nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2010‒12‒23
thirty-one papers chosen by
Steve Ross
University of Connecticut

  1. Spatial integration in European cross-border metropolitan regions: A comparative approach By DECOVILLE Antoine; DURAND Frédéric; SOHN Christophe; WALTHER Olivier
  2. Transport Costs and the Size Distribution of a Linearly Arranged System of Cities By Albrecht Kauffmann
  3. Peer Quality or Input Quality?: Evidence from Trinidad and Tobago By C. Kirabo Jackson
  4. Peers, neighborhoods and immigrant student achievement - evidence from a placement policy By Åslund, Olof; Edin, Per-Anders; Fredriksson, Peter; Grönqvist, Hans
  5. The Role of Regional Price Index in New Economic Geography Models By Dusan Paredes
  6. A political economy model of road pricing By Bruno DE BORGER; Stef PROOST
  7. Agglomerative Forces and Cluster Shapes By William R. Kerr; Scott Duke Kominers
  8. Partial compensation/responsibility By Karen CRABBE; Karolien DE BRUYNE
  9. A regional growth model with external effects among spanish provinces. Un modelo de crecimiento con efectos externos entre las provincias españolas By Ángel Alañón Pardo; Miguel Gómez de Antonio
  10. Building Bridges: Heterogeneous Jurisdictions, Endogenous Spillovers, and the Benefits of Decentralization By Paulo Júlio; Susana Peralta
  11. Do the selected Trans European transport investments pass the Cost Benefit test? By Stef PROOST; Fay DUNKERLEY; Saskia VAN DER LOO; Nicole ADLER; Johannes BRÖCKER; Artem KORZHENEVYCH
  12. Same Work, Lower Grade? Student Ethnicity and Teachers’ Subjective Assessments By Reyn van Ewijk
  13. Legalization and Immigrant Homeownership: Evidence from Spain By Catalina Amuedo-Dorantes; Kusum Mundra
  14. Spatial propagation of macroeconomic shocks in Europe By Hans DEWACHTER; Romain HOUSSA; Priscilla TOFFANO
  15. Are boys discriminated in Swedish high schools? By Tyrefors Hinnerich, Björn; Höglin, Erik; Johannesson, Magnus
  16. Real House Prices in OECD Countries: The Role of Demand Shocks and Structural and Policy Factors By Dan Andrews
  17. Housing investment in Spain: has it been the main engine of growth? By Carolina Cosculluela Martínez; Rafael Flores de Frutos
  19. Eliciting the Regulation of an Economic System: The Case of the French Rail Industry By Ivaldi, Marc; Pouyet, Jérôme
  20. So You’re Considering Introducing Congestion Charging?: Here’s what you need to know By Jonas Eliasson
  21. Urban Planning throughout environmental quality and human well-being By Duque, José; Panagopoulos, Thomas
  22. Price Competition on Graphs By Adriaan R. Soetevent
  23. The Tax Policy in the Chilean Economy: a Regional Applied General Equilibrium Analysis By Marcos Minoru Hasegawa
  24. The political economy of fixed regional investment shares with an illustration for Belgian Railway investments By Stef PROOST; Vera ZAPOROZHETS
  25. Towards a spatial perspective on sustainability transitions By Coenen, Lars; Benneworth, Paul; Truffer, Bernhard
  26. Directed Generosity and Network Formation: Network Dimension Matters By D'Exelle, Ben; Riedl, Arno
  27. On and Off the Beaten Path: Transferring Knowledge through Formal and Informal Networks By Aalbers, Rick; Koppius, Otto; Dolfsma, Wilfred
  28. The Land Transport Sector: Policy and Performance By Jan Persson; Daeho Song
  29. Do Environmental Benefits Matter? A Choice Experiment Among House Owners in Germany By Achtnicht, Martin
  30. Incomes from Owner-occupied Housing for Working-age and Retirement-age Canadians, 1969 to 2006 By Brown, W. Mark; Lafrance, Amélie
  31. Quality of social networks and educational investment decisions By Blanca ZULUAGA

  1. By: DECOVILLE Antoine; DURAND Frédéric; SOHN Christophe; WALTHER Olivier
    Keywords: cross-border; metropilitan regions; spatial integration; commuters; gross domestic product; housing market; Europe
    JEL: F15 F16 J01 J21 J61 R58
    Date: 2010–12
  2. By: Albrecht Kauffmann
    Abstract: The question regarding the effects of changing transports costs on the size distribution of cities is an important topic of systems of cities research. The so-called New Economic Geography has already given some answers to this question. One central assumption in this kind of model is a very particular, simplified spatial structure. This contribution investigates the consequences of changing transport costs for a system of cities that are located equidistantly on a straight line. In the case of rising transport costs, the main outcome of this model is worker concentration in the central large cities, while the peripheral regions lose residents.
