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on Urban and Real Estate Economics |
| By: | Gabrielle Fack; Julien Grenet |
| Abstract: | In this paper, we investigate how housing prices react to the quality of education offered by neighbouring public and private schools. The organization of secondary schooling in the city of Paris, which combines residence-based-assignment to public schools with a well-developed and almost entirely publicly funded private school system, offers a valuable empirical context for analyzing how private schools affect the capitalization of public school performance in housing prices. Using comprehensive data on both schools and real estate transact ions over the period 1997-2004, we develop a matching framework to carefully compare sales across school attendance boundaries. We find that a standard deviation increase in public school performance raises housing prices by 1.4 to 2.4%. Moreover, we show that the capitalization of public school performance in the price of real estate shrinks as the availability of private schools increases in the neighbourhood. Our results confirm the predictions of general equilibrium models of school choice that private schools, by providing an advantageous outside option to parents, tend to mitigate the impact of public school performance on housing prices. |
| Keywords: | School attendance zones, private schools, housing markets,residential segregation |
| JEL: | H41 I21 I28 R21 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0119&r=ure |
| By: | Stephen Gibbons; Sandra McNally; Martina Viarengo |
| Abstract: | Improvement of educational attainment in schools in urban, disadvantaged areas is an important priority for policy - particularly in countries like England which have a long tail at the bottom of the educational distribution and where there is much concern about low social mobility. An anomaly in the spatial dimension of school funding policy in England allows us to examine the effect of increasing school expenditure for schools in urban areas. This anomaly arises because an 'area cost adjustment' is made in how central government allocates funds to Local Authorities (school districts) whereas, in reality, teachers are drawn from the same labour market and are paid according to national pay scales. This is one of the features that give rise to neighbouring schools on either side of a Local Authority boundary being allocated very different resources, even if they have very similar characteristics. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This finding lends adds to the evidence that school resources have an important role to play in improving educational attainment and has direct policy implications for the current 'pupil premium' policy in England. |
| Keywords: | Urban schools, education, resources |
| JEL: | R0 I21 H52 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0090&r=ure |
| By: | John V. Duca; John Muellbauer; Anthony Murphy |
| Abstract: | The U.S. house price boom has been linked to an unsustainable easing of mortgage credit standards. However, standard time series models of U.S. house prices omit credit constraints and perform poorly in the 2000s. We incorporate data on credit constraints for first-time buyers into a model of U.S. house prices based on the (inverted) demand for housing services. The model yields not only a stable long-run cointegrating relationship, a reasonable speed of adjustment, plausible income and price elasticities and an improved fit, but also sensible estimates of tax credit effects and the possible bottom in real house prices. |
| Keywords: | Housing - Prices ; Credit ; Subprime mortgage |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1104&r=ure |
| By: | Stephen Gibbons; Sandra McNally; Martina Viarengo |
| Abstract: | Improvement of educational attainment in schools in urban, disadvantaged areas is an important priority for policy - particularly in countries like England which have a long tail at the bottom of the educational distribution and where there is much concern about low social mobility. An anomaly in the spatial dimension of school funding policy in England allows us to examine the effect of increasing school expenditure for schools in urban areas. This anomaly arises because an 'area cost adjustment' is made in how central government allocates funds to Local Authorities (school districts) whereas, in reality, teachers are drawn from the same labour market and are paid according to national pay scales. This is one of the features that give rise to neighbouring schools on either side of a Local Authority boundary being allocated very different resources, even if they have very similar characteristics. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This finding lends adds to the evidence that school resources have an important role to play in improving educational attainment and has direct policy implications for the current 'pupil premium' policy in England. |
| Keywords: | Urban schools, education, resources, |
| JEL: | R0 I21 H52 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0128&r=ure |
| By: | John V. Duca; John Muellbauer; Anthony Murphy |
