nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒10‒24
34 papers chosen by
Steve Ross
University of Connecticut

  1. School Choice in German Primary Schools: How binding are school districts? By Andrea Riedel; Kerstin Schneider; Claudia Schuchart; Horst Weishaupt
  2. Pricing externalities from passenger transportation in Mexico city By Parry, Ian W.H.; Timilsina, Govinda R.
  3. Tax Competition and Income Sorting: Evidence from the Zurich Metropolitan Area By Christoph A. Schaltegger; Frank Somogyi; Jan-Egbert Sturm
  4. The land value of local roads By Jason Junge; David Levinson
  5. The Influence of Network Structure on Travel Distance By Pavithra Parthasarathi; Hartwig Hochmair; David Levinson
  6. Desigualdade econômica regional e spillovers espaciais: evidências para o nordeste do Brasil By Luzia Maria Cavalcante de Melo; Rodrigo Ferreira Simões
  7. The spatial structure of the financial development in Brazil By Marco Crocco; Fabiana Santos; Pedro Amaral
  8. Economic and equity effects of transportation utility fees By Jason Junge; David Levinson
  9. Financing transportation with land value taxes: Effects on development intensity By Jason Junge; David Levinson
  10. Contacts and Meetings: Location, Duration and Distance Traveled By Nebiyou Tilahun; David Levinson
  11. Neighborhood Diversity and the Appreciation of Native- and Immigrant-Owned Homes By Cobb-Clark, Deborah A.; Sinning, Mathias
  12. Access for Performance By Kevin Krizek; David Levinson
  13. People don't use the shortest path By Shanjiang Zhu; David Levinson
  14. Modeling phase changes of road networks By Arthur Huang; David Levinson
  15. Convergence of Metropolitan House Prices in South Africa: A Re-Examination Using Efficient Unit Root Tests By Sonali Das; Rangan Gupta; Patrick Agu Kaya
  16. Financial Globalization, Financial Crises and Contagion By Enrique G. Mendoza; Vincenzo Quadrini
  17. Measuring Winners and Losers from the new I-35W Mississippi River Bridge By Shanjiang Zhu; David Levinson; Henry Liu
  18. How Local Is Travel? By Michael Scharenbroich; Michael Iacono; David Levinson
  19. Bayesian Estimation of Spatial Externalities Using Regional Production Function: The Case of China and Japan By Hashiguchi, Yoshihiro
  20. The Importance of Being Early By Pavithra Parthasarathi; Anupam Srivastava; Nikolas Geroliminis; David Levinson
  21. Gibrat's Law for (All) Cities: A Rejoinder By Yannis M. Ioannides; Spyros Skouras
  22. Anthropologies of the Urban Periphery: Salvador, Bahia By Maria Gabriela Hita; John Gledhill
  23. Simple Regression Based Tests for Spatial Dependence By Benjamin Born; Jörg Breitung
  24. The Role of Job Search Methods and Contacts on Commuting and Relocation Decisions By Nebiyou Tilahun; David Levinson
  25. Planned Versus Unplanned: Travel Impacts and Adjustment Strategies of the Collapse and the Reopening of I-35W Bridge By Shanjiang Zhu; Nebiyou Tilahun; David Levinson; Xiaozheng He
  26. A tale of two debt crises: a stochastic optimal control analysis By Stein, Jerome L.
  27. A house price index defined in the potential outcomes framework By Nicholas Longford
  28. Regional Economic Impacts of Cross-Border Infrastructure: A General Equilibrium Application to Thailand and Lao PDR By Warr, Peter; Menon, Jayant; Yusuf, Arief Anshory
  29. Towards better Schools and more Equal Opportunities for Learning in Italy By Romina Boarini
  30. Gasoline Prices and Traffic Safety: Age and Gender Variations By Guangqing Chi; Arthur Cosby; Paul Gilbert; David Levinson
  32. Days on Market and Home Sales By Catherine Tucker; Juanjuan Zhang; Ting Zhu
  33. New Actors, New Political Spaces, Same Divided City? Reflections on Poverty and the Politics of Urban Development in Salvador, Bahia By John Gledhill; Maria Gabriela Hita
  34. Fiscal Competition for Imperfectly-Mobile Labor and Capital: A Comparative Dynamic Analysis By Wildasin, David

  1. By: Andrea Riedel (Schumpeter School of Business and Economics, University of Wuppertal); Kerstin Schneider (Schumpeter School of Business and Economics, University of Wuppertal and CESifo); Claudia Schuchart (ZBL, University of Wuppertal); Horst Weishaupt (DIPF, Frankfurt)
    Abstract: In this paper we look at school choice in primary schools in Germany. The data used is from Wuppertal, a major city in North-Rhine Westphalia (NRW), where school districts were abolished in 2008 to allow for free school choice. Here we look at the situation before 2008 to learn more about choice in the presence of school districts. Our analysis shows that it is not uncommon to visit a primary school that is not the assigned public school. Moreover, parents choose schools taking into account the distance to school, the quality and the socioeconomic composition of the school. Families from disadvantaged neighborhoods tend to send their children to the assigned school. A high percentage of migrants and/or economically disadvantaged families in the school district, however, induces parents to choose another school. Advantaged families make segregating choices, whereas the results for disadvantaged are not clear cut. The negative external effect of choice on the composition of the not chosen school is significant and the level of segregation in the primary schools is high and exceeds the level of residential segregation.
