nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2008‒10‒21
39 papers chosen by
Steve Ross
University of Connecticut

  1. An Impact Evaluation of Chile’s Progressive Housing Program By Luis Marcano; Inder J. Ruprah
  2. City Beautiful By Gerald A. Carlino; Albert Saiz
  3. Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain? By Edward L. Glaeser; William R. Kerr
  4. How to Improve the Capture of Urban Goods Movement Data? By Danièle Patier; Jean-Louis Routhier
  5. Identification of relationship between housing difficulty and property values in urban areas By Montrone, Silvestro; Perchinunno, Paola; Torre, Carmelo Maria
  6. On the impact of labor market matching on regional disparities (CORE Discussion Paper 2008/46) By Tharakan, J.; Tropeano, J.P.
  7. Quality of Life in Buenos Aires Neighborhoods: Hedonic Price Regressions and the Life Satisfaction Approach By Guillermo Cruces Author-X-Name_First: Guillermo Author-X-Name_Last: Cruces; Andres Ham Author-X-Name_First: Andres Author-X-Name_Last: Ham; Martin Tetaz Author-X-Name_First: Martin Author-X-Name_Last: Tetaz
  8. The rise and fall of spatial inequalities in France: A long-run perspective By Pierre-Philippe Combes; Miren Lafourcade; Jacques-François Thisse; Jean-Claude Toutain
  9. Social Interactions, Network Fluidity and Network Effects By Catherine Tucker; ;
  10. Network Effects and Geographic Concentration of Industry By Zhu Wang; Daniel Yi Xu
  11. Indústria transformadora portuguesa: especialização das regiões e/ou concentração geográfica de indústrias? By Natércia Godinho Mira
  12. Quality of Life in Montevideo By Giorgina Piani Author-X-Name_First: Giorgina Author-X-Name_Last: Piani; Zuleika Ferre Author-X-Name_First: Zuleika Author-X-Name_Last: Ferre; Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman
  13. Race to the top and race to the bottom: Tax competition in rural China: By Yao, Yi; Zhang, Xiaobo
  15. Spatial inequalities explained - Evidence from Burkina Faso By Johannes Gräb; Michael Grimm
  16. An Agent-based Model of Retail Location with Complementary Goods By Arthur Huang; David Levinson
  17. Measuring the Importance of Labor Market Networks By Hellerstein, Judith K.; McInerney, Melissa; Neumark, David
  18. Should you compete or cooperate with your schoolmates? By Antonio Filippin; Massimiliano Bratti; Daniele Checchi
  19. An Empirical Test of the Heckman and Rubinstein GED Mixed-Signal: Evidence from Prison By Jason Aimone
  20. Perception of Own Death Risk : A Reassessment of Road-Traffic Mortality Risk By ANDERSSON Henrik
  21. The Contribution of New Businesses to Regional Employment - An Empirical Analysis of the Direct Employment Effect By Michael Fritsch; Yvonne Schindele
  22. Am I Missing Something? The Effects of Absence from Class on Student Performance By Arulampalam, Wiji; Naylor, Robin; Smith, Jeremy
  23. Ensuring Hinterland Access The Role of Port Authorities By Peter W. de Langen
  24. Female-Headed Households and Homeownership in Latin America By Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman
  25. Gender Differentials in Judicial Proceedings: Field Evidence from Housing-Related Cases in Uruguay By Eduardo Gandelman Author-X-Name_First: Eduardo Author-X-Name_Last: Gandelman; Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman; Julie Rothschild Author-X-Name_First: Julie Author-X-Name_Last: Rothschild
  26. "Tax Competition, Public Good Provision, and Income Redistribution: The Case of Linear Capital Income Tax" By Toshihiro Ihori; C.C. Yang
  27. Knowledge Production in Nanomaterials: An Application of Spatial Filtering to Regional Systems of Innovation By Grimpe, Christoph; Patuelli, Roberto
  28. Estimating a Model of Strategic Store Network Choice with Policy Simulation By Mitsukuni Nishida; ;
  29. The Incentives to Cooperate in Local Public Goods Supply: A Repeated Game with Imperfect Monitoring By CHEIKBOSSIAN, Guillaume; SAND-ZANTMAN, Wilfried
  30. The Economic Impact of Olympic Games: Evidence from Stock Markets By Dick, Christian D.; Wang, Qingwei
  31. Fear of Crime: Does Trust and Community Participation Matter? By Pavel Luengas; Inder J. Ruprah
  32. Fiscal decentralization and economic growth in Central and Eastern Europe By Andrés Rodríguez-Pose; Anne Krøijer
  33. High-Technology Entrepreneurship in Silicon Valley Opportunities and Opportunity Costs By Robert Fairlie; Aaron Chatterji;
  34. Caught in the US Subprime Meltdown 2007/2008 : Germany Loses Its Wallet but Escapes Major Harm By Stefan Kooths; Matthias Rieger
  35. Railroads and the Rise of the Factory: Evidence for the United States, 1850-70 By Jeremy Atack; Michael R. Haines; Robert A. Margo
  36. Urbanization and the spread of diseases of affluence in China By Van der Poel, E; O'Donnell, O; van Doorslaer, E
  37. "A Simple Proposal to Resolve the Disruption of Counterparty Risk In Short-Term Credit Markets" By Jan Kregel
  38. Quality of life in urban neighborhoods in Metropolitan Lima, Peru By Lorena Alcazar Author-X-Name_First: Lorena Author-X-Name_Last: Alcazar; Raul Andrade Author-X-Name_First: Raul Author-X-Name_Last: Andrade
  39. Will the TARP Succeed? Lessons From Japan By Takeo Hoshi; Anil K Kashyap

