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on Urban and Real Estate Economics |
| By: | HUD - PD&R |
| Abstract: | The housing finance system of the United States is a marvel in its size, scope, and efficiency. One key feature of the U.S. housing finance system is its integration into the broader financial markets, providing Americans with access to cheap sources of capital. As a result, Americans enjoy high-quality housing and high homeownership rates. Thus, housing finance is of central importance to two critical sectors of the national economy: one obvious—the housing industry— and the other less obvious—the larger financial system of the United States. |
| JEL: | G00 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39147&r=ure |
| By: | Ron Boschma (Utrecht University); Simona Iammarino (SPRU, University of Sussex) |
| Keywords: | agglomeration economies, related variety, regional growth |
| JEL: | R11 R12 O18 |
| Date: | 2007–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:162&r=ure |
| By: | Lindahl, Erica (Department of Economics, Uppsala University) |
| Abstract: | This study investigates the importance of gender and ethnic interactions among teachers and students for school performance in Swedish, English and Mathematics. School leaving certificates assigned by the teacher is compared with results on comprehensive national tests. The analysis is based on data on grade 9 students (age 16) from Sweden. I find that a student is likely to obtain better test scores in Mathematics, when the share of teachers of the same gender as the student increases. Correspondingly, ethnic minority students, on average, obtain better test scores in Mathematics, when the share of ethnic minority teachers increases. The positive same-gender effect on test scores is counteracted by a negative assessment effect. That is, conditional on test scores, same-gender teachers are less generous than opposite-gender teachers when assessing students’ performance. In Swedish and English no statistically significant effects are found. |
| Keywords: | School achievements; student and teacher interactions; gender; race |
| JEL: | I21 |
| Date: | 2007–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2007_025&r=ure |
| By: | Nobuhiro Kiyotaki; Alexander Michaelides; Kalin Nikolov |
| Abstract: | This paper is a quantitatively-oriented theoretical study into the interaction between housing prices, aggregate production, and household behaviour over a lifetime. We develop a life-cycle model of a production economy in which land and capital are used to build residential and commercial structures. We find that, in an economy where the share of land in the value of structures is large, housing prices react more to an exogenous change in expected productivity or the world interest rate, causing large redistribution effects between net buyers and net sellers of houses. Changing the financing constraint, however, has limited effects on housing prices. |
| Keywords: | Real estates, Land, Housing Prices, Life cycle, Collateral constraints. |
| JEL: | E21 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmacp:0705&r=ure |
| By: | HUD - PD&R |
| Abstract: | It is commonly accepted that a well-developed primary residential mortgage market promotes homeownership and that homeownership in turn promotes economic and political stability. Secondary mortgage markets (SMMs) serve to enhance primary mortgage markets by separating the mortgage investment and origination functions. This separation increases the number of mortgage investors and, ultimately, the amount of capital available in the market. Increased competition in the primary market leads to more choices and lowers costs for borrowers. The net effect is to expand the benefits accruing from a primary mortgage market: making homeownership cheaper and more affordable, and expanding the ability of citizens to become homeowners. |
| JEL: | G00 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39146&r=ure |
| By: | HUD - PD&R |
| Abstract: | It is a critical time for the residential construction sector. With single family housing construction having increased dramatically over the past five years and moderate slowdowns expected to keep construction value near 2005 levels, the timing is ideal for the industry to develop and introduce new technologies and innovations. |
| JEL: | O20 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:hud:wpaper:39148&r=ure |
| By: | Vyacheslav Mikhed; Petr Zemcik |
| Abstract: | We employ recently developed cross-sectionally robust panel data tests for unit roots and cointegration to find whether house prices reflect house-related earnings. We use U.S. data for Metropolitan Statistical Areas, with house price measured by the weighted-repeated-sales index, and cash flows either by market tenant rents or estimates of a fair market rent. In our full sample periods, an error-correction model is not appropriate, i.e. there is a bubble. We then combine overlapping ten-year periods, price-rent ratios, and the panel data tests to construct a bubble indicator. The indicator is high for the late 1980s, early 1990s and since the late 1990s for both panels. Finally, evidence based on panel data Granger causality tests suggests that house price changes are helpful in predicting changes in rents and vice versa. |
