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on Urban and Real Estate Economics |
| By: | M. Hashem Pesaran; Til Schuermann; Björn-Jakob Treutler |
| Abstract: | In theory the potential for credit risk diversification for banks could be substantial. Portfolio diversification is driven broadly by two characteristics: the degree to which systematic risk factors are correlated with each other and the degree of dependence individual firms have to the different types of risk factors. We propose a model for exploring these dimensions of credit risk diversification: across industry sectors and across different countries or regions. We find that full firm-level parameter heterogeneity matters a great deal for capturing differences in simulated credit loss distributions. Imposing homogeneity results in overly skewed and fat-tailed loss distributions. These differences become more pronounced in the presence of systematic risk factor shocks: increased parameter heterogeneity greatly reduces shock sensitivity. Allowing for regional parameter heterogeneity seems to better approximate the loss distributions generated by the fully heterogeneous model than allowing just for industry heterogeneity. The regional model also exhibits less shock sensitivity. |
| Keywords: | Risk management, default dependence, economic interlinkages, portfolio choice |
| JEL: | C32 E17 G20 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0529&r=ure |
| By: | Charles Grant; Tuomas Peltonen |
| Abstract: | The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found, averaging over all households, both statistically and economically insignificant housing wealth effects. However, we found homeowners' MPC out of housing wealth gains to be |
| Keywords: | Wealth Effect; Consumption; MPC; Housing; Equities; SHIW |
| JEL: | D12 E21 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:043&r=ure |
| By: | Sandra Wallman (University College London) |
| Abstract: | This paper unpicks the assumption that because social networks underpin social capital, they directly create it – more of one inevitably making more of the other. If it were that simple, the sheer quantity of networks criss-crossing a defined urban space would be a proxy measure for the local stock of social capital. Of course the interrelationships are more complex. Two kinds of complication stand out. The first is specific: networks have both quantitative and qualitative dimensions, but the two elements have no necessary bearing on each other. The shape and extent of a network says nothing about the content of the links between its nodes. Certainly the line we draw between any two of them indicates contact and potential connection, but what kind of contact, how often, how trusting, in what circumstances, to what end…? Reliable answers to these questions need more than surface maps or bird’s eye accounts of who goes where, who speaks to whom. The second complication is a general, not to say universal, difficulty. We are stuck with the fact that sociological concepts - networks, social capital and trust included - are ‘only’ abstractions. They are ways of thinking about the apparent chaos of people behaving all over the place – here, to make it worse, in multi-cultural urban environments - but none of them is visible to be measured, weighed or quantified. This does not make the concepts ‘untrue’, and it should not stop them being useful. My hope is that we can find a nuanced perspective which will at least make the complications intelligible. At best, a multi-layered model will account for diversity in the nature of trust; and for variations in the way social capital is hoarded or distributed within and across ethnic boundaries. It would be contribution enough if we were able to specify the conditions which cause social capital, as Puttnam formulates it, to be exclusionary or inclusionary in its effect. |
| Keywords: | Network capital, Social trust, ‘Good’ diversity |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.67&r=ure |
| By: | Elsbeth van Hylckama Vlieg (The International Federation for Housing and Planning, The Hague) |
| Abstract: | Urban Planning is a discipline that covers the whole of spatial expressions of social processes. Like economics and culture, spatial development has an impact on all sectors of policy. The theme of this event focuses on diversity, growth and sustainable development, which are the key points for urban development in general. This paper concentrates on the creation of physical conditions, with particular emphasis on the accommodation of social differences in our built environment, the processes that lead to segregation, and how planning methods could provide a counterweight. |
| Keywords: | Urban planning, Spatial development, Diversities |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.72&r=ure |
| By: | Ercole Sori (Università Politecnica delle Marche); Renato Sansa (Università Politecnica delle Marche) |
