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on Urban and Real Estate Economics |
| By: | Kristopher S. Gerardi; Christopher L. Foote; Paul S. Willen |
| Abstract: | Understanding the evolution of real-time beliefs about house price appreciation is central to understanding the U.S. housing crisis. At the peak of the recent housing cycle, both borrowers and lenders appealed to optimistic house price forecasts to justify undertaking increasingly risky loans. Many observers have argued that these rosy forecasts ignored basic theoretical and empirical evidence that pointed to a massive overvaluation of housing and thus to an inevitable and severe price decline. We revisit the boom years and show that the economics profession provided little such countervailing evidence at the time. Many economists, skeptical that a bubble existed, attempted to justify the historic run-up in housing prices based on housing fundamentals. Other economists were more uncertain, pointing to some evidence of bubble-like behavior in certain regional housing markets. Even these more skeptical economists, however, refused to take a conclusive position on whether a bubble existed. The small number of economists who argued forcefully for a bubble often did so years before the housing market peak, and thus lost a fair amount of credibility, or they make arguments fundamentally at odds with the data even ex post. For example, some economists suggested that cities where new construction was limited by zoning regulations or geography were particularly "bubble-prone," yet the data shows that the cities with the biggest gyrations in house prices were often those at the epicenter of the new construction boom. We conclude by arguing that economic theory provides little guidance as to what should be the "correct" level of asset prices -- including housing prices. Thus, while optimistic forecasts held by many market participants in 2005 turned out to be inaccurate, they were not ex ante unreasonable. |
| Keywords: | Housing - Prices |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:10-5&r=ure |
| By: | Sébastien CHANTELOT (ESC Bretagne Brest); Stéphanie PERES (USC INRA 2032 GAIA); Stéphane VIROL (GREThA, UMR CNRS 5113) |
| Abstract: | This paper analyses the creative class geography in France, in 2006. This geography is seen here through the lens of Explanatory Spatial Data Analysis (ESDA). This method brings originality to the question of creative people geography in addition to the spatial context, France, where this question hasn’t been deepened yet. Methodology allows measurement of spatial agglomeration degree and identification of creative people location patterns. First, by computing locational Gini index and Moran’s I statistic of global spatial autocorrelation. These measures provide an overview of the spatial distribution of creative people among French districts and the existence of some hotspot regions with strong dynamic of creative people accumulation. Second, Exploratory Spatial Data Analysis (ESDA) tools, such as Moran scatterplot and LISA statistics, allow to identify district clusters of creative people. It leads to evidence that creative people are unevenly geographically distributed across French districts. District clusters of creative occupations result from spreading of French largest cities influence. |
| Keywords: | Creative class, ESDA, location patterns, spatial autocorrelation, French districts |
| JEL: | C12 O18 R23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-16&r=ure |
| By: | Pavlyuk, Dmitry |
| Abstract: | This paper aimed at a statistical analysis of competition for tourists between regions within Baltic states (Estonia, Latvia, Lithuania) and estimation relative efficiency levels of regions. We apply a modern approach called Spatial Stochastic Frontier and corresponded to spatial modification of a stochastic frontier model. We specify two alternative spatial stochastic frontier models – distance and travel-time based to identify an influence of existing transport network on research results. Using the model we analyse region-specific factors (tourism infrastructure, employment, geographical position and natural attractors) having an effect on a number of visitors and estimate regions' efficiency values. We discover a significant level of inefficiency of Baltic states regions and propose some ways to improve the situation. |
| Keywords: | spatial stochastic frontier; efficiency; competition; regional tourism; transport network |
| JEL: | C51 O18 R15 C31 L83 C33 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25052&r=ure |
| By: | Arthur Grimes (Motu Economic and Public Policy Research, University of Waikato); Mark Holmes (University of Waikato) |
| Abstract: | House price trends in each of New Zealand and Australia are frequently discussed as national level developments. Sub-national developments are also important, especially where regions display idiosyncratic trends driven either by demand factors (differential income patterns) or by supply factors (geographical or regulatory restrictions). At a broader scale, it is possible that the New Zealand housing market, or a specific regional housing market (e.g. Auckland), is part of a broader Australasian housing market. If this were the case, New Zealand house prices would converge to a broadly stable ratio of house prices in Australia. One reason this could occur is if international macroeconomic and asset price trends dominate housing market outcomes. New Zealand authorities may then be relatively powerless to control the major real determinants of house prices through regulatory or other policies. We extract the major drivers of house prices at regional levels within New Zealand and Australia to examine the degree of differentiation across regional housing markets. While some minor regional differences are apparent, the evidence points to the dominance of a single trans-Tasman housing trend. |
| Keywords: | House price convergence; international housing markets; Australasia |
| JEL: | R21 R31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:10_07&r=ure |
| By: | James Vickery; Joshua Wright |
| Abstract: | Most mortgages in the United States are securitized through the agency mortgage-backed-securities (MBS) market. These securities are generally traded on a “to-be-announced,” or TBA, basis. This trading convention significantly improves agency MBS liquidity, leading to lower borrowing costs for households. Evaluation of potential reforms to the U.S. housing finance system should take into account the effects of those reforms on the operation of the TBA market. |
| Keywords: | Mortgages ; Mortgage-backed securities ; Liquidity (Economics) ; Housing - Finance ; Financial market regulatory reform |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:468&r=ure |
