nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2011‒08‒15
37 papers chosen by
Steve Ross
University of Connecticut

  1. House Prices and Economic Growth in South Africa: Evidence from Provincial-Level Data By Beatrice D. Simo-Kengne; Manoel Bittencourt; Rangan Gupta
  2. Accessibility Dynamics and Location Premia: Do Land Values Follow Accessibility Changes? By Michael Iacono; David Levinson
  3. Growing Up in Social Housing in the New Millennium: Housing, Neighbourhoods, and Early Outcomes for Children Born in 2000 By Andrew Jenkins; Dylan Kneale; Ruth Lupton; Rebecca Tunstall
  4. Network Structure and City Size By David Levinson
  5. Knowledge Virtualiazation and Local Connectedness among Smart High-tech Companies By Marina van Geenhuizen; Peter Nijkamp
  6. Detecting Mortgage Delinquencies By Askitas, Nikos; Zimmermann, Klaus F.
  7. Immigration and Innovation in European Regions By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  8. Accessibility, network structure, and consumers’ destination choice: a GIS analysis of GPS travel data. By Arthur Huang; David Levinson
  9. Love Thy Neighbor: Income Distribution and Housing Preferences By Leung, Tin Cheuk; Tsang, Kwok Ping
  10. Immigration and House Prices in the UK By Sa, Filipa
  11. What said the new economic geography about Portugal? By Martinho, Vítor João Pereira Domingues
  12. Spatial Autocorrelation and Verdoorn Law in Portugal By Vítor João Pereira Domingues Martinho
  13. Impacts of Central Business District Location: A Hedonic Analysis of Legal Service Establishments By Frank Limehouse; Robert McCormick
  14. There Goes the Neighborhood? People’s Attitudes and the Effects of Immigration to Australia By Sinning, Mathias; Vorell, Matthias
  15. Accessibility Futures. By Paul Anderson; David Levinson; Pavithra Parthasarathi
  16. Homeowners' Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany By Michelsen, Carl Christian; Madlener, Reinhard
  17. Are there neighbourhood effects on teenage parenthood in the UK, and does it matter for policy? A review of theory and evidence By Dylan Kneale; Ruth Lupton
  18. Application possibilities of the micro-meso-macro framework in economic geography By Heike Schroeder
  19. Cognitive Capital and Islands of Innovation: The Lucas Growth Model from a Regional Perspective By Andrea Caragliu; Peter Nijkamp
  20. Local social capital and geographical mobility . By Wasmer, Etienne; Janiak, Alexandre; David, Quentin
  21. The Distribution of CAP Payments - Redistributional Injustice or Spatially Adapted policy? By Bergmann, Holger; Noack, Eva Maria; Thomson, Kenneth J.
  22. Educational Standards for Economic Education at All Types of General-education Schools in Germany By thomas.retzmann; Bernd Remmele; Guenther Seeber; Hans-Carl Joengebloed
  23. The Hedonic Price Function in a Matching Model of Housing Market By Lisi, Gaetano
  24. A Portfolio Theory of Route Choice By Shanjiang Zhu; David Levinson
  25. Continuous-Time Modelling with Spatial Dependence By Johan H.L. Oud; Henk Folmer; Roberto Patuelli; Peter Nijkamp
  26. Commuter Effects on Local Labour Markets: A German Modelling Study By Giovanni Russo; Federico Tedeschi; Aura Reggiani; Peter Nijkamp
  27. Regional Policy Spillovers: The National Impact of Demand-Side Policy in an Interregional Model of the UK Economy By Michelle Gilmartin; David Learmonth; Peter McGregor; Kim Swales; Karen Turner
  28. To game or not to game: teaching transportation planning with board games By Arthur Huang; David Levinson
  29. "Interregional mobility, productivity and the value of patents for prolific inventors in France, Germany and the U.K" By William Latham; Dmitry Volodin; Christian Le Bas; Riad Bouklia Hassane
  30. How accurate are commercial-real-estate appraisals? evidence from 25 years of NCREIF sales data By Cannon, Susanne; Col, Rebel A.
  31. Second-degree Price Discrimination and Inter-group Effects in Airline Routes between European Cities By Marco Alderighi; Alessandra Cento; Peter Nijkamp; Piet Rietveld
  33. Effects of Mode Shares on Mode Choice By Carlos Carrion-Madera; Nebiyou Tilahun; David Levinson
  34. Teacher Certification in Indonesia: A Confusion of Means and Ends By Mohamad Fahmi; Achmad maulana; Arief Anshory Yusuf
  35. Short-run dynamics of income disparities and regional cycle synchronization By Hasan Engin Duran
  36. The Provision of Ecosystem Services by Agriculture â a Spatially Explicit DEA Approach By Kapfer, Martin; Hubner, Rico; Eckstein, Karin; Ziesel, Sigrid; Kantelhardt, Jochen
  37. The Dynamics of Interfirm Networks along the Industry Life Cycle: The Case of the Global Video Games Industry 1987-2007 By Pierre-Alexandre Balland; Mathijs de Vaan; Ron Boschma

  1. By: Beatrice D. Simo-Kengne (Department of Economics, University of Pretoria); Manoel Bittencourt (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper empirically examines the effect of house price changes on economic growth across provinces in South Africa. The economic impact of house prices is estimated using a panel data set that covers all nine provinces in South Africa from 1996 to 2010. We find that when heterogeneity, endogeneity and spatial dependence are controlled for, house price changes exhibit a significant effect on regional economic growth in South Africa. The paper then introduces a Seemingly Unrelated Regression (SUR) specification and shows that spatial effects are highly important in South African housing markets. Moreover, the estimation results suggest that the wealth effect is important at the aggregated level which contrasts the relevance of the collateral effect found at the regional level.