    Date: 2010–12
  3. By: C. Kirabo Jackson
    Abstract: Using exogenous secondary school assignments to remove self-selection bias to schools and peers, I obtain credible estimates of (1) the effect of attending schools with higher-achieving peers, and (2) the direct effect of peer quality improvements within schools, on the same population. While students at schools with higher-achieving peers have better academic achievement, within-school increases in peer achievement improve outcomes only at high-achievement schools. Peer quality can account for about one tenth of school value-added on average, but over one-third among the top quartile of schools. The results reveal large and important differences by gender.
    JEL: H0 I2 J0
    Date: 2010–12
  4. By: Åslund, Olof (Uppsala Center for Labor Studies); Edin, Per-Anders (Uppsala Center for Labor Studies); Fredriksson, Peter (Uppsala Center for Labor Studies); Grönqvist, Hans (SOFI)
    Abstract: We examine to what extent immigrant school performance is affected by the characteristics of the neighborhoods that they grow up in. We address this issue using a refugee place¬ment policy which provides exogenous variation in the initial place of residence in Sweden. The main result is that school performance is increasing in the number of highly educated adults sharing the subject’s ethnicity. A standard deviation increase in the fraction of high-educated in the assigned neighborhood raises compulsory school GPA by 0.9 percentile ranks. Particularly for disadvantaged groups, there are also long-run effects on educational attainment.
    Keywords: Peer effects; Ethnic enclaves; Immigration; School performance
    JEL: I20 J15 Z13
    Date: 2010–11–30
  5. By: Dusan Paredes (Department of Economics, Universidad Católica del Norte)
    Keywords: New Economic Geography, Regional Price Index
    Date: 2010–12
  6. By: Bruno DE BORGER; Stef PROOST
    Abstract: In this paper, we take a political economy approach to study the introduction of urban congestion tolls, using a simple majority voting model. Making users pay for external congestion costs is for an economist an obvious reform, but successful introductions of externality pricing in transport are rare. The two exceptions are London and Stockholm that are characterized by two salient facts. First, the toll revenues were tied to improvements of public transport. Second, although a majority was against road pricing before it was actually introduced, a majority was in favor of the policy reform after its introduction. This paper constructs a model to explain these two aspects. Using a stylized model with car and public transport, we show that it is easier to obtain a majority when the toll revenues are used to subsidize public transport than when they are used for a tax refund. Furthermore, introducing idiosyncratic uncertainty for car substitution costs, we can explain the presence of a majority that is ex ante against road pricing and ex post in favor. The ex ante majority against road pricing also implies that there is no majority for organizing an experiment that would take away the individual uncertainty.
    Date: 2010–06
  7. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Scott Duke Kominers (Harvard Business School)
    Abstract: We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.
    Keywords: Agglomeration, Clusters, Industrial Organization, Silicon Valley, Entrepreneurship, Labor Markets, Technology Flows, Patents, Natural Advantages.
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2010–12
  8. By: Karen CRABBE; Karolien DE BRUYNE
    Abstract: The goal of this paper is to analyse the impact of interactions between tax rates and agglomeration rents on location decisions of firms within Belgium. In the theoretical literature it is argued that both location determinants may weaken each other’s impact. Using the number of new firms at the sector level for 43 Belgian districts, we show that local effective tax rates either have no or a negative impact on location decisions. Moreover, both types of agglomeration rents in a district are important for location decisions. The presence of firms in a district attracts new firms, while the presence of firms in the same sector deters firm entry due to competition. However, the interaction effect between taxes and agglomeration rents on firm entry is significant. We show that a higher effective tax rate in a district weakens the positive impact of the agglomeration rents on location decisions of firms.
