nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2006‒11‒18
thirty-one papers chosen by
Steve Ross
University of Connecticut

  1. School Quality and the Black-White Achievement Gap By Eric A. Hanushek; Steven G. Rivkin
  2. Social Interaction and Urban Sprawl By Jan K. Brueckner; Ann G. Largey
  3. A Spatio-Temporal Model of House Prices in the US By Sean Holly; M. Hashem Pesaran; Takashi Yamagata
  4. Constrained School Choice By Guillaume Haeringer; Flip Klijn
  5. All in the Extended Family: Grandparents, Aunts, and Uncles and Educational Attainment By Linda Loury
  6. Description and Spatial Analysis of Employment Change in New Zealand Regions 1986-2001 By Jacques Poot; Bill Cochrane; Sandra Baxendine
  7. Multimarket spatial competition in the Colombian deposit market By Dairo Estrada; Sandra Rozo
  8. On Joint Modelling and Testing for Local and Global Spatial Externalities By Zhenlin Yang
  9. Tiebout's Tale in Spatial Economies: Entrepreneurship, Self-Selection, and Efficiency By Hideo Konishi
  10. Major League Duopolists: When Baseball Clubs Play in Two-Team Cities By Phillip Miller
  11. Regional Specialization And Location Of Industrial Activity In Turkey By Ayten Aysen Kaya
  13. Local Market Scale and the Pattern of Job Changes Among Young Men By Christopher H. Wheeler
  14. Teen Childbearing and Conservative Religious Communities By Linda Loury
  15. Is Terrorism Eroding Agglomeration Economies in Central Business Districts? Lessons from the Office Real Estate Market in Downtown Chicago By Alberto Abadie; Sofia Dermisi
  16. Factors Underlying the Formation of Industrial Clusters in Japan and Industrial Cluster Policy: A Quantitative Survey By Yoshida, Kentaro; Nakanishi, Machiko
  17. The impact of policies to control motor vehicle emissions in Mumbai, India By Takeuchi, Akie; Cropper, Maureen; Bento, Antonio
  18. Analyse spatiale du pouvoir de vote : application au cas de l'intercommunalité dans le département du Val d'Oise By Fabrice Barthélémy; Mathieu Martin
  19. Agglomeration Economies in Japan: Technical Efficiency, Growth and Unemployment By Mitra, Arup; Sato, Hajime
  20. As cidades e a classe criativa no Brasil: diferenças espaciais na distribuição de indivíduos qualificados By André Braz Golgher
  21. Exploratory Spatial Data Analysis and Spatial Econometric Modeling for the study of Regional Productivity Differentials in European Union, from 1975 to 2000 By Yiannis Kamarianakis; Julie Le Gallo
  22. The Balassa Index Meets the Dissimilarity Theil Index: a Decomposition Methodology for Location Studies By Eleonora CUTRINI
  23. A credit contagion model for loan portfolios in a network of firms with spatial interaction By Diana Barro; Antonella Basso
  24. Competitve Position OF The Baltic Sea Region. The Role of Regional Clusters. Potential for Regional Cooperation and Competitiveness-stimulating Intraregional Realocation By Tomasz Brodzicki
  25. Theory of a Flowchart Approach to Industrial Cluster Policy By Kuchiki, Akifumi
  26. Schooling, Skin Tone, and Attractiveness: Beauty Makes Skin Seem Deep By Linda Loury
  27. Is the Eldest Son Different? The Residential Choice of Siblings in Japan By Midori Wakabayashi; Charles Y. Horioka
  28. The Effect of Wal-Mart Supercenters on Grocery Prices in New England By Richard J. Volpe III; Nathalie Lavoie
  29. Informal Contacts and Job Search Among Young Workers By Linda Loury
  30. Airport Noise Regulation, Airline Service Quality, and Social Welfare By Jan K. Brueckner; Raquel Girvin
  31. To Segregate or to Integrate: Education Politics and Democracy By Matthias Doepke

  1. By: Eric A. Hanushek; Steven G. Rivkin
    Abstract: Substantial uncertainty exists about the impact of school quality on the black-white achievement gap. Our results, based on both Texas Schools Project (TSP) administrative data and the Early Childhood Longitudinal Survey (ECLS), differ noticeably from other recent analyses of the black-white achievement gap by providing strong evidence that schools have a substantial effect on the differential. The majority of the expansion of the achievement gap with age occurs between rather than within schools, and specific school and peer factors exert a significant effect on the growth in the achievement gap. Unequal distributions of inexperienced teachers and of racial concentrations in schools can explain all of the increased achievement gap between grades 3 and 8. Moreover, non-random sample attrition for school changers and much higher rates of special education classification and grade retention for blacks appears to lead to a significant understatement of the increase in the achievement gap with age within the ECLS and other data sets.
