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on Urban and Real Estate Economics |
| By: | Kaizoji, Taisei |
| Abstract: | In this chapter we investigate root causes of the recent U.S. housing bubble which has been caused a serious downturn in U.S. economic growth since autumn of 2008. We propose a simple model of housing markets in order to indicate the possible determinants of recent housing prices. Utilizing the model, we verify a number of hypotheses which have been proposed in the recent literature on the housing bubbles. We suggest that the main causes of the housing bubble from 2000 to 2006 are (i) non-elastic housing supply in the metropolitan areas, and (ii) declines in the mortgage loan rate and the housing premium by the massive mortgage credit expansion. We also suggest that these factors were strongly influenced by policies that governments and the Federal reserve Board performed. |
| Keywords: | Housing bubble, The price-to-rent ratio |
| JEL: | G10 R11 |
| Date: | 2009–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16807&r=ure |
| By: | Chris McDonald; Mark Smith (Reserve Bank of New Zealand) |
| Abstract: | Widely used measures of growth in mean or median housing prices will reflect changes in the composition of dwellings sold as well as changes in demand and supply conditions. Using a suburb-level dataset from the Real Estate Institute of New Zealand we use stratification techniques to adjust for compositional change and derive a timely and robust measure of housing prices for New Zealand. Results suggest this stratified measure produces estimates of housing price inflation that accord closely with the accurate but less timely figures obtained from the QV Quarterly House Price Index. |
| JEL: | G12 R31 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:nzb:nzbdps:2009/07&r=ure |
| By: | Atif R. Mian; Amir Sufi |
| Abstract: | Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the sharp rise in U.S. household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Employing land topology-based housing supply elasticity as an instrument for house price growth, we estimate that the average homeowner extracts 25 to 30 cents for every dollar increase in home equity. Money extracted from increased home equity is not used to purchase new real estate or pay down high credit card balances, which suggests that borrowed funds may be used for real outlays (i.e., consumption or home improvement). Home equity-based borrowing is stronger for younger households, households with low credit scores, and households with high initial credit card utilization rates. Homeowners in high house price appreciation areas experience a relative decline in default rates from 2002 to 2006 as they borrow heavily against their home equity, but experience very high default rates from 2006 to 2008. Our estimates suggest that home equity-based borrowing is equal to 2.8% of GDP every year from 2002 to 2006, and accounts for at least 34% of new defaults from 2006 to 2008. |
| JEL: | E0 E00 E2 E3 E5 E6 G21 G3 G32 G33 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15283&r=ure |
| By: | Martha Poon (CSI - Centre de sociologie de l'innovation - CNRS : UMR7185 - Mines ParisTech) |
| Abstract: | (Provides original sociological research on the development of consumer credit scoring in the United States and its links to subprime mortgage finance.) |
| Keywords: | Science and Technology Studies; Economic Sociology; Social Studies of Finance; subprime mortgages; consumer credit; risk |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00359712_v1&r=ure |
| By: | Gianluca Marcato (School of Real Estate & Planning, University of Reading); Giovanni Alberto Tira (School of Real Estate & Planning, University of Reading) |
| Abstract: | This work represents a first attempt to price European commercial mortgage backed securities (CMBS) and our results are consistent with research carried out in the US market. More specifically this research intends to study the significance of bond, mortgage and property-related variables in the pricing of European CMBS, along with macro-economic and financial factors used as control variables. Particularly we define some variables to describe the underlying property portfolio and the behavior of the real estate market to test their significance in explaining CMBS spreads. Multiple linear regression analysis using a databank of A Tranches issued between 1997 and 2007 indicates a strong relationship with bond-related factors, followed by real estate and mortgage market conditions. As floater coupon tranches tend to be riskier and exhibit higher spreads, we also estimate a model using this sub-set of data only and results hold reinforcing our findings. Finally, we estimate our model for both tranches A and B and discuss main differences. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-04&r=ure |
| By: | Peter Wyatt (School of Real Estate & Planning, University of Reading Business School) |