| Keywords: | Cointegration, panel data, unit root, bubble, house prices, rents. |
| JEL: | G12 R21 R31 C33 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp338&r=ure |
| By: | Lindahl, Erica (Department of Economics, Uppsala University) |
| Abstract: | This study compares results on national tests with teachers’ assessment of student performance, by using Swedish data of grade 9 students (16 years old). I examine whether there are systematic differences correlated with gender and ethnic background. That is, if the relationship between school leaving certificates and national test results differs between girls and boys or between natives and non-natives. The results show that girls are more generously rewarded in teachers’ assessment compared to test results in all three subjects studied. Non-native students are more generously rewarded in teachers’ assessment compared to test results in two out of three subjects studied. |
| Keywords: | School performance; gender; race |
| JEL: | I21 |
| Date: | 2007–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2007_024&r=ure |
| By: | Subhayu Bandyopadhyay; Christopher H. Wheeler |
| Abstract: | We present a model of crime where two municipalities exist within a metro area (MSA). Consistent with the literature, local law enforcement has a crime reduction effect and a crime diversion effect. The former confers a spillover benefit to the other municipality, while the latter a spillover cost. If the net spillovers are positive (negative), then the respective Nash enforcement levels are too low (high) from the perspective of the MSA. When we allow for Tiebout type mobility, labor will move to the location offering lower disutility crime (including the tax burden). To attract labor both jurisdictions would like to raise the relative crime that exists in the competing region. Interestingly, this could raise or reduce enforcement compared to the immobility case. If it was too high (low) under immobility, it will be raised (reduced) further under mobility. In the symmetric case, neither can gain any labor, but the competition for it pushes the jurisdictions further away from the efficient (cooperative) outcome. Thus, mobility must be welfare reducing. We also consider asymmetry in the context of differences in efficiency of enforcement. The low cost municipality has the lower crime damage (inclusive of the tax burden) and attracts labor. Mobility is necessarily welfare reducing for the high cost municipality and for the MSA, but it has an ambiguous effect on the low cost municipality. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2007-046&r=ure |
| By: | Rajashri Chakrabarti |
| Abstract: | In this paper, I analyze the behavior of public schools facing vouchers. The literature on the effects of voucher programs on public schools typically focuses on student and mean school scores. This paper tries to go inside the black box to investigate some of the ways in which schools facing the threat of vouchers in Florida behaved. Under a 1999 program, Florida schools earning an "F" grade for the first time were exposed to the threat of vouchers, but did not face vouchers unless and until they got a second "F" within the next three years. Exploiting the institutional details of this program, I analyze the incentives built into the system and investigate the behavior of the public schools facing these incentives. I find strong evidence that they did respond to incentives. Using highly disaggregated school-level data, a difference-in-differences estimation strategy as well as a regression discontinuity analysis, I find that the threatened schools tended to focus more on students below the minimum criteria cutoffs rather than equally on all; interestingly, however, this improvement did not come at the expense of higher performing students. Second, consistent with incentives, the schools focused on writing rather than reading and math. These results are robust to controlling for differential pre-program trends, changes in demographic compositions, mean reversion, and sorting and have important policy implications. |
| Keywords: | Educational vouchers ; Public schools |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:306&r=ure |
| By: | Robert J. Shiller |
| Abstract: | This paper looks at a broad array of evidence concerning the recent boom in home prices, and considers what this means for future home prices and the economy. It does not appear possible to explain the boom in terms of fundamentals such as rents or construction costs. A psychological theory, that represents the boom as taking place because of a feedback mechanism or social epidemic that encourages a view of housing as an important investment opportunity, fits the evidence better. |
| JEL: | R0 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13553&r=ure |
| By: | Charles Raux (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat) |
