nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒08‒06
35 papers chosen by
Steve Ross
University of Connecticut

  1. House Prices and School Quality: The Impact of Score and Non-score Components of Contextual Value-Added By Sofia Andreou; Panos Pashardes
  2. Choosing secondary school by moving house: school quality and the formation of neighbourhoods By Rebecca Allen; Simon Burgess; Tomas Key
  3. Location, Regional Accessibility and Price Effects: Evidence from Twin Cities Home Sales By Michael Iacono; David Levinson
  4. Housing and Commuting in an Extended Monocentric Model By Vincent Breteau; Fabien Leurent
  5. Network Structure and Activity Spaces By Pavithra Parthasarathi; Hartwig Hochmair; David Levinson
  6. The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics By Ugo FRATESI
  7. Poverty, living conditions, and infrastructure access : a comparison of slums in Dakar, Johannesburg, and Nairobi By Gulyani, Sumila; Talukdar, Debabrata; Jack, Darby
  8. The relative effectiveness and costs of contract and regular teachers in India By Paul Atherton; Geeta Kingdon
  9. Does the Rotten Child Spoil His Companion? Spatial Peer Effects Among Children in Rural India By Christian Helmers; Manasa Patnam
  10. Impact of Light Rail Implementation on Labor Market Accessibility: A Transportation Equity Perspective By Yingling Fan; Andrew Guthrie; David Levinson
  11. Entrepreneurship and Market Size: The Case of Young College Graduates in Italy By Di Addario, Sabrina; Vuri, Daniela
  12. House Prices, Non-Fundamental Components and Interstate Spillovers: The Australian Experience By Greg Costello; Patricia Fraser; Nicolaas Groenewold
  13. Network Structure and Metropolitan Mobility By Pavithra Parthasarathi; David Levinson
  14. A Positive Theory of Network Connectivity By David Levinson; Arthur Huang
  15. The Choice between fixed and random effects models: some considerations for educational research. By Paul Clarke; Claire Crawford; Fiona Steele; Anna Vignoles
  16. What kernel methods bring to the analysis of spatial concentration of migrants in France: 1968-1999 By R. RATHELOT; P. SILLARD
  17. Services sectors\' agglomeration and its interdependence with industrial agglomeration in the European Union By Astrid Krenz
  18. School entrance recommendation: A question of age or development? By Horstschräer, Julia; Muehler, Grit
  19. An Approach for spatial and temporal data analysis: application for mobility modeling of workers in Luxembourg and its bordering areas By OMRANI Hichem; CHARIF Omar; KLEIN Olivier; GERBER Philippe
  20. Is judicial inefficiency increasing the house property market weight in Spain? Evidence at the local level By Juan S. Mora-Sanguinetti
  21. Why choose the new I-35W Mississippi River Bridge? By Carlos Carrion-Madera; David Levinson
  22. I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem By Fabio FIORILLO; Agnese SACCHI
  23. All for One? The Dynamic of Intermunicipal Cooperation in Regional Marketing Partnerships By NELLES Jennifer
  24. Educational Inequality in Argentina: The best and worst performers. By Melisa Morales; Corina Paz Terán
  25. Regional Hub Port Development - The Case of Montevideo, Uruguay By Gordon Wilmsmeier; Inmaculada Martínez-Zarzoso; Norbert Fiess
  26. Incomes of Retirement-age and Working-age Canadians: Accounting for Home Ownership By Brown, W. Mark; Hou, Feng; Lafrance, Amélie
  27. Measuring Efficiency of German Bus Public Transport By Raimund Scheffler; Karl-Hans Hartwig; Robert Malina
  28. Evaluating the provision of school performance information for school choice By Rebecca Allen; Simon Burgess
  29. Value of Travel Time Reliability: A review of current evidence By Carlos Carrion-Madera; David Levinson
  30. Industrial Localization and Countries\' Specialization in the European Union: An Empirical Investigation By Astrid Krenz; Gerhard Rübel
  31. Residential choices and interaction in three-member households: a choice experiment. By Edoardo Marcucci; Amanda Stathopoulos; Romeo Danielis; Lucia Rotaris
  32. Chile: Climbing on Giants’ Shoulders: Better Schools for all Chilean Children By Nicola Brandt
  33. Social Learning with Local Interactions By Ianni, A.; Guarino, A.
  34. An empirical model for strategic network foundation By Nicholas Christakis; James Fowler; Guido Imbens; Karthik Kalyanaraman
  35. Can Emerging Asset Price Bubbles be Detected? By Jesús Crespo Cuaresma

  1. By: Sofia Andreou; Panos Pashardes
    Abstract: This paper investigates how the newly introduced Contextual Value Added (CVA) indicator of school quality affects house prices in the catchment area of primary and secondary schools in England. The empirical analysis, based on the data drawn from three independent and previously unexplored UK data sources, shows that the score component of CVA has a strong positive effect on house prices at both primary and secondary levels of education; while the non-score component of this school quality indicator has a significant (negative) effect only in the analysis of secondary school data. Nevertheless, the effect of CVA and its score and non-score components on house prices also varies with the level of spatial aggregation at which empirical investigation is pursued, assuming a more positive role between rather than within Local Authorities (Las). This reflects the emphasis placed by CVA on public good aspects of school quality and suggests that LA policies aimed at raising the average non-score quality characteristics of school conform to household preferences.