| Abstract: | This paper investigates the extent to which office activity contributes to travel-related CO2 emission. Travel accounts for 32% of UK CO2 emission and commuting and business travel accounts for a fifth of transport-related CO2 emissions, equating to 6.4% of total UK emissions. Figures from the Department for Transport (2006) report that 70% of commuting trips were made by car, accounting for 73% of all commuting miles travelled. In assessing the environmental performance of an office building, the paper questions whether commuting and business travel-related CO2 emission is being properly assessed. For example, are office buildings in locations that are easily accessible by public transport being sufficiently rewarded? The de facto method for assessing the environmental performance of office buildings in the UK is the Building Research Establishment’s Environmental Assessment Method (BREEAM). Using data for Bristol, this paper examines firstly whether BREEAM places sufficient weight on travel-related CO2 emission in comparison with building operation-related CO2 emission, and secondly whether the methodology for assigning credits for for travel-related CO2 emission efficiency is capable of discerning intra-urban differences in location such as city centre and out-of-town. The results show that, despite CO2 emission per worker from building operation and travel being comparable, there is a substantial difference in the credit-weighting allocated to each. Under the current version of BREEAM for offices, only a maximum of 4% of the available credits can be awarded for ensuring the office location is environmentally sustainable. The results also show that all locations within the established city centre of Bristol will receive maximum BREEAM credits. Given the parameters of the test there is little to distinguish one city centre location from another and out of town only one office location receives any credits. It would appear from these results that the assessment method is not able to discern subtle differences in the sustainability of office locations. |
| Keywords: | transport, CO2, real estate, environmental performance |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-06&r=ure |
| By: | Andra C. Ghent; Marianna Kudlyak |
| Abstract: | We analyze the impact of lender recourse on mortgage defaults theoretically and empirically across U.S. states. We study the effect of state laws regarding deficiency judgments in a model where lenders can use the threat of a deficiency judgment to deter default or to shorten the default process. Empirically, we find that recourse decreases the probability of default when there is a substantial likelihood that a borrower has negative home equity. We also find that, in states that allow deficiency judgments, defaults are more likely to occur through a lender-friendly procedure, such as a deed in lieu of foreclosure. |
| Keywords: | Mortgage loans |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:09-10&r=ure |
| By: | Hugo Benitez-Silva; Selcuk Eren; Frank Heiland; Sergi Jimenez-Martín |
| Abstract: | Self-reported home values are widely used as a measure of housing wealth by researchers; the accuracy of this measure, however, is an open empirical question, and requires some type of market assessment of the values reported. In this study, the authors examine the predictive power of self-reported housing wealth when estimating housing prices, utilizing the portion of the University of Michigan's Health and Retirement Study covering 1992-2006. They find that homeowners, on average, overestimate the value of their properties by 5–10 percent. More importantly, the authors establish a strong correlation between accuracy and the economic conditions at the time of the property's purchase. While most individuals overestimate the value of their property, those who buy during more difficult economic times tend to be more accurate; in some cases, they even underestimate the property's value. The authors find a surprisingly strong, likely permanent, and in many cases long-lived effect of the initial conditions surrounding the purchase of properties, and on how individuals value them. This cyclicality of the overestimation of house prices provides some explanation for the difficulties currently faced by many homeowners, who were expecting large appreciations in home value to rescue them in case of interest rate increases--which could jeopardize their ability to live up to their financial commitments. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_571&r=ure |
| By: | Ngee-Choon Chia (Department of Economics, National University of Singapore); Albert K C Tsui (Department of Economics, National University of Singapore) |
| Abstract: | The public housing program and the unique way of financing housing through the mandatory savings system in Singapore have created a class of homeowners. This paper compares the instruments available to different flat owners to monetize their assets, including the Lease Buyback Scheme (LBS), subletting, downsizing and reverse mortgage. We estimate the present value of retirement incomes derived from these options by incorporating the survival probability which is forecasted using the Lee-Carter demographic model. We compare the monthly payouts that can be unlocked and discuss the tradeoffs of adequate retirement with the elderly preference for leaving a bequest and ageing in place. Our results show that LBS is the most attractive option. It allows the elderly to age-inplace while generating a steady stream of monthly drawdown and possibility of leaving a bequest. Subletting releases housing equity while retaining the asset. This helps the elderly to fulfill their bequest motive. Reverse mortgage is the least attractive option, yielding the lowest retirement income due to high loading factors. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:sca:scaewp:0901&r=ure |
