nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒01‒25
34 papers chosen by
Steve Ross
University of Connecticut

  1. Increasing Returns in Transportation and the Formation of Hubs By MORI Tomoya
  2. Australian Residential Housing Market & Hedonic Construction of House Price Indices for Metropolitan By Eva Knight; Remy Cottet
  3. Unintended effects of urbanization in China: Land use spillovers and soil carbon loss By Li, Man; Wu, JunJie; Deng, Xiangzheng
  4. The Housing Wealth Effect: The Crucial Roles of Demographics, Wealth Distribution and Wealth Shares By Charles W. Calomiris; Stanley D. Longhofer; William Miles
  5. Analysis of Industrial Agglomeration Patterns: An application to manufacturing industries in Japan By MORI Tomoya; Tony E. SMITH
  6. Space and municipal development in Bolivia By Osvaldo Nina; Tania Evia
  7. Aligning Student, Parent, and Teacher Incentives: Evidence from Houston Public Schools By Roland G. Fryer, Jr
  8. Expectations-driven cycles in the housing market By Lambertini, Luisa; Mendicino , Caterina; Punzi , Maria Teresa
  9. Peer heterogeneity, school tracking and students'performances: evidence from Pisa 2006 By Michele Raitano; Francesco Vona
  10. School building conditions and student achievments: Norwegian evidence By Arnt Ove Hopland
  11. Are All Migrants Really Worse Off in Urban Labour Markets? New Empirical Evidence from China By Gagnon, Jason; Xenogiani, Theodora; Xing, Chunbing
  12. The Dynamics of Inter-Regional Collaboration – An Analysis of Co-Patenting By Sidonia von Proff; Thomas Brenner
  13. Assessing students'equality of opportunity in OECD countries : the role of national and school-level policies By Michele Raitano; Francesco Vona
  14. Where russians should live: a counterfactual alternative to Soviet location policy By Mikhailova, Tatiana
  15. Agglomeration, related-variety and internationalisation. Does a relationship exist? By Giulio Cainelli; Eleonora Di Maria; Roberto Ganau
  16. Financial education on secondary school students: the randomized experiment revisited By Leonardo Becchetti; Fabio Pisani
  17. The emergence of new industries at the regional level in Spain. A proximity approach based on product-relatedness By Ron Boschma; Asier Minondo; Mikel Navarro
  18. School facilities and student achievements: evidence from the Timss By Arnt Ove Hopland
  19. International Capital Flows and House Prices: Theory and Evidence By Jack Favilukis; David Kohn; Sydney C. Ludvigson; Stijn Van Nieuwerburgh
  20. Girls take over: Long-term impacts of an early stage education intervention in the Philippines By Yamauchi, Futoshi; Liu, Yanyan
  21. Temporal and spatial analysis of social inequalities: An innovative method to grasp social inequalities evolution on the territory By LORD Sébastien; GERBER Philippe; SOHN Christophe; EGGERICKX Thierry; HERMIA Jean-Pierre; KESTELOOT Christian
  22. Housing market and current account imbalances in the international economy By Punzi, Maria Teresa
  23. "Productivity and innovation spillovers: Micro evidence from Spain" By Esther Goya; Esther Vayá; Jordi Suriñach
  24. The Pitfalls and Booby Traps of Cluster Policy By Gunther Maier; Michaela Trippl
  25. Oates' Decentralization Theorem with Household Mobility By Francis Bloch; Unal Zenginobuz
  26. Migration and Regional Convergence in the European Union By Peter Huber; Gabriele Tondl
  27. Childhood Peer Status and the Clustering of Adverse Living Conditions in Adulthood By Almquist, Ylva B.; Brännström, Lars
  28. Hedonic valuation of odor nuisance using field measurements, a case study of an animal waste processing facility in Flanders By Eyckmans, Johan; De Jaeger, Simon; Rousseau, Sandra
  29. Impacts of urbanization on national transport and road energy use: Evidence from low, middle and high income countries By Phetkeo Poumanyvong; Shinji Kaneko; Shobhakar Dhakal
  30. Landownership Concentration and the Expansion of Education By Francesco Cinnirella; Erik Hornung
  31. Mathematical Genesis of the Spatio-Temporal Covariance Functions By Fernández-Avilés, G; Montero, JM; Mateu, J
  32. Do Traffic Tickets Reduce Motor Vehicle Accidents? Evidence from a Natural Experiment By Dara Lee
  33. Transaction costs, externalities and innovation By Estrada, Fernando
  34. Market Size and Entrepreneurship By SATO Yasuhiro; TABUCHI Takatoshi; YAMAMOTO Kazuhiro

  1. By: MORI Tomoya
    Abstract: The spatial structure of transport networks is subject to increasing returns in transportation, distance, and density economies. Transport costs between locations are thus, in general, endogenous, and are determined by the interaction between the spatial distribution of transport demand and these increasing returns, although such interdependence has long been ignored in regional models. By using a simple model, the present paper investigates the characteristics of viable hub structures (in terms of spacing and hierarchical relations) given the presence of density and distance economies in transportation.
