nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2009‒11‒27
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. School Quality and Property Values: Re-examining the Boundary Approach By Paramita Dhar; Stephen L. Ross
  3. The Fundamental Law of Road Congestion: Evidence from US cities By Duranton, Gilles; Turner, Matthew A
  4. Aging Nations and the Future of Cities By Gaigné, Carl; Thisse, Jacques-François
  5. Is the Canadian Housing Market Overvalued? A Post-Crisis Assessment By Evridiki Tsounta
  6. Early Childhood Residential Instability and School Readiness: Evidence from the Fragile Families and Child Wellbeing Study By Kathleen M. Ziol-Guest; Claire McKenna
  7. Human Capital Spillovers Productivity and Regional Convergence in Spain By Raul Ramos; Manuel Artís; Jordi Suriñach
  8. The Impact of No Child Left Behind on Student Achievement By Thomas Dee; Brian Jacob
  9. Explaining high transport costs within Malawi - bad roads or lack of trucking competition ? By Lall, Somik V.; Wang, Hyoung; Munthali, Thomas
  10. Cultural Identity and Knowledge Creation in Cosmopolitan Cities By Ottaviano, Gianmarco Ireo Paolo; Prarolo, Giovanni
  11. A Dynamic Model of Network Formation with Strategic Interactions By König, Michael; Tessone, Claudio J.; Zenou, Yves
  12. Credit Ratings Failures and Policy Options By Pagano, Marco; Volpin, Paolo
  13. Spatial Development By Desmet, Klaus; Rossi-Hansberg, Esteban
  14. Delaying the Bell: The Effects of Longer School Days on Adolescent Motherhood in Chile By Kruger, Diana; Berthelon, Matias
  15. Adolescent Motherhood and Secondary Schooling in Chile By Kruger, Diana; Berthelon, Matias; Navia, Rodrigo
  16. Isolation and Development By Ashraf, Quamrul; Galor, Oded; Özak, Ömer
  17. Labor Market Discrimination and Capital Investment: The Effects of Fan Discrimination on Stadium Investment By Bodvarsson, Örn B.; Humphreys, Brad R.
  18. Heterogeneous Class Size Effects: New Evidence from a Panel of University Students By Bandiera, Oriana; Larcinese, Valentino; Rasul, Imran
  19. Parental Incarceration, Child Homelessness, and the Invisible Consequences of Mass Imprisonment By Christopher Wildeman
  20. Three Cycles: Housing, Credit, and Real Activity By Alain N. Kabundi; Deniz Igan; Marcelo Pinheiro; Francisco Nadal-De Simone; Natalia T. Tamirisa
  21. Price and quality in spatial competition By Brekke, Kurt Richard; Siciliani, Luigi; Straume, Odd Rune
  22. Determinants of the Choice of Migration Destination By Fafchamps, Marcel; Shilpi, Forhad
  23. Knowledge Spillovers from Creation to Exploitation: A Theoretical Model with Implications for Firms and Public Policy By Zoltan J. Acs; Claire Economidou; Mark Sanders
  24. Beyond Absenteeism: Father Incarceration and its Effects on Children’s Development By Amanda Geller; Carey E. Cooper; Irwin Garfinkel; Ofira Schwartz-Soicher; Ronald B. Mincy
  25. On the Equivalence of Location Choice Models: Conditional Logit, Nested Logit and Poisson By Brülhart, Marius; Schmidheiny, Kurt
  26. Monetary and Macroprudential Policy Rules in a Model with House Price Booms By Pau Rabanal; Prakash Kannan; Alasdair Scott
  27. Does Culture Affect Unemployment? Evidence from the Röstigraben By Brügger, Beatrix; Lalive, Rafael; Zweimüller, Josef
