nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2006‒08‒19
eight papers chosen by
Steve Ross
University of Connecticut

  1. Assessing benefits of slum upgrading programs in second-best settings By Dasgupta, Basab; Lall, Somik V.
  2. Regional-Local Dimension of Russia's Fiscal Equalization By Jorge Martinez-Vazquez; Andrey Timofeev
  3. Investing cash transfers to raise long term living standards By Gertler, Paul; Martinez, Sebastian; Rubio-Codina, Marta
  4. University-local industry linkages : the case of Tohoku University in the Sendai area of Japan By Jiang, Juan; Harayama, Yuko; Abe, Shiro
  5. Should the Portuguese Toll-Free Highways Remain Toll Free? By Alfredo M. Pereira; Jorge M. Andraz
  6. Diffusion on social networks By Jackson, Matthew O.; Yariv, Leeat
  7. Educational Homogamy: Preferences or Opportunities? By Michael Svarer; Helena Skyt Nielsen
  8. Infrastructure and growth in South Africa : direct and indirect productivity impacts of 19 infrastructure measures By Fedderke, Johannes W.; Bogetic; Zeljko

  1. By: Dasgupta, Basab; Lall, Somik V.
    Abstract: Slum upgrading programs are being used by national and city governments in many countries to improve the welfare of households living in slum and squatter settlements. These programs typically include a combination of improvements in neighborhood infrastructure, land tenure, and building quality. In this paper, the authors develop a dynamic general equilibrium model to compare the effectiveness of alternative slum upgrading instruments in a second-best setting with distortions in the land and credit markets. They numerically test the model using data from three Brazilian cities and find that the performance of in situ slum upgrading depends on the severity of land and credit market distortions and how complementary policy initiatives are being implemented to correct for these problems. Pre-existing land supply and credit market distortions reduce the benefit-cost ratios across interventions, and change the rank ordering of preferred interventions. In the light of these findings, it appears that partial equilibrium analysis used in typical cost-benefit work overstates the stream of net benefits from upgrading interventions and may in fact propose a misleading sequence of interventions.
    Keywords: Banks & Banking Reform,Urban Housing,Urban Slums Upgrading,Urban Services to the Poor,Economic Theory & Research
    Date: 2006–08–01
  2. By: Jorge Martinez-Vazquez (Andrew Young School of Policy Studies); Andrey Timofeev (Andrew Young School of Policy Studies)
    Abstract: National equalization policies often are concerned with the quality and accessibility of services delivered at the lowest level (or local) government. When these policies are implemented in a hierarchical fashion through the intermediate level governments, national equalization policies need to take into account possible offsetting effects originating on regional or provincial government policies. In this paper, we examine recent fiscal equalization outcomes for about 2,000 Russian local governments to assess and explain the extent of equalization differences between and within regions. In particular, we examine the claim that intraregional policies should be blamed for rising disparities in local fiscal outcomes despite Russia 's federal government efforts to equalize sub-national government finances.
    Keywords: Russia's Fiscal Equalization, equalization differences, local fiscal, sub-national government finances
    Date: 2006–05–01
  3. By: Gertler, Paul; Martinez, Sebastian; Rubio-Codina, Marta
    Abstract: The authors test whether poor households use cash transfers to invest in income generating activities that they otherwise would not have been able to do. Using data from a controlled randomized experiment, they find that transfers from the Oportunidades program to households in rural Mexico resulted in increased investment in micro-enterprise and agricultural activities. For each peso transferred, beneficiary households used 88 cents to purchase consumption goods and services, and invested the rest. The investments improved the household ' s ability to generate income with an estimated rate of return of 17.55 percent, suggesting that these households were both liquidity and credit constrained. By investing transfers to raise income, beneficiary households were able to increase their consumption by 34 percent after five and a half years in the program. The results suggest that cash transfers to the poor may raise long-term living standards, which are maintained after program benefits end.
    Keywords: Economic Theory & Research,Small Area Estimation Poverty Mapping,Municipal Housing and Land,Land and Real Estate Development,Real Estate Development
    Date: 2006–08–01
  4. By: Jiang, Juan; Harayama, Yuko; Abe, Shiro
    Abstract: This paper focuses on Tohoku University in Sendai in the nonmetropolitan area of Japan. Both a long historical and comparative perspective and a spacial perspective are essential to discuss the relevance of university-local industry linkages to local regional economic development. The conjunction of these linkages and economic development has been affected by two evolutionary processes: institutional configurations and territorial dynamics in the national innovation system. In addition, university-local industry linkages have been complicated by top-down regionalization and bottom-up regionalism.
    Keywords: Tertiary Education,ICT Policy and Strategies,Agricultural Knowledge & Information Systems,Technology Industry,Rural Development Knowledge & Information Systems
    Date: 2006–08–01
  5. By: Alfredo M. Pereira (Department of Economics, College of William and Mary); Jorge M. Andraz (Faculdade de Economia, Universidade do Algarve)
    Abstract: This paper provides empirical evidence on the economic and budgetary effects of the recent investments in toll-free highways in Portugal, the so-called SCUTS, in an effort to bring some clarity to the current policy debate on these highways. This debate is centered on the issue of the financial sustainability of these highways and is related to the fact that their financing involves payments of shadow tolls from the public budget to the private firms that constructed and operate them. In this context, the introduction of tolls has been suggested. Our results deal directly with the conceptual adequacy and the financial necessity of such tolls. Our first conclusion is that investments in SCUTS have positive economic effects in all regions of the country. Furthermore, we find that regional spillovers account for about three-quarters of the total effects of these investments. A paradigmatic case is Lisbon, a region that captures the greatest share of these effects without any investments having actually occurred in the region itself. The importance of spillovers suggests that the conceptual argument for the introduction of tolls is weak. Our second conclusion is that investments in SCUTS do not seem to generate problems of financial sustainability for the public budget. We estimate that for all SCUTS, the equilibrium tax rate, i.e., the rate that would balance the tax revenues induced by these highways and the shadow tolls the government has to pay, is lower than the effective tax rate for the economy. Accordingly, the introduction of tolls is not necessary from a financial perspective.
    Keywords: road infrastructures, regional spillovers, financial sustainability, SCUTS, Portugal.
    JEL: C32 H54 R53
    Date: 2006–08–11
  6. By: Jackson, Matthew O.; Yariv, Leeat
  7. By: Michael Svarer; Helena Skyt Nielsen (School of Economics and Management, University of Aarhus, Denmark)
    Abstract: Individuals match on length and type of education. We investigate whether the systematic relationship between educations of partners is explained by opportuni- ties (e.g. low search frictions) or preferences (e.g. complementarities in household production or portfolio optimization). We find that half of the systematic sorting on education is due to low search frictions in marriage markets of the educational institutions. The other half is attributed to complementarities in household pro- duction, since income properties of the joint income process show no influence on partner selection.
    Keywords: positive assortative matching on education, search frictions, hedging, complementarities in household production
    JEL: J12 J24
    Date: 2006–08–16
  8. By: Fedderke, Johannes W.; Bogetic; Zeljko
    Abstract: Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity.
    Keywords: Transport Economics Policy & Planning,Economic Theory & Research,Public Sector Economics & Finance,Economic Growth,Inequality
    Date: 2006–08–01

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