nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒04‒23
35 papers chosen by
Steve Ross
University of Connecticut

  1. Is India's Manufacturing Sector Moving Away From Cities? By Ejaz Ghani; Arti Grover Goswami; William R. Kerr
  2. Peer Effects: Evidence from Secondary School Transition in England By Gibbons, Steve; Telhaj, Shqiponja
  3. Migration, Urbanization and City Growth in China By Nong Zhu; Xubei Luo; Heng-fu Zou
  4. Business change in Italian regions. A spatial shift-share approach to plant-level data By Giuseppe Espa; Danila Filipponi; Diego Giuliani; Davide Piacentino
  5. Evidence from Spatial Correlation of Poverty and Income By Hamaguchi, Nobuaki
  6. Appraising the breakdown of unequal individuals in large French cities By Pascaline Vincent; Frédéric Chantreuil; Benoït Tarroux
  7. Does fiscal decentralization foster regional investment in productive infrastructure? By Kappeler , Andreas; Solé-Ollé, Albert; Stephan, Andreas; Välilä, Timo
  8. Ethnic Networks and Technical Knowledge Learning in Industrial Clusters By Chung, Yessica C.Y.
  10. Benchmarking Regions: Estimating the Counterfactual Distribution of Labor Market Outcomes By Fitzenberger, Bernd; Furdas, Marina
  11. Lock-in or lock-out? How structural properties of knowledge networks affect regional resilience? By Joan Crespo; Raphael Suire; Jérôme Vicente
  12. School Turnarounds: Evidence from the 2009 Stimulus By Thomas Dee
  13. Social Insurance Networks By Markussen, Simen; Røed, Knut
  14. Empirical evidence on horizontal competition in tax enforcement By José María Durán-Cabré; Alejandro Esteller-Moré; Luca Salvadori
  15. A conditional directional distance function approach for measuring regional environmental efficiency: Evidence from the UK regions By Halkos, George; Tzeremes, Nickolaos
  16. Measuring the Impact of Establishment Level Agglomeration on Productivity: Industrial specialization and urbanization effects (Japanese) By KONISHI Yoko; SAITO Yukiko
  17. The Effect of Teacher Gender on Student Achievement in Primary School: Evidence from a Randomized Experiment By Antecol, Heather; Eren, Ozkan; Ozbeklik, Serkan
  18. Non-Native Speakers of English in the Classroom: What Are the Effects on Pupil Performance? By Geay, Charlotte; McNally, Sandra; Telhaj, Shqiponja
  19. Are there Regional Disparities in Suicide Rates? Quantifying Suicide Rates? Quantifying Suicide Distributions for Queensland, 1990-2007 By Ruth F.G. Williams; D.P. Doessel; Jerneja Sveticic
  20. Foreign trade, home linkages and the spatial transmission of economic fluctuations in Italy By Valter Di Giacinto
  21. Taxing home ownership: distributional effects of including net imputed rent in taxable income By Figari, Francesco; Paulus, Alari; Sutherland, Holly; Tsakloglou, Panos; Verbist, Gerlinde; Zantomio, Francesca
  22. The Regional Distribution of Public Employment: Theory and Evidence By Kessing, Sebastian G.; Strozzi, Chiara
  23. Do fiscal decentralization and government fragmentation affect corruption in different ways? Evidence from a panel data analysis By Nadia Fiorino; Emma Galli; Fabio Padovano
  24. Peer Effects in Sexual Initiation: Separating Demand and Supply Mechanisms By Seth Richards-Shubik
  25. Do Community-Managed Schools Facilitate Social Capital Accumulation? Evidence from the COGES Project in Burkina-Faso By Sawada, Yasuyuki; Ishii, Takaharu
  26. Decentralization in China By Jing Jin; Chunli Shen; Qian Wang; Heng-fu Zou
  27. Edutainment Radio, Women's Status and Primary School Participation: Evidence from Cambodia By Cheung, Maria
  28. No Pass No Drive: Education and Allocation of Time By Barua, Rashmi; Vidal-Fernández, Marian
  29. Forecasting House Prices for the Four Census Regions and the Aggregate US Economy: The Role of a Data-Rich Environment By Rangan Gupta
  30. On The Political Economy Of Educational Vouchers By Dennis N. Epple; Richard Romano
  31. Properties of knowledge base and firm survival: Evidence from a sample of French manufacturing firms By Alessandra Colombelli; Jackie Krafft; Francesco Quatraro
  32. Quitting and Peer Effects at Work By Rosaz, Julie; Slonim, Robert; Villeval, Marie Claire
  33. Threshold Learning Dynamics in Social Networks. By [no author]
  34. Welfare Migration By Giulietti, Corrado; Wahba, Jackline
  35. Forecasting house price inflation: a model combination approach By Sarah Drought; Chris McDonald

  1. By: Ejaz Ghani; Arti Grover Goswami; William R. Kerr
    Abstract: This paper investigates the urbanization of the Indian manufacturing sector by combining enterprise data from formal and informal sectors. We find that plants in the formal sector are moving away from urban and into rural locations, while the informal sector is moving from rural to urban locations. While the secular trend for India’s manufacturing urbanization has slowed down, the localized importance of education and infrastructure have not. Our results suggest that districts with better education and infrastructure have experienced a faster pace of urbanization, although higher urban-rural cost ratios cause movement out of urban areas. This process is associated with improvements in the spatial allocation of plants across urban and rural locations. Spatial location of plants has implications for policy on investments in education, infrastructure, and the livability of cities. The high share of urbanization occurring in the informal sector suggests that urbanization policies that contain inclusionary approaches may be more successful in promoting local development and managing its strains than those focused only on the formal sector.