  28. The Economic Diversity of Immigration Across the United States By Friedberg, Rachel; Jaeger, David A.
  29. Do Retail Petrol Prices Rise More Rapidly Than They Fall in Australia’s Capital Cities? By Valadkhani, Abbas
  30. Families as Roommates: Changes in U.S. Household Size from 1850 to 2000 By Salcedo, Alejandrina; Schoellman, Todd; Tertilt, Michèle
  31. Changing households'investments and aspirations through social interactions : evidence from a randomized transfer program By Macours, Karen; Vakis, Renos
  32. Governance decentralization and local infrastructure provision in Indonesia: By Chowdhury, Shyamnal; Yamauchi, Futoshi; Dewina, Reno
  33. Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital By Wahba, Jackline; Zenou, Yves
  34. Allocating Air Traffic Flow Management Slots By Lorenzo Castelli; Raffaele Pesenti; Andrea Ranieri
  35. The Myth of Financial Innovation and the Great Moderation By Den Haan, Wouter; Sterk, Vincent
  36. Fathers in Fragile Families By Marcia J. Carlson; Sara S. McLanahan
  37. Estimation of Treatment Effects Without an Exclusion Restriction: with an Application to the Analysis of the School Breakfast Program By Daniel L. Millimet; Rusty Tchernis

  1. By: Simon Burgess (CMPO, University of Bristol); Ellen Greaves (CMPO, University of Bristol); Anna Vignoles (DoQSS, Institute of Education, University of London); Deborah Wilson (CMPO, University of Bristol)
    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: 2009–11–16
  2. By: Paramita Dhar (University of Connecticut); Stephen L. Ross (University of Connecticut)
    Abstract: This paper examines the hypothesis that the strong reduction in the effect of school quality on housing prices from the inclusion of boundary fixed affects can be attributed to uncertainty associated with school assignment near attendance zone boundaries, rather than unobserved neighborhood attributes. We examine this hypothesis using repeated cross-sections of housing transactions near school district boundaries in Connecticut since these boundaries are primarily town boundaries and for the most part have not changed in many decades. However, once we control for the across boundary neighborhood quality differences that are likely to arise over time with permanent boundaries, we find fairly small effects of test scores on property values; findings that are very similar to the findings of traditional studies based on attendance zone boundaries.
    Keywords: School District Performance, Housing Price, District Boundaries, Boundary Uncertainty, Test Scores, Omitted Neighborhood Attributes.
    JEL: I2 R2 R5
    Date: 2009–11
  3. By: Duranton, Gilles; Turner, Matthew A
    Abstract: We investigate the relationship between interstate highways and highway vehicle kilometers traveled (vkt) in US cities. We find that vkt increases proportionately to highways and identify three important sources for this extra vkt: an increase in driving by current residents; an increase in transportation intensive production activity; and an inflow of new residents. The provision of public transportation has no impact on vkt. We also estimate the aggregate city level demand for vkt and find it to be very elastic. We conclude that an increased provision of roads or public transit is unlikely to relieve congestion and that the current provision of roads exceeds the optimum given the absence of congestion pricing.
    Keywords: congestion; highways; public transport; vehicle-kilometers traveled
    JEL: L91 R41
    Date: 2009–09
  4. By: Gaigné, Carl; Thisse, Jacques-François
    Abstract: We investigate whether an aging population may challenge the supremacy of large working-cities. To this end, we develop an economic geography model with two types of individuals (workers and retirees) and two sectors (local services and manufacturing). Workers produce and consume; the elderly consume only. As a result, the mobility decision of workers is driven by both the wage gap and the cost-of-living gap, unlike the elderly who react to the differences in the cost of living only. We show that the return of pre-industrial urban system dominated by rentier cities does not seem to be on the agenda. Quite the opposite, the future of large working-cities is still bright, the reason being that today’s urban costs act as a strong force that prevents a large share of local services and manufacturing firms from following the rentiers in the elderly-cities, while the supply of differentiated b2c services prevent their complete separation.
    Keywords: aging population; commuting costs; economic geography; sectoral mobility; spatial mobility
    JEL: F12 F16 J60 L13 R12
    Date: 2009–08
  5. By: Evridiki Tsounta
    Abstract: Canadian house prices have increased significantly between 2003 and early 2008, with a marked downward trend since mid-2008, especially in the resource-rich western provinces. This paper estimates the evolution of equilibrium real home prices during this period in key provinces and finds that, following recent declines, home prices are now generally close to equilibrium throughout Canada. However, house prices in Alberta and British Columbia remain around 8 percent overvalued at the end of the sample (second quarter of 2009). Despite the limitations of econometric estimates of house-price dynamics, the measured small degree of overvaluation suggests that the Canadian housing market is essentially at equilibrium.
    Keywords: Asset prices , Banking sector , Business cycles , Canada , Economic models , Fiscal policy , Household credit , Housing prices , Price increases ,
    Date: 2009–10–27
  6. By: Kathleen M. Ziol-Guest (Institute for Children and Poverty and Statistics Norway); Claire McKenna (Institute for Children and Poverty)
    Abstract: This paper assesses the consequences of residential instability during the first five years of a child’s life for a host of school readiness outcomes. Using data from the Fragile Families and Child Wellbeing Study, we examine the relationship between multiple moves and children’s cognitive and behavioral readiness at age five. We further test this relationship for differences among poor, near poor, and not poor children. We find that moving three or more times in a child’s first five years is significantly associated with increases in several measures of internalizing and externalizing behavior. These effects are strongest for children who live in poverty.
