nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2011‒06‒11
thirty papers chosen by
Steve Ross
University of Connecticut

  1. Rise And Fall Of Cities, Measuring Spatial Clustering And Economies Of Urban Agglomeration In West Java By Rullan Rinaldi; Eva Nurwita
  2. Credit Conditions and the Real Economy: The Elephant in the Room By Muellbauer, John; Williams, David M
  3. External productivity and utility effects of city airports. By Ahlfeldt, Gabriel M.; Maennig, Wolfgang
  4. Spatial clustering and nonlinearities in the location of multinational firms By Roberto Basile; Luigi Benfratello; Davide Castellani
  5. Rental Housing Assistance for the 21st Century By Brendan O'Flaherty
  6. School Proximity and Child Labor Evidence from Rurul Tanzania By Florence Kondylis; Marco Manacorda
  7. A Consumer Demand Approach to Estimating the Education Quality Component of Housing Cost By Sofia Andreou, Panos Pashardes and Nicoletta Pashourtidou
  8. The effects of agglomeration on wages: evidence from the micro-level By Bernard Fingleton; Simonetta Longhi
  9. How well do South African schools convert grade 8 achievement into matric outcomes? By Stephen Taylor; Servaas van der Berg; Vijay Reddy; Dean Janse van Rensburg
  10. The Spatial Organization of Multinational Firms By Fabrice Defever
  11. Children Left Behind: The Effects of Statewide Job Loss on Student Achievement By Elizabeth Oltmans Ananat; Anna Gassman-Pines; Dania V. Francis; Christina M. Gibson-Davis
  12. Travel Demand Model with Heterogeneous Users and Endogenous Congestion: An application to optimal pricing of bus services By Batarce, Marco; Ivaldi, Marc
  13. Macroeconomic Effects of Bankruptcy & Foreclosure Policies By Kurt Mitman
  14. Students today, teachers tomorrow ? identifying constraints on the provision of Education By Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz
  15. Is distance dying at last? Falling home bias in fixed effects models of patent citations By Rachel Griffith; Sokbae 'Simon' Lee; John Van Reenen
  16. House allocation with overlapping generations By Kurino Morimitsu
  17. Well-being Disparities Within the Paris Region. A Capabilist Spatialized Outlook By Lise Bourdeau-Lepage; Elisabeth Tovar
  18. The Origins of Technolinguistic Diversity By Stelios Michalopoulos
  19. Local administration funding and regional disparities in Italy before WW1 By P. Battilani
  20. The Impact of Economic Migration on Children’s Cognitive Development: Evidence from the Mexican Family Life Survey By Elizabeth Powers
  21. Size and The City: Productivity, Match Quality and Wage Inequality By YIP, Chi Man
  22. Housing is expensive in Britain. This is because we have built too few houses for the number of new households – land auctions will help give us the homes we need. By Leunig, Tim
  23. A dynamic school choice model By Juan Sebastián Pereyra
  24. Regional Economic Disparity: Real wages and happiness (Japanese) By MORIKAWA Masayuki
  25. Effects of a Mortgage Interest Rate Subsidy: Evidence from Colombia By Marc Hofstetter; Jorge Tovar; Miguel Urrutia
  26. Gasoline and Diesel Consumption for Road Transport in Spain: a Dynamic Panel Data Approach By Rosa M. González-Marrero; Rosa M. Lorenzo-Alegría; Gustavo A. Marrero
  27. Complexity and Technological Change: Knowledge Interactions and Firm Level Total Factor Productivity By Antonelli Cristiano; Scellato Giuseppe
  28. Total Factor Productivity and Technical Efficiency of Indian Manufacturing: The Role of Infrastructure and Information & Communication Technology By Marie-Ange VEGANZONES; Arup MITRA; Chandan SHARMA
  29. The Emergence of Leadership in Social Networks By T. Clemson; T. S. Evans
  30. Patterns of Collaborations between Regional Firms and Universities: Evidence from the Piedmont region in Italy By Bodas Freitas Isabel Maria; Geuna Aldo; Rossi Federica

  1. By: Rullan Rinaldi (Department of Economics, Padjadjaran University); Eva Nurwita (Department of Economics, Padjadjaran University)
    Abstract: With others neighboring Provinces in the western part of Java, the West Java Province shares the southeast Asian most densely urban area (Bodebek as part of Jabodetabek and Greater Bandung). This research tries to identify the spatial clustering of urban economies activities using employment data from Economic Census of 2006 as proxy for urban agglomeration. Using the identification result, we then estimate aggregate production function of the urban agglomeration area to calculate it’s economies of agglomeration. From the result we found that both Bodebek and Greater Bandung metropolitan area are both have been reach the stage of saturation in their economic activity. Meanwhile, the alternative definition of Bodebek shows the stage of slight increasing return to scale, indicate the economies are trying to expand to regain the economies of scale that has been saturated in origin area.
