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on Urban and Real Estate Economics |
| By: | Stijn Van Nieuwerburgh; Pierre-Olivier Weill |
| Abstract: | We investigate the 30 year increase in the level and dispersion of house prices across U.S. metropolitan areas in a calibrated dynamic general equilibrium island model. The model is based on two main assumptions: households flow in and out metropolitan areas in response to local wage shocks, and the housing supply cannot adjust instantly because of regulatory constraints. Feeding in our model the 30 year increase in cross-sectional wage dispersion that we document based on metropolitan-level data, we generate the observed increase in house price level and dispersion. In equilibrium, workers flow towards exceptionally productive metropolitan areas and drive house prices up. The calibration also reveals that, while a baseline level of regulation is important, a tightening of regulation by itself cannot account for the increase in house price level and dispersion: in equilibrium, workers flow out of tightly regulated towards less regulated metropolitan areas, undoing most of the price impact of additional local supply regulations. Finally, the calibration with increasing wage dispersion suggests that the welfare effects of housing supply regulation are large. |
| JEL: | E24 R12 R13 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12538&r=ure |
| By: | Juanna Schrøter Joensen; Helena Skyt Nielsen (School of Economics and Management, University of Aarhus, Denmark) |
| Abstract: | Outsourcing of jobs to low-wage countries has increased the focus on the accumulation of skills - such as Math skills - in high-wage countries. In this paper, we exploit a high school pilot scheme to identify the causal effect of advanced high school Math on labor market outcomes. The pilot scheme reduced the costs of choosing advanced Math because it allowed for at more flexible combination of Math with other courses. We find clear evidence of a causal relationship between Math and earnings for the students who are induced to choose Math after being exposed to the pilot scheme. The effect partly stems from the fact that these students end up with higher education. |
| Keywords: | Math, High School Curriculum, Instrumental Variable, Local Average Treatment Effect. |
| JEL: | I20 J24 |
| Date: | 2006–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2006-11&r=ure |
| By: | Mercedes Esteban-Bravo; Jose M. Mugica; Jose M. Vidal-Sanz |
| Abstract: | Outlet location plays a crucial role in retail strategy. In this paper we study the relationship between spatial density (concentration) of retailers in the trade area and their economic performance. This analysis will help managers figure out the economic potential of starting a retail business in a given area, reducing business start-up risks. We find that retail businesses located in high and low retail density zones enjoy higher performance levels, consistent with competitive advantage arising from agglomeration economies and local market power respectively. We also find that retail businesses located in intermediate density areas use a differentiation strategy based on business variety (diversification across stores). Outlets located in areas with the highest variety enjoy performance levels similar to those achieved in the agglomeration and low density areas. The results suggest that retail companies should jointly consider variety and density to determine location. |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wbrepe:wb065817&r=ure |
| By: | Bloch, Francis; Zenginobuz, Unal |
| Abstract: | This paper analyzes the provision of local public goods with positive spillovers across jurisdictions. If spillovers are symmetric, the noncooperative game played by jurisdictions admits a unique equilibrium, and an increase in spillovers reduces the total provision of public goods. Smaller jurisdictions always reduce their contribution, but larger jurisdictions can increase their contribution. When spillovers are asymmetric, equilibrium is unique if spillovers are low, while multiple equilibria exist for high spillover values. In the case of two jurisdictions, an increase in the flow of spillovers to one jurisdiction benefits agents from that jurisdiction but harms agents in the other jurisdiction. Beyond the case of two jurisdictions, the effect of changes in spillovers cannot be signed. An increase in the spillovers flowing to a jurisdiction can actually result in an increase in the supply of public goods by that jurisdiction and harm agents residing in it, while benefiting agents in the other jurisdictions. The results of the paper reveal the complexity of interactions that will plague the design of institutions for multijurisdictional local public good economies with spillovers. |
| Keywords: | local public goods; positive spillovers; equilibrium |
| JEL: | H41 H77 H73 |
| Date: | 2004–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:186&r=ure |
| By: | Raphaël Suire(CREM - CNRS); Jérome Vicente (LEREPS - GRES); Yan Dala Pria (CSO - IEP - CNRS) |
| Abstract: | The aim of this paper is to study the ambivalent properties of stabilities of clusters. We propose to enter the black box of the local knowledge externalities by focusing on the location decision externalities. In particular, we show that the nature of mimetic strategies in the convergence process of locational choices influence the dynamic stability of clusters. Thus, when uncertainty and search for legitimacy prevail on the need for coordination and the associated necessities of compatibility and technological convergence, the clusters are unstable, due to an excess of cognitive proximity and a risk of unintended spillovers. Nevertheless, this search for legitimacy, through the strategy which consists in following the locational choice of companies leader of a sector, can lead to the fast emergence of a cluster. But without relational proximity, its stability is not insured. These results are obtained following the formulation of some theoretical proposals on the links between location decision externalities and the resulting forms of socioeconomic proximities. This set of proposals is validated firstly by a model of simulation which makes it possible to test the properties of stability of aggregate outcomes of locational choices. Secondly, they are illustrated by a comparative empirical analysis of two main French clusters (Silicon Sentier and Sophia-Antipolis).. |
