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on Urban and Real Estate Economics |
| By: | Arnab Bhattacharjee; Chris Jensen-Butler |
| Abstract: | This paper proposes a methodology for estimation of spatial weights matrices which are consistent with a given or estimated pattern of spatial autocovariance. This approach is potentially useful for applications in urban, environmental, development, growth and other areas of economics where there is uncertainty regarding the nature or spatial (or cross-sectional) interaction between regions (or economic agents). The proposed methodology is applied to housing markets in England and Wales and several new hypotheses are advanced about the social and economic forces that determine spatial diffusion in housing demand. |
| Keywords: | Spatial econometrics; Spatial autocorrelation; Spatial weights matrix, Spatial error model; Housing demand |
| JEL: | C14 C15 C30 C31 R21 R31 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:san:crieff:0519&r=ure |
| By: | Esteban Rossi-Hansberg; Pierre-Daniel_Sarte; Raymond Owens III |
| Abstract: | We document several empirical regularities regarding the evolution of urban structure in the largest U.S. metropolitan areas over the period 1980-1990. These regularities relate to changes in resident population, employment, occupations, as well as the number and size of establishments in different sections of the metropolitan area. We then propose a theory of urban structure that emphasizes the location and internal structure decisions of firms. In particular, firms can decide to locate their headquarters and operation plants in different regions of the city. Given that cities experienced positive population growth throughout the 1980s, we show that firm fragmentation produces the diverse set of facts documented in the paper. |
| JEL: | R12 R14 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11839&r=ure |
| By: | Gerard Marlet; Clemens van Woerkens |
| Abstract: | Richard Florida stated that it is not (only) job opportunities or urban amenities which attract creative high-educated people to cities but, rather, tolerance and aesthetics. We have tested this hypothesis in a cross section of Dutch cities. Our conclusion is that the tolerance/creative class nexus empirically fails to materialize for the Netherlands. However, the aesthetic assets of cities do provide a strong explanation for both share and growth of the creative class in Dutch cities. Beside that, job opportunities and urban amenities are still the most important factors influencing the choice for a place of residence. |
| Keywords: | urban economics, human capital, creative class, tolerance, urban amenities, city aesthetics |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0533&r=ure |
| By: | Miren Lafourcade; Giordano Mion |
| Abstract: | This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data we find, as in Kim (1995) and Holmes and Stevens (2002, 2004), that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities, and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-42&r=ure |
| By: | Gabor Vadas (Magyar Nemzeti Bank); Gergely Kiss (Magyar Nemzeti Bank) |
| Abstract: | As part of the monetary transmission studies of the Magyar Nemzeti Bank, this paper attempts to analyse the role of the housing market in the monetary transmission mechanism of Hungary. The housing market can influence monetary transmission through three channels, namely, the nature of the interest burden of mortgage loans, asset (house) prices, and the credit channel. The study first summarises the experiences of developed countries, paying special attention to issues arising from the monetary union. It then examines the developments in the Hungarian housing and mortgage markets in the last 15 years, as well as the expected developments and changes attendant to the adoption of the euro. Using panel econometric techniques, the study investigates the link between macroeconomic variables and house prices in Hungary, and the effect of monetary policy on housing investment and consumption through the wealth effect and house equity withdrawal. |
| Keywords: | Housing, Monetary transmission, Mortgage market, Panel econometrics |
| JEL: | E52 |
| Date: | 2005–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0512010&r=ure |
| By: | Donald Boyd; Pamela Grossman; Hamilton Lankford; Susanna Loeb; James Wyckoff |
| Abstract: | We are in the midst of what amounts to a national experiment in how best to attract, prepare, and retain teachers, particularly for high poverty urban schools. Using data on students and teachers in grades three through eight, this study assesses the effects of pathways into teaching in New York City on the teacher workforce and on student achievement. We ask whether teachers who enter through new routes, with reduced coursework prior to teaching, are more or less effective at improving student achievement than other teachers and whether the presence of these alternative pathways affects the composition of the teaching workforce. Results indicate that in some instances the new routes provide teachers with higher student achievement gains than temporary license teachers, though more typically there is no difference. When compared to teachers who completed a university-based teacher education program, teachers with reduced course work prior to entry often provide smaller initial gains in both mathematics and English language arts. Most differences disappear as the cohort matures and many of the differences are not large in magnitude, typically 2 to 5 percent of a standard deviation. The variation in effectiveness within pathways is far greater than the average differences between pathways. |
