|
on Urban and Real Estate Economics |
| By: | Edward L. Glaeser; Joshua D. Gottlieb |
| Abstract: | Empirical research on cities starts with a spatial equilibrium condition: workers and firms are assumed to be indifferent across space. This condition implies that research on cities is different from research on countries, and that work on places within countries needs to consider population, income and housing prices simultaneously. Housing supply elasticity will determine whether urban success shows up in more people or higher incomes. Urban economists generally accept the existence of agglomeration economies, which exist when productivity rises with density, but estimating the magnitude of those economies is difficult. Some manufacturing firms cluster to reduce the costs of moving goods, but this force no longer appears to be important in driving urban success. Instead, modern cities are far more dependent on the role that density can play in speeding the flow of ideas. Finally, urban economics has some insights to offer related topics such as growth theory, national income accounts, public economics and housing prices. |
| JEL: | D0 D00 R0 R00 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14806&r=ure |
| By: | Angel Alañón Pardo (Department of Applied Economics I (Complutense University of Madrid) and Real Colegio Complutense at Harvard University); Josep-Maria Arauzo-Carod (Quantitative Urban and Regional Economics (QURE) Department of Economics (Rovira i Virgili University)) |
| Abstract: | This paper deals with location decisions of manufacturing firms in Spain. We analyse how agglomeration economies and, especially, transport accessibility influence location decisions of firms. During the 1990s there was an intense programme of high capacity road construction which improved accessibility to municipalities. We analyse the location decisions of firms at municipality level and in three industries. The main empirical contributions of this paper are the econometric techniques used (spatial econometrics models) and some of the explanatory variables (local added value, road accessibility, and the characteristics of firms in neighbouring municipalities). The results show that agglomeration economies (including road network improvements) are important in industrial location decision-making. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doctra:09-01&r=ure |
| By: | Andra C. Ghent; Michael T. Owyang |
| Abstract: | We analyze the relationship between housing and the business cycle in a set of 36 US cities. Most surprisingly, we find that falls in house prices are often not followed by declines in employment. We also find that the leading indicator property of residential investment is not consistent across cities and that, at the national level, the leading indicator property of residential investment is not robust to including financial factors as control variables. |
| Keywords: | Housing ; Housing - Prices ; Business cycles |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2009-07&r=ure |
| By: | Erik B. Johnson; Randall Walsh |
| Abstract: | The Tiebout model assumes that individuals 'vote with their feet' and choose to locate in the jurisdiction which best matches their fiscal preferences. In this paper, we test Tiebout's voting mechanism by examining whether housing purchase decisions are sensitive to changes in local property tax rates. Results from previous empirical tests of the link between property taxes and mobility are mixed and typically suffer from a myriad of identification problems including the confounding influence of tax rates on public good levels, tax endogeneity arising as a result of jurisdictional composition, and aggregation bias. In this paper, we are able to overcome many of the traditional obstacles to identification by: 1) focusing on purchasers of vacation homes who arguably receive no benefits from public goods funded by the tax change; 2) examining an exogenous and differential change in tax rates that arose from Michigan's Proposal A in 1994; and 3) using a high-resolution tax dataset at the Census Tract level. Our results provide some of the clearest evidence to date that household location choices are sensitive to tax changes. Further, consistent with theoretical predictions, the impact of tax changes on housing counts is found to be sensitive to the elasticity of housing supply. |
| JEL: | H2 H22 H71 R21 R23 R31 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14793&r=ure |
| By: | Göbel, Jürgen |
| Abstract: | In a local economy, the citizens can react on local policy by exit. Exit induces a shift in the housing demand. The local policy may thus capitalize into the housing prices. However, the citizens encounter specific coordination problems on the housing market. Therefore, it may be asked how effective their exit option is. To answer this question, we work with a sample of 234 U.S. counties, from 2002 and 2003. Our empirical analysis shows that the property tax revenue is the local fiscal variable which has the strongest connection with the housing prices. In contradiction to the general theory, this connection is positive and indirect. The essential element within this connection is the personal income. |
| Keywords: | local policy; exit; housing price; capitalization |
| JEL: | H72 H30 R21 |
| Date: | 2009–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14053&r=ure |
| By: | Cécile Détang-Dessendre; Carl Gaigné |