  1. 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: This paper evaluates Progressive Housing Program; a public housing program that facilitates the purchase of a new home. The evaluation finds that the program’s package (savings requirement, voucher and mortgage) design is inappropriate if the program is targeted to the poor. In fact the pro-poor targeting of the program was poor with high under-coverage and high leakage. Further, the benefit, a minimum quality new house, was not sustainable as many households slipped back into the housing shortage category overtime. An impact evaluation reveals that although the program had significant positive effects on materiality conditions (access to water, sewerage, and electricity), it had a negative effect on overcrowding, and had no discernable effects on welfare indicators (poverty, school attendance, occupation ratio, etc.). This could be due to high residential segregation that resulted from attempting to maximize the number of housing solutions on the cheap. The study also cautions against the mechanical use of cost benefit calculations for policy decisions: the program’s internal rate of return was higher than the official cut off rate of 12%.
    Keywords: Housing Program, Poverty, Segregation, Impact Evaluation, Housing Shortage, Cost-Benefits Analysis
    JEL: R31 H43 I38
    Date: 2008–06
  2. By: Gerald A. Carlino; Albert Saiz
    Abstract: The City Beautiful movement, which in the early 20th century advocated city beautification as a way to improve the living conditions and civic virtues of the urban dweller, had languished by the Great Depression. Today, new urban economic theorists and policymakers are coming to see the provision of consumer leisure amenities as a way to attract population, especially the highly skilled and their employers. However, past studies have provided only indirect evidence of the importance of leisure amenities for urban development. In this paper we propose and validate the number of leisure trips to metropolitan statistical areas (MSAs) as a measure of consumers' revealed preferences for local leisure-oriented amenities. Population and employment growth in the 1990s was about 2 percent higher in an MSA with twice as many leisure visits: the third most important predictor of recent population growth in standardized terms. Moreover, this variable does a good job of forecasting out-of-sample growth for the period 2000-2006. “Beautiful cities” disproportionally attracted highly educated individuals and experienced faster housing price appreciation, especially in supply-inelastic markets. Investment by local government in new public recreational areas within an MSA was positively associated with higher subsequent city attractiveness. In contrast to the generally declining trends in the American central city, neighborhoods that were close to “central recreational districts” have experienced economic growth, albeit at the cost of minority displacement.
    Keywords: Cities and towns
    Date: 2008
  3. By: Edward L. Glaeser (Harvard University, John F. Kennedy School of Government; Faculty of Arts and Sciences); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.
    Keywords: Entrepreneurship, Industrial Organization, Agglomeration, Labor Markets, Input-Output Flows, Innovation, Research and Development, Patents.
    JEL: J2 L0 L1 L2 L6 O3 R2
    Date: 2008–10
  4. By: Danièle Patier (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Jean-Louis Routhier (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: The surveys specifically focused on the thorough knowledge of urban freight transport appeared about ten years ago. The local problematic of goods transport at local level was partially taken into account by the city planners and by the researchers: until recent years, the integration of goods transport in the total urban flows models was estimated applying a multiplying factor to car traffic. Delivering goods was not considered like a concern.Because of the quick growth of car traffic in the cities, the main stakes changed too: the fight against traffic congestion, the management of the lack of space (shipment consolidation and storage), the attempts to reduce local environmental impacts and global externalities (energy saving, reduction of greenhouse gas emissions), and economic valuation of city centres (under the pressure of a slowed down economic growth).All these changes were taking place in a context in which available rooms for manoeuvre were limited by factors such as congestion, concerns about the quality of urban life and budget restriction. It resulted in a growing unease on the freight transport industry and the city authorities, the latter having little or no data, methods and references in order to elaborate a satisfactory policy framework.
    Keywords: surveys on urban freight transport ; urban freight movements ; urban freight data collection ; urban goods data collection ; diversity of measurement units and methods ; state of the art
    Date: 2008
  5. By: Montrone, Silvestro; Perchinunno, Paola; Torre, Carmelo Maria
    Abstract: The objective of the present work is to use statistical data to identify territorial zones characterized by the correlation between urban access to services and quality of housing and the value of property ownership. While poverty is widely accepted to be an inherently multi-dimensional concept, it has proved very difficult to develop measures that both capture this multidimensionality and make comparisons over time and space easy. With this in mind, we attempt to apply a Total Fuzzy and Relative (TFR) approach, based on a fuzzy measure of the degree of association of an individual to the totality of the poor and an approach of semantic distance (Munda, 1995), based on the definition of a “fuzzy distance” as a discriminating reference to rank the availability to property in real estate market, as complement of urban poverty, in a specific case (the Italian City of Bari).
