nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2011‒05‒30
47 papers chosen by
Steve Ross
University of Connecticut

  1. External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis By Niels Vermeer; Wouter Vermeulen
  2. Urban patterns, population density and optimal city dimension: The case of public infrastructure By Prieto, Ángel; Zofío, José Luis; Álvarez, Inmaculada
  3. Urban sustainability and community development: Creating healthy sustainable urban communities By Malo André Hutson
  4. Does the housing market reflect cultural heritage? A case study of Greater Dublin By Moro, Mirko; Mayor, Karen; Lyons, Seán; Tol, Richard S. J.
  5. Transportation, freight rates, and economic geography By Kristian Behrens; Pierre M. Picard
  6. Is New Economic Geography Right? Evidence from Price Data By Jessie Handbury; David E. Weinstein
  7. Patterns in U.S. urban growth (1790–2000) By González-Val, Rafael; Lanaspa, Luis
  8. Il social housing in Europa By Massimo Baldini; Marta Federici
  9. Taxes, agglomeration rents and location decision of firms By Karen Crabbe; Karolien De Bruyne
  10. The new way forward: Using collaborations and partnerships for greater efficiency and impact By Dee Walsh; Robert Zdenek
  11. Equity in the City: On Measuring Urban (Ine)Quality of Life By Marco Giovanni Brambilla; Alessandra Michelangeli; Eugenio Peluso
  12. Understanding Sustainable Transportation Choices: Shifting Routine Automobile Travel to Walking and Bicycling By Schneider, Robert James
  13. Changing School Autonomy: Academy Schools and their Introduction to England's Education By Stephen Machin; James Vernoit
  14. The competitiveness of regions. A comparison between Belgian and German regions By Joep Konings; Luca Marcolin
  15. Immigration and Innovation. By Fabling, Richard; Stillman, Steven; Maré, David. C
  16. Mortgage Modification and Strategic Behavior: Evidence from a Legal Settlement with Countrywide By Christopher J. Mayer; Edward Morrison; Tomasz Piskorski; Arpit Gupta
  17. Finances of Urban Local Bodies in Jharkhand: Some Issues and Comparisons By Simanti Bandyopadhyay
  18. Explaining Property Tax Collections in Developing Countries: The Case of Latin America By Jorge Martinez-Vazquez; Cristian Sepúlveda
  19. Regulation in the Market for Education and Optimal Choice of Curriculum By Gerald Eisenkopf; Ansgar Wohlschlegel
  20. The Comparative Political Economy of Economic Geography By Wiberg, Magnus
  21. Exploiting Parallelization in Spatial Statistics: an Applied Survey using R. By Bivand, Roger
  22. Does Quality Make a Difference?: Employment Effects of High- and Low-Quality Start-Ups By Michael Fritsch; Alexandra Schroeter
  23. The effect of Walmart on the tax base: evidence from New Jersey By Vandegrift, Donald; Loyer, John; Kababik, David
  24. Teacher experience and the class size effect - experimental evidence By Mueller, Steffen
  25. Strangers on the move. Ethnic entrepreneurs as urban change actors By Kourtit, K.; Nijkamp, P.
  26. Geographical information systems technologies for spatial visualization of statistical data By Dardala, Marian; Reveiu, Adriana
  27. Estimating economic impact using ex post econometric analysis: Cautionary tales By Robert Baumann; Victor Matheson
  28. Comparing estimation methods for spatial econometrics techniques using R. By Bivand, Roger
  29. The Effect of Education Policy on Crime: An Intergenerational Perspective By Meghir, Costas; Palme, Mårten; Schnabel, Marieke
  30. Computing the Jacobian in spatial models: an applied survey. By Bivand, Roger
  31. Labor Market Effects of Immigration: Evidence from Neighborhood Data By Bauer, Thomas; Flake, Regina; Sinning, Mathias
  32. How does New Hampshire do it?: an analysis of spending and revenues in the absence of a broad-based income or sales tax By Jennifer Weiner
  33. Does cash for school influence young women's behavior in the longer term ? evidence from Pakistan By Alam, Andaleeb; Baez, Javier E.; V. Del Carpio, Ximena
  34. How Far is the East? Educational Performance in Eastern Europe By Alina Botezat; Ruben R. Seiberlich
  35. Municipal Finances in Latin America: Features, Issues, and Prospects By Jorge Martinez-Vazquez
  36. Measuring regional creative capacity: A literature review for rural-specific approaches By Gulumser, A.A.; Baycan, T.; Nijkamp, P.
  37. The Dual Policy in the Dual Economy - The Political Economy of Urban Bias in Dictatorial Regimes By Shifa, Abdulaziz
  38. High-Technology Entrepreneurship in Silicon Valley By Fairlie, Robert W.; Chatterji, Aaron K.
  39. Regional growth and unemployment. The validity of Okun's law for the Finnish regions By Kangasharju, A.; Tavera, C.; Nijkamp, P.
  40. Spatial organization of production in India: contesting themes and conflicting evidence By Roy, Satyaki
  41. Labor Market Effects of the World Cup: A Sectoral Analysis By Robert Baumann; Bryan Engelhardt; Victor Matheson
  42. A Schumpeterian model of entrepreneurship, innovation, and regional economic growth By Batabyal, A.A.; Nijkamp, P.
  43. Labor mobility and entrepreneurship: Who do new firms employ? By Nyström, Kristina
  44. Should Economists Listen to Educational Psychologists? : Some Economics of Student Motivation By Donze, Jocelyn; Gunnes, Trude
