nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒03‒28
24 papers chosen by
Steve Ross
University of Connecticut

  1. Central City Exploitation by Urban Sprawl? Evidence from Swiss Local Communities By Christoph A. Schaltegger; Benno Torgler; Simon Zemp
  2. Variabilité spatiale des prix hédoniques des caractéristiques du logement: une nouvelle méthode de calcul des indices de prix spatiaux By Filali, Radhouane
  3. Voters Hold the Key: Lock-in, Mobility and the Portability of Property Tax Exemptions By Ron Cheung; Chris Cunningham
  4. The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble By Dean Baker; David Rosnick
  5. What drives returns to euro area housing? Evidence from a dynamic dividend-discount model. By Paul Hiebert; Matthias Sydow
  6. Spatial asymmetric duopoly with an application to Brussels' airports By Fay Dunkerley; André De Palma; Stef Proost
  7. Spatial Point Pattern Analysis and Industry Concentration By Reinhold Kosfeld; Hans-Friedrich Eckey; Jørgen Lauridsen
  8. Consequences of Debt Capitalization: Property Ownership and Debt/Tax Choice By Reiner Eichenberger; David Stadelmann
  9. The Housing Crash Recession and the Case for a Third Stimulus By Dean Baker
  10. Agglomeration, migration, and regional growth: A CGE analysis for Uganda By Dorosh, Paul; Thurlow, James
  11. Sebastiano Brusco and the Italian School of Local Development By Margherita Russo; Anna Natali
  12. Modeling regional house prices By Dijk, A. van; Franses, Ph.H.B.F.; Paap, R.; Dijk, D.J.C. van
  13. An Empirical Evaluation of Poverty Mapping Methodology: Explicitly Spatial versus Implicitly Spatial Approach By Olivia, Susan; Gibson, John; Smith, Aaron; Rozelle, Scott; Deng, Xiangzheng
  14. Do house price developments spill over across euro area countries? Evidence from a Global VAR. By Isabel Vansteenkiste; Paul Hiebert
  15. The new Dutch timetable: The OR revolution By Kroon, L.G.; Huisman, D.; Abbink, E.J.W.; Fioole, P-J.; Fischetti, M.; Maroti, G.; Schrijver, A.; Steenbeek, A.; Ybema, R.
  16. Real Estate Prices and the Importance of Bequest Taxation By Giorgio Bellettini; Filippo Taddei
  17. Fiscal competition over taxes and public inputs - theory and evidence. By Sebastian Hauptmeier; Ferdinand Mittermaier; Johannes Rincke
  18. Bringing Home the Green Recovery: A User's Guide to the 2009 American Recovery and Reinvestment Act By Shawn Fremstad; Radhika Fox; Jason Walsh
  19. Reciprocity and Competition: Is There a Connection? By Jonathan C. Rork; Gary A. Wagner
  20. Pricing in networks By Francis Bloch; Nicolas Quérou
  21. The Effect on the Swedish Real Economy of the Financial Crisis By Österholm, Pär
  22. Input-Output Based Economic Impact Evaluation System for Small City Development: A Case Study on Saemangeum's Flux City Design By Meng, Bo; Okamoto, Nobuhiro; Tsukamoto, Yoshiharu; QU, Chao
  23. Production Networks and Spatial Economic Interdependence: An International Input-Output Analysis of the Asia-Pacific Region By Meng, Bo; Inomata, Satoshi
  24. Urban Water Restrictions: Unbundling Motivations, Compliance and Policy Viability By Cooper, Bethany; Crase, Lin

  1. By: Christoph A. Schaltegger; Benno Torgler; Simon Zemp
    Abstract: This paper investigates spatial spillovers in local spending decisions between the center and the surrounding local communities by using panel data of the canton of Lucerne during the 1990s. Due to the geographical fragmentation with a major central city and some 100 small suburban local communities within a distance from 4 to 55 kilometers to the center this area represents a particularly useful database in order to test the relevance of spatial interactions in a small metropolitan area. The empirical evidence confirms strategic interactions among suburban governments and the central city only for public education, health and environmental spending. There are no spatial interactions with the central city for overall government spending.
