic nonlinearity between individual and group responses is sufficient to identify the model without imposing any exclusion restrictions. Our results are consistent with fairness effects but reject social conformity and correlated effects. <P>Cet article généralise le modèle standard de fraude fiscale en permettant la présence d’interactions sociales. Suivant la nomenclature de Manski (1993), notre modèle tient compte des effets de conformité sociale (i.e. interactions endogènes), des effets d’équité (i.e. interactions exogènes) et des effets de sélection (i.e. effets corrélés). Le modèle est testé à l’aide de données expérimentales. Les participants doivent choisir le montant déclaré de leur revenu, étant donné leur taux d’impôt, leur probabilité d’être contrôlé par le fisc et étant donné ceux de leur groupe de référence ainsi que le revenu moyen déclaré par ce dernier. L’estimation se fonde sur un modèle tobit simultané à deux bornes avec des effets fixes de groupe. Un équilibre social unique existe lorsque le modèle satisfait des conditions de cohérence. Suivant en cela Brock et Durlauf (2001b), la non-linéarité intrinsèque entre les réponses individuelles et celles du groupe est suffisante pour identifier le modèle sans avoir à imposer des restrictions d’exclusion. Nos résultats sont cohérents avec la présence d’effets d’équité mais rejettent la conformité sociale ainsi que les effets corrélés.
    Keywords: social, interactions, tax evasion, simultaneous tobit, laboratory experiments., interactions sociales, fraude fiscale, tobit simultané, économie expérimentale
    JEL: H26 D63 C24 C92 Z13
    Date: 2004–12–01
  11. By: Andrea Morrison (University of Piemonte Orientale, Novara, Italy,)
    Abstract: A great amount of recent studies dealing with industrial clustering suggests that the innovative performance of industrial districts is strictly linked with their ability to absorb external knowledge. This paper aims at identifying and analysing the main actors involved in this process. We investigate to what extent leading firms located within a successful Italian furniture district behave as gatekeepers of knowledge. Empirical analysis has been carried out on a sample of technicians working within firms’ knowledge intensive units. Adopting social network techniques we are able to trace linkages between technicians and external sources of knowledge and to evaluate their relevance for innovative activities. Our findings suggest that leading firms absorb external knowledge and spread it only to their own network of clients and providers. According to our theoretical framework we argue that leading firms cannot be interpreted as knowledge gatekeepers.
    Keywords: Knowledge flows; Industrial districts; Leader firms; Social networks.
    JEL: O31 R0 Z13
    Date: 2004–11
  12. By: Berliant,M.; Raa,M.H. ten (Tilburg University, Center for Economic Research)
    Abstract: Conventional wisdom tells us that with no market failure and local non-satiation of preferences, the core is at least as large as the collection of competitive equilibrium allocations. We con.rm this for a standard model featuring land. Next we consider the public land ownership version of the model. If the role of land ownership and rent distribution is assumed by a government that ploughs back rent (at least in excess of its agricultural value) to its citizens, the equilibrium remains efficient, but no longer need be in the core.
    JEL: H42 R13 R52 D51 D61
    Date: 2004
  13. By: Jörn-Steffen Pischke
    Date: 2004–01
  14. By: Souleymane Coulibaly
    Abstract: In "new economic geography" models, spatial concentration typically arises either because of worker mobility or because of vertical linkages among firms. We examine a setup that combines those two approaches in conjunction with local congestion costs. We find that, as trade costs are lowered, the spatial concentration of total activity ("agglomeration") follows an inverse u-shaped evolution, while the degree of specialization of locations increases. The evolution of spatial configurations accommodated by this model is consistent with changes in sectorial employment patterns within US metropolitan areas over the 1850-1990 period.