    JEL: J61 L10 L60 O10 O14 O17 R11 R12 R13 R14 R23
    Date: 2012–04
  2. By: Gibbons, Steve (London School of Economics); Telhaj, Shqiponja (London School of Economics)
    Abstract: We study the effects of peers on school achievement, with detailed data on children making the same primary to secondary school transition in consecutive years in England. Our estimates show that secondary school composition, on entry at age 12, affects achievement at age 14, although the effect sizes are small. These secondary school peer effects originate in peer characteristics encapsulated in family background and early achievements (age 7), rather than subsequent test score gains in primary school. Our specifications control for individual unobservables and school fixed effects and trends, rendering peer group composition conditionally uncorrelated with student's characteristics.
    Keywords: peer effects, schools, education
    JEL: I2
    Date: 2012–03
  3. By: Nong Zhu; Xubei Luo; Heng-fu Zou
    Abstract: Migration and urbanization have transformed the Chinese economy and society in the past 25 years. This paper intends to explore the determinants of population flows and city growth using a panel data at the provincial level in China. The main findings are: (i) regional disparities of urbanization in China, in particular those between coastal and inland areas, are very significant; (ii) the open-door policy has encouraged urban development in China; (iii) the population of small and medium size cities grows faster than that of large cities; (iv) the role of the secondary and tertiary sectors differs from region to region. In central China, the secondary sector actually serves as the push factor for local urbanization; and in coastal region, however, it is the development of the tertiary sector that pushes urbanization; and (iv) the labor force tends to move to cities with good infrastructures.
    Keywords: regional disparities, migration, urbanization, city growth
    JEL: J61 O18 R23
    Date: 2012
  4. By: Giuseppe Espa; Danila Filipponi; Diego Giuliani; Davide Piacentino
    Abstract: In this paper, a shift-share decomposition analysis of business change at plant-level is applied to Italian regions with reference to the period 2004-2009. In particular, a spatial version of shift-share analysis allows to look not only at the national, industrial mix and regional-shift components, as in traditional approaches, but also at the neighbourhood effect. Additionally, we introduce a novel spatial decomposition which is able to conclude more effectively on the neighbourhood influence. Moreover, the micro-level nature of data allows us to analyse the neighbourhood effect at different spatial levels of aggregation (NUTS-2 and NUTS-3 regions). Some results are worth mentioning. First, the spatial level of aggregation affects heavily the results. Second, we find evidence of neighbourhood advantage in the Southern NUTS-3 regions and opposite results for the Central-Northern NUTS-3 regions. Third, we find evidence of positive industrial mix effects only in the Centre-North of Italy. Finally, results obtained over a shorter time span 2004-2007 confirm our conclusions
    Keywords: Business change, Spatial shift-share, Plant-level data, Italian regions
    JEL: C21 L26 R12
    Date: 2012
  5. By: Hamaguchi, Nobuaki
    Abstract: Using the district-level data, we found that even in a relatively poor country like Kenya, ethnic diversity is associated with better economic outcomes at local level. However, we found that income spillovers depend on ethnic similarity. This suggests the influence of ethnic bias through which ethnic diversity may undermine economic efficiency at the national-level, as many crosscountry regressions have pointed out. This result implies, for policy making, that the question of interregional transaction costs cannot be narrowly focused on problems of transportation infrastructure but it is also related with ethnic divisions in African context.
