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on Urban and Real Estate Economics |
| By: | Luc Laeven; Deniz Igan; Giovanni Dell'Ariccia |
| Abstract: | This paper links the current sub-prime mortgage crisis to a decline in lending standards associated with the rapid expansion of this market. We show that lending standards declined more in areas that experienced larger credit booms and house price increases. We also find that the underlying market structure mattered, with entry of new, large lenders triggering declines in lending standards by incumbent banks. Finally, lending standards declined more in areas with higher mortgage securitization rates. The results are consistent with theoretical predictions from recent financial accelerator models based on asymmetric information, and shed light on the relationship between credit booms and financial instability. |
| Keywords: | Working Paper , Credit expansion , Loans , Housing , Industrial structure , Financial instruments , Moral hazard , |
| Date: | 2008–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/106&r=ure |
| By: | Martin, Philippe; Mayer, Thierry; Mayneris, Florian |
| Abstract: | This paper analyzes empirically the effect of spatial agglomeration of activities on the productivity of firms using French individual firm data from 1996 to 2004. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. French firms benefit from localization economies, but not from urbanization economies nor from competition effects. The benefits generated by increased sectoral clustering, though positive and highly significant are modest and geographically very limited. The gains from clusters are also quite well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains and the geography actually observed. |
| Keywords: | clusters; localization economies; productivity; spatial concentration |
| JEL: | C23 R10 R11 R12 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6858&r=ure |
| By: | Albert Solé-Ollé (Universitat de Barcelona & IEB); Miriam Hortas Rico (Universitat de Barcelona & IEB) |
| Abstract: | This paper examines the impact of urban sprawl, a phenomenon of particular interest in Spain, which is currently experiencing this process of rapid, low-density urban expansion. Many adverse consequences are attributed to urban sprawl (e.g., traffic congestion, air pollution and social segregation), though here we are concerned primarily with the rising costs of providing local public services. Our initial aim is to develop an accurate measure of urban sprawl so that we might empirically test its impact on municipal budgets. Then, we undertake an empirical analysis using a cross-sectional data set of 2,500 Spanish municipalities for the year 2003 and a piecewise linear function to account for the potentially nonlinear relationship between sprawl and local costs. The estimations derived from the expenditure equations for both aggregate and six disaggregated spending categories indicate that low-density development patterns lead to greater provision costs of local public services. |
| Keywords: | Urban sprawl, local public spending. |
| JEL: | H1 H72 R51 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2008/5/doc2008-6&r=ure |
| By: | Friso de Vor (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam) |
| Abstract: | This paper addresses the question to what extent the performance of industrial sites is affected by their local economic structure and accessibility. For this aim, we test for the existence of statistically significant relationships between agglomeration externalities (specialization, diversity, and competition), accessibilty measures and the employment growth of a particular industry on a particular site. We use data on employment growth of site-industries on 68 formal industrial sites in the municipality of Amsterdam between 1998 and 2006. We show that at the site-industry level, specialization hampers growth. Furthermore, we find that industrial sites that are easily accessible from the highway grow relatively fast, as well as sites located in the Amsterdam harbour area. |
| Keywords: | industrial sites; agglomeration externalities; employment growth; spatial heterogeneity; accessibility |
| JEL: | C31 O18 R11 |
| Date: | 2008–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080033&r=ure |
| By: | Marco Espinosa-Vega; L. Zanforlin |
| Abstract: | This paper reviews the Mexican experience with the securitization of residential mortgages. It highlights the key legislative and institutional reforms leading to the development of primary and secondary mortgage markets and reports the main features and valuation practices of the RMBS markets. The paper identifies areas warranting close attention to improve the outlook for the Mexican RMBS market and draws some lessons from the recent U.S. subprime mortgage market problems. |
| Keywords: | Working Paper , Mexico , |
| Date: | 2008–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/105&r=ure |
| By: | Luis Marcano (Office of Evaluation and Oversight at the Interamerican Development Bank.); Inder J. Ruprah (Office of Evaluation and Oversight at the Interamerican Development Bank.) |
