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on Urban and Real Estate Economics |
| By: | Wolter Hassink; Michiel van Leuvensteijn |
| Abstract: | We investigate the size of the mark-up on the lending rate for endowment mortgages, due to expected prepayment by the borrower. For this type of mortgage, prepayment is mostly the result of mobility in the housing market. We control for the risk of default by using a unique data set of Dutch borrowers insured against default. The estimates indicate that households with a higher liquidity constraint are less likely to prepay, as they have a lower mark-up on the lending rate. In contrast, the collateral constraint has a very limited influence on the mark-up. We explain this result as follows. Usually, income constraints are generated at the household level, whereas constraints on housing wealth pertain to the regional level. Hence, income changes may improve the relative position of households in the housing market, but an increase in homeowners. housing wealth does not improve their relative position in the housing market. |
| Keywords: | Mortgage market, Prepayment, Lending rate, Liquidity constraint, Collateral constraint, Residential mobility |
| JEL: | D40 D80 E43 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0905&r=ure |
| By: | Jordan, Jeffrey L.; Anil, Bulent; Herbert, Velma; Chatterjee, Swan |
| Abstract: | The purpose of this paper is to investigate the relationship between housing uncertainties, child time preferences and education outcomes in the form of staying in school. The paper tests the hypothesis that students who face housing uncertainties through mortgage foreclosures and evictions learn impatient behavior and are therefore at greater risk of dropping our of school, impeding human capital formation and economic development. |
| Keywords: | discount rates, housing and educaiton, Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49320&r=ure |
| By: | Angelo, Mele |
| Abstract: | Existing indices of residential segregation are based on an arbitrary partition of the city in neighborhoods: given a spatial distribution of racial groups, the index provides different levels of segregation for different partitions. This paper proposes a method in which individual locations are mapped to aggregate levels of segregation, avoiding arbitrary partitions. Assuming a simple spatial process driving the locations of different racial groups, I define a location-specific segregation index and measure the city-level segregation as average of the individual index. After deriving several distributional results for this family of indices, I apply the idea to US Census data, using nonparametric estimation techniques. This approach provides different levels and rankings of cities' segregation than traditional indices. I show that high aggregate levels of spatial separation are the result of very few locations with extremely high local segregation. I replicate the study of Cutler and Glaeser (1997) showing that their results change when segregation is measured using my approach. These findings potentially challenge the robustness of previous studies about the impact of segregation on socioeconomic outcomes. |
| Keywords: | spatial segregation; spatial processes; nonparametric estimation |
| JEL: | C14 J15 C21 |
| Date: | 2009–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15155&r=ure |
| By: | Shaik, Saleem; Gustaphson, Cole |
| Abstract: | This paper has a two-fold contribution, 1) Examine the importance of aggregate economic policy on housing prices and rural housing prices, and 2) delineate factors resulting in divergent housing prices between urban and rural markets. Empirical application to US state level data from 1975-2006 indicates general economic variables are consistently influencing both urban and rural housing prices. While the farm economic variables do have differential influences on the housing and rural housing prices, their effects are transitory. Finally regional effects have greater impact on differential effects on urban rural housing price indexes than national farm programs. |
| Keywords: | US state data, rural housing prices, 1975-2007., Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49515&r=ure |
| By: | Chumacero, Romulo; Gomez, Dabiel; Paredes, Ricardo |
| Abstract: | One of the pillars of the educational voucher system instituted in Chile is that competition among schools to attract students would improve the quality of the education provided. Surveys have suggested that families rank the distance of the school from their home as the most important factor for choosing a school. They also suggest that parents largely ignore the results of standardized tests. We use a novel data set which includes measures of the distance between homes and schools to analyze the determinants of school choice. Economic theory suggests, and the estimations confirm, that parents consider quality of the school and its location when choosing schools. The paper quantifies the relevant trade-offs. |
| Keywords: | Vouchers; School Choice; Distance; Chile |
| JEL: | I21 C25 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15125&r=ure |
| By: | Carrion-Flores, Carmen E.; Flores-Lagunes, Alfonso; Guci, Ledia |
| Abstract: | Urban decentralization and dispersion trends have led to increased conversion of rural lands in many urban peripheries and exurban regions of the U.S. The growth of the exurban areas has outpaced growth in urban and suburban areas, resulting in growth pressures at the urban-rural fringe. A thorough analysis of land use change patterns and the ability to predict these changes are necessary for the effective design of regional environmental, growth, and development policies. We estimate a multinomial discrete choice model with spatial dependence using parcel-level data from Medina County, Ohio. Accounting for spatial dependence should result in improved statistical inference about land use changes. Our spatial model extends the binary choice âlinearized logitâ model of Klier and McMillen (2008) to a multinomial setting. A small Monte Carlo simulation indicates that this estimator performs reasonably well. Preliminary results suggest that the location of new urban development is guided by a preference over lower density areas, yet in proximity to current urban development. In addition, we find significant evidence of spatial dependence in land use decisions. |
| Keywords: | Land Use Change, Multinomial Logit, Spatial Dependence, Community/Rural/Urban Development, Land Economics/Use, Research Methods/ Statistical Methods, R14, C21, C25, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49403&r=ure |
| By: | Matthias Wrede (University of Marburg and CESifo, 35032 Marburg, Germany) |