| Abstract: | This paper is an excursus on multiculturalism from a historical perspective. It ranges from the encounters of different cultures in ancient times, through the Middle Ages, the Reformation and Counter-Reformation period up to the present times. It describes the peculiarity of the solutions adopted, juridical or social, formal or informal. Although it is difficult to classify the various attitudes towards foreigners, a decisive distinction should be made between modern history and previous times. Until the 19th century the number of migrants was significant in a historical perspective, but limited in absolute terms. May this fact have helped the hosting institutions to encourage a favourable policy towards foreign settlements? Another distinction must be made between high qualified migration and humble and unskilled workers. Cities’ histories are full of discriminatory measures towards local immigrants from villages who swelled the ranks of urban outcasts. Finally, it seems clear that the category of multiculturalism, as a premise for the successful integration of foreigners can only be applied with precautions to historical examples. The challenge of the clash of cultures was tackled differently in past societies, without necessarily meaning that those societies were racist or xenophobic. Successful examples of integration and development with the contribution of diversity in the past could involve exclusion and discrimination apparently unacceptable nowadays. |
| Keywords: | Social dynamics, Conflicts, Multicultural cities, Diversities |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.73&r=ure |
| By: | Åslund, Olof (IFAU - Institute for Labour Market Policy Evaluation); Nordström Skans, Oskar (IFAU - Institute for Labour Market Policy Evaluation) |
| Abstract: | In empirical studies of segregation it is often desirable to quantify segregation that cannot be explained by underlying characteristics. To this end, we propose a fully non-parametric method for accounting for covariates in any measure of segregation. The basic idea is that given a set of discrete characteristics, there is a certain probability that a person belongs to a particular group, which can be used to compute an expected level of segregation. We also demonstrate that a modified index of exposure has both favorable analytical features and interpre-tational advantages in such settings. The methods are illustrated by an applica-tion to ethnic workplace segregation in Sweden. We also show how one can use a measure of exposure to study the earnings consequences of segregation stemming from different sources. |
| Keywords: | Exposure; covariates; ethnic workplace segregation |
| JEL: | C15 J15 J42 |
| Date: | 2005–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2005_012&r=ure |
| By: | Hiselius, Lena Winslott (Department of Economics, Lund University) |
| Abstract: | This paper uses the choice experiment approach to assess people's preferences regarding road transports of hazardous materials. In a mail survey, carried out in Stockholm, the capital of Sweden, changes in exposure to hazardous materials are used as a proxy for changes in accident risk. The results are analysed in the light of an earlier study on transports of hazardous materials by rail. Special attention is given to biases associated with the choice experiment method. The presence of hypothetical bias is studied by the use of self-reported degree of confidence that the respondent would vote the same way in a real referendum. The presence of a focusing effect is studied by an inclusion of information on other fatal risks. The indication is that there are no major differences in individual preferences for hazmat transported by rail or road. The estimates are also dependent on the confidence of stated choices and interpreting this dependence as a hypothetical bias, suggest that this type of bias tends to push estimated values downwards. The findings show that individual background data regarding transports of hazardous materials affect individuals in expected ways and there is no focusing effect. |
| Keywords: | Biases; Hazardous materials; Risk; Choice experiments |
| JEL: | C25 D61 D81 R41 |
| Date: | 2005–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2005_030&r=ure |
| By: | Gallo, Fredrik (Department of Economics, Lund University) |
| Abstract: | We analyse the political determination of transportation costs in an analytically solvable core-periphery model. In a benchmark case with certainty about where agglomeration takes place, we find that a majority of voters prefers low trade costs and the resulting equilibrium is an industrialised core and a de-industrialised periphery. Allowing for uncertainty we show that a high trade cost candidate, that guarantees the initial symmetric equilibrium, may defeat the core-periphery equilibrium candidate. The reason is that a coalition of risk-averse immobile factors of production votes for status quo due to uncertainty about which region that will attract industrial activity. |
| Keywords: | core-periphery model; majority voting; new economic geography; regional policy |
| JEL: | F12 F15 R12 |
| Date: | 2005–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2005_032&r=ure |
| By: | Philip J. Cook; Jens Ludwig |