    Keywords: Sub National Data, Indonesia
    JEL: R11
    Date: 2011–06
  2. By: Muellbauer, John; Williams, David M
    Abstract: Changes in credit market architecture are an important but unobservable structural influence on economic activity. For Australian data, we model non-price credit supply conditions within equilibrium correction models of consumption, house prices, mortgage credit and housing equity withdrawal. Our "latent interactive variable equation system" (LIVES) employs a single latent variable to capture evolutionary shifts (in credit conditions) that affect not only the intercept of each equation, but also interact with key economic variables. We show that credit conditions impact on consumption by: (i) lowering the mortgage downpayment constraint facing young households; (ii) introducing a housing collateral channel from house prices to real activity; and (iii) facilitating intertemporal consumption smoothing.
    Keywords: Consumption; credit conditions; house prices; wealth
    JEL: E21 E44 G21 R31
    Date: 2011–05
  3. By: Ahlfeldt, Gabriel M.; Maennig, Wolfgang
    Abstract: This paper uses a micro-level data set for residential and commercial property transactions to investigate external utility and productivity effects for three (city) airports in Berlin, Germany in a spatial hedonic analysis. We find strong evidence of adverse noise effects on property prices and a discontinuity at approximately 55dB. Marginal price effects decrease significantly in the presence of alternative noise sources, which can lead to biased estimates if the interaction effect is not accounted for appropriately. Given that there is less evidence of positive accessibility effects, our result questions the justification for locating airports in citycentres.
    Date: 2011
  4. By: Roberto Basile; Luigi Benfratello; Davide Castellani
    Abstract: We propose a semiparametric geoadditive negative binomial model of industrial location which allows to simultaneously address some important methodological issues, such as spatial clustering and nonlinearities, which have been only partly addressed in previous studies. We apply this model to analyze location determinants of inward greenfield investments occurred over the 2003-2007 period in 249 European regions. The inclusion of a geoadditive component (a smooth spatial trend surface) allows to control for omitted variables which induce spatial clustering, and suggests that such unobserved factors may be related to regional policies towards foreign investors Allowing for nonlinearities reveals, in line with theoretical predictions, that the positive effect of agglomeration economies fades as the density of economic activities reaches some limit value.
    Keywords: industrial location, negative binomial models, geoadditive models, european union.
    JEL: C14 C21 F14 F23
    Date: 2011–05–02
  5. By: Brendan O'Flaherty (Columbia University - Department of Economics)
    Abstract: Current rental housing assistance programs are not designed to provide a safety net for people whose lives are volatile, or to encourage poor people to live in good locations. These failings can be corrected. HUD should establish a program of rental insurance-like mortgage insurance, but for renters. Low income housing assistance formulas should be revised to reward good neighborhood features, and punish bad.
    Date: 2011
  6. By: Florence Kondylis; Marco Manacorda
    Abstract: Is improved school accessibility an effective policy tool for reducing child labor in developing countries? We address this question using micro data from rural Tanzania and a regression strategy that attempts to control for non-random location of households around schools as well as classical and non-classical measurement error in self-reported distance to school. Consistent with a simple model of child labor supply, but contrary to what appears to be a widespread perception, our analysis shows that school proximity leads to a rise in school attendance but no fall in child labor.
    Keywords: Distance to school, child labor, school enrolment
    JEL: J22 J82 O12 O55
    Date: 2010–12
  7. By: Sofia Andreou, Panos Pashardes and Nicoletta Pashourtidou
    Abstract: A consumer demand-based approach is proposed for estimating the shadow price of education relative to housing for households with children in state schools. This approach can be used together with or in place of a hedonic approach in countries where the location of households is not disclosed in publicly available data. An empirical illustration is provided using UK data from the family expenditure surveys.
    Keywords: Consumer demand, hedonic analysis, school quality
    Date: 2011–06
  8. By: Bernard Fingleton (Department of Economics, University of Strathclyde); Simonetta Longhi (Institute for Social and Economic Research (ISER), University of Essex.)
