|
on Urban and Real Estate Economics |
| By: | Matthias Wrede (University of Marburg) |
| Abstract: | This paper analyzes the impact of fiscal equalization on asymmetric tax competition when positive agglomeration externalities are present. It shows that equalization of standardized tax revenue improves the spatial allocation of capital provided that agglomeration externalities are sufficiently strong. |
| Keywords: | Agglomeration, tax competition, fiscal equalization. |
| JEL: | R12 H71 H73 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2009/4/doc2009-5&r=ure |
| By: | Andrew Haughwout; Christopher Mayer; Joseph Tracy |
| Abstract: | Some observers have argued that minority borrowers and neighborhoods were targeted for expensive credit in 2004-06, the peak period for subprime lending. To investigate this claim, we take advantage of a new data set that merges demographic information on subprime borrowers with information on the mortgages they took out. In a sample of more than 75,000 adjustable-rate mortgages, we find no evidence of adverse pricing by race, ethnicity, or gender in either the initial rate or the reset margin. Indeed, if any pricing differential exists, minority borrowers appear to pay slightly lower rates, as do those borrowers in Zip codes with a larger percentage of black or Hispanic residents or a higher unemployment rate. Mortgage rates are also lower in locations that previously had higher rates of house price appreciation. These results suggest some economies of scale in subprime lending. Yet there are important caveats: we are unable to measure points and fees at loan origination, and the data do not indicate whether borrowers might have qualified for less expensive conforming mortgages. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:368&r=ure |
| By: | Li, Chuan-Zhong (Department of Economics); Isacsson, Gunnar (Department of Economics, Dalarna University, VTI, Borlänge) |
| Abstract: | This paper is concerned with the implicit values of urban accessibility and air quality in Sweden. Based on the hedonic wage and rent theory, we construct an econometric model to compute such values, and illustrate their implications for regional sustainability analysis. It is shown that for most Swedish cities, welfare has increased from 1986 to 1998 due to improved air quality but the positive effect is partly offset by the deteriorated accessibility in some areas. The results also indicate that the values people place on urban accessibility and air quality vary considerably across regions. |
| Keywords: | hedonic pricing; air quality; urban accessibility; welfare analysis |
| JEL: | Q51 R10 |
| Date: | 2009–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2009_002&r=ure |
| By: | Wenli Li; Haiyong Liu; Rui Yao |
| Abstract: | We estimate a structural model of optimal life-cycle housing and consumption in the presence of realistic labor income and house price uncertainties. The model postulates constant elasticity of substitution between housing service and nonhousing consumption, and explicitly incorporates a house adjustment cost. Our estimation fits the cross-sectional and time-series household wealth and housing profiles from the Panel Study of Income Dynamics quite well, and suggests an intra-temporal elasticity of substitution between housing and nonhousing consumption of 0.33 and a housing adjustment cost that amounts to about 15 percent of house value. Policy experiments with estimated preference parameters imply that households respond nonlinearly to house price changes with large house price declines leading to sizable decreases in both the aggregate homeownership rate and aggregate non-housing consumption. The average marginal propensity to consume out of housing wealth changes ranges from 0.4 percent to 6 percent. When lending conditions are tightened in the form of a higher down payment requirement, interestingly, large house price declines result in more severe drops in the aggregate homeownership rate but milder decreases in nonhousing consumption. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:09-7&r=ure |
| By: | W. Scott Frame |
| Abstract: | Fannie Mae and Freddie Mac are government-sponsored enterprises that play a central role in U.S. residential mortgage markets. In recent years, policymakers became increasingly concerned about the size and risk-taking incentives of these two institutions. In September 2008, the federal government intervened to stabilize Fannie Mae and Freddie Mac in an effort to ensure the reliability of residential mortgage finance in the wake of the subprime mortgage crisis. This paper describes the sources of financial distress at Fannie Mae and Freddie Mac, outlines the measures taken by the federal government, and presents some evidence about the effectiveness of these actions. Looking ahead, policymakers will need to consider the future of Fannie Mae and Freddie Mac as well as the appropriate scope of public sector activities in primary and secondary mortgage markets. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2009-13&r=ure |
| By: | Enström Öst, Cecilia (Institute for Futures Studies) |
