nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒11‒06
eighteen papers chosen by
Steve Ross
University of Connecticut

  1. Can Targeted, Non-Cognitive Skills Programs Improve Achievement? Evidence from EPIS By Martins, Pedro S.
  2. Mergers in Fiscal Federalism By Marie-Laure Breuillé; Skerdilajda Zanaj
  3. Appropriate Economic Space for Transnational Infrastructural Projects: Gateways, Multimodal Corridors, and Special Economic Zones By Peter J. Rimmer; Howard Dick
  4. Trends and cycles in regional economic growth : how spatial differences formed the Swedish growth experience 1860-2009 By Martin Henning; Kerstin Enflo; Fredrik NG Andersson
  5. Expectations-Driven Cycles in the Housing Market By Lambertini, Luisa; Mendicino, Caterina; Punzi, Maria Teresa
  6. General equilibrium effects of land market restrictions on labor market : evidence from wages in Sri Lanka By Emran, M. Shahe; Shilpi, Forhad
  7. High-School Dropouts and Transitory Labor Market Shocks: The Case of the Spanish Housing Boom By Ainhoa Aparicio
  8. Strategic Choice of Freight Mode and Investments in Transport Infrastructure within Production Networks By Ying Yi Tsai
  9. Assessing Socioeconomic Impacts of Transport Infrastructure Projects in the Greater Mekong Subregion By Susan Stone; Anna Strutt; Thomas Hertel
  10. Trust and the Choice Between Housing and Financial Assets: Evidence from Spanish Households By El-Attar, Mayssun; Poschke, Markus
  11. Citizens' control and the efficiency of local public services By Núria Bosch Roca; Marta Espasa Queralt; Antoni Mora Corral
  12. Differentiated financing of schools in French-speaking Belgium: prospectives for regulating a school quasi-market By Marc Demeuse; Antoine Derobertmasure; Nathanaël Friant
  13. Neighbourhood Effects, Housing Tenure, and Individual Employment Outcomes By Manley, David; van Ham, Maarten
  14. A Count Data Analysis of Ridership in Germany’s Public Transport By Manuel Frondel; Colin Vance
  15. The Dog ATE my Economics Homework! Estimates of the Average Effect of Treating Hawaii’s Public High School Students with Economics By Kimberly Burnett; Sumner La Croix
  16. Crime and Education in a Model of Information Transmission By Darwin Cortés; Guido Friebel; Darío Maldonado
  17. The Benefits of Regional Infrastructure Investment in Asia: A Quantitative Exploration By Fan Zhai
  18. Mentoring, Educational Services, and Incentives to Learn: What Do We Know About Them? By Rodriguez-Planas, Nuria

  1. By: Martins, Pedro S. (Queen Mary, University of London)
    Abstract: EPIS is an original and large private-sector program aimed at improving student achievement and eroding early school leaving at Portuguese state schools. The program first screens students to focus only on those more likely to perform poorly; and then conducts a number of small-group sessions aimed at improving the non-cognitive skills (e.g. study skills, motivation, self-esteem) of the selected students. Our quasi-experimental evidence of the effects of EPIS is drawn from rich longitudinal student data and the different timings in the roll-out of the program, both within and across schools. The results indicate that the program reduced grade retention by at least 10 percentage points and did so in a cost effective way.
    Keywords: student achievement, program evaluation, matched school-student data
    JEL: I20 J08
    Date: 2010–10
  2. By: Marie-Laure Breuillé (Université Catholique de Louvain); Skerdilajda Zanaj (CREA, University of Luxembourg)
    Abstract: This paper analyzes mergers of regions in a two-tier setting with both horizontal and vertical tax competition. The merger of regions induces three effects on regional and local tax policies, which are transmitted both horizontally and vertically: i) an alleviation of tax competition at the regional level, ii) a rise in the regional tax base, and iii) a larger internalization of tax externalities generated by cities. It is shown that the merger of regions increases regional tax rates while decreasing local tax rates. This Nash equilibrium with mergers is then compared with the Nash equilibrium with coalitions of regions.
