nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2011‒03‒12
29 papers chosen by
Steve Ross
University of Connecticut

  1. Real Estate and Land Values on the shoreline: a transaction-level analysis (In French) By Jeanne DACHARY-BERNARD (UR ADBX, CEMAGREF); Sandrine LYSER (UR ADBX, CEMAGREF); Frédéric GASCHET (GREThA, CNRS, UMR 5113); Guillaume POUYANNE (GREThA, CNRS, UMR 5113); Stéphane VIROL (GREThA, CNRS, UMR 5113)
  2. La Dolce Vita: Hedonic Estimates of Quality of Life in Italian Cities By Emilio Colombo; Alessandra Michelangeli; Luca Stanca
  3. Whose Children Gain from Starting School Later? Evidence from Hungary By Hámori, Szilvia; Kollo, Janos
  4. Clusters, Networks and Creativity By Karlsson, Charlie
  5. Teachers' Sickness Absence in Primary Schools: A Panel Data Multilevel Analysis By Bratberg, Espen; Holmås, Tor Helge; Islam, M. Kamrul; Vaage, Kjell
  6. Geographic Clustering and Productivity: An Instrumental Variable Approach for Classical Composers By Karol Jan Borowiecki
  7. Asymmetrien in der Neuen Ökonomischen Geographie : Modelle, Simulationsmethoden und wirtschaftspolitische Diskussion = Asymmetries in new economic geography : models, simulation methods and economic discussion By Sascha Frohwerk
  8. Investing in Schooling in Chile: The Role of Information about Financial Aid for Higher Education By Taryn Dinkelman; Claudia Martínez A.
  9. Towns (and Villages); Definitions and Implications in a Historical Setting By Florian Ploeckl
  10. Consumption and initial mortgage conditions - evidence from survey data By Giacomo Masier; Ernesto Villanueva
  11. How Does Size Matter? Investigating the Relationships Among Plant Size, Industrial Structure, and Manufacturing Productivity By Joshua Drucker
  12. Assessing the Incidence and Efficiency of a Prominent Place Based Policy By Matias Busso; Jesse Gregory; Patrick Kline
  13. How efficient is the Italian hospitality sector? A window DEA and truncated-Tobit analysis By JG. Brida; Claudio Detotto; Manuela Pulina
  14. Multilevel Modelling with Spatial Effects By Bernard Fingleton; Luisa Corrado
  15. Unconventional factors of efficiency in public transport. A case study and theory. By Beria, Paolo; Grimaldi, Raffaele
  16. Determinants of Violent and Property crimes in England: A Panel Data Analysis By Lu Han; Siddhartha Bandyopadhyay; Samrat Bhattacharya
  17. Are We Wasting Our Children's Time by Giving Them More Homework? By Eren, Ozkan; Henderson, Daniel J.
  18. Two-echelon freight transport optimisation: unifying concepts via a systematic review By Jesus Gonzalez-Feliu
  19. Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices By Courtemanche, Charles; Carden, Art
  20. A Hotelling Style Model of Spatial Competition for Convenience Goods By B. Curtis Eaton; Jesse Tweedle
  21. Cycles Inside Cycles. Spanish Regional Aggregation By Maria Dolores Gadea; Ana Gomez Loscos; Antonio Montañes
  22. Spatial Risk Premium on Weather Derivatives and Hedging Weather Exposure in Electricity By Wolfgang Karl Härdle; Maria Osipenko
  23. Police and Thieves in the Stadium: Measuring the (Multiple) Effects of Football Matches on Crime By Marie Olivier
  24. Indiscriminate Discrimination : A Correspondence Test for Ethnic Homophily in the Chicago Labor Market. By Nicolas Jacquemet; Constantine Yannelis
  25. A proposal for a world database on transport infrastructure regulation By Beria, Paolo; Ponti, Marco; Laurino, Antonio
  26. Local Interaction in Tax Evasion By Barnab s M. Garay; Andr s Simonovits; J nos T¢th
  27. Subprime consumer credit demand - evidence from a lender's pricing experiment By Sule Alan; Ruxandra Dumitrescu; Gyongyi Loranth
  28. Gregariousness, Interactive Jobs and Wages By Friedhelm Pfeiffer; Nico Johannes Schulz
  29. Corruption and Social Interaction: Evidence from China By Bin Dong; Benno Torgler

    Abstract: Land use changes generate some conflicts, in particular between agricultural and residential uses in the urbanization context and sprawl phenomena. Coastal zones also produce specific amenities that create conflicts over land-use, increase housing and land values and, associated with and/or substituted to urban amenities modify the structure of the territory.\r\nThis article is aimed at studying the influence of coastal and urban amenities, respectively defined in terms of accessibility to the sea side and to employment center, on prices. We differentiate the analysis between two distinct study areas according to the degree of urban development: the Charente coast that is still highly agricultural, and the Basque coastal area more urbanized. According to these local specificities, we will study with the same hedonic pricing method land use prices in the first case and property prices in the second.\r\nThe main results underline the major influence of littoralisation as structural phenomena in housing and land prices dynamics. We identify two different types of gradient of values in relation to distance to sea side as regards to the residential or agricultural use: a “growth premium” explains the agricultural land price gradient whereas both amenity and accessibility premiums justify the residential gradients.
