nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2005‒01‒23
eleven papers chosen by
Steve Ross
University of Connecticut

  1. Equilibrium Search Unemployment with Explicit Spatial Frictions By Wasmer, Etienne; Zenou, Yves
  2. Infrastructure, Public Education and Growth with Congestion Costs By P R Agénor
  3. The Black-White Test Score Gap Through Third Grade By Roland G. Fryer; Steven D. Levitt
  4. Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions By Steven D. Levitt; Chad Syverson
  5. Interest Rate, Inflation, and Housing Price: With an Emphasis on Chonsei Price in Korea By Dongchul Cho
  6. Social Interactions and Economic Behavior By Giulio Zanella
  7. Discrete Choice with Social Interactions and Endogenous Memberships By Giulio Zanella
  8. Econometric Analysis of O.U.T.A. – Organisation of Urban Transportations of Athens By Giovanis Elephtherios
  9. Inequality in Child Academic Achievement in Single Parent Households: Evidence from Brazil By Andrew W. Horowitz; Andre Portela Souza
  10. Investing in Health: The Long-Term Impact of Head Start By Kathryn Anderson; James Foster; David Frisvold
  11. Transport objectives, Instruments and Indicators By Meersman H.; Van de Voorde E.; Vanelslander T.

  1. By: Wasmer, Etienne (Université du Quebec à Montreal, CIRPEE, CEPR and IZA Bonn); Zenou, Yves (IUI, GAINS, CEPR and IZA Bonn)
    Abstract: Assuming that job search efficiency decreases with distance to jobs, workers’ location in a city depends on spatial elements such as commuting costs and land prices and on labour elements such as wages and the matching technology. In the absence of moving costs, we show that there exists a unique equilibrium in which employed and unemployed workers are perfectly segregated but move at each employment transition. We investigate the interactions between the land and the labour market equilibrium and show under which condition they are interdependent. When relocation costs become positive, a new zone appears in which both the employed and the unemployed co-exist and are not mobile. We demonstrate that the size of this area goes continuously to zero when moving costs vanish. Finally, we endogeneize search effort, show that it negatively depends on distance to jobs and that long and shortterm unemployed workers coexist and locate in different areas of the city.
    Keywords: local labour markets, relocation costs, search effort, job matching
    JEL: E24 J41 R14
    Date: 2005–01
  2. By: P R Agénor
    Abstract: This paper studies the optimal allocation of public expenditure between infrastructure and education services in an endogenous growth framework. Raw labor must be educated to become productive. The balanced-growth path is derived and the transitional dynamics associated with an increase in the share of spending on infrastructure are characterized. The growth-maximizing share is shown to depend on the elasticities of output with respect to both infrastructure services and the supply of educated labor. If the supply of raw labor is increasing in wages, the growth-maximizing share of government spending on infrastructure depends negatively on the degree of congestion in schooling.
    Date: 2005
  3. By: Roland G. Fryer; Steven D. Levitt
    Abstract: This paper describes basic facts regarding the black-white test score gap over the first four years of school. Black children enter school substantially behind their white counterparts in reading and math, but including a small number of covariates erases the gap. Over the first four years of school, however, blacks lose substantial ground relative to other races; averaging .10 standard deviations per school year. By the end of third grade there is a large Black-White test score gap that cannot be explained by observable characteristics. Blacks are falling behind in virtually all categories of skills tested, except the most basic. None of the explanations we examine, including systematic differences in school quality across races, convincingly explain the divergent academic trajectory of Black students.
    JEL: I2
    Date: 2005–01
  4. By: Steven D. Levitt; Chad Syverson
    Abstract: Agents are often better informed than the clients who hire them and may exploit this informational advantage. Real-estate agents, who know much more about the housing market than the typical homeowner, are one example. Because real estate agents receive only a small share of the incremental profit when a house sells for a higher value, there is an incentive for them to convince their clients to sell their houses too cheaply and too quickly. We test these predictions by comparing home sales in which real estate agents are hired by others to sell a home to instances in which a real estate agent sells his or her own home. In the former case, the agent has distorted incentives; in the latter case, the agent wants to pursue the first-best. Consistent with the theory, we find homes owned by real estate agents sell for about 3.7 percent more than other houses and stay on the market about 9.5 days longer, even after controlling for a wide range of housing characteristics. Situations in which the agent's informational advantage is larger lead to even greater distortions.
    JEL: D8 L1 L8 R2
    Date: 2005–01
  5. By: Dongchul Cho
    Abstract: This paper discusses the relationship between interest rate and inflation rate on one part and the house price relative to chonsei price (up-front lump-sum deposit from the tenant to the owner for the use of the property with no additional requirement for periodic rent payments) on the other. The key point of the paper is that the relative price of sales to chonsei depends on the ratio of inflation to real interest rate, and thus even when the monetary authority maintains a pre-announced target level of inflation rate, the relative price of sales to chonsei rises if the real interest rate is lowered. This finding seems to help understand the recent hikes of the house prices despite the stabilizing chonsei prices. Recognizing this relationship, it may be sensible to lower the target inflation rate in an economy where real interest rates permanently decline, if the society wishes to reduce its adverse effect on the wealth distribution between house owners and chonsei tenants.
    JEL: R2 E4 E1
    Date: 2005–01
  6. By: Giulio Zanella