    Keywords: Urban Difficulty, Scan Statistics, Fuzzy logic, Property appraisal
    JEL: C5 R2 R31 C1
    Date: 2008–10
  6. By: Tharakan, J.; Tropeano, J.P.
    Abstract: We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.
    JEL: J61 J42 R12
    Date: 2008
  7. By: Guillermo Cruces Author-X-Name_First: Guillermo Author-X-Name_Last: Cruces; Andres Ham Author-X-Name_First: Andres Author-X-Name_Last: Ham; Martin Tetaz Author-X-Name_First: Martin Author-X-Name_Last: Tetaz
    Abstract: This paper studies quality of life in urban neighborhoods in the Buenos Aires Metropolitan Area. First, hedonic price regressions for residential prices are augmented with neighborhood characteristics, based on a real estate database with indicators on each property’s distance to public facilities and amenities, and on a smaller survey with greater detail. Second, following recent developments in the field of happiness research, the document assesses the importance of different neighborhood characteristics on quality of life by interacting objective and subjective indicators. Indices of quality of life related to local amenities are derived for the different neighborhoods for both the hedonic regression and life satisfaction approaches. The results indicate a strong but not perfect correlation between real estate prices, income levels and neighborhood characteristics, suggesting scope for welfare-improving policy interventions.
    Date: 2008–09
  8. By: Pierre-Philippe Combes; Miren Lafourcade; Jacques-François Thisse; Jean-Claude Toutain
    Abstract: This paper uses a unique database that provides value-added, employment, and population levels for the entire set of French departments for the years 1860, 1930, and 2000. These data cover three sectors: agriculture, manufacturing, and services. This allows us to study the evolution of spatial inequalities within France and to test the empirical relevance of economic geography predictions over the long run. The evidence confirms the existence of a bell-shaped evolution of the spatial concentration of manufacturing and services. In contrast, labor productivity has been converging across departments. Last, our study also confirms the presence of strong agglomeration economies during the full time-period. Market potential during the first sub-period (1860-1930), and higher education during the second (1930-2000), together with sectoral diversity, account for the spatial distribution of these gains.
    Date: 2008
  9. By: Catherine Tucker (MIT Marketing); ;
    Abstract: This paper asks how much the strength of network effects depends on the stability and structure of the underlying social network. I answer this using extensive micro-data on all potential adopters of a firm's internal video-messaging system and their subsequent video-messaging. This firm's New York office had to be relocated due to the terrorist attacks of 2001 which lead to a physical re-organization of teams in that city but not in other comparable cities. I study the consequences of this disruption for adoption of video-messaging and the size of network effects. I find evidence that generally network effects are based on direct social interactions. Potential adopters react to adoption only by people they wish to communicate with: They are not affected by adoption by other people. However, when there is a disruption to the social network and communication patterns become less predictable, users become more responsive to adoption by a broader group of users.
    Keywords: Network Effects, Local Networks, Stability, Option-Value
    JEL: K21 Q31 Q34 L42 L40 L12
    Date: 2008–10
  10. By: Zhu Wang (Economic Research Department, Federal Reserve Bank of Kansas City.); Daniel Yi Xu (Department of Economics, New York University.)
    Abstract: This paper provides a theory of “family network”, in contrast to “local externalities”, to explain the geographic concentration of industry. For many industries, one most important source of entrants is spinoffs, who typically locate near parent firms and benefit from knowledge linkage and business relation within the family network. As a result, firms are more likely to enter and less likely to exit if they are associated with a large family. Using a unique dataset of US automobile industry in its early years, we identify six historically important production centers and sixty spinoff families. Our empirical analysis disentangles the effect of “family networks” from other “local externalities,” and provides strong evidence that it was the former rather than the latter that caused the geographic concentration of US automobile production.
    Keywords: Spinoffs, Entry and Exit, Geography of Industry
    JEL: J6 L0 R1
    Date: 2008–09
  11. By: Natércia Godinho Mira (Universidade de Evora, Departamento de Gestão, CEFAGE-UE)
    Abstract: In spite of the relation between industrial specialisation and geographic concentration of industries, these are two different concepts. After clarifying both, the aim of this paper is to analyze the structural change on Portuguese manufacturing industry from two perspectives: the specialisation of regions in particular sectors and the regional concentration of those sectors (industries). Our empirical study uses yearly data for the period 1996 - 2004 and made use of absolute indicators to measure whether individual industries became more or less concentrated in Portuguese regions, and whether the industry structure of the Portuguese regions became more similar. In the first case we talk about geographical concentration of industries, in the second about a decrease of sectoral specialisation of regions. The results suggest a high level of concentration and a variable level of specialisation between regions.
    Keywords: European Integration; Industrial Specialisation; Geographic Concentration; Industries Location.