| Abstract: | This paper analyzes the impact of skill heterogeneity on regional patterns of production and housing in the presence of pecuniary externalities within a general-equilibrium framework assuming monopolistic competition at intermediate good markets. It shows that the interplay of heterogeneous skills and relatively homogeneous land demand triggers skill segmentation and agglomeration. The core region, being more attractive to high skilled workers, has a disproportionately large share of production at all levels of the supply chain. The paper studies the effects on segmentation and agglomeration of interregional trade in intermediate goods, attachment to home, the presence of immobile unskilled workers, various conditions at local land markets, and federal taxation. |
| Keywords: | Agglomeration, Skill heterogeneity, land use, segmentation, agglomeration |
| JEL: | R12 R13 R14 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200922&r=ure |
| By: | Joeri Gorter; Suzanne Kok |
| Abstract: | The drift to the city has been going on for hundreds of years. As a result, most economic activity is concentrated in small geographical areas. The advantages of proximity of people and firms go under the name ‘agglomeration economies’. In this paper, we measure their strength on the basis of Dutch regional data. We regress regional labour productivity on a set of agglomeration indices, and find evidence for a productivity effect of concentration of production with a malus for industrial variety. Thus, the evidence supports Marschall-Arrow- Romer economies. The evidence does not support, however, Jacobs economies, nor variants of the Creative Class Hypothesis. |
| Keywords: | Agglomeration externalities; labour productivity; industrial concentration |
| JEL: | O18 R11 R12 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:124&r=ure |
| By: | Torben Klarl (University of Augsburg, Department of Economics) |
| Abstract: | During the last year, the research field of spatial economic has rapidly increased. There is consensus that the economic performance of a region depends not only on its own potential, but also on the development of their neighbouring regions. Knowledge spillovers, which are non constant over space, should influence the evolution of the region specific productivity. The so called "folk theorem of spatial economics" states, that increasing returns to scale are essential for explaining the uneven economic distribution of specific economic activity, which implies that knowledge spillover, agglomeration and distribution of per capita productivity are closely linked. Thus, the aim of this paper is, to introduce a spatial regional growth model, which links first time knowledge spillover, agglomeration, distribution of per capita productivity and the grasp of spillovers. Further, it is shown in a simulation study, how different regimes of returns to scale and grasps of knowledge affect agglomeration and distribution of per capita productivity. One of key findings is, that grasp of knowledge affects dynamic distribution of per capita productivity. Moreover, the simulation study particularly finds support for the "folk theorem of spatial economics". |
| Keywords: | Spatial Economics, Agglomeration, Spatial knowledge spillovers, New economic geography, Regional growth |
| JEL: | R11 R12 F43 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0305&r=ure |
| By: | Joëlle Noailly; Suncica Vujic; Ali Aouragh |
| Abstract: | We investigate the impact of competition between primary schools on the quality of education in the Netherlands. Do schools facing more competition in their neighbourhood perform better than schools facing less competition? As a measure of school quality, we look at the performance of pupils at the nationwide standard test (the so-called Cito test) in the final year of primary education. Since competition is likely to be endogenous to the quality of schools, we use the distance between the school and the town centre as an instrument for the level of competition faced by a school. The intuition is that schools located close to the town centre, which are easily accessible to a large number of parents, face more competition than schools located further away from the town centre. Using a large range of data on pupil, school and market characteristics, we find that school competition has a small positive significant effect on pupil achievement. An increase in competition by one standard deviation (comparable to 5 additional schools in the market) increases pupil achievement at the Cito test by five to ten percent of the mean standard deviation, so about less than one point. This result is robust to a large range of specifications. |
| Keywords: | education; competition; primary schools; pupil achievement |
| JEL: | I20 H70 R5 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:120&r=ure |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move, generating a Fréchet distribution of city sizes that is empirically competitive with other models. |
| Keywords: | Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory |
| JEL: | R12 |
| Date: | 2009–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15191&r=ure |
| By: | Xu, Wenchao; Wu, JunJie |
| Abstract: | Recent years have seen mass casualties and severe property damage caused by wildland fires. With increasing housing development in natural-amenity-rich fire-prone areas, human activities not only exert intense pressures on local ecosystems, but also increase difficulties for wildland fire suppression. To cope with wildland fire threats and protect life and property from wildfire, a new California Natural Hazard Disclosure Law (California Civil Code Sec. 1103) went into effect in 1998. Information disclosure required by Sec. 1103 and its related laws is expected to enhance the efficiency of market allocation of land and developments in hazardous areas, making land price and development pattern better reflect the benefit and risk of living in the natural hazard zones. However, Troy and Romm (2004) suggested that the California Natural Hazard Disclosure Law had no effect for the overall population of fire-zone houses and did not stop overdevelopment in wildfire hazardous areas. In this paper, we expand a classic urban economics model to explore the impact of wildland fire-zone designations on housing development patterns in both a general equilibrium framework and a quantifiable manner. We conduct simulation studies to characterize the changes in urban development patterns and spatial profiles in response to the dynamics of wildland fire regimes. Our model and simulation results reveal the behaviors of residents and local governments and help us understand why Sec. 1103 and its related laws fail to stop over-development in wildfire hazardous areas. |
| Keywords: | wildfire, land use, urban development pattern, income mix, natural amenity, Community/Rural/Urban Development, Land Economics/Use, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49428&r=ure |
| By: | Brown, Jason P.; Lambert, Dayton M.; Florax, Raymond J.G.M. |