| Abstract: | Congestion pricing as a transport demand management measure is difficult to implement because most of motorists expect a deterioration of their welfare. Tradable driving rights (TDR), that is allocating quotas of driving rights for free to urban inhabitants, could be a more acceptable alternative. This mechanism provides also a supplementary incentive to save whether trips or distance travelled by car, because of the possibility of selling unused rights. A complete system of TDR is designed in detail, aiming whether at reducing trips or vehicles-kilometres, in order to control congestion, or the same target modulated on the basis of the pollutant emission categories of vehicles in order to control atmospheric pollution. An assessment is carried out on the Lyon urban area, which points at some welfare distributive issues between motorists and the community, when compared with conventional congestion pricing. |
| Keywords: | transport demand management (TMD) ; tradable driving rights (TDR) ; automobile traffic ; congestion pricing ; air pollution ; urban areas ; Lyon (France) |
| Date: | 2007–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00185012_v1&r=ure |
| By: | Ottaviano, Gianmarco I P; Peri, Giovanni |
| Abstract: | In this paper we document a strong positive correlation of immigration flows with changes in average wages and average house rents for native residents across U.S. states. Instrumental variables estimates reveal that the correlations are compatible with a causal interpretation from immigration to wages and rents of natives. Separating the effects of immigrants on natives of different schooling levels we find positive effects on the wages and rents of highly educated and small effects on the wages (negative) and rents (positive) of less educated. We propose a model where natives and immigrants of three different education levels interact in production in a central district and live in the surrounding region. In equilibrium the inflow of immigrants has a positive productive effect on natives due to complementarieties in production as well as a positive competition effect on rents. The model calibrated and simulated with U.S.-states data matches most of the estimated effects of immigrants on wages and rents of natives in the period 1990-2005. This validation suggests the proposed model as a useful tool to evaluate the impacts of alternative immigration scenarios on U.S. wages and rents. |
| Keywords: | housing prices; immigration; rents; U.S. States; wages |
| JEL: | F22 J61 R23 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6551&r=ure |
| By: | Gerald A. Carlino; Robert M. Hunt |
| Abstract: | This paper extends the research in Carlino, Chatterjee, and Hunt (2007) to examine the effects of local economic characteristics on the rate of innovation (as measured by patents) in more than a dozen industries. The availability of human capital is perhaps the most important factor explaining the invention rate for most industries. The authors find some evidence that higher job market density is associated with more patenting in industries such as pharmaceuticals and computers. They find evidence of increasing returns with respect to city size (total jobs) for many industries and more modest effects for increases in the size of an industry in a city. This suggests that inter-industry spillovers are often at least as important as intra-industry spillovers in explaining local rates of innovation. A more competitive local market structure, characterized by smaller establishments, contributes significantly to patenting in nearly all industries. More often than not, specialization among manufacturing industries is not particularly helpful, but the authors find the opposite for specialization among service industries. Industries benefit from different local sources of R&D (academia, government labs, and private labs) and to varying degrees. |
| Keywords: | Technological innovations |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:07-28&r=ure |
| By: | Myoung-jae Lee (Department of Economics, Korea University) |
| Abstract: | Difference in differences (DD) relies on the key identifying condition that the untreated response variable would have grown equally across the control and treatment groups; i.e., the ¡®time effects¡¯ across the groups are the same. This condition can be rewritten as the ¡®group effects¡¯ across the time points being the same, with which this paper generalizes DD to difference in generalized-differences (DG). DG is indexed by a parameter ¥ç, and includes DD as a special case when ¥ç = 1. This makes it possible to use DG as a sensitivity analysis for DD by trying values of ¥ç other than one. Going further from sensitivity analysis, one may desire to fix ¥ç. For this, we provide a way to get a benchmark value of ¥ç using a dynamic panel data model for the control group. An empirical analysis is provided for the effects of moving from private to public school on test scores. In the empirical analysis, (i) DD magnitude is fairly sensitive to changes in ¥ç around one, but its statistical significance is not, (ii) ¥ç is significantly smaller than one in math score (and possibly in science score), and (iii) DG yields a significant negative effect of about 3-5% for reading score, but the effects are ambiguous or insignificant for the other scores. ¥ç being less than 1 means that, had the movers to public school stayed, the score gap between the movers and stayers would have narrowed. That is, the move to public school is likely to have been involuntary. |