    Date: 2012–01
  2. By: Eva Knight (Faculty of Economics and Business, The University of Sydney); Remy Cottet
    Abstract: A Semiparametric spatial model is used as it allows nonlinear estimation of both mean and variance.<br /><br /> A Bayesian approach is used for inference via a Markov Chain Monte Carlo sampling scheme. A distinct advantage of using the Bayesian approach is the incorporation of prior information in the inferential process. The prior is updated with arrival of information. In the real world, the modeller should have some idea of the outcome before the modelling process begins. Finite sample inference can be obtained and is more accurate than asymptotic approximation. In the case of the real estate market, transaction data are finite due to infrequent trading. Estimation is done via posterior distributions which factor in the variability of estimators and therefore have improved confidence intervals.<br /><br /> Spatial variables such as longitude and latitude are modelled via the construction of a bivariate thin plate spline. These two variables provide powerful lens for capturing the effect of demographic factors and for borrowing and lending information in neighbouring suburbs. Demographic factors and 1 trends are just as important as economic factors in determining demand for residential housing and they are also included in the model.
    Keywords: Housing, index, House Price Surface, smoothing, Hedonic Imputation
    Date: 2011–02
  3. By: Li, Man; Wu, JunJie; Deng, Xiangzheng
    Abstract: This paper uses a national-level geographic information system database on land use, weather conditions, land quality, soil organic carbon (SOC), topographic features, and economic variables to analyze the major drivers of land use change and the resulting impact on soil carbon storage in China. The framework developed in this study includes two main components. One is a spatial panel multinomial logit land use model that takes into account the spatial and temporal dependence of land use choices explicitly. The other is a statistical causal evaluation model that estimates the effect of land use change on SOC density. Results indicate that local economic growth, as measured by county-level gross domestic product, was a major cause of urban development and grassland conversions. Rapid expansion of road networks, promoted by massive public investment, increased the conversion of forests, grassland, and unused land to crop production and urban development. Urbanization had significant secondary ripple effects in terms of both indirect land use change and soil carbon loss. Some of the soil carbon loss may be irreversible, at least in the short run.
    Keywords: Land use, propensity score-matching, road density, soil organic carbon, spatial panel,
    Date: 2011
  4. By: Charles W. Calomiris; Stanley D. Longhofer; William Miles
    Abstract: Current estimates of housing wealth effects vary widely. We consider the role of omitted variables suggested by economic theory that have been absent in a number of prior studies. Our estimates take into account age composition and wealth distribution (using poverty rates as a proxy), as well as wealth shares (how much of total wealth is comprised of housing vs. stock wealth). We exploit cross-state variation in housing, stock wealth and other variables in a newly assembled panel data set and find that the impact of housing on consumer spending depends crucially on age composition, poverty rates, and the housing wealth share. In particular, young people who are more likely to be credit-constrained, and older homeowners, likely to be “trading down” on their housing stock, experience the largest housing wealth effects, as suggested by theory. Also, as suggested by theory, housing wealth effects are higher in state-years with higher housing wealth shares, and in state-years with higher poverty rates (likely reflecting the greater importance of credit constraints for those observations). Taking these various factors into account implies huge variation over time and across states in the size of housing wealth effects.
    JEL: E21 J11
    Date: 2012–01
  5. By: MORI Tomoya; Tony E. SMITH
    Abstract: The standard approach to studying industrial agglomeration is to construct summary measures of the "degree of agglomeration" within each industry and to test for significant agglomeration with respect to some appropriate reference measures. But such summary measures often fail to distinguish between industries that exhibit substantially different spatial patterns of agglomeration. In a previous paper, a cluster-detection procedure was developed that yields a more detailed spatial representation of agglomeration patterns (Mori and Smith [28]). This methodology is applied here to the case of manufacturing industries in Japan, and is shown to yield a rich variety of agglomeration patterns. In addition, to analyze such patterns in a more quantitative way, a new set of measures is developed that focuses on both the global extent and local density of agglomeration patterns. Here, it is shown for the case of Japan that these measures provide a useful classification of pattern types that reflect a number of theoretical findings in the New Economic Geography.
