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on Urban and Real Estate Economics |
| By: | Holly, S.; Pesaran, M.H.; Yamagata, T. |
| Abstract: | This paper provides a method for the analysis of the spatial and temporal diffusion of shocks in a dynamic system. We use changes in real house prices within the UK economy at the level of regions to illustrate its use. Adjustment to shocks involves both a region specific and a spatial effect. Shocks to a dominant region - London - are propagated contemporaneously and spatially to other regions. They in turn impact on other regions with a delay. We allow for lagged effects to echo back to the dominant region. London in turn is influenced by international developments through its link to New York and other financial centers. It is shown that New York house prices have a direct effect on London house prices. We analyse the effect of shocks using generalised spatio-temporal impulse responses. These highlight the di¤usion of shocks both over time (as with the conventional impulse responses) and over space. |
| Keywords: | House Prices, Cross Sectional Dependence, Spatial Dependence |
| JEL: | C21 C23 |
| Date: | 2009–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0952&r=ure |
| By: | Giuseppe Arbia; Michele Battisti; Gianfranco Di Vaio |
| Abstract: | This article provides an empirical assessment of the growth experiences of European regions, during the period 1991-2004, by taking into account the spatial effects due to both institutions and geography. These effects have been modeled by means of specific controls and by using a non-conventional spatial weight matrix. Results favour a model dealing with substantive spatial externalities. Within this framework, the country-specific institutions are strongly and positively related to the regional productivity’s growth rate. In addition, the geo-institutional proximity increases the spatial dependence of the regional output per worker and raises the speed of convergence. By contrast, the pure geographical metrics is underperforming, while underestimating the convergence dynamics. |
| Keywords: | Regional growth, income convergence, institutions, geography, spatial effects. |
| JEL: | C21 O40 R11 |
| Date: | 2009–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:72/2009&r=ure |
| By: | Mason, Patrick L. |
| Abstract: | This study examines whether there is differential productivity associated with teachers trained within Florida Agricultural & Mechanical University’s college of education relative to teachers trained in other colleges and schools affiliated with the same university. We also examined whether there is differential productivity associated with alternative majors within and between the college of education and other academic units. We measure the productivity of a teacher by the educational achievement of pupils assigned to that teacher during a given year. We find that among pupils taught by recent graduates of FAMU, there is greater academic achievement among elementary school pupils taught by a teacher with a college major in elementary education than among elementary school pupils taught by a teacher with a college major in either secondary education or a non-education subject area. However, relative to secondary education and non-education majors, elementary education majors provide less value-added in middle school and high school. |
| Keywords: | teacher quality; value-added model; historically black colleges and universities; HBCU; teacher productivity; education and value-added |
| JEL: | J45 I2 J44 J15 J48 |
| Date: | 2010–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20060&r=ure |
| By: | Pamina Koenig; Florian Mayneris; Sandra Poncet |
| Abstract: | This paper investigates the presence of local export spillovers on both the extensive (the decision to start exporting) and the intensive (the export volume) margins of trade, using data on French individual export flows, at the product-level and by destination country, between 1998 and 2003. We investigate whether the individual decision to start exporting and exported volume are influenced by the presence of nearby product and/or destination specific exporters, using a gravity-type equation estimated at the firmlevel. Spillovers are considered at a fine geographical level corresponding to employment areas (348 in France). We control for the new economic geography-type selection of firms into agglomerated areas, and for the local price effects of firms agglomeration. Results show evidence of the presence of export spillovers on the export decision but not on the exported volume. We interpret this as a first evidence of export spillovers acting through the fixed rather than the variable cost. Spillovers on the decision to start exporting are stronger when specific, by product and destination, and are not significant when considered on all products-all destinations. Moreover, export spillovers exhibit a spatial decay within France: the effect of other exporting firms on the export decision is stronger within employment areas and declines with distance. |
| Keywords: | Firm-level export data; product and destination specific spillovers; agglomeration |
| JEL: | F1 R12 L25 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2009-18&r=ure |
| By: | Jan P.A.M. Jacobs (University of Groningen, CAMA and CIRANO); Jenny E. Ligthart (International Studies Program. Andrew Young School of Policy Studies, Georgia State University); Hendrik Vrijburg (Erasmus University Rotterdam) |