    Abstract: This paper is a critical introduction to the new wave of economic literature on the effect of social interactions on individual behavior and aggregate economic outcomes. I refer to this research program, also known as new social economics, as the socioeconomic analysis of behavior, to distinguish it from the more popular economic analysis of social behavior. I discuss the main features of so-called interactions-based models, and I show how they help us to understand substantive economic phenomena. In order to restrict the focus, I choose five possible applications: matching in the labor market, welfare participation, poverty traps and inequality, investor behavior, and consumer behavior. Then I dwell upon two key undecided questions: (i) why economic behavior is affected by social interactions, and (ii) how the social context is shaped by rational individuals. Finally, I briefly discuss the main empirical routes so far used.
    Keywords: new social economics, social interactions, neighborhood effects, social networks, social norms, social multiplier
    JEL: D10 D85 Z13
    Date: 2004–11
  7. By: Giulio Zanella
    Abstract: This paper tackles the issue of self-selection in social interactions models. I develop a theory of sorting and behavior, when the latter is subject to social influences, extending the model developed by Brock and Durlauf (2001a, 2003) to allow for equilibrium group formation. Individuals choose a group, and a behavior subject to an endogenous social effect. The latter turns out to be a segregating force, and stable equilibria are stratified. The sorting process may induce, inefficiently, multiple behavioral equilibria. Such a theory serves as a means to solve identification and selection problems that may undermine the empirical detection of social effects on individual behavior. I exploit the theoretical model to build a nonlinear (in the social effect) selection correction term. Such a term allows identification, and solves the selection problem that arises when individuals can choose the group whose effect the researcher is trying to disentangle. The resulting econometric model, although relying on strict parametric assumptions, indicates a viable alternative when reliable instrumental variables are not available, or randomized experiments not possible.
    Keywords: social interactions, neighborhood effects, sorting, self-selection, nested logit, identification of social effects
    JEL: C25 D85 E19 Z13
    Date: 2004–11
  8. By: Giovanis Elephtherios
    Abstract: In this project we will analyse specific economic factors of O.U.T.A. (Organism of Urban and Transportations of Athens. O.U.T.A. is a legal person of private law and was established in according to the law 2175/1993, as a successor of O.U.T. . (Organism of Urban and Transportations). O.U.T.A. was established in according to the law 588/1977 as a full public enterprise, applicable under the principles of private economy and operational for the public benefit under the supervisor and the control of the Ministry of transportations and communications. O.U.T.A. as a maternal enterprise supervise four other companies, which they belong to O.U.T.A. There are U.T.B. (Union of thermal bushes), which concerns the control of thermal bushes, E.R.A.P. (Electric Railroad of Athens-Peraia ) which took over the control of the Electric railroad of Athens and also the control of the green bushes, D.E.B.A.P. (Driven by Electricity bushes of Athens-Peraia) the driven bushes by electricity with antennas and finally the A.M.C.F. (Attica Metro company function) which company is not anything else than the company that have taken over the control of the Metro function. In the first chapter we will analyse three models of adaptive expectations. The first model concerns the revenues, the second concerns investments and third concerns the costs. In the second chapter we will examine, with the help of dynamic Nerlove model, the adjustment of the real revenues at the desirable level. Also the same analysis will be done with the lending and the subsidy. We will examine the O.U.T.A. at the total of the same O.U.T.A. and the total of the other four enterprises, but we will examine also each of the four other companies. In chapter third we present simultaneous equations of revenues and investments. Finally , in fourth chapter is being reference to the Koyck model and the Almon technique. Specifically, we will present two models, which the first concerns, revenues and investments and the second model concerns revenues and the price of tickets.
    Keywords: basic ecocometrics Organization of Urban transportation of Athens
    JEL: C
    Date: 2005–01–16
  9. By: Andrew W. Horowitz (Department of Economics, Sam M. Walton College of Business, University of Arkansas); Andre Portela Souza (Department of Economics, Vanderbilt University and Department of Economics, University of Sao Paulo)
    Abstract: In this paper we compare the intra-household dispersion of children¹s education achievement in single female-parent households with two-parent households. We find significantly more dispersion across children in households¹ headed by females after controlling for household per-capita permanent income and other anticipated correlates. These results are robust and suggest that single-female parents are forced to alter the distribution as well as the level of household investment in children. Our empirical analysis is preceded by development of a theoretical model that suggests the correlation between the intra-household dispersion of academic achievement and single-parenthood may be general; i.e., not specific to Brazil. These results may have important policy implications for the interventions and incentives that target single parent households.
    Keywords: Human capital distributiuon, intra-household allocation, single-parent household
    JEL: D60 I20 J22
    Date: 2004–12
  10. By: Kathryn Anderson (Department of Economics, Vanderbilt University); James Foster (Department of Economics, Vanderbilt University); David Frisvold (Graduate Student at Vanderbilt University)
    Abstract: Head Start is a comprehensive, early childhood development program designed to augment the human capital and health capital levels of disadvantaged children. Grossman's (1972) health capital model suggests that early investments of this type should have lasting effects on health outcomes. This research evaluates the impact of Head Start on long-term health by comparing health outcome and behavioral indicators of adults who attended Head Start with those of siblings who did not. The results suggest that there are long-term health benefits from participation in Head Start and that these benefits result from lifestyle changes.
    Keywords: Early childhood education, Head Start, health, health capital, health disparities, human capital, program evaluation
    JEL: H51 I12 I21 I38
    Date: 2004–12
  11. By: Meersman H.; Van de Voorde E.; Vanelslander T.
    Date: 2004–12

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