nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2008‒06‒13
eighteen papers chosen by
Steve Ross
University of Connecticut

  1. Measuring Housing Affordability: Looking Beyond the Median By Quan Gan; Robert J. Hill
  2. Job accessibility and employment probability By Anna Matas Prats; José Luís Raymond Bara; José Luís Raymond Bara
  3. Cities and Growth: In Situ Versus Migratory Human Capital Growth By Beckstead, Desmond; Brown, W. Mark; Newbold, Bruce
  4. Constant-Quality House Price Indexes for Switzerland By Steven C. BOURASSA; Martin HOESLI; Donato SCOGNAMIGLIO; Philippe SORMANI
  5. Do College Football Games Pay for Themselves? The Impact of College Football Games on Local Sales Tax Revenue By Dennis Coates; Craig A. Depken, II
  6. The Persistence of Teacher-Induced Learning Gains By Brian A. Jacob; Lars Lefgren; David Sims
  7. Welfare Payments and Crime By C. Fritz Foley
  8. A Spatiotemporal Autoregressive Price Index for the Paris Office Property Market By Nappi-Choulet, Ingrid; Maury, Tristan-Pierre
  9. London: a Cultural Audit By Freeman, Alan
  10. Validation of the Regional Authority Index By SCHAKEL , ARJAN H.
  11. Is the Growing Skill Premium a Purely Metropolitan Issue? By Chul Chung; Jeremy Clark; Bonggeun Kim
  12. Creative destruction and economic welfare in Swedish regions: Spatial dimensions of structural change, growth and employment By Karl-Johan Lundquist; Lars-Olof Olander; Martin Svensson Henning
  13. Discretionary Behavior and Racial Bias in Issuing Traffic Tickets: Theory and Evidence By Nejat Anbarci; Jungmin Lee
  14. Next Steps: Preparing a Quality Workforce By Stephen Coelen; Sevin� Rende; Doug Fulton
  15. How to Determine whether Regional Markets are Integrated? Theory and Evidence from European Electricity Markets By Georg Gebhardt; Felix Höffler
  16. Economics and Ideology: Causal Evidence of the Impact of Economic Conditions on Support for Redistribution and Other Ballot Proposals By Eric Brunner; Stephen L. Ross; Ebonya Washington
  17. Peer Effects and Peer Avoidance: Epidemic Diffusion in Coevolving Networks By Constanza Fosca; Matteo Marsili; Fernando Vega-Redondo
  18. Schools, Skills, and Synapses By James J. Heckman

  1. By: Quan Gan (School of Economics, University of New South Wales); Robert J. Hill (School of Economics, University of New South Wales)
    Abstract: We draw a distinction between the concepts of purchase affordability (whether a household is able to borrow enough funds to purchase a house) and repayment affordability (the burden imposed on a household of repaying the mortgage). We operationalize this distinction in the context of a new methodology for constructing affordability measures that draws on the value-at-risk concept and takes account of the whole distribution of household income and house prices rather than just the median. Empirically we find that the distinction between purchase and repayment affordability can be pronounced. In the Sydney prime mortgage market over the period 1996 to 2006, repayment affordability deteriorated very significantly while purchase affordability remained quite stable. This difference can be attributed to the loosening of credit constraints in the mortgage market which it seems has carried through primarily into higher house prices. We also consider how median house-price-to-income ratio measures of affordability can be extended to take account of the whole distribution of income and house prices. We propose a new quantile based measure which indicates that the housing affordability problem may be systematically worse than suggested by standard median measures.
    Keywords: Housing affordability; Affordability at risk; Affordable limit; Mortgage market; Price-to-income ratio
    JEL: C43 E25 E64 R31
    Date: 2008–05
  2. By: Anna Matas Prats (GEAP, Universitat Autònoma de Barcelona (SPAIN).); José Luís Raymond Bara (GEAP, Universitat Autònoma de Barcelona (SPAIN).); José Luís Raymond Bara (GEAP, Universitat Autònoma de Barcelona (SPAIN).)
    Abstract: The objective of this paper is to estimate the impact of residential job accessibility on female employment probability in the metropolitan areas of Barcelona and Madrid. Following a “spatial mismatch” framework, we estimate a female employment probability equation where variables controlling for personal characteristics, residential segregation and employment potential on public transport network are included. Data used come from Microcensus 2001 of INE (National Institute of Statistics). The research focuses on the treatment of endogeneity problems and the measurement of accessibility variables. Our results show that low job accessibility in public transport negatively affects employment probability. The intensity of this effect tends to decrease with individual’s educational attainment. A higher degree of residential segregation also reduces job probability in a significant way..
