nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2006‒11‒12
thirteen papers chosen by
Steve Ross
University of Connecticut

  1. Dispersed Interactions of Urban Residents By Bazhanov, Andrei; Hartwick, John
  2. Prospects for a unified urban general equilibrium theory By Berliant, Marcus
  3. El Paso Property Tax Abatement Ineffectiveness By Fullerton, Thomas; Aragones-Zamudio, Victor
  4. Geography and Electronic Commerce: Measuring Convenience, Selection, and Price By Chris Forman; Anindya Ghose; Avi Goldfarb
  5. Discriminatory Competition and Local competition By Jack Ochs; S.K. Han
  6. Can Information Asymmetry Cause Agglomeration? By Berliant, Marcus; Kung, Fan-chin
  7. Precios hedónicos para valoración de atributos de viviendas sociales en la Región Metropolitana de Santiago By Quiroga, Bernardo F.
  8. Does Social Capital Reduce Crime? By Paolo Buonanno; Daniel Montolio; Paolo Vanin
  9. Agglomeration and market entry in the U.S. steel industry:Empirical evidence based on the advent of slab casting by U.S. steel minimills By Gene Gruver; Frank Giarratani; Randall Jackson
  10. Airline Pricing, Price Dispersion and Ticket Characteristics On and Off the Internet By Anirban Sengupta; Steven Wiggins
  11. Long-Term Consequences of Congestion Pricing: A Small Cordon in the Hand Is Worth Two in the Bush By Margaret Walls; Safirova, Elena; Jiang, Yi
  12. The Control of Land Rent in the Fortified Farming Town By John Hartwick
  13. Tax Increment Financing By Jack Ochs; S.K. Han