    Keywords: coastal areas, land and housing markets, hedonic pricing, gradients
    JEL: R31 Q15 C31
    Date: 2011
  2. By: Emilio Colombo; Alessandra Michelangeli; Luca Stanca
    Abstract: This paper provides an assessment of quality of life in Italian cities using the hedonic approach. We analyze micro-level data for housing and labor markets to estimate compensating differentials for local amenities within five domains: climate, environment, services, society and economy. The estimated implicit prices are used to construct overall and domain-specific quality of life indices. We find that differences in amenities are re°ected in substantial compensating differentials in housing prices, whereas the effects on wages are relatively small. Quality of life varies substantially across space and is strongly related to differences in public services and economic conditions. Overall, quality of life is highest in medium-sized cities of the Center-North, displaying relatively high scores in all the domains considered. Northern cities fare better with respect to services, social and economic conditions, while relatively worse for climate and environmental conditions.
    Keywords: quality of life, hedonic prices, housing markets
    JEL: C4 D5 H4 J3 J6 P2 P3 Q2 R2
    Date: 2010–12
  3. By: Hámori, Szilvia (Hungarian Academy of Sciences); Kollo, Janos (Hungarian Academy of Sciences)
    Abstract: We look at the effect of school starting age on standardized test scores using data covering all grade four and grade eight students in Hungary. Instrumental variables estimates of the local average treatment effect suggest that children generally gain from starting school one year later and the effects are much stronger in the case of students coming from low-educated families. We test the robustness of the results by allowing for heterogeneity in the age effect, distinguishing between fields of testing, using discontinuity samples and relying on alternative data. The hypothesis that delayed entry has a stronger impact on low-status children is supported by the robustness checks. The observed patterns are most probably explained by the better performance of kindergartens, as opposed to schools, in developing the skills of low-status children.
    Keywords: education, student test scores, enrolment age, identification
    JEL: I21 I28 J24
    Date: 2011–02
  4. By: Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: An extensive amount of studies have been devoted to the importance of the creative process. Creativity is critical to research and in particular to innovation, a key feature of economic competitiveness. Most of the previous studies have dealt with the creativity of individuals, the creativity of teams and the importance of the organisational context. This chapter, however, emphasises the role of the characteristics of the local and regional economic milieu where the creative process takes place and the local and non-local networks of such milieus. Both the local ‘buzz’ related to interaction and learning opportunities, and non-local networks associated with integration of different milieus, offer special but different advantages for creative activities. The milieu will play an important role in creativity by supplying both a large number of incompatible ideas and good conditions for bringing them together in order to gain new, profound insights. Local accessibility, i.e. clustering, of incompatible ideas and the interregional accessibility to incompatible ideas in other regions are a function of the network characteristics of the local milieu. The purpose of this chapter is to explore the spatial concentration of creativity and the role of clustering and networks in stimulating creative regional economic milieus. One of the arguments of the chapter highlights how clustering of creative agents and creative processes in specific locations generates creative advantages that stimulate creativity and the in-migration of creative agents. Furthermore, the chapter stresses the idea that a better connected economic milieu to other economic milieus via networks transmitting new ideas, information knowledge, etc., will generate higher creative potential of that economic milieu.