| Abstract: | Attracting manufacturing investment is a frequently used rural development policy. Previous research in the location literature has informed policymakers which factors are most important for attracting new firm investment. Far less is known about the interaction of birth and death of establishments. A conceptual model of county-level investment in the U.S. manufacturing sector is developed from location theory and subsequent literature. Specifically, we test the relative importance of location factors influencing firm investment, and if these factors influence firm birth and death differently. Local factors include agglomeration due to localization, urbanization, and internal economies, market structure, labor quality, availability, and cost, market conditions, , infrastructure, and fiscal policy. This study covers the time period 2000 to 2004 for U.S. counties in the lower 48 states. Counts of establishments are from the U.S. Census Bureauâs Dynamic Firm Data Series, which links establishments across space and time. Negative binomial models containing spatially lagged endogenous variables are estimated in a regional adjustment framework to show how ceteris paribus changes in location factors affect the conditional number of establishment births and deaths in a county. |
| Keywords: | location determinants, manufacturing, count models, Community/Rural/Urban Development, Research Methods/ Statistical Methods, L60, R11, R12, |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49467&r=ure |
| By: | Kriesel, Warren; Mullen, Jeffrey D. |
| Abstract: | Coastal Georgia continues to experience extremely high population growth rates. People are attracted by coastal amenities, including pleasant views of the saltwater marshes. The real estate market has responded to population growth with a pattern of development that exhibits varying degrees of compatibility with the nearby marshland ecosystem. Among community leaders there is a need for information on development alternatives. Information has been generated from a hedonic price analysis that contains proximity to amenities and development design variables. We conclude that real estate developers have, under certain circumstances, an economic incentive to incorporate more open space in their design of residential subdivisions in marshland environments. |
| Keywords: | Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49514&r=ure |
| By: | Armin Zeinali (Queen's University); Glenn P. Jenkins (Queen's University); Andrey Klevchuk (Cambridge Resources International Inc.) |
| Abstract: | The purpose of this study is to develop a model to arrive at a joint optimizing strategy for the use of a given capital budget for the construction of new school buildings and for the repair of the already existing schools. This is to be done in a way that will have the maximum positive impact on the enhancement of the education system. Cost effectiveness analysis is used as the main analytical tool in the analysis. A key factor of the model is that it gives one the optimal mix of repair versus new construction that should be undertaken under a fixed budget constraint. The model is simulated using a sample data set from the information available for the education sector of Limpopo Province, South Africa. It utilizes a very basic set of information that is available in all school districts across the province. Application of this model for the selection of infrastructure investments (either building or repair) in the education sector would increase the efficiency of capital expenditure in this sector. This is particularly the case for the countries that are faced with a large excess demand for school buildings. |
| Keywords: | education, cost effectiveness, school location, school construction, school repair, South Africa |
| JEL: | D61 I28 H52 H75 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1204&r=ure |
| By: | Chen, Susan E.; Florax, Rayond J.G.M.; Snyder, Samantha D. |
| Abstract: | This paper provides quantitative estimates of the effect of proximity to fast food restaurants and grocery stores on obesity in urban food markets. Our empirical model combined georeferenced micro data on access to fast food restaurants and grocery stores with data about salient personal characteristics, individual behaviors, and neighborhood characteristics. We defned a "local food environment" for every individual utilizing 0.5-mile buffers around a person's home address. Local food landscapes are potentially endogenous due to spatial sorting of the population and food outlets, and the body mass index (BMI) values for individuals living close to each other are likely to be spatially correlated because of observed and unobserved individual and neighborhood effects. The potential biases associated with endogeneity and spatial correlation were handled using spatial econometric estimation techniques. Our policy simulations for Indianapolis, Indiana, focused on the importance of reducing the density of fast food restaurants or increasing access to grocery stores. We accounted for spatial heterogeneity in both the policy instruments and individual neighborhoods, and consistently found small but statistically signifcant effects for the hypothesized relationships between individual BMI values and the densities of fast food restaurants and grocery stores. |
| Keywords: | obesity, fast food, grocery store, spatial econometrics, micro data, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Public Economics, Research Methods/ Statistical Methods, C31, D12, I12, I18, |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49512&r=ure |
| By: | Perevodchikov, Evgeniy V. |
| Abstract: | Information theoretic estimators for the first-order autoregressive model are considered. Extensive Monte Carlo experiments are used to compare finite sample performance of traditional and three information theoretic estimators including maximum empirical likelihood, maximum empirical exponential likelihood, and maximum log Euclidean likelihood. It is found that information theoretic estimators are robust to specification of spatial autocorrelation and dominate traditional estimators in finite samples. Finally, the proposed estimators are applied to an illustrative example of hedonic housing pricing. |
| Keywords: | information theoretic estimators, the first-order spatial autoregressive model, Research Methods/ Statistical Methods, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49491&r=ure |
| By: | Williams, David M |
