nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2011‒08‒22
thirty papers chosen by
Steve Ross
University of Connecticut

  1. Exam High Schools and Academic Achievement: Evidence from New York City By Will Dobbie; Roland G. Fryer, Jr.
  2. A quantitative analysis of the U.S. housing and mortgage markets and the foreclosure crisis By Satyajit Chatterjee; Burcu Eyigungor
  3. Key Mobility Challenges in Indian Cities By Geetam Tiwari
  4. What said the new economic geography about Portugal? An alternative approach By Martinho, Vítor João Pereira Domingues
  5. State Roles in Providing Affordable Mass Transport Services for Low-Income Residents By Robert Cervero
  6. Disentangling spillover effects of antibiotic consumption: a spatial panel approach By Laura González; Giuliano Masiero
  7. Meeting Society's Transport Needs under Tight Budgets By OECD
  8. Net migration and convergence in Portugal By Martinho, Vítor João Pereira Domingues
  9. Cart or Horse: Transport and Economic Growth By Tim Leunig
  10. Public Acceptability of Sustainable Transport Measures: A Review of the Literature By Alison Pridmore; Apollonia Miola
  11. On Educational Performance Measures By Muriel, Alastair; Smith, Jeffrey A.
  12. Economic Perspectives on Transport And Equality By David Lewis
  13. Fiscal Federalism, Public Capital Formation, and Endogenous Growth By Liutang Gong; Heng-fu Zou
  14. The Decoupling of Affluence and Waste Discharge under Spatial Correlation: Do Richer Communities Discharge More Waste? By Daisuke Ichinose; Masashi Yamamoto; Yuichiro Yoshida
  15. House Price Booms and the Current Account By Klaus Adam; Pei Kuang; Albert Marcet
  16. Equitable Access: Remote and Rural Communities 'Transport Needs' By Peter White
  17. Internal Migration in the United States By Molloy, Raven; Smith, Christopher L.; Wozniak, Abigail
  18. Migration in Arctic Alaska: Empirical Evidence of the Stepping Stones Hypothesis By E. Lance Howe; Lee Huskey; Matthew D. Berman
  19. Perspectives from Mexico to Achieve More with Less: Alternative Transport Modes and their Social and Environmental Benefits By Adriana Lobo
  20. Local Government Tax Effort in China: an Analysis of Provincial Tax Performance By Qian Wang; Chunli Shen; Heng-fu Zou
  21. Contact, Diversity, and Segregation By Uslaner, Eric
  22. Islamic house financing: Current models and a proposal from social perspective By Hasan, Zubair
  23. Alcohol Availability and Crime: Lessons from Liberalized Weekend Sales Restrictions By Grönqvist, Hans; Niknami, Susan
  24. More than you can handle : decentralization and spending ability of Peruvian municipalities By Loayza, Norman V.; Rigolini, Jamele; Calvo-Gonzalez, Oscar
  25. Virtual Incubation in Industrial Clusters: A Case Study in Pakistan By Babur Wasim Arif; Tetsushi Sonobe
  26. Measuring University Contributions to Regional Economies: A Discussion of Guidelines for Enhancing Credibility By Swenson, David A.
  27. When more schooling is not worth the effort: another look at the dropout decisions of disadvantaged students in Uruguay. By Rossana Patrón
  28. Patent licensing in spatial competition: Does pre-innovation cost asymmetry matter? By Poddar, Sougata; Bouguezzi , Fehmi
  29. Migration and Stratification By Jasso, Guillermina
  30. Collateral damage: Sizing and assessing the subprime CDO crisis By Larry Cordell; Yilin Huang; Meredith Williams

  1. By: Will Dobbie; Roland G. Fryer, Jr.
    Abstract: Publicly funded exam schools educate many of the world's most talented students. These schools typically contain higher achieving peers, more rigorous instruction, and additional resources compared to regular public schools. This paper uses a sharp discontinuity in the admissions process at three prominent exam schools in New York City to provide the first causal estimate of the impact of attending an exam school in the United States on longer term academic outcomes. Attending an exam school increases the rigor of high school courses taken and the probability that a student graduates with an advanced high school degree. Surprisingly, however, attending an exam school has little impact on Scholastic Aptitude Test scores, college enrollment, or college graduation -- casting doubt on their ultimate long term impact.