| Abstract: | The aim with this paper is to investigate whether parental wealth influences the tenure choice of young adults. Sweden as a welfare state has historically been considered as strong and with an ambitious housing policy. However, since the early 1990’s there has been a decrease in housing subsidies and a rolling back of the welfare state. These changes have been associated with rising house prices and costs which have worsened young adults’ chances on the housing market. Such problems may increase the importance of parental wealth. Data from three birth-cohorts that entered the housing market during different periods suggest that family background has now become an important factor in describing young adults’ housing situation. Young adults with parents who are owner occupiers and whose fathers have a university degree seem to have become more likely to buy their housing. The results also indicate that growing up with a single parent – a factor that has been shown to put children at risk – now also seems to have become a constraint on choice in the housing market. The result from this three-cohort study indicates that housing opportunities of young adults may have become a matter of class affiliation. |
| Keywords: | Housing tenure; Family background; Wealth; Young adult |
| JEL: | I30 J10 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2009_001&r=ure |
| By: | Erdem Basci; Ismail Saglam |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:0902&r=ure |
| By: | Monika Piazzesi; Martin Schneider |
| Abstract: | This paper studies household beliefs during the recent US housing boom. To characterize the heterogeneity in households’ views about housing and the economy, we perform a cluster analysis on survey responses at different stages of the boom. The estimation always finds a small cluster of households who believe it is a good time to buy a house because house prices will rise further. The size of this “momentum” cluster doubled towards the end of the boom. We also provide a simple search model of the housing market to show how a small number of optimistic investors can have a large effect on prices without buying a large share of the housing stock. ; This paper is an extension of Monika Piazzesi's and Martin Schneider's work while they were in the Research Department of the Federal Reserve Bank of Minneapolis. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:422&r=ure |
| By: | Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier) |
| Abstract: | The paper sheds light on the impact of local human capital endowments on individual wages in Western Germany. Using panel data it shows that regional wage differentials are partly attributable to localized human capital externalities arising from the regional share of highly qualified workers. Employing the regional number of public schools and of students as instrumental variables, the paper shows that human capital externalities are underestimated in ordinary panel regressions for highly qualified workers due to supply shifts of workers of different skills. An an alysis by sector reveals that human capital externalities are more pronounced in manufacturing than in the service sector. We find indication that highly qualified workers benefit from intraindustry knowledge spillovers, while non-highly qualified workers profit from pecuniary externalities between industries. Our findings are stable among a variety of indicators of regional human capital and robust to the inclusion of other sources of increasing returns, as well as wage curve, price level, and amenity effects. |
| Keywords: | Human Capital Externalities, Agglomeration, Urban Wage Premium |
| JEL: | D62 D83 J24 J31 O15 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:wpaper:200903&r=ure |
| By: | McArthur, David Philip (Stord/Haugesund University College); Thorsen, Inge (Stord/Haugesund University College); Ubøe, Jan (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | Traffic congestion and the policies to combat it have been studied extensively. However, most studies neglect the labour market impacts of congestion. Many also fail to account for the simultaneity between commuting and migration. This paper models impacts such as unemployment disparities, changes in commuting flows and changes in the flow of migrants by adopting an agent based simulation approach. This approach has the strength that it allows the simultaneous consideration of commuting, migration and labour force participation decisions. The results obtained have important theoretical and policy implications and show how an "optimal" charge may, in fact, be sub-optimal. |
| Keywords: | Congestion; Road pricing; Agent-based approach; Spatial interaction; Infrastructure investment |
| JEL: | J61 R12 R23 R41 R48 |
| Date: | 2009–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2009_003&r=ure |
| By: | Korpi, Martin (Institute for Futures Studies); Clark, William A.V. (Geography Department, UCLA, Los Angeles); Malmberg, Bo (Institute for Futures Studies) |
| Abstract: | This paper examines the variation in gains and losses from migration within the Swedish urban hierarchy. The central questions focus on whether increases in disposable income outweigh the associated increases in housing costs, especially with movements up the urban hierarchy to larger and more expensive locations. The paper extends the literature which considers cost of living adjustments associated with individual and household migration. The questions are addressed using Swedish Census data for 3.5 million individuals and two fixed effect panel models are estimated for four consecutive time periods, 1993-2002. The results consistently show relatively higher increases in disposable income moving up the urban hierarchy. Taking changes in housing expenditure into account, this pattern is however reversed; the largest gains are made by households moving from larger to smaller labour markets, a significantly smaller share of total domestic migration. The results point to factors beyond short term nominal income gains as important in explaining the bulk of domestic migration. |
