nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒06‒18
37 papers chosen by
Steve Ross
University of Connecticut

  1. Explaining Regional Variation in Equilibrium Real Estate Prices and Income By Oliver Bischoff
  2. Are School Counselors a Cost-Effective Education Input? By Mark L. Hoekstra; Scott Carrell
  3. Relative house price dynamics across euro area and US cities: convergence or divergence? By Paul Hiebert; Moreno Roma
  4. Economic Benefits and Drawbacks of Cities and their Growth Implications By Tisdell, Clem
  5. Getting people out of unemployment: A spatial perspective across Auckland By Don J. Webber; Gail Pacheco
  6. Agglomeration processes in aging societies By Theresa Grafeneder-Weissteiner; Klaus Prettner
  7. Mentoring, Educational Services, and Economic Incentives: Longer-Term Evidence on Risky Behaviors from a Randomized Trial By Rodriguez-Planas, Nuria
  8. School Responsiveness to Quality Rankings: An Empirical Analysis of Secondary Education in the Netherlands By Koning, Pierre; van der Wiel, Karen
  9. Graded Children – Evidence of Longrun Consequences of School Grades from a Nationwide Reform By Sjögren, Anna
  10. Formation and geography of science-industry collaborations: the case of the University of Poitiers By Marie Ferru
  11. Re-defining the Boundaries of Major Italian Cities By Antonio G. CALAFATI; Paolo VENERI
  12. Demographic change, growth and agglomeration By Theresa Grafeneder-Weissteiner
  13. Ethnic concentration and language fluency of immigrants : quasi-experimental evidence from the guest-worker placement in Germany By Danzer, Alexander M.; Yaman, Firat
  14. Under Pressure? The Effect of Peers on Outcomes of Young Adults By Black, Sandra E.; Devereux, Paul; Salvanes, Kjell G.
  15. How do Clusters/Pipelines and Core/Periphery Structures Work Together in Knowledge Processes? By Pierre-Alexandre Balland; Raphael Suire; Jerome Vicente
  16. Fees versus royalties in a two dimensional square city with quadratic transport costs By Bouguezzi, Fehmi
  17. Measuring Discrimination in Education By Rema Hanna; Leigh Linden
  18. Moving in – Selling Out: the outcomes of slum rehabilitation in Mumbai By Paula Restrepo Cadavid
  19. Knowledge diffusion and innovation policies within the European regions: Challenges based on recent empirical evidence By Corinne Autant-Bernard; Muriel Fadairo; Nadine Massard
  21. Do School Resources Increase School Quality ? By Nadir Altinok
  22. Does Raising the School Leaving Age Reduce Teacher Effort? A Note from a Policy Experiment By Colin Green; Maria Navarro Paniagua
  23. The GED By Heckman, James J.; Humphries, John Eric; Mader, Nicholas S.
  24. Households’ Willingness to Pay for Undergrounding Electricity and Telecommunications Wires By McNair, Ben J.; Bennett, Jeff; Hensher, David A.
  25. Family Business or Social Problem? The Cost of Unreported Domestic Violence By Mark L. Hoekstra; Scott Carrell
  26. Homeownership over the Life Course of Canadians: Evidence from Canadian Censuses of Population By Hou, Feng
  27. Which “Greenness” is Valued? Evidence from Green Condominiums in Tokyo By Yoshida, Jiro; Sugiura, Ayako
  28. Migration, Self-Selection, and Income Distributions: Evidence from Rural and Urban China By Xing, Chunbing
  29. Solid Waste Disposal: A Choice Experiment Experience in Malaysia By Pek , Chuen Khee; Othman, Jamal
  30. Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland By Tony Flegg; T. Tohmo
  31. Airport slot allocation in Europe: economic efficiency and fairness By Lorenzo Castelli; Paola Pellegrini; Raffaele Pesenti
  32. Discrete distributions when modeling the disability severity score of motor victims By Germà Xavier Fageda; Juan Luis Jiménez; Jordi Perdiguero
  33. Grade surprise and choice at 16 By Don J. Webber
  34. The Plight of Mixed Race Adolescents By Fryer, Roland G.; Levitt, Steven D.; Kahn, Lisa; Spenkuch, Jörg L.
  35. Decentralization of the Size and Scope of Local Governments and Corruption By Rajeev K. Goel; Michael A. Nelson
  36. Credit Whitin the Firm By Luigi Guiso; Luigi Pistaferri; Fabiano Schivardi
  37. Does Racial and Ethnic Discrimination Vary Across Minority Groups? Evidence from a Field Experiment By Booth, Alison L.; Leigh, Andrew; Varganova, Elena

  1. By: Oliver Bischoff (Chair for Economic Policy, University of Hamburg)
    Abstract: We combine the real estate model of Potepan (1996) with the spatial equilibrium approach of Roback (1982) to prove the interdependency of housing prices, rental prices, building land prices and income via one simultaneous equilibrium analysis. Using unique cross-sectional data on the majority of German counties and cities for 2005, we estimate the equations in their structural and reduced form. The results show significantly positive interaction effects of income and real estate prices. Moreover, we can confirm model predictions concerning the majority of exogenous determinants. In particular, expectations about population development seem to be among the most important determinants of price and income disparities between regions in the long term.
