|
on Urban and Real Estate Economics |
| By: | Stephanie Riegg Cellini; Fernando Ferreira; Jesse Rothstein |
| Abstract: | This paper analyzes the impact of voter-approved school bond issues on school district balance sheets, local housing prices, and student achievement. We draw on the unique characteristics of California's system of school finance to obtain clean identification of bonds' causal effects, comparing districts in which school bond referenda passed or failed by narrow margins. We extend the traditional regression discontinuity (RD) design to account for the dynamic nature of bond referenda, since the probability of future proposals depends on the outcomes of past elections. By law, bond revenues can be used only for school facilities projects. We find that bond funds indeed stick exclusively in the capital account, with no effect on current expenditures or other revenues. Our housing market estimates indicate that California school districts under-invest in school facilities: passing a referendum causes immediate, sizable increases in home prices, implying a willingness-to-pay on the part of marginal homebuyers of $1.50 or more for each $1 of facility spending. These effects do not appear to be driven by changes in the income or racial composition of homeowners, and the school bond impact on test scores cannot explain more than a small portion of the total housing price effect. Our estimates indicate that parents value improvements in other dimensions of school output (e.g., safety) that may be not captured by test scores. |
| JEL: | C23 H21 H41 H71 H75 I22 R13 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14516&r=ure |
| By: | Jonah E. Rockoff; Lesley J. Turner |
| Abstract: | In November of 2007, the New York City Department of Education assigned elementary and middle schools a letter grade (A to F) under a new accountability system. Grades were based on numeric scores derived from student achievement and other school environmental factors such as attendance, and were linked to a system of rewards and consequences. We use the discontinuities in the assignment of grades to estimate the impact of accountability in the short run. Specifically, we examine student achievement in English Language Arts and mathematics (measured in January and March of 2008, respectively) using school level aggregate data. Although schools had only a few months to respond to the release of accountability grades, we find that receipt of a low grade significantly increased student achievement in both subjects, with larger effects in math. We find no evidence that these grades were related to the percentage of students tested, implying that accountability can cause real changes in school quality that increase student achievement over a short time horizon. We also find that parental evaluations of educational quality improved for schools receiving low accountability grades. However, changes in survey response rates hold open the possibility of selection bias in these complementary results. |
| JEL: | H52 H75 I21 I28 L38 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14564&r=ure |
| By: | Dean Baker |
| Abstract: | This report states that bringing about the rapid adjustment of house prices to trend levels is the best means of returning stability to the housing market. The paper also calls for the restriction of GSE capital in bubble-inflated markets, with the intent of forcing house prices in these areas to return to trend level. The removal of capital from bubble markets and the consequent infusion of loans into non-bubble markets would stabilize prices in these areas, thus preventing a downward price spiral and overshooting of trend-level prices on the negative side. The report also advocates mortgage appraisal based on a price-to-rent ratio of 15 to 1. As well, the paper suggests giving families facing foreclosure the right to rent their homes both to keep them in their houses and offer banks real incentives to avoid foreclosure. |
| Keywords: | housing bubble, home prices, household wealth, right to rent |
| JEL: | R21 L85 O51 E E21 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2008-33&r=ure |
| By: | Jos van Ommeren (VU University Amsterdam) |
| Abstract: | According to economic theory, there are no strong reasons to tax (or to subsidise) residential moves, although low levels of taxation may be potentially justified to deal with the presence of externalities and economic stability. This is in contrast to practise in most countries where governments have created strong barriers to moving (transaction taxes, rent control) which induces substantial transaction costs. Likely, the welfare losses due to these government-induced transaction costs are substantial. |
| Keywords: | Housing market; residential mobility; transaction costs; transaction taxes; rent control |
| JEL: | R21 R23 |
| Date: | 2008–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080099&r=ure |
| By: | Alicia H. Munnell; Mauricio Soto; |