    Date: 2010–10
  9. By: Ángel Alañón Pardo (Departamento de Economía Aplicada I. Universidad Complutense de Madrid.); Miguel Gómez de Antonio (Departamento de Economía Aplicada VI. Universidad Complutense de Madrid.)
    Abstract: A non neoclassical growth model with external effects among Spanish provinces is estimated through cross section and panel data Spatial Econometrics techniques for the 1970-2000 period. There are two kind of regional product determinants: spatial variables (intra and interregional agglomeration forces) and non spatial variables (firm size and public capital). Results show that both intra regional and inter regional spatial variables are statistically significant, and the need of considering the use of Spatial Econometrics techniques when dealing with spatial data and phenomena. We find a positive relationship between public investment and regional economic growth, accepting Aschauer’s hypothesis for the Spanish economy.
    Abstract: En este trabajo se estima un modelo de crecimiento no neoclásico con efectos externos entre las provincias españolas que permite contrastar la hipótesis de Aschauer utilizando técnicas de econometría espacial. El modelo se estima para datos sección cruzada y para un panel de datos para el periodo 1970-2000. Se distinguen dos conjuntos de determinantes de la renta provincial: las variables territoriales (fuerzas de aglomeración intra e interregionales) y las no territoriales (tamaño empresarial y capital público). Los resultados destacan la importancia de las variables territoriales, tanto intraterritoriales como interterritoriales, así como, la relación positiva entre la inversión pública y el crecimiento económico. Así mismo, se subraya la necesidad de contemplar el uso de técnicas de econometría espacial cuando se trabaja con datos y con fenómenos espaciales.
    Keywords: Regional growth, Agglomeration, External effects, Spatial econometrics, Crecimiento regional, Aglomeración, Efectos externos, Econometría espacial
    JEL: R1 R11 R12 O49
    Date: 2010
  10. By: Paulo Júlio (Gabinete de Estratégia e Estudos, Ministry of Economy, Innovation and Development); Susana Peralta (Faculdade de Economia, Universidade Nova de Lisboa, CORE-UCL and CEPR.)
    Abstract: We model two heterogeneous districts of unequal size that may enjoy each other's local public good if a costly national infrastructure (the bridge) is provided. We compare a decentralized regime where local public goods are decided locally and the bridge centrally, with a centralized regime where all decisions are taken centrally, under both benevolent planner and median voter decision making. In both cases, it may happen that either both regimes build the bridge, none, or only one does. We provide a full-edged welfare comparison of all the possibilities. When the bridge is built in both regimes, centralization dominates if the spillovers allowed by the bridge are sufficiently high. When the bridge is not built in the centralized regime, decentralization is always preferred. We also show that, under some circumstances, it may happen that decentralization dominates even if it does not build the bridge, while the centralized regime does. Finally, we suggest a simple mechanism to avoid the costs imposed by the centralized regime upon minorities: allocating decision power over the local public goods and the bridge to different local constituents.
    Keywords: Local public goods; Endogenous Spillovers; Fiscal (de)centralization.
    JEL: D70 H11 H41 H70
    Date: 2010–12
    Abstract: This paper assesses the economic justification for the selection of priority projects defined under the auspices of the Trans-European transport network. In analyzing the current list of 30 priority projects, we apply three different transport models to undertake a cost-benefit comparison. We find that many projects do not pass the cost-benefit test and only a few of the economically justifiable projects would need European subsidies to make them happen. Two remedies are proposed to minimize the inefficiencies in future project selection. The first remedy obliges each member state or group of states to perform a cost-benefit analysis (followed by a peer review) and to make the results public prior to ranking priority projects. The second remedy would require federal funding to be available only for projects with important spillovers to other countries, in order to avoid pork barrel behaviour.