| Abstract: | Financial liberalisation and innovation (FLIB) in Australia over the 1980s and 1990s provided the institutional backdrop for one of the most rapid increases in household balance sheets and house prices in the world. An equilibrium correction model of quarterly Australian house prices for 1972-2006 identifies the key long run drivers as real non-property income per house, the working age population proportion, the unemployment rate, two government policy changes, real and nominal interest rates and non-price credit conditions. All else equal, easing credit supply conditions attributable to FLIB directly raised the long run level of real house prices by around 51 per cent while higher real interest rates subtracted 29 per cent from long run prices. Real interest rates are shown to have a significant impact on real house prices after financial liberalisation but play no role before. These findings suggest that FLIB fundamentally relaxed binding credit constraints on households and enhanced opportunities for intertemporal smoothing. The model also explicitly captures short run overshooting dynamics in Australian house prices. Whenever lagged real house price growth is greater than about 4 per cent, for example during booms, house prices tend to display "frenzy" behaviour measured as a cubic of lagged house price changes. |
| Keywords: | House prices; Mortgage markets; Financial liberalisation |
| JEL: | E21 G21 |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15212&r=ure |
| By: | Baylis, Kathy; Garduno-Rivera, Rafael; Piras, Gianfranco |
| Abstract: | This paper studies the regional distribution of the benets from trade in Mexico after NAFTA. Specically, we ask whether or not NAFTA has increased the concentration of economic activity in Mexico. Unlike previous work which uses state-level data, we identify the eect of NAFTA on economic activity at the municipal level allowing us to observe detailed growth patterns across space. Further, to explicitly identify the eect of the trade agreement, we compare results for growth in traded and non-traded sectors. Given the spatial nature of these data, we make explicit use of spatial econometrics methods. We find that NAFTA caused the wealthy regions nearest to the border to grow faster than others, increasing regional disparity. Second, we find that larger municipalities experienced greater per-capita economic benefits from NAFTA. This effect is particularly noticeable in the north. Somewhat surprisingly, we nd that regions with a less literate workforce and worse infrastructure grew faster than other areas after the trade agreement, decreasing regional disparity. We notice these redistributive eects occur primarily in the non-traded sectors. |
| Keywords: | Regional Disparities, Trade Liberalization, Agglomeration Economies, Economic Growth, Mexico, Transport Cost, Spatial econometrics, Community/Rural/Urban Development, International Development, International Relations/Trade, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49463&r=ure |
| By: | Wendt, Minh; Kinsey, Jean |
| Abstract: | This paper investigates the association between weight and elementary school studentsâ academic achievement, as measured by standardized Item Respond Theory scale scores in reading and math. Data for this study come from the 1998 cohort of the Early Childhood Longitudinal Study, Kindergarten-Fifth Grade (ECLS-K), which contains a large national sample of children between the ages of 5 and 12. Estimates of the association between weight and achievement were obtained by utilizing two regression model specifications, a mixed-effects linear model and a student-specific fixed-effects model. A comprehensive set of explanatory variables such as a householdâs motivation in helping the student learn (e.g. parentsâ expectations for their childâs schooling and levels of parental involvement with school activities), teacher qualification, and school characteristics are controlled for. The results show that malnourished children, both underweight and overweight, especially obese, achieve lower scores on standardized tests, particularly for mathematics, when compared to normal weight children. The outcomes are more pronounced for female students compared to male students. These results emphasize the need to reduce childhood malnutrition, especially childhood obesity. |
| Keywords: | Childhood overweight, academic achievement, ECLS-K, Consumer/Household Economics, Teaching/Communication/Extension/Profession, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49347&r=ure |
| By: | Elizabeth U. Cascio |
| Abstract: | In the 1960s and 1970s, many states introduced grants for school districts offering kindergarten programs. This paper exploits the staggered timing of these initiatives to estimate the long-term effects of a large public investment in universal early education. I find that white children aged five after the typical state reform were less likely to be high school dropouts and had lower institutionalization rates as adults. I rule out similar positive effects for blacks, despite comparable increases in their enrollment in public kindergartens in response to the initiatives. The explanation for this finding that receives most empirical support is that state funding for kindergarten crowded out participation in federally-funded early education among the poorest five year olds. |
| JEL: | H75 I28 J15 J24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14951&r=ure |
| By: | Gottlieb, Paul D.; O'Donnell, Anthony; Rudel, Thomas; O'Neill, Karen; McDermott, Melanie |
| Abstract: | Local governments in the United States use a wide range of tools to preserve rural landscapes. Some of these tools, like the purchase or transfer of development rights, are generally welcomed by farmers and other large landowners. Other tools, like increasing the minimum lot size in a townâs agricultural zone, are more controversial because they are believed to have negative effects on landowner wealth. In this contentious policy environment, it would be useful to know which land use tools actually work to control residential growth, thus achieving the consensual objective of rural preservation. It is reasonable to suppose that large-lot zoning and open space preservation will both reduce the number of homes in a community when it is fully developed. The short and medium-term effects of these policies, however, are less certain. Indeed, there is some evidence that permanently-preserved open space increases short-run home building through an âamenity magnetâ effect. Similarly, an increase in minimum lot size could trigger the immediate development of agricultural land by reducing the option value of waiting. This study uses data on 83 communities in the Highlands region of New Jersey to help answer these questions about the unintended consequences of these two rural conservation tools. The dataset includes GIS-based information on developable land, open space inventory, and minimum lot size zoning for the period 1995 to 2002. The study concludes that the relationship between minimum lot size and homebuilding in a community can be described as a concave quadratic. The pace of homebuilding rises to a maximum at a weighted average minimum lot size of 4.15, and then starts to fall. The percentage of a community that is permanently-preserved open space was found to have no significant effect on homebuilding, other things equal. |