    Keywords: House prices, Economic growth, Spatial dependence, Panel data
    JEL: C33 E23 E24 R11 R12
    Date: 2011–08
  2. By: Michael Iacono; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The structure of transportation networks and the patterns of accessibility they give rise to are an important determinant of land prices, and hence urban spatial structure. While there is ample evidence on the cross-sectional relationship between location and land value (usually measured from the value of improved property), there is much less evidence available on the changes in this relationship over time, especially where location is represented using a disaggregate measure of urban accessibility. This paper provides evidence of this dynamic relationship using data on home sales in the Minneapolis-St. Paul (MN) metropolitan area, coupled with disaggregate measures of urban accessibility for multiple modes, for the period from 2000 to 2005. Our investigation seeks to track the effects of marginal changes in accessibility over time, as opposed to static, cross-sectional relationships, by using an unconventional approach in which the unit of observation is a "representative house" for each transportation analysis zone in the region. This approach allows us to control for changes in structural attributes of houses over time, while also isolating the effect of changes in accessibility levels. Results of this approach are compared to a cross-sectional model using the same variables for a single year to illustrate important differences. These differences are discussed in terms of their implications for practitioners and for further investigations of the relationship between transportation, location and land value.
    Keywords: Accessibility, Hedonic Model, Trends, Transportation, Land Use.
    JEL: R12 R14 R41 R48 R52 R53 H11
    Date: 2011
  3. By: Andrew Jenkins; Dylan Kneale; Ruth Lupton; Rebecca Tunstall
    Abstract: This study draws on the Millennium Cohort Study to explore the housing and neighbourhood circumstances of children born in England in 2000 at the age of 5 in 2006. The majority of children experienced good housing conditions. Those in social rented homes, and to a lesser extent in private rented homes too, were markedly disadvantaged in terms of family circumstances and neighbourhood deprivation, while housing conditions and other neighbourhood characteristics also varied somewhat between tenures. Links were found between children's housing tenure and test scores. These were largely explained by a combination of family characteristics and neighbourhood deprivation.
    Keywords: Millennium Cohort Study, housing conditions, neighbourhood conditions, housing tenure effects, neighbourhood effects
    JEL: I30
    Date: 2011–02
  4. By: David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Network structure varies across cities. This variation may yield important knowledge about how the internal structure of the city affects its performance. This paper systematically com- pares a set of surface transportation network structure variables (connectivity, hierarchy, circuity, treeness, entropy, accessibility) across the 50 largest metropolitan areas in the United States. It finds most of these measures vary with city size. A set of scaling parameters are discovered to show how network size and structure vary with city size. These results suggest that larger cities are physically more inter-connected.
    Keywords: Connectivity, Network Structure, Transportation Geography, Network Science, City Size, Scaling Rules
    JEL: R41 R42 R48 D85 R14 R52
    Date: 2011
  5. By: Marina van Geenhuizen (Delft University of Technology, Delft); Peter Nijkamp (VU University Amsterdam)
    Abstract: Smart high-tech companies are characterized by knowledge intensity and open innovation. Even when these companies emerge in spatial clusters or dense urban places, they may utilize knowledge networks on a global scale. However, there is not much insight into the factors that shape knowledge networks, the role of virtualization herein and the impact of on global knowledge sourcing on local connectedness. This paper seeks to fill these gaps in understanding, by drawing on a selected sample of young high-technology companies in the Netherlands and application of rough set analysis to identify homogeneous categories of companies in the highly differentiated segment of young high-tech companies. The outcomes suggest that employing mainly local and employing mainly global knowledge networks coexist in city-regions, and that only part of the globalized companies are losing local connectedness, particularly those involved in co-creation with global customers and those acting as learning partners of multinational corporations ('reverse' knowledge transfer). Factors counteracting a weakening of local connectedness are specific local knowledge relationships and the strategy of developing local/regional customer markets.
    Keywords: high-technology companies; open innovation; knowledge networks; strategic focus; dynamic capabilities; virtualization; local connectedness; rough set analysis
    JEL: D21
    Date: 2011–08–09
  6. By: Askitas, Nikos (IZA); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: Economic hardship is strongly reflected by the housing market. It is the concern of much research, but its analysis is often obstructed by insufficient lagged data. This paper evaluates search intensity for "hardship letter" from Google Insights to detect ensuing mortgage delinquencies. Such searches locate documents which assist to write a successful loan modification request. Other relevant searches for "short sale", "REO" (as in Real Estate Owned) or "FHA" (as in Federal Housing Administration) are used to provide a comprehensive view of the housing market. Using data from the great recession and benchmarking them against data from the labor market, the paper demonstrates that internet activity captures socioeconomic phenomena in real time very well, with no interviewer effect at a high frequency. This suggests that the new data base should spur new housing research.