    JEL: H4 H7 I2 J15 J7 I1
    Date: 2006–10
  2. By: Jan K. Brueckner; Ann G. Largey
    Abstract: Various authors, most notably Putnam (2000), have argued that low-density living reduces social capital and thus social interaction, and this argument has been used to buttress criticisms of urban sprawl. If low densities in fact reduce social interaction, then an externality arises, validating Putnam’s critique. In choosing their own lot sizes, consumers would fail to consider the loss of interaction benefits for their neighbors when lot size is increased. Lot sizes would then be inefficiently large, and cities excessively spread out. The paper tests the premise of this argument (the existence of a positive link between interaction and density) using data from the Social Capital Benchmark Survey. In the empirical work, social interaction measures for individual survey respondents are regressed on census-tract density and a host of household characteristics, using an instrumental-variable approach to control for the potential endogeneity of density.
    JEL: J11 R10
    Date: 2006
  3. By: Sean Holly; M. Hashem Pesaran; Takashi Yamagata
    Abstract: The purpose of this paper is to apply recent advances in the econometrics of panel data to a problem that has a clear spatial dimension. We model the dynamic adjustment of real house prices using data at the level of US States. In the last decade, in most OECD countries there has been a significant rise in real house prices. This attracted the attention of many international organisations and central banks. In this paper we consider interactions between housing markets by examining the extent to which real house prices at the State level are driven by fundamentals such as real income, as well as by common shocks, and determine the speed of adjustment of house prices to macroeconomic and local disturbances. We take explicit account of both cross sectional dependence and heterogeneity. This allows us to find a cointegrating relationship between house prices and incomes and to identify a small role for real interest rates. Using this model we then examine the role of spatial factors, in particular the effect of contiguous states by use of a weighting matrix. We are able to identify a significant spatial effect, even after controlling for State specific real incomes, and allowing for a number of unobserved common factors.
    Keywords: house price, cross sectional dependence, spatial dependence
    JEL: C21 C23
    Date: 2006
  4. By: Guillaume Haeringer; Flip Klijn
    Abstract: Recently, several school districts in the US have adopted or consider adopting the Student-Optimal Stable Mechanism or the Top Trading Cycles Mechanism to assign children to public schools. There is clear evidence that for school districts that employ (variants of) the so-called Boston Mechanism the transition would lead to efficiency gains. The first two mechanisms are strategy-proof, but in practice student assignment procedures impede students to submit a preference list that contains all their acceptable schools. Therefore, any desirable property of the mechanisms is likely to get distorted. We study the non trivial preference revelation game where students can only declare up to a fixed number (quota) of schools to be acceptable. We focus on the stability of the Nash equilibrium outcomes. Our main results identify rather stringent necessary and sufficient conditions on the priorities to guarantee stability. This stands in sharp contrast with the Boston Mechanism which yields stable Nash equilibrium outcomes, independently of the quota. Hence, the transition to any of the two mechanisms is likely to come with a higher risk that students seek legal action as lower priority students may occupy more preferred schools.
    Keywords: school choice, matching, stability, Gale-Shapley deferred acceptance algorithm, top trading cycles, Boston mechanism, acyclic priority structure, truncation
    JEL: C78 D78 I20
    Date: 2006–11–06
  5. By: Linda Loury
    Abstract: Previous work on social interactions has analyzed the effects of nuclear family, peer, school, and neighborhood characteristics. This paper complements this research by first showing that individuals from similar nuclear families often differ in extended family member characteristics. It then demonstrates that older extended family members - aunts, uncles, and grandparents – independently affect college attendance probabilities and test score results of their younger relatives. In some cases, the sizes of the estimated effects are large enough to substantially narrow the achievement gap between disadvantaged and other youth.
