nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2007‒11‒24
thirty-one papers chosen by
Steve Ross
University of Connecticut

  1. Housing supply in the Netherlands By Wouter Vermeulen; Jan Rouwendal
  2. Equilibrium mortgage choice and housing tenure decisions with refinancing By Matthew Chambers; Carlos Garriga; Don Schlagenhauf
  3. The Housing Boom and Forest Fires By Libertad González Luna
  4. Selective Schools and Academic Achievement By Damon Clark
  5. Understanding the subprime mortgage crisis By Yuliya Demyanyk; Otto Van Hemert
  6. Industry Churning and the Evolution of Cities: Evidence for Germany By Sebastian Findeisen; Jens Suedekum
  7. Productive Public Expenditure in a New Economic Geography Model By Commendatore, Pasquale; Kubin, Ingrid; Petraglia, Carmelo
  8. "Homeless Networks and Geographic Concentration: Evidence from Osaka City" By Shinichiro Iwata; Koji Karato
  9. The impact of wetlands rules on the prices of regulated and proximate houses: a case study By Katherine A. Kiel
  10. Taxing owner-occupied housing: comparing the Netherlands to other European Union countries By van der Hoek, M. Peter; Radloff, Sarah. E.
  11. Combining Ability Tracking with Ability-Adjusted Class Size By Shapiro, Bradley
  12. Principal Accountability at Private Secondary Schools By Sherrilyn M. Billger
  13. Economic and Ethnic Polarisation among Children in Sweden’s Three Metropolitan Areas By Danuta Biterman; Bjorn Gustafsson; Torun Österberg
  14. The labor supply of married women: why does it differ across U.S. cities? By Dan Black; Natalia Kolesnikova; Lowell J. Taylor
  15. High fertility in city suburbs: compositional or contextual effects? By Hill Kulu; Paul J. Boyle
  16. Strengthening Cluster Building in Developing Country alongside the Triple Helix: Challenge for Indonesian Clusters - A Case Study of the Java Region By IRAWATI, DESSY
  17. Public transport subsidies and affordability in Mumbai, India By Bhattacharya, Soma; Cropper, Maureen
  18. The invariance properties of the Mutual Information index of multigroup segregation By Ricardo Mora; Javier Ruiz-Castillo
  19. Is New England experiencing a "brain drain"?: facts about demographic change and young professionals By Heather Brome
  20. Social Determinants of Labor Market Status of Ethnic Minorities in Britain By Martin Kahanec; Mariapia Mendola
  21. Ethnic Competition and Specialization By Martin Kahanec
  22. Ethnic Sorting in the Netherlands By Aslan Zorlu; Jan Latten
  23. Non-Cognitive Child Outcomes and Universal High Quality Child Care By Nabanita Datta Gupta; Marianne Simonsen
  24. House Prices and Employment Reallocation: International Evidence By Olympia Bover; Juan F. Jimeno
  25. Acculturation Identity and Educational Attainment By Lena Nekby; Magnus Rödin; Gülay Özcan
  26. Bowling Alone, Drinking Together By Paolo Buonanno; Paolo Vanin
  27. Comparison of Recent Toll Road Concession Transactions in the United States and France. By Germà Bel; John Foote
  29. Regional Economies of Scale in Transportation and Regional Welfare By Alexandre Skiba
  30. A defense of an entropy based index of multigroup segregation By Ricardo Mora; Javier Ruiz-Castillo
  31. Regional Unemployment and Human Capital in Transition Economies By Stepán Jurajda; Katherine Terrell

  1. By: Wouter Vermeulen; Jan Rouwendal
    Abstract: In spite of a growing recognition of the importance of supply conditions for the level and volatility of house prices, empirical work on housing supply outside the US is scarce. This paper considers various measures of housing supply in the Netherlands, where real house prices have roughly tripled since 1970. Besides the volume of investment in residential structures and new housing construction in units, we derive time series of structure and location quality in a hedonic analysis. Each of these variables appears to be almost fully inelastic with respect to house prices in at least the short to medium long run. Further analysis of the quality of location index shows that conventional models of competitive land and housing markets cannot account for these findings. However, they may be well explained in terms of the rather extensive body of interventions by the Dutch government.
