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on Urban and Real Estate Economics |
| By: | George Leckie |
| Abstract: | Traditional studies of school differences in educational achievement use multilevel modelling techniques to take into account the nesting of pupils within schools. However, educational data are known to have more complex non-hierarchical structures. The potential importance of such structures is apparent when considering the impact of pupil mobility during secondary schooling on educational achievement. Movements of pupils between schools suggest that we should model pupils as belonging to the series of schools attended and not just their final school. Since these school moves are strongly linked to residential moves, it is important to additionally explore whether achievement is also affected by the history of neighbourhoods lived in. Using the national pupil database (NPD), this paper combines multiple-membership and cross-classified multilevel models to simultaneously explore the relationships between secondary school, primary school, neighbourhood and educational achievement. The results show a negative relationship between pupil mobility and achievement, the strength of which depends greatly on the nature and timing of these moves. Accounting for pupil mobility also reveals that schools and neighbourhoods are more important than shown by previous analysis. A strong primary school effect appears to last long after a child has left that phase of schooling. The additional impact of neighbourhoods, on the other hand, is small. Crucially, the rank order of school effects across all types of pupils is sensitive to whether we account for the complexity of the multilevel data structure. |
| Keywords: | Cross-classified models, Multiple-membership-models, Multilevel modelling, Pupil mobility, School effectiveness, Value-added models |
| JEL: | I2 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:07/189&r=ure |
| By: | Katherine Cuff; Nicolas Marceau |
| Abstract: | We develop a model of a competitive rental housing market with an endogenous rate of tenancy default arising from income uncertainty. Potential tenants must choose to engage in a costly search for rental housing, and must commit to a rental agreement before the uncertainty is resolved. We show that there are two possible equilibria in this market: a market-clearing equilibrium and an equilibrium with excess demand. Therefore, individuals might not have access to rental housing because they are unable to afford to look for housing, they are unable to pay their rent, or with excess demand in the market they are simply unable to find a rental unit. We show that government regulations affecting the cost of default to the housing suppliers and the quality of rental units can have different effects on the equilibrium variables of interest - rental rate, quantity demanded and supplied, and access to rental housing - depending on the type of equilibria in the market. A numerical example illustrates these results. |
| Keywords: | Tenancy Default, Excess Demand, Rental Housing Policies |
| JEL: | R21 R31 R38 D41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0744&r=ure |
| By: | Matthew Chambers; Carlos Garriga; Don Schlagenhauf |
| Abstract: | This paper analyzes the connection between the asymmetric tax treatment of homeowners and landlords and the progressivity of income taxation using a quantitative overlapping generations general equilibrium model with housing and rental markets. Our model emphasizes the determinants of tenure choice (owning versus renting) and the household decision to supply housing services to the rental market. This formulation breaks the link between the rental price and the equilibrium interest rate. Hence, the aggregate supply of rental property responds differently to the direction of rental price changes, marginal tax rate changes, and maintenance cost changes. We show that the model replicates the key factors and the distributional patterns of ownership, house size, and landlords. The degree of progressivity in the income tax code has important implications for housing tenure and housing consumption. We find that a movement toward a less progressive income tax code can generate sizable increases in homeownership and welfare that result from the equilibrium effects and a portfolio reallocation mechanism absent in economies with single assets (e.g., Conesa and Krueger 2006). We find that the removal of existing asymmetries in the tax code has effects on housing that differ from those reported in the literature. We show that housing policy can increase the ownership rate of a particular segment of the population but generate nontrivial distributional costs. The welfare increases are no larger than those found when the progressivity of the tax code is reduced. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2008-06&r=ure |
| By: | Charles Grant (University of Reading, Whiteknights, Reading, RG6 6AH, United Kingdom.); Tuomas A. Peltonen (DG International and European Relations, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | The study quantifies stock market and housing market wealth effects on households' non-durable consumption using Italian household panel data (SHIW) of 1989-2002. We found all households react similarly to aggregate housing and stock market gains. We also found statistically and economically significant housing wealth effects with a marginal propensity to consume out of idiosyncratic housing wealth gains to be over 8 percent. The results from idiosyncratic equity wealth effects were lower, at around 0.4 percent. We also found that older households react more to changes in housing wealth. JEL Classification: D12, E21. |
