nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2008‒03‒25
25 papers chosen by
Steve Ross
University of Connecticut

  1. Ad valorem housing subsidies may reduce house building. By José M. Usategui
  2. Housing market spillovers: Evidence from an estimated DSGE model By Matteo Iacoviello; Stefano Neri
  3. Policy Coordination in an Oligopolistic Housing Market. By Ana I. Saracho; José M. Usategui
  4. Social Housing under Oligopoly. By José M. Usategui
  5. Does Mentoring Reduce Turnover and Improve Skills of New Employees? Evidence from Teachers in New York City By Jonah E. Rockoff
  6. Spatial coordination in public good allocation: Nonparametric evidence from decentralized Indonesia By Yamauchi, Futoshi; Chowdhury, Shyamal; Dewina, Reno
  7. Efficiency of Finnish Upper Secondary Schools: An Application of Stochastic Frontier Analysis with Panel Data By Tanja Kirjavainen
  8. Household transport expenditure in Sub-Saharan African cities: measurement and analysis By Lourdes Diaz Olvera; Didier Plat; Pascal Pochet
  9. Transport Infrastructure Investment and Demand Uncertainty By Stef Proost; Saskia van der Loo
  10. Evaluating School Facilities in Brazil By Sheila Walbe Ornstein; Nanci Saraiva Moreira
  11. On the importance of borrowing constraints for house price dynamics By Eerola, Essi; Määttänen, Niku
  12. The Geography and Determinants of Entrepreneurship By Jagannadha Pawan Tamvada
  13. Conditional Cash Transfers in Education Design Features, Peer and Sibling Effects Evidence from a Randomized Experiment in Colombia By Felipe Barrera-Osorio; Marianne Bertrand; Leigh L. Linden; Francisco Perez-Calle
  14. Revealing Agglomeration Economies with Stochastic Frontier Modelling in the Finnish ICT Industry By Elina Berghäll
  15. Socioeconomic determinants of primary school dropout: the logistic model analysis By Okumu, Ibrahim M.; Nakajjo, Alex; Isoke, Doreen
  16. Monetary Policy, Market Excesses and Financial Turmoil By Rudiger Ahrend; Boris Cournède; Robert Price
  17. Equity and efficiency in private and public education: a nonparametric comparison By Laurens Cherchye; Kristof De Witte; Erwin Ooghe
  18. A signalling model of school grades: centralized versus decentralized examinations By De Paola, Maria; Scoppa, Vincenzo
  19. Capacity cost structure, welfare and cost recovery: are transport infrastructures with high fixed costs a handicap? By Bruno De Borger; Fay Dunkerley; Stef Proost
  20. Dynamic Option Adjusted Spread and the Value of Mortgage Backed Securities By Mario Cerrato; Abdelmadjid Djennad
  21. Urbanization, educational expansion, and expenditures inequality in Indonesia in 1996, 1999, and 2002: By Akita, Takahiro; Miyata, Sachiko
  22. Qualifying Religion: The Role of Plural Identities for Educational Production By Timo Boppart; Josef Falkinger; Volker Grossmann; Ulrich Woitek; Gabriela Wüthrich
  23. Are Computers Good for Children? The Effects of Home Computers on Educational Outcomes By Daniel O. Beltran; Kuntal K. Das; Robert W. Fairlie
  24. Export and Economic Growth: Analysis of the cities of the COREDE Serra - 1997-2004 By Galimberti, Jaqueson Kingeski; Caldart, Wilson Luís
  25. Penetrating the Knowledge Filter in "Rust Belt" Economies By Zoltan Acs; Lawrence A. Plummer; Ryan Sutter

  1. By: José M. Usategui (The University of the Basque Country)
    Abstract: In this paper it is shown that an ad valorem housing subsidy set by a central regulator (or a raise in the ad valorem housing subsidy rate) may reduce the number of houses built in the market and increase the price paid by the buyers of houses. The analysis considers a situation where there is imperfect competition in the housing market and a local regulator that decides on density, or on the number of sites for housing development, and that cares about a combination of the profits of housing developers and the surplus of buyers of houses.
    Keywords: Housing subsidies, imperfect competition, price of houses.