  45. Young firms and innovation: a microeconometric analysis By Gabriele Pellegrino; Mariacristina Piva; Marco Vivarelli
  46. Energy Policies for Passenger Motor Vehicles By Kenneth Small
  47. Lessons from migration impact analysis By Bakens, J.; Nijkamp, P.

  1. By: Niels Vermeer; Wouter Vermeulen
    Abstract: <p>This paper models external benefits of the transformation of an inner city industrial site into a residential area in an urban general equilibrium framework</p><p>Does brownfield redevelopment warrant government support?</p><p>We model external benefits of the transformation of an inner city industrial site into a residential area in an urban general equilibrium framework, focussing on the removal of a local nuisance, the exploitation of agglomeration economies and preservation of open space at the urban fringe. These benefits are compared to the value of transformed land, which accrues to the developer.</p><p>A numerical application indicates that local nuisance and agglomeration effects may push social returns significantly beyond these private returns. However, depending on the price elasticity of local housing demand, the amount of preserved greenfield land may be small and it only generates additional benefits to the extent that direct land use policies fail to internalize its value as open space.</p>
    JEL: R13 R21 R52
    Date: 2011–05
  2. By: Prieto, Ángel (Instituto de Recursos Naturales y Agrobiología, Salamanca, Spain); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Álvarez, Inmaculada (Departamento de Análisis Económico (Teoría e Historia Económica). UAM)
    Abstract: Determination of the optimal city size underlies the economic rationality of infrastructure provision by local governments. We investigate the existence of decreasing average costs resulting from economies of scale, associated with larger urban dimensions in terms of population and housing, and economies of density, brought about by reductions in urban dispersion, and calculate optimal population densities when providing basic infrastructure. The methodology relies on novel definitions of scale and density economies and their estimation by way of flexible translog cost functions, extensively applied in the literature dealing with the provision of services—i.e., utilities, but extended here to their supporting infrastructure. Our results unveil the existence of latent economies of scale and density resulting in a cost excess in the provision of infrastructure due to the effect of urban sprawl that translates into suboptimal city sizes. Based on these findings several policy guidelines rationalizing urban development are suggested. The model is illustrated using Spanish statistical data collected from the nationwide local infrastructure and equipment survey, and prices from a new database that uses engineering cost benchmarks.
    Keywords: Urban patterns; Optimal urban density; Scale and density economies; Translog cost function.
    JEL: C3 D24 H1 H4 R53
    Date: 2010–11
  3. By: Malo André Hutson
    Abstract: Increased urbanization has also led to many challenges for urban residents. In the United States, land use and zoning, transportation and infrastructure, lack of affordable housing, and disinvestment have severely affected the quality of life of poor urban populations. Despite these challenges, opportunities do exist to make economically disadvantaged urban communities more sustainable, livable, and healthy. This working paper discusses the challenges facing urban communities and then considers the opportunities that exist to develop sustainable urban communities given our current economic climate.
    Keywords: Community development ; Urban economics
    Date: 2011
  4. By: Moro, Mirko; Mayor, Karen; Lyons, Seán; Tol, Richard S. J.
    Abstract: Does the housing market reflect cultural heritage? We estimate several specifications of a hedonic price equation to establish whether distance to cultural heritage site is capitalised into housing prices in Greater Dublin, Ireland. The results show that distance to the nearest historic building has a significant and robust effect on housing prices. To our knowledge this is the first application of the hedonic price method to cultural heritage.
    Keywords: housing market/Ireland
    Date: 2011–05
  5. By: Kristian Behrens (Canada Research Chair, Department of Economics, Universite du Quebec a Montreal (uqam)); Pierre M. Picard (crea, Universite du Luxembourg, Luxembourg; and core, Universite catholique de Louvain, Belgium)
    Abstract: We investigate the role of competitive transport markets in shaping the location of economic activity and the pattern of trade. In our model, carriers supply transport services for shipping man- ufactured goods, and freight rates are set to clear transport markets. Each carrier must commit to the maximum capacity for a round-trip and thus faces a logistics problem as there are opportunity costs of returning empty. These costs increase the freight rates charged to firms located in regions that are net exporters of manufactured goods. Since demand for transport services depends on the spatial distribution of economic activity, the concentration of production in one region raises freight rates to serve foreign markets from there, thus working against specialization and the agglomera- tion of firms. Consequently, a more even spatial distribution of firms and production prevails at equilibrium when freight rates are endogenously determined than when they are assumed to be exogenous as in the literature.
    JEL: F12 R12
    Date: 2011
  6. By: Jessie Handbury; David E. Weinstein
    Abstract: The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index. Despite his Nobel Prize, there have been no tests of this idea. This paper represents the first such test. Using a rich dataset covering 10-20 million purchases of grocery items, we find that after controlling for store and shopping effects: 1) Aggregate grocery prices are lower in larger cities; 2) Residents of larger cities have access to substantially more varieties than residents of smaller cities; and 3) These forces combine to substantially lower variety adjusted prices in large cities. In short, Krugman was right.
    JEL: L81 R12 R13
    Date: 2011–05
  7. By: González-Val, Rafael; Lanaspa, Luis
    Abstract: This paper reconsiders the evolution of the growth of American cities since 1790 in the light of new theories of urban growth. Our null hypothesis for long-term growth is random growth. We obtain evidence supporting random growth against the alternative of mean reversion (convergence) in city sizes using panel unit root tests. We also examine mobility within the distribution to try to extract growth patterns different from the general unit root trend detected. We find evidence of high mobility when we model growth as a first-order Markov process. Finally, using a cluster procedure we find strong evidence in favour of conditional convergence in city growth rates within convergence clubs, which we can interpret as “local” mean-reverting behaviours. Both the high mobility and the results of the clustering analysis seem to indicate a sequential city growth pattern.