| JEL: | I0 I2 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11844&r=ure |
| By: | Robert C. Ficke; Andrea Piesse |
| Abstract: | To break the cycle of reliance of government assistance, HUD’s legislation includes a requirement that most public housing authorities (PHAs) offering the Housing Choice Voucher program develop action plans promoting family self-sufficiency (FSS) for client families. Avenues to family self-sufficiency include individual case management, education, employment, childcare and transportation, and a substantial delayed monetary incentive for families that achieve increases in earnings. PHAs’ FSS plans rely on community partnerships through which these opportunities and services are made available to public housing and Housing Choice Voucher families. Then, in a contractual arrangement of up to five years, an individual family and the PHA jointly target goals, utilizing the support services arranged by the PHA that they believe will enable the family to attain economic self-sufficiency. This study presents a descriptive profile of FSS program participants and FSS programs in terms of size across the country. Using site visits and 1996–2000 HUD administrative data, the study also reports FSS program outcomes and compares them with what changes occurred in similar non-FSS program participants during the same period. |
| JEL: | R50 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39010&r=ure |
| By: | Jeffrey R. Campbell |
| Abstract: | This paper develops a simple and robust implication of free entry followed by competition without substantial strategic interactions: Increasing the number of consumers leaves the distributions of producers' prices and other choices unchanged. In many models featuring non-trivial strategic considerations, producers' prices fall as their numbers increase. Hence, examining the relationship between market size and producers' actions provides a nonparametric tool for empirically discriminating between these distinct approaches to competition. To illustrate its application, I examine observations of restaurants' seating capacities, exit decisions, and prices from 224 U.S. cities. Given factor prices and demographic variables, increasing a city's size increases restaurants' capacities, decreases their exit rate, and decreases their prices. These results suggest that strategic considerations lie at the heart of restaurant pricing and turnover. |
| JEL: | L11 L81 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11847&r=ure |
| By: | Lars-Erik Borge; Linn Renée Naper |
| Abstract: | The paper performs an efficiency analysis of the lower secondary school sector in Norway. The efficiency potential is calculated to 14 percent based on a DEA analysis with grades in core subjects (adjusted for student characteristics and family background) as outputs. The analysis of the determinants of efficiency indicates that a high level of municipal revenue, a high degree of party fragmentation, and a high share of socialists in the local council are associated with low educational efficiency. The negative effects of the share of socialists and party fragmentation seem to reflect both higher resource use and lower student performance. |
| Keywords: | educational efficiency, DEA analysis, determinants of efficiency, political and budgetary institutions |
| JEL: | I21 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1624&r=ure |
| By: | Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics) |
| Abstract: | This paper carries out an empirical assessment of the relationship between social capital and the quality of economic development in Italy. The analysis draws on a dataset collected by the author including about two hundred variables representing different aspects of economic development and four “structural” dimensions of social capital. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, gender equality, and labour markets, while social capital is measured through synthetic indicators representing strong family ties, weak informal ties, voluntary organizations, and political participation. The quality of development exhibits a strong positive correlation with bridging weak ties and a negative correlation with strong family ties. Particularly, the analysis shows a strong correlation between informal ties and an indicator of “social well-being” (synthesizing gender equality, public services and labour markets) and between voluntary organizations and the state of health of urban ecosystems. Active political participation proves to be irrelevant in terms of development and well-being. Finally, the role of public spending for education, health care, welfare work, and the environment protection is analysed, revealing a scarce correlation both with social capital and development indicators. |
