nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2005‒05‒14
thirteen papers chosen by
Steve Ross
University of Connecticut

  1. The Political Economy of Equalization Transfers By Stuti Khemani
  2. THE ECONOMICS OF TRANSMILENIO, A MASS TRANSIT SYSTEM FOR BOGOTÁ By Juan Carlos Echeverry; Ana María Ibáñez; Luis Carlos Hillón
  4. Proximities, industries and territories (In French) By Jean-Pierre GILLY (LEREPS-GRES); Yannick LUNG (E3i, IFReDE-GRES)
  5. Firm Location, Corporate Structure, R&D Investment, Innovation and Productivity By Johansson, Börje; Lööf, Hans; Rader Olsson, Amy
  6. Regional Productivity and Accessibility to Knowledge and Dense Markets By Karlsson, Charlie; Pettersson, Lars
  7. Mortgages and Financial Expectations: A Household Level Analysis By Sarah Brown; Gaia Garino; Karl Taylor
  8. Demand for Environmental Quality: A Spatial Hedonic Approach By David M. Brasington; Diane Hite
  9. Public and Private School Competition: The Spatial Education Production Function By David M. Brasington
  10. Does Spatial Disaggregation Matter in Job Creation and Destruction Flows? By Elena Cefis; Roberto Gabriele
  11. Modeling the Choice of Telecommuting 2: A Case of the Preferred Impossible Alternative By Patricia Mokhtarian; Ilan Salomon
  12. Modeling the Choice of Telecommuting 3: Identifying the Choice Set and Estimating Binary Choice Models for Technology-Based Alternatives By Patricia Mokhtarian; Ilan Salomon
  13. Central Place Theory By Marcus Berliant

  1. By: Stuti Khemani
    Abstract: Normative theories of fiscal federalism postulate that intergovernmental transfers should be determined by equity and efficiency considerations, to support local governments in providing differentiated public goods to heterogeneous populations, while ensuring an even distribution of basic services across all regions (Musgrave, 1959, 1983; Oates, 1972; Gramlich, 1977). However, a recent surge of empirical evidence shows that variations in intergovernmental transfers to sub-national jurisdictions within countries cannot be explained by traditional concerns of equity and efficiency alone, and that political variables representing electoral incentives of public agents are additional and significant determinants.
    Keywords: Political Economy,Equalization Transfers, determinants
    Date: 2004–11–01
  2. By: Juan Carlos Echeverry; Ana María Ibáñez; Luis Carlos Hillón
    Abstract: By the end of the 1990s, inefficiency, excess supply and low service quality characterized the mass transit system of Bogotá. The average travel time to work was one hour and ten minutes, obsolete buses provided public transport, traffic generated 70 percent of air pollution and there were frequent traffic accidents. To address all of these issues, the municipal and national governments designed and put in place a new mass transit system named TransMilenio (TM), which came into operation in January 2001. The purpose of this paper is to analyze Bogotá’s mass transit system before and after TM, study the political economy of its adoption process and conduct a cost-benefit analysis (CBA) of the first phase of the system. The new transit system is a hybrid model that combines public planning of the network structure, route tendering conditions, regulation and supervision, as well as private operation of the separated functions of revenue collection and transport service. The adoption of this new model needed to resolve delicate political economy issues that characterized private transport systems in many developing countries. The new organization had a sizeable impact on TM users’ by improving traveling conditions significantly. In addition, congestion, pollution and traffic accidents plummeted in TM corridors. However, the type of transition adopted for the remaining transport corridors not covered by TM caused unforeseen negative spillovers, as a consequence of slow scrapping rates and bus and routes relocation. Consequently, although the CBA for the first phase of the corridors covered by TM is positive, once these additional measures are taken into consideration, the net effect is negative due primarily to increases in travel time for passengers using the traditional transport system. In order to minimize the negative spillovers during the full implementation of TM, expected to last until 2015, integration of the traditional and new systems should be carried on, and strict regulation of the traditional public transport system should be crafted.
    Keywords: urban transport
    JEL: R41
    Date: 2004–08–01
  3. By: Felipe Barrera; Ana María Ibáñez
    Abstract: The paper develops a dynamic theoretical model and presents empirical evidence about the relationship between violence and education investments. Although some papers have estimated regressions to link educational outcomes and violence, no formal models have been developed yet. A theoretical model is crucial to understand the different channels through which violence affects education. Three channels are identified. First, violence can affect directly the utility of households and, therefore, it may modify the consumption of education. Second, extreme violence can destroy physical capital and create uncertainty, which will lower investment and production. In the long run, destruction of physical assets and drop in investment impact the income of households who in turn must reduce consumption and cutback investments in education. Third, violence can modify the rates of return of education, and therefore, can change the investment on education. We find violence indeed exerts a toll on education. School enrollment is less in Colombian municipalities with homicide rates above the national median. Moreover, the likelihood of school enrollment decreases as homicide rates rise for all group ages. The impact of homicide rates is larger than transferences from the national government to the local government earmarked for investment in education and health.