    Keywords: Regional Housing Markets; Spatial Equilibrium Analysis; Simultaneous Equation; Germany
    JEL: C21 C31 R11 R13 R21 R31
    Date: 2010–06–05
  2. By: Mark L. Hoekstra; Scott Carrell
    Abstract: While much is known about the effects of class size and teacher quality on achievement, there is little evidence on whether non-instructional resources improve academic achievement. We exploit plausibly exogenous within-school variation in counselors and find that one additional counselor reduces student misbehavior and increases reading and math achievement by 1.1 percentile points. Estimates imply the marginal counselor has the same impact on achievement as increasing the quality of every teacher in the school by 0.4 standard deviations, and is 3 times more effective than reducing class size by hiring an additional teacher. Results also indicate the academic benefits are largest for children from higher-income families attending school with economically disadvantaged peers, suggesting that additional support staff may help prevent flight from urban schools.
    JEL: I21
    Date: 2010–06
  3. By: Paul Hiebert (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Moreno Roma (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: This paper examines the time varying dispersion in city house price levels across the four biggest euro area countries compared with those in the United States. Using available city-level data over the period 1987-2008, it tests for price convergence and analyses key factors explaining price differentials in a panel regression framework including per capita income, population and relative distances. Results indicate limited evidence of convergence in city-level house prices despite synchronised cycles in the national aggregates for most countries since the 1990s. There is an important role for income differentials in explaining city-level house price dispersion in Germany, France, and the US (but not in Italy or Spain once unobserved city factors are taken into account). At the same time, population differences across cities play a role, though this appears to be associated with amenities specific to a particular location. In general, there has been a lower dispersion of city-level house prices in the four largest euro area economies compared with the US in conjunction with a lower estimated income elasticity for house price differentials. The results, particularly for income, appear to be robust to restricting the analysis to large urban centres. JEL Classification: R21, R31, E31.
    Keywords: House price convergence, house price dispersion, house price drivers, panel data analysis.
    Date: 2010–06
  4. By: Tisdell, Clem
    Abstract: Recent trends in the growth of cities particularly in developing countries (and especially in India and China) are identified. Beneficial and negative sharing mechanisms influencing the growth of cities are examined. Economic benefits of agglomeration arise not so much from the type of economic goods available in a city location (such as common property or local public goods) but from the enhanced operation of processes of economic exchange. Two theoretical implications of the growth of cities are considered, namely: (1) city growth results in growing inequality of income and wealth within the city and (2) a city will expand beyond its optimal size. Nevertheless, the growth of cities is linked with increased levels of per capita income nationally. Worldwide growth of cities is connected with increasing globalization and with rising income inequality.
    Keywords: agglomeration economies, China, city-sizes, common property, economic growth, globalization, income distribution, India, open-access resources, quasi-public goods, spillovers, Community/Rural/Urban Development,
    Date: 2009–09
  5. By: Don J. Webber (Department of Economics, Auckland University of Technology and Department of Economics, UWE, Bristol); Gail Pacheco (Department of Economics, Auckland University of Technology, Auckland, New Zealand.)
    Abstract: Reducing the unemployment rate is an aim of most governing authorities. This paper presents a socio-economic analysis of area-level employment rate changes across Auckland using Census area-level data for the time period 1996 to 2006. Exploratory spatial data analyses suggest the presence of strong spatial patterns in intra-city employment rates changes. Application of seemingly unrelated regressions highlight forces, such as education, that are associated with increases in part time and full time employment relative to being unemployed.
    Keywords: Unemployment; Seemingly unrelated regressions; Queen spatial weights
    JEL: R20 E24 J21 C30
    Date: 2010–06
  6. By: Theresa Grafeneder-Weissteiner (Department of Economics, Vienna University of Economics & B.A.); Klaus Prettner (Vienna Institute of Demography, Austrian Academy of Sciences)
    Abstract: This article investigates agglomeration processes in aging societies by introducing an overlapping generation structure into a New Economic Geography model. Whether higher economic integration leads to spatial concentration of economic activity crucially hinges on the economies' demographic properties. While population aging as represented by declining birth rates strengthens agglomeration processes, declining mortality rates weaken them. This is due to the fact that we allow for nonconstant population size. In particular, we show that population growth acts as an important dispersion force that augments the distributional effects on agglomeration processes resulting from the turnover of generations.
