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on Urban and Real Estate Economics |
| By: | Cameron, Gavin; Muellbauer, John; Murphy, Anthony |
| Abstract: | This paper investigates the bubbles hypothesis with a dynamic panel data model of British regional house prices between 1972 and 2003. The model consists of a system of inverted housing demand equations, incorporating spatial interactions and lags and relevant spatial parameter heterogeneity. The results are data consistent, with plausible long-run solutions and include a full range of explanatory variables. Novel features of the model include transaction cost effects influencing the speed of adjustment, and interaction effects between an index of credit availability and real and nominal interest rates. No evidence for a recent bubble is found. |
| Keywords: | bubble; house prices; ripple effect |
| JEL: | C51 E39 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5619&r=ure |
| By: | Justine S. Hastings; Thomas J. Kane; Douglas O. Staiger |
| Abstract: | We use data from a public school choice lottery to estimate the effect of attending a first-choice school. For the average student, attending a first-choice school is not associated with improvements in test scores or other academic outcomes. However, academic achievement is only one goal families may have when choosing a school and, depending on their preferences, parents may trade-off academic achievement against other desirable school traits. We estimate the implicit weight families attached to school test scores as revealed by their choices, and test for interactions between those preferences and the impact of winning the lottery. We find that those whose parents placed high weights on school test scores in their school choices experienced significant gains in test scores. Therefore, the impact of winning the lottery on academic achievement depends upon parents' objectives when choosing schools. |
| JEL: | I0 I2 I20 I28 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12145&r=ure |
| By: | Li Gan; Qinghua Zhang |
| Abstract: | This paper provides a search model for housing market where the number of buyers and/or sellers plays very important role. The model makes three testable predictions: (1) the unemployment rate has a negative impact on the trading volume and the sale prices of the housing market; (2) a larger housing market has a lower average sale price, shorter time-to-sale and smaller price dispersion, in addition to a lower vacancy rate. (3) In a larger housing market, when the unemployment rate goes up (or down), the sale price decreases (or increases) by a smaller percentage than in a smaller market. All three predictions are supported by a panel dataset of the Texas city-level housing markets. |
| JEL: | R0 R3 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12134&r=ure |
| By: | Patacchini, Eleonora; Zenou, Yves |
| Abstract: | We investigate the sources of differences in school performance between students of different races by focusing on identity issues. We find that having a higher percentage of same-race friends has a positive effect of white teenagers’ test score while having a negative effect on blacks’ test scores. However, the higher the education level of a black teenager’s parent, the lower this negative effect, while for whites, it is the reverse. It is thus the combination of the choice of friends (which is a measure of own identity) and the parent’s education that are responsible for the difference in education attainment between students of different races but also between students of the same race. One interesting aspects of this paper is to provide a theoretical model that grounds the instrumental variable approach used in the empirical analysis to deal with endogeneity issues. |
| Keywords: | education achievement; endogeneity issues; ethnic minorities; peer effects |
| JEL: | A14 I21 J15 J24 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5607&r=ure |
| By: | Sund, Krister (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Whether or not to differentiate - or track - students according to ability has been debated over the years. In Sweden, secondary schools that practiced tracking and schools that did not practice tracking existed simultaneously from 1980 to 1997. This variation in tracking status between schools is used in a differences-in-differences approach. I estimate whether tracking math, or not, in Swedish secondary school had any effect on the probability of having graduated upper-secondary school, but also whether tracking had any consequence for the math grade in upper-secondary school. The results show that when considering the attainment of upper-secondary education and the mean achievement in math, there are no effects of tracking. However, there are effects when estimating the probability of receiving a specific grade, i.e. fail, pass, pass with distinction or pass with special distinction. Tracked students, from families with low-educated parents, are more likely to fail math than similar students in a non-tracked environment. |
| Keywords: | Educational economics; Tracking; Ability grouping |
| JEL: | I21 |
| Date: | 2006–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2006_002&r=ure |
| By: | Eric J. Brunner (Quinnipiac University and University of Connecticut); Jennifer Imazeki |
| Abstract: | This paper examines who is likely to gain and who is likely to lose under a universal voucher program. Following Epple and Romano (1998, 2003), and Nechyba (2000, 2003a), we focus on the idea that gains and losses under a universal voucher depend on two effects: changes in peer group composition and changes in housing values. We show that the direction and magnitude of each of these effects hinges critically on market structure, i.e., the amount of school choice that already exists in the public sector. In markets with little or no Tiebout choice, potential changes in peer group composition create an incentive for high-socioeconomic (SES) households to vote for the voucher and for low-SES households to vote against voucher. In contrast, in markets with significant Tiebout choice, potential changes in housing values create an incentive for high-SES households to vote against the voucher and for low-SES households to vote for the voucher. Using data on vote outcomes from California's 2000 voucher initiative, we find evidence consistent with those predictions. |