| Keywords: | Land use, Farmland preservation, Zoning, Housing, Community/Rural/Urban Development, Land Economics/Use, R52, R14, R31, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49310&r=ure |
| By: | Motamed, Mesbah; Florax, Raymond J.G.M.; Masters, Will |
| Abstract: | This paper addresses the timing of historical transition from rural to urban activity. In our model, rural production has constant returns and meets subsistence needs, while urban production has scale economies and meets the demands of higher-income consumers. Urbanization occurs sooner when rural or urban productivity is higher or transport costs are lower. We test the model on worldwide data that divides the earth's surface at half-degree intervals into over 60,000 cells. From an independent estimate of each cell's rural and urban population history, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for country fixed effects and neighbors' urbanization using spatial techniques, we find that the date at which each cell passes each urbanization threshold is positively associated with its suitability for cultivation, having seasonal frosts, more access to navigable waterways and lower elevation. Aggregating cells into countries, an earlier urbanization date is linked to higher per capita income today. |
| Keywords: | economic growth, economic geography, urbanization, agriculture, Community/Rural/Urban Development, Research Methods/ Statistical Methods, C21, N50, O11, O18, R1, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49589&r=ure |
| By: | Yamamura, Eiji |
| Abstract: | This paper explores how the circumstances of where a person resides is related to the degree of their investment in social capital using individual data from Japan. Controlling for unobserved area-specific fixed effects and various individual characteristics, I found; (1) Not only that homeownership and length of residence are positively related to investment in social capital, but also that rates of homeowners and long-time residents in a locality increase in individual’s investments in social capital. (2) The effects of local neighborhood homeownership and local length of residence are distinctly larger than that of an individual’s. |
| Keywords: | Social Capital; homeownership; length of residence |
| JEL: | D71 R11 R23 |
| Date: | 2009–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15174&r=ure |
| By: | Majumdar, Shibalee; Partridge, Mark D. |
| Abstract: | Impact of Economic Growth on Income Inequality: A Regional Perspective Shibalee Majumdar and Mark Partridge Egalitarianism refers to the doctrine of the equality of mankind and the desirability of political, economic and social equality. In this paper, we are going to refer to the concept of economic equality. Theory shows that income inequality is a condition that prevails along with economic growth. According to the utilitarian view, income inequality must exist along with economic growth in order to maximize social welfare. This is in sharp contrast to the egalitarian view according to which, all members of the society should have equal access to all economic resources in terms of economic power, wealth and contribution. Kuznets (1955) introduced the inverted U-shaped Kuznets curve that showed that in an economic system, at the initial level of low economic growth, income inequality is low and as growth occurs, income inequality increases till a threshold, after which, income inequality decreases with increased economic growth. In the United States, income inequality remained stable till the 1970s but then began to increase as earnings increased. This has been called the great U-turn by Harris, et. al (1986). Partridge et. al (1996) notes that while Kuznets held the manufacturing sector as the main driver of the economic growth, the current economic growth is being spearheaded by the services sector. While one school of research shows how income inequality might harm economic growth, empirical studies show that in the United States, a positive linkage between economic growth and income inequality has existed since the 1970s. The causality between economic growth and income inequality is an important one. The relationship may differ depending on regions or size of an economy. Fallah and Partridge (2007) show that the impact of inequality on economic growth is opposite in rural and urban settings. Most of the research dealing with the inequality-growth relationship has either looked at the impact of inequality on economic growth (Fallah and Partridge, 2007) or the impact of various socio-economic variables on inequality. Though there has been some research on finding out the causality between economic growth and wage inequality, research assessing whether economic growth affects income inequality, and that too whether the degree of the impact varies between rural and urban regions, are few. The aim of this paper is to see how economic growth affects income inequality. Does improved economic growth lead to a more redistributive system of social welfare or does the polarization become more acute? Does the impact of economic growth on income inequality differ between metropolitan and non-metropolitan areas? Does inequality vary depending on the nature of the agglomeration or the demographic composition of a region? The empirical equation is: ginicsy = gcsy-1 + educsy + popcsy + lcsy + ethcsy + immigcsy + strcsy + Ïcs + Ïy + ε where, gini denotes the gini coefficient, g denotes per capita income, edu denotes educational attainment, pop denotes population density, l denotes labour market size, eth denotes ethnic diversity, immig denotes international immigration, str denotes the structural change index, Ïcs denotes state fixed effects and Ïy denotes time fixed effects. The subscripts c, s and y denotes county, state and year, respectively. A lagged value of the per capita income is used in order to avoid any endogeneity issues. The analysis for this paper will be done at the county-level. For the dependant variable and all explanatory variables except the per capita income, a panel will be constructed using county-level data for two decades, 1990 and 2000. The gini coefficient will be calculated using the income data from the U.S. Census Bureau. Data on per capita income, educational attainment, population density and international migration can be obtained from the U.S. Census Bureau. The ethnic diversity measure will be calculated using the population data from the U.S. Census Bureau. The structural change index will be calculated by using data from the Bureau of Economic Analysis, Regional Economic Information System. The aim of the paper is to find out whether per capita income (representing economic growth) has an impact on the gini