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on Urban and Real Estate Economics |
| By: | Haavio, Markus (Bank of Finland Research); Kauppi , Heikki (Turku School of Economics) |
| Abstract: | We develop a dynamic multi-region model, with fluctuating regional house prices, where an owner-occupied household’s location choice depends on its current wealth and its current type and involves both consumption and investment considerations. The relative strength of the consumption motive and the investment motive in the location choice determines the equilibrium pattern of residential sorting, with a strong investment (consumption) motive implying sorting according to the type (wealth). The model predicts a negative relation between the size of house price fluctuations and the degree of residential sorting in the type dimension. Also, movers should be more sorted than stayers in the type dimension. These predictions are consistent with evidence from US metropolitan areas when income, education and age are used as proxies for household type. |
| Keywords: | residential sorting; house prices; consumption motive; investment motive; incomplete markets; household mobility |
| JEL: | D52 G11 R13 R21 R23 |
| Date: | 2011–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2011_024&r=ure |
| By: | Stephen Gibbons; Stephen Machin; Olmo Silva |
| Abstract: | Existing research shows that house prices respond to local school quality as measured by average test scores. However, higher test scores could signal better quality teaching and academic value-added, or higher ability, sought-after intakes. In our research, we show decisively that value-added drives households' demand for good schooling. However, prior achievement - linked to the background of children in school - also matters. In order to identify these effects, we improve the boundary discontinuity regression methodology by matching identical properties across admissions authority boundaries; by allowing for boundary effects and spatial trends; by re-weighting our data towards transactions that are closest to district boundaries; by eliminating boundaries that coincide with major geographical features; and by submitting our estimates to a number of novel falsification tests. Our results survive this battery of experiments and show that a one-standard deviation change in either school average value-added or prior achievement raises prices by around 3%. |
| Keywords: | House prices, school quality, boundary discontinuities |
| JEL: | C21 I20 H75 R21 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0132&r=ure |
| By: | Toby C. Monsod (School of Economics, University of the Philippines Diliman) |
| Abstract: | Informal housing arrangements, substandard structures, congestion, and land use conflicts characterize the urban housing problem in the Philippines. The record suggests that the response of the State, especially its reliance on below-market priced mortgage loans, has aggravated rather than helped solve the situation. If the housing problem is to be solved, government needs to rethink its role in housing finance, delink housing social assistance from finance markets, and turn its attention to fundamental supply side and urban governance issues. |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201104&r=ure |
| By: | Charlot, S.; Paty, S.; Visalli, M. |
| Abstract: | This article provides empirical evidence on the impact of local taxation on property prices, controlling for the local public spending, using data on property taxation and real estate transactions, over the period 1994–2004. Our empirical methodology pairs transactions in the same spatial environments. Spatial differencing and Instrumental Variables (IV) methodology allow us to compare sales across municipality boundaries and to control for the potential endogeneity of local taxation and public spending. Our results suggest that the local Property Tax (PT) rate has no impact on property prices, while the amount of taxes paid appears to have a negative effect on property price. |
| Keywords: | FISCAL CAPITALIZATION;LOCAL TAXATION;PROPERTY PRICES;BORDERS |
| JEL: | H30 R20 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:201106&r=ure |
| By: | C. Kirabo Jackson |
| Abstract: | Unlike in elementary schools, high school teacher effects may be confounded with unobserved track-level treatments (such as the AVID program) that are correlated with individual teachers. I present a strategy that exploits detailed course-taking information to credibly estimate the effects of 9th grade Algebra and English teachers on test scores. I document substantial bias due to track-specific treatments and I show that traditional tests for the existence of teacher effects are flawed. After accounting for bias, I find sizable algebra teacher effects and little evidence of English teacher effects. I find little evidence of teacher spillovers across subjects. |
| JEL: | H0 I20 J00 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17722&r=ure |
| By: | Deniz Igan; Heedon Kang |
| Abstract: | With another real estate boom-bust bringing woes to the world economy, a quest for a better policy toolkit to deal with these boom-busts has begun. Macroprudential measures could be in such a toolkit. Yet, we know very little about their impact. This paper takes a step to fill this gap by analyzing the Korean experience with these measures. We find that loan-to-value and debt-to-income limits are associated with a decline in house price appreciation and transaction activity. Furthermore, the limits alter expectations, which play a key role in bubble dynamics. |
