nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒11‒07
37 papers chosen by
Steve Ross
University of Connecticut

  1. What Parents Want: School preferences and school choice By Simon Burgess; Ellen Greaves; Anna Vignoles; Deborah Wilson
  2. Thieves, Thugs, and Neighborhood Poverty By Bjerk, David
  3. Tax Competition and Income Sorting: Evidence from the Zurich Metropolitan Area By Christoph A. Schaltegger; Frank Somogyi; Jan-Egbert Sturm
  4. Sorting, Peers and Achievement of Aboriginal Students in British Columbia By Friesen, Jane; Krauth, Brian
  5. Housing Markets in Central and Eastern Europe: Is There a Bubble in the Czech Republic? By Petr Zemcik
  6. Bedrock Depth and the Formation of the Manhattan Skyline, 1890-1915 By Jason Barr; Troy Tassier; Rossen Trendafilov
  7. Entrepreneurship and the spatial context: evidence on the location of firm births in Greece By Irene Daskalopoulou; Panagiotis Liargovas
  8. Impacts of policy instruments to reduce congestion and emissions from urban transportation : the case of Sao Paulo, Brazil By Anas, Alex; Timilsina, Govinda R.
  9. The housing price boom of the late ’90s: did inflation targeting matter? By Frappa, S.; Mésonnier, J-S.
  10. Concentration, Separation, and Dispersion: Economic Geography and the Environment By Michael Rauscher
  11. Housing and Debt Over the Life Cycle and Over the Business Cycle By Matteo Iacoviello; Marina Pavan
  12. Clusters of Entrepreneurship By Edward Glaeser; William Kerr; Giacomo Ponzetto
  13. Mind the neighbors : the impact of productivity and location on firm turnover By Hallward-Driemeier, Mary; Thompson, Fraser
  14. More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads By Michael D. Makowsky; Thomas Stratmann
  15. Targeting Non-Cognitive Skills to Improve Cognitive Outcomes: Evidence from a Remedial Education Intervention By Holmlund, Helena; Silva, Olmo
  16. Real Estate Market Efficiency: A Survey of Literature By Gunther Maier; Shanaka Herath
  17. From data to levy design. The five stages of implementing housing taxes By Erling Røed Larsen
  18. Do as the Neighbors Do: The Impact of Social Networks on Immigrant Employees By Fredrik Anderson; Simon Burgess; Julia Lane
  19. A contribution to the empirics of crime By Andrea, Borlizzi
  20. Social capital and economic growth in Polish regions By Dzialek, Jaroslaw
  21. Traffic forecasts under uncertainty and capacity constraints By Anna Matas; Josep-Lluis Raymond; Adriana Ruiz
  22. The impact of teacher wages on the performance of students: evidence from PISA By Ali, Amjad
  23. A Dynamic Game of Airline Network Competition: Hub-and-Spoke Networks and Entry Deterrence By Victor Aguirregabiria; Chun-Yu Ho
  24. Unobserved Heterogeneity and International Benchmarking in Public Transport By Astrid Cullman; Mehdi Farsi; Massimo Filippini
  25. Test Scores, Subjective Assessment and Stereotyping of Ethnic Minorities By Simon Burgess; Ellen Greaves
  26. Regional determinants of manufacturing start-ups in Greece: evidence on the effect of agglomeration economies By Irene Daskalopoulou; Panagiotis Liargovas
  27. The dark and the bright side of liquidity risks: evidence from open-end real estate funds in Germany By Fecht, Falko; Wedow, Michael
  28. Isolation and Development By Quamrul Ashraf; Oded Galor; Omer Ozak
  29. The Regulation of Migration in a Transition Economy: China’s Hukou System By Bao, Shuming; Bodvarsson, Örn B.; Hou, Jack W.; Zhao, Yaohui
  30. Carpooling and Congestion Pricing: HOV and HOT Lanes By Hideo Konishi; Se-il Mun
  31. Road accidents and tourism: the case of the Balearic Islands (Spain) By Jaume Rosselló Nadal; Óscar Saenz-de-Miera
  32. Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International Historical Comparison By Carmen M. Reinhart; Kenneth S. Rogoff
  33. The impact of the NAO index on European Airline Transit By Jaume Rosselló Nadal
  34. Income Differentials on Regional Labour Markets in Southwest Germany By Alice Guyot; Stefan Berwing; Maria Lauxen-Ulbrich
  35. Using Cluster Analysis for Studying the Proximity of Registered Unemployment at the Level of Counties in Romania at the Beginning of the Economic Crisis By Babucea Ana-Gabriela; Danacica Emanuela-Daniela
  36. Discrimination in a Low-Wage Labor Market: A Field Experiment By Pager, Devah; Western, Bruce; Bonikowski, Bart
  37. The Officina Emilia Initiative:Innovative Local Actions to Support Education and Training Systems By Margherita Russo; Paola Mengoli

  1. By: Simon Burgess; Ellen Greaves; Anna Vignoles; Deborah Wilson
    Abstract: Parental demand for academic performance is a key element in the view that strengthening school choice will drive up school performance. In this paper we analyse what parents look for in choosing schools. We assemble a unique dataset combining survey information on parents’ choices plus a rich set of socio-economic characteristics; administrative data on school characteristics, admissions criteria and allocation rules; and spatial data attached to a pupil census to define the de facto set of schools available to each family in the survey. To achieve identification, we focus on cities where the school place allocation system is truth-revealing (“equal preferences”). We take great care in trying to capture the set of schools that each family could realistically choose from. We also look at a large subset of parents who continued living in the same house as before the child was born, to avoid endogenous house/school moves. We then model the choices made in terms of the characteristics of schools and families and the distances involved. School characteristics include measures of academic performance, school socio-economic and ethnic composition, and its faith school status. Initial results showed strong differences in the set of choices available to parents in different socio-economic positions. Our central analysis uses multinomial logistic regression to show that families do indeed value academic performance in schools. They also value school composition – preferring schools with low fractions of children from poor families. We compute trade-offs between these characteristics as well as between these and distance travelled. We are able to compare these trade-offs for different families. Our results suggest that preferences do not vary greatly between different socio-economic groups once constraints are fully accounted for.