    Abstract: effects of agglomeration on wages: evidence from the micro-level
    Abstract: This paper estimates individual wage equations in order to test two rival non-nested theories of economic agglomeration, namely New Economic Geography (NEG), as represented by the NEG wage equation and urban economic (UE) theory , in which wages relate to employment density. The paper makes an original contribution by evidently being the first empirical paper to examine the issue of agglomeration processes associated with contemporary theory working with micro-level data, highlighting the role of gender and other individual-level characteristics. For male respondents, there is no significant evidence that wage levels are an outcome of the mechanisms suggested by NEG or UE theory, but this is not the case for female respondents. We speculate on the reasons for the gender difference.
    Keywords: urban economics, new economic geography, household panel data.
    JEL: C21 C31 C33 D1 O18 R20 R12
    Date: 2011–05
  9. By: Stephen Taylor (Department of Economics, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch); Vijay Reddy (Human Sciences Research Council); Dean Janse van Rensburg (Human Sciences Research Council)
    Abstract: School retention in South Africa and performance in the major school-leaving matric examination are characterised by significant inequalities on the basis of race and socio-economic status. In order to know at what point in the educational trajectory policy interventions and school improvement programmes will be most effective, it is necessary to trace the development of these educational inequalities to earlier phases of schooling and before. This paper reports on findings from a unique dataset that tracks individuals who participated in TIMSS in 2002 as grade 8 students to matric in 2006 and 2007. This permits an investigation into the extent to which educational inequalities are already evident by the eighth grade, and what if anything is achieved by secondary schools to reduce them. Several noteworthy findings emerge. The overall level of achievement, at both grade 8 and matric, differs widely across the historically different parts of the school system. There are also intriguing differences in the abilities of different parts of the system to convert grade 8 achievement into matric outcomes. What is clear is that inequalities in the cognitive ability of students at the outset of secondary school persist and that there is no observable evidence of a closing of these gaps by matric. This points to the importance of interventions prior to secondary school – at the primary school level and even at the level of early childhood development. Finally, it is also demonstrated that the decision to take mathematics in matric is characterised by a high degree of randomness within the historically black part of the school system. This points to the value of meaningful assessment practices and feedback to students, which serve as an important signal as to whether or not to choose mathematics as a matric subject.
    Keywords: South Africa, Socio-economic Status, Education, Educational Achievement, Educational Inequality
    JEL: I20 I21 I30 O15
    Date: 2011
  10. By: Fabrice Defever
    Abstract: Using six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely located to a previous investment positively affects firm location choice. However, the impact of distance is dependent on the type of investment (production or service). While within-firm co-location is important for both service and production activities, only production plants are likely to be located close to prior production investments. In this latter case, national borders have a surprisingly positive effect, increasing the probability of choosing a nearby location, but on the other side of the border.
    Keywords: Functional fragmentation, vertical linkages, location choice
    JEL: F23 L22 R3
    Date: 2010–12
  11. By: Elizabeth Oltmans Ananat; Anna Gassman-Pines; Dania V. Francis; Christina M. Gibson-Davis
    Abstract: Given the magnitude of the recent recession, and the high-stakes testing the U.S. has implemented under the No Child Left Behind Act (NCLB), it is important to understand the effects of large-scale job losses on student achievement. We examine the effects of state-level job losses on fourth- and eighth-grade test scores, using federal Mass Layoff Statistics and 1996-2009 National Assessment of Educational Progress data. Results indicate that job losses decrease scores. Effects are larger for eighth than fourth graders and for math than reading assessments, and are robust to specification checks. Job losses to 1% of a state’s working-age population lead to a .076 standard deviation decrease in the state’s eighth-grade math scores. This result is an order of magnitude larger than those found in previous studies that have compared students whose parents lose employment to otherwise similar students, suggesting that downturns affect all students, not just students who experience parental job loss. Our findings have important implications for accountability schemes: we calculate that a state experiencing one-year job losses to 2% of its workers (a magnitude observed in seven states) likely sees a 16% increase in the share of its schools failing to make Adequate Yearly Progress under NCLB.