| Abstract: | Most U.S. house price models break down in the mid-2000s due to the omission of exogenous changes in mortgage credit supply (associated with the subprime mortgage boom) from house price-to-rent ratio and inverted housing demand models. Previous models lack data on credit constraints facing first-time homebuyers. Incorporating a measure of credit conditions—the cyclically adjusted loan-to-value ratio for first-time buyers—into house price-to-rent ratio models yields stable long-run relationships, more precisely estimated effects, reasonable speeds of adjustment and improved model fits. |
| Keywords: | Housing - Prices ; Subprime mortgage ; Credit ; Rent |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1103&r=ure |
| By: | Filipa Sá; Pascal Towbin; Tomasz Wieladek |
| Abstract: | A number of OECD countries experienced an environment of low interest rates and a rapid Increase in real house prices and residential investment during the past decade. Different explanations have been suggested for the housing boom: expansionary monetary policy, capital inflows due to a global savings glut and excessive financial innovation combined with inappropriately lax financial regulation. In this study we examine the effects of these three factors on the housing market. We estimate a panel VAR for a sample of OECD countries and identify monetary policy and capital inflows shocks using sign restrictions. To explore how the effects of these shocks change with the structure of the mortgage market and the degree of securitization, we allow the VAR coefficients to vary with mortgage market characteristics. Our results suggest that both types of shocks have a significant and positive effect on real house prices, real credit to the private sector and residential investment. The response of housing variables to both types of shocks is stronger in countries with more developed mortgage markets. The amplification effect of mortgage-backed securitization is particularly strong for capital inflows shocks. |
| Keywords: | Money supply ; Capital movements |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:79&r=ure |
| By: | Ozgur Emre Ergungor; Stephanie Moulton |
| Abstract: | We evaluate the effects of the lending institution and soft information on mortgage loan performance for low-income homebuyers. We find that even after controlling for bank selection, those who receive a loan from a local bank are significantly less likely to become delinquent or default than other bank or nonbank borrowers, suggesting an information effect. These effects are most pronounced for higher-risk borrowers, who likely benefit more from informational advantages of local banks. These findings support previous research on small business lending and provide additional explanation for observed differences in mortgage loan performance between bank and nonbank lenders. |
| Keywords: | Housing - Finance ; Default (Finance) ; Mortgages |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1115&r=ure |
| By: | Sandra Gomes; Caterina Mendicino |
| Abstract: | This paper quantifies the role of expectation-driven cycles for housing market fluctuations in the United States. We find that news shocks: (1) account for a sizable fraction of the variability in house prices and other macroeconomic variables over the business cycle and (2) significantly contributed to booms and busts episodes in house prices over the last three decades. By linking news shocks to agents’ expectations, we find that house prices were positively related to inflation expectations during the boom of the late 1970’s while they were negatively related to interest rate expectations during the housing boom that peaked in the mid-2000’s. |
| JEL: | C50 E32 E44 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201121&r=ure |
| By: | Stephen Gibbons; Olmo Silva; Felix Weinhardt |
| Abstract: | In this paper, we use census data on several cohorts of secondary school students in England matched to detailed information on place of residence to investigate the effect of neighbours' background characteristics and prior achievements on teenagers' educational and behavioural outcomes. Our analysis focuses on the age-11 to age-16 time-lapse, and uses variation in neighbourhood composition over this period that is driven by residential mobility. Exploiting the longitudinal nature and detail of our data, we are able to control for pupil unobserved characteristics, neighbourhood fixed-effects and time-trends, school-by-cohort unobservables, as well as students' observable attributes and prior attainments. Our results provide little evidence that neighbours' characteristics significantly affect pupil test score progression during secondary education. Similarly, we find that neighbourhood composition only exerts a small effect on pupil behavioural outcomes, such as general attitudes towards schooling, substance use and anti-social behaviour. |
| Keywords: | Neighbourhood effects, cognitive and non-cognitive outcomes, secondary schools |
| JEL: | C21 I20 H75 R23 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0122&r=ure |
| By: | Robert B. Avery; Kenneth P. Brevoort |
