nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒10‒30
37 papers chosen by
Steve Ross
University of Connecticut

  1. "Racial Preferences in a Small Urban Housing Market: A Spatial Econometric Analysis of Microneighborhoods in Kingston, New York" By Sanjaya DeSilva; Anh Pham; Michael Smith
  2. The impact of LIHTC program on local schools By Wenhua Di; James C. Murdoch
  3. The Impact of Mixed Land Use on Residential Property Values By Hans R.A. Koster; J. Rouwendal
  4. Testing Urbanization Economies in Manufacturing Industries: Urban Diversity or Urban Size? By Shihe Fu; Junjie Hong
  5. The current landscape of the California housing market By Laura Choi
  6. Neighbourhood Choice and Neighbourhood Reproduction By Bergström, Lina; van Ham, Maarten; Manley, David
  7. The housing crisis and state and local government tax revenue: five channels By Byron Lutz; Raven Molloy; Hui Shan
  8. Akin to my teacher: Does caste, religious or gender distance between student and teacher matter? Some evidence from India By Shenila Rawal; Geeta Kingdon
  9. Marshallian Sources of Growth and Interdependent Location of Swedish Firms and Households By Sörensson, Robert
  10. Fifty years of urban accessibility: the impact of the urban railway network on the land gradient in Berlin 1890-1936. By Ahlfeldt, Gabriel M.; Wendland, Nicolai
  11. Related variety and regional growth in Spain By Ron Boschma; Asier Minondo; Mikel Navarro
  12. The Demand for Historic Preservation By Carruthers, John I; Clark, David E; Tealdi, Michael
  13. Local Interactions By ÖZGÜR, Onur
  14. School Choice with Control By EHLERS, Lars
  15. Borders, market access and urban growth; the case of Saxon towns and the Zollverein By Florian Ploeckl
  16. Network Dependency in Migration Flows – A Space-time Analysis for Germany since Re-unification By Timo Mitze
  18. Housing Subsidies and Work Incentives By Shroder, Mark
  19. The Impact of School Design on Academic Achievement in The Palestinian Territories: An Empirical Study By Mohammed Matar; Imad Brighith
  20. Free Primary Education in Kenya: An Impact Evaluation Using Propensity Score Methods By Milu Muyanga; John Olwande; Esther Mueni; Stella Wambugu
  21. First nature vs. second nature causes: industry location and growth in the presence of an open-access renewable resource By Rafael González-Val; Fernando Pueyo
  22. Technical Progress in Transport and the Tourism Area Life Cycle By Andrew Kato; James Mak
  23. An investigation of the relation between cooperation and the innovative success of German regions By Tom Broekel; Matthias Buerger; Thomas Brenner
  24. Space to Develop: How Architecture Can Play a Vital Role in Young Children’s Lives By Bronwen Cohen
  25. Bend It Like Beckham: Ethnic Identity and Integration By Bisin, Alberto; Patacchini, Eleonora; Verdier, Thierry; Zenou, Yves
  26. Railroads of the Raj: Estimating the Impact of Transportation Infrastructure By Dave Donaldson
  27. A nonparametric test for industrial specialization By Stephen B. Billings; Erik B. Johnson
  28. Friends' Networks and Job Finding Rates By Cappellari, Lorenzo; Tatsiramos, Konstantinos
  29. Is conformism desirable? Network effects, location choice, and social welfare in a duopoly By L. Savorelli
  30. On the Correlation between Research Performance and Social Network Analysis Measures Applied to Research Collaboration Networks By Alireza Abbasi; Jorn Altmann
  31. Identification of Interaction Effects in Survey Expectations: A Cautionary Note By Alfarano, Simone; Milakovic, Mishael
  32. Different effects of social capital on health status among residents: evidence from modern Japan By Eiji Yamamura
  33. Lead, Mortality, and Productivity By Karen Clay; Werner Troesken; Michael R. Haines
  34. Can carpooling clean the air? The economics of HOV lanes, hybrid cars and the Clean Air Act. By Shewmake, Sharon
  35. Uneven landscapes and the city size distribution By Sanghoon Lee; Qiang Li
  36. Endogenous Social Networks in the Labor Market By Tolga U. Kuzubas
  37. Interjurisdictional Spillovers, Decentralized Policymaking and the Elasticity of Capital Supply By Marco Runkel; Thomas Eichner

  1. By: Sanjaya DeSilva; Anh Pham; Michael Smith
    Abstract: This paper use spatial econometric models to test for racial preferences in a small urban housing market. Identifying racial preferences is difficult when unobserved neighborhood amenities vary systematically with racial composition. We adopt three strategies to redress this problem: (1) we focus on housing price differences across microneighborhoods in the small and relatively homogenous city of Kingston, New York; (2) we introduce GIS-based spatial amenity variables as controls in the hedonic regressions; and (3) we use spatial error and lag models to explicitly account for the spatial dependence of unobserved neighborhood amenities. Our simple OLS estimates agree with the consensus in the literature that black neighborhoods have lower housing prices. However, racial price discounts are no longer significant when we account for the spatial dependence of errors. Our results suggest that price discounts in black neighborhoods are caused not by racial preferences but by the demand for amenities that are typically not found in black neighborhoods.