    JEL: I2 J6
    Date: 2011–06
  12. By: Batarce, Marco; Ivaldi, Marc
    Abstract: We formulate and estimate a structural model for travel demand, in which users have heterogeneous preferences and make their transport decisions considering the network congestion. A key component in the model is that users have incomplete information about the preferences of other users in the network and they behave strategically when they make transportation decisions (mode and number of trips). Therefore, the congestion level is endogenously determinate in the equilibrium of the game played by users. For the estimation, we use the first order conditions of the users’ utility maximization problem to derive the likelihood function and apply Bayesian methods for inference. Using data from Santiago, Chile, the estimated demand elasticities are consistent with results reported in the literature and the parameters confirm the effect of the congestion on the individuals’ preferences. Finally, we compute optimal nonlinear prices for buses in Santiago, Chile. As a result, the nonlinear pricing schedule produces total benefits slightly greater than the linear pricing. Also, nonlinear pricing implies fewer individuals making trips by bus, but a higher number of trips per individual.
    Keywords: endogenous congestion; nonlinear pricing; urban transport
    JEL: D82 D86 L51 L92
    Date: 2011–06
  13. By: Kurt Mitman (Department of Economics, University of Pennsylvania)
    Abstract: Bankruptcy laws govern consumer default on unsecured credit. Foreclosure laws regulate default on secured mortgage debt. I investigate to what extent differences in foreclosure and bankruptcy laws can jointly explain variation in default rates across states. I construct a general equilibrium model where heterogeneous infinitely-lived households have access to unsecured borrowing and can finance housing purchases with mortgages. Households can default separately on both types of debt. The model is calibrated to match national foreclosure and bankruptcy rates and aggregate statistics related to household net worth and debt. The model can account for 83% of the variation in bankruptcy rates due to differences in bankruptcy and foreclosure law. I find that more generous homestead exemptions raise the cost of unsecured borrowing. Households in states with high exemptions therefore hold less unsecured and more mortgage debt compared to low exemption states, which leads to lower bankruptcy rates but higher foreclosure rates. The model also predicts recourse results in higher bankruptcy rates and a higher coincidence of foreclosure and bankruptcy. I use the model to evaluate how proposed and implemented changes to bankruptcy policy affect default rates and welfare. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act yields large welfare gains (1% consumption equivalent variation) but results in increases in both foreclosure and bankruptcy rates. I find that implementing the optimal joint foreclosure and bankruptcy policy, which is characterized by no-recourse mortgages and a homestead exemption equal to one quarter of median income, yields modest welfare gains (0.3% consumption equivalent variation).
    Keywords: Bankruptcy, Foreclosure, Housing, Default Risk, Household Debt
    JEL: E21 G11 K35 R21
    Date: 2011–06–01
  14. By: Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz
    Abstract: With an estimated 115 million children not attending primary school in the developing world, increasing access to education is critical. Resource constraints limit the effectiveness of demand-based subsidies. This paper focuses on the importance of a supply-side factor -- the availability of low-cost teachers -- and the resulting ability of the market to offer affordable education. The authors first show that private schools are three times more likely to emerge in villages with government girls'secondary schools (GSS). Identification is obtained by using official school construction guidelines as an instrument for the presence of GSS. In contrast, there is little or no relationship between the presence of a private school and girls'primary or boys'primary and secondary government schools. In support of a supply-channel, the authors then show that, for villages that received a GSS, there are over twice as many educated women and that private school teachers'wages are 27 percent lower in these villages. In an environment with poor female education and low mobility, GSS substantially increase the local supply of skilled women lowering wages locally and allowing the market to offer affordable education. These findings highlight the prominent role of women as teachers in facilitating educational access and resonate with similar historical evidence from developed economies. The students of today are the teachers of tomorrow.
    Keywords: Education For All,Primary Education,Tertiary Education,Secondary Education,Teaching and Learning
    Date: 2011–06–01
  15. By: Rachel Griffith (Institute for Fiscal Studies and University of Manchester); Sokbae 'Simon' Lee (Institute for Fiscal Studies and Seoul National University); John Van Reenen
    Abstract: <p>We examine the "home bias" of knowledge spillovers (the idea that knowledge spreads more slowly over international boundaries than within them) as measured by the speed of patent citations. We present econometric evidence that the geographical localization of knowledge spillovers has fallen over time, as we would expect from the dramatic fall in communication and travel costs. Our proposed estimator controls for correlated fixed effects and censoring in duration models and we apply it to data on over two million patent citations between 1975 and 1999. Home bias is exaggerated in models that do not control for fixed effects. The fall in home bias over time is weaker for the pharmaceuticals and information/communication technology sectors where agglomeration externalities may remain strong.</p>
    Date: 2011–05
  16. By: Kurino Morimitsu (METEOR)
    Abstract: Many real-life applications of house allocation problems are dynamic. For example, each year college freshmen move in and seniors move out of on-campus housing. Each student stays on campus for only a few years. A student is a `newcomer’ in the beginning and then becomes an ''existing tenant.’ Motivated by this observation, we introduce a model of house allocation with overlapping generations. In terms of a dynamic rule without monetary transfers, we examine two static rules of serial dictatorship (SD) and top trading cycles (TTC), both of which are based on an ordering of agents and give a higher-order agent a more advantageous position in the assignment procedure. We support a seniority-based SD rule by showing its dynamic Pareto efficiency. Similarly, we support a seniority-based TTC rule under time-invariant preferences by showing its dynamic Pareto efficiency and incentive compatibility.