    Keywords: agglomeration; specialization; congestion cost; input-output linkages
    JEL: F12 R12 R15
    Date: 2004–12
  15. By: Arnaud Chevalier
    Date: 2004–09
  16. By: Jo Blanden; Paul Gregg
    Date: 2004–09
  17. By: Sylvie Charlot; Gilles Duranton
    Abstract: To identify communication externalities in French cities, we exploit a unique survey recording workplacecommunication of individual workers. Our hypothesis is that in larger and/or more educated cities, workersshould communicate more. In turn, more communication should have a positive effect on individual wages. Byestimating both an earnings and a communication equation, we find evidence of communication externalities.Being in a larger and more educated city makes workers communicate more and in turn this has a positiveeffects on wages. However, only a small fraction of the overall effects of a more educated and larger city onwages percolates through this channel.
    Keywords: human capital, cities, communication externalities
    JEL: J31 R19 R29
    Date: 2003–11
  18. By: Anthony J. Venables
    Abstract: Spatial inequality in developing countries is due to the natural advantages of some regionsrelative to others and to the presence of agglomeration forces, leading to clustering ofactivity. This paper reviews and develops some simple models that capture these first andsecond nature economic geographies. The presence of increasing returns to scale in citiesleads to urban structures that are not optimally sized. This depresses the return to jobcreation, possibly retarding development. Looking at the wider regional structure,development can be associated with large shifts in the location of activity as industry goesfrom being inward looking to being export oriented.
    Keywords: cities, spatial disparities, urbanisation, developing countries
    JEL: R1 R12 O18
    Date: 2003–11
  19. By: Jun Koo; Somik V. Lall (World Bank)
    Abstract: Economic geography has become a mantra for many economists, geographers, and regional scientists. Previous studies have tested the importance of economic geography for production activities and found a significant association between them. Most of these studies, however, have not taken into account that economic geography influences location decisions at the firm level. Koo and Lall show a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Their analysis using microdata of Indian manufacturing firms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis. This paper—a product of the Infrastructure and Environment Team, Development Research Group—is part of a larger effort in the group to examine industry location decisions. The study was partly funded by the Bank’s Research Support Budget under the research project "Urbanization and the Quality of Life.”
    Keywords: Infrastructure; Industry
    Date: 2004–12–30
  20. By: Steve Gibbons; Alan Manning
    Abstract: Housing Benefit (HB) in the UK subsidizes the rent of tenants in both the private and publicsectors. Its share in total welfare benefits has risen markedly through time and there iswidespread dissatisfaction with it. But, reform has been very slow. One important issue isthe extent to which the incidence of HB is actually on the tenants. Exploiting two data setsfrom the mid-1990s when the subsidy regime changed for some tenants but not for others,this paper explores the incidence. We find that some of the incidence is on landlords thoughour two data sets differ in the extent to which this is true. We also find evidence in support ofa ¿matching¿ model of the rental market rather tha n a perfectly competitive one.
    Keywords: Housing Subsidies, Tax Incidence
    JEL: H22 R31
    Date: 2003–12
  21. By: Michael Storper; Anthony J. Venables
    Abstract: This paper argues that existing models of urban concentrations are incomplete unless grounded in the mostfundamental aspect of proximity; face-to-face contact. Face-to-face contact has four main features; it is anefficient communication technology; it can help solve incentive problems; it can facilitate socialization andlearning; and it provides psychological motivation. We discuss each of these features in turn, and developformal economic models of two of them. Face-to-face is particularly important in environments whereinformation is imperfect, rapidly changing, and not easily codified, key features of many creative activities.
    Keywords: Agglomeration, clustering, urban economics, face-to-face
    JEL: R1
    Date: 2003–12
  22. By: Samuel A. Baker (Department of Economics, College of William and Mary); David H. Feldman (Department of Economics, College of William and Mary)
    Abstract: Voting in an election in which elimination of the local car tax is the central issue shows how a highly visible universal tax cut can prevail in the electoral process even if benefits are skewed toward upper income households. These results are consistent with positive models of fiscal structure choice in which fiscal systems are the consequence of support maximizing politicians attempting to supply net benefits to easily identifiable interest groups without generating significant opposition from other groups.
    Keywords: Targeted universalism, Personal property taxes, Tax revolt
    JEL: H2
    Date: 2004–11–10
  23. By: Andrew Postlewaite (Department of Economics, University of Pennsylvania); Dan Silverman (Department of Economics, University of Michigan)
    Abstract: There is an increasing interest in the concept of social exclusion and the related concept of social isolation and their potential role in understanding inequality. We examine the degree to which voluntary separation from social activities during adolescence affects adult wages. It is well-known that participation in high school athletic programs leads to higher adult wages. We present empirical evidence that this premium is not primarily due to selection on predetermined characteristics valued in the labor market.