| Keywords: | domestic migration; urban hierarchy |
| JEL: | J60 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2008_015&r=ure |
| By: | Andreas Hornstein |
| Abstract: | These notes provide the derivations of results stated without proof in Hornstein (2009). For a simple model of the demand for housing, it is shown that on a balanced growth path, the rate at which the relative price of housing changes over time is determined by the relative productivity growth rates of the housing sector and the rest of the economy. The model is then modified to include a collateral constrained consumer. We show that collateral constraints may affect the level of the housing price path, but they do not affect the growth rate of housing prices. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:09-03&r=ure |
| By: | Essi Eerola; Määttänen; Niku |
| Abstract: | In a dynamic setting, housing capital is both an asset and a consumption good. But should it be taxed like other forms of consumption or like other forms of capital? We analyze this question by considering the taxation of housing capital in a version of the neoclassical growth model. We derive the optimal tax treatment of housing capital vis-à-vis the tax treatment of both business capital and other forms of consumption allowing for relatively general preferences. We show that for a class of utility functions that includes the standard Cobb-Douglas function, the second-best optimum can be achieved with a simple tax structure where housing construction is taxed at the same rate as non-housing consumption and the tax rate on the imputed rent equals the tax rate on the return to business capital in every period. We also show how the optimal tax structure depends on the elasticities of substitution between housing, non-housing consumption, and leisure. Our numerical analysis shows that the optimal tax burden on housing capital is indeed very sensitive to household preferences. |
| Keywords: | Optimal taxation, dynamic Ramsey taxation, housing taxation |
| JEL: | E21 H21 |
| Date: | 2009–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:3&r=ure |
| By: | John Mc Breen (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat, IXXI - Institut rhône-alpin des systèmes complexes - INRIA - Ecole Normale Supérieure de Lyon - ENS Lyon - Institut National des Sciences Appliquées de Lyon - Université Claude Bernard - Lyon I - Ecole Normale Supérieure Lettres et Sciences Humaines - Université Joseph Fourier - Grenoble I - CNRS - IRD, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - CNRS : UMR5672 - Ecole Normale Supérieure de Lyon - ENS Lyon); Florence Goffette-Nagot (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Pablo Jensen (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat, IXXI - Institut rhône-alpin des systèmes complexes - INRIA - Ecole Normale Supérieure de Lyon - ENS Lyon - Institut National des Sciences Appliquées de Lyon - Université Claude Bernard - Lyon I - Ecole Normale Supérieure Lettres et Sciences Humaines - Université Joseph Fourier - Grenoble I - CNRS - IRD, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - CNRS : UMR5672 - Ecole Normale Supérieure de Lyon - ENS Lyon) |
| Abstract: | We simulate a closed rental housing market with search and matching frictions, in which both landlord and tenant agents are imperfectly informed. Homogeneous landlords set rents to maximise revenue, using information on the market to estimate the relationship between posted rent and time-on-the-market (TOM). Tenants, heterogeneous in income, engage in undirected search accepting residences based on their idiosyncratic tastes for housing and a disagreement point derived from information on the distribution of offers. The steady state to which the simulation evolves shows price dispersion, nonzero search times and vacancies.The main results concern the effects of increasing information on either side of the market. When tenants see a greater percentage of the distribution of offers, tenants learn to refuse high rents and so the population rises and tenants' utilities rise as does overall welfare. Conversely, when landlords have less information, their utility can rise as over estimations in best posting rent move the market to higher rents. |
| Keywords: | Real estate; Rental markets; Search; Information; Simulation; Multi-agent systems |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00374157_v1&r=ure |
| By: | Pekkarinen, Tuomas (Helsinki School of Economics); Uusitalo, Roope (Government Institute for Economic Research (VATT)); Kerr, Sari (Charles River Associates) |
| Abstract: | The Finnish comprehensive school reform replaced the old two-track school system with a uniform nine-year comprehensive school and significantly reduced the degree of heterogeneity in the Finnish primary and secondary education. We estimate the effect of this reform on the test scores in the Finnish Army Basic Skills test. The identification strategy relies on a differences-in-differences strategy and exploits the fact that the reform was implemented gradually across the country during a six-year period between 1972 and 1977. We find that the reform had a small positive effect on the verbal test scores but no effect on the mean performance in the arithmetic or logical reasoning tests. Still in all tests the reform improved the scores of students from families where parents had only basic education. |
