nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒03‒28
forty papers chosen by
Steve Ross
University of Connecticut

  1. On spatial equilibria in a social interaction model By MOSSAY, Pascal; PICARD, Pierre M.
  2. Wage Premia in Employment Clusters: Agglomeration or Worker Heterogeneity? By Shihe Fu; Stephen L. Ross
  3. Planning for Human Settlements in India-Spatial Perspective By V.K. Dhar
  4. Housing Policies in China: Issues and Options By Zenou, Yves
  5. Agglomeration and regional employment growth By Dauth, Wolfgang
  6. Urban concentration and economic growth: checking for specific regional effects By Pholo Bala, Alain
  7. The Effect of Class Size on Teacher Attrition: Evidence from Class Size Reduction Policies in New York State By Emily Pas Isenberg
  8. Parental decisions in a choice based school system: Analyzing the transition between primary and secondary school By Mattia Makovec; Alejandra Mizala; Andrés Barrera
  9. Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants? By Rikard Eriksson
  10. Privatisation of Urban Transport in Delhi By Shailly Arora
  11. Urban Growth Drivers and Spatial Inequalities: Europe - a Case with Geographically Sticky People. By Paul C. Cheshire; Stefano Magrini
  12. Residential equilibrium in a multifractal metropolitan aera By CAVAILHES, Jean; FRANKHAUSER, Pierre; PEETERS, Dominique; THOMAS, Isabelle
  13. Cycle commuting in Belgium: Spatial determinants and Ôre-cyclingÕ strategies By VANDENBULCKE, GrŽgory; DUJARDIN, Claire; THOMAS, Isabelle; DE GEUS, Bas
  14. Neighbourhood effects and endogeneity issues By DUJARDIN, Claire; PEETERS, Dominique; THOMAS, Isabelle
  15. On tax competition, public goods provision and jurisdictionsÕ size By PIERETTI, Patrice; ZANAJ, Skerdilajda
  16. Gates, hubs and urban primacy in Sub-Saharan Africa By Pholo Bala, Alain
  17. Pre-School Education and School Performance The Case of Public Schools in Montevideo By Aguilar, Renato; Tansini, Ruben
  18. Ethnic Concentration and Language Fluency of Immigrants in Germany By Alexander M. Danzer; Firat Yaman
  19. Neighborhood effects on unemployment ? A test ˆ la Altonji By DUJARDIN, Claire; GOFFETTE-NAGOT, Florence
  20. Motivated Sellers in the Housing Market By Selcuk, Cemil
  21. A theory on the co-evolution of seaports with application to container terminal development in the Rhine-Scheldt Delta By Wouter Jacobs; Theo Notteboom
  22. Asset Booms and Structural Fiscal Positions: The Case of Ireland By Daniel Kanda
  23. Exchange of indivisible goods and indifferences: the Top Trading Absorbing Sets mechanisms By ALCALDE-UNZU, Jorge; MOLIS, Elena
  24. The Ugly and the Bad: Banking and Housing Crises Strangle Output Permanently, Ordinary Recessions Do Not By Jens Hogrefe; Nils Jannsen; Carsten-Patrick Meier
  25. An In-Sample and Out-of-Sample Empirical Investigation of the Nonlinearity in House Prices of South Africa By Mehmet Balcilar; Rangan Gupta; Zahra Shah
  26. Social Mobility: Is There an Advantage in Being English in Scotland? By van Ham, Maarten; Findlay, Allan; Manley, David; Feijten, Peteke
  27. The school reentry decision on poor girls: structural estimation and policy analysis using PROGRESA database By María Nieves Valdés
  28. R&D Productivity and the Organization of Cluster Policy: An Empirical Evaluation of the Industrial Cluster Project in Japan By Junichi Nishimura; Hiroyuki Okamuro
  29. Trapped by Over-Embeddedness: The Effects of Regional Social Capital on Internationalization By Francesca Masciarelli; Keld Laursen; Andrea Prencipe
  30. How Much Do We Know about the Impact of the Economic Downturn on the Employment of Migrants? By Dandan Zhang
  31. The Impact of the Commonwealth Games 2010 on Urban Development of Delhi -An Analysis with a Historical Perspective from Worldwide Experiences and the 1982 Asian Games By Vinayak Uppal; Debjani Ghosh
  32. School accountability : (how) can we reward schools and avoid cream-skimming By OOGHE, Erwin; SCHOKKAERT, Erik
  33. Fiscal Decentralization and Economic Growth in Central and Eastern Europe. By Andrés Rodríguez-Pose; Anne Krøijer
  34. The impact of regional factors on leaving home in Spain: A multilevel approach By Agnese Vitali
  35. Fiscal federalism and electoral accountability By Toke S. Aidt; Jayasri Dutta
  36. How emergence conditions of technological clusters affect their viability? Theoretical perspectives on cluster lifecycles By Joan Crespo
  37. Can Information Asymmetry Cause Stratification? By Berliant, Marcus; Kung, Fan-chin
  38. On Geographic Inequality in Japanese Regional Health Insurance By Kumagai, Narimasa
  39. Labor Migration and Social Networks Participation: Evidence from Southern Mozambique By Juan M. Gallegoy; Mariapia Mendola
  40. Policy note on pre-primary schooling: An empirical contribution to the 2009 Medium Term Strategic Framework By Martin Gustafsson

  1. By: MOSSAY, Pascal (School of Economics, Henley Business School, University of Reading, U.K.); PICARD, Pierre M. (SoSS, University of Manchester, U.K. and UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Abstract: Social interactions are at the essence of societies and explain the gathering of individuals in villages, agglomerations, or cities. We study the emergence of multiple agglomerations as resulting from the interplay between spatial interaction externalities and competition in the land market. We show that the geographical nature of the residential space tremendously affects the properties of spatial equilibria. In particular, when agents locate on an open land strip (line segment), a single city emerges in equilibrium. In contrast, when the spatial economy extends along a closed land strip (circumference), multiple equilibria with odd numbers of cities arise. Spatial equilibrium configurations involve a high degree of spatial symmetry in terms of city size and location, and can be Pareto-ranked.