    Keywords: education system, segregation, school choice, denominational school, migration, socioeconomic status
    Date: 2009–10
  2. By: Parry, Ian W.H.; Timilsina, Govinda R.
    Abstract: The Mexico City Metropolitan Area has been suffering severely from transportation externalities such as accidents, air pollution, and traffic congestion. This study examines pricing instruments to reduce these externalities using an analytical and numerical model. The study shows that the optimal levels of a gasoline tax and a congestion toll on automobiles could generate social benefits, measured in terms of welfare gain, of US$132 and US$109 per capita, respectively, through the reduction of externalities. The largest component of the welfare gains comes from reduced congestion, followed by local air pollution reduction. The optimal toll and tax would, however, double the cost of driving and could be politically sensitive. Still, more than half of those welfare gains could be obtained through a more modest tax or toll, equivalent to $1 per gallon of gasoline. The welfare gains from reforming the pricing of public transportation are small relative to those from reforming the taxation of automobiles. Although the choice among travel modes depends on specific circumstances, in the absence of road travel pricing that accounts for externalities, there will be potential for higher investment in roads relative to mass transit. Given the rapidly increasing demand for transportation infrastructure in Mexico City, careful efforts should be made to include the full social costs of travel in evaluating alternative infrastructure investments.
    Keywords: Transport Economics Policy&Planning,Roads&Highways,Energy Production and Transportation,Transport and Environment,Transport in Urban Areas
    Date: 2009–10–01
  3. By: Christoph A. Schaltegger (economiesuisse, University of St. Gallen and CREMA); Frank Somogyi (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jan-Egbert Sturm (ETH Zürich, KOF Swiss Economic Institute, CESifo)
    Abstract: In this paper, we provide empirical evidence for the influence of income taxes on the choice of residence of taxpayers at the local level. The fact that Swiss communities can individually set tax multipliers thereby shifting the progressive tax scheme which is fixed at the cantonal (state) level enables us to study the effect of differences in income taxation on individuals’ choice of location within an economically and culturally homogeneous region. Using panel IV regressions covering the years 1991-2003 and 171 communities in the Swiss canton of Zurich and spatial error regressions for the 171 communities in 2003, we find substantial evidence for income sorting.
    Keywords: tax competition, fiscal federalism, income segregation, income tax
    JEL: H71 H73 R50
    Date: 2009–10
  4. By: Jason Junge; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Roads cover a signiÞcant fraction of the land area in many municipalities. The public provision of roads means this land is exempt from the local property tax. Transferring roads from public to private ownership would not only remove maintenance costs from city budgets, but increase potential property tax revenue as well. This paper calculates the value of the land occupied by roads in sample cities and determines the potential revenue increase if they were subject to property tax. Further calculation computes the extent to which the property tax rate could be reduced if the land value of roads were added to the tax base.
    Keywords: tax, land value, locational analysis, transportation finance
    JEL: R40 R11 R14
    Date: 2009
  5. By: Pavithra Parthasarathi; Hartwig Hochmair; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The objective of this research is to identify the role of network architecture in influencing individual travel behavior using travel survey data from two urban areas in Florida: Fort Lauderdale and Miami. Various measures of network structure, compiled from existing sources, are used to quantify roadway networks, capture the arrangement and connectivity of nodes and links in the networks and the temporal and spatial variations that exist among and within networks. The results from the regression models estimated show that network design influences how people travel and make decisions. Results from this analysis can be used to understand how changes in network can be used to bring about desired changes in travel behavior.
    Keywords: Network structure, travel behavior, transport geography, commuting, circuity
    JEL: R41 R42 R48 D85 R14 R52
    Date: 2009
  6. By: Luzia Maria Cavalcante de Melo (Cedeplar-UFMG); Rodrigo Ferreira Simões (Cedeplar-UFMG)
    Abstract: Objective of this study is to identify existence of spatial dependence between the capital microregions of the Northeast of Brazil, as well as the existence of spatial spillovers on the growth of GDP per capita between these cities, in 2000-2006. For this it was estimated an econometric model space, using a matrix of spatial weights which were considered as the capital of neighboring microregions including the travel time to the other is up to two hours, which had a sample of 166 geographical units of analysis. The results show that in the period analyzed, the economic performance of capital microregions of the Northeast was not affected by the performance of its neighbors, ie, there is the presence of spillovers between municipalities located in the sample.