    Date: 2006
  6. By: Jacques Poot (University of Waikato); Bill Cochrane (University of Waikato); Sandra Baxendine (Waikato District Health Board)
    Abstract: Over the last two decades New Zealand has undergone fundamental economic restructuring, and phases of slow and rapid growth, which have resulted in some dramatic changes in the regional economies. This paper provides a detailed multiperiod shift-share analysis over three intercensal periods between 1986 and 2001 on changes in regional employment outcomes at two levels of spatial disaggregation: 29 Administrative Regions (ARs), based on Regional Council areas, and 58 Labour Market Areas (LMAs) that have economically meaningful (commuting determined) boundaries. The contributions to employment outcomes of national trends, sectoral composition within regions, structural change, and local conditions are identified. A four-category disaggregation of regional employment into sex, age, occupation industry is also undertaken. The results show a dichotomy between metropolitan and non-metropolitan areas, but also several distinct clusters among the latter. Regional competitive advantage is clearly linked with net inward migration. There is also evidence of significantly positive spatial autocorrelation in the competitive effect. Local indicators of spatial association help to identify regions that stand out in terms of being surrounded by similar regions, or by regions that are just the opposite, in terms of the competitive effect. Interestingly, regional population growth precedes the competitive component of employment growth rather than just being a symptom of it.
    Keywords: Shift-Share Analysis, Cluster Analysis, Regional Competitiveness, Migration, Spatial Correlation
    JEL: R11 R12
    Date: 2005–11–21
  7. By: Dairo Estrada; Sandra Rozo
    Abstract: This paper presents a multimarket spatial competition oligopoly model for the Colombian deposit market, in line with the New Empirical Industrial Organization (NEIO) approach. In this framework, banks use price and non-price strategies to compete in the market, which allows us to analyze the country and the regional competitiveness level. The theoretical model is applied to quarterly Colombian data that covers the period between 1996 and 2005. Our results suggest that, although the country deposit market appears to be more competitive than the Nash equilibrium, there are some local areas within the country that present evidence of market power.
    Keywords: Banking; Location; Competition; Colombia. Classification JEL: D4; G21; L13; R12.
  8. By: Zhenlin Yang (School of Economics and Social Sciences, Singapore Management University)
    Abstract: This paper concerns the joint modeling, estimation and testing for local and global spatial externalities. Spatial externalities have become in recent years a standard notion of economic research activities in relation to social interactions, spatial spillovers and dependence, etc., and have received an increasing attention by econometricians and applied researchers. While conceptually the principle underlying the spatial dependence is straightforward, the precise way in which this dependence should be included in a regression model is complex. Following the taxonomy of Anselin (2003, International Regional Science Review 26, 153-166), a general model is proposed, which takes into account jointly local and global externalities in both modelled and unmodelled effects. The proposed model encompasses all the models discussed in Anselin (2003). Robust methods of estimation and testing are developed based on Gaussian quasi-likelihood. Large and small sample properties of the proposed methods are investigated.
    Keywords: Asymptotic property, Finite sample property, Quasi-likelihood, Spatial regression models, Robustness, Tests of spatial externalities.
    JEL: C1 C2 C5
    Date: 2006–10
  9. By: Hideo Konishi (Boston College)
    Abstract: This paper establishes the existence and efficiency of equilibrium in a local public goods economy with spatial structures by formalizing Hamilton's (1975 Urban Studies) elaboration of Tiebout's (1956 JPE) tale. We use a well-known equilibrium concept from Rothschild and Stiglitz (1976, QJE) in a market with asymmetric information, and show that Hamilton's zoning policy plays an essential role in proving existence and efficiency of equilibrium. We use an idealized large economy following Ellickson, Grodal, Scotchmer and Zame (1999, Econometrica) and Allouch, Conley and Wooders (2004). Our theorem is directly applicable to the existence and efficiency of a discrete approximation of mono- or multi-centric city equilibrium in urban economics with commuting time costs even if we allow existence of multiple qualities of (collective) residences, when externalities due to traffic congestion are not present.
    JEL: C62 D60 H41 H70 H73 R52
    Date: 2006–11–10
  10. By: Phillip Miller (Department of Economics, Minnesota State University)
    Abstract: This paper focuses on examining the attendance of MLB teams that play home games in the same metropolitan area – duopoly teams. Comparisons were made between the determinants of attendance for duopoly teams and monopoly teams. While duopoly and monopoly teams share most of the same determinants, the estimated weights on some determinants differ. There is evidence that one duopolist’s attendance is negatively related to the other’s performance. Evidence is therefore provided that fans of one team respond to quality changes in the other team in a city.