    JEL: I20 J00
    Date: 2011–08
  2. By: Satyajit Chatterjee; Burcu Eyigungor
    Abstract: The authors construct a quantitative equilibrium model of the housing sector that accounts for the homeownership rate, the average foreclosure rate, and the distribution of home-equity ratios across homeowners prior to the recent boom and bust in the housing market. They analyze the key mechanisms that account for these facts, including the preferential tax treatment of housing and in ation. The authors then use the model to gain a deeper understanding of the recent housing and mortgage crisis by studying the consequence of an unanticipated increase in the supply of housing (overbuilding shock). They show that the model can account for the observed decline in house prices and much of the increase in the foreclosure rate if two additional forces are taken into account: (i) the lengthening of the time to complete a foreclosure (during which a defaulter can stay rent-free in his house) and (ii) the tightening of credit constraints in the market for new mortgages.
    Keywords: Foreclosure ; Global financial crisis ; Mortgage loans
    Date: 2011
  3. By: Geetam Tiwari
    Abstract: The existing modal share in Indian cities is in favor of Non-motorized transport (NMT) and public transport. However given the hostile conditions for public transport and increasing risk to pedestrians and cyclists, the use of personal motorized vehicle is increasing. This trend is accompanied with the rise in traffic crashes and deteriorating air quality in cities. Emission levels vary with travel behavior which is dependent on city size, structure and mode choice available.
    Date: 2011–05
  4. 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. We pretend, also, in a linear way to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo and the productivity factor significantly improves the results that explain the regional clustering in Portugal. The aim of this paper is to analyze, yet, the relationship between the regional industry clustering and the demand for labor by companies in Portugal. Again, the results are consistent with the theoretical developments of the New Economic Geography, namely the demand for labor is greater where transport costs are lower and where there is a strong links "backward and forward" and strong economies of agglomeration.
    Keywords: new economic geography; linear and non linear models; Portuguese regions
    JEL: O18 C23 R12 R23
    Date: 2011
  5. By: Robert Cervero
    Abstract: Governments support urban mass transport services worldwide under the guise of helping the poor and improving the environment. With more and more governments cash-strapped and facing budgetary shortfalls in other vital areas, the fiscal burdens of underwriting public transport have prompted some observers to question such rationales. This paper reviews the role of states in ensuring affordable mass transport services are available to low-income residents. The heavy financial burdens that the poor sometime face in moving about the city and possible ways of reducing these impacts are discussed. Examples of keeping transit fares affordable while also ensuring reasonably cost-effective mass transport services are cited. Because public policy choices that shape mass transport services are informed by technical evaluations, this paper also examines conventional practices regarding how transport proposals are reviewed and assessed. It argues that moving toward a framework that focuses on enhancing accessibility rather than principally mobility would better represent the long-term impacts of capital investments while also promoting the interests of mobility-disadvantaged populations.
    Date: 2011–05
  6. By: Laura González (Department of Economics, University of Lugano, Switzerland); Giuliano Masiero (Department of Economics and Technology Management, University of Bergamo, Italy)
    Abstract: Literature on socioeconomic determinants of antibiotic consumption in the community is limited to few countries using cross-sectional data. This paper analyses regional variations in outpatient antibiotics in Italy using a balanced panel dataset covering the period 2000-2008. We specify an econometric model where antibiotic consumption depends upon demographic and socioeconomic characteristics of the population, the supply of health care services in the community, and antibiotic copayments. The model is estimated by means of Ordinary least squares techniques with fixed effects (FE). The implications of consumption externalities across geographical areas are investigated by means of spatial-lag and spatial-error models (SLFE and SEFE). We find significant and positive income elasticity and negative effects of copayments. Antibiotic use is also affected by the age structure of the population and the supply of community health care. Finally, we find evidence of spatial dependency in the use of antibiotics across regions. This suggests that regional policies (e.g. public campaigns) aimed at increasing efficiency in antibiotic consumption and controlling bacterial resistance may be influenced by policy makers in neighbouring regions. There will be scope for a strategic and coordinated view of regional policies towards the use of antibiotics.
    Keywords: Antibiotic consumption, Socioeconomic inequalities, Spatial dependency, Regional policies.