| Abstract: | This paper attempts to determine whether residential location affects unemployment duration. Our analysis is based on a spatial job search framework that shows the importance of dissociating the role of travel time from physical distance in unemployment duration. The contribution of our study also stems from the development of skill-specific accessibility measures that take into account the spatial distribution of labor supply and demand. Our results show that physical distance and competition among searchers must be controlled for in order to understand the significant role of job access (measured in terms of travel time) in unemployment duration. Second, improvements in access raise the probability that persons living in urban fringes and rural areas will become employed. Third, for workers living in large urban centers, the relationship between location and unemployment duration is insignificant. |
| Keywords: | unemployment duration, job accessibility, commuting time |
| JEL: | J64 R23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:200904&r=ure |
| By: | Martins, Pedro S. (Queen Mary, University of London) |
| Abstract: | How do teacher incentives affect student achievement? We contribute to this question by examining the effects of the recent introduction of teacher performance-related pay and tournaments in Portugal's public schools. Specifically, we draw on matched student-school panel data covering the population of secondary school national exams over seven years. We then conduct a difference-in-differences analysis based on two complementary control groups: public schools in two autonomous regions that were exposed to lighter versions of the reform than in the rest of the country; and private schools, which are also subject to the same national exams but whose teachers were not affected by the reform. Our results consistently indicate that the increased focus on individual teacher performance caused a significant decline in student achievement, particularly in terms of national exams. The triple-difference results also document a significant increase in grade inflation. |
| Keywords: | performance-related pay, public sector, matched school-student data |
| JEL: | I21 M52 I28 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4051&r=ure |
| By: | Rangan Gupta (Department of Economics, University of Pretoria); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas) |
| Abstract: | We examine the time-series relationship between housing prices in eight Southern California metropolitan statistical areas (MSAs). First, we perform cointegration tests of the housing price indexes for the MSAs, finding seven cointegrating vectors. Thus, the evidence suggests that one common trend links the housing prices in these eight MSAs, a purchasing power parity finding for the housing prices in Southern California. Second, we perform temporal Granger causality tests revealing intertwined temporal relationships. The Santa Anna MSA leads the pack in temporally causing housing prices in six of the other seven MSAs, excluding only the San Luis Obispo MSA. The Oxnard MSA experienced the largest number of temporal effects from other MSAs, six of the seven, excluding only Los Angeles. The Santa Barbara MSA proved the most isolated in that it temporally caused housing prices in only two other MSAs (Los Angels and Oxnard) and housing prices in the Santa Anna MSA temporally caused prices in Santa Barbara. Third, we calculate out-of-sample forecasts in each MSA, using various vector autoregressive (VAR) and vector error-correction (VEC) models, as well as Bayesian, spatial, and causality versions of these models with various priors. Different specifications provide superior forecasts in the different MSAs. Finally, we consider the ability of theses time-series models to provide accurate out-of-sample predictions of turning points in housing prices that occurred in 2006:Q4. Recursive forecasts, where the sample is updated each quarter, provide reasonably good forecasts of turning points. |
| Keywords: | Housing prices, Forecasting |
| JEL: | C32 R31 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0912&r=ure |
| By: | Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Connecticut and University of Nevada, Las Vegas) |
| Abstract: | We examine the time-series relationship between housing prices in eight Southern California metropolitan statistical areas (MSAs). First, we perform cointegration tests of the housing price indexes for the MSAs, finding seven cointegrating vectors. Thus, the evidence suggests that one common trend links the housing prices in these eight MSAs, a purchasing power parity finding for the housing prices in Southern California. Second, we perform temporal Granger causality tests revealing intertwined temporal relationships. The Santa Anna MSA leads the pack in temporally causing housing prices in six of the other seven MSAs, excluding only the San Luis Obispo MSA. The Oxnard MSA experienced the largest number of temporal effects from other MSAs, six of the seven, excluding only Los Angeles. The Santa Barbara MSA proved the most isolated in that it temporally caused housing prices in only two other MSAs (Los Angels and Oxnard) and housing prices in the Santa Anna MSA temporally caused prices in Santa Barbara. Third, we calculate out-of-sample forecasts in each MSA, using various vector autoregressive (VAR) and vector error-correction (VEC) models, as well as Bayesian, spatial, and causality versions of these models with various priors. Different specifications provide superior forecasts in the different MSAs. Finally, we consider the ability of theses time-series models to provide accurate out-of-sample predictions of turning points in housing prices that occurred in 2006:Q4. Recursive forecasts, where the sample is updated each quarter, provide reasonably good forecasts of turning points. |
| Keywords: | Housing prices, Forecasting |
| JEL: | C32 R31 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2009-10&r=ure |
