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on Urban and Real Estate Economics |
| By: | Paredes - Araya, Dusan |
| Abstract: | This paper proposes a methodology for a spatial cost index of housing that considers spatial heterogeneity in properties across regions. The index is built by combining three different techniques to reduce the spatial heterogeneity in housing: Quasi-experimental methods, hedonic prices and Fisher spatial price index. Using microdata from the Chilean survey CASEN 2006, it is shown that the quasi-experimental method called Mahalanobis metric within propensity score calipers (MMWPS) leads to a significant reduction in the potential bias. The technique matches dwellings of a particular region with other properties of similar characteristics in the benchmark region (Metropolitan region). Once the houses are matched, a hedonic price model is computed, and a regional housing price matrix is created using Fisher spatial price indices. The paper concludes the existence of price differentials for homogeneous houses across regions in Chile. |
| Keywords: | Housing Cost; Index Hedonic Prices Index; Matching Estimator; Spatial Fisher Index. |
| JEL: | C43 C21 R21 |
| Date: | 2009–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15016&r=ure |
| By: | Juusola, Pia (Jönköping International Business School) |
| Abstract: | This paper uses the hedonic housing model to assess economic values to high value meadows and grazings located in rural settings. The hypothesis is that residential purchase prices include premiums for properties located in the surrounding areas of such environments. The dataset consist of 7565 property transactions sold during the period 1977-2007. The main findings are that houses located in the immediate surrounding area of these lands were on average 2.6 per cent more expensive which implies that the size of the premium approximately equals €3200 for these properties. |
| Keywords: | Hedonic housing; Geographic information systems; Meadows; Grazings |
| JEL: | Q10 Q50 |
| Date: | 2009–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hjiseg:0005&r=ure |
| By: | Damm, Anna Piil (Department of Economics, Aarhus School of Business); Schultz-Nielsen, Marie Louise (The Rockwool Foundation Research Unit) |
| Abstract: | In this paper we propose a model for constructing neighbourhoods based on georeferenced data and administrative data. The 431,233 inhabited hectare cells in Denmark are clustered into 9,404 small and 2,296 large neighbourhoods, inhabited on average in 2004 by 572 and 2,343 persons respectively. The priorities in the clustering process are to obtain neighbourhoods that are unaltered over time, delineated by physical barriers, compact, homogeneous in terms of type of housing and ownership, relatively small, homogeneous in terms of number of inhabitants, and comprised of a contiguous cluster of cells. To illustrate the importance of detailed neighbourhood information we compare social and ethnic segregation measured by Isolation and Dissimilation indices on the levels of municipalities and of small neighbourhoods. Our findings demonstrate substantial variation in the residential mix in neighbourhoods within a given municipality, and thus show the importance of having information on a more detailed geographical level than that of the municipality. |
| Keywords: | Geo-referenced data; Neighbourhoods; Segregation |
| JEL: | J61 |
| Date: | 2008–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2008_017&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: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14951&r=ure |
| By: | Ballester, Coralio; Calvó-Armengol, Antoni; Zenou, Yves |
| Abstract: | Delinquents are embedded in a network of relationships. Social ties among delinquents are modelled 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: | Crime policies; Delinquency decision; Key group; NP-hard problem; Social networks |
| JEL: | A14 C72 K42 L14 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7293&r=ure |
| By: | Michele Fratianni (Department of Business Economics and Public Policy, Indiana University Kelley School of Business); Francesco Marchionne (Universita Politecnica delle Marche) |
| Abstract: | The ultimate point of origin of the great financial crisis of 2007-2009 can be traced back to an extremely indebted US economy. The collapse of the real estate market in 2006 was the close point of origin of the crisis. The failure rates of subprime mortgages were the first symptom of a credit boom tuned to bust and of a real estate shock. But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. The latter had become fragile as a result of several factors that are unique to this crisis: the transfer of assets from the balance sheets of banks to the markets, the creation of complex and opaque assets, the failure of ratings agencies to properly assess the risk of such assets, and the application of fair value accounting. To these novel factors, one must add the now standard failure of regulators and supervisors in spotting and correcting the emerging weaknesses. Accounting data fail to reveal the full extent of the financial maelstrom. Ironically, according to these data, US banks appear to be still adequately capitalized. Yet, bank undercapitalization is the biggest stumbling block to a resolution of the financial crisis. |
| Keywords: | accounting, banks, credit, crisis, fair values, risk aversion, undercapitalization |
| JEL: | G21 N20 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2009-02&r=ure |
