nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2007‒04‒09
forty papers chosen by
Steve Ross
University of Connecticut

  1. Property Rights and the Urban Environment: Local Public Goods in Indonesian Cities By Hoy, M.; Jimenez, E.
  2. 2007 Housing Bubble Update: 10 Economic Indicators to Watch By Dean Baker
  3. No Child Left Behind: Estimating the Impact on Choices and Student Outcomes By Justine S. Hastings; Jeffrey M. Weinstein
  4. Resident Perceptions of Crime: How Similar are They to Official Crime Rates? By John Hipp
  5. House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics By Steven Bourassa; Donald Haurin; Jessica Haurin; Martin Hoesli; Jian Sun
  6. Does Secondary School Tracking Affect Performance? Evidence from IALS By Kenn Ariga; Giorgio Brunello
  7. Language, Agglomeration, and Hispanic Homeownership By Donald Haurin; Stuart Rosenthal
  8. Does Money Buy Higher Schooling? Evidence from Secondary School Track Choice in Germany By Marcus Tamm
  9. Preferences, Information, and Parental Choice Behavior in Public School Choice By Justine S. Hastings; Richard Van Weelden; Jeffrey Weinstein
  10. Home and Mortgage Ownership of the Dutch Elderly By Anna van der Schors; Rob J.M. Alessie; Mauro Mastrogiacomo
  11. The Influence of Household Formation on Homeownership Rates across Time and Race By Donald Haurin; Stuart Rosenthal
  12. Geographic concentration and firm productivity By David C. Maré; Jason Timmins
  13. Voting behavior in a city of poor workers and rich entrepreneurs: Local contextual effects and class voting in the Mexico City metropolitan area, 1994-2000 By Vilalta y Perdomo, Carlos J.
  14. Can Information Asymmetry Cause Agglomeration? By Berliant, Marcus; Kung, Fan-chin
  15. Segregation and Strategic Neighborhood Interaction By Jason Barr; Troy Tassier
  16. Home-ownership and Economic Performance of Immigrants in Germany By Mathias Sinning
  17. House Prices and Rents: Socio-Economic Impacts and Prospects By Arthur Grimes; Andrew Aitken
  18. The Demand Potential of an Urban Freight Consolidation Centre By Romeo Danielis; Edoardo Marcucci
  19. How Does Geography Matter in Ethnic Labor Market Segmentation Process? A Case Study of Chinese Immigrants in the San Francisco CMSA By Qingfang Wang
  20. Skyscrapers and the Skyline: Manhattan, 1895-2004 By Jason Barr
  21. The Ups and Downs of New Zealand House Prices By Viv B. Hall; John McDermott
  22. On the Link between Urban Form and Automobile Use - Evidence from German Survey Data By Colin Vance; Ralf Hedel
  23. Expensive and low-price places to live - Regional price levels and the agglomeration wage differential in Western Germany By Blien, Uwe; Gartner, Hermann; Stüber, Heiko; Wolf, Katja
  24. Homeownership Gaps Among Low-Income and Minority Households By Donald Haurin; Christopher Herbert; Stuart Rosenthal
  25. Satellites and Suburbs: A High-resolution Model of Open-space Conversion By Colin Vance; Rich Iovanna
  26. Recession Looms for the U.S. Economy in 2007 By Dean Baker
  27. What attracts human capital? : Understanding the skill composition of interregional job matches in Germany By Arntz, Melanie
  28. Identification of Peer Effects through Social Networks By Yann Bramoullé; Habiba Djebbari; Bernard Fortin
  29. Clusters and Innovation: Beijing's Hi-technology Industry Cluster and Guangzhou's Automobile Industry Cluster By Kuchiki, Akifumi
  30. Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing By Jacques Poot
  31. Spill-Overs from Good Jobs By Paul Beaudry; David A. Green; Benjamin Sand
  32. Financing Road Infrastructure by Savings in Congestion Costs: A CGE Analysis By Conrad, Klaus; Heng, Stefan
  33. Pupil-teacher gender interaction effects on scholastic outcomes in England and the USA By Ammermüller, Andreas; Dolton, Peter J.