    Date: 2012–01
  6. By: Osvaldo Nina (Institute for Advanced Development Studies); Tania Evia (Iowa State University)
    Abstract: This paper seeks to establish the factors related to the Human Development Index, incorporating the spatial dimension in the analysis of its determinants. The variables were classified into four groups: geographic, socio-economic, demographic and infrastructure and services. The results show that the geographic and demographic variables are important in the socio-economic development of municipalities. In relation to economic variables, only the variable rural economic organizations is significant, showing the importance of these institutions. Furthermore, contrary to expectations, the variable municipal social spending per capita is not significant, suggesting that central government spending is more important in achieving better health and education indicators, and finally, the process of decentralization has not been able to reach these levels. On the other hand, the spatial dimension is relevant in human development at the municipal level, showing that there is a process in which events in one location are more likely to predict similar events in neighboring geographical units. In this regard, plans or projects of the municipalities should be made jointly and not individually.
    Keywords: Regional distribution; Municipal development; Spatial econometrics; Bolivia
    JEL: R12 O18 C21
    Date: 2011–12
  7. By: Roland G. Fryer, Jr
    Abstract: This paper describes an experiment designed to investigate the impact of aligning student, parent, and teacher incentives on student achievement. On outcomes for which incentives were provided, there were large treatment effects. Students in treatment schools mastered more than one standard deviation more math objectives than control students, and their parents attended almost twice as many parent-teacher conferences. In contrast, on related outcomes that were not incentivized (e.g. standardized test scores, parental engagement), we observe both positive and negative effects. We argue that these facts are consistent with a moral hazard model with multiple tasks, though other explanations are possible.
    JEL: I20
    Date: 2012–01
  8. By: Lambertini, Luisa (EPFL, College of Management); Mendicino , Caterina (Banco de Portugal, Departamento Estudos Economicos); Punzi , Maria Teresa (University of Nottingham)
    Abstract: Survey data suggests that news of changes in business conditions are significantly related to house prices and consumers' beliefs of favorable buying conditions in the housing market. This paper explores the transmission of "news shocks" as a source of boom-bust cycles in the housing market. News on shocks originated in different sectors of the economy can generate booms in the housing market in accordance with the average behavior in the data; expectations on monetary policy and in inflationary shocks that are not fulfilled can also lead to the observed subsequent macroeconomic recession. Investigating the role of the credit market for house market fluctuations we find that favorable credit conditions that are expected to be reversed in the near future generate boom-bust cycle dynamics in line with the most recent episode. Further, credit conditions also affect boom-bust cycles generated by news shocks originated in other sectors of the economy. In particular, lower loan-to-value ratios reduce the severity of expectations-driven cycles and the volatility of household debt, aggregate consumption and GDP.
    Keywords: boom-bust cycles; credit frictions; housing market
    JEL: E32 E44 E52
    Date: 2012–01–11
  9. By: Michele Raitano (Sapienza University of Rome); Francesco Vona (Observatoire Français des Conjonctures Économiques)
    Abstract: This paper analyses the interaction between school tracking policies and peer effects in OECD countries. Using the PISA 2006 dataset, we show that the linear peer effects are stronger and more concave-shaped in the early-tracking educational system than in the comprehensive one. Second, and more interestingly, the effect of peer heterogeneity goes in opposite directions in the two systems. In both student- and school-level estimates, peer heterogeneity reduces students’ achievements in the comprehensive system while it has a positive impact in the early-tracking one. For late tracking countries, this result appears driven by pupils attending vocationally-oriented programs. Finally, peer effects are stronger for low ability students in both groups of countries.
    Keywords: peer heterogeneity, peer effects; schooling tracking, educational production functions
    JEL: I21 I28 J24
    Date: 2011–10
  10. By: Arnt Ove Hopland (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Abstract This paper studies the effects from poor school building conditions on student achievements in Norwegian primary schools based on results from national tests in mathematics, English and Norwegian. The benchmark OLS results suggest a negative relationship, but the estimates are mostly insignificant. Further, a municipality fixed effects (MFE) and an instrumental variable approach (IV) is suggested as alternatives to OLS in order to battle potential endogeneity issues due to unobservable characteristics. The results from the OLS and IV procedures are mostly similar to the OLS results.