| By: | Don J. Webber (Department of Business Economics, Auckland University of Technology and Department of Economics, UWE, Bristol); Michael Horswell (Faculty of the Built and Natural Environment, University of the West of England, UK) |
| Abstract: | This paper initially presents an exploratory spatial data analysis which indicates the presence of small-scale geographical variations in levels and standard deviations of labour productivity across England and Wales in 2005. We identify the presence of spatial autocorrelation for both measures. This finding motivates a subsequent review and extension of theories which suggest the possible presence of small-scale geographical patterns of labour productivity. |
| Keywords: | Labour productivity; standard deviation; districts and local authorities; geographical autocorrelation |
| JEL: | R39 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:uwe:wpaper:0913&r=ure |
| By: | Glenn Ellison; Ashley Swanson |
| Abstract: | This paper uses a new data source, American Mathematics Competitions, to examine the gender gap among high school students at very high achievement levels. The data bring out several new facts. There is a large gender gap that widens dramatically at percentiles above those that can be examined using standard data sources. An analysis of unobserved heterogeneity indicates that there is only moderate variation in the gender gap across schools. The highest achieving girls in the U.S. are concentrated in a very small set of elite schools, suggesting that almost all girls with the ability to reach high math achievement levels are not doing so. |
| JEL: | I2 J16 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15238&r=ure |
| By: | Casey B. Mulligan |
| Abstract: | This paper uses the theories of price discrimination and optimal taxation to investigate effects of underwater mortgages on foreclosures and the incentives to earn income, and the degree to which those effects are shaped by public policy. I find that the federal government’s means-tested mortgage modification plan creates a massive implicit tax that may be significant even from a macroeconomic perspective. An alternative of modifying mortgages to maximize lender collections would also feature means tests, but with less effort distortion and perhaps fewer foreclosures. The paper also considers the consequences of a public policy that left mortgage modification to lenders, subject to a requirement that modification would not be conditioned on borrower income. |
| JEL: | E24 H21 L11 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15281&r=ure |
| By: | Sameeha Sheth |
| Date: | 2009–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwneu:neurusp142&r=ure |
| By: | Picard, Pierre M. (University of Luxembourg); Wildasin, David (University of Kentucky) |
| Abstract: | Economic regions, such as urban agglomerations, face external demand and price shocks that produce income risk. Workers in large and diversified agglomerations may benefit from reduced wage volatility, while firms may outsource the production of intermediate goods and realize benefits from Chamberlinian externalities. Firms may also protect workers from wage risks through fixed wage contracts. This paper explores the relationships between firms' risks, workers' contracts, and the structure of production in cities. |
| Keywords: | labor market, labor contracts, Chamberlinian externalities |
| JEL: | R12 R23 J31 J65 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4357&r=ure |
| By: | Franz Fuerst (School of Real Estate & Planning, University of Reading Business School); George Matysiak (School of Real Estate & Planning, University of Reading Business School) |
| Abstract: | The principle aim of this research is to elucidate the factors driving the total rate of return of non-listed funds using a panel data analytical framework. In line with previous results, we find that core funds exhibit lower yet more stable returns than value-added and, in particular, opportunistic funds, both cross-sectionally and over time. After taking into account overall market exposure, as measured by weighted market returns, the excess returns of value-added and opportunity funds are likely to stem from: high leverage, high exposure to development, active asset management and investment in specialized property sectors. A random effects estimation of the panel data model largely confirms the findings obtained from the fixed effects model. Again, the country and sector property effect shows the strongest significance in explaining total returns. The stock market variable is negative which hints at switching effects between competing asset classes. For opportunity funds, on average, the returns attributable to gearing are three times higher than those for value added funds and over five times higher than for core funds. Overall, there is relatively strong evidence indicating that country and sector allocation, style, gearing and fund size combinations impact on the performance of unlisted real estate funds. |
| Keywords: | unlisted real estate funds, performance analysis, commercial real estate, panel data analysis |
| JEL: | C23 F21 G11 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-02&r=ure |
| By: | Franz Fuerst (School of Real Estate & Planning, University of Reading Business School); Patrick McAllister (School of Real Estate & Planning, University of Reading) |