  34. Traffic, Transportation, Infrastructure and Externalities - a Theoretical Framework for a CGE Analysis - By Conrad, Klaus
  35. The Productivity Argument for Investing in Young Children By James J. Heckman; Dimitriy V. Masterov
  36. Social Interactions - Is There Really an Identification Problem? By v. Kalckreuth, Ulf
  37. Competition in Transportation Models and the Provision of Infrastructure Services By Conrad, Klaus
  38. How Land Use Shapes the Evolution of Road Networks By David Levinson; Bhanu Yerra
  39. Cointegration of real estate stocks and REITs with common stocks, bonds and consumer price inflation : an international comparison By Westerheide, Peter
  40. The Harris-Todaro Hypothesis By M. Ali Khan

  1. By: Hoy, M.; Jimenez, E.
    Date: 2006
  2. By: Dean Baker
    Abstract: This updated paper provides key economic indicators of the state of the housing market -- including new 2006 data. It gives an up-to-date analysis of the available data sources, such as home sales, mortgage applications, vacancy rates and construction.
    JEL: G12 E66 E31
    Date: 2007–02
  3. By: Justine S. Hastings; Jeffrey M. Weinstein
    Abstract: Several recent education reform measures, including the federal No Child Left Behind Act (NCLB), couple school choice with accountability measures to allow parents of children in under-performing schools the opportunity to choose higher-performing schools. We use the introduction of NCLB in the Charlotte-Mecklenburg School District to determine if the choice component had an impact on the schools parents chose and if those changed choices led to academic gains. We find that 16% of parents responded to NCLB notification by choosing schools that had on average 1 standard deviation higher average test scores than their current NCLB school. We then use the lottery assignment of students to chosen schools to test if changed choices led to improved academic outcomes. On average, lottery winners experience a significant decline in suspension rates relative to lottery losers. We also find that students winning lotteries to attend substantially better (above-median) schools experience significant gains in test scores. Because proximity to high-scoring schools drives both the probability of choosing an alternative school and the average test score at the school chosen, our results suggest that the availability of proximate and high-scoring schools is an important factor in determining the degree to which school choice and accountability programs can succeed at increasing choice and immediate academic outcomes for students at under-performing schools.
    JEL: D8 I2
    Date: 2007–04
  4. By: John Hipp
    Abstract: This study compares the relationship between official crime rates and residents’ perceptions of crime in census tracts. Employing a unique dataset that links household level data from the American Housing Survey metro samples over a period of 25 years (1976-2000) with official crime rate data for census tracts in selected cities during selected years, this large sample provides considerable ability to generalize the findings. I find that residents’ perception of crime is most strongly related to official rates of tract violent crime. Models simultaneously taking into account both violent and property crime consistently found that property crime actually has a negative effect on perceived crime. Among types of violent crime, the robbery rate is consistently related to higher levels of perceived crime in the tract, whereas it appears a structural shift occurred in the mid-1980s in which aggravated assault and murder rates now impact perceptions of crime, even when taking into account the robbery rate.
    Keywords: perceived crime, official rates of crime, violent crime, neighborhoods, longitudinal, census tract
    Date: 2007–03
  5. By: Steven Bourassa (School of Urban and Public Affairs, University of Louisville); Donald Haurin (Department of Economics, Ohio State University); Jessica Haurin (Center for Real Estate, Massachusetts Institute of Technology); Martin Hoesli (University of Geneva); Jian Sun (School of Urban and Public Affairs, University of Louisville)
    Abstract: While the average change in house prices is related to changes in fundamentals or perhaps market-wide bubbles, not all houses in a market appreciate at the same rate. The primary focus of our study is to investigate the reasons for these variations in price changes among houses within a market. We draw on two theories for guidance, one related to the optimal search strategy for sellers of atypical dwellings and the other focusing on the bargaining process between a seller and potential buyers. We hypothesize that houses will appreciate at different rates depending on the characteristics of the property and the change in the strength of the housing market. These hypotheses are supported using data from three New Zealand housing markets.
    Keywords: Atypicality, Bargaining, Housing Risk, House Price Appreciation, Search Models
    JEL: R31 R21 D83
    Date: 2007–01
  6. By: Kenn Ariga (Institute of Economic Research, Kyoto University); Giorgio Brunello (Department of Economics, University of Padova)
    Abstract: There is substantial cross - country variation in secondary school design, with some countries tracking students into different ability schools very early, and other countries with little or no tracking at all. Does tracking length affects school performance, as measured by standardized test scores? We use the international data from the International Adult Literacy Survey to estimate the relationship between the experienced tracking length and the performance in standardized cognitive test scores of young adults, aged between 16 and the mid - twenties. Our IV estimates suggest that the contribution of tracking to performance is positive and statistically significant: conditional on total years of schooling, one additional year spent in a track raises average performance by 3.3 to 3.4 percentage points, depending on the estimates.
