|
on Urban and Real Estate Economics |
| By: | Sabrina Di Addario; Eleonora Patacchini |
| 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 to 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: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:243&r=ure |
| By: | Marvin M. Smith; Christy Chung Hevener |
| Abstract: | This paper presents the results of a Philadelphia Fed study that analyzes whether the community development efforts of a nonprofit in Camden, NJ, have an effect on local neighborhoods |
| Keywords: | Home ownership ; Housing |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpcd:05-02&r=ure |
| By: | Weili Ding (Queen's University); Steven Lehrer (Queen's University) |
| Abstract: | Peer effects have figured prominently in debates on school vouchers, desegregation, ability tracking and anti-poverty programs. Compelling evidence of their existence remains scarce for plaguing endogeneity issues such as selection bias and the reflection problem. This paper is among the first to firmly establish the link between peer performance and student achievement, using a unique dataset from China. We find strong evidence that peer effects exist and operate in a positive and nonlinear manner; reducing the variation of peer performance increases achievement; and our semi-parametric estimates clarify the tradeoffs facing policymakers in exploiting positive peers effects to increase future achievement. |
| Keywords: | Peer Effects, Ability Grouping, Selection on observables, China, Academic performance, Teacher quality |
| JEL: | I2 Z13 P36 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1047&r=ure |
| By: | Sabrina Di Addario |
| Abstract: | I analyze empirically the effects of both urban and industrial agglomeration on men`s and women`s search behavior and on the efficiency of matching. The analysis is based on the Italian Labor Force Survey micro-data, which covers 520 randomly drawn Local Labor Market Areas (66 per cent of the total) over the four quarters of 2002. I compute transition probabilities from non-employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched, and I test whether these are affected by urbanization, industry localization, labor pooling and family network quality. In general, the main results indicate that urbanization and labor pooling raise job seekers` chances of finding employment (conditional on having searched), while industry localization and family network quality increase only men`s. Moreover, neither urban nor industrial agglomeration affect non-employed indvidiual`s search behavior; although men with thicker family networks search more intensively. |
| Keywords: | Labour Market Transitions, Search Intensity, Urbanization, Industrial Localization |
| JEL: | J64 R00 J60 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:235&r=ure |
| By: | Giang Ho; Anthony Pennington-Cross |
| Abstract: | Local authorities in North Carolina, and subsequently in at least 23 other states, have enacted laws intending to reduce predatory and abusive lending. While there is substantial variation in the laws, they typically extend the coverage of the Federal Home Ownership and Equity Protection Act (HOEPA) by including home purchase and open end mortgage credit, by lowering annual percentage rate (APR) and fees and points triggers, and by prohibiting or restricting the use of balloon payments and prepayment penalties. Empirical results show that the typical local predatory lending law tends to reduce rejections, while having little impact on the flow (application and origination) of credit. However, the strength of the law, measured by the extent of market coverage and the extent of prohibitions, can have strong impacts on both the flow of credit and rejections. |
| Keywords: | Mortgages ; Banking law ; Home equity loans |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2006-009&r=ure |
| By: | Weili Ding (Queen's University); Steven Lehrer (Queen's University) |
| Abstract: | Class size proponents draw heavily on the results from Project STAR to support their initiatives. Adding to the political appeal of these initiative are reports that minority and economic disadvantaged students receive the largest benefits. To explore and truly understand the heterogeneous impacts of class size and student achievement requires more flexible estimation approaches. We consider several semi and nonparametric strategies and find strong evidence that i) higher ability students gain the most from class size reductions while many low ability students do not benefit from these reductions, ii) there are no significant benefits in reducing class size from 22 to 15 students in any subject area, iii) no additional benefits from class size reductions for minority or disadvantaged students, iv) significant heterogeneity in the effectiveness of class size reductions across schools and in parental and school behavioural responses. |
| Keywords: | Class size, Academic performance, Project STAR, Economic disadvantaged students, Minority students |
| JEL: | I2 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1046&r=ure |
| By: | Saïd Hanchane (LEST - Laboratoire d'économie et de sociologie du travail - http://www.univ-aix.fr/lest - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II] - []); Mostafa Tarek (LEST - Laboratoire d'économie et de sociologie du travail - http://www.univ-aix.fr/lest - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II] - []) |
| Abstract: | In this paper, we analyze the equilibrium on the market for schooling where both public and private schools coexist and where individuals are differentiated by income and ability. We study the distribution of students across sectors while examining the conditions for the existence of a majority voting equilibrium in the context of non single peaked preferences. Finally, we examine the existence of a hierarchy of school qualities, as a consequence of the discriminating pricing strategy used by private schools to internalize the effect of peer groups. |
| Keywords: | Education market; Majority voting equilibrium; Peer group effect; Pricing discrimination; Educational opportunity |
| Date: | 2006–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00009533_v1&r=ure |
| By: | Marc van der Steeg |