    Keywords: city size; urban growth; random growth; sequential city growth; transition matrices; club convergence
    JEL: O18 C12 R12 R11
    Date: 2011–05–20
  8. By: Massimo Baldini; Marta Federici
    Abstract: This paper aims to provide an overview of practice and policies in social housing sector in the European Union. In order to establish meaningful comparisons between Member States – that are characterized by a great heterogeneity in housing systems – first of all we present a definition of social housing, according to its distinctive elements. After a brief historical review, the paper analyses: the role of social housing, the al location criteria, the providers and the sources of financing. Then, some recent social and economics trends are examined: on the one hand these have determined an important need of houses at affordable prices, and on the other hand have induced providers – both public and private – to diversify and broaden their areas of intervention. Finally the paper focus on some relevant EU countries: France, UK, Netherlands and Sweden
    Keywords: Social housing; housing policies; European Union
    JEL: R31 I38
    Date: 2011–04
  9. 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: 2011
  10. By: Dee Walsh; Robert Zdenek
    Abstract: This paper uses seven short case studies of nonprofit housing and community development organizations to explore three different collaborative strategies that increase their efficiency and impact. These case studies include both recent and long-standing partnerships in affordable housing, community development finance, neighborhood stabilization, and transit-oriented development. It concludes with recommendations based on the examples, including effective strategies for successful innovation, collaboration, and partnership formation.
    Keywords: Housing ; Community development
    Date: 2011
  11. By: Marco Giovanni Brambilla; Alessandra Michelangeli; Eugenio Peluso (DISCE, Università Cattolica)
    Abstract: We merge contributions from the New Urban Economics and inequality measurement to assess quality of life (QOL) in a given city. We take the point of view of a city planner in favor of an even accessibility to amenities within the city. Instead of the average value of amenities computed in the Roback (1982) QOL index, our index captures the value of its multidimensional "certainty equivalent". We apply this methodology to derive a QOL index for the city of Milan.
    Keywords: Urban quality of life, amenities, hedonic prices, inequality index, just city.
    JEL: D63 H4 R1 R2
    Date: 2011–05
  12. By: Schneider, Robert James
    Abstract: In the two decades since the United States Congress passed the federal Intermodal Surface Transportation Efficiency Act, there has been a surge of interest in making urban transportation systems more sustainable. Many agencies, representing all levels of government, have searched for strategies to reduce private automobile use, including policies to shift local driving to pedestrian and bicycle modes. Progress has been made in a number of communities, but the automobile remains the dominant mode of transportation in all metropolitan regions. Sustainable transportation advocates are especially interested in routine travel, such as shopping and other errands, because it tends to be done frequently and for distances that could be covered realistically by walking or bicycling. According to the 2009 National Household Travel Survey, Americans made more trips for shopping than for any other purpose, including commuting to and from work. One-third of these shopping trips were shorter than two miles (3.2 km). However, 76% of these short shopping trips were made by automobile, while only 21% were made by walking and 1% by bicycling. In order to identify effective strategies to change travel behavior, practitioners need a greater understanding of why people choose certain modes for routine travel. Choosing to walk or bicycle rather than travel by automobile may help individuals get exercise, save money, interact with neighbors, and reduce tailpipe emissions. Yet, in some communities, non-motorized modes may also require more time and physical effort to run a series of errands, be less convenient for carrying packages and traveling in bad weather, and be perceived as having a higher risk of traffic crashes or street crime than driving. A mixed-methods approach was used to develop a more complete understanding of factors that are associated with walking or bicycling rather than driving for routine travel. An intercept survey was implemented to gather travel data from 1,003 customers at retail pharmacy stores in 20 San Francisco Bay Area neighborhoods in fall 2009. Follow-up interviews were conducted with 26 survey participants in spring and summer 2010 to gain a deeper understanding of factors that influenced their transportation decisions. The methodological approach makes several contributions to the body of research on sustainable transportation. For example, the study: Explored multiple categories of factors that may be associated with walking and bicycling, including travel, socioeconomic, attitude, perception, and shopping district characteristics. Few studies of pedestrian or bicycle mode choices have included all of these categories of factors. Statistical models showed that variables in all categories had significant associations with mode choice. Documented and analyzed short pedestrian movements, such as from a parking space to a store entrance or from a bus stop to home. These detailed data provided a greater understanding of pedestrian activity than traditional travel survey analyses. Walking was used as the primary mode for 65% of respondent trips between stops within shopping districts, and 52% of all respondents walked along a street or between stops at some time between leaving and returning home. Maps of respondent pedestrian path density revealed distinct pedestrian activity patterns in different types of shopping districts. Used four different approaches to capture participant travel mode information. Respondents reported the primary mode of transportation they were using on the day of the survey, the mode they typically used, and all modes that they would consider using to travel to the survey store. They also mapped all stops on their tour and said what modes they used between each stop. These four approaches revealed nuanced travel habits and made it possible to correct inaccuracies in self-reported primary travel mode data. Measured and tested fine-grained local environment variables in shopping districts rather than around respondents' homes. These variables characterized the shopping district area (e.g., sidewalks, bicycle facilities, metered parking, and tree canopy coverage), the main commercial roadway (e.g., posted speed limit, number of automobile lanes, and pedestrian crossing distance), and the survey store site (e.g., number of automobile and bicycle parking spaces and distance from the public sidewalk to the store entrance). This dissertation adds to the small number of studies that have explored how the characteristics of activity destinations are related to travel behavior. The study results contribute to the body of knowledge about factors that may encourage people to shift routine travel from automobile to pedestrian or bicycle modes. After controlling for travel factors such as time and cost, socioeconomic characteristics, and individual attitudes, mixed logit models