| Abstract: | High delinquency rate of publicly provided mortgages in social housing programs are often interpreted to be due to moral hazard. In this paper we show that the typically used parametric approaches give misleading results due to overlooked confounding and selection biases. We show that by using the more appropriate impact or treatment non-parametric approach the problem of high delinquency rate in publicly provided mortgages is due to the incapacity to pay and not due to moral hazard. The results caution against public policies to encourage private mortgage providers to move down market, and suggest eliminating mortgages and correspondingly increasing the grant component of the programs. |
| Keywords: | Moral hazard, mortgages, delinquency rate, social housing programs, confounding bias. |
| JEL: | R31 G21 H43 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:ovewps:0308&r=ure |
| By: | E. Anthon Eff |
| Abstract: | Policy makers need accurate measures of school district-level costs for a variety of reasons, including salary equity efforts and state-level funding of local schools. Since salaries constitute most of the operating costs for local education providers, teacher salary data provide a ready resource for constructing school cost indices. This paper provides an example of such an index, using year 2000 data for over 60,000 teachers employed by Tennessee public schools. The index is constructed using the parameters from a hedonic wage regression, and the resulting figures are published in the tables in the appendix. |
| Keywords: | school cost, hedonic regression, teacher salary, Tennessee |
| JEL: | I22 I28 J45 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200805&r=ure |
| By: | Marisa Hidalgo-Hidalgo |
| Abstract: | The belief that both the behavior and outcomes of students are affected by their peers is important in shaping education policy. I analyze two polar education systems -tracking and mixing- and propose several criteria for their comparison. I find that tracking is the system that maximizes average human capital in societies where the distribution of pre-school achievement is not very dispersed. I also find that when peer effects and individuals’ pre-school achievement are close substitutes, all risk averse individuals prefer mixing. |
| Keywords: | Human Capital; Efficiency; Peer Effects; Tracking, Mixing |
| JEL: | D63 I28 J24 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:08/18&r=ure |
| By: | Szilvia Hamori (PhD student, Center for Doctoral Studies in Economics, University of Mannheim) |
| Abstract: | The study estimates the effect of school starting age on academic performance for Hungarian grade four students using the "Progress in International Reading Literacy Study" (PIRLS) and the "Trends in Mathematics and Science Study" (TIMMS). The study uses the control function approach, exploiting the exogenous variation in school starting age driven by the children's month of birth and the cut-off date regulation for enrolment. The results indicate a positive age effect on Reading, Mathematics and Science performance. |
| Keywords: | Education, student test scores, enrolment age, identification |
| JEL: | I21 I28 J24 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:0702&r=ure |
| By: | Andrea R. Lamorgese (Bank of Italy, Department for Structural Economic Analysis) |
| Abstract: | This paper formalizes one mechanism through which diversification in the production of research & development across firms located in a city dampens volatility in the local labor market, improves the incentives to perform research & development and smooths the aggregate business cycle fluctuations of a city. This is done by adapting the standard multi-sector quality ladder model (Grossman and Helpman 1991) in order to allow for heterogeneity across firms, thus taking into account knowledge spillovers across heterogenous sectors, knowledge accumulation, pecuniary externalities and segmented labor markets. As a result, according to the local degree of diversification in research & development, sectoral technological shocks have an influence on the current choice of research & development and the location of production, and in turn on local business cycles and the life cycle of the city: diversification in research & development allows innovations in different sectors of the city to arrive at different points in time, thus avoiding to put pressure on the local labor markets and keeping wage discipline. This permits firms located in the city to perform enough research & development and possibly beat outside competition in discovering and manufacturing new products, thus growing -at the aggregate city level-through less volatile cycles. |
| Keywords: | quality ladder with heterogeneity across firms, labor pooling economies, knowledge spillovers, diversification, schumpeterian growth in the city |
| JEL: | I31 I32 D63 D31 E32 O31 R23 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_667_08&r=ure |
| By: | Aidt, T.S.; Daunton, M.; Dutta, J. |
