|
on Urban and Real Estate Economics |
| By: | Robert Tannenwald |
| Abstract: | In debating Massachusetts business tax policy, protagonists have cited many different indicators purporting to assess the fairness, adequacy, and competitiveness of the Commonwealth’s business taxes. These statistics actually reveal very little about the degree to which Massachusetts business taxes achieve these widely accepted tax policy goals. The author explains why these indicators are misleading and presents new indicators of business tax competitiveness that, although imperfect, are more accurate than those most widely quoted. The article concludes that the fairness of Massachusetts business taxes is unclear and that the Commonwealth’s corporate income taxes are inadequate. The clearest conclusion drawn is that Massachusetts business taxes do not harm its competitive standing. |
| Keywords: | Business tax - Massachusetts |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:04-4&r=ure |
| By: | Robert Tannenwald; Nicholas Turner |
| Abstract: | This paper compares states in terms of their relative fiscal capacity, fiscal need, fiscal comfort, and tax effort in state fiscal year 1999 (FY1999). It is the most recent in a series initiated by the U.S. Advisory Commission on Intergovernmental Relations (ACIR) in 1962. As in previous studies, the authors use the representative tax system and representative expenditure system methodologies in their analysis. Compared with FY1997, the authors find less interstate disparity in fiscal capacity, fiscal need, and fiscal comfort. However, such disparity, though diminished, remains substantial. The New England and Mid-Atlantic regions remain the most “fiscally comfortable,” while the East South Central and West South Central regions are still the most “fiscally stressed.” |
| Keywords: | State finance ; Taxation |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:04-9&r=ure |
| By: | Yoonsoo Lee |
| Abstract: | Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policymakers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the effectiveness of state development policy. Only a few studies have looked at how manufacturing firms geographically locate their production facilities and have used either small manufacturing samples or small geographic regions. This paper provides broader evidence of the impact of plant relocations using confidential establishment level data from the U.S. Census Longitudinal Research Database (LRD), covering the full population of manufacturing establishments in the United States over the period 1972 to 1992. This paper finds a relatively small role for relocation in explaining the disparity of manufacturing employment growth rates across states. Moreover, it finds evidence of very weak effects of incentive programs on plant relocations. |
| Keywords: | Industrial location ; Manufactures ; Regional planning |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0415&r=ure |
| By: | Andreas Lehnert |
| Abstract: | I test the credit-market effects of housing wealth shocks by estimating the consumption elasticity of house price shocks among households in different age quintiles. Younger households face faster expected income growth and hence would like to borrow more than older households. I estimate consumption elasticities from housing wealth by age quintile to be {4; 0; 3; 8; 3} percent. As predicted by theory, the youngest group has a higher elasticity of consumption than the next two age quintiles. That the consumption of the age quintile on the verge of retirement is responsive to housing wealth is also not surprising: I show that these households are likeliest to "downsize" their house and thus realize any capital gains. |
| Keywords: | Consumption (Economics) ; Housing - Prices ; Consumer credit |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2004-63&r=ure |
| By: | Robert M. Adams; Kenneth P. Brevoort; Elizabeth K. Kiser |
| Abstract: | Little empirical work exists on the substitutability of depository institutions. In particular, the willingness of consumers to substitute banks for thrifts and to switch between multimarket and single-market institutions (i.e., institutions with large vs. small branch networks) has been of strong interest to policymakers. We estimate a structural model of consumer choice of depository institutions using a panel data set that includes most depository institutions and market areas in the United States over the period 1990-2001. Using a flexible framework, we uncover utility parameters that affect a consumer's choice of institution and measure the degree of market segmentation for two institution subgroups. We use our estimates to calculate elasticities and perform policy experiments that measure the substitutability of firms within and across groupings. We find both dimensions --thrifts and banks, and single- and multimarket institutions-- to be important market segments to consumer choice and, ultimately, to competition in both urban and rural markets. |
| Keywords: | Banks and banking ; Thrift institutions ; Financial institutions |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-03&r=ure |
| By: | Wayne Passmore |