    Keywords: Housing supply; residential investment; housing markets; land use regulation
    JEL: E22 R31 R52
    Date: 2007–09
  2. By: Matthew Chambers; Carlos Garriga; Don Schlagenhauf
    Abstract: The last decade has brought about substantial mortgage innovation and increased refinancing. The objective of the paper is to understand the determinants and implications of mortgage choice in the context of general equilibrium model with incomplete markets. The equilibrium characterization allows us to study the impact of mortgage financing = decisions in the productive economy. We show the influence of different contract characteristics such as the downpayment requirement, repayment structure, and the amortization schedule for mortgage choice. We find that loan products that allow for low or no downpayment or an increasing repayment schedule increase the participation of young and lower income households. We find evidence that the volume of housing transactions increase when the payment profile is increasing and households have little housing equity. In contrast, we show that loans that allow for a rapid accumulation of home equity can still have positive participation effects without increasing the volatility of the housing market. The model predicts that the expansion of mortgage contracts and refinancing improves risk sharing opportunities for homeowners but the magnitude varies with each contract.
    Keywords: Mortgage loans ; Housing - Finance
    Date: 2007
  3. By: Libertad González Luna
    Keywords: Forest fires, housing prices, land-use change
    JEL: Q15 Q23 R21
    Date: 2007–10
  4. By: Damon Clark (University of Florida and IZA)
    Abstract: In this paper I consider the impact of attending a selective high school in the UK. Students are assigned to these schools on the basis of a test taken in primary school and, using data on these assignment test scores for a particular district, I exploit this rule to estimate the causal effects of selective schools on test scores, high school course taking and university enrollment. Despite the huge peer advantage enjoyed by selective school students, I show that four years of selective school attendance generates at best small effects on test scores. Selective schools do however have positive effects on course-taking and university enrollment, evidence suggesting they may have important longer run impacts.
    Keywords: selective schools, education, instrumental variables
    JEL: C21 I21
    Date: 2007–11
  5. By: Yuliya Demyanyk; Otto Van Hemert
    Abstract: We analyze the subprime mortgage crisis: an unusually large fraction of subprime mortgages originated in 2006 being delinquent or in foreclosure only months later. We utilize a loan-level database, covering about half of all US subprime mortgages, and identify two major causes. First, over the past five years, high loan-to-value borrowers increasingly became high-risk borrowers, in terms of elevated delinquency and foreclosure rates. Lenders were aware of this and adjusted mortgage rates accordingly over time. Second, the below-average house price appreciation in 2006-2007 further contributed to the crisis.
    Keywords: Mortgage loans
    Date: 2007
  6. By: Sebastian Findeisen (University of Konstanz); Jens Suedekum (University of Duisburg-Essen, University of Konstanz and IZA)
    Abstract: In this paper we show that the recent model by Duranton (AER, 2007) performs remarkably well in replicating the city size distribution of West Germany, much better than the simple rank-size rule known as Zipf’s law. The main mechanism of this theoretical framework is the "churning" of industries across cities. Little is known so far about the determinants of local industry turnover, however. We present an empirical analysis of the excess churning index for West German cities, which describes the strength of intra-city industry reallocations that has occurred over time. We find that human capital is a key driver of growth and local industrial change, but only among successful cities. Industrial change within unsuccessful cities is strongly driven by the disappearance of old-fashioned and declining industries such as agriculture or mining. On a more general level, our results suggest that the recent model by Duranton is a powerful description of the urban growth process. Still there are some aspects that are not captured by that model, which are at the core of other theories of urban growth.
    Keywords: industry turnover, urban growth, structural change, churning, city size distribution, Zipf’s law
    JEL: O18 R11 R12
    Date: 2007–11
  7. By: Commendatore, Pasquale; Kubin, Ingrid; Petraglia, Carmelo
    Abstract: We assess whether and how differences in productive public expenditure impacts on industrial location. Since productive public expenditure and taxation affect in opposite direction industrial location, it is not straightforward that following an increase in productive public expenditure in a region, that region will necessarily enjoy stronger agglomeration. As a major contribution to the literature, we consider jointly two effects arising from public policy: the demand effect and the productivity effect. The interplay of these two effects determines the final impact on the spatial distribution of firms. The result is influenced by the proportion in which tax payers of the two regions contribute to the financing of public expenditure.
