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on Urban and Real Estate Economics |
| By: | Guido de Blasio (Bank of Italy, Economic Research Department) |
| Abstract: | To explain the concentration of human capital in cities, urban theory conjectures that the metropolitan scale provides two sources of returns for the more educated; production benefits, both in terms of wages and non-monetary gains, and consumption benefits. By exploiting a unique survey on Italian workers that records information for the two sources of returns, this paper quantifies their respective roles. The findings show that skilled workers enjoy higher consumption amenities in larger cities. They benefit from the local public goods, such as transportation, health and schooling services, the shopping possibilities, and the cultural consumption potentials made possible by the urban location of cinemas, theaters, and museums. On the other hand, the more educated do not receive benefits on the production side. Their wages do not reflect a premium, and the returns to education and experience are not higher than elsewhere. Moreover, urban skilled workers do not change jobs more readily than elsewhere and do not appear to be more satisfied of their jobs. The estimates imply that in the largest metropolitan areas the value of the consumption amenities can be as high as 50% of the rents or 16-17% of the wages. |
| Keywords: | cities, human capital |
| JEL: | R0 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_571_06&r=ure |
| By: | Sabrina Di Addario (Bank of Italy, Economic Research Department); Eleonora Patacchini (University of Rome La Sapienza) |
| Abstract: | We analyze empirically the impact of urban agglomeration on Italian wages. Using micro-data from the Bank of Italy's Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets (30 percent of the total), we test whether the structure of wages varies with urban scale. We find that every additional 100 employees per square kilometer (100,000 inhabitants) in the local labor market raises earnings by 0.4-0.6 percent (0.1 percent) and that employees working in large cities earn, on average, 2-3 percent higher wages than those in the rest of the economy. The application of spatial data analysis techniques enables us to state that this effect is present only in the large cities surrounded by low-populated areas. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to managers, worker supervisors, and office workers. |
| Keywords: | Wage Differentials, Urbanization, Agglomeration Externalities, Population Clustering, Spatial Autocorrelation |
| JEL: | R12 J31 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_570_06&r=ure |
| By: | Andrea Pescatori (Universitat Pompeu Fabra); Caterino Mendicino (Stockholm School of Economics) |
| Date: | 2005–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:mmf:mmfc05:67&r=ure |
| By: | Peter Abelson (Department of Economics, Macquarie University); Roselyne Joyeux (Department of Economics, Macquarie University); George Milunovich (Department of Economics, Macquarie University); Demi Chung (Department of Accounting and Finance, Macquarie University) |
| Abstract: | This paper describes and explains changes in real house prices in Australia from 1970 to 2003. In the first part of the paper, we develop a national index of real house prices. We then discuss the main factors that determine real house prices and some previous attempts to model Australian house prices. We develop and estimate a long-run equilibrium model that shows the real economic determinants of house prices and a short-run asymmetric error correction model to represent house price changes in the short run. Consistent with economic theory, we find that in the long run real house prices are related significantly and positively to real income and to the rate of inflation as represented by the consumer price index. They are also related significantly and negatively to the unemployment rate, mortgage rates, equity prices, and the housing stock. Employing our short-run asymmetric error correction model, we find that there are significant lags in adjustment to equilibrium. When real house prices are rising at more than 2 per cent per annum the housing market adjusts to equilibrium in four quarters. When real house prices are static or falling, the adjustment process takes six quarters. |
| JEL: | G12 R31 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:mac:wpaper:0504&r=ure |
| By: | Calvin Schnure |
| Keywords: | Financial sector , Financial stability , |
| Date: | 2005–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/200&r=ure |
| By: | Baker, Judy L. |
| Abstract: | This study looks at the experience of integrated urban upgrading in a low-income neighborhood of Salvador, Bahia, Brazil. Infrastructure and social investments have been made in the community through a government program, with community participation playing a major role in the design and implementation. This approach is now perceived to be highly successful in terms of its implementation and positive impact on living conditions, and will provide the basis for a major state-wide program. This paper analyzes the lessons learned from the experience, with implications for scaling up as well as applications for other urban upgrading programs. Among the key issues looked at are: (1) what has worked well with the integrated urban upgrading approach and what has not; (2) how cost-effective the interventions were; (3) institutional arrangements given the multi-sectoral approach; and (4) sustainability issues of financing, tenure security, the prevention of further slum expansion, operations and maintenance, environmental sustainability, and job creation, and how they will impact on the poor over time. Key findings point to the importance of community participation, clear roles and responsibilities in institutional arrangements, the need for strong local government participation, and the high costs and challenges of providing housing for the poor. |
| Keywords: | Health Monitoring & Evaluation,Housing & Human Habitats,Urban Slums Upgrading,Urban Services to the Poor,Public Sector Economics & Finance |
| Date: | 2006–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3861&r=ure |
| By: | Michael Podgursky (Department of Economics, University of Missouri-Columbia) |
| Abstract: | In school finance lawsuits plaintiffs often claim that pay levels are not sufficient to recruit teachers who can deliver constitutionally-mandated levels of educational services. In this paper I consider several ways in which one might bring economic theory and data to bear on that question. I conclude that at present, and at least for the near term, education research cannot prescribe an “adequate” level of school spending on teachers, whether in the form of pay, benefits, or professional training, that can reliability predict a target level of student performance. If courts are predisposed to intervene in this matter, a more reasonable standard for “adequacy” is whether available revenues, when spent in an efficient manner, are sufficient to staff classrooms with appropriately-certified teachers in a flexible licensing regime that satisfies both state and federal teacher quality standards. |