    Keywords: Housing; Race; Neighborhood Amenities; Spatial Econometrics Commonwealth of Independent States
    JEL: J15 R21
    Date: 2010–05
  2. By: Wenhua Di; James C. Murdoch
    Abstract: The low-income housing tax credit (LIHTC) program has developed over two million rental homes for low-income households since 1986. The perception of deterioration in school quality has been a main reason for community opposition to LIHTC projects in middle-and upper-income areas. In this paper, we examine the impact of LIHTC projects on the nearby school performance. The LIHTC projects tend to have positive and statistically significant impacts on school performance the year they are placed in service and this finding is robust to various specifications. Offsetting these, the one year lag effects are negative and of similar or smaller magnitude.
    Keywords: Housing subsidies ; Housing policy ; Education ; Poverty
    Date: 2010
  3. By: Hans R.A. Koster (VU University Amsterdam); J. Rouwendal (VU University Amsterdam)
    Abstract: Contemporary European urban planning policies aim to mix land uses in compact neighbourhoods. It is presumed that mixing land uses yields socio-economic benefits and therefore has a positive effect on housing values. In this paper, we investigate the impact of mixed land use on housing values using semiparametric estimation techniques. We demonstrate that a diverse neighbourhood is positively valued by households. There are various land use types which positively affect house prices, e.g. business services and leisure. Land uses that are incompatible with residential land use are, among others, manufacturing and wholesale. It appears that households are willing to pay up to 6 percent more for a house in a mixed neighbourhood than for an otherwise comparable house in a monofunctional area. We also show that there is substantial heterogeneity in willingness to pay for mixed land use. For example, apartment occupiers are willing to pay almost 25 percent more for diversity than households living in detached housing.
    Keywords: Mixed land use; diversity; hedonic price analysis; semiparametric estimation
    JEL: R14 R30 R52 R58
    Date: 2010–10–18
  4. By: Shihe Fu; Junjie Hong
    Abstract: Whether urbanization economies stem from urban diversity or urban scale is not clear in the literature. This paper uses the 2004 China manufacturing census data and tests simultaneously the effects of urban size and industrial diversity on firm productivity, controlling for localization economies and human capital externalities. We find that productivity increases with city size—but at a diminishing rate, and the city size effect becomes negative for cities with population over two million. Firms also benefit from industrial diversity, and the strength of such benefit increases with city size but decreases with firm size. The characteristics of agglomeration economies in a transition economy are also discussed.
    Keywords: Urbanization economies; Industrial diversity; Jacobs externalities; City size.
    JEL: L60 R12 R30
    Date: 2010–10–18
  5. By: Laura Choi
    Abstract: California's housing market has been severely affected by the foreclosure crisis. The state's high foreclosure rate has also contributed to neighborhood destabilization in many communities, resulting in negative spillover effects such as price declines and increased crime and blight. In light of these rapid changes in the housing landscape, this report provides a current "snapshot" of California's housing market in the wake of the foreclosure crisis. It presents historical trends as well as current data on foreclosures, home prices, and affordability, and also considers the state's future housing needs. Given the state's sheer size and dramatic regional variation, the report also digs down into conditions at the regional and county level. The study hopes to inform stakeholders from across the state and help in the development of a strategic response to the drastic changes that have taken place in California's housing market over the past few years.