    Keywords: Sports, Baseball
    JEL: L83
    Date: 2006–11
  11. By: Ayten Aysen Kaya (Department of Economics, Ege University)
    Abstract: The aim of this study is to determine where the Turkish manufacturing industry tend to concentrate and by finding out the direction of this tendency to provide a ground in order to contribute to the realizations of regional policies of Turkey. Turkey’s regions are examined within the context of regional specialization and concentration. Regional specialization and concentration are measured by the Location Quotient Index (LQ) that can be computed at the regional level (NUTS 2). There are 26 NUTS 2 level in Turkey. Using employment data at 4 Digit ISIC Rev.3 codes, regional high point industries is identified, where industries account for at least over 0.2 percent of the regional workforce and which are at least 25 % more concentrated than average (LQ> 1.25). Consequently, changes in LQ are measured for high point manufacturing industries. These high point industries are then grouped to form the basis of a cluster. Focusing on industry clusters that gives all regions of Turkey a comparative advantage will help to create sustainable regional development policies.
    Keywords: regional specialization, regional concentration, industrial cluster, Location Quotient Index,
    JEL: R11 R12
    Date: 2006–11
  12. By: Thomas Rawski
    Date: 2006–10
  13. By: Christopher H. Wheeler (Federal Reserve Bank of St. Louis)
    Abstract: In finding a career, workers tend to make numerous job changes, with the majority of "complex" changes (i.e. those involving changes of industry) occurring relatively early in their working lives. This pattern suggests that workers tend to experiment with different types of work before settling on the one they like best. Of course, since the extent of economic diversity differs substantially across local labor markets in the U.S. (e.g. counties and cities), this career search process may exhibit important differences depending on the size of a worker's local market. This paper explores this issue using a sample of young male workers drawn from the National Longitudinal Survey of Youth 1979 Cohort. The results uncover two rather striking patterns. First, the likelihood that a worker changes industries rises with the size and diversity of his local labor market when considering the first job change he makes. Second, however, this association gradually decreases as a worker makes greater numbers of job changes. By the time he makes his fourth change, the likelihood of changing industries significantly decreases with the scale and diversity of the local market. Both results are consistent with the idea that cities play an important role in the job matching process.
    Keywords: Job Search, Labor Market Matching, Agglomeration
    JEL: J24 R23
    Date: 2006–09
  14. By: Linda Loury
    Abstract: The importance of neighborhood background characteristics on socioeconomic outcomes is uncertain because some dimensions of neighborhood quality such as social norms and social cohesion are difficult to measure. This paper shows that teen childbearing declines with increases in the fraction of a community’s religious adherents who are Catholics or Conservative Protestants. This finding is not simply due to related differences in local economic costs and benefits or with unobserved family or individual characteristics. Instead the results reflect social norms about teen sexual activity. They indicate that policy choices should take account of the influence of norms on individual behavior.
    Date: 2006
  15. By: Alberto Abadie; Sofia Dermisi
    Abstract: The attacks of September 11, 2001, and more recently the Madrid and London downtown train bombings, have raised concerns over both the safety of downtowns and the continuous efforts by terrorists to attack areas of such high density and significance. This article employs building-level data on vacancy rates to investigate the impact of an increased perception of terrorist risk after 9/11 on the office real estate market in downtown Chicago. Chicago provides the perfect laboratory to investigate the effects of an increase in the perceived level of terrorist risk in a major financial district. Unlike in New York, the 9/11 attacks did not restrict directly the available office space in downtown Chicago. Moreover, the 9/11 attacks induced a large increase in the perception of terrorist risk in the Chicago Central Business District, which includes the tallest building in the U.S. (the Sears Tower) and other landmark buildings which are potential targets of large-scale terrorist attacks. Our results show that, following the 9/11 attacks, vacancy rates experienced a much more pronounced increase in the three most distinctive Chicago landmark buildings (the Sears Tower, the Aon Center and the Hancock Center) and their vicinities than in other areas of the city of Chicago. Our results suggest that economic activity in Central Business Districts can be greatly affected by changes in the perceived level of terrorism.
