nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2006‒10‒21
twelve papers chosen by
Steve Ross
University of Connecticut

  1. School Competition By Jaag, Christian
  2. A Simple Model of Educational Production By Jaag, Christian
  3. Fat City: The Relationship Between Urban Sprawl and Obesity By Jean Eid; Henry G. Overman; Diego Puga; Matthew A. Turner
  4. Evaluating the impact of Mexico ' s quality schools program : the pitfalls of using nonexperimental data By Skoufias, Emmanuel; Shapiro, Joseph
  5. The optimal tax treatment of housing capital in the neoclassical growth model By Eerola , Essi; Määttänen , Niku
  6. An empirically based implementation and evaluation of a network model for commuting flows By Gitlesen, Jens Petter; Kleppe, Gisle; Thorsen, Inge; Ubøe, Jan
  7. A practitioner ' s guide to intergovernmental fiscal transfers By Shah, Anwar
  8. Baby Boomer Retirement Security: the Roles of Planning, Financial Literacy, and Housing Wealth By Annamaria Lusardi; Olivia S. Mitchell
  9. Teacher Incentives By Jaag, Christian
  10. Conscription and Crime By Galiani, Sebastian; Rossi, Martin; Schargrodsky, Ernesto
  11. Congestion Pricing: Long-Term Economic and Land-Use Effects By Safirova, Elena A.; Houde, Sébastien; Lipman, D. Abram; Harrington, Winston; Bagliano, Andrew D.
  12. Do Social Networks Inspire Employment? - An Experimental Analysis - By Berninghaus, Siegfried K.; Fischer, Sven; Gueth, Werner

  1. By: Jaag, Christian
    Abstract: This paper considers the influence of spatial competition on education and its effect on students' school choice and educational achievement by explicitely modeling educational production and the students' participation decision. Education at school is a function of teacher effort and class size. Students decide which school to attend on the basis of an assessment of the associated costs and prospective benefits from doing so. We analyze how competition between schools affects equilibrium resource spending and school diversity as well as the level and distribution of student attainment and welfare. The consideration of spatial aspects of school choice without recourse to vertical differentiation is a unique contribution of this paper. We argue that schools in metropolitan areas with short ways to school and many potential students face fiercer competition which increases school productivity and student performance. This result confirms the findings in Hoxby (2000). Overall learning time in school is constant in the probability that students behave well if students are segregated by type. However, better behaved students have a higher achievement due to higher optimum resource spending. Finally, we support our argument by an empirical analysis of student performance in various matura schools in Switzerland.
    Keywords: Schools; Education; Competition
    JEL: I21
    Date: 2006
  2. By: Jaag, Christian
    Abstract: There is a large body of literature on the effect of educational resources on student performance, such as teacher qualification, class size, and physical resources in school. It is dominated by empirical studies which often find ambiguous effects of resource spending on student outcomes. The unique contribution of this paper is the provision of a framework to study educational production with differentiated input factors, which allows for closedform solutions. We try to interpret the empirical findings on the basis of a simple theoretical model of educational production: Class size, employed school resources and student effort are endogenously determined in order to account for differences in educational achievement. We also discuss the choice of integrated vs. segregated classes. Optimum class size and school quality increase with higher discipline, while in equilibrium overall classroom disruption is equal in all classes.
    Keywords: Schools; Education; Educational Production
    JEL: I21
    Date: 2006
  3. By: Jean Eid; Henry G. Overman; Diego Puga; Matthew A. Turner
    Abstract: We study the relationship between urban sprawl and obesity. Using data that tracks individuals over time, we find no evidence that urban sprawl causes obesity. We show that previous findings of a positive relationship most likely reflect a failure to properly control for the fact the individuals who are more likely to be obese choose to live in more sprawling neighborhoods. Our results indicate that current interest in changing the built environment to counter the rise in obesity is misguided.