| Abstract: | House prices rose 60 percent between 2000 and 2007 before the housing bubble burst. The question is whether the housing boom made people better or worse prepared for retirement. If they extracted the equity from their home through some form of housing-related debt and consumed all their borrowings, they will be left with additional debt and no additional assets and probably will be worse off in retirement. If they did not borrow and consume their equity, they will have more housing wealth to tap in retirement and will be better off... |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2008-8-12&r=ure |
| By: | Anthony Briant; Pierre-Philippe Combes; Miren Lafourcade |
| Abstract: | This paper evaluates, in the context of economic geography estimates, the magnitude of the distortions arising from the choice of zoning system, which is also known as the Modifiable Areal Unit Problem (MAUP). We consider three standard economic geography exercises (the analysis of spatial concentration, agglomeration economies, and trade determinants), using various French zoning systems differentiated according to the size and shape of spatial units, which are the two main determinants of the MAUP. While size matters a little, shape does so much less. Both dimensions seem to be of secondary importance compared to specification issues. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-66&r=ure |
| By: | Brown, Jason P.; Florax, Raymond J.G.M.; McNamara, Kevin T. |
| Abstract: | The paper starts with a discussion of a conceptual model of location factors in U.S. manufacturing investment at the state level. The purpose of the paper is to test the relative importance of growth factors influencing investment and whether or not they have changed in importance over time. These factors include agglomeration, market structure, labor, infrastructure, and fiscal policy. A better understanding of investment flows in the manufacturing sector will help determine how growth factors have changed over time and which economic development policies may be most appropriate at targeting the sector. The analysis covers the time period 1994 to 2006 for the 48 contiguous states, with data taken from the Annual Survey of Manufactures, the Bureau of Economic Analysis, and the Bureau of Labor Statistics. Panel methods are used to test for fixed effects due to heterogeneity across states. Spatial panel methods with time effects are used for determination and specification of spatial and temporal effects. Empirical results are consistent across the empirical models put forth. Results suggest that market demand remains one of the most important location factors of manufacturing investment. Investment also goes to states with more productive labor and localized agglomeration of manufacturing activity. |
| Keywords: | manufacturing, investment, location factors, Community/Rural/Urban Development, L60, R11, R30, |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:puaewp:42502&r=ure |
| By: | Pieter A. Gautier (VU University Amsterdam, and CEPR); Yves Zenou (Stockholm University and Research Institute of Industrial Economics, Sweden) |
| Abstract: | We show how small initial wealth differences between low skilled black and white workers can generate large differences in their labor-market outcomes. This even occurs in the absence of a taste for discrimination against blacks or exogenous differences in the distance to jobs. Because of the initial wealth difference, blacks cannot afford cars while whites can. Car ownership allows whites to reach more jobs per unit of time and this gives them a better bargaining position. As a result, in equilibrium, blacks end up with both higher unemployment rates and lower wages than whites. Furthermore, it takes more time for blacks to reach their jobs even though they travel less miles. Those predictions are consistent with the data. Better access to capital markets or better public transportation will reduce the differences in labor market outcomes. |
| Keywords: | Transportation; mismatch; job search; spatial labor markets; multiple job centers; ethnic minorities |
| JEL: | D83 J15 J64 R1 |
| Date: | 2008–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080106&r=ure |
| By: | Brian A. Jacob; Jens Ludwig |
| Abstract: | This study estimates the effects of means-tested housing programs on labor supply using data from a randomized housing voucher wait-list lottery in Chicago. Evidence for the net effects of housing programs on labor supply is central to a wide range of policy decisions about how to provide housing assistance to the poor. Economic theory is ambiguous about the expected sign of any labor supply response. We find that among working-age, able-bodied adults, housing voucher use reduces quarterly labor force participation rates by 4 percentage points (6 percent of the control complier mean) and quarterly earnings by $285 (10 percent), and increases social program participation rates by 2 percentage points (16 percent of the control mean). These impacts are toward the lower end of the range of recent estimates from other studies of housing programs, but nonetheless do still imply that housing vouchers reduce labor supply. |
| JEL: | I38 J22 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14570&r=ure |
| By: | Brian Jacob; Jens Ludwig |