    JEL: R12 J10 F15 C61
    Date: 2010–06
  7. By: Rodriguez-Planas, Nuria (Universitat Autònoma de Barcelona)
    Abstract: This paper is the first to use a randomized trial in the US to analyze the short- and long-term impacts of an after-school program that offered disadvantaged high-school youth: mentoring, educational services, and financial rewards to attend program activities, complete high-school and enroll in post-secondary education on youths' engagement in risky behaviors, such as substance abuse, criminal activity, and teenage childbearing. Outcomes were measured at three different points in time, when youths were in their late-teens, and when they were in their early- and their late-twenties. Overall the program was unsuccessful at reducing risky behaviors. Heterogeneity matters in that perverse effects are concentrated among certain subgroups, such as males, older youths, and youths from sites where youths received higher amount of stipends. We claim that this evidence is consistent with different models of youths’ behavioral response to economic incentives. In addition, beneficial effects found in those sites in which QOP youths represented a large fraction of the entering class of 9th graders provides hope for these type of programs when operated in small communities and supports the hypothesis of peer effects.
    Keywords: after-school program, short-, medium- and long-term effects, behavioral models, peer effects, criminal activity, teen childbearing and substance abuse
    Date: 2010–05
  8. By: Koning, Pierre (CPB Netherlands Bureau for Economic Policy Analysis); van der Wiel, Karen (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper analyzes the response of secondary schools to changes in their quality ratings. The current analysis is the first to address the impact of quality scores that have been published by a newspaper (Trouw), rather than public interventions. Our research design exploits the substantial lags in the registration and publication of the Trouw scores and that takes into account all possible outcomes of the ratings, instead of the lowest category only. Overall, we find evidence that school quality performance does respond to Trouw quality scores. Both average grades increase and the number of diplomas go up after receiving a negative score. For schools that receive the most negative ranking, the short-term effects (one year after a change in the ranking of schools) of quality transparency on final exam grades equal 10% to 30% of a standard deviation compared to the average of this variable. The estimated long run impacts are roughly equal to the short-term effects that are measured.
    Keywords: school quality, school accountability
    JEL: H75 I20 D83
    Date: 2010–05
  9. By: Sjögren, Anna (Research Institute of Industrial Economics (IFN))
    Abstract: Swedish elementary school children stopped receiving written end of year report cards following a grading reform in 1982. Gradual implementation of the reform creates an opportunity to investigate the effects of being graded on adult educational attainments and earnings for children in the cohorts born 1954–1974, using a difference-in-differences strategy. Accounting for municipal time trends and tracing out reform dynamics, there is some evidence that being graded increases girls’ years of schooling, but has no significant average effect on boys. Analysis of effects by family background suggests that receiving grades increases the probability of high school graduation for boys and girls with compulsory school educated parents. Sons of university graduates, however, earn less and are less likely to get a university degree if they were graded in elementary school.
    Keywords: School policy; Grades; Educational attainment; Adult earnings; Family background; Difference-in-differences
    JEL: I21 I28 J13 J24
    Date: 2010–06–08
  10. By: Marie Ferru (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: This paper tries to elicit elements which explain the geography of science-industry collaborations by focusing on their construction process which is rarely studied regarding the existing literature. Constraints linked to the search of resources, on the one hand, and constraints linked to the logics of contact, on the other, weigh on actors when choosing their partner and could influence the geography of collaborations. An empirical study on collaborations established between Poitiers University's laboratories and firms confirms this hypothesis. Cognitive constraints lead to the spatial dissemination of collaborations. An econometric model shed light on the impact of logics of contact and shows that whereas most of these logics enable the construction of local and non local partnerships, non professional ties favor significantly local ones.
    Keywords: Collaborations; geography; social networks; institutions; resources
    Date: 2010–10–04
  11. By: Antonio G. CALAFATI (Universita' Politecnica delle Marche, Dipartimento di Economia); Paolo VENERI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: The processes of spatial polarisation and territorial integration that have taken place in Italy since the 1950s have not been accompanied by corresponding institutional adaptations, generating the current huge discrepancy between the functional and political-administrative organisation of the territory. As argued in the paper, this institutional lock-in is rooted in a mistaken conceptualisation of territorial integration, which has focused on the identification of "travel-to-work areas", rather than on the formation of inter-municipal territorial systems which have the nature of cities de facto - larger and structurally different from the legal cities. The paper corroborates this thesis by focusing on the eight largest Italian cities de jure, identifying, on the basis of both functional and morphological features, the corresponding cities de facto.