| By: | Michel De Lara (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est); André De Palma (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan); Moez Kilani (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est); Serge Piperno (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est) |
| Abstract: | We propose an efficient algorithm that solves the monocentric city model with traffic congestion, and use it to explore the impact of congestion pricing on urban forms and, hence, on transport volume, CO2 emissions and energy consumption. The application focuses on the region Ie-de-France. Four pricing policies are considered: no toll, where transport cost is equal to the vehicle operating cost, cordon toll where users pay the toll when they drive inside cordon region linear toll (optimal under the class of linear tolls) and optimal toll (or first-best toll). The linear toll is equivalent to an increase in the vehicle operating cost. It performs well with respect to the first-best solution but, since it applies identically to all trips, it is not likely to be relevant in practice. By comparison to the no-toll situation, optimal congestion pricing reduces the radius of the city and the average travel distance by 34% and 15%, respectively. |
| Keywords: | Monocentric model; Equilibrium computation; Transport pricing; Long term impacts |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00348439_v2&r=ure |
| By: | Pareto, Vittorio Emmanuel |
| Abstract: | The urban development process intends to enhance urban equipment, infrastructure and services to improve urban conditions and reduce inequalities. While planning activities usually demand a sizeable amount of data to assess these conditions, it is hard to find a straightforward procedure to translate these data into a comprehensive and balanced set of projects and programs. Most urban projects have a strong sectorial character and it is difficult to compare parks with roads or sanitation with schools. Development projects are normally justified in their own terms, yet rarely are sectorial demands equably met by the proposed projects. The following model intends to facilitate this task, providing a simple yet efficient means to assess urban conditions, evaluate and compare the sectorial demands and assemble a balanced set of development goals that can be used to estimate the overall investment needed. The proposed system assesses urban conditions through a set of selected indicators, derived from a compact data base. These indicators represent the performance of the basic urban sectors at each urban zone, thus providing the necessary spatial component to the system. The indicators are normalised to allow comparison of conditions between different sectors. The values of the normalised indicators are then used to evaluate the relative quality of services at each urban zone. By displaying the normalised indicators as bar charts, it is easier to visualise sectorial demands and spatial imbalances. The model is built on a spreadsheet, making fairly easy to verify how much improvement in the sector is needed to attain the desired performance level in each zone. New values can be entered interactively until a preferred urban conditions pattern is attained. The information produced by the model can be used as the basic guideline to dimension sectorial projects and compose a comprehensive development program. Besides describing and discussing all the procedures adopted, a simple yet complete example illustrates the use of the model. |
| Keywords: | planning; urban; development; model; infrastructure; condition; regional |
| JEL: | O18 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13985&r=ure |
| By: | Bandyopadhyay, Simanti; Rao, M. Govinda |
| Abstract: | This paper provides an overview of the fiscal problems faced by five urban agglomerations in India, namely, Delhi, Hyderabad, Kolkata, Chennai, and Pune. It analyzes the fiscal health of the five urban agglomerations, quantifies their revenue capacities and expenditure needs, and draws policy recommendations on the means to reduce the gaps between revenue raising capacities and expenditure needs. The main findings suggest that, except for five small urban local bodies in Hyderabad, the others are not in a position to cover their expenditure needs by their present revenue collections. All the urban agglomerations have unutilized potential for revenue generation; however, with the exception of Hyderabad, they would fail to cover their expenditure needs even if they realized their revenue potential. Except in Chennai, larger corporations are more constrained than smaller urban local bodies. The paper recommends better utilization of"own revenue"through improved administration of property taxes, implementation of other taxes, and collection of user charges. It recommends that state governments should explore the option of allowing local bodies to piggyback a small proportion on their value-added tax collections. Another way to reduce the fiscal gap would be to earmark a portion of the sales proceeds from land and housing by state governments sold through their development agencies for improvements in urban infrastructure. The paper also recommends that the State Finance Commissions should develop appropriate norms for estimating expenditure needs, based on which transfers from the state to local governments can be decided. |
| Keywords: | Public Sector Economics&Finance,Debt Markets,Municipal Financial Management,Public Sector Management and Reform,Banks&Banking Reform |
| Date: | 2009–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4863&r=ure |
| By: | John Yinger (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020) |