    JEL: L L R
    Date: 2008–03–14
  2. By: Matteo Iacoviello (Boston College); Stefano Neri (Bank of Italy, Economics and International Relations)
    Abstract: The ability of a two-sector model to quantify the contribution of the housing market to business fluctuations is investigated using U.S. data and Bayesian methods. The estimated model, which contains nominal and real rigidities and collateral constraints, displays the following features: first, a large fraction of the upward trend in real housing prices over the last 40 years can be accounted for by slow technological progress in the housing sector; second, residential investment and housing prices are very sensitive to monetary policy and housing demand shocks; third, the wealth effects from housing on consumption are positive and significant, and have become more important over time. The structural nature of the model allows identifying and quantifying the sources of fluctuations in house prices and residential investment and measuring the contribution of housing booms and busts to business cycles.
    Keywords: House prices, Collateral Constraints, Bayesian methods, Two-sector Models
    JEL: E32 E44 E47 R21 R31
    Date: 2008–01
  3. By: Ana I. Saracho (The University of the Basque Country); José M. Usategui (The University of the Basque Country)
    Abstract: This paper analyzes the consequences of the interaction between two different levels of government (regulators) in the development of housing policy when their decisions determine the level of competition in the housing market. The analysis discusses the implications derived from a lack of coordination between a local regulator who controls the supply of land for housing development and a central regulator who decides on housing subsidies. The results suggest that lack of coordination has significant effects on prices and supply of houses, housing developers' profits, and buyers' surplus.
    Keywords: Imperfect competition, housing policy coordination
    JEL: L L
    Date: 2008–03–14
  4. By: José M. Usategui (The University of the Basque Country)
    Abstract: In this paper it is shown that the setting up of a social housing system may decrease the total number of houses built in the market, induce a price of non-social houses greater than the price of houses without that system and increase the profits of housing developers even in situations where they have to sell social houses at a price below production cost. The analysis considers a situation with imperfect competition in the housing market and with a social housing system where housing developers must provide some social houses when they obtain a permit to build non-social houses.
    Keywords: Social housing, imperfect competition, housing stock.
    JEL: L L R
    Date: 2008–03–14
  5. By: Jonah E. Rockoff
    Abstract: Mentoring has become an extremely popular policy for improving the retention and performance of new teachers, but we know little about its effects on teacher and student outcomes. I study the impact of mentoring in New York City, which adopted a nationally recognized mentoring program in 2004. I use detailed program data to examine the relationship between teacher and student outcomes and measures of mentoring quality, such as hours of mentoring received and the characteristics of mentors. Although assignment of teachers to mentors was non-random, I use instrumental variables and school fixed effects to address potential sources of bias. I find strong relationships between measures of mentoring quality and teachers' claims regarding the impact of mentors on their success in the classroom, but weaker evidence of effects on teacher absences, retention, and student achievement. The most consistent finding is that retention within a particular school is higher when a mentor has previous experience working in that school, suggesting that an important part of mentoring may be the provision of school specific knowledge. I also find evidence that student achievement in both reading and math were higher among teachers that received more hours of mentoring, supporting the notion that time spent working with a mentor does improve teaching skills.
    JEL: I2 J24 J63
    Date: 2008–03
  6. By: Yamauchi, Futoshi; Chowdhury, Shyamal; Dewina, Reno
    Abstract: "This paper examines dynamics in public good accessibility and cross-community inequality in Indonesia, using village-level panel data from 2000 to 2006 from their decentralized public-good allocation system. The introduction of decentralization makes public-good investment dependent on initial local income and endowment, and makes it difficult to coordinate investment decisions across communities. Our analysis also shows that possible strategic interactions among communities connected with transportation infrastructure (externalities) implies spatial divergence. Empirical evidence on education and heath facilities, however, demonstrates that during the decentralized period, (1) accessibility to school has improved and school investments were effectively coordinated over space; (2) hospital access has improved only marginally; but (3) per-capita availability of schools and local medical clinics (puskesmas) in the community shows convergence toward low-level equilibria. Despite the coordination in spatial allocation even in the decentralization period (observed in intervillage accessibility), endogenous population mobility and growth partially cancel the benefits of the coordinated efforts in public-good allocation. This point requires further policy attention." from Authors' Abstract
    Keywords: Public goods, Education, health, Spatial coordination, Poverty dynamics,
    Date: 2007
  7. By: Tanja Kirjavainen
    Abstract: In this study the efficiency of Finnish upper secondary schools is evaluated with stochastic frontier analysis. Different stochastic frontier models for panel data are used to estimate education production functions. The results in matriculation examination are explained with comprehensive school grade point average, parents? socioeconomic background, resources, length of studies and decentralization of test taking on matriculation examination. Controls for schools with specialized curriculum are also included. The heterogeneity across schools is allowed by estimating both true random and true fixed effects models. The results show that the effect of teaching resources on examination results is even negative when the heterogeneity across schools is taken into account. Length of studies and decentralization of test taking affected negatively on student achievement. The inefficiency and the rankings of schools based on inefficiency score varied quite considerably depending on the type of stochastic frontier model. The lowest estimates for inefficiency were obtained with true random and true fixed effects models that separate time constant random or fixed effects from inefficiency.