| Abstract: | The housing-related government-sponsored enterprises Fannie Mae and Freddie Mac (the "GSEs") have an ambiguous relationship with the federal government. Most purchasers of the GSEs' debt securities believe that this debt is implicitly backed by the U.S. government despite the lack of a legal basis for such a belief. In this paper, I estimate how much GSE shareholders gain from this ambiguous government relationship. I find that (1) the government's ambiguous relationship with Fannie Mae and Freddie Mac imparts a substantial implicit subsidy to GSE shareholders, (2) the implicit government subsidy accounts for much of the GSEs' market value, and (3) the GSEs would hold far fewer of their mortgage-backed securities in portfolio and their capital-to-asset ratios would be higher if they were purely private. |
| Keywords: | Government-sponsored enterprises ; Mortgages |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-05&r=ure |
| By: | Wayne Passmore; Shane M. Sherlund; Gillian Burgess |
| Abstract: | We derive a theoretical model of how jumbo and conforming mortgage rates are determined and how the jumbo-conforming spread might arise. We show that mortgage rates reflect the cost of funding mortgages and that this cost of funding can drive a wedge between jumbo and conforming rates (the jumbo-conforming spread). Further, we show how the jumbo-conforming spread widens when mortgage demand is high or core deposits are not sufficient to fund mortgage demand, and tighten as the mortgage market becomes more liquid and realizes economies of scale. Using MIRS data for April 1997 through May 2003, we estimate that the GSE funding advantage accounts for about seven basis points of the 15-18 basis point jumbo-conforming spread. |
| Keywords: | Government-sponsored enterprises ; Mortgage loans ; Interest rates |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-06&r=ure |
| By: | Andreas Lehnert; Wayne Passmore; Shane M. Sherlund |
| Abstract: | Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that purchase mortgages and issue mortgage-backed securities (MBS). In addition, the GSEs are active participants in the primary and secondary mortgage markets on behalf of their own portfolios of MBS. Because these portfolios have grown quite large, portfolio purchases as well as MBS issuance are likely to be important forces in the mortgage market. This paper examines the statistical evidence of a connection between GSE actions and the interest rates paid by mortgage borrowers. We find that both portfolio purchases and MBS issuance have negligible effects on mortgage rate spreads and that purchases are not any more effective than securitization at reducing mortgage interest rate spreads. We also examine the 1998 liquidity crisis and find that GSE portfolio purchases did little to affect interest rates paid by borrowers. These results are robust to alternative assumptions about causality and to model specification. |
| Keywords: | Government-sponsored enterprises ; Secondary markets |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-07&r=ure |
| By: | Morris A. Davis; Robert F. Martin |
| Abstract: | Many recent papers have claimed that when housing services are treated separately from other forms of consumption in utility, a wide range of economic puzzles such as the equity premium puzzle can be explained. Our paper challenges these claims. The key assumption embedded in this literature is that households are not very willing to substitute housing services for consumption. We show that housing services and consumption must be much more substitutable than has been assumed for a neoclassical consumption model to be consistent with U.S. house price data. Further, when forced to match both historical house prices and stock returns, the lowest risk-free rate the model can generate is 11 percent. |
| Keywords: | Housing - Prices ; Housing |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-13&r=ure |
| By: | Robert M. Adams; Dean F. Amel |
| Abstract: | We study the relationship between banking competition and the transmission of monetary policy through the bank lending channel. Using business small loan origination data provided from the Community Reinvestment Act from 1996-2002 in our analysis, we are able to reaffirm the existence of the bank lending channel of monetary transmission. Moreover, we find that the impact of monetary policy on loan originations is weaker in more concentrated markets. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-16&r=ure |
| By: | J. Vernon Henderson; Yukako Ono |
| Abstract: | Firms’ headquarters [HQ] support their production activity, by gathering information and outsourcing business services, as well as, managing, evaluating, and coordinating internal firm activities. In search of a better location for these functions, firms often separate the HQ function physically from their production facilities and construct stand-alone HQs. By locating its HQ in a large, service oriented metro area away from its production facilities, a firm may be better able to out-source service functions in that local metro market and also to gather information about market conditions for their products. However if the firm locates the HQ away from its production activity, that increases the coordination costs in managing plant activities. In this paper we empirically analyze the trade-off of these two considerations. |
| Keywords: | Corporations - Headquarters ; Industrial location ; Manufactures |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-04-29&r=ure |
| By: | Lisa Barrow; Cecilia Elena Rouse |
