nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒07‒03
forty-six papers chosen by
Steve Ross
University of Connecticut

  1. The geography of foreclosure in Contra Costa County, California By Kristin L. Perkins
  2. House Price Impacts of Racial, Income, Education, and Age Neighborhood Spatial Concentration By David M. Brasington; Andres Jauregui; Diane Hite
  3. The Complementarity between Cities and Skills By Edward L. Glaeser; Matthew G. Resseger
  4. No Room to Live: Urban Overcrowding in Edwardian Britain By Gazeley, Ian; Newell, Andrew T.
  5. Does Local School Control Raise Student Outcomes?: Evidence on the Roles of School Autonomy and Parental Participation By Gunnarsson, Victoria; Orazem, Peter; Sanchez, Mario; verdisco, Aimee
  6. Monetary Policy and Housing Sector Dynamics in a Large-Scale Bayesian Vector Autoregressive Model By Rangan Gupta; Marius Jurgilas; Alain Kabundi; Stephen M. Miller
  7. Drivers of Agglomeration: geography VS. History By Goerlich, Francisco José; Mas, Matilde
  8. Fiscal health of selected Indian cities. By Bandyopadhyay,Simanti; Rao, M. Govinda
  9. Measuring a Boom and Bust: The Sydney Housing Market 2001-2006 By Robert J. Hill; Daniel Melser; Iqbal Syed
  10. School Buildings in Today's Crisis By Alastair Blyth
  11. Does Geographic Factors Determine Local Economic Development? By Brata, Aloysius Gunadi
  12. Scientists on the move: tracing scientists’ mobility and its spatial distribution By Ernest Miguélez; Rosina Moreno; Jordi Suriñach
  13. Housing, Energy Cost, and the Poor : Counteracting Effects in Germany's Housing Allowance Program By Peter Grösche
  14. Technological relatedness and regional branching By Ron Boschma; Koen Frenken
  15. Reducing foreclosures By Christopher L. Foote; Kristopher S. Gerardi; Lorenz Goette; Paul S. Willen
  16. Anti-Lemons: School Reputation and Educational Quality By W. Bentley MacLeod; Miguel Urquiola
  17. Towards a more prosperous Springfield, Massachusetts: project introduction and motivation By Lynn Browne; DeAnna Green; with Marques Benton; Prabal Chakrabarti; Yolanda Kodrzycki; Ana Patricia Muñoz; David Plasse; Richard Walker
  18. The Economic Growth Impact of Hurricanes: Evidence from US Coastal counties By Eric Strobl
  19. Regional Variation in Informal Employment: Skills, Norms, and Governance By Jonasson, Erik
  20. Regional Differences in the Efficiency of Health Production: an Artefact of Spatial Dependence? By Harald Tauchmann; Stefan Felder
  21. Modeling the short-term effect of traffic on air pollution in Torino with generalized additive models By Pancrazio Bertaccini; Vanja Dukic; Rosalba Ignaccolo
  22. Network Measures in Civil Air Transport: A Case Study of Lufthansa By Aura Reggiani; Sara Signoretti; Peter Nijkamp; Alessandro Cento
  23. Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion By Henry Chen; Paul Gompers; Anna Kovner; Josh Lerner
  24. The Re-Building Effect of Hurricanes: Evidence from Employment in the US Construction Industry By Eric Strobl; Frank Walsh
  25. Efficiency of Public Goods Provision in Space By Travis Warziniack
  26. Does higher sport supply lead to higher sport demand? A city level analysis By Sandrine Poupaux; Christoph Breuer
  27. After Hubris, Smoke and Mirrors, The Downward Spiral: Financial and real markets pull each other down; how can policy reverse this? By Edward Nell and Willi Semmler
  28. Explaining the Great Moderation: Credit in the Macroeconomy Revisited By Bezemer, Dirk J
  29. The economic crisis and community development finance: an industry assessment By Mark Pinsky; Nancy Andrews; Paul Weech; Ellen Seidman; Rick Cohen
  30. Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap By Hirsch, Boris; König, Marion; Möller, Joachim
  31. The dynamic adjustment of local government budgets: Does Spain Behave differently? By Albert Sole-Olle; Pilar Sorribas-Navarro
  32. Estimating the Impact of Metro North By Edgar Morgenroth
  33. Yet Another Tale of Two Cities: Buenos Aires and Chicago By Filipe Campante; Edward L. Glaeser
  34. The role of education in regional innovation activities and economic growth: spatial evidence from China By Chi, Wei; Qian, Xiaoye
  35. Industrial Concentration, Price-Cost Margins, and Innovation By David Flath
  36. The geography of hospital admission in a National Health Service with patient choice: Evidence from Italy By Fabbri, D; Robone, S
  37. Portugal’s Secondary School Modernisation Programme By Teresa V. Heitor; José M. R. Freire da Silva
  38. CREATING SPATIAL ORGANIZATIONS By Deprez, Frank Lekanne; Tissen, René
  39. Transmission of the U.S. Subprime Crisis to Emerging Markets: Evidence on the Decoupling-Recoupling Hypothesis By Michael P. Dooley; Michael M. Hutchison
  40. Fat and Out in Salerno and Province: Adolescent Obesity and Early School Leaving in Southern Italy By Barone, Adriana; O'Higgins, Niall
  41. The enduring challenge of concentrated poverty in America: case study of Fresno, California By Naomi Cytron
  42. Unemployment dynamics in West Germany : do districts adjust differently than larger regional units? By Kunz, Marcus
  43. Intermodal Competition in The London-Paris Passenger Market: High-Speed Rail and Air Transport By Christiaan Behrens; Eric Pels
  44. Driving for Fun? – A Comparison of Weekdays and Weekend Travel By Manuel Frondel; Colin Vance
  45. Forgive and forget: who gets credit after bankruptcy and why? By Ethan Cohen-Cole; Burcu Duygan-Bump; Judit Montoriol-Garriga
  46. On Teachers Quality Decline By Amodio, Francesco

  1. By: Kristin L. Perkins
    Abstract: Americans of all races and income levels recognize homeownership as a quintessential part of the American dream. This belief, along with federal policy that encourages homeownership and increased access to credit, has contributed to a dramatic rise in the number of families that own their home, particularly among low-income and minority households. In addition, rising homeownership in the first part of this decade contributed substantially to neighborhood revitalization, and brought much needed investment into low- and moderate-income neighborhoods. The recent subprime meltdown and rising foreclosures, however, threaten these gains. In this study, I use 2007 foreclosure data from Contra Costa County, California, to examine how foreclosures are distributed across neighborhoods, and to identify the neighborhood characteristics that are associated with foreclosure. I find that foreclosures are directly associated with subprime lending and that both subprime lending and foreclosures are concentrated in neighborhoods with high proportions of minority residents, lower-income households, and less educated households. These results have important policy implications for mortgage lending regulations and housing policies moving forward.