    JEL: F15 L60 R10 R30
    Date: 2008
  12. By: Giorgina Piani Author-X-Name_First: Giorgina Author-X-Name_Last: Piani; Zuleika Ferre Author-X-Name_First: Zuleika Author-X-Name_Last: Ferre; Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman
    Abstract: This paper analyzes various dimensions of the quality of life in Montevideo. The paper finds that satisfaction with various public goods and services at the neighborhood level play a minor role in the overall reported well-being of individuals and in the satisfaction of life domains, such as leisure, social life, family, health, housing, neighborhood economic situation and work. This is in spite the fact that there are significant disparities in a wide range of indicators among those living in different areas of the city. The results further suggest that differences in overall happiness and in domain satisfaction are mostly due to differences in individual outcomes like education, health, labor situation and housing quality.
    Date: 2008–09
  13. By: Yao, Yi; Zhang, Xiaobo
    Abstract: "Fiscal federalism has been argued to intensify regional competition and promote economic growth. This paper is the first, to our knowledge, to empirically assess the patterns and extent of strategic tax competition between geographically neighboring governments in China. Using a panel data set containing data at the county level, we apply Anselin's (1995) local indicator of spatial association (LISA) approach to statistically test the existence of local capital tax competition and examine its determining factors. We find heterogeneous tax competition behaviors across regions. Under decentralized fiscal structure and centralized merit-based governance structure, local governments have strong incentives to compete with each other to attract mobile capital. Counties in the coastal areas with favorable initial conditions of larger tax base tend to “race to the bottom” by lowering tax rates so as to create a pro-business environment. In contrast, the local governments in poor regions have difficulty in competing with the governments on the coast to attract investment and develop the local nonfarm economy. Their local revenues are sometimes barely sufficient to cover the salaries of civil servants on the public payroll. Consequently, they are more likely to levy heavy taxes on existing enterprises, worsening the business investment environment. This leads to a “race to the top” in raising effective tax rate in lagging regions." from authors' abstract
    Keywords: Fiscal decentralization, Regional inequality, Tax competition, economic growth, Development strategies,
    Date: 2008
  14. By: Sonali Das (CSIR, Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Alain Kabundi (Department of Economics and Econometrics, University of Johannesburg)
    Abstract: This paper develops large-scale Bayesian Vector Autoregressive (BVAR) models, based on 268 quarterly series, for forecasting annualized real house price growth rates for large-, medium- and small-middle-segment housing for the South African economy. Given the in-sample period of 1980:01 to 2000:04, the large-scale BVARs, estimated under alternative hyperparameter values specifying the priors, are used to forecast real house price growth rates over a 24-quarter out-of-sample horizon of 2001:01 to 2006:04. The forecast performance of the large-scale BVARs are then compared with classical and Bayesian versions of univariate and multivariate Vector Autoregressive (VAR) models, merely comprising of the real growth rates of the large-, medium- and small-middle-segment houses, and a large-scale Dynamic Factor Model (DFM), which comprises of the same 268 variables included in the large-scale BVARs. Based on the one- to four-quarters ahead Root Mean Square Errors (RMSEs) over the out-of-sample horizon, we find the large-scale BVARs to not only outperform all the other alternative models, but to also predict the recent downturn in the real house price growth rates for the three categories of the middle-segment-housing over an ex ante period of 2007:01 to 2008:02.
    Keywords: Dynamic Factor Model, BVAR, Forecast Accuracy
    JEL: C11 C13 C33 C53
    Date: 2008–10
  15. By: Johannes Gräb (Georg-August-Universität Göttingen / Germany); Michael Grimm (ISS, The Hague / The Netherlands)
    Abstract: The literature shows that regional disparities in growth and poverty are often relatively high, that these regional disparities do not necessarily disappear as the economies grow and develop and that these disparities are itself in many cases an important driver of the overall performance of an economy. In this paper we make use of the advantage of a multilevel random coefficient model to explain spatial disparities in incomes among Burkinab`e households. Our findings show that it is not a geographical concentration of people with poor endowments that make areas poor in Burkina Faso. Household income disparities are largely driven by differences in neighborhood endowments and to a smaller extent by provincial or regional characteristics. We conclude that the policy should target small scale geographical units, such as villages. Providing infrastructure, enhancing the functioning of labor markets and fostering demand for education can compensate for climatical disadvantages.
    Keywords: Spatial inequality, poverty, multilevel modeling, decomposition, Sub-Saharan Africa
    JEL: C21 I32 O12 R12
    Date: 2008–07–23
  16. By: Arthur Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper examines the emergence of retail clusters on a supply chain network comprised of suppliers, retailers, and consumers. An agent-based model is proposed to investigate retail location distribution in a market of two complementary goods. The methodology controls for supplier locales and unit sales prices of retailers and suppliers; a consumer's willingness to patronize a retailer depends on the total travel distance of buying both goods. On a circle comprised of discrete locations, retailers play a non-cooperative game of location choice to maximize individual proÞts. Our Þndings suggest that the number of clusters in equilibrium follow a power-law distribution and that hierarchical distribution patterns are much more likely to occur than the spread-out ones. In addition, retailers of complementary goods tend to co-locate at supplier locales. Sensitivity tests on the number of retailers and retailers' sequence of moving are also performed.