    Keywords: Mergers, Tax Competition, Fiscal Federalism
    JEL: H73 H25
    Date: 2010
  3. By: Peter J. Rimmer; Howard Dick (Asian Development Bank Institute)
    Abstract: This study addresses three questions that arise in Asia when formulating, financing, implementing, and maintaining transnational linkages versus purely domestic connections. Firstly, how is optimal economic space to be defined as a useful starting point? Secondly, how can relevant criteria be developed to define the emerging spatial economy and identify efficient transnational transport networks? Thirdly, what are the main investment opportunities in physical infrastructure that would result in more efficient and effective regional cooperation and integration (making special reference to the potential role of crossborder special economic zones (SEZs) or their equivalents)?
    Keywords: economic space, crossborder special economic zones, transnational transport networks
    JEL: R00 R10 R30 R40 R50
    Date: 2010
  4. By: Martin Henning; Kerstin Enflo; Fredrik NG Andersson
    Abstract: Using a novel dataset on regional GDP per worker 1860-2009, this paper analyzes communalities in regional long-term growth trajectories for 24 Swedish provinces. Wavelet Analysis and Principal Component Analysis are used to decompose regional growth trajectories, and to assess to what extent growth in regions share common trend and cyclical properties. It is found that regional trend growth shows strong common features among groups of regions. Primarily natural resource rich regions benefited from the First Industrial Revolution. Contrary to regional development in many other European economies, a strong growth surge in Sweden later benefited virtually the whole country during the Second Industrial Revolution. Growth in this countrywide trend slowed down in the 1970s, when the metropolitan regions became main growth engines. In mid- and short-term cyclical movements regions display more heterogeneous growth patterns, and evidence of mid-term sequential lead-lag patterns in regional growth is found, especially between core and periphery.
    Keywords: Economic history, Economic geography, Regional growth, Wavelet analysis, Sweden
    JEL: N9 O14 R11 C22
    Date: 2010–10
  5. By: Lambertini, Luisa; Mendicino, Caterina; Punzi, Maria Teresa
    Abstract: This paper analyzes housing market boom-bust cycles driven by changes in households' expectations. We explore the role of expectations not only on productivity but on several other shocks originated in the housing market, the credit market, the production sector and the conduct of monetary policy. We find that expectations related to different sectors of the economy can generate booms in the housing market in accordance with the empirical findings. However, only expectations of future expansionary monetary policy that are not fulfilled can also generate a macroeconomic recession. Regarding the credit market, increased access to credit generates boom-bust cycles only if it is expected to be reversed in the near future. Moreover, economies with higher access to credit are characterized by higher volatility of consumption and indebtedness but, not necessarily, of real GDP.
    Keywords: Boom-Bust Cycles, Credit Frictions, Housing Market
    JEL: E32 E52 E44
    Date: 2010–10–22
  6. By: Emran, M. Shahe; Shilpi, Forhad
    Abstract: Taking advantage of a historical quasi-experiment in Sri Lanka, this paper provides evidence on the effects of land market restrictions on wages and its spatial pattern. The empirical specification is derived from a general equilibrium model that predicts that the adverse effects of land market restrictions on wages will be less in remote locations. For identification, the study exploits the effects of historical malaria prevalence on the incidence of land restrictions through its effects on"crown land". During the 16th to early 20th centuries, areas severely affected by malaria were abandoned by households and the land was taken over by the government. These lands that were later distributed through resettlement programs are subject to sales, rental, and mortgage restrictions. The variations in the amount of crown land resulting from different intensity of historical malaria provide a source of exogenous variations in the incidence of land restrictions in a sub-district. The results show that land restrictions reduce wages substantially, and this effect is smaller in remote locations. A 1 percent increase in land restrictions reduces wages by about 6.6 percent at the median travel time from an urban center, and the effect becomes effectively zero after 6 hours of travel time.
