nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒05‒30
fourteen papers chosen by
Steve Ross
University of Connecticut

  1. Two-Sided Market with Spillover - Modeling a City By Shchetinin, Oleg
  2. The Empirics of New Economic Geography By Redding, Stephen J
  3. Wealth Effects on Consumption: Evidence from the euro area. By Ricardo M. Sousa
  4. Factors Influencing Tenure Choice in European Countries By Monika Bazyl
  5. Farsighted House Allocation By Bettina-Elisabeth Klaus; Flip Klijn; Markus Walzl
  6. The Origins of Ethnolinguistic Diversity By Stelios Michalopoulos
  7. Contextualizing The Urban Healthcare System - Methodology for Developing a Geodatabase of Delhi's Healthcare System. By Pierre Chapelet
  8. Effect of Mobiles on Socio-economic Life of Urban Poor By Ankur Sarin
  9. Environmental Liability and Redevelopment of Old Industrial Land By Hilary Sigman
  10. Mobile criminals, immobile crime: the efficiency of decentralized crime deterrence By Martin Gregor; Lenka Šťastná
  11. The effect of social diversity on volunteering: Evidence from New Zealand By Jeremy Clark; Bonggeun Kim
  12. Bonding and Bridging Social Capital and Economic Growth By Beugelsdijk, S.; Smulders, J.A.
  13. Changing Core-Periphery Economic Interdependence in the Late Twentieth Century: The Emergence of the Urban Core in Western Oregon By Holland, David; Lewin, Paul; Sorte, Bruce; Weber, Bruce
  14. The International Financial Crisis: an Expert Survey By Antonio Forte; Giovanni Pesce

  1. By: Shchetinin, Oleg
    Abstract: The paper explores the analogy between city and two-sided market. It generalizes the results on the pricing strategies of the platform in the two-sided markets for the case when concentration spillover plays an important role. The two-sided market framework is applied to model a city. The paper highlights the importance of the network effect and labor market structure for city size, governance and agglomeration formation. The cases of an isolated city and competing cities are considered.
    Keywords: Two-sided markets; Industrial organization; Urban economics; Concentration spillover; City; Labor matching market
    JEL: D4
    Date: 2009
  2. By: Redding, Stephen J
    Abstract: Although a rich and extensive body of theoretical research on new economic geography has emerged, empirical research remains comparatively less well developed. This paper reviews the existing empirical literature on the predictions of new economic geography models for the distribution of income and production across space. The discussion highlights connections with other research in regional and urban economics, identification issues, potential alternative explanations and possible areas for further research.
    Keywords: Industrial Location; Market Access; Multiple Equilibria; New Economic Geography
    JEL: F12 F14 O10
    Date: 2009–05
  3. By: Ricardo M. Sousa (Economic Policies Research Unit (NIPE) and Department of Economics, University of Minho, Campus of Gualtar, 4710-057 Braga, Portugal.)
    Abstract: This paper estimates the wealth effects on consumption in the euro area as a whole. I show that: (i) financial wealth effects are relatively large and statistically significant; (ii) housing wealth effects are virtually nil and not significant; (iii) consumption growth exhibits strong persistence and responds sluggishly to shocks; and (iv) the immediate response of consumption to wealth is substantially different from the long- run wealth effects. By disaggregating financial wealth into its major components, the estimates suggest that wealth effects are particularly large for currency and deposits, and shares and mutual funds. In addition, consumption seems to be very responsive to financial liabilities and mortgage loans. JEL Classification: E21, E44, D12.
    Keywords: consumption, housing wealth, financial wealth.
    Date: 2009–05
  4. By: Monika Bazyl
    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
  5. By: Bettina-Elisabeth Klaus (Harvard Business School, Negotiation, Organizations & Markets Unit); Flip Klijn (Institute for Economic Analysis (CSIC)); Markus Walzl (Department of Economics, Bamberg University)
    Abstract: In this note we study von Neumann-Morgenstern farsightedly stable sets for Shapley and Scarf (1974) housing markets. Kawasaki (2008) shows that the set of competitive allocations coincides with the unique von Neumann-Morgenstern stable set based on a farsighted version of antisymmetric weak dominance (cf., Wako, 1999). We demonstrate that the set of competitive allocations also coincides with the unique von Neumann-Morgenstern stable set based on a farsighted version of strong dominance (cf., Roth and Postlewaite, 1977) if no individual is indifferent between his endowment and the endowment of someone else.