    Keywords: School quality, hedonic regression, house prices
    Date: 2010–07
  2. By: Rebecca Allen; Simon Burgess; Tomas Key
    Abstract: This paper uses the pupil census in England to explore how family house moves contribute to school and residential segregation. We track the moves of a single cohort as it approaches the secondary school admission age. We also combine a number of cohorts and estimate a dynamic nonlinear model for house moving with unobserved effects. These approaches yield the same result: moving is significantly negatively correlated with school quality, and segregation does increase as a cohort reaches age 11. However, this relationship is weak: the increase in segregation is slight and quantitative significance of the estimated relationship is low.
    Keywords: school quality, moving, segregation, neighbourhoods
    JEL: I20 R23
    Date: 2010–04
  3. By: Michael Iacono; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Regional location factors, with measures of regional accessibility foremost among them, exert a strong influence on urban property markets. While accessibility represents an important regional-scale factor, more local influences such as proximity to urban highway links may also positively or negatively influence the desirability of a location. In this paper, we use a cross-section of home sales in Hennepin County, Minnesota from the years 2001 through 2004, along with a set of disaggregate regional accessibility measures, to estimate the value of access to employment and resident workers. We also estimate the (dis)amenity effects of locations near major freeway links that have recently undergone, or were scheduled to undergo (as of the time period covered by the home sales), major construction to add capacity. The richness of the home sales data set allows us to control for a number of structural attributes, as well as some site characteristics, while additional neighborhood characteristics (such as income levels and local educational quality) are added from supplemental data sources. Empirical results indicate that households highly value employment access, while access to other resident workers (i.e. competition for jobs) is considered a disamenity. Proximity to local highway access points is positively associated with sale price, while proximity to the highway link itself is negatively associated with price. The paper concludes with some implications for research and practice of the concept and measurement of the relationship between location and land value.
    Keywords: Transportation Ð Economics, Land Value, Accessibility, Hennepin County (MN)
    JEL: R41 R48 R53
    Date: 2010
  4. By: Vincent Breteau (LVMT - Laboratoire Ville, Mobilité, Transports - INRETS - Université Paris-Est - Ecole Nationale des Ponts et Chaussées); Fabien Leurent (LVMT - Laboratoire Ville, Mobilité, Transports - INRETS - Université Paris-Est - Ecole Nationale des Ponts et Chaussées)
    Abstract: We model a city in which jobs are exogenous and distributed across an extended business area in which transport has a nonzero cost. Households are homogeneous in terms of utility and gross income, but each household chooses its residential location on the basis of its place of employment, which is deemed to be fixed. Equilibrium conditions for this residential location market are established. It is shown that there is an equilibrium that is unique (for a closed city with absentee landlords). Households' utility and dwelling size increase the farther the workplace is from the centre, whereas land rent decreases. Within a simplified framework, the model is resolved analytically and we establish the sensitivity of the endogenous variables to the city's characteristic parameters. Two extreme cases are highlighted: the “quasi-monocentric” city where net income decreases with distance from the centre, versus the “eccentric” city, where net income increases with distance from the centre.
    Keywords: Residential Location ; Land Markets ; Commuting
    Date: 2010–07–23
  5. By: Pavithra Parthasarathi; Hartwig Hochmair; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This research analyzes the influence of network structure on household spatial patterns, as measured by activity spaces. The analysis uses street network and travel survey data from the Twin Cities and South Florida to compile measures of network structure. Statistical regression models test the relationship between network structure and travel. The results show that network design does influence travel, after controlling for other non-network based measures. Results from this analysis can be used to understand how changes in network can be used to bring about desired changes in travel behavior.
    Keywords: Transportation Geography, Network Structure, Circuity, Accessibility
    JEL: R41 R48 R53
    Date: 2010
  6. By: Ugo FRATESI ([n.a.])
    Abstract: This paper analyzes the effects of national regional policy choices on domestic and foreign regions to detect the different interests at play. The analysis starts from a new 2-country-4-region model with agglomeration economies, an immobile production factor and a mobile one, allowing the study of international capital and profit flows moreover, different assumptions on bilateral transport costs allow to obtain results in different spatial settings. It is shown that concurrent and often conflicting interests co-exist, especially when agglomeration economies are strong. The other key variables influencing the results are the characteristics and specificities of regions, which can be introduced in the model, and the existence of peripheral regions.
    Keywords: Agglomeration economies, Efficiency and Equity, Peripherality, Regional Policy, Territorial Characteristics
    JEL: E61 H79 R13 R58
    Date: 2010–07
  7. By: Gulyani, Sumila; Talukdar, Debabrata; Jack, Darby
    Abstract: In this paper the authors compare indicators of development, infrastructure, and living conditions in the slums of Dakar, Nairobi, and Johannesburg using data from 2004 World Bank surveys. Contrary to the notion that most African cities face similar slum problems, find that slums in the three cities differ dramatically from each other on nearly every indicator examined. Particularly striking is the weak correlation of measures of income and human capital with infrastructure access and quality of living conditions. For example, residents of Dakar’s slums have low levels of education and high levels of poverty but fairly decent living conditions. By contrast, most of Nairobi’s slum residents have jobs and comparatively high levels of education, but living conditions are but extremely bad . And in Johannesburg, education and unemployment levels are high, but living conditions are not as bad as in Nairobi. These findings suggest that reduction in income poverty and improvements in human development do not automatically translate into improved infrastructure access or living conditions. Since not all slum residents are poor, living conditions also vary within slums depending on poverty status. Compared to their non-poor neighbors, the poorest residents of Nairobi or Dakar are less likely to use water (although connection rates are similar) or have access to basic infrastructure (such as electricity or a mobile phone). Neighborhood location is also a powerful explanatory variable for electricity and water connections, even after controlling for household characteristics and poverty. Finally, tenants are less likely than homeowners to have water and electricity connections.