    Keywords: clustering, agent-based model, location choice, power-law distribution pattern, retailing
    JEL: R30 L22
    Date: 2008
  17. By: Hellerstein, Judith K. (University of Maryland); McInerney, Melissa (College of William and Mary); Neumark, David (University of California, Irvine)
    Abstract: We specify and implement a test for the importance of network effects in determining the establishments at which people work, using recently-constructed matched employer-employee data at the establishment level. We explicitly measure the importance of network effects for groups broken out by race, ethnicity, and various measures of skill, for networks generated by residential proximity. The evidence indicates that labor market networks play an important role in hiring, more so for minorities and the less-skilled, especially among Hispanics, and that labor market networks appear to be race-based.
    Keywords: networks, race, ethnicity, immigrants
    JEL: J15 J61
    Date: 2008–10
  18. By: Antonio Filippin; Massimiliano Bratti (DEAS, University of Milan); Daniele Checchi (University of Milan)
    Abstract: Building upon some education studies finding that cooperative behaviour in class yields better achievements among students, this paper presents a simple model showing that free riding incentives lead to an insufficient degree of cooperation between schoolmates, which in turn decreases the overall achievement. A cooperative learning approach may instead emerge when competitive behaviour is negatively evaluated by schoolmates, especially when the class is more homogeneous in terms of students' characteristics (e.g., ability). Empirical evidence supporting our model is found using the 2003 wave of the OECD Programme for International Student Assessment (PISA) survey on students' literacy levels. A competitive learning approach has a positive individual return (higher in comprehensive educational systems), while student performance increases with the average cooperative behaviour, particularly in tracked educational systems.
    Keywords: cooperation; competition; PISA; student attitudes,
    Date: 2008–07–11
  19. By: Jason Aimone (Interdsciplinary Center for Economic Science, George Mason University)
    Abstract: Economists have begun to embrace the notion, already accepted by the market, that GEDs and High School Diplomas signal similar cognitive abilities, but different non-cognitive abilities. To better understand this phenomenon and its implications, this paper presents a study of an education environment, prison, which provides natural controls for non-cognitive abilities. The study reveals similarities in decisions between the two types of agents that are surprising in light of decisions made in standard educational environments. The results support the mixed-signal theory and furthermore suggest that stricter enforcement of discipline and other non-cognitive attributes may help to reduce dropout rates in non-prison educational facilities.
    Date: 2008–10
  20. By: ANDERSSON Henrik
    Date: 2008–10
  21. By: Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Yvonne Schindele (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We investigate regional differences in the contribution of newly founded businesses to regional employment. This is labeled the direct employment effect of new businesses. The analysis is at the spatial level of West German planning regions for the period 1984-2002. We find rather pronounced differences for the direct employment effect across regions. Regression analyses for explaining these differences show that the start-up rate, the education level of the regional workforce, and an entrepreneurial character of the regional technological regime have a positive impact on the direct employment effect of new businesses. The overall effect of population density is negative, but the marginal effect is positive for regions beyond a certain threshold. Our results suggest that the success of the new businesses is not at the expense of the incumbents but that direct and indirect employment effects of new businesses are positively interlinked.
    Keywords: Entrepreneurship, new business formation, regional development, direct employment effect
    JEL: L26 M13 O1 O18 R11
    Date: 2008–10–10
  22. By: Arulampalam, Wiji (University of Warwick); Naylor, Robin (University of Warwick); Smith, Jeremy (University of Warwick)
    Abstract: We exploit a rich administrative panel data-set for cohorts of Economics students at a UK university in order to identify causal effects of class absence on student performance. We utilise the panel properties of the data to control for unobserved heterogeneity across students and hence for endogeneity between absence and academic performance of students stemming from the likely influence of unobserved effort and ability on both absence and performance. Our estimations also exploit features of the data such as the random assignment of students to classes and information on the timetable of classes, which yield potential instruments in our identification strategy. Among other results, we find that there is a causal effect of absence on performance for students: missing class leads to poorer performance. There is evidence from a quantile regression specification that this is particularly true for better-performing students, consistent with our hypothesis that effects of absence on performance are likely to vary with factors such as student ability.
    Keywords: randomised experiments, quantile regression, selection correction, panel data, education, student performance, class absence
    JEL: C41 J24 I2
    Date: 2008–10
  23. By: Peter W. de Langen
    Abstract: n this paper, it is argued that port authorities can actively contribute to better hinterland access. Different types of involvement of the port authority are discussed, as well as reasons for such involvement. The analysis is explorative and aims to provide a basis for further discussion. The analysis applies to landlord port authorities (PAs) with public goals. Landlord port authorities have become more autonomous and take the initiative for expansion and redevelopment of port infrastructure. The activities of PAs can be classified in four broad categories: traffic management, customer management, area management and stakeholder management. PAs traditionally act as landlords but increasingly operate ‘beyond the landlord’ model. The main argument for a more active involvement of the PA is the fact that coordination in clusters as well as transport chains does not always emerge spontaneously, for various reasons. More coordination can lead to more efficient supply chains and more competitive ports. Consequently, PAs have incentives to invest to improve coordination in port clusters and supply chains.