    Keywords: social interaction, multiple agglomerations, spatial economy
    Date: 2009–10–01
  2. By: Shihe Fu; Stephen L. Ross
    Abstract: This paper tests whether the correlation between wages and the spatial concentration of employment can be explained by unobserved worker productivity differences. Residential location is used as a proxy for a worker’s unobserved productivity, and average workplace commute time is used to test whether location based productivity differences are compensated away by longer commutes. Analyses using confidential data from the 2000 Decennial Census Long Form find that the agglomeration estimates are robust to comparisons within residential location and that the estimates do not persist after controlling for commutes suggesting that the productivity differences across locations are due to agglomeration, rather than productivity differences across individuals.
    Keywords: Agglomeration, Wages, Sorting, Locational Equilibrium, Human Capital Externalities
    JEL: R13 R30 J24 J31
    Date: 2010–02
  3. By: V.K. Dhar
    Abstract: This paper examines the basis upon which rural and urban areas are classified as such. It looks into various criteria for the above all over the world and re-iterates the Indian definition of an ‘urban’ area. It then examines the role of cities and urban areas as engines of growth and specifies the need for developing rural-urban linkages and planning in a spatial perspective. [Working Paper No. 06-10].
    Keywords: rural, urban areas, cities, city, Indian, growth, Human Settlements, SEZs, municipal local areas, villages, population
    Date: 2010
  4. By: Zenou, Yves (Research Institute of Industrial Economics (IFN))
    Abstract: This article consists in three parts. The first part deals with theory. We evaluate the pros and cons of government involvement in urban housing and of renting versus ownership. In the second part, we summarize the different housing policies that have been implemented in the United States, Europe, and Asia. We draw some conclusions. In particular, we show that there is a tradeoff between encouraging home ownership and social housing since countries that have favor the former have neglected the latter (like Japan, Spain, etc.). In the third part, we use the theory and the international policy parts to address housing policy issues in China. One of the main concerns in Chinese cities is the raise of poverty mainly by “illegal” migrants (who are Chinese rural residents) living in “urban villages”. We propose two steps to fight against poverty in Chinese cities. The first one is to require that the Chinese government recognizes these “illegal” migrants by helping them becoming “legal”. The second step is to encourage social housing that directly or indirectly subsidizes housing for the poor. In that case, to fight against poverty, one can either implement place-targeted policies (like the enterprise zone programs in the US and Europe and/or housing projects in the US, UK, or France) or people-targeted policies (like the MTO programs in the US). We also discuss other issues related to poverty. In particular, we suggest that the government could also try to keep migrants in rural areas by attracting firms there and/or introduce a microfinance system that helps them become entrepreneur.
    Keywords: Urban villages; Social housing; Poverty; Place-targeted policies; People-targeted policies; China
    JEL: H50 O53
    Date: 2010–03–01
  5. By: Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The advent of the New Economic Geography has spawned a renewed interest in questions of agglomeration. The work expands the research on the impact of agglomeration economies on employment growth by connecting two strands of the empirical literature. A localization index and a cluster index are calculated in order to measure the prevalence of agglomeration. Using these indices, industries and locations that exhibit geographical concentration are identified. The main part of the paper is an econometric analysis. In a dynamic panel data model, the two indices are explicitly used to measure additional dynamic employment growth in agglomerated plants. The study uses panel data that covers all western German employment subject to social security from 1989 to 2006 in 326 districts. I analyze which regional characteristics favor the growth of employment in 191 industries of the manufacturing and service sectors. There is evidence that industrial agglomerations exhibit stronger dynamic growth than other industry/region cells." (author's abstract, IAB-Doku) ((en))
    Keywords: regionaler Arbeitsmarkt, regionale Disparität, Ballungsraum, Beschäftigungsentwicklung, verarbeitendes Gewerbe, Dienstleistungsbereich, Clusteranalyse, Westdeutschland, Bundesrepublik Deutschland
    JEL: O47 R11 R12
    Date: 2010–02–16
  6. By: Pholo Bala, Alain (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: urban primacy, economic growth, missing data, imputation, semiparametric estimation
    JEL: C14 C30 C49 R15
    Date: 2009–05–01
  7. By: Emily Pas Isenberg
    Abstract: Starting in 1999, New York State implemented class size reduction policies targeted at early elementary grades, but due to funding limitations, most schools reduced class size in some grades and not others. I use class size variation within a school induced by the policies to construct instrumental variable estimates of the effect of class size on teacher attrition. Teachers with smaller classes were not significantly less likely to leave schools in the full sample of districts but were less likely to leave a school in districts that targeted the same grade across schools. District-wide class size reduction policies were more likely to persist in the same grade in the next year, suggesting that teacher expectations of continued smaller classes played a role in their decision whether or not to leave a school. A decrease in class size from 23 to 20 students (a decrease of one standard deviation) under a district-wide policy decreases the probability that a teacher leaves a school by 4.2 percentage points.