| Abstract: | Hedonic regressions with house value as the dependent vaqriable are widely used to study the value of public services and amenities. This paper builds on the theory of household bidding and sorting to derive a bid function envelope, which provides a form for these regressions. This approach uses a general characterization of household heterogeneity, yields estimates of the price elasticities of demands for services and amenities directly from the hedonic with no need for a Rosen two-step procedure, and provides tests of key hypotheses about household sorting. An application to data from Cleveland in 2000 yields precise estimates of price elasticities for school quality, distance from environmental hazards, and neighborhood ethnic composition. The results support the sorting hypotheses and indicate that household preferences are very heterogeneous, with some households placing a negative value on many "amenities." |
| Keywords: | Hedonics, capitalization, bidding, sorting |
| JEL: | H73 R21 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:114&r=ure |
| By: | Balk, Bert M.; Diewert, Erwin; Nakamura, Alice O. |
| Abstract: | This paper provides a brief introduction to a proposed new opportunity cost treatment of owner occupied housing in measures of inflation for the United States. In addition, the paper introduces, and provides links to, a collection of nine other papers that discuss various aspects of the treatment of owner occupied housing in measures of inflation for a number of nations including Canada, Germany, Iceland and the United States. |
| Keywords: | Durable goods, Consumer Price Index, Cost of Living Index, Owner Occupied Housing, depreciation, hedonic regression models, rental equivalence approac |
| JEL: | C23 C43 C81 D12 E31 |
| Date: | 2009–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:erwin_diewert-2009-18&r=ure |
| By: | André De Palma (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan); Moez Kilani (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est); Michel De Lara (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est); Serge Piperno (Université Paris-Est, CERMICS, Ecole des Ponts ParisTech - Université Paris-Est) |
| Abstract: | We propose a method to compute an equilibrium solution for the monocentric city model with traffic congestion, and to quantify the im- pact of cordon tolls on social surplus. The focus of this paper is on the comparison of road pricing of one and two cordons, with the no toll and first-best situations as benchmarks. We find that a one-cordon toll yields a social efficiency of 63% with respect to first-best, and that an optimal two-cordon toll increases the efficiency to 73%. Both policies have a pos- itive impact on CO2 emissions because they reduce the average length of trips and reduce the road size. |
| Keywords: | Monocentric model; Cordon toll; Acceptability of road pricing |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00348437_v1&r=ure |
| By: | Kristopher S. Gerardi; Andreas Lehnert; Shane M. Sherland; Paul S. Willen |
| Abstract: | This paper explores the question of whether market participants could have or should have anticipated the large increase in foreclosures that occurred in 2007 and 2008. Most of these foreclosures stem from loans originated in 2005 and 2006, leading many to suspect that lenders originated a large volume of extremely risky loans during this period. However, the authors show that while loans originated in this period did carry extra risk factors, particularly increased leverage, underwriting standards alone cannot explain the dramatic rise in foreclosures. Focusing on the role of house prices, the authors ask whether market participants underestimated the likelihood of a fall in house prices or the sensitivity of foreclosures to house prices. The authors show that, given available data, market participants should have been able to understand that a significant fall in prices would cause a large increase in foreclosures, although loan-level (as opposed to ownership-level) models would have predicted a smaller rise than actually occurred. Examining analyst reports and other contemporary discussions of the mortgage market to see what market participants thought would happen, the authors find that analysts, on the whole, understood that a fall in prices would have disastrous consequences for the market but assigned a low probability to such an outcome. |
| Keywords: | Subprime mortgage ; Financial crises ; Foreclosure |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:09-1&r=ure |
| By: | Diewert, Erwin; Nakamura, Alice O. |
| Abstract: | Statistical agencies in different nations usually use the rental equivalence approach to the treatment of housing in their CPIs but a few countries use the user cost approach. The paper argues that an opportunity cost approach is the correct theoretical framework for accounting for OOH in a CPI. This approach, first mentioned in a 2006 OECD paper by Diewert, is developed more fully here. We explore the relationship of this new approach to the usual rental equivalency and user cost approaches. The new approach leads to an Owner Occupied Housing Opportunity Cost (OOHOC) index that is a weighted average of the rental and the financial opportunity costs. |
| Keywords: | Durable goods, Consumer Price Index, Cost of Living Index, Owner Occupied Housing, depreciation, hedonic regression models, rental equivalence approac |
| JEL: | C23 C43 C81 D12 E31 |
| Date: | 2009–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:erwin_diewert-2009-19&r=ure |
| By: | Biswas, Rongili; Gravel, Nicolas; Oddou, Rémy |