showed that automobile use was negatively associated with higher employment density, smaller parking lots, and metered on-street parking in the shopping district. Walking was positively associated with higher population density, more street tree canopy coverage, lower speed limits, and fewer commercial driveway crossings. The exploratory analysis of a small number of bicycle tours found that bicycling was associated with more extensive bicycle facility networks and more bicycle parking. However, people were more likely to drive when they perceived a high risk of crime. Results also suggest the magnitude of mode shifts that could occur if short- and long-term land use and transportation system changes were made to each study shopping district. The mode choice model representing travel only to and from the study shopping districts (N = 388) was used to estimate respondent mode shares under the following three scenarios: 1) double population and employment densities in each study shopping district, 2) double street tree canopy coverage in each study shopping district, and 3) eliminate half of the automobile parking 3 spaces at the survey store. Based on the model, the combination of these three changes could increase pedestrian mode share among the 388 sample respondents from 43% to 61% and decrease automobile mode share from 50% to 31%. This shift could eliminate 129 (13%) of the 983 respondent vehicle miles traveled (208 of the 1,580 respondent vehicle kilometers traveled), and 110 (36%) of the 308 times respondents parked their automobiles in the shopping district. The mode choice model of walking versus driving within survey shopping districts (N = 286) was used to test the combination of the following scenarios: 1) cluster separated stores around shared parking lots, 2) consolidate commercial driveways so that there are half as many driveway crossings along the main commercial roadway, 3) reduce all main commercial roadway speed limits to 25 miles per hour (40 kilometers per hour), and 4) install metered parking in all shopping districts. These changes could increase the percentage of the 286 sample respondents walking between shopping district activities from 32% to 54%. This shift could eliminate 29 (38%) of the 76 respondent vehicle miles traveled (47 of the 122 respondent vehicle kilometers traveled), and 105 (22%) of the 469 times respondents parked their automobiles in the shopping district. Note that these forecasted mode shifts are illustrative examples based on cross-sectional data and do not account for the process of modifying travel behavior habits. Qualitative interviews provided a foundation for a proposed Theory of Routine Mode Choice Decisions. This five-step theory also drew from survey results and other mode choice theories in the transportation and psychology fields. The first step, 1) awareness and availability, determines which modes are viewed as possible choices for routine travel. The next three steps, 2) basic safety and security, 3) convenience and cost, and 4) enjoyment, assess situational tradeoffs between modes in the choice set and are supported by many of the statisticallysignificant factors in the mode choice models. The final step, 5) habit, reinforces previous choices and closes the decision process loop. Socioeconomic characteristics explain differences in how individuals view each step in the process. Understanding each step in the mode choice decision process can help planners, designers, engineers, and other policy-makers implement a comprehensive set of strategies that may be able to shift routine automobile travel to pedestrian and bicycle modes.
    Keywords: Urban Studies and Planning
    Date: 2011–05–01
  13. By: Stephen Machin; James Vernoit
    Abstract: In this paper, we study a high profile case - the introduction of academy schools into the English secondary school sector ‐ that has allowed schools to gain more autonomy and flexible governance by changing their school structure. We consider the impact of an academy school conversion on their pupil intake and pupil performance and possible external effects working through changes in the pupil intake and pupil performance of neighbouring schools. These lines of enquiry are considered over the school years 2001/02 to 2008/09. We bypass the selection bias inherent in previous evaluations of academy schools by comparing the outcomes of interest in academy schools to a specific group of comparison schools, namely those state‐maintained schools that go on to become academies after our sample period ends. This approach allows us to produce a well balanced treatment and control group. Our results suggest that moving to a more autonomous school structure through academy conversion generates a significant improvement in the quality of their pupil intake and a significant improvement in pupil performance. We also find significant external effects on the pupil intake and the pupil performance of neighbouring schools. All of these results are strongest for the schools that have been academies for longer and for those who experienced the largest increase in their school autonomy. In essence, the results paint a (relatively) positive picture of the academy schools that were introduced by the Labour government of 1997‐2010. The caveat is that such benefits have, at least for the schools we consider, taken a while to materialise.
    Keywords: Academies, pupil intake, pupil performance
    JEL: I20 I21 I28
    Date: 2011–04
  14. By: Joep Konings; Luca Marcolin
    Abstract: This paper uses firm level data to analyze the regional competitiveness of two federal Euro area countries, Belgium and Germany. Competitiveness is defined as the labor cost per unit of output and hence takes into account productivity differences. Analyzing regional competitiveness is important because of the regional concentration in economic activity, the unequal spatial development of regions within countries and the increased importance of regional policy both at the EU as at the national level.
    Date: 2011
  15. By: Fabling, Richard (Reserve Bank of New Zealand); Stillman, Steven (Motu Economic and Public Policy Research); Maré, David. C (Motu Economic and Public Policy Research)
    Abstract: We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. Controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation.
    Keywords: Innovation; Immigration; Local labour market
    JEL: O31 R30
    Date: 2011–05
  16. By: Christopher J. Mayer; Edward Morrison; Tomasz Piskorski; Arpit Gupta
    Abstract: We investigate whether homeowners respond strategically to news of mortgage modification programs. We exploit plausibly exogenous variation in modification policy induced by U.S. state government lawsuits against Countrywide Financial Corporation, which agreed to offer modifications to seriously delinquent borrowers with subprime mortgages throughout the country. Using a difference-in-difference framework, we find that Countrywide’s relative delinquency rate increased thirteen percent per month immediately after the program’s announcement. The borrowers whose estimated default rates increased the most in response to the program were those who appear to have been the least likely to default otherwise, including those with substantial liquidity available through credit cards and relatively low combined loan-to-value ratios. These results suggest that strategic behavior should be an important consideration in designing mortgage modification programs.