    Date: 2008–05
  3. By: Beckstead, Desmond; Brown, W. Mark; Newbold, Bruce
    Abstract: University degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas. This relatively high rate of growth stems from net migratory flows and/or higher rates of degree attainment in cities. Using data from the 1996 and 2001 Censuses, this paper tests the relative importance of these two sources of human capital growth by decomposing degree-holder growth across cities into net migratory flows (domestic and foreign) and in situ growth: that is, growth resulting from higher rates of degree attainment among the resident populations of cities. We find that both sources are important, with in situ growth being the more dominant force. Hence, it is less the ability of cities to attract human capital than their ability to generate it that underlies the high rates of degree attainment we observe across city populations.
    Keywords: Education, training and learning, Business performance and ownership, Population and demography, Educational attainment, Regional and urban profiles, Mobility and migration
    Date: 2008–06–02
  4. By: Steven C. BOURASSA (University of Louisville, CEREBEM, BEM Management School); Martin HOESLI (University of Geneva, University of Aberdeen, CEREBEM, BEM Management School and Swiss Finance Institute); Donato SCOGNAMIGLIO (IAZI / CIFI); Philippe SORMANI (IAZI / CIFI)
    Abstract: The measurement of house price movements is a vital topic from both academic and practical perspectives and hence has been the focus of much research. There is almost unanimous consensus in the literature that house price indexes should control for the quality of properties; the most widely used methods to attain this aim are the hedonic and repeat sales approaches. The objective of this paper is to compare the Swiss house prices indexes published by the Swiss National Bank (SNB), which are constructed using medians of list prices as published in newspapers and on the internet, to hedonic indexes based on sale prices for the period 1985 to 2006. We find that the list price indexes exhibit quite a different price path than the hedonic indexes during the period. In particular, they appear to overstate price changes in housing markets. We attribute this, at least in part, to changes over time in the composition of the sample of properties on the market.
    Keywords: house price indexes, hedonic method, Switzerland
    JEL: E31 R31
    Date: 2008–05
  5. By: Dennis Coates (Department of Economics, University of Maryland, Baltimore County); Craig A. Depken, II (Belk College of Business, University of North Carolina - Charlotte)
    Abstract: This paper analyzes the net impacts of college football games on the sales tax revenues and taxable sales of four mid-sized cities in Texas. The paper addresses the question in the title, but also asks whether state policy makers might be justified in encouraging schools in their state to play one another based on the local economic impact those games will have. In general, our evidence suggests the answer to that question is no.
    Keywords: tourism, economic impacts, special events
    JEL: L83 H27
    Date: 2008–06
  6. By: Brian A. Jacob; Lars Lefgren; David Sims
    Abstract: Educational interventions are often narrowly targeted and temporary, and evaluations often focus on the short-run impacts of the intervention. Insofar as the positive effects of educational interventions fadeout over time, however, such assessments may be misleading. In this paper, we develop a simple statistical framework to empirically assess the persistence of treatment effects in education. To begin, we present a simple model of student learning that incorporates permanent as well as transitory learning gains. Using this model, we demonstrate how the parameter of interest – the persistence of a particular measurable education input – can be recovered via instrumental variables as a particular local average treatment effect. We initially motivate this strategy in the context of teacher quality, but then generalize the model to consider educational interventions more generally. Using administrative data that links students and teachers, we construct measures of teacher effectiveness and then estimate the persistence of these teacher value-added measures on student test scores. We find that teacher-induced gains in math and reading achievement quickly erode. In most cases, our point estimates suggest a one-year persistence of about one-fifth and rule out a one-year persistence rate higher than one-third.
    JEL: I2 I21 J20 J24 J38
    Date: 2008–06
  7. By: C. Fritz Foley
    Abstract: This paper tests the hypothesis that the timing of welfare payments affects criminal activity. Analysis of daily reported incidents of major crimes in twelve U.S. cities reveals an increase in crime over the course of monthly welfare payment cycles. This increase reflects an increase in crimes that are likely to have a direct financial motivation like burglary, larceny-theft, motor vehicle theft, and robbery, as opposed to other kinds of crime like arson, assault, homicide, and rape. Temporal patterns in crime are observed in jurisdictions in which disbursements are focused at the beginning of monthly welfare payment cycles and not in jurisdictions in which disbursements are relatively more staggered.