    JEL: H56 K42 R33
    Date: 2006–11
  16. By: Yoshida, Kentaro; Nakanishi, Machiko
    Abstract: The purpose of this report is to use information provided by a questionnaire survey to analyze the factors and processes underlying the formation of industrial clusters in Japan. The study, based on questionnaire surveys, forms part of an “Industrial Cluster Projectâ€. The Japanese government has implemented policies for industrial clusters so as to enable Japanese industries to maintain competitive power in global markets, and to aid the self-sufficient expansion of local industries. The government's project goes under the heading “Industry Agglomeration for the Recovery of Local Industries with respect to so-called "Industry Clusters." The authors aim to identify what expectations are held of government by the enterprises that make up industrial clusters. As part of our investigation, we used the results of a survey conducted by UNDP in 2004. Tsuji's study, published by the Osaka School of International Public Policy, surveyed 1198 small or medium sized manufacturing companies located in O ward, Tokyo and Higashi Osaka city, Osaka prefecture. The outcome of the present study, together with data from Tsuji's work on IT usage by SMEs in Japan, is meant to form the basis for policy design and implementation.
    Keywords: Industrial Cluster Policy, Agglomeration, Innovation, IT, Industrial policy, Local industry, Japan
    JEL: O14 R10 R58
    Date: 2006–10
  17. By: Takeuchi, Akie; Cropper, Maureen; Bento, Antonio
    Abstract: This paper examines the impact of measures to reduce emissions from passenger transport, specifically buses, cars, and two-wheelers in Mumbai. These include converting diesel buses to compressed natural gas (CNG), as the Indian Supreme Court required in Delhi, which would necessitate an increase in bus fares to cover the cost of pollution controls. The authors model an increase in the price of gasoline, which should affect the ownership and use of cars and two-wheelers, as well as imposing a license fee on cars to retard growth in car ownership. The impact of each policy on emissions depends not only on how the policy affects the mode that is regulated, but on shifts to other modes. The results suggest that the most effective policy to reduce emissions from passenger vehicles-in terms of the total number of tons of PM10 (particulate matter that measure less than or equal to 10 micrometers in aerodynamic diameter) reduced-is to convert diesel buses to CNG. The conversion of 3,391 diesel buses to CNG would result in an emissions reduction of 663 tons of PM10 a year, 14 percent of total emissions from transport. The bus conversion program passes the cost-benefit test. In contrast, the results suggest the elasticities of emissions from transport with respect to a gasoline tax and a tax on vehicle ownership are -0.04 and -0.10 respectively. As a consequence, it would take substantial increases in the gasoline tax or vehicle ownership tax to produce reductions in emissions similar to the bus conversion program. These results, however, reflect the low shares of cars and two-wheelers in the Mumbai emissions inventory and need not apply to cities, such as Delhi, where these shares are higher.
    Keywords: Transport Economics Policy & Planning,Transport in Urban Areas,Transport and Environment,Roads & Highways,Urban Transport
    Date: 2006–11–01
  18. By: Fabrice Barthélémy (Université de Cergy-Pontoise (Théma)); Mathieu Martin (Université de Cergy-Pontoise (Théma))
    Abstract: The spatial analysis of power indices is commonly used in the literature to study the importance of ideological criteria. Our purpose is to show, through the example of some french groupings of local cities, the importance of the geographical situation of the players when considering power analysis. We show that the classical measure of power (with the Shapley-Shubik index of power) may be sometimes radically different if the geographical aspect of the player is taken into account (with the Shapley-Owen index of power).
    Keywords: Shapley-Shubik index of power, french grouping of local cities, spatial analysis
    JEL: C7 D7 R5
    Date: 2006
  19. By: Mitra, Arup; Sato, Hajime
    Abstract: This paper examines if the effects of agglomeration economies get manifested in technical efficiency and generate faster economic growth and higher (lower) levels of employment (unemployment). Using the prefecture level data for each of the two-digit groups of industries in Japan, the paper estimates region-specific technical efficiency index based on the stochastic frontier production function framework. The results of the factor analysis show that in most of the industry-groups (with a few exceptions) efficiency has a positive association with external scale variable(s). Though the relationship is not seen to be very strong, it would be equally erroneous to ignore the effect of agglomeration economies on efficiency. In the case of some of the light goods industries the agglomeration effect is relatively stronger. Further, economic growth varies positively with external scale variable(s) and unemployment rate tends to fall with respect to growth and concentration. All this tends to suggest that measures against industrial concentration may be counter-productive, particularly in the context of globalisation when countries are in dire need of raising productivity.