    Keywords: Cities de facto, Metropolitan areas, Territorial organisation
    JEL: R11 R12 R23 R38
    Date: 2010–06
  12. By: Theresa Grafeneder-Weissteiner (Department of Economics, Vienna University of Economics & B.A.)
    Abstract: This article presents a framework within which the effects of demographic change on both agglomeration and growth of economic activities can be analyzed. I introduce an overlapping generation structure into a New Economic Geography model with endogenous growth due to learning spillovers and focus on the effects of demographic structures on long-run equilibrium outcomes and stability properties. First, life-time uncertainty is shown to decrease long-run economic growth perspectives. In doing so, it also mitigates the pro-growth effects of agglomeration resulting from the localized nature of learning externalities. Second, the turnover of generations acts as a dispersion force whose anti-agglomerative effects are, however, dampened by the growth-linked circular causality being present as long as interregional knowledge spillovers are not perfect. Finally, lifetime uncertainty also reduces the possibility that agglomeration is the result of a self-fulfilling prophecy.
    JEL: F43 O33 J10 R11
    Date: 2010–06
  13. By: Danzer, Alexander M.; Yaman, Firat (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The paper analyses the impact of regional own-ethnic concentration on the language proficiency of immigrants. It solves the endogeneity of immigrants' location choices by exploiting the fact that guest-workers in Germany after WWII were initially placed by firms and labor agencies. We find a robust negative effect of ethnic concentration on immigrants' language ability. Simulation results of a simultaneous location and learning choice model confirm the presence of the effect and show how immigrants with high learning cost select into ethnic enclaves. Under the counterfactual scenario of a regionally equal distribution of immigrants the share of German-speakers increases only modestly." (author's abstract, IAB-Doku) ((en))
    Keywords: ausländische Arbeitnehmer, Beschäftigungspolitik, Arbeitskräftemangel, Wohnort, Einwanderungsland, Sprachkenntnisse, deutsche Sprache, ethnische Gruppe, Ballungsraum
    JEL: J61 R23 F22
    Date: 2010–06–09
  14. By: Black, Sandra E. (University of Texas at Austin); Devereux, Paul (University College Dublin); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration)
    Abstract: A variety of public campaigns, including the "Just Say No" campaign of the 1980s and 1990s that encouraged teenagers to "Just Say No to Drugs", are based on the premise that teenagers are very susceptible to peer influences. Despite this, very little is known about the effect of school peers on the long-run outcomes of teenagers. This is primarily due to two factors: the absence of information on peers merged with long-run outcomes of individuals and, equally important, the difficulty of separately identifying the role of peers. This paper uses data on the population of Norway and idiosyncratic variation in cohort composition within schools to examine the role of peer composition in 9th grade on longer-run outcomes such as IQ scores at age 18, teenage childbearing, post-compulsory schooling educational track, adult labor market status, and earnings. We find that outcomes are influenced by the proportion of females in the grade, and these effects differ for men and women. Other peer variables (average age, average mother's education) have little impact on the outcomes of teenagers.
    Keywords: education, peer effects
    JEL: I2
    Date: 2010–05
  15. By: Pierre-Alexandre Balland; Raphael Suire; Jerome Vicente
    Abstract: This paper contributes to the empirical identification of geographical and structural properties of innovative networks, focusing on the particular case of Global Navigation Satellite Systems (GNSS) at the European level. We show that knowledge bases of organizations and knowledge phases of the innovation process are the critical factors in determining the nature of the interplay between structural and geographical features of knowledge networks. Developing a database of R&D collaborative projects of the 5th and 6th European Framework Programs, we propose a methodology based on social network analysis. Its originality consists in starting from a bimodal network, in order to deduce two affiliation matrixes that allow us to study both the properties of the organization network and the properties of the project network. The results are discussed in the light of the mutual influence of the cognitive, structural and geographical dimensions on knowledge production and diffusion, and in the light of the knowledge drivers that give rise to the coexistence of a relational core-periphery structure with a geographical cluster and pipeline structure.
    Keywords: Economic Geography, Knowledge networks, Social network analysis, EU Framework Programs, GNSS
    JEL: O32 R12
    Date: 2010–06
  16. By: Bouguezzi, Fehmi
    Abstract: This paper studies and compares licensing regimes of a cost reducing innovation in a two dimensional square city where consumers are located in the interior of the square city and pay a quadratic transport cost when moving to one of the competing firms. The difference between results in this model and results in the other models of the existing literature is that here I find that royalties licensing is always better than fixed fee licensing independently of the size of the innovation. This result contradicts those found in a linear city à la Hotelling and in a circular city à la Salop. However, the paper shows that optimal licensing strategies for the patent holding firm are the same as in a Hotelling model where royalties are better for a non drastic innovation.