| By: | Lynn Fisher; Lauren Lambie-Hanson; Paul S. Willen |
| Abstract: | This paper assesses the impact of the mortgage crisis on Chelsea, Massachusetts, a low-and-moderate-income community of 35,000 adjacent to Boston. After years of rapid growth, house prices started falling in 2005. According to our repeat-sales indices, by the end of 2009 prices had fallen by as much as 50 percent from their peak. Foreclosures have soared and lenders have repossessed or allowed short sales on more than 330 homes, resulting in a forced exit of at least one in 30 of the town's households. A large fraction of the foreclosed properties were two- or three-family homes, so the number of households affected by the crisis undoubtedly extends beyond the number of foreclosures. But there is some positive news. After a slow start, servicers appear to have become far more efficient at selling foreclosed properties, so the stock of real estate owned properties has been falling since 2008. For the most part, homeowners who bought prior to the peak of the boom have so far avoided selling in the moribund market and thus are poised to gain if and when the market recovers. In addition, the crisis has not prevented homeowners from maintaining and improving their properties: both the number and the dollar value of building permits have held up well even for those homeowners who have bought recently and likely have negative equity in their homes. |
| Keywords: | Housing - Prices - Massachusetts ; Foreclosure - Massachusetts |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:10-6&r=ure |
| By: | Bianca Biagi; Claudio Detotto |
| Abstract: | This paper analyses the linkage between tourism and crime with particular focus on the distortions generated onto criminal activities by the presence of visitors. Controlling for socio-demographic and economic variables, we empirically investigate the contribution of tourist arrivals to different types of crimes for 103 Italian provinces and for the year 2005. Possible spill-over effects of crime are taken into account by testing two spatial models (one spatial lag model and one spatial error model). We also test the hypothesis according to which the different geography of tourist destinations - i.e. urban, mountain, marine etc- alters the impact of tourism on crime. Finally, we measure the social cost of crime associated with tourist arrivals. |
| Keywords: | Crime; tourism; spill-over effect; negative externality |
| JEL: | K0 R0 L83 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201015&r=ure |
| By: | Francisco Gallego |
| Abstract: | Public schools in Chile receive a per-student subsidy depending on enrollment, and are managed by local governments that operate under soft budget constraints. In this paper, we study the effects of this system on per-student expenditures. Per-student expenditures on rural areas are 30% higher than in urban areas. We find that about 75% of this difference is due to the fact that rural public schools are significantly smaller and thus do not benefit from economies of scale. Besides, we also show that in our preferred estimates about 50% of the students in rural areas could be moved to schools that could exploit economies of scale—i.e., these students could attend bigger schools traveling at most an hour a day in total. We show that even if we use conservative average speed rates or control for transportation, utility and infrastructure costs, there is a sizeable share of the students that could be consolidated. We argue that local governments that have soft budget constraints do not consolidate these schools giving the existing potential because of political factors: closing schools is harmful for mayors in electoral terms. Consistent with this claim, we find that a decrease in the degree of political competition in areas with better access to non-voucher transfers from the central government (i.e. with softer budget constraints) decreases the extent of the inefficiency. |
| Keywords: | School size, rural schools, consolidation, Chile, education decentralization, political economy, soft budget constraints |
| JEL: | I22 H52 H75 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:375&r=ure |
| By: | Daniel Hartley |
| Abstract: | Several studies have measured negative price effects of foreclosed residential properties on nearby property sales. However, these studies do not address which mechanism is responsible for these effects. I measure separate effects for different types of foreclosed properties and use these estimates to decompose the effects of foreclosures on nearby home prices into a component that is due to additional available housing supply and a component that is due to disamenity stemming from deferred maintenance or vacancy. I estimate that each extra unit of supply decreases prices within 250 feet by about 1.6% in low-vacancy-rate census tracts while the disamenity stemming from a foreclosed property is near zero. In high-vacancy-rate census tracts the story is reversed: each extra unit of foreclosure is associated with a disamenity effect of about -2% within 250 feet but no supply effect. |
| Keywords: | Foreclosure ; Housing - Prices |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1011&r=ure |
| By: | Bharadwaj, Prashant; Eberhard, Juan; Neilson, Christopher |
| Abstract: | This paper investigates the causal relationship between birth weight and school achievement among children in grades 1 through 8. We find that birth weight significantly affects performance on both math and language test scores in school. Children with higher birth weight do better - a 10% increase in birth weight improves performance in math by nearly 0.05 standard deviations in 1st grade. Children who are born at a weight less than 1500 grams (very low birth weight) have scores in math that are 0.15 standard deviations less in 1st grade. We exploit repeated observations on children to show that birth weight has a persistent effect that does not deteriorate as children advance through grades (upto 8th grade). Children with greater birth weight are also less likely to have ever repeated a grade. The causal link is identified by using a twins estimator - we collected birth weight and basic demographic data on all twins born in Chile between 1992-2000 and match these twin pairs to administrative school records between 2002-2008. There are no differences in school attendance by birth weight, suggesting that missing school perhaps due to health problems is likely not a channel via which test score differentials arise. |
| Keywords: | school achievement, birth weight |
| Date: | 2010–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsdec:1562347&r=ure |
| By: | Pavlyuk, Dmitry |