    Keywords: Foreclosure - California
    Date: 2009
  2. By: David M. Brasington; Andres Jauregui; Diane Hite
    Abstract: We compare hedonic price models estimated with spatial statistics in order to examine the impacts of four different types of neighborhood spatial association: age, education, income and racial clustering. Using Getis and Ord’s (1995) Z(Gi*) as an indicator of spatial clustering, we estimate the impact of segregation on housing prices in seven metropolitan areas in Ohio, USA. In addition, we examine second order clustering impacts by interacting Z(Gi*) variables. Results of price simulations indicate that a 1 standard deviation increase in spatial concentration of African-Americans decreases property prices, while increases in the spatial concentration of people of similar income, age and education level have a mostly positive impact on housing prices across metropolitan areas. Further, we find that increasing both income and black clustering or educational and black clustering does not necessarily increase house prices above the baseline, while increasing both age and black clustering has a decidedly negative effect.
    Date: 2009
  3. By: Edward L. Glaeser; Matthew G. Resseger
    Abstract: There is a strong connection between per worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies. This correlation is particularly strong in cities with higher levels of skill and virtually non-existent in less skilled metropolitan areas. This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive. Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas.
    JEL: D0 R0
    Date: 2009–06
  4. By: Gazeley, Ian (University of Sussex); Newell, Andrew T. (University of Sussex)
    Abstract: We study the extent of overcrowding amongst British urban working families in the early 1900s and find major regional differences. In particular, a much greater proportion of households in urban Scotland were overcrowded than in the rest of Britain and Ireland. We investigate the causes of this spatial distribution of overcrowding and find that prices, especially rents and wages are the proximate causes of the phenomenon. In large cities, ports and cities specialising in old heavy industries high rent and overcrowding are more prevalent. Within cities, but not between cities, variations in infant mortality are clearly correlated with measures of overcrowding. All the findings are consistent with a core-periphery view of urban households choosing the location and size of housing to balance the health risks of overcrowding against the risks associated with lower and less regular incomes in places where rents are lower.
    Keywords: poverty, rent, overcrowding, Scotland, 1904, infant mortality, Bowley
    JEL: I10 N33 R12
    Date: 2009–06
  5. By: Gunnarsson, Victoria; Orazem, Peter; Sanchez, Mario; verdisco, Aimee
    Abstract: School autonomy and parental participation have been frequently proposed as ways of making schools more productive. Less clear is how governments can foster decentralized decision-making by local schools. This paper shows that across eight Latin-American countries, most of the variation in local control over school decisions exists within and not between countries. That implies that the exercise of local authority to manage schools is largely a local choice only modestly influenced by constitutional stipulations regarding jurisdiction over school personnel, curriculum and facilities. As a consequence, estimated impacts of local school autonomy, parental participation or school supplies on student performance must account for the endogeneity of local efforts to manage schools. Empirical tests confirm that local managerial effort by the principal and the parents and the adequacy of school supplies are strongly influenced by parental human capital and the size and remoteness of the community, and that these effects are only partially moderated by central policies regarding the locus of control over the schools. Correcting for endogeneity, parental participation and adequacy school supplies have strong positive effects on 4th grade test performance, but school autonomy has no discernable impact on school outcomes.
    Keywords: Autonomy, parental participaton, school inputs, achievement, test scores, education, Latin America
    JEL: I2
    Date: 2009–06–19
  6. By: Rangan Gupta (University of Pretoria); Marius Jurgilas (Bank of England); Alain Kabundi (University of Johannesburg); Stephen M. Miller (University of Connecticut and University of Nevada, Las Vegas)
    Abstract: Our paper considers this channel whereby monetary policy, a Federal funds rate shock, affects the dynamics of the US housing sector. The analysis uses impulse response functions obtained from a large-scale Bayesian Vector Autoregression (LBVAR) model that incorporates 143 monthly macroeconomic variables over the period of 1986:01 to 2003:12, including 21 variables relating to the housing sector at the national and four census regions. We find at the national level that housing starts, housing permits, and housing sales fall in response to the tightening of monetary policy. Housing sales reacts more quickly and sharply than starts and permits and exhibits more duration. Housing prices show the weakest response to the monetary policy shock. At the regional level, we conclude that the housing sector in the South drives the national data. The responses in the West differ the most from the other regions, especially for the impulse responses of housing starts and permits.
    Keywords: Monetary policy, Housing sector dynamics, Large-Scale BVAR models
    JEL: C32 R31
    Date: 2009–06
  7. By: Goerlich, Francisco José; Mas, Matilde
    Abstract: This paper focuses on the influence of two classical drivers of population agglomeration: geography and history. Geography is identified by two co-ordinates: coastal position and altitude. The prominence of history is also captured by two characteristics: the initial size of the municipalities, and their status as the administrative centre of the area. In first instance we examine localization patterns, at a small geographical scale, according to these characteristics and present empirical evidence of the progressive population concentration along the coast, on the plains and in the regional (provincial) capitals; a process that has not finished in the present days. Next, we show that both drivers of population agglomeration, geography and history, are relevant for Spain and that they show an increasing explanatory power in accounting for population concentration. From a quantitative point of view the capital status factor shows the most prominent role. An exercise of conditional convergence shows that, even in the absence of these factors, we would have seen a significant amount of population concentration but at a smaller rate. Our reference is the census population data for Spanish municipalities for the period 1900-2001. Given the important changes in municipality structure, the eleven censuses have been homogenised according to the municipal structure of the 2001 Census.