    Keywords: housing instability; Fragile Families and Child Wellbeing Study; behavior problems; test scores; poverty
    JEL: D19 D63 I21 J15 I30
    Date: 2009–11
  7. By: Raul Ramos (Faculty of Economics, University of Barcelona); Manuel Artís (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This paper analyses the differential impact of human capital, in terms of different levels of schooling, on regional productivity and convergence. The potential existence of geographical spillovers of human capital is also considered by applying spatial panel data techniques. The empirical analysis of Spanish provinces between 1980 and 2007 confirms the positive impact of human capital on regional productivity and convergence, but reveals no evidence of any positive geographical spillovers of human capital. In fact, in some specifications the spatial lag presented by tertiary studies has a negative effect on the variables under consideration.
    Keywords: Regional convergence, productivity, human capital composition, geographical spillovers.
    Date: 2009–11
  8. By: Thomas Dee; Brian Jacob
    Abstract: The No Child Left Behind (NCLB) Act compelled states to design school-accountability systems based on annual student assessments. The effect of this Federal legislation on the distribution of student achievement is a highly controversial but centrally important question. This study presents evidence on whether NCLB has influenced student achievement based on an analysis of state-level panel data on student test scores from the National Assessment of Educational Progress (NAEP). The impact of NCLB is identified using a comparative interrupted time series analysis that relies on comparisons of the test-score changes across states that already had school-accountability policies in place prior to NCLB and those that did not. Our results indicate that NCLB generated statistically significant increases in the average math performance of 4th graders (effect size = 0.22 by 2007) as well as improvements at the lower and top percentiles. There is also evidence of improvements in 8th grade math achievement, particularly among traditionally low-achieving groups and at the lower percentiles. However, we find no evidence that NCLB increased reading achievement in either 4th or 8th grade.
    JEL: H52 I20 I21 I28 J01 J08 J18
    Date: 2009–11
  9. By: Lall, Somik V.; Wang, Hyoung; Munthali, Thomas
    Abstract: What are the main determinants of transport costs: network access or competition among transport providers? The focus in the transport sector has often been on improving the coverage of"hard"infrastructure, whereas in reality the cost of transporting goods is quite sensitive to the extent of competition among transport providers and scale economies in the freight transport industry, creating monopolistic behavior and circular causation between lower transport costs and greater trade and traffic. This paper contributes to the discussion on transport costs in Malawi, providing fresh empirical evidence based on a specially commissioned survey of transport providers and spatial analysis of the country’s infrastructure network. The main finding is that both infrastructure quality and market structure of the trucking industry are important contributors to regional differences in transport costs. The quality of the trunk road network is not a major constraint but differences in the quality of feeder roads connecting villages to the main road network have significant bearing on transport costs. And costs due to poor feeder roads are exacerbated by low volumes of trade between rural locations and market centers. With empty backhauls and journeys covering small distances, only a few transport service providers enter the market, charging disproportionately high prices to cover fixed costs and maximize markups.
    Keywords: Transport Economics Policy&Planning,Rural Roads&Transport,Roads&Highways,Banks&Banking Reform,Rural Transport
    Date: 2009–11–01
  10. By: Ottaviano, Gianmarco Ireo Paolo; Prarolo, Giovanni
    Abstract: We study how the city system is affected by the possibility for the members of the same cultural diaspora to interact across different cities. In so doing, we propose a simple two-city model with two mobile cultural groups. A localized externality fosters the productivity of individuals when groups interact in a city. At the same time, such interaction dilutes cultural identities and reduces the consumption of culture-specific goods and services. We show that the two groups segregate in different cities when diaspora members find it hard to communicate at distance whereas they integrate in multicultural cities when communication is easy. The model generates situations in which segregation is an equilibrium but is Pareto dominated by integration.
    Keywords: cosmopolitan cities; cultural diaspora; cultural identity; knowledge creation
    JEL: F0 O4 R1
    Date: 2009–08
  11. By: König, Michael; Tessone, Claudio J.; Zenou, Yves
    Abstract: In order to understand the different characteristics observed in real-world networks, one needs to analyze how and why networks form, the impact of network structure on agents' outcomes, and the evolution of networks over time. For this purpose, we combine a network game introduced by Ballester et al. (2006), where the Nash equilibrium action of each agent is proportional to her Bonacich centrality, with an endogenous network formation process. Links are formed on the basis of agents' centrality while the network is exposed to a volatile environment introducing interruptions in the connections between agents. A remarkable feature of our dynamic network formation process is that, at each period of time, the network is a nested split graph. This graph has very nice mathematical properties and are relatively easy to characterize. We show that there exists a unique stationary network (which is a nested split graph) whose topological properties completely match features exhibited by real-world networks. We also find that there exists a sharp transition in efficiency and network density from highly centralized to decentralized networks.