| Abstract: | We extend the three-step generalized methods of moments (GMM) approach of Kapoor, Kelejian, and Prucha (2007), which corrects for spatially correlated errors in static panel data models, by introducing a spatial lag and a one-period lag of the dependent variable as additional explanatory variables. Combining the extended Kapoor, Kelejian, and Prucha (2007) approach with the dynamic panel data model GMM estimators of Arellano and Bond (1991) and Blundell and Bond (1998) and supplementing the dynamic instruments by lagged and weighted exogenous variables as suggested by Kelejian and Robinson (1993) yields new spatial dynamic panel data estimators. The performance of these spatial dynamic panel data estimators is in- vestigated by means of Monte Carlo simulations. We show that dierences in bias as well as root mean squared error between spatial GMM estimates and corresponding GMM estimates in which spatial error correlation is ignored are small. |
| Keywords: | Dynamic panel models, spatial lag, spatial error, GMM estimation |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0915&r=ure |
| By: | Julien Martin |
| Abstract: | This paper presents a theoretical discussion and an empirical investigation of the impact of distance on the spatial pricing policy of exporting firms. The theoretical part points out the importance of transport costs formulation to determine how distance impacts fob prices. Assuming additive or iceberg transport costs might imply opposite predictions concerning this relationship. The empirical analysis is based on French export data providing us with bilateral export unit values at the firm and product level. The main empirical result is that French exporters set higher prices toward the more remote markets. This finding goes against the predictions of the main models of international trade (with or without quality) predicting either a nil or a negative impact of distance on prices at the firm level. It also questions the use of iceberg transport costs. A way to reconcile theory with the data is to introduce additive transport costs. |
| Keywords: | Spatial price discrimination; export prices; distance; firm level data |
| JEL: | F10 F14 L11 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2009-21&r=ure |
| By: | Emanuela Marrocu; Raffaele Paci |
| Abstract: | <p>It is well known that firms productivity is influenced by information spillovers generated either by other firms located nearby or by direct contacts with final demand or by foreign demand in the case of traded products. In this paper we investigate a new channel of efficiency - enhancing information spillovers: tourism flows. The idea is that tourists, in general, have preferences for high quality goods and differentiated products which are revealed when they buy local products in the tourism destinations, thus transmitting relevant information to the local firms. The latter, in turn, exploit this new information generating a positive impact on the efficiency level of the local economy. More specifically we examine the effects of tourist flows on regional total factor productivity, within a spatial dynamic model, controlling also for other intangible factors (such as human, social and technological capital) and for the degree of accessibility. We apply the analysis to 199 European regions belonging to the EU15 member countries, plus Switzerland and Norway. The econometric results show the positive impact of tourism flows on regional efficiency levels together with the positive role played by intangible assets, infrastructures and spatial spillovers.</p> |
| Keywords: | tourism, information; total factor productivity; European regions |
| JEL: | R10 O33 L83 D83 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200910&r=ure |
| By: | Fabio Cerina; F. Mureddu |
| Abstract: | We propose a New Economic Geography and Growth (NEGG) model able to reconcile theory with empirical evidence and current regional policy rules. By extending Baldwin et al. (2001) with an additional non-tradable services sector which benefits from localized intersectoral knowledge spillovers coming from the industrial sector, we show that aggregate growth and interregional equity do not necessarily conflict. In particular, we show that an equal distribution of industrial activities among regions is good for aggregate real growth when: 1) the importance of services in agents’ preferences 2) the spatial range of localized intertemporal knowledge spillovers and 3) the intensity of localized intersectoral knowledge are all large enough. Unlike other NEGG works, these results are consistent with the empirical evidence according to which the trade-off between aggregate growth and interregional equity loses relevance in more advanced stages of development. Moreover, our model provides a theoretical basis to EU and US regional policies which favour dispersion of industrial activities. Finally, an important by-product of our model is that we show that regional growth rates of real income always diverge when agglomeration takes place, being lower in the periphery. These results have strong policy implications as they suggest that concentrating industrial activities in only one region may be welfare – harming for both the less industrialized region and at the aggregate level. |
| Keywords: | Economic geography; efficiency-equity trade-off; intersectoral localized knowledge spillovers; non tradables; growth. |
| JEL: | O33 O41 R10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200913&r=ure |