    Keywords: transport infrastructure, cost benefit analysis, Europe Union
    JEL: R42 H11 H54
    Date: 2010–01
  12. By: Reyn van Ewijk (VU University Amsterdam, and Netspar)
    Abstract: Previous research shows that ethnic minority students perform poorer in school when they are taught by ethnic majority teachers. Why this is the case was unclear. This paper focuses on one important potential explanation: I examine whether ethnic majority teachers grade minority and majority students differently for the same work. Using an experiment, I rule out the existence of such a direct grading bias. I do find indirect evidence for alternative explanations: teachers report lower expectations and unfavorable attitudes that both likely affect their behavior towards minority students, potentially inducing them to perform below their ability level. Effects of having majority teachers on minority students' grades hence seem more likely to be indirect than direct.
    Keywords: Ethnicity; Discrimination; Grading; Experiment
    JEL: I2 J15
    Date: 2010–12–13
  13. By: Catalina Amuedo-Dorantes; Kusum Mundra
    Abstract: A significant homeownership gap still remains between natives and immigrants in most countries. Because of the many advantages of homeownership for immigrants and for the communities where immigrants reside, a variety of countries have tried to implement policies that facilitate immigrant homeownership. Many of these policies hinge on immigrants’ legal status. Yet, owing to data limitations, we still know very little about its impact on immigrant homeownership. We address this gap in the literature and find that legalization raises immigrant homeownership by 20 percentage-points even after accounting for a wide range of individual and family characteristics known to impact housing ownership. This finding underscores the importance of legal status in immigrant assimilation –housing being an important indicator of immigrant adaptation, and the need for further explorations of the impact of amnesties on the housing markets of immigrant-receiving economies.
    Keywords: Immigration, Housing, Legal Status, Spain
    JEL: J1 J61 R0
    Date: 2010–12
  14. By: Hans DEWACHTER; Romain HOUSSA; Priscilla TOFFANO
    Abstract: This paper develops a Spatial Vector Auto-Regressive (SpVAR) model that takes into account both the time and the spatial dimensions of economic shocks. We apply this framework to analyze the propagation through space and time of macroeconomic (inflation, output gap and interest rate) shocks in Europe. The empirical analysis identifies an economically and statistically significant spatial component in the transmission of macroeconomic shocks in Europe.
    Keywords: Macroeconomics, Spatial Models, VAR
    JEL: E3 E43 E52 C51 C33
    Date: 2010–04
  15. By: Tyrefors Hinnerich, Björn (Department of Economics, Stockholm University); Höglin, Erik (Swedish Fiscal Policy Council); Johannesson, Magnus (Department of Economics, Stockholm School of Economics)
    Abstract: Girls typically have higher grades than boys in school and recent research suggests that part of this gender difference may be due to discrimination of boys. We rigorously test this in a field experiment where a random sample of the same tests in the Swedish language is subject to blind and non-blind grading. The non-blind test score is on average 15 % lower for boys than for girls. Blind grading lowers the average grades with 13 %, indicating that personal ties and/or grade inflation are important in non-blind grading. But we find no evidence of discrimination against boys. The point estimate of the discrimination effect is close to zero with a 95 % confidence interval of ±4.5 % of the average non-blind grade.
    Keywords: Discrimination; Field experiments; Grading; Education; Gender
    JEL: C93 I20 J16
    Date: 2010–11–22
  16. By: Dan Andrews
    Abstract: This paper analyses the factors influencing the level and volatility of real house prices in a panel of OECD countries over the period 1980-2005. Results suggest that real house prices tend to rise proportionally with real household incomes, while declines in structural unemployment and real interest rates are associated with higher real house prices. The process of mortgage market deregulation has coincided with a noticeable increase in real house prices in OECD countries, while high rates of leverage are found to amplify house price volatility. Estimates suggest that tax reliefs on mortgage debt financing costs tend to be capitalised into real house prices and may also amplify price volatility, reflecting the tendency for such policies to encourage leverage. While higher transaction costs are associated with lower house price volatility, this effect is modest compared to the impact of banking supervision. Indeed, prudential banking supervision and policies designed to contain the excessive build-up of leverage are shown to significantly reduce the extent of house price volatility, underscoring the importance of ongoing efforts to reform prudential frameworks in OECD countries.<P>Prix réels des logements dans les pays de l’OCDE : Le rôle des chocs sur la demande et des facteurs structurels et politiques<BR>Ce document analyse les facteurs qui influencent le niveau et la volatilité des prix réels des logements dans un panel de pays de l'OCDE sur la période 1980-2005. Les résultats suggèrent que les prix réels des logements ont tendance à augmenter proportionnellement avec les revenus réels des ménages, alors que les baisses du chômage structurel et de taux d'intérêt réels sont associées à la hausse des prix réels des logements. Le processus de déréglementation du marché hypothécaire a coïncidé avec une hausse notable des prix réels des logements dans les pays de l'OCDE, tandis que les taux d'endettement élevés ont amplifié la volatilité des prix. Les estimations suggèrent que les allégements fiscaux sur les coûts de la dette hypothécaire de financement ont tendance à être capitalisées dans les prix réels des logements et peuvent amplifier la volatilité des prix, reflétant la tendance de ces politiques à encourager un effet de levier. Bien que les coûts de transaction plus élevés se sont associés à la volatilité des prix, cet effet est modeste par rapport à l'impact de la supervision bancaire. En effet, un contrôle prudentiel des banques et des politiques visant à contenir l'accumulation excessive de l'effet de levier réduisent d'une façon significative la volatilité des prix des logements, ce qui souligne l'importance des efforts en cours pour réformer les structures prudentielles dans les pays de l'OCDE.