| Abstract: | Using data from the U.S. Decennial Census and the National Longitudinal Surveys, we find little evidence of differences in the return to schooling across racial and ethnic groups, even with attempts to control for ability and measurement error biases. While our point estimates are relatively similar across racial and ethnic groups, our conclusion is driven in part by relatively large standard errors. ; That said, we find no evidence that returns to schooling are lower for African Americans or Hispanics than for non-minorities. As a result, policies that increase education among the low-skilled have a good possibility of increasing economic well-being and reducing inequality. More generally, our analysis suggests further research is needed to better understand the nature of measurement error and ability bias across subgroups in order to fully understand potential heterogeneity in the return to schooling across the population. |
| Keywords: | Education ; Employees - Training of |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-05-02&r=ure |
| By: | Jordan Rappaport |
| Abstract: | Population density varies widely across U.S. cities. A calibrated general equilibrium model in which productivity and quality-of-life differ across locations can account for such variation. Individuals derive utility from consumption of a traded good, a nontraded good, leisure, and quality-of-life. The traded and nontraded goods are produced by combining mobile labor, mobile capital, and non-mobile land. An eight-fold increase in population density requires an approximate 50 percent productivity differential or an approximate 20 percent compensating differential. A thirty-two-fold increase in population density requires an approximate 95 percent productivity differential or a 33 percent compensating differential. Empirical evidence suggests productivity and quality-of-life differentials of this magnitude are plausible. The model implies that broad-based technological progress can induce substantial migration to localities with high quality-of-life. |
| Keywords: | Productivity ; Population ; Quality of life ; Cities and towns |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp04-12&r=ure |
| By: | Christopher H. Wheeler |
| Abstract: | The surge in U.S. wage inequality over the past several decades is now commonly attributed to an increase in the returns paid to skill. Although theories differ with respect to why, specifically, this increase has come about, many agree that it is strongly tied to the increase in the relative supply of skilled (i.e. highly educated) workers in the U.S. labor market. A greater supply of skilled labor, for example, may have induced skill-biased technological change or generated greater stratification of workers by skill across firms or jobs. Given that metropolitan areas in the U.S. have long possessed more educated populations than non-metropolitan areas, these theories suggest that the rise in both the returns to skill and wage inequality should have been particularly pronounced in cities. Evidence from the U.S. Census over the period 1950 to 1990 supports both implications. |
| Keywords: | Wages ; Regional economics |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-020&r=ure |
| By: | Christopher H. Wheeler |
| Abstract: | Empirically, large employers have been shown to devote greater resources to filling vacancies than small employers. Following this evidence, this paper offers a theory of producer size based on labor market search, whereby a key factor in the determination of producer's total employment is the ease with which workers can be found to fill jobs that are, periodically, vacated. Since the geographic localization of industry has long been conjectured to facilitate the search process, the model provides an explanation for the observed positive association between average producer size and the magnitude of an industry's presence within local labor markets. |
| Keywords: | Regional economics ; Labor market |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-021&r=ure |
| By: | Anthony Pennington-Cross |
| Abstract: | This paper examines the expected price appreciation of distressed property and compares it to the prevailing metropolitan area appreciation rate. The results show that the simple fact that the property is foreclosed indicates that it will be sold at a substantial discount (appreciate less than expected). The magnitude of the discount is sensitive to loan characteristics, legal restrictions, housing market conditions, and the bargaining position of the selling institution. |
| Keywords: | Real property |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-022&r=ure |
| By: | Christopher H. Wheeler |
| Abstract: | While the productivity gains associated with the geographic concentration of industry (i.e. localization) are by now well-documented, little work has considered how those gains are distributed across individual workers. This paper offers evidence on the connection between total employment and the relative wage earnings of high- and low-skill workers (i.e. inequality) within two-digit manufacturing industries across the states and a collection of metropolitan areas in the U.S. between 1970 and 1990. Using two different measures - 90-10 percentile gaps in both overall and residual wages - I find that wage dispersion falls substantially as industry employment expands. Results from a simple decomposition of this relationship into average plant-size and plant-count components indicate overwhelmingly that average plant size is the primary driving mechanism. Although not necessarily inconsistent with theories appealing to intermediate inputs or technological spillovers, such findings are particularly supportive of Marshall's (1920) labor market pooling explanation for localization. |
| Keywords: | Wages ; Regional economics |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-023&r=ure |