| By: | Non, Marielle |
| Abstract: | I study the location choice of competing shops. A shop can either be isolated or join a mall. A fraction of consumers is uninformed about prices and incurs costs to travel between market places and to enter a shop. The equilibrium mall size is computed for several parameter values, showing that mall and isolated shops can coexist. Several effects play a role. Mall shops attract more consumers, but isolated shops set a higher maximum price. Moreover, numerical evaluations show that an increase in mall size decreases the average price level and increases the participation level of uninformed consumers. |
| Keywords: | location choice; travel costs; pricing; consumer search |
| JEL: | L11 L13 D83 |
| Date: | 2010–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20044&r=ure |
| By: | Albrecht, James (Georgetown University); Gautier, Pieter (VU University Amsterdam); Vroman, Susan (Georgetown University) |
| Abstract: | In this paper, we present a directed search model of the housing market. The pricing mechanism we analyze reflects the way houses are bought and sold in the United States. Our model is consistent with the observation that houses are sometimes sold above, sometimes below and sometimes at the asking price. We consider two versions of our model. In the first version, all sellers have the same reservation value. In the second version, there are two seller types, and type is private information. For both versions, we characterize the equilibrium of the game played by buyers and sellers, and we prove efficiency. Our model offers a new way to look at the housing market from a search-theoretic perspective. In addition, we contribute to the directed search literature by considering a model in which the asking price (i) entails only limited commitment and (ii) has the potential to signal seller type. |
| Keywords: | directed search, housing |
| JEL: | D83 R31 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4671&r=ure |
| By: | Ebner, André |
| Abstract: | Home equity is the most important part of a household portfolio, but only recently has it become more accessible through innovations in the mortgage market and financial deregulation. This study looks at the factors driving home equity withdrawal on a household level using Dutch survey data and assesses to which degree different theoretical predictions can be empirically supported. There is little evidence that equity withdrawal is used as a buffer against adverse income shocks, with financial motives and life-cycle effects likely to dominate a household’s decision. Finally, the study provides first evidence of the impact of changing supply side conditions on home equity withdrawal. |
| Keywords: | home equity withdrawal; Dutch housing market; consumption models |
| JEL: | D1 D9 E2 E4 G2 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11309&r=ure |
| By: | Cohen-Zada, Danny (Ben Gurion University); Gradstein, Mark (Ben Gurion University); Reuven, Ehud (Ben Gurion University) |
| Abstract: | Using a rich individual-level dataset on secondary public schools in Israel, we find strong evidence for discontinuities in the relationship between enrollment and household characteristics at cutoff points induced by a maximum class size rule. Our findings extend existing work that documents such discontinuities only among private schools (Urquiola and Verhoogen, 2009). These discontinuities violate the assumptions underlying the regression discontinuity design, which are crucial for identification. Consequently, IV estimates of class size effects are likely to be seriously biased. Potential manipulation of the treatment assignment rule by public schools warrants caution in applying a regression discontinuity design to estimate class size effects and indicates that institutional context is crucial for its scope of applicability. |
| Keywords: | regression discontinuity design, class size |
| JEL: | I20 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4679&r=ure |
| By: | Belot, Michèle; James, Jonathan |
| Abstract: | This paper provides field evidence on the effects of diet on educational outcomes, exploiting a campaign lead in the UK in 2004, which introduced drastic changes in the meals, offered in the schools of one Borough â Greenwich - shifting from low-budget processed meals towards healthier options. We evaluate the effect of the campaign on educational outcomes in primary schools using a difference in differences approach; comparing educational outcomes in primary schools (key stage 2 outcomes more specifically) before and after the reform, using the neighbouring Local Education Authorities as a control group. We find evidence that educational outcomes did improve significantly in English and Science. We also find that the campaign lead to a 15% fall in authorised absences â which are most likely linked to illness and health. |
| Keywords: | Child nutrition, Child health, School meals, Education, Natural Experiment, Placebo effect, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, J13, I18, I28, H51, H52, |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:56207&r=ure |
| By: | Tuck, Brigid; Linscheid, Neil; Dolan, Tim; Nelson, David |
| Keywords: | Community/Rural/Urban Development, |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ummeep:56404&r=ure |
| By: | Bruno De Borger (University of Antwerp); Wilfried Pauwels (University of Antwerp) |