    Keywords: Population; Municipalities; Census; Agglomeration
    JEL: J10 J11
    Date: 2009
  8. By: Bandyopadhyay,Simanti (National Institute of Public Finance and Policy); Rao, M. Govinda (National Institute of Public Finance and Policy)
    Abstract: The paper aims to assess the fiscal health of five urban agglomerations (UAs) in India viz. Delhi, Hyderabad, Kolkata, Chennai, and Pune. Our sample consists of five corporations and sixty three smaller Urban Local Bodies (ULBs) dispersed in thirteen districts of five major states. The main objective of the paper is twofold. First, to review the status of revenue generation and expenditure responsibilities of the constituent ULBs. Second, to assess the magnitudes of their fiscal gaps by estimating the expenditure needs and revenue capacities and give some useful recommendations to reduce these gaps. Data on ULB finances for the financial year 2004-05 collected through surveys are used for the analysis. For estimation of expenditure needs the updated financial norms on the selected services specified by Zakaria Committee are used as benchmarks. For revenue capacity estimations Gross City Products (GCPs) are estimated from non-agricultural components of the District Domestic Products (DDPs). Revenue capacities are estimated by applying a tax-to-GCP ratio, which is higher than that existing in a ULB by a politically feasible margin, on the estimated GCPs. The main findings suggest that excepting five small ULBs in Hyderabad, the others are not in a position to cover their expenditure needs by their present revenue collections. All the UAs have unutilised potentials for revenue generations but with the exception of one UA i.e, Hyderabad, all the others would fail to cover their expenditure needs, even if they realise their revenue potentials. In all the UAs, except Chennai, bigger corporations are more constrained than the smaller ULBs. Besides, concrete evidence in support of the efficiency of parastatal agencies in sharing the burden of responsibilities cannot be established. The paper recommends better utilisation of 'own revenue' handles of the cities, by improved administration of the property taxes, implementation of other taxes, and collection of user charges. The option of state governments to allow the local bodies piggybacking a small proportion on their VAT collections can also be explored. Another way to reduce the fiscal gap would be to earmark a portion of the sales proceeds from land and housing by state governments sold through their development agencies for improvement in the infrastructure of the cities. The paper also recommends that the State Finance Commissions (SFCs) should develop appropriate norms for estimating expenditure needs based on which transfers from the state to local governments can be decided.
    Keywords: Expenditure needs ; Revenue capacity ; Fiscal gap
    JEL: H72 H73 H76 R51 R58
    Date: 2009–03
  9. By: Robert J. Hill (School of Economics, University of New South Wales); Daniel Melser (Department of Economics, Monash University); Iqbal Syed (School of Economics, University of New South Wales)
    Abstract: The Sydney housing market peaked in 2003. The period 2001-2006 is, therefore, of particular interest since it captures a boom and bust in the housing market. We compute hedonic, repeat-sales and median price indexes for five regions in Sydney over this period. While the three approaches are in broad agreement regarding the timing of the turning point in the housing market, some important differences also emerge. In particular, we find evidence of sample selection bias in our hedonic and repeat-sales data sets, which in turn seems to generate bias (although in opposite directions) in our hedonic and repeat-sales indexes. The median indexes also may be biased as a result of an apparent decline in the average quality of houses sold in the latter part of the sample. Although in this case the repeat-sales indexes seem to generate the most reliable results, we nevertheless in general favor the hedonic approach. We also find evidence of convergence in prices across regions during the boom and divergence in the subsequent bust.
    Keywords: House prices; Price index; Hedonic regression; Repeat-Sales index; Sample selection bias; Convergence
    JEL: C23 C43 E31
    Date: 2009–05
  10. By: Alastair Blyth
    Abstract: To get a picture of the impact of the current economic and financial crisis on educational building programmes so far, the OECD Centre for Effective Learning Environments (CELE) has been conducting a survey of member countries and regions. The survey focuses on three main issues: the impact of the crisis on publicly funded projects, the impact on projects funded by private finance initiatives or through a public-private partnership, and the extent to which the crisis has affected the construction industry’s ability to build schools.
    Date: 2009–06
  11. By: Brata, Aloysius Gunadi
    Abstract: The purpose of this paper is to analyze the influence of geographic characteristics on the local economic development. There are two important reasons related to that objective. First, study on this topic in the case of Indonesia is rather limited, especially in the field of local economic development of the country. Second, geographically, Indonesia is a heterogeneous country and its consequence is development policy should also consider the geographic characteristics of the country. The study estimates impact of some geographic variables on the Gross Domestic Regional Product (GDRP) per capita and GDRP density as indicators of local economic development with data of the districts in the Central Java province uses regression models. Geographic variables used in the model are distance to economic centres, location of districts, and a measure of clustering of economic activity. Other socio-economic variable is also used in the model, such as literacy rate which is one of the components of human development index (HDI). This study found that in general geography influences local economic performance; however, geography is not the only determinant of economic performance. It also suggests that study on geographic inequality not only apply “per capita approach” but also “density approach” to get a more comprehensive picture of the impact of geography on economic development.
    Keywords: geographic; local economic development; Indonesia
    JEL: R58 O18 R11
    Date: 2009–06
  12. By: Ernest Miguélez (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This paper aims to provide new insights into the well-studied phenomenon of knowledge spillovers. We study one of the main mechanisms through which these spillovers occur, that is, the mobility of highly-skilled individuals. In contrast to earlier studies, we focus on the geographical mobility of inventors across European regions. First, we gather information from PCT patent documents (from the OECD REGPAT database, May 2008 edition) and match the names which seemed to belong to the same inventor using name matching algorithms; second, we create a new algorithm to decide whether each patent applied for under each name belongs to the same inventor, according to set of predetermined characteristics. We use this information to trace the pattern of scientists’ and inventors’ mobility across European regions.