    Keywords: housing, hardship letter, loan delinquency, mortgage, National Delinquency Survey (NDS), financial crisis, recession, bubble, Google Insights
    JEL: C81 E65 G21 R31
    Date: 2011–07
  7. By: Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (National Institute of Demographic and Economic Analysis (NIDEA), University of Waikato, Hamilton, New Zealand)
    Abstract: The concentration of people with diverse socio-cultural backgrounds in particular geographic areas may boost the creation of new ideas, knowledge spillovers, entrepreneurship, and economic growth. In this paper we measure the impact of the size, skills, and diversity of immigration on the innovativeness of host regions. For this purpose we construct a panel of data on 170 regions in Europe (NUTS 2 level) for the periods 1991-1995 and 2001-2005. Innovation outcomes are measured by means of the number of patent applications per million inhabitants. Given the geographical concentration and subsequent diffusion of innovation activity, and the spatial selectivity of immigrants' location choices, we take account of spatial dependence and of the endogeneity of immigrant settlement in our econometric modelling. We use the location of McDonald's restaurants as a novel instrument for immigration. The results confirm that innovation is clearly a function of regio nal accessibility, industrial structure, human capital, and GDP growth. In addition, patent applications are positively affected by the diversity of the immigrant community beyond a critical minimum level. An increase in the fractionalization index by 0.1 from the regional mean of 0.5 increases patent applications per million inhabitants by about 0.2 percent. Moreover, the average skill level of immigrants (proxied by global regions of origin) also affects patent applications. In contrast, an increasing share of foreigners in the population does not conclusively impact on patent applications. Therefore, a distinct composition of immigrants from different backgrounds is a more important driving force for innovation than the sheer size of the immigrant population in a certain locality.
    Keywords: immigration; cultural diversity; economic growth; innovation; spatial autocorrelation
    JEL: J61 O31 R23
    Date: 2011–08–09
  8. By: Arthur Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Anecdotal and empirical evidence has shown that road networks, destination accessibility, and travelers' choice of destination are closely related. Nevertheless, there have not been systematic investigations linking individuals' travel behavior and retail clusters at the microscopic level. Based on GPS travel data in the Twin Cities, this paper analyzes the impacts of travelers' interactions with road network structure and clustering of services at the destination on travelers' destination choice. A multinomial logit model is adopted. The results reveal that higher accessibility and diversity of services in adjacent zones of a destination are associated with greater attractiveness of a destination. Further, the diversity and accessibility of establishments in an area are often highly correlated. In terms of network structure, a destination with a more circuitous or discontinuous route dampens its appeal. Answering where and why people choose to patronize certain places, our planning, our findings shed light on the design of road networks and clusters from a travel behavior perspective.
    Keywords: travel behavior, destination choice, accessibility, GIS analysis, GPS travel data, road networks
    JEL: R30 L22
    Date: 2011
  9. By: Leung, Tin Cheuk; Tsang, Kwok Ping
    Abstract: Do homeowners prefer living in an area with a more equal distribution of income? We answer this question by estimating a semi-parametric hedonic pricing model for about 90,000 housing units transacted in Hong Kong between 2005 and 2006. We first identify a hedonic price function by locally regressing the rental price of the housing unit on its intrinsic and neighborhood characteristics, one of which is the Gini coefficient for household income of the constituency area. We then combine the estimates with a log utility function to obtain the heterogeneous preference parameters. Finally, we estimate the joint distribution of the preference parameters and demographics. We find that most homeowners have a strong distaste for inequality in their neighborhood, and the distaste increases with income and goes down with education level. Counterfactual experiments show that reallocating Public Rental Housing by half can increase the welfare of homeowners by about HK$8,000 on average per year, an amount which is equivalent to increasing the housing unit by 20 square feet or reducing the age of the unit by 5 years.
    Keywords: hedonic pricing; housing; income inequality
    JEL: R32 R21 R23
    Date: 2011–06
  10. By: Sa, Filipa (University of Cambridge)
    Abstract: This article studies the effect of immigration on house prices in the UK. It finds that immigration has a negative effect on house prices and presents evidence that this negative effect is due to the mobility response of the native population. Natives respond to immigration by moving to different areas and those who leave are at the top of the wage distribution. This generates a negative income effect on housing demand and pushes down house prices. The negative effect of immigration on house prices is driven by local areas where immigrants have lower education.
    Keywords: immigration, house prices
    JEL: J61 R21
    Date: 2011–07
  11. By: Martinho, Vítor João Pereira Domingues
    Abstract: With this work we try to analyse the agglomeration process in Portugal, using the New Economic Geography models, in a linear and in a non linear way. In a non linear way, of referring, as summary conclusion, that with this work the existence of increasing returns to scale and low transport cost, in the Portuguese regions, was proven and, because this, the existence of agglomeration in Portugal. This work aims, also, to study the Portuguese regional agglomeration process, using the linear form of the New Economic Geography models. We pretend, yet, to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition, describing the mechanisms by which these processes are based. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo (which is evidence of regional divergence in Portugal) and the productivity factor significantly improves the results that explain the regional clustering in Portugal (despite being ignored in the models of New Economic Geography). So, we can refer which the new economic geography said that in Portugal there is divergence between the continental regions.