    Keywords: school preferences, school choice, parental choice
    JEL: I20
    Date: 2009–10
  2. By: Bjerk, David (Claremont McKenna College)
    Abstract: This paper develops a model of crime analyzing how such behavior is associated with individual and neighborhood poverty. The model shows that even under relatively minimal assumptions, a connection between individual poverty and both property and violent crimes will arise, and moreover, "neighborhood" effects can develop, but will differ substantially in nature across crime types. A key implication is that greater economic segregation in a city should have no effect or a negative effect on property crime, but a positive effect on violent crime. Using IV methods, I show this implication to be consistent with the empirical evidence.
    Keywords: poverty, crime, neighborhood effects, segregation, instrumental variables, public housing
    JEL: K42 I38
    Date: 2009–10
  3. By: Christoph A. Schaltegger; Frank Somogyi; Jan-Egbert Sturm
    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: 2009–09
  4. By: Friesen, Jane; Krauth, Brian
    Abstract: We use administrative data on students in grades 4 and 7 in British Columbia to examine the extent to which differences in school environment contribute to the achievement gap between Aboriginal and non-Aboriginal students as measured by standardized test scores. We find that segregation of Aboriginal and non-Aboriginal students is substantial, and that differences in the distribution of these two groups across schools account for roughly half the overall achievement gap on the Foundation Skills Assessment tests in grade 7. The substantial school-level segregation of Aboriginal and non-Aboriginal student across schools means that Aboriginal students on average have a higher proportion of peers who are themselves Aboriginal, as well as a higher proportion of peers in special education. We estimate the effect of peer composition on value-added exam outcomes, using longitudinal data on multiple cohorts of students together with school-by-grade fixed effects to account for endogenous selection into schools. We find that having a greater proportion of Aboriginal peers, if anything, improves the achievement of Aboriginal students.
    Keywords: Aboriginal education, peer effects
    JEL: I21
    Date: 2009–10–24
  5. By: Petr Zemcik
    Abstract: Real estate prices more than doubled in many countries of Central and Eastern Europe from 2003 to 2008. In this paper, I provide the first assessment of whether housing prices in this region correspond to rents, i.e. to cash-flows related to an apartment purchase. State-of-theart panel data stationarity and Granger causality techniques are employed to test the implications of the standard present-value model using regional data from the Czech Republic. Apartment prices both in this country overall and in its capital are only slightly overvalued. In addition, changes in prices are helpful in predicting changes in rents and vice versa.
    Keywords: Central and Eastern Europe, Czech Republic, panel data, unit root, bubble, house prices, rents.
    JEL: G12 R21 R31 C33
    Date: 2009–09
  6. By: Jason Barr; Troy Tassier; Rossen Trendafilov
    Abstract: Skyscrapers in Manhattan need to be anchored to bedrock to prevent (possibly uneven) settling. This can potentially increase construction costs if the bedrock lies deep below the surface. The conventional wisdom holds that Manhattan developed two business centers--downtown and midtown--because the depth to the bedrock is close to the surface in these locations, with a bedrock "valley" in between. We measure the effects of building costs associated with bedrock depths, relative to other important economic variables in the location of early Manhattan skyscrapers (1890-1915). We find that bedrock depths had very little influence on the skyline; rather its polycentric development was due to residential and manufacturing patterns, and public transportation hubs.