    Keywords: economic geography; public expenditure; footloose capital
    JEL: F20 H5 R12
    Date: 2007–04
  8. By: Shinichiro Iwata (Faculty of Economics, University of Toyama); Koji Karato (Faculty of Economics, University of Toyama)
    Abstract: Homeless people in Osaka City are geographically concentrated. The purpose of this paper is to examine this geographic concentration by focusing on homeless networks. The data we use contain information on Osaka City.s homeless population by census blocks. The estimated results of a spatial autoregressive model with autoregressive disturbances show that the homeless network is signi.cantly positive across census blocks. Networks exist in a homeless society.
    Date: 2007–11
  9. By: Katherine A. Kiel
    Abstract: Federal, state and local wetlands protection laws that restrict landowners' ability to develop their properties in certain ways could decrease the value of the affected properties. However, the regulations could also give benefits to nearby neighbors, who no longer need to worry about increased development in their area. Given that some properties may decline in value while others increase, the impact on individual properties must be determined empirically. ; This study uses a data set from Newton, Massachusetts, to examine the impact of wetlands laws on the regulated properties as well as on proximate properties. Looking at house sales data from 1988 through 2005, the hedonic technique is used to estimate the effect of wetlands regulations on single-family home prices and finds that having wetlands on a property decreases its value by 4 percent relative to non-regulated properties. Homes that are contiguous to regulated houses do not experience any change in price. Thus, it seems unlikely that neighbors are receiving any benefit from knowing that further development is restricted in their immediate vicinity.
    Keywords: Housing - Prices - Massachusetts ; Wetland conservation - Massachusetts
    Date: 2007
  10. By: van der Hoek, M. Peter; Radloff, Sarah. E.
    Abstract: This paper compares owner-occupied housing tax regimes in the Netherlands and the other countries in the EU-15. The Nether-lands appears to stand apart in two respects. First, in Luxembourg and the Netherlands owner-occupiers have to include an imputed rental income in their taxable income. Second, in the Netherlands, the tax-deductibility of mortgage interest payments is almost unre-stricted. The tax regime of owner-occupied homes increasingly erodes the personal income tax base in the Netherlands, so that higher tax rates are needed to collect a given amount of revenue. However, elimination or reduction of the mortgage interest deduction can only be realized gradually. Due to a lack of data both within the various tax regimes and across time periods, a comprehensive multivariate time-series comparison among the various tax regimes in the EU-15 is not pos-sible. Thus, the statistical analysis is limited to bivariate compari-sons.
    Keywords: owner-occupied housing; mortgage interest deduction; imputed rental income
    JEL: H2
    Date: 2007
  11. By: Shapiro, Bradley
    Abstract: Ability tracking and class size have become two of the most hotly debated issues in education policy in the United States in recent years. Most current studies examine the effects of each policy in isolation. In this paper, I review the literature on class size, ability tracking, and school choice, and then make a case for separate classes of different sizes for students with different levels of ability. The proposal is designed as a compromise that could please many on all sides of the class size and ability tracking debates. A game theoretical analysis of the proposal shows that it produces a stable equilibrium when parents can move their children between classes of different sizes.
    Keywords: Educational Economics; Efficiency; Resource Allocation; School Choice
    JEL: I2 I28
    Date: 2007–11–20
  12. By: Sherrilyn M. Billger (Illinois State University and IZA)
    Abstract: Increasing interest in voucher programs and privatizing public schools reveals a commonlyheld belief that private schools are better able to produce a quality education. While state and national standards do not directly affect these schools, their private control yields strong student performance. To contribute to the general discovery about private schools, I use SASS and Census data to investigate accountability and outcomes at private secondary schools, focusing on principals, student outcomes, and administrator effectiveness. I find that principals are not rewarded for facing accountability or for exercising autonomy. OLS and quantile regression results also suggest no direct benefit for strong students at high quality schools. However, accountability does improve student outcomes at the (conditionally) weakest schools.
