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on Urban and Real Estate Economics |
| By: | NAKAMURA Ryohei |
| Abstract: | There are two types of local industrial agglomeration of economic activity. One is the clustering of like-kind businesses—small and medium-sized companies, plants, and other types of establishments belonging to the same industrial group—in a specific geographic area. The other is the agglomeration of individuals, typically, employees of a large-scale company. The former type of agglomeration relates to localization economies, whereas the latter relates to scale economies arising from the size of operations.<br /><br />It is usually difficult to distinguish the effects of these two types of agglomeration when we use aggregated data, such as those aggregated at the regional level. Also, such regionally aggregated data do not allow us to capture differences in the extent to which each establishment benefits from agglomeration. Most of the previous studies on agglomeration economies and productivity have failed to properly discern the effects of agglomeration at the establishment level.<br /><br />This study focuses on the effects of local agglomeration on productivity, taking into account the spatial distribution of the size of establishments within a certain geographic area. The data set used in this study is comprised of four-digit establishment-level data on Japanese manufactures for 2005. The use of establishment-level data in estimating a frontier production function enables us to identify various agglomeration effects. In this study, we focus on traditional industries and high-tech industries, both of which tend to benefit from localization economies. The estimation model is based upon the stochastic frontier production function approach, in which we examine what type of local agglomeration contributes to the improvement of productive efficiency. The estimation results point to the effectiveness of industrial cluster policy as a means to generate agglomeration economies. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:11043&r=ure |
| By: | Hölzl, Corinna; Krellenberg, Kerstin; Heinrichs, Dirk; Welz, Juliane; Kabisch, Sigrun |
| Abstract: | This discussion paper presents a methodological approach to sustainability indicators and scenarios that evolved within the framework of the interdisciplinary and application-oriented Risk Habitat Megacity research initiative on sustainable urban development in Santiago de Chile. The aim of this discussion paper is to support regional and local planning authorities and political decision-makers in the area of housing and other urban policy fields. It will be shown how the approach was contextualized in order to contribute to the ongoing debate on methodological approaches to social sustainability and to the policy-related understanding of socio-spatial differentiation trends and their implications for social inclusion. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:22011&r=ure |
| By: | Baddeley, M. |
| Abstract: | Housing markets are subject to many interrelated sources of instability on both a microeconomic and macroeconomic scale. Housing decisions of different individuals will be interdependent, generating non-linearities, discontinuities and feedback effects. This paper focuses in on some behavioural factors that contribute to complexity in housing demand. In particular, the impact of herding and social influence is captured using a model incorporating the impact of social information on willingness to pay. This model is tested in an experimental context and this experimental evidence confirms first, that social information has a statistically significant impact and, second, this impact is determined by a person’s individual characteristics including gender and personality traits. |
| JEL: | D70 D83 D85 R21 |
| Date: | 2011–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1120&r=ure |
| By: | Midrigan, Virgiliu; Philippon, Thomas |
| Abstract: | A salient feature of the recent U.S. recession is that output and employment have declined more in regions (states, counties) where household leverage had increased more during the credit boom. This pattern is difficult to explain with standard models of financing frictions. We propose a theory that can account for these cross-sectional facts. We study a cash-in-advance economy in which home equity borrowing, alongside public money, is used to conduct transactions. A decline in home equity borrowing tightens the cash-in-advance constraint, thus triggering a recession. We show that the evidence on house prices, leverage and employment across US regions identifies the key parameters of the model. Models estimated with cross-sectional evidence display high sensitivity of real activity to nominal credit shocks. Since home equity borrowing and public money are, in the model, perfect substitutes, our counter-factual experiments suggest that monetary policy actions have significantly reduced the severity of the recent recession. |
| Keywords: | cash-in-advance; household credit; housing; leverage; monetary policy; Recession |
| JEL: | E2 E4 E5 G0 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8381&r=ure |
| By: | Claessens, Stijn; Kose, Ayhan; Terrones, Marco E |