    Keywords: Decision making; Bayesian; Behavioral Economics
    JEL: D81
    Date: 2004–04–27
  24. By: Petra E. Todd (Department of Economics, University of Pennsylvania); Kenneth I. Wolpin (Department of Economics, University of Pennsylvania)
    Abstract: This paper studies the determinants of children’s scores on tests of cognitive achievement in math and reading. Using rich longitudinal data on test scores, home environments, and schools, we implement alternative specifications for the production function for achievement and test their assumptions. We do not find support for commonly used restrictive models that assume test scores depend only on contemporaneous inputs or that assume conditioning in a lagged score captures the effects of all past inputs. Instead, the results show that both contemporaneous and lagged inputs matter in the production of current achievement and that it is important to allow for unobserved child-specific endowment effects and endogeneity of inputs. Using a specification that incorporates these features, we analyze sources of test score gaps between black, white and Hispanic children. The estimated model captures key patterns in the data, such as the widening of minority-white test score gaps with age, which is most pronounced for black children.
    Keywords: Education production function, racial test score gaps, school quality, child development and cognitive achievement
    JEL: J24 J15 I20
    Date: 2004–04–26
  25. By: Antonio Merlo (Department of Economics, University of Pennsylvania); François Ortalo-Magné (School of Business, University of Wisconsin-Madison)
    Abstract: This paper presents a new data set of individual residential property transactions in England. The main novelty of the data is the record of all listing price changes and all offers made between initial listing and sale agreement. We establish a number of stylized facts pertaining to the sequence of events that occur within individual property transaction histories. We assess the limitations of existing theories in explaining the data and discuss alternative theoretical frameworks
    JEL: D4 R0 L0
    Date: 2002–02–01
  26. By: De Borger Bruno; Van Dender Katrien
    Abstract: We consider a model of urban transport with two trip purposes, commuting (assumed perfectly complementary to labour supply) and non-commuting, to analyse the effects of transport tax reform on the value of time and marginal external congestion costs. Higher commuting taxes plausibly reduce time values, but higher non-commuting transport prices will typically raise the value of time. The intuition for this latter finding is that the reduction in congestion that follows from the tax increase itself raises net wages per hour of work (inclusive of commuting time). Empirical illustrations with Belgian data show a potentially large effect of transport tax reform on time values. In quite a few of the tax reforms studied traffic levels are reduced, but the increase in time values implies that marginal external congestion costs actually increase.
    Date: 2003–03
  27. By: De Maeyer Jan; Pauwels Tom
    Date: 2003–05
  28. By: Van De Vooren F. W. C. J.; Pauwels Tom
    Date: 2003–07
  29. By: De Borger B.; Proost S.; Van Dender K.
    Abstract: The purpose of this paper is to study tax competition on a parallel road network when different governments have tolling authority on different links of the network. Reflecting many current situations in Europe, each link is used by both local and transit traffic, and transit has a choice of route. Each government maximises the surplus of local users plus total tax revenues in controlling local and transit transport. Three types of tolling systems are considered: (i) toll discrimination between local traffic and transit, (ii) uniform tolls on local and transit transport, (iii) local tolls only. The results suggest that the welfare effects of introducing transit tolls are large, but that differentiation of tolls between local and transit transport as compared to uniform tolls does not yield large welfare differences. Moreover, the welfare effects of coordination between countries are relatively small in comparison with the welfare gains of tolling transit. Numerical application of the model further illustrates the effects of different transit shares and explicity considers the role of asymmetries between countries. Higher transit shares strongly raise the Nash equilibrium transit toll and slightly decrease local tolls. With asymmetric demands, the welfare gains of introducing differentiated tolling rise strongly for the country with lower local demand.