| Keywords: | clusters, proximities, stability, location under decision externalities, Silicon Sentier, Sophia-Antipolis |
| JEL: | C63 D85 R3 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:200619&r=ure |
| By: | Paul Beaudry; Mark Doms; Ethan Lewis |
| Abstract: | This paper focuses on the bi-directional interaction between technology adoption and labor market conditions. We examine cross-city differences in PC adoption, relative wages, and changes in relative wages over the period 1980-2000 to evaluate whether the patterns conform to the predictions of a neoclassical model of endogenous technology adoption. Our approach melds the literature on the effect of the relative supply of skilled labor on technology adoption to the often distinct literature on how technological change influences the relative demand for skilled labor. Our results support the idea that differences in technology use across cities and its effects on wages reflect an equilibrium response to local factor supply conditions. The model and data suggest that cities initially endowed with relatively abundant and cheap skilled labor adopted PCs more aggressively than cities with relatively expensive skilled labor, causing returns to skill to increase most in cities that adopted PCs most intensively. Our findings indicate that neoclassical models of endogenous technology adoption can be very useful for understanding where technological change arises and how it affects markets. |
| Keywords: | Technological innovations ; Labor market |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2006-24&r=ure |
| By: | Andreas Lehnert; Wayne Passmore; Shane M. Sherlund |
| Abstract: | Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that securitize mortgages and issue mortgage-backed securities (MBS). In addition, the GSEs are active participants in the secondary mortgage market on behalf of their own investment portfolios. Because these portfolios have grown quite large, portfolio purchases (in addition to MBS issuance) are often thought to be an important force in the mortgage market. Using monthly data from 1993 to 2005 we estimate a VAR model of the relationship between GSE secondary market activities and mortgage interest rate spreads. We find that GSE portfolio purchases have no significant effects on either primary or secondary mortgage rate spreads. Further, we examine GSE activities and mortgage rate spreads in the wake of the 1998 debt crisis, and find that GSE portfolio purchases did little to affect interest rates paid by new mortgage borrowers. This empirical finding is robust to alternative identification assumptions and to alternative model and variable specifications. |
| Keywords: | Government-sponsored enterprises ; Secondary markets |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2006-30&r=ure |
| By: | Michael Fritsch; Dirk Schilder |
| Abstract: | We investigate whether the supply of Venture Capital (VC) in Germany is driven by spatial influences. The study is based on information from more than 300 VC investments made in Germany between 2004 and 2005. We find evidence that the geographical distance between a VC company and the portfolio firm is not an important factor for German VC investments. Syndication of investments helps to overcome the problem of distance to portfolio firms if one of the investors is located close to the investment. Altogether, we find no evidence for a severe regional equity gap for young and innovative companies in Germany. |
| Keywords: | Venture Capital, regional equity gap, start-up financing |
| JEL: | G24 O16 D21 M13 R12 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2006-25&r=ure |
| By: | De Borger Bruno (University of Antwerp); Dunkerley Fay (K.U.Leuven-Center for Economic Studies); Proost Stef (K.U.Leuven-Center for Economic Studies; UCL - CORE) |
| Abstract: | The purpose of this paper is to compare the interaction between pricing and capacity decisions on simple serial and parallel transport networks. When individual links of the network are operated by different regional or national authorities, toll and capacity competition is likely to result. Moreover, the problem is potentially complicated by the presence of both local and transit demand on each link of the network. We bring together and extend the recent literature on the topic and, using both theory and numerical simulation techniques, provide a careful comparison of toll and capacity interaction on serial and parallel network structures. First, we show that there is more tax exporting in serial transport corridors than on competing parallel road networks. Second, the inability to toll transit has quite dramatic negative welfare effects on parallel networks. On the contrary, in serial transport corridors it may actually be undesirable to allow the tolling of transit at all. Third, if the links are exclusively used by transit transport, toll and capacity decisions are independent in serial networks. This does not generally hold in the presence of local transport. Moreover, it contrasts with a parallel setting where regional authorities compete for transit; in that case, regional investment in capacity leads to lower Nash equilibrium tolls. |
| Keywords: | congestion pricing, transport investment, transit traffic |
| JEL: | H23 H71 R41 R48 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:ete:etewps:ete0607&r=ure |