    Keywords: class size, teachers, teacher attrition
    JEL: I29 J45 J62
    Date: 2010–02
  8. By: Mattia Makovec; Alejandra Mizala; Andrés Barrera
    Abstract: We study parental choice focusing on the transition between primary and secondary school, taking advantage of the fact that most Chilean students have to switch school at the end of the 8th grade, the last year of primary school. Using a recursive probit model we estimate jointly the probability of attending private voucher versus public school, taking explicitly into account the endogeneity of the school choice at primary level. We find that parents caring more about school academic performance are more likely to have their children enrolled in public schools at the secondary school level, while parents taking into account peers’ socioeconomic background and school values are more likely to select voucher schools. We also show that while private voucher schools “cream skim” the best students from the socioeconomic standpoint, this does not necessarily hold for high ability students. JEL classification: I2. Key words: parental choice, primary-secondary school transition, cream skimming, Chile.
    Date: 2010
  9. By: Rikard Eriksson
    Abstract: By means of a unique longitudinal database with information on all plants and employees in the Swedish economy, this paper analyzes how geographical proximity influences the impact of spillovers and knowledge flows on the productivity growth of plants. Concerning the effects of spillovers, we show that the density of economic activities as such mainly contributes to plant performance within a very short distance and that the composition of economic activities is more influential further away. Regarding the influence of local industrial setup, proximity increases the need to be located near different, but related, industries whereas increased distance implies a greater effect of intra-industry spillovers. The analyses also demonstrate that knowledge flows via the mobility of skilled labor is primarily a sub-regional phenomenon. Only inflows of skills that are related to the existing knowledge base of plants and come from less than 50 kilometers away have a positive effect on plant performance. Concerning outflows of skills, the results indicate that it is less harmful for a dispatching plant if a former employee remains within the local economy as compared to leaving for a job in another part of the national economy.
    Keywords: agglomeration economies, knowledge spillovers, labor mobility, plant performance, geographical proximity, related variety
    JEL: R11 Q12 O18
    Date: 2010–03
  10. By: Shailly Arora
    Abstract: This paper seeks to analyse the present situation of the bus transport system in Delhi and addresses the question of how privatising bus transport system in Delhi would make the present scenario of Delhi roads much better. [CCS WP No. No. 0036].
    Keywords: urban transport system, delhi, bus, privatising, roads, India, private, city bus, contract, CNG, Civil Engineering, carriage
    Date: 2010
  11. By: Paul C. Cheshire; Stefano Magrini
    Abstract: Analysts of regional growth differences in the US tend to assume full spatial equilibrium (Glaeser et al, 1995). Flows of people thus indicate changes in the distribution of spatial welfare more effectively than differences in incomes. Research in Europe, however, shows that people tend to be immobile. Even mobility within countries is restricted compared to the US but national boundaries offer particular barriers to spatial adjustment. Thus it is less reasonable to assume full spatial equilibrium in a European context and differences in per capita incomes may persist and signal real spatial welfare differences. Furthermore, it implies that the drivers of what population movement there is, may differ from the drivers of spatial differences in productivity or output growth. This paper analyses the drivers of differential urban growth in the EU both in terms of population and output growth. The results show significant differences in the drivers as well as common ones. They also reveal the extent to which national borders still impede spatial adjustment in Europe. This has important implications for policy and may apply more generally to countries – for example China - less homogeneous than the USA.
