nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2007‒05‒19
twenty papers chosen by
Steve Ross
University of Connecticut

  1. Parental Valuation of Charter Schools and Student Performance By Jim VanderHoff
  2. Discrimination Against Persons with Disabilities: Testing Guidance for Practitioners By Sara Pratt; Carla Herbig; Diane Levy; Julie Fenderson; Margery Austin Turner
  3. Home and Mortgage Ownership of the Dutch Elderly: Explaining Cohort, Time and Age Effects By Anna van der Schors; Rob J.M. Alessie; Mauro Mastrogiacomo
  4. Decentralization and Environmental Quality: An International Analysis of Water Pollution By Hilary Sigman
  5. Industrial Clusters in India: Evidence from Automobile Clusters in Chennai and the National Capital Region By Okada, Aya; Siddharthan, N.S.
  6. A new measure of local endowments of transport infrastructures By Giovanna Messina
  7. What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns By William Kerr; Edward Glaeser; Glenn Ellison
  8. Competition in Law Enforcement and Capital Allocation By Nicolas Marceau; Steeve Mongrain
  9. Spatial asymmetric duopoly with an application to Brussels’ airports By Fay Dunkerley; André de Palma; Stef Proost
  10. Urban growth and decline in Europe By Maarten Bosker; Gerard Marlet
  11. The Principle of Moderate Differentiation By Sallstrom Matthews, S.E.
  12. Downtown Parking in Auto City By Richard Arnott; John Rowse
  13. Innovation, Dynamic Regions and Regional Dynamics By Karlsson, Charlie; Andersson, Åke E; Cheshire, Paul; Stough, Roger R
  14. Market Structure and Internalization of Congestion in Air Transportation By Kurt Van Dender
  15. Does Welfare Policy Affect Residential Choices? Evidence from a Natural Experiment By Jon H. Fiva
  16. Environmental Policy as Social Policy? The Impact of Childhood Lead Exposure on Crime By Jessica Wolpaw Reyes
  17. Towards Reform of Land Acquisition Framework in India By Morris Sebastian; Pandey Ajay
  18. Regional Unemployment Disparities: An Evaluation of Policy Measures By Nicolaas Groenewold; Alfred Hagger
  19. Do fiscal rules cause budgetary outcomes? By Signe Krogstrup; Sébastien Wälti
  20. Private Property, Public Use, and Just Compensation: The Economics of Eminent Domain By Thomas Miceli; Kathleen Segerson

  1. By: Jim VanderHoff
    Abstract: This paper reports evidence that parental value of charter schools is primarily determined by the schools’ academically effectiveness. Data on the New Jersey charter schools indicate that not all charter schools are equally effective, measured by student test scores, or equally valued, measured by the number of students on their waiting list. The charter school value model estimates the effect of tests score, student demographics and school characteristics for both the charter school and the home district traditional public schools. The estimates indicate that the charter school test scores have the largest and most robust effect on the size of the waiting list. Neither the charter school students’ race or income nor traditional public school students’ test scores affect charter school parental value. Thus this research supports a basic tenet for competitive, market based public school improvement--parents choose academically effective schools.
    Keywords: Charter Schools, School Choice
    JEL: I21
    Date: 2007–05
  2. By: Sara Pratt; Carla Herbig; Diane Levy; Julie Fenderson; Margery Austin Turner
    Abstract: Housing discrimination against persons with disabilities has become an increasingly important issue in fair housing enforcement. Since 1988, when disability was added to the Fair Housing Act as an illegal basis for housing discrimination, the percentage of complaints filed with the United States Department of Housing and Urban Development (HUD) alleging disability discrimination has steadily risen. Since 1993, complaints alleging disability discrimination have been the most or second most common type of fair housing complaint received by HUD.
    JEL: Y90
    Date: 2005–07
  3. 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: 2007–05
  4. By: Hilary Sigman
    Abstract: Many arguments about decentralization in public goods provision have testable implications for the relationship between decentralization and the level and spatial variability of public goods. This paper explores the empirical relationship between decentralization and environmental public good, water quality in rivers at monitoring stations around the world. It examines pollution levels and spatial variability of pollution within a country for both a local and a regional pollutant. The results suggest higher pollution levels with greater decentralization when fixed effects are included; the evidence is strongest for the regional pollutant, where it might result from interjurisdictional free riding. Federalism is associated with greater spatial variability in pollution within a country, consistent with the traditional view that decentralization allows policies more tailored to local conditions.