    Keywords: urban sprawl; obesity; selection effects
    JEL: I12 R14
    Date: 2006–10–06
  4. By: Skoufias, Emmanuel; Shapiro, Joseph
    Abstract: The authors evaluate whether increasing school resources and decentralizing management decisions at the school level improves learning in a developing country. Mexico ' s Quality Schools Program (PEC), following many other countries and U.S. states, offers US$15,000 grants for public schools to implement five-year improvement plans that the school ' s staff and community design. Using a three-year panel of 74,700 schools, the authors estimate the impact of the PEC on dropout, repetition, and failure using two common nonexperimental methods-regression analysis and propensity score matching. The methods provide similar but nonidentical results. The preferred estimator, difference-in-differences with matching, reveals that participation in the PEC decreases dropout by 0.24 percentage points, failure by 0.24 percentage points, and repetition by 0.31 percentage points-an economically small but statistically significant impact. The PEC lacks measurable impact on outcomes in indigenous schools. The results suggest that a combination of increased resources and local management can produce small improvements in school outcomes, though perhaps not in the most troubled school systems.
    Keywords: Tertiary Education,Education For All,Primary Education,Teaching and Learning,Secondary Education
    Date: 2006–10–01
  5. By: Eerola , Essi (RUESG, University of Helsinki); Määttänen , Niku (The Research Institute of the Finnish Economy and CEBR)
    Abstract: In a dynamic setting, housing is both an asset and a consumption good. But should it be taxed like other forms of consumption or like other forms of saving? We consider the optimal taxation of the imputed rent from owner housing within a version of the neoclassical growth model. We find that the optimal tax rate on the imputed rent is quite sensitive to the constraints imposed on the other available tax rates. In general, it is not optimal to tax the imputed rent at the same rate as the business capital income.
    Keywords: housing; capital taxation; optimal taxation
    JEL: E21 H21
    Date: 2005–07–11
  6. By: Gitlesen, Jens Petter (University of Stavanger); Kleppe, Gisle (Stord/Haugesund University College (HSH)); Thorsen, Inge (Stord/Haugesund University College (HSH)); Ubøe, Jan (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)
    Abstract: In this paper we present empirical results based on a network model for commuting flows. The model is a modified version of a construction introduced in Thorsen et al. (1999). Journeys-to-work are determined by distance deterrence effects, the effects of intervening opportunities, and the location of potential destinations relative to alternatives at subsequent steps in the transportation network. Calibration is based on commuting data from a region in Western Norway. Estimated parameter values are reasonable, and the explanatory power is found to be very satisfying compared to results from a competing destinations approach. We also provide theoretical arguments in favor of a network approach to represent spatial structure characteristics.
    Keywords: Journeys-to-work; transportation network; network approach; spatial structure characteristics
    JEL: C13 C51 C52
    Date: 2006–04–27
  7. By: Shah, Anwar
    Abstract: Intergovernmental fiscal transfers are a dominant feature of subnational finance in most countries. They are used to ensure that revenues roughly match the expenditure needs of various orders (levels) of subnational governments. They are also used to advance national, regional, and local area objectives, such as fairness and equity, and creating a common economic union. The structure of these transfers creates incentives for national, regional, and local governments that have a bearing on fiscal management, macroeconomic stability, distributional equity, allocative efficiency, and public services delivery. This paper reviews the conceptual, empirical, and practice literature to distill lessons of policy interest in designing the fiscal transfers to create the right incentives for prudent fiscal management and competitive and innovative service delivery. It provides practical guidance on the design of performance-oriented transfers that emphasize bottom-up, client-focused, and results-based government accountability. It cites examples of simple but innovative grant designs that can satisfy grantors ' objectives while preserving local autonomy and creating an enabling environment for responsive, responsible, equitable, and accountable public governance. The paper further provides guidance on the design and practice of equalization transfers for regional fiscal equity as well as the institutional arrangements for implementation of such transfer mechanisms. It concludes with negative (practices to avoid) and positive (practices to emulate) lessons from international practices.
    Keywords: Public Sector Economics & Finance,Intergovernmental Fiscal Relations and Local Finance Management,Public Sector Management and Reform,Public & Municipal Finance,Urban Economics
    Date: 2006–10–01
  8. By: Annamaria Lusardi; Olivia S. Mitchell
    Abstract: We compare wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers in 2004, and individuals in the same age group in 1992. Levels and patterns of total net worth have changed relatively little over time, though Boomers rely more on housing equity than their predecessors. Most important, planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non-planners. Instrumental variables estimates show that planning behavior can explain the differences in savings and why some people arrive close to retirement with very little or no wealth.