    Keywords: Housing - California ; Foreclosure - California
    Date: 2010
  6. By: Bergström, Lina (Uppsala University); van Ham, Maarten (University of St. Andrews); Manley, David (University of St. Andrews)
    Abstract: Although we know a lot about why households choose certain dwellings, we know relatively little about the mechanisms behind neighbourhood choice. Most studies of neighbourhood choice only focus on one or two dimensions of neighbourhoods: typically poverty and ethnicity. This paper argues that neighbourhoods have multiple dimensions and that models of neighbourhood choice should take these dimensions into account. We propose the use of a conditional logit model. From this approach we can gain insight into the interaction between individual and neighbourhood characteristics which lead to the choice of a particular neighbourhood over alternative destinations. We use Swedish register data to model neighbourhood choice for all households which moved to a neighbourhood in the city of Uppsala between 1997 and 2006. Our results show that neighbourhood sorting is a highly structured process where households are very likely to choose neighbourhoods where the neighbourhood population matches their own characteristics.
    Keywords: neighbourhood, housing choice, sorting, residential mobility, conditional logit, Sweden
    JEL: I30 J60 R23
    Date: 2010–10
  7. By: Byron Lutz; Raven Molloy; Hui Shan
    Abstract: State and local government tax revenues dropped steeply following the most severe housing market contraction since the Great Depression. We identify five main channels through which the housing market affects state and local tax revenues: property tax revenues, transfer tax revenues, sales tax revenues (including a direct effect through construction materials and an indirect effect through the link between housing wealth and consumption), and personal income tax revenues. We find that property tax revenues do not tend to decrease following house price declines. We conclude that the resilience of property tax receipts is due to significant lags between market values and assessed values of housing and the tendency of policy makers to offset declines in the tax base with higher tax rates. The other four channels have had a relatively modest effect on state tax revenues. We calculate that these channels jointly reduced tax revenues by $15 billion from 2005 to 2009, which is about 2 percent of total state own-source revenues in 2005. We conclude that the recent contraction in state and local tax revenues has been driven primarily by the general economic recession, rather than the housing market per-se.
    Date: 2010
  8. By: Shenila Rawal (Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL.); Geeta Kingdon (Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL.)
    Abstract: This paper uses a unique data set from 5028 primary school children in rural India to examine whether the demographic interactions between students and teachers influence student outcomes and whether social distance between student and teacher exacerbates gender, caste and religious gaps in children's achievement. One would expect this to be the case if discrimination and/or role model effects persist in the classroom. School and individual fixed effects methodology are used. In the pupil fixed effects model, across subject variation is used to test whether having a teacher whose gender, caste and religion are the same as that of the student improves student test scores. We find statistically significant positive effects of matching student and teacher characteristics. We find that a student's achievement in a subject in which the teacher shares the same gender, caste and religion as the child is, on average, nearly a quarter of a SD higher than the same child's achievement in a subject taught by a teacher who does not share the child's gender, caste or religion. Policy implications are considered.
    Keywords: education, religion, gender
    JEL: I2 I21
    Date: 2010–10–21
  9. By: Sörensson, Robert (Department of Economics, Umeå University)
    Abstract: This thesis consists of three papers that examine Marshallian sources of growth and interdependent location of Swedish firms and households. Paper [I] examines the impact of static and dynamic knowledge externalities and their impact on Swedish market operating firms growth pattern between 1997 and 2005. The three types of externalities are: (i) Marshall-Arrow-Romer (MAR), (ii) Jacobs, and (iii) Porter. My empirical findings for the 40 industries can briefly be summarized in the following points: (i) static MAR, Jacobs and/or Porter externalities are present in all but nine industries; (ii) except for five cases all industries are exposed to one or more of the MAR, Jacobs and/or Porter type of dynamic externalities; (iii) contrary to previous studies but in line with theoretical predictions, we do find positive and significant effects for static as well as dynamic Jacobs externalities. Paper [II] focuses on the presence of agglomeration economies in the form of labor pooling and educational matching and their impact on economic growth in Swedish manufacturing and service industries from 1997 to 2005. To accom- plish this I employ a translog production function that enables me to decompose the total agglomeration elasticities into returns that accrue to: direct agglom- eration effects, an indirect effect of agglomeration at given input levels, a cross agglomeration effect of matching on labor pooling and vice versa. Household services is the single industry where both the labor pooling and matching hy- pothesis is supported by our data. Publishing is the sole instance of better input usage due to matching consistent with the theoretical claim. Paper [III] studies the interdependent location choices of households and firms expressed as population and employment in Swedish municipalities. Using a model of the Carlino-Mills type to investigate the impact of various location attributes such as differences in public revenue and spending patterns, accessi- bility to jobs and potential workforce, quality of the labor pool, concentration of commercial, private and public services. The findings suggest that fiscal factors significantly alters the impact of housing and accessibility attributes compared to exiting studies on Swedish data. Another finding, in line with previous stud- ies, indicate that there is a significant degree of inertia in household and firm location choices.