    JEL: D10 G21 G33 K0
    Date: 2011–05
  17. By: Simanti Bandyopadhyay (Andrew Young School of Policy Studies, Georgia State University)
    Abstract: The paper brings together the information on different components of revenues and expenditures of the urban local bodies (ULBs) in Jharkhand and analyses their growth over a recent period. The performances of the ULBs are evaluated by estimating some indicators based on actual revenues and expenditures. The expenditures are also compared with the financial norms estimated for different urban services for Indian cities according to different size classes. An attempt to estimate the gross city product of each ULB in Jharkhand is also made. A broad comparison on finances and service delivery indicators of these ULBs with those in the ULBs of the eight adjacent districts of West Bengal is also attempted. We find that the revenue capacities estimated on an average can generate additional revenues of 77 per cent for the ULBs in Jharkhand. The increase in total revenues would be the highest (184 per cent) for the 1 lakh plus cities and the lowest (30 per cent) for the smallest size class of cities. We also find that on an average Jharkhand cities generate only 0.17 per cent of their Gross City Products as own revenues. The bigger cities are found to be relatively more constrained than the smaller ones. An overall analysis of finances on the basis of actuals in the ULBs of the two states reveals that West Bengal is in a comparatively better position than Jharkhand as far as the performance according to indicators related to finances are concerned. Out of eight indicators selected, the performance on an average is better in West Bengal in almost all of them. A close look at the dependency ratio on the higher tiers of the government as a percentage of transfers to total revenues reveal that on an average 91 per cent of the revenues in the ULBs of Jharkhand comes from transfers where transfers constitute grants in different forms of assistance. Whereas in West Bengal the average ratio is 61 per cent which also includes assigned revenues. While only 6 per cent of the expenditures can be covered by own revenues in Jharkhand, the ratio is about 37 per cent in West Bnegal. Own revenues can cover 19 per cent of revenue expenditures in Jharkhand whereas in West Bengal the ratio is 43 per cent. While Jharkhand covers 41 per cent of the revenue expenditure norms by their actual revenue expenditure, West Bengal on an average can only cover 36 per cent. A brief analysis in terms of some coverage indicators of municipal services, infrastructure, employment, socio-demographic indicators and some standard of living indicators show that the urban service delivery, in terms of some of the coverage indicators, are relatively better in most of the size classes and also on an average as a whole in West Bengal. We can generally conclude that the relatively better indicator in terms of finances and expenditure management in the ULBs of West Bengal has a somewhat positive impact on municipal service delivery too.
    Date: 2011–05–24
  18. By: Jorge Martinez-Vazquez (International Studies Program. Andrew Young School of Policy Studies, Georgia State University); Cristian Sepúlveda (International Studies Program. Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper analyzes the problem of collecting property taxes in fiscally decentralized developing economies. The property tax is arguably the most important source of own revenues for local governments around the world, and economists generally agree that, although imperfect, the property tax is a good local tax. In practice, however, the property tax does not always become a productive revenue source and local governments do not gain the fiscal autonomy required to realize the benefits of fiscal decentralization. This problem is rather common among developing economies and particularly severe in Latin America. One of the main reasons for the poor tax performance of Latin American countries seems to be the lack of administrative capacity at the local level. This problem is notably aggravated, we argue, by a deficient design of the fiscal decentralization system. We also identify the main determinants of property tax performance in Latin American countries, and provide guidance for future reforms in the region.
    Date: 2011–05–10
  19. By: Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Ansgar Wohlschlegel (Wirtschaftspolitische Abteilung, University of Bonn, Germany)
    Abstract: We analyze educational institutions’ incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality of student achievement on the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized.
    Keywords: Education, Local Externalities, Product Differentiation, Price Competition, Vouchers
    JEL: I28 L13
    Date: 2011–05–24
  20. By: Wiberg, Magnus (Ministry of Finance)
    Abstract: This paper examines how different electoral rules affect the lo- cation decisions of firms through the effect on regional policy. The equilibrium location of industry in the economically smaller (larger) region is higher under majoritarian (proportional) elections. The stan- dard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the smaller region is increasing in the level of regional integration. As trade is in- creasingly liberalized, the economy features a reversed core-periphery equilibrium. This result holds under both electoral rules. However, firms locate to the smaller region at a relatively higher rate in the case of majoritarian voting, hence, the reversed equilibrium occurs for a relatively lower level of regional integration with majoritarian elections. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instru- mental variable strategy that accounts for the potential endogeneity of the electoral rule.
    Keywords: Economic Geography; Regional Policy; Electoral Rules
    JEL: D72 F12 R12
    Date: 2011–05–08
  21. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Computing tasks may be parallelized top-down by splitting into per-node chunks when the tasks permit this kind of division, and particularly when there is little or no need for communication between the nodes. Another approach is to parallelize bottom-up, by the substitution of multi-threaded low-level functions for single-threaded ones in otherwise unchanged user-level functions. This survey examines the timings of typical spatial data analysis tasks across a range of data sizes and hardware under different combinations of these two approaches. Conclusions are drawn concerning choices of alternatives for parallelization, and attention is drawn to factors conditioning those choices.
    Keywords: Statistical software; Parallelization; Optimized linear algebra subroutines; Multicore processors; Spatial statistics.
    JEL: C12 C13 C87 C88
    Date: 2010–10–06
  22. By: Michael Fritsch; Alexandra Schroeter
    Abstract: This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall growth effects than those in services. Moreover, new businesses in innovative manufacturing and in knowledge-intensive service industries make a larger direct contribution to employment than start-ups affiliated with other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. However, the impact of start-ups in innovative manufacturing industries on overall regional employment growth is not statistically significant, which may be mainly due to their rather small share in all start-ups and because they impact more on firms and employment in other regions than do start-ups in non-innovative manufacturing. Finally, we discuss the implications for entrepreneurship policy that can be derived from our findings.