| Abstract: | This paper investigates the effect of voluntary eco-certification on the rental and sale prices of US commercial office properties. Hedonic and logistic regressions are used to test whether there are rental and sale price premiums for LEED and Energy Star certified buildings. The results of the hedonic analysis suggest that there is a rental premium of approximately 6% for LEED and Energy Star certification. A sale price premium of approximately 35% was found for 127 price observations involving LEED rated buildings and 31% for 662 buildings involving Energy Star rated buildings. When compared to samples of similar buildings identified by a binomial logistic regression for LEED-certified buildings, the existence of a rent and sales price premium is confirmed albeit with differences regarding the magnitude of the premium. Overall, the results of this study confirm that LEED and Energy Star buildings exhibit higher rental rates and sales prices per square foot controlling for a large number of location- and property-specific factors. |
| JEL: | R33 Q2 Q4 M2 C31 C5 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-07&r=ure |
| By: | Robin A. Prager |
| Abstract: | A large and growing number of low-to-moderate income U.S. households rely upon alternative financial service providers (AFSPs) for a variety of credit products and transaction services, including payday loans, pawn loans, automobile title loans, tax refund anticipation loans and check-cashing services. The rapid growth of this segment of the financial services industry over the past decade has been quite controversial. One aspect of the controversy involves the location decisions of AFSPs. This study examines the determinants of the locations of three types of AFSPs--payday lenders, pawnshops, and check-cashing outlets. Using county-level data for the entire country, I find that the number of AFSP outlets per capita is significantly related to demographic characteristics of the county population (e.g., racial/ethnic composition, age, and education level), measures of the population's credit worthiness, and the stringency of state laws and regulations governing AFSPs. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2009-33&r=ure |
| By: | Tommaso Gabrieli; Gianluca Marcato (School of Real Estate & Planning, University of Reading) |
| Abstract: | This paper builds on a fast growing literature which introduces game theory in the analysis of real option investments in a competitive setting. Specifically, in this paper we focus on the issue of multiple equilibria and on the implications that different equilibrium selections may have for the pricing of real options and for subsequent strategic decisions. We present some theoretical results of the necessary conditions to have multiple equilibria and we show under which conditions different tie-breaking rules result in different economic decisions. We then present a numerical exercise using the information set obtained on a real estate development in South London. We find that risk aversion reduces option value and this reduction decreases marginally as negative externalities decrease. |
| Keywords: | game theory and real options, equilibrium selection, real estate development |
| JEL: | C73 D81 D11 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-05&r=ure |
| By: | Rachel A. Razza (Syracuse University); Anne Martin (Columbia University); Jeanne Brooks-Gunn (Columbia University) |
| Abstract: | This study examined the developmental pathways from children’s family environment to school readiness within an at-risk sample (N = 1,701). Measures of the family environment (maternal parenting behaviors and maternal mental health) across early childhood were related to children’s observed sustained attention as well as to academic and behavioral outcomes at age 5 years. Results suggest specificity in the associations among attention and its correlates. Maternal parenting behaviors but not mental health explained individual differences in sustained attention, which in turn were associated with variability in children’s academic school readiness. Mediation tests confirmed that sustained attention partially accounted for the link between parenting behaviors and academic school readiness. While maternal mental health was associated with children’s behavioral school readiness, sustained attention did not play a mediating role. Findings indicate sustained attention as a potential target for efforts aimed at enhancing academic school readiness among predominantly poor and minority children. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:1172&r=ure |
| By: | Alberto A. Gaggero (University of Valle d'Aosta, Italy.); Claudio A. Piga (Dept of Economics, Loughborough University) |
| Abstract: | This paper analyzes the empirical relationship between market structure and price dispersion in the airline markets connecting the UK and the Republic of Ireland. Price dispersion is measured by a number of inequality indexes, calculated using fares posted on the Internet at specific days before takeoff. We find a negative correlation between market dominance and price dispersion; thus competition appears to hinder the airlines' ability to price discriminate to exploit consumers' heterogeneity in booking time preferences. Moreover, in the Christmas and Easter periods of high demand, fares are less dispersed, possibly because airlines target a less heterogenous set of consumers. |
| Keywords: | Intertemporal pricing, competition, price dispersion. |
| JEL: | D43 L10 L93 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2009_10&r=ure |