| Keywords: | Business cycles , Economic models , Household credit , Housing prices , Loans , |
| Date: | 2011–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/297&r=ure |
| By: | Tim Landvoigt; Monika Piazzesi; Martin Schneider |
| Abstract: | This paper uses an assignment model to understand the cross section of house prices within a metro area. Movers' demand for housing is derived from a lifecycle problem with credit market frictions. Equilibrium house prices adjust to assign houses that differ by quality to movers who differ by age, income and wealth. To quantify the model, we measure distributions of house prices, house qualities and mover characteristics from micro data on San Diego County during the 2000s boom. The main result is that cheaper credit for poor households was a major driver of prices, especially at the low end of the market. |
| JEL: | E21 G10 R20 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17723&r=ure |
| By: | Michael Ralph M. Abrigo (Philippine Institute for Development Studies); Desiree A. Desierto (School of Economics, University of the Philippines Diliman) |
| Abstract: | Outward migration data from the Philippines exhibit spatial clustering. This is likely due to information spillover effects--fellow migrants share information with other neighboring migrants, thereby lowering the costs of migration. To verify this, we use spatial econometrics to define a geography-Âbased network of migrants and estimate its effect on the growth in the number of succeeding migrants. We find that current and past migration from one municipality induces contemporaneous and future migration in neighboring municipalities, even while controlling for demographic, economic and institutional factors that may be common across municipalities. |
| Keywords: | Migration, Network effects, spatial econometrics |
| JEL: | C21 D85 F22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201106&r=ure |
| By: | Scott A. Imberman; Adriana D. Kugler |
| Abstract: | In response to low take-up, many public schools have experimented with moving breakfast from the cafeteria to the classroom. We examine whether such a program increases performance as measured by standardized test scores, grades and attendance rates. We exploit quasi-random timing of program implementation that allows for a difference-in-differences identification strategy. Our main identification assumption is that schools where the program was introduced earlier would have evolved similarly to those where the program was introduced later. We find that in-class breakfast increases both math and reading achievement by about one-tenth of a standard deviation relative to providing breakfast in the cafeteria. Moreover, we find that these effects are most pronounced for low performing, free-lunch eligible, Hispanic, and low BMI students. We also find some improvements in attendance for high achieving students but no impact on grades. |
| JEL: | I10 I21 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17720&r=ure |
| By: | Raj Chetty; John N. Friedman; Jonah E. Rockoff |
| Abstract: | Are teachers’ impacts on students’ test scores (“value-added”) a good measure of their quality? This question has sparked debate largely because of disagreement about (1) whether value-added (VA) provides unbiased estimates of teachers’ impacts on student achievement and (2) whether high-VA teachers improve students’ long-term outcomes. We address these two issues by analyzing school district data from grades 3-8 for 2.5 million children linked to tax records on parent characteristics and adult outcomes. We find no evidence of bias in VA estimates using previously unobserved parent characteristics and a quasi-experimental research design based on changes in teaching staff. Students assigned to high-VA teachers are more likely to attend college, attend higher- ranked colleges, earn higher salaries, live in higher SES neighborhoods, and save more for retirement. They are also less likely to have children as teenagers. Teachers have large impacts in all grades from 4 to 8. On average, a one standard deviation improvment in teacher VA in a single grade raises earnings by about 1% at age 28. Replacing a teacher whose VA is in the bottom 5% with an average teacher would increase students’ lifetime income by more than $250,000 for the average classroom in our sample. We conclude that good teachers create substantial economic value and that test score impacts are helpful in identifying such teachers. |
| JEL: | I2 J24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17699&r=ure |
| By: | Gerald Eisenkopf; Ansgar Wohlschlegel |
| Abstract: | We analyze educational institutions incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality of student achievement on the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized. |
| Keywords: | Education, Local Externalities, Produkt Differentiation, Price Competition, Vouchers |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0064&r=ure |
| By: | Birol Kanik |
| Abstract: | This paper evaluates different types of simple monetary policy rules according to the determinacy and learnability of rational expectations equilibrium criteria within a dynamic stochastic general equilibrium framework. Incorporating housing prices and collateralized borrowing into the standard model allow us to answer important policy questions. One objective is to investigate whether responding to housing prices affects determinacy and learnability of rational expectations equilibrium. For this purpose, we work with a New Keynesian model in which housing plays an accelerator role in business cycles as a collateralized asset. The results show that for current data rule, responding to asset prices does not improve learnable outcomes but for a monetary policy with lagged data and forward-looking rules we see improved learnable outcome if current housing prices are available to monetary authority. Moreover, we examine the effects of interest rate inertia and price stickiness on E-stability of REE. |