    Keywords: principal pay, accountability, private schools
    JEL: J3 I2
    Date: 2007–11
  13. By: Danuta Biterman (Swedish National Board of Health and Welfare); Bjorn Gustafsson (University of Göteborg and IZA); Torun Österberg (University of Göteborg)
    Abstract: This paper investigates certain issues of economic and ethnic segregation from the perspective of children in the three metropolitan regions of Sweden by using a relative new operationalization of the neighbourhood concept. Neighbourhoods are clustered by population share of visible immigrants in proportion to share of native born residents. The target variable under study is child income based on income of parents. Inequality in child income 1990, 1996 and 2002 is studied by decomposing additively decomposable inequality indexes. Based on this, measures of residential economic polarisation and residential ethnic polarisation are obtained. Of major significance is that residential polarisation increased for all three regions and for both sub-periods 1990-1996 and 1996-2002. For example, while in the Stockholm region 7 percent of inequality in child income in 1990 was due to differences in mean income across neighbourhoods, the proportion had increased to as much as 22 percent in 2002. Ethnic residential polarisation increased as well and we report a relatively large overlap between economic and ethnic polarisation. Based on estimated regression models, we conclude that increased returns to parental education have forcefully contributed to larger economic polarisation among children in Swedish metropolitan regions.
    Keywords: segregation, children, Sweden, immigrants, income, education
    JEL: D31 J13 J15
    Date: 2007–11
  14. By: Dan Black; Natalia Kolesnikova; Lowell J. Taylor
    Abstract: Using Census Public Use Micro Sample (PUMS) data for 1980, 1990 and 2000, this paper documents a little-noticed feature of U.S. labor markets that there is wide variation in the labor market participation rates and annual work hours of white married women across urban areas. This variation is also large among sub-groups, including women with children and those with different levels of education. Among the explanations for this variation one emerges as particularly important: married women's labor force participation decisions appear to be very responsive to commuting times. There is a strong empirical evidence demonstrating that labor force participation rates of married women are negatively correlated with commuting time. What is more, the analysis shows that metropolitan areas which experienced relatively large increases in average commuting time between 1980 and 2000 also had slower growth of labor force participation of married women. This feature of local labor markets may have important implications for policy and for further research.
    Keywords: Women - Employment ; Labor market
    Date: 2007
  15. By: Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany); Paul J. Boyle (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Fertility rates are known to be higher in city suburbs. One interpretation is that the suburban ‘context’ influences the behaviour of individuals who reside there while an alternative is that the ‘composition’ of the suburban population explains the higher fertility levels. Furthermore, suburban in-migrants who intend to have children may have a significant influence on suburban fertility rates. Using Finnish longitudinal register data we show that fertility rates are higher in the suburbs and rural areas and lower in the cities. While fertility variation across these residential contexts decreases significantly after controlling for women’s demographic and socio-economic characteristics, it does not disappear entirely suggesting that the local context may have some influence on fertility. While movers to suburbs do display higher fertility levels than non-migrant residents, their overall impact is not great because they form a small share of the suburban population.