    Date: 2010–01
  12. By: CAVAILHES, Jean (NRA, UMR 1041, CESAER, Dijon, France); FRANKHAUSER, Pierre (CNRS, ThŽMA, UniversitŽ de Franche-ComtŽ, Besanon, France); PEETERS, Dominique (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE) and Department of Geography); THOMAS, Isabelle (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE) and Department of Geography)
    Keywords: peri-urban, residential localisation, fractal geometry, amenities
    JEL: R12 R21
    Date: 2009–07–01
  13. By: VANDENBULCKE, GrŽgory (UniversitŽ catholique de Louvain, CORE and Department of Geography, B-1348 Louvain-la-Neuve, Belgium); DUJARDIN, Claire (UniversitŽ catholique de Louvain, CORE and FRS-FNRS, B-1348 Louvain-la-Neuve, Belgium); THOMAS, Isabelle (UniversitŽ catholique de Louvain, CORE and FRS-FNRS, B-1348 Louvain-la-Neuve, Belgium); DE GEUS, Bas (Department of Human Psychology and Sports Medicine, Vrije Universiteit Brussel, B-1050 Brussels, Belgium)
    Abstract: This paper attempts to explain the spatial variation of the use of a bicycle for commuting to work at the level of the 589 municipalities in Belgium. Regression techniques were used and special attention was paid to autocorrelation, heterogeneity and multicollinearity. Spatial lag models were used to correct for the presence of spatial dependence and a disaggregated modelling strategy was adopted for the northern and southern parts of the country. The results show that much of the inter-municipality variation in bicycle use is related to environmental aspects such as the relief, traffic volumes and cycling accidents. Town size, distance travelled and demographic aspects also have some effect. In addition, there are regional differences in the effects of the structural covariates on bicycle use: the impact of variables such as traffic volume and cycling accidents differs substantially between the north and the south of the country. This paper also suggests that high rates of bicycle use in one municipality stimulate cycling in neighbouring municipalities, and hence that a mass effect can be initiated, i.e. more cycle commuting encourages even more commuters in the area to cycle. These findings provide some recommendations for decision-makers wishing to promote a shift from car to bicycle use
    Keywords: cycling, commuting, spatial lag model, spatial regime, pro-cycling strategies
    Date: 2009–11–01
  14. By: DUJARDIN, Claire (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)); PEETERS, Dominique (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)); THOMAS, Isabelle (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Abstract: A recent body of research suggests that the spatial structure of cities might influence the socioeconomic characteristics and outcomes of their residents. In particular, the literature on neighbourhood effects emphasizes the potential influence of the socioeconomic composition of neighbourhoods in shaping individualÕs behaviours and outcomes, through social networks, peer influences or socialization effects. However, empirical work still has not reached a consensus regarding the existence and magnitude of such effects. This is mainly because the study of neighbourhood effects raises important methodological concerns that have not often been taken into account. Notably, as individuals with similar socio-economic characteristics tend to sort themselves into certain parts of the city, the estimation of neighbourhood effects raises the issue of location choice endogeneity. Indeed, it is difficult to distinguish between neighbourhood effects and correlated effects, i.e. similarities in behaviours and outcomes arising from individuals having similar characteristics. This problem, if not dequately corrected for, may yield biased results. In the first part of this paper, neighbourhood effects are defined and some methodological problems involved in measuring such effects are identified. Particular attention is paid to the endogeneity issue, giving a formal definition of the problem and reviewing the main methods that have been used in the literature to try to solve it. The second part is devoted to an empirical illustration of the study of neighbourhood effects, in the case of labour-market outcomes of young adults in Brussels. The effect of living in a deprived neighbourhood on the unemployment probability of young adults residing in Brussels is estimated using logistic regressions. The endogeneity of neighbourhood is addressed by restricting the sample to young adults residing with their parents. Then, a ensitivity analysis is used to assess the robustness of the results to the presence of both observed and unobserved parental covariates.
    Keywords: neighbourhood effects, endogeneity, self-selection, sensitivity analysis, Brussels
    JEL: R0 J6 C1
    Date: 2009–09–01
  15. By: PIERETTI, Patrice; ZANAJ, Skerdilajda (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: tax competition, public goods competition, spatial competition, foreign direct investments, country size
    JEL: H25 H73 F13 F15 F22
    Date: 2009–03–01
  16. By: Pholo Bala, Alain (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: economic geography, urban primacy, hub, developing countries
    JEL: D58 F12 F15 R12
    Date: 2009–05–01
  17. By: Aguilar, Renato (Department of Economics, School of Business, Economics and Law, Göteborg University); Tansini, Ruben (Department of Economics Faculty of Social Sciences University of Uruguay)
    Abstract: In this paper we try to explain the academic performance of a sample of children starting their first year at public schools in 1999 in Montevideo, Uruguay. We are mainly interested in the effect of pre-school education on the children’s academic results. We found fairly strong empirical evidence to suggest that having pre-school education has a short term positive effect on these children’s results in the first year at school, and the long-term effect, after six years, seems to be somewhat weaker but is still positive. We also estimated several other factors connected with schools and with households that might lie behind children’s short-term and long-term performance. It is important to note that the results for boys are clearly differentiated from those for girls.<p>
    Keywords: pre-school education; school performance; Uruguay
    JEL: I21
    Date: 2010–03–17
  18. By: Alexander M. Danzer; Firat Yaman
    Abstract: Studies that investigate the effect of the regional ethnic composition on immigrant outcomes have been complicated by the self-selection of ethnic minorities into specific neighbourhoods. We analyse the impact of own-ethnic concentration on the language proficiency of immigrants by exploiting the fact that the initial placement of guest-workers after WWII was determined by labour demanding firms and the federal labour administration and hence exogenous to immigrant workers. Combining several data sets, we find a small but robust and significant negative effect of ethnic concentration on immigrants’ language ability. Simulation results of a choice model in which location and learning decisions are taken simultaneously confirm the presence of the effect. Immigrants with high learning costs are inclined to move to ethnic enclaves, so that the share of German-speakers would increase only modestly even under the counterfactual scenario of a regionally equal distribution of immigrants across Germany.