| By: | Christopher H. Wheeler |
| Abstract: | A large body of research has established a positive connection between an industry's productivity and the magnitude of its presence within locally defined geographic areas. This paper examines the extent to which this relationship can be explained by a micro-level underpinning commonly associated with productivity: establishment scale. Looking at data on two-digit manufacturing across a sample of U.S. metropolitan areas, I find two primary results. First, average plant size - defined in terms of numbers of workers - increases substantially as an industry's employment in a metropolitan area rises. Second, results from a decomposition of localization effects on labor earnings into plant-size and plant-count components reveal that the widely observed, positive association between a worker's wage and the total employment in his or her own metropolitan area-industry derives predominantly from the former, not the latter. Localization economies, therefore, appear to be the product of plant-level organization rather than pure population effects. |
| Keywords: | Industrial productivity ; Regional economics |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2004-024&r=ure |
| By: | Wenli Li; Rui Yao |
| Abstract: | The authors develop a life-cycle model to study the effects of house price changes on household consumption and welfare. The model explicitly incorporates the dual feature of housing as both a consumption good and an investment asset and allows for costly adjustments in housing and mortgage positions. Li and Yao's analysis indicates that although house price changes have small aggregate effects, their consumption and welfare consequences on individual households vary significantly. In particular, the non-housing consumption of young and old homeowners is much more sensitive to house price changes than that of middle-aged homeowners. More importantly, while house price appreciation increases the net worth and consumption of all homeowners, it only improves the welfare of middle-aged and old homeowners. Young homeowners and renters are worse off due to higher life-cycle housing consumption costs. |
| Keywords: | Consumption (Economics) ; Saving and investment ; Housing ; Mortgages |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:05-7&r=ure |
| By: | Ethan Lewis |
| Abstract: | Using detailed plant-level data from the 1988 and 1993 Surveys of Manufacturing Technology, this paper examines the impact of skill mix in U.S. local labor markets on the use and adoption of automation technologies in manufacturing. The level of automation differs widely across U.S. metropolitan areas. In both 1988 and 1993, in markets with a higher relative availability of less skilled labor, comparable plants – even plants in the same narrow (4-digit SIC) industries – used systematically less automation. Moreover, between 1988 and 1993 plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to expectations, and even de-adoption was not uncommon. This relationship is stronger when examining an arguably exogenous component of local less-skilled labor supply derived from historical regional settlement patterns of immigrants from different parts of the world. ; These results have implications for two long-standing puzzles in economics. First, they potentially explain why research has repeatedly found that immigration has little impact on the wages of competing native-born workers at the local level. It might be that the technologies of local firms – rather than the wages that they offer – respond to changes in local skill mix associated with immigration. A modified two-sector model demonstrates this theoretical possibility. Second, the results raise doubts about the extent to which the spread of new technologies have raised demand for skills, one frequently forwarded hypothesis for the cause of rising wage inequality in the United States. Causality appears to at least partly run in the opposite direction, where skill supply drives the spread of skill-complementary technology. |
| Keywords: | Immigrants ; Technology - Economic aspects ; Labor market |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:05-8&r=ure |
| By: | Diana Hancock; Andreas Lehnert; Wayne Passmore; Shane M. Sherlund |
| Keywords: | Bank capital - Law and legislation ; Mortgages ; Mortgage-backed securities |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgwp:4&r=ure |
| By: | William R. Emmons; Gregory E. Sierra |
| Abstract: | Corporate governance-and executive-compensation arrangements in particular-should be an important component of the agenda to reform the housing GSEs. The GSEs' safety-and-soundness regulator-who is essentially the debtholders' and taxpayers' representative-must be admitted to the GSEs' boardroom in a way that is atypical of an ordinary publicly held company. This intrusion into the board's oversight of executive-compensation plans is justified given the GSEs' public purposes and their large potential cost to taxpayers. Prudent public policy requires greater supervisory control over executive compensation at the GSEs, which would follow a precedent set in banking. |
| Keywords: | Government-sponsored enterprises ; Executives - Salaries |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlsp:2004-06&r=ure |
| By: | Frank de Jong; Joost Driessen; Otto van Hemert |