    Keywords: skyscrapers, geology, bedrock, sprawl, urban agglomeration
    JEL: N61 N92 R14 R33
    Date: 2009–10
  7. By: Irene Daskalopoulou; Panagiotis Liargovas
    Abstract: This paper analyses the effect of the spatial context upon entrepreneurship in Greek regions. Cross-sectional data referring to 4,151 births at NUTS III level (prefecture) are used for firm births in four industries. Results indicate that the spatial context of entrepreneurship affects different industries in different ways. Localization economies are the primary factor affecting the location of manufacturing and tourism births. Births in services and commerce seem to be the outcome of urbanization economies rather than the result of intra-industry concentration. Manufacturing and services are positively affected by state financial incentives promoting births at certain locations. Nonetheless, in the case of manufacturing, the effectiveness of such incentives is questioned by the presence of negative localization effects.
    Date: 2009
  8. By: Anas, Alex; Timilsina, Govinda R.
    Abstract: This study examines impacts on net social benefits or economic welfare of alternative policy instruments for reducing traffic congestion and atmospheric emissions in São Paulo, Brazil. The study shows that expanding road networks, subsidizing public transit, and improving automobile fuel economy may not be as effective as suggested by economic theories because these policies could cause significant rebound effects. Although pricing instruments such as congestion tolls and fuel taxes would certainly reduce congestion and emissions, the optimal level of these instruments would steeply increase the monetary cost of travel per trip and are therefore politically difficult to implement. However, a noticeable finding is that even smaller tolls, which are more likely to be politically acceptable, have substantial benefits in terms of reducing congestion and emissions. Among the various policy instruments examined in the study, the most socially preferable policy option for São Paulo would be to introduce a mix of congestion toll and fuel taxes on automobiles and use the revenues to improve public transit systems.
    Keywords: Transport Economics Policy&Planning,Climate Change Economics,Roads&Highways,Climate Change Mitigation and Green House Gases,Transport and Environment
    Date: 2009–10–01
  9. By: Frappa, S.; Mésonnier, J-S.
    Abstract: The recent boom in housing markets of most developed economies has spurred criticism that inflation targeting central banks may have neglected the build-up of financial imbalances. This paper provides a formal empirical test of such claims, using a standard program evaluation methodology to correct for a possible bias due to self-selection into inflation targeting. We consider 17 industrial economies over 1980-2006, among which nine countries have targeted inflation a some dates. We find robust evidence of a significant positive effect of inflation targeting on real housing price growth and on the housing price to rent ratio.
    Keywords: Inflation targeting; Housing prices; Treatment effect; OECD countries.
    JEL: E4 E52 E58
    Date: 2009
  10. By: Michael Rauscher (University of Rostock)
    Abstract: The paper investigates the spatial patterns of industrial location and environmental pollution in a new-economic-geography model. Factors of production and their owners are mobile, but factor owners are not required to live in the region in which their factors are employed. Under laisser-faire, a chase-and-flee cycle of location is possible: people, who prefer a clean environment, are chased by polluting industries, which want to locate geographically close to the market. Locational patterns under optimal environmental regulation include concentration, separation, dispersion and several intermediate patterns. Moreover, it is shown that marginal changes in environmental policy may induce discrete changes in locational patterns.
    Keywords: economic geography, migration, trade, pollution, environmental regulation
    JEL: Q52 Q56 Q58 R30 F12
    Date: 2009
  11. By: Matteo Iacoviello (Boston College); Marina Pavan (The Geary Institute, University College Dublin)
    Abstract: We present an equilibrium life-cycle model of housing where nonconvex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution, the age profiles of consumption, homeownership, and mortgage debt, and data on the frequency of housing adjustment. In the time-series dimension, the model accounts for the procyclicality and volatility of housing investment, and for the procyclical behavior of household debt. We use a calibrated version of our model to ask the following question: what are the consequences for aggregate volatility of an increase in household income risk and a decrease in downpayment requirements? We distinguish between an early period, the 1950s through the 1970s, when household income risk was relatively small and loan-to-value ratios were low, and a late period, the 1980s through today, with high household income risk and high loan-to-value ratios. In the early period, precautionary saving is small, wealth-poor people are close to their maximum borrowing limit, and housing investment, homeownership and household debt closely track aggregate productivity. In the late period, precautionary saving is larger, wealth-poor people borrow less than the maximum and become more cautious in response to aggregate shocks. As a consequence, the correlation between debt and economic activity on the one hand, and the sensitivity of housing investment to aggregate shocks on the other, are lower, as is found the data. Quantitatively, our model can explain: (one) 45 percent of the reduction in the volatility of household investment; (two) the decline in the correlation between household debt and economic activity; (three) about 10 percent of the reduction in the volatility of GDP.
    Keywords: Housing, Housing Investment, Household Debt, Life-cycle Models, Income Risk, Homeownership, Dynamic Stochastic General Equilibrium Models.
    JEL: E22 E32 E44 E51 D92 R21
    Date: 2009–11–02
  12. By: Edward Glaeser; William Kerr; Giacomo Ponzetto
    Abstract: Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.