    Keywords: inventors’ mobility, knowledge spillovers,name matching algorithms, exploratory data analysis
    Date: 2009–06
  13. By: Peter Grösche
    Abstract: Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people's health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients are thus likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this counteracting effect is of negligible magnitude. Yet, from an ecological perspective, the allowance scheme creates distorted incentives and should be reformed.
    Keywords: Housing Allowance, Energy Efficiency, Simultaneous-Equation System
    JEL: C33 H53 Q48
    Date: 2009
  14. By: Ron Boschma; Koen Frenken
    Abstract: The relatedness between the technologies used among firms in a region is thought to affect the nature and scope of knowledge spillovers. In this paper, we set out how the concepts of technological relatedness and related variety have enriched recent literature in economic geography. First, applying the notion of related variety has led to new insights in the externalities literature. There is increasing evidence that regions with different but technologically related activities (related variety) benefit more from spillovers. Second, the technological relatedness concept has provided additional insights to the question whether extra-regional linkages matter for regional growth: it is not inflows of extra-regional knowledge per se, but inflows of knowledge that are related to the existing knowledge base of regions that might be crucial. Third, the concept of relatedness has found its way in network analysis. There is evidence that collaborative research projects tend to create more new knowledge when they consist of agents that bring in related competences. Linking network dynamics to the industry life-cycle approach, one expects that cognitive proximity levels between cluster firms will increase over time, with detrimental effects on their performance levels. Fourth, the cluster literature often regards labor mobility as a key mechanism through which knowledge diffuses, but no attention has been paid to relatedness until recently. And fifth, studies demonstrate that countries and regions tend to expand into sectors that are closely related to their existing activities. To the extent that new industries emerge from related industries, the sectoral composition of a regional economy affects the diversification opportunities of regions in the long run. This process of sectoral branching occurs primarily at the regional level, because it becomes manifest through a number of knowledge transfer mechanisms (i.e. spinoff activity, firm diversification, labor mobility and networking) that tend to be geographically bounded.
    Keywords: evolutionary economic geography, technological relatedness, regional branching, related variety
    JEL: R0 R1 R12
    Date: 2009–06
  15. By: Christopher L. Foote; Kristopher S. Gerardi; Lorenz Goette; Paul S. Willen
    Abstract: This paper takes a skeptical look at a leading argument about what is causing the foreclosure crisis and what should be done to stop it. We use an economic model to focus on two key decisions: the borrower’s choice to default on the mortgage and the lender’s choice on whether to renegotiate or “modify” the loan. The theoretical model and econometric analysis illustrate that “unaffordable” loans, defined as those with high mortgage payments relative to income at origination, are unlikely to be the main reason that borrowers decide to default. Rather, the typical problem appears to be a combination of household income shocks and an unprecedented fall in house prices. Regarding the small number of loan modifications to date, we show, both theoretically and empirically, that the efficiency of foreclosure for investors is a more plausible explanation for the low number of modifications than contract frictions related to securitization agreements between servicers and investors. While investors might be foreclosing when it would be socially efficient to modify, there is little evidence to suggest they are acting against their own interests when they do so. An important implication of our analysis is that policies designed to reduce foreclosures should focus on ameliorating the immediate effects of job loss and other adverse life events, rather than modifying loans to make them more “affordable” on a long-term basis.
    Keywords: Foreclosure
    Date: 2009
  16. By: W. Bentley MacLeod; Miguel Urquiola
    Abstract: Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a perfectly competitive labor market. To this it adds one ingredient: school reputation in the spirit of Holmstrom (1982). The first result is that if schools cannot select students based upon their ability, then a free market is indeed efficient and encourages entry by high productivity schools. However, if schools are allowed to select on ability, then competition leads to stratification by parental income, increased transmission of income inequality, and reduced student effort---in some cases lowering the accumulation of skill. The model accounts for several (sometimes puzzling) findings in the educational literature, and implies that national standardized testing can play a key role in enhancing learning.
    JEL: D02 I2 J3
    Date: 2009–06
  17. By: Lynn Browne; DeAnna Green; with Marques Benton; Prabal Chakrabarti; Yolanda Kodrzycki; Ana Patricia Muñoz; David Plasse; Richard Walker
    Abstract: The Federal Reserve Bank of Boston has committed to supporting ongoing efforts at the state and local levels to revitalize the City of Springfield, Massachusetts. Drawing upon its analytical capabilities, its experience working with community organizations and earlier research on poverty in Springfield, the Bank seeks to develop strategies that will enable Springfield residents, particularly those living in impoverished neighborhoods in and near downtown, to participate more fully in the Springfield economy and the revitalization process. The Bank’s efforts are also intended to complement the development of an economic vision for Springfield that is currently being undertaken by the civic think tank, MassINC, as well as efforts by Massachusetts and Springfield public officials and the local business community to attract jobs to the City.
    Keywords: Cities and towns - Massachusetts ; Economic conditions - Massachusetts
    Date: 2009
  18. By: Eric Strobl (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: We estimate for the first time the impact of hurricane strikes on local economic growth rates and how this is reflected in more aggregate growth patterns. To this end we assemble a panel data set of US coastal counties' growth rates and construct a novel hurricane destruction index that is based on a monetary loss equation, local wind speed estimates derived from a physical wind field model, and local exposure characteristics. Our econometric results suggest that in response to a hurricane strike a county's annual economic growth rate will initially fall by 0.8, but then partially recover by 0.2 percentage points. While the pattern is qualitatively similar at the state level, the net effect over the long term is negligible. Hurricane strikes do not appear to be economically important enough to be reflected in national economic growth rates.