    Keywords: new economic geography; linear and non linear models; Portuguese regions
    JEL: O18 C23 R12
    Date: 2011
  12. By: Vítor João Pereira Domingues Martinho (Centro de Estudos em Educação, Tecnologias e Saúde (CI&DETS))
    Abstract: This study analyses, through cross-section estimation methods, the influence of spatial effects in productivity (product per worker), at economic sectors level of the NUTs III of mainland Portugal, from 1995 to 1999 and from 2000 to 2005 (taking in count the data availability and the Portuguese and European context), considering the Verdoorn relationship. From the analyses of the data, by using Moran I statistics, it is stated that productivity is subject to a positive spatial autocorrelation (productivity of each of the regions develops in a similar manner to each of the neighbouring regions), above all in services. The total sectors of all regional economy present, also, indicators of being subject to positive autocorrelation in productivity. Bearing in mind the results of estimations, it can been that the effects of spatial spillovers, spatial lags (measuring spatial autocorrelation through the spatially lagged dependent variable) and spatial error (measuring spatial autocorrelation through the spatially lagged error terms), influence the Verdoorn relationship when it is applied to the economic sectors of Portuguese regions. The results obtained for the two periods are different, as expected, and are better in second period, because, essentially, the European and national public supports.
    Keywords: Spatial Econometrics, Economic Growth, Productivity Analysis, Regional Development
    JEL: C21 O40 O47 R58
    Date: 2011–08
  13. By: Frank Limehouse; Robert McCormick
    Abstract: This analysis examines the business impacts on law firms of locating in Central Business Districts (CBDs) in major U.S. cities. Specifically, we measure the price premium that law firms pay to locate in CBDs. Using micro-level data from the 1992 and 2007 Census of Services, we find that after controlling for firm size, firm specialization characteristics, and MSA and county attributes, law firms within CBDs pay about 15 to 20 percent more in overhead compared to those firms outside CBDs – a result consistent across time between 1992 and 2007. When including an important additional measure of firm quality, however, we find that this impact is reduced to about 7 to 9 percent, but still statistically significant. Additional results show that there is a significant correlation between firm quality and CBD location. We also find that firm size and firm specialization measures are important factors in the choice to locate within CBDs. We argue that these results indicate that CBD location for law firms may serve as networking, quality sorting, and branding mechanisms.
    Date: 2011–07
  14. By: Sinning, Mathias (Australian National University); Vorell, Matthias (RWI)
    Abstract: This paper compares the effects of immigration flows on economic outcomes and crime levels to the public opinion about these effects using individual and regional data for Australia. We employ an instrumental variables strategy to account for non-random location choices of immigrants and find that immigration has no adverse effects on regional unemployment rates, median incomes, or crime levels. This result is in line with the economic effects that people typically expect but does not confirm the public opinion about the contribution of immigration to higher crime levels, suggesting that Australians overestimate the effect of immigration on crime.
    Keywords: effects of immigration, attitudes towards immigrants, international migration
    JEL: F22 J61
    Date: 2011–07
  15. By: Paul Anderson; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota); Pavithra Parthasarathi
    Abstract: This study uses accessibility as a performance measure to evaluate a matrix of future land use and network scenarios for planning purposes. Previous research has established the coevolution of transportation and land use, demonstrated the dependence of accessibility on both, and made the case for the use of accessibility measures as a planning tool. This study builds off of these findings by demonstrating the use of accessibility-based performance measures on the Twin Cities Metropolitan Area. This choice of performance measure also allows for transit and highway networks to be compared side-by-side. A zone to zone travel time matrix was computed using SUE assignment with travel time feedback to trip distribution. A database of schedules was used on the transit networks to assign transit routes. This travel time data was joined with the land use data from each scenario to obtain the employment, population, and labor accessibility from each TAZ within specified time ranges. Tables of person- weighed accessibility were computed for 20 minutes with zone population as the weight for employment accessibility and zone employment as the weight for population and labor accessibility. The person-weighted accessibility results were then used to evaluate the planning scenarios. The results show that centralized population and employment produce the highest accessibility across all networks.
    Keywords: Accessibility, Forecasting, Travel Demand, Scenarios, Trends, Transportation, Land Use.
    JEL: R12 R14 R41 R48 R52 R53 H11
    Date: 2011
  16. By: Michelsen, Carl Christian (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University)
    Abstract: Space heating accounts for a large fraction of the primary energy consumption and CO2 emissions of residential buildings. Besides targeting the insulation standard, residential heating systems (RHS) based on renewable energy sources offer the potential to reduce energy demand for space heating. Therefore, understanding the determinants of the homeowners’ adoption decisions in favor of RHS becomes increasingly important. In this paper, we analyze the influence of preferences about RHS-specific attributes on the adoption decision. Moreover, we control for the influence of socio-demographic, home and spatial characteristics. For this purpose, we specify the discrete appliance choice as a multinomial logit model. We apply the model to representative survey data for Germany. Our findings show that there are different drivers for the adoption of RHS in newly built and existing 1- and 2-family homes, and that the importance of key drivers also differs across groups of homeowners and RHS, respectively. First, we find that adopters of a gas- and oil-fired condensing boiler with solar thermal support have a strong preference for energy savings, while adopters of a heat pump or wood pellet-fired boiler prefer being more independent from fossil fuels. Second, we find preferences about RHS-specific attributes to be highly relevant for owners of newly built homes, while evidence for an influence of the control variables is scarce. Third, we find that socio-demographic, home and spatial characteristics have a higher and more differentiated impact in the case of existing homes. These variables predetermine the decision context and leave less leeway for the influence of preferences when replacing a RHS in an existing home.