| Keywords: | School Vouchers, Tiebout Choice, Voting |
| JEL: | H7 I2 L1 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2006-10&r=ure |
| By: | Alan Manning (London School of Economics); Jörn-Steffen Pischke (London School of Economics and IZA Bonn) |
| Abstract: | British secondary schools moved from a system of extensive and early selection and tracking in secondary schools to one with comprehensive schools during the 1960s and 70s. Before the reform, students would take an exam at age eleven, which determined whether they would attend an academically oriented grammar school or a lower level secondary school. The reform proceeded at an uneven pace in different areas, so that both secondary school systems coexist during the 1960s and 70s. The British transition therefore provides an excellent laboratory for the study of the impact of a comprehensive versus a selective school system on student achievement. Previous studies analyzing this transition have typically used a value-added methodology: they compare outcomes for students passing through either type of school controlling for achievement levels at the time of entering secondary education. While this seems like a reasonable research design, we demonstrate that it is unlikely to successfully eliminate selection effects in who attends what type of school. Very similar results are obtained by looking at the effect of secondary school environment on achievement at age 11 and controlling for age 7 achievement. Since children only enter secondary school at age 11, these effects are likely due to selection bias. Careful choice of treatment and control areas, and using political control of the county as an instrument for early implementation of the comprehensive regime do not solve this problem. |
| Keywords: | tracking, selective secondary schooling, comprehensive schools |
| JEL: | I21 I28 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2072&r=ure |
| By: | Ghebreegziabiher Debrezion (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam); Eric Pels (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam); Piet Rietveld (Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam) |
| Abstract: | A hedonic pricing model is estimated to analyse the impact of railways on house prices in terms of distance to railway station, frequency of railway services and distance to the railway line. Correcting for a wide range of other determinants of house prices we find that dwellings very close to a station are on average about 25% more expensive than dwellings at a distance of 15 kilometres or more. A doubling of frequency leads to an increase of house values of about 2.5%, ranging from 3.5% for houses close to the station to 1.3% for houses far away. Finally we find a negative effect of distance to railways, probably due to noise effects. Two railway station references were used in the analysis: the nearest and most frequently chosen station in the post code area. This distinction indicates that railway station accessibility is a more complex concept than one might think. It involves competition between railway stations. |
| Keywords: | property value; railway station; accessibility; hedonic pricing method |
| JEL: | R3 R4 |
| Date: | 2006–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20060031&r=ure |
| By: | Andreas Ammermueller (ZEW, Mannheim); Jörn-Steffen Pischke (London School of Economics and IZA Bonn) |
| Abstract: | We estimate peer effects for fourth graders in six European countries. The identification relies on variation across classes within schools. We argue that classes within primary schools are formed roughly randomly with respect to family background. Similar to previous studies, we find sizeable estimates of peer effects in standard OLS specifications. The size of the estimate is much reduced within schools. This could be explained either by selection into schools or by measurement error in the peer background variable. When we correct for measurement error we find within school estimates close to the original OLS estimates. Our results suggest that the peer effect is modestly large, measurement error is important in our survey data, and selection plays little role in biasing peer effects estimates. We find no significant evidence of non-linear peer effects. |
| Keywords: | peer effects, measurement error |
| JEL: | I21 J24 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2077&r=ure |
| By: | Eric J. Brunner (Quinnipiac University and University of Connecticut); Jon Sonstelie (University of California, Santa Barbara) |
| Abstract: | The 1971 ruling of the California Supreme Court in the case of Serrano v. Priest initiated a chain of events that abruptly ended local financing of public schools in California. In seven short years, California transformed its school finance system from a decentralized one in which local communities chose how much to spend on their schools to a centralized one in which the state legislature determines the expenditures of every school district. This paper begins by describing California's school finance system before Serrano and the transformation from local to state finance. It then delineates some consequences of that transformation and draws lessons from California's experience with school finance reform. |
| Keywords: | School Finance Reform, Centralization, Fiscal Federalism |
| JEL: | H1 H2 I2 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2006-09&r=ure |
| By: | Thomas J. Kane; Jonah E. Rockoff; Douglas O. Staiger |
