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on Urban and Real Estate Economics |
| By: | Goei, B. de; Burger, M.J.; Oort, F.G. van; Kitson, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | In contemporary literature on changing urban systems, it is often argued that the traditional central place conceptualisation is outdated and should be replaced by a network view that emphasises the increasing criss-crossing pattern of interdependencies between spatial units. This paper tests for urban network development by looking at commuting patterns in the Greater South East UK. The analysis is based on census commuting interaction data for three points in time during the past three decades (1981, 1991, and 2001). Although the empirical results indicate that the Greater South East UK can still not be characterized as a polycentric urban region or integrated urban network, there is some evidence for urban network development at the local, intra-urban, level as well as a decentralization of the system at the regional, inter-urban, level. |
| Keywords: | United Kingdom;gravity model;commuting;urban networks;Greater South East |
| Date: | 2009–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765016213&r=ure |
| By: | Manuel Adelino; Kristopher Gerardi; Paul S. Willen |
| Abstract: | We document the fact that servicers have been reluctant to renegotiate mortgages since the foreclosure crisis started in 2007, having performed payment-reducing modifications on only about 3 percent of seriously delinquent loans. We show that this reluctance does not result from securitization: servicers renegotiate similarly small fractions of loans that they hold in their portfolios. Our results are robust to different definitions of renegotiation, including the one most likely to be affected by securitization, and to different definitions of delinquency. Our results are strongest in subsamples in which unobserved heterogeneity between portfolio and securitized loans is likely to be small, and for subprime loans. We use a theoretical model to show that redefault risk, the possibility that a borrower will still default despite costly renegotiation, and self-cure risk, the possibility that a seriously delinquent borrower will become current without renegotiation, make renegotiation unattractive to investors. |
| Keywords: | Mortgage loans ; Foreclosure ; Financial crises ; Subprime mortgage ; Mortgage-backed securities |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:09-4&r=ure |
| By: | Alessandro Calza (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Tommaso Monacelli (IGIER, Università Bocconi, Via Sarfatti, 25 Milano, Italy.); Livio Stracca (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | We study how the structure of housing finance affects the transmission of monetary policy shocks. We document three main facts: first, the features of residential mortgage markets differ markedly across industrialized countries; second, and according to a wide range of indicators, the transmission of monetary policy shocks to residential investment and house prices is significantly stronger in those countries with larger flexibility/development of mortgage markets; third, the transmission to consumption is stronger only in those countries where mortgage equity release is common and mortgage contracts are predominantly of the variable-rate type. We build a two-sector DSGE model with price stickiness and collateral constraints and analyze how the response of consumption and residential investment to monetary policy shocks is affected by alternative values of two institutional features: (i) down-payment rate; (ii) interest rate mortgage structure (variable vs. fixed rate). In line with our empirical evidence, the sensitivity of both variables to monetary policy shocks increases with lower values of the down-payment rate and is larger under a variable- rate mortgage structure. JEL Classification: E21, E44, E52. |
| Keywords: | Housing finance, mortgage markets, collateral constraint, monetary policy. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:200901069&r=ure |
| By: | Yamina Tadjeddine |
| Abstract: | With financial globalization, there has been a thorough reorganization of financial activities. A new geography of finance has emerged with, first of all, activities being transferred from the historical heart of big cities to the peripheral areas. Alternative asset management that has emerged in Europe in the past ten years is undoubtedly the paradox example of this suburbanization movement. We notice a high level of spatial concentration in the historical heart of Paris and London. Hedge Funds, particularly independent organizations choose Upper Class area. To provide an understanding of the future dynamics of the location of financial activities we need to redefine the notion of financial market. To provide an understanding of this location of alternative activities we need to redefine the socio-economic characteristics of hedge funds. The specific nature of this activity – highly skilled employees, high value-added knowledge services, lack of public information – justify concentration in order to take advantage of informational externalities and of the presence of specialized companies. An address in Mayfair or at Place Vendôme counts in the world of hedge funds. |
| Keywords: | Financial Institution, Financial Geography, Informational Externalities |
| JEL: | R1 G2 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2009-27&r=ure |
| By: | Oort, F.G. van; Burger, M.J.; Raspe, O. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | The current debate on polycentric urban development suggests that inter-firm relations are important for the creation and sustainment of urban networks. Conceptually, the degrees of spatial and functional integration and urban complementarities in economic network relations are hypothesised to be important. However, the theoretical economic rationale has not been convincingly tested. In this paper, we use data on inter-firm relations in the Dutch Randstad to test conditions for integration and the existence of economic complementarities within this region. Contrary to the ‘polycentricity hypothesis’, we observe a clear hierarchy in the different types of spatial interdependencies in the Randstad, in which the central place model prevails. Furthermore, we do not find evidence for the functional integration of municipalities in the Randstad. We conclude that at this moment the Randstad does not function as a spatially and functionally integrated region, and that spatial economic policy can better focus on smaller regions within the Randstad when urban economic complementarities and integration are desired. This also calls into question the applicability of the urban network concept in general, as the Dutch Randstad is usually seen as a prime example of an economically successful polycentric urban system. |
| Keywords: | competitiveness;Randstad;urban networks;decentralization |
| Date: | 2009–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765016214&r=ure |
| By: | Gunther Capelle-Blancard; Yamina Tadjeddine |
| Abstract: | The location of financial activities is traditionally characterized by a great deal of inertia. However, the boom in new information and communication technologies, the globalization of economies and the 2007-08 financial crisis have considerably modified the geography of finance. Financial globalization has, first of all, had a heavy impact on the level of spatial concentration / dispersion of activities. The dynamics have not acted in a uniform way – schematically speaking three levels can be distinguished. On the urban scale, financial activities have been spread out (suburbanization), while on the regional scale or the national scale, due to financial globalization, financial activities have been more tightly grouped. Lastly, on the international scale, a movement of dispersion has mainly been observed, along with a specialization of financial centers. The 2007-08 financial crisis might well accentuate this last effect and cause an upheaval in world hierarchy. Actually, the financial centers that are most elastic to the economic situation – London, New York and tax havens – are massively losing jobs, while the stock markets in Shanghai, Hong Kong and Bombay are now upstaging them as major players. |
| Keywords: | Financial Geography, International Financial Centers, Globalization, Informational Externalities |
| JEL: | E44 G2 R1 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2009-26&r=ure |