| Keywords: | Education; school system; tracking; comprehensive school; test scores |
| JEL: | H52 I21 |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_006&r=ure |
| By: | Stefania Vitali; Mauro Napoletano; Giorgio Fagiolo |
| Abstract: | This paper employs a homogenous firms database to investigate industry localization in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser (1997) index and the Duranton and Overman (2005) index. We find that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we find that the two indices significantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a cross-sectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly ``traditional'' sectors (like jewelery, wine, and textiles) and sectors where scale economies are important. However, once one controls for countries' industrial structures science-based sectors turn out to be the most localized ones. |
| Keywords: | Industry Localization; Manufacturing Industries; Localization Indices; Spatial Concentration; Spatial correlation; Cross-country studies |
| JEL: | R12 R3 |
| Date: | 2009–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2009/04&r=ure |
| By: | Barbara Despiney (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | The chapter concentrates on the positive development dynamics of "industrial districts" based on the network of Small an Medium-Sized firms in Poland.The crux of the matter is to establish whether or not industrial districts constitute a model for the regenaration of local and regional economies in Central European Countries. |
| Keywords: | regional development; industrial clusters; Poland |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00374435_v1&r=ure |
| By: | Bäckman, Olof (Institute for Futures Studies); Nilsson, Anders (Institute for Futures Studies) |
| Abstract: | That living conditions differ between urban and rural areas is often taken for granted. But what does it look like when we explore more manifest indicators of social exclusion and marginalization? Are these problems present also in rural areas? And if so, does the character of such problems problem vary depending on local settings? This paper delivers a short and summarizing review of some key indicators of living conditions in rural and urban areas in Sweden. It is shown that on most indicators problems are more frequent in the rural areas than in the bigger cities. It is also shown that the mortality rate is higher among socially excluded young adults in the rural areas as compared to their counterparts in the bigger cities. |
| Keywords: | social exclusion; marginalization |
| JEL: | R00 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifswps:2008_012&r=ure |
| By: | Helmut Gründl; Thomas Post |
| Abstract: | Lack of transparency in securitization transactions significantly contributed to the severe financial crisis of 2007–2009. To increase transparency we propose a new mechanism: financial claims with fingerprints. They would allow market participants at each stage of the securitization process to obtain easily full information about the underlying original risks and the superior claims that need to be satisfied before receiving their own payoffs. The fingerprint mechanism would considerably enhance transparency in securitization transactions at the expense of some transaction costs, while reducing the need for government involvement in securitization markets. |
| Keywords: | Financial Crisis, Securitization, Mortgage-Backed Securities, Transparency, Opaqueness |
| JEL: | D53 E44 F34 G14 G18 G21 G24 G28 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2009-018&r=ure |
| By: | Kukenova, Madina; Monteiro, Jose-Antonio |
| Abstract: | This paper investigates the finite sample properties of estimators for spatial dynamic panel models in the presence of several endogenous variables. So far, none of the available estimators in spatial econometrics allows considering spatial dynamic models with one or more endogenous variables. We propose to apply system-GMM, since it can correct for the endogeneity of the dependent variable, the spatial lag as well as other potentially endogenous variables using internal and/or external instruments. The Monte-Carlo investigation compares the performance of spatial MLE, spatial dynamic MLE (Elhorst (2005)), spatial dynamic QMLE (Yu et al. (2008)), LSDV, difference-GMM (Arellano & Bond (1991)), as well as extended-GMM (Arellano & Bover (1995), Blundell & Bover (1998)) in terms of bias, root mean squared error and standard-error accuracy. The results suggest that, in order to account for the endogeneity of several covariates, spatial dynamic panel models should be estimated using extended GMM. On a practical ground, this is also important, because system-GMM avoids the inversion of high dimension spatial weights matrices, which can be computationally unfeasible for large N and/or T. |
| Keywords: | Spatial Econometrics; Dynamic Panel Model; System GMM; Monte Carlo Simulations |
| JEL: | C15 C33 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13404&r=ure |