    Keywords: enclave, ethnic concentration, language proficiency, immigrants, Instrumental variable, random utility model
    JEL: J61 R23 F22
    Date: 2010
  19. By: DUJARDIN, Claire (UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium); GOFFETTE-NAGOT, Florence (UniversitŽ de Lyon, F-69003 Lyon, France; CNRS, GATE, UMR 5824, Ecully, F-69130, France)
    Abstract: The aim of this paper is to test for the influence of neighborhood deprivation on individual unemployment probability in the case of Lyon (France). We estimate a bivariate probit model of unemployment and location in a deprived neighborhood. Our identification strategy is twofold. First, we instrument neighborhood type by the gender composition of householdÕs children and the spouseÕs workplace. Second, we use the methodology proposed by Altonji et al. (2005), that in our case consists in making hypotheses as to the correlation between the unobservables that determine unemployment and the unobservables that influence the selection into neighborhood types. Our results show that the effect of neighborhood deprivation is not significantly different from zero in the bivariate probit with exclusion restrictions. We also show that a correlation of the unobservables as low as ten percent of the correlation of observables is sufficient to explain the positive neighborhood effect that is observed when endogeneity is not accounted for.
    Keywords: neighborhood effects, unemployment, simultaneous probit models, instrumental variables, selection on unobservables
    JEL: R2 I32
    Date: 2009–12–01
  20. By: Selcuk, Cemil (Cardiff Business School)
    Abstract: We present a search-and-matching model of the housing market where potential buyers' willingness to pay is private information and sellers may become desperate as they are unable to sell. A unique steady state equilibrium exists where desperate sellers offer sizeable price cuts and sell faster. If the number of distressed sales rises then even relaxed sellers are forced to lower their prices. Buyers, on the other hand, become more selective and search longer for better deals. The model yields a theoretical density function of the time-to-sale, which is positively skewed and may be hump-shaped. These results are consistent with recent empirical findings.
    Keywords: housing; private information; random search; motivated sellers
    JEL: D39 D49 D83
    Date: 2010–03
  21. By: Wouter Jacobs; Theo Notteboom
    Abstract: How do seaports evolve in relation to each other? Recent studies in port economics and transport geography focused on how supply chain integration has structurally changed the competitive landscape in which individual ports and port actors operate. Port regionalization has been addressed as the corresponding new phase in the spatial and functional evolution of port systems. However, these studies lack theoretical foundations that allow us to empirically assess both the role of the institutional context and of strategic agency in the competitive (spatial and functional) evolution of regional (integrated) port systems. The paper presents a theoretical framework to analyze and understand the co- evolution of seaports in a regional context by making use of the concept of windows of opportunity. The empirical part will unravel the role of seaport-based co-evolution in the processes aimed at positioning market players and ports on the container scene in the Rhine-Scheldt Delta.
    Keywords: co-evolution, seaports, regionalization, institutions, economic geography
    JEL: O18 O30 R11 R40
    Date: 2010–02
  22. By: Daniel Kanda
    Abstract: Asset booms and sectoral changes can distort traditional estimates of structural fiscal revenue, and could lead to serious fiscal policy errors. This paper extends the estimation of structural revenues to take account of asset prices and sectoral changes, and applies this to the case of Ireland, where a property bust has revealed a large hole in the public finances. It is shown that excluding these factors led to a substantial bias in the estimation of structural revenues, and the structural balance prior to the crisis was much larger than earlier estimated.
    Keywords: Asset prices , Business cycles , Economic growth , Economic models , Fiscal analysis , Fiscal policy , Government expenditures , Housing prices , Ireland , National income , Revenues , Taxes ,
    Date: 2010–03–09
  23. By: ALCALDE-UNZU, Jorge (Department of Applied Economics IV (Mathematics), UPV-EHU. Bilbao, Spain); MOLIS, Elena (FacultŽs Universitaires Saint-Louis, CEREC, Bruxelles ; UniversitŽ Catholique de Louvain, CORE, Louvain-la-Neuve)
    Abstract: There is a wide range of economic problems involving the exchange of indivisible goods without monetary transfers, starting from the housing market model of the seminal paper of Shapley and Scarf [10] and including other problems like the kidney exchange or the school choice problems. For many of these models, the classical solution is the application of an algorithm/mechanism called Top Trading Cycles, attributed to David Gale, which satisÞes good properties for the case of strict preferences. In this paper, we propose a family of mechanisms, called Top Trading Absorbing Sets mechanisms, that generalizes the Top Trading Cycles for the general case in which individuals can report indifferences, and preserves all its desirable properties.