    Keywords: tracking, secondary schools, efficiency
    JEL: I21 I28
    Date: 2007–02
  7. By: Donald Haurin (Department of Economics, Ohio State University); Stuart Rosenthal (Department of Economics, Syracuse University)
    Abstract: As of the fourth quarter of 2005, 76 percent of white non-Hispanic families owned homes, but only 50 percent of Hispanic families. We argue that low rates of homeownership in Hispanic communities create a self-reinforcing mechanism that contributes to this large disparity. In part, this occurs because proximity to other homeowners belonging to a family’s social network improves access to information about how to become a homeowner. Role model effects may also be relevant. We investigate these issues using household-level data on out-of-state movers from the 2000 Decennial Census. Three especially important results are obtained. First, proximity to Hispanic homeowners in the 1995 place of residence increases the propensity of a Hispanic family to own a home in 2000. Second, that effect is especially strong with respect to proximity to weak English speaking Hispanic homeowners. Third, these patterns hold regardless of the Hispanic family’s own ability to speak English. From a policy perspective, these results suggest that local programs designed to promote homeownership among weak English-speaking Hispanic families likely increase Hispanic homeownership beyond just the immediate program participants.
    Keywords: Language, Agglomeration, Homeownership
    JEL: R11 R12 R21
    Date: 2007–01
  8. By: Marcus Tamm
    Abstract: The German schooling system selects children into different secondary school tracks already at a very early stage in life. School track choice heavily influences choices and opportunities later in life. It has often been observed that secondary schooling achievements display a strong correlation with parental income.We use sibling fixed effects models and information on a natural experiment in order to analyze whether this correlation is due to a causal effect of income or due to unobservable factors that themselves might be correlated across generations. Our main findings suggest that income has no positive causal effect on school choice and that differences between high- and low-income households are driven by unobserved heterogeneity, e.g. differences in motivation.
    Keywords: Child poverty, educational attainment, secondary schools, sibling differences, natural experiment
    JEL: D31 I21 J13
    Date: 2007–01
  9. By: Justine S. Hastings; Richard Van Weelden; Jeffrey Weinstein
    Abstract: The incentives and outcomes generated by public school choice depend to a large degree on parents' choice behavior. There is growing empirical evidence that low-income parents place lower weights on academics when choosing schools, but there is little evidence as to why. We use a field experiment in the Charlotte-Mecklenburg Public School district (CMS) to examine the degree to which information costs impact parental choices and their revealed preferences for academic achievement. We provided simplified information sheets on school average test scores or test scores coupled with estimated odds of admission to students in randomly selected schools along with their CMS school choice forms. We find that receiving simplified information leads to a significant increase in the average test score of the school chosen. This increase is equivalent to a doubling in the implicit preference for academic performance in a random utility model of school choice. Receiving information on odds of admission further increases the effect of simplified test score information on preferences for test scores among low-income families, but dampens the effect among higher-income families. Using within-family changes in choice behavior, we provide evidence that the estimated impact of simplified information is more consistent with lowered information costs than with suggestion or saliency.
    JEL: D8 I2 L3
    Date: 2007–03
  10. By: Anna van der Schors; Rob J.M. Alessie; Mauro Mastrogiacomo
    Abstract: The relationship between home ownership of Dutch elderly households and age is strongly negative. Other studies suggest that this age gradient should be attributed to a cohort effect. In this paper, we investigate where those cohort effects come from. We also observe that mortgage ownership among elderly home-owners increased considerably during the nineties. Using panel data, we estimate models explaining home and mortgage ownership by age, cohort, and time effects, as well as other factors. Cohort and time effects are modelled explicitly using macro economic and housing market related variables. We find that the level of GDP per capita when the household head was young is the main factor explaining generation effects in home ownership among the elderly. After accounting for cohort effects it also appears that home ownership decreases slightly with age. Mortgage ownership among elderly home owners rose considerably during the nineties due to house price increases and due to financial innovation in the mortgage market. Cohort effects are also important. A supplementary analysis suggests that those cohort effects are due to the fact that the accidental bequest motive is becoming less important.
    Keywords: home ownership; mortgages; cohort effects
    JEL: D12 D14 D91
    Date: 2007–01
  11. By: Donald Haurin (Department of Economics, Ohio State University); Stuart Rosenthal (Department of Economics, Syracuse University)
    Abstract: Homeownership rates equal the number of households that own homes divided by the number of households in the population. Differences in the propensity to form a household, therefore, may contribute to changes in homeownership rates over time in addition to longstanding racial gaps in homeownership. We examine these issues on an age-specific basis using data from the 1970 to 2000 public use micro samples (PUMS) of the decennial census. Results indicate that lower headship rates tend to reduce homeownership rates. This pattern is most notable for individuals in their early and mid-20s. For these individuals, declining headship rates between 1970 and 2000 reduced homeownership rates by 3 to 5 percentage points. Moreover, year-2000 African American headship rates narrow white-black gaps in homeownership by roughly three percentage points, while year-2000 Hispanic headship rates widen white-Hispanic gaps in homeownership by two to three percentage points. Thus, controlling for differences in headship behavior, white-black homeownership gaps are somewhat more severe than previously recognized, but the reverse is true for white-Hispanic gaps.