    Keywords: microeconomics ;
    Date: 2011
  17. By: Lise Bourdeau-Lepage; Elisabeth Tovar
    Abstract: Urban riots, such as in France in 2005, have drawn attention on the spatial determinants of social discontent. We provide evidence on the pervasive collective perception of a dramatic increase of the well-being disparities within the Paris Region during the decade preceding the 2005 riots. We ground our well-being indicator on a spatialized version of Sen's normative capabilist approach, which allows to explicitly take into account the impact of one's localization on one's realizations, opportunities and freedom. Then, using multidimensional poverty indicators and ESDA, we show a global improvement of the Paris region municipalities' Capabilist Spatialized well-being (CaS) between 1999 and 2006 as well as a catching-up phenomenon between advantaged and disadvantaged municipalities. Nevertheless, we also find a growing cluster of very disadvantaged municipalities, some of which have witnessed a decrease of their CaS level. This evidence may explain the belief of a growing socio-spatial fracture within the Paris region.
    Keywords: capabilist well-being, socio-spatial disparities, Paris region
    Date: 2011
  18. By: Stelios Michalopoulos (Tufts University and the Institute for Advanced Study)
    Abstract: This study explores the determinants of ethnolinguistic diversity within as well as across countries shedding light on its geographic origins. The empirical analysis conducted across countries, virtual countries and pairs of contiguous regions establishes that geographic variability, captured by variation in regional land quality and elevation, is a fundamental determinant of contemporary linguistic diversity. The findings are consistent with the proposed hypothesis that differences in land endowments gave rise to location-specific human capital, leading to the formation of localized ethnicities.
    Keywords: Ethnic Diversity, Geography, Growth, Languages, Human Capital
    JEL: O10 O40 N50 Z10
    Date: 2011–05
  19. By: P. Battilani
    Abstract: Numerous studies have been made of regional differences in income and level of development in Italy, and these studies basically differ in the responses they give to the question of whether the said differences were already of a substantial nature prior to Unification, or whether in fact they have widened since then. The present essay is going to examine this problem by focusing on the local administrative system adopted after Italian Unification, in order to ascertain the existence of a different approach to public intervention at the local level, and thus to the existence of disparities in local public spending. The paper offers an analysis of the actual working of the post-Unification administrative system in Italy, in terms both of the powers attributed to Italy’s municipalities and provinces, and of the degree of autonomy they had in deciding on funding methods. This analysis aims to ascertain whether the chosen strategy could have been maintained in a state characterised by strong regional differences, and to establish the kind of impact such a strategy had on the regional differences themselves. The main conclusion is that in absence of any sort of automatic transfer from the more industrialized regions to the poor ones, the adoption of a decentralized tax system for the financing of local public expenditure contributed to the deepening of regional divide. As a consequence at the beginning of the 19th century the central government started to subsidize the poorest regions and little by little move towards a more centralized fiscal system.
    JEL: N43
    Date: 2011–05
  20. By: Elizabeth Powers
    Abstract: This paper uses data from the Mexican Family Life Survey to estimate the impact of a household member’s migration to the United States on the cognitive development of children remaining in Mexico. While there is no developmental effect of a child’s sibling migrating to the United States, there is an adverse effect when another household member—typically the child’s parent—migrates. This is particularly true for pre-school to early-school-age children with older siblings, for whom the effect of parental migration is comparable to speaking an indigenous language at home or having a mother with very low educational attainment. Additionally, household-member migration to the United States affects how children spend their time in ways that may influence and/or be influenced by cognitive development.