| Keywords: | Marginal Propensity to Consume, Housing, Equities. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080857&r=ure |
| By: | Shane M. Sherlund |
| Abstract: | This paper estimates the jumbo-conforming spread using data from the Federal Housing Finance Board’s Monthly Interest Rate Survey from January 1993 to June 2007. Importantly, this paper augments the typical parametric approach by adding state-level foreclosure laws and ZIP-level demographic variables to the model, estimating the effects of loan size and loan-to-value ratio on mortgage rates nonparametrically, and including geographic location as a control for some potentially unobserved borrower and market characteristics that might vary over geography, such as credit scores, debt-to-income ratios, and house price volatility. A partial locallinear regression approach is used to estimate the jumbo-conforming spread, on the premise that loans similar to each other in terms of loan size, loan-to-value ratio, or geographic location might also be similar in other, unobservable borrower and market characteristics. I find estimates of the jumbo-conforming spread of 13 to 24 basis points—50 to 24 percent smaller since about 1996, when credit scores became widely used in mortgage underwriting, than estimates from a commonly used parametric model. I therefore attribute the difference in estimates to credit quality and other unobserved characteristics, among other potential explanations, making these controls an important issue in estimating the jumbo-conforming spread. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2008-01&r=ure |
| By: | B. Douglas Bernheim; Jonathan Meer |
| Abstract: | Sales commissions for residential real estate brokers historically average nearly six percent of a home's closing price. Do brokers add sufficient value to justify those commissions? We address this question using a unique data set pertaining to sales of faculty and staff homes on the Stanford University campus. We find no evidence that the use of a broker leads to higher average selling prices, or that it significantly alters average initial asking prices. However, those who use brokers sell their houses more quickly. |
| JEL: | D14 R21 R31 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13796&r=ure |
| By: | Inder J Ruprah (Inter-American Development Bank); Luis T Marcano (Inter-American Development Bank) |
| Abstract: | The Chilean's housing policy and programs are one of the most copied amongst the Chilean policies. The homegrown policy was and is considered a vanguard way of approaching housing problems. This paper presents the findings of a meta-evaluation of Chile's Social Housing Programs. We found that in terms of affordability and housing quality housing needs have improved overtime due to an improving enabling economic environment and sustained public intervention. However, the aggregate figures shroud the problems still faced by households in the lowest two income quintiles and, the opening to home-buying private market to underserved households remains a challenge. In terms of welfare impacts of public housing programs, we found that targeting of the programs to lower income quintiles has improved overtime and the effects on housing materiality outcome indicators are positive and significant in most cases. However, in terms of welfare outcome indicators, the impacts of public housing programs are diverse and non-significant in most cases. Finally, we also we found that that the search for the "best" program is misplaced, as revealed by the Chilean case, in which different programs introduced and wound down as the size and type of problems and context changes is the preferred option. |
| Keywords: | Housing Finance, Policy Evaluation, Housing Deficit, and Moral Hazard. |
| JEL: | H43 I38 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:ovewps:0207&r=ure |
| By: | Adele Atkinson; Simon Burgess; Paul Gregg; Carol Propper; Steven Proud |
| Abstract: | The effect of a more able peer group on a child’s attainment is considered an integral part in estimating a pupil level educational production function. Examinations in England at age 16 are tiered according to ability, leading to a large stratification of pupils by ability. However, within tiers, there is a range of policies between schools regarding setting, ranging from credibly random to strict setting by results from examinations at age 14. We use this variation to estimate ordinary least squares (OLS) estimates, with school and teacher fixed effects, of the effect of a more able peer group using a subset of schools that has apparently random allocation of pupils. As a robustness test of the apparently random setting results, we use an instrumental variables (IV) methodology developed by Lefgren (2004b). We find significant, positive, and non-trivial effects of a more able peer group using both the OLS and IV estimations for English and mathematics. |
| Keywords: | peer groups, education |
| JEL: | J13 D1 I21 I38 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:07/187&r=ure |
| By: | Joseph B. Nichols |
| Abstract: | Households who wish to extract home equity through refinancing their mortgage face a hidden transaction cost. The real value of the fixed nominal mortgage payment declines over time with inflation. The change in the real value of the mortgage payments from taking on a new mortgage is positive and an increasing function of inflation; higher inflation thus discourages households from re-balancing their portfolio as frequently as they would otherwise. The life cycle model developed in this paper demonstrates how the share of total wealth held in housing is sensitive to the rate of inflation, even when perfectly anticipated. Households hold larger positions in home equity earlier in the life cycle and smaller positions later in the life cycle as the rate of inflation increases. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2007-67&r=ure |