| Abstract: | Does local democracy help or hinder the solution of collective action problems? We study this question in the context of public spending on health-related urban amenities in a panel of 75 municipal boroughs in England and Wales in 1868, 1871 and 1886. We .nd evidence of a U-shaped relationship between spending on urban amenities and the extension of the local voting franchise. We argue that this retrenchment e¤ect arose because middle class taxpayers were unwilling to pay the cost of poor sanitation and the urban elites, elected on a narrow franchise, were instrumental for sanitary improvements. Our model of taxpayer democracy suggests that the retrenchment e¤ect is related to forced enfranchisement of the middle class through nation-wide reforms. |
| Keywords: | Voting franchise, retrenchment, local public goods, sanitation. |
| JEL: | D62 D78 H71 N93 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0818&r=ure |
| By: | Peter Kuhn (University of California at Santa Barbara); Peter Kooreman (Tilburg University); Adriaan R. Soetevent (University of Amsterdam (ASE)); Arie Kapteyn (RAND and Tilburg University) |
| Abstract: | In the Dutch Postcode Lottery a postal code (19 households on average) is randomly selected weekly, and prizes –consisting of cash and a new BMW-- are awarded to lottery participants living in that postal code. On average, this generates a temporary, unexpected income shock equal to about eight months of income for about one third of the households in a typical winning code, while leaving the incomes of nonwinning, neighboring households unaffected. We study the responses of consumption and reported happiness of both winners and nonwinners to these shocks. Consistent with simple models of in-kind transfers, the overwhelming majority of households who won a BMW convert it into cash. With the exception of food away from home, the only ‘own’ effects of cash winnings we detect are on durables expenditures and car consumption; these results support a version of the permanent income hypothesis in which durable spending is used to smooth consumption. We detect social effects of neighbors’ winnings on two types of consumption: cars and exterior home renovations. Six months after the fact, winning the lottery does not make households happier, nor do neighbors’ winnings reduce happiness. |
| Keywords: | social interactions; quasi-experiments |
| JEL: | D12 C21 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080048&r=ure |
| By: | Erik T. Verhoef (VU University Amsterdam); Andrew Koh (University of Leeds); Simon Shepherd (University of Leeds) |
| Abstract: | This paper considers the use of ‘long-run cost functions’ for congested networks in solving second-best network problems, in which capacity and tolls are instruments. We derive analytical results both for general cost and demand functions and for specific functional forms, namely Bureau of Public Roads cost functions and constant-elasticity demand functions. The latter are also used in a numerical simulation model. We consider second-best cases where only a subset of links in a network is subject to tolling and/or capacity choice, and cases with and without a self-financing constraint imposed. We will demonstrate that, under certain assumptions, second-best long-run cost (or actually: generalized price) functions can be derived for most of the cases of interest, which can be used in an applied network model as a substitute for the conventional short-run user cost functions. Doing so reduces the dimensionality of the problem and should therefore be helpful in speeding up procedures for finding second-best optima. |
| Keywords: | Traffic congestion; Road pricing; Road capacity choice; Second-best; Networks |
| JEL: | R41 R48 D62 |
| Date: | 2008–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080056&r=ure |
| By: | Hessel Oosterbeek (University of Amsterdam); Mirjam C. van Praag (University of Amsterdam); Auke IJsselstein (University of Amsterdam) |
| Abstract: | This paper analyzes the impact of a leading entrepreneurship education program on college students’ entrepreneurship competencies and intentions using an instrumental variables approach in a difference-in-differences framework. We exploit that the program was offered to students at one location of a school but not at another location of the same school. Location choice (and thereby treatment) is instrumented by the relative distance of locations to parents’ place of residence. The results show that the program does not have the intended effects: the effect on students’ self-assessed entrepreneurial skills is insignificant and the effect on the intention to become an entrepreneur is even significantly negative. |
| Keywords: | Entrepreneurship education; program evaluation; entrepreneur competencies; entrepreneur intentions |
| JEL: | A20 C31 H43 H75 I20 J24 L26 |
| Date: | 2008–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080038&r=ure |
| By: | Boehlé, J.L.; Rothkrantz, L.J.M.; Wezel, M.C. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Navigational systems assist drivers in finding a route between two locations that is time optimal in theory but seldom in practice due to delaying circumstances the system is unaware of, such as traffic jams. Upon arrival at the destination the service of the system ends and the driver is forced to locate a parking place without further assistance. We propose a City Based Parking Routing System (CBPRS) that monitors and reserves parking places for CBPRS participants within a city. The CBPRS guides vehicles using an ant based distributed hierarchical routing algorithm to their reserved parking place. Through means of experiments in a simulation environment we found that reductions of travel times for participants were significant in comparison to a situation where vehicles relied on static routing information generated by the well known Dijkstra’s algorithm. Furthermore, we found that the CBPRS was able to increase city wide traffic flows and decrease the number and duration of traffic jams throughout the city once the number of participants increased. |