    Keywords: Technology adoption; Consumer behavior; residential heating systems; space heating; discrete choice
    JEL: D12 O33 Q41 R22
    Date: 2011–05
  17. By: Dylan Kneale; Ruth Lupton
    Abstract: This paper is a forerunner to an empirical study of neighbourhood effects on teenage parenthood using the British Cohort Study (BCS70). It reviews evidence for the existence of such effects within the quantitative 'neighbourhood effects' literature. It also draws on the wider literature on teenage parenthood to identify three explanatory frameworks for the phenomenon (opportunity costs, differential values and social networks), and to examine the qualitative and quantitative evidence that these mechanisms vary over space in ways that create distinctive 'place effects' at different spatial scales. We conclude that while there is good reason to believe that neighbourhood and wider area influences might be associated with planned or unplanned teenage pregnancies and with the propensity to continue to parenthood, statistical evidence is mixed, and relatively sparse for the UK. Policy makers need to draw on the wider body of literature, including qualitative studies and practitioner knowledge as well as 'hard' proof of neighbourhood effects. Finally we consider implications for policy. We critically interrogate the notion that area effects and area-based policies are necessarily related and instead offer some more specific conclusions as to what the evidence implies (and does not imply) for the purpose and design of policy interventions.
    Keywords: neighbourhood, neighbourhood effects, area effects, teenage parenthood
    JEL: I30
    Date: 2010–09
  18. By: Heike Schroeder
    Abstract: The micro-meso-macro approach is an analytical framework to study processes of economic evolution. In economic geography it has been hardly taken up so far. Using the example of spatial implications of corporate processes of adaption and renewal after structural interruptions, this paper shows at a conceptual level how the framework could be applied to topics in economic geography. Compared to other approaches, the micro-meso-macro framework has several advantages: It allows to analyse the coevolution between different forms of knowledge in an economic system and the context in which companies operate. By integrating mechanism rules, it also considers the ability of firms to adapt to a changing environment. Furthermore, it is possible to explain the interplay between enterprises and higher levels of analysis like industry sectors or regions through the analytical unit of the rule trajectory. In this paper it is argued not to assign any spatial dimension to the different levels of analysis per se, but to examine the mechanism rules along trajectories of operational rules under a spatial perspective.
    Keywords: evolutionary economic geography, analytical framework, rules, coevolution, meso level, corporate processes of renewal, structural interruptions
    JEL: B52 O18 R11
    Date: 2011–08
  19. By: Andrea Caragliu (Politecnico di Milano); Peter Nijkamp (VU University Amsterdam)
    Abstract: Knowledge triggers regional growth. Evidence suggests that skilled labour force concentrates in islands of innovation, determining an advantage for innovative regions and a challenge for lagging ones. We address the role of knowledge in shaping effective markets for skilled labour. Estimates are based on the Lucas (1988) model, with EVS and EUROSTAT data. The externality driving growth in the model is cognitive capital. Empirical tests show that a higher endowment of cognitive capital generates increasing returns to knowledge, favouring the emergence of islands of innovation; regions with a high endowment of cognitive capital attract knowledge spillovers from neighbours.
    Keywords: human capital; cognitive capital; knowledge spillovers; islands of innovation
    JEL: C21 E24 R11
    Date: 2011–08–09
  20. By: Wasmer, Etienne (Centre de recherche en économie de Sciences Po); Janiak, Alexandre (Departamento de Ingenieria Industrial (DII)); David, Quentin (Département de Droit de l'UL)
    Abstract: In the North of Europe, club membership is higher than in the South, but the frequency of contacts with friends, relatives and neighbors is lower. We link this fact to another one: the low geographical mobility rates in the South of Europe relative to the North. To interpret these facts, we build a model of local social capital and mobility. Investing in local ties is rational when workers do not expect to move to another region. We find that observationally close individuals may take different paths characterized by high local social capital, low mobility and high unemployment, vs. low social capital, high propensity to move and higher employment probability. Employment protection reinforces the accumulation of local social capital and thus reduces mobility. European data supports the theory: within a country and at the individual level, more social capital is associated with lower mobility.
    Date: 2010–09
  21. By: Bergmann, Holger; Noack, Eva Maria; Thomson, Kenneth J.
    Abstract: This paper analyses the distributional equality of individual Scottish Government-administered payments in 2008 under CAP Pillars One (single farm payments) and Two (rural development measures) and in total, in terms of economic, social and spatial factors. The analysis shows that 94% of all payments were paid to claimants in core rural areas (94%) while only a few (5%) claimants resided in urban areas or outside of Scotland (1%). However, in both Pillars, claims made by urban residents were often higher than those made by rural dwellers. The Ordinary Least Squares spatial analysis shows that the level of payments was extremely dependent on the geographical location and natural conditions. Spatial factors describing the economic situation in the area of the claimant were significantly related to the level of the CAP amounts paid. Overall, the level of amounts paid was positively related to the natural, economic and social structures of the area of residence. The discussion tackles the question of whether the current system of farm income support by decoupled payments should be developed into a poverty payment system.