| Abstract: | The purpose of this paper is to study toll and investment competition along a serial transport corridor competition allowing for partial cooperation between regional governments. Partial cooperation is modeled as a Nash bargaining problem with endogenous disagreement points. We show that the bargaining approach to partial cooperation implies lower tolls and higher quality and capacity investment than fully non-cooperative behavior. Moreover, under bargaining, strategic behavior at the investment stage induces regions to offer lower quality and invest less in capacity as compared to full cooperation. Finally, Nash bargaining partially resolves the problem of welfare losses due to toll and capacity competition pointed out in the recent literature. |
| Keywords: | Nash bargaining, tax competition, congestion pricing |
| JEL: | H71 H77 R48 R42 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/1/doc2010-1&r=ure |
| By: | Gu, Yiquan; Wenzel, Tobias |
| Abstract: | This paper explores the implications of price-dependent demand in spatial models of product differentiation. We introduce consumers with a quasi-linear utility function in the framework of the Salop (1979) model. We show that the so-called excess entry theorem relies critically on the assumption of completely inelastic demand. Our model is able to produce excessive, insufficient, or optimal product variety. A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided. -- |
| Keywords: | Demand elasticity,Spatial models,Excess entry theorem |
| JEL: | L11 L13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:032009&r=ure |
| By: | Robert S. Chirinko (University of Illinois at Chicago); Daniel J. Wilson (Federal Reserve Bank of San Francisco) |
| Abstract: | The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent. We depart from this assumption by allowing policymakers to be influenced by the rent-seeking behavior of businesses. 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, we find that contributions have a significant direct effect on tax policy, the economic value of a $1 business campaign contribution is nearly $4, the slope of the tax reaction function is negative, and the empirical results are sensitive to state effects. |
| Keywords: | Campaign contributions, business taxation, state tax competition |
| JEL: | H71 H73 H25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/1/doc2010-2&r=ure |
| By: | Luisa Lambertini (Chair of International Finance, Ecole Polytechnique Federale de Lausanne (EPFL), Switzerland); Caterina Mendicino; Maria Teresa Punzi |
| Abstract: | This paper analyzes housing market boom-bust cycles driven by changes in households' expectations. We introduce expectations-driven fluctuations into the housing-market model developed by Iacoviello and Neri (2009). We find that changes in expectations about the future state of productivity, investment cost, housing supply, inflation, the policy rate and the central bank's inflation target can generate macroeconomic boom-bust cycles in accordance with the data. Contrary to previous literature, we show that a strong anti-inflationary stance is detrimental both in terms of macroeconomic volatility and welfare. We also document that economies subject to a lower degree of credit friction experience higher volatility in both consumption household indebtedness. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:cif:wpaper:201001&r=ure |
| By: | Christa D. Jensen (Regional Research Institute, Department of Economics, West Virginia University); Stuart McIntyre (Department of Economics, University of Strathclyde); Max Munday (Welsh Economy Research Unit, Member of ESRC Centre for Business Relationships, Accountability, Sustainability and Society (BRASS), Cardiff University); Karen Turner (Department of Economics, University of Strathclyde) |
| Abstract: | The paper uses a regional input-output (IO) framework and data derived on waste generation by industry to examine regional accountability for waste generation. In addition to estimating a series of industry output-waste coefficients, the paper considers two methods for waste attribution but focuses first on one (trade endogenised linear attribution system (TELAS)) that permits a greater focus on private and public final consumption as the main exogenous driver of waste generation. Second, the paper uses a domestic technology assumption (DTA) to consider a regional ‘waste footprint’ where local consumption requirements are assumed to be met through domestic production. |
| Keywords: | waste attribution; regional economy; input-output analysis; Wales |
| JEL: | C67 Q01 Q53 R15 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:0924&r=ure |
| By: | Yuksel, Mutlu (IZA) |
| Abstract: | In this paper, I analyze intergenerational mobility of immigrants and natives in Germany. Using the German Socioeconomic Panel (GSOEP), I find intergenerational elasticities that range from 0.19 to 0.26 for natives and from 0.37 to 0.40 for immigrants. These elasticity estimates are lower than typically found for the U.S. and imply higher mobility in Germany than in the U.S. However, as in the U.S., I find greater mobility among German natives than among immigrants. Moreover, I investigate to what extent the lower mobility among immigrants in Germany is due to “ethnic capital” as suggested by Borjas (1992). I find that the impact of father’s earnings on son’s earnings remains virtually unchanged when including a measure of ethnic capital, suggesting that the higher father-son correlation found among immigrants is not due to omitting ethnic capital. However, I do find a large independent effect of ethnic capital on sons’ earnings (the coefficient is 0.81 as opposed to 0.25 found by Borjas (1992)). These results are consistent with estimates from Microcensus data, where the combined effect of parents’ and ethnic capital is close to unity. Thus, contrary to the U.S. results which suggest convergence of immigrants’ earnings towards natives’ earnings, the German results suggest divergence of immigrant earnings. |