    Keywords: Bonacich centrality; nested split graphs; network formation; social interactions
    JEL: A14 C63 D85
    Date: 2009–10
  12. By: Pagano, Marco; Volpin, Paolo
    Abstract: This paper examines the role of credit rating agencies in the subprime crisis that triggered the 2007-08 financial turmoil. The focus of the paper is on two aspects of ratings that contributed to the boom and bust of the market for asset-backed securities: rating inflation and coarse information disclosure. The paper discusses how regulation can be designed to mitigate these problems in the future. The suggestion is that regulators should require rating agencies to be paid by investors rather than by issuers (or at least constrain the way they are paid by issuers) and force greater disclosure of information about the underlying pool of securities.
    Keywords: credit rating agencies; crisis; default; liquidity; securitization; transparenccy
    JEL: D82 G18 G21
    Date: 2009–11
  13. By: Desmet, Klaus; Rossi-Hansberg, Esteban
    Abstract: We present a theory of spatial development. A continuum of locations in a geographic area choose each period how much to innovate (if at all) in manufacturing and services. Locations can trade subject to transport costs and technology diffuses spatially across locations. The result is an endogenous growth theory that can shed light on the link between the evolution of economic activity over time and space. We apply the model to study the evolution of the U.S. economy in the last few decades and find that the model can generate the reduction in the employment share in manufacturing, the increase in service productivity in the second part of the 1990s, the increase in land rents in the same period, as well as several other spatial and temporal patterns.
    Keywords: Dynamic spatial models; Growth; Innovation; Land rent evolution; Structural transformation; Technology diffusion; Trade
    JEL: E32 O11 O18 O33 R12
    Date: 2009–09
  14. By: Kruger, Diana (Universidad Catolica de Valparaiso, Chile); Berthelon, Matias (Universidad Catolica de Valparaiso, Chile)
    Abstract: We analyze the effect of a Chilean school reform that lengthened the school day from half to full-day shifts on the likelihood that adolescent girls become mothers. By increasing the number of hours spent in school, the reform curtails opportunities to engage in risky sexual behaviors. Using Chile's socio-economic household surveys and administrative data from the Ministry of Education from 1990–2006, we exploit the exogenous time and regional variation in the implementation of the reform to identify the effects of increased education and adult supervision on the likelihood that adolescent girls become mothers. We find that access to full-day schools reduces the probability of becoming an adolescent mother among poor families and in urban areas: an increase in full-day municipal enrollment of 20% reduces the likelihood of teen motherhood by 5%.
    Keywords: adolescent motherhood, adolescent pregnancy, school day reform, Chile
    JEL: H51 I18 I28 J13 O15
    Date: 2009–11
  15. By: Kruger, Diana (Universidad Catolica de Valparaiso, Chile); Berthelon, Matias (Universidad Catolica de Valparaiso, Chile); Navia, Rodrigo (Universidad Catolica de Valparaiso, Chile)
    Abstract: We analyze the determinants of adolescent motherhood and its subsequent effect on high school attendance and completion in Chile. Using eight rounds of household surveys, we find that adolescents who were born to teen mothers, those that live in poor households and in single-mother families, are more likely to have children, while access to full-time high schools reduces the likelihood of motherhood. We then estimate the effect of adolescent motherhood on the probability of high school attendance and completion. Using an instrumental variables approach to control for possible endogeneity between teen pregnancy and schooling, we find that being a mother reduces the probability of high school attendance and completion by 24 to 37 percent, making it the most important determinant of high school desertion, which implies that policies aimed at reducing early childbearing will have immediate, important effects on their school attainments.
    Keywords: adolescent motherhood, high school completion, high school desertion, Chile
    JEL: J13 O12 O15
    Date: 2009–11
  16. By: Ashraf, Quamrul; Galor, Oded; Özak, Ömer
    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: Agglomeration; Development; Globalization; Growth; Isolation
    JEL: F15 N7 O10
    Date: 2009–11
  17. By: Bodvarsson, Örn B. (St. Cloud State University); Humphreys, Brad R. (University of Alberta)
    Abstract: We investigate the possibility that labor market discrimination affects economic outcomes in the complementary capital market. Previous research contains ample theoretical justification, and empirical evidence, that discrimination affects wages and employment in labor markets. However, the effects of discrimination against minority labor on transactions in markets for other inputs used in production are not known. We develop a model of the optimal capital stock put in place in the presence of customer discrimination and test this model using data on sports facility construction over the period 1950-2004. The empirical evidence suggests that teams in cities with more racial segregation spend less on sports facilities, confirming the predictions of the model about the effect of customer discrimination on capital investment.