    JEL: I12 I38 J11 J61 O15
    Date: 2011–05
  21. By: YIP, Chi Man
    Abstract: This paper elucidates the impact of city growth on wage and wage inequality using a search-theoretical approach. Firms differ in capital intensity and land intensity of the jobs created. When a worker meets a job via a matching technology, a match-specific productivity level is realized and they sign a job contract when they agree with the bargaining wage. A rise in population density leads to rental increment. As a consequence, a higher expected flow profit is required for the creation of a good job. Rent-sharing ensures an increase of the average wage in the good-job sector. This, in turn, increases the reservation wage of workers in the equilibrium. Although the rental increment does not affect the setup costs in the bad-job sector, higher realized productivity level is required to cover higher reservation wage. Since only job contacts with realized productivity levels exceeding reservation productivity threshold are observed, such increase in the threshold raises also the average wage in the bad-job sector. Hence, the average productivity, the match quality and wage go up in each sector unambiguously, giving rise to urban wage premium. In addition, this paper predicts that urbanization widens residual wage inequality of a city. Existing empirical evidence is presented to support the implications of this model.
    Keywords: Urban Wage Premium; Match Quality; Job Match
    JEL: J31 O15 J64
    Date: 2011–04–11
  22. By: Leunig, Tim
    Abstract: The budget today will almost certainly see the announcement of new plans for land auctions. Tim Leunig outlines how, if introduced, these ‘community land auctions’ will give councils an absolute right to decide on new development – and the ability to benefit far more greatly from new development than they do under the current system.
    Date: 2011–03–23
  23. By: Juan Sebastián Pereyra (El Colegio de México)
    Abstract: This paper considers a real-life assignment problem faced by the Mexican Ministry of Public Education. Inspired by this situation, we introduce a dynamic school choice problem that consists in assigning positions to overlapping generations of teachers. From one period to another, agents are allowed either to retain their current position or to choose a preferred one. In this framework, a solution concept that conciliates the fairness criteria with the individual rationality condition is introduced. It is then proved that a fair matching always exists and that it can be reached by a modified version of the deferred acceptance algorithm of Gale and Shapley. We also show that the mechanism is dynamic strategy-proof, and respects improvements whenever the set of orders is lexicographic by tenure.
    Keywords: school choice, overlapping agents, dynamic matching, deferred acceptance algorithm
    JEL: C71 C78 D71 D78 I28
    Date: 2011–05
  24. By: MORIKAWA Masayuki
    Abstract: This paper presents some empirical facts on regional economic disparity in Japan from an equity perspective. The main findings are as follows: 1) interprefectural differences explain less than 10% of wage disparity amongst individuals, with the majority of disparity being attributable to variances within prefectures; 2) according to the Oaxaca-Blinder decomposition analysis, from 70% to 80% of the disparities of nominal wages between Kanto and Tohoku or Kanto and Kyushu is explained by observable worker characteristics, workplace characteristics, and price level differences. Among the positive relationship between city population and wages, about half is explained by the observable worker and workplace characteristics, and from one third to one half of the remaining half is attributable to price differences; 3) prefecture minimum wages adjusted by the cost of living index indicate that the real minimum wage is the lowest in Tokyo; 4) Although household income is an important determinant of individual happiness, the effect of income on the differences in regional happiness is almost nonexistent. These findings suggest that, from the viewpoint of equity in well-being of people, distributional policy should focus on individuals or households.
    Date: 2010–07
  25. By: Marc Hofstetter; Jorge Tovar; Miguel Urrutia
    Abstract: Government intervention in the construction sector as a way to boost the economy has been a constant in Colombia for the past 90 years. This paper explicitly tests the impact of the most recent of such interventions: a subsidy to the mortgage interest rate. The results show that the subsidy boosted mortgage loans by around 38 percent. However, it is also found that real interest rates went up by 1. 09 percent, i. e. , there has been an incomplete pass-through of the subsidy to the consumer. The pass-through of this instance of intervention is estimated to be in the range of 65 percent to 74 percent.
