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on Urban and Real Estate Economics |
| By: | Harvey Schwartz (Department of Economics, York University) |
| Abstract: | This paper is concerned with two questions. What are the major problems facing Canadian cities in the 21st century? (The City of Toronto is used as an example). Are large amalgamated cities or decentralized cities better suited to compete in the 21st century? From 1995 to 2003 the Ontario government made a number of major changes in the way that municipalities were governed and financed. Some municipalities were forced to amalgamate despite the opposition of their residents. The government also redistributed the responsibilities of the province and the municipalities through the Local Service Realignment Programme (LSRP). This process is called ?disentanglement?. Since the LSRP lead to the cost of many of the shared-cost programmes being shifted to the cities, the programme is also called ?downloading?. Other major changes include the use of market value for property tax assessment and the transfer of education funding for the local school boards to the provincial government. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2005_3&r=ure |
| By: | Andrea M. Weber (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | This paper examines educational outcomes of pupils selected to secondary school types by different tracking regimes in a German state: The traditional regime of streaming pupils after fourth grade of elementary school is compared to a regime in which pupils are selected into different secondary school tracks after sixth grade. Descriptive evidence demonstrates that the proportion of pupils reaching the highest level of secondary education is relatively small for those who attended later tracking schools. Additionally, the incidence of track modification is relatively frequent for schools with a high proportion of incoming pupils from the later tracking regime. However, less favorable educational outcomes of the later tracking schools are due to self-selection of relative low performers into these schools: The downward bias in estimating tracking regime effects is reduced considerably by controlling for a broad variety of socio-economic background characteristics. Corresponding regression results mainly indicate that there are no negative effects of later tracking on observed educational outcomes measured in the middle of secondary school. Regression analyses for different sub-groups suggest that the reading performance of immigrant pupils is better under the later tracking regime compared to the early tracking system. |
| Keywords: | education, segregation, streaming, tracking, identification, immigration |
| JEL: | I21 I28 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:176&r=ure |
| By: | Nestor Duch Brown (Universitat de Barcelona) |
| Abstract: | The New Economic Geography literature allows detailed analysis of the factors that determine the location decisions of firms in integrated markets. However, the competitive process is modelled in a rather rudimentary way, and the empirical evidence has usually been obtained from reduced-form econometric specifications. This study describes a structural model that takes into account strategic interactions between firms. We investigate the relationship between the degree of perceived competition not only from local firms but from firms in other regions and geographic concentration. The preliminary results indicate that, in aggregate terms, local firms present stronger competition than firms in other regions. Moreover, it is confirmed that greater geographical concentration of production reduces market power, due to the intensification of local competition; however, its impact on production costs is unclear. |
| Keywords: | agglomeration, conjectural variations, spatial competition |
| JEL: | F15 L11 L22 L23 L60 R15 R32 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2006150&r=ure |
| By: | Christopher H. Wheeler; Elizabeth A. La Jeunesse |
| Abstract: | Human capital tends to have significant external effects within local markets, increasing the average income of individuals within the same metropolitan area. However, evidence on both human capital spillovers and peer effects in neighborhoods suggests that these effects may be confined to relatively small areas. Hence, the distribution of income gains from average levels of human capital should depend on how that human capital is distributed throughout a city. This paper explores this issue by documenting the extent to which college graduates are residentially segregated across more than 165000 block groups in 359 U.S. metropolitan areas over the period 1980-2000. Using three different metrics, we find that the segregation of college graduates rose between 1980 and 2000. We also find that cities which experienced larger increases in their levels of segregation also experienced larger increases in income inequality, although our results suggest that inequality and segregation likely influence each other. |
| Keywords: | Human capital ; Income distribution |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2006-055&r=ure |
| By: | Heather Antecol (Simon Fraser University and IZA Bonn); Deborah A. Cobb-Clark (SPEAR, RSSS, Australian National University and IZA Bonn) |
| Abstract: | We use the exogenous assignment of Army personnel to duty locations to analyze the relationship between the characteristics of local markets and the propensity for consumers to be subjected to racial discrimination in their everyday commercial transactions. Overall, one in ten soldiers report that they or their families have experienced racial discrimination in finding non-government housing or in patronizing businesses in their local communities. Discrimination is related to a community’s demographic profile with white and Asian soldiers feeling more unwelcome in local businesses as the local population becomes more heavily weighted towards other groups. Moreover, there is evidence that increased economic vulnerability in the community results in more housing discrimination amongst minorities. While the evidence that increased competition reduces consumer market discrimination is mixed, it is clear that discrimination is related to the nature of a soldier’s interaction with the local community. |