| Abstract: | This paper reviews arguments for government interference in the education sector and discusses the effectiveness of commonly used policy instruments. There are both efficiency and equity reasons for government intervention. Particular attention is paid to education spillovers (an efficiency motive). The empirical literature shows that there is little reason to argue for additional policy efforts to correct for externalities. There is some promising evidence, however, for non-pecuniary spillovers in the form of crime reduction and health improvements. With regard to the effectiveness of policy instruments, the paper discusses studies with a (quasi-)experimental design so that the causal impact of the policy can be identified. Early childhood interventions appear to be more effective than interventions in later stages of the education cycle. |
| Keywords: | private and social returns to education; education and equity; education policy; controlled and social policy experiments |
| JEL: | I20 I28 H23 H52 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:memodm:122&r=ure |
| By: | Thomas Brenner |
| Abstract: | This paper studies the frequency of observing a certain number of firms or employees in a region for a given industry. Various predictions for these frequencies are deduced from theoretical considerations. Then, the empirical distributions of 198 industries in Germany are analysed. It is found that different kinds of industries show quite different distributions. |
| Keywords: | industry study, spatial distribution, local industrial clusters. |
| JEL: | C12 L60 R12 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2005-16&r=ure |
| By: | Weili Ding (Queen's University); Steven Lehrer (Queen's University); J. Niles Rosenquist (University of Pennsylvania); Janet Audrain-McGovern (University of Pennsylvania) |
| Abstract: | This paper examines the influence of health conditions on academic performance during adolescence. To account for the endogeneity of health outcomes and their interactions with risky behaviors we exploit natural variation within a set of genetic markers across individuals. We present strong evidence that these genetic markers serve as valid instruments with good statistical properties for ADHD, depression and obesity. They help to reveal a new dynamism from poor health to lower academic achievement with substantial heterogeneity in their impacts across genders. Our investigation further exposes the considerable challenges in identifying health impacts due to the prevalence of comorbid health conditions and endogenous health behaviors. |
| Keywords: | health, education, genetic predisposition, obesity, ADHD, depression, instrumental variables, risky health behaviors |
| JEL: | I1 I2 C21 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1045&r=ure |
| By: | Denis Fougère (CNRS, CREST-INSEE, CEPR and IZA Bonn); Francis Kramarz (CREST-INSEE, CEPR and IZA Bonn); Julien Pouget (CREST-INSEE and IZA Bonn) |
| Abstract: | In this paper we examine the influence of unemployment on property crimes and on violent crimes in France for the period 1990 to 2000. This analysis is the first extensive study for this country. We construct a regional-level data set (for the 95 départements of metropolitan France) with measures of crimes as reported to the Ministry of Interior. To assess social conditions prevailing in the département in that year, we construct measures of the unemployment rate as well as other social, economic and demographic variables using multiple waves of the French Labor Survey. We estimate a classic Becker type model in which unemployment is a measure of how potential criminals fare in the legitimate job market. First, our estimates show that in the cross-section dimension, crime and unemployment are positively associated. Second, we find that increases in youth unemployment induce increases in crime. Using the predicted industrial structure to instrument unemployment, we show that this effect is causal for burglaries, thefts, and drug offences. To combat crime, it appears thus that all strategies designed to combat youth unemployment should be examined. |
| Keywords: | crime, youth unemployment |
| JEL: | J19 K42 J64 J65 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2009&r=ure |
| By: | Nizar Allouch (Queen Mary, University of London); John P. Conley (University of Vanderbilt); Myrna Wooders (University of Warwick) |
| Abstract: | We introduce a model of a local public goods economy with a continuum of agents and jurisdictions with finite, but unbounded populations. Under boundedness of per capita payoffs we demonstrate nonemptiness of the core of the economy. We then demonstrate that the equal treatment core coincides with the set of price-taking equilibrium outcomes with anonymous prices - that is, prices for public goods depend only on observable characteristics of agents. Existence of equilibrium follows from nonemptiness of the core and equivalence of the core to the set of equilibrium outcomes. Our approach provides a new technique for showing existence of equilibrium in economies with a continuum of agents. |
| Keywords: | Tiebout, Clubs, Jurisdictions, F-core, Core-equilibrium equivalence, Edgeworth equivalence, Continuum economies with clubs, Crowding types, Core, Equal treatment core |
| JEL: | C62 D71 H41 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp556&r=ure |
| By: | Paulo Reis Mourão (Universidade do Minho - NIPE) |
| Abstract: | This work aims at testing the hypothesis “The economic development level of a region influences the presence of professional soccer teams in the country’s first league, which have their head offices in that region”. Using a rational choice model and working with binary time-series cross-section data, this work focuses on the Portuguese case, from 1970 to 1999. The results corroborate the main importance of three factors, which increase the probability that a municipality has the head office of a team that plays in the first league: the per capita revenue, the level of infrastructures and the demographic dimension. |
| Keywords: | Regional development; Sports; BTSCS; logit models |
| JEL: | R11 R33 L83 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:1/2006&r=ure |
| By: | Carolina Fugazza (Center for Research on Pensions and Welfare Policies); Massimo Guidolin (Federal Reserve Bank of St. Louis); Giovanna Nicodano (Department of Economics, University of Turin and Center for Research on Pensions and Welfare Policies, Turin) |