coefficient (representing income inequality), and to show whether this impact varies between rural and urban areas. The expected results are as follows. Economic growth may have a negative impact on income inequality since economic growth is often positively associated with higher investments, higher employment-generating processes and higher employment, hence giving greater access to jobs and income to a larger number of people. The degree of the impact may vary between rural and urban areas because of the following reasons. A higher population density in the urban area may lead to greater job competition and hence lead to lower access to jobs than in rural areas. International immigration is usually higher in urban areas than in rural areas. The greater influx of immigrants, as well as often seen, the willingness of the immigrants to work at lower wages may lead to lower access to jobs for the locals. This should hold true for the low-skilled jobs. For the high-skilled jobs on the other hand, educational attainment of the people will play a more important role on their ability to get jobs in the urban areas than in the rural areas. However, growth may reduce income inequality in the urban areas because higher population density results in more personal contacts, better networking and access to information, and hence more opportunities to access more and better jobs. If the results show that economic growth has a negative impact on income inequality, it will be possible to comment on the causality of the inequality-growth relationship. More so, if it is seen that economic growth has a stronger impact in decreasing income inequality in the urban areas than in the rural areas, it will show that the higher wages and more diverse job opportunities in the urban areas have a greater spillover effect than in the rural areas. The policy implication such a result may have is that higher investments will have to be made in educational and vocational training in order to generate a stream of skilled labourers, which in turn will add to economic growth and thus will lead to lower income inequality and better social cohesion. |
| Keywords: | Regional development, income inequality, spatial relation, Community/Rural/Urban Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49270&r=ure |
| By: | Pede, Valerien O.; Florax, Raymond J.G.M.; Partridge, Mark D. |
| Abstract: | This paper revisits the inequality-growth relationship accounting for sectoral differences and focusing on US counties. For 8 two-digit industries of the NAICS classification, we estimated a conditional growth model where employment growth depends on regional income inequality and a number of control variables. Spatial econometrics techniques are used to account for spatial dependence. Results indicate that there is no association between employment growth and family income inequality for the Agriculture, Forestry, Fishing and Hunting sector and the Real Estate, Rental and Leasing sector. However, income inequality consistently shows a negative impact on employment growth in the construction sector, and results are mixed for other sectors such as: Manufacturing; Retail Trade; Professional Scientific and Technical Services; Accommodation and Food Services; Educational Services. In several sectors, mixed results were obtained when differentiation is made between urban and rural samples. |
| Keywords: | employment growth, inequality, spatial dependence, Community/Rural/Urban Development, R0, R11, O15, D30, |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49460&r=ure |
| By: | Giacomo DeGiorgi; Michele Pellizzari; Silvia Redaelli |
| Abstract: | In this paper we investigate whether peers' behavior influences the choice of college major, thus contributing to the mismatch of skills in the labor market. Using a newly constructed dataset, we are able to identify the endogenous effect of peers on such decisions through a novel identification strategy that solves the common econometric problems of studies of social interactions. Results show that, indeed, one is more likely to choose a major when many of her peers make the same choice. We also provide evidence on skills mismatch in terms of entry wages and occupation. We find that peers can divert students from majors in which they have a relative ability advantage, with adverse consequences on academic performance, entry wages and job satisfaction. |
| JEL: | I21 J0 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14948&r=ure |
| By: | Monika Bazyl (Department of Applied Econometrics, Warsaw School of Economics) |
| 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: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:36&r=ure |
| By: | Helmers, Claes Gustav; Connor, John M.; Florax, Raymond J.G.M.; Vroom, Govert |
| Abstract: | This paper analyses the impact of ownership type on the locating behavior and capacity choice of prospective entrant hotels. An important aspect which has often been neglected in the entry literature is the relevance of the ownership that defines an establishment. A hotel outlet can be company-owned, franchised, or independently owned. As this is an important driver of the incentive structure for a firm as well as a strategic indicator for its (prospective) competitors, this paper argues that ownership form is a necessary explanatory factor in market conduct analysis. We show using a spatial lag model that a disaggregated analysis provide a good understanding of market interaction among hotels. |
| Keywords: | Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49561&r=ure |
| By: | Chumacero, Romulo; Paredes, Ricardo |
| Abstract: | This paper uses different methods to evaluate the performance of students of public, subsidized, and private schools; distinguishing among for-profit and non-profit schools. |
| Keywords: | Voucher System; Education; Non-profit; Chile |
| JEL: | H52 C21 I22 |
| Date: | 2008–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15099&r=ure |
| By: | Fabio Bagliano (University of Turin and CeRP-Collegio Carlo Alberto, Turin); Claudio Morana (Università del Piemonte Orientale and CeRP-Collegio Carlo Alberto, Turin) |
| Abstract: | In this paper a small-scale macroeconomic system is estimated in the framework of a common trends model, in order to explore the dynamic interactions between real house prices, consumption expenditure and output in the US and major European economies. The results point to important differences across countries, with long-run house price effects on consumption only for France, Germany and the US. However, some interactions between house prices and consumption are detected in all countries at shorter horizons. Evidence of international comovements in the common trend component of house price dynamics is also found. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:81&r=ure |
| By: | Yamamura, Eiji |