| Abstract: | A common practice in the fields of education, mental health, and juvenile justice is to segregate problem youths in groups with deviant peers. Assignments of this sort, which concentrate deviant youths, may facilitate deviant peer influence and lead to perverse outcomes. This possibility adds to the list of arguments in support of "mainstreaming" whenever possible. But there are other concerns that help justify segregated-group assignments, including efficiency of service delivery and protection of the public. Our analysis organizes the discussion about the relevant tradeoffs. First, the number of deviant youths (relative to the size of the relevant population, or to the number of assignment locations) affects whether the harm-minimizing assignment calls for diffusion or segregation. Second, the nature of the problematic behavior is relevant; behavior which has a direct, detrimental effect on others who share the assignment makes a stronger case for segregation. Third, the capacity for behavior control matters, and may make the difference in a choice between segregation and integration. We briefly discuss the empirical literature, which with some exceptions is inadequate to the task of providing clear guidance about harm-minimizing assignment strategies. Finally, we reflect briefly on the medical-practice principle "first do no harm," and contrast it with the claims of potential victims of deviants. |
| JEL: | I18 I2 K42 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11390&r=ure |
| By: | Orley Ashenfelter; William J. Collins; Albert Yoon |
| Abstract: | In this paper we study the long-term labor market implications of school resource equalization before Brown and school desegregation after Brown. For cohorts born in the South in the 1920s and 1930s, we find that racial disparities in measurable school characteristics had a substantial influence on black males' earnings and educational attainment measured in 1970, albeit one that was smaller in the later cohorts. When we examine the income of male workers in 1990, we find that southern-born blacks who finished their schooling just before effective desegregation occurred in the South fared poorly compared to southern-born blacks who followed behind them in school by just a few years. |
| JEL: | J7 I28 N32 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11394&r=ure |
| By: | Markus Froehlich; Katharina Michaelowa |
| Abstract: | As opposed to many other school inputs, textbooks have frequently been demonstrated to significantly foster student achievement. Using the rich data set provided by the 'Program on the Analysis of Education Systems' (PASEC) for five francophone, sub-Saharan African countries, this paper goes beyond the estimation of direct effects of textbooks on students' learning and focuses on peer effects resulting from textbooks owned by students' classmates. Applying and extending nonparametric estimation methods from the treatment evaluation literature we separate the direct effect of textbooks from their peer effect. The latter clearly dominates but depends upon the initial level of textbook availability. |
| JEL: | C14 C21 O15 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2005:2005-11&r=ure |
| By: | dhafer saidane (gremars - University Lille 3) |
| Abstract: | A banking spatial competition model is developed to activate the horizontal and vertical parameters of differentiation in a two- dimensional space. Banking competition has become more relevant given the vertical differentiation elements related to some financial assets features. We consider a model in which spatial competition including vertical differentiation sets banks into a geometrical variable space linked with the regulation of deposit interest rates and financial transformation intensity. Thus we can rehabilitate in some case the Hotelling minimum differentiation principle applied to banking space and the financial changes based on the relation between financial imitation and financial innovation. |
| Keywords: | Banking, spatial competition |
| JEL: | G L |
| Date: | 2005–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0505021&r=ure |
| By: | Christoph A. Schaltegger; Simon Zemp |
| Abstract: | This paper investigates spatial spillovers in local spending decisions by using panel data of the Swiss communes in the canton of Lucerne during the 1990s. Due to the geographical fragmentation with a major central city and some 100 suburban communes within a distance from 4 to 55 kilometers to the center this area represents a particularly useful data base in order to test the relevance of spatial interactions in metropolitan areas. The empirical evidence confirms strategic interactions among suburban governments and the central city for public security spending. A 10% increase of the city’s security spending leads to a 3% decrease in security spending of the suburban communes in the Lucerne area. For all other spending items, the empirical evidence suggests no quantitative and significant spatial spillover effects. The same applies for spatial spillovers in overall local spending between the Lucerne communes and the Lucerne central city. |
| Keywords: | spatial spillovers; strategic interaction; central city exploitation |
| JEL: | D72 H72 |
| Date: | 2003–10 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2003-06&r=ure |
| By: | Christoph A. Schaltegger; Benno Torgler |