| Abstract: | We calculate optimal portfolio choices for a long-horizon, risk-averse European investor who diversifies among stocks, bonds, real estate, and cash, when excess asset returns are predictable. Simulations are performed for scenarios involving different risk aversion levels, horizons, and statistical models capturing predictability in risk premia. Importantly, under one of the scenarios, the investor takes into account the parameter uncertainty implied by the use of estimated coefficients to characterize predictability. We find that real estate ought to play a significant role in optimal portfolio choices, with weights between 10 and 30% in most cases. Under plausible assumptions, the welfare costs of either ignoring predictability or restricting portfolio choices to financial assets only are found to be in the order of at least 100 basis points per year. These results are robust to changes in the benchmarks and in the statistical framework. |
| Keywords: | Optimal asset allocation, real estate, predictability, parameter uncertainty |
| JEL: | G11 L85 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:40&r=ure |
| By: | Lorenz Goette (University of Zurich, CEPR and IZA Bonn); David Huffman (IZA Bonn); Stephan Meier (Federal Reserve Bank of Boston) |
| Abstract: | Due to incomplete contracts, efficiency of an organization depends on willingness of individuals to take non-selfish actions, e.g., cooperate when there is no incentive to do so, or punish inefficient actions by others. Organizations also constitute a social boundary, or group. We investigate whether this social aspect of organizations has an important benefit, fostering unselfish cooperation and norm enforcement within the group, but whether there is also a dark side, in the form of hostility between groups. Our experiment provides the first evidence without the confounding effect of self-selection into groups. Individuals are randomly assigned to different platoons during a four-week portion of officer training in the Swiss Army. We conduct choice experiments - simultaneous prisoner’s dilemma games, with and without third-party punishment - in week three. Random assignment significantly increases willingness to cooperate with fellow platoon members. Assignment does not lead to hostility, in the sense of vindictive punishment of outsiders, but does affect norm enforcement, enhancing willingness to enforce a norm of cooperation towards fellow platoon members. This suggests that the social aspect of organizations motivates efficient behavior even when ordinary incentives fail, and helps explain practices designed to foster social ties or group identification within an organization. |
| Keywords: | organizations, in-group favoritism, social identity, punishment |
| JEL: | D23 J00 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2020&r=ure |
| By: | Banzhaf, H. Spencer (Resources for the Future); Walsh, Randy |
| Abstract: | Tiebout’s (1956) suggestion that people “vote with their feet” to find the community that provides their optimal bundle of taxes and public goods has played a central role in the theory of local public finance over the past 50 years. Given the central importance of Tiebout’s insights, there have been surprisingly few direct tests of his premise. In this paper, we use a Tiebout equilibrium model to derive testable hypotheses about changes in local community demographics. The model clearly predicts increased population density in neighborhoods that experience an exogenous increase in public goods but yields only tentative predictions about the effect on neighborhood composition. To test these hypotheses, we use a difference-in-difference model to identify the effect of initial pollution levels and changes in local pollution on population and demographic composition. Our results provide strong empirical support for the notion that households “vote with their feet” in response to changes in environmental quality. This result has two implications. First, and most broadly, it provides direct empirical support for the assumptions underlying the Tiebout model. Second, in our particular application, the potential for what we call “environmental gentrification” has important implications both for the analysis of environmental equity and for the design of environmental policies aimed at benefiting the less-advantaged elements of society. |
| Keywords: | Tiebout, gentrification, air quality |
| JEL: | J6 Q5 R2 |
| Date: | 2006–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-06-10&r=ure |
| By: | Thierry Warin; André Fourçans |
| Abstract: | This paper addresses the question of the likelihood of a race to the bottom in a monetary union, like the Euro-zone, that could result from tax competition between countries. This fear of a race to the bottom is used both in the economic literature and the political arena to promote tax harmonization. Using a game theoretical approach with the costs of changing tax policies to analyze the conditions of a race to the bottom, this paper shows that countries may not choose such an extreme strategy. In other words, the extreme case scenario of a race to the bottom is unlikely, and proponents of tax harmonization should base their reasoning upon other assumptions. |
| Keywords: | Monetary union, Economic integration, Tax competition, Tax harmonization, Fiscal competition |
| JEL: | H20 H26 H77 H87 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0603&r=ure |
| By: | anonymous |
| Abstract: | Banks are looking at new approaches to serving the unbanked, but many barriers exist. KeyBank is a pioneer in offering banking services to the unbanked. |
| Keywords: | Unbanked |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedccf:12&r=ure |
| By: | Philip Bond; David K. Musto; Bilge Yilmaz |
| Abstract: | Regulators express growing concern over “predatory lending,” which we take to mean lending that reduces the expected utility of borrowers. We present a rational model of consumer credit in which such lending is possible, and identify the circumstances in which it arises with and without competition. Predatory lending is associated with imperfect competition, highly collateralized loans, and poorly informed borrowers. Under most circumstances competition among lenders eliminates predatory lending. |
| Keywords: | Predatory lending |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:06-2&r=ure |