    Keywords: racial discrimination, capital stock, complementarity, stadium financing
    JEL: J15
    Date: 2009–11
  18. By: Bandiera, Oriana; Larcinese, Valentino; Rasul, Imran
    Abstract: Over the last decade, many countries have experienced dramatic increases in university enrolment, which, when not matched by compensating increases in other inputs, have resulted in larger class sizes. Using administrative records from a leading UK university, we present evidence on the effects of class size on students' test scores. We observe the same student and faculty members being exposed to a wide range of class sizes from less than 10 to over 200. We therefore estimate non-linear class size effects controlling for unobserved heterogeneity of both individual students and faculty. We find that -- (i) at the average class size, the effect size is -.108; (ii) the effect size is however negative and significant only for the smallest and largest ranges of class sizes and zero over a wide range of intermediate class sizes; (iii) students at the top of the test score distribution are more affected by changes in class size, especially when class sizes are very large. We present evidence to rule out class size effects being due solely to the non-random assignment of faculty to class size, sorting by students onto courses on the basis of class size, omitted inputs, the difficulty of courses, or grading policies. The evidence also shows the class size effects are not mitigated for students with greater knowledge of the UK university system, this university in particular, or with greater family wealth.
    Keywords: class size; heterogeneity; university education
    JEL: A20 D23 I23
    Date: 2009–10
  19. By: Christopher Wildeman (University of Michigan)
    Abstract: Although the share of the homeless population composed of African Americans and children has grown since at least the early 1980s, the causes of these changes remain poorly understood. This article implicates mass imprisonment in at least the second of these shifts by considering the effects of parental incarceration on child homelessness using data from the Fragile Families and Child Wellbeing Study. These are the only data that simultaneously represent a contemporary cohort of the urban children most at risk of homelessness, establish appropriate time-order between parental incarceration and child homelessness, and control for prior housing, which is vital given the imprisonment-homelessness nexus. Results show strong effects of recent but not distal parental incarceration on the risk of child homelessness. They also show that effects are concentrated among African American children. Taken together, results suggest that mass imprisonment exacerbates marginalization among disadvantaged children, thereby contributing to a system of stratification in which the children of the prison boom become virtually invisible.
    Keywords: Fragile families, child homelessness, family structure, family stability, imprisonment, African Americans
    JEL: D19 D63 J12 J15 I30
    Date: 2009–11
  20. By: Alain N. Kabundi; Deniz Igan; Marcelo Pinheiro; Francisco Nadal-De Simone; Natalia T. Tamirisa
    Abstract: We examine the characteristics and comovement of cycles in house prices, credit, real activity and interest rates in advanced economies during the past 25 years, using a dynamic generalized factor model. House price cycles generally lead credit and business cycles over the long term, while in the short to medium term the relationship varies across countries. Interest rates tend to lag other cycles at all time horizons. While global factors are important, the U.S. business cycle, house price cycle and interest rate cycle generally lead the respective cycles in other countries over all time horizons, while the U.S. credit cycle leads mainly over the long term.
    Keywords: Bank credit , Business cycles , Credit demand , Cross country analysis , Developed countries , Economic growth , Economic models , Household credit , Housing prices , Interest rates , Time series ,
    Date: 2009–10–22
  21. By: Brekke, Kurt Richard; Siciliani, Luigi; Straume, Odd Rune
    Abstract: We study the relationship between competition and quality within a spatial competition framework where firms compete in prices and quality. We generalise existing literature on spatial price-quality competition along several dimensions, including utility functions that are non-linear in income and cost functions that are non-separable in output and quality. Our main message is that the scope for a positive relationship between competition and quality is underestimated in the existing literature. If we allow for income effects by assuming that utility is strictly concave in income, we find that lower transportation costs always lead to higher quality. The presence of income effects might also reverse a previously reported negative relationship between the number of firms and equilibrium quality. This reversal result is further strenghtened if there are cost substitutabilities between output and quality. Equilibrium quality provision is always less than socially optimal in the presence of income effects.