    JEL: I0 C3
    Date: 2011–08
  7. By: OECD
    Abstract: In the aftermath of the 2008 financial crisis, both the private and public sectors face stringent constraints in funding for transport infrastructure investment and transport services. At the same time, economic recession highlights the social value of public support for disadvantaged users of transport services and more generally the importance of effective transport systems to efficient labour markets and access to jobs. This drives governments to focus anew on efficiency in the delivery of transport services and infrastructure investments and on efficient targeting of support for public transport. In developing economies these policy concerns are amplified by rapid urbanisation, which makes coordination of transport services across metropolitan areas imperative.
    Date: 2011–04
  8. By: Martinho, Vítor João Pereira Domingues
    Abstract: This work aims to present a project of research about the identification of the determinants that affect the mobility of labor from 1991 to 2001 (at NUTs III level). As main conclusion it can be said which is confirmed the existence of some labor mobility in Portugal and that regional mobility is mainly influenced positively by the availability of housing. This study analyses, also, through cross-section estimation methods, the influence of spatial effects in the conditional product convergence in the parishes’ economies of mainland Portugal between 1991 and 2001. Taking into account the estimation results, it is stated that there are not indications of convergence (the population is in the littoral of Portugal) and it can be seen that spatial spillover effects, spatial lag and spatial error condition the convergence of product of Portuguese parishes in the period under consideration.
    Keywords: net migration; convergence theory; panel and cross-section estimations; Portuguese regions
    JEL: O18 O47 C21 R23
    Date: 2011
  9. By: Tim Leunig
    Abstract: This paper argues that transport is more cart than horse, in that transport improvements are not the most important driver of economic growth for most countries. Nevertheless there are circumstances in which transport is particularly important. Big transport breakthroughs – such as replacing walking with railways, or creating a highways network for the first time – do have big effects, but these are unlikely to be seen again in developed economies. Instead transport in developed economies is best seen as having a supporting role. If it is neglected, it can constrain growth, as congestion and unreliable transport systems can exact a heavy price. But as long as the transport system is “good enough”, the returns to greater transport investment will be relatively limited.
    Date: 2011–04
  10. By: Alison Pridmore; Apollonia Miola
    Abstract: Increasingly, the debate on transport policy involves the challenge of sustainable development. The concept of sustainable transport is derived from the general term of sustainable development. Sustainable transportation can be considered by examining the sustainability of the transport system itself, in view of its positive and negative external effects on: the environment; public health; safety and security; land use; congestion; economic growth; and social inclusion (OECD, 2000).
    Date: 2011–05
  11. By: Muriel, Alastair (Institute for Fiscal Studies, London); Smith, Jeffrey A. (University of Michigan)
    Abstract: Quantitative school performance measures (QPMs) are playing an ever larger role in education systems on both sides of the Atlantic. In this paper we outline the rationale for the use of such measures in education, review the literature relating to several important problems associated with their use, and argue that they nonetheless have a positive role to play in improving the educational quality. We delineate several institutional reforms which would help schools to respond "positively" to QPMs, emphasizing the importance of agents' flexibility to change the way they work, and the importance of a sound knowledge base regarding "what works" in raising attainment. We suggest that the present institutional setups in both England and the US too often hold schools accountable for outcomes over which they have little control – but that such problems are far from insurmountable.
    Keywords: performance measures, education incentives, school quality
    JEL: H52 I2 I28
    Date: 2011–08
  12. By: David Lewis
    Abstract: Poverty, inequality and social exclusion are closely tied to personal mobility and the accessibility of goods and services. Evidence of the economic role of transport in promoting better living standards and greater wellbeing can be seen in the effects of both overall public investment in transport infrastructure, and in the impacts of specific transport policies, projects and multi-project plans.
    Date: 2011–04
  13. By: Liutang Gong (Guanghua School of Management, Peking University; Institute for Advanced Study, Wuhan University); Heng-fu Zou (Guanghua School of Management, Peking University; Institute for Advanced Study, Wuhan University; Development Research Group, The World Bank)
    Abstract: This paper extends the Barro (1990) growth model with one aggregate government spending and one flat income tax to include federal and local public consumption, federal and local public capital formation, federal and local taxes, and federal transfers to locality. It derives the rate of endogenous growth and examines how the growth rate and welfare respond to changes in federal taxes, local taxes, and federal transfers.
