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on Urban and Real Estate Economics |
| By: | Christopher J. Mayer; Karen Pence |
| Abstract: | We explore the types of data used to characterize risky subprime lending and consider the geographic dispersion of subprime lending. First, we describe the strengths and weaknesses of three different datasets on subprime mortgages using information from LoanPerformance, HUD, and HMDA. These datasets embody different definitions of subprime mortgages. We show that estimates of the number of subprime originations are somewhat sensitive to which types of mortgages are categorized as subprime. Second, we describe what parts of the country and what sorts of neighborhoods had more subprime originations in 2005, and how these patterns differed for purchase and refinance mortgages. Subprime originations appear to be heavily concentrated in fast-growing parts of the country with considerable new construction, such as Florida, California, Nevada, and the Washington DC area. These locations saw house prices rise at faster-than-average rates relative to their own history and relative to the rest of the country. However, this link between construction, house prices, and subprime lending is not universal, as other markets with high house price growth such as the Northeast did not see especially high rates of subprime usage. Subprime loans were also heavily concentrated in zip codes with more residents in the moderate credit score category and more black and Hispanic residents. Areas with lower income and higher unemployment had more subprime lending, but these associations are smaller in magnitude. |
| JEL: | G1 G2 R2 R31 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14083&r=ure |
| By: | Audretsch, David B; Tamvada, Jagannadha Pawan |
| Abstract: | A growing body of literature shows that geographic location plays an important role in influencing economic phenomena. Despite the renewed interest in economic geography, the existing literature on the firm size distribution (FSD) has ignored the impact of geographic location. A wave of recent studies has examined the determinants and evolution of FSD (Cabral and Mata, 2003; Angelini and Generale 2008, AER) and a component of this literature has focused on the size of the new firm start-ups. However, while the impact of firm-specific and industry-specific characteristics on size of new firms has been analyzed, the role of geographic location has been largely neglected. Using Bayesian semi-parametric geoadditive models, we estimate geographic location as a micro-determinant of firm start-up size. The estimations based on a comprehensive database of firm start-ups in India suggest that the size distribution of new firms exhibits distinct regional patterns, even after controlling for firm and industry characteristics. These residual spatial patterns are found to be attributable, to some extent, to the level of economic and financial development in the regions. |
| Keywords: | Bayesian Methods; Developing Countries; Firm Size Distribution; Geoadditive Models; Geography; Start-Up Size |
| JEL: | L11 L60 R12 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6846&r=ure |
| By: | Olivier THOMAS (LEREPS-GRES) |
| Abstract: | Considering that the French metropolitan area makers decided not to respect the 1999’s law and its spirit, this paper intends to highlight the reasons why the French State accepted this situation so easily. First, the degrees of freedom taken by local elected actors are stressed thanks to two examples : the determination of the list of common tasks on the one hand, and the choice of the boundaries of the metropolitan area on the other hand. Then, the idea that the French State, thanks to its non interference and to fiscal incentives, has chosen to go round local inertia with a tacit and indirect strategy is contended. The final long term goal would concern the will to reduce, in spite of the numerous opponents, the number of French cities. |
| Keywords: | French metropolitan areas; urban communities with own taxes; local public economics; merger; fiscal incentives |
| JEL: | H30 H73 R51 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2008-12&r=ure |
| By: | Octávio Figueiredo (Universidade do Porto and CEMPRE); Paulo Guimarães (University of South Carolina and CEMPRE); Douglas Woodward (University of South Carolina) |
| Abstract: | This paper uses a novel measure and detailed plant-level Portuguese data to reexamine the Marshallian hypothesis that specialization and the vertical disintegration of firms should be greater in areas where an industry concentrates. Our measure of firm specialization and vertical disintegration employs a Herfindhal index constructed with occupational shares for all workers within the firm. Controlling for firm size and sector of activity, we find that vertical disintegration is around three percent higher in areas where industries agglomerate. Sensitivity tests reveal that this positive relation is remarkably robust across different specifications. |