    Keywords: ethnic bias , spatial correlation , regional economy
    Date: 2011–11–14
  6. By: Pascaline Vincent (Phd student - University of Rennes 1 - CREM (UMR 6211 CNRS)); Frédéric Chantreuil (UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211); Benoït Tarroux (University of Rennes 1 - CREM (UMR 6211 CNRS))
    Abstract: In this paper, we examine the general properties of the Neighbourhood Sorting Index (NSI) introduced by Jargowski (1996) and their intuitive interpretation, illustrating the inverse relation between neighbourhood's homogeneity and segregation. The use of the NSI is illustrated measuring and comparing the segregation in the 30 largest French urban areas from 2000 to 2008.
    Keywords: Measure of Segregation, Residential segregation, Income, City,Neighbourhood Sorting Index
    JEL: D31 D63 O18
    Date: 2012–04
  7. By: Kappeler , Andreas (European Investment Bank); Solé-Ollé, Albert (University of Barcelona); Stephan, Andreas (Jönköping International Business School); Välilä, Timo (European Investment Bank)
    Abstract: The aim of this paper is to analyze the effect of revenue decentralization on the provision of infrastructure at the sub-national level. We estimate the effects of revenue decentralization and earmarked grant financing on the level of sub-national infrastructure investment in 20 European countries over the period 1990-2009. The results are interpreted in light of the predictions of the theory on fiscal federalism. We find that it is sub-national infrastructure investment that increases after revenue decentralization and not investment in redistribution. However, the effect of revenue decentralization is lower the higher the use of earmarked grants to fund infrastructure investment.
    Keywords: Regional investment; fiscal federalism; dynamic panel data
    JEL: C23 H54 H76 H77
    Date: 2012–04–12
  8. By: Chung, Yessica C.Y.
    Abstract: Using an enterprise-level dataset collected from 234 workshops located in the furniture cluster of the city of Arusha, Tanzania, this paper investigates the mechanisms of technical knowledge exchange that take place in clusters. A knowledge exchange link is defined as any two clustering entrepreneurs who perform similar manufacturing techniques in the production process. The results show that the strength of the ethnic networks of producers has positive effects on acquisition of manufacturing techniques, particularly in skills such as wood-joining, which are mainly influenced by a producer’s own skills rather than production facilities. Using dyadic data analysis, this paper further finds that two producers from the same ethnic minority are more likely to exhibit the same manufacturing techniques compared with two producers from the same ethnic majority. These findings suggest that ethnic networks facilitate knowledge exchange in an industrial cluster, but that this positive externality of the ethnic network effect only takes place in small-sized ethnic groups, and only to the extent that sophisticated facilities are not essential in the knowledge learning processes.
    Keywords: ethnic networks , knowledge learning , industrial cluster , Africa
    Date: 2012–01–24
  9. By: Somekh, Babak (Department of Economics, University of Haifa)
    Abstract: We demonstrate how firm pricing strategy and determinants of household location can interact to determine city structure. We go beyond previous work on spatial income segregation by endogenizing the tradeoff between households' choice of location and shopping behavior, as well as solving for the firms' optimal pricing strategy in a general equilibrium framework. In this city, consumers and firms live on a continuous line interval. Our model consists of two types of firms; many high-cost perfectly competitive "Corner Stores" located in the Central Business District, and one large low-cost "Superstore", choosing its location and price strategically. We begin by considering a model with homogenous consumers in order to determine the strategy for the Superstore in a spatial model. Then we consider the impact of introducing different income classes to our city structure. We show how the shopping habits of the consumer population, as determined by the relative price of the Superstore and the Corner Stores, can contribute to the various income segregation outcomes described in previous literature. In addition we consider the impact of city income structure on the pricing decision of firms.
    Date: 2012–02–19
  10. By: Fitzenberger, Bernd (University of Freiburg); Furdas, Marina (University of Freiburg)
    Abstract: This paper develops and implements a new benchmarking approach for labor market regions. Based on panel data for regions, we use nonparametric matching techniques to account for observed labor market characteristics and for spatial proximity. As the benchmark, we estimate the counterfactual distribution of labor market outcomes for a region based on outcomes of similar regions. This allows to measure both the rank (relative performance) and the absolute performance based on the actual outcome for a region. Our outcome variable of interest is the hiring rate among the unemployed. We implement different similarity measures to account for differences in labor market conditions and spatial proximity, and we choose the tuning parameters in our matching approach based on a cross-validation procedure. The results show that both observed labor market characteristics and spatial proximity are important features to successfully match regions. Specifically, the modified Zhao (2004) distance measure and geographic distance in logs work best in our applications. Our estimated performance measures remain quite stable over time.