    JEL: D91 I38 K42
    Date: 2008–06
  8. By: Nappi-Choulet, Ingrid (ESSEC Business School); Maury, Tristan-Pierre (ESSEC Business School)
    Abstract: This paper applies the spatiotemporal hedonic approach to analysis of office transaction prices in the Paris property market (i.e. central Paris and its inner suburbs). The analysis focuses primarily on the market’s two main business districts (the CBD and the La Defense District). We find that spatial and temporal dependence effects are strongly present in these submarkets. Additionally, we propose a hybrid method for incorporating a temporal regime into the spatiotemporal autoregressive model proposed by Pace, Barry, Clapp and Rodriguez (1998). Regime switching around 1997 (i.e. in the presence of temporal heterogeneity) substantially affects the significance of spatial and temporal dependences. Finally, we build a new price index that incorporates both spatiotemporal dependences and temporal heterogeneity. This index differs strongly from the usual hedonic price index
    Keywords: Hedonic Prices; Paris Office Property Market; Spatiotemporal Autoregressive Price Index; Temporal Heterogeneity
    JEL: C51 D40 R33
    Date: 2008–04
  9. By: Freeman, Alan
    Abstract: This report is a pre-final version of a report published by the Greater London Authority and the London Development Agency in March 2008. It benchmarks London’s cultural offer against four other world cities: Paris,  New York, Tokyo and Shanghai and is the first comprehensive such undertaking compiled according to international standards. The final printed version can be downloaded from The printed version includes full acknowledgement to the several contributors to research into this project, without whom it would not have been possible
    Keywords: cultural economics; creative industries; London; World Cities
    JEL: Z1 O18
    Date: 2008–03–19
  10. By: SCHAKEL , ARJAN H.
    Abstract: This article validates the Regional Authority Index with seven widely used decentralization indices in the literature. A principal axis analysis reveals a common structure. The major source of disagreement between the Regional Authority Index and the other indices stems from the fact that the Regional Authority Index does not include local governance whereas most other indices do. Two other sources of disagreement concern the treatment of federal versus non-federal countries, and countries which have recently regionalized and/or have asymmetrical regions, whereby the more fine-grained Regional Authority index captures greater variation. The second part discusses content validity of fiscal indicators.
    Keywords: federalism;decentralization;regional authority; fiscal indicators
    JEL: A12 G18 H72 H71
    Date: 2008–02
  11. By: Chul Chung; Jeremy Clark (University of Canterbury); Bonggeun Kim
    Abstract: This paper documents that virtually all of the growth in the skilled wage premium over the 1980’s in the United States was confined to metropolitan areas. Explanations for the growth in the skilled wage premium will therefore need to take location into account.
    Keywords: Skilled wage premium; Metropolitan areas
    JEL: J31 R23 F16
    Date: 2008–01–05
  12. By: Karl-Johan Lundquist; Lars-Olof Olander; Martin Svensson Henning
    Date: 2008
  13. By: Nejat Anbarci (Department of Economics, Florida International University); Jungmin Lee (Department of Economics, Florida International University)
    Abstract: Recently, police departments, legislators, media, and the public at large in the U.S. have increasingly been concerned about racial disparities in officers' issuing traffic tickets. Ascertaining the extent to which an observed disparity reflects racial bias is the crucial issue. First, we use a theoretical model which borrows features from the recent literature regarding racial bias in vehicle searches. In our model, motorists, picking the speed to travel at, take into account the probability of getting ticketed and the speed that the officer will cite, while officers maximize a benefit function generically increasing in the speed of ticketed drivers; this benefit function, however, is general enough to allow officers to give certain drivers a break by citing them at a lower speed than they were traveling. Empirically, we exploit the existence of a massive accumulation of speeding tickets at 10 m.p.h. over the speed limit to elicit officers' discretionary behavior and leniency. Surprisingly,about 30% of all ticketed drivers were cited for driving exactly at this particular speed. Using our novel measure of officers' leniency, we find that especially white and male officers are heavily engaged in discretionary behavior. We also find officers' discretion is racially biased; minority officers are less lenient to minority drivers. This is interesting in comparison with Antonovics and Knight (forthcoming) who, using the same data set, found evidence on own-race preferences in vehicle searches.