| By: | Guillaume Haeringer (Universitat Autònoma de Barcelona); Caterina Calsamiglia (Universitat Autònoma de Barcelona); Flip Klijn (Institute for Economic Analysis (CSIC)) |
| Abstract: | The literature on school choice assumes that families can submit a preference list over all the schools they want to be assigned to. However, in many real-life instances families are only allowed to submit a list containing a limited number of schools. Subjects' incentives are drastically affected, as more individuals manipulate their preferentes. Including a safety school in the constrained list explains most manipulations. Competitiveness across schools plays an important role. Constraining choices increases segregation and affects the stability and efficiency of the final allocation. Remarkably, the constraint reduces significantly the proportion of subjects playing a dominated strategy. |
| Keywords: | School Choice, Matching, Experiment, Gale-Shapley, Top Trading Cycles, Boston Mechanism, Efficiency, Stability, Truncation, Truthtelling, Safety School |
| JEL: | C72 C78 D78 I20 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.29&r=ure |
| By: | Jurijs Grizans (Department of Environmental and Business Economics, University of Southern Denmark) |
| Abstract: | Cities are at the heart of Europe. As four of every five European citizens live in urban areas, their quality of life and the quality of their environment depends upon how cities look and how they function. Cities are also places where business is done, investments are made and jobs are created. In Northern Europe, people spend over 90% of their time inside and in the winter months, this can rise to almost 100%. If they are not inside, people are usually travelling from one building to another, using civil infrastructure facilities such as roads, bridges and railways. For most people in the developed world, most of the time, the urban environment is their environment. As cities continue to grow, increasing attention must be given to the quality of their urban environment and to their livability. Improving the urban environment – and city dweller's quality of life – has become a major issue in the global effort to achieve sustainable development. This literature study focuses on the urban environment issues and solutions in the context of sustainable development. The purpose of this paper is to study the causes and processes of the emergence, formation and development of the city and the urban environment. The field of urban environment comprises a vital area for the application of sustainable development principles, not least because of the scope for conflicts between interpretations of development. As an activity that has clear economic, social and environmental dimensions, urban policy holds considerable potential to make a positive contribution to the practical realization of sustainable development. Urban environment in this paper is seen as a complex social, economic and biophysical system produced by the interaction between a man-made fabric and the physical characteristics of the landscapes. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:sdk:wpaper:92&r=ure |
| By: | Polasek, Wolfgang (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria); Schwarzbauer, Wolfgang (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria); Sellner, Richard (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria) |
| Abstract: | Economists expect positive returns to investments in infrastructure. However a project with higher national returns might have less favourable effects on a regional level than the alternative. Therefore new infrastructure should also be assessed on a regional level, but econom(etr)ic evaluation models are scarce, especially in regional science. This paper proposes new approaches to evaluate infrastructure by a dynamic spatial econometric model that allows long-term predictions. We investigate the regional effects for two Austrian railway projects and show that infrastructure returns are positive on an aggregate and at a regional level but spatial variation can be large. |
| Keywords: | Regional growth convergence, traffic accessibility, infrastructure evaluation, spatial econometrics |
| JEL: | C31 H43 H54 R11 R12 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:242&r=ure |
| By: | Theresa Grafeneder-Weissteiner; Klaus Prettner |
| Abstract: | This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of ageing on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value is rather sensitive to changes in mortality. In particular, the introduction of a positive mortality rate makes the symmetric equilibrium more stable and therefore counteracts agglomeration tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality. |
| Keywords: | Agglomeration, New Economic Geography, Trade and Growth, Constructed Capital Model, Population Ageing. |
| JEL: | C61 F12 F15 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:vid:wpaper:0901&r=ure |
| By: | John Mc Breen (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat, IXXI - Institut rhône-alpin des systèmes complexes - INRIA - Ecole Normale Supérieure de Lyon - ENS Lyon - Institut National des Sciences Appliquées de Lyon - Université Claude Bernard - Lyon I - Ecole Normale Supérieure Lettres et Sciences Humaines - Université Joseph Fourier - Grenoble I - CNRS - IRD, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - CNRS : UMR5672 - Ecole Normale Supérieure de Lyon - ENS Lyon); Florence Goffette-Nagot (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Pablo Jensen (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat, IXXI - Institut rhône-alpin des systèmes complexes - INRIA - Ecole Normale Supérieure de Lyon - ENS Lyon - Institut National des Sciences Appliquées de Lyon - Université Claude Bernard - Lyon I - Ecole Normale Supérieure Lettres et Sciences Humaines - Université Joseph Fourier - Grenoble I - CNRS - IRD, Phys-ENS - Laboratoire de Physique de l'ENS Lyon - CNRS : UMR5672 - Ecole Normale Supérieure de Lyon - ENS Lyon) |
| Abstract: | We simulate a closed rental housing market with search and matching frictions, in which both landlord and tenant agents are imperfectly informed. Homogeneous landlords set rents to maximise revenue, using information on the market to estimate the relationship between posted rent and time-on-the-market (TOM). Tenants, heterogeneous in income, engage in undirected search accepting residences based on their idiosyncratic tastes for housing and a disagreement point derived from information on the distribution of offers. The steady state to which the simulation evolves shows price dispersion, nonzero search times and vacancies.The main results concern the effects of increasing information on either side of the market. When tenants see a greater percentage of the distribution of offers, tenants learn to refuse high rents and so the population rises and tenants' utilities rise as does overall welfare. Conversely, when landlords have less information, their utility can rise as over estimations in best posting rent move the market to higher rents. |
| Keywords: | Real estate; Rental markets; Search; Information; Simulation; Multi-agent systems |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00374157_v2&r=ure |
| By: | Mary A. Burke; Gary M. Fournier; Kislaya Prasad |
| Abstract: | Location-specific norms of behavior are a widespread phenomenon. In the case of medical practice, numerous studies have found that geographic location exerts a strong influence on the choice of treatments and procedures. This paper shows how the presence of social influence on treatment decisions can help to explain this phenomenon. We construct a theoretical model in which physicians' treatment choices depend on patients' characteristics and on the recent choices of nearby peers - either because there are local knowledge spillovers or because physicians want to conform to local practice patterns. In our model, regional differences in the patient mix give rise to geographically divergent treatment patterns - the treatment a patient receives depends on where she lives. Investigation of Florida data reveals significant geographic variation in treatment rates consistent with the predictions of our model. Implications for patient welfare are explored. |
| Keywords: | Medical care |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:09-5&r=ure |
| By: | Laurent Denant-Boemont (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen); Sabrina Hammiche (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen) |