| Abstract: | Using individual data from Japan, this paper investigates how a neighbor’s immobility is associated with individual investment in social capital. It is found that local homeownership has a positive effect on individual investment and that this effect for individual homeowners is about 2.5 times larger than for renters. |
| Keywords: | Social Capital; homeownership; length of residence. |
| JEL: | D71 Z13 R11 R23 |
| Date: | 2009–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15124&r=ure |
| By: | Nils Braakmann (Institute of Economics, University of Lüneburg) |
| Abstract: | This paper provides first evidence on the anatomy of human capital externalities arising from both firm-level and regional human capital. Using panel data from German social security records, both at an individual and aggregated at the plant and regional level, I estimate earnings functions incorporating measures of regional and firm-level human capital while controlling for various types of unobserved heterogeneity. The results suggest that the firm-level share of high-skilled workers generates positive, although small social returns to education for low-skilled and skilled workers but not for the high-skilled. This finding is in line with learning based theories of human capital externalities. Some estimates also suggest negative social returns for the regional shares of low-skilled workers. No such effects are found for the firm-level shares of low-skilled workers and the regional shares of high-skilled workers. |
| Keywords: | Human capital externalities, social returns to education, error-component model |
| JEL: | D62 J24 J31 R11 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:126&r=ure |
| By: | Martens, M. Andrea |
| Abstract: | This study analyzes Wal-Martâs pricing practices and its inï¬uence on competitorsâ input cost transmission. Previous attempts to analyze Wal-Martâs pricing strategy in the United States have been limited by the companyâs refusal to provide scanner data to third party research ï¬rms such as AC Nielsen. This is the ï¬rst study to observe Wal-Martâs prices over an extended period of time. Using weekly-store level price data between 2001 and 2006 that government oï¬cials collected in 12 Mexican cities, I ï¬nd that Wal-Mart adjusts its prices 1/3-3 times slower to wholesale price increases than other retailers and responds 5-7 times faster to wholesale price decreases than its competitors. This evidence is robust to the comparison of Wal-Mart to other hypermarkets that oï¬er âevery day low pricesâ and to potential endogeneity of Wal-Martâs location choices. All retailers respond asymmetrically to wholesale cost changes. However, retailers other than Wal-Mart respond twice as fast to wholesale price increases than to decreases, while Wal-Mart behaves in the opposite way. I ï¬nd no evidence that proximity to a Wal-Mart supercenter or the level of competition aï¬ects the speed of price adjustment of retailers. |
| Keywords: | Wal-Mart, cost pass-through, competition, Agribusiness, Industrial Organization, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49459&r=ure |
| By: | Roel van Elk; Marc van der Steeg; Dinand Webbink |
| Abstract: | This paper examines the impact of early tracking on enrollment in and completion of higher education. We compare pupils that are directly tracked in lower general secondary education (‘mavo’) to pupils that postpone their choice of education level by entering secondary education in a combined first-grade class. Potential self-selection problems are addressed in two ways. First of all, using micro data allows us to control for a large set of individual background characteristics including tests of cognitive ability. Second, we exploit differences in regional supply of particular school types. The estimates show that early tracking has a detrimental effect on enrollment in and completion of higher education for pupils who leave primary education with a mavo advice. In addition, we find no evidence that pupils who leave primary education with a higher general secondary education (‘havo’) advice would be negatively affected by being in a comprehensive class together with the mavo advice pupils. Enrollment in and completion of higher education can be increased by stimulating participation in combined first-grade classes that keep pupils with a mavo or havo advice together for an additional one or two years. |
| Keywords: | early tracking |
| JEL: | I21 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:182&r=ure |
| By: | Williamson, James M.; Brady, Mike; Durst, Ron |
| Abstract: | This project examines Section 1031 of the Internal Revenue Code and agriculture land exchanges. Stakeholders in rural communities and agriculture are particularly interested in Section 1031 because the recent growth in transaction values of farmland may have, in part, been stimulated by Section 1031 land exchanges. Further, although many have speculated that such exchanges are widely used, little empirical research exists about the provision. We examine the theory of exchanges and develop a theoretical premium value for exchanges. We also present the first evidence of like-kind exchanges involving farmland using Federal tax data. |
| Keywords: | Like-Kind Exchange, Capital Gains Tax, Agricultural Land, Land Economics/Use, Public Economics, Q15, H24, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49299&r=ure |
| By: | Daras, Tomasz; Tyrowicz, Joanna |
| Abstract: | n this paper we take a simulation approach towards household budgets survey, analysing the impact of changes in labour market status of household members on the ability of this household to service the mortgage payments. Using the current status as benchmark, we performed simulations using stylised facts about labour market evolutions. Households with mortgage are characterised by higher activity rates and lower unemployment rates than demographically comparable households without a credit. While these are typical preconditions for the credit approval decision, this state of matters may not necessarily persist throughout the entire mortgage service period. Firstly, labour market conditions may worsen in general, comprising the credit takers together with the rest of the population. Alternatively, credit takers may undergo employment experience in the \emph{same way} as other labour market participants. Consequently, we performed analyses along two scenarios: (i) households with mortgages will gradually become alike the demographically comparable group in terms of employment performance; and (ii) recognising the fact that debtor households members may exert potentially higher effort in maintaining labour market status we model the effects of general employment outlooks deterioration. We use labour force survey data to obtain the probabilities of changing the individual labour market status, while we resort to propensity score matching techniques to provide adequate benchmark for the changes among creditors with relation to general population. In the simulations we find the share of creditors loosing liquidity with the change in the labour market status and the implied burden to the financial sector stability. |