| By: | Chaudhury, Nazmul; Asadullah, Mohammad Niaz |
| Abstract: | This paper identifies endogenous social effects in mathematics test performance for eighth graders in rural Bangladesh using information on arsenic contamination of water wells at home as an instrument. In other words, the identification relies on variation in test scores among peers owing to exogenous exposure to arsenic contaminated water wells at home. The results suggest that the peer effect is significant, and school selection plays little role in biasing peer effects estimates. |
| Keywords: | Tertiary Education,Education For All,Teaching and Learning,Primary Education,Secondary Education |
| Date: | 2008–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4508&r=ure |
| By: | Hugo Benítez-Silva; Selcuk Eren; Frank Heiland; Sergi Jiménez-Martín |
| Abstract: | Self-reported home values are widely used as a measure of housing wealth by researchers employing a variety of data sets and studying a number of different individual and household level decisions. The accuracy of this measure is an open empirical question, and requires some type of market assessment of the values reported. In this research, we study the predictive power of self-reported housing wealth when estimating sales prices utilizing the Health and Retirement Study. We find that homeowners, on average, overestimate the value of their properties by between 5% and 10%. We also find a strong correlation between accuracy and the economic conditions (measured by the prevalent interest rate, the growth of household income, and the growth of median housing prices) at the time of the purchase of the property. While most individuals overestimate the value of their properties, those who bought during more difficult economic times tend to be more accurate, and in some cases even underestimate the value of their house. This cyclicality of the overestimation of house prices can provide some clues regarding the reasons for the difficulties currently faced by many homeowners. |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-10&r=ure |
| By: | Terra McKinnish; Randall Walsh; T. Kirk White |
| Abstract: | This paper uses confidential Census data, specifically the 1990 and 2000 Census Long- Form data, to study the demographic processes underlying the gentrification of low income urban neighborhoods during the 1990’s. In contrast to previous studies, the analysis is conducted at the more refined census-tract level with a narrower definition of gentrification and more narrowly defined comparison neighborhoods. The analysis is also richly disaggregated by demographic characteristic, uncovering differential patterns by race, education, age and family structure that would not have emerged in the more aggregate analysis in previous studies. The results provide little evidence of displacement of low-income non-white households in gentrifying neighborhoods. The bulk of the income gains in gentrifying neighborhoods are attributed to white college graduates and black high school graduates. It is the disproportionate in-migration of the former and the disproportionate retention and income gains of the latter that appear to be the main engines of gentrification. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:08-02&r=ure |
| By: | Steven Proud |
| Abstract: | The effect of a child’s peers has long been regarded as an important factor in affecting their educational outcomes. However, these effects follow several different mechanisms and are often difficult to estimate, due to unobserved selection. This paper builds on the work of Hoxby (2000) and uses exogenous changes in the proportion of girls within UK school cohorts to estimate the effect of a more female peer group. I include estimates of effects at a classroom level for schools that appear to contain only one class per cohort to estimate the direct effect of a peer group. Further, I examine if there is a differential effect of boys and girls with differing socioeconomic status, and also examine the effect of a more female peer group on a child’s value added score. I find large significant negative effects of a more female peer group on boy’s outcomes in English, whilst in maths and science, both boys and girls benefit from a more able peer group up until age 11. |
| Keywords: | peer groups, education |
| JEL: | J13 D1 I21 I38 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:07/186&r=ure |
| By: | Anna Aizer |
| Abstract: | Three quarters of American children have been exposed to neighborhood violence in their lifetimes. Most of the existing research has concluded that exposure to violence leads to restricted emotional development, aggressive behavior and poor school outcomes. However, this literature fails to account for the fact that children exposed to neighborhood violence are highly disadvantaged in other ways: they are more likely to be black, poor and have poorly educated parents. As such, it is not clear whether exposure to violence or the underlying measures of disadvantage are responsible for the poor child outcomes observed. Using individual survey data on urban youth and their families from Los Angeles, we find that the most violent neighborhoods are also characterized by the highest degree of disadvantage: greatest poverty, highest unemployment, least education. And while living in a violent neighborhood increases the probability of exposure to violence, within violent neighborhoods those personally exposed to street violence are significantly more disadvantaged and are more likely to associate with violent peers than their unexposed neighbors. Once we control for observed and unobserved family disadvantage, the impact of violence declines for some child outcomes, suggesting that underlying disadvantage explains some of the negative outcomes observed, but not all - it is still the case that associating with violent peers is negatively correlated with cognitive test scores. In addition, when we control for underlying differences across families, the relationship between violence and internalizing behavioral problems appears stronger. |