    Keywords: Northeast, Growth, Location, Spillovers
    JEL: R11 R12
    Date: 2009–09
  7. By: Marco Crocco (Cedeplar-UFMG); Fabiana Santos (Cedeplar-UFMG); Pedro Amaral (Cedeplar-UFMG)
    Abstract: This paper explores the financial development in Brazil. It focuses on the impacts of the development level of a municipality’s financial system over its neighborhood, under the light of the Central Place Theory. Using a GMM estimator for a spatial panel model with an endogenous spatial lag and spatial moving average errors we investigate the spatial structure of the financial system in Brazil. The results point to a negative spatial association between the Brazilian municipalities’ financial system, in the way that a municipality with more developed financial system tends to be surrounded by municipalities with less developed financial systems.
    Keywords: financial development, spatial structure, bank strategy, Brazil
    JEL: O16 R12 G21
    Date: 2009–09
  8. By: Jason Junge; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Transportation utility fees are a financing mechanism for transportation that treats the network as a utility and bills properties in proportion to their use, rather than their value as with the property tax. This connects the costs of maintaining the infrastructure more directly to the benefits received from mobility and access to the system. The fees are based on trips generated and vary with land use. This paper evaluates the fees as an alternative funding source in terms of economic, equity and administrative effects. The experiences of cities currently using utility fees for transportation are discussed. Calculations are included to determine the fee levels necessary for transportation maintenance budget needs in three sample cities and a county in the Twin Cities metropolitan area. Proposed fees for each property type are compared to current property tax contributions toward transportation. The regressive effects of the fees and the effect of adjusting for the length of trips generated are also quantified.
    Keywords: tax, land value, locational analysis, transportation finance
    JEL: H71 L91 R48 R51 R52
    Date: 2009
  9. By: Jason Junge; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: A significant portion of local transportation funding comes from the property tax. The tax is conventionally assessed on both land and buildings, but transportation increases only the value of the land. A more direct, efficient way to fund transportation projects is to tax land at a higher rate than buildings. The lower tax on buildings would allow owners to retain more of the profits of their investment in construction, and have the expected side effect of increased development intensity. A partial equilibrium simulation is created for three sample cities to determine the magnitude of the intensity increase for both residential and nonresidential development if various levels of split rate property taxes were enacted.
    Keywords: tax, land value, locational analysis, transportation finance
    JEL: R51 R52 R48 H23 H27 H71 R14 R21 R33
    Date: 2009
  10. By: Nebiyou Tilahun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The role of contacts on travel behavior has been getting increasing attention. This paper reports on data collected on individualÕs social meetings and the choice of in-home/out-of-home meeting locations as well as the distance travelled and duration of out-home-meetings and its relationship to the type of contact met and other attributes of the meeting. Empirically we show that in-home meetings tend to occur most often with close contacts and less often with distant contacts. The purpose, meeting day, and household size suggest that leisure, weekend and large household size people tend to have their meetings either at their home or at their contactÕs home. In addition when meetings occur outside of the house, the duration is longer for close contacts and distance to the meeting location is directly inßuenced by duration and indirectly by the relationship type. Overall the paper illustrates that relationship type along with other meeting speciÞc and demographic variables is important in explaining the location, duration and distance travelled for social meetings.
    Keywords: Travel behavior, social networks, meetings, network analysis
    JEL: R41 D10 D85 R48
    Date: 2009
  11. By: Cobb-Clark, Deborah A. (Australian National University); Sinning, Mathias (Australian National University)
    Abstract: This paper examines the effect of neighborhood diversity on the nativity gap in home-value appreciation in Australia. Specifically, immigrant homeowners experienced a 41.7 percent increase in median home values between 2001 and 2006, while the median value of housing owned by the native-born increased by 59.4 percent over the same period. We use a semi-parametric decomposition approach to assess the relative importance of the various determinants of home values in producing this gap. We find that the differential returns to housing wealth are not related to changes in the nature of the houses or the neighborhoods in which immigrants and native-born homeowners live. Rather, the gap stems from the fact that over time there were differential changes across groups in the hedonic prices (i.e., returns) associated with the underlying determinants of home values.