| Keywords: | Teacher compensation, School finance |
| JEL: | I2 J3 |
| Date: | 2006–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0601&r=ure |
| By: | Charles Ka Yui Leung; Peiling Wei; Siu Kei Wong |
| Abstract: | Due to the relocation of manufacturing facilities from Hong Kong to Mainland China, it is widely believed that some vacant private factories have been used as offices in Hong Kong. Yet there is no direct and systematic evidence to support this speculation. In fact, according to MacGregor and Schwann (2003), industrial and commercial real estate shares some common features. Our research attempts to investigate empirically the price and volume relationship between industrial and commercial real estate, using both aggregate and disaggregate data from the industrial and commercial property markets in Hong Kong. The study was built on the observation that economic restructuring and geographical distance will affect the substitutability (and thus the correlation) of different types of property, and utilizes commonly used time series techniques for analysis. Policy implications are discussed. |
| Keywords: | aggregation bias, geographical distance, industrial real estate, substitutability |
| JEL: | G12 L80 R30 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhked:_179&r=ure |
| By: | Simona Iammarino (SPRU, University of Sussex); Philip McCann (University of Reading) |
| Abstract: | In this paper we investigate the relationship between location patterns, innovation processes and industrial clusters. In order to do this we extend a transactions costs-based classification of industrial clusters into a knowledge-based taxonomy of clusters, along the lines suggested by a critical revision of the main assumptions underlying most of the existing literature on spatially defined clusters. Our arguments show that the transactions costs approach and the innovation and technological change framework are broadly consistent, and that real insights into the microfoundations, nature, and evolution of clusters can be provided by these classification systems. |
| Keywords: | industrial clusters, firm location, innovation processes, cluster classification |
| JEL: | O31 O33 R3 D8 |
| Date: | 2006–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:138&r=ure |
| By: | Smart, Michael; Mintz, Jack M. |
| Abstract: | The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about electoral prospects would favor expenditures providing immediate benefits to their voters. An alternative budgetary approach is to separate capital from current revenues and expenditures and relax fiscal constraints by allowing governments to finance capital expenditures with debt, as suggested by the golden rule approach to capital funding. But the effect of capital budgeting would be to provide opportunities to politicians to escape the fiscal rule constraints by shifting current expenditures into capital accounts that are difficult to measure properly, thereby leading to increased borrowing. As an alternative, the authors propose a modified golden rule limiting debt finance to a proportion of the government ' s investment in self-liquidating assets. |
| Keywords: | Public Sector Economics & Finance,Investment and Investment Climate,Economic Theory & Research,Public & Municipal Finance,Urban Economics |
| Date: | 2006–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3860&r=ure |
| By: | Linda Loury |
| Abstract: | Understanding the role of informal contacts in job search can be important given that roughly half of workers find employment through such sources. Some previous research finds that informal contacts improve labor market outcomes. Other work shows that individuals who found their jobs through friends and relatives had lower wages and less job satisfaction than those who used other methods. In light of the varying effects, the purpose of this paper is to uncover why individuals differ in the types of contacts used to find the jobs that they hold. |
| Keywords: | Job search, Informal contacts |
| JEL: | J64 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0604&r=ure |
| By: | Giovanni B. Concu (Risk and Sustainable Management Group, University of Queensland) |
| Abstract: | This paper describes a Choice Modelling experiment set up to investigate the relationship between distance and willingness to pay for environmental quality changes. The issue is important for the estimation and transfer of benefits. So far the problem has been analysed through the use of Contingent Valuation-type of experiments, producing mixed results. The Choice Modelling experiment allows testing distance effects on parameters of environmental attributes that imply different trade-offs between use and non-use values. The sampling procedure is designed to provide a Ògeographically balancedÓ sample. Several specifications of the distance covariate are compared and distance effects are shown to take complex shapes. Welfare analysis also shows that disregarding distance produces under-estimation of individual and aggregated benefits and losses, seriously hindering the reliability of costbenefit analyses. |
| Keywords: | choice Modelling techniques, distance, aggregation, sampling, functional forms. |
| JEL: | Q51 Q58 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:murray:m05_7&r=ure |
| By: | Giovanni B. Concu (Risk and Sustainable Management Group, University of Queensland) |
| Abstract: | This article tests for the effect of distance on non-use values using a Choice Modelling (CM) experiment. Estimating a distance decay relationship for non-use values (NUVs) is important because it would define the market area for an environmental good, i.e. identify the limits for aggregating individual benefit estimates. In contrast to the common definition of NUVs as non-usersÕ values, the CM experiment designs the environmental attributes so that NUV changes can be disentangled from Use Value (UV) changes. The experiment also allows for testing different specification of the distance covariates. Data are obtained from a geographically representative sample. Results show that NUVs do not depend on distance. Aggregation of NUVs is based on income and individualsÕ environmental attitudes. |
| Keywords: | choice modelling, non-use values, aggregation, distance, geographical sampling. |
| JEL: | Q51 Q58 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:murray:m05_6&r=ure |