| Abstract: | This paper examines the segregative properties of endogenous processes of jurisdiction formation à la Tiebout in the presence of a central government who makes equalization transfers to jurisdictions in such a way as to maximize a welfarist objective. Choice of location by households, of local public good provision by jurisdictions, and of equalization grants and tax by the central government are assumed to be made simultaneously, taking the choices of others as given. Two welfarist objectives for the central government are considered in turn: Leximin and Utilitarianism. If the central government pursues a Leximin objective, it is easily shown that the only stable jurisdiction structures that can emerge are those in which the jurisdictions' poorest households have all the same wealth. A richer class of stable jurisdiction structures are compatible with a central utilitarian government. Yet, it so happens that, if individual preferences are additively separable, the class of households preferences that garantee the segregation of any stable jurisdiction structure remains unchanged by the presence of a central government. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:121&r=ure |
| By: | Peter Franz; Christoph Hornych |
| Abstract: | The rising attention of politicians as well as scientists in the EU to the large urban agglomerations as centres of economic growth is accompanied by political efforts to identify and to demarcate such agglomerations under the label ‘metropolitan regions’. This study develops a theoretical framework broaching the issue of cooperation between municipalities from the perspective of regional economics as well as political science. The framework is applied to the empirical case of the polycentric metropolitan region ‘Saxony Triangle’ in East Germany. The results show that various intervening factors prevent intense cooperation between the actors in the region. Policy implications and con- clusions for future research are discussed. |
| Keywords: | Polycentric Urban Regions, Metropolitan Regions, Saxony Triangle, Coop- eration, Agglomeration, Correspondence Analysis |
| JEL: | R12 R53 R58 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:6-09&r=ure |
| By: | Felix Hüfner |
| Abstract: | House prices have risen strongly in past years, helped by rising incomes and declining interest rates. At the same time, construction of new dwellings has remained fairly muted and has only recently shown signs of picking up. A characteristic feature of the Slovak housing market, and a consequence of the privatization programme initiated in the early 1990s, is the virtual absence of a private rental market. As euro membership will most likely go along with easier financial conditions and also entails limited availability of national policy tools, current housing policies will have to be adjusted. The challenges are to avoid overheating of the housing market in the medium term, in part by making supply more reactive to demand, and to phase out the hurdles that are currently impeding the private rental market, which would facilitate labour mobility. This Working Paper relates to the 2009 OECD Economic Survey of the Slovak Republic.<P>Ajuster la politique du logement en Slovaquie dans le contexte de l’adoption de l’euro<BR>Les prix des logements ont fortement augmenté ces dernières années avec la hausse des revenus et la baisse des taux d’intérêt. En revanche, la construction de logements neufs est restée assez léthargique et n’a montré que récemment des signes d’accélération. L’une des caractéristiques du marché du logement en République slovaque, conséquence du programme de privatisation engagé au début des années 90, est la quasi-inexistence d’un marché locatif privé. Puisque la participation à la zone euro se traduira très probablement par un assouplissement des conditions financières tout en limitant les instruments d’action nationaux, il faudra modifier la politique actuelle du logement. L’enjeu sera d’éviter une surchauffe du marché du logement à moyen terme, notamment en agissant pour que l’offre réagisse davantage à la demande, et d’éliminer les obstacles actuels à un marché locatif privé, ce qui faciliterait la mobilité des travailleurs. |
| Keywords: | Slovak Republic, République slovaque, house prices, prix des logements, marché locatif, housing policies, rental market, prêts hypothécaires |
| JEL: | H21 H31 J61 |
| Date: | 2009–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:682-en&r=ure |
| By: | Ozkan Eren (Department of Economics, University of Nevada, Las Vegas); Daniel J. Henderson (Department of Economics, State University of New York at Binghamton and IZA Bonn) |
| Abstract: | Following an identification strategy that allows us to largely eliminate unobserved student and teacher traits, we examine the effect of homework on math, science, English and history test scores for eighth grade students in the United States. Noting that failure to control for these effects yields selection biases on the estimated effect of homework, we find that math homework has a large and statistically meaningful effect on math test scores throughout our sample. However, additional homework in science, English and history are shown to have little to no impact on their respective test scores. |
| Keywords: | First Differencing, Homework, Selection Bias, Unobserved Traits |
| JEL: | C23 I21 I28 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0907&r=ure |
| By: | Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México) |
| Abstract: | Shopping malls contribute to business more significantly than traditional markets which were viewed as simple convergence of supply and demand. Shopping malls attract buyers and sellers, and induce customers providing enough time to make choices as well as a recreational means of shopping. However, competition between malls, congestion of markets and traditional shopping centers has led mall developers and management to consider alternative methods to build excitement with customers. This study examines the impact of growing congestion of shopping mall in urban areas on shopping conveniences and shopping behavior. Based on the survey of urban shoppers, the study analyzes the cognitive attributes of the shoppers towards attractiveness of shopping malls and intensity of shopping. The results of the study reveal that ambiance of shopping malls, assortment of stores, sales promotions and comparative economic gains in the mall attract higher customer traffic to the malls. |