| Abstract: | This paper is devoted to statistical analysis of spatial competition and cooperation between European airports. We propose a new multi-tier modification of spatial models, which allow estimating of spatial influence varying with the distance. Competition and cooperation effects don't diminish steadily with moving from a given airport, their structure is more complex. The suggested model is based on a set of distance tiers, with different possible effects inside each tier. We apply the proposed modification to the standard spatial stochastic frontier model and use it to estimation of competition and cooperation effects for European airport and airport's efficiency levels. We identify three tiers of spatial influence with different completion-cooperation ratio in each one. In the first, closest to an airport, tier we note significant advantage of cooperation effects over competition ones. In the second, more distant, tier we discover the opposite situation – significant advantage of completion effects. The last tier's airports doesn't influence significantly. In this paper we also consider some other possible applications of the proposed spatial multi-tier model. |
| Keywords: | spatial stochastic frontier; airport efficiency; competition; cooperation |
| JEL: | C51 L93 C31 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25050&r=ure |
| By: | Areal, Francisco J; Balcombe, Kelvin; Tiffin, R |
| Abstract: | An approach to incorporate spatial dependence into Stochastic Frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency. |
| Keywords: | Spatial dependence; technical efficiency; Bayesian; spatial weight matrix |
| JEL: | C51 C13 C23 Q12 C11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24961&r=ure |
| By: | Rajashri Chakrabarti; Joydeep Roy |
| Abstract: | Charter schools have been one of the most important dimensions of recent school reform measures in the United States. Currently, there are more than 4,500 charter schools spread across forty U.S. states and the District of Columbia. Though there have been numerous studies on the effects of charter schools, these have mostly been confined to analyzing the effects on student achievement, student demographic composition, parental satisfaction, and the competitive effects on regular public schools. This study departs from the existing literature by investigating the effect of charter schools on enrollment in private schools. To investigate this issue empirically, we focus on the state of Michigan, where there was a significant spread of charter schools in the 1990s. Using data on private school enrollment from decennial censuses and biennial National Center for Education Statistics private school surveys, and using a fixed-effects as well as instrumental-variables strategy that exploits exogenous variation from Michigan charter law, we investigate the effect of charter school penetration on private school enrollment. We find some evidence of a decline in enrollment in private schools - but the effect is only modest in size. This finding is reasonably robust, and survives several robustness checks. |
| Keywords: | Education - Economic aspects ; Public schools ; Private schools |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:472:x:1&r=ure |
| By: | Rajashri Chakrabarti; Joydeep Roy |
| Abstract: | This paper examines the effects of constraints in a Tiebout framework applied to school finance reforms. We use data from Michigan, which enacted a comprehensive school finance reform in 1994 that, in effect, ended local discretion over school spending. This scenario affords us a unique opportunity to study the implications of imposing limits on local government’s control over the quality of local public goods. We find that the reform was successful in overturning existing trends toward increased disparities. However, the reform also constrained the highest spending districts and was associated with negative effects on their subsequent educational outcomes. These results survive several sensitivity checks. Going behind the “black box” to look at whether the reform affected incentives and responses, we find that loss of discretion appeared to act as a strong disincentive to high-spending districts and, more generally, across the board. The performance improvements of the lowest spending districts were likely related to relative increases in spending rather than higher effort. This same finding is corroborated by results from an alternative strategy, which exploits differences in the nature of incentives faced by districts in more competitive areas versus those in less competitive areas. |
| Keywords: | Education - Economic aspects ; Public schools ; Reward (Psychology) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:471&r=ure |
| By: | Ahlfeldt, Gabriel M.; Feddersen, Arne |
| Abstract: | This paper presents evidence that high speed rail systems, by bringing economic agents closer together, sustainably promote economic activity within regions that enjoy an increase in accessibility. Our results on the one hand confirm expectations that have led to huge public investments into high speed rail all over the world. On the other hand, they confirm theoretical predictions arising from a consolidate body of (New) Economic Geography literature taking a positive, man-made and reproducible shock as a case in point. We argue that the economic geography framework can help to derive ex-ante predictions on the economic impact of transport projects. The subject case is the German high speed rail track connecting Cologne and Frankfurt, which, as we argue, provides exogenous variation in access to regions due to the construction of intermediate stations in the towns of Limburg and Montabaur. |
| Keywords: | NEG; high speed rail; transport policy; market access; acces-sibility |
| JEL: | R12 R48 R38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25106&r=ure |
| By: | Chris Edell; Kai-yan Lee |
| Abstract: | With the impact of municipal debt burdens, coupled with the effects of declining real estate prices and the US financial crisis, municipalities are looking for novel and cost-effective approaches to address abandoned, blighted and/or foreclosed properties that threaten the quality of life of their communities. Receivership, the use of statutory power to seize buildings and place properties under control of a judicially supervised 'receiver', can be an effective tool to tackle the problem of troubled properties which repeatedly violate safety and sanitary codes. Despite its potential, receivership requires significant coordination, as well as a committed team, in order to implement the intricate process of running a successful receivership strategy. |
| Keywords: | Foreclosure - Massachusetts ; Housing policy - Massachusetts |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpc:2010-3&r=ure |