    Keywords: Efficiency, stochastic frontier analysis, secondary schools
    Date: 2007–11–08
  8. By: Lourdes Diaz Olvera (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Didier Plat (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Pascal Pochet (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: In Sub-Saharan Africa the cost of transport faced by city dwellers, particularly the poor, tends to add to their travel and economic difficulties. Knowledge of the burden of transport expenditure in the household budget seems essential for passenger transport policy formulation in order to improve their travel conditions and social equity. <br />The literature review and the three case studies (Dar es Salaam, Niamey, Ouagadougou) show that estimates of travel expenditure are partially conditioned by survey data collection methodologies and by the choice of equivalence scales used to compare the standard of living of households. According to consumption and expenditure survey data, the relative amount spent on transport increases as household expenditure rises. Conversely, the share of transport decreases as income rises when analysing travel survey data. The sensitivity to the equivalence scale is tested for several transport expenditure indicators: the share of travel expenditure by household budget quintile, the concentration indices for public and private household transport expenditure and the average monthly expenditure per person on public and private transport. Results also highlight the fact that transport is a major component of household expenditure, that there are considerable inequalities between households and that regular use of motorized transport is unaffordable for poor populations. These findings have implications for both improving expenditure data collection methodologies in the transport area and formulating pro-poor urban policies.
    Keywords: Transport expenditure ; Urban transport ; Survey methodology ; Equivalence scale ; Poverty ; Sub-Saharan Africa
    Date: 2008
  9. By: Stef Proost; Saskia van der Loo
    Abstract: In transportation planning there can be long lead times to adapt capacity. This paper addresses two questions. First, in a one mode world (say rail or road), what is the optimal capacity choice when faced with uncertain demand, long lead times and congestion. Using a simple analytical model it is shown that when demand is inelastic, it is socially optimal to invest more than if only the expected level of demand is taken into account. In this case it may be beneficial to overinvest in capacity because congestion costs are a convex function of relative use. This result holds with or without optimal tolling. The second question deals with two competing modes and where only one mode has long lead times for capacity while the other has flexible capacity. This is typical for the competition between High Speed Rail and air for the medium distance trips (500 to 1000 km), or for the competition between inland waterways and trucks for freight. We find that overinvestment is less justified because the substitute mode can more easily absorb the high demand outcomes.
    Keywords: transport infrastructure, uncertainty, investments
    JEL: R41 R42
    Date: 2008–03
  10. By: Sheila Walbe Ornstein; Nanci Saraiva Moreira
    Abstract: Brazil’s São Paulo Metropolitan Region is conducting a performance evaluation pilot study at three schools serving disadvantaged populations. The objective is first to test methods which can facilitate Post Occupancy Evaluations (POEs) and then to carry out the evaluations. The preliminary results are provided below.
    Keywords: evaluation, secondary schools, school building design, learning environment, educational buildings
    Date: 2008–02
  11. By: Eerola, Essi (University of Helsinki and HECER); Määttänen, Niku (The Research Institute of the Finnish Economy)
    Abstract: We study how a household borrowing constraint the the form of a down payment requirement affects house price dynamics in an OLG model with standard preferences. We find that in certain situations the borrowing constraint shapes house price dynamics substantially. The importance of the constraint depends very much on whether house price changes are driven by interest rate or aggregate income shocks. Moreover, because of the borrowing constraint, house price dynamics display substantial asymmetries between large positive and large negative income shocks. These results are related to the fact that the share of borrowing-constrained households is different following different shocks.