| Keywords: | Shopping malls, traditional markets, sales promotion, market ambiance, leisure shopping, recreational services, retailing, market congestion, customer value, consumer behavior |
| JEL: | D12 L81 M31 R51 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ega:wpaper:200805&r=ure |
| By: | De Donder, Philippe; Le Breton, Michel; Peluso, Eugenio |
| Abstract: | In this paper, we lay the first building blocks of a positive theory of nation formation where national choices consist of the size and location of a public good. Individuals differ both in income and in their preferences for the public good location. Public expenditures are financed either by a lump sum tax or by a proportional income tax. We study both the simultaneous and the sequential determinations of the public good size and location. We show that, while the choice of the type of public good follows the traditional median logic, the majoritarian determination of the taxation rate need not coincide with the choice of a median income citizen. With lump sum financing, income heterogeneity plays no role and the sequential equilibrium consists of the median location together with the public good level most-preferred by the individual located at the median distance from the median. This policy bundle also constitutes an equilibrium with simultaneous voting in the special case of a uniform bivariate distribution of individuals' income and location. With proportional taxation, there is no policy equilibrium with simultaneous voting. We offer a complete characterization of the equations describing the sequential equilibrium in the general case and we show why and how our results depart from those obtained with the lump sum case. The public good level is lower than the one emerging under lump sum taxation when the income distribution is concave and when the correlation between individuals' income and location is positive but not perfect. |
| Keywords: | bidimensional policy and trait spaces; proportional income taxation |
| JEL: | D72 H41 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7223&r=ure |
| By: | Berliant, Marcus |
| Abstract: | Applications of the framework of behavioral economics to questions arising from urban economics are discussed. Directions for future research are outlined. |
| Keywords: | behavioral urban economics; ambiguity aversion; loss aversion; regional art |
| JEL: | C90 R23 |
| Date: | 2009–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14140&r=ure |
| By: | André De Palma (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan); Robin Lindsey (University of Alberta - University of Alberta); Nathalie Picard (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise) |
| Abstract: | Information about traffic conditions has traditionally been conveyed to drivers by radio and variable message signs, and more recently via the Internet and Advanced Traveler Information Systems. This has spurred research on how travelers respond to information, how much they are willing to pay for it and how much they are likely to benefit from it collectively. In this paper we analyze the decisions of drivers whether to acquire information and which route to take on a simple congested road network. Drivers vary in their degree of risk aversion with respect to travel time. Four information regimes are considered: No information, Free information which is publicly available at no cost, Costly information which is publicly available for a fee, and Private information which is available free to a single individual. Private information is shown to be individually more valuable than either Free or Costly information, while the benefits from Free and Costly information cannot be ranked in general. Free or Costly information can decrease the expected utility of drivers who are very risk-averse, and with sufficient risk aversion in the population the aggregate compensating variation for information can be negative. |
| Keywords: | Transportation, route choice, information provision, expected utility, congestion |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00349492_v1&r=ure |
| By: | Robert DeYoung; Ronnie J. Phillips |
| Abstract: | We estimate the pricing determinants for 35,098 payday loans originated in Colorado between 2000 and 2006, and generate a number of results with implications for public policy. We find evidence consistent with classical price competition early in the sample, but as time passed these competitive effects faded and the data become more consistent with a variety of strategic pricing practices. On average, loan prices moved upward toward the legislated price ceiling over time, consistent with implicit collusion facilitated by price focal points. Large multi-store payday firms tended to charge higher prices than independent single-store operators, but were less likely to exploit inelastic demand near military bases and in largely minority neighborhoods. Of the three loan pricing measures used in our analysis, the annual percentage interest rate (APR) favored by regulators and analysts performed poorly. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp09-07&r=ure |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Peter Egger; Michael Pfafermayr |