| Abstract: | We use six years of data on student test performance to evaluate the effectiveness of certified, uncertified, and alternatively certified teachers in the New York City public schools. On average, the certification status of a teacher has at most small impacts on student test performance. However, among those with the same certification status, there are large and persistent differences in teacher effectiveness. This evidence suggests that classroom performance during the first two years, rather than certification status, is a more reliable indicator of a teacher's future effectiveness. We also evaluate turnover among teachers with different certification status, and the impact on student achievement of hiring teachers with predictably high turnover. Given relatively modest estimates of experience differentials, even high turnover groups (such as Teach for America participants) would have to be only slightly more effective in their first year to offset the negative effects of their high exit rates. |
| JEL: | I2 J0 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12155&r=ure |
| By: | Swenson, David A.; Eathington, Liesl |
| Abstract: | Tax increment financing (TIF) is a mechanism authorized by Iowa law allowing local governments, primarily cities, to capture the taxes collected on property valuation growth in a specified district. The use of TIF authority among Iowa's cities is extremely popular. In fiscal 1991, there were 746 different TIF districts or projects in Iowa. By fiscal 1997 that number had increased to 1,014, and by fiscal 2006, it had increased to 2,358, a 133 percent increase in a nine year period. More cities are using TIF authority, there are many more TIF projects than there were a decade ago, and the amount of statewide property taxable valuation that is sequestered within TIF districts and therefore not available to the general funds of all local governments has also grown strongly over the years. This report analyzes a decade of changes in TIF usage in Iowa. |
| Date: | 2006–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12586&r=ure |
| By: | Felix Weickmann |
| Date: | 2006–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwneu:neurusp93&r=ure |
| By: | Samuel Berlinski (Institute for Fiscal Studies and University College, London); Sebastian Galiani; Paul Gertler |
| Abstract: | Although the theoretical case for universal pre-primary education is strong, the empirical foundation is weak. In this paper, we contribute to the empirical case by investigating the effect of a large expansion of universal pre-primary education on subsequent primary school performance in Argentina. We estimate that one year of preprimary school increases average third grade test scores by 8 percent of a mean or by 23 percent of the standard deviation of the distribution of test scores. We also find that preprimary school attendance positively affects student’s self-control in the third grade as measured by behaviors such as attention, effort, class participation, and discipline. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:06/04&r=ure |
| By: | Fabio Sabatini |
| 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 a relevant 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: | C39 O15 O18 R11 Z13 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:sap:spesar:01&r=ure |
| By: | Martha Misas A. |
| Abstract: | This paper investigates the possible responses of an inflation-targeting monetary policy in the face of asset price deviations from fundamental values. Focusing on the housing sector of the Colombian economy, we consider a general equilibrium model with frictions in credit market and bubbles in housing prices. We show that monetary policy is less efficient when it responds directly to asset price of housing than a policy that reacts only to deviations of expected inflation (CPI) from target. Some prudential regulation may provide a better outcome in terms of output and inflation variability. |
| Date: | 2006–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:001043:002464&r=ure |
| By: | Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari; Economics and Organization, School for Advanced Studies in Venice) |
| Abstract: | A Quadratic Almost Ideal Demand System that allows for social interactions is described and then estimated on CEX data. Social interactions are introduced as mean budget shares and depend on peer membership and visibility. Peer identification is obtained by means of a similarity index which measures the probability of group membership. Reflection problem is tackled directly and therefore estimation is carried on with a Generalized Spatial 2SLS that deal with two types of endogeneity: the first due to contemporaneous choices of households, the second due to contemporaneous choice of goods. The results support the hypothesis that total expenditure allocation to budget shares depends both on social interaction and visibility. |
| Keywords: | Social Interactions, Demand System, Similarity, Endogeneity, Spatial Econometrics |
| JEL: | H31 C31 C49 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:22_06&r=ure |
| By: | Orazio Attanasio (Institute for Fiscal Studies and University College London); Laura Blow (Institute for Fiscal Studies); Robert Hamilton; Andrew Leicester (Institute for Fiscal Studies) |
| Abstract: | Over much of the past 25 years, the cycles of house price and consumption growth have been closely synchronised. Three main hypotheses for this co-movement have been proposed in the literature. First, that an increase in house prices raises households’ wealth, particularly for those in a position to trade down the housing ladder, which increases their desired level of expenditure. Second, that house price growth increases the collateral available to homeowners, reducing credit constraints and thereby facilitating higher consumption. And third, that house prices and consumption have tended to be influenced by common factors. This paper finds that the relationship between house prices and consumption is stronger for younger than older households, which appears to contradict the wealth channel. These findings therefore suggest that common causality has been the most important factor behind the link between house price and consumption. |
