|
on Urban and Real Estate Economics |
| By: | Monika Bazyl (Warsaw School of Economics) |
| Abstract: | A hedonic price model has been constructed for Warsaw housing market using 2006 asking price data. Model parameters reveal a substantial influence of proximity to the metro station on flat prices. If there is a metro station within 1 km distance to a flat its price increases by 15% according to the estimated basic hedonic model. Also green areas have a positive impact on flat prices while industrial areas affect negatively flat prices. To account for spatial autocorrelation two types of spatial hedonic model were constructed: spatial autoregression model and spatial error model. Both proved that there is a significant spatial autocorrelation present in the basic hedonic model. |
| Keywords: | hedonic price analysis, spatial model, housing, location |
| JEL: | C21 Q51 R21 |
| Date: | 2009–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:42&r=ure |
| By: | Amin Mazloumian; Nikolas Geroliminis; Dirk Helbing |
| Abstract: | Due to the complexity of the traffic flow dynamics in urban road networks, most quantitative descriptions of city traffic so far are based on computer simulations. This contribution pursues a macroscopic (fluid-dynamic) simulation approach, which facilitates a simple simulation of congestion spreading in cities. First, we show that a quantization of the macroscopic turning flows into units of single vehicles is necessary to obtain realistic fluctuations in the traffic variables, and how this can be implemented in a fluid-dynamic model. Then, we propose a new method to simulate destination flows without the requirement of individual route assignments. Combining both methods allows us to study a variety of different simulation scenarios. These reveal fundamental relationships between the average flow, the average density, and the variability of the vehicle densities. Considering the inhomogeneity of traffic as an independent variable can eliminate the scattering of congested flow measurements. The variability also turns out to be a key variable of urban traffic performance. Our results can be explained through the number of full links of the road network, and approximated by a simple analytical formula. |
| Keywords: | Urban traffic, network dynamics, congestion spreading, macroscopic traffic model, fundamental diagram |
| Date: | 2009–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:stz:wpaper:ccss-09-00009&r=ure |
| By: | Buiter, Willem H. |
| Abstract: | A fall in house prices due to a change in its fundamental value redistributes wealth from those long housing (for whom the fundamental value of the house they own exceeds the present discounted value of their planned future consumption of housing services) to those short housing. In a closed economy representative agent model and in the Yaari-Blanchard OLG model used in the paper, there is no pure wealth effect on consumption from a change in house prices if this represents a change in their fundamental value. There is a pure wealth effect on consumption from a change in house prices if this reflects a change in the speculative bubble component of house prices. Two other channels through which a fall in house prices can affect aggregate consumption are (1) redistribution effects if the marginal propensity to spend out of wealth differs between those long housing (the old, say) and those short housing (the young, say) and (2) collateral or credit effects due to the collateralisability of housing wealth and the non-collateralisability of human wealth. A decline in house prices reduces the scope for mortgage equity withdrawal. For given sequences of future after-tax labour income and interest rates, this may depress consumption in the short run while boosting it in the long run. -- |
| Keywords: | Wealth effect,house prices,speculative bubbles |
| JEL: | E2 E3 E5 E6 G1 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:200956&r=ure |
| By: | Paulo Guimarães (University of South Carolina and CEMPRE); Octávio Figueiredo (CEMPRE and Faculdade de Economia, Universidade do Porto); Douglas Woodward (University of South Carolina) |
| Abstract: | A common problem with spatial economic concentration measures (e.g. Gini, Herfindhal, entropy and Ellison-Glaeser indices) is accounting for the position of regions in space. While they purport to measure spatial clustering, these statistics are confined to calculations within individual areal units. They are insensitive to the proximity of regions - to neighboring effects. Clearly, economic clusters may cross the boundaries of the regions. Yet with current measures, any industrial agglomeration that traverses boundaries will be chopped into two or more pieces. Activity in adjacent spatial units is treated in exactly the same way as activity in far-flung, non-adjacent areas. This paper shows how some popular measures of spatial concentration relying on areal data can be modified to account for neighboring effects and spatial autocorrelation. With a U.S. application, we also show that the new instruments we propose are useful and easy to implement. |
| Keywords: | Measures of Agglomeration, Spatial Concentration |
| JEL: | R12 R39 C49 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:353&r=ure |
| By: | Berliant, Marcus; Yu, Chia-Ming |