    Date: 2012–01–10
  11. By: Gagnon, Jason (OECD); Xenogiani, Theodora (OECD); Xing, Chunbing (Beijing Normal University)
    Abstract: The rapid and massive increase of rural-to-urban migration in China has drawn attention to the welfare of migrant workers, particularly to their working conditions and pay. This paper uses data from a random draw of the 2005 Chinese national census survey to investigate discrimination in urban labour markets against rural migrants, by comparing their earnings and the sector (formal vs. informal) they work in with those of urban residents and urban migrants. Exploiting differences in their status in the Chinese residential registration system (hukou) we find no earnings discrimination against rural migrants compared with urban residents, contrary to popular belief. In contrast, we find that urban migrants in fact gain a large wage premium by migrating. However, both rural and urban migrants are found to be discriminated out of the formal sector, working in informal jobs and lacking adequate social protection.
    Keywords: migration, China, discrimination, informal employment
    JEL: O15 R23 J24 J71
    Date: 2011–12
  12. By: Sidonia von Proff (Department of Geography, Philipps University Marburg); Thomas Brenner (Department of Geography, Philipps University Marburg)
    Abstract: The paper at hand investigates how co-patenting over distance develops when aggregating inventive activities on a regional level. That means, the object of analysis is a link between two regions in contrast to other studies, where links between two individuals or firms are investigated. We analyse which regional characteristics influence the creation and continuation of such links. The main focus lies on different types of distance. The approach adds a dynamic view to the existing, often static literature about collaboration behaviour. The regressions are done for all patent-relevant industries in Germany. We find that several distance types decrease – as expected – the likelihood of link creation but also - not in all cases expected - of link continuation.
    Keywords: patents, research collaboration, collaboration dynamics, inter-regional links, Germany
    JEL: R11 O34 L14
    Date: 2011–10
  13. By: Michele Raitano (Sapienza University of Rome); Francesco Vona (Observatoire Français des Conjonctures Économiques)
    Abstract: This paper analyses the relationship between equality of opportunities and characteristics of the educational systems, jointly considering country- and school-level features. Because the peer group composition represents a fundamental channel in shaping educational opportunities, we consider all policies, surveyed in the PISA 2006 dataset, that affect the sorting of students to schools. Our empirical analysis shows that the inclusion of sorting policies enhances the capacity of explaining the determinants of the socio-economic gradient with respect to previous studies including only countrylevel features. In particular, it casts doubts on the prominent role attributed to school tracking. However sorting policies do not fully account for the influence of school composition on the socioeconomic gradient; the direct inclusion of peer variables allows to highlight the equalizing impact of mixing students from different backgrounds. Among the other policies, also pre-school enrolment, public expenditure in education and ability tracking display a significant equalizing effect.
    Keywords: School composition, equality of opportunity, sorting and tracking policies, family background
    JEL: I21 I24 H52
    Date: 2011–09
  14. By: Mikhailova, Tatiana
    Abstract: This paper investigates the extent of distortions in Russia's spatial economy that are inherited from the Soviet system. Using Canada as a benchmark for spatial dynamics of economic activity in a market economy, I construct the spatial allocation of population that would result in Russia, given its initial conditions and existing regional endowments, in the absence of Soviet location policy. The results show that Siberia and the Far East were overpopulated by about 14.5 million people by the end of the Soviet period. Overdevelopment of Siberia comes at the expense of the European area of the country. This discrepancy persists, even after adjusting the simulated counterfactual allocation for WWII.
    Keywords: Russia; USSR; Siberia; economic geography; Soviet location policy
    JEL: P5 R1
    Date: 2012–01–13
  15. By: Giulio Cainelli; Eleonora Di Maria; Roberto Ganau
    Abstract: This paper uses a large sample of Italian manufacturing firms over the period 2004-2006, to investigate whether different types of agglomeration externalities affect firms’ internationalisation modes. In addition to specialisation economies, Jacobs externalities are analysed following the recent contribution by FRENKEN et al. (2007) which distinguishes between related and unrelated variety. Econometric results show that agglomeration externalities – in particular, specialisation and related-variety – positively affect export, while they do not affect the multinational strategy. Moreover, results show that the impact of agglomeration externalities on firms’ internationalisation decisions is higher for small sized firms.