    Keywords: Discretionary behavior, strict behavior, leniency, racial bias, drivers' speeding decision, officers' ticketing and citation decision.
    JEL: J70 K42
    Date: 2008–06
  14. By: Stephen Coelen; Sevin� Rende; Doug Fulton
    Abstract: Weaknesses of the continuum from high school education into the Connecticut workforce include the following: (1) Too many highly qualified high school students do not go on to college at all; (2) Too many high school students neglect to apply to in-State colleges or are not accepted in the in- State college of their choice; leaving the State, they often remain in their out-of-state community to work (3) Too many additional students transfer from in-State to Out-of-State colleges during college and these, in great numbers, do not return to Connecticut in their post college years; (4) Too many students, wherever trained, may start in the Connecticut labor market but fail to stay in Connecticut employment for very long; and (5) Too many, starting college, fail to complete college, making college an expensive and uncertain proposition, while improving students' completion rates would promote greater efficiency in the use of student and State resources.
    Keywords: high school education; college education; workplace success; CAPT testing; SAT testing
    Date: 2008–04
  15. By: Georg Gebhardt; Felix Höffler (Department of Econmics, University of Munich, Ludwigstr. 28 (Rgb), D-80539 Munich; Chair of Regulatory Economics, WHU - Otto Beisheim School of Management - Burgplatz 2, 56179 Vallendar , Germany)
    Abstract: Prices may differ between regional markets if transport capacities are limited. We develop a new approach to determine to which extent such differences stem from limited participation in cross-border trader rather than from bottlenecks. We derive a theoretical integration benchmark for the typical case where transportation markets clear before the product markets, using Grossman's (1976) notion of a rational expectations equilibrium. We compare the benchmark to data from European electricity markets. The data reject the integration hypothesis: Capacity prices contain too little information about spot price dierential; this indicates that well informed traders do not engage in cross-border trade.
    Keywords: Market integration, electricity markets, interconnector, competition policy, rational expectations equilibrium
    JEL: G14 D84 L94
    Date: 2008–05
  16. By: Eric Brunner (Quinnipiac University); Stephen L. Ross (University of Connecticut); Ebonya Washington (Yale University)
    Abstract: There is a large literature demonstrating that positive economic conditions increase support for incumbent candidates, but little understanding of how economic conditions affect preferences for parties and for particulars of their platforms. We ask how exogenous shifts to the value of residentsÇ human capital affect voting behavior in California neighborhoods. As predicted by economic theory, we find that positive economic shocks decrease support for redistributive policies. More notably, we find that conservative voting on a wide variety of ballot propositions--from crime to gambling to campaign finance--is increasing in economic well being. We further show that positive economic circumstances decrease turnout and have a mixed impact on candidate choice, highlighting a limitation of inferring policy preferences from party choice.
    Keywords: Voting, Employment, Taxes, Expenditures
    JEL: D72 H0
    Date: 2008–06
  17. By: Constanza Fosca; Matteo Marsili; Fernando Vega-Redondo
    Abstract: We study the long-run-emergency of behavioral patterns in dynamic complex networks. Individuals display two kinds of behavior: G("good") or B ("bad"). We assume that agents have an innate tendency towards G, but can also be led towards B though the influence of peer bad behavior. We model the implications of those peer effects as an epidemic process in the standard SIS (Susceptible-Infected-Susceptible) framework. The key novelty of our model is that, unlike in received epidemic literature, the network is taken to change over time within the same time scale as behavior. Specifically, we posit that links connecting two G agents last longer, reflecting the idea that B agents tend to be avoided. The main concern of the paper is to understand the extent to which such biased network turnover may play a significant role in supporting G behavior in a social system. And indeed we find that network coevolution has nontrivial and interesting effects on long-run behavior. This yields fresh insights on the role of (endogenous) peer pressure on the diffusion of (a)social behavior as well as on the traditional study of disease epidemics.
    Keywords: Coevolutionary networks, diffusion of behavior, social dilemma, epidemics
    JEL: C71 D83 D85
    Date: 2008
  18. By: James J. Heckman
    Abstract: This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effectiveness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.
    JEL: A12
    Date: 2008–06

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