    Date: 2004–03
  30. By: Steve Gibbons; Stephen Machin
    Abstract: In this paper we implement a powerful empirical approach than has not previously been appliedto rail transport evaluation to ascertain how much consumers value rail access. We study theeffects on house prices of a transport innovation that altered the distance to the nearest station forsome households, but left others unaffected. The transport innovation we study is theconstruction of new stations under improvements made to the London Underground andDocklands Light Railway in South East London in the late 1990s. Using the innovation toimplement a quasi-experimental approach studying house price changes in affected versusunaffected areas allows us to avoid the biases inherent in cross-sectional valuation work. Ourevidence on distance-station effects on prices suggests that rail access is significantly valued byhouseholds and that these valuations are sizable as compared to the valuations of other localamenities and services.
    Keywords: House Prices, Transport Innovations
    JEL: R4
    Date: 2004–01
  31. By: De Borger B.; Mayeres I.
    Abstract: In this paper we study the taxation of car ownership, car use and public transport in the presence of externalities within the framework of a discrete/continuous choice model. We first derive optimal taxes in a simplified setting, emphasizing the specific role of fixed car ownership taxes and the relevance of public transport demand by non-car owners for the optimal tax structure. A numerical optimisation model is then constructed to study welfare-optimal public transport fares and two-part tariffs on ownership and use of gasoline and diesel cars in Belgium. Results are as follows. First, the current differences in tax treatment between diesel and gasoline car ownership and car use cannot be justified on the basis of external cost and budgetary considerations. Efficient pricing requires substantial increases in the relative user tax on diesel cars as compared to gasoline cars; optimal fixed taxes are substantially below current levels and only marginally differ between car fuel types, implying a ver y large decrease in the tax on diesel cars. Second, large differences in fixed car taxes do result (i) if for political or technical reasons variable car taxes cannot be optimally adjusted, and (ii) if optimal taxes are implemented but the government uses kilometre taxes as the main variable tax instrument. Third, the results of a series of marginal tax reform exercises suggest that a shift form gasoline towards diesel taxation is welfare improving, both for fixed and variable taxes. Somewhat surprisingly, a shift from fixed towards variable taxes is not necessarily welfare-improving: it is for diesel, but not for gasoline cars.
    Date: 2004–10
  32. By: Emek Basker (Department of Economics, University of Missouri-Columbia)
    Abstract: This paper estimates the effect of Wal-Mart expansion on retail employment at the county level. Using an instrumental-variables approach to correct for both measurement error in entry dates and endogeneity of the timing of entry, I find that Wal-Mart entry increases retail employment by 100 jobs in the year of entry. Half of this gain disappears over the next five years as other retail establishments exit and contract, leaving a long-run statistically significant net gain of 50 jobs. Wholesale employment declines by approximately 20 jobs due to Wal-Mart’s vertical integration. No spillover effect is detected in retail sectors in which Wal-Mart does not compete directly, suggesting Wal-Mart does not create agglomeration economies in retail trade at the county level.
    Keywords: Wal-Mart
    JEL: J21 L11 L81
    Date: 2004–12–15
  33. By: Peter R. Mueser (Department of Economics, University of Missouri-Columbia); Lael R. Keiser (Department of Political Science, University of Missouri-Columbia); Carolyn J. Heinrich
    Abstract: This paper explores the impact of the race of individual clients and of the local racial context on the implementation of sanctions for recipients of Temporary Assistance for Needy Families (TANF) in a Midwestern state. We find that although nonwhites are sanctioned at lower rates than whites overall, nonwhites are sanctioned more compared to whites in each local area. This paradox occurs because nonwhites tend to live in areas with lower sanction rates. Consistent with the literature on race and policy, we find that sanction rates increase as the nonwhite population increases until a threshold is reached where nonwhites gain political power.
    JEL: I38 L32 J78
    Date: 2004–10–20
  34. By: Andrew B. Bernard; Stephen Redding; Peter K. Schott; Helen Simpson
    Abstract: Relative wages vary considerably across regions of the United Kingdom, with skill-abundantregions exhibiting lower skill premia than skill-scarce regions. This paper shows that thelocation of economic activity is correlated with the variation in relative wages. U.K. regionswith low skill premia produce different sets of manufacturing industries than regions withhigh skill premia. Relative wages are also linked to subsequent economic development: overtime, increases in the employment share of skill- intensive industries are greater in regionswith lower initial skill premia. Both results suggest firms adjust production across and withinregions in response to relative wage differences.