| Keywords: | consumer markets, discrimination, U.S. military, economics of minorities |
| JEL: | J15 D12 D40 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2389&r=ure |
| By: | Carol E. Heim |
| Abstract: | <p>Phoenix and neighboring municipalities, like many in the South and West, pursued a growth strategy based on annexation in the decades after World War II. This paper explores the link between annexation and competition for tax revenues. After discussing arguments for annexation, it traces the history of annexation in the Phoenix metropolitan area. A long-running series of "border wars" entailed litigation, pre-emptive annexations, and considerable intergovernmental conflict. The paper argues that tax revenues have been a key motivation for annexation, particularly since the 1970s. It then considers several related policy issues and argues that while opportunities for annexation are becoming more limited, competition for tax revenues (particularly sales tax revenues) continues to be fierce and to create dilemmas for municipalities in the region</p><p>(Paper revised July 2006.)</p> |
| Keywords: | annexation, municipal revenues, sales tax, Phoenix, urban growth, intergovernmental relations |
| JEL: | H71 H77 N92 R51 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp112_revised&r=ure |
| By: | Dahlberg, Matz (Department of Economics); Mörk, Eva (Department of Economics); Rattso, Jorn (Department of Economics); Ågren, Hanna (Department of Economics) |
| Abstract: | When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this paper we make use of a discontinuity in the Swedish grant system in order to estimate the causal effects of general intergovernmental grants on local spending and local tax rates. The formula for the distribution of funds is used as an exclusion restriction in an IV-estimation. We find evidence of crowding-in, where federal grants are shifted to more local spending, but not to reduced local tax rates. Our results thus confirm a flypaper effect for Sweden. |
| Keywords: | Fiscal federalism; grants; flypaper effect: local taxation; local government expenditure; causal effects |
| JEL: | H21 H71 H77 R51 |
| Date: | 2006–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2006_025&r=ure |
| By: | Barnett, W. Steven; Belfield, Clive R. |
| Abstract: | Steven Barnett and Clive Belfield examine the effects of preschool education on social mobility in the United States. They note that under current policy three- and four-year-old children from economically and educationally disadvantaged families have higher preschool attendance rates than other children. But current programs fail to enroll even half of poor three-and four-year olds. Hispanics and children of mothers who drop out of school also participate at relatively low rates. The programs also do little to improve learning and development. Barnett and Belfield point out that preschool programs raise academic skills on average, but do not appear to have notably different effects for different groups of children, and so do not strongly enhance social mobility. In such areas as crime, welfare, and teen parenting, however, preschool seems more able to break links between parental behaviors and child outcomes. Increased investment in preschool, conclude Barnett and Belfield, could raise social mombility. Program expansions targeted to disadvantaged children would help them move up the ladder, as would a more universal set of policies from which disadvantaged children gained disproportionately. Increasing the educational effectiveness of early childhood programs would provide for greater gains in social mobility than increasing participation rates alone. The authors observe that if future expansions of preschool programs end up serving all children, not just the poorest, society as a whole would gain. Benefits would exceed costs and there would be more economic growth, but relative gains for disadvantaged children would be smaller than absolute gains because there would be some (smaller) benefits to other children. |
| Keywords: | early childhood education; social mobility; benefit/cost analyses; income disparity; disadvantaged children |
| JEL: | I28 H31 J6 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:858&r=ure |
| By: | J. Benson Durham |
| Abstract: | This paper examines the first three moments of investors' expectations for the housing sector. That is, first, what do financial markets imply about expected future home prices? Second, how much confidence do investors have in their forecast? And, third, do market participants see more downside than upside risk? Housing futures and options, which trade on the Chicago Mercantile Exchange (CME), are not yet deep and liquid, and derivatives on homebuilders' shares reflect considerable idiosyncratic information and are therefore an imperfect proxy. Nonetheless, prices suggest that investors currently expect some mild depreciation in home values within the next year. Also, uncertainty has increased, but, generally inconsistent with the perception of a "bubble," the implied risks do not seem particularly tilted to the downside. Probability density functions derived from options on homebuilders' stocks are not appreciably skewed to the left in general, vis-à-vis the broader market, or with respect to recent history. |
| Keywords: | Housing - Prices ; Housing - Finance |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2006-32&r=ure |
| By: | Giorgio Brunello (University of Padua); Maria De Paola (University of Calabria) |
| Abstract: | In this paper we use a search and matching model to investigate the economic relationship between training and local economic conditions. We identify two aspects of this relationship going in opposite directions: on the one hand, the complementarity between local knowledge spillovers and training generates a positive correlation between training and local density; on the other hand, higher wages and labor turnover in denser areas reduce training. Overall the relationship can be either positive or negative, depending on the relative strength of these two effects. Our empirical analysis, based on a sample of Italian firms, shows that training is lower in provinces with higher labor market density, measured as the number of employees per squared kilometer. |