    Keywords: spatial spillovers; strategic interaction; central city exploitation
    JEL: D72 H72
    Date: 2009–03
  2. By: Filali, Radhouane
    Abstract: Estimation of spatial housing price indices requires a housing market segmentation into local sub-markets. In this paper, we use geographically weighted regression model (GWR) to take account for spatial heterogeneity of housing attribute marginal prices. Estimated marginal prices are then used to assess constant quality housing values over space. Evidences from urban Tunisia assert attribute marginal prices variability and provide satisfactory indices in both ownership and rental markets.
    Keywords: Marché de logement - Prix hédoniques - régression géographiquement pondérée - indice de prix spatiaux
    JEL: C43 D12 C21 R21
    Date: 2008–10–20
  3. By: Ron Cheung (Department of Economics, Florida State University); Chris Cunningham (Federal Reserve Bank of Atlanta)
    Abstract: We examine support for a recent and novel Florida referendum to allow home owners with existing assessment caps to “port” their exemption to a new residence. Employing a rich dataset of all Florida real property, census-block data and precinct level voting results, we find that support for the law change was greater in high-mobility and high exemption precincts. Support was also greater in cities with more out-of-state migration or containing more second homes. Within cities, a precinct’s mobility relative to the rest of the city was more predictive suggesting that voters were savvy to the tax-share implications of the amendment.
    Keywords: tax limitations, property tax, assessment cap, referendum, voting, lock-in, mobility
    JEL: R5 H7 H5
    Date: 2009–03
  4. By: Dean Baker; David Rosnick
    Abstract: This report builds upon previous CEPR projections to more accurately describe the current wealth prospects for the baby boom cohorts aged 45 to 54 and 55 to 64. The severity of the housing market meltdown, coupled with the recent collapse of the stock market, has had a severe negative impact on the wealth of these cohorts. Using data from the 2004 Survey of Consumer Finance and the November 2008 Case-Shiller 20 City Price Index, the authors create three possible scenarios for baby boomer wealth and find these households will enter retirement with little wealth beyond Social Security. For each cohort in 2004 and 2009, the paper analyzes net worth, financial assets, equity in real estate, percent of households in each cohort who will need cash to close on their primary residence, net worth of homeowners, net worth of non-homeowners, and the percent of homeowners who would need cash to close on their primary residence.
    Keywords: housing bubble, baby boomers, economic crisis, household wealth
    JEL: R R2 R21 O51 E E21
    Date: 2009–02
  5. By: Paul Hiebert (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Matthias Sydow (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: We apply a dynamic dividend-discount model to analyse unexpected housing returns in a panel of eight euro area countries which together comprise 90% of euro area GDP. The application of this model allows for a decomposition of house price movements into movements in rent (cash-flow) and expected return news components. The empirical application of the model involves the estimation of a panel vector autoregressive model (VAR) for four variables –excess return to housing, rents, the real interest rate and real disposable per capita income– using quarterly data over the period 1985-2007. This empirical investigation yields two main findings. First, the bulk of the variability of house price movements in the panel of countries analysed can be attributed to movements in the rental yield. Indeed, perturbations to rents appear to result in a one-to-one analogous movement in house prices over the long term once controlling for changes in expected returns. Second, evidence from the dynamic profile of shocks along with the negative co-movement between changing rental yield expectations and changing expected returns on housing assets would suggest that euro area house prices overreact to news. JEL Classification: R21, C33, G12.
    Keywords: House price, housing rental yield, return decomposition, panel VAR estimation, cash flow news.
    Date: 2009–03
  6. By: Fay Dunkerley (CES - KU Leuven - CES - KU Leuven); André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Stef Proost (CES - KU Leuven - CES - KU Leuven)
    Abstract: In this paper the problem of a city with access to two firms or facilities (shopping malls, airports, commercial districts) selling a differentiated product (shopping, flights) and/or offering a differentiated workplace is studied. Transport connections to one facility are congested. A model is presented for this asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. A comparative statics analysis is used to illustrate the properties of the equilibrium. A numerical model is then applied to the two Brussels airports. Three stylised policies are implemented to address the congestion problem: expansion of transport capacity; congestion pricing; and a direct subsidy to the uncongested facility. Our results indicate that the degree of intrinsic differentiation between the two firms is crucial in determining the difference in profit and market share. Price and wage differences also depend on trip frequency and consumer preferences for diversity. Congestion pricing is the most effective policy tool but all three options are shown to have attractive attributes.