    Keywords: creativity; creative process; clusters; artistic clusters; network theory; regional economics; local milieu; local and non-local interaction; innovation
    JEL: O31 R11
    Date: 2010–10–28
  5. By: Bratberg, Espen (University of Bergen); Holmås, Tor Helge (UniRokkansenteret); Islam, M. Kamrul (UniRokkansenteret); Vaage, Kjell (University of Bergen)
    Abstract: This paper uses longitudinal employer–employee data and multilevel models to examine both observed and unobserved variation of the probability and length of certified and self-certified sickness absence for Norwegian primary school teachers. We argue that self-certified absences are particularly prone to moral hazard. We find that most of the observed teacher, school and municipality characteristics are significantly associated with the probability and the length of sickness absence. However, most of the unexplained variation is attributed to teacher factors rather than influenced by variation at the school or municipality levels. Teacher characteristics that may be associated with less attachment to the workplace increase the probability of self-certified absences. Moreover, the unexplained variation in schools and at municipality level is higher for self-certified than for certified sickness absence. There may be some scope for reducing self-certified absence by improving work conditions or changing administrative practices, but our main policy conclusion is that to reduce sickness absence, the main focus must be on individual health and the incentives to report sick.
    Keywords: sickness absence; employer-employee data; multilevel analysis
    JEL: J21 J22 J28
    Date: 2010–06–01
  6. By: Karol Jan Borowiecki (Department of Economics, Trinity College Dublin)
    Abstract: It is difficult to estimate the impact of geographic clustering on productivity because of endogeneity issues. I use birthplace-cluster distance as an instrumental variable for the incidence of clustering of prominent classical composers born between 1750 and 1899. I find that geographic clustering strongly impacts the productivity of the clustering individuals: composers were approx. 33 percentage points more productive while they remained in a geographic cluster. Top composers and composers who migrated to the cluster are the greatest beneficiaries of clustering. The benefit depends on the clustering intensity and has a long-term impact.
    Keywords: geographic concentration, cities, mobility, productivity, urban history, composer
    JEL: D24 J24 J61 N90 O47 R11 Z19
    Date: 2011–03
  7. By: Sascha Frohwerk
    Abstract: The new economic geography explains agglomerations based on a microeconomic general equilibrium model, witch is usually assumed to be symmetric in the sense, that regions are of the same size and transport costs and expenditure shares are the same. As a result, the models can explain why an agglomeration occurs, but not in witch region. This book modifies three of the most influential models of the new economic geography and assumes various asymmetries. It compares the results to the symmetric cases. Not only theoretical aspects but also methods of simulation are discussed in detail. This methods can be applied to a wide variety of models. To show the political implications of the theoretical results, one of the asymmetric models is applied to the economical development in germany after reunification. The model is able to explain the persistent difference in wages between east and west and the simultaneous incomplete agglomeration in the west.