| JEL: | I1 I3 J15 J24 K42 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13773&r=ure |
| By: | Richard J. Murnane |
| Abstract: | For a variety of reasons described in the paper, improving the performance of urban school districts is more difficult today than it was several decades ago. Yet economic and social changes make performance improvement especially important today. Two quite different bodies of research provide ideas for improving the performance of urban school districts. One group of studies, conducted primarily by scholars of organizational design, examines the effectiveness of particular district management strategies. The second, conducted primarily by economists, focuses on the need to improve incentives. Each body of research offers important insights. Each is somewhat insensitive to the importance of the insights offered by the other literature. A theme of this paper is that insights from both literatures are critical to improving urban school systems. |
| JEL: | I2 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13791&r=ure |
| By: | Miren Lafourcade; Jacques-François Thisse |
| Abstract: | The paper surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of development, which relates the degree of spatial concentration to the level of transport costs, would be bell-shaped. The paper also provides a detailed discussion of the main determinants of transport costs, which remain fairly large in most countries. It concludes with a discussion of some policy implications. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-02&r=ure |
| By: | Pedro Cantos-Sanchez; Rafael Moner-Colonques; Jose J. Sempere-Monerris; Oscar Alvarez |
| Abstract: | This paper explores the importance of heterogeneity in value of time when assessing the viability of a new road infrastructure to alleviate congestion problems. The Spanish government has developed a congestion pricing demonstration entering Madrid city centre, where road users have to choose between a free but highly congested road and a priced free-flowing road. We consider a continuum of users who di¤er in their value of time. Users dislike congestion and this is more so the more a user values his travel time. A logit estimation is undertaken with information from a questionnaire among road users in the Eastern Madrid area to obtain users' value of time. The impact and viability of artery road R3 under several competitive regimes is examined. The tolls obtained generate a tra¢ c reallocation towards the new roadway such that revenues suffice to render the infrastructure socio-economically viable. This is so for all the competitive regimes analyzed even for modest traffic growth rates. Regarding economic viability, the artery road infrastructure is always economically viable under the private regime and for the other two regimes, a sufficiently high traffic growth rate is required. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-06&r=ure |
| By: | Wennberg, Karl (Dept. of Business Administration, Stockholm School of Economics); Lindqvist, Göran (Dept. of Business Administration, Stockholm School of Economics) |
| Abstract: | This paper investigates the long-term survival and performance of new entrepreneurial firms, comparing firms located within regional clusters with those located outside of clusters.We use matched employee-employer databases to investigate all Swedish firms started in the telecom and consumer electronic s, financial services, information technology, medical equipment, and pharmaceuticals and biotech sectors (N = 4,397). We follow these firms from 1993 to 2002 and measure their contribution to local economic vitality in term of job creation, payment of taxes, and payment of salaries to employees. <p> Controlling for factors such as firm size, age, and absorptive innovative capabilities, we find strong empirical evidence that being located within a cluster has positive effects on the survival of new firms. We also find that clustered firm creates more jobs, higher tax payments, and higher wages to employees. The effects are consistent across alternative measures of agglomeration and different regional levels. <p> Thid study contributes to the literatures on entrepreneurship and economic geography. By measuring the economic contributions of clustered and non-clustered firms, the empirical evidence also provides support for basing economic policies on clusters. |
| Keywords: | Clusters; Entrepreneurship; Economic Development |
| Date: | 2007–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhb:hastba:2008_003&r=ure |
| By: | Robin Cowan; Natalia Zinovyev |