    Keywords: housing market, indifferences, top trading cycles, absorbing sets
    JEL: C71 C78 D71 D78
    Date: 2009–10–01
  24. By: Jens Hogrefe; Nils Jannsen; Carsten-Patrick Meier
    Abstract: This paper provides statistical evidence suggesting that in industrial countries, recessions that are associated with either banking crises or housing crises dampen output far more than ordinary recessions. Using a parametric panel framework that allows for a bounceback of the level of output in the course of the cyclical recovery, we find that ordinary recessions are followed by strong recoveries that make up for almost all the preceding shortfall in output. This bounceback tends to be significantly smaller following recessions associated with banking crises or housing crises. Our paper corroborates the practice of focusing exclusively on severe crises used in an emerging macroeconomic literature and integrates it with the earlier literature on recessions and recoveries
    Keywords: business cycle, banking crisis, housing crisis, panel data, asymmetry, persistence
    JEL: E32 C33
    Date: 2010–01
  25. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, North Cyprus,via Mersin 10, Turkey); Rangan Gupta (Department of Economics, University of Pretoria); Zahra Shah (Department of Economics, University of Pretoria)
    Abstract: This paper first tests if housing prices in the five segments of the South African housing market, namely, large-middle, medium-middle, small-middle, luxury and affordable, exhibits non-linearity based on smooth transition autoregressive (STAR) models estimated using quarterly data covering the period of 1970:Q2 to 2009:Q3. We find overwhelming evidence of non-linearity in these five segments based on in-sample evaluation of the linear and non-linear models. We then provide further support for non-linearity by comparing one- to four-quarters-ahead out-of-sample forecasts of the non-linear time series model with those of the classical and Bayesian versions of the linear autoregressive (AR) models for each of these segments, over an out-of-sample horizon of 2001:Q1 to 2009:Q3, using an in-sample period from 1970:Q2 to 2000:Q4. Our results indicate that barring the one-, two and four-step(s)-ahead forecasts of the small-middle-segment the non-linear model always outperforms the linear models.
    Keywords: Bayesian autoregressive models, Housing market, smooth transition autoregressive models, Forecast accuracy
    JEL: C12 C13 C22 C52 C53 R31
    Date: 2010–03
  26. By: van Ham, Maarten (University of St. Andrews); Findlay, Allan (University of Dundee); Manley, David (University of St. Andrews); Feijten, Peteke (University of St. Andrews)
    Abstract: This paper seeks to unpick the complex effects of migration, country of birth, and place of residence in Scotland on individual success in the labour market. We pay specific attention to the labour force experience of English-born residents in Scotland, whom the cross sectional literature suggests are more likely to achieve high occupational status than the Scottish born residents. Using data from the Scottish Longitudinal Study – linking individual records from the 1991 and 2001 Censuses – and logistic regressions we show that those living in, or moving to Edinburgh, and those born in England and Wales are the most likely to experience upward occupational mobility.
    Keywords: escalator region, social class, social mobility, longitudinal data, Scotland
    JEL: J24 J61 J62 R23
    Date: 2010–03
  27. By: María Nieves Valdés
    Abstract: In this paper I present a dynamic structural model of girls' schooling choices and estimate it using the Mexican PROGRESA database. This structural approach allows evaluating the efectiveness of several policies to increase school reentry rates for girls in low-income households. To increase school attendance among poor children in developing countries, policy makers have implemented conditional cash transfers programs. Although transfers have been successful in keeping girls at school, they do not increase school attendance among girls who have dropped out of school. Cash transfer programs may fail because most of these poor girls leave school to stay at home helping in housework, rather than working for a salary. Results suggest that effective policies to increase school reentry rates for poor girls are free access to community nurseries and kindergartens, and increasingg the availability of secondary schools.
    Keywords: Policy evaluation, Dynamic discrete choice structural models, School choices for girls, School reentry, PROGRESA
    JEL: I21 I28 J16 O15
    Date: 2009–10
  28. By: Junichi Nishimura; Hiroyuki Okamuro
    Abstract: Industrial clusters have attracted increasing attention as important locations of innovation. Therefore, several countries have started promotion policies for industrial clusters. However, there are few empirical studies on cluster policies. This paper examines the effects of the “Industrial Cluster Project” (ICP) in Japan on the R&D productivity of participants, using a unique dataset of 229 small firms, and discusses the conditions necessary for the effective organization of cluster policies. Different from former policy approaches, the ICP aims at building collaborative networks between universities and industries and supports the autonomous development of existing regional industries without direct intervention in the clustering process. Thus far, the ICP is similar to indirect support systems adopted by successful European clusters. Our estimation results suggest that participation in the cluster project alone does not affect R&D productivity. Moreover, research collaboration with a partner in the same cluster region decreases R&D productivity both in terms of the quantity and quality of patents. Therefore, in order to improve the R&D efficiency of local firms, it is also important to construct wide-range collaborative networks within and beyond the clusters, although most clusters focus on the network at a narrowly defined local level. However, cluster participants apply for more patents than others without reducing patent quality when they collaborate with national universities in the same cluster region.