    Keywords: hurricanes, economic growth, US coastal counties
    Date: 2009–06–07
  19. By: Jonasson, Erik (Department of Economics, Lund University)
    Abstract: Informal economic activity across countries has been studied thoroughly in the empirical literature, but little research addresses sources of variation in informality on the sub-national level. This paper analyzes reasons for regional variation in informal employment. It develops a theoretical model, which predicts that worker skill endowment, quality of local governance, and social norms are important determinants of the degree of informal employment in a city. The empirical application draws on data from Brazil, where 45 percent of the urban labor force are employed informally. The degree of such employment, however, varies substantially across regions, with some cities having 20 percent or less informal employment and others having 80 percent or more. The empirical evaluation supports the predictions of the model and shows that informal employment is lower in regions with better governance and stronger social norms for compliance with tax and labor regulation. The analysis also supports the notion of a "skill threshold" for successful entry into the formal sector. Endogeneity concerns are raised and assessed along with other robustness checks of the empirical results.
    Keywords: informal employment; social norms; government effectiveness; Latin America; Brazil
    JEL: J21 J24 O17 R23
    Date: 2009–04–26
  20. By: Harald Tauchmann; Stefan Felder
    Abstract: The inefficiency of health care provision presents a major health policy concern in Germany. In order to address the issue of efficiency comprehensively – i.e. at the level of the entire system of health care provision rather than individual service providers – empirical analyses are often based on data at the regional level.However, regional efficiencies might be subject to spatial dependence, rendering any analysis biased that aims at identifying the determinants of efficiency differentials. We address this issue by specifying a spatial autoregressive model to explain efficiency scores for German districts which we derive through data envelopment analysis. Regression results suggest that spatial dependence is not a dominant feature in the data. Hence, ignoring spatial interdependence is unlikely to severely bias results of efficiency analyses based on regional data.This holds, in particular, for the role of the states in the efficiency of health production. Significant heterogeneity among states is found in the data regardless of whether or not spatial dependence is accounted for.
    Keywords: Health production, data envelopment analysis, spatial autoregressive model
    JEL: I12 R10
    Date: 2009–06
  21. By: Pancrazio Bertaccini; Vanja Dukic; Rosalba Ignaccolo
    Abstract: Vehicular traffic typically plays an important role in atmospheric pollution. This is especially true in urban areas, where high pollutant concentrations are often observed. In this paper, we consider hourly measures of concentrations of nitrogen oxides (NO, NO2 and NOx), carbon oxide (CO) and particulate matter (PM), collected at the stations distributed throughout the city of Turin. To help explain the short-term behavior of the concentrations of these pollutants, we propose using generalized additive models (GAM), focusing in particular on traffic along with the meteorological predictors. All the data are collected during the period from December 2003 to April 2005.
    Keywords: urban area, air quality, vehicular traffic, CO, NO2, NOx, NO, PM, generalized additive models
    Date: 2009–06
  22. By: Aura Reggiani (University of Bologna, Italy); Sara Signoretti (University of Bologna, Italy); Peter Nijkamp (VU University Amsterdam); Alessandro Cento (KLM Royal Dutch Airlines, Milan Italy)
    Abstract: Air transport networks have exhibited a trend towards complex dynamics in recent years. Using Lufthansa’s networks as an example, this paper aims to illustrate the relevance of various network indicators – such as connectivity and concentration – for the empirical analysis of airline network configurations. The results highlight the actual strategic choices made by Lufthansa for its own net-work, as well in combination with its partners in Star Alliance.
    Keywords: air transport; complex networks; connectivity; concentration; Lufthansa
    Date: 2009–05–27
  23. By: Henry Chen; Paul Gompers; Anna Kovner; Josh Lerner
    Abstract: We document geographic concentration by both venture capital firms and venture capital-financed companies in three cities – San Francisco, Boston, and New York. We find that firms open new satellite offices based on the success rate of venture capital-backed investments in an area. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. Ironically, this outperformance arises from outsized performance outside of the venture capital firms’ office locations, including in peripheral locations. If the goal of state and local policy makers is to encourage venture capital investment, outperformance of non-local investments suggests that policy makers might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms
    JEL: G24 R12
    Date: 2009–06
  24. By: Eric Strobl (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Frank Walsh (School of Economics - University College Dublin)
    Abstract: We examine the impact of hurricane strikes on the construction industry in US counties. To this end we use a measure of hurricane destruction derived from a wind field model and historical hurricane track data and employ this within a dynamic labour demand framework. Our results show that destruction due to hurricanes causes on average an increase in county level employment in construction of a little over 25 per cent.
    Keywords: hurricanes, labour demand, construction industry
    Date: 2009–06–10
  25. By: Travis Warziniack (University of Heidelberg, Department of Economics)
    Abstract: This article incorporates a political decision process into an urban land use model to predict the likely location of a public good. It fills an important gap in the literature by modeling the endogenous location of open space. The article compares open space decisions made under a majority-rules voting scheme with welfare-improving criterion and finds households tied to a location in space compete against each other for public goods located nearer them. Significant differences emerge between the two decision criteria, indicating that requiring referenda for open space decisions is likely to lead to inefficient outcomes. Specifically, many open space votes are likely to fail that would lead to welfare improvements, and any open space decisions that do pass will require amenities larger than needed to achieve the social optimum. The more dispersed and large the population, the larger is the gap between the socially efficient level and the level needed for a public referendum to pass.