| By: | Todd Gabe; Jaison R. Abel; Adrienne Ross; Kevin Stolarick |
| Abstract: | This study identifies clusters of U.S. and Canadian metropolitan areas with similar knowledge traits. These groups—ranging from Making Regions, characterized by knowledge about manufacturing, to Thinking Regions, noted for knowledge about the arts, humanities, information technology, and commerce—can be used by analysts and policymakers for the purposes of regional benchmarking or comparing the types of programs and infrastructure available to support closely related economic activities. In addition these knowledge-based clusters help explain the types of regions that have levels of economic development that exceed, or fall short of, other places with similar amounts of college attainment. Regression results show that Engineering, Enterprising, and Building Regions are associated with higher levels of productivity and earnings per capita, while Teaching, Understanding, Working, and Comforting Regions have lower levels of economic development. |
| Keywords: | Regional economics ; Productivity ; Manufacturing industries ; Education - Economic aspects ; Professional employees |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:470&r=ure |
| By: | Ahlfeldt, Gabriel M.; Georgios, Kavetsos |
| Abstract: | This paper focuses on the channels through which stadium externalities capitalize into property prices. We investigate two of the largest stadium investment projects of the recent decade – the This paper focuses on the channels through which stadium externalities capitalize into property prices. We investigate two of the largest stadium investment projects of the recent decade – the New Wembley and the Emirates stadium in London, UK. Evidence suggests positive stadium externalities, which are large compared to construction costs. Notable anticipation effects are found immediately following the announcement of the final stadium plans. Our results emphasize the role stadium architecture plays in promoting positive spillovers to the neighbourhood. We therefore recommend public funding of large-scale sports facilities to be made conditional on a comprehensive urban design strategy that maximizes the external benefits. |
| Keywords: | Property prices Stadium impact |
| JEL: | R53 R58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25003&r=ure |
| By: | Masood Sarwar Awan; Nasir Iqbal (Pakistan Institute of Development Economics) |
| Abstract: | Urban poverty, which is distinct from rural poverty due to demographic, economic and political aspects remain hitherto unexplored, at the city level in Pakistan. We have examined the determinants of urban poverty in Sargodha, a medium-size city of Pakistan. The analysis is based on the survey of 330 households. Results suggest that employment in public sector, investment in human capital and access to public amenities reduce poverty while employment in informal sector, greater household size and female dominated households increase poverty. We recommend greater investment in human capital and public amenities as a strategy for poverty alleviation. |
| Keywords: | Urban Poverty, Pakistan |
| JEL: | I31 I32 R20 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2294&r=ure |
| By: | Ekblad, Kristin (Department of Business, Economics, Statistics and Informatics); Bokenblom, Mattias (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | Sickness absence has been found to vary substantially across geographical areas. There are large differences between different countries but also between different regions within a particular country. In the literature some of these observed differentials have been suggested to stem from differences in local norms with regard to the legitimacy of living off benefits. The aim of our study is to investigate the effect of geographical and presumed cultural context on sickness absence. In order to identify this effect we compare changes in sickness related absence for individuals who move from one Swedish region to another with those occurring when individuals move within Swedish regions. Our results indicate that the region of residence is important to the individual sickness related absence. Moreover, we cannot rule out the possibility that the observed patterns are caused by local cultures regarding sickness absence and the existence of a so called “cultural illness”. |
| Keywords: | Sickness absence; social norms; domestic migration |
| JEL: | J22 R23 Z13 |
| Date: | 2010–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2010_011&r=ure |
| By: | Usha Jayachandran |
| Abstract: | This paper investigates the socio-economic determinants of school attendance in India, and the possible causes of disadvantage faced by the girl child. Based on Census data for 1981 and 1991, the determinants of inter-district variations in school attendance are explored, separately for boys and girls. A similar analysis is applied to the gender bias in school attendance. The results indicate that school attendance is positively related to school accessibility and parental education, and negatively related to poverty and household size. Interestingly, a positive association emerges between women’s labour-force participation and children’s school attendance; possible explanations of this pattern are discussed. The gender bias in school attendance declines with school accessibility and parental education, and rises with household size. Panel data analysis based on the random-effects model supports the cross-section findings. [Working Paper No. 103] |
| Keywords: | socio-economic, girl child, parental education, parental education, poverty, household |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2866&r=ure |
| By: | Emanuel Shachmurove (Independent); Yochanan Shachmurove (Department of Economics,The City College of the City University of New YorkAuthor-Name:) |
| Abstract: | Economic Geography maintains that economic activities are not randomly distributed across space. This paper examines the impact of industrial and regional characteristics on venture capital activities in the United States from 1995 until 2009. The unique database allows for stratifications into seventeen industries within nineteen regions of the United States. This study affirms the significance of both Location and industry in venture capital investment. Both statistical and graphical methods are employed in order to better ascertain the dynamic nature of the data. |
| Keywords: | Venture Capital; Economic Geography; Location; Biotechnology; Business Products and Services; Computers and Peripherals; Consumer Products and Services; Electronics and Instrumentation; Financial Services; Healthcare Services; Industrial and Energy; Information Technology Services; Media and Entertainment; Medical Devices and Equipment; Networking and Equipment; Retailing and Distribution; Semiconductors; Software; Telecommunications. |