| Keywords: | Vertical Disintegration of Firms; Agglomeration; Localization Economies |
| JEL: | R12 R39 L25 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:280&r=ure |
| By: | D. Vuri |
| Abstract: | In this paper we present evidence on the impact of distance to school and school availability on households’ decisions concerning primary age children’s time allocation between work, schooling and household chores activities using data from the Ghana Living Standard Survey 1998-99 (GLSS) and the Guatemalan Living Standards Measurement Survey 2000 (ENCOVI). Overall, our results indicate that the increased and eased access to school has a well-defined impact on children’s time use, with both similarities and striking dissimilarities between the chosen countries. In particular, in Ghana the availability and the travel distance to schools (both primary and middle) in the community influence children’s work in both economic activities and household chores and children’s school attendance. The longer the travel time to school the more difficult it is for children to reconcile work and school attendance. In Guatemala, secondary school access constraints have almost no effect on children’s time allocation. In addition, reducing the cost of access to primary education has an effect only on children’s school attendance but it reduces neither child work nor time spent in household chores. Our results are robust to control for the endogeneity of school location and per capita expenditures. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:41&r=ure |
| By: | Daniel F. McCaffrey; Rosalie Liccardo Pacula; Bing Han; Phyllis Ellickson |
| Abstract: | In this study we reconsider the relationship between heavy and persistent marijuana use and high school dropout status using a unique prospective panel study of over 4500 7th grade students from South Dakota who are followed up through high school. Propensity score weighting is used to adjust for baseline differences that are found to exist before marijuana initiation occurs (7th grade). Weighted logistic regression incorporating these propensity score weights is then used to examine the extent to which time-varying factors, including substance use, also influence the likelihood of dropping out of school. We find a positive association between marijuana use and dropping out (OR=5.68), over half of which can be explained by prior differences in observational characteristics and behaviors. The remaining association (OR=2.31) is made statistically insignificant when measures of cigarette smoking are included in the analysis. Because no physiological justification can be provided for why cigarette smoking would reduce the cognitive effects of marijuana on schooling, we interpret this as evidence that the association is due to other factors. We then use the rich data to explore which constructs are driving this result, determining that it is time-varying parental and peer influences. |
| JEL: | I10 I18 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14102&r=ure |
| By: | Dan Bogart; Gary Richardson |
| Abstract: | Between 1660 and 1830, Parliament passed thousands of acts restructuring rights to real and equitable estates. These estate acts enabled individuals and families to sell, mortgage, lease, exchange, and improve land previously bound by inheritance rules and other legal legacies. The loosening of these legal constraints facilitated the reallocation of land and resources towards higher-value uses. Data reveals correlations between estate acts, urbanization, and economic development during the decades surrounding the Industrial Revolution. |
| JEL: | D02 D61 D63 D86 K0 K11 N0 N43 N93 O12 P48 R12 R14 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14107&r=ure |
| By: | Eric J. Brunner; Stephen L. Ross; Ebonya L. Washington |
| 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 residents' 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. |
| JEL: | D72 H0 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14091&r=ure |
| By: | Jèrome Massiani (DDipartimento di Ingegneria Civile e Ambientale, Università di Trieste (Italy)); Romeo Danielis (Dipartimento di Scienze Economiche e Statistiche, Università di Trieste (Italy)); Edoardo Marcucci (Facoltà di Scienze Politiche, Università di Roma 3 (Italy)) |
| Abstract: | In this paper, we investigate the theoretical and empirical relevance of the distinction between generic goods and specific goods for the understanding of freight transport demand. Specific goods are Taylor-made for a single customer while generic goods are produced irrespective of the final customer who will buy them. Theoretically, the distinction lays on a different relationship with time, based for specific goods on a trade-off between transport duration and cost, and for generic goods on optimal stock. The distinction affects shippers’ valuation of freight transport attributes such as value of time, value of transport time reliability and value of the risk of loss and damages. The theoretical analysis has not so far been able to establish conclusively how shippers’ valuation of freight transport attributes is affected by the type of good produced. Hence, some empirical evidence derived from stated preference data collected among Italian shippers is used to shed some light on the topic. |