| Abstract: | Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at a location. When workers’ price elasticity of demand for housing is negatively correlated with their productivity, skill-biased technological change causes a core-periphery bifurcation where the agglomeration of high-skill workers eventually constitutes a unique stable equilibrium. When workers’ price elasticity of demand for housing and their productivity are positively correlated, skill-biased technological improvements will never result in a core periphery equilibrium. This paper claims that location can at best be an approximate rather than a precise sieve for high-skill workers. |
| Keywords: | Agglomeration; Adverse Selection; Asymmetric Information; Locational Signaling |
| JEL: | R13 D82 D51 |
| Date: | 2009–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19462&r=ure |
| By: | Lall, Somik V.; Deichmann, Uwe |
| Abstract: | Today, 370 million people live in cities in earthquake prone areas and 310 million in cities with high probability of tropical cyclones. By 2050, these numbers are likely to more than double. Mortality risk therefore is highly concentrated in many of the world’s cities and economic risk even more so. This paper discusses what sets hazard risk in urban areas apart, provides estimates of valuation of hazard risk, and discusses implications for individual mitigation and public policy. The main conclusions are that urban agglomeration economies change the cost-benefit calculation of hazard mitigation, that good hazard management is first and foremost good general urban management, and that the public sector must perform better in generating and disseminating credible information on hazard risk in cities. |
| Keywords: | Banks&Banking Reform,Environmental Economics&Policies,Hazard Risk Management,Urban Housing,Labor Policies |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5161&r=ure |
| By: | Agarwal, Sumit (Federal Reserve Bank of Chicago); Amromin, Gene (Federal Reserve Bank of Chicago); Ben-David, Itzhak (Ohio State University); Chomsisengphet, Souphala (Office of the Comptroller of the Currency, US Department of the Treasury); Evanoff, Douglas D. (Federal Reserve Bank of Chicago) |
| Abstract: | Mortgage counseling is regarded as an integral tool in ensuring appropriate choices by prospective home buyers. We use micro-level data from an urban voluntary counseling program aimed at disadvantaged households to assess its effectiveness. We find substantially lower ex-post delinquency rates among program graduates. This finding is robust to an array of controls and several ways of modeling the probability of selection into counseling treatment. We attribute improved performance to the type of mortgage contract extended to the graduates, to the budgeting and credit management skills taught in the program, and to active post-purchase counseling that seeks to cure delinquency at early stages. The effects appear strongest among the least creditworthy households, suggesting an important role for long-term preparation for homeownership. |
| JEL: | D14 D18 L85 R21 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2009-23&r=ure |
| By: | Jane Dokko; Brian Doyle; Michael T. Kiley; Jinill Kim; Shane Sherlund; Jae Sim; Skander Van den Heuvel |
| Abstract: | We examine the role of monetary policy in the housing bubble. Our review examines the setting of monetary policy in the middle of this decade, the impetus from monetary policy to the housing market, and other factors that may have contributed to the run-up, and subsequent collapse, in house prices. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2009-49&r=ure |
| By: | Simon Burgess; Ellen Greaves; Anna Vignoles; Deborah Wilson |
| Abstract: | We investigate the central premise of the theory of markets in education, namely that parents value academic standards. We ask what parents really want from schools and whether different types of parents have similar preferences. We examine parents’ stated preferences and revealed preferences for schools (their actual choice of school as opposed to what they say they value in a school). More educated and higher socio-economic status (SES) parents are more likely to cite academic standards, whilst less educated and lower SES parents are more likely to cite proximity. More advantaged parents choose better performing schools, particularly in areas with many schools and therefore a lot of potential school choice. More advantaged parents also choose schools with much lower proportions of pupils eligible for free school meals, relative to other schools available to them. Hence whilst parents do not admit to choosing schools on the basis of their social composition, this happens in practice. Most parents get their first choice of school (94%) and this holds both for more and less advantaged parents, though this is partially because poorer parents make more ‘realistic’, i.e. less ambitious, choices. If, in areas where there is a lot of potential competition between schools, more advantaged families have a higher chance of achieving their more ambitious choices that do poorer parents, this could tend to exacerbate social segregation in our schools. |
| Keywords: | school preferences, school choice, parental choice |
| JEL: | I20 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:09/224&r=ure |
| By: | Sheng Guo (Department of Economics, Florida International University) |