    Keywords: Entrepreneurship, new business formation, innovative industries, regional development, entrepreneurship policy
    JEL: L26 M13 O1 O18 R11
    Date: 2011
  23. By: Vandegrift, Donald; Loyer, John; Kababik, David
    Abstract: This paper measures the impact of 30 Walmart openings on the municipal tax base using panel data for New Jersey municipalities from 1998-2007. We consider the impact of the new Walmart on the home municipality as well as the nearest adjacent municipality in the year the outlet opens as well as the two subsequent years. Because Walmart may exert differing effects on residential and non-residential values, we undertake separate analyses of the impact of Walmart on the residential and non-residential tax bases. We find that a new Walmart has a significant positive impact on the growth in the tax base in host municipalities the second year that it is open, but not in years one and three. In addition, the impact of the Walmart on the growth in the tax base depends on the size of the municipality. In the average-sized municipality, the real equalized tax base growth rate rises only about 0.35 percentage points in the second year. This effect is primarily the result of Walmart’s impact on residential values in the host municipality. By contrast, a new Walmart causes a modest but consistently negative effect on growth of the tax base in the adjacent municipality across all three years that we are able to measure. In the average sized municipality for our sample, the real equalized tax base growth rate falls rate falls 0.065, 0.081, and 0.096 percentage points, respectively. This effect occurs primarily through the Walmart’s impact on growth of non-residential values. The cumulative effect of this reduction in growth in the adjacent municipality is roughly two thirds of the increase in growth experienced by the home municipality.
    Keywords: Tax Base; Walmart; Retailing; Big Box
    JEL: R58 L81 R11
    Date: 2011–05–16
  24. By: Mueller, Steffen
    Abstract: We analyze teacher experience as a moderating factor for the effect of class size reduction on student achievement in the early grades using data from the Tennessee STAR experiment with random assignment of teachers and students to classes of different size. The analysis is motivated by the high costs of class size reductions and the need to identify the circumstances under which this investment is most rewarding. We find a class size effect only for senior teachers. The effect is most pronounced for higher and average-performing students. We further show that senior teachers outperform rookies only in small classes. The results have straightforward policy implications. Interestingly, the class size effect is most likely due to a higher quality of instruction in small classes and not due to less disruptions. --
    Keywords: class size reduction,teacher experience,student achievement
    JEL: I2 H4 J4
    Date: 2011
  25. By: Kourtit, K.; Nijkamp, P.
    Date: 2011
  26. By: Dardala, Marian; Reveiu, Adriana
    Abstract: This paper proposes an original solution to present statistical data using the facilities provided by the Geographical Information Systems, to improve the means of statistical data figure and distribution inside the territorial profile. The proposed solution allows to represent more statistical data sets, on the same map, using two different methods of data representation: using a color ramp to represent the territorial distribution of an aggregate indicator and a set of charts overlapped to represent the proportions of the variables that form the indicator.
    Keywords: Geographical Information Systems; Spatial Visualization; ArcObjects; Cartograms
    JEL: R12
    Date: 2011–05–02
  27. By: Robert Baumann (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: This paper provides an overview of techniques that can be used to estimate the economic impact of stadiums, events, championships, and franchises on local economies. Utilizing data from National Collegiate Athletic Association championships, this paper highlights the potential problems that can be made if city and time effects are not handled and unit-roots are not accounted for. In addition, the paper describes the technique for estimating dynamic panel data and the advantages that come with these modeling techniques.
    Keywords: College sports, impact analysis, econometrics
    JEL: L83 R53 C23
    Date: 2011–05
  28. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Recent advances in spatial econometrics model fitting techniques have made it more desirable to be able to compare results and timings. Results should correspond between implementations using different applications, while timings are more readily compared within a single application. A broad range of model fitting techniques are provided by the contributed R packages for spatial econometrics. These model fitting techniques are associated with methods for estimating impacts and some tests, which will also be presented and compared. This review constitutes an up-to-date demonstration of techniques now available in R, and mentions some that will shortly become more generally available.
    Keywords: Spatial autoregression; Econometric software.
    JEL: C13 C21 C87
    Date: 2010–10–06
  29. By: Meghir, Costas (Yale University and University College London); Palme, Mårten (Dept. of Economics, Stockholm University); Schnabel, Marieke (University College London)
    Abstract: The Swedish comprehensive school reform implied an extension of the number of years of compulsory school from 7 or 8 to 9 for the entire nation and was implemented as a social experiment by municipality between 1949 and 1962. A previous study (Meghir and Palme, 2005) has shown that this reform significantly increased the number of years of schooling as well as labor earnings of the children who went through the post reform school system, in particular for individuals originating from homes with low educated fathers. This study estimates the impact of the reform on criminal behavior: both within the generation directly affected by the reform as well as their children. We use census data on all born in Sweden between 1945 and 1955 and all their children merged with individual register data on all convictions between 1981 and 2008. We find that the educational reform decreased crime substantially for men who were directly affected by it. We also find that the crime rate declined for the sons of those fathers directly affected by the new educational system; we interpret this results as implying that improved education increased resource and parenting quality, leading to improved child outcomes.
    Keywords: Comprehensive school; economics of crime; returns to education; returns to human capital
    JEL: I20 I21 I28 K42 N34
    Date: 2011–05–19
  30. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Despite attempts to get around the Jacobian in fitting spatial econometric models by using GMM and other approximations, it remains a central problem for maximum likelihood estimation. In principle, and for smaller data sets, the use of the eigenvalues of the spatial weights matrix provides a very rapid and satisfactory resolution. For somewhat larger problems, including those induced in spatial panel and dyadic (network) problems, solving the eigenproblem is not as attractive, and a number of alternatives have been proposed. This paper will survey chosen alternatives, and comment on their relative usefulness.
    Keywords: Spatial autoregression; Maximum likelihood estimation; Jacobian computation; Econometric software.
    JEL: C13 C21 C87
    Date: 2010–08–17
  31. By: Bauer, Thomas (RWI); Flake, Regina (Ruhr Graduate School in Economics); Sinning, Mathias (Australian National University)
    Abstract: This paper combines individual-level data from the German Socio-Economic Panel (SOEP) with economic and demographic postcode-level data from administrative records to analyze the effects of immigration on wages and unemployment probabilities of high- and low-skilled natives. Employing an instrumental variable strategy and utilizing the variation in the population share of foreigners across regions and time, we find no support for the hypothesis of adverse labor market effects of immigration.