    Keywords: Information and knowledge spillover; MAR; Jacobs and Porter externalities; labor pooling; interdependent location choice; panel data
    JEL: C33 D24 H72 H73 R11 R23 R30
    Date: 2010–10–19
  10. By: Ahlfeldt, Gabriel M.; Wendland, Nicolai
    Abstract: As the first to use an archival data set on historical land values in Berlin, Germany, from 1890 to 1936, we investigate the impact of the rapid transport system on urban decentralization, using comparative statics of classical rent theory as a benchmark. We find that the monocentric model performs well over the entire period studied, revealing gradients that – although diminishing over time – turn out to be relatively steep in international comparison. Travel time to CBD measures incorporating the rapid transport network, however, clearly outperform traditional distance to CBD measures in terms of explanatory power. The evolution of the rapid transit network, and the subsequent changes in travel times to the CBD, explain almost three quarter of the overall trend in decentralization. Endogeneity concerns are addressed in an IV framework using a counterfactual transport network as an instrument
    Date: 2010
  11. By: Ron Boschma; Asier Minondo; Mikel Navarro
    Abstract: This paper investigates whether related variety, among other types of spatial externalities, affected regional growth in Spain at the NUTS 3 level during the period 1995-2007. We found evidence that related variety matters for growth across regions, especially when measured with the assistance of the Porter's cluster classification and the proximity index proposed by Hidalgo et al.. That is, Spanish provinces with a range of industries that are technologically related tend to show higher economic growth rates, controlling for the usual suspects. We did not find, however, any evidence of regional growth effects that come from technologically related sectors imports.
    Keywords: technological relatedness, related variety, regional branching, regional diversification
    JEL: R11 O14 N94
    Date: 2010–10
  12. By: Carruthers, John I (U.S. Department of Housing and Urban Development); Clark, David E (Department of Economics Marquette University); Tealdi, Michael (Department of Economics Marquette University)
    Abstract: Historic preservation is commonly used to protect old buildings and neighborhoods from deterioration. In 1981, the City of Milwaukee established a historic preservation commission to develop and maintain a local register of places with historical importance to the area. The commission also reviews all applications for historic status as well as any requests for exterior alterations. As such, there are numerous rules and restrictions that are imposed on property owners once it has been declared a historic site. Thus, while historic designation can serve to internalize the externalities in neighborhoods with historic buildings, it also imposes costs on homeowners who wish to make improvements to their homes. This paper uses a hedonic model to estimate the impact of historic preservation on the sale price of a single family home in the Milwaukee area. Preliminary results show that the impact of historic preservation is positive when it is significant, with the average impact at 26.6%. However, there was significant variation between districts, with the impact significantly positive in 13 of 22 districts used in the sample. Specifically, the positive impact ranged between 11% and 65%, holding other factors constant. None of the 22 districts had a negative and significant impact. An evaluation of spillover effects reveal that just over one third of them displayed positive and significant spillover effects, whereas 21% had negative and significant spillover effects. The remainder were insignificant. An important question is what factors influence this variability in historic preservation effects. The eventual goal of this research is to extend our preliminary analysis to two stages using a recently developed method that employs spatial econometric methods to solve the unique identification problems inherent in hedonic models (Carruthers and Clark, forthcoming in Journal of Regional Science). This will permit us to determine the specific factors that influence these premiums. While the spatial estimates presented in this preliminary work do not permit a two-stage model, we did explore whether implicit prices appear to be correlated with the household income and racial makeup of the neighborhoods in which they are located. The findings show little evidence that the implicit values of historic districts are correlated, but the implicit price associated with historic district spillovers was positively correlated with both neighborhood measures.
    Keywords: hedonic housing model, historic preservation district, Milwaukee, Economics
    JEL: R31 Q51
    Date: 2010–09
  13. By: ÖZGÜR, Onur
    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.