| Abstract: | This review paper, prepared for the forthcoming Russell Sage volume Changing Poverty, considers the ability of different education policies to improve the learning outcomes of low-income children in America. Disagreements on this question stem in part from different beliefs about the problems with our nation's public schools. In our view there is some empirical support for each of the general concerns that have been raised about public schools serving high-poverty student populations, including: the need for more funding for those school inputs where additional spending is likely to pass a benefit-cost test; limited capacity of many schools to substantially improve student learning by improving the quality of instruction on their own; and the need for improved incentives for both teachers and students, and for additional operational flexibility. Evidence suggests that the most productive changes to existing education policies are likely to come from increased investments in early childhood education for poor children, improving the design of the federal No Child Left Behind accountability system, providing educators with incentives to adopt practices with a compelling research base while expanding efforts to develop and identify effective instructional regimes, and continued support and evaluation of a variety of public school choice options. |
| JEL: | I20 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14550&r=ure |
| By: | Michelle J. White |
| Abstract: | This paper discusses four bankruptcy-related policy issues. First, what is the economic rationale for having a bankruptcy procedure at all and what defines an economically efficient bankruptcy procedure? Second, why did the number of U.S. bankruptcy filings increase so dramatically between 1980 and 2005? Third, a major bankruptcy reform went into effect in the U.S. in 2005—what did it do and how did it affect credit and mortgage markets? Finally, the paper discusses the mortgage crisis, the high social cost of foreclosures, and the difficulty of avoiding foreclosure by voluntarily renegotiation of mortgage contracts, even when such renegotiations are in the joint interest of debtors and creditors. I also discuss the pros and cons of government programs to refinance mortgages and the possibility of giving bankruptcy judges new power to change the terms of mortgage contracts in bankruptcy. |
| JEL: | E44 K35 R31 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14549&r=ure |
| By: | Florencia Lopez-Boo |
| Abstract: | This paper examines the effect of labor market opportunities on schoolingemployment decisions in 12 urban areas in Argentina over 12 years, emphasizing the recession/crisis years 1998-2002. Over “typical” years deteriorating job rates increase the probability of attending school and decrease the probability of combining work and school, particularly for boys; the probability of being in school for secondary school children was about 6 percent higher in 2002 than in 1998. These estimates account for the fact that a new Federal Education Law (FEL) in 1996 extended mandatory education to 10 years. Differences across regions in implementation and differences in exposure across cohorts induced by the timing of the Law reveal that children in provinces fully implementing the FEL were 3 percent more likely to be in school and 1.6 percent points less likely to be working. |
| Keywords: | schooling decision, macroeconomic shocks, education policy |
| JEL: | I21 J31 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4602&r=ure |
| By: | Fosgerau, Mogens |
| Abstract: | This paper investigates the distribution of delays during a repeatedly occurring demand peak in a congested facility with random capacity and demand, such as an airport or an urban road. Congestion is described in the form of a dynamic queue using the Vickrey bottleneck model and assuming Nash equilibrium in arrival times. The paper shows that the expected delay and the variance of delay vary differently over time during the peak and must hence be considered separately. The paper gives some characterization of how the expected delay and the variance of delay are related, which explain the looping phenomenon that has now been observed a number of times. Empirical illustration is provided. |
| Keywords: | Bottleneck model; Random capacity; Congestion; Nash Equilibrium; Loop |
| JEL: | D8 R41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11994&r=ure |
| By: | Jacques Mairesse; Benoit Mulkay |
| Abstract: | This paper is an attempt to assess the existence and magnitude of local research spillovers in France. We rely on the model of an extended production function (Cobb-Douglas and Translog) with both local and neighborhood R&D capital stocks. We estimate this model on 312 employment areas as of 1999, first for the whole economy, then separately for five large manufacturing industries. The estimated elasticities of productivity with respect to R&D capital are significant and plausible, both within own-area and across neighboring areas as well as within own-industry, but they are weaker across different industries. |
| JEL: | C21 O30 O32 O47 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14552&r=ure |
| By: | Dae-Jin Lee; Maria Durban |