    Keywords: Housing&Human Habitats,Transport Economics Policy&Planning,Urban Slums Upgrading,Urban Services to the Poor,Town Water Supply and Sanitation
    Date: 2010–07–01
  8. By: Paul Atherton; Geeta Kingdon
    Abstract: While use of contract teachers provides a low-cost way to increase teacher numbers, it raises the quality concern that these less trained teachers may be less effective. We estimate the causal contract-teacher effect on student achievement using school fixed effects and value-added models of the education production function, using Indian data. We allow for both homogenous and heterogeneous treatment effects, to highlight the mechanisms through which the contract teacher effect works. We also present school fixed effects teacher pay equations and predict achievement marks per Rupee spent on regular and contract teachers. We find that despite being paid just a third of the salary of regular teachers with similar observed characteristics, contract teachers produce higher student learning.
    Keywords: Student achievement, contract teachers, India
    JEL: I21
    Date: 2010
  9. By: Christian Helmers; Manasa Patnam
    Abstract: This paper identifies the effect of neighborhood peer groups on childhood skill acquisition using observational data. We incorporate spatial peer interaction, defined as a child’s nearest geographical neighbors, into a production function of child cognitive development in Andhra Pradesh, India. Our peer group construction takes the form of directed networks, whose structure allows us to identify peer effects and enables us to disentangle endogenous effects from contextual effects. We exploit variation over time to avoid confounding correlated with social effects. Our results suggest that spatial peer and neighborhood effects are strongly positively associated with a child’s cognitive skill formation. These peer effects hold even when we consider an alternative IV-based identification strategy and different variations to network size. Further, we find that the presence of peer groups helps provide insurance against the negative impact of idiosyncratic shocks to child learning.
    Keywords: Children, peer effects, cognitive skills, India
    JEL: C21 O15 R23
    Date: 2010
  10. By: Yingling Fan; Andrew Guthrie; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This study examines transit's role in promoting social equity by assessing impacts of recent transit changes in the Twin Cities, including opening of the Hiawatha light rail line, on job accessibility among workers of different wage categories. Geo-spatial and descriptive analyses are employed to examine the magnitude of the accessibility changes and where changes occur. This study also uses regression analysis to estimate block-level before- and after-LRT accessibility as a function of the block's locational characteristics and demographic composition. The analysis finds that proximity to light rail stations and bus stops offering direct rail connections are associated with large, statistically significant gains in accessibility to low-wage jobs. These gains stand out from changes in accessibility for the transit system as a whole. The paper concludes by discussing implications of the study results for informing more equitable transit polices in the future.
    Keywords: Transportation equity, transit, light rail, bus, Twin Cities, Minneapolis, St. Paul
    JEL: R41 R48 R53
    Date: 2010
  11. By: Di Addario, Sabrina (Bank of Italy); Vuri, Daniela (University of Rome Tor Vergata)
    Abstract: We analyze empirically the effects of urban agglomeration on Italian college graduates’ work possibilities as entrepreneurs three years after graduation. We find that each 100,000 inhabitant-increase in the size of the individual’s province of work reduces the chances of being an entrepreneur by 0.2-0.3 percent. This result holds after controlling for regional fixed effects and is robust to instrumenting urbanization. Province’s competition, urban amenities and dis-amenities, cost of labor, earning differentials between employees and self-employed workers, unemployment rates and value added per capita account for 40 percent of the negative urbanization penalty. Our result cannot be explained by the presence of negative large-city differentials in returns to education either. In fact, as long as they succeed in entering the largest markets, young entrepreneurs are able to reap-off the benefits of urbanization externalities: every 100,000-inhabitant increase in the province's population raises entrepreneurs' net monthly income by 0.2-0.3 percent.
    Keywords: labor market transitions, urbanization
    JEL: R12 J24 J21
    Date: 2010–07
  12. By: Greg Costello (Curtin University of Technology); Patricia Fraser (Curtin University of Technology); Nicolaas Groenewold (UWA Business School, The University of Western Australia)
    Abstract: Using Australian capital city data from 1984Q3-2008Q2, this paper utilizes a dynamic present value model within a VAR framework to construct time series of house prices depicting what aggregate house prices should be given expectations of future real disposable income – the ‘fundamental price’ – and continues by comparing capital city fundamental prices with actual prices. The extent to which revealed capital city ‘non-fundamental’ components spillover from state to state, as well as their long-term impact is also investigated. Results provide evidence of periods of sustained deviations of house prices from values warranted by income for all state capitals with the greatest deviations arising in the NSW market and starting around 2000. In general NSW is relatively more susceptible to spillovers transmitted from other states while ACT and WA are most isolated from the rest of the country.
    Keywords: house prices, present value model, house price fundamentals, house price-income ratio, VAR/VEC modelling
    Date: 2010
  13. By: Pavithra Parthasarathi; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This research develops quantitative measures that capture various aspects of underlying network structure, using aggregate level travel data from fifty metropolitan areas across the U.S. The influence of these measures on system performance is then tested using statistical regression models. The results corroborate that the quantitative measures of network structure affect the system performance. The results from this analysis can be used to develop network design guidelines that can be used to address current transportation problems.
    Keywords: Network structure, mobility, congestion, accessibility, travel behavior, transportation geography
    JEL: R41 R48 R53
    Date: 2010
  14. By: David Levinson; Arthur Huang (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper develops a positive theory of network connectivity, seeking to explain the micro-foundations of alternative network topologies as the result of self-interested actors. By building roads, landowners hope to increase their parcelsÕ accessibility and economic value. A simulation model is performed on a grid-like land use layer with a downtown in the center, whose structure resembles the early form of many Midwest- ern and Western (US) cities. The topological attributes for the networks are evaluated. This research posits that road networks experience an evolutionary process where a tree-like structure first emerges around the centered parcel before the network pushes outward to the periphery. In addition, road network topology undergoes clear phase changes as the economic values of parcels vary. The results demonstrate that even without a centralized authority, road networks have the property of self-organization and evolution, and, that in the absence of intervention, the tree-like or web-like nature of networks is a result of the underlying economics.