    Keywords: Fiscal federalism, Public expenditures, Public capital, Taxes, Federal transfers, Endogenous growth
    JEL: E0 G1 H0 O0
    Date: 2011
  14. By: Daisuke Ichinose (Tohoku University of Community Service and Science); Masashi Yamamoto (University of Toyama); Yuichiro Yoshida (National Graduate Institute for Policy Studies)
    Abstract: Although there are many studies on the environmental Kuznets curve, very few of them address municipal solid waste cases, and there is still controversy concerning the validity of the waste Kuznets curve hypothesis. In this paper, we provide empirical evidence for the waste Kuznets curve hypothesis by applying spatial econometrics methods to municipal-level data in Japan. To our knowledge, this is the first study that finds valid evidence for the waste Kuznets curve hypothesis in the absolute decoupling manner. The successful result owes in part to our highly disaggregated data and also to the use of a spatial econometric model that takes into account the mimicking behavior among neighboring municipalities. The former indicates that distinguishing between household and business waste is the key to revealing the waste–income relationship, while the latter implies the importance of peer effects when municipal governments formulate waste-reduction policies.
    Date: 2011–08
  15. By: Klaus Adam; Pei Kuang; Albert Marcet
    Abstract: A simple open economy asset pricing model can account for the house price and current account dynamics in the G7 over the years 2001-2008. The model features rational households, but assumes that households entertain subjective beliefs about price behavior and update these using Bayes' rule. The resulting beliefs dynamics considerably propagate economic shocks and crucially contribute to replicating the empirical evidence. Belief dynamics can temporarily delink house prices from fundamentals, so that low interest rates can fuel a house price boom. House price booms, however, are not necessarily synchronized across countries and the model correctly predicts the heterogeneous response of house prices across the G7, following the fall in real interest rates at the beginning of the millennium. The response to interest rates depends sensitively on agents' beliefs at the time of the interest rate reduction, which are a function of the prior history of disturbances hitting the economy. According to the model, the US house price boom could have been largely avoided, if real interest rates had decreased by less after the year 2000.
    Keywords: interest rates, house prices, short-term capital movements
    JEL: F41 F32 E43
    Date: 2011–07
  16. By: Peter White
    Abstract: Transport in rural and remote regions receives considerable attention in research, but this is often focussed on specific means of resolving problems in those regions – for example, the role of demand-responsive bus services, or scope for attracting users to rail services. The aim of this paper is to take a broader view, firstly in defining what constitute “rural and remote regions”, and secondly in considering a wide range of public transport options available. Experience in Britain will be taken as a starting point, since extensive research has been conducted here, and rural issues are also a focus of much public debate at present. Findings from other European countries will also be examined.
    Date: 2011–05
  17. By: Molloy, Raven (Federal Reserve Board of Governors); Smith, Christopher L. (Federal Reserve Board of Governors); Wozniak, Abigail (University of Notre Dame)
    Abstract: We review patterns in migration within the US over the past thirty years. Internal migration has fallen noticeably since the 1980s, reversing increases from earlier in the century. The decline in migration has been widespread across demographic and socioeconomic groups, as well as for moves of all distances. Although a convincing explanation for the secular decline in migration remains elusive and requires further research, we find only limited roles for the housing market contraction and the economic recession in reducing migration recently. Despite its downward trend, migration within the US remains higher than that within most other developed countries.
    Keywords: internal migration, migration trends, housing crisis, U.S. recession, cross-country comparisons
    JEL: J61 R23 J1
    Date: 2011–08
  18. By: E. Lance Howe (Department of Economics, University of Alaska Anchorage); Lee Huskey (Department of Economics, University of Alaska Anchorage); Matthew D. Berman (Institute of Social and Economic Research and Department of Economics, University of Alaska Anchorage)
    Abstract: This paper explores hypotheses of hierarchical migration using data from the Alaskan Arctic. We focus on migration of Iñupiat people, who are indigenous to the region, and explore the role of income and subsistence harvests on migration. To test related hypotheses we use confidential micro-data from the US Census Bureau’s 2000 Decennial Census of Population and Income and generate migration probabilities using a mixed multinomial and conditional logit model. Our findings are broadly consistent with Ravenstein’s (1885) early hypothesis of step-wise migration; we find evidence of step-wise migration, both up and down an urban and rural hierarchy. We also find that where migrants choose to live is a function of place, personal, and household characteristics.