    Keywords: Agglomeration, externalities, internationalisation
    JEL: F23 R12
    Date: 2011
  16. By: Leonardo Becchetti (Department of Economics, Universitˆ Tor Vergata); Fabio Pisani (Department of Economics, Universitˆ Tor Vergata)
    Abstract: We analyze the effects of financial education on a large sample of secondary school students with a randomized experiment performed in the Center (Rome) and North (Milan and Genova) of Italy. Our main findings document that the course increases significantly financial literacy at both student and class level but the effect is different in different urban environments. More specifically, we document that the overall (questionnaire plus course) learning effect is significantly higher in the North than in Rome. We finally observe that high grades at final middle school exams, willingness to attend Economics at University and household borrowing status are three factors which significantly and positively affect financial education.
    Keywords: financial education, financial literacy, demand for money balances, randomized experiment
    Date: 2011–12
  17. By: Ron Boschma; Asier Minondo; Mikel Navarro
    Abstract: How do regions diversify over time? Inspired by recent studies, we argue that regions diversify into industries that make use of capabilities in which regions are specialized. As the spread of capabilities occurs through mechanisms that have a strong regional bias, we expect that capabilities available at the regional level play a larger role than capabilities available at the country level for the development of new industries. To test this, we analyze the emergence of new industries in 50 Spanish regions at the NUTS 3 level in the period 1988-2008. We calculate the capability-distance between new export products and existing export products in Spanish regions, and provide econometric evidence that regions tend to diversify into new industries that use similar capabilities as existing industries in these regions. We show that proximity to the regional industrial structure plays a much larger role in the emergence of new industries in regions than proximity to the national industrial structure. This suggests that capabilities at the regional level enable the development of new industries.
    Keywords: Regional branching, diversification, new industries, capabilities, Spain, proximity index
    JEL: R11 N94 O14
    Date: 2012–01
  18. By: Arnt Ove Hopland (Department of Economics, Norwegian University of Science and Technology)
    Abstract: This paper studies the link between school facilities and student achievements in eight countries using data from the TIMSS 2003 database. OLS and propensity score matching is used to control for observable characteristics. Both methods indicate that poor school facilities may be negatively associated with student achievements, but the estimated coefficients are mainly insignificant. Significantly negative estimates are found in only three out of eight countries when using OLS. When using matching on propensity scores I only find significant coefficients in one of the countries.
    Date: 2011–09–23
  19. By: Jack Favilukis; David Kohn; Sydney C. Ludvigson; Stijn Van Nieuwerburgh
    Abstract: The last fifteen years have been marked by a dramatic boom-bust cycle in real estate prices, accompanied by economically large fluctuations in international capital flows. We argue that changes in international capital flows played, at most, a small role in driving house price movements in this episode and that, instead, the key causal factor was a financial market liberalization and its subsequent reversal. Using observations on credit standards, capital flows, and interest rates, we find that a bank survey measure of credit supply, by itself, explains 53 percent of the quarterly variation in house price growth in the U.S. over the period 1992-2010, while it explains 66 percent over the period since 2000. By contrast, once we control for credit supply, various measures of capital flows, real interest rates, and aggregate activity—collectively—add less than 5% to the fraction of variation explained for these same movements in home values. Credit supply retains its strong marginal explanatory power for house price movements over the period 2002-2010 in a panel of international data, while capital flows have no explanatory power.
    JEL: F20 F32 G12 G21
    Date: 2012–01
  20. By: Yamauchi, Futoshi; Liu, Yanyan
    Abstract: This paper examines the long-term impacts of improved school quality at the elementary school stage on subsequent schooling investments and labor market outcomes using unique data from a recent survey that tracked students in the Philippines. Empirical results, based on a comparison of students who graduated from treatment and control schools before and after a school intervention, show significant differences in subsequent schooling investments, migration, and labor market earnings between females and males. That is, females study more (relative to males) and tend to migrate and earn more if they receive high-quality educational investments at an early stage. The above results are consistent with females' greater incentives to study, driven by their higher returns to schooling, especially after high school completion, observed in the labor market.