    Keywords: Conformity, externalities, local interactions, Markov perfect equilibrium, multiple equilibria, rational expectations, social interactions, social multiplier, strategic complementarities
    JEL: C31 C33 C62 C72 C73 D9 D62 D50 Z13
    Date: 2010
  14. By: EHLERS, Lars
    Date: 2010
  15. By: Florian Ploeckl (University of Oxford)
    Abstract: The Zollverein, the 1834 customs union between independent German states, removed all internal borders. This paper investigates its economic impact focussing on urban population growth in the state of Saxony. Implications from a economic geography model are tested with a data set on town populations and location characteristics as well as an improved distance measure created with GIS techniques to include geography and infrastructure. Saxony's Zollverein membership led to significantly higher growth for towns close to the liberalized border. The effect depended on a town's size, was reinforced through neighboring markets and worked through influencing migration and natural increase.
    Keywords: Economic geography, market access, customs union, GIS
    JEL: N93 F15 R12 R23
    Date: 2010
  16. By: Timo Mitze
    Abstract: The contribution of this paper is to analyse the role of network interdependencies in a dynamic panel data model for German internal migration fl ows since re-unification. So far, a capacious account of spatial patterns in German migration data is still missing in the empirical literature. In the context of this paper, network dependencies are associated with correlations of migration flows strictly attributable to proximate flows in geographic space. Using the neoclassical migration model, we start from its aspatial specification and show by means of residual testing that network dependency eff ects are highly present. We then construct spatial weighting matrices for our system of interregional flow data and apply spatial regression techniques to properly handle the underlying space-time interrelations. Besides spatial extensions to the Blundell-Bond (1998) system GMM estimator in form of the commonly known spatial lag and unconstrained spatial Durbin model, we also apply system GMM to spatially filtered variables. Finally, combining both approaches to a mixed spatial filteringregression specification shows a remarkably good performance in terms of capturing spatial dependence in our migration equation and at the same time qualify the model to pass essential IV diagnostic tests. The basic message for future research is that space-time dynamics is highly relevant for modelling German internal migration flows.
    Keywords: Internal migration, dynamic panel data; Spatial Durbin Model; GMM
    JEL: R23 C31 C33
    Date: 2010–09
  17. By: Judith K. Hellerstein (Department of Economics and MPRC,University of Maryland); Melissa P. McInerney (Department of Economics, College of William and Mary); David Neumark (Department of Economics, UCI, NBER, and IZA)
    Abstract: We specify and implement a test for the presence and importance of labor market network based on residential proximity in determining the establishments at which people work. Using matched employeremployee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and various measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work, that they are more important for minorities and the less-skilled, especially among Hispanics, and that these networks appear to be race-based.
    Date: 2010–10–18
  18. By: Shroder, Mark
    Abstract: Low-income housing assistance is part of the welfare state of all developed countries. The rest of the welfare state may cause work disincentives. In theory, housing assistance may also do so, but those disincentives may be blunted by its in-kind character and the way it is rationed. Rationing and selection make the estimation difficult; the most rigorous evidence from the United States suggests a loss of 10 to 20 cents in earnings per dollar of assistance. Less rigorous evidence from Australia suggests negative impacts in public housing but not housing benefit, while in Scandinavia researchers have as yet found no long-term duration of dependency.
    Keywords: Housing Subsidies; Housing Assistance; Work Disincentives; Rationing; Selection; Comparative International
    JEL: H20 I38 R29
    Date: 2010–10–19
  19. By: Mohammed Matar; Imad Brighith
    Abstract: A recent research project aimed to gather first-hand data from school users as well as academic performance data from pupils. Researchers compared data obtained from users of new and site-specific schools to that of "standard" ones in order to show whether more attractive and site-specific designs have a positive effect on learning...
    Date: 2010–04
  20. By: Milu Muyanga; John Olwande; Esther Mueni; Stella Wambugu
    Abstract: This paper attempts to evaluate the impact of the free primary education programme in Kenya, which is based on the premise that government intervention can lead to enhanced access to education especially by children from poor parental backgrounds. Primary education system in Kenya has been characterised by high wastage in form of low enrolment, high dropout rates, grade repetition as well as poor transition from primary to secondary schools. This scenario was attributed to high cost of primary education. To reverse these poor trends in educational achievements, the government initiated free primary education programme in January 2003. This paper therefore analyzes the impact of the FPE programme using panel data. Results indicate primary school enrolment rate has improved especially for children hailing from higher income categories; an indication that factors that prevent children from poor backgrounds from attending primary school go beyond the inability to pay school fees. Grade progression in primary schools has slightly dwindled. The results also indicate that there still exist constraints hindering children from poorer households from transiting to secondary school. The free primary education programme was found to be progressive, with the relatively poorer households drawing more benefits from the subsidy.