    Keywords: Income effects; Quality; Spatial competition
    JEL: D21 L13 L15
    Date: 2009–08
  22. By: Fafchamps, Marcel; Shilpi, Forhad
    Abstract: This paper examines migrants' choice of destination conditional on migration. To this end, we design an empirical strategy which remedies both migration selection and unobserved heterogeneity problems. The study uses data from two rounds of Nepal Living Standard Surveys and a Population Census and examine how the choice of a migration destination is influenced by income differentials and other covariates. We find distance, population density, and social proximity to have a strong significant effect: migrants move primarily to proximate, high population density areas where many people share their language and ethnic background. Better access to amenities is significant as well. Differentials in average income across districts are significant in univariate comparisons but not once we control for other covariates. Differentials in consumption expenditures are statistically significant but smaller in magnitude than other determinants. It is differentials in absolute, not relative, consumption that seem to matter most to work migrants. Except for the latter, results are robust to different specifications and datasets.
    Keywords: income differentials; migration; south Asia
    JEL: J61 O15
    Date: 2009–08
  23. By: Zoltan J. Acs; Claire Economidou; Mark Sanders
    Abstract: In this paper we present an endogenous growth model in which we investigate the implications of knowledge spillovers between knowledge creators (inventors) and commercializers (innovators). We then turn to the question how such knowledge spillovers affect value creation within and among organizations as well as at the aggregate level and discuss how the internalization of these knowledge spillovers can help improve economic performance at both levels.
    Keywords: knowledge spillovers; innovation management; strategic entrepreneurship
    JEL: L26 O31 O32 O38
    Date: 2009–11
  24. By: Amanda Geller; Carey E. Cooper; Irwin Garfinkel; Ofira Schwartz-Soicher; Ronald B. Mincy
    Abstract: High rates of incarceration among American men, coupled with high rates of fatherhood among men in prison, have motivated recent research on the effects of parental imprisonment on children’s development. We contribute to this literature using data from the Fragile Families and Child Wellbeing Study to examine the effects of paternal incarceration on developmental and school readiness outcomes for approximately 3,000 urban children. We estimate cross-sectional and longitudinal regression models that control not only for fathers’ basic demographic characteristics and a rich set of potential confounders, but also for several measures of pre-incarceration child development, and family fixed effects. We find that paternal incarceration is positively associated with children’s externalizing problems at age five. Results are mixed with respect to attention problems, and we find some evidence that children of incarcerated fathers experience less anxiety than their peers. The observed effects of incarceration on child behavioral problems are significantly stronger than the effects of other forms of father absence, suggesting that children with incarcerated fathers may require specialized support from caretakers, teachers, and social service providers.
    Keywords: Fragile families, childbearing, nonmarital childbearing, fartherhood, fathers, incarceration
    JEL: D19 D63 J12 J15 I30
    Date: 2009–11
  25. By: Brülhart, Marius; Schmidheiny, Kurt
    Abstract: It is well understood that the two most popular empirical models of location choice - conditional logit and Poisson - return identical coefficient estimates when the regressors are not individual specific. We show that these two models differ starkly in terms of their implied predictions. The conditional logit model represents a zero-sum world, in which one region's gain is the other regions' loss. In contrast, the Poisson model implies a positive-sum economy, in which one region's gain is no other region's loss. We also show that all intermediate cases can be represented as a nested logit model with a single outside option. The nested logit turns out to be a linear combination of the conditional logit and Poisson models. Conditional logit and Poisson elasticities mark the polar cases and can therefore serve as boundary values in applied research.
    Keywords: conditional logit; firm location; nested logit; Poisson count model; residential choice
    JEL: C25 H73 R3
    Date: 2009–07
  26. By: Pau Rabanal; Prakash Kannan; Alasdair Scott
    Abstract: We argue that a stronger emphasis on macrofinancial risk could provide stabilization benefits. Simulations results suggest that strong monetary reactions to accelerator mechanisms that push up credit growth and asset prices could help macroeconomic stability. In addition, using a macroprudential instrument designed specifically to dampen credit market cycles would also be useful. But invariant and rigid policy responses raise the risk of policy errors that could lower, not raise, macroeconomic stability. Hence, discretion would be required.
    Keywords: Asset prices , Capital markets , Central banks , Credit controls , Credit demand , Credit risk , Economic models , External shocks , Household credit , Housing prices , Monetary policy , Price increases ,
    Date: 2009–09–23
  27. By: Brügger, Beatrix; Lalive, Rafael; Zweimüller, Josef
    Abstract: This paper studies the role of culture in shaping unemployment outcomes. The empirical analysis is based on local comparisons across a language barrier in Switzerland. This Röstigraben seperates cultural groups, but neither labor markets nor political jurisdictions. Local contrasts across the language border identify the role of culture for unemployment. Our findings indicate that differences in culture explain differences in unemployment duration on the order of 20 %. Moreover, we find that horizontal transmission of culture is more important than vertical transmission of culture and that culture is about as important as strong changes to the benefit duration.