    Keywords: house prices; dynamics; borrowing constraints; down payment constraint
    JEL: E21 R21
    Date: 2008–03–17
  12. By: Jagannadha Pawan Tamvada (Max Planck Institute of Economics, Jena)
    Abstract: Entrepreneurship literature (Parker 2004) has rarely considered spatial location as a micro-determinant of occupational choice, although there are compelling reasons to posit that spatial location influences economic behavior. Using Bayesian semiparametric methodologies and geoadditive techniques, we examine spatial location as a micro-determinant of self-employment choice of Indians, in addition to standard determinants such as age, gender and education. The empirical analysis suggests the presence of spatial occupational neighborhoods and a clear north-south divide in self-employment choice in India when individuals of agricultural and nonagricultural sectors are considered together; however, such spatial patterns are less pronounced when individuals in nonagriculture alone are considered in the analysis. These residual spatial patterns are found to be inversely related to the per-capita GDP of the region. The results further suggest nonlinear relationships between age, wealth and the probability of self-employment.
    Keywords: Entrepreneurship, Self-employment, Developing Countries, Bayesian Semiparametric Methods, Geoadditive Models
    JEL: J24 J43 J44 L26
    Date: 2008–03–20
  13. By: Felipe Barrera-Osorio; Marianne Bertrand; Leigh L. Linden; Francisco Perez-Calle
    Abstract: We evaluate multiple variants of a commonly used intervention to boost education in developing countries -- the conditional cash transfer (CCT) -- with a student level randomization that allows us to generate intra-family and peer-network variation. We test three treatments: a basic CCT treatment based on school attendance, a savings treatment that postpones a bulk of the cash transfer due to good attendance to just before children have to reenroll, and a tertiary treatment where some of the transfers are conditional on students' graduation and tertiary enrollment rather than attendance. On average, the combined incentives increase attendance, pass rates, enrollment, graduation rates, and matriculation to tertiary institutions. Changing the timing of the payments does not change attendance rates relative to the basic treatment but does significantly increase enrollment rates at both the secondary and tertiary levels. Incentives for graduation and matriculation are particularly effective, increasing attendance and enrollment at secondary and tertiary levels more than the basic treatment. We find some evidence that the subsidies can cause a reallocation of responsibilities within the household. Siblings (particularly sisters) of treated students work more and attend school less than students in families that received no treatment. We also find that indirect peer influences are relatively strong in attendance decisions with the average magnitude similar to that of the direct effect.
    JEL: I2 I38
    Date: 2008–03
  14. By: Elina Berghäll
    Abstract: Agglomeration economies are sought with stochastic frontier methodology to analyse their role in the extraordinary productivity growth of the knowledge-intensive information and communication technology (ICT) equipment industry in Finland. Results suggest that the method, though imprecise, is useful for identifying developments in agglomeration economies. The main empirical result is that the highly increasing scale elasticities (i.e., relative to firm size) found in the sector are more industry and firm size related, than location related external economies of scale. Policy-wise, there are two neglected concerns: (i) Agglomeration economies have weakened with the industry life cycle, and the maturing of the underlying technology towards mass production is well under way in the industry, with R&D saving and labour using technical change. (ii) The deployment of R&D subsidies as instruments of regional policy may harm long term competitiveness in dispersing innovation intensive activities to low spillover areas and by disrupting the creation of persistent location-specific advantages.
    Keywords: Agglomeration, productivity, scale, technical change, efficiency
    Date: 2008–01–14
  15. By: Okumu, Ibrahim M.; Nakajjo, Alex; Isoke, Doreen
    Abstract: Abstract This paper describes the socioeconomic determinants of primary school dropout in Uganda with the aid of a logistic model analysis using the 2004 National Service Delivery Survey data. The Objectives were to establish the; household socioeconomic factors that influence dropout of pupils given free education and any possible policy alternatives to curb dropout of pupils. Various logistic regressions of primary school dropout were estimated and these took the following dimensions; rural-urban, gender, and age-cohort. After model estimation, marginal effects for each of the models were obtained. The analysis of the various coefficients was done across all models. The results showed the insignificance of distance to school, gender of pupil, gender of household head and total average amount of school dues paid by students in influencing dropout of pupils thus showing the profound impact Universal Primary Education has had on both access to primary education and pupil dropout. Also the results vindicated the importance of parental education, household size and proportion of economically active household members in influencing the chances of pupil dropout. The study finally calls for government to; keep a keen eye on non-school fees payments by parents to schools as these have the potential to increase to unsustainable levels by most households especially in rural areas; roll-out adult education across the entire country; and expand free universal education to secondary and vocational levels as it would allow some of those who can not afford secondary education to continue with schooling. This has the effect of reducing the number of unproductive members in the household.