    JEL: H77 Q5
    Date: 2007–05
  5. By: Okada, Aya; Siddharthan, N.S.
    Abstract: This study analyzes the patterns of agglomeration of some modern manufacturing sectors in India, and in particular the Indian automobile sector. It also examines and contrasts the factors that have led to different patterns of cluster development in two leading auto clusters in India-Chennai and the National Capital Region (NCR). Moreover, the study analyzes whether firms in clusters perform better than those that are excluded and whether the relative importance of variables that determine the behavior of firms differs among clusters. Our analyses, which employ a combination of quantitative and qualitative methods, show that Indian industrial clusters are largely concentrated in the three clustered regions: NCR, Mumbai-Pune, and Chennai-Bangalore, across different manufacturing sectors. Our study of the auto clusters in Chennai and the NCR find considerable differences in the patterns of cluster formation, due partly to the historical and policy conditions under which firms, particularly, the lead firms must operate. Moreover, our econometric analyses confirmed that being part of a cluster positively influences the performance of the auto component firms and those belonging to a cluster perform better.
    Keywords: Industrial clusters, Automobile industry, Spatial distribution of industry, India, Industrial estates
    JEL: L62 O14 R12
    Date: 2007–04
  6. By: Giovanna Messina (Banca d'Italia, Servizio Studi)
    Abstract: The aim of this study is to develop a new method to measure local endowments of transport infrastructures. Starting from the analytical approach of the “new economic geography”, which emphasizes the role of spatial location in determining the growth performance of an economy, it is possible to build a system of indicators which include the effect of the speed and of the quality of transport infrastructures as well as of their physical stock. The new technique is applied to Italian provinces in order to study the action of road and rail transport in the different areas of the country.
    Keywords: new economic geography, transport infrastructures, market potential
    JEL: R12 R40 R58
    Date: 2007–04
  7. By: William Kerr; Edward Glaeser; Glenn Ellison
    Abstract: Many industries are geographically concentrated. Many mechanisms that could account for such agglomeration have been proposed. We note that these theories make different predictions about which pairs of industries should be coagglomerated. We discuss the measurement of coagglomeration and use data from the Census Bureau’s Longitudinal Research Database from 1972 to 1997 to compute pairwise coagglomeration measurements for U.S. manufacturing industries. Industry attributes are used to construct measures of the relevance of each of Marshall’s three theories of industry agglomeration to each industry pair: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. We assess the importance of the theories via regressions of coagglomeration indices on these measures. Data on characteristics of corresponding industries in the United Kingdom are used as instruments. We find evidence to support each mechanism. Our results suggest that input-output dependencies are the most important factor, followed by labor pooling.
    Date: 2007–04
  8. By: Nicolas Marceau (Université du Québec à Montréal); Steeve Mongrain (Simon Fraser University)
    Abstract: This paper studies interjurisdictional competition in the fight against crime and its impact on occupational choice and the allocation of capital. In a world where capital is mobile, jurisdictions are inhabited by individuals who choose to become workers or criminals. Because the return of the two occupations depends on capital, and because investment in capital in a jurisdiction depends on its crime rate, there is a bi-directional relationship between capital investment and crime which may lead to capital concentration. By investing in costly law enforcement, a jurisdiction makes the choice to become criminal less attractive, which reduces the number of criminals and makes its territory more secure. This increased security increases the attractiveness of the jurisdiction for investors and this can eventually translate into more capital being invested. We characterize the Nash equilibria — some entailing a symmetric outcome, others an asymmetric one — and study their efficiency.
    Keywords: Crime; Occupational Choice; Capital Location; Law Enforcement
    JEL: K42
    Date: 2007–05
  9. By: Fay Dunkerley (CES – KU Leuven, Belgium); André de Palma (THEMA, Univ de Cergy Pontoise, France & ENPC); Stef Proost (CES – KU Leuven, Belgium, CORE, Belgium)
    Abstract: We study the problem of a city with access to two firms or subcentres (restaurants, airports) selling a differentiated product and/or offering a differentiated workplace. The first subcentre is easily congested (near city centre, access by road), the second less prone to congestion but further away. Both need to attract customers and employees and need to make profits to cover their fixed costs. This is an asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. This solution involves excessive congestion for the nearby subcentre. Three stylised policies are studied to address this congestion. The first policy is to widen the congested road to the nearby subcentre. The second policy option is to add congestion pricing (or parking pricing etc.) for the congested subcentre. The third policy is to provide a direct subsidy to the remote subcentre so that it can reduce its price. We illustrate the theory using a numerical model applied to the two Brussels airports.