    Keywords: Gender, labor markets, School quality, tracking survey,
    Date: 2011
  21. By: LORD Sébastien; GERBER Philippe; SOHN Christophe; EGGERICKX Thierry; HERMIA Jean-Pierre; KESTELOOT Christian
    Abstract: This paper puts forward a methodology to rank the population along a hierarchical continuum, from a lower level to a higher level of social precariousness. Going beyond the complex layered issues related to the concept of poverty, it rather explores the notion of deprivation with the idea of social inequalities which are observable according to specific socio-economic key dimensions. Part of a broader research – Destiny – focusing on both the spatial and the temporal evolutions of social inequalities in Belgium and Luxembourg, this method represents a first phase of the project. The social inequalities are addressed in an individual perspective with disaggregated data. This standpoint allowed the analysis of the whole population for Belgium and Luxembourg in a ten-year period (1991 and 2001). The method is based, on the one hand, on the national censuses from both countries – the only comprehensive data available on an individual basis –, and on the second hand, on the European Union - Study on Income and Living Conditions Panel (EU-SILC). These two data sources have been combined for accessing economic information from EU-SILC and transposed into the national censuses in both countries. The EU-SILC detailed data on household income were used as an indicator of social inequalities for three dimensions: education, socio-professional status and housing. This enabled to rank each individual on a ‘social continuum’. After a presentation of the methodological framework, individual ranking results are exposed and discussed on the basis of spatial analysis.
    Keywords: Social inequality; Spatial inequality; Methodology; Census; Luxembourg; Belgium
    JEL: J11 J21 J80 R10 R20
    Date: 2011–10
  22. By: Punzi, Maria Teresa (Bank of Finland Research)
    Abstract: This paper presents a two-sector, two-country model showing that inflation in the housing market, a low personal savings rate, and a construction investment boom can contribute to a large current account deficit. In the model, demand by a group of households in the domestic country is constrained by the availability of collateral. This implies more procyclical debt capacity because constrained households can borrow against the increase in the value of their houses during an expansion. A higher degree of financial liberalization and development helps constrained households reach higher loan-to-value ratios, thus relaxing their borrowing constraints. The resulting higher net worth and lower need for savings imply a worsening current account.
    Keywords: housing market; current account; international economy
    JEL: E21 E32 F32 F41 J22
    Date: 2012–01–10
  23. By: Esther Goya (Faculty of Economics, University of Barcelona); Esther Vayá (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This article analyses the impact that innovation expenditure and intrasectoral and intersectoral externalities have on productivity in Spanish firms. While there is an extensive literature analysing the relationship between innovation and productivity, in this particular area there are far fewer studies that examine the importance of sectoral externalities, especially with the focus on Spain. One novelty of the study, which covers the industrial and service sectors, is that we also consider jointly the technology level of the sector in which the firm operates and the firm size. The database used is the Technological Innovation Panel (PITEC), which includes 12,813 firms for the year 2008 and has been little used in this type of study. The estimation method used is Iteratively Reweighted Least Squares method (IRLS), which is very useful for obtaining robust estimations in the presence of outliers. The results confirm that innovation has a positive effect on productivity, especially in high-tech and large firms. The impact of externalities is more heterogeneous because, while intrasectoral externalities have a positive and significant effect, especially in low-tech firms independently of size, intersectoral externalities have a more ambiguous effect, being clearly significant for advanced industries in which size has a positive effect..
    Keywords: Productivity, innovation, sectoral externalities, firm size. JEL classification:D24, O33
    Date: 2011–12
  24. By: Gunther Maier; Michaela Trippl
    Abstract: Over the past two decades, cluster policies have become a standard instrument of public authorities and economic development practitioners in many parts of the world. This paper takes a critical stance on this phenomenon and provides theoretical arguments that challenge the widespread application of cluster initiatives to promote long-term regional development. We distinguish between and compare two main bodies of thought: the neoclassical view and the agglomeration view. We show that there are no rationales for cluster policy from the perspective of neoclassical theory. The agglomeration view, in contrast, provides a convincing conceptual basis for justifying economic policies implemented in form of cluster initiatives. At the same time, however, it points to major problems related with the cluster policy approach. We identify and elaborate on three essential difficulties, i.e. the proper (1) targeting, (2) dosing, and (3) timing of cluster policy actions. We highlight that the problems related with these fundamental issues of each public initiative constitute powerful pitfalls and booby traps of cluster policies.