    Keywords: Technology transfer; Patent licensing; Square city
    JEL: O32 O31 C21 L24
    Date: 2010–06
  17. By: Rema Hanna; Leigh Linden
    Abstract: In this paper, a methodology to measure discrimination in educational contexts is illustrated. In India, exam competition is run through which children compete for a large financial prize and teachers have been recruited to grade the exams.Then there is a random assignment of child “characteristics†(age, gender, and caste) to the cover sheets of the exams to ensure that there is no systematic relationship between the characteristics observed by the teachers and the quality of the exams. It has been found out that teachers give exams that are assigned to be lower caste scores that are about 0.03 to 0.09 standard deviations lower than exams that are assigned to be high caste. The effect is small relative to the real differences in scores between the high and lower caste children. Low-performing, low caste children and top-performing females tend to lose out the most due to discrimination. Interestingly, findings also suggest that the discrimination against low caste students is driven by low caste teachers, while teachers who belong to higher caste groups do not appear to discriminate at all. This result runs counter to the previous literature, which tends to find that individuals discriminate in favor of members of their own groups.[Working Paper no. 230]
    Keywords: methodology, discrimination, educational contexts, large financial prize, teachers, characteristicsage, gender, and caste, cover sheets, exams, favor
    Date: 2010
  18. By: Paula Restrepo Cadavid (CERNA - Centre d'économie industrielle - Mines ParisTech)
    Abstract: Slums have been present in developing cities landscapes for quite some time. And while central and local governments continue their quest for making their cities slum-free, the overall outcome of slum policies is in most cases unknown or unclear. Some studies have revealed that slum policies might have unexpected benefits such as the improvement of children's health or household's access to credit. Yet, others have pointed unforeseen side-effects such as poverty recycling: where poor slum dwellers aren't able to maintain new living conditions and sell/rent their dwelling moving back to the slum. This paper focuses on the effects of slum rehabilitation on residential mobility in order to test the myth of poverty recycling. In order to do so, an exhaustive household survey was carried out in the city of Mumbai, comprising 510 households in 4 rehabilitated sites and 5 to-be-rehabilitated sites. Results show that the magnitude of poverty recycling is small and that in most cases slum rehabilitation actually serves as a platform to attain better living conditions both for those who left as for newcomers.
    Date: 2010
  19. By: Corinne Autant-Bernard (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; Université de Saint-Etienne, Jean Monnet, F-42023 Saint Etienne, France); Muriel Fadairo (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; Université de Saint-Etienne, Jean Monnet, F-42023 Saint Etienne, France); Nadine Massard (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; Université de Saint-Etienne, Jean Monnet, F-42023 Saint Etienne, France)
    Abstract: This article builds upon empirical results concerning localised knowledge spillovers to highlight some policy implications within European regions. The analysis emphasises the role of regional innovation policies in supporting the institutions that generate knowledge and learning. However, the variety of regional features presented in the empirical literature suggests that the search for universal policy tools is unrealistic. From this perspective, we argue that original strategies must be generated to cope with the various dilemmas faced by regional innovation policies. Such specific strategies require accurate knowledge of local features. Improving data and indicators to diagnose and monitor regional innovation is therefore presented as a key issue for policy makers.
    Keywords: innovation policy, localised knowledge flows, European regions, knowledge-based economy
    JEL: O38 C12
    Date: 2010
  20. By: Marie Ferru (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: This paper attempts to elicit new explanations of the geography of collaborations by insisting on determinants generally neglected. We consider that the geography of collaborations are structured by constraints linked to the linkage of partners. The reconstruction of more than 200 histories of collaborations and an econometric treatment of these qualitative information reveal the structuring role of the modalities of linkage and differences in the geography of collaborations between science-industry vs. inter-company partnerships. Actors turn to their previous collaborations to construct their partnerships, leading to the strengthening of the existing geography of collaborations. To find a partner, they initially use mediation mechanisms or social networks. The first one favors extra-regional collaborations whereas the latter does not necessarily lead to local partnerships, depending on the precise form of social ties.
    Keywords: Socio-economic proximity, past collaborations, mediation mechanisms, social networks.
    Date: 2009–07–04
  21. By: Nadir Altinok (IREDU - Institut de recherche sur l'éducation : Sociologie et Economie de l'Education - CNRS : UMR5225 - Université de Bourgogne, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg)
    Abstract: The aim of this paper is to verify whether school resource factors have an impact on the quality of education. This latter is measured with the help of a unique database on student scores in international skills tests. The general difficulties inherent in this type of study are the possibility of endogeneity bias and measurement errors. After estimation bias correction, we show that improvement in the quality of educational systems does not necessarily require an increase in school resources. When an alternative indicator of the performance of educational systems is used, our results are confirmed. Consequently, one should remain cautious about recommending purely financial measures to improve quality of education.