    Keywords: organizational slack, antecedents, dispositional requirements, resources
    JEL: D23 L29 M10
    Date: 2009–06
  26. By: Sandrine Poupaux; Christoph Breuer
    Abstract: This paper explores the decision to participate in sports activities and the subsequent frequency of participation using data from a big German city, Munich, representative sample of individuals in 2008. Individual and socio-economic variables characterizing the individuals were collected. A new type of variable, which has not been included in the existing econometric studies yet, is introduced: the availability of sport infrastructures, including their geographical localization and the type of infrastructure. If building sport infrastructures can be seen as an investment and as a consequence a cost for the city, sport infrastructures can also be considered as a factor influencing positively the sport demand. However, the localization of such an infrastructure can be seen as a time and income constraint for the sport participant if the distance from the home is too important. Traditional non linear econometric analysis, logit and poisson models, as well as two-level nonlinear hierarchical models are used to examine the empirical evidence provided by the data collected by survey including 11.715 persons. The results suggest that social and individual characteristics are of paramount importance in determining sports participation and sports frequency, as shown in the 2 recent econometric studies based on UK and US data (Downward, 2007 and Humpreys and Ruseski, 2007). In our study related to the city Munich, we can see that the impact of the variable age is non linear, that the gender is highly significant in explaining the differences of sport participation and the impact of the level of school attendance on sport practice are significantly explanatory. A very interesting result is the explanatory power of the variable ethnicity, or nationality of the person and we take a particular attention on it. The regression coefficients related to different nationalities differs among sport disciplines. These differences could be explained no only by sociological reasons, but also by economic reasons, among other things. The economic variables, taking alone, particularly the monthly income of the person interweaved, have a lower impact on both the decision to practice sport and the frequency of the sport activity. The most innovative result of our econometric study is to state, through an analysis of each kind of sport infrastructures, that the sport practice supply in an acceptable distance from the individual home has a significant and positive impact on both the decision of practicing a sport and on the frequency of this activity. These results, related to the city Munich, open an alternative way of considering the urban sport demand. Such a study could allow predicting the outcomes of political decisions in the domain of sport for all at the city level, the econometrical models using there being able to predict on how many percent the sport participation would increase if a new sport infrastructure would be built.
    Keywords: Sports
    JEL: L83
    Date: 2009–06
  27. By: Edward Nell and Willi Semmler (New School for Social Research, New York, NY)
    Keywords: financial crisis; real estate bubble; recession
    Date: 2009–05
  28. By: Bezemer, Dirk J
    Abstract: This study in recent history connects macroeconomic performance to financial policies in order to explain the decline in volatility of economic growth in the US since the mid-1980s, which is also known as the ‘Great Moderation’. Existing explanations attribute this to a combination of good policies, good environment, and good luck. This paper hypothesizes that before and during the Great Moderation, changes in the structure and regulation of US financial markets caused a redirection of credit flows, increasing the share of mortgage credit in total credit flows and facilitating the smoothing of volatility in GDP via equity withdrawal and a wealth effect on consumption. Institutional and econometric analysis is employed to assess these hypotheses. This yields substantial corroboration, lending support to a novel ‘policy’ explanation of the Moderation.
    Keywords: real estate; macro volatility
    JEL: E44 G21
    Date: 2009–05
  29. By: Mark Pinsky; Nancy Andrews; Paul Weech; Ellen Seidman; Rick Cohen
    Abstract: For thirty years, the community development finance industry—banks, credit unions, loan funds, community development corporations, venture funds, microfinance institutions—has quietly provided responsible, well-designed and wellpriced credit to lower-income people and communities. These entities have provided this credit with the support of the federal government, through the Community Development Financial Institutions Fund, the Low Income Housing and New Markets Tax Credits, the Small Business Association, the U.S. Department of Agriculture, and various housing and facilities development programs. The industry has also been supported in its efforts by mainstream institutions such as banks and insurance companies, most frequently motivated by the Community Reinvestment Act (CRA) or by concern that CRA-like obligations would be imposed. Philanthropic foundations and supporters and state and local governments have also played their parts. The result: a community development finance industry that has survived and even prospered during recessions and political downdrafts. But the field, and the communities, businesses, and individuals it serves, are hurting now, and fearing bigger hurt. This paper examines this situation and focuses attention on what needs to be done.
    Date: 2009
  30. By: Hirsch, Boris (University of Erlangen-Nuremberg); König, Marion (IAB, Nürnberg); Möller, Joachim (IAB, Nürnberg)
    Abstract: In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial oligopsony model, we show that more densely populated labour markets are more competitive and constrain employers' ability to discriminate against women. Utilising a large administrative data set for western Germany and a flexible semi-parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly ten percentage points remained surprisingly constant over the entire observation period of thirty years.
    Keywords: gender pay gap, urban-rural differences, matching, monopsonistic discrimination
    JEL: J16 J42 J71
    Date: 2009–06
  31. By: Albert Sole-Olle; 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, local government, intergovernmental transfers
    JEL: H77 H72 H70
    Date: 2009
  32. By: Edgar Morgenroth (ESRI)
    Abstract: The single largest project under the Irish National Development Plan (NDP) 2007-2013, is the construction of a Metro system. Despite the fact that this is the largest project under the NDP and the government?s transport strategy, Transport 21, no cost benefit analysis on the project has been published. This paper aims at addressing this lack of published analysis by considering the likely economic impact one of the Metro projects, Metro-North. In doing so the paper implements two novel methods namely the use of estimates from hedonic house price models and the results from macroeconomic studies instead of the conventional cost-benefit analysis. The two methods come up with contradictory results in that the hedonic pricing methodology would suggest that the Metro-North project should not proceed while the macroeconomic approach suggests the investment should go ahead. These results are dependent on the underlying assumptions, excluded benefits and parameters used, but given the analysis in the paper alternatives can be implemented readily.
    Date: 2009–06
  33. By: Filipe Campante; Edward L. Glaeser
    Abstract: Buenos Aires and Chicago grew during the nineteenth century for remarkably similar reasons. Both cities were conduits for moving meat and grain from fertile hinterlands to eastern markets. However, despite their initial similarities, Chicago was vastly more prosperous for most of the 20th century. Can the differences between the cities after 1930 be explained by differences in the cities before that date? We highlight four major differences between Buenos Aires and Chicago in 1914. Chicago was slightly richer, and significantly better educated. Chicago was more industrially developed, with about 2.25 times more capital per worker. Finally, Chicago’s political situation was far more stable and it wasn’t a political capital. Human capital seems to explain the lion’s share of the divergent path of the two cities and their countries, both because of its direct effect and because of the connection between education and political instability.