| Abstract: | A growing literature suggests that housing policy, embodied by the Community Reinvestment Act (CRA) and the affordable housing goals of the government sponsored enterprises, may have caused the subprime crisis. The conclusions drawn in this literature, for the most part, have been based on associations between aggregated national trends. In this paper we examine more directly whether these programs were associated with worse outcomes in the mortgage market, including delinquency rates and measures of loan quality. We rely on two empirical approaches. In the first approach, which focuses on the CRA, we conjecture that historical legacies create significant variations in the lenders that serve otherwise comparable neighborhoods. Because not all lenders are subject to the CRA, this creates a quasi-natural experiment of the CRA's effect. We test this conjecture by examining whether neighborhoods that have been disproportionally served by CRA-covered institutions historically experienced worse outcomes. The second approach takes advantage of the fact that both the CRA and GSE goals rely on clearly defined geographic areas to determine which loans are favored by the regulations. Using a regression discontinuity approach, our tests compare the marginal areas just above and below the thresholds that define eligibility, where any effect of the CRA or GSE goals should be clearest. We find little evidence that either the CRA or the GSE goals played a significant role in the subprime crisis. Our lender tests indicate that areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2011-36&r=ure |
| By: | Fernando Ferreira; Joseph Gyourko; Joseph Tracy |
| Abstract: | This paper provides updated estimates of the impact of three financial frictions – negative equity, mortgage lock-in, and property tax lock-in – on household mobility. We add the 2009 wave of the American Housing Survey (AHS) to our sample and also create an improved measure of permanent moves in response to Schulhofer-Wohl’s (2011) critique of our earlier work (Ferreira, Gyourko and Tracy (2010)). Our updated estimates corroborate our previous results: negative equity reduces household mobility by 30 percent, and $1,000 of additional mortgage or property tax costs reduces household mobility by 10%-16%. Schulhofer-Wohl’s finding of a slight positive correlation between mobility and negative equity appears due to a large fraction of false positives, as his coding methodology has the propensity to misclassify almost half of the additional moves it identifies relative to our measure of permanent moves. This also makes his mobility measure dynamically inconsistent, as many transitions originally classified as a move are reclassified as a non-move when additional AHS panels become available. We conclude with directions for future research, including potential improvements to measures of household mobility. |
| JEL: | R21 R23 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17405&r=ure |
| By: | Oliver Falck; Christina Guenther; Stephan Heblich; William R. Kerr |
| Abstract: | We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources. |
| Keywords: | Agglomeration, competition, firm dynamics, labor, Germany |
| JEL: | R10 L10 H25 O10 J20 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0088&r=ure |
| By: | Deng, Yongheng (National University of Singapore); Morck, Randall (University of Alberta and NBER); Wu, Jing (National University of Singapore and Tsinghua University); Yeung, Bernard (National University of Singapore) |
| Abstract: | In the recent financial crisis, macroeconomic stimuli produced mixed results across developed economies. In contrast, China's stimulus boosted real GDP growth from an annualized 6.2% in the first quarter of 2009 trough to 11.9% in the first quarter of 2010. Amidst this phenomenal response, land auction and house prices in major cities soared. We argue that the speed and efficacy of China's stimulus derives from state control over its banking system and corporate sector. Beijing ordered state-owned banks to lend, and they lent. Beijing ordered centrally-controlled state-owned enterprises (SOEs) to invest, and they invested. However, our data show that much of this investment was highly leveraged purchases of real estate. Residential land auction prices in eight major cities rose about 100% in 2009, controlling for quality variation. Moreover, higher price rises occur these SOEs are more active buyers. We argue that these centrally-controlled SOEs overbid substantially, fueling a real estate bubble; and that China's seemingly highly effective macroeconomic stimulus package may well have induced costly resource misallocation. |
| Keywords: | Monetary stimuli; Fiscal Stimuli; Ownership Structure; Housing Market; China |
| JEL: | E52 G21 G38 P27 P34 |
| Date: | 2011–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0173&r=ure |
| By: | Jonathan Jones; Colin Wren |
| Abstract: | The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries. |
| Keywords: | Industrial location, agglomeration economies, intermediate goods, FDI |
| JEL: | H3 O2 L2 R3 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0089&r=ure |
| By: | Mohsin, Hasan M; Gilbert, Scott |
| Abstract: | The study estimates relative city price convergence using CPI data from July 2001 to June 2008 on 35 Pakistani cities. Two cities Lahore and Karachi are chosen to be the numeraire cities. The half life of relative city price shock has also been estimated. The study finds average half life of price shock to be less than 5 months but it varies from 1.3 to 68 months in the case of individual cities. The estimates of Spatial GLS are found to be lower than OLS which may imply that Spatial Correlations are important factor for the estimation of half life. Furthermore, the average half life of a price shock in Lahore is less than that of Karachi. |