    Keywords: Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities
    JEL: J2 L0 L1 L2 L6 O3 R2
    Date: 2009–10
  13. By: Hallward-Driemeier, Mary; Thompson, Fraser
    Abstract: This paper examines the impact of firm productivity and local industrial structure on firm entry and exit in Morocco between 1985 and 2001. There is strong evidence of productivity exerting a market-cleansing role. Less productive firms are found to be more likely to exit - and locations with more productive firms attract higher rates of new firm entry. The effect of productivity operates not only in an absolute sense; a firm’s relative productivity or distance to the local sector frontier matters too. First, large productivity gaps are associated with higher rates of exit, while new firms are attracted to locations with small productivity gaps. Second, local competition increases the probability of exit, although it does not encourage entry. Third, there is evidence of scale or agglomeration effects that increase firm turnover. Fourth, measures of sector diversity are not associated with lower turnover. Fifth, the geographic level at which agglomeration and competition effects are defined matters differently for exit than entry. For exit, the provincial measures are strong, while those for communes are weaker. For entry, it is the local productivity at the commune level that is more significant. This implies that competitive pressures are less geographically constrained while the potential benefits of agglomeration and spill-overs are indeed more local.
    Keywords: Microfinance,Labor Policies,Economic Theory&Research,Knowledge for Development,Labor Markets
    Date: 2009–10–01
  14. By: Michael D. Makowsky (Department of Economics, Towson University); Thomas Stratmann (Department of Economics, George Mason University)
    Abstract: Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident- prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.
    Keywords: traffic accidents, safety, law enforcement, simultaneity.
    JEL: K32 K42 H71 C33
    Date: 2009–06
  15. By: Holmlund, Helena (CEP, London School of Economics); Silva, Olmo (London School of Economics)
    Abstract: A growing body of research highlights the importance of non-cognitive skills as determinants of young people's cognitive outcomes at school. However, little evidence exists about the effects of policies that specifically target students' non-cognitive skills as a way to improve educational achievements. In this paper, we shed light on this issue by studying a remedial education programme aimed at English secondary school pupils at risk of school exclusion and with worsening educational trajectories. The main peculiarity of this intervention is that it solely targets students' non-cognitive skills – such as self-confidence, locus of control, self-esteem and motivation – with the aim of improving pupils' records of attendance and end-of-compulsory-education (age 16) cognitive outcomes. We evaluate the effect of the policy on test scores in standardized national exams at age-16 using both least squares and propensity-score matching methods. Additionally, we exploit repeated observations on pupils’ test scores to control for unobservables that might affect students’ outcomes and selection into the programme. We find little evidence that the programme significantly helped treated youths to improve their age-16 test outcomes. We also find little evidence of heterogeneous policy effects along a variety of dimensions.
    Keywords: cognitive and non-cognitive skills; policy evaluation; secondary schooling
    JEL: C20 I20 H75
    Date: 2009–10
  16. By: Gunther Maier; Shanaka Herath
    Date: 2009
  17. By: Erling Røed Larsen (Statistics Norway)
    Abstract: Taxes on housing consumption have attractive features. They can enhance overall efficiency, function as automatic stabilizers, and work progressively. Implementation, however, requires a careful balance between economic ambition and political reality. This article suggests a 5-stage procedure: identification; estimation; data acquisition and combination; empirical investigation; and tax function construction. It illustrates how to implement by employing the rental-equivalence principle to estimate recent values of owner-occupied housing consumption in a cross-section of Norwegian households by imputing rent for owners based on observed rents in rental markets. It analyzes the distribution of imputed rent over the income range, and demonstrates that imputed rent is a necessary good. A simple tax scheme on real households in a dataset from 2006, shows how a housing tax can be structured with attractive features. Such a tax scheme would, in contrast to the current interest payment subsidy, work counter-cyclically and could, if used as a substitute for income taxes, reduce deadweight losses from labor income taxes. In its suggested form, it would generate approximately 12 billion NOK in revenue for Norway.
    Keywords: automatic stabilization; deadweight loss; distribution; efficiency; housing taxation; imputed rent; progressive levy; rental equivalence
    JEL: C14 C21 D12 D63 H23
    Date: 2009–10
  18. By: Fredrik Anderson; Simon Burgess; Julia Lane
    Abstract: Substantial immigrant segregation in the United States, combined with the increase in the share of the U.S. foreign-born population, have led to great interest in the causes and consequences of immigrant concentration, including those related to the functioning of labor markets. This paper provides robust evidence that both the size and the quality of an immigrant enclave affects the labor market outcomes of new immigrants. We develop new measures of the quality, or information value, of immigrant networks by exploiting data based on worker earnings records matched to firm and Census information. We demonstrate the importance of immigrant employment links: network members are much more likely than other immigrants to be employed in the same firm as their geographic neighbors. Immigrants living with large numbers of employed neighbors are more likely to have jobs than immigrants in areas with fewer employed neighbors. The effects are quantitatively important and robust under alternative specifications. For example, in a high value network – one with an average employment rate in the 90th percentile – a one standard deviation increase in the log of the number of contacts in the network is associated with almost a 5% increase in the employment rate. Earnings, conditional on employment, increase by about 0.7%.