    Keywords: matching function, regional employment offices, performance measurement, nonparametric matching, conditional quantile positions
    JEL: C14 J68 R50
    Date: 2012–04
  11. By: Joan Crespo; Raphael Suire; Jérôme Vicente
    Abstract: The paper develops an evolutionary framework of regional resilience with a primary focus on the structural properties of local knowledge networks. After a presentation of the network-based rationales of growth and structuring of clusters, we analyze under which structural conditions a regional cluster can mix short run competitiveness without compromising long run resilience capabilities. We show that degree distribution (the level of hierarchy) and degree correlation (the level of structural homophily) of regional knowledge networks are suited properties for studying how clusters succeed in combining technological lock-in and regional lock-out. We propose a simple model of cluster structuring in order to highlight these properties, and discuss the results on a policy-oriented analysis. We conclude showing that policies for regional resilience fit better with ex ante regional diagnosis and targeted interventions on particular missing links, rather than ex post myopic applications of policies based on an unconditional increase of network relational density.
    Keywords: resilience, clusters, degree distribution, assortativity, regional policy
    JEL: B52 D85 O33 R11 R12
    Date: 2012–04
  12. By: Thomas Dee
    Abstract: The American Recovery and Reinvestment Act of 2009 (ARRA) targeted substantial School Improvement Grants (SIGs) to the nation’s “persistently lowest achieving” public schools (i.e., up to $2 million per school annually over 3 years) but required schools accepting these awards to implement a federally prescribed school-reform model. Schools that met the “lowest-achieving” and “lack of progress” thresholds within their state had prioritized eligibility for these SIG-funded interventions. Using data from California, this study leverages these two discontinuous eligibility rules to identify the effects of SIG-funded whole-school reforms. The results based on these “fuzzy” regression-discontinuity designs indicate that there were significant improvements in the test-based performance of schools on the “lowest-achieving” margin but not among schools on the “lack of progress” margin. Complementary panel-based estimates suggest that these improvements were largely concentrated among schools adopting the federal “turnaround” model, which compels more dramatic staff turnover.
    JEL: H52 I2
    Date: 2012–04
  13. By: Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: Based on administrative panel data from Norway, we examine how social insurance dependency spreads within neighborhoods, families, ethnic minorities, and among former schoolmates. We use a fixed effects methodology that accounts for endogenous group formation, contextual interactions, and time-constant as well as time-varying confounders. We report evidence that social insurance dependency is contagious. The estimated network effects are both quantitatively and statistically significant, and they rise rapidly with "relational closeness" in a way that establishes endogenous social interaction as a central causal mechanism. Social interactions do not cross ethnic borders.
    Keywords: social interaction, social multiplier, work norms, peer effects
    JEL: C31 H55 I38
    Date: 2012–03
  14. By: José María Durán-Cabré (Universitat de Barcelona & IEB); Alejandro Esteller-Moré (Universitat de Barcelona & IEB); Luca Salvadori (Universitat de Barcelona & IEB)
    Abstract: Tax auditing parameters have been largely overlooked by the literature as policy-making instruments of any relevance; however, enforcement strategies are critical elements of the tax burden. In this paper we show that, in a federal framework, tax auditing policies can serve as additional tools for regional interaction. We examine the presence of this interaction by adopting a spatial econometric approach. We employ a time-space recursive model that accounts for sluggish adjustment in auditing policies and obtain results that are congruent with standard theory, corroborating the presence of horizontal competition between regions in their tax auditing policies. We also find that once regional governments acquire legal power, the opaque competition in enforcement policies disappears apparently switching to a more transparent competition in statutory tax parameters.
    Keywords: Tax administration and auditing, fiscal competition, fiscal federalism
    JEL: H71 H77 H83
    Date: 2012
  15. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper, by using conditional directional distance functions as introduced by Simar and Vanhems [J. Econometrics 166 (2012) 342-354] modifies the model by Färe and Grosskopf [Eur. J. Operat. Res. 157 (2004) 242-245], examines the link between regional environmental efficiency and economic growth. The proposed model using conditional directional distance functions incorporates the effect of regional economic growth on regions’ environmental efficiency levels. The results from the UK regional data reveal that economic growth has a negative effect on regions’ environmental performance up to a certain GDP per capita level, where after that point the effect becomes positive. This indicates the existence of a Kuznets type relationship between the UK regions’ environmental performance and economic growth.