    Keywords: Pillar One, Common Agricultural Policy, Gini-Coefficient, Rural-Urban distribution, distributional justice, Land Economics/Use, Q15, R14, R11,
    Date: 2011–04
  22. By: thomas.retzmann (Chair of Economics and Economic Education, University of Duisburg-Essen); Bernd Remmele (Wissenschaftliche Hochschule Lahr); Guenther Seeber (University of Koblenz-Landau); Hans-Carl Joengebloed (Kiel University)
    Keywords: economic education, educational standards, general-education schools, germany, competences, competence model
    JEL: A21
    Date: 2010–10
  23. By: Lisi, Gaetano
    Abstract: This paper develops a theoretical model in which the matching framework à la Pissarides (2000) extended to the housing market is integrated with the hedonic price theory. Market tightness and selling price collectively determine the long-run equilibrium of the economic system in which a seller can become a buyer, and vice versa. As a result, the house price depends not only on the housing characteristics but also on the market tensions and bargaining power of the parties. This integration allows to overcome a major drawback of the hedonic price theory, namely the assumption of perfect competition.
    Keywords: hedonic price theory; housing market; matching models
    JEL: J64 R21 R31
    Date: 2011–08–07
  24. By: Shanjiang Zhu; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Although many individual route choice models have been proposed to incorporate travel time variability as a decision factor, they are typically still deterministic in the sense that the optimal strategy requires choosing one particular route that maximizes utility. In contrast, this study introduces an individual route choice model where choos- ing a portfolio of routes instead of a single route is the best strategy for a rational traveler who cares about both journey time and lateness when facing stochastic net- work conditions. The model is then tested with GPS data collected in metropolitan Minneapolis-St. Paul, Minnesota. Our data suggest strong correlation among link speed when analyzing morning commute trips. There is no single dominant route (de- fined here as a route with the shortest travel time for a 15 day period) in 18% of cases when links travel times are correlated. This paper demonstrates that choosing a port- folio of routes could be the rational choice of a traveler who wants to optimize route decisions under variability.
    Keywords: Transportation planning, route choice, travel behavior, link performance
    JEL: R41 R48 D10 D83 C72
    Date: 2011
  25. By: Johan H.L. Oud (Radboud University Nijmegen); Henk Folmer (University of Groningen); Roberto Patuelli (University of Lugano); Peter Nijkamp (VU University Amsterdam)
    Abstract: (Spatial) panel data are routinely modelled in discrete time (DT). However, there are compelling arguments for continuous time (CT) modelling of (spatial) panel data. Particularly, most social processes evolve in CT, so that statistical analysis in DT is an oversimplification, gives an incomplete representation of reality and may lead to misinterpretation of estimation results. The most compelling reason for a CT approach is that, in contrast to DT modelling, it allows adequate modelling of dynamic adjustment processes. The paper introduces spatial dependence in a CT modelling framework. We propose a nonlinear Structural Equation Model (SEM) with latent variables for estimation of the Exact Discrete Model (EDM), which links the CT model parameters to the DT observations. The use of a SEM with latent variables makes it possible to take measurement errors in the variables into account, leading to a reduction of attenuation bias (i.e., disattenuation). The SE M-CT model with spatial dependence developed here is the first dynamic structural equation model with spatial dependence. The spatial econometric SEM-CT framework is illustrated on the basis of a simple regional labour market model for Germany made up of the endogenous state variables unemployment change and population change and of the exogenous input variables change in regional average wage and change in the structure of the manufacturing sector.
    Keywords: continuous-time modelling; structural equation modelling; latent variables; spatial dependence; panel data; disattenuation; measurement errors; unemployment change; population change; Germany
    JEL: C33 E24 O18 R11
    Date: 2011–08–09
  26. By: Giovanni Russo (VU University Amsterdam); Federico Tedeschi (University of Bologna); Aura Reggiani (University of Bologna); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper offers an exploratory investigation of the effects of inbound commuter flows on employment in regional labour markets in Germany. For this purpose, we distinguish three main channels that may transmit the effects concerned: a crowding-out mechanism, and two labour demand effects, namely, an aggregate demand effect and a positive externality on vacancy creation. To this end, we develop a stepwise commuting impact model. Our results bring to light that, on the whole, commuter flows have a positive and robust effect on both employment and the number of jobs in the receiving labour market districts, but a distinctly negative effect on the share of jobs filled by resident workers. We then interpret the implications of our results, and, finally, we suggest ways in which the analysis could be improved and expanded.
    Keywords: commuter flows; lacal labour markets
    JEL: J21
    Date: 2011–08–09
  27. By: Michelle Gilmartin (Fraser of Allander Institute, University of Strathclyde); David Learmonth (Fraser of Allander Institute, University of Strathclyde); Peter McGregor (Department of Economics, University of Strathclyde); Kim Swales (Department of Economics, University of Strathclyde); Karen Turner (Stirling Management School, Division of Economics)
    Abstract: UK regional policy has been advocated as a means of reducing regional disparities and stimulating national growth. However, there is limited understanding of the interregional and national effects of such a policy. This paper uses an interregional computable general equilibrium model to identify the national impact of a policy-induced regional demand shock under alternative labour market closures. Our simulation results suggest that regional policy operating solely on the demand side has significant national impacts. Furthermore, the effects on the non-target region are particularly sensitive to the treatment of the regional labour market.