| Abstract: | We study the Downs-Thomson paradox, a situation where an additional road capacitycan cause an overall increase in transport generalized cost and therefore a decrease in welfarefor transport users. To this end, we build an experiment based on a double market-entrygame (DMEG) where users have to choose between road and public transit after that the op-erator has choosen public transit capacity. The optimal strategy for operator is to minimizecapacity, and the equilibrium for users depend on the endogeneous public transit capacitycompared to exogeneous road capacity. The most important result is that we observe theDowns-Thomson paradox empirically in the laboratory: An increase in road capacity causesshift from road to rail and, at the end, increases total travel costs. But the contrary isnot true: A decrease in road capacity does not cause lower total travel costs, which is incontradiction with our theoretical model. Results also show that the capacity chosen byoperator di¤ers from Nash prediction, levels being signi cantly higher than those predictedby our model. Moreover, users coordinate remarkably well on Nash equilibrium entry ratewhile capacity has been chosen by operator. |
| Keywords: | traffic equilibrium, public transit, congestion, experimental economics, market entry game |
| Date: | 2009–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00405501_v1&r=ure |
| By: | Thomas Brenner (Department of Geography, Philipps University Marburg); Tom Broekel (Department of Human Geography and Planning, Faculty of Geosciences, Utrecht University) |
| Abstract: | Measuring the innovation performance of regions or nations has been repeatedly done in the literature. What is missing in the literature is a discussion of what innovation performance of a region means. How do regions or nations contribute really to the innovation output of ï¬rms? And how can this contribution be investigated in an empirically sound way? We argue that while the literature offers many suggestions, their theoretical foundation is often weak and the underlying assumptions are rarely discussed. In this paper, we systematize various mechanisms by which spatial units influence ï¬rms' innovation activities. On the basis of this, common innovation performance measures and analyses are discussed and evaluated. It is concluded that there is no general best way of measuring the innovation performance of spatial units. In fact, the most interesting insights can be obtained using a multitude of different approaches at the same time. |
| Keywords: | Innovation performance, regional innovativeness, innovation generation, regional innovation system, national innovation system |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2009-01&r=ure |
| By: | Laurent Denant-Boèmont (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen); Sabrina Hammiche (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen) |
| Abstract: | We study the Downs-Thomson paradox, a situation where an additional road capacitycan cause an overall increase in transport generalized cost and therefore a decrease in welfarefor transport users. To this end, we build an experiment based on a double market-entrygame (DMEG) where users have to choose between road and public transit after that the op-erator has choosen public transit capacity. The optimal strategy for operator is to minimizecapacity, and the equilibrium for users depend on the endogeneous public transit capacitycompared to exogeneous road capacity. The most important result is that we observe theDowns-Thomson paradox empirically in the laboratory: An increase in road capacity causesshift from road to rail and, at the end, increases total travel costs. But the contrary isnot true: A decrease in road capacity does not cause lower total travel costs, which is incontradiction with our theoretical model. Results also show that the capacity chosen byoperator di¤ers from Nash prediction, levels being signi cantly higher than those predictedby our model. Moreover, users coordinate remarkably well on Nash equilibrium entry ratewhile capacity has been chosen by operator. |
| Keywords: | traffic equilibrium, congestion, market entry game, coordination, experimental economics |
| Date: | 2009–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00406223_v1&r=ure |
| By: | Rego, Conceição; Caleiro, António |
| Abstract: | Many studies, provided by diverse authors and institutions, demonstrate that, at a territorial level, development is directly related to the level of education and R&D. Territories with higher development levels are, generally, those that have a higher level of education and R&D. The relationship between the acquisition of knowledge and institutional education is therefore decisive. In this area, the role of universities is fundamental. The retention of university graduates is one of the main ways that the cities and the regions can adopt to retain those endowed with higher propensity to innovation, enterprise spirit and management capacity. Given that higher education institutions, in general, and universities, in particular, are obviously crucial in the process of knowledge increase, it becomes important to analyse how can these institutions act as ways of spatial diffusion of knowledge given that their graduates may migrate to other regions of the country (or for another country). The alleged increased probability of this migration to occur when the university is located in a small or medium sized town makes that analysis also interesting from the viewpoint of the development role that this kind of cities can perform, not only in the adjacent rural areas, but also across all the urban areas of the territory. The focus of our work consists in this analysis, which complements a theoretical approach with an empirical part based upon the results that can be observed for the influence of one university located in a small/medium sized town (the University of Évora) in the spatial diffusion of knowledge through its graduates. |
| Keywords: | Human capital; Small towns; Spatial diffusion of knowledge; Universities |
| JEL: | O15 I23 J24 R11 |
| Date: | 2009–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16241&r=ure |
| By: | Moscone, Francesco; Tosetti, Elisa |
| Abstract: | We consider Generalized Method of Moments (GMM) estimation of a regression model with spatially correlated errors. We propose some new moment conditions, and derive the asymptotic distribution of the GMM based on them. The analysis is supported by a small Monte Carlo exercise. |
| Keywords: | Generalized Method of Moments; spatial econometrics |
| JEL: | C13 A19 |
| Date: | 2009–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16327&r=ure |
| By: | Casper van Ewijk; Michiel van Leuvensteijn |
| Abstract: | Increasing labour market flexibility is at the top of the European agenda. A new and challenging view is a lack of mobility in the labour market may arise from rigidities in the housing market. The research in this book has been inspired by the intriguing hypothesis put forward by Andrew Oswald that homeownership may be a hindrance to the smooth working of the labour markets, as homeowners tend to be less willing to accept jobs outside their own region.<br> This book brings together leading economists from across Europe to analyse the interaction between housing markets and labour markets. In the EU homeownership rates have been on the increase, often as a result of government policies, making the barriers that homeownership creates in terms of labour mobility increasingly important. This book shows on the one hand, at the individual level, that homeownership limits the likelihood of becoming unemployed and increases the probability of finding a job once unemployed. On the other hand, the transaction costs inherent in the housing market and homeownership hamper job-to-job changes and increase unemployment at the country level. This insight provides a clear policy message to European policymakers: reform in the housing market, aimed at lowering transaction costs and providing less generous subsidies for homeowners could be an effective instrument for reducing unemployment and improving labour market flexibility. |
| Keywords: | home ownership; labour market; Europe; housing market; transaction costs; labor mobility; unemployment |
| JEL: | J60 J61 R23 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:spcial:79&r=ure |
| By: | Berardino Cesi (Université de Cergy-Pontoise, THEMA. Site des Chênes I, 33 Bd du Port, F-95000, Cergy- Pontoise, France) |