| Abstract: | The empirical literature has demonstrated that housing assets exhibit larger wealth effects than stocks (or, more broadly, financial assets), which is often interpreted as a larger MPC (Marginal Propensity of Consumption) out of housing wealth. Still, the question remains as to whether this stylized fact has anything to do with the collaterality of housing assets. We build a household consumption and portfolio choice model with two risky assets, housing and stocks, whereby housing can be used as collateral to borrow against. The optimizing agent’s preference and investment opportunity set generate implications of dierent MPCs for groups characterized by their respective asset/debt portfolios. Under calibrated parameters from macro data, the model exhibits the highest MPC for households who simultaneously borrow against housing asset and invest in stocks. We examine the Panel Study of Income Dynamics (PSID) micro data of homeowners and find no evidence of this implied collateral eect on non-durable consumption. |
| Keywords: | wealth effects; consumption; portfolio choice; housing; collateral; borrowing constraints; household debt |
| JEL: | D11 D12 D14 D91 E21 G11 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0914&r=ure |
| By: | M. König; Claudio J. Tessone; Yves Zenou |
| 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 ï¬nd that there exists a sharp transition in efficiency and network density from highly centralized to decentralized networks. |
| Keywords: | Bonacich centrality, Network formation, Social interactions, Nested split graphs |
| JEL: | A14 C63 D85 |
| Date: | 2009–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:stz:wpaper:ccss-09-00006&r=ure |
| By: | Andrew Haughwout; Ebiere Okah; Joseph Tracy |
| Abstract: | Mortgage modifications have become an important component of public interventions designed to reduce foreclosures. In this paper, we examine how the structure of a mortgage modification affects the likelihood of the modified mortgage re-defaulting over the next year. Using data on subprime modifications that precede the government's Home Affordable Modification Program, we focus our attention on those modifications in which the borrower was seriously delinquent and the monthly payment was reduced as part of the modification. The data indicate that the re-default rate declines with the magnitude of the reduction in the monthly payment, but also that the re-default rate declines relatively more when the payment reduction is achieved through principal forgiveness as opposed to lower interest rates. |
| Keywords: | Subprime mortgage ; Foreclosure ; Default (Finance) |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:417&r=ure |
| By: | Billger, Sherrilyn M. (Illinois State University); Beck, Frank D. (Illinois State University) |
| Abstract: | Facing substantial financial pressure, many districts close schools in order to preserve solvency and improve student outcomes. Using a new longitudinal data set on all non-Cook County Illinois schools, we examine the determinants of high school closure decisions from 1991 through 2005. Our dataset combines information from a wide variety of sources, including the Illinois State Board of Education, the Census Bureau, the Illinois Department of Revenue, and the Bureau of Labor Statistics. Prior studies in this area typically use cross-sectional data, short panels, or case-studies. Schools that close have lower enrollments, are located in more rural areas, and have higher per-pupil expenditures. Enrollments and fiscal resources are indeed the most important determinants of school closures. Neither math and reading test scores nor the sociodemographics of the students have a significant impact on high school closure decisions. |
| Keywords: | economics of education, education finance, human capital, secondary education |
| JEL: | I22 I21 J24 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4641&r=ure |
| By: | Martin Gustafsson (Department of Economics, University of Stellenbosch); Firoz Patel (System Planning and Monitoring, Department of Education) |
| Abstract: | A review of a few input-output models indicates the importance of teacher ability, which may be independent of years of training, for improving pupil performance. A historical analysis confirms the substantial pay increases experienced by teachers in the mid-1990s, moderate pay increases in real terms since 1996, and a falling ratio of teacher pay to GDP per capita. Analysis of Labour Force Survey data reveals that in 2007 teachers were paid less than other professionals, even if the comparison is made conditional on a number of non-pay variables. Working hours is not used as a conditioning variable, however, and low pupil performance levels suggest that the average productivity of teachers is not high. In 2007 the age-pay slope for teachers was flatter than that for other professionals. The impact of the 2008 changes to the teacher pay system are considered. These changes initiate a gradual closing of the pay gap between teachers and other professionals, and convert a rather flat age-pay slope for teachers into one that compares favourably to that of other professionals, and to those of teachers in other countries. The fact that the new system links progression up the salary scales to the behavioural input characteristics of teachers is line with good practice elsewhere, but the linking of pupil performance to teacher pay is probably best undertaken collectively at the level of the school. The teaching hours put in by teachers compares favourably to those in other countries, yet the utilisation of teacher time in many schools is not optimal, resulting in class sizes that are unacceptably high. |