| Abstract: | We investigate the impact of owner-occupied housing on financial portfolio and mortgage choice under stochastic inflation and real interest rates. To this end we develop a dynamic framework in which investors can invest in stocks and bonds with different maturities. We use a continuous-time model with CRRA preferences and calibrate the model parameters using data on inflation rates and equity, bond, and house prices. For the case of no short-sale constraints, we derive an implicit solution and identify the main channels through which the housing to total wealth ratio and the horizon affect financial portfolio choice. This solution is used to interpret numerical results that we provide when the investor has short-sale constraints. We also use our framework to investigate optimal mortgage size and type. A moderately risk-averse investor prefers an adjustable-rate mortgage (ARM), while a more risk-averse investor prefers a fixedrate mortgage (FRM). A combination of an ARM and an FRM further improves welfare. Choosing a suboptimal mortgage leads to utility losses up to 6%. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp538&r=ure |
| By: | Daunfeldt, Sven-Olov (The Swedish Research Institute of Trade (HUI)); Orth, Matilda (Department of Economics, School of Economics and Commercial Law, Göteborg University); Rudholm, Niklas (Department of Economics, Umeå University) |
| Abstract: | A real-options approach was used, incorporating uncertainty and irreversibility of investments, to study the number of stores entering the Swedish retail food market during the period 1994-2002. It was found that uncertainty affected the entry-decision. Entry was less frequent in highly concentrated local retail food-markets characterized by a high degree of uncertainty, whereas higher profit opportunities seem to have increased the probability of entry. <p> |
| Keywords: | Real options; uncertainty; retail food; entry; negative binomial regression |
| JEL: | L13 L81 |
| Date: | 2005–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0170&r=ure |
| By: | Brekke, Kjell Arne (Ragnar Frisch Centre for Economic Research); Nyborg, Karine (Ragnar Frisch Centre for Economic Research); Rege, Mari (Department of Economics, Case Western Reserve University) |
| Abstract: | To secure their membership in a popular group, individuals may contribute more to the group’s local public good than they would if group formation were exogenous. Those in the most unpopular group do not have this incentive to contribute to their group. Substantial differences in individual efforts levels between groups may be the result. A principal may prefer either exogenous or endogenous group formation, depending on whether an increase in contributions to the local public good coincides with the principal’s interests. We analyze two examples: Social interaction in schools, and multiple-task teamwork. |
| Keywords: | Local public goods; opportunity costs; popularity; multiple-task principalagent analysis. |
| JEL: | C72 D11 D23 L24 Z13 |
| Date: | 2005–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2005_009&r=ure |
| By: | Roland G. Fryer, Jr.; Paul Torelli |
| Abstract: | There is a debate among social scientists regarding the existence of a peer externality commonly referred to as 'acting white.' Using a newly available data set (the National Longitudinal Study of Adolescent Health), which allows one to construct an objective measure of a student's popularity, we demonstrate that there are large racial differences in the relationship between popularity and academic achievement; our (albeit narrow) definition of 'acting white.' The effect is intensified among high achievers and in schools with more interracial contact, but non-existent among students in predominantly black schools or private schools. The patterns in the data appear most consistent with a two-audience signaling model in which investments in education are thought to be indicative of an individual's opportunity costs of peer group loyalty. Other models we consider, such as self-sabotage among black youth or the presence of an oppositional culture, all contradict the data in important ways. |
| JEL: | J0 I2 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11334&r=ure |
| By: | Pinka Chatterji; Jeff DeSimone |
| Abstract: | This paper estimates the effect of binge and frequent drinking by adolescents on subsequent high school dropout using data from the National Longitudinal Survey of Youth 1979 Young Adults. We estimate an instrumental variables model with an indicator of any past month alcohol use, which is by definition correlated with heavy drinking but should have minimal additional impact on educational outcomes, as the identifying instrument, and also control for a rich set of potentially confounding variables, including maternal characteristics and dropout risk factors measured before and during adolescence. In comparison, OLS provides conservative estimates of the causal impact of heavy drinking on dropping out, implying that binge or frequent drinking among 15 %uF81816 year old students lowers the probability of having graduated or being enrolled in high school four years later by at least 11 percent. Overidentification tests using two measures of maternal youthful alcohol use as additional instruments support our identification strategy. |
| JEL: | I12 I21 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11337&r=ure |
| By: | Scott Adams; David Neumark |