    Keywords: new economic geography, methods of simulation, agglomeration, regional development
    JEL: P25 C63 R13 R23
    Date: 2011–03
  8. By: Taryn Dinkelman (Princeton University); Claudia Martínez A. (Universidad de Chile)
    Abstract: Recent economic research shows that imperfect information about Mincer returns to education (in developing countries) or about financial aid (in the US) may undermine investments in schooling and exacerbate inequalities in access to education. We extend this literature by presenting the results of an experiment that provided children and a subset of their parents with specific information about financial aid for higher education, and measured the impact on effort in primary school. We developed a DVD information program and randomly assigned a sample of Chilean 8th graders in poor urban schools to information treatment and control groups. Half of the treatment group watched the DVD at school (Student group) and the other half received a copy of the program to watch at home (Family group). Using survey and matched administrative data to measure outcomes three to six months post-intervention, we show that knowledge of financial aid sources improves in treated schools and school-reported absenteeism falls by 14%. These responses appear to be driven by students with higher baseline grades; yet we find no significant effects on 8th Grade scores or 9th Grade enrolment for any students. While parents in the Family treatment group score significantly higher on tests of information related to DVD content, watching the DVD at home is no more effective at changing effort than watching at school, at least for high ability students likely to select in to watching the DVD. Our results suggest that Chile falls somewhere between developing and developed countries: exposure to information about financial aid for post-secondary schooling significantly affects student knowledge and absenteeism, but is insufficient for improving other educational outcomes.
    Keywords: finaicial aid, education, Chile, imperfect information, behavior, education investment
    JEL: D80 I20 O12
    Date: 2011–02
  9. By: Florian Ploeckl
    Abstract: Urbanization has been extensively used as a proxy for economic activity. The urban status of settlements is usually determined by an ad hoc population size household. This paper proposes a new threshold, taking into account the effect of local agricultural endowments. The new population threshold is a population size, such that for smaller settlements these endowments influence their size, while for larger they do not. This results in an endogeneous, data based threshold. The idea is practically shown for Saxony in the 19th century. The relevance of a different classification is demonstrated in four particular examples, the development of urbanization over time, Gibrat’s law, the impact of geography on town locations and the spatial relationship between towns and villages. The resulst demonstrate that the underlying classification scheme matters for the conclusions drawn from urban data.
    Keywords: Towns, villages, geography, definition, classification, town size
    JEL: N93 B49 O13 R12
    Date: 2011
  10. By: Giacomo Masier (Previnet, Italy.); Ernesto Villanueva (Research Department, Banco de España, Alcala 48, 28014 Madrid, Spain.)
    Abstract: Economic theory predicts that the consumption path of unconstrained homeowners responds to the interest rate, while the consumption path of credit constrained homeowners is determined by the size and timing of payments (mortgage maturity). We exploit the rapid expansion of mortgage markets during the last decade in Spain and a very detailed survey on household finances to estimate group-specific consumption responses to changes in the credit conditions. Our estimates suggest that the consumption of households headed by an individual with high school responds more to mortgage maturity than to the interest rate spread. The consumption of the rest of indebted households is insensitive to loan maturity. Those results are confirmed when we instrument loan maturity exploiting the fact that banks are reluctant to offer contracts with age at maturity above 65. An interpretation of those results is that households headed by middle education individuals, 8% of our sample, behave as credit constrained. JEL Classification: D91, E91.
    Keywords: Credit constraints, mortgages, household consumption.
    Date: 2011–02
  11. By: Joshua Drucker
    Abstract: Industrial concentration and market power have been studied extensively at the national scale, in fields ranging from economics and industrial organization to regional science and economic development. At the regional scale, however, industrial structure and firm size relationships have received little attention outside of non-generalizable case studies, primarily because accurate measurements require difficult-to-obtain plant- or firm-level information. Readily available secondary data sources on establishment size distributions (such as County Business Patterns or the Census of Manufactures) cannot be linked to performance information for particular establishments or firms. Yet region-specific industrial structure may be a crucial determinant of firm performance and thus regional economic fortunes as well (Chinitz 1961; Christopherson and Clark 2007). This paper examines how industrial concentration and agglomeration economies impact plant performance, focusing on the influence of establishment size in mediating these effects. The Longitudinal Research Database of the U.S. Census Bureau is accessed to construct production functions for three manufacturing industries nationwide. These production functions, specified at the establishment level, incorporate characteristics of establishments, industries, and regions, including spatially-differentiated measures of agglomeration economies. Establishment size is evaluated both as an absolute metric and relative to other regional industry plants, as theory suggests that absolute size may be most pertinent to agglomeration benefits but relative size more relevant to industrial structure (Caves and Barton 1990; Bothner 2005). The research builds on earlier work by the author that establishes a direct link between regional industry concentration and the productivity of manufacturing establishments.