    Keywords: duopoly, imperfect competition, congestion, general equilibrium, airport competition
    Date: 2008–12
  7. By: Reinhold Kosfeld (Institute of Economics, University of Kassel, 34109 Kassel, Germany); Hans-Friedrich Eckey (Institute of Economics, University of Kassel, 34109 Kassel, Germany); Jørgen Lauridsen (Institute of Public Health, University of Southern Denmark, Odense M 5230, Denmark)
    Abstract: Traditional measures of spatial industry concentration are restricted to given areal units. They do not make allowance for the fact that concentration may be differently pronounced at various geographical levels. Methods of spatial point pattern analysis allow to measure industry concentration at a continuum of spatial scales. While common distancebased methods are well applicable for sub-national study areas, they become inefficient in measuring concentration at various levels within industrial countries. This particularly applies in testing for conditional concentration where overall manufacturing is used as a reference population. Using Ripley’s K function approach to second-order analysis, we propose a subsample similarity test as a feasible testing approach for establishing conditional clustering or dispersion at different spatial scales. For measuring the extent of clustering and dispersion, we introduce a concentration index of the style of Besag’s (1977) L function. By contrast to Besag’s L function, the new index can be employed to measure deviations of observed from general spatial point patterns. The K function approach is illustratively applied to measuring and testing industry concentration in Germany.
    Keywords: Spatial concentration, clustering, dispersion, spatial point pattern analysis, K function
    JEL: C46 L60 L70 R12
    Date: 2009
  8. By: Reiner Eichenberger; David Stadelmann
    Abstract: Public debts capitalize into property prices. Therefore, property owners tend to favor tax over debt financing for government spending. In contrast, tenants do not suffer from debt capitalization. Thus, they tend to favor debt over tax financing. Our model of the resulting democratic fight between property owners and tenants over public debts and taxes predicts that the property ownership rate in a jurisdiction negatively effects the debt level. We provide empirical support for this hypothesis by analyzing a cross-section of the 171 communities in the Swiss Canton of Zurich in the year 2000.
    Keywords: Public Debts; Homeownership; Taxes; Ricardian Equivalence
    JEL: H74 R51 H00
    Date: 2009–03
  9. By: Dean Baker
    Abstract: This paper makes the case for a third stimulus package to in the face of economic indicators signaling that the economy is in a deeper downturn than was expected based on previous projections. Specifically, the report calls for an employer tax-credit for extending health care coverage and another per worker employer tax credit for increasing paid time off from work. The author also makes the case for a housing policy centered on the stabilization of prices in non-bubble and deflated markets rather than applying the same efforts on markets that remain at bubble inflated levels. Finally, the paper argues that the dollar must be allowed to fall in order to adjust trade imbalances that are compounding the U.S. economic crisis caused by the collapse of the housing market.
    Keywords: housing bubble, economic stimulus, fiscal stimulus, recession, dollar policy
    JEL: O51 R R2 R21 E E2 E21 E27 E24 E3 E32 E E5 E58 E6 E61 E62 E63 E66 H H2 H5
    Date: 2009–03
  10. By: Dorosh, Paul; Thurlow, James
    Abstract: "Uganda has experienced rapid economic growth and poverty reduction over the past decade but has failed to significantly improve incomes in its northern regions where prolonged conflict has hindered growth. We consider three strategies to close this regional divide: (1) develop a north-south corridor to encourage regional trade, (2) accelerate growth in the southern capital city and encourage north-south migration, and (3) improve agricultural productivity in rural areas. We examine these strategies using a regionalized computable general equilibrium model, accounting for internal migration and productivity gains from urban agglomeration effects. Simulation results indicate that a north-south corridor benefits northern households, but its benefits are limited by the small size of northern urban centers and the low productivity of northern producers. Investing in the capital city accelerates economic growth but has little effect on other regions' welfare because of the city's weak growth linkages with other regions and small migration effects. Improving agricultural productivity, however, though less effective at stimulating national economic growth, generates broad-based welfare improvements in both rural and urban areas. We therefore conclude that without significant gains in agricultural productivity in the next decade, out-migration and urban-led growth centered in Kampala will be insufficient to significantly reduce poverty in northern Uganda. " from authors' abstract
    Keywords: economic growth, Poverty, Agricultural development, Spatial economics, Development strategies,
    Date: 2009
  11. By: Margherita Russo; Anna Natali
    Abstract: The essay, presented as opening lecture at the first edition of the Summer School of Local Development “Sebastiano Brusco” (Seneghe, July 2006), outlines the original contribution of Sebastiano Brusco on two related issues: theory and tools for analyzing the industrial structure and for designing development policy. Her we enlighten some distinctive elements apparently running through all Brusco’s work, from the youth years in Sardinia, spent in cultural and political activities alongside Antonio Pigliaru, till the more mature studies on industrial districts. In Brusco’s thought, a central role is played by knowledge, competence, information, education and training: as far as small firms productive systems, industrial districts, and also less developed areas are concerned. An innovative approach to policy design and intervention stems from this view, stressing mechanisms able to diffusely affect capacity, learning and perception of opportunities.