    Date: 2008–03
  24. By: Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman
    Abstract: The gender of the household head has often been treated as an exogenous determinant of homeownership. This paper argues that several determinants of homeownership also affect household headship and that failing to explicitly account for this endogeneity leads to inconsistent results. Using individual level data for Chile, Honduras and Nicaragua, the paper shows that although on average women have lower probability of being homeowners, women who head households (single, separated or divorced) have a greater probability of attaining homeownership. Thus household level analysis should control for the endogeneity of household headship in order to properly address the gender effect on housing tenure. Estimating a bivariate probit model, the paper finds evidence that femaleheaded families have a lower probability of owning their home in Latin American countries. Without the endogeneity control this result was not present in eight countries.
    Date: 2008–01
  25. By: Eduardo Gandelman Author-X-Name_First: Eduardo Author-X-Name_Last: Gandelman; Nestor Gandelman Author-X-Name_First: Nestor Author-X-Name_Last: Gandelman; Julie Rothschild Author-X-Name_First: Julie Author-X-Name_Last: Rothschild
    Abstract: Using micro data on judicial proceedings in Uruguay, this paper presents evidence that female defendants receive more favorable treatment in courts than male defendants. This is due to longer foreclosure proceedings and higher probabilities of being granted extensions in evictions and dispossessions for female defendants.
    Date: 2008–01
  26. By: Toshihiro Ihori (Faculty of Economics, University of Tokyo); C.C. Yang (Institute of Economics, Academia Sinica and Department of Public Finance, National Chengchi University)
    Abstract: This paper considers a tax competition model in which regional government activities include income redistribution as well as public good provision. To incorporate the regional government function of income redistribution, we extend the tax system from the stylized proportional capital income tax to the linear capital income tax: the revenue collected from capital taxation in each region is used not only to provide the regional public good but also to offer a uniform lump-sum grant to each individual in the region. In contrast to Hoyt's (1991) finding that the extent to which public goods are undersupplied is monotonically increasing in the number of competing regions, we show that, regardless of the number of competing regions, all heterogeneous individuals concur with each other on the first-best provision of public goods; on the other hand, the size of income redistribution is monotonically decreasing in the number of competing regions.
    Date: 2008–10
  27. By: Grimpe, Christoph; Patuelli, Roberto
    Abstract: Nanomaterials are seen as a key technology for the 21st Century, and much is expected of them in terms of innovation and economic growth. They could open the way to many radically new applications, which would form the basis of innovative products. In this context, it seems all the more important for regions to put their own innovation systems in place, and to ensure that they offer a suitable location for such activities in order to benefit from the expected growth. Many regions have already done so by establishing ‘science parks’ and ‘nanoclusters’. As nanomaterials are still in their infancy, both public research institutes and private businesses could play a vital role in the process. This paper investigates what conditions and configurations allow a regional innovation system to be competitive in a cutting-edge technology like nanomaterials. We analyse European Patent Office data at the German district level (NUTS-3) on applications for nanomaterial patents, in order to chart the effects of localised research and development (R&D) in the public and private sector. We estimate two negative binomial models in a knowledge production function framework and include a spatial filtering approach to adjust for spatial effects. Our results indicate that there is a significant positive effect of both public and private R&D on the production of nanomaterial patents. Moreover, we find a positive interaction between them which hints at the importance of their co-location for realising the full potential of an emerging technology like nanomaterials.
    Keywords: nanotechnology, innovation, patents, Germany, spatial autocorrelation, spatial filtering
    JEL: L60 O32
    Date: 2008
  28. By: Mitsukuni Nishida (Department of Economics, University of Chicago); ;
    Abstract: Competition among multi-store chains is common in the retail industry. This paper proposes a general model of strategic store network choices by two chains. Unlike previous work on store network choice, it allows chains to choose not only which markets to open its stores but also how many stores to open in a market, internalizing the effects among their own stores on profits. To deal with the huge number of possible combinations of strategy profiles in their network choices, I exploit the lattice structure of the game. I show that a chain's trade-off between costs and benefits from clustering their stores in a market (within-market effect) can be either positive or negative to ensure existence of an equilibrium, thereby providing a way to freely estimate the effect from data. I apply the technique to market-level data from the convenience store industry in Okinawa, Japan. Integrating the model with revenue allows welfare interpretation of results. I find that the within-market effect is negative and as large as the business stealing effect, reduction in revenues due to presence of a rival chain store. The estimated structural model allows us to perform policy analysis. In particular, this paper considers how significantly the zoning regulation introduced in Japan in 1968 affects chains' store network choices. A counterfactual experiment of eliminating the current zoning regulation shows that in the new equilibrium chains would increase the number of their stores. Total surplus is also expected to increase, due to increase in aggregate sales and aggregate profits. The impacts of a hypothetical horizontal merger among two chains on product variety measured by the number of stores and economic welfare are also evaluated.