    Keywords: Industrial cluster; University-industry partnership; Small and medium enterprise; R&D; Patent
    JEL: O23 O32 O38 R38
    Date: 2010
  29. By: Francesca Masciarelli; Keld Laursen; Andrea Prencipe
    Abstract: Drawing on social capital theory and international business literature, we argue that firms’ home region social capital increases the degree of firms’ internationalization for both goods and knowledge. Beyond a certain level of social capital, however, firms become over-embedded in their home region social relationships so that the degree of internationalization decreases. We also conjecture that firms’ investment in research and development moderates the relationship between home region social capital and the degree of internationalization for goods and knowledge in a positive fashion. Combining data on social capital at the level of 21 regions with a large-scale data set on internationalization activities by a representative sample of around 2000 Italian manufacturing firms, we find—after controlling for a large set of firm and regional characteristics—overall support for our theoretical arguments.
    Keywords: Regional social capital; Internationalization; Research and development; over-embeddedness
    Date: 2010
  30. By: Dandan Zhang (Asian Development Bank Institute)
    Abstract: The employment shock of late 2008 in the People’s Republic of China (PRC) may have been a product of three different events: (i) the contractionary macroeconomic policies introduced by the government and the central bank in 2007 to slow growth, (ii) the introduction of the new Labor Contract Law at the start of 2008, and (iii) the reduction in export orders due to the global financial crisis from the second half of 2008. These three events occurred sequentially, and their impact on employment has been borne most heavily by rural–urban migrants. Using unique data that track 5,000 migrant households in 15 cities from 2008 to 2009, this paper documents the size of the employment impact of the economic downturn, investigates the geographic location and industry distribution of the effect, and examines the types of migrant workers who lost their jobs in 2008 because of the economic downturn. We find that job loss is not confined to export manufacturing industries, nor is it restricted to coastal cities where export industries are located. We interpret this widespread job loss to indicate that the employment shock that took place in the PRC at the end of 2008 and early 2009 was a response to both the global financial crisis and domestic economic policies.
    Keywords: employment shocks, China, labour policy, global financial crisis
    JEL: J64
    Date: 2010
  31. By: Vinayak Uppal; Debjani Ghosh
    Abstract: The paper raises some hard questions that need to be answered before one can conclude that events such as Common Wealth Games has a positive effect on the host community. Can the financial requirements for such an event be possible to generate? Some other questions that arise out of such events, with particular relevance in this paper, is its impact on the urban scenario. Will the event lead to rampant and unchecked development, possibly unplanned? Will the infrastructure created be beneficial post-event or will it remain under utilised? Will the city’s infrastructure be able to bear the strain of additional visitors that flood the city during such an event? Will the event prove to be a hindrance to the city’s residents during the event? [Working paper No. 06- 12].
    Keywords: city, Asian Games, Commonwealth Games, Olympics, Sports Authority of India, Sports facility structure, Ministry of Youth Affairs, sports infrastructure, development, financial requirements, urban scenario, community, infrastructure, sports event,
    Date: 2010
  32. By: OOGHE, Erwin (Department of Economics, KULeuven, B-3000 Leuven, Belgium); SCHOKKAERT, Erik (UniversitŽ catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium and Department of Economics, KULeuven, B-3000 Leuven, Belgium)
    Abstract: Introducing school accountability may create incentives for efficiency. However, if the performance measure used does not correct for pupil characteristics, it will lead to an inequitable treatment of schools and create perverse incentives for cream-skimming. We apply the theory of fair allocation to show how to integrate empirical information about the educational production function in a coherent theoretical framework. The requirements of rewarding performance and correcting for pupil characteristics are incompatible if we want the funding scheme to be applicable for all educational production functions. However, we characterize an attractive subsidy scheme under specific restrictions on the educational production function. This subsidy scheme uses only information which can be controlled easily by the regulator. We show with Flemish data how the proposed funding scheme can be implemented. Correcting for pupil characteristics has a strong impact on the subsidies (and on the underlying performance ranking) of schools
    Date: 2009–12–01
  33. By: Andrés Rodríguez-Pose; Anne Krøijer
    Abstract: The majority of the literature on fiscal decentralization has tended to stress that the greater capacity of decentralized governments to tailor policies to local preferences and to be innovative in the provision of policies and public services, the greater the potential for economic efficiency and growth. There is, however, little empirical evidence to substantiate this claim. In this paper we examine, using a panel data approach with dynamic effects, the relationship between the level of fiscal decentralization and economic growth rates across 16 Central and Eastern European countries over the 1990-2004 period. Our findings suggest that, contrary to the majority view, there is a significant negative relationship between two out of three fiscal decentralization indicators included in the analysis and economic growth. However, the use of different time lags allows us to nuance this negative view and show that long term effects vary depending on the type of decentralization undertaken in each of the countries considered. While expenditure at and transfers to subnational tiers of government are negatively correlated with economic growth, taxes assigned at the subnational level evolve from having a significantly negative to a significantly positive correlation with the national growth rate. This supports the view that subnational governments with their own revenue source respond better to local demands and promote greater economic efficiency.
    Keywords: Fiscal decentralization, economic growth, efficiency, devolution, Central and Eastern Europe
    Date: 2010–01
  34. By: Agnese Vitali
    Abstract: In this paper the question of within-country heterogeneity in patterns of transition to adulthood is addressed, focusing on the exit from the parental home in Spain, a country representative of the latest-late transition to adulthood. Microcensus data are used to investigate the relative weight that structural-contextual factors measured at the municipal level and cultural factors measured at the provincial level might have in explaining regional existing differences in the transition to independent living, by applying multilevel multinomial logistic model on three choices of living arrangements, namely, co-residing with parents, living outside the parental home and in partnership, living outside the parental home and not in partnership.