    Keywords: duopoly, imperfect competition, congestion, general equilibrium, airport competition
    JEL: L13 D43 R41 R13
    Date: 2007
  10. By: Maarten Bosker; Gerard Marlet
    Abstract: In this paper we examine growth differences between European cities. We have used the Urban Audit, a rather new dataset from Eurostat. After clarifying the merits of this dataset as well as some of its limitations, we provide some detailed characteristics of city growth in the European Union. This shows that urban growth in the EU is pretty persistent and is still, in spite of further European integration, largely driven by growth of national born population; non-national European born and non-European born migrants contribute only marginally to urban growth differentials. Moreover differences in birth rates explain a substantial part of the variation in (national-born population) growth rates. Controlling for these differences in birth rates, we look for the determinants of migration-driven European city growth relative to average city growth in the EU as a whole as well as to average national city growth, meanwhile distinguishing between national, non-national EU and non-EU population growth. Our results suggest that, by and large, the smaller, less dense, safer, amenity-rich cities with high levels of GDP per capita are growing fastest. When focussing on national, EU and non-EU population growth, we moreover find that nationals are attracted to the less dense, amenity-rich, more productive cities; that EU nonnationals are concentrated in cities with high levels of human capital; and that non-EU population growth is determined by climate and by employment structure.
    Keywords: European urban growth
    JEL: R00 R11 O18
    Date: 2006–11
  11. By: Sallstrom Matthews, S.E.
    Abstract: What would happen if firms could collusively choose cost of transport (inconvenience) in Hotelling's spatial model? This paper endogenises inconvenience in a three stage game, where firms choose locations, the inconvenience, and finally compete in price, on the assumption of a common reservation price. The equilibrium of the game reveals a novel mechanism which induces firms to differentiate their products in moderation by locating halfway to the center and choosing inconvenience such that the market remains covered in equilibrium. Furthermore, using Launhardt's model with differential freight rate, it is shown that the collusive inconvenience is a Nash equilibrium.
    Keywords: spatial differentiation, location, market structure, cost of transport, inconvenience, freight rate, business strategies.
    JEL: L11 L13 D43 D21
    Date: 2007–05
  12. By: Richard Arnott (Boston College); John Rowse (University of Calgary)
    Abstract: This paper develops and calibrates a model of downtown parking in a city without mass transit, and applies it to investigate downtown parking policy. There is curbside and garage parking and traffic congestion. Spatial competition between private parking garages determines the equilibrium garage parking fee and spacing between parking garages. Curbside parking is priced below its social opportunity cost. Cruising for parking adjusts to equalize the full prices of on- and off-street parking, and contributes to traffic congestion. The central result is that raising curbside parking fees appears to be a very attractive policy since it generates efficiency gains that may be several times as large as the increased revenues raised.
    Keywords: parking, traffic congestion, parking garages, parking policy
    JEL: R40
    Date: 2007–04–30
  13. By: Karlsson, Charlie (Jönköping International Business School (JIBS) and CESIS); Andersson, Åke E (Jönköping International Business School (JIBS) and CESIS); Cheshire, Paul (London School of Economics (LSE)); Stough, Roger R (George Mason University (GMU))
    Abstract: This paper analyses the aspects of spatial economics that deals with innovation, regional specialization and dynamic systems of functional regions and in particular the contributions made by the economist Börje Johansson. The innovation aspect consists of innovation networks, knowledge sources and knowledge sinks, cost and innovation of product characteristics and innovation at the industry and sector level. In the regional specialization part the infrastructure, regional economic milieus, the specialization of regions and specific the specialization in small and large regions, spatial transaction costs, and endogenous specialization are subjects that are being treated. Regional dynamics consists of location dynamics in a system of functional urban regions where different theories are being discussed as the spatial product life cycle theory and filtering-down theory. The last part does also take up lead-lag models.
    Keywords: innovation; regional; specialization; dynamic systems; functional regions
    JEL: O18 O31 R10
    Date: 2007–04–18
  14. By: Kurt Van Dender (Department of Economics, University of California-Irvine)
    Abstract: We use a simple analytical framework to derive pricing rules for oligpolistic airlines at airports that are served by competitive airlines as well. The pricing rules show how the degree of internalization of marginal congestion costs depends on market structure. The analysis illustrates the importance of selecting an accurate representation of market structure, when making recommendations about the desirability of congestion pricing mechanisms.
    Keywords: Airports; Airline; Congestion; Congestion tolls; Oligopoly
    JEL: L13 L93 R41
    Date: 2007–04
  15. By: Jon H. Fiva (Statistics Norway)
    Abstract: This paper studies how changes in welfare benefit levels affect welfare recipients’ residential choices. Although several empirical studies have stressed that welfare policy may affect residential choices of welfare recipients, few studies have simultaneously taken into account that residential choices of welfare recipients also affect welfare policy. The main contribution of this paper is to address this policy endogeneity by utilizing a policy reform as a natural experiment. The results show that welfare policy exerts a nontrivial effect on residential choices of welfare recipients. Moreover, I show that ignoring the policy endogeneity may give rise to a downward bias in the estimated migration responses.