    Keywords: Theory of Education
    JEL: I21
    Date: 2004–07–01
  4. By: Jean-Pierre GILLY (LEREPS-GRES); Yannick LUNG (E3i, IFReDE-GRES)
    Abstract: The paper compares the research agendas of two different approaches of a meso-analysis which could combine industrial and spatial dynamics: the economics of proximity approach on one side, the regulation theory on the other side. Their specificities and divergences are identified in the first part, considering the parallel trajectories of the two French research groups developing these approaches during the last years, “Dynamiques de proximité” and “Régulation-Secteur-Territoire” respectively. The second part discusses their possible convergence.
    Keywords: Industry, meso-analysis, post fordism, proximity, regulation theory, spatial dynamics
    JEL: B52 D21 L10 R11 R30
    Date: 2005
  5. By: Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Rader Olsson, Amy (CEFIN)
    Abstract: This study elucidates how firm location and corporate structure influence R&D-intensity, external collaboration on innovation, return on R&D and economic performance. The study, based on 1,907 firm level observations, essentially compare a functional region with four other regional areas in Sweden. In this context, the Stockholm region is assumed as an integrated functional urban region with innovation-proximity characteristics. The paper examines systematically the influence of location versus various firm characteristics. The econometric results suggest the following: First, a typical Stockholm firm has a significantly larger likelihood than other firms of being engaged in innovation activities. Second, among innovative firms, the R&D intensity and global collaboration on innovation is primarily determined by its corporate structure, not geographic location. Third, the embeddedness in regional and national scientific and vertical innovation systems is relatively more intense outside Stockholm. Finally, the advantage of being located within Sweden’s most strongest concentration of R&D spending, universities, human capital and multinational enterprises with their global networks is reflected by a superior return on R&D investments and higher productivity, when controlling for firm size, human capital, physical capital, R&D-intensity, market orientation and sector classification.
    Keywords: Regional economy; multinational companies; R&D; innovation; innovation system
    JEL: C21 G34 L22 O33
    Date: 2005–05–09
  6. By: Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Pettersson, Lars (Jönköping International Business School)
    Abstract: Accessibility to knowledge and local service markets can be assumed to explain regional growth performance. The role of regional supply of services and educated labour with respect to regional development are stressed by many researchers. In this paper we make an empirical analysis using panel data for Swedish municipalities. The purpose is to analyse the relationship between regional productivity measures as gross regional product per square kilometre and accessibility to educated labour. We also acknowledge the extension of the regional economy in terms of functionality and access to population as a measure of accessibility to labour and to purchasing power. We estimate first a cross-section model by using OLS. Second we employ a panel data model, using time distance access to population and the share local labour force with longer higher education as explanatory variables. In the analysis we compare the results for Sweden from the different models with other studies in this field. We find that local externalities for increasing returns are very important in the Swedish economy. Our estimated models yields a high level of goodness of fit, and the results indicates that the elasticity for longer higher education and population density are around unity in the Swedish economy with respect to performance of regional gross domestic product per square kilometre
    Keywords: Agglomeration; Productivity; Sweden; Spatial; Regional; accessibility
    JEL: D24 J24 O47 R11 R23 R40
    Date: 2005–05–09
  7. By: Sarah Brown; Gaia Garino; Karl Taylor
    Abstract: We contribute to the literature on household mortgage demand by focusing on one particular influence on the decision to acquire increasing levels of mortgage debt at the household level, namely the financial expectations of the individuals within the household. Our theoretical model predicts a positive association between the quantity of mortgage debt undertaken and optimistic financial expectations. Our empirical findings based on household level data provide convincing support for our theoretical priors in that optimistic financial expectations impact positively on the level of outstanding mortgage debt.
    Keywords: Mortgage Debt; Financial Expectations; Inter-temporal Consumption; Random Effects; Tobit Estimator
    JEL: D18 D84 D91
    Date: 2005–04
  8. By: David M. Brasington; Diane Hite
    Abstract: We first estimate the relationship between house prices and environmental disamenities using spatial statistics, confirming that nearby point-source pollutants depress house price. We then calculate implicit prices of environmental quality and related characteristics from the house price hedonics to estimate a demand curve for environmental quality, finding a price elasticity of demand of ?0.12. We find evidence of significant spatial effects in both the hedonic and demand estimations. We find that environmental quality and school quality are purchased together (elasticity =-0.80), environmental quality and house size are substitutes (elasticity=0.91), and environmental quality and lot size are not related goods.
