nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2008‒03‒08
sixteen papers chosen by
Steve Ross
University of Connecticut

  1. Spatial structure and mobility patterns:;towards a taxonomy of the Italian urban systems By Andrea CIRILLI; Paolo VENERI
  2. Medium-Sized Cities and the Dynamics of Creative Services By Claude LACOUR (GREThA-GRES); Sylvette PUISSANT (GREThA-GRES)
  3. Valuing access to water - a spatial hedonic approach applied to Indian cities By Lall, Somik; Deichmann, Uwe; Lozano-Gracia, Nancy; Anselin, Luc
  4. Does Spatial Proximity Matter? Micro-evidence from Italy. By Cainelli, Giulio; Lupi, Claudio
  5. On Measuring the Complexity of Urban Living By Hasan, Lubna
  6. Can Information Asymmetry Cause Agglomeration? By Berliant, Marcus; Kung, Fan-chin
  7. Information and communication technologies and geographic concentration of manufacturing industries: evidence from China By Fu, Shihe; Hong, Junjie
  8. The Impact of Fiscal Equalization on Local Expenditure Policies: Theory and Evidence from Germany By Hauptmeier, Sebastian
  9. Spatial Spillovers in the Development of Institutions By Harry Kelejian; Peter Murrell; Oleksandr Shepotylo
  10. Choice Valuation of Traffic Restrictions: Perspectives on Noise, Pollution and Congestion Preferences By Carlos Pestana Barros; Peter Dieke
  11. Long-term growth determinants of young businesses in Germany : effects of regional concentration and specialisation By Otto, Anne; Fornahl, Dirk
  12. Interregional Disparities in Productivity and the Choice of Fiscal Regime By Kimiko Terai
  13. How To Solve The U.S. Housing Problem and Avoid A Recession: A Revived HOLC and RTC By Davidson, Paul
  14. Regional Opportunities and Policy Initiatives for New Venture Creation By Verheul, I.; Carree, M.A.; Santarelli, E.
  15. The governance of localized knowledge externalities By Antonelli Cristiano; Pierpaolo Patrucco; Quatraro Francesco
  16. Mortgage Interest Rates, Country Risk and Maturity Matching in Colombia By Arturo José Galindo; Marc Hofstetter

  1. By: Andrea CIRILLI (Universita' Politecnica delle Marche, Dipartimento di Economia); Paolo VENERI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: Urban spatial organization has become a wide field of research in the last years, since it is thought to be an important determinant of the city's performance, from many points of view. Nevertheless, Italian urban spatial organization has not been studied in depth yet and a general description of the Italian urban territory is lacking. The aim of this work is to build a taxonomy of the Italian cities - where the latter are conceptualised as agglomeration of contiguous municipalities - on the basis of their spatial organization features and of their patterns of commuting-to-work mobility. To reach this aim, three preliminary steps had to be carried out. First of all, the major Italian urban systems have been identified following a functional approach that is based on the principle of maximum self-containment of commuters' flows, as allowed by Local Labour Systems (LLSs). Secondly, original indicators have been built to gain a better understanding of cities' spatial organization and of their patterns of mobility. Thirdly, the relation between these two dimensions has been investigated through a multivariate statistical analysis. The results of the analysis show that spatial organization - especially urban dispersion - and mobility patterns are closely related and cities might be aggregated in five groups, ranging from the most compact and transit-oriented cities to the most dispersed and car-oriented ones.
    Date: 2008–02
    Abstract: This paper examines the development of “creative” services (research, information, art etc.), located in medium-sized areas. Insofar as urban dynamics lead to extend the advanced services outside metropolises, particular attention is given to issues concerning the definition of “medium-sized cities”, and their significance regarding urban systems; the approach in terms of creativity and metropolization clarifies the incidence of their economic contexts and their structuring role within spatial frameworks. The findings presented in this paper are based on the experiment of French cities. They precise the meanings and the limits of the urban size effect, which can play in favour of medium-sized areas growth, and to their detriment as well.
    Keywords: medium-sized cities, metropolization, services, niches, France
    JEL: J24 J44 R11 R23
    Date: 2008
  3. By: Lall, Somik; Deichmann, Uwe; Lozano-Gracia, Nancy; Anselin, Luc
    Abstract: An important infrastructure policy issue for rapidly growing cities in developing countries is how to raise fiscal revenues to finance basic services in a fair and efficient manner. This paper applies hedonic analysis that explicitly accounts for spatial spillovers to derive the value of improved access to water in the Indian cities of Bhopal and Bangalore. The findings suggest that by looking at individual or private benefits only, the analysis may underestimate the overall social welfare from investing in service supply especially among the poorest residents. The paper further demonstrates how policy simulations based on these estimates help prioritize spatial targeting of interventions according to efficiency and equity criteria.