| Keywords: | Prices; convergence; Spatial GLS |
| JEL: | F4 R1 E31 |
| Date: | 2010–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27901&r=ure |
| By: | Farole, Thomas; Winkler, Deborah |
| Abstract: | Using a cross-section of more than 40,000 manufacturing and services firms in 79 developing countries from the World Bank's Enterprise Surveys Database, this paper assesses how firm location determines the likelihood and extent of exporting in developing countries. Descriptive statistics confirm higher export participation (but not intensity) for firms in core versus non-core regions, despite the finding that firms in the core assess many aspects of the investment climate more negatively. Results from a probit model show that, in addition to firm-specific characteristics, both regional investment climate and agglomeration factors have a significant impact on export participation. Specifically, customs clearance and electricity quality matter for export participation for manufacturing firms. Although localization economies and export spillovers are associated with increased exporting, the opposite is found for urbanization economies for both manufacturing and services firms. The analysis finds that firm-level determinants of exporting matter more for firms located in non-core regions, while regional determinants and agglomeration economies play a larger role in core regions. The findings point to the presence of congestion costs in the core, and suggest that policy interventions to target export participation are likely to have a greater impact if they are focused on core regions over non-core regions, where firm-specific factors predominate. Moreover, the importance of export spillovers and localization economies highlights the potential value of efforts to remove barriers to natural agglomeration both in core and non-core regions, for example through investments in infrastructure, the provision of social services, and regional integration arrangements. |
| Keywords: | Regional Economic Development,Microfinance,E-Business,Banks&Banking Reform,Private Participation in Infrastructure |
| Date: | 2011–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5780&r=ure |
| By: | Michael Lytton |
| Abstract: | Many schools around the world are struggling in the face of reduced funding and fluctuating enrolments. Often, the solution to this unhappy equation is quite simply to shut down facilities. But when all the costs of closing a school are considered – financial, material and human – implementing this policy calls for caution. |
| Keywords: | school closures, utilisation rates, educational performance, operating costs, shuttering |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2011/8-en&r=ure |
| By: | Wiberg, Magnus (Ministry of finance) |
| Abstract: | This paper examines how different electoral rules affect the location decisions of firms through the effect on regional policy. The equilibrium location of industry in the economically smaller (larger) region is higher under majoritarian (proportional) elections. The standard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the smaller region is increasing in the level of regional integration. As trade is in- creasingly liberalized, the economy features a reversed core-periphery equilibrium. This result holds under both electoral rules. However, firms locate to the smaller region at a relatively higher rate in the case of majoritarian voting, hence, the reversed equilibrium occurs for a relatively lower level of regional integration with majoritarian elections. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instrumental variable strategy that accounts for the potential endogeneity of the electoral rule. |
| Keywords: | Economic Geography; Regional Policy; Electoral Rules |
| JEL: | D72 F12 R12 |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0021&r=ure |
| By: | Laurino, Antonio; Grimaldi, Raffaele |
| Abstract: | Car sharing is increasing its role worldwide as an alternative transport mode, that could contribute to a more sustainable urban mobility by reducing congestion and pollution. The paper focuses on the understanding of which are the main characteristics of this service starting from the literature on this topic both in terms of user profile and impact of the service; in the second part of the paper, the Italian context will be presented starting from the analysis of four Italian experiences with a particular focus on Milan’s car sharing. Summarizing the conclusion, it emerges that to date, the overall impact on transport is still quite low, in part due to a scarce integration and coordination with other transport modes and in part because car is still perceived primarily as a status symbol and a “good” rather than as a “service”. Therefore, car sharing can perform as a significant complementary and sustainable solution to mobility needs only in a context of cultural change and inside a transport policy aimed at changing transport behavior. |
| Keywords: | car sharing; sustainable mobility; transport policy; urban mobility; peer to peer car sharing; |
| JEL: | Q50 R40 |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33100&r=ure |
| By: | Filipa Sá; Tomasz Wieladek |