    Keywords: Household headship, Household formation, Homeownership rates, Racial gap in homeownership, Black-white differences
    JEL: R21 D10
    Date: 2007–01
  12. By: David C. Maré (Motu Economic and Public Policy Research); Jason Timmins (New Zealand Department of Labour)
    Abstract: Firms operating in dense labour markets are more productive, although understanding the mechanisms behind this relationship is both challenging and contentious. This paper uses a newly assembled dataset on location and labour productivity of most New Zealand firms to examine the role of location patterns at the industry, local labour market, and industry*location levels. We derive estimates in the presence of firm, location, and period fixed effects, paying particular attention to controlling for unobserved local and industry factors. Our findings confirm that labour productivity is higher for firms in geographically-concentrated industries ("localisation"), for firms in more industrially-diversified labour markets ("urbanisation"), and for firms operating in larger labour markets. Controlling for heterogeneity of industries, locations, and firms, we find some support for a positive productivity effect of changes in both localisation and urbanisation, although not all estimated effects are statistically and economically significant.
    Keywords: Labour Productivity, Geographic concentration; agglomeration
    JEL: R12 R3
    Date: 2006–10
  13. By: Vilalta y Perdomo, Carlos J. (Tecnológico de Monterrey, Campus Ciudad de México)
    Date: 2007–03
  14. By: Berliant, Marcus; Kung, Fan-chin
    Abstract: The modern literature on city formation and development, for example the New Economic Geography literature, has studied the agglomeration of agents in size or mass. We investigate agglomeration in sorting or by type of worker, that implies agglomeration in size when worker populations differ by type. This kind of agglomeration can be driven by asymmetric information in the labor market, specifically when firms do not know if a particular worker is of high or low skill. In a model with two types and two regions, workers of different skill levels are offered separating contracts in equilibrium. When mobile low skill worker population rises or there is technological change that favors high skilled workers, integration of both types of workers in the same region at equilibrium becomes unstable, whereas sorting of worker types into different regions in equilibrium remains stable. The instability of integrated equilibria results from firms, in the region to which workers are perturbed, offering attractive contracts to low skill workers when there is a mixture of workers in the region of origin.
    Keywords: Adverse selection; Agglomeration
    JEL: D82 R13 R12
    Date: 2006–10–31
  15. By: Jason Barr; Troy Tassier
    Abstract: We introduce social interactions into the Schelling model of residential choice. These social interactions take the form of a Prisoner's Dilemma game played with neighbors. First, we study the Schelling model over a wide range of utility functions and then proceed to study a spatial Prisoner's Dilemma model. These models provide a benchmark for studying a combined model with preferences over like-typed neighbors and payoffs in the spatial Prisoner's Dilemma game. We study this combined model both analytically and using agent-based simulations. We find that the presence of these additional social interactions may increase or decrease segregation compared to the standard Schelling model. If the social interactions result in cooperation then segregation is reduced, otherwise it is increased.
    Keywords: Schelling Tipping Model, Spatial Prisoner's Dilemma, Cooperation, Segregation
    JEL: C63 C73 D62
    Date: 2007–04
  16. By: Mathias Sinning
    Abstract: This paper analyzes the home-ownership gap between native and immigrant households in Germany, paying particular attention to the assimilation process of immigrant households.A double cohort approach is applied to investigate the effect of the duration of residence in Germany on the homeownership probability of immigrant households.Moreover, focusing on homeowners, differences in the housing quality between native and immigrant households are being examined.The estimates indicate that immigrant households are less likely to own their primary residence than comparable native households. Since the effect of the duration of residence in Germany on the home-ownership probability turns out to be insignificant, the empirical findings suggest that an assimilation process in home-ownership between native and immigrant households does not take place. Finally, differences in housing quality measures become insignificant after controlling for socioeconomic characteristics and contextual factors of native and immigrant households in an interacted model.