    Date: 2012
  25. By: Francis Bloch (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Unal Zenginobuz (Bogazici Universitesi - {-])
    Abstract: This paper studies how Oates' trade-off between centralized and decentralized public good provision is affected by changes in households' mobility. We show that an increase in household mobility favors centralization, as it increases competition between jurisdictions in the decentralized regime and accelerates migration to the majority jurisdiction in the centralized regime. Our main result is obtained in a baseline model where jurisdictions first choose taxes, and households move in response to taxb levels. We consider two variants of the model. If jurisdictions choose public goods rather than tax rates, the equilibrium level of public good provision is lower, and mobility again favors centralization. If jurisdictions maximize total utility rather than resident utility, the equilibrium level of public good provision again decreases, and mobility favors centralization when the size of the mobile population is bounded.
    Keywords: Oates' decentralization theorem, Fiscal federalism, Household mobility, Spillovers, Tax competition
    Date: 2012–01–09
  26. By: Peter Huber (WIFO); Gabriele Tondl
    Abstract: We offer an empirical, econometric analysis of the impact of migration on the EU 27's NUTS-2 regions in the period 2000-2007. While our results indicate that migration had no statistical impact on regional unemployment in the EU it had a significant impact on both per-capita GDP and productivity. The coefficients suggest that a 1 percent increase in immigration to immigration regions increased per-capita GDP by about 0.02 percent and productivity by about 0.03 percent. For emigration regions a 1 percent increase in the emigration rate leads to a reduction of 0.03 percent in per-capita GDP and 0.02 percent in productivity. Since immigration regions are also often regions with above-average GDP and productivity while emigration regions in Europe practically all have below-average GDP, migration seems to induce divergence rather than convergence.
    Keywords: Migration, Convergence, Unemployment
    Date: 2012–01–18
  27. By: Almquist, Ylva B. (Centre for Health Equity Studies (CHESS)); Brännström, Lars (Swedish Institute for Social Research, Stockholm University)
    Abstract: Within the context of the school class, children attain a social position in the peer hierarchy to which varying amounts of status are attached. Several studies have shown that children’s peer status is associated with a wide range of social and health-related outcomes. These studies commonly target separate outcomes, paying little attention to the fact that such circumstances are likely to go hand in hand. The overarching aim of the present study was therefore to examine the impact of childhood peer status on the clustering of living conditions in adulthood. Based on a 1953 cohort born in Stockholm, Sweden, multinomial regression analysis demonstrated that children who had lower peer status also had exceedingly high risks of ending up in more problem-burdened clusters as adults. Moreover, these associations remained after adjusting for a variety of family-related circumstances. We conclude that peer status constitutes a central aspect of children’s upbringing with important consequences for subsequent life chances, over and above the influences originating from the family.
    Keywords: childhood; peer status; cohort; life course; outcome profiles; living conditions
    Date: 2012–01–11
  28. By: Eyckmans, Johan (Hogeschool-Universiteit Brussel (HUB), Belgium); De Jaeger, Simon (Hogeschool-Universiteit Brussel (HUB), Belgium); Rousseau, Sandra (Hogeschool-Universiteit Brussel (HUB), Belgium)
    Abstract: In this paper we estimate the external cost caused by odor from an animal waste processing facility in Flanders using new odor measures based on field measurements. We compare three different ways of incorporating odor nuisance indicators into the model: distance to the odor source, continuous odor measures, and a dummy variable approach comparable to the standard procedure in hedonic price analysis of noise pollution. We argue that the dummy variable approach is best suited to estimate the external costs and we test these specifications for a dataset of about 1400 observations of house sales transaction between 2004 and 2008. Results show that houses subject to moderate and severe odor nuisance sell at a discount of about 5% and 12% respectively compared to houses without odor nuisance. The overall capitalized external cost of the odor exposure for the area of the case study was estimated to range between 6 and 56 million euro, with a central estimate of about 31 million euro. This estimate proves to be very stable over different model specifications. Compared to 1991, the external cost has almost been cut by half as a result of odor emission reducing measures taken by the facility.
    Keywords: valuation of environmental externalities; odor nuisance; hedonic price method; spatial econometrics
    JEL: C31 Q25 R52
    Date: 2011–11
  29. By: Phetkeo Poumanyvong (Graduate School for International Development and Cooperation, Hiroshima University); Shinji Kaneko (Graduate School for International Development and Cooperation, Hiroshima University); Shobhakar Dhakal (National Institute for Environmental Studies)
    Abstract: Few attempts have been made to investigate quantitatively and systematically the impact of urbanization on transport energy use for countries of different stages of economic development. This paper examines the influence of urbanization on national transport and road energy use for low, middle and high income countries during 1975?2005, using the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model. After controlling for population size, income per capita and the share of services in the economy, the main results suggest that urbanization influences national transport and road energy use positively. However, the magnitude of its influence varies among the three income groups. Changes in urbanization appear to have a greater impact on transport and road energy use in the high income group than in the other groups. Surprisingly, the urbanization elasticities of transport and road energy use in the middle income group are smaller than those of the low income group. This study not only sheds further light on the existing literature, but also provides policy makers with insightful information on the link between urbanization and transport energy use at the three different stages of development.