| Keywords: | Teacher, School, Wage Differentials, Incentive, South Africa |
| JEL: | H52 I28 J31 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers99&r=ure |
| By: | Astrid Cullmann; Mehdi Farsi; Massimo Filippini |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp960&r=ure |
| By: | Akramov, Kamiljon T.; Asante, Felix Ankomah |
| Abstract: | "This paper explores disparities in local public service provision between decentralized districts in Ghana using district- and household-level data. The empirical results show that districts' geographic locations play a major role in shaping disparities in access to local public services in Ghana. Most importantly, the findings suggest that ethnic diversity has significant negative impact in determining access to local public services, including drinking water. This negative impact is significantly higher in rural areas. However, the negative impact of ethnic diversity in access to local public services (drinking water) decreases as average literacy level increases. The paper relates the results to literature and discusses policy implications of main findings." from authors' abstract |
| Keywords: | Decentralization, Access to public services, Ethnic diversity, Geography, Development strategies, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:872&r=ure |
| By: | Christian A. L. Hilber; Frédéric Robert-Nicoud |
| Abstract: | We model residential land use constraints as the outcome of a political economy game betweenowners of developed and owners of undeveloped land. Land use constraints benefit the former group(via increasing property prices) but hurt the latter (via increasing development costs). More desirablelocations are more developed and, as a consequence of political economy forces, more regulated.Using an IV approach that directly follows from our model we find strong and robust support for ourpredictions. The data provide weak or no support for alternative hypotheses whereby regulationsreflect the wishes of the majority of households or efficiency motives. |
| Keywords: | Land use regulations, zoning, land ownership, housing supply |
| JEL: | H7 Q15 R52 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0964&r=ure |
| By: | Yamamura, Eiji |
| Abstract: | This paper, using individual data from Japan, explores how the circumstances of where a person resides is related to the degree of their investment in social capital. Controlling for unobserved area-specific fixed effects and various individual characteristics, I found: (1) Not only is the rate of homeowners in a locality positively related to investment in social capital, but the rate of homeownership there increases an individual’s investment in social capital. (2) The effect of local neighborhood homeownership is distinctly larger than that of an individual’s when endogeneity bias is controlled for using instruments such as land price and the rental price of an apartment. |
| Keywords: | Social Capital; Rate of homeowner |
| JEL: | D71 R11 R23 |
| Date: | 2009–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19495&r=ure |
| By: | Mitropoulos, Atanasios; Zaidi, Rida |
| Abstract: | We have assembled a unique loan-level performance dataset for mortgages originated in the UK to study the differences in default likelihood between loans of varying borrower and loan characteristics. We can broadly confirm the relevance of most commonly known riskfactors and find that most drivers of default for prime are also relevant for non-conforming, drivers of repossessions are largely similar to drivers of arrears and information on adverse borrower information dominates any other risk factor. Our study provides many more details and compares results with recent studies for the US and other European countries. |
| Keywords: | residential mortgages; loan defaults; consumer behaviour; logistic regression; United Kingdom |
| JEL: | D14 G21 |
| Date: | 2009–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19619&r=ure |
| By: | de Marti, Joan (Universitat Pompeu Fabra); Zenou, Yves (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We survey the literature on social networks by putting together the economics, sociological and physics/applied mathematics approaches, showing their similarities and differences. We expose, in particular, the two main ways of modeling network formation. While the physics/applied mathematics approach is capable of reproducing most observed networks, it does not explain why they emerge. On the contrary, the economics approach is very precise in explaining why networks emerge but does a poor job in matching real-world networks. We also analyze behaviors on networks, which take networks as given and focus on the impact of their structure on individuals’ outcomes. Using a game-theoretical framework, we then compare the results with those obtained in sociology. |
| Keywords: | Random Graph; Game Theory; Centrality Measures; Network Formation; Weak |
| JEL: | A14 C72 D85 Z13 |
| Date: | 2009–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0816&r=ure |