  1. By: Bazhanov, Andrei; Hartwick, John
    Abstract: Beckmann's interaction model has each resident touching base in face-to-face activity with every other resident at the other's residence per unit time. We re-work his resulting ''interaction city'' with each resident ''operating with'' a Cobb-Douglas utility function. Similar but somewhat ''richer'' outcomes occur. We also investigate a new case with intermediate dispersion of face-to-face activity, one with scale economies in trip-making.
    Keywords: Household spatial interactions; Dispersed residential activity
    JEL: R14 D11
    Date: 2006–11–09
  2. By: Berliant, Marcus
    Abstract: This is a short essay on open questions in urban economic theory.
    Keywords: Urban General Equilibrium Theory; Universal Commodity Space
    JEL: R13 D60 D51
    Date: 2006–08–06
  3. By: Fullerton, Thomas; Aragones-Zamudio, Victor
    Abstract: Similar to many communities throughout the United States, the City of El Paso, Texas utilizes property tax abatements as a means for inducing companies to invest in the local economy. Abatements in El Paso were first introduced in 1988. Although many studies have examined the effectiveness of municipal abatement policies, most of those efforts rely on survey questionnaires or cross-sctional data. This study employs a time series data set to examine whether municipal authorities have achieved the objectives of the abatement program in El Paso.
    Keywords: Municipal property tax abatements; metropolitan development; applied econometrics
    JEL: R11 H25
    Date: 2006
  4. By: Chris Forman (Tepper School of Business); Anindya Ghose (Stern School of Business, New York University); Avi Goldfarb (Rotman School of Management, University of Toronto)
    Abstract: We develop a formal model of online-offline substitution to identify three factors that drive consumers to purchase online: convenience, selection, and price. This model builds hypotheses on how features of offline retail supply impact online purchasing. We then examine how the local availability of offline retail options drives use of the online channel and consequently how the convenience, selection, and price advantages of the online channel may vary by geographic location. In particular, we examine the effect of local store openings on online book purchases in that location. We explore this problem using data from Amazon on the top selling books for 1501 unique locations in the US for 10 months ending in January 2006. In addition to this data, we use information on changes in local retail competition as measured by openings of large specialty bookstores such as Borders or Barnes & Noble and discount stores such as Wal-Mart or Target. We show that even controlling for product-specific preferences by location, changes in local retail options have substantial effects on online purchases. We demonstrate how the convenience, selection, and price benefits of the Internet are different for customers in different types of locations. More generally, we show that geography significantly impacts the benefit that consumers derive from electronic markets.
    Date: 2006–09
  5. By: Jack Ochs; S.K. Han
    Date: 2006–01
  6. By: Berliant, Marcus; Kung, Fan-chin
    Abstract: Various models, such as those used in the New Economic Geography, employ combinations of agglomerative and repulsive forces to generate equilibria with cities and agglomeration. Can classical asymmetric information in the labor market, in the form of adverse selection, result in an equilibrium that features agglomeration of agents? We use a model with two types, high and low ability, and two locations. The high type dislikes work more than the low type. Firms in both locations have the same technology for production of a single consumption commodity. They know the distribution of types, but the type of a particular agent is private information to that agent. The firms compete with both potential entrants and firms in the other location. Firms offer labor contracts that specify wages based on hours worked. In equilibrium, zero profit, voluntary participation, and incentive compatibility constraints must be satisfied along with feasibility. A further stability requirement is imposed, that the equilibrium be immune to small locational deviations of consumers. We have functional forms and some relatively mild restrictions on parameters such that the equilibrium separates types by location. Thus, high and low skilled workers agglomerate separately. This can be induced as a comparative static change from a symmetric equilibrium to an asymmetric one by varying some of the exogenous parameters.
    Keywords: Adverse selection; Agglomeration
    JEL: R13 D82 R12
    Date: 2006–10–31
  7. By: Quiroga, Bernardo F.
    Abstract: In this paper, an hedonic pricing model is used to measure non-market attribute valuation in Social Housing Programs in Santiago de Chile. Implicit marginal prices are calculated as first stage Rosen estimates for attributes such as distance to different services, number of rooms of each type, and availability of warm water and connection to the sewage network. Distance implicit prices were calculated as the difference between coefficients of dummy variables which measured different distance levels. Results reveal non-linearity in the value of distances. Also, the number of rooms (especially bathrooms), as well as access to warm water and sewage system were highly valued.
    Keywords: hedonic modeling; social housing programs; attribute valuation.
    JEL: I38 H42 R21
    Date: 2005–12
  8. By: Paolo Buonanno (University of Bergamo); Daniel Montolio (University of Barcelona); Paolo Vanin (University of Padova)
    Abstract: We investigate the effects of civic norms and associational networks on crime rates. Through their impact on trust and economic development, civic norms may raise the expected returns to crime, but they may also increase its opportunity cost and the feelings of guilt and shame attached to it. Associational networks may increase returns to non-criminal activities and raise detection probabilities, but they may also provide communication channels for criminals. The empirical assessment of these effects poses serious problems of endogeneity, omitted variables and measurement error. Italy's great variance in social and economic characteristics, its homogeneity in policies and institutions, and the availability of historical data on social capital in its regions allow us to minimise the first two problems. To tackle the third one, we exploit high and stable report rates for some forms of property crime. Once we address these problems, we find that both civic norms and associational networks have a negative and significant impact on property crimes across Italian provinces.
    Keywords: Civic norms, Associational networks, Property crime, Italy
    JEL: A14 K42 Z13
    Date: 2006–10
  9. By: Gene Gruver; Frank Giarratani; Randall Jackson
    Date: 2006–01
  10. By: Anirban Sengupta (Texas A&M University); Steven Wiggins (Texas A&M University)
    Abstract: This paper uses a unique individual transactions data set to investigate the effects of internet purchase on the prices paid for individual airline tickets. The analysis also investigates the effects of changes in the percentage of online transactions on both online and offline prices and on overall price dispersion. The analysis also uses these unique data to provide a more complete analysis of the factors affecting airline price levels and price dispersion, contributing more generally to our understanding of airline pricing. Our novel data set includes detailed transaction level data the includes ticket characteristics and restrictions, carrier, estimated flight level load factors, date of issue, departure date, other hedonic factors affecting prices, whether the ticket was purchased online or offline, and the share of online purchases for the citypair. Controlling for numerous observed ticket characteristics, as well as carrier and route effects, the results show that online prices average about 13 percent less than the offline prices. The analysis also shows that a ten percent increase in the online share of tickets sold on a route decreases average prices by an additional 5 percent, with more of this effect coming in the form of lower offline prices. The results also suggest that the potential savings to the consumers from buying online in markets with lower share of internet purchases are higher than in markets where the online share is larger. The paper also finds evidence that an increase in online shares decrease price dispersion. The paper also uses these unique data to investigate the effects of hub dominance and high route shares on pricing. Due to data limitations previous investigations of these issues could not control for important ticket characteristics, load factors, and time of purchase in measuring the effects of concentration on price levels and dispersion. Our analysis controls for these factors while investigating the impact of market concentration on price levels and dispersion.
    Keywords: search cost, online, offline, price dispersion
    JEL: L8 L93
    Date: 2006–09
  11. By: Margaret Walls (Resources for the Future); Safirova, Elena (Resources for the Future); Jiang, Yi
    Abstract: We analyze a 2002 survey of Southern California residents to evaluate the relative importance of factors that affect workers’ propensity to telecommute and telecommuting frequency. The survey collected a wealth of individual demographic information as well as job type, industry, and employer characteristics from about 5,000 residents. In agreement with previous studies, we find that the propensity to telecommute is increasing with worker age and educational attainment. At the same time, we conclude that the propensity to telecommute depends to a large extent on a worker’s job characteristics and that the quantitative effects of job characteristics are at least as important as demographic factors. We also study what factors affect telecommuting frequency based on a one-week commuting diary of the telecommuters in the survey. The industry and occupation categories that play a significant role in affecting propensity to telecommute do not have similar effects on telecommuting frequency. On the contrary, some other job-related factors show substantial influences.
    Keywords: telecommuting, telework, transportation planning, econometric estimation, telecommuting frequency, telecommuting propensity
    JEL: C35 J22 R41
    Date: 2006–10–19
  12. By: John Hartwick (Queen's University)
    Abstract: We consider costly administration at the center of a farming community surrounding a fortified village. Land rent taxation is high cost mode of financing central administration in a tax incidence sense. Participatory administration by the governed is a lower cost alternative. We speculate why the low cost option has been out-competed by its higher cost alternative throughout history. We also take up constraints on predation on farmers by a landlord at the center.
    Keywords: administrative structure, public goods, welfare cost
    JEL: H41 H11
    Date: 2006–10
  13. By: Jack Ochs; S.K. Han
    Date: 2006–01

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