    Keywords: Home-ownership, International Migration, Assimilation
    JEL: F22 I31 R21
    Date: 2006–08
  17. By: Arthur Grimes (Motu Economic and Public Policy Research); Andrew Aitken (Motu Economic and Public Policy Research)
    Abstract: We use New Zealand property data at the area unit (suburb) level to examine implied prospects for communities over time, and test whether these derived prospects have explanatory power relating to actual future outcomes. We also use the data to analyse whether disadvantaged communities face particular problems in relation to rental markets. Our results indicate that: capital gains and rental growth expectations historically have appeared reasonable in that they have not been suggestive of asset bubbles or other fad behaviour; derived capital gains and rental growth expectations have explanatory power both over actual future capital gains and actual future rental growth; and lower socio-economic areas face higher rental yields even after controlling for non-socio-economic factors than do high socio-economic areas.
    Keywords: House prices; house rents; rental yields; capital gains; community prospects
    JEL: R11 R21
    Date: 2007–03
  18. By: Romeo Danielis (Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Trieste); Edoardo Marcucci (Department of Economics, Università di Urbino "Carlo Bo")
    Keywords: Urban Transport, stated preferences, service contract.
    JEL: R40 R41
    Date: 2007–03
  19. By: Qingfang Wang
    Abstract: In the context of continuing influxes of large numbers of immigrants to the United States, urban labor market segmentation along the lines of race/ethnicity, gender, and class has drawn considerable growing attention. Using a confidential dataset extracted from the United States Decennial Long Form Data 2000 and a multilevel regression modeling strategy, this paper presents a case study of Chinese immigrants in the San Francisco metropolitan area. Correspondent with the highly segregated nature of the labor market as between Chinese immigrant men and women, different socioeconomic characteristics at the census tract level are significantly related to their occupational segregation. This suggests the social process of labor market segmentation is contingent on the immigrant geography of residence and workplace. With different direction and magnitude of the spatial contingency between men and women in the labor market, residency in Chinese immigrant concentrated areas is perpetuating the gender occupational segregation by skill level. Whereas abundant ethnic resources may exist in ethnic neighborhoods and enclaves for certain types of employment opportunities, these resources do not necessarily help Chinese immigrant workers, especially women, to move upward along the labor market hierarchy.
    Keywords: Chinese immigrants, ethnic niches, gender, residence, workplace, San Francisco
    Date: 2007–03
  20. By: Jason Barr
    Abstract: This paper investigates the determinants of skyscraper building cycles in Manhattan from 1895 to 2004. We first provide a simple model of the market for tall buildings. Then we empirically estimate the determinants of the time series of the number of skyscraper completions and their average heights over the 110 year period. We estimate the model under the assumption of rational expectations and myopic expectations, and find that the myopic model provides a better fit of the data. Furthermore, we find that several local and national variables determine both the number of completions and the average height of skyscrapers, including New York City area population; national employment in finance, insurance and real estate; building costs; access to financing; property tax rates and zoning regulations.
    Keywords: Skyscrapers, building cycles, building height, Manhattan,New York City, myopic expectations, rational expectations
    JEL: D84 N61 N62 R11 R33
    Date: 2007–04
  21. By: Viv B. Hall (Victoria University of Wellington); John McDermott (Victoria University of Wellington)
    Abstract: This paper identifies the expansion and contraction phases of New Zealand's national and regional house prices, by employing techniques typically used to study cycles in real activity, the so-called Classical cycle dating method. We then enquire into the nature of the cycles, addressing five questions: (1) What are the New Zealand and regional house price cycles, and do the regional cycles differ from the national cycle?; (2) What are the typical durations, magnitudes and shapes of these house price cycles?; (3) Do cycles in house prices match cycles in economic activity, at either national or regional levels?; (4) Does it matter which of the two main sets of house price series are used? i.e. Quotable Value New Zealand (QVNZ) or Real Estate Institute of New Zealand (REINZ)?; and (5) Does the sample period matter? Findings are evaluated in the context of work by Grimes, Aitken and Kerr (2004), and Hall and McDermott (2005). Avenues for further research are suggested.
    Keywords: House price cycles; regional business cycles; classical business cycle; New Zealand
    JEL: C22 E31 E32 R11 R15 R21
    Date: 2006–07
  22. By: Colin Vance; Ralf Hedel
    Abstract: This study investigates the influence of urban form on automobile travel using travel-diary data from Germany. Two dimensions of car use are considered: the discrete decision to own a car and the continuous decision of distance traveled. Because these decisions are likely to be influenced by factors unobservable to the researcher, we apply censored regression models to evaluate the role of biases emerging from sample selectivity. Unlike much of the literature, we find that urban form variables are a significant determinant of both automobile ownership and use, a finding that holds even after using instrumental variables to control for endogeneity.