| Abstract: | Penalized splines (P-splines) and individual random effects are used for the analysis of spatial count data. P-splines are represented as mixed models to give a unified approach to the model estimation procedure. First, a model where the spatial variation is modelled by a two-dimensional P-spline at the centroids of the areas or regions is considered. In addition, individual area-effects are incorporated as random effects to account for individual variation among regions. Finally, the model is extended by considering a conditional autoregressive (CAR) structure for the random effects, these are the so called “Smooth-CAR” models, with the aim of separating the large-scale geographical trend, and local spatial correlation. The methodology proposed is applied to the analysis of lip cancer incidence rates in Scotland. |
| Keywords: | Mixed models, P-splines, Overdispersion, Negative Binomial, PQL, CAR models, Scottish lip cancer data |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:ws085820&r=ure |
| By: | Francisca Richter |
| Abstract: | A quantile regression model is used to identify the main neighborhood characteristics associated with high foreclosure rates in weak market neighborhoods, specifically for two counties in Ohio and one in Pennsylvania. A decomposition technique by Machado and Mata (2005) allows separating foreclosure filing rate differentials across counties into two components: the first due to differences in the levels of neighborhood characteristics and the second due to differences in the model parameters. At higher than median rates, foreclosure rate differentials between counties in Ohio are mainly explained by the levels of these characteristics. However, foreclosure rate differences between counties across states are mainly explained by the parameter component, suggesting that state level effects might have contributed to shape foreclosure rate outcomes. |
| Keywords: | Foreclosure ; Federal Reserve District, 4th ; Economic conditions - Ohio ; Economic conditions - Pennsylvania |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0811&r=ure |
| By: | Karlsson, Charlie (Jönköping International Business School); Backman, Mikaela (Jönköping International Business School) |
| Abstract: | This paper investigates the impact human capital has on new firm formation, traditionally expected to have a positive influence. Individuals are attracted to regions with a stimulating atmosphere and tend to stay within the same region. Since human capital is partly spatially bounded, the size of municipality accessibility to human capital is expected to have a larger impact than intra-regional and inter-regional interaction. The empirical analysis is based on data on new firm formation at the municipality level in Sweden and accessibility to human capital, defined as minimum three years at tertiary level. The new firm formation is both measured in absolute and in relative terms. In the analysis, the municipalities are divided into four groups; (i) all municipalities, (ii) central municipalities (ii) municipalities within the hinterland in large functional regions and (iii) municipalities within the hinterland in small functional regions. This is done to make the comparison easy. The results indicate that it is the local market, measured as the size of the municipality accessibility to human capital that has a positive impact on new firm formation. Income per capita has a positive impact and average firm size has a negative impact on new firm formation. |
| Keywords: | human capital; new firm formation; municipalities; accessibility; Sweden |
| JEL: | L26 R11 |
| Date: | 2008–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hjiseg:0001&r=ure |
| By: | Nicole Adler (Hebrew University of Jerusalem, Israel); Chris Nash (Institute for Transport Studies, Leeds, England); Eric Pels (VU University Amsterdam) |
| Abstract: | This paper develops a methodology to assess transport infrastructure investments and their effects on a Nash equilibria taking into account competition between multiple privatized transport operator types. The operators, including high-speed rail, hub and spoke legacy airlines and low cost carriers, maximize profit functions via prices, frequency and train/plane sizes, given infrastructure provision and costs and environmental charges. The methodology is subsequently applied to all 27 European Union countries, specifically analyzing four of the prioritized Trans-European Networks. |
| Keywords: | airlines; high-speed rail; networks; applied game theory; infrastructure pricing |
| JEL: | R40 L92 L93 |
| Date: | 2008–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080103&r=ure |
| By: | Lambert, Dayton M.; Florax, Raymond J.G.M.; Cho, Seong-Hoon |