    Keywords: development policy; regional policy
    JEL: R11
    Date: 2008–12
  12. By: Dijk, A. van; Franses, Ph.H.B.F.; Paap, R.; Dijk, D.J.C. van (Erasmus Econometric Institute)
    Abstract: We develop a parsimonious panel model for quarterly regional house prices, for which both the cross-section and the time series dimension is large. The model allows for stochastic trends, cointegration, cross-equation correlations and, most importantly, latent-class clustering of regions. Class membership is fully data-driven and based on (i) average growth rates of house prices, (ii) the propagation of shocks to house prices across regions, also known as the ripple effect, and (iii) the relationship of house prices with economic growth and other variables. Applying the model to quarterly data for the Netherlands, we find convincing evidence for the existence of two distinct clusters of regions, with pronounced differences in house price dynamics.
    Keywords: cross-section dependence;cointegration;ripple effect
    Date: 2008–03–18
  13. By: Olivia, Susan; Gibson, John; Smith, Aaron; Rozelle, Scott; Deng, Xiangzheng
    Abstract: Poverty maps provide information on the spatial distribution of welfare and can predict poverty levels for small geographic units like counties and townships. Typically regression methods are used to estimate coefficients from the detailed information in household surveys, which are then applied to the more extensive coverage of a census. One problem with standard regression techniques is that they do not take into account the ‗spatial dependencies‘ that often exist in the data. Ignoring spatial autocorrelation in the regression providing the coefficient estimates could lead to misleading predictions of poverty, and estimates of standard errors. Household survey data usually lack exact measures of location so it is not possible to fully account for this spatial autocorrelation. In this paper, we use data from Shaanxi, China with exact measures of distance between each household to explicitly model this spatial autocorrelation. We also investigate which set of augmenting variables (i) census means or (ii) environmental variables mainly from satellite imagery have the most impact in soaking up unwanted spatial autocorrelation.
    Keywords: China, Poverty, Small Area Estimation, Survey Methods, Spatial Models,
    Date: 2009
  14. By: Isabel Vansteenkiste (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Paul Hiebert (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: This paper empirically assesses the prospects for house price spillovers in the euro area, where co-movement in house prices across countries may be particularly relevant given a general trend with monetary union toward increasing linkages in trade, financial markets, and general economic conditions. The application involves a Global VAR for three housing demand variables (real house prices, real per capita disposable income, and the real interest rate) on the basis of quarterly data for 10 euro area countries (Belgium, Germany, Ireland, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland) over the period 1989-2007. The results suggest limited house price spillovers in the euro area, with evidence of some overshooting in the first 1-3 years after the shock, followed by a long run aggregate euro area impact of country-specific changes in real house prices related in part to the country's economic weight. This contrasts with the impacts of a shock to domestic long-term interest rates, with the latter causing a permanent shift in house prices after around 3 years. Underlying this aggregate development are rather heterogeneous house price spillovers at the country level, with a strong importance for economic weight in the euro area in governing their general magnitude, while geographic proximity appears to also play a role. JEL Classification: R21, R31, C32.
    Keywords: House price, Global VAR (GVAR), International linkages.