    Keywords: taxation, house prices, mortgage markets, housing market, financial regulation, fiscalité, prix des logements, marchés hypothécaires, réglementation financière, marché des logements
    JEL: G21 H24 R21 R31
    Date: 2010–12–13
  17. By: Carolina Cosculluela Martínez (Departamento de Economía Aplicada I, Universidad Rey Juan Carlos, Pº de los Artilleros, s/n 28032, Madrid, Spain); Rafael Flores de Frutos (Departamento de Fundamentos de Análisis Económico II, Universidad Complutense de Madrid. Campus de Somosaguas, 28223, Ma-drid, Spain)
    Abstract: This paper studies dynamic responses of employment and GDP growth to a permanent, uni-tary shock in the housing capital stock for the Spanish economy. It quantifies the importance of this variable in the boom experienced by the Spanish economy during the pre-crisis years. Results confirm that building industry has been the most important engine for output and labour growth.
    Keywords: Housing capital stock, Spanish economy, Building industry, Labour growth.
    Date: 2010
  18. By: Andersson, Mats (Swedish National Road & Transport Research Institute (VTI)); Smith, Andrew (Institute for Transport Studies, University of Leeds); Wheat, Phillip (Institute for Transport Studies, University of Leeds); Wikberg, Åsa (Swedish National Road & Transport Research Institute (VTI))
    Abstract: Economic theory advocates marginal cost pricing for efficient utilisation of transport infrastructure. A growing body of literature has emerged on the issue of marginal infrastructure wear and tear costs, but the majority of the work is focused on costs for infrastructure maintenance. Railway track renewals are a substantial part of an infrastructure manager’s budget, but in disaggregated statistical analyses, they cause problems for traditional regression models since there is a piling up of values of the dependent variable at zero. Previous econometric work has sought to circumvent the problem by aggregation in some way. In this paper we work with disaggregate (track-section) data, including the zero observations, but apply censored and sample selection regression models to overcome the bias that would result from estimation using OLS. We derive track renewal cost elasticities with respect to traffic volumes and in turn marginal renewal costs using Swedish railway renewal data over the period 1999 to 2009. Our paper is the first paper in the literature that we are aware of to report usage elasticities specifically for renewal costs and therefore adds important new evidence to the previous literature where there is a paucity of studies on renewals and considerable uncertainty over the effects of rail traffic on renewal costs. In the Swedish context, we find that the inclusion of marginal track renewal costs in the track access pricing regime, which currently only reflects marginal maintenance costs, would add substantially to the existing track access charge.
    Keywords: Marginal cost; railway; renewal; selection models.