| Abstract: | We show that capitalization of local education into the housing price induces childless voters to support local education. In particular, low income childless households vote for a tax raise when capitalization is strong, whereas high income childless supports a higher tax when capitalization is weak. The median income voter is never pivotal because "ends with the middle" coalitions arise: high income households (with and without a child) makes coalition with middle income class with a child, whereas low income households (with and without a child) make coalition with childless middle income class. We ?nd that the income of the childless median voter is higher than the median income, whereas median voter with a child has income lower than the median. Thus the equilibrium tax preferred by the median voter (childless or not), is higher than the tax preferred by the childless median income voter and lower than the tax preferred by the median income voter with a child. This result implies that it is not possible to exclude voting equilibria in which the tax of the childless median voter is higher than the tax of the median voter with a child. |
| Keywords: | local public education; housings; local tax; capitalization; childless voting |
| JEL: | H52 H72 I22 R2 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2009-07&r=ure |
| By: | Benjamin Golub (Stanford University); Matthew O. Jackson (Stanford University) |
| Abstract: | We examine how three different communication processes operating through social networks are affected by homophily - the tendency of individuals to associate with others similar to themselves. Homophily has no effect if messages are broadcast or sent via shortest paths; only connection density matters. In contrast, homophily substantially slows learning based on repeated averaging of neighbors' information and Markovian diffusion processes such as the Google random surfer model. Indeed, the latter processes are strongly affected by homophily but completely independent of connection density, provided this density exceeds a low threshold. We obtain these results by establishing new results on the spectra of large random graphs and relating the spectra to homophily. We conclude by checking the theoretical predictions using observed high school friendship networks from the Adolescent Health dataset. |
| Keywords: | Networks, Learning, Diffusion, Homophily, Friendships, Social Networks, Random Graphs, Mixing Time, Convergence, Speed of Learning, Speed of Convergence |
| JEL: | D83 D85 I21 J15 Z13 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.35&r=ure |
| By: | Alicia Sasser |
| Abstract: | Over the past several years, policymakers and business leaders throughout New England have expressed concern regarding the region's ability to attract and retain skilled workers, given the economic climate of the region compared with other parts of the nation. Indeed, net domestic migration for New England became increasingly negative after the 2001 recession, as the number of people leaving the region exceeded those entering. Examining the factors underlying these migration trends is important for determining what role, if any, public policy might play in addressing their potential impact on the region's labor supply. Using a logistic migration model, this paper examines the relative role of economic factors - namely labor market conditions, per capita incomes, and housing affordability - in determining domestic state-to-state migration flows. Using such flows from the Internal Revenue Service for each of the 48 states in the continental United States from 1977 through 2006, the model controls for demographic characteristics of origin states as well as state-specific fixed amenities, such as climate, culture, and natural features. The model's estimates show that while all three measures of relative economic conditions are significant determinants of migration, the magnitude of their impact varies. The estimates also show that the impact of these economic factors on state-to-state migration flows has changed considerably over time. For example, the importance of per capita income as a determining factor has fallen considerably since the late 1970s, while that of housing affordability has risen. Forecasts of net domestic migration based on the model show that while New England will continue to lose individuals to other states during 2009, the pace of out-migration will likely slow, particularly in Massachusetts. This is likely due to the fact that both the region and the Bay State are performing slightly better than the nation as a whole during the current recession. However, this trend may reverse itself if economic conditions deteriorate in the New England states relative to other parts of the country. |
| Keywords: | Labor supply - New England ; Migration, Internal - United States |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcw:09-1&r=ure |
| By: | Andrés Rodríguez-Pose (London School of Economics); Vassilis Tselios (Newcastle University) |
| Abstract: | This paper examines whether differences in educational externalities affect individual earnings across regions in the EU. Using microeconomic data from the European Community Household Panel, the analysis relies on spatial economic analysis in order to determine to what extent differences in individual earnings are the result of (a) the educational attainment of the individual, (b) the educational attainment of the other members of the household he/she lives in, (c) the educational endowment of the region where the individual lives, or (d) the educational endowment of the neighbouring regions. The results highlight that, in addition to the expected positive returns of personal educational attainment, place-based regional and supra-regional educational externalities generate significant pecuniary benefits for workers. These findings are robust to the inclusion of different individual, household, and regional control variables. |
| Keywords: | individual earnings; educational attainment; externalities; households; regions; Europe |
| Date: | 2009–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2009-07&r=ure |
| By: | Petra Stanat; Hans Döbert |
| Abstract: | Research on school education is exceptionally active at present. This heightened level of activity is partly due to the realization that, compared to other countries, Germany knows very little about its school system. Before the results from the first cycle of PISA (Programme for International Student Assessment) were published at the end of 2001, for example, even the proportion of immigrant students attending German schools was largely unknown (Baumert and Schümer 2001). Although the situation has changed tremendously over the last 10 years, many questions remain open. One of the major research gaps pertains to how students’ competencies and other aspects of educational success develop over time and across different stages of the education system. Similarly, information on factors shaping these developments is lacking. This is particularly the case for process factors within schools, classrooms, and families that affect student learning. Although considerable progress has been made in capturing cognitive competencies and skills, moreover, little is known about how they unfold over time. Also, the role “soft-skills,” such as social competencies, play as determinants and outcomes of educational processes is largely unclear. To provide a basis for exploring these and other issues, it is necessary to make existing data sets available to researchers and to generate additional data sets with improved research designs and instrumentation. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rsw:rswwps:rswwps38&r=ure |
| By: | Skribans, Valerijs |
| Abstract: | Recently construction industry in Latvia has experienced substantial changes. Stabile increase of construction since 2002 has transformed to a boom in 2006-2007. Year 2008 characterizes with continuation of the boom in first half-year and with the rapid downslide in the second half-year. The downslide can cause the protracted recession not only in construction industry, but also in the whole national economy. In the paper Latvian construction industry is comprehensively evaluated and compared with the Baltic States and the European Union. State of dwelling funds, dynamics of construction industry and factors influencing demand, including solvency of population, desires and necessities; factors of commercial and government demand are presented. Industry costs are analyzed separately: natural resources, production of building materials, fixed assets and attraction of money capital, personnel costs. Possibilities to obtain profit while working in construction were analyzed. Basing on the analysis, suggestions for improvements in the industry activities are elaborated. |