    Keywords: international migration, effects of immigration
    JEL: F22 J31 J64 R23
    Date: 2011–05
  32. By: Jennifer Weiner
    Abstract: This report seeks to understand how New Hampshire has avoided a broad-based income or sales tax by examining the factors that drive the state’s lower-than-average per capita spending and the revenue sources the state relies on to pay for that spending in lieu of an income or sales tax. It presents comparative data for the six New England states and discusses some of the impediments faced by other states in the region interested in emulating New Hampshire's fiscal model. ; The author finds that New Hampshire's below-average spending is due to a combination of policy choices and favorable circumstances that the state faces, such as a relatively low poverty rate. States with needier populations or higher input costs may need to spend more than New Hampshire does to provide a given level of services. On the revenue side, New Hampshire state and local governments collectively rely more heavily on property taxes than other New England state. However, the state government's revenue system is more diverse than those of its regional counterparts and possesses several unique features, such as the business enterprise tax. ; This report does not advocate for a particular fiscal model. However, by illuminating how and why New Hampshire differs from its neighbors, it aims to inform policymakers’ discussion in states across the region and nation as they grapple with how to provide services in fiscally challenging times.
    Keywords: Fiscal policy - New Hampshire ; Taxation - New Hampshire ; Economic conditions - New Hampshire
    Date: 2011
  33. By: Alam, Andaleeb; Baez, Javier E.; V. Del Carpio, Ximena
    Abstract: The Punjab Female School Stipend Program, a female-targeted conditional cash transfer program in Pakistan, was implemented in response to gender gaps in education. An early evaluation of the program shows that the enrollment of eligible girls in middle school increased in the short term by nearly 9 percentage points. This paper uses regression discontinuity and difference-in-difference analyses to show that five years into the program implementation positive impacts do persist. Beneficiary adolescent girls are more likely to progress through and complete middle school and work less. There is suggestive evidence that participating girls delay their marriage and have fewer births by the time they are 19 years old. Girls who are exposed to the program later, and who are eligible for the benefits given in high school, increase their rates of matriculating into and completing high school. The persistence of impacts can potentially translate into gains in future productivity, consumption, inter-generational human capital accumulation and desired fertility. Lastly, there is no evidence that the program has negative spillover effects on educational outcomes of male siblings.
    Keywords: Education For All,Primary Education,Tertiary Education,Gender and Education,Disability
    Date: 2011–05–01
  34. By: Alina Botezat (Department of Economics, Al. I. Cuza University of Iasi, Rumänien); Ruben R. Seiberlich (Department of Economics, University of Konstanz, Germany)
    Abstract: When the Soviet Union collapsed a transition process started in Eastern Europe. This included a number of reforms to adapt the educational system to the new requirements of the job market. To assess the educational systems in Eastern Europe, this paper takes a look at the gap in PISA test scores between different countries. Using PISA 2006 data we disentangle the effects that explain the gap between Finland, the best performing country, and seven Eastern European countries, as well as, between Eastern European countries. The methodology applied in this paper is a semiparametric version of the threefold Blinder-Oaxaca decomposition, an approach which is not yet used in the research regarding the differences in school outcomes. Our results show that in all cases the differences in characteristics does not explain much of the gap. The return effect is the driving force of the differences in test scores. Under our identifying assumption, our results therefore indicate that the PISA test score gap can mainly be attributed to the different efficiency of school systems and are not due to better characteristics of students in a particular country. Furthermore, we provide evidence that the gap is smaller for better students indicating that, especially for poor performing students, the efficiency of Eastern European schools is behind the efficiency of Finnish schools.
    Keywords: PISA, test score gap, decomposition, semiparametric, propensity score matching
    JEL: J24 I21 C14
    Date: 2011–05–22
  35. By: Jorge Martinez-Vazquez (International Studies Program. Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper takes an in-depth look at the current state of the local public finances in the Latin America region, identifies and analyzes some of the main challenges for improving efficiency, equity and effectiveness in the delivery of public services and it closes by offering a set of recommendations for policy reform.
    Date: 2011–04–10
  36. By: Gulumser, A.A.; Baycan, T.; Nijkamp, P.
    Date: 2011
  37. By: Shifa, Abdulaziz (Dept. of Economics, Stockholm University)
    Abstract: One of the most common policy obstacles in the global effort against poverty is what is termed as “urban bias” where rural residents, who constitute majority of the poor in the world, face systematic bias against their economic interests by their own governments. This paper develops a simple political economy model of urban bias in dictatorial regimes. Equilibrium outcomes relating policy outcomes with economic structure, political power, and other behavioral and structural variables are analyzed. The model shows that anti-agricultural biases can emerge in primarily agrarian societies even if there is no bias in political power between urban and rural citizens. Evidence from recent World Bank country level panel data on biases against/for agriculture provides support for the model’s prediction.
    Keywords: Urban bias; rural poverty; dictatorship
    JEL: D72 O17 O20 P48 R00
    Date: 2011–05–15
  38. By: Fairlie, Robert W. (University of California, Santa Cruz); Chatterji, Aaron K. (Duke University)
    Abstract: The economic expansion of the late 1990s created many opportunities for business creation in Silicon Valley, but the opportunity cost of starting a business was also high during this period because of the exceptionally tight labor market. A new measure of entrepreneurship derived from matching files from the Current Population Survey (CPS) is used to provide the first test of the hypothesis that business creation rates were high in Silicon Valley during the "Roaring 90s." Unlike previous measures of firm births based on large, nationally representative datasets, the new measure captures business creation at the individual-owner level, includes both employer and non-employer business starts, and focuses on only hi-tech industries. Estimates indicate that hi-tech entrepreneurship rates were lower in Silicon Valley than the rest of the United States during the period from January 1996 to February 2000. Examining the post-boom period, we find that entrepreneurship rates in Silicon Valley increased from the late 1990s to the early 2000s. Although Silicon Valley may be an entrepreneurial location overall, we provide the first evidence that the extremely tight labor market of the late 1990s, especially in hi-tech industries, may have suppressed business creation during this period.