    Keywords: urban form, non-work automobile travel, sample selectivity, instrumental variables
    JEL: R14 R41
    Date: 2006–09
  23. By: Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Stüber, Heiko (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Recently, there has been a renewed interest in the agglomeration wage differential. One of the open research question is whether wage differences between large cities and the rural country are due to unobserved differences in regional price levels. In this paper information on regional price levels for western German regions is used to assess this wage differential. Since for many regions price information is not available Multiple Imputation is used to generate completed data sets. It can be shown that this strategy is more reliable than simply using predictions of regression analysis. The results obtained show that the agglomeration wage differential in Germany is smaller than in the US, and that only a minor part of it can be explained by differences in prices." (author's abstract, IAB-Doku) ((en))
    Keywords: Lohnunterschied, regionale Disparität, Preisniveau, Westdeutschland, Bundesrepublik Deutschland
    JEL: R12 J31 C11
    Date: 2007–04–05
  24. By: Donald Haurin (Department of Economics, Ohio State University); Christopher Herbert (Abt Associates, Inc.); Stuart Rosenthal (Department of Economics, Syracuse University)
    Abstract: While homeownership rates currently stand at historically high levels for all segments of the U.S. population, large gaps are present comparing various groups of the population. As of the third quarter of 2006, the non-Hispanic white homeownership rate was 76 percent while black and Hispanic homeownership rates were below 50 percent, and the Asian rate was 60 percent. The ownership gap between black and white households is larger in 2006 than 1990, while that between Hispanics and whites is only slightly smaller. Households with very-low income had a homeownership rate that was 37 percentage points below the rate for high-income households. These gaps have changed little over the last 50 years. The primary goal of this study is to synthesize what is known about the determinants of gaps in homeownership rates by income, racial, and ethnic status. We first present a conceptual framework for analyzing the determinants of homeownership. We then review the literature that identifies the relative importance of various contributing factors to observed homeownership gaps, separating the factors into those that are observed and those that are part of an unexplained residual that represents unmeasured factors such as discrimination, lack of information about the home buying and mortgage financing process, and omitted socio-economic variables.
    JEL: J1 J7 R21 R31
    Date: 2007–01
  25. By: Colin Vance; Rich Iovanna
    Abstract: This study examines the determinants of urbanized area across a 10,000-mile square swath in central North Carolina, an area undergoing extensive conversion of forest and agricultural land.We model the temporal and spatial dimensions of these landscape changes using a database that links five satellite images spanning 1976–2001 to a suite of socioeconomic, ecological and GIScreated explanatory variables. By specifying the complementary log-log derivation of the proportional hazards model, we employ a methodology for modeling a continuous time process – the conversion of land to impervious surface – using discrete-time satellite data. Spatial effects are captured by several variables derived from the imagery that measure the landscape configuration surrounding a pixel. Empirical results confirm the significance of several determinants of urbanization identified elsewhere in the literature, including proximity to roads and population density, but also suggest that the parameterization of these variables is biased when the influence of landscape configuration is unaccounted for. We conclude that the inclusion of spatial pattern metrics significantly improves both the explanatory and predictive power of the estimated model of urbanization.
    Keywords: Urbanization, hazard models, satellite imagery
    JEL: R14 C41
    Date: 2006–10
  26. By: Dean Baker
    Abstract: This paper forecasts that weakness in the housing market is likely to push the economy into a recession in 2007. Economist Dean Baker provides predictions for GDP, job and wage growth; inflation (CPI); investment; exports and imports; and more.
    Date: 2006–11
  27. By: Arntz, Melanie
    Abstract: By examining the destination choice patterns of heterogenous labor, this paper tries to explain the skill composition of internal job matching flows in Germany. Estimates from a nested logit model of destination choice suggest that spatial job matching patterns by high-skilled individuals are mainly driven by interregional income differentials, while interregional job matches by less-skilled individuals are much more affected by regional differentials in job opportunities. Regional differentials in non-pecuniary assets slightly contribute to spatial sorting processes in Germany. Such differences in destination choices by skill level are partly modified by different spatial patterns of job-to-job matches and job matches after unemployment. Simulating job matching patterns in a scenario of economic convergence between eastern and western Germany demonstrates that wage convergence is the most effective means of attracting human capital to eastern Germany.