| JEL: | C12 D81 D92 E22 G24 G3 M13 M21 O16 O3 |
| Date: | 2010–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:10-030&r=ure |
| By: | DeAnna Green with Marques Benton; Lynn Browne; Prabal Chakrabarti; Yolanda Kodrzycki; Ana Patricia Muñoz; Richard Walker; Bo Zhao |
| Abstract: | Compared to the city, the region, and the state, labor force participation rates in Springfield's downtown and surrounding neighborhoods are very low. Residents and community leaders have expressed concerns about the employment prospects for the low-income residents that make up these neighborhoods. The purpose of this discussion paper is to highlight the perspectives of residents and community-based organizations on why so few residents of Springfield’s downtown neighborhoods are employed and to look at the some of the resources available to Springfield residents to help them address barriers to employment. |
| Keywords: | Economic conditions - Massachusetts ; Job creation - Massachusetts ; Unemployment - Massachusetts |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpc:2010-1&r=ure |
| By: | Hellerstedt, Karin (Jönköping International Business School); Wennberg, Karl (The Ratio Institute and Stockholm School of Economics) |
| Abstract: | This paper presents an analysis of regional start-up rates in the knowledge intensive services and high-tech industries. To supplement prevailing frameworks focusing mainly on supply-side economic factors, we integrate insights from economic geography and population ecology to the entrepreneurship literature as to present a theoretical framework that captures both supply-and demand-side factors, with a specific emphasis on the demand side. Using a rich multi-level data material on all knowledge intensive start-ups across the 286 Swedish municipalities between 1994 and 2002, the empirical analysis focuses on how characteristics of the economic milieu of regions influence firm births. We find that economically affluent regions dominate entrepreneurial activity in terms of firm births, yet a number of much smaller rural region revealed high levels of start ups. Both economic and sociological variables such as knowledge spillovers from universities and firm R&D, and the political regulatory regime within the municipality, exhibit strong influences on firm births. These patterns points to strong support for the notion that ‘the geographic connection’ is important for analyzing entrepreneurial processes. |
| Keywords: | Firm birth; Geography; Entrepreneurship |
| JEL: | M13 R11 R23 |
| Date: | 2010–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0156&r=ure |
| By: | Alfredo Marvão Pereira (Department of Economics, The College of William and Mary); Jorge M. Andraz (Faculdade de Economia, Universidade do Algarve) |
| Abstract: | The objective of this paper is to identify the effects of railroad infrastructure investments on aggregate and regional economic performance in Portugal. At the aggregate level, we show that railroad investments crowd in private investment and employment and have strong effects on output. At the regional level, we show that railroad investments affect private investment positively in all regions, employment in only Lisbon and North, and output in all regions with the exception of Alentejo. The effects are regionally distributed in a rather uneven manner with Lisbon and North capturing the bulk of the effects. Our results also highlight the relevance of regional spillovers. In terms of the relative effects of comparable railroad investments in the region and elsewhere in the country, we find that North and Center benefit more from investments elsewhere while the remaining regions benefit more from local investments. Finally, from a country-wide perspective, railroad investments located in Lisbon generate the largest marginal benefits, which reflect, mostly, the large effects in the Lisbon region itself. By contrast, railroad investments in the remaining regions have a much lower marginal benefit to the country but these benefits reflect mostly spillovers. This highlights the difficulty in implementing policies that simultaneously maximize aggregate growth and reduce regional disparities. |
| Keywords: | railroad infrastructure, public investment, regional spillovers |
| JEL: | C32 H54 R53 |
| Date: | 2010–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:96&r=ure |
| By: | Diana Hancock; Wayne Passmore |
| Abstract: | Mortgage securitization has been tried several times in the United States and each time it has failed amid a credit bust. In what is now a familiar recurring history, during the credit boom, underwriting standards are violated and guarantees are inadequately funded; subsequently, defaults increase and investors in mortgage-backed securities attempt to dump their investments. ; We focus on a specific market failure associated with asset-backed securitization and propose a tailored government remedy. Our analysis of loan market equilibriums shows that the additional liquidity provided by securitization may (or may not) lower primary loan rates, but such liquidity comes at a cost. More specifically, if guarantee-sensitive investors doubt the credit quality of asset-backed bonds, significant risk premiums can develop. If a financial crisis ensues, securitization can disappear from the market entirely, leaving banks that originate just the highest quality loans as the only source of credit. This abrupt increase in lending standards can tighten credit, exacerbate asset price declines, and impinge on economic growth. ; We argue that an institutional structure for stemming "runs," analogous to the current set up for the Federal Deposit Insurance Corporation, could be deployed to insure pre-specified asset-backed instruments. Such an insurer would likely benefit from the accumulated information and infrastructure that is embodied in Fannie Mae and Freddie Mac. Hence, the provision of federally-backed catastrophic insurance could provide a rationale for restructuring the housing-related GSEs towards a public purpose. Regardless of its institutional structure, a federally-backed catastrophic bond insurer would provide greater financial stability and ensure credit is provided at reasonable cost both in times of prosperity and during downturns. Moreover, the explicit pricing of the government-backed guarantee would mitigate the market distortions that have been created by implicit government guarantees during prosperity. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2010-46&r=ure |
| By: | Patrick Bayer; Randi Hjalmarsson; Shamena Anwar |