    Keywords: Finland, event history analysis, fertility, migration, residential mobility, rural areeas, suburban areas, urban areas
    JEL: J1 Z0
    Date: 2007–11
    Abstract: This paper is a component of my conceptual foundation paper due to PhD field work in Indonesia to understand the possibility and the chance for developing country such as Indonesia to strengthen cluster building alongside The Triple Helix model within the region of Java. This paper is a conceptual paper based on case study in Indonesia related to the Triple Helix and cluster approach for chosen Industrial Clusters in Java. In this paper, the focus will be on six selected industrial clusters across the Java region. They are Gresik Industrial District in East Java, Tugu Wijaya Semarang in Central Java, Sentul Bogor in West Java, Jababeka in Bekasi, Kujang Industrial District, and Kawasan Berikat Nusantara in Jakarta. In conjunction with the fact in Indonesian industrial condition, Indonesian government initiated the setting up of industrial district which later known as 2 industrial cluster to make existence easier for both domestic and international investors by providing all necessary infrastructure, facilities and housing in one safe location - at a reasonable cost - thus providing a secure base for industry and manufacturing. Regarding clustering approach, Indonesia has a very long tradition of SMEs (Small and Medium Sized Enterprises) cluster around similar activities. In 2002, the cluster comprised approximately 3700 firms mostly SMEs employing 58.000 permanent workers (Loebis and Schmitz, 2005). They are usually craft industries and export oriented driven. About 70% of the cluster production is exported while the rest is sold on the domestic markets. However, little is known about the critical success factors that determine economic development of cities and regions and empirical studies that draw lessons for policy are scarce (Tichy, 1998), specifically for implementing cluster approach in industry/manufacturing sector in Indonesia. Moreover, there are good reasons to doubt to what extent a purely sectoral view is adequate to analyse region economic growth and to design policies. There are many indications that urban economic growth increasingly seems to emerge from fruitful cooperation between economic actors, who form innovative networks. It is in these geographically concentrated network configurations, or ‘cluster’ that value-added and employment growth in urban regions is realised. This demands a new policy approach in urban economic development, specifically for Indonesian study. Accordingly, it is motivating to investigate the process of cluster building in industrial district in Java region as the important region due to economic, social, and political condition. Thus, details can be read in the following section within this paper.
    Keywords: Cluster; Triple Helix; SMEs;
    JEL: O5
    Date: 2007–01–07
  17. By: Bhattacharya, Soma; Cropper, Maureen
    Abstract: This paper describes the role of public transport and the nature and incidence of transport subsidies in Mumbai, India. Mumbai has an extensive rail and bus network, and public transport is used for over 75 percent of all motorized trips in Greater Mumbai. Both rail and bus fares in Mumbai are subsidized: BEST, which operates public buses in Mumbai, is also an electric utility, and subsidizes bus fares from electricity revenues. We analyze the incidence of these subsidies, and their effect on mode choice, using data from a survey of households in Greater Mumbai. In Mumbai, as in many cities, the middle class is more likely to use public transport for travel than the poor. The poor, however, also use public transit, and their expenditure on public transit constitutes, on average, a larger share of their income than it does for the middle class. It is, therefore, the case that the poor benefit from transit subsidies in Mumbai, as well as the middle and upper-middle classes; however, the poorest 27 percent of the population receives only 19 percent of bus subsidies and 15.5 percent of rail subsidies. Indeed, 26 percent of the lowest income households surveyed do not use rail, while 10 percent do not use bus, implying that they receive no transit subsidies. Expenditure on transpo rt accounts for 16 percent of income in the lowest income category ( < 5000 Rs./month), with 10 percent of income, on average, spent on bus and rail fares. This percentage, however, is not evenly distributed: it is much higher than 10 percent for households in which workers take the bus or train to work, and lower for households in which the main earner walks to work. Even in these households, however, 12.5 percent of income is spent on transportation. Expenditure on public transport would be even higher if bus fares in Mumbai were not subsidized. In 2005-2006, transport revenues of BEST fell below total costs by 30 percent and below operating costs by 20 percent. Rail fares, which are much lower than bus fares per km traveled, officially covered operating costs and almost covered depreciation expenses.
    Keywords: Transport Economics Policy & Planning,Transport in Urban Areas,Urban Transport,Roads & Highways,
    Date: 2007–11–01
  18. By: Ricardo Mora; Javier Ruiz-Castillo
    Abstract: In the context of educational segregation by ethnic group, it has been argued that rigorous pair wise segregation comparisons over time or across space should be invariant in two situations: when the ethnic composition of the population changes while the distribution of each ethnic group over the schools remains constant (invariance 1), or when the size distribution of schools changes while the ethnic composition of each school remains constant (invariance 2). This paper makes three contributions to this literature. First, it presents a testing strategy for choosing between the two properties. Second, it argues that both properties have strong implications, and that there are reasons to defend that the overall segregation index need not satisfy either one. In particular, the contrast between invariant segregation indices and the Mutual Information segregation index that violates both properties is illustrated with a number of examples. Third, nevertheless, it is shown that pair wise segregation comparisons using this index can be expressed in terms of (i) changes in the ethnic composition of the population, (ii) changes in the school size distribution, and (iii) changes in a third term that is invariant 1 or invariant 2. These decompositions can be used to reach the analogous ones obtained in Deutsch et al. (2006).