    JEL: D0 N0 R0
    Date: 2009–06
  34. By: Chi, Wei; Qian, Xiaoye
    Abstract: This study examines one of the channels through which education may contribute to economic growth, specifically, innovation. Endogenous growth theory has long suggested that human capital lead to greater innovation and, through technology innovation and diffusion, contribute to economic growth. However, there is little evidence on the role of human capital in innovation. Using the Chinese provincial data from 1997 to 2006, we show that workers’ tertiary education is significantly and positively related to provincial innovative activities measured by invention patent applications per capita. This result does not vary when spatial dependence is allowed in the estimation. Thus, we find strong and robust evidence for the prediction of endogenous growth theory regarding the effect of human capital on innovation. However, we do not find the consistently significant effect of innovation on growth. This finding may, however, relate to the growth pattern in China.
    Keywords: Education; Human Capital; Innovation; Paten; Economic Growth; Spatial Analysis
    JEL: O1 O3
    Date: 2009–06
  35. By: David Flath
    Abstract: This paper explores a panel data set matching establishment-based production statistics from Japan's Census of Manufacturers with wholesale price indices from the Bank of Japan, and Herfindahl indices from the Japan Fair Trade Commission. The data include annual observations over the period 1961-1990, for 74 industries at the 4-digit s.i.c. level. We estimate Cobb-Douglas production functions and Solow residuals for each industry and then use these estimates to further analyze the determinates of industrial concentration and innovation. The industries having great capital intensity, small employment of labor, and with high price-cost margins tend to be more concentrated. Cross-section estimates reveal a U-shaped mapping from concentration to innovation.
    Date: 2009–05
  36. By: Fabbri, D; Robone, S
    Abstract: Every year 35% of the 10 million hospital admissions in Italy occurs outside the patients' Local Health Authority of residence. In this paper we look for explanation for this phenomenon and estimate gravity equations for "trade" in hospital care using a Poisson pseudo maximum likelihood method. Our results suggest that the gravity model is a good framework for explaining patient mobility in most of the examined diagnostic groups. We find that the ability to restrain the imports of hospital services increases with the size of the pool of enrollees. Moreover, the ability to export hospital services, as proxied by the ratio of export-to-internal demand, is U-shaped. Therefore our evidence suggests that there are scale effects played by the size of the pool of enrollees.
    Keywords: patients mobility, hospital care, gravity model, Italian National Health Service
    Date: 2009–06
  37. By: Teresa V. Heitor; José M. R. Freire da Silva
    Abstract: The aim of the Secondary School Modernisation Programme, being implemented in Portugal by Parque Escolar, EPE, is based on the pursuit of quality and makes Portuguese education a potential international benchmark. This paper discusses the strategies adopted to reorganise school spaces. It describes the conceptual model and highlights the solutions proposed for libraries, science teaching spaces and museum units.
    Date: 2009–06
  38. By: Deprez, Frank Lekanne; Tissen, René (Nyenrode Business Universiteit)
    Abstract: This paper addresses the spatial design of modern organizations in the context of a fundamental change which is currently taking place in the way companies view their organizations and the inherent performance expectations, requirements and results underlying these. This change involves a managerial shift in perspective from the commonly adopted resource-based view of the firm, towards the knowledge based view of the firm. This paper follows the notion that company performance from a knowledge-based perspective benefits more from new ways of organizing, than from new ways of managing. A different type of organizations is introduced - that of the spatial organization - in which traditional one size fits all organizational ‘structures’ are replaced by ‘spatial arrangements’ which aim to connect people, knowledge and technology in a mentally fitting –natural- way. A number of core spatial organizational forms are presented and discussed (modular, circular, cellular, constellar). This paper encompasses part two of a series of Nyenrode research papers on spatial organizations, of which part one describes the theoretical foundations underlying their emergence.
    Keywords: Knowledge Economy, Knowledge Based View of the Firm, Spatial Arrangements, Organizational Design, Spatial Organizations
    Date: 2009
  39. By: Michael P. Dooley; Michael M. Hutchison
    Abstract: We find that emerging markets appeared to be somewhat insulated from developments in U.S. financial markets from early 2007 to summer 2008. From that point on, however, emerging markets responded very strongly to the deteriorating situation in the U.S. financial system and real economy. Policy measures taken in emerging markets to insulate themselves from global financial developments proved inadequate in the face of the credit crunch and decline in international trade that followed the Lehman bankruptcy in September 2008.
    JEL: F3 F36 F41
    Date: 2009–06
  40. By: Barone, Adriana (University of Salerno); O'Higgins, Niall (University of Salerno)
    Abstract: In this paper, we focus on the causes and consequences of adolescent obesity from an economic perspective. The paper examines the determinants of obesity and its role in influencing early school leaving amongst adolescents in the province of Salerno in Southern Italy. A simple human capital investment model is employed and this provides a framework within which to analyse the interrelated 'decisions' regarding schooling and overeating, taking into account the importance of time preference and the differential effects of adolescent obesity for males and females. We find that: a) there is a strong and robust positive effect of obesity on early school leaving; b) there are significant gender differences in the nature of this relationship; and, c) although not statistically significant, there is support for the idea that contextual factors – such as the type of school attended - are important in determining the effects of obesity on early school leaving. These findings have important policy implications. In particular, evidence on the positive causal link running from obesity to early school leaving suggests: i) that action aimed at reducing obesity – such as the encouragement of sporting activity - may also have beneficial effects in terms of reducing early school leaving rates; ii) the introduction of financial incentives to encourage educational participation; and, iii) the significant differences identified between young men and young women suggest the adoption of some gender- specific policy measures.
    Keywords: obesity, early school-leaving
    JEL: I12 I21 J13
    Date: 2009–06
  41. By: Naomi Cytron
    Abstract: This report is an expanded version of a case study that appeared as one of 16 community profiles published in “The Enduring Challenge of Concentrated Poverty in America: Case Studies from Communities Across the U.S.,” a joint project of the Community Affairs Offices of the Federal Reserve System and the Metropolitan Policy Program at the Brookings Institution. The intent of this publication is not to explain poverty causation; poor people, and the communities they live in, have been the subject of serious study and debate for decades. Rather, our goal is to add texture to our understanding of where and how concentrated poverty exists by studying new areas and by interviewing local stakeholders—including residents, community leaders, and government representatives—to understand how concentrated poverty affects both individuals and communities. We hope this report will contribute to the public conversation among policymakers and practitioners about the relationship between people and place, and ultimately to a comprehensive policy discussion on poverty alleviation and community reinvestment.