| Abstract: | This paper examines the impact of jury racial composition on trial outcomes using a unique dataset of all felony trials in Sarasota County, Florida between 2004 and 009. We utilize a research design that exploits day-to-day variation in the composition of the jury pool to isolate quasi-random variation in the composition of the seated jury. We find strong evidence that all-white juries acquit whites more often and are less favorable to black versus white defendants when compared to juries with at least one black member. Using the Anwar-Fang rank order test, we find strong statistical evidence of discrimination on the basis of defendant race. These results are consistent with racial prejudice on the part of white jurors, black jurors, or both. Using a simple model of jury selection and decision-making, we replicate the entire set of empirical regularities observed in the data, including the fact that blacks in the jury pool are just as likely as whites to be seated. Simulations of the model suggest that jurors of each race are heterogeneous in the standards of evidence that they require to convict and that both black and white defendants would prefer to face jurors of the same race. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:10-57&r=ure |
| By: | Hoyt Bleakley; Jeffrey Lin. |
| Abstract: | The authors examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphologic feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsolete, the authors document the continuing-and even increasing-importance of these portage sites over time. They interpret this finding in a model with path dependence arising from local increasing returns to scale. |
| Keywords: | Geography ; Urban economics |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:10-27&r=ure |
| By: | Schiöler, Linus (Statistical Research Unit, Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Information about the spatial spread of epidemics can be useful for many purposes. The spatial aspect of Swedish influenza data was analyzed with the main aim of finding patterns that could be useful for statistical surveillance of the outbreak, i.e. for detecting an increase in incidence as soon as possible. In Sweden, two types of data are collected during the influenza season: laboratory diagnosed cases (LDI), collected by a number of laboratories, and cases of influenza-like illness (ILI), c... merollected by a number of selected physicians. Quality problems were found for both types of data but were most severe for ILI. No evidence for a geographical pattern was found. Instead, it was found that the influenza outbreak starts at about the same time in the major cities and then occurs in the rest of the country. The data were divided into two groups, a metropolitan group representing the major cities and a locality group representing the rest of the country. The properties of the metropolitan group and the locality group were studied and it was found that the time difference in the onset of the outbreak was about one week. Both parametric and nonparametric regression models were suggested. |
| Keywords: | Influenza; Sweden; onset of outbreak; statistical models; spatial; monitoring |
| JEL: | C10 |
| Date: | 2010–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunsru:2010_001&r=ure |
| By: | Onur Özgür |
| Abstract: | Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are `close' to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular forms of externalities, their presence typically suggests government action. I survey and discuss existing theoretical work on economies with local interactions and point to areas for further research. <P>Les interactions locales concernent les phénomènes socio-économiques où les choix des individus sont influencés par les choix des autres qui sont proches d'eux socialement ou géographiquement. Cela représente une image assez juste de l'expérience humaine. De plus, puisque les interactions sociales sont en fait des externalités particulières, leur présence implique typiquement l'intervention gouvernementale. Dans cet article, je présente la littérature théorique récente sur les interactions locales et propose diverses avenues de recherche. |
| Keywords: | Conformity, externalities, local interactions, Markov perfect equilibrium, multiple equilibria, rational expectations, social interactions, social multiplier, strategic complementarities., Anticipations rationales, conformité, équilibre de Markov parfait, équilibres multiples, externalités, interactions locales, interactions sociales, multiplicateur social, complémentarités stratégiques. |
| JEL: | C31 C33 C62 C72 C73 D9 D62 D50 Z13 |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2010s-37&r=ure |
| By: | Steiner, Andreas |
| Abstract: | Countries' capital account policies might be contagious in the sense that domestic policies are driven by other countries' policies. A model of strategic interactions is developed to show that countries' best response to policy changes elsewhere consists in imitating this policy. Using a spatial econometric model, the hypothesis of policy interactions is tested in a large panel data set. The evidence shows that capital account policies are contemporaneously correlated across countries. Concerning fundamentals, the move to a fixed exchange rate regime and an increase in real world interest rates are correlated with the imposition of capital account restrictions. -- |
| Keywords: | Capital Controls,Strategic Interaction,Panel Data Analysis |
| JEL: | C23 F21 F3 F42 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec10:41&r=ure |
| By: | John Gilbert; Nilanjan Banik (Asian Development Bank Institute) |
| Abstract: | Although the overall economic performance of economies in South Asia in recent years has been impressive, there is concern that an aging and increasingly inadequate infrastructure may limit the potential for further growth and economic development. A critical infrastructure component is the transportation network, and there are currently several transportation infrastructure projects in the South Asia Subregional Economic Cooperation (SASEC) region, connecting Nepal, eastern India, Bangladesh, and Bhutan. This paper uses computable general equilibrium (CGE) methods to address how these infrastructure developments might affect the broader economy in SASEC, and in particular impact on income distribution and poverty. The paper describes a new CGE model for South Asia, covering India, Sri Lanka, Bangladesh, Nepal, and Pakistan, which incorporates modifications to household structure in order to capture the implications of reform for changes in intra-household income. The scenarios that are considered reflect proposed investments in land transport infrastructure in the SASEC region. These should result in reductions in the land transport component of international transport margins, which vary bilaterally by commodity. We found that all SASEC economies would benefit from the reductions in terms of aggregate welfare, with the largest gains accruing to India in absolute terms, but the largest relative gains to Nepal, followed by Bangladesh and Sri Lanka when the margin reduction is prorated to intra-South Asian trade rather than just SASEC. In terms of household level distribution, the picture was mixed, with clearly pro-poor outcomes in some countries, such as Nepal, but more ambiguous impacts in others. In terms of potential adjustment costs, examination of the extent of predicted structural changes suggests that these would be minor, although somewhat more significant for the smaller economies in the region. |