    Date: 2009–03
  15. By: Kroon, L.G.; Huisman, D.; Abbink, E.J.W.; Fioole, P-J.; Fischetti, M.; Maroti, G.; Schrijver, A.; Steenbeek, A.; Ybema, R. (Erasmus Econometric Institute)
    Abstract: In December 2006, Netherlands Railways introduced a completely new timetable. Its objective was to facilitate the growth of passenger and freight transport on a highly utilized railway network, and improve the robustness of the timetable resulting in less train delays in the operation. Further adjusting the existing timetable constructed in 1970 was not option anymore, because further growth would then require significant investments in the rail infrastructure. Constructing a railway timetable from scratch for about 5,500 daily trains was a complex problem. To support this process, we generated several timetables using sophisticated operations research techniques, and finally selected and implemented one of these timetables. Furthermore, because rolling-stock and crew costs are principal components of the cost of a passenger railway operator, we used innovative operations research tools to devise efficient schedules for these two resources. The new resource schedules and the increased number of passengers resulted in an additional annual profit of 40 million euros ($60 million) of which about 10 million euros were created by additional revenues. We expect this to increase to 70 million euros ($105 million) annually in the coming years. However, the benefits of the new timetable for the Dutch society as a whole are much greater: more trains are transporting more passengers on the same railway infrastructure, and these trains are arriving and departing on schedule more than they ever have in the past. In addition, the rail transport system will be able to handle future transportation demand growth and thus allow cities to remain accessible. Therefore, people can switch from car transport to rail transport, which will reduce the emission of greenhouse gases.
    Date: 2008–11–10
  16. By: Giorgio Bellettini; Filippo Taddei
    Abstract: Taxation of bequests and donations is an important determinant of real estate prices. We show that, ceteris paribus, a decrease in taxes on inter vivos donations and bequests brings about an increase in real estate prices. We provide a general equilibrium rationalization in the context of OLG economies featuring intergenerational altruism. This has relevant policy implications. We test the predictions of our theory employing a unique policy shock: the abolition of bequest and donation taxation that took place in Italy in 2001. Considering this policy shift provides the first evidence that a drastic reduction in bequest and donation taxation significantly increased real estate prices. Our estimates suggest that the 2001 abolition of taxation on bequests and donations alone led to an appreciation of residential real estate in excess of 10%.
    JEL: E60 E65 H24
    Date: 2009
  17. By: Sebastian Hauptmeier (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Ferdinand Mittermaier (Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, D-80539 München, Germany.); Johannes Rincke (Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, D-80539 München, Germany.)
    Abstract: We set up a model to characterize the reaction functions of governments competing for mobile capital by simultaneously setting both the business tax rate as well as the level of provision of a productive public input. Using a rich data set of local jurisdictions, we then test the predictions of the model with respect to the nature of strategic interaction among governments. Our findings from efficient estimation of a system of spatially interrelated equations for both policy instruments support the notion that local governments use both the business tax rate and public inputs to compete for capital. In particular, we find that if neighbors cut their tax rates, governments try to restore competitiveness by lowering their own tax and increasing spending on public inputs. If neighbors provide more infra-structure, governments react by increasing their own spending on public inputs. JEL Classification: H72, H77, C72.
    Keywords: Tax competition, public input competition, system estimation.
    Date: 2009–03
  18. By: Shawn Fremstad; Radhika Fox; Jason Walsh
    Abstract: The $787 billion recovery package marks a big, bold, and historic investment in creating green jobs and building more equitable communities. The package invests nearly $100 billion in funding for transportation and infrastructure, $48 billion in investments in job training and education, $41 billion for energy-related programs, and $20 billion in tax incentives for renewable energy. But without substantial advocacy from local and state groups, these historic federal investments may not end up in the communities that need them most. The in-depth guide offers tangible, up-to-date information and ideas for using and securing recovery dollars to help expand opportunity in low-income communities and communities of color. The guide is a first step in what will be a vital nationwide effort to ensure the recovery package helps all communities rise stronger than ever from this economic crisis, and that community-based organizations are at the forefront in crafting a green, equitable recovery.