    Keywords: Regional environmental performance; Directional distance function; Conditional measures; U.K. regions
    JEL: R10 Q50 C14 Q56 C60
    Date: 2012–04
  16. By: KONISHI Yoko; SAITO Yukiko
    Abstract: This paper investigates the effect of agglomeration on the productivity of manufacturing establishments using data from Japan’s Census of Manufactures. For this purpose, we propose a distance-based index defined for each establishment, rather than one based on data aggregated per administrative unit level, as a measurement of agglomeration. Our index is designed to reflect locational heterogeneity within a region as an administrative unit and avoids biases caused by spatial correlations and other problems associated with segmenting data based on administrative boundaries. In addition, we create two different indices to measure two different types of agglomeration—industrial specialization and urbanization—based on data at the four levels of the Japan Standard Industrial Classification (JSIC). Using these indices, we measure the impact these two phenomena have on labor productivity and total factor productivity (TFP) for various industries categorized as growing, declining, labor intensive, and asset intensive. Our analysis finds a positive correlation between the two agglomeration indices as well as labor productivities and both of the indices. Meanwhile, it shows that TFP values, calculated for establishments with 30 employees or more, are positively correlated with the urbanization index, whereas TFP and the industrial specialization index are uncorrelated in most industries and negatively correlated in some. As an exception, we find some industries for which both the industrial and urbanization indices are positively correlated with TFP, all of them categorized as declining. In some of the industries categorized as growing, no correlation is observed between TFP and agglomeration, whether urbanization or industrial specialization. These findings imply that certain attributions—establishment size, industry type, etc.—can serve as a guide for the government in identifying the effective target of cluster promotion policy.
    Date: 2012–03
  17. By: Antecol, Heather (Claremont McKenna College); Eren, Ozkan (University of Nevada, Las Vegas); Ozbeklik, Serkan (Claremont McKenna College)
    Abstract: This paper attempts to reconcile the contradictory results found in the economics literature and the educational psychology literature with respect to the academic impact of gender dynamics in the classroom. Specifically, using data from a randomized experiment, we look at the effects of having a female teacher on the math test scores of students in primary school. We find that female students who were assigned to a female teacher without a strong math background suffered from lower math test scores at the end of the academic year. This negative effect however not only seems to disappear but it becomes (marginally) positive for female students who were assigned to a female teacher with a strong math background. Finally, we do not find any effect of having a female teacher on male students' test scores (math or reading) or female students' reading test scores. Taken together, our results tentatively suggest that the findings in these two streams of the literature are in fact consistent if one takes into account a teacher's academic background in math.
    Keywords: teacher gender, student achievement, random assignment
    JEL: I21 J24
    Date: 2012–03
  18. By: Geay, Charlotte (Paris Graduate School of Economics, ENSAE); McNally, Sandra (London School of Economics); Telhaj, Shqiponja (London School of Economics)
    Abstract: In recent years there has been an increase in the number of children going to school in England who do not speak English as a first language. We investigate whether this has an impact on the educational outcomes of native English speakers at the end of primary school. We show that the negative correlation observed in the raw data is mainly an artefact of selection: non-native speakers are more likely to attend school with disadvantaged native speakers. We attempt to identify a causal impact of changes in the percentage of non-native speakers within the year group. In general, our results suggest zero effect and rule out negative effects.
    Keywords: non-native English speakers, educational attainment
    JEL: I2 J15
    Date: 2012–03
  19. By: Ruth F.G. Williams (School of Economics, La Trobe University); D.P. Doessel (The School of History, Philosophy, Religion and Classics, The University of Queensland, St Lucia, Queensland, Australia 4072.); Jerneja Sveticic (Australian Institute for Suicide Research and Prevention (AISRAP), Griffith University, Queensland, Australia 4122.)
    Abstract: The study commences with a question that epidemiology would regard as 'old' viz. whether suicide rates are higher in rural areas or urban areas, and turns to applying an economic technique of analysis to studying regional suicide disparities. Several dispersion measures are applied to time series male and female suicide rates, including economic inequality measures and measures from regional studies. Equations are modelled on these dispersion measurements, establishing the sign on the slope coefficients. It is determined whether regional disparities in Queensland lessened, or increased, in the study period. The interpretations relevant to a regional studies literature are discussed.