    JEL: C34 D24 L92
    Date: 2010–11–17
  19. By: Ivaldi, Marc (Toulouse School of Economics); Pouyet, Jérôme (Paris School of Economics)
    Abstract: Based on the modern theory of regulation, the analysis aims to characterize the effective economic regulation of the French railway industry. The methodology consists in econometrically testing various scenarios of regulation and determining which of these best fits the data. Using aggregate data on the overall passenger traffic for the incumbent French rail operator (RO), SNCF, the two behavioral hypotheses of reference which we consider –absence of regulation of the rail operator which acts as a pure monopoly, and price regulation of services supplied by the RO– are both statistically significant and do not subtract from each other. This result is certainly related to the fact that passenger services include both high speed train services, for which the RO has some entrepreneurial freedom, and regional transport services, which are regulated by local authorities. In any case however, as the presence of unobservable efforts exerted by the RO to improve its productivity is statistically relevant, one concludes that the RO is not fully and properly regulated. This emphasizes that the design of policy reforms must account for the incentives they create on the RO. The analysis also shows that the most statistically significant scenarios are the ones in which the access tariff imposed by the infrastructure manager is such that the revenue generated by the access tariff is equal to the infrastructure spending. The pricing of the access to the infrastructure network therefore does not seem to be governed by economic principles, but more by budget considerations. While data limitations does neither allow to understand all the facets of a complex reality, nor to claim a high level of precision in the measure of all the parameters of interest, we believe however that we provide an objective methodology to characterize the optimal economic policies for the railway sector, in particular because it yields realistic estimates of the main structural parameters. Indeed the empirical results suggest that the railway industry as a whole exhibits increasing returns to scale, which incidentally is not compatible with the presence of multiple firms. In addition, the elasticity of demand for railway transport is relatively high, an indication of the competitive constraints this mode of transport faces from other transport modes or induced traffic.
    Keywords: Regulation, Asymmetric information, Railroad industry
    JEL: L51 L92
    Date: 2010–12–06
  20. By: Jonas Eliasson
    Abstract: The paper draws from already published material. In fact, a reader already familiar with the congestion charging literature will find few completely new findings or insights. The contribution of the paper is rather the selection of the most relevant, interesting, important and sometimes surprising facts, insights, findings, advice and conclusions for policymakers, out of a vast literature on congestion charging in general and Stockholm in particular.
    Date: 2010–01
  21. By: Duque, José (Huelva University); Panagopoulos, Thomas (vice-president of the CIEO)
    Abstract: The cities of today present some requirements that are not similar to the past. There are cities that the industrial and service sectors are in decline; others begin their journey into the technological and industrial sector. In general, politically and socially are restructured in terms of its economy, which results in an entirely different shape to their primitive structures. As people begin to understand the dynamic nature of landscapes, they will change the way they see the landscape as a static scene. Sustainable cities must be simultaneously economically viable, socially just, politically well managed and ecologically sustainable to maximize human comfort. The present research suggests a multi-disciplinary approach for a holistic understanding of urban environmental quality and human well-being in sustainable urban development.
    Keywords: Well-being; Urban planning; Liveable city; Environmental quality
    JEL: Q01 R10
    Date: 2010–10–29
  22. By: Adriaan R. Soetevent (University of Amsterdam)
    Abstract: This paper extends Hotelling's model of price competition with quadratic transportation costs from a line to graphs. I propose an algorithm to calculate firm-level demand for any given graph, conditional on prices and firm locations. One feature of graph models of price competition is that spatial discontinuities in firm-level demand may occur. I show that the existence result of D'Aspremont et al. (1979) does not extend to simple star graphs. I conjecture that this non-existence result holds more generally for all graph models with two or more firms that cannot be reduced to a line or circle.
    Keywords: spatial competition; Hotelling; graphs
    JEL: D43 L10 R12
    Date: 2010–12–13
  23. By: Marcos Minoru Hasegawa (Department of Economics, Universidad Católica del Norte)
    Abstract: The main goal of this research is to analyze the tax reduction policy impact in sector and regional level and its effectiveness in the Chilean Economy by means of a regional applied general equilibrium model (AGE). A static, deterministic and top-down AGE model, known as ORANIG model with regional extension was adapted for the Chilean Economy that was re-named as ORANICL model. Regional particularities among Chilean regions are relevant when designing policies are oriented to improve welfare and the economic performance at regional and national level in the taxing and spending function with special attention to the value aggregated tax (VAT). A 1% reduction on the VAT increases real GDP in 0.64% and the aggregated employment in 1.60%. In the regional level a 1% of VAT reduction increases the activity level by 0.58%, 0.64%, 0.76% and 0.68% for North, Central, Metropolitan region of Santiago and South regions respectively. By the same shock, employment increases by 1.47%, 1.49%, 1.71% and 1.52% for the same regions respectively. Results yielded by a 1% of VAT reduction seems to be not enough to refute the hypothesis that the centralism approach adopted for the Chilean government is the best policy design choice. Likewise, we show that a regional AGE model is a powerful tool for policy analysis for Chile.