    Date: 2011–03
  12. By: Matias Busso; Jesse Gregory; Patrick Kline
    Abstract: This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. Using rejected and future applicants to the EZ program as controls, we find that EZ designation substantially increased employment in zone neighborhoods and generated wage increases for local workers without corresponding increases in population or the local cost of living. The results suggest the efficiency costs of first Round EZs were relatively small.
    JEL: H2 O1 R58 C21
    Date: 2011–02
  13. By: JG. Brida; Claudio Detotto; Manuela Pulina
    Abstract: This paper analyses the Italian regional efficiency of the hospitality sector using a data envelopment analysis (DEA), for the time span 2000-2004. Via a window DEA, pure technical efficiency is computed. The Lombardy region presents the best relative performance. Overall Italian regions denote important sources of inefficiency mostly related to their inputs. Via a truncated-Tobit analysis, the rate of utilisation and regional intrinsic features positively are found to affect hospitality efficiency. Nevertheless, empirical evidence does not support spill-over effects amongst Italian regions.
    Keywords: Regional hospitality sector; window DEA; double bootstrap; spatial heterogeneity.
    JEL: C14 C24 L83 R11
    Date: 2011
  14. By: Bernard Fingleton (Department of Economics, University of Strathclyde.); Luisa Corrado (Faculty of Economics, University of Cambridge)
    Abstract: In multilevel modelling, interest in modeling the nested structure of hierarchical data has been accompanied by increasing attention to di¤erent forms of spatial interactions across different levels of the hierarchy. Neglecting such interactions is likely to create problems of inference, which typically assumes independence. In this paper we review approaches to multilevel modelling with spatial e¤ects, and attempt to connect the two literatures, discussing the advantages and limitations of various approaches.
    Keywords: Multilevel Modelling, Spatial E¤ects, Fixed E¤ects, Random E¤ects, IGLS, FGS2SLS.
    JEL: C21 C31 R0
    Date: 2011–02
  15. By: Beria, Paolo; Grimaldi, Raffaele
    Abstract: In this paper we analyse some possible unconventional factors of efficiency in public transport. The occasion for such analysis rises from a case study in the southern Italian region of Sicily. Most of the regional bus service is here historically franchised to some local private bus companies, without tenders or any other form of competition. The structure of the network has never been planned ex-ante, as it is the result of negotiations among bus companies, local and regional authorities. Though this situation is obviously quite far from indications of the regulation theory, it results in a surprisingly efficient system, with very low unit costs. An analysis of this situation is here carried out in order to understand which factors are forcing those companies to be efficient and which problems this situation may generate. The quality and effectiveness of the offered service is also reckoned. Two factors seem to be most relevant to this results: the relatively low level of subsidies together with the fact of being private operators (rather an exception than a rule in Italy). In order to improve their efficiency, those companies also merged together but eventually split again in the last decades in order to reach a more efficient size and suggesting the presence of possible diseconomies of scale in the sector. Taking for granted that a form of regulation is needed, it is here suggested that regulatory strategies should adapt to this counterintuitive fact and not destroy the incentives already effective in the present situation. Our suggestion is to prefer medium sized tenders rather than large ones, not only for granting more contestability, but also for financial reasons.
    Keywords: regulation; bus; economies of scale; public transport; tender
    JEL: R40 L92 L33
    Date: 2010–04
  16. By: Lu Han; Siddhartha Bandyopadhyay; Samrat Bhattacharya
    Abstract: We examine various determinants of property and violent crimes by using police force area level (PFA) data on England and Wales over the period 1992-2008. Our list of potential determinants includes two law enforcement variables namely crime-specific detection rate and prison population, and various socio-economic variables such as unemployment rate, real earnings, proportion of young people and Gini Coefficient. By adopting a fixed effect dynamic GMM estimation methodology we attempt to address the potential bias that arises from the presence of time-invariant unobserved characteristics of a PFA and the endogeneity of several regressors. There is a significant positive effect of own-lagged crime rate. The own-lagged effect is stronger for property crime, on an average, than violent crime. We find that, on an average, higher detection rate and prison population leads to lower property and violent crimes. This is robust to various specifications. However, socio-economic variables with the exception of real earnings play a limited role in explaining different crime types.