    Keywords: suicide, regional disparities, measuring dispersion, economic inequality
    Date: 2012
  20. By: Valter Di Giacinto (Bank of Italy)
    Abstract: During the recent global recession both the export-oriented northern Italian regions and those in the far less open South experienced a sharp decline in economic activity. One of the possible explanations is the existence of strong domestic linkages propagating foreign demand shocks from North to South. To assess the scope of the spatial transmission of global and local disturbances across Italian regions, in this paper we specify and estimate a bivariate structural spatial VAR model featuring GDP and foreign exports as endogenous variables. A standard gravity equation approach is implemented to model unobserved domestic regional trade flows, while regional sales on foreign markets are related to global trade fluctuations and local shocks to competitiveness, broken down into a national and an idiosyncratic component. In line with expectations, strong domestic linkages are uncovered on the basis of model estimation results. The latter show that even less export-oriented Italian regions, although broadly unaffected on impact, may eventually experience a sharp output decline following a fall in global trade of the size observed in the recent recession.
    Keywords: panel VAR model, trade linkages, spatial econometrics
    JEL: C21 C33 F14
    Date: 2011–10
  21. By: Figari, Francesco; Paulus, Alari; Sutherland, Holly; Tsakloglou, Panos; Verbist, Gerlinde; Zantomio, Francesca
    Abstract: Imputed rental income of homeowners is tax exempt in most countries, despite the long-standing arguments recommending its inclusion in the tax base, on both equity and efficiency grounds. The current fiscal crisis revived interest towards this form of taxation. The paper investigates the fiscal and distributional consequences of including homeowners imputed rent, net of mortgage interest and maintenance costs, in taxable income as any cash income source that extends consumption opportunities. Three scenarios are analysed in six European countries: in the first imputed rent is included in the taxable income of homeowners, while at the same time existing mortgage interest tax relief schemes and taxation of cadastral incomes are abolished. In two further revenue-neutral scenarios, the additional tax revenue raised through the taxation of imputed rent is redistributed to taxpayers, either through a proportional rebate or a lump-sum tax credit. Results show how including net imputed rent in the tax base might affect inequality in each of the countries considered. Housing taxation appears to be a promising avenue for raising additional revenues, or lightening taxation of labour, with no inequality-increasing side-effects.
    Date: 2012–04–01
  22. By: Kessing, Sebastian G. (University of Siegen); Strozzi, Chiara (University of Modena and Reggio Emilia)
    Abstract: We analyze the optimal regional pattern of public employment in an information-constrained second-best redistribution policy showing that regionally differentiated public employment can serve as an expenditure side tagging device, bypassing or relaxing the equity-efficiency trade-off. The optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality within the country. Empirically, using a panel of European regions from 1995-2007, we find evidence that public employment is systematically higher in low productivity regions. The latter effect is stronger in countries with higher levels of regional inequality.
    Keywords: public employment, redistribution, regional inequality, European regions
    JEL: H11 J45 R12
    Date: 2012–03
  23. By: Nadia Fiorino (Dipartimento di Sistemi e Istituzioni per l’Economia, Università de l’Aquila); Emma Galli (Dipartimento di Scienze Sociali, Università di Roma “La Sapienza”); Fabio Padovano (CREM-CNRS, Université de Rennes 1 and DIPES, Università Roma Tre)
    Abstract: Are countries characterized by more decentralized fiscal and spending powers less corrupt? Or is a higher degree of government fragmentation a more effective way to deter corruption? Is there any evidence that these alternative ways to enhance government accountability reinforce each other? This paper tries to answer these questions by using several indicators of government fragmentation and fiscal decentralization for a panel of 23 countries in the 1995-2007 time interval. Taken separately, while various measures of government fragmentation do not seem to affect corruption in any significant way, fiscal decentralization measured as fiscal and spending autonomy does seem to reduce corruption. This latter effect is reinforced if fiscal decentralization is combined with a high degree of government fragmentation at the local level. The results appear robust to different specifications of the empirical model.
    Keywords: decentralization, common pool, fiscal autonomy, government fragmentation, corruption
    Date: 2012–03–23
  24. By: Seth Richards-Shubik (H. John Heinz III School of Public Policy and Management, Carnegie Mellon University)
    Abstract: Most work on social interactions studies a single, composite effect of interactions within a group. Yet in the case of sexual initiation, there are two distinct social mechanisms - peer-group norms and partner availability with separate effects and different potential interventions. Here I develop an equilibrium search and matching model for first sexual partners that specifies distinct roles for these two mechanisms as part of demand and supply. I estimate the model using a national sample of high school students, with data over time on individual virginity status. The results indicate that peer-group norms have a large effect on the timing of sexual initiation for both boys and girls. Changes in opposite-gender search behavior (i.e., partner availability) also have a large impact on initiation rates for boys, but not for girls. The existence of a composite effect of social interactions is also confirmed using a standard method: instrumental variables estimation of linear regressions.