    Keywords: Primary education, Programme evaluation, Propensity score, benefit incidence analysis, Kenya
    JEL: I20 I21 I22
    Date: 2010
  21. By: Rafael González-Val (Universitat de Barcelona & IEB); Fernando Pueyo (Universidad de Zaragoza)
    Abstract: In this paper we present a model integrating characteristics of the New Economic Geography, the theory of endogenous growth and the economy of natural resources. This theoretical framework enables us to study explicitly the effect of “first nature causes” in the concentration of economic activity, more specifically, the consequences of an asymmetrical distribution of natural resources. The natural resource we consider appears as a localized input in one of the two countries, giving firms located in that country a cost advantage. In this context, after a decrease in transport costs, firms decide to move to the country with the greatest domestic demand and market size, where they can take more advantage of increasing returns, despite the cost advantage of locating in the South, due to the presence of the natural resource.
    Keywords: Industrial location, endogenous growth, renewable resource, geography
    JEL: F43 O30 Q20 R12
    Date: 2010
  22. By: Andrew Kato (University of Hawaii Economic Research Organization, University of Hawaii at Manoa); James Mak (Department of Economics, University of Hawaii Economic Research Organization)
    Abstract: Richard ButlerÕs tourism area life cycle envisions tourism destinations to evolve in stages from exploration to rapid growth followed by slackening, stagnation, and even decline. The eventual slow-down in tourism growth is attributed to the destinations reaching their physical and social carrying capacities. This article examines the evolution of Hawaii as a tourism destination from 1922 to 2009. We demonstrate that tourism growth in Hawaii has declined but not because the destination has reached its carrying capacity but primarily because of the slowdown in technical progress in passenger air transportation and competition from newer destinations. We conclude that for destinations that depend on transportation improvements to attract tourists, technical progress in transport may provide a better explanation of the evolution of their destinations than their carrying capacities.
    Keywords: Tourism Area Life Cycle, Transportation, Technical Progress
    JEL: O33 L83 L93
    Date: 2010–10
  23. By: Tom Broekel; Matthias Buerger; Thomas Brenner
    Abstract: Concepts like regional innovation systems, innovative milieu, and learning regions emphasize the positive contribution of intra-regional cooperation to firmsÕ innovation performance. Despite substantial numbers of case studies, the quantitative empirical evidence for this claim is thin. Using data on the co-application and co- invention of patents for 270 German labor market regions the study shows that intra- regional cooperation intensity and regional innovation efficiency are associated. In contrast to the negative influence of inter-regional cooperation, medium levels of intra-regional cooperation stimulate regional innovation efficiency.
    Keywords: regional innovation efficiency, cooperation intensity, collaboration, regional cooperation
    JEL: O18 R11 O31
    Date: 2010–10
  24. By: Bronwen Cohen
    Abstract: As Scotland moves ahead with both an ambitious school building programme and forward-thinking educational reforms, Bronwen Cohen explores the background to “Making Space 2010”, an exciting design programme which aims to focus international vision on the importance of space.
    Date: 2010–07
  25. By: Bisin, Alberto (New York University); Patacchini, Eleonora (Sapienza University of Rome); Verdier, Thierry (Paris School of Economics); Zenou, Yves (Stockholm University)
    Abstract: We propose a theoretical framework to study the determinants of ethnic and religious identity along two distinct motivational processes which have been proposed in the social sciences: cultural conformity and cultural distinction. Under cultural conformity, ethnic identity is reduced by neighborhood integration, which weakens group loyalties and prejudices. On the contrary, under cultural distinction, ethnic minorities are more motivated in retaining their own distinctive cultural heritage the more integrated are the neighborhoods where they reside and work. Data on ethnic preferences and attitudes provided by the Fourth National Survey of Ethnic Minorities in the UK enables us to test the relative significance of these two identity processes. We find evidence consistent with intense ethnic and religious identity mostly formed as a cultural distinction mechanism. Consistently, we document that ethnic identities are more intense in mixed than in segregated neighborhoods.
    Keywords: ethnicity, identity, intermarriage, cultural transmission
    JEL: A14 J15
    Date: 2010–10
  26. By: Dave Donaldson
    Abstract: How large are the benefits of transportation infrastructure projects, and what explains these benefits? To shed new light on these questions, this paper uses archival data from colonial India to investigate the impact of India's vast railroad network. Guided by four predictions from a general equilibrium trade model, I find that railroads: (1) decreased trade costs and interregional price gaps; (2) increased interregional and international trade; (3) increased real income levels; and (4), that a sufficient statistic for the effect of railroads on welfare in the model (an effect that is purely due to newly exploited gains from trade) accounts for virtually all of the observed reduced-form impact of railroads on real income in the data. I find no spurious effects from over 40,000 km of lines that were approved but - for four different reasons - were never built.