    Keywords: Leaving home, multilevel models, Spain
    Date: 2009–07
  35. By: Toke S. Aidt (University of Cambridge); Jayasri Dutta (University of Birmingham)
    Abstract: We study the efficient allocation of spending and taxation authority in a federation in which federal politicians are exposed to electoral uncertainty. We show that centralization may, but need not, result in a loss of electoral accountability. We identify an important asymmetry between positive and negative externalities and show that centralization may not be efficient in economies with positive externalities even when regions are identical and centralization does not entail a loss of accountability. We also show that decentralization can only Pareto dominate centralization in economies with negative externalities.
    Keywords: Fiscal federalism, local public goods, externalities, performance voting,turnout uncertainty, electoral accountability
    JEL: D72 D78 H41
    Date: 2010
  36. By: Joan Crespo
    Abstract: The widely studied concept of clusters has been usually treated as pre-established and successful structures. We argue that clusters are not pre-established but emerge through a double competition process of technological and regional nature. Moreover, faced to a changing environment they are not always successful. Their long-term evolution depends on their viability capacities. We show that viability is dependent on the emergence conditions, because different forms of emergence create clusters with different structures.
    Keywords: cluster life cycle, emergence, viability, networks
    JEL: R12 O31 D85
    Date: 2010–01
  37. By: Berliant, Marcus; Kung, Fan-chin
    Abstract: The empirical literature has found evidence of locational sorting of workers by wage or skill. We show that such sorting can be driven by asymmetric information in the labor market, specifically when firms do not know if a particular worker is of high or low skill. In a model with two types and two regions, workers of different skill levels are offered separating contracts in equilibrium. When mobile low skill worker population rises or there is technological change that favors high skilled workers, integration of both types of workers in the same region at equilibrium becomes unstable, whereas sorting of worker types into different regions in equilibrium remains stable. The instability of integrated equilibria results from firms, in the region to which workers are perturbed, offering attractive contracts to low skill workers when there is a mixture of workers in the region of origin.
    Keywords: Adverse Selection; Stratification
    JEL: R13 D82 R12
    Date: 2010–03–12
  38. By: Kumagai, Narimasa
    Abstract: In Japan, economic stagnation due to the lack of aggregate demand has hit the regional health insurance system and this affects most retired pensioners. The fiscal state of insurers in rural areas deteriorated. This paper aims to investigate whether the regional disparities in medical levies per household make a contribution to income-related geographic inequalities in health care financing. Data of the central two regions of the Japanese National Health Insurance in 2005 were extracted. Their share of population was about 41.5 percent. Retired employees and self-employed individuals are covered by this insurance system. We conducted the geographic decomposition using the concentration index. The within-area inequality in medical levies mainly accounted for geographic inequality in medical levies per household. The hypothesis that there was no between-area inequality in medical levies was not rejected. We revealed the differences in the within-area inequality in medical levies in the central Kanto. This means such proportionality was not built into the NHI system through near constant contribution rates across the distribution of living standards. It can be considered that the differences in the within-area inequality were caused by the inequality in income per household and the multiplier of income levies. We found that income per household, the standard land price of residential districts and the size of an insurer are major determinants of the multiplier of income levies. The higher land price tends to greater the multiplier of income levies. The expansion of insurer's size increases the multiplier of income levies in most of districts. The inequality in the multiplier of income levies will reduce if local governments raise per-household levy in proportion to the size of an insurer and lower the multiplier of income levy.
    Keywords: Decomposition, Inequality, Japan, Medical Levies, National Health Insurance
    Date: 2010–02
  39. By: Juan M. Gallegoy; Mariapia Mendola
    Abstract: This paper investigates how social networks in poor developing settings are af- fected if people migrate. By using an unique household survey from two southern regions in Mozambique, we test the role of labor mobility in shaping participation in groups and social networks by migrant sending households in village economies at origin. We find that households with successful migrants (i.e. those receiving either remittances or return migration) engage more in community based social networks. Our findings are robust to alternative definitions of social interaction and to endogeneity concerns suggesting that stable migration ties and higher income stability through remittances may decrease participation constraints and increase household commitment in cooperative arrangements in migrant-sending communities.
    Keywords: International Migration, Social Capital, Networks, Group Participation, Mozambique
    JEL: O17 O15 O12
    Date: 2010–02
  40. By: Martin Gustafsson (Department of Economics, University of Stellenbosch)
    Abstract: Various data analysis approaches are used to gauge recent pre-primary enrolment trends in South Africa and the level of compliance with official age-grade norms in Grades R and 1. An analysis of the circumstances of Grade R learners finds that large class sizes are a problem. Two separate logit models are used to examine what factors are associated with better pre-school participation and whether participation in pre-school leads to better learning outcomes in primary school.
    Keywords: Pre-primary schooling, South Africa, Age-grade norms
    JEL: I21 I28
    Date: 2010

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