    Keywords: Transport Economics Policy&Planning,Political Economy,Population Policies,Urban Housing and Land Settlements,National Urban Development Policies&Strategies
    Date: 2010–10–01
  7. By: Ainhoa Aparicio
    Abstract: This paper addresses the implications of transitory changes in labor market conditions for low versus high educated workers on the decision to acquire education. To identify this effect, I use the improvement in the labor market prospects of low educated workers motivated by the increases in employment and wages in the construction sector during the recent housing boom. The estimation strategy is based on the fact that changes in the labor market driven by the construction sector affect only men. Increases in construction activity are found to increase men's propensity to drop out of high-school, relative to women. According to this finding, policies promoting education should strengthen when in the presence of transitory shocks in the labor market that make dropping out more attractive.
    Keywords: High-school dropout; housing boom; Spain
    JEL: J24 J22 I20 L74
    Date: 2010
  8. By: Ying Yi Tsai
    Abstract: In the context of production linkages in which downstream producers require freight services provided by transport operators, the author show that the strategic choice of using an alternative transport mode does not necessarily induce lower access charges, relative to the standard transport mode. Additionally, he show that the nature of infrastructure investment determines the share of final goods delivery by the alternative transport mode. An immediate implication is that interactions among infrastructure investments; building transportation capacity costs; and industry-specific characteristics should be carefully assessed when planning transport infrastructure investments to enhance competitiveness in export markets. [ADBI Working Paper 132]
    Keywords: production, transport operators, investment, capacity, export markets
    Date: 2010
  9. By: Susan Stone; Anna Strutt; Thomas Hertel (Asian Development Bank Institute)
    Abstract: This study attempts to quantify the links between infrastructure investment and poverty reduction using a multi-region general equilibrium model, supplemented with household survey data for the Greater Mekong Subregion (GMS). Infrastructure investment is an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, for example by significantly reducing travel times and costs. In this study, we concentrate on quantifying the effects of some of the key linkages between upgraded infrastructure, economic growth, and poverty reduction. We model the impact of both reducing transport costs and improving trade facilitation in the GMS. Our findings suggest strong gains to the GMS countries as a result of infrastructure development and trade facilitation with national poverty reduced throughout the region. However, the impact on various segments of these populations differs, depending in part on factor returns.
    Keywords: infrastructure investment, travel time, travel cost, trade facilitation, poverty reduction
    JEL: O12 F15 I32
    Date: 2010
  10. By: El-Attar, Mayssun (McGill University); Poschke, Markus (McGill University)
    Abstract: Trusting behavior has been shown to affect households' portfolio choice between risky and risk-free financial assets. We extend the analysis of the effect of trust on portfolio choice to include the dominant component of households' portfolios, real estate. In a simple model, we show how the effect of trust on expected investment returns affects portfolio composition, including the share of real estate. Using data from the European Social Survey, we estimate individual-level trust as an unobserved attitude using survey questions on personal attitudes by applying a hierarchical item response model. Combining these estimates with data on Spanish households' financial decisions from the Survey of Household Finances (EFF) conducted by the Bank of Spain, we show that households with less trust invest more in housing and less in financial assets, in particular risky ones. Trust thus may drive not only (limited) stock market participation, but financial development more generally.