    Keywords: regional CGE modelling, migration, regional development policy
    JEL: C68 D58 R58
    Date: 2011–07
  28. By: Arthur Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Traditional "chalk and talk" teaching in civil engineering has gradually been replaced with the idea of active learning focusing on encouraging students' knowledge discovery with innovative pedagogical methods and tools. One interesting tool is the board game. This research examines the efficacy of adopting transportation board games as a tool in graduate-level transportation planning and transportation economics classes at the Department of Civil Engineering of the University of Minnesota from 2008 to 2010. In these classes, a weekday night was scheduled for playing transportation board games. Students were asked to evaluate the effectiveness of the games on their learning and to write a self-reflective paper about their findings. The majority of the students reveal that their understanding of the planning process, network deployment, and practical issues, and and their ability to form opinion about transportation planning has been improved. Their summaries on the game economy and its implications on planning validate that their understanding obtained from this game process has met the pedagogical goals. Our analysis further shows that students who are moderately/highly visual, sensing, active, or sequential, all else equal, tend to learn more effectively through this approach than those who are not. Overall, this research suggests that properly incorporating board games into the curriculum can enhance students' learning process in transportation planning.
    Keywords: retail clusters, agent-based model, location choice, distribution pattern
    JEL: R2 R4 A23
    Date: 2011
  29. By: William Latham (Department of Economics,University of Delaware); Dmitry Volodin (Department of Economics,University of Delaware); Christian Le Bas (Laboratoire d'Économie de la Firme et des Institutions, Université Lumière Lyon); Riad Bouklia Hassane (Laboratoire d'Économie de la Firme et des Institutions, Université Lumière Lyon)
    Abstract: Regional creative resources include inventors. Policies conducive to inventors’ productivity or attracting productive inventors promote regional development. We build on prior work on inventor mobility and productivity, analyzing German, French and British patents filed in the US by 7,500 “prolific” inventors (fifteen or more inventions). We measure inventor mobility across regions, companies and technologies. We analyze the relationships among mobility, productivity and value. We find geographic mobility increases inventor productivity in the UK and France but not in Germany and geographic mobility is not related to the value of inventions except in Germany where it has a negative effect.
    Keywords: Patents, inventor mobility, prolific inventors
    JEL: O31 R58
    Date: 2011
  30. By: Cannon, Susanne; Col, Rebel A.
    Abstract: In this study, we provide new evidence on the performance measurement and reporting of commercial real estate returns. We do so by examining the accuracy of commercial-real-estate appraisals that occurred prior to the sale of properties from the NCREIF National Property Index (“NPI”) during 1984 – 2010, a period which spans two up-and-down cycles of the market. We find that, on average, appraisals are more than 12% above, or below, subsequent sales prices that take place two quarters following the appraisal. Even in a portfolio context, allowing for offsetting positive and negative differences, appraisals are off by an average of 4% – 5 % of value, even after adjusting for capital appreciation during those two quarters. We also provide new evidence regarding how, and by how much, appraised values lag behind sales prices. We find that appraisals appear to lag the true sales prices, falling significantly below in hot markets and remaining significantly above in cold markets. This new evidence provides guidance to investors, regulators and others about how to interpret real-estate indices like the NPI that are based upon appraised values, in both a rising and falling market. Finally, we find that this “appraisal error” is largely systematic; we can explain more than half of the variation in the signed percentage difference in sales price and appraised value. Hence, appraisal errors are not due solely to property-specific heterogeneity.
    Keywords: appraisal; commercial real estate; commingled real estate fund; NCREIF; real estate
    JEL: G11 G23 R33
    Date: 2011–05–25
  31. By: Marco Alderighi (Universita della Valle d'Aosta, Aosta, Italy; Universita Bocconi, Italy); Alessandra Cento (KLM Royal Dutch Airlines, Milano, Italy); Peter Nijkamp (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: This paper presents a model of second-degree price discrimination and inter-group effects to describe the full-service pricing behaviour in the passenger aviation market. Consumer heterogeneity is assumed on both a horizontal and a vertical dimension, while various distinct market structures, some of which include low-cost carriers (LCCs), are considered. In the theoretical model framework, we derive that the rivalry between full-service carriers (FSCs) reduces fare differences between the business and leisure segments. Furthermore, the presence of LCCs increases fare gaps between leisure and business travellers, and it also induces FSCs to decrease fares in the leisure segment and eventually to increase them in the business one. This last outcome emerges from a change in passenger arrangements caused by inter-group effects. In our empirical analysis, we use data on published airfares of Lufthansa, British Airways, KLM and Alitalia for the main city-pairs from Italy to Germany, the UK and the Netherlands. Our results show that the empirical results provide support for our theoretical propositions.
    JEL: L1 L93 D4
    Date: 2011–08–09
  32. By: Pami Dua (Department of Economics, Delhi School of Economics, Delhi, India); B. N. GOLDAR (V.K.R.V. Rao Centre for Studies in Globalization Institute of Economic Growth Delhi); SMRUTI RANJAN BEHERA (Department of Economics Shyamlal College, University of Delhi,Delhi)
    Abstract: The paper attempts to explore the technology spillover effects of Foreign Direct Investment (FDI) in Indian manufacturing industries across different selected clusters in India. To measure the spillover effect to domestic firms in a particular cluster, a model is used that combines an innovative production function with a conventional production function. The model parameter estimates provide an evaluation of the technology spillovers in a cluster and the inter-cluster spillovers taking place in various regions. The empirical findings reveal significant variations across clusters in regard to spillovers. While some clusters benefit from foreign firm presence and technological stock within the cluster, a more commonly observed pattern is that domestic firms in a cluster gain from the presence of foreign firms in other clusters of the region and spillovers from technological stock in the regions. In some clusters, productivity enhancing effects of investment climates is visible, but in several others there is no such effect.