| Abstract: | This paper prooses a generalized panel data model with random effects and first-order spatially autocorrelated residuals that encompasses two previously suggested specifications. The first one is described in Anselin's (1988) book and the second one by Kapoor, Kelejian, and Prucha (2007). Our encompassing specification allows us to test for these models as restricted specifications. In particular, we derive three LM and LR tests that restrict out generalized model to obtain (i) the Anselin model, (ii) the Kapoor, Kelejian, and Prucha model, and (iii) the simple random effects model that ignores the spatial correlation in the residuals. For two of these three tests, we obtain closed form solutions and we derive their large sample distributions. Our Monte Carlo results show that the suggested tests are powerful in testing for these restricted specifications even in small and medium sized samples. |
| Keywords: | Panel data, spatially autocorrelated residuals, maximum-likelihood estimation, Lagrange multiplier, likelihood ratio |
| JEL: | C12 C23 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:113&r=ure |
| By: | Franziska Kupfer (University of Antwerp, Department of Transport and Regional Economics); Frédéric Lagneaux (National Bank of Belgium, Microeconomic Information Department) |
| Abstract: | This study is a publication issued by the Microeconomic Analysis service of the National Bank of Belgium, in partnership with the Department of Transport and Regional Economics of the University of Antwerp (UA). It is the outcome of a first research project on the Belgian airport and air transport sector. The former relates to the economic activities within the airports of Antwerp, Brussels, Charleroi, Kortrijk, Liège and Ostend, while the latter concentrates on the air transport business as a whole. In the past few years, the logistics business has come to play a significant part in income creation in our country, whose economy is to a large extent driven by services1. Air transport and airports in particular are driving forces in this context, not only in terms of business generated within the air transport cluster, but also in terms of airports' attractiveness. On world scale an overall growth of cargo and passengers could be observed in the last ten years. However, the air transport sector has undergone a major crisis during the 2001-2003 period, when passenger traffic numbers first fell sharply and then stagnated. Only after 2003 this activity has picked up again and this until the third quarter of 2008. Cargo traffic on its part recovered already in 2002. In Belgium, a similar evolution can be observed. It should be stressed however that between 1997 and 2007 cargo volumes grew much faster than passenger traffic did. The rankings of European airports underline the importance of cargo traffic for Belgium: In 2006 Brussels, Liège and Ostend-Bruges respectively occupy ranks 6, 8, and 20 in the European cargo airport top 20, while for passenger airports, Brussels can only be found at the end of the top 20. In this study, a sectoral approach has been followed by focusing, for every airport, on two major economic activity components: the air transport cluster on the one hand and other airport-related sectors on the other hand. In that respect, annual accounts data from the Central Balance Sheet Office were used for the calculation of direct effects, the social balance sheet analysis and the study of financial ratios. Due to an inevitable time lag in the data provision, the analysis was limited to 2006. Like in other sectoral studies published by the Bank, indirect effects have also been estimated on the basis of data from the National Accounts Institute. In 2006, the total activities under review –direct and indirect, inside and outside airports- accounted for roughly 6.2 billion euro, i.e. 2 p.c. of Belgium's GDP and domestic employment. Considering the direct effects only, these percentages both amounted to 0.8 p.c. The three major airports, i.e. Brussels, Charleroi and Liège, alone account for 95.2 p.c. of the direct value added generated by the six airports under review. They represent 0.5 p.c. of Belgian GDP and, taking account of the indirect effects, 1.1 p.c. of the national income. Furthermore, it has to be pointed out that most Belgian airports are specialised. While the airports of Liège and Ostend focus on air cargo, Charleroi Airport deals mostly with low-cost passenger transport. Moreover, the smaller regional airports like Antwerp and Kortrijk focus on business travel. The analysis was completed in December 2008 |
| Keywords: | air transport, airport activities, sector analysis, indirect effect, public investments UA, |
| JEL: | C67 D40 J21 L93 R15 R34 R41 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:docwpp:200903-03&r=ure |
| By: | Antonio F. Galvao, Jr. (galvao@illinois.edu); Gabriel V. Montes-Rojas (Department of Economics, City University, London); Gabriel Sung Y. Park (Wang Yanan Institute for Studies in Economics (WISE), Xiamen University) |
| Abstract: | This paper studies quantile regression in an autoregressive dynamic framework with exogenous stationary covariates. Hence, we develop a quantile autoregressive distributed lag model (QADL). We show that these estimators are consistent and asymptotically normal. Inference based on Wald and Kolmogorov-Smirnov tests for general linear restrictions is proposed. An extensive Monte Carlo simulation is conducted to evaluate the properties of the estimators. We demonstrate the potential of the QADL model with an application to house price returns in the United Kingdom. The results show that house price returns present a heterogeneous autoregressive behavior across the quantiles. The real GDP growth and interest rates also have an asymmetric impact on house prices variations. |
| Keywords: | quantile autoregression, distributed lag model, autoregressive model |