| Keywords: | Social capital, Social networks, Public spending, Economic development, Human development, Principal component analysis |
| JEL: | O15 O18 R11 |
| Date: | 2005–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0512011&r=ure |
| By: | Lindh, Thomas (Institute for Futures Studies); Malmberg, Bo (Institute for Futures Studies) |
| Abstract: | There are obvious reasons why residential construction should depend on the population’s age structure. We estimate this relation on Swedish time series data and OECD panel data. Large groups of young adults are associated with higher rates of residential construction. But there is also a significant negative effect from those above 75. Age effects on residential investment are robust and forecast well out-of-sample in contrast to the corresponding house price results. This may explain why the debate around house prices and demography has been rather inconclusive. Rapidly aging populations in the industrialized world makes the future look bleak for the construction industry of these countries. |
| Keywords: | demography; housing demand |
| JEL: | J11 |
| Date: | 2005–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2005_020&r=ure |
| By: | James Alm (Andrew Young School of Policy Studies, Georgia State University); Edward Sennoga (Andrew Young School of Policy Studies, Georgia State University); Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater) |
| Abstract: | In this paper we use monthly gasoline price data for all fifty U.S. states over the period 1984 to 1999 to examine the incidence of state gasoline excise taxes. Standard economic theory predicts full shifting of the excise tax to consumers when the supply of gasoline is perfectly elastic, and our empirical results are largely consistent with this prediction. In general, we find full shifting of gasoline taxes to the final consumer, with changes in gasoline taxes fully reflected in the tax-inclusive gasoline price almost instantly, a result consistent with a retail gasoline market in which firms are perfectly competitive and produce at constant cost. In addition, although we find that gasoline retail prices demonstrate asymmetric responses to changes in gasoline wholesale prices, we find only limited evidence of such behavior for retail prices with respect to gasoline excise taxes. Importantly, we also present a novel application of a spatial price discrimination model to examine tax incidence in markets that are not perfectly competitive. In this alternative framework, the incidence of excise taxes depends upon the competitiveness of retail gasoline markets, which depends in turn on spatial aspects of the market. Consistent with this alternative theoretical framework, our empirical estimates demonstrate that gasoline markets in urban states exhibit full shifting, but those in rural states demonstrate somewhat less than full shifting. |
| Keywords: | incidence, spatial competition, asymmetric response |
| JEL: | H22 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:uww:wpaper:05-09&r=ure |
| By: | Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics) |
| Abstract: | This paper carries out an assessment of the influence that different kinds of social ties exert on labour precariousness, on the state of health of urban environments and on the economic performance in Italy. Overall, the empirical evidence shows that weak ties connecting members of voluntary organizations positively affect the economic performance and the quality of urban ecosystems, differently from strong ties connecting family members and close friends, which, on the other side, are proved to reduce labour precariousness. |
| Keywords: | Social capital, Social networks, Economic development, Social quality, Civil Society, Labour precariousness, Structural Equations Modelling |
| JEL: | O P |
| Date: | 2005–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0512009&r=ure |
| By: | Richard J. Murnane; Richard R. Nelson |
| Abstract: | In an attempt to improve the quality of educational research, the U.S. Department of Education’s Institute of Education Sciences has provided funding for 65 randomized controlled trials of educational interventions. We argue that this research methodology is more effective in providing guidance to extremely troubled schools about how to make some progress than guidance to schools trying to move from making some progress to becoming high performance organizations. We also argue that the conventional view of medical research -- discoveries made in specialized laboratories that are then tested using randomized control trials -- is an inaccurate description of the sources of advances in medical practice. Moreover, this conventional view of the sources of advances in medical practice leads to incorrect inferences about how to improve educational research. We illustrate this argument using evidence from the history of medical research on the treatment of cystic fibrosis. |
| JEL: | I21 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11846&r=ure |
| By: | Charles F. Manski |