| By: | Rangan Gupta (University of Pretoria); Alain Kabundi (University of Johannesburgh); Stephen M. Miller (University of Connecticut and University of Nevada, Las Vegas) |
| Abstract: | We employ a 10-variable dynamic structural general equilibrium model to forecast the US real house price index as well as its turning point in 2006:Q2. We also examine various Bayesian and classical time-series models in our forecasting exercise to compare to the dynamic stochastic general equilibrium model, estimated using Bayesian methods. In addition to standard vector-autoregressive and Bayesian vector autoregressive models, we also include the information content of either 10 or 120 quarterly series in some models to capture the influence of fundamentals. We consider two approaches for including information from large data sets -- extracting common factors (principle components) in a Factor-Augmented Vector Autoregressive or Factor-Augmented Bayesian Vector Autoregressive models or Bayesian shrinkage in a large-scale Bayesian Vector Autoregressive models. We compare the out-of-sample forecast performance of the alternative models, using the average root mean squared error for the forecasts. We find that the small-scale Bayesian-shrinkage model (10 variables) outperforms the other models, including the large-scale Bayesian-shrinkage model (120 variables). Finally, we use each model to forecast the turning point in 2006:Q2, using the estimated model through 2005:Q2. Only the dynamic stochastic general equilibrium model actually forecasts a turning point with any accuracy, suggesting that attention to developing forward-looking microfounded dynamic stochastic general equilibrium models of the housing market, over and above fundamentals, proves crucial in forecasting turning points. |
| Keywords: | US House prices, Forecasting, DSGE models, Factor Augmented Models, Large-Scale BVAR models |
| JEL: | C32 R31 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2009-42&r=ure |
| By: | Ricardo Mora; Javier Ruiz Castillo |
| Abstract: | In this paper the Kullback-Leibler notion of discrepancy (Kullback and Leibler, 1951) is used to propose a measure of segregation within a general statistical framework. Under general conditions, this measure coincides with the Mutual Information index of segregation, M, first proposed by Theil and Finizza (1971), and fully characterized in terms of eight ordinal axioms by Frankel and Volij (2009). In this paper, two specific issues are addressed in relation to this index: the evaluation of statistical significance for observed differences in M measurements, and the control for the statistical association between demographic groups and schools and other socioeconomic variables. Among the main results of the paper it is established that M can be decomposed to isolate segregation conditional on any vector of socioeconomic characteristics. Furthermore, consistent estimators for M and the terms in its decomposition are proposed, and their asymptotic properties are obtained. As a result, the M index now stands as the only index of segregation which has been fully characterized in terms of axiomatic properties, is well embedded into a general statistical framework, and can be used when samples are finite and a multivariate framework is required. The usefulness of the approach is illustrated by looking at patterns of multigroup school segregation in the U.S. for the school years 1989-90 and 2005-06. |
| Keywords: | Multigroup segregation measurement, Axiomatic properties, Econometric models |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we09448&r=ure |
| By: | Mogues, Tewodaj; Benin, Samuel; Cudjoe, Godsway |
| Keywords: | Decentralization, Inter-governmental transfers, Local government, Internally generated revenues, Development strategies, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:934&r=ure |
| By: | Jeffrey R. Campbell; Thomas N. Hubbard |
| Abstract: | We measure industry evolution following permanent changes in the level and location of demand for gasoline in hundreds of counties during the time surrounding the completion of Interstate Highway segments. We find that the timing and margin of adjustment depends on whether the new highway is located close to or far from the old route. When the new highway is close to the old one, there is no evidence that the number of stations changes around the time it opens. However, average station size increases by 6% before the highway is completed. When the new highway is far from the old one (say, 5-10 miles), the number of stations increases by 8% and average station size remains unchanged. Unlike the station size adjustment when the new highway is close, the entire increase takes place after construction. These results provide evidence on how this industry, which is characterized by high location-specific sunk costs, adjusts to demand changes. Our results are consistent with theories in which firms have strategic investment incentives to preempt competitors. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-09-24&r=ure |
| By: | Andrew Haughwout; Richard Peach; Joseph Tracy |