    Keywords: international migration, home-ownership, decomposition analysis
    JEL: F22 D31
    Date: 2009–10
  12. By: Kevin Krizek; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper urges that policy decisions be based on important and reliable performance measures. Robust measures that assess the performance of the transportation and land use dimensions of cities, however, are typically missing from such discussionsÑthey typically focus on congestion and mobility. The heart of approach suggested herein lies concept of accessibility: the ability of people to reach the destinations that they need to visit in order to meet their needs. By focusing on accessibilityÑrather than congestion or mobilityÑthis approach produces a more complete and meaningful picture of metropolitan transport and land use. We place accessibility in a position of prominence as a performance measure by (a) describing the use and measurement of accessibility for metropolitan areas, (b) identifying robust, concrete and practical issues about measurement of the concept, (c) and offering prescriptions for resolving measurement issues.
    Keywords: Accessibility, Performance Measures, Transportation, Land Use, Measures of Effectiveness.
    JEL: R12 R14 R41 R48 R52 R53 H11
    Date: 2009
  13. By: Shanjiang Zhu; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Most recent route choice models, following either Random Utility Maximization or rule-based paradigm, require explicit enumeration of feasible routes. The quality of model estimation and prediction is sensitive to the appropriateness of consideration set. However, few empirical studies of revealed route characteristics have been reported in the literature. Such study could also help practitioners and researchers evaluate widely applied shortest path assumptions. This study aims at bridging the gap by evaluating morning commute routes followed by residents at the Twin Cities, Minnesota. Accurate GPS and GIS data were employed to reveal routes people utilized. Findings from this study could also provide guidance for future efforts in building better travel demand models.
    Keywords: Rationality, travel behavior, transport geography, commuting, transportation networks
    JEL: D81 D83 R41 R48 C93 D01
    Date: 2009
  14. By: Arthur Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Adopting an agent-based approach, this paper explores the topological evolution of road networks from a microscopic perspective. We assume a decentralized decision-making mechanism where roads are built by self-interested land parcel owners. By building roads, parcel owners hope to increase their parcelsÕ accessibility and economic value. The simulation model is performed on a grid-like land use layer with a downtown in the center, whose structure is similar to the early form of many Midwestern and Western (US) cities. The topological attributes for the networks are evaluated by multiple centrality measures such as degree centrality, closeness centrality, and betweenness centrality. Our findings disclose that the growth of road network experiences an evolutionary process where tree-like structure first emerges around the centered parcel before the network pushes outward to the periphery. In addition, road network topology undergoes obvious phase changes as the economic values of parcels vary. The results demonstrate that even without a centralized authority, road networks have the property of self-organization and evolution; furthermore, the rise-and-fall of places in terms of their economic/social values may considerably impact road network topology.
    Keywords: road network, land parcel, network evolution, network growth, phase change
    JEL: D85 R48 R51 R52 R53 H32 H41
    Date: 2009
  15. By: Sonali Das (LQM, CSIR, Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Patrick Agu Kaya (Department of Economics, University of Pretoria)
    Abstract: This paper analyzes whether the Law of One Price (LOOP) holds in the housing market of five metropolitan areas of South Africa, namely Cape Town, Durban, Greater Johannesburg, Port Elizabeth/Uitenhage and Pretoria. We test the existence of LOOP using the efficient unit root tests proposed by Elliott et al. (1996) [DF-GLS] and Elliott (1999) [DF-GLSu] based on monthly data on residential property prices covering the period of 1967:01 to 2009:03 for the large-, medium and small-middle segments of the housing market. Based on the DF-GLSu test, we find overwhelming evidence of the existence of LOOP in twelve of the fifteen possible cases, especially as the sample period becomes more recent. More importantly, our results are in sharp contrast with those obtained by Burger and Van Rensburg (2008) using quarterly data based on the Im, Pesharan and Shin (IPS, 2003) test, which are, in turn, shown to be highly sensitive to frequency of the data and temporal aggregation. With the rejection or the non-rejection of the null hypothesis of unit roots, based on panel data tests, not providing sufficient evidence to conclude that all the series in the panels have a unit root or that they are all stationary, more reliability should be placed on our results obtained from the efficient unit root tests.
    Keywords: Efficient Unit Root Tests, House Prices, Law of One Price, Price Convergence, Single Market
    JEL: C12 C22 C21 D40 L85
    Date: 2009–10
  16. By: Enrique G. Mendoza; Vincenzo Quadrini
    Abstract: Two observations suggest that financial globalization played an important role in the recent financial crisis. First, more than half of the rise in net borrowing of the U.S. nonfinancial sectors since the mid 1980s has been financed by foreign lending. Second, the collapse of the U.S. housing and mortgage-backed-securities markets had worldwide effects on financial institutions and asset markets. Using an open-economy model where financial intermediaries play a central role, we show that financial integration leads to a sharp rise in net credit in the most financially developed country and leads to large asset price spillovers of country-specific shocks to bank capital. The impact of these shocks on asset prices are amplified by bank capital requirements based on mark-to-market.