    Date: 2009
  42. By: Kunz, Marcus
    Abstract: "The results for labour demand shocks at the place of residence for German Federal States and districts according to the model of regional adjustment developed by Blanchard/Katz (1992) are in line with other studies in this field. They suggest that adjustment to region-specific shocks in the year of the shock is mainly through par-ticipation behaviour and unemployment changes, not by migration. If, however, the estimations additionally allow for commuting as adjustment mechanism, the unemployment rate and interregional mobility (i.e. migration and commuting activities) capture the major part of the regional adjustment process. Thus, migration and commuting are highly relevant for the adjustment behaviour of districts as well as for Federal States. As the major part of the shock has settled within only about one to two years, slow working adjustment mechanisms in the aftermath of labour demand shocks are not responsible for persistent unemployment differentials. Furthermore, the hypothesis that the adjustment process for smaller spatial units is much more reflected in interregional mobility and less in changes in the unemployment and the participation rate is confirmed." (author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitskräftenachfrage, Konjunkturabhängigkeit, Arbeitskräfteangebot - Anpassung, regionale Mobilität, Arbeitsmigration, Pendelwanderung, Arbeitslosenquote, regionaler Vergleich, Bundesländer, Landkreis, regionale Disparität, Arbeitskräftemobilität, regionale Faktoren, Westdeutschland, Bundesrepublik Deutschland
    Date: 2009–06–05
  43. By: Christiaan Behrens (VU University Amsterdam); Eric Pels (VU University Amsterdam)
    Abstract: This paper studies inter- and intramodal competition in the London-Paris passenger market. Using revealed preference data, we estimate nested and mixed multinomial logit models to examine passenger behaviour in the London-Paris market. We present a case study on the relocation of Eurostar services from Waterloo International to St Pancras International station. The results show that competition is present in this market. Demand is elastic, and passengers are heterogeneous in their valuation of fares and accessibility. Aviation and high-speed rail are homogenous in unobserved effects. The large market share of the Eurostar and the withdrawal of aviation alternatives indicate that competition will decline in the long-run.
    Keywords: inter- and intramodal competition; nested logit; mixed logit; aviation; rail
    JEL: R40 R41
    Date: 2009–06–08
  44. By: Manuel Frondel; Colin Vance
    Abstract: Focusing on individual motorists in car-owning households in Germany, this paper econometrically investigates the determinants of automobile travel with the specific aim of quantifying the effects of fuel prices and person-level attributes on travel conducted over a five-day week and weekend. Our analysis is predicated on the notion that car use is an individual decision, albeit one that is dependent on intra-household allocation processes, thereby building on a growing body of literature that has identified the importance of socioeconomic factors such as employment status, gender, and the presence of children in determining both access to the car and distance driven. To capture this two-stage decision process, we employ the Two-Part Model, which consists of Probit and OLS estimators, and derive elasticity estimates that incorporate both the discrete and continuous choices pertaining to car use.With fuel price elasticity estimates ranging between –0.42 and –0.48, our results suggest raising prices via fuel taxes to be a promising energy conservation and climate protection measure.
    Keywords: Automobile travel, Two-Part Model, interaction effects
    JEL: D13 Q41
    Date: 2009–04
  45. By: Ethan Cohen-Cole; Burcu Duygan-Bump; Judit Montoriol-Garriga
    Abstract: Conventional wisdom about individuals who have gone bankrupt is that they find it very difficult to get credit for at least some time after their bankruptcy. However, there is very little non-survey based empirical evidence on the availability of credit post-bankruptcy. This paper makes two contributions using data from one of the largest credit bureaus in the US. First, we show that individuals who file for bankruptcy can indeed get credit very quickly after they file. Indeed, 90% of individuals have access to some sort of credit within the 18 months after filing for bankruptcy, and 66% have unsecured credit. Second, we show that those individuals who are effectively the least punished and can get the easiest access to credit after bankruptcy tend to be the ones who have shown the least ability and propensity to repay their debt prior to declaring bankruptcy. In fact, a significant fraction of individuals at the bottom of the credit quality spectrum seem to receive more credit after filing than before. We interpret the widespread credit access and the difference in credit provision across borrower types as evidence that lenders target at-risk borrowers. By means of a simple stylized model we show that this observation is consistent with a profit maximizing lender whose optimal strategy involves segmenting borrowers by observable credit quality and bankruptcy status and that offers credit contracts to each group. This interpretation is also in line with survey evidence that shows that lenders repeatedly solicit debtors to borrow after bankruptcy, with unsecured credit card being the easiest one to obtain.
    Keywords: Bankruptcy ; Credit
    Date: 2009
  46. By: Amodio, Francesco
    Abstract: Evidence suggests the average ability of teachers to have progressively declined in developed countries over the last decades. Many explanations have been proposed, all suggesting the idea of a lower attractiveness of teaching professions (both in monetary and non monetary terms) with respect to feasible alternative working opportunities. This should apply to women at least, because of the great expansion of job opportunities which interested female cohorts in the second half of the century. However, the long lasting problem of getting credible ability measures has often driven partial results. Here two UK population samples of individuals born in different years are considered. Individuals were exposed to ability tests at early stages of their life, so that subsequent education paths are exogenous to test scores. Transformation in percentiles allows to get comparable measures of ability, and distributions for those who undertook the teaching career are obtained in the two samples. Consistently with previous literature, using difference-in-difference, we find evidence of teachers quality decline. A gender based analysis is performed in order to address gender differences and specific questions. Data on salaries, ditributions across jobs and social mobility are finally used in order to find possible explanations. Further questions arise.
    Keywords: teachers quality; ability measure; NCDS; BCS; difference in difference; social mobility
    JEL: J08 J45 I2 J0 J16
    Date: 2009–06–18

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