| Abstract: | Living wage campaigns have succeeded in about 100 jurisdictions in the United States but have also been unsuccessful in numerous cities. These unsuccessful campaigns provide a better control group or counterfactual for estimating the effects of living wage laws than the broader set of all cities without a law, and also permit the separate estimation of the effects of living wage laws and living wage campaigns. We find that living wage laws raise wages of low-wage workers but reduce employment among the least-skilled, especially when the laws cover business assistance recipients or are accompanied by similar laws in nearby cities. |
| JEL: | J38 J58 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11342&r=ure |
| By: | Peter Englund; Ake Gunnelin; Patric H. Hendershott; Bo Soderberg |
| Abstract: | We analyze the joint dynamics of property space markets using an error-correction model, where rent and vacancies adjust to deviations from equilibrium rent and vacancies. The analysis is based on a new lease rent series for the Stockholm office rental market for the time-period 1977 %uF8182002 constructed by standard hedonic methods applied to a data-set of some 2,400 individual leases. Simulations illustrate the separate roles of rent and vacancy rate movements in the adjustment process. We calculate the natural vacancy rate assuming a trending equilibrium. Property markets may be slow to adjust because tenants are constrained by long-term leases and may be slow to adjust to current rents for other reasons. This gives rise to %u201Chidden vacancies%u201D (the difference between space occupancy and demand at the current lease rate). Using our market rent series and the lease-length distribution, we estimate a time series on the average rent on existing leases. We find that most of the variation in hidden vacancies is explained by the difference between demand at current and average rent. |
| JEL: | R1 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11345&r=ure |
| By: | Thomas J. Kane; Douglas O. Staiger; Stephanie K. Riegg |
| Abstract: | We study the relationship between school characteristics and housing prices in Mecklenburg County, North Carolina between 1994 and 2001. During this period, the school district was operating under a court-imposed desegregation order and redrew a number of school boundaries. We use two different sources of variation to disentangle the effect of schools and other neighborhood characteristics: differences in housing prices along assignment zone boundaries and changes in housing prices following the change in school assignments. We find systematic differences in house prices along school boundaries, although the impact of schools is only one-quarter as large as the naive cross-sectional estimates would imply. Moreover, house prices seem to react to changes in school assignments. Part of the impact of school assignments is mediated by subsequent changes in the characteristics of the population living in the school zone. |
| JEL: | J0 R0 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11347&r=ure |
| By: | Nicolaas J. Vriend (Queen Mary, University of London) |
| Abstract: | Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not). |
| Keywords: | Endogenous interaction, Agent-based Computational Economics (ACE). |
| JEL: | C6 C7 D1 D2 D3 D4 D5 D6 D8 L1 M3 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp542&r=ure |
| By: | Adriaan R. Soetevent (University of Amsterdam); Peter Kooreman (University of Groningen) |
| Abstract: | In this paper we identify the lines along which social ties between high school teenagers are primarily formed. To this end, we introduce interaction weights between pupils in the same school class that are a function of exogenous individual background characteristics, like gender, ethnicity, and having older siblings. The resulting model with endogenous interactions and school specific fixed effects is estimated using data from the Dutch National School Youth Survey (NSYS), a survey in which in principle all students in a sampled class are interviewed. By combining the 1992, 1996, 1999 and 2001 NSYS data, we are able identify trends in social relationships of teenagers. We find that the roles that gender and ethnicity play in how teenagers interact varies strongly across different types of behavior. For example, going out shows strong within-ethnicity interactions, while expenditures on cell phone and on clothing exhibit mainly between-girls interactions. Having older siblings has a minor effect on within school class social interactions. There is weak evidence of decreased ethnic segregation within school classes during the decade considered. |
| Keywords: | teenage behavior, social interactions, segregation, time use, expenditures |
| JEL: | D12 |
| Date: | 2005–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpmi:0505004&r=ure |
| By: | Petri Böckerman (Labour Institute for Economic Research); Eero Lehto (Labour Institute for Economic Research) |
| Abstract: | This paper explores domestic mergers and acquisitions (M&As) from the regional perspective. The Finnish firm-level evidence reveals that geographical closeness matters a lot for M&As within a single country. Thus, a great number of domestic M&As occur within narrowly defined regions. Interestingly, domestic M&As reinforce the core-periphery dimension. The results from matched firm-level data show that the strong ability by an acquiring company to monitor the target (measured by the knowledge embodied in human capital) is able to support M&As that occur across distant locations. |
| Keywords: | mergers, acquisitions, monitoring, agglomeration |
| JEL: | G34 R12 |
| Date: | 2005–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0505002&r=ure |
| By: | P Nair (ICFAI University); Deepak Kumar (ICFAI University Press) |