    Keywords: Deindustrialization, Relative Factor Prices, Diversification Cones
    JEL: F11 F14 C14
    Date: 2004–02
  35. By: Peter R. Mueser (Department of Economics, University of Missouri-Columbia); Christopher T. King
    Abstract: Our study examines the dynamic structure of welfare participation and the labor market involvement of recipients starting in the early 1990s and extending through 1999 in the core counties containing six major urban areas: Atlanta, Baltimore, Chicago, Fort Lauderdale, Houston, and Kansas City. By focusing on six major cities, we can examine the extent to which differences in state and local policy, administrative directives, and local labor market conditions contribute to observed trends.
    JEL: I38 I31 H43
    Date: 2004–10–18
  36. By: Peter R. Mueser; Myoung Lee; Michael Podgursky (Department of Economics, University of Missouri-Columbia)
    Abstract: The A+ Schools Program was initiated to offer financial incentives to students to attend Missouri’s public 2-year post-secondary schools. Under the program, the state government provides eligible students with college expenses, but only students in specially designated schools are eligible. It also promotes high school institutional change through the provision of grants to high schools. The program was initiated in 1997 and continues to be phased in gradually. The purpose of this research is to evaluate the effects of the A+ Program on Missouri high schools and post-secondary institutions. The use of administrative data provided by the Missouri state government assures greater reliability of the measures of program participation and postsecondary school attendance than obtained in studies using survey data. Program impacts are based on difference-in-differences estimators using the high school as the unit of analysis. Outcome measures include high school dropout rates, college enrollment rates, average test performance, and grades of high school seniors. The results suggest that high schools that initially have greater enrollments in 2-year colleges are more likely to participate in the program. Schools participating in the A+ program experience declines in dropout rates and A+ designation also increases the number of graduates who enroll in Missouri 2-year public colleges. This increase in enrollment in 2-year public colleges is the result of behavioral changes in two types of students: those who would not have gone to college at all and those who would have gone to other types of post-secondary institutions. Enrollment in 4-year public post-secondary institutions has decreased as a result of the program
    JEL: I21 J24 I28
    Date: 2004–10–18
  37. By: Joe Haslag (Department of Economics, University of Missouri-Columbia); Antoine Martin (Research Department, Federal Reserve Bank of Kansas City)
    Abstract: Recent papers suggest that when intermediation is analyzed seriously, the Friedman rule does not maximize social welfare in overlapping generations model in which money is valued because of spatial separation and limited communication. These papers emphasize a trade-off between productive efficiency and risk sharing. We show financial intermediation or a trade-off between productive efficiency and risk sharing are neither necessary nor sufficient for that result. We give conditions under which the Friedman rule maximizes social welfare and show any feasible allocation such that money grows faster than the Friedman rule is Pareto dominated by a feasible allocation with the Friedman rule. The key to the results is the ability to make intergenerational transfers.
    JEL: E31 E51 E58
    Date: 2004–12–27
  38. By: John Schmitt; Jonathan Wadsworth
    Abstract: If personal computers (PCs) are used to enhance learning and information gathering across avariety of subjects, then a home computer might reasonably be considered an input in aneducational production function. Using data on British youths from the British HouseholdPanel Survey between 1991 and 2001, this paper attempts to explore the link betweenownership of a home computer at ages 15 and 17 and subsequent educational attainment inthe principal British school examinations taken at ages 16 (GCSEs) and 18 (A levels). Thedata show a significant positive associatio n between PC ownership and both the number ofGCSEs obtained and the probability of passing five or more GCSEs. These results survive aset of individual, household, and area controls, including using other household durables and\"future\" PC ownership as proxies for household wealth and other unobservable householdlevel effects. Home computer ownership is also associated with a significant increase in theprobability of passing at least one A level conditional on having passed five and increase inthe probability of successfully completing three or more A levels, conditional on havingpassed at least one A level.