| Abstract: | This paper provides a comprehensive analysis of financial cycles using a large database covering 21 advanced countries over the period 1960:1-2007:4. Specifically, we analyze cycles in credit, house prices, and equity prices. We report three main results. First, financial cycles tend to be long and severe, especially those in housing and equity markets. Second, they are highly synchronized within countries, particularly credit and house price cycles. The extent of synchronization of financial cycles across countries is high as well, mainly for credit and equity cycles, and has been increasing over time. Third financial cycles accentuate each other and become magnified, especially during coincident downturns in credit and housing markets. Moreover, globally synchronized downturns tend to be associated with more prolonged and costly episodes, especially for credit and equity cycles. We discuss how these findings can guide future research on various aspects of financial market developments. |
| Keywords: | asset busts; credit booms; credit cycles; crunches; equity prices; house prices |
| JEL: | E32 F42 G12 G15 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8379&r=ure |
| By: | Sá, F.; Wieladek, T. |
| Abstract: | We estimate an open economy VAR model to quantify the effect of monetary policy and capital inflows shocks on the US housing market. The shocks are identified with sign restrictions derived from a standard DSGE model. We find that monetary policy shocks have a limited effect on house prices and residential investment. In contrast, capital inflows shocks driven by an increase in foreign savings have a positive and persistent effect on both housing variables. Other sources of capital inflows shocks, such as foreign monetary expansion or an increase in aggregate demand in the US, have a more limited role. |
| JEL: | E5 F3 |
| Date: | 2011–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1141&r=ure |
| By: | Sa A. Bui; Steven G. Craig; Scott A. Imberman |
| Abstract: | In this paper we determine how the receipt of gifted and talented (GT) services affects student outcomes. We identify the causal relationship by exploiting a discontinuity in eligibility requirements and find that for students on the margin there is no discernable impact on achievement even though peers improve substantially. We then use randomized lotteries to examine the impact of attending a GT magnet program relative to GT programs in other schools and find that, despite being exposed to higher quality teachers and peers that are one standard deviation higher achieving, only science achievement improves. We argue that these results are consistent with an invidious comparison model of peer effects offsetting other benefits. Evidence of large reductions in course grades and rank relative to peers in both regression discontinuity and lottery models are consistent with this explanation. |
| JEL: | H75 I2 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17089&r=ure |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:1112&r=ure |
| By: | MORIKAWA Masayuki |
| Abstract: | A large number of studies have indicated that densely populated cities enhance the productivity of workers through knowledge spillover and a better matching with employers in the labor market. This paper quantitatively analyzes the relationship among urban density, human capital, and wages by using micro-data from the <i>Basic Survey on Wage Structure</i> for the years from 1990 to 2009. According to the estimation of standard wage functions augmented with population density, a relatively higher agglomeration wage premium is observed for several service sectors, including the wholesale and retail industries. The agglomeration premium is larger for workers with higher observable skills such as education, tenure, and potential experience, which suggests rapid learning and a better matching in the densely populated cities. Under structural changes such as a declining population and trend toward a knowledge-based service economy, forming densely populated areas by facilitating the migration of workers has desirable effects on both individual wages and firm productivity throughout Japan. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:11046&r=ure |
| By: | Musso, Fabio |
| Abstract: | This paper aims to analyze the public policies that can be adopted in order to support small retail firms located in town centers and countryside small towns. The role of small retailing has been recognized for the preservation of an economic, social and cultural identity of both town centers and rural/mountain areas. The field of this analysis is more extended than that covered by the Town Centre Management (TCM) literature, that is mainly focused on city centers. In this case the study is also addressed to smaller towns and inland areas. A case study of an Italian province has been conducted with the objective to underline the main factors that need to be considered by local administrators for the adoption of coordinated policies. |
| Keywords: | Town Center Management; small retailing; urban planning; rural development |
| JEL: | R50 O21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31110&r=ure |
| By: | Bisin, Alberto; Patacchini, Eleonora; Verdier, Thierry; Zenou, Yves |
| Abstract: | We develop a dynamic model of identity formation that explains why ethnic minorities may choose to adopt oppositional identities (i.e. some individuals may reject or not the dominant culture) and why this behavior may persist over time. We first show that the prevalence of an oppositional culture in the minority group cannot always be sustained in equilibrium. Indeed, because the size of the majority group is larger, there is an |
| Keywords: | cultural transmission; Ethnicity; peer effects; racism; role models |
| JEL: | A14 J15 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8380&r=ure |
| By: | Ebonya L. Washington |