| Keywords: | monetary policy rules, determinacy, learning, housing prices |
| JEL: | E3 E4 E5 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1203&r=ure |
| By: | Johan Almenberg (Swedish Ministry of Finance); Artashes Karapetyan (Norges Bank (Central Bank of Norway)) |
| Abstract: | We report evidence that salience may have economically significant effects on homeowners’ borrowing behavior, through a bias in favour of less salient but more costly loans. Survey evidence corroborates the existence of such a bias. We outline a simple model in which some consumers are biased and show that under plausible assumptions this affects prices in equilibrium. Market data support the predictions of the model. |
| Keywords: | Salience, Debt, Housing market, Co-op, Capital structure |
| JEL: | D12 G14 G21 G32 |
| Date: | 2012–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2011_22&r=ure |
| By: | KANIK, Birol |
| Abstract: | This paper evaluates different types of simple monetary policy rules according to the determinacy and learnability of rational expectations equilibrium criteria within a dynamic stochastic general equilibrium framework. Incorporating housing prices and collateralized borrowing into the standard model allow us to answer important policy questions. One objective is to investigate whether responding to housing prices affects determinacy and learnability of rational expectations equilibrium. For this purpose, we work with a New Keynesian model in which housing plays an accelerator role in business cycles as a collateralized asset. The results show that for current data rule, responding to asset prices does not improve learnable outcomes but for a monetary policy with lagged data and forward-looking rules we see improved learnable outcome if current housing prices are available to monetary authority. Moreover, we examine the effects of interest rate inertia and price stickiness on E-stability of REE. |
| Keywords: | monetary policy rules; determinacy; learning; housing prices |
| JEL: | E5 E4 E3 |
| Date: | 2011–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35782&r=ure |
| By: | Ohnishi, Takaaki; Mizuno, Takayuki; Shimizu, Chihiro; Watanabe, Tsutomu |
| Abstract: | How can we detect real estate bubbles? In this paper, we propose making use of information on the cross-sectional dispersion of real estate prices. During bubble periods, prices tend to go up considerably for some properties, but less so for others, so that price inequality across properties increases. In other words, a key characteristic of real estate bubbles is not the rapid price hike itself but a rise in price dispersion. Given this, the purpose of this paper is to examine whether developments in the dispersion in real estate prices can be used to detect bubbles in property markets as they arise, using data from Japan and the U.S. First, we show that the land price distribution in Tokyo had a power-law tail during the bubble period in the late 1980s, while it was very close to a lognormal before and after the bubble period. Second, in the U.S. data we find that the tail of the house price distribution tends to be heavier in those states which experienced a housing bubble. We also provide evidence suggesting that the power-law tail observed during bubble periods arises due to the lack of price arbitrage across regions. |
| Keywords: | Econophysics, Power law, Bubbles, House prices, Land prices, Price dispersion |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cinwps:15&r=ure |
| By: | Gregory Elacqua (Facultad de Economía y Empresa, Universidad Diego Portales); Matías Martínez (Facultad de Economía y Empresa, Universidad Santo Tomás) |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ptl:wpaper:16&r=ure |
| By: | Danny Cohen-Zada (Ben Gurion University of the Negev, Beer-Sheva, Israel Author-Name - Todd Elder Author-Name - First: Todd; Michigan State University, USA) |
| Abstract: | We develop a model of school choice in which the demand for religious schooling is driven partly by the desire of parents to limit their children’s exposure to the influences of competing religions. This framework links the literature on the effects of religious market shares on the within-denomination intensity of religious activity with a separate literature relating religious pluralism to the overall level of religious participation. The model predicts that when a religious group’s share of the local population grows, the fraction of that group’s members whose children attend religious schools decreases. In addition, it implies that the overall demand for religious schooling is a positive function of both the local religiosity level and the level of religious pluralism, as measured by a Herfindahl Index. Using both U.S. county-level data and individual data from ECLS-K and NELS:88, we find evidence strongly consistent with the model’s predictions. Our findings also illustrate that failing to control for the local religiosity level in estimating the effect of religious pluralism on religious participation, as is common in previous studies, may lead a researcher to erroneously conclude that pluralism has a negative effect on participation. |
| Keywords: | Religious participation, school choice, religious pluralism |
| JEL: | I21 Z12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:1201&r=ure |