| Keywords: | construction economics; demand; living conditions; real estate; solvency; credit burden; investments |
| JEL: | N60 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16370&r=ure |
| 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: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:09/16&r=ure |
| By: | Frank Partnoy (University of San Diego School of Law) |
| Abstract: | The first part of the paper describes how over time credit rating agencies ceased to play the role of information intermediaries. Rating agencies did not provide information about the risk associated with the securitized instruments, but they simply enabled structurers to create and maintain tranches of these instruments with unjustifiably high credit ratings. The second part of the paper suggests how future policy may minimize overdependence on credit ratings, by removing regulatory licences and by implementing shock-therapy mechanisms to wean investors simple rating mnemonics. |
| Keywords: | Rating Agencies, Subprime Mortgages, Securitization |
| JEL: | G24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.27&r=ure |
| By: | Tobia Lakes |
| Abstract: | Empirical data can be characterized by a precise location in space and time. An estimated 80% of all data holds such a spatio-temporal reference and is termed geodata. This paper starts with the question: What is the additional benefit for socio-economic sciences using geodata and the spatial dimension respectively? In the following a multidimensional approach is chosen to outline the Status Quo of geodata and spatial techniques in Germany. It is particularly the continuously growing amount and the variety of available geodata which is stated. Data security is an issue of high importance when using geodata. Furthermore, the present developments in price and user concepts, accessibility, technical standards and institutionalisation are addressed. A number of challenges concerning the field of geodata are identified including the open access to geodata, data security issues and standardization. The main challenge however seems to be the exchange between the rather segregated fields of geoinformation and the information infrastructure. Furthermore, the census 2011 is identified as a major challenge for the acquisition and management of geodata. Geodata and spatial techniques are a rapidly developing field due to technology developments of data and methods as well as due to recently growing public interest. Their additional be efit for socioeconomic research should be exploited in the future. |
| Keywords: | geodata, geoinformation, Web-GIS, geodata-infrastructure, spatial techniques |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rsw:rswwps:rswwps49&r=ure |
| By: | Choe, Chung (CEPS/INSTEAD); Chrite, E. LaBrent (University of Arizona) |
| Abstract: | Migrations historically have led to fears of “brain drain” from the sending regions because many studies show that the more highly skilled and motivated people are more likely to migrate. South Africa provides a natural testing ground for the study of brain drains because the Apartheid system, which ended in the early 1990s, had long constrained the locational choices of black migrants of all skill levels. As apartheid was being dismantled, new opportunities for movement opened up to black workers, leading to a surge in internal migration. We first analyze whether migration patterns of Black South Africans during the period 1992 to 1996 match the predictions of the two seminal papers, Roy (1951) and Sjaastad (1962), where individuals are hypothesized to be income-maximizers. The results from conditional logit regressions on individual choices among 318 locations show that they do. Individuals prefer localities with higher expected log wages regardless of their educations and skills. More importantly, workers with at least some matriculation tend to favor areas where a higher share of the population attended high school. In contrast, workers who did not attend high school find such areas less attractive. Over the study period, brain drain arose among blacks within South Africa: the share of high-educated residents in areas with high shares of high schooling increased. |
| Keywords: | Internal Migration; South Africa ; Self-selection ; Brain Drain |
| JEL: | D31 J61 O15 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:iriswp:2009-06&r=ure |
| By: | Edoardo Gallo (University of Oxford) |
| Abstract: | Many social networks have the following properties: (i) a short average distance between any two individuals; (ii) a high clustering coefficient; (iii) segregation patterns; the presence of (iv) brokers and (v) hubs. (i) and (ii) define a small world network. This paper develops a strategic network formation model where agents have heterogeneous knowledge of the network: cognizant agents know the whole network, while ignorant ones are less knowledgeable. For a broad range of parameters, all pairwise Nash (PN) networks have properties (i)-(iv). There are some PN networks with one hub. Cognizant agents have higher betweenness centrality: they are the brokers who connect different parts of the network. Ignorant agents cause the emergence of segregation patterns. The results are robust to varying the number of cognizant agents and to increasing the knowledge level of ignorant ones. An application shows the relevance of the results to assessing the welfare impact of an increase in network knowledge due to, e.g., improved access to social networking tools. |
| Keywords: | Network, Cognitive Network, Small World, Broker, Segregation |
| JEL: | C72 D85 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.34&r=ure |
| By: | Orsetta Causa; Catherine Chapuis |
| Abstract: | This paper focuses on inequalities in learning opportunities for individuals coming from different socioeconomic backgrounds as a measure of (in) equality of opportunity in OECD countries and looks at the role played by policies and institutions in shaping countries’ relative positions. Based on harmonised 15- year old students’ achievement data collected at the individual level, the empirical analysis shows that while Nordic European countries exhibit relatively low levels of inequality, continental Europe is characterised by high levels of inequality - in particular of schooling segregation along socio-economic lines - while Anglo-Saxon countries occupy a somewhat intermediate position. Policies allowing increasing social mix are found to reduce school socio-economic segregation without affecting overall performance. Countries that emphasise childcare and pre-school institutions exhibit lower levels of inequality of opportunity, suggesting the effectiveness of early intervention policies in reducing persistence of education outcomes across generations. There is also a positive association between inequality of opportunities and income inequality. As a consequence, cross-country regressions suggest that redistributive policies can help to reduce inequalities of educational opportunities associated with socioeconomic background and, hence, persistence of education outcomes across generations.<P>Équité et compétences scolaires dans les pays de l'OCDE : examen du rôle des politiques publiques<BR>Cet article analyse les inégalités de compétences scolaires pour des individus d’origine sociale différente comme une mesure d’(in)égalité des chances dans les pays de l’OCDE et étudie le rôle joué par les politiques publiques dans ce contexte. Le travail empirique est basé sur l’analyse de données individuelles harmonisées entre pays mesurant les compétences scolaires d’étudiants âgés de 15 ans. Les résultats montrent que les pays d’Europe du Nord sont caractérises par des niveaux relativement faibles d’inégalités, tandis que les pays d’Europe continentale sont caractérises par des niveaux relativement élevés d’inégalités, en particulier en termes de ségrégation socio-économique a l’école; enfin, les pays anglosaxons occupent a ce titre une position intermédiaire. Les politiques favorables à la mixité sociale à l’école réduisent la ségrégation scolaire sans en affecter la performance générale. Les pays qui mettent l’accent sur les services à la petite enfance et sur les institutions préscolaires sont caractérisés par des niveaux relativement faibles d’inégalités des chances, ce qui suggère l’efficacité potentielle des interventions éducatives précoces dans la promotion de la mobilité intergénérationnelle. L’analyse empirique suggere l’existence d’une association positive entre inégalités de compétences scolaires et inégalités de revenu. Par conséquent, les régressions inter-pays suggerent que les politiques redistributives peuvent aider à réduire les inégalités de compétences scolaires associées a l’origine sociale, et, ce faisant, les phénomènes de persistance éducative entre les générations. |