| Abstract: | We estimate an open economy VAR model to quantify the effect of monetary policy and capital inflows shocks on the US housing market. The shocks are identified with sign restrictions derived from a standard DSGE model. We find that monetary policy shocks have a limited effect on house prices and residential investment. In contrast, capital inflows shocks driven by an increase in foreign savings have a positive and persistent effect on both housing variables. Other sources of capital inflows shocks, such as foreign monetary expansion or an increase in aggregate demand in the US, have a more limited role. |
| Keywords: | Monetary policy ; Money supply ; International finance |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:80&r=ure |
| By: | Kathleen Moore |
| Abstract: | This article provides an overview of the “Schools of the Future” initiative introduced in California in January 2011 by the newly elected State Superintendent of Public Instruction, Tom Torlakson. Its objective is to focus on the reform of the state school facility programme and to design highperforming, “greener” schools. |
| Keywords: | investment, infrastructure, sustainability, energy efficiency, high performance |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2011/7-en&r=ure |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move, generating a Fréchet distribution of city sizes that is empirically competitive with other models. |
| Keywords: | Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory |
| JEL: | R12 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33121&r=ure |
| By: | Victor Lavy |
| Abstract: | There are large differences across countries in instructional time in schooling institutions. Can these differences explain some of the differences across countries in pupils' achievements in different subjects? What is the likely impact of changes in instructional time? While research in recent years provides convincing evidence about the effect of several inputs in the education production function, there is limited evidence on the effect of classroom instructional time. Such evidence is of policy relevance in many countries, and it became very concrete recently as President Barrack Obama announced the goal of extending the school week and year as a central objective in his proposed education reform for the US. In this paper, I estimate the effects of instructional time on students' academic achievement in math, science and language. I estimate linear and non-linear instructional time effects controlling for unobserved heterogeneity of both pupils and schools. The evidence from a sample of 15 year olds from over fifty countries that participated in PISA 2006 consistently shows that instructional time has a positive and significant effect on test scores. The effect is large relative to the standard deviation of the within pupil test score distribution. The OLS results are highly biased upward but the within student estimates are very similar across groups of developed and middle-income countries. However, the estimated effect of instructional time in the sample of developing countries is much lower than the effect size in the developed countries. Several checks for threats of identification support the causal interpretation of this evidence. I obtain very similar results when I use as an alternative data from primary and middle schools in Israel and a somewhat different identification strategy. Finally, I also explore some correlations that suggest that suggest that the productivity of instructional time is higher in countries that implemented s |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0118&r=ure |
| By: | Mardi Dungey; Gerald P. Dwyer; Thomas Flavin |
| Abstract: | The misevaluation of risk in securitized financial products is central to understand- ing the Financial Crisis of 2007-2008. This paper characterizes the evolution of factors affecting collateralized debt obligations (CDOs) based on subprime mortgages. A key feature of subprime-mortgage backed indices is that they are distinct in their vintage of issuance. Using a latent factor framework that incorporates this vintage effect, we show the increasing importance of a common factor on more senior tranches during the crisis. We examine this common factor and its relationship with spreads. We estimate the effects on the common factor of the financial crisis. |
| JEL: | G12 C32 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2011-30&r=ure |
| By: | Jocelyn Donze and Trude Gunnes (Statistics Norway) |
| Abstract: | This paper sheds light on the role of student motivation in the success of schooling. We develop a model in which a teacher engages in the management of student motivation through the choice of the classroom environment. We show that the teacher is able to motivate high-ability students, at least in the short run, by designing a competitive environment. For students with low ability, risk aversion, or when engaged in a long term relationship, the teacher designs a classroom environment that is more focused on mastery and self-referenced standards. In doing so, the teacher helps to develop the intrinsic motivation of students and their capacity to overcome failures. |
| Keywords: | Education; Student Achievement; Intrinsic and Extrinsic Motivation; Effort; Goal Theory. |
| JEL: | I21 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:662&r=ure |
| By: | Stuart J. Fowler; Jennifer J. Wilgus |