    Keywords: Quality of education ; School performance ; School resources
    Date: 2010–05
  22. By: Colin Green; Maria Navarro Paniagua
    Abstract: This paper examines the impact of an increase in the school leaving age on high school teachers’ absence behaviour. We estimate differ- ence in difference models of absenteeism using count data approaches. Employing data from the Spanish Labour Force Survey, our findings suggest that high school teachers reduced their effort due to the re- form that raised the age of compulsory education commencing in the academic year 1998-1999 in Spain. In particular, they take 15% more sickness absence in the posttreatment period. This result should be of interest to both policy makers and researchers who rely upon com- pulsory school law changes as a source of exogenous variation in edu- cational attainment.
    Keywords: Absenteeism, Compulsory Schooling Laws, Count data, Teachers
    Date: 2010
  23. By: Heckman, James J. (University of Chicago); Humphries, John Eric (University of Chicago); Mader, Nicholas S. (University of Chicago)
    Abstract: The General Educational Development (GED) credential is issued on the basis of an eight hour subject-based test. The test claims to establish equivalence between dropouts and traditional high school graduates, opening the door to college and positions in the labor market. In 2008 alone, almost 500,000 dropouts passed the test, amounting to 12% of all high school credentials issued in that year. This chapter reviews the academic literature on the GED, which finds minimal value of the certificate in terms of labor market outcomes and that only a few individuals successfully use it as a path to obtain post-secondary credentials. Although the GED establishes cognitive equivalence on one measure of scholastic aptitude, recipients still face limited opportunity due to deficits in noncognitive skills such as persistence, motivation and reliability. The literature finds that the GED testing program distorts social statistics on high school completion rates, minority graduation gaps, and sources of wage growth. Recent work demonstrates that, through its availability and low cost, the GED also induces some students to drop out of school. The GED program is unique to the United States and Canada, but provides policy insight relevant to any nation's educational context.
    Keywords: returns to education, GED, dropouts, graduation rate, noncognitive skills
    JEL: I21 J24 J31
    Date: 2010–05
  24. By: McNair, Ben J.; Bennett, Jeff; Hensher, David A.
    Abstract: Underground telecommunications and low-voltage electricity networks have several advantages over overhead networks including reliability of supply, safety and improved visual amenity. The economic viability of replacing existing overhead networks with new underground networks depends on the value of these benefits to households, but no complete value estimates are available in the literature. This paper represents a contribution towards addressing this research gap. A stated choice survey is used to estimate willingness-to-pay for undergrounding in established residential areas in Canberra. Average willingness-to-pay is at least $6,838 per household and there is significant variation in preferences over the population. The results suggest that benefits would be highest in areas with higher household income and older residents where visual amenity, safety, tree trimming or restrictions on the use of yard space are of concern.
    Keywords: Stated preference; willingness-to-pay; undergrounding; supply reliability
    JEL: L94 Q51
    Date: 2010–05
  25. By: Mark L. Hoekstra; Scott Carrell
    Abstract: Social interest in problems such as domestic violence is typically motivated by concerns regarding equity, rather than efficiency. However, we document that reporting domestic violence yields substantial benefits to external parties. Specifically, we find that while children exposed to as-yet-unreported domestic violence reduce the achievement of their classroom peers, these costs disappear completely once the parent reports the violence to the court. This suggests the public has an interest in helping families overcome their problems in general, and to report domestic violence in particular. It also suggests that social and judicial interventions may help combat negative peer effects in schools.
    JEL: J12 D62 I21
    Date: 2010–06
  26. By: Hou, Feng
    Abstract: Homeownership affects investment, consumption, and savings decisions of households, and plays a major role in post-retirement well-being. This paper examines two questions. First, to what extent do Canadians acquire and retain homeownership at different life-course stages, particularly after retirement? Second, has the age profile of homeownership changed over generations? Using data from eight Canadian censuses of population, conducted between 1971 and 2006, we find a strong regularity in the age profile of homeownership across generations of Canadians. The homeownership rate rises quickly with the age of household maintainers (i.e., the person(s) who pay(s) for shelter costs) in the period before the age of 40, and continues to climb thereafter at a slower pace until reaching the plateau near age 65, when about three quarters of Canadian households own their homes. We find that the homeownership rate changes little from age 65 to 74 but starts declining after age 75. As well, we note that the level at which homeownership plateaus has risen steadily across birth cohorts since the 1970s.
    Keywords: Income, pensions, spending and wealth, Families, households and housing, Seniors, Income, pensions and wealth
    Date: 2010–06–07
  27. By: Yoshida, Jiro; Sugiura, Ayako
    Abstract: This is one of the first researches on price differentials of green buildings in Asia. Using a rich set of data on condominium transactions and mandatory evaluation of environmental performance in Tokyo, we estimate the effects of itemized green scores on transaction prices. Although green condominiums are on average traded at a premium, the premium is mainly attributed to the building age and quality. After controlling for relevant attributes, we find significant price discounts for newly constructed green condominiums. However, green condominiums experience little depreciation at least during the initial years. Using itemized scores, we find that the long-life design mitigates price discounts, but other factors such as the use of eco-friendly materials, renewable energy, water reuse, and greening exacerbate discounts. Several possibilities are discussed including high future maintenance costs of green condominiums.