    Keywords: Migration, Hierarchical Migration, Rural to Urban Migration, Arctic Alaska
    JEL: J61 O15 R23
    Date: 2011
  19. By: Adriana Lobo
    Abstract: The discussion presented below focuses on improving the decision-making process as the true challenge of mobility we face. It proposes a way of thinking about some of the key topics within each of the layers involved in decision-making at the strategic level, including attributes of the transport system and regulatory frameworks.
    Date: 2011–05
  20. By: Qian Wang (School of Public & Environmental Affairs (SPEA) Indiana University Bloomington); Chunli Shen (Central University of Finance and Economics); Heng-fu Zou (Shenzhen University, Wuhan University and Central University of Finance and Economics)
    Abstract: This paper aims to enhance the understanding of provincial tax performance in China, paying special attention to the recent fiscal reforms in the 1980s and in 1994. Using provincial panel data for the period 1986-2004, our analysis consists of two steps. First, a combined fixed time effects and random provincial effects model is used to analyze the statistical relationship between the tax share in GDP and economic and demographic variables. Results indicate that the decentralized fiscal system over the period 1986¨C1993 has had a positive impact on the tax share in GDP, whereas the recentralized fiscal system in the period 1994-2004 has had a negative impact. Second, provincial tax effort indices are calculated to estimate potential room for additional taxation. The findings from the analysis have important policy implications on the redistribution of fiscal resources as well as on the effectiveness of the tax administration.
    Keywords: Tax effort, Tax capacity, Fiscal reforms, Fiscal decentralization
    JEL: H20 H71 C23
    Date: 2011
  21. By: Uslaner, Eric (Stockholm University Linnaeus Center for Integration Studies - SULCIS)
    Abstract: There is a growing concern across the West that diversity (and immigration) has led to a decline in trust and social cohesion. In this working paper, which is based upon the core theoretical chapter of my book under contract to Cambridge University Press, Segregation and Mistrust, I argue that it is not diversity but segregation that drives down trust. I argue that the negative effects of diversity have been overstated, as has the simple idea that contact among people of different backgrounds will build trust. There is stronger evidence for Allport's "optimal contacts," where people have deeper and more frequent contacts based upon a foundation of equality. There is little evidence of a direct link between diverse contacts and trust. Nor is there strong evidence of a negative relationship between diversity and trust. I argue that it is not diversity but residential segregation that drives down trust. To build trust, people must live in neighborhoods that are integrated and diverse-and have heterogenous friendship networks-as Allport and Pettigrew have argued. I show that diversity and segregation are not the same thing and show that segregation leads to both greater inequality and worse outcomes on several measures across American communities and across nations. I also argue that governmental multiculturalism policies reinforce a strong sense of ethnic identity, which leads to high in-group trust at the expense of generalized trust.
    Keywords: trust; segregation; diversity; multiculturalism
    JEL: A13 Z13
    Date: 2011–08–09
  22. By: Hasan, Zubair
    Abstract: This brief note supplements the argument of an earlier paper Islamic Home Financing: Current Models and a Proposal from Social Perspective”; it explains that the Diminishing Balance Model for Islamic home financing is operable in a Shari’ah compliant way even without the Islamic Banking laws accommodating the notion of constructive ownership as envisaged earlier. It further clarifies how the new model scores over the models currently being used for the purpose.
    Keywords: Key words: Islamic home finance; interest based model; MMP model; Diminishing Balance model
    JEL: D14 G21
    Date: 2011–08–10
  23. By: Grönqvist, Hans (Swedish Institute for Social Research, Stockholm University); Niknami, Susan (Swedish Institute for Social Research, Stockholm University)
    Abstract: In February 2000, the Swedish state monopoly alcohol retail company launched a large scale experiment in which all stores in selected counties were allowed to keep open on Saturdays. We assess the effects on crime of this expansion in access to alcohol. To isolate the impact of the experiment from other factors, we compare conviction rates in age cohorts above and below the national drinking age restriction in counties where the experiment had been implemented, and contrast these differences to those in counties that still prohibited weekend alcohol commerce. Our analysis relies on extensive individual conviction data that have been merged to population registers. After demonstrating that Saturday opening of alcohol shops significantly raised alcohol sales, we show that it also increased crime. The increase is confined to crimes committed on Saturdays and is driven by illegal activity among individuals with low ability and among persons with fathers that have completed at least some secondary education. Although the increases in crime and alcohol sales were slightly higher during the initial phase of the experiment, our evidence suggests that both effects persist over time. Our analysis reveals that the social costs linked to the experiment exceed the monetary benefits.