| By: | Franz Fuerst (School of Real Estate & Planning, University of Reading Business School); Gianluca Marcato (School of Real Estate & Planning, University of Reading) |
| Abstract: | While style analysis has been studied extensively in equity markets, applications of this valuable tool for measuring and benchmarking performance and risk in a real estate context are still relatively new. Most previous real estate studies on this topic have identified three investment categories (rather than styles): sectors, administrative regions and economic regions. However, the low explanatory power reveals the need to extend this analysis to other investment styles. We identify four main real estate investment styles and apply a multivariate model to randomly generated portfolios to test the significance of each style in explaining portfolio returns. Results show that significant alpha performance is significantly reduced when we account for the new investment styles, with small vs. big properties being the dominant one. Secondly, we find that the probability of obtaining alpha performance is dependent upon the actual exposure of funds to style factors. Finally we obtain that both alpha and systematic risk levels are linked to the actual characteristics of portfolios. Our overall results suggest that it would be beneficial for real estate fund managers to use these style factors to set benchmarks and to analyze portfolio returns. |
| Keywords: | investment styles, commercial real estate, portfolio analysis, performance measurement |
| JEL: | C20 G1 G11 G12 R33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-01&r=ure |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research) |
| Abstract: | This short paper estimates the state and local fiscal benefits of the Nurse Family Partnership (NFP) program. NFP provides nurse home visiting services to low-income first-time mothers. In addition to social benefits, NFP provides state and local fiscal benefits by reducing costs of social services, welfare, and crime, and increasing tax receipts due to increased earnings of mothers and former child participants when they grow up. Based on previous studies, this paper estimates that the present value, in 2007 dollars, of these state and local fiscal benefits is a little over $15,000 per NFP case. |
| Keywords: | Nurse Family Partnership Program, state and local effects |
| JEL: | H75 H71 I18 J48 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:09-152&r=ure |
| By: | Beatrix Brügger; Rafael Lalive; Josef Zweimüller |
| Abstract: | This paper studies the role of culture in shaping unemployment outcomes. The empir- ical analysis is based on local comparisons across a language barrier in Switzerland. This Röstigraben separates cultural groups, but neither labor markets nor political jurisdictions. Local contrasts across the language border identify the role of culture for unemployment. Our findings indicate that differences in culture explain differences in unemployment dura- tion on the order of 20 %. Moreover, we find that horizontal transmission of culture is more important than vertical transmission of culture and that culture is about as important as strong changes to the benefit duration. |
| Keywords: | culture, cultural transmission, unemployment duration, regional unemployment |
| JEL: | J21 J64 Z10 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2009_10&r=ure |
| By: | Henry, Ruby (Toulouse School of Economics) |
| Abstract: | I explicitly introduce racial conflict and cultural attitudes on racial diversity as determinants of destination choice to test their continued relevance to African Americans. I construct several measures of racial intolerance towards African Americans using hate crime activity and the feelings of white Americans about race extracted from a national social attitudes survey. Recognizing that African American migration may actually spawn hate crimes against them, I use a control function method with assaults on white police officers and hate crimes against Jews as instruments to correct for potential endogeneity. The results show that the probability of African American migrants choosing a city is significantly reduced by per capita hate crimes against them, the level of race-based crimes against them, by racially intolerant attitudes held by whites, and by poor evolution in whites' feelings about racial diversity − all regardless of the region in which a city is located. Also striking is the previously undocumented divide among African Americans with respect to region, after controlling for racial intolerance. Those starting in the North exhibit an extreme distaste for the South at the margin, which contrasts sharply to the extreme taste for the South displayed by African Americans originating in the South. |
| Keywords: | racial violence, discrimination, migration, conditional logit |
| JEL: | J15 J61 R23 C25 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4349&r=ure |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research) |