    Keywords: socioeconomic determinants; primary education; and dropout
    JEL: O1 I2
    Date: 2008–02
  16. By: Rudiger Ahrend; Boris Cournède; Robert Price
    Abstract: This paper addresses the question of whether and how monetary policy ease may lead to excesses in financial and real asset markets and ultimately result in financial dislocation. It presents evidence suggesting that periods when short-term interest rates have been persistently and significantly below what Taylor rules would prescribe are correlated with increases in asset prices, especially as regards housing, though no systematic effects are identified on equity markets. Significant asset price increases, however, can also occur when interest rates are in line with Taylor rules, associated with periods of financial deregulation and/or innovation. The paper argues that accommodating monetary policy over the period 2002-2005, in combination with rapid financial market innovation, would seem in retrospect to have been among the factors behind the run-up in asset prices and consequent financial imbalances -- the (partial) unwinding of which helped trigger the 2007 financial market turmoil. Moreover, the paper points out that in certain situations policy rates may be a rather blunt tool for dealing with both the build-up and aftermath of financial imbalances, raising the question whether “macro-prudential” regulation could be useful. <P>Politique monétaire, excès des marchés et troubles financiers <BR>Dans quelle mesure la politique monétaire a-t-elle pu conduire à des excès dans les marchés d'actifs réels et financiers et in fine mener aux récentes perturbations financières ? Cette étude aborde cette question en fournissant des éléments qui laissent à penser que, lorsque les taux courts se trouvent de manière durable nettement au-dessous de ce que prescrirait une règle de Taylor, les prix des actifs, notamment immobiliers, ont tendance à s'élever (hormis ceux des actions). D'importantes augmentations des prix des actifs sont aussi observées lors des périodes de dérégulation ou d'innovation financières. Cette étude avance des arguments selon lesquels le relâchement monétaire observé en 2002-2005, se combinant à une rapide innovation financière, apparaît rétrospectivement comme l'un des facteurs ayant contribué à l'envolée des prix des actifs et au gonflement des déséquilibres financiers qui en a résulté, un processus dont la résorption a alimenté les troubles financiers de 2007. En outre, cette étude souligne que, dans certaines situations, les taux directeurs sont un instrument peu adapté pour répondre à la formation et au dégonflement de déséquilibres financiers, ce qui soulève la question de savoir si la réglementation « macro-prudentielle » ne serait pas alors plus utile.
    Keywords: financial markets, marchés financiers, housing, logement, house prices, regulation, monetary policy, politique monétaire, asset prices, prix des actifs, interest rate, taux d'intérêt
    JEL: E44 E5 F3 G15
    Date: 2008–03–10
  17. By: Laurens Cherchye; Kristof De Witte; Erwin Ooghe
    Abstract: We present a nonparametric approach for the equity and efficiency evaluation of (private and public) primary schools in Flanders. First, we use a nonparametric (Data Envelopment Analysis) model that is specially tailored to assess educational efficiency at the pupil level. The model accounts for the fact that minimal prior structure typically available for the behavior (objectives and feasibility set) under evaluation, it reckons with outlier behavior in the available data, while it corrects for ‘environmental’ characteristics that are specific to each pupil. Second, we propose first- and second-order stochastic dominance (FSD and SSD) criteria as naturally complementary aggregation criteria for comparing the performance of different school types (private and public schools) in Flanders. While FSD only accounts for (Pareto) efficiency, SSD also takes (Pigou-Dalton) equality into consideration. We find that private schools outperform public schools in terms of SSD.