| By: | Franz R. Hahn (WIFO) |
| Abstract: | Stylised facts suggest that there is some "spatial structure" in the dynamics of cross-border lending of Austrian regional banks that seems to be closely related to the eastward enlargement of the European Union. This short paper provides evidence that a stark space-related dependency of competition has been at work governing the cross-border lending behaviour of the Austrian regional banks since 1995. |
| Keywords: | spatial econometric analysis, cross-border bank lending, institutions |
| Date: | 2012–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:418&r=ure |
| By: | Cristina Martinez-Fernandez; Pawel Chorazy; Tamara Weyman; Monika Gawron |
| Abstract: | The European Union Treaty of Lisbon brought a new dimension to cohesion – the territorial dimension, which has become one of the most frequently discussed aspects for achieving cohesion and, at the same time, one of the challenges for EU policies. The ‘territorial dimension’ determines many socio-economic problems and presents challenges for the European Social Fund (ESF), which has to enhance its flexibility and highlight the capacity and needs of specific territories at national, regional and local levels at the programming and implementation stages. While our understanding of the national and regional levels has advanced, the dynamics with the local level need further consideration, chiefly in the context of Europe 2020 strategy, and regarding the territorial dimension of the European Social Fund and mechanisms of territorialisation.<p> This paper discusses the conceptualisation of territoriality and the different levels of applicability in regional development approaches. The paper draws on OECD and other organisations research and analysis; particularly the work of the OECD Local Economic and Employment Development Programme (LEED). The paper argues that the local level is emerging as the key spatial dimension where EU development instruments apply and therefore a systemic local approach may be needed when designing national and regional cohesion policies and instruments. The paper is divided into 5 sections discussing: 1) The importance of an integrated spatial approach to development; 2) The success of the local approach to development: complexity, integration and the policy mix; 3) Integrating territorial mechanisms for job creation, employability and inclusive growth; 4) Fostering education policies for qualification and skills rich ecosystems; and 5) The way forward. |
| Date: | 2011–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2011/23-en&r=ure |
| By: | Eric A. Hanushek; Kuzey Yilmaz |
| Abstract: | Considerable prior analysis has gone into the study of zoning restrictions on locational choice and on fiscal burdens. The prior work on zoning - particularly fiscal or exclusionary zoning - has provided both inconclusive theoretical results and quite inconsistent empirical support of the theory. More importantly, none of this work addresses important questions about the level and distribution of public goods that are provided under fiscal zoning. Since fiscal issues and Tiebout demands are central to much of the motivation for exclusionary zoning, we expand the theoretical analysis to encompass the interplay between land use restrictions and public good provision. In this, we focus on schooling outcomes, since the provision of education is one of the primary activities of local jurisdictions. We develop a general equilibrium model of location and the provision of education. Some households create a fiscal burden, motivating the use by local governments of exclusionary land-use controls. Then, the paper analyzes what the market effects of land-use controls are and how successful they are. The policies considered (minimum lot size zoning, local public finance with a head tax, and fringe zoning) demonstrate how household behavior directly affects the equilibrium outcomes and the provision of the local public good. |
| JEL: | H4 H7 I2 J6 R2 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17730&r=ure |
| By: | Jan K. Brueckner (University of California, Irvine); David Neumark (University of California, Irvine & National Bureau of Economic Research) |
| Abstract: | The absence of a competitive market and the presence and strength of public-sector labor unions make it likely that public-sector pay reflects an element of rent extraction by government workers. In this paper, we test a specific hypothesis that connects such rent extraction to the level of local amenities. Specifically, although migration of taxpayers limits the extent of rent-seeking, public-sector workers may be able to extract higher rents in regions where high amenities mute the migration response. We develop a theoretical model that predicts such a link between public-sector wage differentials and local amenities, and we test the model’s predictions by analyzing variation in these wage differentials and amenities across states. The evidence reveals that public-sector wage differentials are, in fact, larger in the presence of high amenities, with the effect being stronger for unionized public-sector workers, who are likely better able to exercise political power in extracting rents. |
| Keywords: | Public-sector pay, unions, amenities |
| JEL: | J3 J45 R12 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/1/doc2011-42&r=ure |
| By: | Roy Thurik; David Audretsch; Isabel Grilo |