    Keywords: Foreign Direct Investment; Technology Spillover; Clusters; Firm location
    JEL: O41 O1 L6 R12
    Date: 2011–08
  33. By: Carlos Carrion-Madera; Nebiyou Tilahun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This study considers the influence of the knowledge of existing mode shares on travelers mode choice. This contrasts with traditional mode choice models, where the main objective is to predict the overall mode shares as the aggregate of individual mode choices according to variables encompassing attributes of the modes, and characteristics of the travelers. In this study, a computer-administered adaptive stated preference survey is developed and applied to a sample of subjects selected from the University of Minnesota. The results indicate that the presence of mode shares in the mode choice model does influence the decision of travelers.
    Keywords: mode choice, mode shares, mixed logit, stated preference.
    JEL: R41 R48 R53
    Date: 2011
  34. By: Mohamad Fahmi (Department of Economics, Padjadjaran University); Achmad maulana (Department of Economics, Padjadjaran University); Arief Anshory Yusuf (Department of Economics, Padjadjaran University)
    Abstract: In 2006, Indonesia started implementing a nation-wide program of teacher certification with the aim to certify as many as 2.3 million teachers in 2015 with the budgetary cost of as much as US$460 million. Despite the magnitude and the importance of this program, there has been no quantitative study to evaluate the impact of such program on student’s achievement. In this study, we conducted a teacher survey in the Greater Bandung Area and collected the information on average national exam scores of the students of certified and not-certified teachers. We use two different impact evaluation techniques namely Propensity Score Matching (PSM) and Difference-in-Difference (DD) to evaluate the impact of certification. Both methods suggest that teacher certification has no impact on student’s achievement. The certification program may have improved teacher’s living standard as remuneration increase is an elemental part of it, yet its formally-stated goal to improve the quality of education as should be indicated in better students’ performance may not have been achieved. This program, being the largest in the nation’s history, may have confused means and ends.
    Keywords: teacher certification, propensity score matching, impact evaluation, Indonesia
    JEL: J31
    Date: 2011–07
  35. By: Hasan Engin Duran (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Since the 1990s, the issue of regional income convergence and its long term tendencies has been thoroughly and heatedly discussed. Far less attention, however, has been devoted to the short-run dynamics of regional convergence. In particular, three important aspects have not yet been adequately addressed. Firstly, it is indeed essential to understand whether regional disparities manifest a tendency to move systematically along the national cycle. Then, if this happens to be the case, it becomes crucial to know whether: i. these movements are pro- or counter-cyclical, ii. the cyclical evolution of the disparities is a consequence of differences in the timing with which the business cycle is felt across regions or it is motivated by the amplitude differences across local cyclical swings. In this paper, we shed light on these issues using data on personal income for the 48 coterminous US states between 1969 and 2008.
    Keywords: cyclical income disparities, regional business cycles, synchronization
    JEL: R11 E32 O18
    Date: 2011
  36. By: Kapfer, Martin; Hubner, Rico; Eckstein, Karin; Ziesel, Sigrid; Kantelhardt, Jochen
    Abstract: According to the concept of ecosystem services, agriculture not only provides commodities but also cultural and regulating services. While it is easy to value commodity production by market prices, the valuation of cultural and regulating services is complex because of their public good character. Non-parametric approaches such as the Data Envelopment Analysis (DEA) allow for estimating the contribution of agriculture to such services. However, it is not enough to know the extent of ecosystem services provided; it is also necessary to be aware of which farmers provide these services and where they are provided. In this paper, we suggest a plot-specific approach combining GIS analysis and DEA models. This allows a spatially explicit assessment of agricultural land use for different subject matters such as ecology and the contribution of a single plot to landscape diversity. The approach is undertaken in a marginal low-mountain region in Germany on 95 farms involving more than 5,800 plots. The results show the spatial distribution of externalities supplied by agriculture and the degree of segregation between âproduction areasâ and âprotection areasâ. The results also allow a deeper understanding of the spatial impact of policy measures on the provision of ecosystem services by agriculture.
    Keywords: Agricultural land use, data envelopment, environment-oriented technical efficiency, landscape-appearance-oriented technical efficiency, Land Economics/Use, Q12, Q26, Q57,
    Date: 2011–04
  37. By: Pierre-Alexandre Balland; Mathijs de Vaan; Ron Boschma
    Abstract: In this paper, we study the formation of network ties between firms along the life cycle of a creative industry. We focus on three drivers of network formation: i) network endogeneity which stresses a path-dependent change originating from previous network structures, ii) five forms of proximity (e.g. geographical proximity) which ascribe tie formation to the similarity of actors' attributes; and (iii) individual characteristics which refer to the heterogeneity in actors capabilities to exploit external knowledge. The paper employs a stochastic actor-oriented model to estimate the - changing - effects of these drivers on inter-firm network formation in the global video game industry from 1987 to 2007. Our findings indicate that the effects of the drivers of network formation change with the degree of maturity of the industry. To an increasing extent, video game firms tend to partner over shorter distances and with more cognitively similar firms as the industry evolves.
    Keywords: network dynamics, industry life cycle, proximity, creative industry, video game industry, stochastic actor-oriented model
    JEL: D85 B52 O18
    Date: 2011–08

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