    JEL: N96 R21
    Date: 2011–05
  26. By: Rosa M. González-Marrero; Rosa M. Lorenzo-Alegría; Gustavo A. Marrero
    Abstract: Using a panel data set for Spanish regions between 1998 and 2006, we study the factors explaining per capita fuel consumption for road transport at the macroeconomic level. The contributions of the article are the following. First, we specify a dynamic panel data (DPD) model for gasoline and diesel consumption. Second, we properly apply estimation techniques based on the system Generalized Methods of Moments (GMM) procedure of Arellano and Bover (1995). We find that more traditional estimation procedures (pooling-OLS, the Within-Group or the first difference GMM), which might generate bias estimate in a DPD framework, produce important differences that may even change policy recommendations. Finally, we find important differences between the results for the gasoline and the diesel model. While the estimated equation correctly fits the gasoline consumption behavior, results emphasizes the need to specify a different model for aggregate diesel consumption, which must include aditional determinants than those traditionally used in fuel consumption models.
    Date: 2011–05
  27. By: Antonelli Cristiano; Scellato Giuseppe (University of Turin)
    Abstract: The analysis of social interactions as drivers of economic dynamics represents a growing field of the economics of complexity. Social interactions are a specific form of interdependence whereby the changes in the behavior of other agents affect utility functions for households and production functions for producers. In this paper, we apply the general concept of social interactions to the area of the economics of innovation and we articulate the view that knowledge interactions play a central role in the generation of new technological knowledge so that innovation becomes the emergent property of a system, rather then the product of individual actions. In particular, we articulate and test the hypothesis that different layers of knowledge interactions play a crucial role in determining the rate of technological change that each firm is able to introduce. The paper presents an empirical analysis of firm level total factor productivity (TFP) for a sample of 7020 Italian manufacturing companies observed during the years 1996-2005 that is able identify the distinctive role of regional, inter-industrial and localized intra-industrial knowledge interactions as distinctive and significant determinants, together with internal research and innovation efforts, of changes in firm level TFP
    Date: 2011–03
  28. By: Marie-Ange VEGANZONES (Centre d'Etudes et de Recherches sur le Développement International); Arup MITRA; Chandan SHARMA
    Abstract: Drawing on a recent dataset of the Indian manufacturing industry for 1994 to 2008, this paper shows for eight sectors that core infrastructure and Information & Communication Technology (ICT) matter for Total Factor Productivity (TFP) and Technical Efficiency (TE).In the analysis, we use a range of advanced estimation techniques to overcome problems of non-stationary, omitted variables, endogeneity and reverse causality (such as System-GMM, panel cointegration and FMOLS). Estimation results suggest that the impact of core infrastructure is rather strong on TFP and TE (elasticity of 0.32 and 0.17 respectively), while the effect of ICT appears slightly smaller (0.12 and 0.08, respectively). This finding is of particular importance in the Indian context of infrastructure bottlenecks. It strongly supports the idea that a lack of infrastructure can hamper growth in developing countries. Our results also reveal that the impact of infrastructure and ICT varies among the industries. Interestingly, Transport Equipments, Metal & Metal Products and Textile, which are sectors relatively more exposed to foreign competition, are also found to be more sensitive to infrastructure endowment. This result can be extended to the Chemical industry for TE. This finding implies that improving core and ICT infrastructure would proportionally benefit more to these sectors, which could play a leading role in the competitiveness and the industrial growth of the Indian economy.
    Keywords: infrastructure, Manufacturing Industry, India, Information and Communication Technology, total factor productivity, Technical efficiency
    Date: 2011
  29. By: T. Clemson; T. S. Evans
    Abstract: We study a networked version of the minority game in which agents can choose to follow the choices made by a neighbouring agent in a social network. We show that for a wide variety of networks a leadership structure always emerges, with most agents following the choice made by a few agents. We find a suitable parameterisation which highlights the universal aspects of the behaviour and which also indicates where results depend on the type of social network.
    Date: 2011–06
  30. By: Bodas Freitas Isabel Maria; Geuna Aldo; Rossi Federica (University of Turin)
    Abstract: This paper explores the factors affecting firms’ decisions concerning whether to collaborate with universities in their region or elsewhere, and the level of investment in the collaboration. Building upon an original survey of a representative sample of firms in the Italian region of Piedmont, the paper examines the effect of firm and collaboration characteristics (including the type and diversity of each collaboration’s objectives) on the location of the university partners and on the investment in university-industry collaborations. We find that firms that are smaller, less engaged in international markets, less vertically integrated, and that engage in collaborations with universities in order to solve organizational problems, tend to collaborate more with regional universities. Firms tend to invest more in collaborations focused only on R&D activities with nearby universities, though the maximum amount spent in a collaboration was with a foreign university.
    Date: 2011–03

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