| By: | Ballester, Coralio (University of Alicante); Calvó-Armengol, Antoni (Universitat Autònoma de Barcelona); Zenou, Yves (Stockholm University) |
| Abstract: | Delinquents are embedded in a network of relationships. Social ties among delinquents are modeled by means of a graph where delinquents compete for a booty and benefit from local interactions with their neighbors. Each delinquent decides in a non-cooperative way how much delinquency effort he will exert. Using the network model developed by Ballester et al. (2006), we characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy, which targets the delinquent who, once removed, leads to the highest aggregate delinquency reduction. We then extend our characterization of optimal single player network removal for delinquency reduction, the key player, to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex since it depends on wages and on the structure of the network. |
| Keywords: | social networks, delinquency decision, key group, NP-hard problem, crime policies |
| JEL: | A14 C72 K42 L14 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4122&r=ure |
| By: | Noonan, Douglas S. (Georgia Tech); Krupka, Douglas J. (IZA) |
| Abstract: | Much has been written identifying property price effects of historic preservation policies. Little attention has been paid to the possible policy endogeneity in hedonic price models. This paper outlines a general case of land use regulation in the presence of externalities and then demonstrates the usefulness of the model in an instrumental-variables estimation of a hedonic price analysis – with an application to historic preservation in Chicago. The theoretical model casts doubt on previous results concerning price effects of preservation policies. The comparative statics identify some determinants of regulation that seem, on the face of it, most unlikely to also belong in a hedonic price equation. The analysis employs these determinants as instruments for endogenous regulatory treatment in a hedonic price analysis. OLS estimation of the hedonic offers results consistent with much of previous literature, namely that property values are higher for historic landmarks. In the 2SLS hedonic, robust estimates of the "own" price effect of historic designation are shown to be large and negative (approx. -27%) for homes in landmark districts. Further, significant and substantively important (positive) external price effects of landmark designations are found. The paper concludes with a discussion of the policy implications of these findings for historic preservation. |
| Keywords: | hedonics, built heritage, heritage valuation, real estate economics |
| JEL: | R21 R31 R52 Z1 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4110&r=ure |
| By: | Giuseppe C.Ruggeri (University of New Brunswick) |
| Abstract: | This paper discusses the methodology for the calculation of federal fiscal flows in a federation and the measurement of interregional redistribution. It identifies five major steps: (a) the selection of the approach for calculating federal fiscal flows, (b)the allocation of federal revenues and expenditures among regions, (c) the choice of the appropriate concept of regional economic disparities, (d) the selection of the relevant indicators of interregional redistribution, and (e) the estimation of these indicators. It concludes with some suggestions for further research, stressing the need to develop a common methodology and to place the study of interregional redistribution in a dynamic context. |
| Keywords: | Methodology, interregional redistribution, fiscal federalism. |
| JEL: | B41 H77 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2009/3/doc2009-4&r=ure |
| By: | Giorgio Ponti |
| Abstract: | Thanks to financing from the European Regional Development Fund (ERDF) (2009-2013 Programme) and other Italian funding programmes, the Campania Region has begun a project to improve the quality of its school buildings, in partnership with the research centre CISEM of Milan.1 The Educational Quality Facilities (EQF) project has a total budget of about EUR 600 million. The Campania Region will allocate the necessary funds to the municipalities and provinces for the construction and equipment involved. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2009/2-en&r=ure |
| By: | Yann Bramoullé; Bernard Fortin |
| Abstract: | In a social network, agents have their own reference group that may influence their behavior. In turn, the agents' attributes and their behavior affect the formation and the structure of the social network. We survey the econometric literature on both aspects of social networks and discuss the identification and estimation issues they raise. |
| Keywords: | Social network, peer effects, identification, network formation, pair-wise regressions, separability, mutual consent |
| JEL: | D85 L14 Z13 C3 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0913&r=ure |
| By: | Michael Lytton |