    Keywords: cultural transmission; culture; regional unemployment; unemployment duration
    JEL: J21 J64 Z10
    Date: 2009–08
  28. By: Friedberg, Rachel (Brown University); Jaeger, David A. (University of Cologne)
    Abstract: While it is well known that some areas of the United States receive more immigrants than others, less is understood about the extent to which the character of immigration varies as well. There is much broader geographic variation in the skill and demographic composition of immigrants than natives, with important implications for their economic effects. This paper provides a new perspective by focusing on heterogeneity in outcomes such as the share of population growth due to immigration, the presence of immigrant children in schools, and the effect of immigration on the age, sex, language, and educational composition of the local population and workforce.
    Keywords: language, immigration, local labor markets, immigrant children
    JEL: J61 J68 J4
    Date: 2009–11
  29. By: Valadkhani, Abbas (University of Wollongong)
    Abstract: This paper examines the long-run and short-run determinants of unleaded petrol prices in Australia’s capital cities using monthly data to test whether prices respond asymmetrically to external shocks. In the long-run petrol prices are mainly determined by the Tapis crude oil and Singapore petrol prices. There is some evidence of asymmetric price adjustments in the short-run since petrol price increases have been mostly passed on to the consumer faster than price decreases in four capital cities. One can thus argue that there are a significant degree of market inefficiency and/or collusion, requiring closer government price monitoring and scrutiny.
    Keywords: Petrol prices; Asymmetric effects; Australia.
    JEL: C22 E31 L11
    Date: 2009
  30. By: Salcedo, Alejandrina; Schoellman, Todd; Tertilt, Michèle
    Abstract: Living arrangements have changed enormously over the last two centuries. While the average American today lives in a household of only three people, in 1850 household size was twice that figure. Further, both the number of children and the number of adults in a household have fallen dramatically. We develop a simple theory of household size where living with others is beneficial solely because the costs of household public goods can be shared. In other words, we abstract from intra-family relations and focus on households as collections of roommates. The model’s mechanism is that rising income leads to a falling expenditure share on household public goods, which endogenously makes household formation less beneficial and privacy more attractive. To assess the magnitude of this mechanism, we first calibrate the model to match the relationship between household size, consumption patterns, and income in the cross-section at the end of the 20th century. We then project the model back to 1850 by changing income. We find that our proposed mechanism can account for 37% of the decline in the number of adults in a household between 1850 and 2000, and for 16% of the decline in the number of children.
    Keywords: economies of scale; fertility decline; household public goods; household size; living arrangements; roommates
    JEL: D10 E10 J11 N30 O10
    Date: 2009–11
  31. By: Macours, Karen; Vakis, Renos
    Abstract: Low aspirations can limit households’ investments and contribute to sustained poverty. Vice versa, increased aspirations can lead to investment and upward mobility. Yet how aspirations are formed is not always well understood. This paper analyzes the role of social interactions in determining aspirations in the context of a program aimed at increasing households'investments. The causal effect of social interactions is identified through the randomized assignment of leaders and other beneficiaries to three different interventions within each treatment community. Social interactions are found to affect households’ attitudes toward the future and to amplify program impacts on investments in human capital and productive activities. The empirical evidence indicates that communication with motivated and successful nearby leaders can lead to higher aspirations and corresponding investment behavior.
    Keywords: Debt Markets,Labor Policies,Investment and Investment Climate,Primary Education,Housing&Human Habitats
    Date: 2009–11–01
  32. By: Chowdhury, Shyamnal; Yamauchi, Futoshi; Dewina, Reno
    Abstract: This paper examines the recent decentralization of governance in Indonesia and its impact on local infrastructure provision. The decentralization of decisionmaking power to local jurisdictions in Indonesia may have improved the matching of public infrastructures provision with local preferences. However, decentralization has made local public infrastructures depend on local resources. Due to differences in initial endowments, this may result in the divergence of local public infrastructures in rich and poor jurisdictions. Using data from village-level panel surveys conducted in 1996, 2000, and 2006, this paper finds that (1) local public infrastructures depend on local resources, (2) decentralization has improved the availability of local public infrastructures, (3) local jurisdictions are converging to a similar level of local public infrastructure, and (4) to some extent, decentralized public infrastructures' provision reflects local preferences.