| Keywords: | education, éducation, public policy, politique publique, equality of education opportunity, égalité des chances scolaires, equity in student achievement, school socio-economic segregation, ségrégation socioéconomique à l'école, équité et compétences scolaires |
| JEL: | H23 I20 I21 I28 I38 |
| Date: | 2009–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:708-en&r=ure |
| By: | Dotan Persitz (Tel Aviv University) |
| Abstract: | The heterogeneous connections model is a generalization of the homogeneous connections model of Jackson and Wolinsky (1996) in which the intrinsic value of each connection is set by a discrete, positive and symmetric function that depends solely on the types of the two end agents. Core periphery networks are defined as networks in which the agents' set can be partitioned into two subsets, one in which the members are completely connected among themselves and the other where there are no internal links. A two-type society is defined as "power based" if both types of agents prefer to connect to one of the types over the other, controlling for path length. An exhaustive analysis shows that core periphery networks, in which the "preferred" types are in the core and the "rejected" types are in the periphery, are crucial in the "power based" society. In particular, if the linking costs are not too low and not too high, at least one such network is pairwise stable. Moreover, in many cases these networks are the unique pairwise stable networks and in all cases they are the unique strongly efficient networks. The set of efficient networks often differs from the set of pairwise stable networks, hence a discussion on this issue is developed. These results suggest heterogeneity accompanied by "power based" linking preferences as a natural explanation for many core-periphery structures observed in real life social networks. |
| Keywords: | Network Formation, Heterogeneity, Pairwise Stability |
| JEL: | D85 L14 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.42&r=ure |
| By: | Tim Hellmann (Bielefeld University); Berno Buechel (Bielefeld University) |
| Abstract: | Since the seminal contribution of Jackson & Wolinsky 1996 [A Strategic Model of Social and Economic Networks, JET 71, 44-74] it has been widely acknowledged that the formation of social networks exhibits a general conflict between individual strategic behavior and collective outcome. What has not been studied systematically are the sources of inefficiency. We approach this omission by analyzing the role of positive and negative externalities of link formation. This yields general results that relate situations of positive externalities with stable networks that cannot be “too dense” in a well-defined sense, while situations with negative externalities tend to induce “too dense” networks. |
| Keywords: | Networks, Network Formation, Connections, Game Theory, Externalities, Spillovers, Stability, Efficiency |
| JEL: | D85 C72 L14 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.38&r=ure |
| By: | Baroni, Michel (ESSEC Business School); Barthélémy, Fabrice (THEMA, Université de Cergy-Pontoise); Mokrane, Mahdi (AEW EUROPE) |
| Abstract: | As suggested by D. Geltner, commercial properties indices have to be built using repeat sales instead of hedonic indices. The repeat sales method is a means of constructing real estate price indices based on a repeated observation of property transactions. These indices may be used as benchmarks for real estate portfolio managers. But the investors in general are also interested in introducing real estate performance in their portfolio to enhance the efficient frontier. Thus, expected return and volatility are the two key parameters. To create and to improve contracts on real estate indices, trend and volatility of these indices must be robust regarding to the periodicity of the index and the volume of transactions. This paper aims to test the robustness of the trend and volatility estimations for two indices: the classical Weighted Repeat Sales (Case & Shiller 1987) and a PCA factorial index (Baroni, Barthélémy and Mokrane 2007). The estimations are computed from a dataset of Paris commercial properties. The main findings are the trend and volatility estimates are biased for the WRS index and not for the PCA factorial index when the periodicity increases. Consequently, the level of the index at the end of the computing period is significantly different for various periodicities in the case of the WRS index. Globally, the PCA factorial seems to be more robust to the number of transactions. Firstly, we present the two methodologies and then the dataset. Finally we test the impact of the number of transactions per period on the trend and volatility estimates for each index and we give an interpretation of the results. |
| Keywords: | Index Estimations; Property Transactions Volume; Repeat Sales Indices |
| JEL: | C20 G00 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-09003&r=ure |
| By: | von Hinke Kessler, Scholder, S |
| Abstract: | This paper examines the relationship between children’s weight and academic outcomes using genetic markers as instruments to account for the possible endogeneity of body size. We use medically assessed measures of body size which are more appropriate than the generally used BMI measures. OLS results indicate that leaner children perform better in school tests compared to their heavier counterparts, but the IV results, using genetic markers as instruments, show no evidence that fat mass affects academic outcomes. We compare these IV results to those using the instruments generally adopted in this literature. We show that the results are sensitive to the instrument set and argue that several of the commonly used instruments do not meet the exclusion restrictions required of a valid instrument. |
| Keywords: | Child weight; Academic Performance; Educational Outcomes; Instrumental Variables; Mendelian Randomization; Genetic Markers; DXA; Body Mass Index; ALSPAC |
| JEL: | I1 I2 J24 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:09/25&r=ure |
| By: | Yoshio Kamijo (Waseda University); Ryo Kawasaki (Tokyo Institute of Technology) |
| Abstract: | While most of the literature starting with Shapley and Scarf (1974) have considered a static exchange economy with indivisibilities, this paper studies the dynamics of such an economy. We find that both the dynamics generated by competitive equilibrium and the one generated by weakly dominance relation, converge to a set of allocations we define as strictly stable, which we can show to exist. Moreover, we show that even when only pairwise exchanges between two traders are allowed, the strictly stable allocations are attained eventually if traders are sufficiently farsighted. |
| Keywords: | Indivisible Goods Market, Dynamics, Competitive Allocation, Strict Core, Foresight, Stable Set |
| JEL: | D78 C71 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.51&r=ure |
| By: | Claude Mathys (National Bank of Belgium, Microeconomic Information Department) |