    Keywords: Agglomeration economies, Technical efficiency, Economic conditions, Economic growth, Manufacturing industries, Unemployment, Japan
    JEL: J60 L60 R12
    Date: 2006–02
  20. By: André Braz Golgher (Cedeplar-UFMG)
    Abstract: The theoretical foundation for this text is the one presented by Florida (2002a, 2002b, 2005). He discusses the importance of a vibrant society and also of a highly diversified population for the attraction of talented and creative people. This attraction would promote a concentration of this type of person in some specific localities and this would be decisive for the development of cities and regions. Based on this discussion, an empirical analysis about the distribution of qualified population and some aspects that influence this distribution was done for Brazil. In order to do so, some indicators were built for different geographical areas and periods. Firstly, the text discusses the temporal tendencies for states in Brazil in the period between 1986 and 2004. A positive evolution was verified for all the qualification index, and a tendency of homogenization was observed. Then, municipal data for the year of 2000 was presented. Some municipalities had the highest values for most of the indicators, such as: São Caetano do Sul (SP), Niterói (RJ) and Florianópolis (SC). After this, given the importance of intraurban interchanges in Brazilian metropolitan regions, it was presented a study emphasizing these areas. Two metropolitan regions had the best indicators and were classified as in areas: Florianópolis (SC) and Rio de Janeiro (RJ). In the last part of the text, the intraurban heterogeneity of the three more populous metropolitan regions in Brazil, RMSP, RMRJ and RMBH, was studied and a high degree of urban polarization was verified.
    Keywords: Human capital; internal migration; regional development; Brazil
    JEL: J24 O15 R10
    Date: 2006–10
  21. By: Yiannis Kamarianakis (Regional Analysis Division, Institute of Applied and Computational Mathematics, Foundation for Research and Technology-Hellas, Greece); Julie Le Gallo (, France)
    Abstract: Economic processes are often characterized by spatial autocorrelation: the coincidence of value similarity to locational similarity. As a consequence of spatial autocorrelation, analysts observe spatial regional clusters. Recent advances in the areas of spatial statistics/econometrics offer tools for the investigation of the aforementioned issues. Following the exploratory spatial data analysis of Le Gallo and Ertur (2003) on European regional per capita GDP we use such tools to investigate the evolution of regional productivity disparities in the European Union and the extent to which the existing interregional inequalities in productivity can be attributed to differences in sectoral composition between regions and/or to uniform productivity gaps across sectors. At the exploratory stage we observe a core-periphery pattern similar to the one observed in the study of regional GDP. At the modeling stage the inclusion of spatial dependencies produces estimations significantly different from the ones presented at previous studies.
    Keywords: spatial autocorrelation, exploratory spatial data analysis, European regions, productivity dispariti
  22. By: Eleonora CUTRINI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: It is well known that the broad concept of localisation has two connotations, namely, regional specialisation and industrial concentration. The main purpose of this paper is to introduce an entropy index of overall localisation suitable to conceptualise specialisation and concentration as the two sides of the same medal in a nested geographical perspective. The system of dissimilarity entropy measures is potentially applicable to the assessment of the spatial distribution of several economic phenomena when a twofold geographical level of analysis is considered. In the specific case, the decomposition provides an accurate method to quantify the cross-country divergence in localisation from the agglomeration within countries.
    Keywords: concentration, dissimilarity entropy index, localisation, specialisation, within-between country decomposition
    JEL: C43 L16 O18 R12
    Date: 2006–11
  23. By: Diana Barro (Department of Applied Mathematics, University of Venice); Antonella Basso (Department of Applied Mathematics, University of Venice)
    Abstract: This contribution studies the effects of credit contagion on the credit risk of a portfolio of bank loans. To this aim we introduce a model that takes into account the counterparty risk in a network of interdependent firms that describes the presence of business relations among different firms. The location of the firms is simulated with probabilities computed using an entropy spatial interaction model. By means of a wide simulation analysis we use the model proposed to study the effects of default contagion on the loss distribution of a portfolio.