    Keywords: American Recovery and Reinvestment Act, stimulus
    JEL: H H2 E62
    Date: 2009–03
  19. By: Jonathan C. Rork (Andrew Young School of Policy Studies - Georgia State University); Gary A. Wagner (University of Arkansas at Little Rock)
    Abstract: One challenge states face in designing an income tax system is deciding how to treat non-resident earners. Numerous states have entered into reciprocity agreements with other states that exclude non-residents’ income from the tax base. These agreements provide a unique opportunity to explore the nature of state tax competition. We demonstrate that not only do reciprocity agreements dampen competition over income taxes, but the states that enact agreements also exhibit decreased levels of competition over other tax bases. This suggests that reciprocity agreements are a credible vehicle for states to act cooperatively and avoid a potential race to the bottom.
    Keywords: Spatial econometrics, interjurisdictional competition, state taxation, reciprocity.
    JEL: H7 R5
    Date: 2009
  20. By: Francis Bloch (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Nicolas Quérou (School of Management and Economics - Queen's University of Belfast)
    Abstract: This paper studies optimal pricing in networks in the presence of local consumption or price externalities. It analyzes the relation between prices and nodal centrality measures. Using an asymptotic approach, it shows that the ranking of optimal prices and strategies can be reduced to the lexicographic ranking of a specific vector of nodal characteristics. In particular, this result shows that with positive consumption externalities, prices are higher at nodes with higher degree, and with relative price externalities, prices are higher at nodes which have more neighbors of smaller degree.
    Keywords: Social Networks, Network Externalities, Oligopolies
    Date: 2008–10
  21. By: Österholm, Pär (National Institute of Economic Research)
    Abstract: This paper investigates the effects of the financial crisis on the Swedish real economy. In order to do this, an index which describes the financial conditions of the Swedish economy is developed. The index indicates that domestic Swedish financial conditions have deteriorated substan-tially during 2008 and are now at the highest level since the crisis of the early 1990’s. A Bayesian VAR model with both US and Swedish variables is used to assess the quantitative effects of the financial crisis on Swedish real GDP growth. Results suggest that the Swedish economy will grow substantially slower in the next couple of years due to the financial crisis.
    Keywords: GDP growth; Bayesian VAR
    JEL: E37 E44
    Date: 2009–02–28
  22. By: Meng, Bo; Okamoto, Nobuhiro; Tsukamoto, Yoshiharu; QU, Chao
    Abstract: The paper aims to develop a quasi-dynamic interregional input-output model for evaluating the macro-economic impacts of small city development. The features of the model are summarized as follows: (1) the consumption expenditure of households is regarded as an endogenous variable, (2) the technological change is determined by the change of industrial Location Quotient caused by firm's investment activities. (3) a strong feedback function between the city design and the economic analysis is provided. For checking the performance of the model, Saemangeum's Flux City Design Plan is used as the simulation target in our paper.
    Keywords: Input-Output, City design, Economic impact
    JEL: C67 R52 R58
    Date: 2009–02
  23. By: Meng, Bo; Inomata, Satoshi
    Abstract: The Asia-Pacific Region has enjoyed remarkable economic growth in the last three decades. This rapid economic growth can be partially attributed to the global spread of production networks, which has brought about major changes in spatial interdependence among economies within the region. By applying an Input-Output based spatial decomposition technique to the Asian International Input-Output Tables for 1985 and 2000, this paper not only analyzes the intrinsic mechanism of spatial economic interdependence, but also shows how value added, employment and CO2 emissions induced are distributed within the international production networks.
    Keywords: Production networks, Spatial economic interdependence, Input-output table
    JEL: C67 F02
    Date: 2009–03
  24. By: Cooper, Bethany; Crase, Lin
    Abstract: The welfare costs of urban water restrictions are now well recognised, even if not yet quantified with precision (see, for example, Edwards 2008). Notwithstanding the costs that attend this form of intervention, governments have proven reluctant to abandon them, at least until additional infrastructure is in place. Accordingly, some form of behavioural constraint over the use of water is now applied in almost every major urban centre in Australia. Against this background there is value in understanding the motivations for individuals to comply with water restrictions. There is also much to be gained from developing an appreciation of the preferences for different restriction regimes. There is also scope to address wider politico-economic considerations as part of this analysis. This paper considers some of these issues by presenting the results of a choice modelling and contingent valuation study drawing data from New South Wales and Victoria. The study also embodies data from water-rich and water-poor communities in metropolitan and regional settings.
    Keywords: Urban water, water restrictions, choice modelling, contingent valuation, compliance behaviour,
    Date: 2009

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