| Abstract: | The primary purpose of this study is to introduce an estimatable model of search and matching in real estate markets. A benefit of developing such a theory is so we may better understand the structure that determines these choices. The DCDP model that we propose produces the following results. First, the model is able to replicate several salient features of real estate markets. Second, the estimation method is able to accurately and efficiently recover the structural demand and supply functions of the buyers and sellers. |
| Keywords: | Real Estate; Search and Matching; Structural Estimation; MCMC; and Gibbs-Sampler |
| JEL: | C11 C5 C51 C61 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:201105&r=ure |
| By: | Fabrizio Barca (Ministry of Economy and Finance); Philip McCann (University of Groningen); Andrés Rodríguez-Pose (IMDEA Social Sciences Institute) |
| Abstract: | The paper examines the debates regarding place-neutral versus place-based policies for economic development. The analysis is set in the context of how development policy thinking on the part of both scholars and international organizations has evolved over several decades. Many of the previously accepted arguments have been called into question by the impacts of globalization and a new response to these issues has emerged, a response both to these global changes and also to non-spatial development approaches. The debates are highlighted in the context of a series of major reports recently published on the topic. The cases of the developing world and of the European Union are used as examples of how in this changing context development intervention should increasingly focus on efficiency and social inclusion at the expense of an emphasis on territorial convergence and how strategies should consider economic, social, political and institutional diversity in order to maximize both the local and the aggregate potential for economic development. |
| Keywords: | place-based; development; policy; institutions; globalization; economic geography |
| JEL: | R11 R58 O18 P48 |
| Date: | 2011–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-15&r=ure |
| By: | Jesús Cañas; Roberto Coronado; Robert W. Gilmer; Eduardo Saucedo |
| Abstract: | For decades, the maquiladora industry has been a major economic engine along the U.S.–Mexico border. Since the 1970s, researchers have analyzed how the maquiladora industry affects cities along both sides of the border. Gordon Hanson (2001) produced the first comprehensive study on the impact of the maquiladoras on U.S. border cities, considering the impact of these in-bond plants on both employment and wages. His estimates became useful rules of thumb for the entire U.S.–Mexico border. These estimates have become dated, as Hanson's study covered the period from 1975 to 1997. The purpose of this paper is to update Hanson's results using data from 1990 to 2006 and to extend the estimates to specific border cities. For the border region as a whole, we find that the impact of a 10 percent increase in maquiladora production leads to a 0.5 to 0.9 percent change in employment. However, we also find that the border average is quite misleading, with large differences among individual border cities. Cities along the Texas–Mexico border benefit the most from growing maquiladora production. We also estimate the cross-border maquiladora impacts before and after 2001 when border security begins to rise, the maquiladora industry entered a severe recession and extensive restructuring and global low-wage competition intensified as China joined the World Trade Organization. Empirical results indicate that U.S. border cities are less responsive to growth in maquiladora production from 2001 to 2006 than in the earlier period; however, when looking into specific sectors we find that U.S. border city employment in service sectors are far more responsive post-2001. |
| Keywords: | International trade ; Labor market ; Economic development - Latin America |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1107&r=ure |
| By: | Sule Alan; Ruxandra Dumitrescu; Gyongyi Loranth |
| Abstract: | We test the interest rate sensitivity of subprime credit card borrowers using a unique panel data set from a UK credit card company. What is novel about our contribution is that we were given details of a randomized interest rate experiment conducted by the lender between October 2006 and January 2007. We find that individuals who tend to utilize their credit limits fully do not reduce their demand for credit when subject to increases in interest rates as high as 3 percentage points. This finding is naturally interpreted as evidence of binding liquidity constraints. We also demonstrate the importance of truly exogenous variation in interest rates when estimating credit demand elasticities. We show that estimating a standard credit demand equation with nonexperimental variation leads to seriously biased estimates even when conditioning on a rich set of controls and individual fixed effects. In particular, this procedure results in a large and statistically significant 3-month elasticity of credit card debt with respect to interest rates even though the experimental estimate of the same elasticity is neither economically nor statistically different from zero. |
| Keywords: | subprime credit; randomized trials; liquidity constraints |
| JEL: | D11 D12 D14 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp060&r=ure |