    Keywords: Delinquency; Alcohol laws; Substance use
    JEL: K42
    Date: 2011–08–02
  24. By: Loayza, Norman V.; Rigolini, Jamele; Calvo-Gonzalez, Oscar
    Abstract: In the past three decades, emerging countries have gone through extensive decentralization reforms. Yet, there are no studies assessing quantitatively the relative importance of various factors known to affect the success of decentralization. This paper builds on a comprehensive dataset the authors constructed for Peru, which merges municipal fiscal accounts with information about municipalities'characteristics such as population, poverty, education, and local politics. The paper then analyzes the leading factors affecting the ability of municipalities to execute the allocated budget using complementary methodologies, from least squares to quantile regression analyses. According to the existing literature and the Peruvian context, the analysis divides these factors into four categories: the budget size and allocation process; local capacity; local needs; and political economy constraints. Although all four factors affect decentralization, the largest determinant of spending ability is the adequacy of the budget with respect to local capacity. The results confirm the need for decentralization to be implemented gradually over time in parallel with strong capacity building efforts.
    Keywords: Public Sector Expenditure Policy,Subnational Economic Development,Debt Markets,Political Economy,Municipal Financial Management
    Date: 2011–08–01
  25. By: Babur Wasim Arif (Federal Bureau of Statistics, Pakistan); Tetsushi Sonobe (National Graduate Institute for Policy Studies)
    Abstract: In industrial clusters, transaction costs are kept low and free riding is discouraged by a community mechanism developed through dense and repeated interactions among entrepreneurs. In such environments, new entrants without established reputations and connections are put at a distinct disadvantage. This negative effect on new entry must be neutralized for an industrial cluster to expand. Using enterprise level data from Pakistan, this study finds that personal networks are indeed important for successful enterprise operation, which works to the advantage of incumbents, but that subcontracting plays the role of virtual incubation in nurturing new enterprises, reinforcing the cluster’s dynamism.
    Keywords: South Asia, Pakistan, industrial cluster, social capital, subcontracting
    Date: 2011–08
  26. By: Swenson, David A.
    Abstract: In light of tight state fiscal accounts, increased competition among all government service providers for scarce resources, and a poorly performing national economy, public universities are under increasing pressure to demonstrate their worth to regional or statewide economies.  This has resulted in a proliferation of university economic impact studies.This paper is a guide to assist public university economic impact practitioners plan, structure, evaluate, and disseminate higher education economic information that can be used for policy development, general planning, and overall university relations.  It provides some basic considerations, cautions, and checks that university economic impact studies should keep in mind when engaging in this activity. 
    Date: 2011–08–08
  27. By: Rossana Patrón (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: In Uruguay, similar to many developing countries, the economic return to lower secondary studies is low. When heterogeneity is introduced in the analysis, it can be shown that differences in the quality of education and in the probability of repetition mark the contrast between an attractive and an inconvenient investment in secondary education between advantaged and disadvantaged students. The values of internal rate of return computed for the Uruguayan case allow concluding that, paradoxically, lower secondary education is an inconvenient investment for disadvantaged students, even disregarding the possibility of them not being able to afford the opportunity costs, explaining the heavy dropout rates of this student type. These results cast some serious doubts on the fairness of compulsory schooling laws that are not accompanied by complementary policies to ensure equal learning outcomes across socioeconomic groups.