    JEL: E44 F36 F41
    Date: 2009–10
  17. By: Shanjiang Zhu; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota); Henry Liu
    Abstract: The opening of the replacement for the I-35W Mississippi River Bridge bridge on September 18th, 2008 provides a unique opportunity to evaluate the impacts generated by this additional link on network performance, and thus empirically test whether a Braess Paradox occurred. Using detailed GPS data to estimate travel times on links and for origin-destination pairs, this research Þnds that while on average travel time improved with the reopening of the bridge, the subsequent restoration of parts of the rest of the network to their pre-collapse conÞguration worsened travel times signiÞcantly on average. In all cases, the distribution of winners and losers indicates clear spatial patterns associated with these network changes. While no Braess paradox was found in this case, the research provides a method for measuring such phenomena.
    Keywords: Network structure, travel behavior, transport geography, commuting, network disruption, Braess paradox
    JEL: R41 D81 D83
    Date: 2009
  18. By: Michael Scharenbroich; Michael Iacono; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper analyzes the distribution of travel time across different classes of roads for 47 subjects in the Minneapolis-St. Paul metropolitan area. We use global positioning system (GPS) and geographic information system (GIS) data to analyze subject road use, with the objective of getting a sense for how much time individuals spend on different types of roads during their commute trip (in a sense, how ÒlocalizedÓ their travel is). The results reveal an association between the amounts of time spent on various functional classes of roads and home and work locations. Subjects that live and work in the city of Minneapolis are found to spend a higher percentage of their travel time on lower-level (city and county) roads. The results may be used to further inform local road finance decisions in light of the free-rider problem and other problems associated with current financing mechanisms.
    Keywords: Travel Behavior; Transportation Ð Finance; Global Positioning Systems (GPS)
    JEL: R41 R48 R53
    Date: 2009
  19. By: Hashiguchi, Yoshihiro
    Abstract: This paper used regional panel data for Chinese provinces from 1979 to 2003, and for Japanese prefectures from 1955 to 1998, to estimate the spatial externalities (or spatial multiplier effects) using a production function and Bayesian methodology, and to investigate the long-run behavior of the spatial externalities of each country. According to the estimation results, China's spatial externalities increased its domestic production significantly after 1994, which tended to increase until 2003. Before 1993, however, its spatial externalities were not significant. Japan's spatial externalities showed fluctuating values throughout the sample period. Furthermore, the movement of the spatial externalities was correlated with Japan's business conditions: the externalities showed a high value in the economic boom, and a low value in the economic depression. This could mean that spatial externalities depend mainly on business conditions.
    Keywords: Spatial Externalities; Bayesian Estimation; Production Function
    JEL: E23 N95 C11
    Date: 2009–10
  20. By: Pavithra Parthasarathi; Anupam Srivastava; Nikolas Geroliminis; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The assumption that the penalty for being early is less than that for being late was put forward by Vickrey (1963) who analyzed how commuters compare penalties in the form of schedule delay (due to peak hour congestion), against penalties in the form of reaching their destination (ahead or behind their desired time of arrival). This assumption has been tested by many researchers since then for various applications, especially in modeling congestion pricing (Arnott et al., 1990) where it is critical to understand the tradeoff between schedule delay and travel delay. Key findings are summarized in the second section of this paper. This research aims to test this hypothesis of earliness being less expensive than lateness using empirical data at different levels and across different regions. New methods to estimate the ratio of earliness to lateness for different types of datasets are developed, which could be used by agencies to implement control policies like congestion pricing or other schemes more accurately. Travel survey data from metropolitan areas provide individual travel patterns while loop detector data provide link level traffic flow data.
    Keywords: Schedule Delay, Travel Time, Traffic, Travel Behavior.
    JEL: R41 R42 R48 J22
    Date: 2009
  21. By: Yannis M. Ioannides; Spyros Skouras
    Abstract: We establish that the debate between Eeckhout (2004; 2009) and Levy (2009) has still not resolved the key issue of whether the distribution of large US urban places in 2000 is consistent with a lognormal for the intire size range. We resolve this by introducing a new distribution function which switches between a lognormal and a power distribution and estimating it with the data used by Eeckhout and Levy (2009). We find that there is a sudden transition from lognormality to power behavior as city populations icrease above sudden transition from lognormality to power behavior as city populations increase above 100,000. Gibrat's law holds for most cities but a power law holds for most of the population.