| Abstract: | This paper is an annual publication issued by the Microeconomic Analysis service of the National Bank of Belgium. The Flemish maritime ports (Antwerp, Ghent, Oostend, Zeebrugge), the Autonomous Port of Liège and the port of Brussels play a major role in their respective regional economies and in the Belgian economy, not only in terms of industrial activity but also as intermodal centres facilitating the commodity flow. This update paper provides an extensive overview of the economic importance and development of the Flemish maritime ports, the Liège port complex and the port of Brussels in the period 2002 - 2007, with an emphasis on 2007. Focusing on the three major variables of value added, employment and investment, the report also provides some information about social balance and the financial situation in these ports as a whole. These observations are linked to a more general context, along with a few cargo statistics. Annual accounts data from the Central Balance Sheet Office were used for the calculation of direct effects, the study of financial ratios and the analysis of the social balance sheet. The indirect effects of the activities concerned were estimated in terms of value added and employment, on the basis of data from the National Accounts Institute. [...] In terms of maritime cargo traffic, 2007 was another excellent year for all the Flemish maritime ports, driven by the expansion of world trade. Direct value added rose in all the ports in Flanders. Both maritime and non-maritime branches as a whole expanded. The ports of Antwerp and Zeebrugge enjoyed particularly high growth in direct value added of their maritime branches, unlike the ports of Ostend and Ghent where growth was higher in the non-maritime branches. Direct employment also rose, albeit in less spectacularly: the more moderate growth of the biggest Flemish port - Antwerp - set the tone for the overall result. In this favourable economic environment, investment increased in the Flemish ports as a whole, after falling in 2006. The ports of Antwerp, Ostend and Ghent recorded very high levels of investment in 2007, although not reaching Antwerp's peak of 2005. The rise was more marked in the maritime branches, especially in the ports of Antwerp and Ostende, but the non-maritime branches also recorded strong expansion. With the completion of the Albert II dock, investment in the port of Zeebrugge levelled out, even though there are some other projects in progress. The volume of cargo handled in the port of Liège again increased in 2007. Direct value added recorded strong growth and employment picked up. Both these variables improved on the previous year's figures, thanks mainly to the metalworking and energy sectors. Investment doubled. A major factor behind this increase was the construction of a new bioethanol plant in Wanze. Despite these good results, the threat of declining activity in the ArcelorMittal factories in Liège has prompted the local port to pursue its strategy of diversifying traffic. Preparatory work on the land for the Trilogiport project began at the end of 2008. The volume of cargo handled at the port of Brussels rose in 2007. Despite the restrictions on the land available for port-related activities, both value added and employment in the port of Brussels increased. There was a notable fall in investment in the non-maritime branches with the completion of the water purification plant. However, the port authority is continuing with its infrastructure renovation work. The present report provides a comprehensive account of these issues, giving details per economic sector, though the comments are confined to the main changes that occurred in 2007 |
| Keywords: | branch survey, maritime cluster, subcontracting, indirect effects, transport intermodality, public investments |
| JEL: | C67 H57 J21 L22 L91 L92 R15 R34 R41 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:docwpp:200907-14&r=ure |
| By: | Francesco Feri; Miguel A.Meléndez-Jiménez |
| Abstract: | This paper studies an evolutionary model of network formation with endogenous decay, in which agents benefit both from direct and indirect connections. In addition to forming (costly) links, agents choose actions for a coordination game that determines the level of decay of each link. We address the issues of coordination (long-run equilibrium selection) and network formation by means of stochastic stability techniques. We find that both the link cost and the trade-off between efficiency and risk-dominance play a crucial role in the long-run behavior of the system. |
| Keywords: | Coordination, Networks, Risk dominance, stochastic stability |
| JEL: | C72 C73 D83 D85 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-19&r=ure |
| By: | Joana Almodovar (MIoIR, Manchester Business School, U.K); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto) |
| Abstract: | Clusters, as spatial concentrations of economic activity, constitute an important form of coordination with significant repercussions in the configuration of firm and territorial strategies. They are recognized, both by academics and policymakers, as a territorial pattern of economy yielding critical issues in terms of competitive advantage, innovation, and economic growth. Despite that, a rigorous and clear-cut definition of cluster is still far from being reached. In the present paper, resorting to a critical synthesis of the literature on networks and clusters, we propose a unified, encompassing, and less blurred definition of cluster. |
| Keywords: | Clusters, Networks, Concepts |
| JEL: | R10 B52 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:328&r=ure |
| By: | Abay Mulatu (University of Manchester); Reyer Gerlagh (University of Manchester); Dan Rigby (University of Manchester); Ada Wossink (University of Manchester) |
| Abstract: | This paper estimates the effect of environmental regulation on industry location and compares it with other determinants of location such as agricultural, education and R&D country characteristics. The analysis is based on a general empirical trade model that captures the interaction between country and industry characteristics in determining industry location. The Johnson-Neyman technique is used to fully explicate the nature of the conditional interactions. The model is applied to data on 16 manufacturing industries from 13 European countries. The empirical results indicate that the pollution haven effect is present and that the relative strength of such an effect is of about the same magnitude as other determinants of industry location. A significant negative effect on industry location is observed only at relatively high levels of industry pollution intensity. |
| Keywords: | Pollution Haven Hypothesis, Comparative Advantage, Industry Location |
| JEL: | O14 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.2&r=ure |
| By: | Sebastian Grauwin (University of Lyon, Lyon, F-69003, France; ENS-LYON, Laboratoire de Physique, UMR 5672, Lyon, F-69007, France, Institut rhonalpin des systemes complexes, IXXI, Lyon, F-69007, France); Florence Goffette-Nagot (University of Lyon, Lyon, F-69003, France; CNRS, UMR 5824, GATE, Ecully, F-69130, France; ENS LSH, Lyon, F-69007, France); Pablo Jensen (University of Lyon, Lyon, F-69003, France; CNRS, LET, UMR 5593, Lyon, F-69363 France, ENS-LYON, Laboratoire de Physique, UMR 5672, Lyon, F-69007, France, Institut rhônalpin des systèmes complexes, IXXI, Lyon, F-69007, France) |
| Abstract: | In his 1971's Dynamic Models of Segregation paper, the economist Thomas C. Schelling showed that a small preference for one's neighbors to be of the same color could lead to total segregation, even if total segregation does not correspond to individual preferences and to a residential conï¬guration maximizing the collective utility. The present work is aimed at deepening the understanding of the properties of dynamic models of segregation based on Schelling's hypotheses. Its main contributions are (i) to offer a comprehensive and up-to-date review of this family of models; (ii) to provide an analytical solution to the most general form of this model under rather general assumptions; to the best of our knowledge, such a solution did not exist so far; (iii) to analyse the effect of two devices aimed at decreasing segregation in such a model. Chapter one summarizes the ingredients of Schelling's models. We show how the choices of the agent's utility function, of the neighborhood description and of the dynamical rule can impact the outcome of a model. Based on the observation of simulations results, we find that the neighborhood description does not have a qualitative impact. As regards the dynamical rules, we show that the Logit Behavioral rule introduced in this literature by Young (1998); Zhang (2004b) presents several advantages relatively to the Best Response rule. Chapter two presents a general analytical solution to the model. To that aim, Schelling's model is recasted within the framework of evolutionary game theory, as previously done by Young (1998); Zhang (2004b). This allows to define sufficient assumptions regarding agents' utility functions that permit predicting the ï¬nal state of the system starting from any conï¬guration. This analytical resolution is then used to consider the outcomes of Schelling's utility function and of other utility functions previously used in this context. Chapter three examines the effects of introducing coordination in the moving decisions. This coordination is achieved through two different ways. We ï¬rst impose different levels of taxes proportional to the externality generated by each move of the agents. It is shown that even a low level of tax is sufficient under certain circumstances to significantly reduce segregation. We then investigate the effect of the introduction of a local coordination by vote of co-proprietors, who are deï¬ned as the closest neighbors of each agent. It is shown that even a small amount of coordination can break segregation |