| By: | Quak, H.J.; Koster, M.B.M. de (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Local authorities increasingly use time-access regulations to improve social sustainability issues, such as the attractiveness of a city centre, the shopping climate, or to reduce the nuisance caused by urban freight transport. However, these time-windows increase delivery costs and the environmental burden. This paper evaluates five different time-window schemes on their social, environmental, and economic impacts. The first scheme examines the current time-window policy scheme. In the second scheme time-windows are harmonized between different cities. The third scheme moves all deliveries to the night. The fourth and fifth schemes evaluate the consequences of the proposal by the Dutch committee for urban distribution (committee Sakkers). The fourth scheme includes noise-legislation for delivering during the night, the fifth does not. This research includes interviews with several Dutch policy-making officials and is further based on a multiple-case study of fourteen large retail chains in different sectors and with different formulas. The results show that the current time-window scheme performs worst. The best time-window scheme would be a combination of the proposal of the committee Sakkers and the harmonization scenario. |
| Keywords: | Urban Goods Movement;Time-Window Regulation;Retail Logistics;Sustainability;City Logistics; |
| Date: | 2006–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30008999&r=ure |
| By: | Victor Aguirregabiria; Gustavo Vicentini |
| Abstract: | We propose a dynamic model of an oligopoly industry characterized by spatial competition between multi-store firms. Firms compete in prices and decide where to open or close stores depending on demand conditions and the number of competitors at different locations, and on location-specific private-information shocks. We provide an algorithm to compute Markov Perfect Equilibria (MPE) in our model. We conduct several numerical experiments to study how the propensity of multi-store retailers to spatial preemptive behavior depends on the magnitude of entry costs, exit value and transportation costs. |
| Keywords: | Spatial competition; Market dynamics; Sunk costs; Spatial preemptive behavior. |
| JEL: | C73 L13 L81 R10 R30 |
| Date: | 2006–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-253&r=ure |
| By: | Stephen G. Cecchetti |
| Abstract: | Modern central bankers are the risk managers of the financial system. They take actions based not only on point forecasts for growth and inflation, but based on the entire distribution of possible macroeconomic outcomes. In numerous instances monetary policymakers have acted in ways designed to avert disasters. What are the implications of this approach for managin the risks posed by asset price booms? To address this question, I study data from a cross-section of countries to examine the impact of equity and property booms on the entire distribution of deviation in output and price-level from their trends. The results suggest that housing booms worsen growth prospects, creating outsized risks of very bad outcomes. By contrast, equity booms have very little impact on the expected mean and variance of macroeconomic performance, but worsen the worst outcomes. |
| JEL: | E5 G0 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12542&r=ure |
| By: | Pamela Mueller; André van Stel; David J. Storey |
| Abstract: | This paper re-examines the link between new firm formation and subsequent employment growth. It investigates whether it is possible to have the wrong type of entrepreneurship - defined as new firm formation which leads to zero or even negative subsequent employment growth. It uses a very similar approach to that of Fritsch and Mueller (2004), confirming their findings that the employment impact of new firm formation is in three discrete phases. Then, using data for Great Britain, the paper shows the employment impact of new firm formation is significantly positive in England, but zero in Scotland where formation rates are much lower. It also shows that, in the low enterprise counties of GB, new firm formation has a negative effect on employment, implying that we find that the "wrong type of entrepreneurship" is possible. |
| Keywords: | New firm formation, employment growth, Great Britain, low entrepreneurial regions |
| JEL: | J23 L10 M13 R11 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2006-24&r=ure |
| By: | Michael Creel; Montserrat Farell Ferrer |
| Abstract: | Abstract We re-examine the theoretical concept of a production function for cognitive achievement, and argue that an indirect production function that depends upon the variables that constrain parents' choices is both more tractable from an econometric point of view, and more interesting from an economic point of view than is a direct production function that depends upon a detailed list of direct inputs such as number of books in the household. We estimate flexible econometric models of indirect production functions for two achievement measures from the Woodcock-Johnson Revised battery, using data from two waves of the Child Development Supplement to the PSID. Elasticities of achievement measures with respect to family income and parents' educational levels are positive and significant. Gaps between scores of black and white children narrow or remain constant as children grow older, a result that differs from previous findings in the literature. The elasticities of achievement scores with respect to family income are substantially higher for children of black families, and there are some notable difference in elasticities with respect to parents' educational levels across blacks and whites. |
| Keywords: | education; cognitive achievement; test score gaps |
| JEL: | D13 I20 J15 J24 |
| Date: | 2006–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:670.06&r=ure |
| By: | Alexis Leon |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:198&r=ure |
| By: | Yamauchi, Futoshi |
| Abstract: | "While nutritional intake in early childhood provides the basis for a child's health capital, investments in schooling provide the basis for a child's knowledge capital. That store of knowledge, in turn, will eventually be rewarded in the labor market. Does the good health built up by the child in his early years affect his educational achievement and his future success? This paper addresses that question based on panel data from South Africa." Authors' Abstract |
| Keywords: | Children Nutrition, Health capital, Height-for-age, Schooling, Investments, South Africa, Nutrition Evaluation, Nutritional status, Household resource allocation, Households Economic aspects, |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:fcndbr:203&r=ure |