| Abstract: | The Suburban Railway system in Mumbai is perhaps the most complex, densely loaded and intensively utilized system in the world. Due to the magnitude of the project and the need for continuous assistance and involvement of the Government of Maharashtra, a separate corporation, the Mumbai Railway Vikas Corporation (MRVC) was set up jointly between the Ministry of Railways and the Government of Maharashtra. MRVC has made substantial improvements in the Mumbai suburban railway system since its inception, but it has to go a long way. This paper discusses the developments and the challenges of MRVC and a brief description of suburban systems of different Indian metro cities has also been presented. |
| Keywords: | Urban Transport Project |
| JEL: | R |
| Date: | 2005–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0505006&r=ure |
| By: | Ludwig, Alexander (Mannheim Research Institute for the Economics of Aging (MEA) and Sonderforschungsbereich 504); Sløk, Torsten (OECD) |
| Abstract: | This paper analyzes the relationship between stock prices, house prices and consumption using data for 16 OECD countries. The panel data analysis suggests that the long-run responsiveness of consumption to permanent changes in stock prices is higher for countries with a market-based financial system than for countries with a bank-based financial system. Splitting the sample into the 1980s and 1990s further shows an increased sensitivity in the 1990's of consumption to permanent changes in stock prices for both countries with bank-based financial systems as well as countries with market-based financial systems. The relationship between changes in consumption and changes in house prices is positive for the second sample period across all specifications and financial systems. |
| Date: | 2004–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:xrs:sfbmaa:04-12&r=ure |
| By: | Ross Rubenstein (Center for Policy Research, Maxwell School of Citizenship and Public Affairs, Syracuse University, Syracuse, NY); Lawrence Miller (Maxwell School of Citizenship and Public Affairs, Syracuse University, Syracuse, NY) |
| Abstract: | In this brief we take a closer look at the mechanisms used to distribute resources across public schools. We first present what we know about the current distribution of educational resources within New York City and other large city districts. Then we discuss current efforts to promote greater equity in the distribution of resources and improve student performance. We conclude with lessons and policy implications for New York State as it implements the CFE decision in New York City. These findings also apply toother large districts in the state, such as Buffalo, Rochester, Syracuse, and Albany. Our focus in this brief is on vertical equity--ensuring that schools serving students with different levels of need receive appropriately different levels of resources--rather than adequacy. But the two concepts are closely related. If we ensure that students with a variety of needs have ample resources to achieve agreed upon educational goals, we will achieve both school-level adequacy and vertical equity. |
| Keywords: | intradistrict resource allocation; interdistrict resource allocation; vertical equity; across-school disparities; school-based funding; weighted student funding. |
| JEL: | I22 I28 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprpbr:31&r=ure |
| By: | Kenneth Burdett (Department of Economics, University of Pennsylvania); Ricardo Lagos (New York University); Randall Wright (Department of Economics, University of Pennsylvania) |
| Abstract: | There is much discussion of the relationships between crime, inequality, and unemployment. We construct a model where all three are endogenous. We find that introducing crime into otherwise standard models of labor markets has several interesting implications. For example, it can lead to wage inequality among homogeneous workers. Also, it can generate multiple equilibria in natural but previously unexplored ways; hence two identical neighborhoods can end up with different levels of crime, inequality, and unemployment. We discuss the effects of anti-crime policies like changing jail sentences, as well as more traditional labor market policies like changing unemployment insurance. |
| Keywords: | Crime, Inequality, Unemployment, Search |
| JEL: | D83 J64 |
| Date: | 2002–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:03-029&r=ure |
| By: | Kenneth Burdett (Department of Economics, University of Pennsylvania); Ricardo Lagos (Department of Economics, New York University); Randall Wright (Department of Economics, University of Pennsylvania) |
| Abstract: | We extend simple search-theoretic models of crime, unemployment and inequality to incorporate on-the-job search. This is valuable because, although the simple models can be used to illustrate some important points concerning the economics of crime, on-the-job search models are more relevant empirically as well as more interesting in terms of the types of equilibria they generate. We characterize crime decisions, unemployment, and the equilibrium wage distribution. We use quantitative methods to illustrate key results, including a multiplicity of equilibria with different unemployment and crime rates, and to discuss the effects of changes in labor market and anti-crime policies. |
| Keywords: | Crime, Inequality, Unemployment, Search, Turnov |
| JEL: | D83 J31 |
| Date: | 2003–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:03-030&r=ure |