    Keywords: Chile, Regional Economics, Tax Policy, AGE models
    Date: 2010–12
    Abstract: Many local public goods are allocated by federal governments using fixed regional shares: every region is entitled a fixed share of the total budget for a particular type of public good. This paper compares this fixed regional sharing rule with two alternative allocation rules: first best and common pool allocation. We find that the fixed regional sharing rule performs relatively well if the regional shares are reasonable. Legislative bargaining theory is used to study the determination of the fixed regional shares.
    Keywords: local public goods, political economy, railways
    JEL: H41 H77 L9
    Date: 2010–02
  25. By: Coenen, Lars (CIRCLE, Lund University); Benneworth, Paul (Center for Higher Education Policy Studies (CHEPS), University of Twente); Truffer, Bernhard (Eawag (Acquatic Research Institute))
    Abstract: In the past decade, the literature on transitions towards sustainable socio-technical systems has made a considerable contribution in understanding the complex and multi-dimensional shifts considered necessary to adapt societies and economies to sustainable modes of production and consumption. However, transition analyses have often neglected where transitions take place, and the geographical configurations and dynamics of the networks within which transition evolve. An explicit analysis of the geography of transitions contributes to the extant transitions literature in a variety of ways. Firstly it provides a contextualization and reflection on the limited territorial sensitivity of existing transitions analysis. The majority of empirical studies have been conducted in a small number of countries, and primarily the Netherlands, UK or Scandinavia, with an increasing interest in Asian countries. Secondly, it explicitly acknowledges and investigates a variety of transition pathways. Thirdly, it encompasses not only greater emphasis but also better conceptual and theoretical devices for understanding the international, trans-local nature of transition dynamics. Drawing on recent insights from economic geography, this paper seeks to improve existing transition theory by (1) creating a conceptual framework for better understanding geographical dimensions of sustainability transitions, and (2) beginning to highlight some of the boundary
    Keywords: transitions studies; economic geography; territorial innovation systems; multi-scalarity; geographies of transitions
    JEL: O30
    Date: 2010–10–01
  26. By: D'Exelle, Ben (University of East Anglia); Riedl, Arno (Maastricht University)
    Abstract: We explore network effects on generosity for different network dimensions. To this end we elicit multiple network dimensions (friendship, social support, economic exchange, etc.) in a rural village in the Southern hemisphere and measure generosity with a sequence of dictator games conducted in the field. We find that networks of different dimensions differ substantially in density, clustering, and centrality. When relating generosity to networks we observe that social distance only matters for friendship ties but that structural network variables are important in all network dimensions. Importantly, these effects are not invariant across different network dimensions. We also find that individual characteristics are unrelated with generosity per se but that they have strong explanatory power for network formation.
    Keywords: networks, generosity, network formation, experiments
    JEL: C72 C90 D64 L14 Z13
    Date: 2010–12
  27. By: Aalbers, Rick (Atos Consulting); Koppius, Otto (RSM/Erasmus University); Dolfsma, Wilfred (RSM/Erasmus University)
    Abstract: Informal networks are often emphasized as facilitating knowledge transfer. However, we find that formal networks also contribute significantly to knowledge transfer, and in fact contribute more than informal networks. This is particularly the case when knowledge is transferred between units. Additional analysis shows a synergetic effect between formal and informal ties, which suggests that knowledge transfer effects that in previous studies were attributed to informal networks only, may in fact be caused by the combination of both formal and informal networks. We conclude that there is more than one path to transfer knowledge effectively.
    Keywords: Knowledge transfer; Formal networks; informal networks; multi-unit organizations.