    Keywords: entrepreneurship, high-technology, Silicon Valley, economic geography, regional clusters
    JEL: J26
    Date: 2011–05
  39. By: Kangasharju, A.; Tavera, C.; Nijkamp, P.
    Date: 2011
  40. By: Roy, Satyaki
    Abstract: The emergence of space as a determinant in the functional relations linked to production and growth is a recent development in theories of industrial organization. This paper primarily reviews the contesting themes in explaining changes in relative importance of space. In reference to industrial clusters in India, the paper argues that it is the heterogeneity of the industrial organizations that captures ‘space’ as an analytical category and broad generalizations often do not address the spatial dimensions. Neither also is it true, at least for developing countries such as India, that small enterprise clusters always reflect the post-Fordist dimension of change in the production organization. In the context of global production chain, this paper further argues that participation in such value chains might lead to contradictory outcomes in production organization giving rise to increased rift between the ‘global’ and the ‘local’.
    Keywords: endogenous growth; region; technology; fragmentation; footloose industry
    JEL: L23 R12 O12
    Date: 2011–04
  41. By: Robert Baumann (Department of Economics, College of the Holy Cross); Bryan Engelhardt (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: This paper provides an empirical examination of impact the 1994 FIFA World Cup in the United States on local employment. In contrast to ex ante economic impact reports that suggest large increases in employment due to the tournament, an ex post examination of employment in 9 host metropolitan areas finds no significant impact on employment from hosting World Cup games. Furthermore, an analysis of employment in specific sectors of the economy finds no impact from hosting games on employment in the leisure and hospitality and professional and business services sectors but a statistically significant negative impact on employment in the retail trade sector.
    Keywords: World Cup, soccer, impact analysis, mega-event, tourism
    JEL: L83 O18 R53 J21
    Date: 2011–05
  42. By: Batabyal, A.A.; Nijkamp, P.
    Date: 2011
  43. By: Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Entrepreneurship is often claimed to be important for generating employment. However, the empirical evidence on the relationship between entrepreneurship is not always convincing. Most of the studies that analyse the relationship between new firm formation and employment growth perform their analysis on cross-country or regional data. At the micro-level, we still know little about the labour dynamics and re-allocation effects induced by new firm formation. Which role do new firms play regarding labour reallocation? This paper intends to explore the individual and firm characteristics for employees in new Swedish firms. Do new firm start-ups absorb outsiders in the labour market or do they recruit employees from already incumbent firms? The paper use unique matched firm-employees dataset that makes it possible to link new firm formation and information about the individuals employed in these new firms. The empirical results indicate that the individual and firm characteristics associated with employees differ between new and incumbent firms. In particular, the share of immigrants, recently graduated employees and people entering the labor market is slightly higher in new firms. Hence, new firms might play a more important role for outsiders in the labor market.
    Keywords: Entrepreneurship; labour mobility; employment
    JEL: L21 L26 L62
    Date: 2011–05–24
  44. By: Donze, Jocelyn; Gunnes, Trude
    Abstract: This paper sheds light on the role of student motivation in the success of schooling. We develop a model in which a teacher engages in the management of student motivation through the choice of the classroom environment. We show that the teacher is able to motivate high-ability students, at least in the short run, by designing a competitive environment. For students with low ability, risk aversion, or when engaged in a long-term relationship, the teacher designs a classroom environment that is more focused on mastery and self-referenced standards. In doing so, the teacher helps to develop the intrinsic motivation of students and their capacity to overcome failures.
    Keywords: Education; Student Achievement; Intrinsic and Extrinsic Motivation; Effort; Goal Theory.
    JEL: I21
    Date: 2011–05–22
  45. By: Gabriele Pellegrino (DISCE, Università Cattolica); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica)
    Abstract: This paper discusses the determinants of product innovation in young innovative companies (YICs) by looking at in-house and external R&D and at the acquisition of external technology in its embodied and disembodied components. These ‘innovative’ input-output relationships are tested on a sample of 2,713 innovative Italian firms. A sample-selection approach is applied to study both the determinants of product innovation and the factors affecting the intensity of innovation. Results show that in-house R&D is linked to the propensity to introduce product innovation both in mature firms and YICs; however, innovation intensity in the YICs is mainly dependent on embodied technical change from external sources, while in-house R&D does not play a significant role.
    Keywords: R&D; Embodied technological change; Product innovation; New firms; Sample selection
    JEL: O31
    Date: 2010–12
  46. By: Kenneth Small (Department of Economics, University of California-Irvine)
    Abstract: This paper assesses the costs and effectiveness of several energy policies for light-duty motor vehicles in the United States, using the National Energy Modeling System (NEMS). The policies addressed are higher fuel taxes, tighter vehicle efficiency standards, and financial subsidies and penalties for the purchase of high- and low-efficiency vehicles (feebates). I find that tightening fuel-efficiency standards beyond those currently mandated through 2016, or imposing feebates designed to accomplish similar changes, can achieve by 2030 reductions in energy use by all light-duty passenger vehicles of 7.1 to 8.4 percent. A stronger feebate policy has somewhat greater effects, but at a significantly higher unit cost. High fuel taxes, on the order of $2.00 per gallon (2007$), have somewhat greater effects, arguably more favorable cost-effectiveness ratios, and produce their effects much more quickly because they affect the usage rate of both new and used vehicles. Policy costs vary greatly with assumptions about the reason for the apparent myopia commonly observed in consumer demand for fuel efficiency, and with the inclusion or exclusion of ancillary costs of congestion, local air pollution, and accidents.
    Keywords: Fuel efficiency; Light-duty vehicles; Energy policy; Greenhouse gases; Feebate; Fuel tax
    JEL: L92 R48 Q48 Q54 Q52
    Date: 2011–05
  47. By: Bakens, J.; Nijkamp, P.
    Date: 2011

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