    Keywords: social interaction models, mechanisms, sexual activity, youth, structural estimation
    JEL: C31 C33 J13
    Date: 2012–01–17
  25. By: Sawada, Yasuyuki; Ishii, Takaharu
    Abstract: In this paper, we investigate the role of a School Management Committee (COGES) in facili- tating social capital among community members and teachers. We employ unique data from Burkina Faso, where the COGES project was recently introduced. To determine the individual level of social capital of each community member and teacher, we conduct public goods games, one of the standard artefactual field experiments, with monetary rewards. Using in- strumental variable and propensity score matching methods, we obtain several findings. First, we find that the COGES project increases the level of social capital significantly. This finding is robust across different econometric specifications and methodologies. According to our point estimates, the amount of voluntary contribution to public goods increases by 16% to 27%. Second, the social capital facilitation effect of COGES varies based on the characteristics of the participant: while those who are more educated tended to have a lower level of social capital, Muslims have a higher level of social capital with COGES. Third, our qualitative re- sults are maintained if we use the subjective assessment data of social capital based on the General Social Survey (GSS) questions.
    Keywords: School Management Committee (COGES) , community participation , social capital , Burkina Faso , field experiments public goods game
    Date: 2012–03–28
  26. By: Jing Jin; Chunli Shen; Qian Wang; Heng-fu Zou
    Date: 2012
  27. By: Cheung, Maria (Dept. of Economics, Stockholm University)
    Abstract: This paper investigates whether exposure to "edutainment" (education - entertainment) radio leads to improved women's status and primary school participation. Specifically, I examine a popular radio station focusing on gender issues in Cambodia. To identify the effect, I exploit plausible exogenous variation in over-the-air signal strength between radio transmitters and villages within a district, as well as the variation across time and space in exposure. Using individual data, both approaches show that the exposure had a significant impact on behavior by raising the women's decision-making power within the household and increasing children's primary school attendance. The latter impact is also reflected by higher primary school enrollment three years after exposure. The impact was found in both poor and rural house- holds confirming that radio is an effective vehicle to transmit information in the more marginalized areas. Suggestive evidence shows that the exposure also affected attitudes towards domestic violence and the prevalence of son preference which is a stepping stone towards changing socially constructed gender norms.
    Keywords: Radio exposure; information; gender; women's status; schooling; enrollment; attitude; behavior; edutainment; Cambodia
    JEL: D83 I25 J16
    Date: 2012–04–12
  28. By: Barua, Rashmi (Singapore Management University); Vidal-Fernández, Marian (University of New South Wales)
    Abstract: Do negative incentives or sticks in education improve student outcomes? Since the late 1980s, several U.S. states have introduced No Pass No Drive (NPND) laws that set minimum academic requirements for teenagers to obtain driving licenses. Using data from the American Community Survey (ACS) and Monitoring the Future (MTF), we exploit variation across state, time, and cohort to show that NPND laws led to a 6.4 percentage point increase in the probability of graduating from high school among black males. Further, we show that NPND laws were effective in reducing truancy and increased time allocated to school-work at the expense of leisure and work.
    Keywords: negative incentives, education, allocation of time, dropout, No Pass No Drive laws
    JEL: J08 J22 I2
    Date: 2012–04
  29. By: Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper considers the ability of large-scale (involving 145 fundamental variables) time-series models, estimated based on dynamic factor analysis and Bayesian shrinkage, to forecast real house price growth rates of the four US census regions and the aggregate US economy. Besides, the standard Minnesota prior, we also use additional priors that constrain the sum of coefficients of the VAR models. We compare one- to twenty four-months-ahead forecasts of the large-scale models over an out-of-sample horizon of 1995:1-2009:3, based on an insample of 1968:2-1994:12, relative to a random walk model and a small-scale VAR model comprising of just the five real house price growth rates. In addition to the forecast comparison exercise across large- and small-scale models, we also look at the ability of the “optimal” model (i.e., the model that produces the minimum average mean squared forecast error (MSFE)) for a specific region, in predicting ex ante real house prices (in levels) over the period of 2009:4 till 2012:2. Factor-based models (classical or Bayesian) performs the best for the North East, Mid- West, West census regions and the aggregate US economy, and equally as well to a small-scale VAR for the South region. The “optimal” factor models also tend to predict the downward trend in the data when we conduct an ex ante forecasting exercise. Our results highlight the importance of information content in large number of fundamentals in predicting house prices accurately.