| By: | Laurent-Lucchetti, Jérémy; Leroux, Justin |
| Abstract: | The siting of public facilities, such as prisons, airports or incinerators for hazardous waste typically faces social rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect which creates an asymmetry: all involved communities benet from their existence, but only one (the host community) bears the local negative externality. We view the siting problem as a cost sharing issue and provide an axiomatic foundation for Lindahl pricing in this context. The set of axioms we introduce are specically designed to overcome the asymmetry of the problem. |
| Keywords: | Public goods; Externalities; NIMBY; Location; Cost sharing. |
| JEL: | D63 H41 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14930&r=ure |
| By: | Jorge Onrubia (Universidad Complutense de Madrid); M. Carmen Rodado (Universidad Rey Juan Carlos); Luis Ayala (Universidad Rey Juan Carlos) |
| Abstract: | This paper aims at analyzing the redistributive impact that the inclusion of imputed rental market value of owner-occupied housing would have when quantifying ability to pay, rather than the legal imputation that considers cadastral values. We consider the Spanish Personal Income Tax as reference, due to the differential treatment that provides to this type of income, together with the higher percentages of ownership for primary residence in Spain. The analysis is carried out through a micro-simulation exercise in which different scenarios are proposed. Our results show that the measurement of income including market value incomes resulting from actual or potential use of significantly modifies income inequality and IRPF progressivity and redistribution. |
| Keywords: | owner-occupied housing services, inequality by income sources, personal income tax, progressivity, redistribution |
| JEL: | D31 D33 H23 H24 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2009-112&r=ure |
| By: | Peter Haug |
| Abstract: | The paper investigates the existence of fiscal illusion in German municipalities with special focus on the revenues from local public enterprises. These shadow budgets tend to increase the misperception of municipal tax prices and seem to have been neglected in the literature. Therefore, an aggregated expenditure function has been estimated for all German independent cities applying an “integrated budget” approach, which means that revenues and expenditures of the core budget and the local public enterprises are combined to one single municipal budget. The estimation results suggest that a higher relative share of local public enterprise revenues might increase total per capita spending as well as spending for non-obligatory municipal goods and services. Empirical evidence for other sources of fiscal illusion is mixed but some indications for debt illusion, renter illusion or the flypaper effect could be found. |
| Keywords: | fiscal illusion, municipal enterprises, panel data regression |
| JEL: | H72 L32 H71 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:9-09&r=ure |
| By: | Duffy, David (ESRI) |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp291&r=ure |
| By: | Hall, Caroline (Institute for Labour Market Polilcy Evaluation) |
| Abstract: | Since the mid-20th century many OECD countries have discarded their previous selective schools systems, in which students early on were separated between academic and vocational tracks, in favor of more comprehensive schools. The effects of these reforms have generally been difficult to evaluate and their consequences for students’ educational and labor market outcomes remain disputed. This paper evaluates the effects of the introduction of a more comprehensive upper secondary school system in Sweden in the 1990s. The reform reduced the differences between the academic and vocational educational tracks through prolonging and substantially increasing the academic content of all vocational tracks. The effects of this policy change are identified by exploiting a six year pilot scheme, which preceded the actual reform in some municipalities. The results show that the prolongation of the vocational tracks brought about an increased probability of dropping out among low performing students. Though one important motive behind the policy change was to enable all upper secondary school graduates to pursue a university degree, I find no effects on university enrolment or graduation. There are some indications, however, that attending the longer and more academic vocational track may have led to increased earnings in the long run. |
| Keywords: | Upper secondary education; comprehensive school system; educational attainment; earnings; instrumental variables |
| JEL: | I21 I28 |
| Date: | 2009–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_009&r=ure |
| By: | Laurent-Lucchetti, Jérémy; Leroux, Justin |
| Abstract: | Implementing a project, like a nationwide nuclear waste disposal, which benefits all involved agents but brings major costs only to the host is often problematic. In practice, revelation issues and redistributional concerns are significant obstacles to achieving stable agreements. We address these issues by proposing the first mechanism to implement the efficient site (the host with the lowest cost) and share the exact cost while retaining total control over realized transfers. Our mechanism is simple and in the vein of the well-known Divide and Choose procedure. The unique Nash equilibrium outcome of our mechanism coincides with truthtelling, is budget-balanced, individually rational and immune to coalitional deviations. More generally, our mechanism can also handle the symmetric case of positive local externalities (e.g., Olympic Games) and even more complex situations where the usefulness of the project---regardless of its location---is not unanimous. |