    Keywords: road network, land parcel, network evolution, network growth, phase change, centrality measures, degree centrality, closeness centrality, betweenness cen- trality, network structure, treeness, circuitness, topology
    JEL: R41 R48 R53
    Date: 2010
  15. By: Paul Clarke; Claire Crawford; Fiona Steele; Anna Vignoles
    Abstract: We discuss the use of fixed and random effects models in the context of educational research and set out the assumptions behind the two modelling approaches. To illustrate the issues that should be considered when choosing between these approaches, we analyse the determinants of pupil achievement in primary school, using data from the Avon Longitudinal Study of Parents and Children. We conclude that a fixed effects approach will be preferable in scenarios where the primary interest is in policy-relevant inference about the effects of individual characteristics, but the process through which pupils are selected into schools is poorly understood or the data are too limited to adjust for the effects of selection. In this context, the robustness of the fixed effects approach to the random effects assumption is attractive, and educational researchers should consider using it, even if only to assess the robustness of estimates obtained from random effects models. On the other hand, when the selection mechanism is fairly well understood and the researcher has access to rich data, the random effects model should naturally be preferred because it can produce policy-relevant estimates while allowing a wider range of research questions to be addressed. Moreover, random effects estimators of regression coefficients and shrinkage estimators of school effects are more statistically efficient than those for fixed effects.
    Keywords: fixed effects, random effects, multilevel modelling, education, pupil achievement
    JEL: C52 I21
    Date: 2010–06
  16. By: R. RATHELOT (Crest); P. SILLARD (Secrétariat Général Comité interministériel des villes)
    Abstract: Most studies about the geographical location of a phenomenon or a population first aggregate data according to administrative boundaries which are generally not related to the issue. When the population under study is rare, and when the sample is not exhaustive, these aggregation choices often lead the results. In this study, we use non-parametric kernel techniques to estimate ratios of population densities. Using this kind of method is not technically costly and allows one to obtain the optimal trade-off between variance and bias. We apply this technique to the distribution of immigrants over the French territory, using data form population censures between 1968 to 1999. Another contribution of this work is to propose a concentration index based on the density ratios obtained in the first step.
    Keywords: spatial concentration, geographical location, segregation indices, non-parametric estimation, immigration
    JEL: J15 R00
    Date: 2010
  17. By: Astrid Krenz
    Abstract: Services sectors\' agglomeration in the European Union, its development over time, its driving factors and dynamic tendencies will be empirically investigated in this study. Locational gini coefficients are computed taking EU-KLEMS data for 14 European countries covering 22 services sectors over the period from 1970 to 2005. Services sectors\' agglomeration in the European Union decreased over the years between 1970 and 2005. Analysis shows that for most of the services sectors considered agglomeration decreased over time, leading to further dispersion of economic activities. Only the branches of retail trade, other water transport and financial intermediation record a significant increase in agglomeration. Agglomeration tendencies of services sectors can be best explained by Traditional and New Trade Theories, New Economic Geography appears to be not relevant. Theoretical work, incorporating services sectors\' activities in New Economic Geography models, is scarce and as Empirics show there is a justified reason for lack of research in that area. In a further step the interaction between industrial and services sectors\' agglomeration is investigated. Non-stationarity of variables is being checked for and error correction methods or regression in differences is employed. There exist several interactions between services and industrial sectors\' agglomeration in the European Union. In particular, agglomeration in retail trade is positively influenced by an increase in agglomeration in textiles industries over the years between 1970 and 2005. The existence of interaction effects justifies further enhancement of theoretical models. Further, the results are important for understanding agglomeration processes in the EU; interactions between services and industrial sectors are indicative for a highly dynamic region which might attract other activities, as well.
    Keywords: Services, Agglomeration, New Economic Geography, European Integration
    JEL: C50 F12 F14 F15 L80
    Date: 2010–07–05
  18. By: Horstschräer, Julia; Muehler, Grit
    Abstract: According to school entry regulations in most countries, the composition of school entrance cohorts is determined by a fixed cutoff date. This procedure creates inter-cohort differences in age and development which can severely influence educational trajectories. Developmental examinations at school entry might be an instrument to mitigate these differences by delaying school entry for children with developmental impairments. Using data on the compulsory school entrance screening in the German federal state of Brandenburg, this paper shows that age and developmental status are the major influencing factors for a child's probability to receive a school recommendation. Younger children and children with impairments in cognitive, socio-emotional and motor development as well as health are less likely to be recommended. Delaying school entry allows them to improve, although their developmental status remains below average. School entrance examinations thus allow for some harmonization of school cohorts with respect to age and developmental differences. --
    Keywords: child development,school entrance,school recommendation,relative age
    JEL: J13 I21 I38
    Date: 2010
  19. By: OMRANI Hichem; CHARIF Omar; KLEIN Olivier; GERBER Philippe
    Abstract: In this paper, we propose a general visual analytic approach to synthesis very large spatial data and discover interesting knowledge and unknown patterns from complex data based on Origin-Destination (OD) matrices. The research studies of Tobler constitute a good basis in this topic. This paper is interested in the proposal of 2 methods entitled respectively ”Weighted Linear Directional Mean: WLDM” and ”DS-WLDM”. The latter incorporates the Dempster-Shafer theory of evidence with WLDM. Both of the developed methods are an extension of ”Linear Directional Mean: LDM” for mobility modeling. With classical techniques such as LDM among others, the results of data mapping are not intelligible and easy to interpret. However with both WLDM and DS-WLDM methods it is easy to discover knowledge without losing a lot of information which is one of the interests of this paper. This proposal is generic and it intends to be applied for data mapping such as for geographical presentation of social and demographic information (e.g. mobility of people, goods and information) according to multiple spatial scales (e.g. locality, district, municipality). It could be applied also in transportation field (e.g. traffic flow). For the application, administrative data is used in order to evaluate spatial and temporal aspects of the daily and the residential mobility of workers in Luxembourg and its bordering areas.