    Keywords: Urbanization, Transport energy use, Development stages
    JEL: R49 Q41 Q56
    Date: 2012–01
  30. By: Francesco Cinnirella (Ifo Institute and CESifo, Munich); Erik Hornung (Ifo Institute, Munich)
    Abstract: This paper studies the effect of landownership concentration on school enrollment for nineteenth-century Prussia. Prussia is an interesting laboratory given its decentralized educational system and the presence of heterogeneous agricultural institutions. We find that landownership concentration, a proxy for the institution of serf labor, has a negative effect on schooling. This effect diminishes substantially in the second half of the century. Causality of this relationship is confirmed by introducing soil-texture to identify exogenous farm size variation. Panel estimates further rule out unobserved heterogeneity. We argue that serfdom hampered peasants’ demand for education whereas the successive emancipation triggered a demand thereof.
    Keywords: Land concentration, Institutions, Serfdom, Education, Prussian economic history
    JEL: O43 Q15 I25 N33
    Date: 2011–10
  31. By: Fernández-Avilés, G; Montero, JM; Mateu, J
    Abstract: Obtaining new and flexible classes of nonseparable spatio-temporal covariances have resulted in a key point of research in the last years within the context of spatiotemporal Geostatistics. Approach: In general, the literature has focused on the problem of full symmetry and the problem of anisotropy has been overcome. Results: By exploring mathematical properties of positive definite functions and their close connection to covariance functions we are able to develop new spatio-temporal covariance models taking into account the problem of spatial anisotropy. Conclusion/Recommendations: The resulting structures are proved to have certain interesting mathematical properties, together with a considerable applicability.
    Keywords: Spatial anisotropy; bernstein and complete monotone functions; spatio-temporal geostatistics; positive definite functions; space-time modeling; spatio-temporal data
    JEL: C4
    Date: 2011
  32. By: Dara Lee (Department of Economics, University of Missouri-Columbia)
    Abstract: This paper analyzes the effect of traffic tickets on motor vehicle accidents. OLS estimates may be upward-biased because police officers tend to focus on areas where and periods when there is heavy traffic and thus higher rates of accidents. This paper exploits the dramatic increase in tickets during the Click-it-or-Ticket campaign to identify the causal impact of tickets on accidents using data from Massachusetts. I find that tickets significantly reduce accidents and non-fatal injuries. However, there is limited evidence that tickets lead to fewer fatalities. I provide suggestive evidence that tickets have a larger impact at night and on female drivers.
    Keywords: traffic tickets, motor vehicle accidents, natural experiment
    JEL: K32 K42 I18 R41
    Date: 2011–10–05
  33. By: Estrada, Fernando
    Abstract: There is now considerable evidence on the value of using external resources to promote the development of innovative technologies. Furthermore, the ability to experience innovations in business by external links that may help to avoid risk, improve the quality of natural products, which means qualifying business activities and promote companies capable of rationalizing and projecting high yields. This paper provides an approach from the transaction cost theory of Ronald Coase, in particular, provides preconditions to estimate the specific market of biotechnology.
    Keywords: Coase theorem; Transactions costs; Biotechnology; Ronald Coase; Innovation; Fiancial Markets
    JEL: D03 B0 B21 B2 D82 D43 B41
    Date: 2012
  34. By: SATO Yasuhiro; TABUCHI Takatoshi; YAMAMOTO Kazuhiro
    Abstract: In order to examine the impacts of market size on entrepreneurship, we estimate a monopolisticcompetition model that involves the workers' decisions to pursue entrepreneurship by using dataon Japanese prefectures. Our results show that a larger market size in terms of populationdensity leads to a higher incentive for individuals to become entrepreneurs. A 10% increase inthe population density increases the share of people who wish to become entrepreneurs byapproximately 1%. In contrast, such a positive effect on the self-employment rate is observedonly for prefectures with very high or very low densities. The self-employment ratio isnegatively associated with population density in prefectures with medium densities.
    Date: 2012–01

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