    Keywords: Welfare Benefits; Migration; Policy Endogeneity
    JEL: I38 H73 H77 R23
    Date: 2007–05
  16. By: Jessica Wolpaw Reyes
    Abstract: Childhood lead exposure can lead to psychological deficits that are strongly associated with aggressive and criminal behavior. In the late 1970s in the United States, lead was removed from gasoline under the Clean Air Act. Using the sharp state-specific reductions in lead exposure resulting from this removal, this article finds that the reduction in childhood lead exposure in the late 1970s and early 1980s is responsible for significant declines in violent crime in the 1990s, and may cause further declines into the future. The elasticity of violent crime with respect to lead is estimated to be approximately 0.8.
    JEL: I18 K49 Q53 Q58
    Date: 2007–05
  17. By: Morris Sebastian; Pandey Ajay
    Abstract: We bring out the fundamental and more important problems with the current framework of land acquisition in India, regulations on land and the functioning of land markets. We argue that reform is overdue and the current framework would be unsustainable in a democracy that is India. Current land prices are highly distorted owing largely to regulatory constraints and the process of takings. Land acquisition more than any other factor is the most important constraint on development and especially in infrastructure development. We bring out the core elements of the reform – the need to define “public purpose” ex-ante for compulsory acquisition of land, the measures that would allow the market price of land to play its correct role, and the approach to valuation. We also argue for an independent valuer when compulsory taking is involved and methods of valuation to ensure that the land owner including the farmer gets the correct value for this land in both compulsory acquisition and in voluntary sale. We also argue the need for a parallel non-compulsory framework for acquisition and develop the key elements of the same. We also bring out alternatives to physical acquisition of land especially in the context of infrastructure development in central places.
    Keywords: Land-Acquisition, Eminent-Domain, Public Purpose, Takings, Rehabilitation, Law, Valuation, Central Places, Land-Use, Regulation, India
    JEL: K2
    Date: 2007–05–08
  18. By: Nicolaas Groenewold (UWA Business School, The University of Western Australia); Alfred Hagger (School of Economics, The University of Tasmania)
    Abstract: This paper analyses the efficacy of regional and federal government policies in reducing inter-regional unemployment disparities. We use as our framework a two-region general equilibrium model with a given freely-mobile supply of labour. We assume interregional migration to occur in response to inter-regional utility differentials. Each region has households, firms and a regional government. In addition to regional governments, there is a federal government. The firms in a region use a single factor, labour, to produce a single good which we assume to be different to that produced in the other region. It is supplied to households and to the regional government in the form of payroll taxes. Households consume some, trade some with households in the other region and give some up to the federal government as income tax. Firms and households bargain over wages and firms then choose employment to maximise profits. The resulting equilibrium will generally not be a full-employment one. We simulate a linearised numerical version of the model. We examine seven alternative policies, six carried out by a regional government and one by the federal government. In the first group there are traditional tax/expenditure polices as well as policies which might be seen as attacking the natural rate of unemployment: changes in unemployment benefits, changes in union power, changes in the labour force and changes in labour productivity. The federal government policy is a regionally- differentiated fiscal policy. Contrary to expectations, many policies which have traditionally been recommended to alleviate unemployment, are found, in fact, to exacerbate the unemployment problem.
    Date: 2007
  19. By: Signe Krogstrup (IUHEI, The Graduate Institute of International Studies, Geneva); Sébastien Wälti
    Abstract: This paper focuses on the observed empirical relationship between fiscal rules and budget deficits, and examines whether this correlation is driven by an omitted variable, namely voter preferences. We make use of two different estimation methods to capture voter preferences in a panel of Swiss sub-federal jurisdictions. First, we include a recently constructed measure of fiscal preferences. Second, we capture preferences through fixed effects with a structural break as women are enfranchised. We find that fiscal rules continue to have a significant impact on real budget balances.
    Keywords: Fiscal policy; fiscal rules; fiscal institutions; budget deficits; fiscal preferences; endogeneity
    JEL: C2 D7 E6 H6
    Date: 2007–05
  20. By: Thomas Miceli (University of Connecticut); Kathleen Segerson (University of Connecticut)
    Abstract: The eminent domain clause of the U.S. Constitution concerns the limits of the governmentÇs right to take private property for public use. The economic literature on this issue has examined (1) the proper scope of this power as embodied by the 'public use' requirement, (2) the appropriate definition, and implications, of 'just compensation,' and (3) the impact of eminent domain on land use incentives of owners whose land is subject to a taking risk. This essay reviews this literature and draws implications for our understanding of eminent domain law.
    Keywords: Eminent domain, just compensation, land use incentives, public use
    JEL: K11 R52
    Date: 2007–05

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