| Abstract: | This chapter is a draft of Chapter 7 of a planned book, Preschool and Jobs: Human Development as Economic Development, and Vice Versa. This book analyzes early childhood programs’ effects on regional economic development. Four early childhood programs are considered: 1) universally accessible preschool for four-year-olds of similar quality to the Chicago Child Parent Center program; 2) the Abecedarian program, which provides disadvantaged children with high-quality child care and preschool from infancy to age five; 3) the Nurse Family Partnership, which provides low-income first-time mothers with nurse home visitors from the prenatal period until the child is age two; and 4) the Parent Child-Home program, which provides home visits and educational toys and books to disadvantaged families when the child is between the ages of 2 and 3. The book considers the main benefit of state economic development to be the resulting increase in earnings of the original residents who stay in that state. Early childhood programs increase residents’ earnings largely by increasing the quantity and quality of local labor supply. These programs will increase the employability and wages of former child participants in these programs. The book compares the effects on local earnings of early childhood programs with the effects of business incentives (e.g., property tax abatements). Business incentives increase local residents’ earnings by increasing the quantity and/or quality of local labor demand. This chapter considers a problem with early childhood programs: their effects on earnings are mostly long-delayed. The delay occurs because most earnings effects are on former child participants. The chapter considers appropriate discounting of benefits. The chapter considers how the upfront costs of early childhood programs can be delayed or reduced. The chapter considers how the long-run benefits of early childhood programs can be moved up or increased. |
| Keywords: | preschool, economic development, early childhood, education, business incentives |
| JEL: | J13 J24 I21 R23 R31 R30 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:09-150&r=ure |
| By: | Fuchs, Michaela (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper studies the impact of the local industrial structure on employment dynamics in Western Germany. Following an approach of Combes/Magnac/Robin (2004) for France, local employment growth is decomposed into internal growth resulting from employment changes in existing plants and into external growth determined by employment decisions of newly established plants. The dynamics of both components are estimated simultaneously, taking explicitly into account the timing of the impact of specialization, diversity, and competition in a region. The analysis is conducted for 24 sectors in the West German labor market regions from 1993 to 2002. Estimation results emphasize the positive influence of diversity on both internal and external employment growth, whereas there is no clear result on specialization. A high degree of competition fosters external employment, but is detrimental to internal employment. Dynamic panel regressions show that static externalities dominate. Importantly, the impact of the local industrial structure on employment dynamics does not differ between small and larger plants, nor are there fundamental differences between Western Germany and France." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Beschäftigungsentwicklung - Determinanten, regionale Verteilung, Wirtschaftsstruktur, Wettbewerbsbedingungen, IAB-Betriebs-Historik-Panel, Betriebsgröße, Westdeutschland, Frankreich, Bundesrepublik Deutschland |
| JEL: | C33 O18 R11 |
| Date: | 2009–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200918&r=ure |
| By: | Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Alexandra Schroeter (Friedrich Schiller University Jena, School of Economics and Business Administration) |
| Abstract: | Empirical analyses suggest that the employment creating effect of start-ups is highest in regions with a low level of new business formation and that an increase in the regional start-up rate beyond a certain level may lead to negative employment effect. In explaining these results, we assume that the average quality of regional start-ups decreases with the number of start-ups, while the costs of the induced resource reallocation increase. Our model implies that it is not the number of start-ups but their quality that is decisive for their effect on economic development. Therefore, a policy aiming at stimulating economic growth through entrepreneurship should focus on high-quality start-ups. |
| Keywords: | Entrepreneurship, new business formation, regional development, entrepreneurship policy |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2009–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-070&r=ure |
| By: | Abhay Pethe |
| Abstract: | The present study examines issues related to fiscal federalism at the third tier in general and grants to local bodies in particular. The study presents a normative framework to estimate the requirements of operation and maintenance (O&M) expenditure at the local body level based on three important public services that is, water, education and roads. [DRG Study Series No. 29]. |
| Keywords: | fiscal federalism, local bodies, normative frame work, expenditure, local body, local body, water, education, roads, consolidated fund, finance commission, finance, panchayat raj, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2175&r=ure |
| By: | UCD Geary Institute PFL Evaluation Team (The Geary Institute University College Dublin); Orla Doyle (The Geary Institute University College Dublin); Carly Cheevers (The Geary Institute University College Dublin); Sarah Finnegan (The Geary Institute University College Dublin); Louise McEntee (The Geary Institute University College Dublin); Kelly McNamara (The Geary Institute University College Dublin) |