    Keywords: Mobility modeling; data mapping; spatial mobility; geographic knowledge discovery; location uncertainty; daily and residential mobility
    Date: 2010–07
  20. By: Juan S. Mora-Sanguinetti (Banco de España)
    Abstract: Compared with the rest of the European countries the weight of the house property market in Spain is very high, which is consistent with the weakness of the tenancy market. In this context, it has often been argued that an inefficient judicial system, implying a cumbersome procedure to evict a non-paying tenant or simply needing a long period to execute a decision, may be an important determinant of the tenancy market weakness, as it constrains the effective supply by reducing the profitability of landlords. This research has studied this effect econometrically using a panel data approach and exploiting the differences in the judicial efficiency that exists among the Spanish provinces. After controlling for several other factors, this study concludes that the degree of inefficiency of the judicial system has a positive, although minor, impact on the differences in the property share among provinces in Spain.
    Keywords: judicial efficiency, property market, tenancy market, contract enforcement
    JEL: K40 R21
    Date: 2010–07
  21. By: Carlos Carrion-Madera; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: On September 18th 2008, a replacement for the previously collapsed I-35W bridge opened to the public. Consequently, travelers were once again confronted with the opportunity to find better alternatives. The traffic pattern of the Minneapolis road network was likely to readjust, because of the new link addition. However, questions arise about the possible reasons (or components in the route choice process) that are likely to influence travelers crossing the Mississippi, who had to choose among the bridge options, including the new I-35W bridge. Using GPS data and web-based survey collected both before and after the replacement bridge opened, a bridge choice model is estimated using weighted-least squares logit. In this way the proportion of I-35W trips can be estimated depending on the assigned values of the explanatory variables, which include: statistical measures of the travel time distribution experienced by the subjects, alternative diversity, and others. The results showed that travel time savings and reliability were the main reasons for choosing the new I-35W bridge.
    Keywords: I-35W Mississippi River Bridge, Route Choice, Route Assignment, Traffic Assignment, Discrete Choice
    JEL: R41 R48 R53
    Date: 2010
  22. By: Fabio FIORILLO ([n.a.]); Agnese SACCHI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: The aim of the paper is to analyze a simple model of local public good provision with positive interjurisdictional spillover effects - as the case of environment protection spending - comparing decentralized and centralized system, when spending and taxation decisions are made by nonbenevolent politicians. As in the recent so-called Second Generation Theory (SGT) of fiscal federalism (Seabright, 1996; Besley and Coate, 2002; Lockwood, 2002; Oates, 2005, Weingast, 2009), we adopt a political economy approach to look at the trade-off between centralized and decentralized provision of local public goods. The main differences between our paper and theirs are that we model the public good taking into account two important aspects: the size - in terms of population - of local jurisdictions providing it, which is relevant for the scale effect in the financing mechanism of non-rival public goods; the detail of political opportunistic behaviour introducing a "rent equation" directly into the model to represent the additional gain of "non-benevolent" politicians, who levy higher taxes than the costs of the public goods. Considering these two elements, our results appear to be partially different from the SGT. In particular, the convenience of having decentralization versus centralization changes with the degree of spillovers and the size of regions. Three elements have to be considered: i) the implicit transfers ("cross subsidiation") from high scale economy regions to low scale ones; ii) the free-riding gains in receiving positive externalities; iii) the gain of internalization of externalities. When spillovers linked to public goods provision are low, only the first item is relevant. Thus, smaller regions prefer the centralized solution, since through it they can charge bigger regions for some costs of production. On the contrary, bigger local jurisdictions would like decentralization.When beneficial spillover effects increase (and many regions producing them), the other two factors start to play a crucial role, and the opposite situation takes place. The basic trade-off is between the internalization process and the free-riding tendency, whose efficiency gains are different for large and small local jurisdictions. Hence, from a positive viewpoint, decentralization should not be necessarily pursued only in the absence of externalities, but it depends on the relative size of the local jurisdictions.
    Keywords: Decentralization, Free-riding, Local public goods, Rent-seeking behaviour, Spillovers
    JEL: D62 D72 H23 H41 H70
    Date: 2010–07
  23. By: NELLES Jennifer
    Abstract: In this complex and highly interconnected world, one government rarely possesses full capability in any given policy area. It is therefore vital to understand how governments can work together to achieve collective goals. This paper examines how horizontal cooperation between local governments emerges in metropolitan regions. It tests a theoretical framework that unites the two dominant, but so far isolated, approaches to regional governance and cooperation in four cases: the Toronto and Waterloo city-regions in Canada, and the Frankfurt and Rhein-Neckar regions in Germany. Findings demonstrate the inconsistency of the systemic and intervening factors that anchor the two dominant approaches and propose an alternative approach – civic capital – to explain observed patterns of cooperation. Finally, the paper reflects on the theoretical and policy implications of these findings for research in comparative politics and regional governance.