    Keywords: equity; efficiency; private versus public education; non-parametric analysis; data envelopment analysis; stochastic dominance
    Date: 2008–03
  18. By: De Paola, Maria; Scoppa, Vincenzo
    Abstract: In this paper we examine the signalling value for skills of different examination systems in relation to errors that may affect grades obtained by students. Firm use school grades as a signal of the effective skills of workers, taking into account that evaluation are effected by stochastic shocks. We show that more precise evaluation systems, being associated to a higher reactivity of wages to school grades, induce an higher level of student effort. However, the effect is heterogeneous: low ability students tend to react less compared to high ability students. Moreover, from our analysis, it emerges that individuals endowed with low abilities may prefer less accurate evaluation systems. Nevertheless, when productivity increases the convenience of these systems reduces and the number of individuals preferring them shrinks. Our analysis highlights an important trade-off between centralized and decentralized evaluation systems. Frequent evaluations, typical of decentralized systems, reduce the impact on grades of errors that influence student performance and in this way diminish signal noise, on the other hand, different teachers generally adopt different performance assessment standards, and this tends to produce noisier evaluations. Conversely, centralized systems use common evaluation standards, but their frequency is limited by relevant administration costs and then produce evaluations that are more affected by errors influencing student performance. In the final part of the paper we investigate the relationship between the optimal class size and evaluation systems. We show that under decentralized evaluation systems the class size also affects the signal noise, since larger classes may reduce the frequency of evaluations undertaken by teachers.
    JEL: I0
    Date: 2008–01–16
  19. By: Bruno De Borger; Fay Dunkerley; Stef Proost
    Abstract: In this paper, we consider a region that invests in infrastructure used by both local demand and through transport. We then compare transport systems that have, for a given capacity, the same total infrastructure cost but vary in the proportion of fixed costs and variable capacity costs. We show, first, that infrastructure which has (ceteris paribus) a higher share of fixed costs leads to higher welfare for the regional government building it. Contrary to what is commonly believed, it therefore requires less, rather than more, federal subsidies. Second, we find that, even for capacity characterized by, ceteris paribus, very high shares of fixed costs, financing of infrastructure is generally not an important issue as long as regions are allowed to toll through traffic. Third, if member states cannot toll through traffic, or if a federal authority (such as the EU or the USA) can impose pricing at the global marginal social cost, our analysis shows that this reduces investment incentives for the individual regions, and subsidies may be needed. We discuss the policy implications of these findings and illustrate all theoretical results numerically.
    Keywords: capacity cost structure, cost recovery, transport investment
    JEL: R41 R48
    Date: 2008–03
  20. By: Mario Cerrato; Abdelmadjid Djennad
    Abstract: We extend a reduced form model for pricing pass-through mortgage backed securities (MBS) and provide a novel hedging tool for investors in this market. To calculate the price of an MBS, traders use what is known as option-adjusted spread (OAS). The resulting OAS value represents the required basis points adjustment to reference curve discounting rates needed to match an observed market price. The OAS suffers from some drawbacks. For example, it remains constant until the maturity of the bond (thirty years in mortgage-backed securities), and does not incorporate interest rate volatility. We suggest instead what we call dynamic option adjusted spread (DOAS). The latter allows investors in the mortgage market to account for both prepayment risk and changes of the yield curve.
    Keywords: Asset pricing, Mortgage Backed Securities, Term Structure Ambiguity, arrival rate of innovation, R&D investments.
    JEL: C23 G34
  21. By: Akita, Takahiro; Miyata, Sachiko
    Abstract: "This paper considers urban-rural location and education as the main causes of expenditure inequality and attempts to examine inequality changes associated with urbanization and educational expansion in Indonesia from 1996 to 2002, using Indonesian monthly household consumption expenditure data. It introduces a hierarchical framework of inequality decomposition by population subgroups, which enables researchers to analyze inequality resulting from differences in educational attainment as well as inequality within each educational group, after the effects on inequality of urban–rural differences in the composition of educational attainments are removed. It finds that the urban sector's higher educational group contributes significantly to overall inequality. Inequality within the group increased significantly once Indonesia recovered from the financial crisis of 1998. This, together with educational expansion in urban areas, led to a conspicuous rise in urban inequality. Overall expenditure inequality has increased markedly, due not only to the rise in urban inequality but also a widening urban-rural disparity, accompanied by a population shift from the rural to the urban sector. Since more people will obtain higher education as the economy continues to develop, and more jobs requiring specialized skills become available in urban areas, urban inequality is likely to remain high. In order to mitigate urban inequality and thus overall inequality, the government needs to introduce policies that could reduce inequality among households whose heads have a tertiary education." from Authors' Abstract
    Keywords: Expenditure inequality, Urbanization, Educational expansion, Theil index, Two-stage nested inequality decomposition analysis, Public investment,
    Date: 2007
  22. By: Timo Boppart; Josef Falkinger; Volker Grossmann; Ulrich Woitek; Gabriela Wüthrich
    Abstract: This paper examines the role of religious denomination for human capital formation. We employ a unique data set which covers, inter alia, information on numerous measures of school inputs in 169 Swiss districts for the years 1871/72, 1881/82 and 1894/95, marks from pedagogical examinations of conscripts (1875-1903), and results from political referenda to capture conservative or progressive values in addition to the cultural characteristics language and religion. Catholic districts show on average significantly lower educational performance than Protestant districts. However, accounting for other sociocultural characteristics qualifies the role of religion for educational production. The evidence suggests that Catholicism is harmful only in a conservative milieu. We also exploit information on absenteeism of pupils from school to separate provision of schooling from use of schooling.