    Keywords: Human capital, Economic Impact, Personal Computers
    JEL: I2 J2 J13 J24
    Date: 2004–03
  39. By: Kwok Tong Soo
    Abstract: This paper assesses the empirical validity of Zipf¿s Law for cities, using new data on 73countries and two estimation methods ¿ OLS and the Hill estimator. With either estimator,we reject Zipf¿s Law far more often than we would expect based on random chance; for 53out of 73 countries using OLS, and for 30 out of 73 countries using the Hill estimator. TheOLS estimates of the Pareto exponent are roughly normally distributed, but those of the Hillestimator are bimodal. Variations in the value of the Pareto exponent are better explained bypolitical economy variables than by economic geography variables.
    Keywords: Cities, Zipf¿s Law, Pareto distribution, Hill estimator
    JEL: C16 R12
    Date: 2004–07
  40. By: Patricia Rice; Anthony J. Venables
    Abstract: This paper uses NUTS3 sub-regional data for Great Britain to analyse the determinants of spatialvariations in income and productivity. We decompose the spatial variation of earnings into aproductivity effect and an occupational composition effect. For the former (but not the latter) wefind a robust relationship with proximity to economic mass, suggesting that doubling thepopulation of working age proximate to an area is associated with a 3.5% increase in productivityin the area. We measure proximity by travel time, and show that effects decline steeply with time,ceasing to be important beyond approximately 80 minutes.
    Keywords: regional disparities, productivity, clustering
    JEL: R1 O4
    Date: 2004–07
  41. By: Stephen Machin; Olivier Marie
    Abstract: In this paper we look at the relationship between crime and economic incentives in a different way to other workin this area. We look at changes in unemployment benefits and the imposition of benefit sanctions as a means ofstudying the way that people on the margins of crime may react to economic incentives. The paper relies on aquasiexperimental setting induced by the introduction of the Jobseekers Allowance (JSA) in the UK in October1996. We look at crime rates in areas more and less affected by the policy change before and after JSAintroduction. In the areas more affected by the tougher benefit regime crime rose by more. These were also theareas with higher outflows from unemployment and particularly to people dropping off the register but not intowork, education/training or onto other benefits. Areas that had more sanctioned individuals also experiencedhigher crime rates after the introduction of JSA. As such the benefit cuts and sanctions embodied in the JSAappear to have induced individuals previously on the margins to engage in crime. Thus there appears to havebeen an unintended policy consequence, associated with the benefit reform, namely higher crime.
    Keywords: Crime, Benefit Sanctions, Jobseekers allowance
    JEL: H00 J65
    Date: 2004–08
  42. By: Fredrik Andersson; Simon Burgess; Julia Lane
    Abstract: The striking geographical concentration of economic activities suggests that there are substantial benefits toagglomeration. However, the nature of those benefits remains unclear. In this paper we take advantage of a newdataset to quantify the role of one of the main contenders - the matching of workers and jobs. Using individuallevel data for two large US states we show that thicker urban labour markets are associated with moreassortative matching between workers and firms. Another critical condition is required for this to generatehigher productivity: complementarity of worker and firm quality in the production function. Usingestablishment level productivity regressions, we show that such complementarity is found in our data. Puttingtogether the production and matching relationships, we show that production complementarity and assortativematching is an important source of the urban productivity premium.
    Keywords: Urban Productivity, Matching, Agglomeration
    JEL: R23 R12 J24
    Date: 2004–09
  43. By: Anthony J. Venables
    Abstract: There is a substantial empirical literature quantifying the positive relationship between city size and productivity. The paper draws out the implications of this productivity relationship for evaluations of urban transport improvements. A theoretical model is developed and used to derive a wider cost-benefit measure that includes productivity effects. The order of magnitude of such effects is illustrated by calculations in a simple computable equilibrium model. It is argued tht productivity effects, particularly when combined with distortionary taxation, are quantitatively important, substantially increasing the gains that are created by urban transport improvements.
    Keywords: Agglomeration, productivity, urban transport
    JEL: R20 R42
    Date: 2004–09

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