    Keywords: regional governance; intermunicipal cooperation; civic capital; regional development; regional marketing
    Date: 2010–07
  24. By: Melisa Morales (Inter-American Development Bank); Corina Paz Terán (Universidad Nacional de Tucumán)
    Abstract: What do we know about inequality in educational attainment across Argentina's cities? To answer this question, we present the education Gini coefficient for the period 2002-2007. Using microdata from the national household survey, we document the following results. First, educational inequality has declined in almost all metropolitan areas whereas i t has increased in Posadas, Mar del Plata, Rosario and Formosa. Second, although there are no important differences in the average years of schooling across cities, great disparities exist with respect to the education Gini. Buenos Aires City is in a leading position, especially in relation to the northeast region of the country and, particularly, Posadas city.
    Keywords: Gini, Inequality, Bootstrap
    JEL: C43 D3 J24
    Date: 2010–05
  25. By: Gordon Wilmsmeier (Edinburgh Napier University / Scotland); Inmaculada Martínez-Zarzoso (Georg-August-Universität, Göttingen / Germany); Norbert Fiess (The World Bank, Buenos Aires)
    Abstract: This paper reflects on port development in Uruguay in an environment of trilateral interport competition. The regional characteristics of port development in terms of their geographical, functional and operational characteristics are discussed by analysing the port system’s evolution. The case of Montevideo as the success or failure of a regional hub port development strategy is analysed in detail. Particular attention is given to the evolution and impact of the liner shipping service network in defining the role of a port within a regional port system. Further, the evolution of the port of Montevideo in terms of institutional and organisational and the related strategy are described, with focus on the effect on transhipment cargo in the port. The main findings are twofold. First, port development in Montevideo been driven proactively and under a clear strategy, but still faces a number of challenges. Second, economies of scale in transport, port infrastructure and connectivity are important determinants of port development, of which the latter is principally driven by external actors, the shipping lines. The paper shows that despite strong efforts Uruguay and its principal port Montevideo are highly dependent on external factors, particularly the level of connectivity, in their strategy to develop Montevideo as a regional hub. Thus the findings are relevant in relation to the discussion of Montevideo’s development potentials as a hub on South America’s East Coast in particular and the effects of external influences on port development from in general.
    Keywords: Regional port development; transhipment, connectivity; distance; Latin America
    Date: 2010–06–30
  26. By: Brown, W. Mark; Hou, Feng; Lafrance, Amélie
    Abstract: This paper estimates the implicit income generated by the home equity of working-age and retirement-age households. In so doing, it expands our understanding of Canadians' preparation for retirement by taking into account the services that homeowners realize as a result of having invested in their homes. On the basis of both the 2006 Survey of Household Spending and the 2006 Census of Population, we find that housing services make an important contribution to household income. When estimates of the services provided by the equity invested in housing are added to traditional estimates of income, the income of retirement-age households is increased by 9% to 12% for those in the 60-to-69 age class and by 12% to 15% for those in the 70-plus age class. In turn, this additional income reduces the difference in income between working-age and retirement-age households that own their own homes. According to the Survey of Household Spending, net incomes decline by about 45% between the peak household earning years and the 70-plus retirement-age class. This figure is reduced to 42% when the contribution of housing services is taken into account. The Census provides a similar picture: the gap in incomes is 38% when net income alone is considered and 35% when one accounts for housing services.
    Keywords: Income, pensions, spending and wealth, Seniors, Work and retirement
    Date: 2010–07–26
  27. By: Raimund Scheffler (Institute of Transport Economics, Muenster); Karl-Hans Hartwig (Institute of Transport Economics, Muenster); Robert Malina (Institute of Transport Economics, Muenster)
    Abstract: This paper quantifies the technical efficiency of German bus companies and elaborates on the main factors influencing their performance. Efficiency is measured with a stochastic production frontier. We test for the impact on efficiency of ownership structure and participation at tendering. Furthermore, we investigate the influence on efficiency when a bus company is a part of a multi-product enterprise. The results yield insights how public bus companies might improve their performance in order to cope with the changing market environment. The mean technical efficiency of the investigated bus companies is around 87 percent. Bus companies with participation at tendering show a significantly higher mean efficiency than other companies. The ownership structure has no influence on technical efficiency.
    Keywords: Stochastic Frontier Analysis, Production Function, Public Transport, Efficiency Analysis,
    JEL: C13 C23 L92
    Date: 2010–07
  28. By: Rebecca Allen; Simon Burgess
    Abstract: One of the key components of any school choice system is the information given to parents as the basis for choice. We develop and implement a framework for determining the optimal performance metrics to help parents choose a school. This approach combines the three major critiques of the usefulness of performance tables into a natural, implementable metric. The best content for school performance tables is the statistic that best answers the question: “In which feasible choice school will a particular child achieve the highest exam score?” We implement this approach for 500,000 students in England for a range of performance measures. Using performance tables is strongly better than choosing at random: a child who attends the highest ex ante performing school within their choice set will ex post do better than the average outcome in their choice set twice as often as they will do worse.
    Keywords: school choice, performance tables
    JEL: I21 I28
    Date: 2010–06
  29. By: Carlos Carrion-Madera; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Travel time reliability is a fundamental factor in travel behavior. It represents the temporal uncertainty experienced by users in their movement between any two nodes in a network. The importance of the time reliability depends on the penalties incurred by the users. In road networks, travelers consider the existence of a trip travel time uncertainty in different choice situations (departure time, route, mode, and others). In this paper, a systematic review of the current state of research in travel time reliability, and more explicitly in the value of travel time reliability is presented. Moreover, a meta-analysis is performed in order to determine the reasons behind the discrepancy among the reliability estimates.