    Keywords: interregional job matches, destination choice, human capital
    JEL: C35 J61 R23
    Date: 2006
  28. By: Yann Bramoullé; Habiba Djebbari; Bernard Fortin
    Abstract: We provide new results regarding the identification of peer effects. We consider an extended version of the linear-in-means model where each individual has his own specific reference group. Interactions are thus structured through a social network. We assume that correlated unobservables are either absent, or treated as fixed effects at the component level. In both cases, we provide easy-to-check necessary and sufficient conditions for identification. We show that endogenous and exogenous effects are generally identified under network interaction, although identification may fail for some particular structures. Monte Carlo simulations provide an analysis of the effects of some crucial characteristics of a network (i.e., density, intransitivity) on the estimates of social effects. Our approach generalizes a number of previous results due to Manski (1993), Moffitt (2001), and Lee (2006).
    Keywords: Social networks, Peer effects, identification, reflection problem
    JEL: D85 L14 Z13 C3
    Date: 2007
  29. By: Kuchiki, Akifumi
    Abstract: This paper proposes a flowchart approach to the automobile industry cluster policy and the hi-technology industry cluster policy to prioritize policy measures. First, in the automobile industry cluster, suppliers of parts and components to anchor firms such as Honda, Nissan and Toyota of Japanese assembly makers in Guangzhou, China, can innovate partly because the suppliers have become independent of their anchor firms in the Japanese Keiretsu system. Second, concerning the hi-technology industry clustering in Beijing, we show that the existence of universities is a precondition for the industrial cluster policy and that the leadership of the Zhongguancun Science Park Management Committee of Beijing Municipality is crucial to the success of the industrial cluster policy. The flowchart for the hi-technology industry is different from the one for the automobile industry cluster.
    Keywords: Flowchart approach, Prioritization, Innovation, Guangzhou, Beijing, Universities, Local government, China, Industrial estate, Industrial policy, Research organization, ・
    JEL: O18 R11
    Date: 2007–02
  30. By: Jacques Poot (University of Waikato)
    Abstract: The demographic profile of a region is usually seen as a slowly changing background phenomenon in the analysis of regional competitiveness and regional growth. However, regional demographic change can have a significant impact on regional competitiveness and such change is often more rapid and profound than at the national level. In turn, regional population size, growth, composition and distribution are endogenous to regional economic development. This paper focuses on the impact of population ageing and immigration on aspects of regional competitiveness such as innovation, entrepreneurship and productivity. Immigration and ageing trends have generated huge separate literatures but it is argued here that it is fruitful to consider these trends jointly. Theoretically, there are many channels through which immigration and population ageing can affect regional competitiveness. There is empirical evidence that population ageing reduces regional competitiveness, while immigration – particularly of entrepreneurs and highly skilled workers to metropolitan areas – enhances competitiveness. Much of the available literature is based on small-scale case studies and rigorous econometric research on the impact of demographic change at the regional level is still remarkably rare. Some directions for further research are suggested.
    Keywords: regional competitiveness, immigration, population ageing, innovation
    JEL: F22 J11 O31 R11
    Date: 2007–03–27
  31. By: Paul Beaudry; David A. Green; Benjamin Sand
    Abstract: Does attracting or losing jobs in high paying sectors have important spill-over effects on wages in other sectors? The answer to this question is central to a proper assessment of many trade and industrial policies. In this paper, we explore this question by examining how predictable changes in industrial composition in favor of high paying sectors affect wage determination at the industry-city level. In particular, we use US Census data over the years 1970 to 2000 to quantify the relationship between changes in industry-specific city-level wages and changes in industrial composition. Our finding is that the spill-over (i.e., general equilibrium) effects associated with changes in the fraction of jobs in high paying sectors are very substantial and persistent. Our point estimates indicate that the total effect on average wages of a change in industrial composition that favors high paying sectors is about 3.5 times greater than that obtained from a commonly used composition-adjustment approach which neglects general equilibrium effects. We interpret our results as being most likely driven by a variant of the mechanism recently emphasized in the heterogenous firm literature whereby changes in competitive pressure cause a reallocation of employment toward the most efficient firms.
    JEL: J31
    Date: 2007–04
  32. By: Conrad, Klaus; Heng, Stefan (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: Division of labor, outsourcing in manufacturing and just-in-time production require the provision of a good and sufficient road infrastructure system. The society is used to mobility, preference for it even increases, and the full benefit of competition c
  33. By: Ammermüller, Andreas; Dolton, Peter J.
    Abstract: The difference between girls and boys academic performance is a major issue on both sides of the Atlantic. Do boys and girls fair better with a teacher of their own gender? This paper investigates the presence of such ‘pupil-teacher gender interactions’ on scholastic performance. We use data from PIRLS and TIMSS on Reading, Science and Maths at grade 4 and grade 8 for England and the USA for data from 1995, 1999, 2001 and 2003. We find evidence of gender interaction effects in the form of both positive male interaction effects in Maths scores in the US and Science scores in England at grade 8. Further, using individual fixed effects, Gain score analysis of the difference between Maths and Science scores confirms the presence of Maths gender interaction effects in England (but not the USA) at grade 8 by 2003 when these effects were not present in 1995 or 1999.