| Abstract: | The present document analyzes the linkages between globalization, entrepreneurship and the role of regions. After dealing with the meaning of globalization, the regional dimension of the response to globalization is described where downsizing, knowledge spillovers and agglomeration are the essential phenomena. Next, it is shown how these developments have led to the emergence of new entrepreneurial activities. Subsequently, more details are given on the effects of the information and communication (ICT) revolution on the organization of industry in a globalized economy. Finally, it is concluded that policies promoting both knowledge investments as well as entrepreneurship have become prominent for many regions in the most developed countries. |
| Date: | 2012–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201201&r=ure |
| By: | Goodfellow, Tom |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/39870/&r=ure |
| By: | S. Annim; S. Mariwah; J. Sebu |
| Abstract: | Abstract Over time, while some countries have experienced trends of poverty and inequality moving in the same direction, others have witnessed the two developmental issues panning out in opposite directions. The latter is observed in Ghana, where in the last two decades poverty has been reducing and consumption inequality is on the ascendency. Motivated by this observation, we address three objectives in this paper. First, we decompose inequality using administrative districts as the unit of analysis to examine within and between contributions to national inequality. Second, we examine trends of inequality in the only region (Eastern) of Ghana that experienced a reduction in inequality over the period 1991-2006; and, finally, we investigate the relationship between district-level inequality and household poverty. The last three rounds of the Ghana Living Standard Survey are used for our analysis. We observe that the contribution of within district inequality is higher than inequality between districts. This pattern is observed for other geographical classifications, such as rural-urban, ecological zone and regions. In the Eastern region of Ghana, where overall inequality reduced over the period 1998 to 2005, this was not the case for about 50 percent of the districts in the region. Finally, district-level inequality shows a significant effect on household poverty, but with varying signs, depending on the state of economic activity of the unit of analysis (district) and factors that affect both poverty and inequality. We recommend that districtlevel policy implementers should be tasked with the responsibility of minimising inequality within their district and therefore overall inequality in Ghana. Also, poverty reduction strategies should take into consideration district-level poverty and other factors, such as land size distribution, that jointly affect poverty and inequality. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:16112&r=ure |
| By: | Cabrales, Antonio; Calvo-Armengol, Antoni; Zenou, Yves |
| Abstract: | The aim of this paper is to provide a tractable model where both socialization (or network formation) and productive efforts can be analyzed simultaneously. This permits a fullfledged equilibrium/welfare analysis of network formation with endogenous productive efforts and heterogeneous agents. We show that there exist two stable interior equilibria, which we can Pareto rank. The socially efficient outcome lies between these two equilibria. When the intrinsic returns to production and socialization increase, all equilibrium actions decrease at the Pareto-superior equilibrium, while they increase at the Pareto-inferior equilibrium. In both cases, the percentage change in socialization effort is higher (in absolute value) than that of the productive effort |
| Keywords: | Peer effects; Network formation; Welfare; |
| JEL: | L22 L51 O31 O38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12914&r=ure |
| By: | Joanna Kuczewska (Faculty of Economics, University of Gdansk); Maciej Krzeminski (Faculty of Economics, University of Gdansk) |
| Abstract: | Regional competitiveness is the crucial area of research in modern economics. The European Union uses the regional competitiveness and divergences studies in creating the European Member States economies competitive advantages. Regional competitiveness determinates also the enterprises competitiveness advantages and plays the crucial role in creating their competitiveness position. The importance of the regional competiveness increases in the knowledge-based economy circumstances, where competitiveness depends on the ability to use knowledge, skills and attitudes of entrepreneurship. Regions are the leaders responsible for these resources mobilization so identification of their strengths and weaknesses allows to indicate the crucial growth tools. In terms of traditional concept, competitiveness is based on the classical theories of absolute advantage by Smith, Ricardo‘s comparative advantage to the first theory of Porter‘s competitive advantage. Modern knowledge-based economy creates a new approach to regional competitiveness researches – from the advanced Porter competitive advantage theory to the dynamic concept of constructed advantages. The key element of constructed advantages theory is an eclectic approach that combines a variety of different concepts such as Regional Innovation Systems, Triple Helix-concept and public-private partnership. They are characterized by multi-directional and multi-dimensional interactions between the actors of the economy. The objective of this study is a preliminary analysis of the constructed advantages of Polish regions on the example of Pomeranian region. |
| Keywords: | regional competitiveness, constructed advantages, Triple Helix, labour market |