| Keywords: | treatment effect, difference in differences, panel data, private-school effect |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0721&r=ure |
| By: | Lenka Drnakova |
| Abstract: | The admission process into secondary schools in the Czech Republic involves high risk of ending up at an undesired school if failing to be admitted to one’s preferred school. Hence, the application decision is an important element of the process since individuals have to assess their chances of being admitted. Empirical evidence based on pupils participating in the PISA project suggests that especially the education of parents and cognitive abilities matter to a large extent for a pupil’s application decision. Noncognitive skills are found to have an impact on a pupil’s decision as well, even though the significance and magnitude differ across districts, and, most importantly, genders. Non-cognitive skills of females operate in accordance with intuitive expectations– higher risk associated with the outcome of the admission process in the district increases the importance of non-cognitive abilities with respect to decision-making. The opposite, counter-intuitive outcomes are obtained for males. Explanation and research suggestions are offered. |
| Keywords: | Non-cognitive skills, schooling choice, secondary education. |
| JEL: | J24 I21 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp341&r=ure |
| By: | Jacobs, J.P.A.M.; Ligthart, J.E.; Vrijburg, H. (Groningen University) |
| Abstract: | The paper contributes to a small but growing literature that estimates tax re- action functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977-2003. More specifically, we study the impact of a state's spatial characteristics|that is, its size, geographic position, and border length on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial character- istics on tax setting. Tax competition seems to have lessened in the 1990s compared to the early 1980s. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:07008&r=ure |
| By: | Biung-Ghi Ju (Department of Economics, Korea University) |
| Abstract: | In the problem of locating multiple public facilities studied by Barbera and Bevia [2, 3], we offer simple necessary and sufficient conditions for efficiency, decentralizability of efficient decisions in a game of community division and local public goods provision, and a constructive algorithm for efficient and consistent decisions. |
| Keywords: | Efficiency, Consistency, Self-selection consistency, No-envy, Local stability, Diversity, Strong Nash equilibrium, Community division, Location |
| JEL: | H40 D60 D70 D71 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0716&r=ure |
| By: | Michel Baroni (ESSEC Business School, Cergy-Pontoise Cedex, France); Fabrice Barthélémy (THEMA, Université de Cergy-Pontoise); Mahdi Mokrane (AEW EUROPE, Paris, France) |
| Abstract: | In this paper we address the issue of the robustness of the price level, mean, and variance estimates for two sets of repeat sales real estate price indices: the classical WRS method and a PCA factorial method, as elaborated in Baroni, Barthélémy and Mokrane (2007). Our work can be seen as an extension of Clapham, Englund, Quigley and Redfearn (2006), with the aim of helping to judge of the efficiency of such indices in designing real estate derivatives contracts. We use an extensive repeat sales database for the Paris (France) residential market. We describe the dataset used and compute the parameters (drift and volatility) of the indices produced over the period 1982- 2005. The aim here is to test the sensitivity of these two indices to revision due to additional repeat-sales transactions information. Our analysis is conducted on the global Paris market and on submarkets. Our main conclusion is that the revision problem may cause serious concern for the stability of key parameters that are used as inputs in the pricing of derivatives contracts. The impact of index revision is important on the estimate of the index price level. This result is consistent with the finding of the existing literature for the US and Swedish markets. We also find that although the revision impact on the trend estimate can be important, the WRS method seems more robust and derivatives contracts such as swaps may be based on such indices. Finally, and this is probably the most promising result, revision influence on volatility estimates seems to be less stringent, and according to the robustness of the volatility estimate, the BBM factorial index seems to fare relatively better than the WRS index. Hence, we find that the factorial index could better sustain volatility based derivatives such as call or put options. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2007-24&r=ure |
| By: | Vyacheslav Mikhed; Petr Zemcik |
