nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒04‒24
twelve papers chosen by
Steve Ross
University of Connecticut

  1. Housing wealth or economic climate: Why do house prices matter for well-being? By Anita Ratcliffe
  2. Commonwealth Games 2010: Displacement of Persons By Eshaan Puri; Tripti Bhatia
  3. Migration and Urban Poverty and Inequality in China By Park, Albert; Wang, Dewen
  4. Productivity distribution, firm heterogeneity, and agglomeration: Evidence from firm-level data By OKUBO Toshihiro; TOMIURA Eiichi
  5. Ideological Segregation Online and Offline By Matthew Gentzkow; Jesse M. Shapiro
  6. Corporate Tax Systems and the Location of Industry By Wiberg, Magnus
  7. Political Participation, Regional Policy and the Location of Industry By Wiberg, Magnus
  8. A Socio-economic Analysis of Youth Disconnectedness By Friedhelm Pfeiffer; Ruben R. Seiberlich
  9. Industrial Relocation Policy and Heterogeneous Plants Sorted by Productivity: Evidence from Japan By OKUBO Toshihiro; TOMIURA Eiichi
  10. Fiscal Federalism and Electoral Accountability By Aidt, T.; Dutta, J.
  11. Getting Cars Off the Road: The Cost-Effectiveness of an Episodic Pollution Control Program By Maureen L. Cropper; Yi Jiang; Anna Alberini; Patrick Baur
  12. Socioeconomic Impacts of Cross-Border Transport Infrastructure Development in South Asia By Gilbert, John; Banik, Nilanjan