    JEL: F15 N15 N75 O1 R13 R4
    Date: 2010–10
  27. By: Stephen B. Billings (University of North Carolina-Charlotte); Erik B. Johnson (Quinnipiac University)
    Abstract: We introduce a nonparametric microdata based test for industrial specialization and apply it to a single urban area. Our test employs establishment densities for specific industries, a population counterfactual, and a new correction for multiple hypothesis testing to determine the statistical significance of specialization across both places and industries. Results highlight patterns of specialization which are extremely varied, with downtown places specializing in a number of service sector industries, while more suburban places specialize in both manufacturing and service industries. Business service industries are subject to more specialization than non-business service industries while the manufacturing sector contains the lowest representation of industries with specialized places. Finally, we compare the results of our test for specialization with recent tests of localization and show how these two classes of measures highlight the presence of both industry as well as place specific agglomerative forces.
    Keywords: Industrial specialization
    JEL: R12
    Date: 2010
  28. By: Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Tatsiramos, Konstantinos (IZA)
    Abstract: We investigate the effect of social interactions on labor market outcomes using a direct measure of social contacts based on information about individuals’ three best friends and their characteristics. We examine the effect of the number of employed friends on the transition from non-employment to employment, and we find the existence of significant network effects at the individual level. An additional employed friend increases the probability of finding a job by 3.7 percentage points. This finding is robust to specifications that address the endogeneity of friends’ employment status, which may be induced by correlation with unobserved individual attributes and feedback effects. Considering labor market outcomes, we find evidence of higher wages and employment stability for those with more employed friends, which is consistent with networks acting as an information transmission mechanism.
    Keywords: friendship ties, unemployment, networks
    JEL: J64
    Date: 2010–10
  29. By: L. Savorelli
    Abstract: In this paper we study a duopoly where the network e¤ect is nonmonotone and the network can be overloaded. The firms choose prices and locations endogenously, and the agent's utility is influenced by the number of people patronizing the same firm she does. We determine the market equilibrium, and we study how the network effect influences social welfare. We compare this setting with the standard horizontal differentiation model with no network effects to understand whether and how conformism is socially desirable. The results show that whether network effects are desirable depends on how people are conformist, and whether overloading is feasible. If overloading is not possible (in either of the firm's network), and the total consumers' mass is sufficiently high, a network effect which is slightly concave increases social welfare. By contrast, if overloading is feasible, and the total consumers' mass is sufficiently small, social welfare is increased if the network effect is more concave than in the previous case.
    JEL: L14 D62
    Date: 2010–10
  30. By: Alireza Abbasi (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University); Jorn Altmann (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)
    Abstract: In this study, we develop a theoretical model based on social network theory to understand how the collaboration (co-authorship) network of scholars correlates to the research performance of scholars. For this analysis, we use social network analysis (SNA) measures (i.e., normalized closeness centrality, normalized betweenness centrality, efficiency, and two types of degree centrality). The analysis of data shows that the research performance of scholars is positively correlated with two SNA measures (i.e., weighted degree centrality and efficiency). In particular, scholars with strong ties (i.e., repeated co-authorships, i.e., high weighted degree centrality) show a better research performance than those with low ties (e.g., single co-authorships with many different scholars). The results related to efficiency show that scholars, who maintain a strong co-authorship relationship to only one co-author of a group of linked co-authors (i.e., co-authors that have joined publications), perform better than those researchers with many relationships to the same group of linked co-authors.
    Keywords: Social Network Analysis, Co-authorship Network, Researchers' Performance.
    JEL: C43 C44 C65 D80 D85 M12 M21
    Date: 2010–10
  31. By: Alfarano, Simone; Milakovic, Mishael
    Abstract: A growing body of literature reports evidence of social interaction effects in survey expectations. In this note, we argue that evidence in favor of social interaction effects should be treated with caution, or could even be spurious. Utilizing a parsimonious stochastic model of expectation formation and dynamics, we show that the existing sample sizes of survey expectations are about two orders of magnitude too small to reasonably distinguish between noise and interaction effects. Moreover, we argue that the problem is compounded by the fact that highly correlated responses among agents might not be caused by interaction eects at all, but instead by model-consistent beliefs. Ultimately, these results suggest that existing survey data cannot facilitate our understanding of the process of expectations formation.