    Keywords: Crime, Dynamic Panel, GMM, Law Enforcement, Socio-economic Variables
    JEL: K42 C23
    Date: 2011–02
  17. By: Eren, Ozkan (University of Nevada, Las Vegas); Henderson, Daniel J. (Binghamton University, New York)
    Abstract: Following an identification strategy that allows us to largely eliminate unobserved student and teacher traits, we examine the effect of homework on math, science, English and history test scores for eighth grade students in the United States. Noting that failure to control for these effects yields selection biases on the estimated effect of homework, we find that math homework has a large and statistically meaningful effect on math test scores throughout our sample. However, additional homework in science, English and history are shown to have little to no impact on their respective test scores.
    Keywords: first differencing, homework, instrumental variable, selection bias, unobserved traits
    JEL: C23 I21 I28
    Date: 2011–03
  18. By: Jesus Gonzalez-Feliu (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: Multi-echelon distribution schemes are one of the most common strategies adopted by the transport companies in an aim of cost reduction, but their identification in scientific literature is not always easy due to a lack of unification. This paper presents the main concepts of two-echelon distribution via a systematic review, in the specific a meta-narrative analysis, in order to identify and unify the main concepts, issues and methods that can be helpful for scientists and transport practitioners. The problem of system cost optimisation in two-echelon freight transport systems is defined. Moreover, the main variants are synthetically presented and discussed. Finally, future research directions are proposed.
    Keywords: location-routing problems, multi-echelon distribution, cross-docking, combinatorial optimisation, systematic review.
    Date: 2011–02–25
  19. By: Courtemanche, Charles (University of North Carolina at Greensboro, Department of Economics); Carden, Art (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Research shows that grocery stores reduce prices to compete with Walmart Supercenters. This study finds evidence that the competitive effects of two other big box retailers – Costco and Walmart-owned Sam's Club – are quite different. Using city-level panel grocery price data matched with a unique data set on Walmart and warehouse club locations, we find that Costco entry is associated with higher grocery prices at incumbent retailers, and that the effect is strongest in cities with small populations and high grocery store densities. This is consistent with incumbents competing with Costco along non-price dimensions such as product quality or quality of the shopping experience. We find no evidence that Sam’s Club entry affects grocery stores’ prices, consistent with Sam’s Club’s focus on small businesses instead of consumers.
    Keywords: Wal-Mart; Walmart; Costco; Sam’s Club; warehouse clubs; grocery prices; competition; retail
    JEL: L11 L13 L81 R10
    Date: 2011–02–28
  20. By: B. Curtis Eaton; Jesse Tweedle
    Abstract: Ordinarily people do not make special purpose trips to acquire goods like gasoline or roceries, but instead buy them as the need arises in the course of their daily lives. Such goods are commonly called convenience goods. We modify Hotelling's model of spatial competition so that we can analyze the price equilibrium of duopolists that retail a convenience good. Certain features of the duopolists' demand functions suggest that price competition is more severe in the convenience goods model than in the Hotelling model. The same features complicate the analysis because they mean that a pure strategy price equilibrium does not exists for many locational con-figurations. Although we are not able to find the mixed strategy price equilibrium analytically, we do present some numerical results on equilibrium prices that broadly confirm this suggestion. We also provide a more general product differentiation interpretation of the convenience good model.
    Date: 2011–01–01
  21. By: Maria Dolores Gadea; Ana Gomez Loscos; Antonio Montañes (University of Zaragoza)
    Abstract: This paper sets out a comprehensive framework to identify regional business cycles within Spain and analyses their stylised features and the degree of synchronisation among them and the Spanish economy. We show that the regional cycles are quite heterogeneous although they display some degree of synchronisation that can be partially explained using macroeconomic variables. We also propose a dynamic factor model to cluster the regional co-movements and test if the country cycle is simply the aggregation of the regional ones. We find that the Spanish business cycle is not shared by the 17 regions, but is the sum of the different regional behaviours. The implications derived from our results are useful both for policy makers and analysts.