| Keywords: | segregation, Schelling, potential function, coordination, tax, vote |
| JEL: | C63 C72 C73 D62 J15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:0914&r=ure |
| By: | Eric M. Leeper; Michael Plante; Nora Traum |
| Abstract: | Dynamic stochastic general equilibrium models that include policy rules for government spending, lump-sum transfers, and distortionary taxation on labor and capital income and on consumption expenditures are fit to U.S. data under a variety of specifications of fiscal policy rules. We obtain several results. First, the best fitting model allows a rich set of fiscal instruments to respond to stabilize debt. Second, responses of aggregate variables to fiscal policy shocks under rich fiscal rules can vary considerably from responses that allow only non-distortionary fiscal instruments to finance debt. Third, based on estimated policy rules, transfers, capital tax rates, and government spending have historically responded strongly to government debt, while labor taxes have responded more weakly. Fourth, all components of the intertemporal condition linking debt to expected discounted surpluses---transfers, spending, tax revenues, and discount factors---display instances where their expected movements are important in establishing equilibrium. Fifth, debt-financed fiscal shocks trigger long lasting dynamics so that short-run multipliers can differ markedly from long-run multipliers, even in their signs. |
| JEL: | C11 E32 E62 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15160&r=ure |
| By: | Hansjörg Blöchliger; Oliver Petzold |
| Abstract: | This paper analyses trends in and driving forces of the revenue composition of sub-central governments (SCG). Between 1995 and 2005 the share of SCG in total government spending increased from 31 to 33%, while the SCG tax share remained stable at around 17%, increasing SCG’s dependence on intergovernmental grants. While equal access to public services is the most common justification for such grants, the grant systems of most countries are much larger than required by equalization. Moreover, rather than smoothing out SCG revenue fluctuations over the cycle, grants often tend to exacerbate them. Finally, there is some evidence that grants reduce SCG tax raising effort, inflate SCG spending and increase SCG deficits and debt. The economic crisis will both sharply reduce SCG’s own tax revenues and – via budget constraints at the central level – increase pressure on the grant system. The crisis could hence help rethink the SCG revenue mix, their tax structure and the size and design of intergovernmental transfers.<P>Impôts ou transferts : quels revenus pour les administrations infranationales ?<BR>Ce document analyse les tendances et les déterminants de la composition des revenus des administrations infra-nationales (AI). Entre 1995 et 2005, la part des dépenses des AI dans les dépenses publiques totales a augmenté de 31 à 33%, alors que leur participation aux recettes fiscales restait stable autour de 17%, accentuant de ce fait la dépendance des AI envers les transferts intergouvernementaux. Bien que l’égalité d’accès aux services publics soit la raison la plus souvent invoquée pour justifier ces transferts, les systèmes de transferts sont en réalité souvent bien plus importants que ceux qu’impliquerait la simple péréquation. Par ailleurs, les transferts ont tendance à amplifier plutôt qu’à réduire les fluctuations de revenus au cours du cycle. Finalement, il semblerait que les transferts réduisent l’effort fiscal des AI tout en augmentant leurs dépenses et donc leurs déficits et leur dette. La crise économique en cours à la fois va réduire fortement les impôts propres des AI et – suite aux contraintes budgétaires au niveau central – augmenter la pression sur le système des transferts. La crise pourrait donc inciter à repenser la composition des revenues des AI, la structure de leurs impôts et la taille et le design des transferts intergouvernementaux. |
| Keywords: | fiscal federalism, intergovernmental grants, fédéralisme fiscal, transferts intergouvernementaux, impôts locaux, local tax system |
| JEL: | H42 H50 H77 |
| Date: | 2009–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:706-en&r=ure |
| By: | Nuno Cassola; Ali Hortacsu; Jakub Kastl |
| Abstract: | In this paper we study European banks’ demand for short-term funds (liquidity) during the summer 2007 subprime market crisis. We use bidding data from the European Central Bank’s auctions for one-week loans, their main channel of monetary policy implementation. Through a model of bidding, we show that banks’ behavior reflects their cost of obtaining short-term funds elsewhere (i.e., in the interbank market) as well as a strategic response to other bidders. We find considerable heterogeneity across banks in their willingness to pay for short-term funds supplied in these auctions. Accounting for the strategic component is important: while a naive interpretation of the raw bidding data may suggest that virtually all banks suffered a dramatic increase in the cost of obtaining funds in the interbank market, we find that for about one third of the banks, the change in bidding behavior was simply a strategic response. Using a complementary data set, we also find that banks’ pre-turmoil liquidity costs, as estimated by our model, are predictive of their post-turmoil liquidity costs, and that there is considerable heterogeneity in these costs with respect to the country-of-origin. Finally, among the publicly traded banks, the willingness to pay for short-term funds in the second half of 2007 are predictive of stock prices in late 2008. |
| JEL: | D44 D53 E5 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15158&r=ure |
| By: | Frank H. Page (Indiana University); Myrna H. Wooders |
| Abstract: | In all social and economic interactions, individuals or coalitions choose not only with whom to interact but how to interact, and over time both the structure (the “with whom”) and the strategy (“the how”) of interactions change. Our objectives here are to model the structure and strategy of interactions prevailing at any point in time as a directed network and to address the following open question in the theory of social and economic network formation: given the rules of network and coalition formation, the preferences of individuals over networks, the strategic behavior of coalitions in forming networks, and the trembles of nature, what network and coalitional dynamics are likely to emerge and persist. Our main contributions are (i) to formulate the problem of network and coalition formation as a dynamic, stochastic game, (ii) to show that this game possesses a stationary correlated equilibrium (in network and coalition formation strategies), (iii) to show that, together with the trembles of nature, this stationary correlated equilibrium determines an equilibrium Markov process of network and coalition formation, and (iv) to show that this endogenous process possesses a finite, nonempty set of ergodic measures, and generates a finite, disjoint collection of nonempty subsets of networks and coalitions, each constituting a basin of attraction. We also extend to the setting of endogenous Markov dynamics the notions of pairwise stability (Jackson-Wolinsky, 1996), strong stability (Jacksonvan den Nouweland, 2005), and Nash stability (Bala-Goyal, 2000), and we show that in order for any network-coalition pair to persist and be stable (pairwise, strong, or Nash) it is necessary and sufficient that the pair reside in one of finitely many basins of attraction. The results we obtain here for endogenous network dynamics and stochastic basins of attraction are the dynamic analogs of our earlier results on endogenous network formation and strategic basins of attraction in static, abstract games of network formation (Page and Wooders, 2008), and build on the seminal contributions of Jackson and Watts (2002), Konishi and Ray (2003), and Dutta, Ghosal, and Ray (2005). |
| Keywords: | Endogenous Network Dynamics, Dynamic Stochastic Games of Network Formation, Equilibrium Markov Process of Network Formation, Basins of Attraction, Harris Decomposition, Ergodic Probability Measures, Dynamic Path Dominance Core, Dynamic Pairwise Stability |
| JEL: | A14 C71 C72 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.28&r=ure |