| Keywords: | generic good, specific good, freight transport, freight service evaluation, stated preferences. |
| JEL: | L91 R49 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:08_02&r=ure |
| By: | Mikel Larreina |
| Abstract: | In recent times the financial services industry has experienced a major transformation, in which markets and players have been globalised and consolidated. Certain financial centres have concentrated on financial firms and markets, engendering considerable research on the foundations of their pre-eminence. Nevertheless, the growth of financial centres in peripheral regions has not been conveniently analysed, despite the fact that financial activity may play a major role in some economies. This paper provides a thorough survey of state-of-the-art literature, both on the transformation of the financial marketplace, and on the rise of global financial centres, devoting especial attention to the appearance of peripheral financial centres. The Scottish case is studied, among other aspects, through the use of Input-Output multipliers, to determine the dramatic role financial services have to play in this region’s economy. This approach advanced may be adapted to other locations, to help to assess the specific impact of financial centres and to draw attention to possible problems arising from overdependence on their activity. |
| Keywords: | Financial centres, Scotland, financial cluster, Input-Output, regional economy. |
| JEL: | R11 R15 G29 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:san:crieff:0805&r=ure |
| By: | Timothy K.M. Beatty and Dag Einar Sommervoll (Statistics Norway) |
| Abstract: | This paper considers statistical discrimination in rental markets, using a rich data set on rental contracts from Norway. We find that tenants born abroad pay a statistically significant and economically important premium for their dwelling units after controlling for a comprehensive set of apartment, individual and contract specific covariates. We also find that the premium is largest for tenants of African origin. Moreover, the children of parents born abroad also face a statistically significant and economically important rental premium. |
| Keywords: | Statistical Discrimination; Rental Markets; Hedonic Regression |
| JEL: | J15 R21 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:547&r=ure |
| By: | Paulo Horta (CMVM – Comissão do Mercado de Valores Mobiliários); Carlos Mendes (UNINOVA – DEE, Faculdade de Ciências e Tecnologia, Universidade Nova de Lisboa); Isabel Vieira (Universidade de Évora) |
| Abstract: | This study assesses whether capital markets of developed countries reflect the effects of financial contagion from the US subprime crisis and, in such case, if the intensity of contagion differs across countries. Adopting a definition of contagion that relates the phenomenon to an increase of cross-market linkages following a shock, copula models are used to analyse how the connections between the US and each market in the sample, evolved from the pre-crisis to the crisis period. The results suggest that markets in Canada, Japan, Italy, France and the United Kingdom display significant levels of contagion, which are less relevant in Germany. Canada appears to be the country where the highest intensity of contagion is observed. |
| Keywords: | G7, subprime crisis, contagion, copula, event study. |
| JEL: | F30 G14 G15 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2008_08&r=ure |
| By: | Alessandra Fogli; Laura Veldkamp |
| Abstract: | One of the most dramatic economic transformations of the past century has been the entry of women into the labor force. While many theories explain why this change took place, we investigate the process of transition itself. We argue that local information transmission generates changes in participation that are geographically heterogeneous, locally correlated and smooth in the aggregate, just like those observed in our data. In our model, women learn about the effects of maternal employment on children by observing nearby employed women. When few women participate in the labor force, data is scarce and participation rises slowly. As information accumulates in some regions, the effects of maternal employment become less uncertain, and more women in that region participate. Learning accelerates, labor force participation rises faster, and regional participation rates diverge. Eventually, information diffuses throughout the economy, beliefs converge to the truth, participation flattens out and regions become more similar again. To investigate the empirical relevance of our theory, we use a new county-level data set to compare our calibrated model to the time-series and geographic patterns of participation. |
| JEL: | E2 J16 N32 R1 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14097&r=ure |