    Keywords: sustainability; green building; hedonic pricing; transaction price; residential real estate; Japan
    JEL: Q51 R31 R21
    Date: 2010–03–26
  28. By: Xing, Chunbing (Beijing Normal University)
    Abstract: As massive rural residents leave their home countryside for better employment, migration has profound effects on income distributions such as rural-urban income gap and inequalities within rural or urban areas. The nature of the effects depends crucially on who are migrating and their migrating patterns. In this paper, we emphasize two facts. First, rural residents are not homogeneous, they self-select to migrate or not. Second, there are significant differences between migrants who successfully transformed their hukou status (permanent migrants) and those did not (temporary migrants). Using three coordinated CHIP data sets in 2002, we find that permanent migrants are positively selected from rural population especially in terms of education. As permanent migration takes more mass from the upper half of rural income density, both rural income level and inequalities decrease, the urban-rural income ratio increases at the same time. On the contrary, the selection effect of temporary migrants is almost negligible. It does not have obvious effect on rural income level and inequalities.
    Keywords: migration, self-selection, income distribution, China
    JEL: O15
    Date: 2010–05
  29. By: Pek , Chuen Khee; Othman, Jamal
    Abstract: Increasing generation of solid waste requires better quality disposal options in Malaysia. Control tipping is the most commonly used complemented by sanitary landfill and incineration. This study estimates the non-market values of improved waste disposal services and also ranking them using choice experiment. River water quality is the most concerned followed by psychological fear, air pollution and land use. Socio-economic background and distance factor influence the types of compensating surpluses. These conclude the importance of perception, influenced by socio-economic background, the presence of the Not-In-My-Backyard syndrome and that sanitary landfill is more preferred.
    Keywords: Solid waste disposal; willingness-to-pay; choice experiment
    JEL: Q51
    Date: 2009–10–01
  30. By: Tony Flegg (Department of Economics, University of the West of England); T. Tohmo (School of Business and Economics, University of Jyvaskyla, Finland)
    Abstract: This paper examines the use of location quotients (LQs) in constructing regional input?output tables. Its focus is on the modified FLQ formula proposed by Flegg and Webber (1997). Using data for 20 Finnish regions, ranging in size from very small to very large, we determine appropriate values for the unknown parameter d used in this formula. We find that the FLQ yields results far superior to those from standard LQ-based formulae. Our findings should be very helpful to any regional analyst who is contemplating making use of the FLQ formula to generate an initial set of regional input?output coefficients. These coefficients could be used either as part of the RAS procedure or as the non-survey foundations of a hybrid model. We also consider possible improvements to the FLQ formula but find that the inclusion of a regional specialization term in this formula is unhelpful and that the original FLQ is just as good.
    Keywords: Regional input-output tables Finland FLQ formula Location quotients Input coefficients Multipliers Hybrid models
    JEL: C67 O18 R15
    Date: 2010–05
  31. By: Lorenzo Castelli (DEEI, University of Trieste); Paola Pellegrini (Dept. of Applied Mathematics, University of Venice); Raffaele Pesenti (Dept. of Applied Mathematics, University of Venice)
    Abstract: We propose a mechanism for solving the airport slot allocation problem in Europe. We consider the interdependence of the slots at different airports, and we maximize the efficiency of the system. Through an experimental analysis we quantitatively assess the cost imposed by grandfather rights, which constitute one of the main principles of the current slot allocation mechanism. Moreover, we introduce the possibility to fairly redistribute costs among airlines through monetary compensations. Our results suggest that it is possible to remove grandfather rights without significantly penalizing airlines.
    Keywords: Air Traffic Management; Airport slot allocation; Compensation mechanism; SESAR.
    JEL: C61 C44
    Date: 2010–06
  32. By: Germà Xavier Fageda (Faculty of Economics, University of Barcelona); Juan Luis Jiménez (Universidad de Las Palmas de Gran Canaria); Jordi Perdiguero (Faculty of Economics, University of Barcelona)
    Abstract: Competition in airline markets may be tough. In this context, network carriers have two alternative strategies to compete with low-cost carriers. First, they may establish a low-cost subsidiary. Second, they may try to reduce costs using the main brand. This paper examines a successful strategy of the first type implemented by Iberia in the Spanish domestic market. Our analysis of data and the estimation of a pricing equation show that Iberia has been able to charge lower prices than rivals with its low-cost subsidiary. The pricing policy of the Spanish network carrier has been particularly aggressive in less dense routes and shorter routes.