| Abstract: | Economists studying public policy have generally assumed that the relevant social planner knows how policy affects population behavior. Planners typically do not possess all of this knowledge, so there is reason to consider policy formation with partial knowledge of policy impacts. Here I consider the choice of a profiling policy where decisions to search for evidence of crime may vary with observable covariates of the persons at risk of being searched. To begin I pose a planning problem whose objective is to minimize the utilitarian social cost of crime and search. The consequences of candidate search rules depends on the extent to which search deters crime. Deterrence is expressed through the offense function, which describes how the offense rate of persons with given covariates varies with the search rate applied to these persons. I study the planning problem when the planner has partial knowledge of the offense function. To demonstrate general ideas, I suppose that the planner observes the offense rates of a study population whose search rule has previously been chosen. He knows that the offense rate weakly decreases as the search rate increases, but he does not know the magnitude of the deterrent effect of search. In this setting, I first show how the planner can eliminate dominated search rules and then how he can use the minimax or minimax-regret criterion to choose an undominated search rule. |
| JEL: | H8 K4 D8 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11848&r=ure |
| By: | Lloyd Blanchard (Center for Policy Research, Maxwell School, Syracuse University); Bo Zhao (Federal Reserve Bank of Boston); John Yinger (Center for Policy Research, Maxwell School, Syracuse University) |
| Abstract: | This paper examines whether methodological deficiencies in the literature on discrimination in small business credit markets have a significant impact on the estimation of discrimination and provides a preliminary investigation into the causes of discrimination in these markets. We find substantial, statistically significant evidence of discrimination in loan approval against black-owned and Hispanic-owned businesses in 1998 with additional control variables, with a variety of different specifications, and with a simultaneous model of the application and loan-denial decisions. We also find that discrimination in small business lending may take the form of statistical discrimination, driven by lenders' stereotypes about the ability of black- and Hispanic-owned businesses to succeed under some circumstances. In addition, we find that neither adding additional control variables nor accounting for possible endogeneity alters the conclusion that there is no discrimination in interest rates on approved loans. We also find, however, that black-owned businesses do face discrimination in interest rates when they deal with some types of lenders, particularly finance companies. Because finance companies specialize in higher-risk borrowers, this finding might indicate that they are willing to consider group-membership as a risk predictor despite the illegality of this practice. These findings suggest that federal financial regulatory agencies should re-double their efforts to uncover and prosecute lenders who discriminate against black- and Hispanic-owned businesses. |
| Keywords: | credit, discrimination, entrepreneur, minority-owned business, small business |
| JEL: | J15 G21 M13 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:74&r=ure |
| By: | Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics) |
| Abstract: | This paper carries out an empirical assessment of the relationship between social capital and labour productivity in small and medium enterprises in Italy. By means of structural equations models, the analysis investigates the effect of different aspects of the multifaceted concept of social capital. While the bonding social capital of strong family ties seems to be irrelevant, the bridging social capital of weak ties connecting friends and acquaintances is proved to exert a significant and positive influence both on labour productivity and on human development. |
| Keywords: | Labour productivity, Small and medium enterprises, Industrial organization, Social capital, Social networks, Structural equations models |
| JEL: | J24 R11 O15 O18 |
| Date: | 2005–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0512008&r=ure |
| By: | Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics) |
| Abstract: | This paper carries out an empirical assessment of the causal nexus connecting social capital’s diverse aspects to the “quality” of economic development in Italy. The analysis accounts for three main social capital dimensions (i.e. bonding, bridging and linking social capital) and measures them through synthetic indicators built by means of principal component analyses performed on a dataset including multiple variables. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, social protection, gender equality, and labour markets. The causal relationship between social capital’s and development’s different dimensions is then assessed through structural equations models. The analysis in this paper provides relevant a proof of Putnam’s claims on the positive role of civil society organizations in development processes. |
| Keywords: | Social capital, Social networks, Civil Society, Economic development, Social quality, Labour precariousness, Structural Equations Modelling |
| JEL: | O P |
| Date: | 2005–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0512010&r=ure |