    Date: 2007–11
  19. By: Heather Brome
    Abstract: Recent news articles and studies have generated concern among New England policy makers and others that the region’s supply of young, highly educated professionals is disappearing. The fear is that comparatively high housing and other costs may be driving away many within this highly mobile group. This paper explores trends in the stocks and flows of young professionals, defined as people 25 to 39 with at least a bachelor’s degree. The goal is to help policy makers better understand this important demographic story, giving them the facts about how various factors, including migration, are affecting the region’s supply of young, educated labor.
    Keywords: Labor supply - New England ; Labor mobility - New England ; Professional employees - New England ; New England - Population
    Date: 2007
  20. By: Martin Kahanec (IZA); Mariapia Mendola (University of Milan Bicocca)
    Abstract: The labor market outcomes of ethnic minorities in advanced societies and their dependence on social relationships and membership in social networks are important empirical issues with significant policy consequences. We use detailed micro-data on multiple-origin ethnic minorities in England and Wales and a discrete choice model to investigate these issues. We find that the core family structure and contacts with parents and children away (in Britain) increases the probability of self-employment. On the other hand, engagement in organizational social networks is more likely to channel the same people into paid employment. Finally, disaggregating different types of social networks along their compositional characteristics, we find that having ethnic friends is positively associated with the likelihood to be self-employed while integration in mixed or non-ethnic social networks facilitates paid employment among minority individuals. These findings hint at a positive role of social integration on employment opportunities of ethnic communities in host societies.
    Keywords: labor market, self-employment, ethnic minorities, social ties
    JEL: J7 J15 J21
    Date: 2007–11
  21. By: Martin Kahanec (IZA)
    Abstract: Are ethnic specialization and thus a downward sloping labor demand curve fundamental features of labor market competition between ethnic groups? In a general equilibrium model, this paper argues that spillover effects in skill acquisition and social distances between ethnic groups engender equilibrium regimes of skill acquisition that differ in their implications for ethnic specialization. Specifically, fundamental relationships through which relative group sizes determine whether ethnic specialization arises and in what degree are established. Thus, this paper theoretically justifies a downward sloping labor demand curve and explains why some ethnic groups earn more than others, ethnic minorities underperforming or outperforming majorities.
    Keywords: human capital, ethnic group, labor market, ethnic specialization, spillover effects
    JEL: J15 J24 J70 O15
    Date: 2007–11
  22. By: Aslan Zorlu (AMIDst, AIAS, University of Amsterdam and IZA); Jan Latten (Statistics Netherlands)
    Abstract: This paper examines the residential mobility behaviour of migrants and natives in the Netherlands using a rich administrative individual data file. The inclination to move and the choice of destination neighbourhood are estimated, correcting for the selection bias of movers. Subsequently, the role of preferences in the mobility behaviour is implicitly derived from regression estimates. The analysis shows that the percentage of natives in the destination neighbourhood is predicted to be about 18 percentage points lower for nonwestern migrants than for natives. About 65 percent of the differential is explained by their observable characteristics; the remaining part can largely be attributed to preferences and discrimination. No indication is found of the spatial assimilation of second-generation nonwestern migrants. On the other hand, the mobility pattern of the second-generation western migrants is similar to that of natives.