| Abstract: | After rising for a decade, the U.S. homeownership rate peaked at 69 percent in the third quarter of 2006. Over the next two and a half years, as home prices fell in many parts of the country and the unemployment rate rose sharply, the homeownership rate declined by 1.7 percentage points. An important question is, how much more will this rate decline over the current economic downturn? To address this question, we propose the concept of the "homeownership gap" as a gauge of downward pressure on the homeownership rate. We define the homeownership gap as the difference between the "official" homeownership rate and a recomputed rate that excludes owners who are in a negative equity position, meaning that the value of their houses is less than their outstanding mortgage balance. Our estimate of this gap suggests that the official homeownership rate will likely experience significant downward pressure in the coming years. |
| Keywords: | Home ownership ; Recessions ; Mortgages |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:418&r=ure |
| By: | Tengstam, Sven (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The clothing sector has been a driver of diversification and growth for countries that have graduated into middle income. Using a partial adjustment panel data model for 61 countries 1975-2000, we investigate the global international location of clothing production by using a combination of variables suggested by the Heckscher-Ohlin theory and the New Economic Geography (NEG) theory. Our Blundell-Bond system estimator results confirm that the NEG variables do help explain the location of the clothing industry, and point to that convergence is not as inevitable as sometimes assumed. We find that closeness to various intermediates such as low-cost labor and textile production has strong effects on output. Factor endowments and closeness to the world market have inverted U-shaped effects. This is expected since above a certain level several other sectors benefit even more from closeness and factor endowments, driving resources away from the clothing industry.<p> |
| Keywords: | global clothing industry; new economic geography; comparative advantages; industrial agglomeration |
| JEL: | F12 F13 L13 L67 R12 R30 |
| Date: | 2009–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0423&r=ure |
| By: | Dante Contreras G.; Tomás Rau B. |
| Abstract: | In this paper we evaluate the introduction of monetary incentives for teachers, based on a school performance tournament in Chile. We evaluate the tournament effect, i.e. the effect of introducing the incentive scheme on all participant schools: winners and losers. We also evaluate the effect of winning the tournament on next period school performance that we call the gift-exchange effect. Matching and Regression Discontinuity techniques are used to identify both treatment effects. The results indicate a positive and significant tournament effect and a positive but nonsignificant gift-exchange effect. |
| JEL: | I21 I28 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp305&r=ure |
| By: | Gregory Gilpin (Department of Agricultural Economics and Economics, Montana State University) |
| Abstract: | Most researchers find that the non-teaching wage has a significant effect on teacher attrition. Surprisingly no study that estimates this effect actually uses former teachers? wages. The use of aggregate wage data can potentially cause upward bias coefficients due to selection issues. Using wages of former teachers in a simultaneous probit-tobit system of equations, the effect is estimated and found to be insignificant. The results indicate that higher teaching wages and student teaching significantly lower attrition while being attacked or threatened during the previous school year and whether the teacher lives in a household with income above $40,000 significantly increase attrition. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2009-022&r=ure |
| By: | Elena Fumagalli (University Ca' Foscari of Venice); Laura Fumagalli (Institute for Social and Economic Research, University of Essex) |
| Abstract: | The paper studies the impact of ethnic diversity on social participation of young people. We first propose a theoretical model in which the agents choose between structured and unstructured social activities by taking into account the ethnic composition of the groups they join. We test our predictions using English census data together with the `Longitudinal Survey of Young People in England' (LSYPE) and we find that ethnic segregation increases the probability of hanging around near home, while ethnic fractionalization decreases it. Furthermore, more structured activities are not affected by ethnic fractionalization. Finally, we use an IV strategy based on both historical and geographical data to correct for endogenous sorting into neighborhoods. The results we get are even stronger than those obtained where the ethnic composition of the neighborhood is taken as exogenous. |
| Keywords: | Social Participation, Fractionalization, Segregation |
| JEL: | C25 D71 J15 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.94&r=ure |
| By: | Alexander Haupt (University of Plymouth); Tim Krieger (University of Paderborn) |
| Abstract: | In this paper, we analyse the role of mobility in tax and subsidy competition. Our primary result is that increasing ‘relocation’ mobility of firms leads to increasing ‘net’ tax revenues under fairly weak conditions. While enhanced relocation mobility intensifies tax competition, it weakens subsidy competition. The resulting fall in the governments’ subsidy payments overcompensates the decline in tax revenues, leading to a rise in net tax revenues. We derive this conclusion in a model in which two governments are first engaged in subsidy competition and thereafter in tax competition, and firms locate and potentially relocate in response to the two political choices. |