    Keywords: variability, reliability, travel time, scheduling.
    JEL: R41 R48 R53
    Date: 2010
  30. By: Astrid Krenz; Gerhard Rübel
    Abstract: The aim of this study is to empirically investigate the development of Industrial Localization and Countries\' Specialization Patterns in the European Union, to explain the driving forces behind and to find out dynamic tendencies. We extend existing research work by using a broader data set, covering a longer period of time and by applying several econometric methods in order to explain Localization and Specialization. Explanatory variables are derived from Traditional Trade Theory, New Trade Theories and the New Economic Geography. Taking EU-KLEMS data for 14 European countries covering 20 industries over the period from 1970 to 2005 we compute both regional and locational Gini coefficients. There is a clear increase in Industrial Concentration but only a slight increase in Countries\' Specialization in the EU evident over time. Especially, low technology or labor intensive industries experienced the highest increase in Industrial Concentration. New Trade Theory and New Economic Geography can explain both Industrial Concentration and Countries\' Specialization in the EU best. As regards Countries\' Specialization our results indicate that trade costs seem to have declined so much and European liberalization has proceeded so far that dispersion among countries occurs again. We show that it\'s important to consider multicollinearity problems of variables. Furthermore, we test for cointegration between our regression variables. For the EU, results of an error correction modeling framework show that imbalances in European Countries\' Specialization are being set off at a rate of about 68 to 105 percent (according to the regression framework taken) within the next period. New Economic Geography is the best explanatory force within the error correction model. Adjustments rates for Sweden and Italy appear to be much lower than for the EU as a whole. These results might be valuable for understanding agglomeration processes in the EU. Also, as European Integration continues to progress, it is important to know how and how quickly countries will specialize and industries will agglomerate.
    Keywords: New Economic Geography, Concentration, Specialization, European Integration, Cointegration
    JEL: C50 F14 F15
    Date: 2010–07–04
  31. By: Edoardo Marcucci (DIPES/CREI, Faculty of Political Science, University of Roma Tre.); Amanda Stathopoulos (DISES, Faculty of Economics, University of Trieste.); Romeo Danielis (DISES, Faculty of Economics, University of Trieste.); Lucia Rotaris (DISES, Faculty of Economics, University of Trieste.)
    Abstract: Microeconomics studies group behaviour by using the representative member model. However, there is growing evidence that there can be significant differences between choices made by single individuals and those made by the same individuals when choosing collectively. This study investigates the differences between individual and joint decisionmaking in the context of residential location choice. It is widely recognized that household location choices involve several members of a household with heterogeneous preferences and influence power. Nonetheless little is known about group decision-making processes in practice. In particular, there is only scant evidence on how preferences differ among family members and to what extent individual preferences can be aggregated to achieve an approximation of joint choices. The study evaluates whether there is heterogeneity in single members’ preferences. Furthermore, relative power is inferred by measuring similarity between ex ante single preferences and ex post joint choice outcomes. We also quantify the implicit bias generated by relying on the representative member approach. These issues are tested by employing a two-stage conjoint choice experiment administered to a sample of 53 Italian families. This work proposes a novel extension of the commonly used dyadic interaction approach to consider the role of adolescents in household decision-making.
    Keywords: Unitary household, stated choice experiments, residential location, agent interaction and relative influence, discrete choice models, MNL, MMNL.
    JEL: D12 C35 D79
    Date: 2010
  32. By: Nicola Brandt
    Abstract: Chile has made impressive progress in educational attainment. Yet, despite recent improvements, outcomes, as measured by PISA results, still need to catch up with OECD standards and equity problems should be addressed. One decisive ingredient will be better teachers. Chile should aim to attract qualified individuals to the profession and bolster initiatives to improve initial teacher education and training. A second ingredient will be stronger quality assurance mechanisms. For a long time, Chile has relied to a considerable extent on competition to ensure school quality. But there has been limited success, in part due to very unequal conditions for public and private schools to compete in terms of their ability to select children, their flexibility to employ teachers and in terms of financing. Chile has started to address this by prohibiting the selection of students until 6th grade. The ongoing introduction of a nation-wide quality assurance system based on independent evaluation of results is a welcome complement. Finally, Chile will have to improve outcomes for students with poor results even more than for the rest which would lift the average and improve equity at the same time. The government has recently made important changes to invest more in students from weak socio-economic backgrounds. These extra resources can help to make considerable progress. This Working Paper relates to the 2010 Economic Survey of Chile (<P>Chili : Un défi de taille : des écoles plus performantes pour tous les jeunes Chiliens<BR>La progression des niveaux d.instruction au Chili est impressionnante. Pourtant, malgre des ameliorations recentes, les resultats . mesures dans le cadre du PISA . doivent encore rattraper ceux des pays de l.OCDE, et il faut aussi s.employer a resoudre les problemes d.equite. Les enseignants auront dans ces domaines un role capital. Le Chili doit s.efforcer d.attirer des personnes qualifiees vers le metier d.enseignant et de soutenir les initiatives visant a ameliorer leur formation initiale et en cours d.emploi. Il faut egalement renforcer les mecanismes d.assurance qualite. Depuis longtemps, le Chili recourt largement a la concurrence pour assurer la qualite des etablissements scolaires, mais cette methode n.a eu que des resultats limites, en partie a cause de regles du jeu tres inegales entre ecoles publiques et privees concernant la selection des eleves, le recrutement des enseignants et le mode de financement. Le Chili a commence a s.attaquer a ces problemes en interdisant la selection des eleves jusqu.a la 6eme annee de scolarite. Le nouveau dispositif national d.assurance qualite, fonde sur une evaluation independante des resultats, est en cours de mise en oeuvre et viendra utilement completer l.ensemble. Enfin, il faudra aider les eleves en difficulte encore plus que les autres si le Chili veut ameliorer les resultats scolaires moyens et renforcer l.equite dans le meme temps. Les pouvoirs publics ont entrepris recemment des reformes d.envergure pour investir davantage en faveur des enfants de familles modestes. Ces ressources supplementaires peuvent contribuer a obtenir des progres considerables. Ce document de travail se rapporte a l.Etude economique de l.OCDE du Chili 2010 (
    Keywords: education policy, Chile, PISA, School competition, Chili, PISA, politique d'éducation, concurrence entre les établissements scolaires