    Keywords: Town Water Supply and Sanitation,Housing & Human Habitats,Water Supply and Sanitation Governance and Institutions,Water and Industry,Water Use
    Date: 2008–02–01
  4. By: Cainelli, Giulio; Lupi, Claudio
    Abstract: The effect of spatial agglomeration (localisation and urbanisation economies) on employment growth is explored over a balanced panel of 23,374 Italian firms, using a flexible Bayesian model. Contrary to previous research, the agglomeration economies measures are calculated using direct measures of physical distances between pairs of firms, rather than with respect to pre-specified geographical units. We find that localisation effects are positive but decreasing with distance, while the variety effects are negative for distances within 10 kilometers and become positive for distances in a range of 10–30 kilometers. Our results suggest that the use of geographic units such as standard metropolitan units, LLS, administrative regions or provinces can be misleading.
    Keywords: Proximity, agglomeration, knowledge spillover, employment.
    JEL: R11 O47
    Date: 2008–02–22
  5. By: Hasan, Lubna
    Abstract: This paper explores the concept of city ranking as a way to measure dynamics and complexities of urban life. These rankings have various dimensions and uses. Both the context in which these rankings are done, and their nature has changed considerably overtime. These rankings are also afflicted with many methodological and measurement problems. A review of major city rankings and related literature is carried out to suggest a framework for measuring Pakistani cities.
    Keywords: Quality of Life; Cities; Urbanization
    JEL: R10
    Date: 2007
  6. By: Berliant, Marcus; Kung, Fan-chin
    Abstract: The modern literature on city formation and development, for example the New Economic Geography literature, has studied the agglomeration of agents in size or mass. We investigate agglomeration in sorting or by type of worker, that implies agglomeration in size when worker populations differ by type. This kind of agglomeration can be driven by asymmetric information in the labor market, specifically when firms do not know if a particular worker is of high or low skill. In a model with two types and two regions, workers of different skill levels are offered separating contracts in equilibrium. When mobile low skill worker population rises or there is technological change that favors high skilled workers, integration of both types of workers in the same region at equilibrium becomes unstable, whereas sorting of worker types into different regions in equilibrium remains stable. The instability of integrated equilibria results from firms, in the region to which workers are perturbed, offering attractive contracts to low skill workers when there is a mixture of workers in the region of origin.
    Keywords: Adverse Selection; Agglomeration
    JEL: R13 D82 R12
    Date: 2008–03–02
  7. By: Fu, Shihe; Hong, Junjie
    Abstract: Using the 2004 China economic census database, this paper examines the impact of information and communication technologies (ICT) on the geographic concentration of manufacturing industries, controlling for other determinants of industrial agglomeration. Higher geographic concentration is found consistently in industries where ICT are more widely adopted, and the association is stronger at higher geographic levels. Furthermore, young firms that have adopted ICT, although they are more footloose, contribute to industrial agglomeration. High-tech industries with advanced ICT also tend to agglomerate. Contrary to the prevalent argument that ICT lead to more dispersion, our study suggests that ICT promote industrial agglomeration.
    Keywords: Information and communication technologies; Geographic concentration; Agglomeration; China
    JEL: R32 R12
    Date: 2008–03–01
  8. By: Hauptmeier, Sebastian
    Abstract: This paper uses a simple model of fiscal competition in taxes and public inputs among local jurisdictions to analyze the incentive effects of fiscal equalization transfers. We find that a budget-compensated increase in the contribution rate to a system of fiscal equalization not only induces higher local tax rates (e.g., Koethenbuerger, 2002; Bucovetsky and Smart, 2006) but also lower budgetary shares of the public input to production. The subsequent empirical analysis is based on a rich data set of German municipalities and provides strong evidence for the existence of an incentive of fiscal equalization transfers on local expenditure policies.
    Keywords: Fiscal competition, Fiscal equalization, Public inputs, Regression discontinuity approach, Germany
    JEL: H72 H77
    Date: 2007
  9. By: Harry Kelejian; Peter Murrell (Department of Economics, University of Maryland); Oleksandr Shepotylo
    Abstract: We examine spatial spillovers between countries in the development of institutions. Our dependent variables are three measures of institutions that relate to politics, law, and governmental administration. The major explanatory variable on which we focus is a spatial lag of the dependent variable, that is, the level of similar institutions in bordering countries. We also consider long-term determinants of institutions that have been previously examined in the literature, such as legal origin, religious groupings, ethnolinguistic fractionalization, resource base, and initial level of GDP per capita. Our framework of analysis is a spatial panel data model. Because of missing observations, our panel data set is not balanced, which causes special problems in estimating spatial models. These problems are explicitly recognized in our estimation procedure, which implements new results in spatial econometrics. Spatial spill-over effects between countries are statistically significant and economically important. We provide evidence of the size of the general equilibrium effects of spatial spillovers by examining a counter-factual the non-existence of the Soviet Union. Our central conclusions are bolstered by robustness tests that involve alternative treatments of GDP per capita and the inclusion of fixed effects.