| Abstract: | Capital planning for schools should include both qualitative and quantitative dimensions. And while building condition remains an important and necessary factor in short- and long-range facility planning, by itself it is not sufficient to reveal the full range of building performance issues or to guide decision making and strategies for prudent capital investments. Functionality – sometimes referred to as “serviceability” or “fitness of purpose” – has to do with how school buildings and sites support users’ activities. Its reference points are the owner’s operating requirements that represent the purposes and objectives for which the facility was originally designed and built, plus the many new functional requirements that have inevitably arisen over time (driven by such factors as enrolment growth or decline, grade reconfiguration, trends in curriculum, technology or educational philosophy, and community uses). In terms of functionality, a school can have positive attributes – it can be safe and secure, healthy and comfortable, cost-effective and environmentally sustainable, even uplifting and inspirational – or negative ones – it can be overcrowded or underutilised, dilapidated or obsolete, inefficient and expensive, or even dangerous. There is a welcome and growing body of literature on links between the functional quality of educational buildings and the academic performance of the students who occupy them. This research is also consistent with new attention to the environmental aspects of schools, which are significant in terms of embodied pedagogy, the health and comfort of educators and learners, and, indeed, the long-term prospects for life on the planet. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2009/4-en&r=ure |
| By: | Barry Eichengreen; Ashoka Mody; Milan Nedeljkovic; Lucio Sarno |
| Abstract: | How did the Subprime Crisis, a problem in a small corner of U.S. financial markets, affect the entire global banking system? To shed light on this question we use principal components analysis to identify common factors in the movement of banks' credit default swap spreads. We find that fortunes of international banks rise and fall together even in normal times along with short-term global economic prospects. But the importance of common factors rose steadily to exceptional levels from the outbreak of the Subprime Crisis to past the rescue of Bear Stearns, reflecting a diffuse sense that funding and credit risk was increasing. Following the failure of Lehman Brothers, the interdependencies briefly increased to a new high, before they fell back to the pre-Lehman elevated levels – but now they more clearly reflected heightened funding and counterparty risk. After Lehman's failure, the prospect of global recession became imminent, auguring the further deterioration of banks' loan portfolios. At this point the entire global financial system had become infected. |
| JEL: | F36 G15 G18 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14904&r=ure |
| By: | Ethan Cohen-Cole |
| Abstract: | This paper aims to contribute to the growing literature on the causes of consumer bankruptcy. It presents the consumer bankruptcy decision as an irreversible choice that has an embedded real option value. This allows the use of well known framework for the study of decision making under uncertainty. The principal empirical finding is that cross-sectional variances of economic factors, such as unemployment, are strong predictors of bankruptcy rates and are consistent with the implications of the real options model. This supports anecdotal evidence that individuals are facing increased economic uncertainty and that suggests that uninsurable economic shocks are poorly characterized by local information. Finally, the paper concludes that policy regarding changes in the bankruptcy rate may have been disproportionately focused on credit variables such as utilization rates and supply of credit rather than exposure to risk. |
| Keywords: | Bankruptcy |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbqu:qau09-1&r=ure |
| By: | Efraim Benmelech; Jennifer Dlugosz |
| Abstract: | Collateralized Loan Obligations (CLOs) were one of the largest and fastest growing segments of the structured finance market, fueling the 2003-2007 boom in syndicated loans and leveraged buyouts. The credit crisis brought CLO issuance to a halt, and as a result the leveraged loan market dried up. Similar to other structured finance products, investors in CLOs rely heavily on credit rating provided by the rating agencies, yet little is known about CLO rating practices. This paper attempts to fill that gap. Using novel hand-collected data on 3,912 tranches of Collateralized Loan Obligations (CLO) we document the rating practices of CLOs and analyze their existing structures. |
| JEL: | G24 G28 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14878&r=ure |
| By: | Peter Arcidiacono; Esteban M. Aucejo; Hanming Fang; Kenneth I. Spenner |
| Abstract: | We argue that once we take into account the students' rational enrollment decisions, mismatch in the sense that the intended beneficiary of affirmative action admission policies are made worse off could occur only if selective universities possess private information about students' post-enrollment treatment effects. This necessary condition for mismatch provides the basis for a new test. We propose an empirical methodology to test for private information in such a setting. The test is implemented using data from Campus Life and Learning Project (CLL) at Duke. Evidence shows that Duke does possess private information that is a statistically significant predictor of the students' post-enrollment academic performance. We also propose strategies to evaluate more conclusively whether the evidence of Duke private information has generated mismatch. |
| JEL: | D8 I28 J15 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14885&r=ure |