| Keywords: | Tax competition, subsidy competition, capital and firm mobility, foreign direct investment |
| JEL: | H71 H87 F H |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/1/doc2009-37&r=ure |
| By: | Tim Leunig; Chris Minns; Patrick Wallis |
| Abstract: | This paper examines the importance of social and geographical networks in structuring entry intoskilled occupations in premodern London. Using newly digitised records of those beginning anapprenticeship in London between 1600 and 1749, we find little evidence that networks stronglyshaped apprentice recruitment. The typical London apprentice did not have an identifiable connectionto his master in the form of a kin link, shared name, or shared place or county of origin. The majorityof migrant apprentices' fathers came from outside of the craft sector. Our results suggest that themarket for apprenticeship was strikingly open: well-to-do families of all types were able to access awide range of craft and trade apprenticeships, and would-be apprentices had considerable scope tomatch their perceived ability and aptitude to opportunity. |
| Keywords: | Apprenticeship, human capital formation, training, migration, networks, UK, earlymodern |
| JEL: | N3 J2 J6 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0956&r=ure |
| By: | Aslund, Olof (IFAU); Hensvik, Lena (IFAU); Nordström Skans, Oskar (IFAU) |
| Abstract: | We show that immigrant managers are substantially more likely to hire immigrants than are native managers. The finding holds when comparing establishments in the same 5-digit industry and location, when comparing different establishments within the same firm, when analyzing establishments that change management over time, and when accounting for within-establishment trends in recruitment patterns. The effects are largest for small and owner-managed establishments in the for-profit sector. Separations are more frequent when workers and managers have dissimilar origin, but only before workers become protected by EPL. We also find that native managers are unbiased in their recruitments of former co-workers, suggesting that information deficiencies are important. We find no effects on entry wages. Our findings suggest that a low frequency of immigrant managers may contribute to the observed disadvantages of immigrant workers. |
| Keywords: | minority workers, labor mobility, workplace segregation |
| JEL: | J15 J21 J62 M51 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4640&r=ure |
| By: | Gürerk, Özgür (University of Erfurt); Irlenbusch, Bernd (London School of Economics); Rockenbach, Bettina (University of Erfurt) |
| Abstract: | Economic and social interactions often take place in open communities but the dynamics of the community choice process and its impact on cooperation of its members are yet not well understood. We experimentally investigate community choice in social dilemmas. Participants repeatedly choose between a community with and an alternative without punishment opportunities. Within each community a social dilemma game is played. While the community with punishment grows over time and fully cooperates, the alternative becomes depopulated. We analyze the success of this "voting with feet" mechanism and find that endogenous self-selection is key while slow growth is less decisive. |
| Keywords: | cooperation, social dilemmas, community choice, punishment, voting with feet |
| JEL: | C72 C92 H41 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4643&r=ure |
| By: | Vasco Leite (Faculdade de Economia, Universidade do Porto); Sofia B.S.D. Castro (CMUP and Faculdade de Economia, Universidade do Porto); João Correia-da-Silva (CEF.UP and Faculdade de Economia, Universidade do Porto) |
| Abstract: | We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods. We study how trade costs affect the spatial distribution of economic activity. Trade costs have no effect when the elasticity of substitution among non-tradable goods is low. In this case, concentration of all production (of tradable and non-tradable goods) is the unique equilibrium. When the elasticity of substitution among non-tradable goods is high, we find two equilibrium configurations: symmetric dispersion of the production of tradable and non-tradable goods, if trade costs are high; and concentration of production of tradable goods with asymmetric dispersion of production of non-tradable goods, if trade costs are low. |
| Keywords: | New economic geography, Core-periphery model, Footloose entrepreneur, Nontradable goods |
| JEL: | F12 R12 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:352&r=ure |
| By: | Yi, Dale |