    Keywords: institutions, spatial econometrics, governance, neighborhood effects, spatial spillovers
    JEL: C5 O1 O5 P5
    Date: 2007–11
  10. By: Carlos Pestana Barros; Peter Dieke
    Abstract: This paper focuses on the choice valuation of traffic restrictions while entering Lisbon city based on individual preferences for noise, pollution and congestion. The analysis employs a questionnaire distributed in 2007 to ascertain the significant characteristics of traveling to Lisbon, with the aim of curbing the number of cars that enter the city daily. A random parameter logit model is used to analyze the characteristics (e.g. individual characteristics, motivations, type of transport used) that are associated with the probability of individuals supporting a fee on private cars entering the city. The model also takes into account the uncontrolled heterogeneity of the data. Some policy implications are also presented.
    Keywords: Transportation; Lisbon; Mixed Logit Model; Public Policy.
    Date: 2008–02
  11. By: Otto, Anne (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Fornahl, Dirk
    Abstract: "This paper explores how different levels of regional concentration and specialisation affect the long-term growth of young firms. The sample consists of knowledge-intensive and non-knowledge-intensive western German manufacturing firms which were set-up in 1992 and managed to survive 11 years. The paper examines the joint effect of regional, industrial and firm-specific determinants. The analysis of the concentration and specialisation factors takes into account the industrial and technological dimensions and the regional level of human capital. With regard to the concentration measures being located in an industrial or technological agglomeration slightly reduces the growth rates of start-ups. The same negative, but stronger, effect can be observed for competition measures. Furthermore, our results suggest that startups exhibit higher growth rates the higher specialised the region is in which they are located." (author's abstract, IAB-Doku) ((en))
    JEL: R11 L25 R12 O30
    Date: 2008–03–05
  12. By: Kimiko Terai (Hosei University)
    Abstract: Two districts with divergent productivity levels engage in policy-making on the provision of local public goods that enhance future income and hence create a dynamic linkage across periods. The policy choices of district representatives are derived under alternative fiscal systems, and the problem of system selection is examined. It is shown that a decentralized system is more likely to be selected in a more equal society. On the other hand, when a great deal of benefit spills over from a local public good, or when policy makers are expected to care solely about the immediate effects of their decisions on their districts, a centralized system is more likely to be selected.
    Keywords: Interregional and intergenerational spillovers; Decentralization; Centralization; Disparity in productivity; Dynamic political economy model
    JEL: H23 H41 H73 H77
    Date: 2008–02
  13. By: Davidson, Paul
    Abstract: This paper exlains the cause of the sub prime market failure in the US and suggests policies to copy with the problem.
    Keywords: monetary policy; insolvency;
    JEL: D53 E00 E44 A11
    Date: 2008–01
  14. By: Verheul, I.; Carree, M.A.; Santarelli, E. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper investigates the determinants of new venture creation across industries and locations for 103 Italian provinces between 1997 and 2003. We allow for differences in regional opportunities across industries and investigate the impact of a range of factors on entrepreneurship in different industries: manufacturing, retailing and wholesaling, hotels and restaurants. Our results show that wage costs deter entry in manufacturing and that regions with industrial districts are characterized by higher start-up rates. Firm entry in commercial sectors appears higher in large cities and areas with strong economic progress. For hotels and restaurants we find that tourism positively influences new firm formation. In terms of policy we do not find a significant effect of recently introduced regional laws promoting new firm formation.
    Keywords: venture creation;policy initiatives;Italian provinces
    Date: 2007–12–17
  15. By: Antonelli Cristiano (University of Turin); Pierpaolo Patrucco (University of Turin); Quatraro Francesco (University of Turin)
    Abstract: This paper articulates the hypothesis that there is an optimal size of knowledge pools. Too little a density of innovation activities reduces the accessibility of external knowledge. Too large a density enhances congestion and reduces appropriability. Firms can benefit from actual increasing returns stemming from the indivisibility, replicability and non-exhaustibility of knowledge only when the size of innovation networks is comprised between the two extremes. The empirical evidence confirms that the output elasticity of knowledge, included in a typical Griliches production function, is itself a quadratic function of the size of innovation networks. Knowledge externalities do trigger increasing returns that are external to each firm, only within a well defined interval. Knowledge externalities are a property of the system into which firms are embedded. As such they are endogenous to the system and likely to exhibit specific properties related to the changing characteristics of the system itself. The quality of knowledge governance mechanisms in place plays a key role in assessing the actual size of the net positive effects of knowledge externalities.
    Date: 2008–01
  16. By: Arturo José Galindo; Marc Hofstetter
    Abstract: In this paper, we examine the determinants of mortgage loans interest rates in Colombia during the period January 2002 - June 2006. We find that the main macroeconomic determinant is public debt interest rates. At the micro level, we find that credit risk is the main determinant. We demonstrate and analyze the tight relationship between country risk and mortgage debt interest rates. This relationship has been growing over time, as banks have increased their share of long-term liabilities in an effort to reduce the maturity mismatch that characterized their balance sheets prior to the 1998-99 financial crisis. Nevertheless, the reduction in the maturity mismatch has left mortgage rates more exposed to country risk variations.
    Date: 2008–01–14

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