| Abstract: | Conventional wisdom and empirical academic research conclude that majority Black districts decrease Black representation by increasing conservatism in Congress. However, this research generally suffers from three limitations: 1) too low a level of aggregation; 2) lack of a counterfactual and 3) failure to account for the endogeneity of the creation of majority minority districts. I compare congressional delegations of states that during the 1990 redistricting were under greater pressure to create majority minority districts with those under lesser pressure in a difference-in-difference framework. I find no evidence that the creation of majority minority districts leads to more conservative House delegations. In fact point estimates indicate that states that increased their share of majority Black districts saw their delegations grow increasingly liberal. I find similar results for majority Latino districts in the southwest. Thus I find no evidence for the common view that majority minority districts decrease minority representation in Congress. |
| JEL: | D72 J15 K0 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17099&r=ure |
| By: | NAKAJIMA Kentaro; OKAZAKI Tetsuji |
| Abstract: | This paper empirically investigates the effect of industrial agglomeration through labor market pooling. Theoretical literature has shown that labor market pooling in industrial agglomeration can enhance expected profitability of firms by ironing out the firm-level idiosyncratic shocks, and recently Overman and Puga (2009) tested this theoretical hypothesis empirically, using data from the UK. Following Overman and Puga, we measured the magnitude of plant-level idiosyncratic shocks by industry, using the micro-data from the Manufacturing Census of Japan, and examined how it relates to the extent of plant agglomeration. It was confirmed that the magnitude of idiosyncratic shocks is positively associated with the extent of agglomeration of industries, and that this relationship is robust even if we control for other agglomeration factors, i.e., input-sharing and first nature. These results suggest that industrial agglomeration indeed enhances profitability through labor pooling in contemporary Japan. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:11025&r=ure |
| By: | Maria Nieswand; Stefan Seifert |
| Abstract: | Efforts undertaken by France to restructure the allocation of governmental competencies increased the importance of subnational governments by transferring additional tasks. This paper analyzes the efficiency of public spending on an intermediate government level for a sample of 96 départements in metropolitan France in 2008. Spending efficiency is measured using Data Envelopment Analysis (DEA). Results indicate significant room for improvements and detect spending inefficiencies averaging between 10 and 22 percent, depending on model specification. To explain efficiency, a bootstrapped truncated regression, following Simar and Wilson (2007), is applied. The second-stage regression shows that efficiency is also determined by exogenous factors and identifies the distance to the national capital, inhabitants' income and the share of inhabitants of an age over 65 as significant determinants of efficiency. |
| Keywords: | Intermediate government spending efficiency, nonparametric efficiency analysis, bootstrapped truncated regression |
| JEL: | C14 H11 H72 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1130&r=ure |
| By: | Iva Cecchin |
| Abstract: | This paper investigates the speed and completeness of the pass-through from market rates to mortgage rates in Switzerland. The pass-through dynamics are studied under a marginal funding cost perspective. By choosing the appropriate benchmark rates, this study takes into account banks' forecasts of the evolution of their funding costs. It is found that the passthrough of rates of adjustable-rate mortgages is incomplete and sluggish compared to the rates of mortgages with a fixed maturity. For the latter, changes in market rates appear to be transmitted quickly and completely, particularly when benchmark rates are falling. This finding suggests that a low-interest-rate environment stimulates competition among financial institutions. Evidence for a structural change is found for all interest rates. The structural change occurred around the beginning of 2007 for fixed-rate mortgages and in mid-2005 for floating-rate mortgages. For all mortgage rates, asymmetries are detected in the pre-break period. More specifically, the adjustment of fixed-rate-mortgage rates is characterized by downward rigidity, which supports the existence of some form of imperfect competition. By contrast, the rates of adjustable-rate mortgages exhibit upward price stickiness. This result suggests that competition was stronger in this specific mortgage-lending market. In the post-break period, no clear evidence is found in favor of asymmetries with respect to the adjustment coefficient. |
| Keywords: | Interest Rate Pass-Through, Monetary Policy, Mortgages, Cointegration analysis, Panel Data |
| JEL: | E43 E52 G21 C23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2011-08&r=ure |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:1113&r=ure |
| By: | Philip DeCicca; Justin D. Smith |
| Abstract: | We investigate short and long-term effects of early childhood education using variation created by a unique policy experiment in British Columbia, Canada. Our findings imply starting Kindergarten one year late substantially reduces the probability of repeating the third grade, and meaningfully increases in tenth grade math and reading scores. Effects are highest for low income students and males. Estimates suggest that entering kindergarten early may have a detrimental effect on future outcomes. |
| JEL: | I21 I28 J24 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17085&r=ure |