| JEL: | R11 I25 J24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:gda:wpaper:1105&r=ure |
| By: | Grönqvist, Hans (Swedish Institute for Social Research, Stockholm University); Hall, Caroline (Institute for Labor Market Policy Evaluation (IFAU) and Uppsala Center for Labor Studies (UCLS)) |
| Abstract: | This paper studies effects of education policy on early fertility. We study a major educational reform in Sweden in which vocational tracks in upper secondary school were prolonged from two to three years and the curricula were made more academic. Our identification strategy takes advantage of cross-regional and cross-time variation in the implementation of a pilot scheme preceding the reform in which several municipalities evaluated the new policy. The empirical analysis draws on rich population micro data. We find that women who enrolled in the new program were significantly less likely to give birth early in life and that this effect is driven by women with higher opportunity costs of child rearing. There is however no statistically significant effect on mens fertility decisions. Our results suggest that the social benefits of changes in education policy may extend beyond those usually claimed. |
| Keywords: | Schooling reform; teenage childbearing; fertility |
| JEL: | I20 J13 |
| Date: | 2011–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_014&r=ure |
| By: | Tom Worsley |
| Abstract: | Cost benefit analysis has been used in the United Kingdom for the appraisal of road schemes over the past fifty years. It was less widely used for rail, where most investment was concerned with renewing the existing network. The Central London Rail Study (1988) used cost benefit analysis to address the problem of overcrowding on London.s rail network. The Crossrail scheme proposed in the Study was discontinued because of a recession and because of the priority given the developing links to London.s Docklands. Progress on Crossrail was resumed in 2002 at the same time as the Department.s appraisal methods were being revised to incorporate Wider Economic Benefits. The quantification of these additional benefits, the resolution of a source of funding and the role of the Mayor all influenced the Government.s decision that the scheme should be built. Identification of some of the Wider Benefits poses problems for transport models that are only partially resolved through the use of land use transport interaction models. Although the use of a Gross Value Added metric provides an alternative way of estimating the economic impacts of a scheme, it does not replace cost benefit analysis as a decision aid for government ministers. |
| Date: | 2011–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2011/27-en&r=ure |
| By: | Annalisa Cristini; Almudena Sevilla Sanz |
| Abstract: | This paper undertakes a comparison exercise to disentangle what drives the opposite findings regarding the effect of house prices on consumption documented in two papers using the same data set for the UK. On the one hand, Campbell and Cocco (2007) find that old owners are the most benefited by a house price increase and young renters the least, confirming the so-called wealth hypothesis. On the other hand, Attanasio, Blow, Hamilton, and Leicester (2009) find that house prices have the same impact on consumption across age groups, consistent with the so-called common factor hypothesis. We rule out that changes in the sample period, the definition of consumption, the data source, the type of price deflator, and empirical considerations such as endogeneity bias and sampling noise in the construction of synthetic cohorts are the driving factors of the opposite conclusions reached by the two papers. All our evidence points towards the empirical specification, i.e., whether it is a consumption function (an equation for the level of consumption) or an Euler equation (an equation for consumption growth) as the only plausible explanation to the conflicting results. Our findings revive the debate of whether there is an effect of house prices on consumption, an issue of increasing importance in the current context of declining house prices in industrialized countries. |
| Keywords: | Consumption, House prices, Wealth hypothesis, Common factor hypothesis |
| JEL: | D13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:589&r=ure |
| By: | Chiara Criscuolo; Ralf Martin; Henry G. Overman; John Van Reenen |
| Abstract: | Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs ("Regional Selective Assistance"). Area eligibility is governed by pan- European state aid rules which change every seven years and we use these rule changes to construct instrumental variables for program participation. We match two decades of UK panel data on the population of firms to all program participants. IV estimates find positive program treatment effect on employment, investment and net entry but not on TFP. OLS underestimates program effects because the policy targets underperforming plants and areas. The treatment effect is confined to smaller firms with no effect for larger firms (e.g. over 150 employees). We also find the policy raises area level manufacturing employment mainly through significantly reducing unemployment. The positive program effect is not due to substitution between plants in the same area or between eligible and ineligible areas nearby. We estimate that "cost per job" of the program was only $6,300 suggesting that in some respects investment subsidies can be cost effective. |
| Keywords: | industrial policy, regional policy, employment, investment, productivity |
| JEL: | H25 L52 L53 O47 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0098&r=ure |