    Keywords: Gibrat's Law, Zipf's law, upper tail, mixture of distributions, switching regressions, urban evolution, urban heirarchy
    JEL: D30 D51 J61 R12 C24
    Date: 2009
  22. By: Maria Gabriela Hita; John Gledhill
    Abstract: Brazilian slums and squatter settlements have acquired a generally unattractive public image that often obscures differences between peripheral urban situations. Based on research in a socially stigmatised neighbourhood of the city of Salvador, Bahia, this paper begins with a broad structural view of the processes that have shaped the situations of its poor residents, from the conservative modernisation led by the Bahian strongman and protégé of the military, Antônio Carlos Magalhães, to a multi-cultural present of anti-poverty and Afro-Brazilian empowerment initiatives, NGO interventions, and private-public partnerships. It then illustrates a range of variables that influence the ability of poor communities to counteract tendencies towards social and political fragmentation. It highlights the need to consider the particular histories of poor neighbourhoods, their differing relations with richer surrounding areas, their internal divisions and the way these reflect links with broader social, political and religious forces, and the social networks between different poor neighbourhoods that the poor themselves construct as they pursue strategies to maintain livelihoods and acquire assets. Consideration of the processes involved suggests a need to question conventional accounts of social segregation in Salvador and indicates ways in which more rounded ethnographic perspectives on how people live their lives help us to understand their greater or lesser capacity for collective action and why, in some cases but not others, residents are still trying to build ‘places’ that conform to their long-term aspirations to live better.
    Date: 2009
  23. By: Benjamin Born; Jörg Breitung
    Abstract: We propose two simple diagnostic tests for spatial error autocorrelation and spatial lag dependence. The idea is to reformulate the testing problem such that the test statistics are asymptotically equivalent to the familiar LM test statistics. Specically, our version of the test is based on a simple auxiliary regression and an ordinary regression t-statistic can be used to test for spatial autocorrelation and lag dependence. We also propose a variant of the test that is robust to heteroskedasticity. This approach gives practitioners an easy to implement and robust alternative to existing tests. Monte Carlo studies show that our variants of the spatial LM tests possess comparable size and power properties even in small samples.
    Keywords: LM test, Moran I test, spatial correlation
    JEL: C12 C21
    Date: 2009–10
  24. By: Nebiyou Tilahun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper empirically explores the relationship between (i) job finding and commuting outcomes and (ii) the relationship between job search and the commute and location outcomes of relocation decisions after finding employment. The relationship between commute outcomes when finding a new job and the job search method that one employs are explored first. That is followed by an analysis of how long one stays at their residence after finding work, and where they eventually relocate relative to their new employment site as well as their previous residence. Along with the usual socio-demographic variables, the analysis takes on the job search method as well as the local contacts that one has in their residential area as important variables informing these choices. The findings indicate that jobs found through the use of internet and newspapers were on average farther away from the searchersÕ residence as compared to those found through contacts and formal means. On relocation after employment, we find that being a renter and moving to a rental unit were important in how quickly one relocated. In addition those that used the internet to find their jobs also relocated faster after controlling for demographic variables such as age. The distribution of ones social contacts were also found to be important in how far away from the previous location a person relocated.
    Keywords: Job search, travel behavior, transport geography, commuting, relocation
    JEL: J61 J64 R41 R31 D83 L14 D85
    Date: 2009
  25. By: Shanjiang Zhu; Nebiyou Tilahun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota); Xiaozheng He
    Abstract: Major network disruptions have significant impacts on local travelers. A good understanding of behavioral reactions to such incidents is crucial for traffic management and planning. Existing research on such topics is limited. This study investigates travelersÕ reaction to both the collapse and reopening of the I-35W Bridge crossing the Mississippi River at the Twin Cities, Minnesota. A web-based survey conducted at residences in several communities across the metropolitan area supplements the hand- out/mail-back paper-based survey distributed to workers in areas around the bridge collapse (downtown Minneapolis and the University of Minnesota). findings from the survey highlight differences in travel impacts and behavioral reactions after the bridge collapse and the bridge reopening.
    Keywords: Network disruption, travel behavior, web-based survey
    JEL: R41 R48 D83 C99
    Date: 2009
  26. By: Stein, Jerome L.
    Abstract: Banks should evaluate whether a borrower is likely to default. The author applies several techniques in the extensive mathematical literature of stochastic optimal control/dynamic programming to derive an optimal debt in an environment where there are risks on both the asset and liabilities sides. The vulnerability of the borrowing firm to shocks from either the return to capital, the interest rate or capital gain, increases in proportion to the difference between the Actual and Optimal debt ratio, called the excess debt. As the debt ratio exceeds the optimum, default becomes ever more likely. This paper is A Tale of Two Crises because the analysis is applied to the agricultural debt crisis of the 1980s and to the sub-prime mortgage crisis of 2007. A measure of excess debt is derived, and the author shows that it is an early warning signal of a crisis.