    Keywords: Social networks, immigrant enclaves, labor market intermediaries
    JEL: J61 J20
    Date: 2009–09
  19. By: Andrea, Borlizzi
    Abstract: In this thesis I consider two questions. First, I examine the extent to which economic versus sociological theories explain the variation in property and violent crime rates separately. Second, I consider how the relative economic position of a community among neighboring areas may be associated with crime. Both economic and sociological theories suggest that higher inequality may be associated with crime. Economic theories imply that inequality may be positively correlated with crime through its effect on the differential returns from criminal activity versus legitimate pursuits. This suggests that there would be no relationship between crime and inequality, if the benefits and costs of crime participation are controlled. However, sociological theories of crime imply that inequality may have effects on crime through other channels such as lack of social capital, lack of upward mobility, or social disorganization. The empirical evidence on the crime-inequality relationship generally shows a positive relationship. However, there are several limitations in this literature. First, the unit of analysis for which crime is examined is relatively large (e.g. country, states and large metropolitan areas). Various studies suggest that the appropriate geographical unit to study crime might well be much smaller, such as neighborhood. Some recent studies have examined crime at the commune, city block, police precinct level, respectively, but none of these studies address the issue of local inequality and crime. Second, comparability of definitions of crime categories and well-being indicators poses serious problems for most cross-country studies. Finally, most studies treat crime markets as closed, meaning that only the characteristics of own area, and not those of neighboring areas, are allowed to influence the crime rates. This assumption quickly loses appeal when geographical units are such that travel for legitimate or illegitimate activities between them is plausible. Using data for the eight categories of crime during 1998-2002 in three cities of the US (Nashville, TN; Portland, OR; and Tucson, AZ), I address the limitations summarized above. The geographical unit used in the analysis is block group. The results show that, controlling for economic and structural characteristics, there is statistically significant correlation between local inequality and levels of almost all categories of crime. The unemployment rate and racial heterogeneity are powerful predictors of the level of crime in an area. However, results do not support the hypothesis that criminals travel to wealthier areas in order to commit crime. Finally, I find strong evidence in support of both the Social Control and the Routine Activities theories.
    Keywords: crime; local inequality; unemployment; catchment area; unit of analysis; count regression models
    JEL: D63 D74 R12
    Date: 2009–05–15
  20. By: Dzialek, Jaroslaw
    Abstract: There is an ongoing debate on social capital resources in Poland, where the density of associational activities and the level of social trust is low when compared to West European countries. Moreover, some researchers claim that Polish economy is developing despite low resources of social capital. This paper examines spatial patterns of various forms of social capital (networks and trust; bonding and bridging social capital; family, friendship, neighbourhood and associational ties) in Poland and determinants of their distribution. It analyses relations between resources of social capital and regional growth.
    Keywords: social capital; regional growth; Poland
    JEL: O18 O43 Z13
    Date: 2009
  21. By: Anna Matas (GEAP, Dpt. Economia Aplicada. Universitat Autònoma de Barcelona); Josep-Lluis Raymond (GEAP, Dpt. Economia i Història Econòmica. Universitat Autònoma de Barcelona); Adriana Ruiz (GEAP, Dpt. Economia Aplicada. Universitat Autònoma de Barcelona)
    Abstract: Traffic forecasts provide essential input for the appraisal of transport investment projects. However, according to recent empirical evidence, long-term predictions are subject to high levels of uncertainty. This paper quantifies uncertainty in traffic forecasts for the tolled motorway network in Spain. Uncertainty is quantified in the form of a confidence interval for the traffic forecast that includes both model uncertainty and input uncertainty. We apply a stochastic simulation process based on bootstrapping techniques. Furthermore, the paper proposes a new methodology to account for capacity constraints in long-term traffic forecasts. Specifically, we suggest a dynamic model in which the speed of adjustment is related to the ratio between the actual traffic flow and the maximum capacity of the motorway. This methodology is applied to a specific public policy that consists of suppressing the toll on a certain motorway section before the concession expires.
    Date: 2009–11
  22. By: Ali, Amjad
    Abstract: Teacher profile and characteristics are not weightless because student achievements are heavily teacher dependent. In this detailed and in-depth research, the impact of teacher wages on students’ achievement was assessed in different ways by using different measuring sticks; starting salary, salary after 15 year of experience, salary per hour of net teaching time and salary ratio to GDP per capita and by using country scores, of 15 year old pupil enrolled in lower secondary school, in OECD member countries. For this propose PISA 2000, 2003 and 2006 survey data of students’ scores were used. The independent variables “wages” was regressed on the dependent variable “students total mean country score”. The results of these analyses gave an indication that there is a positive impact of teacher wages on students’ performance.