    Keywords: credit risk, bank loan portfolios, contagion models, entropy spatial models
    JEL: G33 G21 C15
    Date: 2006
  24. By: Tomasz Brodzicki (GIME (IBnGR), Department of Economics, University of Gdansk)
    Abstract: GIME Report for PFSL.
    Keywords: competitveness, regional development, industrial clusters, Baltic Sea Region
    JEL: L60 L70 R11 R12 R30
    Date: 2005–11
  25. By: Kuchiki, Akifumi
    Abstract: A flowchart approach to industrial cluster policy emphasizes the importance ofthe ordering of policy measures. The flow of policy implementation is to establish an industrial zone, to invite an anchor company, and to promote its related companies to invest in the industrial zone. This article delineated "a flowchart approach to industrial cluster policy" by proposing sufficient conditions for forming industrial clusters typical in the manufacturing industry in Asia to enhance regional economic growth. The typical industrial cluster policy was theorized by defining an industrial zone as "quasi-public goods", and it was shown that the policy enhances economic growth under a production function of "increasing returns to scale" of an anchor company. Critical amounts of the production of "scale economies" that are used by the related companies to decide whether or not to invest in clusters were also shown.
    Keywords: Flowchart approach, industrial cluster policy, sufficient conditions, regional economic growth, quasi-public goods, increasing returns to scale, scale economies, Industrial policy, Economics, Industrial estates, Economic development, Economic growth
    JEL: O14 R12 R58
    Date: 2006–10
  26. By: Linda Loury
    Date: 2006
  27. By: Midori Wakabayashi; Charles Y. Horioka
    Abstract: In this paper, we analyze the determinants of the living arrangements of elderly parents and their children (whether elderly parents live with their children, and if so, with which child) in Japan using micro data from a household survey. We find that the proportion of elderly parents living with their eldest sons is much higher than that of elderly parents living with children other than the eldest son, even if the eldest son is not the eldest child. Moreover, we find that elderly parents are more likely to live with their eldest sons if the father was a self-employed worker before retirement, whereas they are more likely to live with a child other than the eldest son if the father was an executive before retirement. In addition, daughters whose husbands adopt the daughter's surname are more likely to live with the daughter's parents. All of these findings are consistent with the dynasty and/or strategic bequest (selfish life cycle) models. We also find that the living arrangements of elderly parents are still very much based on Japanese social norms and traditions. Thus, we find support for all models of household behavior other than the altruism model.
    JEL: D12 D91 J14 Z13
    Date: 2006–10
  28. By: Richard J. Volpe III (Department of Agricultural and Resource Economics, University of California at Davis); Nathalie Lavoie (Department of Resource Economics, University of Massachusetts Amherst)
    Abstract: This study examines the competitive price effect of Wal-Mart Supercenters on national brand and private label grocery prices in New England. For this purpose, we use primary price data collected on a basket of identical products from six Supercenters in Massachusetts, Connecticut, and Rhode Island as well as a sample of conventional supermarkets. Taking into account demographics, store characteristics, and market conditions, we estimate the average prices charged by (1) Supercenters, (2) supermarkets competing directly with Supercenters, and by (3) supermarkets geographically distant from Supercenters. By comparing prices at competing stores and at distant stores, we show that the effect of Wal-Mart Supercenters is to decrease prices by 6 to 7 percent for national brand goods and 3 to 7 percent for private label goods. Price decreases are most significant in the dry grocery and dairy departments. Moreover, Wal-Mart sets prices significantly lower than its competitors in the food industry.
    Keywords: Wal-Mart; Supermarket Competition; Grocery Prices; National Brands, Private Labels
    JEL: D21 D43 L11 L13 L81
    Date: 2006–10
  29. By: Linda Loury
    Date: 2006
  30. By: Jan K. Brueckner; Raquel Girvin
    Abstract: This paper explores the impact of airport noise regulation on airline service quality and airfares. It also characterizes the socially optimal stringency of noise limits, taking both noise damage and the various costs borne by airlines and their passengers into account. The analysis also investigates the effect of noise taxes, as well as the optimal level of such taxes. Along with the companion paper by Girvin (2006a), this work represents the first complete theoretical investigation into the economics of airport noise regulation using a model where the interests of the key relevant stakeholders are captured.
    Keywords: airport, airport noise, airport noise regulation, airline, airline service quality, noise taxes, transportation
    JEL: L00 L90 Q20
    Date: 2006
  31. By: Matthias Doepke

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