    Keywords: Optimization,banking,stochastic optimal control,agriculture debt crisis,subprime mortgage crisis
    JEL: C61 D81 D91 D92
    Date: 2009
  27. By: Nicholas Longford
    Abstract: Current methods for constructing house price indices are based on comparisons of sale prices of residential properties sold two or more times and on regression of the sale prices on the attributes of the properties and of their locations. The two methods have well recognised deficiencies, selection bias and model assumptions, respectively. We introduce a new method based on propensity score matching. The average house prices for two periods are compared by selecting pairs of properties, one sold in each period, that are as similar on a set of available attributes (covariates) as is feasible to arrange. The uncertainty associated with such matching is addressed by multiple imputation, framing the problem as involving missing values. The method is applied to aregister of transactions ofresidential properties in New Zealand and compared with the established alternatives.
    Keywords: Hedonic regression, house prices, matching, potential outcomes, propensity scoring, repeat-sales method
    JEL: C1 C13 C15 C3 C31 E3 E31
    Date: 2009–10
  28. By: Warr, Peter (Australian National University); Menon, Jayant (Asian Development Bank); Yusuf, Arief Anshory (Padjadjaran University)
    Abstract: A general equilibrium framework is used in this paper to study the regional economic effects of infrastructure improvements designed to reduce the costs of cross-border inter-regional trade. The analysis focuses on the economic benefits from the Second Mekong International Bridge between Mukdahan Province in Thailand and Savannakhet Province in the Lao People's Democratic Republic. The results suggest that in the short-run, the kind of transport cost reductions that are consistent with improvement of inter-regional transport facilities will produce a modest increase in inter-regional trade volumes in both directions and a small increase in real consumption in both regions. Over a longer period of time, the economic benefits to both regions are very much larger, as investors respond to the changed structure of incentives with new capital investments, and as workers move to regions of greater return to their labor. The results do not confirm the common presumption that the benefits from cross-border infrastructure projects occur only, or overwhelmingly, in the richer region.
    Keywords: Cross-border infrastructure; general equilibrium; Thailand; Lao PDR
    JEL: D58 I32 R40
    Date: 2009–10–01
  29. By: Romina Boarini
    Abstract: Compulsory school education in Italy produces poor results in terms of 15-year olds’ performance on PISA tests, compared with other OECD countries, despite a relatively high level of expenditure. While the influence of social background is smaller than in many OECD countries, it is largely transmitted through a kind of self-segregation resulting from family choices among the different types of upper secondary school. Large differences in pupils’ performance between regions cannot be explained by the quantity of resources available; separating the influence of socio-economic conditions from school efficiency is difficult and must be treated carefully in plans for extending fiscal federalism. The Italian government is rightly concerned to get better value for money and this chapter argues that policies to improve the information available to schools and teachers on the results they are achieving, while giving them appropriate incentives, responsibility and power to respond to such information, are necessary accompaniments to expenditure-saving policies. An improved focus on good quality training, both for new recruits and experienced teachers, and recruitment procedures themselves, should also pay dividends on efficiency.<P>Améliorer l’école et l’égalité d’accès à l’éducation en Italie<BR>Par rapport aux autres pays de l'OCDE, les résultats des tests PISA des élèves italiens de 15 ans sont médiocres, et ce, malgré des dépenses d’éducation relativement élevées. Si l’incidence du milieu social est moindre que dans de nombreux autres pays membres, elle passe essentiellement par une sorte d’autodiscrimination résultant du choix des familles entre les différents types d’établissements secondaires du deuxième cycle. L’importance des écarts de résultats scolaires entre les régions ne peut s’expliquer par le volume des ressources disponibles. Il est difficile de faire la distinction entre l’impact des conditions socioéconomiques et l’efficience des établissements, et cela doit être étudié avec soin dans le cadre des projets d’extension du fédéralisme fiscal. Le gouvernement italien souhaite, à juste titre, optimiser les dépenses publiques et le présent chapitre défend l’idée selon laquelle des mesures visant à améliorer les informations à disposition des établissements scolaires et des enseignants concernant leurs résultats – tout en leur apportant les incitations, les responsabilités et les pouvoirs nécessaires pour agir en fonction de ces résultats – doivent accompagner les mesures d’économies budgétaires. Une attention plus grande accordée à une formation de qualité pour les enseignants, qu’il s’agisse des nouvelles recrues comme des enseignants chevronnés, ainsi qu’aux procédures de recrutement elles-mêmes, devrait également favoriser l’efficience.