    Keywords: housing, trust, portfolio choice, item response models
    JEL: D1 D8 Z1
    Date: 2010–10
  11. By: Núria Bosch Roca (Universitat de Barcelona & IEB); Marta Espasa Queralt (Universitat de Barcelona & IEB); Antoni Mora Corral (Universitat Internacional de Catalunya & IEB)
    Abstract: It is generally accepted that fiscal decentralization increases citizens’ control over politicians, fostering accountability and increasing efficiency. This article identifies the socioeconomic characteristics of citizens (potential voters) that increase their control over local policy-makers and thus generate greater efficiency in a decentralized context. We also highlight the fiscal characteristics of local governments that influence this control and efficiency. The study examines a sample of Spanish municipalities, applying a methodology based on the conventional procedure of two-stage estimation. In the first stage we estimate the efficiency of local public services by calculating a new version of a global output indicator using the DEA technique. In the second stage, using a Tobit type estimation (censored models) and bootstrap methods, we show how the factors mentioned may influence efficiency. The results suggest that strong presence of retailers, retired people, and people entitled to vote favour citizens’ control, which fosters accountability and efficiency. A factor that facilitates this control, and therefore greater efficiency, is the presence of low opportunity costs for obtaining information regarding local public service management.
    Keywords: Technical efficiency, local governments, citizens' control, socioeconomic and fiscal variables
    JEL: H11 H71 H72
    Date: 2010
  12. By: Marc Demeuse (INAS - Institut d'Administration scolaire - Université de Mons); Antoine Derobertmasure (INAS - Institut d'Administration scolaire - Université de Mons); Nathanaël Friant (INAS - Institut d'Administration scolaire - Université de Mons)
    Abstract: The school quasi-market in French-speaking Belgium is characterised by segregation of various types. Efforts to apply measures that encourage greater social mixing have met with stiff resistance and various difficulties. In 2008 and 2009, a significant amount of turbulence was caused by the application of the "social mixing" law influencing the registration procedures for students in secondary education. The purpose of this article is to present some results from a prospective research project that investigated the possibility of modifying the formula for financing schools, the foundation of the quasi-market mechanism. To do this, a generalised formula for allocating funds to schools according to need is proposed on the basis of legislation currently in force in the French Community of Belgium. Then, the solution tested is presented with a financing formula that takes into account indicators of the social composition of the school population. Various scenarios of differentiated financing of schools according to these indicators are presented, through simulations using real data on the effects of these scenarios in terms of gains and losses first for all schools, and then for different contrasting schools thereafter. Finally, the implications of these scenarios are discussed and put into perspective with respect to the different solutions considered since 2005 in French-speaking Belgium.
    Keywords: Prospective; social mixing; regulation; education
    Date: 2010–05–01
  13. By: Manley, David (University of St. Andrews); van Ham, Maarten (University of St. Andrews)
    Abstract: This paper investigates whether individuals living in neighbourhoods with high concentrations of unemployment are less likely to enter work if they are unemployed and more likely to lose their job if they are employed. The main challenge in the neighbourhood effects literature is the identification of causal neighbourhood effects. A particular problem is that individuals do not randomly select neighbourhoods to live in: the selection process is often linked to the labour market situation and potential of individuals. To get more insight in neighbourhood effects we run separate models for social renters and owner occupiers. This study uses anonymised individual level longitudinal data from the Scottish Longitudinal Study for 1991 and 2001 with multiple neighbourhood scales operationalised. Based on the results we argue that any apparent neighbourhoods effects that were present in models of the full population are at least partly an artefact of different neighbourhood selection mechanisms. The conclusions of the paper call for a more nuanced treatment of neighbourhood effects and the development of models that seek to include neighbourhood selection from the outset.
    Keywords: neighbourhood deprivation, neighbourhood effects, labour market outcomes, longitudinal data, Scotland
    JEL: I30 J60 R23
    Date: 2010–10
  14. By: Manuel Frondel; Colin Vance
    Abstract: Focusing on adult members of German households, this paper investigates the determinants of public transit ridership with the aim of quantifying the effects of fuel prices, fares, person-level attributes, and characteristics of the transit system on transport counts over a five-day week. The reliance on individual data raises several conceptual and empirical issues, the most fundamental of which is the large proportion of zero values in transit counts. To accommodate this feature of the data, we employ modeling procedures referred to as zero-inflated models (ZIMs), which order observations into two latent regimes defined by whether the individual never uses public transport. Our estimates reveal fuel prices to have a positive and substantial influence on transit ridership, though there is no evidence for a statistically significant impact of the fare.