| Abstract: | This research note documents estimation procedures and results for an empirical investigation of the performance of the recently developed spatial, heteroskedasticity and autocorrelation consistent (HAC) covariance estimator calibrated with different kernel bandwidths. The empirical example is concerned with a hedonic price model for residential property values. The first bandwidth approach varies an a priori determined plug-in bandwidth criterion. The second method is a data driven cross-validation approach to determine the optimal neighborhood. The third approach uses a robust semivariogram to determine the range over which residuals are spatially correlated. Inference becomes more conservative as the plug-in bandwidth is increased. The data-driven approaches prove valuable because they are capable of identifying the optimal spatial range, which can subsequently be used to inform the choice of an appropriate bandwidth value. In our empirical example, pertaining to a standard spatial model and ditto dataset, the results of the data driven procedures can only be reconciled with relatively high plug-in values (n0.65 or n0.75). The results for the semivariogram and the cross-validation approaches are very similar which, given its computational simplicity, gives the semivariogram approach an edge over the more flexible cross-validation approach. |
| Keywords: | spatial HAC, semivariogram, bandwidth, hedonic model, Community/Rural/Urban Development, Demand and Price Analysis, Land Economics/Use, Research Methods/ Statistical Methods, C13, C31, R21, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:puaewp:44258&r=ure |
| By: | Germà Bel (Faculty of Economics, University of Barcelona); Melania Mur (Universidad de Zaragoza) |
| Abstract: | The aim of this paper is to analyze the effects of intermunicipal cooperation and privatization on the delivery costs of urban solid waste services. The results of our empirical analysis, which we conducted among a sample of very small municipalities, indicate that small towns that cooperate incur lower costs for their waste collection service. Cooperation also raises collection frequency and improves the quality of the service in small towns. By contrast, the form of production, whether it is public or private, does not result in systematic differences in costs. Interestingly, the degree of population dispersion has a significant positive relation with service costs.No evidence of scale economies is found because, it would seem, small municipalities exploit them by means of intermunicipal cooperation. |
| Keywords: | local government, intermunicipal cooperation,privatization, contracting-out, solid waste collection. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:200816&r=ure |
| By: | David Stadelmann; Reiner Eichenberger |
| Abstract: | Rational individuals know that present government debts transform into higher future taxes. The Ricardian equivalence implies that the burden of the debt is not shifted between generations because of compensating intergenerational transfers. While the assumptions for Ricardian equivalence to hold are quite demanding, we argue that there exists another equivalence mechanism which works also with non-altruistic individuals: Public debts capitalize into property values. Thus, communities with larger net debts exhibit, ceteris paribus, lower property prices. We provide empirical evidence for debt capitalization using unique data for the Swiss metropolitan area of Zurich. |
| Keywords: | Capitalization; Public Debts; Ricardian Equivalence; Taxes; Local Public Goods |
| JEL: | H74 R51 H00 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-30&r=ure |
| By: | Ricardo Mora; Javier Ruiz-Castillo |
| Abstract: | This paper defends the use of the entropy based Mutual Information index of multigroup segregation for the following five reasons. (1) It satisfies 14 basic axioms discussed in the literature when segregation takes place along a single dimension. (2) It is additively decomposable into between- and within-group terms for any partition of the set of occupations (or schools) and the set of demographic groups in the multigroup case. (3) The underlying segregation ordering has been recently characterized in terms of 8 properties. (4) It is a monotonic transformation of log-likelihood tests for the existence of segregation in a general model. (5) It can be decomposed so that a term independent of changes in either of the two marginal distributions can be isolated in pair wise segregation comparisons. Other existing measures of segregation have not been characterized, fail to satisfy one or more of the basic axioms, do not admit a between- within-group decomposition, have not been motivated from a statistical approach, or are based on more restricted econometric models. |
| Keywords: | Gender segregation measurement, Axiomatic properties |
| JEL: | J16 J24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we074645&r=ure |
| By: | Hainz , Christa (University of Munich); Weill , Laurent (Université Robert Schuman, Strasbourg); Godlewski, Christophe (University of Strasbourg) |
| Abstract: | We investigate the impact of bank competition on the use of collateral in loan contracts. We develop a theoretical model incorporating information asymmetries in a spatial competition framework where banks choose between screening the borrower and asking for collateral. We show that presence of collateral is more likely when bank competition is low. We then test this prediction empirically on a sample of bank loans from 70 countries. We estimate logit models where the presence of collateral is regressed on bank competition, measured by the Lerner index. Our empirical tests corroborate the theoretical predictions that bank competition reduces the use of collateral. These findings survive several robustness checks. |