| Keywords: | training, local labor markets, Italy |
| JEL: | J24 R12 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0030&r=ure |
| By: | Gabriella Legrenzi (Keele University, Centre for Economic Research and School of Economic and Management Studies); Costas Milas (Keele University, Centre for Economic Research and School of Economic and Management Studies) |
| Abstract: | We introduce possible asymmetries and non-linearities in the analysis of the taxing and spending decisions of local governments. Our empirical results evidence a down-ward inflexibility of both local government spending and taxation, pointing to a budget-maximizing local government. These asymmetries will need to be explicitly tackled in fiscal federalism reforms, in order for decentralization to positively contribute to the achievement of the European Monetary Union objectives. |
| Keywords: | Fiscal federalism, non-linear time series, asymmetric adjustment, fly-paper effect |
| JEL: | H10 H71 C22 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:kee:kerpuk:2006/16&r=ure |
| By: | Christopher D. Carroll; Misuzu Otsuka; Jirka Slacalek |
| Abstract: | This paper presents a simple new method for estimating the size of ‘wealth effects’ on aggregate consumption. The method exploits the well-documented sluggishness of consumption growth (often interpreted as ‘habits’ in the asset pricing literature) to distinguish between short-run and long-run wealth effects. In U.S. data, we estimate that the immediate (next-quarter) marginal propensity to consume from a $1 change in housing wealth is about 2 cents, with a final longrun effect around 9 cents. Consistent with most recent studies, we find a housing wealth effect that is substantially larger than the stock wealth effect. We believe that our approach has sounder theoretical foundations than the currently popular cointegration-based estimation methods, because neither theory nor evidence provides any reason for faith in the existence of a stable cointegrating vector. |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:535&r=ure |
| By: | Michael T. Owyang; Jeremy M. Piger; Howard J. Wall; Christopher H. Wheeler |
| Abstract: | This paper examines the determinants of employment growth rates in metro areas. To obtain growth rates, we use a Markov-switching model that separates a city's growth path into two distinct phases (recession and expansion), each with its own growth rate. The simple average growth rate over some period is, therefore, the weighted average of the recession and expansion growth rates, with the weight being the frequency of recession. We estimate the effects of a variety of factors separately for the recession and expansion growth rates, along with the frequency of recession. We find that growth in expansion is related to human capital, industry mix, and average firm size. In contrast, we find that recession growth rates are mostly related to industry mix, specifically, the relative importance of manufacturing. Finally, the frequency of recession appears to be related to the level of non-education human capital, but to none of the other variables. Overall, our results strongly reject the notion that city-level characteristics influence employment growth equally across recession and expansion. |
| Keywords: | Business cycles ; Cities and towns |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2006-056&r=ure |
| By: | Richard K. Green (The George Washington University School of Business); Amy Crews Cutts (Freddie Mac); Yan Chang (Freddie Mac) |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:gwu:wpaper:0005&r=ure |
| By: | Kenneth Clark (University of Manchester); Stephen Drinkwater (University of Surrey) |
| Abstract: | This paper focuses on two main issues, firstly the extent to which the employment position of the main ethnic minority groups in England and Wales changed between 1991 and 2001 and secondly, a detailed examination of employment amongst ethnic groups in 2001. In relative terms, the employment position of most ethnic minority groups improved over the period, especially for males. Some of this improvement was due to enhanced levels of observable characteristics. However, the employment gap between Whites and some ethnic minority groups remains extremely large. Religion, local deprivation and educational qualifications are found to be important influences for many minority groups. |
| Keywords: | employment, ethnic minorities, discrimination. |
| JEL: | J15 J21 J7 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:1206&r=ure |
| By: | Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Frank H. Fuller (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | China's economic reforms, which began in 1978, resulted in remarkable income growth, and urban Chinese consumers have responded by dramatically increasing their consumption of meat, other livestock products, and fruits and by decreasing consumption of grain-based foods. Economic prosperity, a growing openness to international markets, and domestic policy reforms have changed the food marketing environment for Chinese consumers and may have contributed to shifts in consumer preferences. The objective of this paper is to uncover evidence of structural change in food consumption among urban residents in China. Both parametric and nonparametric methods are used to test for structural change in aggregate household data from 1981 to 2004. The tests provided a reasonably clear picture of changing food consumption over the study period. |
| Keywords: | China, demand models, food consumption, nonparametric analysis, parametric tests, structural change. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:06-wp437&r=ure |
| By: | Richard K. Green (The George Washington University School of Business); Amy Crews Cutts (Freddie Mac); Buchi Ramagopal (Citigroup) |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:gwu:wpaper:0004&r=ure |
| By: | Ben R. Craig; William E. Jackson, III; James B. Thomson |