    JEL: I20 I28
    Date: 2010–06–17
  33. By: Ianni, A.; Guarino, A.
    Abstract: We study a simple dynamic model of social learning with local informational exter-nalities. There is a large population of agents, who repeatedly have to choose one, out of two, reversible actions, each of which is optimal in one, out of two, unknown states of the world. Each agent chooses rationally, on the basis of private information (s)he receives by a symmetric binary signal on the state, as well as the observation of the action chosen among their nearest neighbours. Actions can be updated at revision opportunities that agents receive in a random sequential order. Strategies are stationary, in that they do not depend on time, nor on location. <br><br> We show that: if agents receive equally informative signals, and observe both neighbours, then the social learning process is not adequate and the process of actions converges exponentially fast to a configuration where some agents are permanently wrong; if agents are unequally informed, in that their signal is either fully informative or fully uninformative (both with positive probability), and observe one neighbour, then the social learning process is adequate and everybody will eventually choose the action that is correct given the state. Convergence, however, obtains very slowly, namely at rate ?t: We relate the findings with the literature on social learning and discuss the property of efficiency of the information transmission mechanism under local interaction. <br><br> Keywords; Social Learning, Bayesian Learning, Local Informational External-ities, Path Dependence, Consensus, Clustering, Convergence Rates.
    Date: 2010–07–01
  34. By: Nicholas Christakis; James Fowler; Guido Imbens (Institute for Fiscal Studies and Harvard University); Karthik Kalyanaraman (Institute for Fiscal Studies and UCL)
    Abstract: <p>We develop and analyze a tractable empirical model for strategic network formation that can be estimated with data from a single network at a single point in time. We model the network formation as a sequential process where in each period a single randomly selected pair of agents has the opportunity to form a link. Conditional on such an opportunity, a link will be formed if both agents view the link as beneficial to them. They base their decision on their own characateristics, the characteristics of the potential partner, and on features of the current state of the network, such as whether the the two potential partners already have friends in common. A key assumption is that agents do not take into account possible future changes to the network. This assumption avoids complications with the presence of multiple equilibria, and also greatly simplifies the computational burden of anlyzing these models. We use Bayesian markov-chain-monte-carlo methods to obtain draws from the posterior distribution of interest. We apply our methods to a social network of 669 high school students, with, on average, 4.6 friends. We then use the model to evaluate the effect of an alternative assignment to classes on the topology of the network.</p>
    Date: 2010–06
  35. By: Jesús Crespo Cuaresma
    Abstract: Bayesian Model Averaging techniques are used to analyse how robustly it is possible to identify factors that may lead to the bursting of asset price bubbles in OECD economies. A large set of variables put forward in the literature is assessed, as well as interactions of these variables with estimates of asset price misalignments to evaluate the importance of the different channels postulated by theory. The results indicate that asset price misalignments are not robust determinants of house price reversals unless their interaction with other characteristics of the economy (credit growth, population growth and interest rate developments) is taken into account. On the other hand, stock price reversals are affected by misalignments, as well as other real and monetary variables. Out-of-sample prediction exercises provide evidence that dealing explicitly with model uncertainty using Bayesian model averaging techniques leads to better forecasts of reversals in asset prices than relying on model selection. Conclusions regarding the importance of dealing quantitatively with model uncertainty are drawn to improve the anticipation of asset price reversals.<P>Peut-on détecter les bulles naissantes des prix des actifs ?<BR>Des techniques de modèle bayésien en moyenne ont été utilisées pour analyser dans quelle mesure il est possible d’identifier de façon robuste les facteurs qui peuvent provoquer l’éclatement de bulles des prix des actifs dans les économies de l’OCDE. Un large ensemble de variables mises en avant par les spécialistes a été évalué, de même que les interactions de ces variables avec les estimations des désalignements des prix des actifs, le but étant de déterminer l’importance des différents canaux retenus sur le plan théorique. Les résultats montrent que les désalignements des prix des actifs ne constituent pas un déterminant fiable des retournements des prix immobiliers, sauf si l’on prend en compte leur interaction avec d’autres caractéristiques de l’économie (croissance du crédit, croissance démographique et évolution des taux d’intérêt). En revanche, les retournements des cours des actions subissent les effets des désalignements ainsi que ceux d’autres variables réelles et monétaires. Des exercices de prévision hors échantillon montrent qu’en traitant expressément l’incertitude du modèle par des techniques bayésiennes en moyenne, on obtient des prévisions des retournements des prix des actifs qui sont meilleures qu’en sélectionnant un modèle. Ce document tire une série de conclusions quant à l’importance d’un traitement quantitatif de l’incertitude liée à la modélisation, afin de pouvoir mieux anticiper les retournements des prix des actifs.
    Keywords: model averaging, house prices, asset prices, stock prices, model uncertainty, moyennes de modèles, prix des actifs, prix immobiliers, cours des actions, incertitude des modèles
    JEL: C11 C23 G12
    Date: 2010–06–01

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