    Keywords: Transit Ridership, Pricing Policy, Zero-Inflated Models, Household Data.
    JEL: D13 Q41
    Date: 2010–10
  15. By: Kimberly Burnett (University of Hawaii Economic Research Organization University of Hawaii-Manoa); Sumner La Croix (Department of Economics University of Hawaii-Manoa)
    Abstract: Hawaii is one of 27 states that do not require testing of public high school students regarding their understanding of economics. We report results for the first economics test administered to a large sample of students in Hawaii public high schools during the Spring 2004 semester. Our analysis focuses on evaluating the impact of a semester-long course in economics on student scores on a 20-question, multiple-choice economics test. We specify and estimate a regression analysis of exam scores that controls for other factors that could influence student performance on the exam. While student scores on the economics exam are relatively low, completion of an economics course and participation in a stock market simulation game each add about one point to student scores.
    Keywords: economic education, high school economics, stock market simulation
    JEL: A20 A21 I21
    Date: 2010–01
  16. By: Darwin Cortés (Universidad del Rosario); Guido Friebel (Goethe-Universität); Darío Maldonado (Universidad del Rosario)
    Abstract: We model the decisions of young individuals to stay in school or drop-out and engage in criminal activities. We build on the literature on human capital and crime engagement and use the framework of Banerjee (1993) that assumes that the information needed to engage in crime arrives in the form of a rumor and that individuals update their beliefs about the profitability of crime relative to education. These assumptions allow us to study the effect of social interactions on crime. We first show that a society with fully rational students is less vulnerable to crime than an otherwise identical society with boundedly rational students. We also investigate the spillovers from the actions of talented students to less talented students and show that policies that decrease the cost of education for talented students may increase the vulnerability of less talented students to crime. This is always the case when the heterogeneity of students with respect to talent is sufficiently small.
    Keywords: Human Capital, The Economics of Rumors, Social Interactions, Urban Economics
    JEL: D82 D83 I28
    Date: 2010–10
  17. By: Fan Zhai (Asian Development Bank Institute)
    Abstract: Capitalizing on recent estimates of infrastructure financing requirements in Asia, this paper frames a scenario for infrastructure development in the region and estimates the external effects of infrastructure investment. It also assesses quantitatively the economy-wide welfare effects of developing regional infrastructure in Asia, using a global computable general equilibrium model. The results show that developing Asian economies would gain significantly from the expansion of regional infrastructure in transport and communication. With annual investment of around US$800 billion in transport, communication, and energy infrastructure during 2010–2020, developing Asia is likely to reap welfare gains of US$1,616.3 billion (in 2008 prices) in 2020, or 10% of projected aggregate gross domestic product.
    Keywords: infrastructure financing, infrastructure investment, Asia, welfare, computable general equilibrium model
    JEL: C68 F15
    Date: 2010
  18. By: Rodriguez-Planas, Nuria (Universitat Autònoma de Barcelona)
    Abstract: This paper reviews recent studies on the effectiveness of services and incentives offered to disadvantaged youth. We focus our analysis on three types of interventions: mentoring, educational services, and financial rewards. The objective of this article is threefold. First, we explain alternative theoretical points of view in favor (or against – when applicable) each of these interventions. Then, we discuss how recent empirical work has affected that view, and we summarize the latest findings. We conclude with a discussion on what questions remain to be examined. Our hope is that this article will serve as a resource for those seeking to understand what educational interventions work and for whom, and to use as a starting point to illuminate the debate on where to go next.
    Keywords: cognitive and non-cognitive skills, intrinsic and extrinsic motivation, at-risk youth, resilience, deviancy training, deterrence, primary- and high-school, post-secondary education, remedial programs, incentives on inputs and outputs
    JEL: C93 I21 I22 I28 J24
    Date: 2010–10

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