    Keywords: characteristics; profile; qualities; impact; teacher; learning; achievements; performance; student; salary; wages; gender; PISA; OECD
    JEL: D24
    Date: 2009–04–01
  23. By: Victor Aguirregabiria; Chun-Yu Ho
    Abstract: In a hub-and-spoke network, the total profit function of an airline is supermodular with respect to its entry decisions at different city-pairs. This source of complementarity implies that a hub-and-spoke network can be an effective strategy to deter entry of competitors. This paper presents a dynamic game of airlines network competition that incorporates this entry deterrence motive for using hub-and-spoke networks. We summarize the results of the estimation of the model, with particular attention to empirical evidence on the entry deterrence motive.
    Keywords: Airline networks; Hub-and-spoke; Entry deterrence; Dynamic games; Supermodularity
    JEL: C73 L13 L41 L93
    Date: 2009–10–28
  24. By: Astrid Cullman (German Institute for Economic Research DIW Berlin, Department of Innovation, Manufacturing, Service, Berlin, Germany); Mehdi Farsi (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland); Massimo Filippini (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland)
    Abstract: We analyze the technical efficiency of German and Swiss urban public transport companies by means of SFA. In transport networks we might face different network structures or complexities, not observed, but influencing the production process. The unobserved factors are typically modeled as separable factors. However, we argue that the entire production process is organized around different network structures. Therefore, they are inevitably non-separable from the observed inputs and outputs. The adopted econometric model is a random coefficient stochastic frontier model. We estimate an input distance function for the years 1991 to 2006. The results underline the presence of unobserved non-separable factors.
    Date: 2009–08
  25. By: Simon Burgess; Ellen Greaves
    Abstract: We assess whether ethnic minority pupils are subject to low teacher expectations. We exploit the English testing system of “quasi-blind” externally marked tests and “non-blind” internal assessment to compare differences in these assessment methods between White and ethnic minority pupils. We find evidence that some ethnic groups are systematically “under-assessed” relative to their White peers, while some are “over-assessed”. We propose a stereotype model in which a teacher’s local experience of an ethnic group affects assessment of current pupils; this is supported by the data.
    Keywords: Subjective assessment, stereotypes, education, test score gaps, ethnic minorities
    JEL: I20
    Date: 2009–09
  26. By: Irene Daskalopoulou; Panagiotis Liargovas
    Abstract: The paper analyses the regional determinants of manufacturing start-up ratios in Greece. Emphasis is placed upon analysing the effect of agglomeration economies, which are distinguished between urbanisation, and localisation economies. The data refer to establishments realised in the 51 Greek prefectures (NUTS III level) during 2005. Results indicate that negative urbanisation economies prevail. Localisation economies in the form of positive Marshallian and negative Jacobian externalities are observed and constitute important determinants of start-up ratios. Results regarding the effect of other factors such as expected demand and profit, cost and human resources factors are as anticipated.
    Date: 2009
  27. By: Fecht, Falko; Wedow, Michael
    Abstract: We use a unique and comprehensive data set on open-end real estate funds in Germany to study a liquidity crisis that hit this industry between 2005 and 2006. Since this industry is comparably unregulated our data set permits us to contrast competing explanations of liquidity crisis. We find that fundamental factors matter for the liquidity outflow in normal times. During the crisis, however, they do not play a role. During the panic only strategic complementarities drive withdrawals. Furthermore, we find that funds with a higher load fee suffer from substantially larger outflows in the crisis period, while a higher load fee reduces gross outflows in normal times. As institutional investors predominately invest in funds with a low load fee this is in line with recent theory arguing that complementarities are mitigated by the involvement of large institutional investors who can at least partially correct for the coordination failure resulting from complementarities.
    Keywords: Liquidity crisis,runs,strategic complementarities
    JEL: G11 G12 G14 G23
    Date: 2009
  28. By: Quamrul Ashraf (Williams College); Oded Galor (Brown University; CEPR); Omer Ozak (Brown University)
    Abstract: This paper exploits cross-country variation in the degree of geographical isolation, prior to the advent of sea-faring and airborne transportation technologies, to examine its impact on the course of economic development across the globe. The empirical investigation establishes that prehistoric geographical isolation has generated a persistent beneficial effect on the process of development and contributed to the contemporary variation in the standard of living across countries.