    Keywords: entry; retail location; supermodular game; zoning regulation; merger
    JEL: L13 L81 R52
    Date: 2008–10
  29. By: CHEIKBOSSIAN, Guillaume; SAND-ZANTMAN, Wilfried
    JEL: H7 C73
    Date: 2008–07
  30. By: Dick, Christian D.; Wang, Qingwei
    Abstract: By means of an event study of stock market reactions to the announcement of the Olympic Games host cities, we find a significant and positive announcement effect of hosting the Summer Games, with a cumulative abnormal return of about 2% within a few days. We do not find any significant results for the Winter Games. Neither do we detect a significant impact when bidders lose the competition. Our results differ from those of a similar study by Mirman and Sharma (2008), who find that the Winter Games are subject to a significantly negative announcement impact, while the Summer Games are not. Our results, however, rely on a larger sample of 15 Olympic events and are obtained by assessing the abnormal returns after the announcement against a “business–as–usual" situation (instead of testing the difference between winner group and loser group). Our findings are in line with economic intuition, since the Summer Games represent a larger event and are thus more likely to have a significant impact. We also find that among the winners, small economies tend to have greater cumulative abnormal returns than their large peers.
    Keywords: Olympic Games, economic impact, event study, stock markets
    JEL: G14 L83
    Date: 2008
  31. By: Pavel Luengas (Office of Evaluation and Oversight at the Interamerican Development Bank.); Inder J. Ruprah (Office of Evaluation and Oversight at the Interamerican Development Bank.)
    Abstract: This paper examines the association between trust and community involvement with fear of crime. Fear of crime is measured by three typical perception measures: neighborhood security; walking alone in the dark; and the risk of becoming a victim. The data is from Chile’s Victimization Survey. The techniques used are a multinomial regression and an impact –propensity score single difference- calculation. We find that while trust matters participation generally does not for fear. However, regressions leave open the direction of causality. An impact calculation confirms that participation in a neighborhood crime prevention program does not affect the fear of crime. Thus the evidence challenges the general idea that involvement in one’s community and the specific idea of community participation in neighborhood crime prevention programs reduce fear and increase feelings of safety.
    Keywords: Fear of crime, perceived safety, trust, community participation, multinomial logit regression, impact evaluation
    JEL: I31 I38 K14 H43
    Date: 2008–07
  32. By: Andrés Rodríguez-Pose (London School of Economics); Anne Krøijer (London School of Economics)
    Abstract: The majority of the literature on fiscal decentralization has tended to stress that the greater capacity of decentralized governments to tailor policies to local preferences and to be innovative in the provision of policies and public services, the greater the potential for economic efficiency and growth. There is, however, little empirical evidence to substantiate this claim. In this paper we examine, using a panel data approach with dynamic effects, the relationship between the level of fiscal decentralization and economic growth rates across 16 Central and Eastern European countries over the 1990-2004 period. Our findings suggest that, contrary to the majority view, there is a significant negative relationship between two out of three fiscal decentralization indicators included in the analysis and economic growth. However, the use of different time lags allows us to nuance this negative view and show that long term effects vary depending on the type of decentralization undertaken in each of the countries considered. While expenditure at and transfers to subnational tiers of government are negatively correlated with economic growth, taxes assigned at the subnational level evolve from having significantly negative to significantly positive correlation with the national growth rate. This supports the view that subnational governments with their own revenue source respond better to local demands and promote greater economic efficiency
    Keywords: fiscal decentralization; economic growth; efficiency; devolution; Central and Eastern Europe
    Date: 2008–10–10
  33. By: Robert Fairlie (University of California, Santa Cruz); Aaron Chatterji (Duke University);
    Abstract: The economic expansion of the late 1990s undoubtedly created many opportunities for business creation in Silicon Valley, but the opportunity cost of starting a business was also high during this period because of the exceptionally tight labor market. A new measure of entrepreneurship derived from matching monthly files from the Current Population Survey (CPS) is used to provide the first test of the hypothesis that entrepreneurship rates were high in Silicon Valley during the "Roaring 90s." Unlike previous measures of firm births based on large, nationally representative datasets, the new measure captures business creation at the individual-owner level, includes both employer and non-employer business starts, and focuses on only hi-tech industries. Estimates from the matched CPS data indicate that hi-tech entrepreneurship rates were lower in Silicon Valley than the rest of the United States during the period from January 1996 to February 2000. Controlling for the large concentration of immigrants and highly-educated workforce does not change the conclusion. Examining the post-boom period, we find that entrepreneurship rates in Silicon Valley increased from the late 1990s to the early 2000s. In contrast, trends in entrepreneurship rates in the United States were constant over this period. Although Silicon Valley may be an entrepreneurial location overall, the extremely tight labor market of the late 1990s, especially in hi-tech industries, may have suppressed business creation during this period.