    Keywords: Business Cycle. Synchronisation measures. Dynamic factor models
    Date: 2011–03–01
  22. By: Wolfgang Karl Härdle; Maria Osipenko
    Abstract: Due to dependency of energy demand on temperature, weather derivatives enable the effective hedging of temperature related fluctuations. However, temperature varies in space and time and therefore the contingent weather derivatives also vary. The spatial derivative price distribution involves a risk premium. We examine functional principal components of temperature variation for this spatial risk premium. We employ a pricing model for temperature derivatives based on dynamics modelled via a vectorial Ornstein-Uhlenbeck process with seasonal variation. We use an analytical expression for the risk premia depending on variation curves of temperature in the measurement period. The dependence is exploited by a functional principal component analysis of the curves. We compute risk premia on cumulative average temperature futures for locations traded on CME and fit to it a geographically weighted regression on functional principal component scores. It allows us to predict risk premia for nontraded locations and to adopt, on this basis, a hedging strategy, which we illustrate in the example of Leipzig.
    Keywords: risk premium, weather derivatives, Ornstein-Uhlenbeck process, functional principal components, geographically weighted regression
    JEL: C01 C31
    Date: 2011–03
  23. By: Marie Olivier (METEOR)
    Abstract: During large sporting events criminal behaviour may be affected via three main channels: (i) fan concentration, (ii) self incapacitation, and (iii) police displacement. In this paper I exploit information on football (soccer) matches for nine London teams linked to detailed recorded crime data at the area level to empirically estimate these different effects. My findings show that only property crime significantly increases in the communities hosting football matches but that they experience no changes in violent offences. These results are robust to controlling for a large number of game type and outcome characteristics. There is no evidence of temporal displacement of criminal activity. Our conceptual model suggests that the away game attendance effect on crime is due to voluntary incapacitation of potential offenders. I argue that the police displacement effect of hosting a match increases property crime by 7 percentage point for every extra 10,000 supporters.
    Keywords: public economics ;
    Date: 2011
  24. By: Nicolas Jacquemet (Centre d'Economie de la Sorbonne - Paris School of Economics); Constantine Yannelis (Department of Economics - Stanford University)
    Abstract: The extent of racial discrimination in the labor market is now clearly identified, but its nature largely remains an open question. This paper reports results from an experiment in which fabricated resumes are sent to help-wanted advertisements in Chicago newpapers. We use three groups of identical resumes : one with Anglo-Saxon names, one with African-American names and one with fictitious foreign names whose ethnic origin is unidentifiable to most Americans. We find that resumes with Anglo-Saxon names generate nearly one half more call-backs than identical resumes with African-American or Foreign names. Resumes with non-Anglo-Saxon names, whether African-American or Foreign, show no statistically significant difference in the number of callbacks they elicit. We also find that discrimination is significantly higher in the Chicago suburbs - where ethnic homogenity is high - as opposed to the city proper. We take this as evidence that discriminatory behavior is part of a larger pattern of unequal treatment of any member of non-majority groups - ethnic homophily.
    Keywords: Correspondence testing, racial discrimination.
    JEL: J71 J64
    Date: 2011–02
  25. By: Beria, Paolo; Ponti, Marco; Laurino, Antonio
    Abstract: The paper presents the structure and the concepts at the basis of a database on world transport infrastructure regulation, to be launched. The database will be built promoting a “soft” survey on the world regulatory practices, to be filled by scholars and experts on a voluntary basis. The goal of the database is to stimulate research on best practices and interaction among regulators, regulated and scholars. The work is still under construction. The database structure is ready and the survey is already launched, but incomplete. This paper is a preliminary document which provides a detailed description of the aims and of the database structure, in order to circulate the project and collect suggestions from the academic community. The structure of the paper is as follows. After a presentation of the aims of the work, section 2 provides a literature review on existing databases. Section 3 details the project, describing the characteristics of the survey, the strengths and weaknesses of the approach, the network to be activated. Section 4 is giving more details on the actual structure of the database and of the corresponding survey. Section 5 gives notice of the first results obtained with a preliminary survey and a preliminary review of literature on some selected countries. Conclusions will outline the next steps of the research.