    Keywords: Growth, Development, Isolation, Agglomeration, Globalization
    JEL: O15 F15 N7
    Date: 2009–09
  29. By: Bao, Shuming (University of Michigan); Bodvarsson, Örn B. (St. Cloud State University); Hou, Jack W. (California State University, Long Beach); Zhao, Yaohui (Beijing Normal University)
    Abstract: Unlike most countries, China regulates internal migration. Public benefits, access to good quality housing, schools, health care, and attractive employment opportunities are available only to those who have local registration (Hukou). Coincident with the deepening of economic reforms, Hukou has gradually been relaxed since the 1980s, helping to explain an extraordinary surge of migration within China. In this study of interprovincial Chinese migration, we address two questions. First, what is a sensible way of incorporating Hukou into theoretical and empirical models of internal migration? Second, to what extent has Hukou influenced the scale and structure of migration? We incorporate two alternative measures of Hukou into a modified gravity model – the unregistered migrant's: (i) perceived probability of securing Hukou; and (ii) perceived probability of securing employment opportunities available only to those with Hukou. In contrast to previous studies, our model includes a much wider variety of control especially important for the Chinese case. Analyzing the relationship between Hukou and migration using census data for 1985-90, 1995-2000 and 2000-05, we find that migration is very sensitive to Hukou, with the greatest sensitivity occurring during the middle period.
    Keywords: internal migration, Hukou, migrant networks, reforms
    JEL: J61
    Date: 2009–10
  30. By: Hideo Konishi (Boston College); Se-il Mun (Kyoto University)
    Abstract: It is often argued in the US that HOV (high occupancy vehicle) lanes are wasteful and should be converted to HOT (high occupancy vehicles and toll lanes). In this paper, we construct a simple model of commuters using a highway with multiple lanes, in which commuters are heterogeneous in their carpool organization costs. We first look at the HOV lanes and investigate under what conditions introducing HOV lanes is socially beneficial. Then we examine whether converting HOV lanes to HOT lanes improves the efficiency of road use. It is shown that the result depends on functional form and parameter values. We also discuss the effect of alternative policies: simple congestion pricing without lane division; and congestion pricing with HOV lanes. The analysis using specific functional form is presented to explicitly obtain the conditions determining the rankings of HOV, HOT, and other policies based on aggregate social cost.
    Keywords: HOV lanes, HOT lanes, congestion pricing, transportation economics
    JEL: R41
    Date: 2009–11–01
  31. By: Jaume Rosselló Nadal (Centre de Recerca Econòmica (UIB · Sa Nostra)); Óscar Saenz-de-Miera (Balearic Islands University)
    Abstract: The increase of tourist activity for many destinations and their increased mobility within host countries has implied a rise in tourism associated externalities with vehicle crashes being the most common cause of injury for tourists. Within the transport literature, the number and variations in the amount of accidents has been related to a large set of determining variables, including weather conditions, socio-economic characteristics, exposure, physical characteristics of the road and a variety of dummies which try to capture effects such as safety laws and seasonal variations. However, the presence of tourism has been neglected. Using the case study of the Balearic Islands, the present study estimates the role of tourism in determining the number of accidents on a daily context, using the set of variables suggested by the literature and incorporating a daily measure for the stock of tourists at a host destination. Results show how tourism can be associated to a significant amount of the accidents that take place in the Balearics.
    Keywords: Externalities, Road accidents, Count data models, Daily data, Tourism
    Date: 2009
  32. By: Carmen M. Reinhart (University of Maryland and the NBER, USA); Kenneth S. Rogoff (Harvard University and the NBER, USA)
    Abstract: Is the 2007-2008 U.S. sub-prime mortgage financial crisis truly a new and different phenomena? Our examination of the longer historical record finds stunning qualitative and quantitative parallels to 18 earlier post-war banking crises in industrialized countries. Specifically, the run-up in U.S. equity and housing prices (which, for countries experiencing large capital inflows, stands out as the best leading indicator in the financial crisis literature) closely tracks the average of the earlier crises. Another important parallel is the inverted v-shape curve for output growth the U.S. experienced as its economy slowed in the eve of the crisis. Among other indicators, the run-up in U.S. public debt and is actually somewhat below the average of other episodes, and its pre-crisis inflation level is also lower. On the other hand, the United States current account deficit trajectory is worse than average. A critical question is whether the U.S. crisis will prove similar to the most severe industrialized-country crises, in which case growth may fall significantly below trend for an extended period. Or will it prove like one of the milder episodes, where the recovery is relatively fast? Much will depend on how large the shock to the financial system proves to be and, to a lesser extent, on the efficacy of the subsequent policy response.