    Keywords: housing markets, indivisible goods, farsightedness, von Neumann-Morgenstern stable sets, top trading cycles, competitive allocations
    JEL: D63 D70
    Date: 2009–04
  6. By: Stelios Michalopoulos
    Abstract: This research examines the economic origins of ethnolinguistic diversity. The empirical analysis constructs detailed data on the distribution of land quality and elevation across contiguous regions, virtual and real countries, and shows that variation in elevation and land quality has contributed significantly to the emergence and persistence of ethnic fractionalization. The empirical and historical evidence is consistent with the proposed hypothesis, according to which heterogeneous land endowments generated region specific human capital, limiting population mobility and leading to the formation of localized ethnicities and languages. The research contributes to the understanding of the emergence of ethnicities and their spatial distribution and offers a distinction between the natural, geographically driven, versus the artificial, man-made, components of contemporary ethnic diversity.
    Keywords: Ethnic Diversity, Geography, Technological Progress, Human Capital, Colonization
    JEL: O11 O12 O15 O33 O40 J20 J24
    Date: 2009
  7. By: Pierre Chapelet
    Abstract: This paper introduces the setting up of a Geographical Information System on Delhi for studies in the Social Sciences. Through an explaination of their methodological procedure and demonstration of thematic applications focusing on the healthcare system's spatial organization, the authors lead us through the inherent difficulties of building a GIS in an emerging country like India. They also attempt to demonstrate that this kind of tool remains, however, a relevant support for research in the Social Sciences as long as it is used with care and knowledge of the dataset frame. From this perspective, Exploratory Data Analysis coupled with the play of scales provide powerful ways to assess socio-spatial dynamics taking place in the Indian capital. [CSH OP 11]
    Keywords: GIS; Social sciences; healthcare system; data exploratory analysis; multiscalar; Delhi, Census 1991/2001
    Date: 2009
  8. By: Ankur Sarin
    Abstract: Using a survey of 1774 users and non-users in 84 slums in three metropolitan cities (Delhi, Ahmedabad and Kolkata), we try to understand the impact of mobiles on their social and economic lives. Urban slum dwellers spend significant amounts on communications, both for a first time acquisition of handset and SIM (nearly 40% of the average household earnings per month), as well as on going expenditure. However, a majority of respondents believe that the use of mobiles has led to an improvement in their economic situation and that these benefits are greater than ownership and usage costs. Mobile also appears to change how slum residents interact with each other. Despite reducing face-to-face interactions, mobile usage is associated with stronger social relationships. In comparing users and non-users, we find differences between users and non-users in terms of income, education and other social characteristics. We also find evidence of hierarchies within households, with women far more likely than men to be only infrequent mobile users or not to have access at all. While cost of a handset is the primary barrier to owning a mobile, non-owners report difficulty in using a mobile, clarity of charges for call-plans and information dissemination as other barriers to ownership.[W.P. No. 2009-02-05]
    Keywords: innovations; communication technologies; social impacts; slum; urban India; Research Design; Sample Design; Self-Employed; Regular Wage Activities; household disparities; Mobiles; cell phones; SIM; Productive Purposes; economic activities
    Date: 2009
  9. By: Hilary Sigman
    Abstract: Many communities are concerned about the reuse of potentially contaminated land ("brownfields") and believe that environmental liability is a hindrance to redevelopment. However, with land price adjustments, liability might not impede the reuse of this land. Existing literature has found price reductions in response to liability, but few studies have looked for an effect on vacancies. This paper studies variations in state liability rules — specifically, strict liability and joint and several liability — that affect the level and distribution of expected private cleanup costs. It explores the effects of this variation on industrial land prices and vacancy rates and on reported brownfields in a panel of cities across the United States. In the estimated equations, joint and several liability reduces land prices and increases vacancy rates in central cities. Neither a price nor quantity effect is estimated from strict liability. The results suggest that liability is at least partly capitalized, but does still deter redevelopment.