| Abstract: | Data from a national telephone survey of working-aged adults in the continental US is combined with US Census 2000 data to explore the determinants of attachment to place and time preferences for jobs, natural amenities, and financial assets. Five regions in the US were delineated so that regional differences in the determinants of the dependent variables of interest could be parsed out. The regions are the Great Plains, Borderlands, Appalachia, the Plantation Belt, and the rest of the continental US. The first essay that explores time preferences for jobs, natural amenities, and money. Each was embedded with a ten percent rate of return. In aggregate, the nation as a whole demonstrated that the discount rate for jobs, natural amenities, and financial assets were each very different. The second essay explores the determinants of attachment to place by asking respondents how much money it would take to convince them to move to another community. Regional differences were detected both for time preferences and attachment to place. In addition to the independent variables classically used to explore our dependent variables of interest, these regional variables and their interactive expansions were observed to have a significant effect. |
| Keywords: | Great Plains, migration, time preference, survey, community attachment, social capital, natural amenity, economic development, community, census, zip code, policy, Native American, Community/Rural/Urban Development, Resource /Energy Economics and Policy, R11, R23, R53, R58, Q51, Q52, O13, O15, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midagr:56009&r=ure |
| By: | Robert S. Chirinko; Daniel J. Wilson |
| Abstract: | The standard model of strategic tax competition – the non-cooperative tax-setting behavior of jurisdictions competing for a mobile capital tax base – assumes that government policymakers are perfectly benevolent, acting solely to maximize the utility of the representative resident in their jurisdiction. We depart from this assumption by allowing for the possibility that policymakers, given the political and electoral environments in which they operate, also may be influenced by the rent-seeking (lobbying) behavior of businesses. Firms recognize the factors affecting policymakers’ welfare and may make campaign contributions to influence tax policy. These changes to the standard strategic tax competition model imply that business contributions affect not only the levels of equilibrium tax rates but also the slope of the tax reaction function between jurisdictions. Thus, business campaign contributions may affect tax competition and enhance or retard the mobility of capital across jurisdictions. ; Based on a panel of 48 U.S. states and unique data on business campaign contributions, our empirical work uncovers four key results. First, we document a significant direct effect of business contributions on tax policy. Second, the economic value of a $1 business campaign contribution in terms of lower state corporate taxes is nearly $4. Third, the slope of the reaction function between tax policy in a given state and the tax policies of its competitive states is negative. Fourth, we highlight the sensitivity of the empirical results to state effects. |
| Keywords: | Taxation |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2009-29&r=ure |
| By: | Damiano Brigo; Andrea Pallavicini; Roberto Torresetti |
| Abstract: | We follow a long path for Credit Derivatives and Collateralized Debt Obligations (CDOs) in particular, from the introduction of the Gaussian copula model and the related implied correlations to the introduction of arbitrage-free dynamic loss models capable of calibrating all the tranches for all the maturities at the same time. En passant, we also illustrate the implied copula, a method that can consistently account for CDOs with different attachment and detachment points but not for different maturities. The discussion is abundantly supported by market examples through history. The dangers and critics we present to the use of the Gaussian copula and of implied correlation had all been published by us, among others, in 2006, showing that the quantitative community was aware of the model limitations before the crisis. We also explain why the Gaussian copula model is still used in its base correlation formulation, although under some possible extensions such as random recovery. Overall we conclude that the modeling effort in this area of the derivatives market is unfinished, partly for the lack of an operationally attractive single-name consistent dynamic loss model, and partly because of the diminished investment in this research area. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:0912.5427&r=ure |
| By: | Constant, Amelie F. (DIW DC, George Washington University); Kahanec, Martin (IZA); Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University) |
| Abstract: | This paper is based on recently collected and rich survey data of a representative sample of entrants into unemployment in Germany. Our data include a large number of migration variables, allowing us to adapt a recently developed concept of ethnic identity: the ethnosizer. To shed further light on the native-migrant differences in economic outcomes, we investigate the labor market reintegration, patterns of job search, and reservation wages across unemployed migrants and natives in Germany. Our results indicate that separated migrants have a relatively slow reintegration into the labor market. We explain this finding by arguing that this group exerts a relatively low search effort and that it has reservation wages which are moderate, yet still above the level which would imply similar employment probabilities as other groups of migrants. |
| Keywords: | migration, ethnicity, ethnic identity, ethnosizer, unemployment, job search, reservation Wages |
| JEL: | F22 J15 J61 J64 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4660&r=ure |