| Keywords: | Public goods; local externalities; NIMBY; implementation; mechanism design; VCG mechanisms. |
| JEL: | H41 D61 C70 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14929&r=ure |
| By: | Bazyl, Monika |
| Abstract: | Homeownership rates are very different across European countries. They range from below 50% in Germany to over 80% in Greece, Spain or Ireland. However the differences lie not only in the overall homeownership rates but also in its structure, and this is the focus of this paper. Its aim is to study the impact of microeconomic factors on household’s tenure choice, using a cross-country comparative approach. Logit models are constructed for each country using data for year 2000 from the Consortium of Household Panels for European Socio-Economic Research micro-database. The models show that marriage is a significant determinant of the decision to move to homeownership in all analysed countries, while co- habitating households are more likely to rent, except for Denmark. Nationality, income and age proved to be significant explanatory variables in several countries, while staying insignificant in others. |
| Keywords: | tenure choice; homeownership ; housing |
| JEL: | D10 R20 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:irs:iriswp:2009-04&r=ure |
| By: | Rodrigo Harrison (Instituto de Economía. Pontificia Universidad Católica de Chile.); Gonzalo Hernández; Roberto Muñoz. |
| Abstract: | This paper studies the welfare implications of equilibrium behavior in a market characterized by competition between two interconnected telecommunication ?rms, subject to constraints: the customers belong to a social network. It also shows that social networks matter because equilibrium prices and welfare critically depend on how people are socially related. Next, the model is used to study e¤ectiveness of alternative regulatory schemes. The standard regulated environement, in which the authority de?nes interconnection ac cess charges as being equal to marginal costs and ?nal prices are left to the market, is considered as a benchmark . Then, we focus on the performance of two di¤erent regulatory interventions. First, access prices are set below marginal costs to foster competition. Second, switching costs are reduced to intensify competition. The results show that the second strategy is more efective to obtain equilibrium prices closer to Ramsey?s level. |
| Keywords: | Access charges, social networks, random regular graphs. |
| JEL: | C70 D43 D60 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:350&r=ure |
| By: | Albert Solé-Ollé (Universitat de Barcelona); Pilar Sorribas-Navarro (Universitat de Barcelona) |
| Abstract: | The aim of this paper is to analyze whether Spanish municipalities adjust in response to budget shocks and (if so) which elements of the budget they are more likely to adjust. The methodology we use to answer these questions is a vector error-correction model (VECM), estimated with data from a panel of Spanish municipalities during the period 1988-2006. Our results confirm, first, that municipalities do indeed make adjustments in response to fiscal shocks (i.e., the deficit is stationary in the long run). Second, we find that most of the adjustment to a revenue shock is borne by the municipalities themselves as they proceed to cut expenditures, with a minor role being played by grant financing. By contrast, adjustments to expenditure shocks are shared on largely equal terms by the municipality –through the raising of taxes– and higher tiers of government –through the raising of grants. These results suggest that the viability of the local finance system is feasible with different institutional arrangements. |
| Keywords: | Fiscal adjustment, intergovernmental transfers, local government. |
| JEL: | H70 H72 H77 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2009/4/doc2009-7&r=ure |
| By: | Yamamura, Eiji |
| Abstract: | This paper aims to explore how social capital is related to self-rated health status in Japan and how this relationship depends on the extent to which a person is embedded into community. The study used data from 3 079 adult participants in the 2000 Social Policy and Social Consciousness (SPSC) survey. Controlling for unobserved city size- and area-specific fixed effects, I find through Ordered Probit estimation that social capital has a significantly positive effect on health status for long-time but not for short-time residents. Results also suggested that the experience of divorce is negatively associated with health status for long- time but not short-time residents. People can enjoy a social network that can be regarded as a kind of social capital if they are a member of a network; nevertheless, people appear to be negatively influenced if they are excluded from a network. Such positive and negative effects of social capital are more obvious when people are more deeply integrated into a community. An empirical study provided evidence that social capital and socio-economic effects on health status are significantly influenced by the extent to which respondents are integrated into a community. |
| Keywords: | social capital; health status |
| JEL: | I19 Z13 |
| Date: | 2009–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14983&r=ure |