    JEL: O30
    Date: 2010–12–15
  28. By: Jan Persson; Daeho Song
    Abstract: This paper provides a broad overview of policy goals and instruments and commonly used performance and policy indicators related to land transport. Two policy aspects, infrastructure investment and externalities, are explored in more depth. A review of planning and decision making in individual countries reveal significant variations between countries as regards how cost-benefit analysis affect decision making about infrastructure investment. There is scope for improvements in the use of cost-benefit analysis. Estimates of external costs for fifteen European Union countries are provided, together with estimates on the extent of pricing to internalise external costs. Fuel taxes amounted to around 2% of GDP in 2000, roughly corresponding to estimated external costs related to environmental and health effects. There is a potential to reduce congestion by introducing congestion charges. This can be done in a revenue-neutral manner by transforming existing vehicle taxes and road tolls.<P>Transports terrestres : Politiques et performances<BR>On trouvera dans ce document de travail un large aperçu des objectifs, des instruments d’action et des indicateurs couramment utilisés pour évaluer les performances et les politiques dans le secteur des transports terrestres. Deux aspects, les investissements en infrastructures et les externalités, sont étudiés de façon plus approfondie. Un examen de la planification et de la prise de décision dans les différents pays fait apparaître des différences très marquées quant au degré auquel l’analyse coûts-avantages influe sur les décisions concernant les investissements en infrastructures. L’utilisation de l’analyse coûts-avantages pourrait être grandement améliorée. Les coûts externes pour 15 pays de l’Union européenne sont estimés, de même que le rôle de la tarification dans l’internalisation des coûts externes. Les taxes sur les carburants représentaient environ 2 % du PIB en 2000, ce qui correspond à peu près aux coûts externes estimés pour l’environnement et la santé. Il serait possible de réduire les encombrements en les taxant. Une solution neutre du point de vue des recettes consisterait à transformer les taxes sur les automobiles et les péages routiers actuellement en vigueur.
    Keywords: cost-benefit analysis, Infrastructure investment, Transport policy and performance, pricing of externalities, analyse coûts-avantages, investissement dans les infrastructures, Politique des transports et performance des transports, tarification des externalités
    JEL: H43 Q51 R42 R48
    Date: 2010–11–23
  29. By: Achtnicht, Martin (Centre for European Economic Research (ZEW))
    Abstract: Residential buildings strongly contribute to global CO2 emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained WTP measures for CO2 savings.
    Keywords: Choice experiment; CO2 emissions; Energy efficiency; Energy saving; Mixed logit; Residential buildings; Willingness to pay.
    JEL: C25 D12 Q40 Q51
    Date: 2010–12
  30. By: Brown, W. Mark; Lafrance, Amélie
    Abstract: Using data from the Survey of Household Spending and from its predecessor, the Survey of Family Expenditures, this paper investigates the relative incomes of retirement-age and working-age Canadians from 1969 to 2006, taking into account both explicit household income and the implicit income generated by owner-occupied housing. Over this 37-year period, the explicit incomes of retirement-age households increased at a more rapid pace than those of working-age households. Implicit income from owner-occupied housing also increased rapidly during this time, matching the rate at which the explicit income of retirement-age households increased. On average, this implicit source of earnings raised the incomes of retirement-age households (aged 70 and over) by 16%. Taking both forms of income into account, the incomes of retirement-age households (aged 70 and over), relative to the incomes of working-age households (aged 40 to 49), increased from 45% in 1969 to 59% in 2006. During this period, Canadians invested in housing assets that provided additional income upon retirement.
    Keywords: Income, pensions, spending and wealth, Seniors, Work and retirement
    Date: 2010–12–09
  31. By: Blanca ZULUAGA
    Abstract: All individuals belong to a social network with certain quality level. This paper analyzes the role of the quality of the social network in the educational decision making process. We propose a measure for quality of network based on the schooling level and the labor position of the members of the net. Our analysis compares individuals who are similar in at least two characteristics: socioeconomic level and intellectual ability. Although they belong to the same type of community (poor), they differ in the composition of their social network. The higher the quality of the network, the higher the probability of investing in education. Hence, socially disadvantaged and equally intelligent individuals may end up acquiring different schooling levels.
    Date: 2010–10

This nep-ure issue is ©2010 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.