    Keywords: Financial crises, Economic growth, Public debt
    JEL: E44 F30 N20
    Date: 2008–05
  33. By: Jaume Rosselló Nadal (Centre de Recerca Econòmica (UIB · Sa Nostra))
    Abstract: Climatic variability and a substantial fraction of the most recent temperature warming in the Northern Hemisphere can be accounted for by the North Atlantic Oscillation (NAO) index. The most pronounced anomalies have occurred since the winter of 1989, with significant implications on weather conditions in areas within the index's geographical scope. Because climate is one of the most important factors in explaining world movements by humans, in this paper, variability patterns between quarterly Revenue Passenger Kilometers (RPK), compiled by the European Airline Association, and the NAO index are investigated as a function of different time lags and diverse economic indicators, with the aim of evaluating the impact of NAO variability and trends that can be associated with the change in RPK since the nineties. Using a traditional international air travel demand model, it has been found that the dissociation of the NAO index into positive and negative fluctuations can be related to changes in different geographical RPK time series, once seasonal effects are removed. The results are consistent with the view that meteorological and climate conditions can act as both a pull and push factor.
    Keywords: NAO, tourism, travel, climate change, airline industry
    Date: 2009
  34. By: Alice Guyot (Center for small- and medium-sized business research, University of Mannheim, Germany); Stefan Berwing (Center for small- and medium-sized business research, University of Mannheim, Germany); Maria Lauxen-Ulbrich (Center for small- and medium-sized business research, University of Mannheim, Germany)
    Abstract: The aim of our paper is to identify explanatory variables for income disparities between women and men across different regional types. Using data from the BA Employment Panel (BEP) descriptive statistics show that the gender pay gap grows wider from core regions to periphery. The main explanatory variables for the income differentials are vocational education in the men’s case and size of enterprise in the women’s case. Whereas in the case of women the importance of vocational status increases and the importance of size of enterprise decreases from rural areas to urban areas.
    Keywords: Regional economics, Regional data, Wage differentials, Wage gap
    JEL: J16 J24 J31 R21 R23
    Date: 2009–01
  35. By: Babucea Ana-Gabriela; Danacica Emanuela-Daniela (Constantin Brancusi University of Targu Jiu, Faculty of Economics, Romania)
    Abstract: Cluster analysis classifies a set of observations into two or more mutually exclusive unknown groups based on combination of interval variables and it has proven to be very useful. The classification aim is grouping the objects between their similarities or dissimilarities and so providing a synthetic description or a cut of data. In this paper we analyze the disparities into the counties of Romania looking the number of registered unemployed according to the latest official statistical data using one technique of clusters analysis.
    Keywords: cluster analysis, economic crisis, statistics, unemployment
    JEL: J6 C6
    Date: 2009–05
  36. By: Pager, Devah (Princeton University); Western, Bruce (Harvard University); Bonikowski, Bart (Princeton University)
    Abstract: Decades of racial progress have led some researchers and policymakers to doubt that discrimination remains an important cause of economic inequality. To study contemporary discrimination we conducted a field experiment in the low-wage labor market of New York City. The experiment recruited white, black, and Latino job applicants, called testers, who were matched on demographic characteristics and interpersonal skills. The testers were given equivalent resumes and sent to apply in tandem for hundreds of entry-level jobs. Our results show that black applicants were half as likely to receive a callback or job offer relative to equally qualified whites. In fact, black and Latino applicants with clean backgrounds fared no better than a white applicant just released from prison. Additional qualitative evidence from our testers' experiences further illustrates the multiple points at which employment trajectories can be deflected by various forms of racial bias. Together these results point to the subtle but systematic forms of discrimination that continue to shape employment opportunities for low-wage workers.
    Keywords: discrimination, field experiment, race, labor markets
    JEL: J7
    Date: 2009–10
  37. By: Margherita Russo; Paola Mengoli
    Abstract: The issue of the regeneration of skills, in particular in the light engineering industry, is addressed by Officina Emilia (henceforth OE) as a crucial one in order to re-examine the interweaving of education, innovation and local development in the SMEs production systems. The project, aimed at the education and training systems, is designed to enhance the industrial culture in order to strengthen technical and scientific education. First sponsored in 2000 by the University of Modena & Reggio Emilia (Italy), over the last years OE has gathered the support of local actors dealing with the themes of training, culture, and local development. In 2009 it opened its museolaboratorio (“workshop-museum”) in which teaching activities promote an interest in the themes of work, technologies and the socio-economic development of the territory among the students and teachers of schools of all types and levels. The involvement of class groups, of teachers and other visitors takes place through active learning practices that foster motivation and develop a sense of belonging which is likely to lead to a more profitable educational experience, both secondary and tertiary, as well as to contribute to improving career prospects. Officina Emilia proposes innovative action on a local level, allowing for the implementation of effective teaching practices as well as the broadening and consolidation of best practices which might support a society-wide trend towards maintaining a high demand for a better quality of education and the ability to provide it. Ten years after the beginning of the initiative, with this paper we intend to open up the discussion on the various research issues and on the actions undertaken, focusing on the analytical tools and the main critical areas in the further implementation of the Officina Emilia initiative.
    Keywords: Analysis of Education; Education Policy; Regional Development Policies; Innovation
    JEL: I21 J24 I28 O31 R58
    Date: 2009–05

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