| Keywords: | House prices, consumption booms, wealth effects, collateral effects, common causality |
| JEL: | C13 D10 D91 E21 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:05/24&r=ure |
| By: | Greg Hannsgen |
| Abstract: | The development of the permanent income/life cycle consumption hypothesis was a key blow to Keynesian and Kaleckian economics, and, according to George Akerlof, it Òset the agendaÓ for modern neoclassical macroeconomics. This paper focuses on the relationship of housing wealth to neoclassical consumption theory, and in particular, the degree to which homes can be treated collectively with other forms of Òpermanent income.Ó The neoclassical analysis is evaluated as a partly normative and partly positive one, in recognition of the dual function of the neoclassical theory of rationality. The paper rests its critique primarily on the distinctive role of homes in social life; theories that fail to recognize this role jeopardize the social and economic goods at stake. Since many families do not own large amounts of assets other than their places of residence, these issues have important ramifications for the relevance of consumption theory as a whole. |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_445&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] - []); Isabelle Recotillet (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: | This work aims to study the interdependence between housing mode and situation on the labor market of the young people according to the gender. To this end, we use the Center for Studies and Research on Qualifications (the CEREQ ) data which relate to a sample of young people who have altogether terminated their studies in 1998 and who have been questioned on their professional course in 2001. We defined three modes of housing (with the parents, only and in couple) and distinguished between three situations from insertion on labor market (Fixed term contract, Unlimited duration contract and Unemployment). We deviate from the work completed in the fields insofar as we explicitly take into account the simultaneous character of the realization of a mode of housing and a mode of insertion in employment. We thus estimate simultaneous equations models between these two groups of variables. The results of estimate confirm and moderate the results establish by the literature. Our results show higher effects of the parental decohabitation on the situation on the labor market for the case of the girls compared to the boys, except for the life in couple which seems to affect, in close proportions, stability on the labor market. In addition, the housing modes of the girls are slightly sensitive as well to their own situation on the labor market as to that their parents, contrary to the boys. The latter more seem to profit from the familiar support to build a residential autonomy and to live alone. |
| Keywords: | Housing mode; Job access, Simultaneous equation model |
| Date: | 2006–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00010140_v1&r=ure |
| By: | E. Dijkgraaf (Erasmus Universiteit Rotterdam); R.H.J.M. Gradus (Erasmus Universiteit Rotterdam, and Ministry of Social Affairs, The Hague, and Vrije Universiteit Amsterdam) |
| Abstract: | Sunday shop opening is deregulated to the municipal level in the Netherlands. Despite positive effects on economic growth and employment, many municipalities restrict Sunday shop opening. Based on 2003 data we show that diverse local characteristics, like the size of municipalities and religious and political affiliation, play a major role in decisions about Sunday shop opening. The evidence is consistent with the hypothesis that municipal control over Sunday shopping hours results in a considerable variation in policies. As this variation is related to significant differences between municipalities, reasons exist to decentralize the decision on Sunday shopping opening. |
| Keywords: | Sunday opening; economic regulation; decentralization |
| JEL: | D78 L51 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20060003&r=ure |
| By: | Jacob L. Vigdor |
| Abstract: | The black-white earnings gap has historically been larger in the South than in other regions of the United States. Since 1970, however, the male annual earnings gap outside the South has increased – dramatically, when the analysis factors in non-participants – while the gap within the South has narrowed, to the point where 2000 Census figures indicate significantly lower racial inequality in the South. Three proposed explanations for this trend focus on changing patterns of selective migration, labor market trends including reduced discrimination and the decline of manufacturing employment, and reductions in school segregation and school resource disparities in the South relative to the North. Evidence suggests that selective migration can explain about 40% of the South’s relative advance, and virtually all of the relative advance after 1980. Earlier declines can be attributed in large part to reduced industrial segregation and other labor market advances in the South. Relative improvements in school quality for Southern blacks explain at most 20% of the overall trend. |
| JEL: | J15 J71 N32 N92 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12143&r=ure |
| By: | Verónica Durán-Carbó; Charles ReVelle; Daniel Serra |
| Abstract: | In this paper we present a model that studies firm mergers in a spatial setting. A new model is formulated that addresses the issue of finding the number of branches that have to be eliminated by a firm after merging with another one, in order to maximize profits. The model is then applied to an example of bank mergers in the city of Barcelona. Finally, a variant of the formulation that introduces competition is presented together with some conclusions. |
| Keywords: | Mergers, facility location, spatial competition |
| JEL: | C61 J80 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:960&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:0604&r=ure |