| Keywords: | South Asia Subregional Economic Cooperation, SASEC, South Asia, computable general equilibrium, infrastructure, structural changes |
| JEL: | F14 F17 D58 O53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2264&r=ure |
| By: | Richard Ochmann |
| Abstract: | This paper empirically investigates the effects of differential income taxation on households' portfolio choice and asset allocation applying a two-stage budgeting model of asset demand to German survey data. The model is structured into the discrete asset choice and the continuous asset choice, and the marginal income tax rate is simulated in a module of income taxation. Households that face relatively higher tax rates are found to have relatively greater demand for tax-privileged assets than households in the lower tax brackets. The higher the marginal tax rate the greater demand is for non-owner-occupied housing, for mortgage repayments, for building society deposits, for stocks, for insurances, and for consumer credits, whereas demand is lower for owner-occupied housing, bank deposits, and bonds. |
| Keywords: | Household asset allocation, portfolio choice, two-stage budgeting, capital income taxation |
| JEL: | C35 G11 H31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1058&r=ure |
| By: | Shahnaz Hamid (Pakistan Institute of Development Economics) |
| Abstract: | This paper analyses gender dimensions in rural to urban migration (age 10 years and above) in Pakistan. The study is based on Labour Force Surveys 1996-2006. The findings of the study show that overtime internal migration (age 10 years and above) remained unchanged. Female migrants dominate in internal migration (age 10 years and above). In case of female migration, marriage plays a vital role. Further the direction of migration reveals that over time in internal migration the share of rural to urban migration has increased while urban to urban migration declined, however, the share of urban to urban migration remains highest in internal migration. Females are dominating in recent rural to urban move compared to long term and total rural to urban migration. Gender composition of intra-provincial move of rural to urban migration reveals that in all provinces female migrants are dominated. Further, the trend of intra and inter provincial move indicates that in all provinces long distance movement of females has increased. Not only the share of female migrant in rural to urban migration increased but there seems to be an increasing trend in family migration to cities. This seems to be due to the changes in agrarian structure and rural economy particularly increased in landless households, declined in share cropping and rise in small land holding. In addition to this , the trend in intra and inter-provincial move reveals that except in province of NWFP in all three provinces migration to long distance has an upward trend. Gender composition reveals that in all these three provinces the proportion of both male and female migrants increased over time. |
| Keywords: | Rural to Urban Migration, Agrarian Structure |
| JEL: | R23 Q00 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2296&r=ure |
| By: | Peter C. B. Phillips (Cowles Foundation, Yale University); Jun Yu (Singapore Management University) |
| Abstract: | A new recursive regression methodology is introduced to analyze the bubble characteristics of various financial time series during the subprime crisis. The methods modify a technique proposed in Phillips, Wu and Yu (2010) and provide a technology for identifying bubble behavior and consistent dating of their origination and collapse. The tests also serve as an early warning diagnostic of bubble activity. Seven relevant financial series are investigated, including three financial assets (the Nasdaq index, home price index and asset-backed commercial paper), two commodities (the crude oil price and platinum price), one bond rate (Baa), and one exchange rate (Pound/USD). Statistically significant bubble characteristics are found in all of these series. The empirical estimates of the origination and collapse dates suggest an interesting migration mechanism among the financial variables: a bubble first emerged in the equity market during mid-1995 lasting to the end of 2000, followed by a bubble in the real estate market between January 2001 and July 2007 and in the mortgage market between November 2005 and August 2007. After the subprime crisis erupted, the phenomenon migrated selectively into the commodity market and the foreign exchange market, creating bubbles which subsequently burst at the end of 2008, just as the effects on the real economy and economic growth became manifest. Our empirical estimates of the origination and collapse dates match well with the general datetimes of this crisis put forward in a recent study by Caballero, Farhi and Gourinchas (2008). |
| Keywords: | Financial bubbles, Crashes, Date stamping, Explosive behavior, Mildly explosive process, Subprime crisis, Timeline |
| JEL: | C15 C12 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1770&r=ure |
| By: | Sajeda Amin; S. Chandrasekhar |
| Abstract: | This paper addresses gender equity in parents‘ educational investments in children in a context of rising school attendance in rural Bangladesh. Our premise is that in addition to factors such as school enrollment and aspects of school quality, attention should focus on household level private investments in education. By private investments we mean time allocated to studying at home and access to private tutoring after school. Using data from the nationally representative 2005 Bangladesh Adolescent Survey, we analyze correlates of time spent in school, studying outside school, and work, using a data set on time-use patterns of school-going children and adolescents. We find that time spent in work varies inversely with the amount of time spent studying at home, while time at school shows no such association. We find support for two hypotheses regarding household influences on education. First, time spent in school is insensitive to factors such as poverty and gender. Second, time spent studying outside school is strongly influenced by household decisions that favor boys, who appear to have about 30 minutes more discretionary study time than girls. [Working Paper No. 17] |