    JEL: D91 E21
    Date: 2006–10
  9. By: Jaag, Christian
    Abstract: This paper considers hidden teacher effort in educational production and discusses the implications of multiple teacher effort dimensions on optimum incentive contracts in a theoretical framework. The analysis of educational production in a multitask framework is a new and unique contribution of this paper to the economics of education. We first characterize the first-best and second-best outcomes. The model is extended to address specific questions concerning teacher incentive schemes: We compare input- to output-based accountability measures and study the implication of the level of aggregation in performance measures. Against the background of the empirical evidence on the effectiveness of teacher incentives, we argue that performance measures should be as broad as possible. Further, we present the optimum contract for motivated teachers. Finally, if education is produced in teacher teams, we establish the conditions for optimum team-based and individual incentives: The larger the spillover effects across teacher efforts and the better the measurability of educational achievement, the stronger the case for team-based incentives.
    JEL: M52 I21
    Date: 2006
  10. By: Galiani, Sebastian; Rossi, Martin; Schargrodsky, Ernesto
    Abstract: The initiation in criminal activities is, typically, a young phenomenon. The study of the determinants of entry into criminal activities should pay attention to major events affecting youth. In many countries, one of these important events is mandatory participation in military service. The objective of this study is to estimate the causal relationship between mandatory participation in military service and crime. The authors exploit the random assignment through a draft lottery of young men to conscription in Argentina to identify this causal effect. Their results suggest that participation in military service increased the likelihood of developing a criminal record in adulthood (in particular, for property and weapon-related crimes).
    Keywords: Peace & Peacekeeping,Children and Youth,Political Systems and Analysis,Politics and Government,Crime and Society
    Date: 2006–10–01
  11. By: Safirova, Elena A. (Resources for the Future); Houde, Sébastien (Resources for the Future); Lipman, D. Abram; Harrington, Winston (Resources for the Future); Bagliano, Andrew D.
    Abstract: We employ a spatially disaggregated general equilibrium model of a regional economy that incorporates decisions of residents, firms, and developers integrated with a spatially disaggregated strategic transportation planning (START) model that features mode, time period, and route choice to evaluate economic effects of congestion pricing. First, we evaluate the long-run effects of a road-pricing policy based on the integrated model of land use, strategic transport, and regional economy (LUSTRE) and compare them with the short-term effects obtained from the START model alone. We then look at distributional effects of the policy in question and point out differences and similarities in the short run versus the long run. Finally, we analyze the mechanisms at the source of the economic and land-use effects induced by the road-pricing policy.
    Keywords: traffic congestion, welfare analysis, CGE modeling, cordon tolls, distributional effects
    JEL: C68 D63 R13 R14 R41
    Date: 2006–09–15
  12. By: Berninghaus, Siegfried K. (Universität Karlsruhe); Fischer, Sven (Max Planck Institute for Research into Economic Systems. Strategic Interaction Group); Gueth, Werner (Max Planck Institute for Research into Economic Systems, Strategic Interaction Group)
    Abstract: There is robust field data showing that a frequent and successful way of looking for a job is via the intermediation of friends and relatives. Here we want to test this experimentally. Participants first play a simple public goods game with two interaction partners ('friends'), and share whatever they earn this way with two different sharing partners ('cousins') who have different friends. Thus one's social network contains two 'friends' and two 'cousins'. In the second phase of the experiment participants learn about a job opportunity for themselves and one additional vacancy and decide whom of their network they want to recommend and, if so, in which order. In case of coemployment, both employees compete for a bonus. Will one recommend others for the additional job in spite of this competition, will one prefer 'friends' or 'cousins' and how does this depend on contributions (of 'friends') or shared profits (with 'cousins')? Our findings are partly quite puzzling. Most participants, for instance, recommend quite actively but compete very fiercely for the bonus.
    Date: 2006–10–02

This nep-ure issue is ©2006 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.