| By: | Justina A.V. Fischer |
| Abstract: | The deleterious impact of institutions of direct legislation on student performance found in studies for both the U.S. and Switzerland has raised the question of what its transmission channels are. For the U.S., an increase in the ratio of administrative to instructional spending and larger class sizes were observed, supporting the hypothesis of a Leviathan-like school administration. For Switzerland, using a cross-sectional time-series panel of sub-federal school expenditure and size of classes, no such effect is detected. This finding is in line with previous analyses in which efficiency gains in the provision of public goods for Switzerland have been found. |
| Keywords: | direct democracy, median voter, bureaucracy, public education |
| JEL: | H41 H72 I22 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1628&r=ure |
| By: | Jon H. Fiva |
| Abstract: | This paper adds to the literature by utilizing improved data on tax revenue decentralization to re-examine the relationship between fiscal decentralization and the size of government. An econometric analysis using panel data from 18 OECD countries shows that fiscal decentralization matters for both the size and composition of government spending. Tax revenue decentralization is associated with a smaller public sector, while expenditure decentralization is associated with a larger public sector. The former effect seems to be driven by a reduction in social security transfers, while the latter effect seems to be driven by increased government consumption. |
| Keywords: | fiscal federalism, sub-central fiscal autonomy, government expenditures, size of government |
| JEL: | H11 H53 H77 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1615&r=ure |
| By: | António Afonso; Sónia Fernandes |
| Abstract: | In this paper we measure the relative efficiency of Portuguese local municipalities in a non-parametric framework approach using Data Envelopment Analysis. As an output measure we compute a composite local government output indicator of municipal performance. This allows assessing the extent of municipal spending that seems to be “wasted” relative to the “best-practice” frontier. Our results suggest that most municipalities could achieve, on average, the same level of output using fewer resources, improving performance without necessarily increasing municipal spending. Inefficiency scores are afterwards explained by means of a Tobit analysis with a set of relevant explanatory variables playing the role of non-discretionary inputs.. |
| Keywords: | local government; expenditure efficiency; technical efficiency; DEA; Tobit models. |
| JEL: | C14 C34 H72 R50 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp192005&r=ure |
| By: | Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics) |
| Abstract: | This paper provides an introduction to the concept of social capital, and carries out a critical review of the empirical literature on social capital and economic development. The survey points out six main weaknesses affecting the empirics of social capital. Identified weaknesses are then used to analyze, in a critical perspective, some prominent empirical studies and new interesting researches published in last two years. The need emerges to acknowledge, also within the empirical research, the multidimensional, context-dependent and dynamic nature of social capital. The survey also underlines that, although it has gained a certain popularity in the empirical research, the use of “indirect” indicators may be misleading. Such measures do not represent social capital’s key components identified by the theoretical literature, and their use causes a considerable confusion about what social capital is, as distinct from its outcomes, and what the relationship between social capital and its outcomes may be. Research reliant upon an outcome of social capital as an indicator of it will necessarily find social capital to be related to that outcome. This paper suggests to focus the empirical research firstly on the “structural” aspects of the concept, therefore excluding by the measurement toolbox all indicators referring to social capital’s supposed outcomes. |
| Keywords: | Social capital, Social networks, Trust, Economic development, Relation of economics to other disciplines, Relation of economics to social values |
| JEL: | O P |
| Date: | 2005–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0512008&r=ure |
| By: | Xavier Gabaix; Arvind Krishnamurthy; Olivier Vigneron |
| Abstract: | "Limits of Arbitrage" theories hypothesize that the marginal investor in a particular asset market is a specialized arbitrageur rather than a diversified representative investor. We examine the mortgage-backed securities (MBS) market in this light. We show that the risk of homeowner prepayment, which is a wash in the aggregate, is priced in the MBS market. The covariance of prepayment risk with aggregate wealth implies the wrong sign to match the observed prices of prepayment risk. The price of risk is better explained by a kernel based on MBS-market-wide specific risk. This finding is consistent with the specialized arbitrageur hypothesis. |
| JEL: | G12 G14 G21 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11851&r=ure |