    Keywords: Decentralization, local public goods, indonesia,
    Date: 2009
  33. By: Wahba, Jackline; Zenou, Yves
    Abstract: The aim of this paper is to investigate whether return migrants are more likely to become entrepreneurs than non-migrants. We develop a theoretical search model that puts forward the trade off faced by returnees since overseas migration provides an opportunity for human and physical capital accumulation but, at the same time, may lead to a loss of social capital back home. We test the predictions of the model using data from Egypt. We find that, even after controlling for the endogeneity of the temporary migration decision, an overseas returnee is more likely to become an entrepreneur than a non-migrant. Although migrants lose their original social networks whilst overseas, savings and human capital accumulation acquired abroad over-compensate for this loss. Our results also suggest that social networks have no significant impact on becoming entrepreneurs for returnees but matter for non-migrants.
    Keywords: entrepreneurship; savings; selection; social capital
    JEL: L26 O12 O15
    Date: 2009–11
  34. By: Lorenzo Castelli (DEEI - University of Trieste); Raffaele Pesenti (DMA - University Ca' Foscari of Venice); Andrea Ranieri (DEEI - University of Trieste)
    Abstract: In Europe, when an imbalance between demand and capacity is detected for air traffic network resources, Air Traffic Flow Management slots are allocated to flights on the basis of a First Planned First Served principle. We propose a market mechanism to allocate such slots in the case of a single constrained en-route sector or airport. We show that our mechanism provides a slot allocation which is economically preferable to the current one as it enables airlines to pay for delay reduction or receive compensations for delay increases. We also discuss the implementation of our mechanism through two alternative distributed approaches that spare airlines the disclosure of private information. Both these approaches have the additional advantage that they directly involve airlines in the decision making process. Two computational examples relying on real data illustrate our findings.
    Keywords: Air Transportation, Market Mechanism Design, Air Traffic Flow Management slots, Collaborative Decision Making, SESAR.
    JEL: L93 C61 C71 L98
    Date: 2009–11
  35. By: Den Haan, Wouter; Sterk, Vincent
    Abstract: Financial innovation is widely believed to be at least partly responsible for the recent financial crisis. At the same time, there are empirical and theoretical arguments that support the view that changes in financial markets played a role in the "great moderation". If both are true, then the price of reducing the likelihood of another crisis, e.g., through new regulation, could be giving up another episode of sustained growth and low volatility. However, this paper questions empirical evidence supporting the view that innovation in consumer credit and home mortgages reduced cyclical variations of key economic variables. We find that especially the behaviour of aggregate home mortgages changed less during the great moderation than is typically believed. For example, aggregate home mortgages declined during monetary tightenings, both before and during the great moderation. A remarkable change we do find is that monetary tightenings became episodes during which financial institutions other than banks increased their holdings in mortgages. Once can question the desirability of such strong substitutions of ownership during economic downturns.
    Keywords: consumer credit; impulse response functions; mortgages
    JEL: E32 E44 G21
    Date: 2009–10
  36. By: Marcia J. Carlson (University of Wisconsin); Sara S. McLanahan (Princeton University)
    Abstract: Nonmarital childbearing has increased dramatically in the U.S. since the early 1960s, rising from 6% of all births in 1960 to fully 40% in 2007 (Hamilton, Martin, & Ventura, 2009; Ventura & Bachrach, 2000). Whereas similar trends have occurred in many developed nations, the U.S. stands out in the extent to which such births are associated with socioeconomic disadvantage and relationship instability, giving rise to a new term ‘fragile families.’ The increase in fragile families reflects changes not only in the context of births but also in the fundamental nature and patterns of childrearing, particularly with respect to fathers’ roles and involvement with children.
    Keywords: Fragile families, childbearing, nonmarital childbearing, fartherhood, fathers
    JEL: D19 D63 J12 J15 I30
    Date: 2009–10
  37. By: Daniel L. Millimet; Rusty Tchernis
    Abstract: While the rise in childhood obesity is clear, the policy ramifications are not. School nutrition programs such as the School Breakfast Program (SBP) have come under much scrutiny. However, the lack of experimental evidence, combined with non-random selection into these programs, makes identification of the causal effects of such programs difficult. In the case of the SBP, this difficulty is exacerbated by the apparent lack of exclusion restrictions. Here, we compare via Monte Carlo study several existing estimators that do not rely on exclusion restrictions for identification. In addition, we propose two new estimation strategies. Simulations illustrate the usefulness of our new estimators, as well as provide applied researchers several practical guidelines when analyzing the causal effects of binary treatments. More importantly, we find consistent evidence of a beneficial causal effect of SBP participation on childhood obesity when applying estimators designed to circumvent selection on unobservables.
    JEL: C21 C52 I18 J13
    Date: 2009–11

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