    Keywords: migrants, residential segregation
    JEL: J1 J6 R3
    Date: 2007–11
  23. By: Nabanita Datta Gupta (Danish National Centre for Social Research and IZA); Marianne Simonsen (University of Aarhus)
    Abstract: Exploiting a rich panel data child survey merged with administrative records along with a pseudo-experiment generating variation in the take-up of pre-school across municipalities, we provide evidence of the effects on non-cognitive child outcomes of participating in large scale publicly provided universal pre-school programs and family day care vis-à-vis home care. We find that, compared to home care, being enrolled in pre-school at age three does not lead to significant differences in child outcomes at age seven no matter the gender or mother’s level of education. Family day care, on the other hand, seems to significantly deteriorate outcomes for boys whose mothers have a lower level of education. Finally, increasing hours in family day care from 30-40 hours per week to 40-50 hours per week and hours in pre-school from 20-30 hours per week to 30-40 hours per week leads to significantly poorer child outcomes.
    Keywords: non-cognitive outcomes, publicly provided universal child care, pseudo-experiment
    JEL: J13 J18
    Date: 2007–11
  24. By: Olympia Bover (Bank of Spain, IFS, CEPR and IZA); Juan F. Jimeno (Bank of Spain, CEPR and IZA)
    Abstract: Over the last decade house prices increased remarkably in many countries. However, while in several countries there was an employment boom in the construction sector, in others the share of employment in this sector did not significantly change. In this paper we estimate a model of labor demand in the construction sector, featuring building constraints, which explains many of the international differences in the response of sectoral reallocation of employment to house prices. Countries with more building possibilities (Spain, Sweden and the US) have a high sectoral reallocation of employment, and display larger elasticities of labor demand in the construction sector with respect to house prices than countries that seem to have fewer building possibilities (Belgium, the Netherlands, and the UK). Nevertheless, our estimates imply that, for the whole economy, the elasticity of labor demand with respect to house prices is broadly similar across countries.
    Keywords: house prices, labor demand, sectoral reallocation of labor
    JEL: R32 J23
    Date: 2007–10
  25. By: Lena Nekby (Stockholm University, SULCIS and IZA); Magnus Rödin (Stockholm University, SULCIS); Gülay Özcan (Stockholm University, SULCIS)
    Abstract: This paper explores the identity formation of a cohort of students with immigrant backgrounds in Sweden and the consequences of identity for subsequent educational attainment. Unique for this study is that identity is defined according to a two-dimensional acculturation framework based on both strength of identity to the (ethnic) minority and to the (Swedish) majority culture. Results indicate that integrated men are associated with significantly higher levels of education than assimilated men. No differences in educational attainment are found between the assimilated and the integrated for women. These results put into question the premise of oppositional identities, i.e., a trade-off between ethnic identity and educational achievement, among immigrants in Sweden.
    Keywords: ethnic identity, acculturation, ethnic minorities, education
    JEL: J15 J16 J21 Z13
    Date: 2007–11
  26. By: Paolo Buonanno (Università di Bergamo); Paolo Vanin (Università di Padova)
    Abstract: Alcohol consumption may be associated to a rich social life, but its abuse might be related to a poor social life. This paper investigates whether alcohol consumption is a socially enjoyed good (a complement of social relations) or a substitute for social relations. In particular, it explores whether the answer changes between use and abuse, beer, wine and spirits, youth and adults, controlling or not for family influence and unobserved heterogeneity, and for various forms of social relations. Controlling for a great number of covariates and allowing for non linear and identity-specific family interaction effects, we find that alcohol consumption is a socially enjoyed good.
    Keywords: Social relations, Social interaction, Family, Alcohol consumption, Binge drinking
    JEL: C21 D12 I12 Z13
    Date: 2007–11
  27. By: Germà Bel (Grup de Recerca en Polítiques Públiques i Regulació Econòmica(PPRE-IREA)i Institut de Recerca d'Economia Aplicada (IREA), Departament de Política Econòmica, Universitat de Barcelona.); John Foote (Harvard University)
    Abstract: Recent concessions in France and in the US have resulted in a dramatic difference in the valuation placed on the toll roads; the price paid by the investors in France was twelve times current cash flow whereas investors paid sixty times current cash flow for the U.S. toll roads. In this paper we explore two questions: What accounts for the difference in these multiples, and what are the implications with respect to the public interest. Our analysis illustrates how structural and procedural decisions made by the public owner affect the concession price. Further, the terms of the concession have direct consequences that are enjoyed or borne by the various stakeholders of the toll road.