| Keywords: | dynamic routing;information systems;computer simulation |
| Date: | 2008–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765012467&r=ure |
| By: | Monique de Haan (University of Amsterdam) |
| Abstract: | This paper uses a relatively new approach to investigate the effect of parents' schooling on child's schooling; a nonparametric bounds analysis based on Manski and Pepper (2000), using the most recent version of the Wisconsin Longitudinal Study. We start with making no assumptions and then add some relatively weak and testable assumptions to tighten the bounds. Although the bounds on the treatment effects include a zero effect, the upper bounds are informative especially for the effect of increasing parents' schooling from a high school degree to a bachelor's degree. Both for the effect of mother's schooling as for the effect of father's schooling the nonparametric upper bounds are significantly lower than the OLS results. |
| Keywords: | Intergenerational mobility; nonparametric bounds analysis; education |
| JEL: | I2 J62 C14 |
| Date: | 2008–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080061&r=ure |
| By: | Akçomak, Semih (UNU-MERIT); Weel, Bas ter (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | This paper investigates the relation between social capital and crime. The analysis contributes to explaining why crime is so heterogeneous across space. By employing current and historical data for Dutch municipalities and by providing novel indicators to measure social capital, we find a link between social capital and crime. Our results suggest that higher levels of social capital are associated with lower crime rates and that municipalities’ historical states in terms of population heterogeneity, religiosity and education affect current levels of social capital. Social capital indicators explain about 10 percent of the observed variance in crime. It is also shown why some social capital indicators are more useful than others in a robustness analysis. |
| Keywords: | Social capital, Crime, the Netherlands |
| JEL: | A13 A14 K42 Z13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008042&r=ure |
| By: | Manuel Portugal Ferreira (Instituto Politécnico de Leiria); Fernando A. Ribeiro Serra (UNISUL Business School) |
| Abstract: | In this paper we discuss knowledge and innovation in clusters and the benefits of clustering from a knowledge-based perspective. Knowledge-based resources and innovations are important sources of competitive advantage for firms. Aware of the importance of continuously seeking new knowledge firms increasingly seek knowledge-rich locations such as specific industry clusters across the world. These are locations characterized by the concentration of firms operating in related and supporting activities, a specialized work force and a specialized institutional environment that nurtures the industry. However, it is not likely that these clusters are always locations from which the firms will be able to draw the intended knowledge benefits. The social structure of the relationships between individuals and firms determines the extent to which knowledge will be created, will flow between co-located firms and bounds the knowledge benefits the firms may capture. We finish with a discussion of the need of further examination of the network dynamics involved in an industry cluster to obtain a clearer identification of the actual positive externalities that may accrue to co-locating firms. |
| Keywords: | Strategy; Industry clusters; Innovation |
| JEL: | M0 M1 |
| Date: | 2008–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:24&r=ure |
| By: | Rambonilaza, Tina |
| Abstract: | In this article we discuss the economic approach to evaluate landscape preferences for land-use planning. We then use the choice experiment method to examine public preferences for three landscape features – hedgerows, farm buildings and scrubland – in the Monts d’Arrée region (in Brittany, France), in the context of re-design of landscape conservation policy by the local environmental institute. Surveys were undertaken on two user groups, visitors and local residents. Our objective was to obtain empirical evidence of the difference between the preferences of tourists and residents, for landscape attributes. We then analysed the welfare changes of tourists and residents affected by different landscape programmes. Our results point out the strong divergence between the landscape preferences of the public and those of local public actors. The comparison of the estimated values of willingness to pay for single-attribute landscaping action shows some divergence between residents’ and tourists’ ranking of preferences for agricultural landscape areas. |
| Keywords: | landscape preferences; attributes; choice experiment; welfare estimates |