  9. By: David M. Brasington
    Abstract: School vouchers may increase the competition public school districts face. Greater competition may spur public schools to improve student outcomes, which reliably predict labor market productivity and earnings. Previous school competition studies do not use spatial statistics; they fail to incorporate spillovers and the effect of omitted variables into their education production functions. Significant spatial effects are found in all regressions, and spatial statistics improves adjusted R-squared. There seems to be no consistent association between private school attendance rates and public school achievement, or between the number of public school districts in a county and public school performance. Competitive effects, which seem plausible in non-spatial regressions, dissipate when spatial statistics is used. When school inputs appeared statistically significant in non-spatial regressions, the spatial regressions generally made the significance disappear. Poverty appeared to depress reading and writing passage rates, but this effect disappeared in the spatial models.
  10. By: Elena Cefis; Roberto Gabriele
    Abstract: The paper investigates the changes in job creation and destruction flows considering a very disaggregate level of analysis. If institutional setup plays a more important role compared to other factors, than at lower levels of aggregation we should observe that job flows regularities are in line with national ones. We explore the issue using a unique database on the population of firms in Trentino (a North-Eastern Province of Italy) from 1991 to 2001. We find that: (a) job flows show a ”fractal” nature, i.e. many regularities appear to be scale invariant (magnitude of flows and their persistence). In particular job flows magnitude is in line with the average values for Italy; (b) there are some qualifications to ”fractality”: entrant firms’ contribution to job creation process is lower than the corresponding contribution at national level, whereas the job destruction share accounted for by exit firms is around 30%, in line with stylized facts; (c) size and age shape the job flows; (d) shifts of jobs between macro sectors are rare.
    Keywords: Labour Reallocation, Job Flows, Sample Selection, Two-Stage Heckman Estimator.
  11. By: Patricia Mokhtarian (University of California, Davis); Ilan Salomon (Hebrew University)
    Abstract: A conceptual model of the choice to telecommute was advanced in an earlier paper (Mokhtarian and Salomon, 1994). In this paper, we present empirical data from a non-representative sample of 628 City of San Diego employees on key variables and relationships in that model. The relationships among possibility, preference, and choice are examined. A key finding is the existence of a large group of people (57% of the sample) for whom telecommuting is a Preferred Impossible Alternative. Dichotomous and continuous constraints are distinguished, and three dichotomous constraints are defined. Lack of awareness is active for 4%, job unsuitability for 44%, and manager disapproval for 51% of the sample. For 68% of the sample, at least one of these constraints is active. Even among those for whom none of the dichotomous constraints is in force, most people do not choose telecommuting due to the presence of active continuous constraints. For only 11% of the entire sample, telecommuting is possible, preferred, and chosen. The potential impacts of self-selection bias are estimated, and sampling bias is qualitatively assessed. This analysis provides a crude but useful estimate of the potential of telecommuting in the population, and more specifically, the relative share of potential telecommuters who are prevented by key dichotomous constraints from choosing that option.
    Keywords: telecommuting, teleworking
    JEL: J
    Date: 2005–05–12
  12. By: Patricia Mokhtarian (University of California, Davis); Ilan Salomon (University of California, Davis)
    Abstract: Previous papers in this series have presented a conceptual model of the individual decision to telecommute and explored relationships among constraints, preference, and choice. A related paper has developed a binary model of the preference for home-based telecommuting. Noting that there is a wide gap between preferring to telecommute (88% of the sample) and actually telecommuting (13%), this paper develops binary logit models of telecommuting adoption. Two approaches to dealing with constraints are compared: incorporating them directly into the utility function, and using them to define the choice set. Models using the first approach appear to be statistically superior in this analysis, explaining 63-64% of the information in the data. Variables significant to choice include those relating to work and travel drives, and awareness, manager support, job suitability, technology, and discipline constraints. The best model was used to analyze the impact of relaxing three key constraints on the 355 people in the sample for whom telecommuting was previously identified to be a Preferred Impossible Alternative. When unawareness, lack of manager support, and job unsuitability constraints are relaxed, 28% of the people in the PIA category would be expected to adopt telecommuting. The importance of behavioral models to accurately forecasting telecommuting adoption is emphasized and is suggested to have wider implications for predicting technology-based activity changes.
    Keywords: telecommuting, teleworking, discrete choice, choice set
    JEL: J
    Date: 2005–05–12
  13. By: Marcus Berliant (Washington University in St. Louis)
    Abstract: This is a short dictionary entry. Central place theory is a descriptive theory of market area in a spatial context. Its definition, history, and relation to modern microeconomic theory are provided.
    Keywords: Market Area, City Hierarchy, Hexagonal Structure, Spatial General Equilibrium Theory, Transport Cost, Increasing Returns to Scale
    JEL: R12
    Date: 2005–05–12

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