    JEL: K13 K32 Q53 R14
    Date: 2009–05
  10. By: Martin Gregor (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Lenka Šťastná (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: In this paper we examine a class of local crimes that involve perfectly mobile criminals, and perfectly immobile criminal opportunities. We focus on local non-rival crime deterrence that is more efficient against criminals pursuing domestic crimes than criminals pursuing crimes elsewhere. In a standard case of sincerely delegated politicians and zero transfers to other districts, we show that centralized deterrence unambiguously dominates the decentralized deterrence. With strategic delegation and voluntary in-kind transfers, the tradeoff is exactly the opposite: Decentralization achieves the social optimum, whereas cooperative centralization overprovides for enforcement. This is robust to various cost-sharing modes. We also examine the effects of the growing interdependence of districts, stemming from criminals' increasing opportunities to strategically displace. Contrary to the supposition in Oates's decentralization theorem, increasing interdependence makes centralization less desirable.
    Keywords: crime mobility; crime deterrence; decentralization; strategic delegation; side payments
    JEL: H41 H73 H76 R50
    Date: 2009–05
  11. By: Jeremy Clark (University of Canterbury); Bonggeun Kim
    Abstract: We survey the emerging empirical literature that identifies a negative relationship between heterogeneity of race, ethnicity, income etc. at the neighborhood level, and individuals’ likelihood of contributing money or time to public goods or of trusting their neighbors. One problem in this literature is that the “neighborhoods” used are often by necessity overly broad, and arguably not those that individuals experience day to day. We present a simple model showing the effect of neighbourhood definition when measuring the effect of heterogeneity on peoples’ actions or attitudes. The broad definitions commonly used could produce a spurious negative effect of heterogeneity. With these limitations in view, we use panel data from the 1996, 2001 and 2006 censuses in New Zealand to test whether heterogeneity by race/ethnicity, birthplace, income or language negatively affect New Zealander’s probability of volunteering. Using cross sectional analysis, we estimate the effect of each kind of heterogeneity on volunteering at the “meshblock” (tract) and broader “area unit” levels. We control for confounding neighbourhood characteristics such as household income and deprivation, employment and education status, and religious affiliation. We next address the issue of endogenous self-selection to neighbourhood by comparing cross sectional and fixed effects analysis over the three years of the census. In results, we find that the size of neighbourhood unit significantly affects the estimated effects of heterogeneity on volunteering. Second, in cross sectional analysis at the meshblock level, volunteering appears reduced by heterogeneity of race/ethnicity and language, not affected by heterogeneity of birthplace, and increased by heterogeneity of household income. Third, in fixed effects analysis only racial/ethnic heterogeneity retains a direct negative effect on volunteering.
    Keywords: heterogeneity; volunteering
    JEL: D13 D64 H31
    Date: 2009–05–14
  12. By: Beugelsdijk, S.; Smulders, J.A. (Tilburg University, Center for Economic Research)
    Abstract: In this paper we develop a formal model of economic growth and two types of social capital. Following extant literature, we model social capital as participation in two types of social networks: first, closed networks of family and friends, and, second, open networks that bridge different communities. Higher levels of social capital may crowd out economic growth through a reduction of working time. At the same time, participation in intercommunity networks reduces incentives for rent seeking and cheating, promoting economic growth. We test our hypotheses in a sample of European regions using unique data from the European Value Studies (EVS). Our findings show that it is important to distinguish between the nature of the social interaction.
    Keywords: social capital;economic growth;Europe;regions
    JEL: O40 R11 Z13
    Date: 2009
  13. By: Holland, David; Lewin, Paul; Sorte, Bruce; Weber, Bruce
    Keywords: Community/Rural/Urban Development,
    Date: 2009
  14. By: Antonio Forte (Dipartimento di Economia e Metodi Matematici, Università di Bari); Giovanni Pesce (Dipartimento di Economia e Metodi Matematici, Università di Bari)
    Abstract: The advent of the international financial crisis, and of its effects on the economy, all the world now face the question how to manage the crisis and what measures to implement to restore a normal condition. In this paper we present and discuss the results and implications of an international expert survey. Our target is to understand the perception with regards to several aspects of the international financial crisis and some possible future implications for policy makers’ authorities.
    Keywords: international financial crisis, subprime, expert survey
    Date: 2009–04

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