| JEL: | C14 C32 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cty:dpaper:0904&r=ure |
| By: | John P. Harding (University of Connecticut); Xiaozhong Liang (State Street Corporation); Stephen L. Ross (University of Connecticut) |
| Abstract: | This paper studies the impact of capital requirements, deposit insurance and tax benefits on a bank's capital structure. We find that properly regulated banks voluntarily choose to maintain capital in excess of the minimum required. Central to this decision is both tax advantaged debt (a source of firm franchise value) and the ability of regulators to place banks in receivership stripping equity holders of firm value. These features of our model help explain both the capital structure of the large mortgage Government Sponsored Enterprises and the recent increase in risk taking through leverage by financial institutions. |
| Keywords: | Banks, Capital Structure, Capital Regulation, Financial Intermediation, Leverage, GSE, Investment Banks |
| JEL: | G21 G28 G32 G38 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2009-09&r=ure |
| By: | Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México) |
| Abstract: | This study explores the influence of geo-demographic settings of commercial centers, customer attractions in shopping malls, and route to shopping of urban shoppers. The present research analyzes retailing patterns in urban areas in reference to customer orientation strategies, product search behavior and enhancing the customer value. Interrelationship among urban retailing, marketplace ambiance, conventional shopping wisdom of customers, long-term customer services, and technology led selling processes are also addressed in the study based on empirical survey. Broadly, this study makes contributions to the existing research in urban retailing towards factors determining shopping attractions, routes to shopping, and establishing the customer-centric strategies of the firms. |
| Keywords: | Shopping mall, multi-channel retailing, consumer behavior, customer-centric strategy, market attractiveness, customer satisfaction |
| JEL: | D12 L81 M31 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ega:wpaper:200901&r=ure |
| By: | Pierre Biscourp (ENSAE); Xavier Boutin (INSEE (D3E-MSE) and CREST-LEI); Thibaud Vergé (CREST-LEI) |
| Abstract: | In 1997, a new legislation banning below-invoice retail prices came into force in France. Individually negotiated discounts could no longer be passed on to consumers, which is equivalent to allowing industry-wide price floors. The anti-competitive effects of such practices are well-known. The elimination of intra-brand competition is expected to lead to a sharp increase in the retail prices. Using CPI raw data, we find evidence supporting this claim. The modification or revocation of the existing legislation (as it has been done in Ireland in December 2005) would then be expected to reduce retail prices. |
| Keywords: | retail prices, pricing regulations, resale price maintenance |
| JEL: | L42 L81 K23 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpdeee:2008-02&r=ure |
| By: | Yiquan Gu; Tobias Wenzel |
| Abstract: | This paper explores the implications of price-dependent demand in spatial models of product differentiation.We introduce consumers with a quasi-linear utility function in the framework of the Salop (1979) model.We show that the so-called excess entry theorem relies critically on the assumption of completely inelastic demand. Our model is able to produce excessive, insufficient, or optimal product variety.A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided. |
| Keywords: | Demand elasticity, spatial models, excess entry theorem |
| JEL: | L11 L13 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0092&r=ure |
| By: | Gary Charness (University of California, Santa Barbara); Chun-Lei Yang |
| Abstract: | We test a mechanism whereby groups are formed endogenously, through the use of voting. Once formed, groups play a public-goods game, where there are economies of scale: in two treatments the social value of an incremental contribution to the group account increases with the size of the group, but in the second treatment, the social value is capped once a certain group size is reached. Societies of nine people are initially formed randomly into three groups of three people who play the game for three periods. Individuals then learn about the average contribution of each individual (by ID number) in one's current own group, as well as the average contribution in other groups, and can decide whether to exit the group. Remaining group members choose whether to exclude any current members from the group; the new groups and 'free agents' then choose whether to merge with other existing groups and/or other free agents. We find a great degree of success for this mechanism. The average contribution rate is quite high in both treatments, but is modestly (albeit significantly) higher in the first treatment, when there is no cap on the social value of a contribution. In the first treatment, we see large and stable groups forming, but we see considerably more instability and smaller group sizes in the second treatment. The driving force appears to be the economies of scale combined with the awareness that bad behavior will result in ostracism, but in the Athenian sense of possible redemption. This redemption is a unique feature of our environment, with about one-third of the population becoming good citizens after initially being low contributors. |
| Keywords: | Endogenous group formation, Exclusion, Experiment, Merger, Ostracism, Public goods, Social efficiency, Voting, |
| Date: | 2008–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsbec:13-08&r=ure |