    Keywords: education returns, school quality, repetition rates
    JEL: I21 J24
    Date: 2011–02
  28. By: Poddar, Sougata; Bouguezzi , Fehmi
    Abstract: We consider the optimal licensing strategy of an insider patentee in a circular city of Salop’s model and in a linear city of Hotelling’s model when firms have asymmetric pre-innovation marginal costs of production and compete in prices. We completely characterize the optimal licensing policies using a fixed fee and per-unit royalty under the drastic and non-drastic innovations. We find that when the innovative firm is efficient compared to the licensee at the pre-innovation stage then the results regarding optimal licensing policy coincide with the results described in the literature with symmetric firms. However, this is not true when the innovative firm is inefficient in the pre-innovation stage compared to the licensee. To that end, we show that even a drastic innovation can be licensed using a royalty scheme when the patentee is highly inefficient compared to licensee in the pre-innovation stage and the size of the innovation is intermediate. We also show that in this set-up, fixed fee licensing is never optimal.
    Keywords: Innovation; Technology transfer; Salop model; Hotelling model; Patent licensing; symmetric and asymmetric costs
    JEL: L13 D45 D43
    Date: 2011–08–12
  29. By: Jasso, Guillermina (New York University)
    Abstract: Migration and stratification are increasingly intertwined. One day soon it will be impossible to understand one without the other. Both focus on life chances. Stratification is about differential life chances – who gets what and why – and migration is about improving life chances – getting more of the good things of life. To examine the interconnections of migration and stratification, we address a mix of old and new questions, carrying out analyses newly enabled by a unique new data set on recent legal immigrants to the United States (the New Immigrant Survey). We look at immigrant processing and lost documents, depression due to the visa process, presentation of self, the race-ethnic composition of an immigrant cohort (made possible by the data for the first time since 1961), black immigration from Africa and the Americas, skin-color diversity among couples formed by U.S. citizen sponsors and immigrant spouses, and English fluency among children age 8-12 and their immigrant parents. We find, inter alia, that children of previously illegal parents are especially more likely to be fluent in English, that native-born U.S. citizen women tend to marry darker, that immigrant applicants who go through the visa process while already in the United States are more likely to have their documents lost and to suffer visa depression, and that immigration, by introducing accomplished black immigrants from Africa (notably via the visa lottery), threatens to overturn racial and skin color associations with skill. Our analyses show the mutual embeddedness of migration and stratification in the unfolding of the immigrants' and their children's life chances and the impacts on the stratification structure of the United States.
    Keywords: immigration, immigrant visas, social stratification, gender, race, Hispanic origin, skin color, presentation of self, visa depression, illegal experience, English fluency, spouse selection, children of immigrants, nativity premium, New Immigrant Survey
    JEL: F22 J15 J16 J24 K42
    Date: 2011–08
  30. By: Larry Cordell; Yilin Huang; Meredith Williams
    Abstract: This paper conducts an in-depth analysis of structured finance asset-backed securities collateralized debt obligations (SF ABS CDOs), the subset of CDOs that traded on the ABS CDO desks at the major investment banks and were a major contributor to the global financial panic of August 2007. Despite their importance, we have yet to determine the exact size and composition of the SF ABS CDO market or get a good sense of the write-downs these CDOs will generate. In this paper the authors identify these SF ABS CDOs with data from Intex©, the source data and valuation software for the universe of publicly traded ABS/MBS securities and SF ABS CDOs. They estimate that 727 publicly traded SF ABS CDOs were issued between 1999 and 2007, totaling $641 billion. Once identified, they describe how and why multisector structured finance CDOs became subprime CDOs, and show why they were so susceptible to catastrophic losses. The authors then track the flows of subprime bonds into CDOs to document the enormous cross-referencing of subprime securities into CDOs. They calculate that $201 billion of the underlying collateral of these CDOs was referenced by synthetic credit default swaps (CDSs) and show how some 5,500 BBB-rated subprime bonds were placed or referenced into these CDOs some 37,000 times, transforming $64 billion of BBB subprime bonds into $140 billion of CDO assets. For the valuation exercise, the authors estimate that total write-downs on SF ABS CDOs will be $420 billion, 65 percent of original issuance balance, with over 70 percent of these losses having already been incurred. They then extend the work of Barnett-Hart (2009) to analyze the determinants of expected losses on the deals and AAA bonds and examine the performance of the dealers, collateral managers, and rating agencies. Finally, the authors discuss the implications of their findings for the “subprime CDO crisis” and discuss the many areas for future work.
    Keywords: Debt ; Securities ; Asset-backed financing ; Banks and banking
    Date: 2011

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