| Abstract: | There is a vast empirical literature investigating the relationship between government size and economic growth. But the empirical evidence of growth effects of public expenditure using cross-country regres-sions is still inconclusive. According to a number of authors this is not surprising since the negative rela-tionship only applies for rich countries with a large public sector. Restricting their analysis on rich coun-tries only they can show the predicted negative impact. Naturally, a selection of a sub-sample of rich countries is always somewhat arbitrary. Another possibility is to concentrate on governments within a rich country. However, only few studies investigate the effect of state and local spending on economic growth. This paper concentrates on the relationship between public expenditure and economic growth within a rich country using the full sample of state and local governments from Switzerland over the 1981-2001 period. The general finding is a fairly robust negative relationship between government size and economic growth. However, in contrast to public spending from operating budgets there is no significant impact on economic growth by expenditure from capital budgets. |
| Keywords: | Economic Growth; Government expenditure; Public Sector |
| JEL: | E62 H20 O23 |
| Date: | 2004–07 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2004-16&r=ure |
| By: | Bruno S. Frey; Alois Stutzer |
| Abstract: | Alienation to politics weakens political competition and can undermine the acceptance and legitimacy of democracy as a political system. Governance and representation problems at the local level cause part of citizens’ lack of power and political alienation. Citizens have local power if they can influence the political process so that its outcomes are closer to their preferences and if they feel to be effective in the political sphere. In order to increase citizens’ local power, we emphasize the role of institutions of local governance. Local democratic governance is concerned about the relationship between citizens and local government institutions, political representatives and officials. This relationship is fundamentally shaped by the federal structure of a nation’s government and by the scope and depth of citizens’ participation possibilities in the political process. |
| Keywords: | collective decision-making; constitutional design; constitutional economics; direct democracy; fiscal federalism; local governance; local power; participation |
| JEL: | D70 D71 D72 H10 H77 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2004-25&r=ure |
| By: | Kyoko Hirose (Graduate School of Economics, Osaka University); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University) |
| Abstract: | A Grossman-Helpman-Romer-type endogenous-growth model is developed in this study. This model has two countries in which there are knowledge spillovers that are partially local. Owing to these spillovers, innovation cost in a particular country decreases as the number of firms locating in both that country and the other country increases. If international knowledge spillovers are symmetric, innovation cost is lower in the country that has the larger market. However, if a small-market country can absorb the international knowledge spillovers better than a large-market country, the innovation cost may be lower in the small-market country. When the innovation cost is lower in the country that has a large market, the growth rate increases with agglomeration, which is generated by a reduction in the transportation costs. However, when the innovation cost is lower in the country that has a small market, the growth rate decreases with the reduction in the transportation costs. |
| Keywords: | knowledge spillovers, growth rate, transportation costs, market scale |
| JEL: | F43 O30 R12 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0515&r=ure |
| By: | Kyoko Hirose (Graduate School of Economics, Osaka University) |
| Abstract: | In this paper, a Grossman-Helpman-Romer-type endogenous growth model is developed with two regions in which there are mobile workers and linkage between consumption goods and differentiated intermediate goods. The economy has the potential to reach the following spatial configuration: full agglomeration, partial agglomeration, and segmented agglomeration. In perfect agglomeration, the innovation sector and intermediate goods sector agglomerate in one region. In partial agglomeration, intermediate goods firms partially agglomerate in the region where the innovation sector agglomerates perfectly. In segmented agglomeration, the innovation sector agglomerates in the region where both intermediate goods sector and final good sector do not agglomerate perfectly. In addition, we show the comparison of the welfare of skilled workers in each steady state. Not surprisingly, the welfare of the skilled in full agglomeration is always the highest. However, even though there are transportation costs of final good, the welfare in segmented agglomeration is not necessarily the lowest. |
| Keywords: | knowledge spillovers, transportation costs, inter-regional trade |
| JEL: | F43 O18 R11 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0516&r=ure |