| Keywords: | immigration, intergenerational mobility, natives, ethnic capital |
| JEL: | J61 J62 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4677&r=ure |
| By: | Jorge Martinez-Vazquez (International Studies Program. Andrew Young School of Policy Studies, Georgia State University); Andrey Timofeev (International Studies Program. Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | This paper analyzes the effect of urbanization on the poverty level. Our theoretical model suggests a U-shape relationship between the level of urbanization and poverty. Urbanization contributes to poverty reduction but at much higher levels, urbanization leads to increases in poverty. Empirically, we estimate the “optimal level” of urbanization by using: (i) an instrumental variable approach in the framework of the generalized method of moments and (ii) a dynamic panel analysis approach. We also investigate the robustness of the impact of urbanization on the poverty level by examining a variety of linkages. The empirical analysis covers different regions of the world to study whether the magnitude of the urbanization effects varies across regions. Our results support the hypothesis that there exists a U-shape relationship between the level of urbanization and the poverty level. |
| Keywords: | urbanization, public infrastructure, poverty reduction, pro-poor growth |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0914&r=ure |
| By: | Gabriel J. Felbermayr; Benjamin Jung; Farid Toubal |
| Abstract: | Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias. Moreover, it is partly related to a preference effect rather than to enforcement and/or the availability of information. Applying a theory-based gravity model to ethnicity data for 1980 and 1990, and focusing on pure network effects, we find that the Chinese network leads to a more modest amount of trade creation of about 15%. Using new data on bilateral stocks of migrants from the World Bank for the year of 2000, we extend the analysis to all potential ethnic networks. We find, i.a., evidence for a Polish, a Turkish, a Mexican, or a Pakistani network. While confirming the existence of a Chinese network, its trade creating potential is dwarfed by other ethnic networks. The large heterogeneity in the trade-creating potential of different networks is, among other things, explained by the share of high-skilled immigrants, the degree of ethnic fragmentation, and GDP per capita. |
| Keywords: | Gravity model; international trade; network effects; international migration |
| JEL: | F12 F22 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2009-30&r=ure |
| By: | Szarowska, Irena |
| Abstract: | Enlargement of the European Union and the globalization process significantly affect tax systems and fiscal policies of individual countries. The level and structure of tax burden is often discussed in the European Union, as well as what is more profitable – keeping tax competition or tax harmonization. Tax environment and tax burden are significant factors when deciding about investment allocation. For international comparison, the easiest way is to use statutory tax rates but the result may be rather inaccurate. More convenient way of comparison is comparing implicit rates where we may express impact of taxes on economic activities according to their functions. The paper first summarizes basic theoretic approaches to tax competition. Then it is followed by an analysis of level and structure of tax burden in the European Union in the period of 1995 to 2006. There is emphasis on the dissimilarity of results depending on the type of tax rates used, namely statutory and implicit. The aim is to verify the hypothesis that value of tax burden (measured by tax quota) falls in time and that indirect taxes outweigh direct taxes in the tax burden of the European Union. |
| Keywords: | tax competition; tax burden; tax quota; implicit tax rate |
| JEL: | E62 F2 H2 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19934&r=ure |
| By: | Ken-Ichi Shimomura; Jacques-François Thisse (CREA, University of Luxembourg) |
| Abstract: | Armchair evidence shows that many industries are made of a few big commercial or manufacturing firms, which are able to affect the market outcome, and of a myriad of small family-run businesses with very few employees, each of which has a negligible impact on the market. Examples can be found in apparel, catering, publishers and bookstores, retailing, finance and insurances, and IT industries. We provide a new general equilibrium framework that encapsulates both market structures. Due to the higher toughness of the market, the entry of big firms leads them to sell more through a market expansion eect, which is generated by the exit of small firms. Furthermore, the level of social welfare increases with the number of oligopolistic firms because the procompetitive effect associated with the entry of a big rm dominates the resulting decrease in product variety. |
| JEL: | L13 L40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:09-18&r=ure |