    Keywords: Transport infrastructures, roads, privatization, regulation and tolls.
    JEL: L43 L92 L33
    Date: 2007–09
  28. By: Alejandra Cattaneo (Socioeconomic Institute, University of Zurich); Stefan C. Wolter (Institute of Economics, University of Berne)
    Abstract: Empirical research has given cause to fear that the demographic ageing in industrialized countries is likely to exert a negative impact on educational spending. These papers have linked the share of the elderly with the per capita or per pupil spending on education at the local, state-wide or national level, trying to control for other exogenous effects. Although this line of research shows in many cases a negative correlation between the shares of elderly people and educational expenditures, a causal link is difficult to prove. This paper uses a unique and representative survey of Swiss voters of all age groups. The analysis shows that elderly people present a clear tendency to be less willing to spend money on education. They would rather prefer to spend public resources on health and social security than on education. Furthermore the paper shows that much of the negative correlation between the shares of elderly and educational spending is the result of the elderly being politically more conservative and in general less inclined to pay for expenditures in the public sector as a whole.
    Keywords: public finance, education finance, demographics, survey, Switzerland
    JEL: H52 H72 I22 J18
    Date: 2007
  29. By: Alexandre Skiba (Department of Economics, The University of Kansas)
    Abstract: A discriminatory tariff can be welfare superior to free trade in the presence of regional economies of scale. This is because a tariff on non-regional trade concentrates trade within a region, lowering the cost of transportation, so that the gains from economies of scale can theoretically offset the losses from the tariff. To complement the theoretical point I estimate the relation between transportation cost and regional volume of trade. The estimates suggest that a 10% increase in the volume of trade brings about 2.5% reduction in transportation cost in the long run.
    Keywords: regional economies of scale, transportation costs, preferential trade agreements, regional welfare
    JEL: F10 F12
    Date: 2007–09
  30. By: Ricardo Mora; Javier Ruiz-Castillo
    Abstract: This paper defends the use of the entropy based Mutual Information index of multigroup segregation for the following five reasons. (1) It satisfies 14 basic axioms discussed in the literature when segregation takes place along a single dimension. (2) It is additively decomposable into between- and within-group terms for any partition of the set of occupations (or schools) and the set of demographic groups in the multigroup case. (3) The underlying segregation ordering has been recently characterized in terms of 8 properties. (4) It is a monotonic transformation of log-likelihood tests for the existence of segregation in a general model. (5) It can be decomposed so that a term independent of changes in either of the two marginal distributions can be isolated in pair wise segregation comparisons. Other existing measures of segregation have not been characterized, fail to satisfy one or more of the basic axioms, do not admit a between- within-group decomposition, have not been motivated from a statistical approach, or are based on more restricted econometric models.
    Date: 2007–11
  31. By: Stepán Jurajda (CERGE-EI, CEPR and IZA); Katherine Terrell (University of Michigan, CEPR and IZA)
    Abstract: Differences in regional unemployment in post-communist economies are large and persistent. We show that inherited variation in human-capital endowment across the regions of four such economies explains the bulk of regional unemployment variation there and we explore potential explanations for this outcome through related capital and labor mobility patterns. The evidence suggests that regions with high inherited skill endowments attract skilled workers as well as FDI. This mobility pattern, which helps explain the lack of convergence in regional unemployment rates, is consistent with the presence of complementarities in skill and capital. Nevertheless, we find no supporting evidence of human capital wage spillovers implied by the complementarities story. Unemployment of the least-skilled workers appears lower in areas with a higher share of college-educated labor and future research is needed to see if this finding as well as the observed migration pattern arise from different adjustments to regional shocks by education level brought about in part by Central European labor-market institutions, such as guaranteed welfare income raising effective minimum wages.
    Keywords: unemployment, human capital, regional labor markets, transition economies, labor mobility, complementarities, spillovers, Czech Republic, Hungary, Romania, Ukraine
    JEL: E24 J0 J61
    Date: 2007–11

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