| Keywords: | collateral; bank competition; asymmetric information |
| JEL: | D43 D82 G21 |
| Date: | 2008–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2008_027&r=ure |
| By: | Yu, Li; Jolly, Robert W.; Orazem, Peter |
| Abstract: | This paper uses the pattern of firm entry and exit to develop a classification system for industries. The classifications include urban-rural bias; long-term growth; and firm survival patterns. The first captures the fact that sector-specific economic growth may be favored in urban areas for some industries and may benefit from low population density for others. Some industries have experienced long-term expansion in firm numbers while others have experienced a decline. Finally, some industries are characterized by high rates of both entry and exit while others have low rates of both. A taxonomy classifying industries according to those three criteria is developed in this paper. The taxonomy is applied to the Iowa subset of the National Establishment Time-Series (NETS) database over the period from 1992 to 2004. County level entry and exit rates are shown to be positively correlated across nearly all 2 digit NAICS code industries. Industry growth is found to be biased against rural areas. Not all of the industries experienced expansion or have a positive net entry rate. Entry of new firms replaces old incumbent firms in each industry but to different degrees. Understanding firm entry - exit pattern can help design customized policies of fostering expansion of specific industries in Iowa according to their location bias, industry growth patterns and development dynamics. |
| Keywords: | Entry – Exit Pattern, Taxonomy, Location Bias, Expansion, Churning, Entrepreneurship, Economic Development |
| Date: | 2008–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13007&r=ure |
| By: | Evans, Garen |
| Abstract: | Employment shifts in the Leisure and Hospitality sector along the Gulf coast following Hurricane Katrina were explored using spatial shift-share analysis. Using a spatial weights matrix that incorporated relative employment, and distance measures relative to the track of the storm we calculated classical and spatial shift-share components. Each of the spatial components then was regressed on net employment change, and the results were statistically significant, and similar to results obtained by Marquez and Ramajo (2005). These results suggest that spatial interaction between employment centers as well as with the storm track, was a relevant aspect of the employment shifts that occurred following Hurricane Katrina. |
| Keywords: | Labor and Human Capital, Research Methods/ Statistical Methods, R11, R12, J21, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saeaed:6744&r=ure |
| By: | Sylvain Barde (Observatoire Français des Conjonctures Économiques) |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0833&r=ure |
| By: | Kanyi, Peter M.; Baharanyi, Ntam; Ngandu, Mudiayi; Zabawa, Robert |
| Abstract: | This study assessed homeownership and how it is affected by race, residency in or out of Alabama Black Belt, family status, poverty and other variables. All variables showed significant relationship to Alabama homeownership with single-parenthood showing a negative impact on White homeownership but insignificant to Black homeownership in the region. |
| Keywords: | Public Economics, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saeaed:6795&r=ure |
| By: | Zhiguo He; Arvind Krishnamurthy |
| Abstract: | We present a model to study the dynamics of risk premia during crises in asset markets where the marginal investor is a financial intermediary. Intermediaries face a constraint on raising equity capital. When the constraint binds, so that intermediaries' equity capital is scarce, risk premia rise to reflect the capital scarcity. We calibrate the model and show that it does well in matching two aspects of crises: the nonlinearity of risk premia during crisis episodes; and, the speed of adjustment in risk premia from a crisis back to pre-crisis levels. We use the model to quantitatively evaluate the effectiveness of a variety of central bank policies, including reducing intermediaries' borrowing costs, infusing equity capital, and directly intervening in distressed asset markets. All of these policies are effective in aiding the recovery from a crisis. Infusing equity capital into intermediaries is particularly effective because it attacks the equity capital constraint that is at the root of the crisis in our model. |
| JEL: | G2 G28 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14517&r=ure |
| By: | Michele Fratianni (Department of Business Economics and Public Policy, Indiana University Kelley School of Business) |