| Keywords: | gender, parents, education, investments, bangladesh, private investment, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2837&r=ure |
| By: | F. Combes (Université Paris Est - LVMT); André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X) |
| Abstract: | We set a framework where an individual has to choose one among a set of spatially distributed activities. The individual knows the price of each activity, as well as the distance to reach it. She has either full or zero information about each activity's quality. Qualities are modeled by i.i.d. random variables. Under the full information regime, the individual knows the realizations of the qualities; while under the no information regime, she only knows the distribution of the qualities. In that case, she can decide either ex ante, or en route, how many activities to patronize. We analyze the impact of information availability on the choice process, on the distance the individual covers, and on the individual's expected utility. In this framework, more information yields longer distance traveled, but also higher utility. We compute the individual's willingness to pay for information. Finally, we show that providing information may decrease the individual's benefit when congestion arises. |
| Keywords: | travel demand, search, logit, information regimes, value of information, differentiation |
| Date: | 2010–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00517718_v1&r=ure |
| By: | Thomas K. Bauer; Matthias Vorell |
| Abstract: | Using a matched employer-employee panel dataset for Germany, we analyze the external eff ects of education on individual wages. Following the basic framework of Moretti (2004), we allow spillover eff ects to occur both within a specifi c fi rm and a specifi c region rather than analyzing spillover eff ects only on a regional level. Controlling for individual- and fi rm-specifi c fi xed eff ects and using an instrumental variable strategy, our results confi rm the existence of positive but small external eff ects of human capital. Positive spillover eff ects within fi rms occur only for the group of high-skilled workers. |
| Keywords: | External eff ects; human capital; employer-employee matched data |
| JEL: | C23 D62 J31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0195&r=ure |
| By: | Marco Caliendo; Ricarda Schmidl; Arne Uhlendorff |
| Abstract: | In this paper we analyze the relationship between social networks and the job search behavior of unemployed individuals. It is believed that networks convey useful information in the job search process such that individuals with larger networks should experience a higher productivity of informal search. Hence, job search theory suggests that individuals with larger networks use informal search channels more often and substitute from formal to informal search. Due to the increase in search productivity, it is also likely that individuals set higher reservation wages. We analyze these relations using a novel data set of unemployed individuals in Germany containing extensive information on job search behavior and direct measures for the social network of individuals. Our findings confirm theoretical expectations. Individuals with larger networks use informal search channels more often and shift from formal to informal search. We find that informal search is mainly considered a substitute for passive, less cost intensive search channels. In addition to that, we find evidence for a positive relationship between the network size and reservation wages. |
| Keywords: | job search behavior, unemployment, social networks |
| JEL: | J64 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1055&r=ure |
| By: | Karl-Johan Lundquist; Lars-Olof Olander |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwsre:sre-disc-2010_04&r=ure |
| By: | Bo Zhao with Marques Benton; Lynn Browne; Prabal Chakrabarti; DeAnna Green; Yolanda K. Kodrzycki; Ana Patricia Muñoz; Richard Walker |
| Abstract: | This paper examines the distribution of unrestricted municipal aid in Massachusetts, which has been a major concern to civic leaders and elected officials of many communities, including Springfield. The paper develops a measure of the municipal fiscal gap indicating the relative need of municipalities for state aid. The analysis shows that in recent years, unrestricted municipal aid has not been distributed in proportion to the gap measure among the 10 largest cities in Massachusetts. For example, despite having the largest municipal gap, Springfield received almost the lowest per capita amount of Additional Assistance -- a key component of municipal aid. This pattern is the result of deep and uneven aid cuts in the past that distorted the distribution of municipal aid. This paper therefore suggests that state government consider adopting a formula that provides more aid to communities facing larger municipal gaps. To avoid disrupting local budgets, the state could consider holding existing aid harmless, and using the gap-based formula to distribute new aid. The simulations show that if the state commits to reasonably large increases in municipal aid, this new approach can be both equalizing and beneficial to a majority of municipalities in the Commonwealth within a relatively short time period. The paper provides various formula evaluations and policy recommendations that could support efforts to reform state aid in Massachusetts. |
| Keywords: | Municipal finance - Massachusetts |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcw:10-4&r=ure |
| By: | Anna Alberini; Dennis Guignet |
| Abstract: | The purpose of this research effort is to examine the feasibility of designing a stated preference instrument to elicit the public’s willingness-to-pay (WTP) for remediation of leaking underground storage tank (LUST) sites (or perhaps prevention of releases). Nearly 500,000 releases have been documented from the over 600,000 USTs nationwide. Approximately 80 percent of these sites have been cleaned up. In the three Maryland counties that are the focus of this and the companion hedonic property value study there have been nearly 400 documented releases in the last 10 years. We report the results from four focus groups and four three-on-one interviews conducted in Maryland. The results of this focus group research provide a foundation for development of a stated preference study of the benefits of EPA’s UST program. |
| Keywords: | leaking underground storage tanks, groundwater, remediation benefits, stated preference, focus groups |
| JEL: | Q51 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201009&r=ure |