| Abstract: | We investigate whether recently high U.S. house prices are justified by fundamental factors. The standard unit root and cointegration tests with aggregate data indicate that house rent is the only fundamental which has the same order of integration as the price, but these two variables are not cointegrated. Nationwide analysis potentially suffers from problems of the low power of stationarity tests applied to relatively short series and the ignorance of dependence among regional house markets. Therefore, we conduct panel data stationarity tests which are robust to cross-sectional dependence and have greater power than univariate tests. While this time it is inflation and income that have the same order of integration as house price, they are not cointegrated with it, even if combined with the aggregate stock index. It appears that the real estate prices take long swings from their fundamental value and it can take decades before they revert to it. |
| Keywords: | Cointegration, panel data, unit root, bubble, house prices, rents |
| JEL: | G12 R21 R31 C33 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp337&r=ure |
| By: | Ariga, Kenn; Brunello, Giorgio; Iwahashi, Roki; Rocco, Lorenzo |
| Abstract: | In spite of their relative vicinity Scandinavian countries and Central European countries (mainly Germany) have substantially different schooling institutions. While the former group of countries delays school tracking until age 16, the latter group anticipates differentiation between age 10 and age 13. This paper proposes a simple median voter model of school design which accounts rather well for these differences. The key idea is that voters weight the potential advantages of early tracking in terms of higher wages and human capital against the information loss associated to early selection. |
| Keywords: | Central Europe; Scandinavia; school tracking |
| JEL: | I21 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6552&r=ure |
| By: | Christopher H. Wheeler |
| Abstract: | Human capital is now widely recognized to confer numerous benefits, including higher incomes, lower incidence of unemployment, and better health, to those who invest in it. Yet, recent evidence suggests that it also produces larger, social (external) benefits, such as greater aggregate income and productivity as well as lower rates of crime and political corruption. This paper considers whether human capital also delivers external benefits via reduced mortality. That is, after conditioning on various individual-specific characteristics including income and education, do we observe lower rates of mortality in economies with higher average levels of education among the total population? Evidence from a sample of more than 200 U.S. metropolitan areas over the decade of the 1990s suggests that there are significant human capital externalities on health. After conditioning on a variety of city-specific characteristics, the findings suggest that a 5 percentage point decrease in the fraction of college graduates in the population corresponds to a 14 to 36 percent increase in the probability of death, on average. Although I am unable to identify the precise mechanism by which this relationship operates, it is certainly consistent with the idea that interactions with highly educated individuals - who tend to exhibit relatively healthy behaviors - encourage others to adopt similar behaviors. Evidence of a significant inverse relationship between aggregate human capital and smoking, conditional on personal characteristics, in a sample of 201 U.S. metropolitan areas is also consistent with this hypothesis. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2007-045&r=ure |
| By: | Michael Fritsch (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Alexandra Schroeter (Friedrich Schiller University Jena, Faculty of Economics and Business Administration) |
| Abstract: | We investigate regional differences of the effect of new business formation on employment growth in West Germany. We find an inverse ‘u’-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium level skilled workers, the proportion of Research and Development conducted in small businesses (entrepreneurial technological regime), the unemployment rate as well as the degree of specialization of the regional economy. However, indicators for education and innovation activity in the region proved not to be statistically significant. Conducting our analysis for manufacturing and services separately confirmed the pattern of our previous results only for manufacturing but not for services. |
| Keywords: | Entrepreneurship, new business formation, regional development, entrepreneurship policy |
| JEL: | M13 O1 O18 R11 |
| Date: | 2007–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-077&r=ure |
| By: | Ruben N. Lubowski; Andrew J. Plantinga; Robert N. Stavins |
| Abstract: | Land-use changes involve important economic and environmental effects with implications for international trade, global climate change, wildlife, and other policy issues. We use an econometric model to identify factors driving land-use change in the United States between 1982 and 1997. We quantify the effects of net returns to alternative land uses on private landowners' decisions to allocate land among six major uses, drawing on detailed micro-data on land use and land quality that are comprehensive of the contiguous U.S. This analysis provides the first evidence of the relative historical importance of markets and Federal farm policies affecting land-use changes nationally. |
| JEL: | Q1 Q15 Q23 Q24 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13572&r=ure |