    Keywords: Survey expectations; model-consistent beliefs; social inter- action; networks.
    JEL: D84 D85
    Date: 2010–10
  32. By: Eiji Yamamura
    Abstract: This paper aims to explore how social capital is related to self-rated health status in Japan and how this relationship depends on the extent to which a person is embedded into the community. This study used data from 3079 adult participants in Japan’s Social Policy and Social Consciousness (SPSC) survey conducted in 2000. Controlling for unobserved city size- and area-specific fixed effects, I find through Ordered Probit estimations that social capital has a significantly positive effect on health status for long-time but not for short-time residents. Results also suggested that the experience of divorce is negatively associated with health status for long- time but not short-time residents. People can enjoy a social network, a kind of social capital, if they are a member of such a network. Nevertheless, people appear to be negatively influenced if they are excluded from networks. Such positive and negative effects of social capital are more obvious when people are more deeply integrated into a community. Empirical study provided evidence that social capital and socio-economic effects on health status are significantly influenced by the extent to which respondents are integrated into a community.
    Keywords: Social capital; health status.
    JEL: I19 Z13 R58
    Date: 2010–09–29
  33. By: Karen Clay; Werner Troesken; Michael R. Haines
    Abstract: This paper examines the effect of water-borne lead exposure on infant mortality in American cities over the period 1900-1920. Infants are highly sensitive to lead, and more broadly are a marker for current environmental conditions. The effects of lead on infant mortality are identified by variation across cities in water acidity and the types of service pipes – lead, iron, or concrete – which together determined the extent of lead exposure. Time series estimates and estimates that restrict the sample to cities with lead pipes provide further support for the causal link between water-borne lead and infant mortality. The magnitudes of the effects were large. In 1900, a decline in exposure equivalent to an increase in pH from 6.7 to 7.5 in cities with lead-only pipes would have been associated with a decrease in infant mortality of 12.3 to 14.3 percent or about 22 fewer infant deaths per 1,000 live births. City-level evidence on wages in manufacturing suggests that the adverse health effects of lead may have extended beyond infants.
    JEL: I18 J24 N31 N32
    Date: 2010–10
  34. By: Shewmake, Sharon
    Abstract: Private vehicles are a significant source of air pollution in many areas of the United States. Areas with already high levels of air pollution are required by the Clean Air Act to take steps to reduce automobile use and the associated emissions. The behavioral implications of many travel demand management techniques are poorly understood. In this dissertation I focus on carpooling. Policy makers encourage commuters to carpool through High Occupancy Vehicle (HOV) Lanes, free parking for carpoolers, attempts to connect carpoolers, and casual carpoolers (often called slugging). Despite these e
    Keywords: hybrid cars; HOV Lanes; Clean Air Act; Economics
    JEL: Q50 Y40 L91 Q53 R41
    Date: 2010–09–02
  35. By: Sanghoon Lee (University of British Columbia); Qiang Li (Shanghai University of Finance and Economics)
    Abstract: This paper proposes a new explanation for Zipf’s law often observed in the top tail of city size distribution. We show that Zipf’s law can emerge if city size can be expressed as a product of multiple random factors. Each of the factors need not generate Zipf’s law by itself. The key implication is that we cannot reject a model simply because the model does not generate Zipf’s law. A single model, typically representing only one factor, may not generate Zipf’s law, but if we have many such models together as in reality, Zipf’s law may emerge.
    Keywords: City size distribution, Zipf’s law, rank-size rule, log-normal distribution
    JEL: D39 R12
    Date: 2010
  36. By: Tolga U. Kuzubas
    Date: 2010
  37. By: Marco Runkel (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Thomas Eichner (Department of Economics, University of Hagen)
    Abstract: This paper points to the important role which the elasticity of aggregate capital supply with respect to the net rate of return to capital plays for the efficiency of policymaking in a decentralized economy with mobile capital and spillovers among jurisdictions. In accordance with previous studies, we show that under the assumption of a fixed capital supply (zero capital supply elasticity) the decentralized policy choice is optimal. If the capital supply elasticity is strictly positive, however, capital tax rates are inefficiently low in the decentralized equilibrium.
    Keywords: decentralized policymaking, spillovers, capital supply elasticity
    JEL: H23 H77 Q58
    Date: 2010–09

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