| JEL: | Q0 D61 |
| Date: | 2005–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9225&r=ure |
| By: | Erik T. Verhoef (VU University Amsterdam) |
| Abstract: | This paper studies the regulation of an airline duopoly on a congested airport. Regulation should then address two market failures: uninternalized congestion, and overpricing due to market power. We find that first-best charges are differentiated over airlines if asymmetric, and completely drive out the least efficient airline from the market. This is not generally the case for an undifferentiated charge, which is found to be a weighted average of first-best charge rules for the two airlines, and is less-than-optimally efficient because of its inability to differentiate between them. Tradeable slots may yield the first-best outcome if the congestion externality is relatively important and the market power distortion relatively unimportant, but may be less efficient than non-intervention when the reverse is true. |
| Keywords: | Airport congestion; congestion pricing; slot trading; tradeable permits; second-best |
| JEL: | R41 R48 D62 |
| Date: | 2008–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080030&r=ure |
| By: | Hessel Oosterbeek (University of Amsterdam); Juan Ponce (FLASCO-Ecuador); Norbert Schady (World Bank) |
| Abstract: | This paper presents evidence about the impact on school enrollment of a program in Ecuador that gives cash transfers to the 40 percent poorest families. The evaluation design consists of a randomized experiment for families around the first quintile of the poverty index and of a regression discontinuity design for families around the second quintile of this index, which is the program's eligibility threshold. This allows us to compare results from two different credible identification methods, and to investigate whether the impact varies with families' poverty level. Around the first quintile of the poverty index the impact is positive while it is equal to zero around the second quintile. This suggests that for the poorest families the program lifts a credit constraint while this is not the case for families close to the eligibility threshold. |
| Keywords: | cash transfers; school enrollment; regression discontinuity; randomized experiment |
| JEL: | I38 I28 O15 |
| Date: | 2008–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080037&r=ure |
| By: | Narmania, David |
| Abstract: | This paper describes the administrative powers of local jurisdictions in Georgia, emphasizing on the tax competences and the abilities to mobilize other sources of income. Having listed and explained the types of revenues and incomes, the articles continues to show their distribution among administrative levels according to the current tax code. Following a brief overview of the main laws underlying tax regulation, the existing problems of the status quo before 2007 and some perspectives for the immediate future are outlined. |
| Keywords: | iscal policy , local jurisdictions , tax distribution , state and local budgets |
| JEL: | H7 H2 H1 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:pot:fiwidg:06&r=ure |
| By: | Bernard F. Lentz (Drexel University); David N. Laband (Auburn University) |
| Abstract: | In this paper, we analyze Metropolitan and Micropolitan Statistical Area (MSA)-level data in the U.S. to examine the economic impact of college athletics. Specifically, we examine the relationship between total athletics revenues (aggregated across all colleges in an MSA) and MSA-level employment in the accommodations and food services industries. Controlling for a variety of other factors that might influence hotel/restaurant employment within an MSA, we find that below $40 million (in 2005) in college athletics revenues there is no evidence that college athletics affects MSA employment in the food services and accommodations industries. However, above $40 million we find highly significant impacts on employment in the food services and accommodations industries that climb with college sports revenue generation. |
| Keywords: | sports, college athletics, economic impact, food services and accommodations, tourism |
| JEL: | L83 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0803&r=ure |
| By: | Andersson, Linda (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | The objective of this paper is to empirically analyze the relationship between job flows and regional income stabilization provided by the national tax and transfer systems. The analysis is based on an administrative panel data set containing all sectors in 20 Swedish regions for the time period 1989-2000. Controlling for unobserved regional effects we find that a high net tax-income ratio tends to decrease the rate of jobs that are created and increase the rate of job destruction, increasing the overall rate of job reallocation in the regions. In an attempt to separate out the part of the national tax-transfer system that is aimed at stabilizing the income path over time we find that only job creation is affected, i.e., regions where the income path is more stable tend to have a lower rate of intra-industry job creation. |
| Keywords: | income |
| JEL: | H24 J63 J68 |
| Date: | 2008–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2008_005&r=ure |