| Abstract: | The historical record shows that financial crises are far from being a rare a phenomenon; they occur often enough to be considered part of the workings of finance capitalism. While there is no single hypothesis that can best explain all crises, the implications of the credit boom-and-bust hypothesis, supplemented with asymmetric information, are consistent with the onset and development of many crises, including the current subprime crisis. Governments have reacted to crises by erecting a vast and growing safety net. In turn, to minimize their risk exposure, they have also put in place expansive systems of regulation and supervision. The unwinding of the current crisis will mark a big enlargement of the safety net and moral hazard, as well as a predictable flurry of policy proposals aimed at closing past regulatory loopholes. The maintained hypothesis is that regulatory and market failures are inexorably intertwined. |
| Keywords: | bailout, credit, crisis, money, moral hazard, regulation, safety net, subprime |
| JEL: | E58 F30 G21 N20 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2008-08&r=ure |
| By: | Fosgerau, Mogens; Jensen, Henning F. |
| Abstract: | Consider Vickrey's dynamic bottleneck model of a congested facility. Let capacity be stochastic and assume that identical users minimize expected cost. This note shows that Nash equilibrium does not always exist. A counter-example is provided for the case of linear scheduling costs, where Nash equilibrium does not exist whenever the marginal cost of earliness is sufficiently low. Such a threshold exists for any absolutely continuous distribution of capacity. |
| Keywords: | Bottleneck model; Random capacity; Nash equilibrium |
| JEL: | R41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12012&r=ure |
| By: | David Neumark; Jed Kolko |
| Abstract: | We use new establishment-level data and geographic mapping methods to improve upon evaluations of the effectiveness of state enterprise zones, focusing on California's program. Because zone boundaries do not follow census tracts or zip codes, we created digitized maps of original zone boundaries and later expansions. We combine these maps with geocoded observations on most businesses located in California. The evidence indicates that enterprise zones do not increase employment. We also find no shift of employment toward the lower-wage workers or manufacturing sector targeted by enterprise zone incentives. We conclude that the program is ineffective in achieving its primary goals. |
| JEL: | H25 H73 J23 R12 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14530&r=ure |
| By: | Fosgerau, Mogens |
| Abstract: | This brief paper derives the value of headway, i.e. the time interval between departures, for a scheduled service. It presents a consistent framework in which users have scheduling costs, time costs and planning costs. The model represents both users who arrive at the station to choose just the next departure and users who plan for a specific departure. Planning for a specific departure is costly but becomes more attractive at longer headways. Simple expressions for the user cost result. In particular, the marginal cost of headway is large at short headways and smaller at long headways. The difference in marginal costs is the value of time multiplied by half the headway. |
| Keywords: | Time; Scheduling; Public transport; Aviation |
| JEL: | D11 R41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11995&r=ure |
| By: | Naanwaab, Cephas; Hartarska, Valentina |
| Abstract: | We study the efficiency of Community Development Loan Funds (CDLFs) in the U.S.A. between 2002 and 2005. We find that the largest CDLFs tend to be most efficient and that efficiency decreases with age and the proportion of minority representation on the board, while board size does not affect efficiency. |
| Keywords: | Community/Rural/Urban Development, Public Economics, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saeaed:6726&r=ure |
| By: | van Ommeren , Jos; Fosgerau, Mogens |
| Abstract: | This paper applies a dynamic search model to estimate workers' marginal costs of commuting, including monetary and time costs. Using data on workers' job search activity as well as moving behaviour, for the Netherlands, we provide evidence that, on average, workers’ marginal costs of one hour of commuting are about 17 euro |
| Keywords: | On-the-job search; Job moving; Commuting time; Commuting cost; Willingness-to-pay |
| JEL: | J32 R20 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12010&r=ure |
| By: | Ricardo J. Caballero; Emmanuel Farhi; Pierre-Olivier Gourinchas |
| Abstract: | In this paper we argue that the persistent global imbalances, the subprime crisis, and the volatile oil and asset prices that followed it, are tightly interconnected. They all stem from a global environment where sound and liquid financial assets are in scarce supply. |
| JEL: | F3 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14521&r=ure |
| By: | Ethan Cohen-Cole; Burcu Duygan-Bump; José Fillat; Judit Montoriol-Garriga |
| Abstract: | As Chari et al (2008) point out in a recent paper, aggregate trends are very hard to interpret. They examine four common claims about the impact of financial sector phenomena on the economy and conclude that all four claims are myths. We argue that to evaluate these popular claims, one needs to look at the underlying composition of financial aggregates. Our findings show that most of the commonly argued facts are indeed supported by disaggregated data. |
| Keywords: | Financial crises |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbqu:qau08-5&r=ure |