    Keywords: Airlines, competition, low-cost carriers JEL classification:L13, L59, L71
    Date: 2010–03
  33. By: Don J. Webber (Department of Economics, Auckland University of Technology and Department of Economics, UWE, Bristol)
    Abstract: This paper argues that an important influence on boys’ decisions to stay on into post-compulsory education is the attainment of maths grades that differ from expected.
    Keywords: Bivariate probit; post-compulsory education; choice under uncertainty
    JEL: I21 C35
    Date: 2010–06
  34. By: Fryer, Roland G.; Levitt, Steven D.; Kahn, Lisa; Spenkuch, Jörg L.
    Abstract: Over the past 40 years, the fraction of mixed race black-white births has increased nearly nine-fold. There is very little empirical evidence on how these children fare relative to their single-race counterparts. This paper describes basic facts about the behaviors and outcomes of black-white mixed race individuals. As one might expect, on a host of background and achievement characteristics as well as adult outcomes, mixed race individuals fall in between whites and blacks. When it comes to engaging in risky and anti-social adolescent behavior, however, mixed race adolescents are stark outliers compared to both blacks and whites. We argue that these behavioral patterns are most consistent with a two-sector Roy model, in which mixed race adolescents – not having a predetermined peer group – engage in more risky behaviors to be accepted.
    Keywords: mixed race; biracial; black white race; adolescent behavior
    JEL: J01 J15
    Date: 2010–06–05
  35. By: Rajeev K. Goel; Michael A. Nelson
    Abstract: This research adds to the literature on the nexus between government and corruption by examining further the influence of government decentralization on corruption. Previous research has focused primarily on fiscal decentralization. We bring additional evidence to bear for the United States by addressing whether the structure of local governments – measured both in terms of the scope of services offered and the size of the population served – has a bearing on corruption within the state. Results show that government decentralization does not necessarily reduce corruption – the type of decentralization matters. Specifically, we find that more general-purpose governments consistently contribute to corruption. In contrast, the effect of special-purpose governments on corruption is mixed. The findings uniquely flush out the tension between fiscal decentralization and fragmental local government structures in terms of impacts on corruption. Beyond this, we find that the influences of various government enforcement agencies on corruption, including police, judiciary and corrections, vary. Other corruption determinants generally support the literature. Policy implications are discussed.
    Keywords: Corruption; Fiscal decentralization; Local government fragmentation; Special-purpose government; General-purpose government
    Date: 2010–05
  36. By: Luigi Guiso (European University Institute and EIEF); Luigi Pistaferri (Stanford University, NBER, IZA and SIEPR); Fabiano Schivardi (Cagliari University and EIEF)
    Abstract: We exploit time variation in the degree of development of local credit markets and matched employer-employee data to assess the role of the rm as an internal credit market. In less developed local credit markets rms can oer a atter wage-tenure prole than rms in more developed credit markets to lend implicitly to their workers or oer a steeper prole to implicitly borrow from their workers. We nd that rms located in less nancially developed markets oer wages that are lower at the beginning of tenure and grow faster than those oered by rms in more nancially developed markets, helping rms nance their operations by raising funds from workers. Because we control for local market eects and only exploit time variation in the degree of local nancial development induced by an exogenous liberalization, the eect we nd is unlikely to re ect unobserved local factors that systematically aect wage tenure proles. The size of implicit loans is larger for rms with more problematic access to bank credit and workers less likely to face credit constraints. The amount of credit generated by implicit lending within the rm is economically important and can be as large as 30% of bank lending. Consistent with credit market imperfections opening up trade opportunities within the rm, we nd that the internal rate of return of implicit loans lies between the rate at which workers savings are remunerated in the market and the rate rms pay on their loans from banks.
    JEL: J3 L2 G3
    Date: 2009
  37. By: Booth, Alison L. (University of Essex); Leigh, Andrew (Australian National University); Varganova, Elena (Australian National University)
    Abstract: We conduct a large-scale audit discrimination study to measure labor market discrimination across different minority groups in Australia – a country where one quarter of the population was born overseas. To denote ethnicity, we use distinctively Anglo-Saxon, Indigenous, Italian, Chinese, and Middle Eastern names, and our goal is a comparison across multiple ethnic groups rather than focusing on a single minority as in most other studies. In all cases, we applied for entry-level jobs and submitted a CV showing that the candidate had attended high school in Australia. We find economically and statistically significant differences in callback rates, suggesting that ethnic minority candidates would need to apply for more jobs in order to receive the same number of interviews. These differences vary systematically across groups, with Italians (a more established migrant group) suffering less discrimination than Chinese and Middle Easterners (who have typically arrived more recently). We also explore various explanations for our empirical findings.
    Keywords: discrimination, field experiments, employment
    JEL: J71 C93
    Date: 2010–05

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