| By: | Francesco Rentocchini; Dimitri Tartari |
| Abstract: | The wide diffusion of open source software (OSS) is driving discussion among scholars on a set of issues, including its adoption by public administrations (PA). Previous works only discussed one or a few factors that drive the decision to adopt OSS and did not addressed the potential benefits in terms of e-government that OSS may bring to PA. Our paper attempts to fill these gaps. The analysis is based on the Emilia-Romagna region of Italy and studies the adoption of software (both proprietary and open source) by local PA. The results show there is increased adoption of OSS in several different domains of application, both servers and desktop clients. Among the motivations to adopt OSS, only dependence on software suppliers seems to be important. Its adoption also positively affects the variety and extent of interactivity of local public e-services. |
| Keywords: | open source software; public administration; online public services; empirical research |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpol:1101&r=ure |
| By: | David Card; Laura Giuliano |
| Abstract: | We study social interactions in the risky behavior of best-friend pairs in the National Longitudinal Study of Adolescent Health (Add Health). Focusing on friends who had not yet initiated a particular behavior (sex, smoking, marijuana use, truancy) by the first wave of the survey, we estimate bivariate discrete choice models for their subsequent decisions that include peer effects and unobserved heterogeneity. Social interactions can lead to multiple equilibria in friends’ choices: we consider simple equilibrium selection models as well as partial likelihood models that remain agnostic about the choice of equilibrium. Our identification strategy assumes that there is at least one individual characteristic (e.g., physical development) that does not directly affect a friend’s propensity to engage in a risky activity. Our estimates suggest that patterns of initiation of risky behavior by adolescent friends exhibit significant interaction effects. The likelihood that one friend initiates intercourse within a year of the baseline interview increases by 4 percentage points (on a base of 14%) if the other also initiates intercourse, holding constant family and individual factors. Similar effects are also present for smoking, marijuana use, and truancy. We find larger peer effects for females and for pairs that are more likely to remain best friends after a year. We also find important asymmetries in the strength of the peer effects in non-reciprocated friendships. |
| JEL: | J13 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17088&r=ure |
| By: | Fernando Carriazo; Richard Ready; James Shortle |
| Abstract: | Hedonic pricing models use property value differentials to value changes in environmental quality. If unmeasured quality attributes of residential properties are correlated with an environmental quality measure of interest, conventional methods for estimating implicit prices will be biased. Because many unmeasured quality measures tend to be asymmetrically distributed across properties, it may be possible to mitigate this bias by estimating a heteroskedastic frontier regression model. This approach is demonstrated for a hedonic price function that values air quality in Bogotá, Colombia. |
| Date: | 2011–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:008736&r=ure |
| By: | Geoff Willis |
| Abstract: | The paper discusses various practical consequences of treating economics and finance as an inherently dynamic and chaotic system. On the theoretical side this looks at the general applicability of the market-making pricing approach to economics in general. The paper also discuses the consequences of the endogenous creation of liquidity and the role of liquidity as a state variable. On the practical side, proposals are made for reducing chaotic behaviour in both housing markets and stock markets. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1105.5503&r=ure |
| By: | Kelly, S. |
| Abstract: | Energy consumption from the residential sector is a complex sociotechnical problem that can be explained using a combination of physical, demographic and behavioural characteristics of a dwelling and its occupants. A structural equation model (SEM) is introduced to calculate the magnitude and significance of explanatory variables on residential energy consumption. The benefit of this approach is that it explains the complex relationships that exist between manifest variables and their overall effect through direct, indirect and total effects on energy consumption. Using the English House Condition Survey (EHCS) consisting of 2531 unique cases, the main drivers behind residential energy consumption are found to be the number of household occupants, floor area, household income, dwelling efficiency (SAP), household heating patterns and living room temperature. In the multivariate case, SAP explains very little of the variance of residential energy consumption. However, this procedure fails to account for simultaneity bias between energy consumption and SAP. Using SEM its shown that dwelling energy efficiency (SAP), has reciprocal causality with dwelling energy consumption and the magnitude of these two effects are calculable. When nonrecursivity between SAP and energy consumption is allowed for, SAP is shown to have a moderately negative effect on energy consumption but conversely, homes with a propensity to consume more energy have a higher SAP rating and are therefore more efficient. |
| JEL: | C50 Q4 |
| Date: | 2011–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1139&r=ure |