    Keywords: entrepreneurship, Silicon Valley, hi-tech
    JEL: L26
    Date: 2008–09
  34. By: Stefan Kooths; Matthias Rieger
    Abstract: The ongoing financial crisis so far cost the German financial sector 38 billion Euros due to losses on its mortgage-related subprime bank exposures. This paper looks for the impact of these losses on the real sector of the economy. First, the financial sector is looked at as part of the overall macro economy in order to identify the direct impact of the write-offs and devaluations of financial assets on value-added and employment in the financial industry. In the second part of the paper the financial sector's role as enabler of real investment is analyzed. So far, there is no significant evidence that the credit creation capacity of the German banking system as a whole was negatively affected (as indicated by stable money multiplier and base equity ratio values). In particular, the flow of credit to non-financial businesses remains intact despite heavy turmoil within the financial sector. Also, the overall interest rate for corporate lending did hardly in-crease. Econometrically, a switching disequilibrium model and a market-clearing approached were setup to test for excess demand during the crisis and any general impact of the crisis on the credit market respectively. The statistical tests turned out to be little helpful for quantifying any major effect. We conclude that despite the substantial financial losses there is no major negative spill-over from the banking sector to the real economy in Germany.
    Keywords: Subprime crisis, credit market, financial sector, value-added
    Date: 2008
  35. By: Jeremy Atack; Michael R. Haines; Robert A. Margo
    Abstract: Over the course of the nineteenth century manufacturing in the United States shifted from artisan shop to factory production. At the same time United States experienced a "transportation revolution", a key component of which was the building of extensive railroad network. Using a newly created data set of manufacturing establishments linked to county level data on rail access from 1850-70, we ask whether the coming of the railroad increased establishment size in manufacturing. Difference-in-difference and instrument variable estimates suggest that the railroad had a positive effect on factory status. In other words, Adam Smith was right -- the division of labor in nineteenth century American manufacturing was limited by the extent of the market.
    JEL: N61 N71
    Date: 2008–10
  36. By: Van der Poel, E; O'Donnell, O; van Doorslaer, E
    Abstract: A new methodology is used to quantify, track and explain the distribution of obesity and hypertension across areas differentiated by their degree of urbanicity. We construct an index of urbanicity from longitudinal data on community characteristics from the China Health and Nutrition Survey and compute a rank-based measure of inequality in disease risk factors by degree of urbanicity. Prevalence rates almost doubled over the period 1991-2004 and the risk factors became less concentrated in more urbanized areas. Decomposition analysis shows that urbanicity-related inequalities are mostly attributable to differences in community level characteristics and to disparities in incomes and in the physical and farming activity of individuals.
    Keywords: China, urbanization, health inequalities, obesity, hypertension, decomposition
    Date: 2008–10
  37. By: Jan Kregel
    Abstract: The impaired risk assessment caused by the collapse of mortgage-backed securities is the major problem threatening the stability of the American financial system, yet it is not clear that removing these assets from institutional balance sheets, as the government has proposed, will make it easier to assess counterparty risk in short-term credit markets. Resolving the disruption of counterparty risk should be the first objective of policy, argues Senior Scholar Jan Kregel, since these markets provide basic liquidity support for institutions operating in the broader financial markets.
    Date: 2008–10
  38. By: Lorena Alcazar Author-X-Name_First: Lorena Author-X-Name_Last: Alcazar; Raul Andrade Author-X-Name_First: Raul Author-X-Name_Last: Andrade
    Abstract: This paper presents the results of the estimations of a quality of life (QoL) index focusing on three dimensions: individual factors, urban factors, and civil society. The study was mainly based on information collected through a survey applied in three districts of Lima: La Victoria, Los Olivos and Villa El Salvador. These districts are relatively similar in terms of income, although Villa El Salvador has a larger percentage of poor households. The results show that various indicators have different impacts on QoL. Two findings stand out. First, variables related to participation in civil society are statistically significant in all specifications used. Second, in La Victoria and Los Olivos, QoL is determined largely by indicators in the individual sphere, while the civil society sphere is more important in Villa El Salvador. These results are consistent with the collective action tradition of the Villa El Salvador district and with the market pattern of growth of Los Olivos.
    Date: 2008–09
  39. By: Takeo Hoshi; Anil K Kashyap
    Abstract: The U.S. government is hiring asset managers to purchase up to $700 billion of toxic real estate securities that are the center of the current credit crisis. Buying up assets, if done properly, might address the collective under-capitalization that is the fundamental problem plaguing the financial system. But, experience with financial crises in other countries suggests that success is by no means guaranteed. Japan was the largest other country where the banks were seriously undercapitalized and where asset purchases were a critical part of the government's response to the problem. The U.S. bailout plan is similar to the Japanese approach in that it does not clearly identify the capital problem as critical and instead proposes using AMCs to remove distressed assets from bank balance sheets. When Japan used AMCs, their effectiveness was limited in part because they did not purchase enough assets. AMCs did not help recapitalization, either, and Japan had to come up with different mechanisms to use public funds for recapitalization. Both these risks are also present for the U.S. plan.
    JEL: E44 G18 G28 G38
    Date: 2008–10

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