| Abstract: | The Children's Profile at School Entry (CPSE) was conducted by the UCD Geary Institute who have been commissioned by the Northside Partnership to assess the levels of school readiness in a designated disadvantaged community of Ireland, as part of an overall evaluation of the Preparing for Life (PFL) early childhood intervention programme. |
| Date: | 2009–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200924&r=ure |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research) |
| Abstract: | This paper is a draft of Chapter 8 of a planned book, Preschool and Jobs: Human Development as Economic Development, and Vice Versa. This book analyzes early childhood programs’ effects on regional economic development. Four early childhood programs are considered: 1) universally accessible preschool for four-year-olds of similar quality to the Chicago Child Parent Center program; 2) the Abecedarian program, which provides disadvantaged children with high-quality child care and preschool from infancy to age five; 3) the Nurse Family Partnership, which provides low-income first-time mothers with nurse home visitors from the prenatal period until the child is age two; and 4) the Parent Child-Home program, which provides home visits and educational toys and books to disadvantaged families when the child is between the ages of 2 and 3. The book considers the main benefit of state economic development to be the resulting increase in earnings of the original residents who stay in that state. Early childhood programs increase residents’ earnings largely by increasing the quantity and quality of local labor supply. These programs will increase the employability and wages of former child participants in these programs. The book compares the effects on local earnings of early childhood programs with the effects of business incentives (e.g., property tax abatements). Business incentives increase local residents’ earnings by increasing the quantity and/or quality of local labor demand. This chapter considers the effects of early childhood programs and business incentives on the income distribution. A key issue is whether early childhood programs should be targeted on the poor, or made universally available for free. Relevant considerations in addressing this issue include how benefits of early childhood programs benefit with family income, and the political feasibility of targeted versus universal programs. |
| Keywords: | preschool, economic development, early childhood, education, business incentives |
| JEL: | J13 J24 I21 R23 R31 R30 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:09-151&r=ure |
| By: | Patric Hendershott; Colin Lizieri (School of Real Estate & Planning, University of Reading Business School); Bryan MacGregor |
| Abstract: | Earlier estimates of the City of London office market are extended by considering a longer time series of data, covering two cycles, and by explicitly modeling of asymmetric space market responses to employment and supply shocks. A long run structural model linking real rental levels, office-based employment and the supply of office space is estimated and then rental adjustment processes are modeled using an error correction model framework. Rental adjustment is seen to be asymmetric, depending both on the direction of the supply and demand shocks and on the state of the space market at the time of the shock. Vacancy adjustment does not display asymmetries. There is also a supply adjustment equation. Two three-equation systems, one with symmetric rental adjustment and the other with asymmetric adjustment, are subjected to positive and negative shocks to employment. These illustrate differences in the two systems. |
| Keywords: | office market models, rental adjustment, asymmetric responses, vacancy rate |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:repxwp:rep-wp2009-03&r=ure |
| By: | Di Cesare, Antonio |
| Abstract: | This paper analyzes the effects of CDO issuance on the risk of default of banks. Previous literature showed that the overall riskiness of a bank can increase when it sells part of the loans in its portfolio by issuing a CDO of which it retains the equity tranche. Using Monte Carlo simulations, this paper confirms previous results but also highlights that they can change substantially if one modifies the hypothesis regarding how the proceeds of securitizations are reinvested. The assessment of the effects of securitizations on bank stability is thus mainly a matter of empirical research. Using data for Italian banks I provide evidence that the securitization activity has been a relevant factor in changing the composition of the asset side of banks' balance sheets. Results also show that these changes have probably contributed to lower the average ex-ante riskiness of Italian banks. I also compare the riskiness of loans that have been securitized with that of new loans granted by the same securitizing banks using loan-by-loan data. Results show that new loans are on average riskier than loans that have been securitized, thus pointing to an increasing amount of risk to be born by banks as a consequence of the reinvestment of the proceeds of securitizations. |
| Keywords: | Bank stability; CDOs; Value-at-Risk; bank capital structure; Monte Carlo simulations |
| JEL: | G28 G21 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16831&r=ure |