    Keywords: Culture; Educational production, Plural identity, Religious denomination, School inputs
    JEL: I20 H52 O10 N33
    Date: 2008–03
  23. By: Daniel O. Beltran; Kuntal K. Das; Robert W. Fairlie
    Abstract: Although computers are universal in the classroom, nearly twenty million children in the United States do not have computers in their homes. Surprisingly, only a few previous studies explore the role of home computers in the educational process. Home computers might be very useful for completing school assignments, but they might also represent a distraction for teenagers. We use several identification strategies and panel data from the two main U.S. datasets that include recent information on computer ownership among children -- the 2000-2003 CPS Computer and Internet Use Supplements (CIUS) matched to the CPS Basic Monthly Files and the National Longitudinal Survey of Youth 1997 -- to explore the causal relationship between computer ownership and high school graduation and other educational outcomes. Teenagers who have access to home computers are 6 to 8 percentage points more likely to graduate from high school than teenagers who do not have home computers after controlling for individual, parental, and family characteristics. We generally find evidence of positive relationships between home computers and educational outcomes using several identification strategies, including controlling for typically unobservable home environment and extracurricular activities in the NLSY97, fixed effects models, instrumental variables, and including future computer ownership and falsification tests. Home computers may increase high school graduation by reducing non-productive activities, such as truancy and crime, among children in addition to making it easier to complete school assignments.
    Keywords: technology, computers, education
    JEL: I2
    Date: 2008–03
  24. By: Galimberti, Jaqueson Kingeski; Caldart, Wilson Luís
    Abstract: This paper aims to verify the existence of a relation between exports and the economic growth of the pertaining cities to the region of the COREDE Serra of the Rio Grande do Sul, for the period of 1997 to 2004. For this it is used the approach of the economic growth theory, specifically the model formulated by Feder (1983), in which exports positively affect the economic growth through two possible ways: positive externalities, and through the reallocation of resources for more productive activities. The results indicate that exports affect economic growth positively, and this effect is not consequence of externalidades, but only of the differential of productivity between the exporting sector and the not exporting one. The estimates had indicated that in the exporting sector the production factors are used 62.65% more productive than the remaining portion of the economy. Of this, it is concluded of the importance of promotional politics of the exports, also in municipal scope, as a form to stimulate the regional economic growth. Moreover, the estimates had allowed the verification of the existence of decreasing marginal incomes in the capital and labor factors of production for the sample of cities. Considering exports in set with the accumulated production factors it becomes possible to get constant economies of scale. The conclusion is that the efficiently use of the factors of production in the exporting sector allows to a compensation to the nature of decreasing marginal incomes of the accumulated production factors.
    Keywords: Economic growth; exports; regional economy; externalities
    JEL: O41 F43 R11
    Date: 2007–09–20
  25. By: Zoltan Acs (George Mason University; Max Planck Institute of Economics, Jena); Lawrence A. Plummer (Clemson University); Ryan Sutter (George Mason University)
    Abstract: A new model of economic growth introduces the knowledge filter between new generic knowledge and economically-useful knowledge. It identifies both the formation of new ventures and the absorptive capacity of incumbent firms as the mechanisms that penetrate the knowledge filter. Recent empirical work has shown that new firms are more proficient at penetrating the knowledge filter than are incumbent firms; however, the analysis has only examined expanding economies and has relied on purely cross-sectional regression methodologies. This study explores the role of new and incumbent firms in penetrating the knowledge filter utilizing recent developments in spatial panel estimation techniques to provide a more robust set of findings. The results suggest that new firms are more proficient at penetrating the knowledge filter in declining and growing regions alike.
    Keywords: Entrepreneurship, Knowledge, Regional Growth, Endogenous Growth
    JEL: L26 O1 O18 O3 R1
    Date: 2008–03–14

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