    Keywords: transport; regulation; investment; infrastructure; database; survey
    JEL: H0 C42 R48
    Date: 2010–04
  26. By: Barnab s M. Garay (Faculty of Information Technology - P zm ny P‚ter Catholic University); Andr s Simonovits (Institute of Economics Hungarian Academy of Sciences); J nos T¢th (Department of Analysis - Budapest University of Technology and Economics)
    Abstract: We study a model of tax evasion, where a flat-rate tax only finances the provision of public goods. Deciding on reported income, each individual takes into account that the less he reports, the higher is his private consumption but the lower is his moral satisfaction. The latter depends on his own current report and average previous reports of his neighbors. Under quite general assumptions, the steady state reported income is symmetric and the process converges to the steady state.
    Keywords: tax evasion, steady state, asymptotic stability, symmetrization, networks, monotone maps
    JEL: C62 H26
    Date: 2011–01
  27. By: Sule Alan (Faculty of Economics and CFAP, University of Cambridge, United Kingdom.); Ruxandra Dumitrescu (Faculty of Economics and CFAP, University of Cambridge, United Kingdom.); Gyongyi Loranth (Faculty of Business, Economics and Statistics and University of Vienna and CEPR.)
    Abstract: We test the interest rate sensitivity of subprime credit card borrowers using a unique panel data set from a UK credit card company. What is novel about our contribution is that we were given details of a randomized interest rate experiment conducted by the lender between October 2006 and January 2007. We find that individuals who tend to utilize their credit limits fully do not reduce their demand for credit when subject to increases in interest rates as high as 3 percentage points. This finding is naturally interpreted as evidence of binding liquidity constraints. We also demonstrate the importance of truly exogenous variation in interest rates when estimating credit demand elasticities. We show that estimating a standard credit demand equation with nonexperimental variation leads to seriously biased estimates even when conditioning on a rich set of controls and individual fixed effects. In particular, this procedure results in a large and statistically significant 3-month elasticity of credit card debt with respect to interest rates even though the experimental estimate of the same elasticity is neither economically nor statistically different from zero. JEL Classification: D11, D12, D14.
    Keywords: subprime credit, randomized trials, liquidity constraints.
    Date: 2011–02
  28. By: Friedhelm Pfeiffer; Nico Johannes Schulz
    Abstract: Gregariousness is an important aspect of human life with implications for labour market outcomes. The paper examines, to the best of our knowledge for the first time for Germany, gregariousness and social interaction at the workplace and associated wage differentials. Our empirical findings with samples from the German Socio-Economic Panel (SOEP) demonstrate that gregarious people more often work in jobs with social interaction. Furthermore, females tend to work more often in interactive jobs compared to males. There is evidence that working in an interactive job is associated with a compensating negative wage differential of 7 percent for women and non for men. Implications for wage policy are discussed.
    Keywords: Gregariousness, social interactions, labour markets, sorting, wage differentials
    JEL: J01 J24 J31
    Date: 2011
  29. By: Bin Dong (QUT); Benno Torgler (QUT)
    Abstract: We explore theoretically and empirically whether social interaction, including local and global interaction, influences the incidence of corruption. We first present an interaction-based model on corruption that predicts that the level of corruption is positively associated with social interaction. Then we empirically verify the theoretical prediction using within-country evidence at the province-level in China during 1998 to 2007. Panel data evidence clearly indicates that social interaction has a statistically significantly positive effect on the corruption rate in China. Our findings, therefore, underscore the relevance of social interaction in understanding corruption.
    Keywords: corruption, social interaction, China
    JEL: K42 D72 D64 O17 J24
    Date: 2010–11–26

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