    Keywords: education, Italy, Italie, éducation, fiscal federalism, fédéralisme fiscal, PISA data, données PISA, school outcomes, résultats scolaires
    JEL: I21 I28
    Date: 2009–10–12
  30. By: Guangqing Chi; Arthur Cosby; Paul Gilbert; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Gasoline prices have significant effects on traffic safety. However, existing literature has failed to adequately investigate the effects: the literature has examined only fatal incidents rather than total traffic incidents. This study analyzes the effects of gasoline prices on total traffic incidents and on the incidents by age and gender. The results suggest that gasoline prices have negative short-term effects on traffic safety: as gasoline prices increase, overall traffic incident rates decrease. Gasoline prices have disproportionate effects in reducing traffic incident rates for young drivers and female drivers, longer-term effects on drivers who are 24 years and older, and no effects on male drivers. This study fills the gap in the literature by contributing to the understanding of gasoline price effects on traffic incidents by examining all traffic incidents instead of only fatal incidents and by examining incidents by age and gender.
    Keywords: gasoline prices, traffic incidents, traffic safety, age, gender
    JEL: R41 R48 Q41 R51
    Date: 2009
  31. By: Stéphane Bonhomme (CEMFI, Centro de Estudios Monetarios y Financieros); Ulrich Sauder (University of Warwick)
    Abstract: We compare the effects of selective and non selective secondary education on children’s test scores, using British data from the National Child Development Study (NCDS). Test scores are modelled as the output of an additive production function. Inputs include family and school characteristics, as well as the child’s unobserved initial endowment, which may be correlated with the education system attended. In the model, the average effect of selective education can be estimated using semiparametric Difference-in-Difference (DID) methods. We generalize the DID approach and provide conditions under which the entire counterfactual distribution of potential outcomes is identified, and can be consistently estimated using a deconvolution-related approach. Descriptive statistics on the NCDS data show that children perform better in selective schools. Our results suggest that this is essentially due to differences in pupils’ composition between selective and non selective schools. When correcting for these differences, we find that the effects of selective education are small and mostly insignificant.
    Keywords: Selective education, ability bias, tratment effects, quantiles.
    JEL: C33 I21
    Date: 2009–08
  32. By: Catherine Tucker (Sloan School of Management, MIT); Juanjuan Zhang (Sloan School of Management, MIT); Ting Zhu (Booth School of Business, University of Chicago)
    Abstract: In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.
    Keywords: Days on Market, Relisting, herding
    JEL: D80 L85 R21
    Date: 2009–08
  33. By: John Gledhill; Maria Gabriela Hita
    Abstract: Critics of Lula’s administration argue that business has greatest weight in setting its priorities and that anti-poverty programmes based on conditional cash transfers have little long-term structural impact on social inequality. Yet the coherence and scope of these programmes is now an order of magnitude greater than under the previous administration, their impact on poverty has so far proved sustainable, and poor people themselves often express satisfaction with them. This paper argues that critics who see retreat from universal social benefits as undermining political commitment to reducing social inequality underestimate the countervailing force of the capacity of some poor communities to seize the opportunities that have emerged to oblige politicians to reengage with both poverty and the roots of social injustice. Analyses that focus solely on economic precariousness and the decline of sociability are ignoring the ways in which third sector activity and social change have produced new kinds of political actors and group identities, particularly amongst young people, that may be ambivalent in nature but indicate that levels of politicisation are not being reduced. Nevertheless, optimism about poverty reduction needs to be tempered by appreciation of how problems of violence and insecurity also shape state interventions in, and in some cases virtual withdrawal from, poor communities. The rationality of party politics may have a more negative effect on securing the longer-term patterns of public investment required to reduce social inequality than it has had on the administration of the Bolsa Familia programme. In the case of Salvador, Bahia, where urban real estate interests remain as politically influential as ever, change will depend on the strength of pressures from above and below on municipal and state governments, but although anti-poverty programmes help keep people invested in the political system, they can also increase aspirations for greater economic and racial equality.
    Date: 2009
  34. By: Wildasin, David (University of Kentucky)
    Abstract: Interjurisdictional flows of imperfectly-mobile migrants, investment, and other productive resources result in the costly dynamic adjustment of resource stocks. This paper investigates the comparative dynamics of adjustment to changes in local fiscal policy with two imperfectly mobile productive resources. The intertemporal adjustments for both resources depend on complementarity/substitutability in production and the adjustment cost technologies for each, implying that the evaluation of the fiscal treatment of one resource must account for the simultaneous adjustment of both.
    Keywords: fiscal competition, labor mobility, capital mobility, comparative dynamics
    JEL: H22 H71 H87 J61 R58
    Date: 2009–10

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