    Date: 2006
  34. By: Conrad, Klaus (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: In Europe traffic congestions make it impossible to estimate travel time. The increasing number of cars calls for a transportation policy towards an improved efficiency of the transportation system. However, extending road infrastructure to reduce the con
  35. By: James J. Heckman; Dimitriy V. Masterov
    Abstract: This paper presents a productivity argument for investing in disadvantaged young children. For such investment, there is no equity-efficiency tradeoff.
    JEL: H52 I28
    Date: 2007–04
  36. By: v. Kalckreuth, Ulf (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: Social interactions between individuals are central to modern economic theory as represented by works such as Durlauf (1996), Bénabou (1996a, 1996b) or Borjas (1992, 1995), that explain growth and income distribution jointly. This essay examines the radic
  37. By: Conrad, Klaus (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: The purpose of this paper is to model competition in freight transport and to work out the role of the government in providing infrastructure for the competitors. Freight transport could in principle be provided by the firm itself by using firm-owned trtracks or transportation services could be outsourced by purchasing these services from rail and/or track transport firms. We link productionin the rest of the economy to transport demand provided by two competing modes of transport. Since congestion is an increasing cost component in densely populated countries, we develop an index of congestion which can be controlled by investing in highway infrastructure. Given infrastructure, a fuel tax on the stock of vehicles, we first derive the conditional demand functions of the economy for truck and rail services. The two transport firms know these demand functions and compete in prices. We then propose a transportation policy which choosestwo types of infrastructure, highways and railway systems, and a fuel tax in order to maximize welfare. The economic aspects for an optional provision of the two types of infrastructure can be expressed by a set of unknown elasticities which measure the impact of infrastructure services on prices in the rail and truck industries, on the volume of transport, on congestion, and on utilization of the stock of transportation equipment.
    JEL: H54 L13 L92 R41
  38. By: David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota); Bhanu Yerra
    Abstract: The present research develops an agent-based model to treat the organization, growth, and contraction of network elements. The components model travel demand, revenue, cost, and investment. Revenue earned by links in excess of maintenance costs is invested on the link to until all revenue is consumed. After upgrading (or downgrading) each link in the network, the time period is incremented and the whole process is repeated until an equilibrium is reached or it is clear that it cannot be achieved. The model is tested with three alternative land use patterns: uniform, random, and bell-shaped, to test the effects of land use on resulting network patterns. It is found that similar, but not identical, equilibrium hierarchical networks result in all cases, with the bell-shaped network, with a CBD, having higher level roads concentrated in a belt around the CBD, while the other networks are less concentrated
    Keywords: Self-organization, network growth, network evolution, transportation planning, land use planning
    JEL: R40 R42 R48 R14 D10 D83 D85 O33
    Date: 2006
  39. By: Westerheide, Peter
    Abstract: This paper analyses the performance of real estate securities and their relationship to other asset classes as well as to consumer price inflation in an international comparison over the period from 1990 to 2004. The analysis focuses on the long run relationships, applying three different cointegration tests. It covers the US, Canada, Australia, Japan, the Netherlands, Belgium, France and Germany. Results show that real estate securities in most countries had a high performance in nominal and real terms. The average performance over the whole period (1990 – 2004) has been particularly high in capital market oriented countries in the sample (US, Australia), and also in France. Real estate securities have outperformed bond markets on a risk adjusted basis only in the US and in Australia, while an outperformance of stock markets can be observed also in Japan and France. Particularly in the period 2001 to 2004 real estate security market have soared in most countries with the notable exception of Germany. In general, real estate securities seem to represent an asset class distinct from bonds and stocks in most countries. In the long run they seem provide a potential for further diversification of asset portfolios. Additionally, real estate stocks provide a (weak) hedge against consumer price inflation in almost every country.
    Keywords: REITs, Real Estate Securities, Cointegration, Stock Markets, Bond Markets
    Date: 2006
  40. By: M. Ali Khan (The Johns Hopkins University, Baltimore, USA)
    Abstract: The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups
    Keywords: Harris-Todaro, Wages, Labour Economics, Labour Market, Rural to Urban Migration
    JEL: D00
    Date: 2007

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