| Keywords: | financial sector stability; mortgages; labour market |
| JEL: | C15 R20 G21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15202&r=ure |
| By: | Zsolt Becsi (Department of Economics, Southern Illinois University Carbondale); Victor E. Li (Department of Economics and Statistics, Villanova School of Business, Villanova University); Ping Wang (Department of Economics, Washington University in St. Louis) |
| Abstract: | This paper studies the phenomenon of mismatch in a decentralized credit market where borrowers and lenders must engage in costly search to establish credit relationships. Our dynamic general equilibrium framework integrates incentive based informational frictions with a matching process highlighted by (i) borrowers’ endogenous market entry and exit decision (entry frictions) and (ii) time and resource costs necessary to locate credit opportunities (search frictions). A key feature of the incentive compatible loan contract negotiated between borrowers and lenders is the interaction of informational frictions (in the form of moral hazard) with entry and search frictions. We find that the removal of entry barriers can eliminate information-based equilibrium credit rationing. More generally, entry and incentive frictions are important in understanding the extent of credit rationing, while entry and search frictions are important for understanding credit market breakdown. |
| Keywords: | Entry, Moral Hazard, Credit Rationing, Credit Mismatch, Credit-Market Breakdown |
| JEL: | C78 D82 D83 E44 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:vil:papers:7&r=ure |
| By: | Hon-Chung Hui (Nottingham University Business School - Malaysia Campus) |
| Abstract: | This paper examines the transmission channels through which property markets propagate shocks to the real economy. Using a four-equation model which portrays the theoretical inter-linkages between real estate value and other components of the economy, our findings suggest that in the short run, negative real estate shocks affect GDP by dampening construction, bank lending activities and to a certain extent, consumption. The impact of shocks on investment is harder to decipher given the complicated dynamics arising from an almost instantaneous adjustment process towards equilibrium each time the system is perturbed. In the long run, there is no evidence of positive wealth effects on consumption while sustained depressions in property markets could be harmful to future economic growth. |
| Keywords: | Real estate shocks; Transmission channels; Macroeconomic performance |
| JEL: | C32 E20 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:nom:nubsmc:2008-09&r=ure |
| By: | Manuela Angelucci; Giacomo DeGiorgi; Marcos A. Rangel; Imran Rasul |
| Abstract: | We present evidence on whether and how a household's behavior is influenced by the presence and characteristics of its extended family. Using household panel data from the Progresa program in rural Mexico, we exploit information on the paternal and maternal surnames of heads and spouses in conjunction with the Spanish naming convention to identify the inter and intra generational family links of each household to others in the same village. We then exploit the randomized research design of the Progresa evaluation data to identify whether the treatment effects of Progresa transfers on secondary school enrolment vary according to the presence and characteristics of extended family. We find that Progresa only raises secondary enrolment among households that are embedded in a family network. Eligible but isolated households do not respond. The mechanism through which the extended family influences household schooling choices is the redistribution of resources within the family network from eligibles that receive de facto unconditional cash transfers from Progresa, towards eligibles on the margin of enrolling their children into secondary school. |
| JEL: | I21 J12 O12 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14949&r=ure |
| By: | Enrico Moretti; Matthew Neidell |
| Abstract: | A pervasive problem in the literature on the health costs of pollution is that optimizing individuals may compensate for increases in pollution by reducing their exposure to protect their health. This implies that estimates of the health effects of pollution may vastly understate the full welfare effects of pollution, particularly for individuals most at risk who have the greatest incentive to adopt compensatory behavior. Furthermore, using ambient monitors to approximate individual exposure to pollution may induce considerable measurement error. We overcome these issues by estimating the short run effects of ozone on respiratory related health conditions using daily boat arrivals and departures into the two major ports of Los Angeles as an instrumental variable for ozone levels. While daily variation in boat traffic is a major contributor to local ozone pollution, time-varying pollution due to port activity is arguably a randomly determined event uncorrelated with factors related to health. Instrumental variable estimates are significantly larger than OLS estimates, indicating the importance of accounting for avoidance behavior and measurement error in understanding the full welfare effects from pollution. |
| JEL: | I12 I18 Q53 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14939&r=ure |
| By: | Bonanno, Alessandro |
| Abstract: | Wal-Mart, the largest retailer worldwide, has been suspected of exercising market power over input providers, both merchandise suppliers and workers. However, in spite of a growing body of literature investigating the beneficial economic impact of the company through its price-lowering effect, research analyzing the companyâs economic impact over input suppliers is limited. This paper presents a general framework which can be used to investigate Wal-Martâs market power over input suppliers, vis-Ã -vis a variation in input productivity, focusing on homogenous intermediate goods supplied locally. The model is general enough to account for incumbentsâ reaction to Wal-Martâs entry resulting in exit, entry and changes in the production technology. A simplified version of the theoretical model is tested using data on local labor markets. Preliminary results show Wal-Mart having a wage lowering effect due mainly to the increased productivity of labor, while the increase in oligopsony power counts only for 15% of such effect. |
| Keywords: | Wal-Mart, oligopsony power, entry, wages, Industrial Organization, Labor and Human Capital, L13, L81, J42, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49599&r=ure |