  1. By: Anita Ratcliffe
    Abstract: This study investigates whether and why house prices matter for well-being. House prices may influence well-being via a wealth/access-to-credit mechanism, as a rise in prices increases housing wealth and the collateral value of a house, and via a relative concerns mechanism, if renters compare themselves to homeowners and vice versa. Alternatively, any correlation between house prices and well-being may simply reflect broader economic conditions rather than a causal effect. Using local area house price data, this study distinguishes between these alternative explanations by comparing the correlation between local house prices and well-being for homeowners and renters. A small positive correlation between house prices and well-being exists for both homeowners and renters, indicating the absence of a wealth/credit mechanism or relative concerns mechanism. This correlation cannot be explained by economic variables such as local unemployment, earnings or earnings expectations, hinting at a purely psychological phenomenon.
    Keywords: Well-being, House prices, Wealth, Economic climate
    JEL: I1 D12
    Date: 2010–04
  2. By: Eshaan Puri; Tripti Bhatia
    Abstract: This research paper analyses Government policy with regard to Jhuggi-Jhopri clusters- a particular type of housing present in Delhi. These colonies are perceived to be illegal by the Government. With living conditions akin to slums, the inhabitants of such clusters are part of the economically backward sections of society, often looked over and ignored by the Government. [Intern WP 213].
    Keywords: Dwellers, urban criminals, Commonwealth Games, government, jhuggi, jhopri, clusters, housing, Delhi, slums, econmically backward sections, society, illegal, healthcare, education, planning,
    Date: 2010
  3. By: Park, Albert (University of Oxford); Wang, Dewen (Chinese Academy of Social Sciences)
    Abstract: Using data from recent surveys of migrants and local residents in 10 cities in 2005, this paper examines how migration influences measurements of urban poverty and inequality in China, and also compares how other indicators of well-being differ for migrants and local residents. Contrary to previous studies that report that the income poverty rate of migrant households is 1.5 times that of local resident households, we find relatively small differences in the poverty rates of migrants and local residents. Although the hourly wages of migrants are much lower than those of local residents, migrant workers work longer hours and have lower dependency ratios and higher labor force participation rates. Including migrants increases somewhat measures of urban income inequality. Significant differences between migrants and local residents are found for non-income welfare indicators such as housing conditions and access to social insurance programs.
    Keywords: migration, urban, poverty, inequality, social protection, China
    JEL: J61 O15
    Date: 2010–04
  4. By: OKUBO Toshihiro; TOMIURA Eiichi
    Abstract: This paper empirically examines how productivity distributions of firms vary across regions based on Japanfs manufacturing census data. We confirm the established finding of higher average productivity in core regions, but find that firm productivity is distributed with wide dispersions, especially in core regions. Our firm-level estimates demonstrate that the productivity distribution of firms tends to be noticeably left-skewed deviating from the normal distribution, especially in regions with weak market potential but also in agglomerated or urbanized regions. These findings suggest that agglomeration economies are likely to accommodate heterogeneous firms to co-exist in the same region.
    Date: 2010–04
  5. By: Matthew Gentzkow; Jesse M. Shapiro
    Abstract: We use individual and aggregate data to ask how the Internet is changing the ideological segregation of the American electorate. Focusing on online news consumption, offline news consumption, and face-to-face social interactions, we define ideological segregation in each domain using standard indices from the literature on racial segregation. We find that ideological segregation of online news consumption is low in absolute terms, higher than the segregation of most offline news consumption, and significantly lower than the segregation of face-to-face interactions with neighbors, co-workers, or family members. We find no evidence that the Internet is becoming more segregated over time.
    JEL: D83 L86
    Date: 2010–04
  6. By: Wiberg, Magnus (Ministry of finance)
    Abstract: This paper analyzes the effects of different corporate tax systems on the location of industry within an economic geography model with regional size asymmetries. Both the North and the South gain industry by adopting a tax regime that produces the lowest tax level. As the share of expenditures in the North increases, the Nash equilibrium has this region setting regressive taxes, while the South introduces progressive taxation. The unilateral welfare-maximizing tax structure in the North (South) is the regressive (progressive) system when expenditures in the North increase. Welfare in the North (South) is however maximized if both regions set regressive (progressive) taxes, while regressive (progressive) taxation in both regions represents a joint welfare maximizing outcome if the economic size of the North is higher (lower) than a certain threshold value. As trade is liberalized, the equilibrium tax regime adopted depends on how pro ts respond to lower trade costs. Proportional taxation is never an equilibrium, neither as regional spending changes, nor as trade is liberalized.
    Keywords: Economic Geography; Tax Systems; Corporate Taxation
    JEL: F12 H25 R12
    Date: 2010–04–14
  7. By: Wiberg, Magnus (Ministry of finance)
    Abstract: This paper analyzes the location of manufacturing activities when regional policy is determined by each region’s relative propensity to vote. Once voting over government transfers to regions is included in an economic geography framework with size asymmetries, the standard prediction that the larger region becomes the core when trade barriers are reduced no longer holds. The establishment of manufacturing production in the economically smaller region is increasing in the level of regional integration. As trade is increasingly liberalized, the economy eventually features a reversed core-periphery equilibrium where all firms reside in the South. It is further shown that the relative political participation rate increases in the factor scarce region as trade is liberalized. Empirical evidence shows that the model is consistent with qualitative features of the data.
    Keywords: Economic Geography; Regional Policy; Voter Turnout
    JEL: D72 F12 R12
    Date: 2010–04–14
  8. By: Friedhelm Pfeiffer; Ruben R. Seiberlich
    Abstract: Disconnectedness among youth can have several dimensions. From a socio-economic viewpoint, failure in school, unemployment and the lack of an intimate relationship are among the most important ones. In our samples from SOEP youth questionnaires, approximately 13% of young people in Germany between the ages of 17 and 19 are disconnected. The percentage of disconnected youths has been on the rise since 2001. There is evidence that an adverse family background is the most important variable for being disconnected in young adulthood. Macroeconomic factors also contribute to disconnectedness. Recessions are followed by increases in the number of disconnected youth.
    Keywords: Disconnected youth, unemployment, school failure, life adversity
    JEL: D87 I12 I21 J13
    Date: 2010
  9. By: OKUBO Toshihiro; TOMIURA Eiichi
    Abstract: In an economic geography model with firm heterogeneity, Baldwin and Okubo (2006) show that regional policies for promoting periphery development attract low-productivity firms and adversely affect the productivity gap within a country. This paper empirically examines their theoretical prediction by using plant-level data during active relocation policies in Japan. Our estimation results from plant-level regressions and propensity-score matching that are generally consistent with the theory. Compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants.
    Date: 2010–04
  10. By: Aidt, T.; Dutta, J.
    Abstract: We study the e¢ cient 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 e¢ cient 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 accountabilit
    JEL: D72 D78 H41
    Date: 2010–04–30
  11. By: Maureen L. Cropper; Yi Jiang; Anna Alberini; Patrick Baur
    Abstract: Ground-level ozone remains a serious problem in the United States. Because ozone non-attainment is a summer problem, episodic rather than continuous controls of ozone precursors are possible. We evaluate the costs and effectiveness of an episodic scheme that requires people to buy permits to drive on high-ozone days. We estimate the demand function for permits based on a survey of 1,300 households in the Washington, DC, metropolitan area. Assuming that all vehicle owners comply with the scheme, the permit program would reduce volatile organic compounds (VOCs) by 50 tons and nitrogen oxides (NOx) by 42 tons per Code Red day at a permit price of $75. Allowing for non-compliance by 15 percent of respondents reduces the effectiveness of the scheme to 39 tons of VOCs and 33 tons of NOx per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). This compares favorably with permanent methods of reducing VOCs that cost $645 per ton per year.
    JEL: Q52 Q53 Q58
    Date: 2010–04
  12. By: Gilbert, John (Asian Development Bank Institute); Banik, Nilanjan (Asian Development Bank Institute)
    Abstract: Although the overall economic performance of economies in South Asia in recent years has been impressive, there is concern that an aging and increasingly inadequate infrastructure may limit the potential for further growth and economic development. A critical infrastructure component is the transportation network, and there are currently several transportation infrastructure projects in the South Asia Subregional Economic Cooperation (SASEC) region, connecting Nepal, eastern India, Bangladesh, and Bhutan. This paper uses computable general equilibrium (CGE) methods to address how these infrastructure developments might affect the broader economy in SASEC, and in particular impact on income distribution and poverty. The paper describes a new CGE model for South Asia, covering India, Sri Lanka, Bangladesh, Nepal, and Pakistan, which incorporates modifications to household structure in order to capture the implications of reform for changes in intra-household income. The scenarios that are considered reflect proposed investments in land transport infrastructure in the SASEC region. These should result in reductions in the land transport component of international transport margins, which vary bilaterally by commodity. We found that all SASEC economies would benefit from the reductions in terms of aggregate welfare, with the largest gains accruing to India in absolute terms, but the largest relative gains to Nepal, followed by Bangladesh and Sri Lanka when the margin reduction is prorated to intra-South Asian trade rather than just SASEC. In terms of household level distribution, the picture was mixed, with clearly pro-poor outcomes in some countries, such as Nepal, but more ambiguous impacts in others. In terms of potential adjustment costs, examination of the extent of predicted structural changes suggests that these would be minor, although somewhat more significant for the smaller economies in the region.
    Keywords: cge method; infrastructure development; sasec; income distribution poverty reduction
    JEL: D58 F14 F17 O53
    Date: 2010–04–14

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