| Abstract: | This paper analyzes empirically the channels through which university research affects industry innovation. We examine how the opening of new science, medicine and engineering departments in Italy during 1985-2000 affected regional innovation systems. We find that creation of a new univer- sity department increased regional innovation activity 3-4 years later. On average, an openning of a new department in a region has led to a ten per- cent change in the number of patents filed by regional firms. Given that this effect occurs within the first half decade of the appearance of a new depart- ment, it cannot be ascribed to improvements in the quality and quantity of graduates. At the same time, traditional measures of academic research activity can explain only around 30 percent of this effect. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2008-02&r=ure |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | The methodology used by theories to explain the size distribution of cities takes an empirical fact and works backward to first obtain a reduced form of a model, then pushes this reduced form back to assumptions on primitives. The induced assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. Even aggregate shocks are insufficent to generate consumer movement, since consumers can borrow and save. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move. |
| Keywords: | Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory |
| JEL: | R12 |
| Date: | 2008–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7090&r=ure |
| By: | Yongbok Jeon |
| Abstract: | The purpose of this study is to empirically test the validity of Kaldor’s laws of economic growth in China between 1978 and 2004 and to provide an alternative explanation of sources of Chinese economic growth in a Kaldorian perspective. First, in a spatial econometrics perspective using a regional data set, the present paper empirically verifies that Kaldorian hypotheses on economic growth hold in China during the sample period. Second, it suggests the empirical findings as proving the validity of a demand-side approach. Third, taking this implication, this study provides a more detailed alternative explanation of the sources and processes of economic growth in China during the sample period. Finally, considering a striking finding of the lack of spatial (regional) dependence among Chinese provinces, it also discusses the role of local governments in the development process in China. This study is expected to contribute to the literature as being one of the first studies that identifies sources of Chinese economic growth in demand side. |
| Keywords: | Economic growth in China, Kaldor’s laws, effective demand, Chinese local governments |
| JEL: | O11 O14 O53 R58 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2008_04&r=ure |
| By: | Catherine Bros (Centre d'Economie de la Sorbonne) |
| Abstract: | The aim of this paper is to provide a detailed analysis of the process of segregation formation. The claim is that segregation does not originate from prejudice or exogenous psychological factors. Rather it is the product of strategic interactions among social groups in a setting where one group has captured power. While using a model featuring random matching and repeated games, it is shown that whenever one group seizes power, members of other groups will perceive additional value in forging long term relationships with the mighty. They will systematically cooperate with the latter either because it is in their interest to do so or because they do not have other choice. The mighty natural response to this yearning to cooperate is to refuse intergroup relationships. The dominated group will best reply to this new situation by in turn rejecting the relationships and a segregation equilibrium emerges. Segregation stems from the systematic cooperation by one group with another. However, not all societies that have experienced power captures converge towards segregation. It is shown that the proportion of individuals that are actually powerful within the mighty group determines convergence towards segregation. |
| Keywords: | Segration, discrimination, power, caste, repeated games, prisoner's dilemma, clubs, status, social organizations. |
| JEL: | D02 D63 D71 D80 O15 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:r08002&r=ure |
| By: | Leah Platt Boustan |
| Abstract: | In the mid-twentieth century, relative black wage growth in the North lagged behind the Jim Crow South. Inter-regional migration may explain this trend. Four million black southerners moved North from 1940 to 1970, more than doubling the northern black population. Black migrants will exert more competitive pressure on black wages if blacks and whites are imperfect substitutes. I use variation in the relative black-white migrant flows across skill groups to estimate the elasticity of substitution by race in the northern economy. I then calculate a counterfactual rate of black-white wage convergence in the North in the absence of southern migration. Migration slowed the pace of northern convergence by 50 percent, more than accounting for the regional gap. Ongoing migration appears to have been an impediment to black economic assimilation in the urban North. |
| JEL: | J61 J71 N22 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13813&r=ure |
| By: | Abay Mulatu |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:0803&r=ure |
| By: | Marie CORIS (GREThA-GRES) |
| Abstract: | The objective of this article is to investigate the dynamics of relocations at the micro-economic level. By proposing a grid of “dynamics of proximities”, we focus on the coordination issues which seem to be missing from most of analyses carried about relocations. We apply our framework to software development activities. The proposition we develop in this paper is the following: mobility, ICT use and modularity reduce the need for geographical proximity and favour relocations but, in order to succeed, relocations need to have the support of organisational and institutional proximities to ensure effective coordination between entities and individuals. |
| Keywords: | relocation, software development, dynamics of proximity, coordination |
| JEL: | F23 L23 L86 R30 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2008-03&r=ure |