| Abstract: | We empirically test whether SBA-guaranteed lending has a greater impact on economic performance in markets with a high percentage of potential minority small businesses. This hypothesis is predicated on priors related to three overlapping assumptions. These three assumptions are: (1) The classic type of credit rationing developed in the seminal paper by Stiglitz and Weiss (1981) is more likely to occur in markets with a higher per capita percentage of minority small businesses because such markets are more likely to have more severe information asymmetry problems, (2) SBA-guaranteed lending is likely to reduce these credit rationing problems—thus improving the level of development of the local financial market, and (3) increased local financial market development helps to lubricate the wheels of economic performance (Rajan and Zingales, 1998). Using local labor market employment rates as our measure of economic performance, we find evidence consistent with this proposition. In particular, we find a positive and significant impact on the average annual level of employment in a local market of SBA-guaranteed lending in that local market. This impact is 200 percent larger in markets with a high percentage of potential minority small businesses. This result has important implications for public policy in general and SBA-guaranteed lending in particular. |
| Keywords: | Small business - Finance ; Small Business Administration ; Discrimination in consumer credit |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0613&r=ure |
| By: | Richard K. Green (The George Washington University School of Business) |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:gwu:wpaper:0002&r=ure |
| By: | Alma Romero-Barrutieta; Eric V. Clifton |
| Abstract: | Empirical studies of the impact of geography and institutions on growth and development at the international level have become common place, but the high degree of abstraction at that level has led to calls for subnational studies. This paper examines these issues for a region of the United States, Appalachia, where the specific factors at play are identified and measured thus obviating the need for instrumental variable techniques. The evidence suggests that initial conditions, including both geography and institutions, are very important for economic development, having significant effects lasting hundreds of years. |
| Keywords: | Economic growth , poverty , institutions , geography , Appalachia , Economic growth , United States , Poverty , Income , |
| Date: | 2006–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/169&r=ure |
| By: | Richard K. Green (The George Washington University School of Business); Donald Bradley (Housing Consultant); Brian Surette (Freddie Mac) |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:gwu:wpaper:0001&r=ure |
| By: | Sule Alan; Søren Leth-Petersen |
| Abstract: | This paper investigates the responsiveness of household portfolios to tax incentives by exploiting a substantial tax reform that altered after-tax returns and cost of debt for a large number of households. An extraordinary panel data set that covers two years before and after the reform is used for the analysis. Our empirical findings suggest that households reshuffle their balance sheets in the case of a partial deductibility phase-out. In particular, heavily taxed, interest-bearing assets are used to pay off mortgage debt. Furthermore, we find that taxes have a significant impact on the structure of household portfolios even after controlling for unobserved heterogeneity. |
| Keywords: | Household portfolios, taxation, panel data, natural experiment |
| JEL: | G11 H31 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:163&r=ure |
| By: | Oleg Badunenko (European University Viadrina Frankfurt (Oder), Germany); Michael Fritsch (University of Jena, Faculty of Economics, Max Planck Institute of Economics Jena, and Institute for Economic Research (DIW Berlin)); Andreas Stephan (European University Viadrina Frankfurt (Oder) and the German Institute for Economic Research (DIW Berlin)) |
| Abstract: | This paper investigates the factors that explain the level of technical efficiency of a firm. In our empirical analysis, we use a unique sample of about 35,000 firms in 256 industries from the German Cost Structure Census over the years 1992-2004. We estimate the technical efficiency of the firms and relate it to firm- and industry-specific characteristics. One third of the explanatory power is due to industry effects. Size accounts for another 25 percent and the headquarters? location explains ten percent of the variation in efficiency. Most other firm characteristics such as ownership structure, legal form, age of the firm and outsourcing activities have an extremely small explanatory power. R&D activity does not exert any positive influence on technical efficiency. |
| Keywords: | Frontier analysis, determinants of technical efficiency, firm performance, industry effects, regional effects. |
| JEL: | D24 L10 L25 |
| Date: | 2006–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:jen:jenasw:2006-33&r=ure |
| By: | Jeannette Wicks-Lim |
| Abstract: | Minimum wage laws have become a key political issue, following on the heels of over 130 successful living wage campaigns around the country. In the debates surrounding these mandated wage floors, one recurring issue has been whether the legislation has wider-ranging impacts on wages than the legally-required raises alone. Advocates on both sides of the debate dispute the potential magnitude of 'ripple effects'- the non-mandated raises given by employers to maintain a similar wage hierarchy before and after a change in the wage floor. These ripple effects have the potential to greatly expand the overall impact of mandated wage floors. This study uses data from twenty years of the Current Population Survey to assess the magnitude of ripple effects in the context of variations in minimum wage laws, and looks specifically at the retail trade sector to model the potential magnitude of ripple effects under living wage ordinances, where the 'bite' of the legislation would encompass a larger share of the workforce. |
| Keywords: | ripple effect, wage spillover, wage norms, minimum wage, living wage, wage distribution, retail trade, low wage |
| JEL: | I3 J31 J38 J48 J88 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp116&r=ure |