    Keywords: House prices, Forecasting, Factor Augmented Models, Large-Scale, BVAR models
    JEL: C32 R31
    Date: 2012–04
  30. By: Dennis N. Epple; Richard Romano
    Abstract: Two significant challenges hamper analyses of collective choice of educational vouchers. One is the multi-dimensional choice set arising from the interdependence of the voucher, public education spending, and taxation. The other is that household preferences between public and private schooling vary with the policy chosen. Even absent a voucher, preferences over public spending are not single-peaked; a middling level of public school spending may be less attractive to a household than either high public school spending or private education coupled with low public spending. We show that Besley and Coate’s (1997) representative democracy provides a viable approach to overcome these hurdles. We provide a complete characterization of equilibrium with an endogenous voucher. We undertake a parallel quantitative analysis. For income distributions exhibiting substantial heterogeneity, such as the U.S. distribution, we find that no voucher arises in equilibrium. For tighter income distributions, however, a voucher arises. For example, with the income distribution of Douglas County, Colorado, where a voucher was recently adopted, our model predicts a positive voucher. Public support for a not-to-large voucher arises because the cross subsidy to public school expenditure from those switching to private schools outweighs the subsidy to those that attend private school without a voucher.
    JEL: D72 H44 I22
    Date: 2012–04
  31. By: Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia Antipolis (UNS)); Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia Antipolis (UNS)); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia Antipolis (UNS))
    Abstract: The paper analyzes the effects of the properties of firms' knowledge base on the survival likelihood of firms. Drawing upon the analysis of the patterns of co-occurrence of technological classes in patent applications, we derive the coherence, variety and cognitive distance indexes, accounting respectively for technological complementarity, differentiation and (dis)similarity in the firms' patent portfolios. The results of our analysis are in line with the previous literature, showing that innovation enhances the survival likelihood of firms. In addition, we show that the search strategies at work in the development of firms' knowledge base matter in reducing the likelihood of a failure event. Knowledge coherence and variety appear to be positively related to firms' survival, while cognitive distance exerts a negative effect. We conclude that firms able to exploit the accumulated technological competences have more chances to be successful in competing durably in the market arena, and derive some policy implications concerning the role of public intervention in the orientation of search efforts in local contexts.
    Keywords: Knowledge coherence; variety; cognitive distance; firms' survival
    Date: 2012–04–06
  32. By: Rosaz, Julie (University of Montpellier 1); Slonim, Robert (University of Sydney); Villeval, Marie Claire (CNRS, GATE)
    Abstract: While peer effects have been shown to affect worker's productivity when workers are paid a fixed wage, there is little evidence on their influence on quitting decisions. This paper presents results from an experiment in which participants receive a piece-rate wage to perform a real-effort task. After completing a compulsory work period, the participants have the option at any time to continue working or quit. To study peer effects, we randomly assign participants to work alone or have one other worker in the room with them. When a peer is present, we manipulate the environment by giving either vague or precise feedback on the co-worker's output, and also vary whether the two workers can communicate. We find that allowing individuals to work with a co-worker present does not increase worker's productivity. However, the presence of a peer in all working conditions causes workers to quit at more similar times. When, and only when, communication is allowed, workers are significantly more likely to (1) stay longer if their partner is still working, and (2) work longer the more productive they are. We conclude that when workers receive a piece-rate wage, critical peer effects occur only when workers can communicate with each other.
    Keywords: quits, peer effects, communication, feedback, experiment
    JEL: C91 D83 J63 J28 J81
    Date: 2012–04
  33. By: [no author]
    Abstract: Social learning is defined as the ability of a population to aggregate information, a process which must crucially depend on the mechanisms of social interaction. Consumers choosing which product to buy, or voters deciding which option to take with respect to an important issue, typically confront external signals to the information gathered from their contacts. Economic models typically predict that correct social learning occurs in large populations unless some individuals display unbounded influence. We challenge this conclusion by showing that an intuitive threshold process of individual adjustment does not always lead to such social learning. We find, specifically, that three generic regimes exist separated by sharp discontinuous transitions. And only in one of them, where the threshold is within a suitable intermediate range, the population learns the correct information. In the other two, where the threshold is either too high or too low, the system either freezes or enters into persistent flux, respectively. These regimes are generally observed in different social networks (both complex or regular), but limited interaction is found to promote correct learning by enlarging the parameter region where it occurs.
    Date: 2011
  34. By: Giulietti, Corrado (IZA); Wahba, Jackline (University of Southampton)
    Abstract: This chapter reviews and discusses major theories and empirical studies about the welfare magnet hypothesis, i.e. whether immigrants are more likely to move to countries with generous welfare systems. Although economic theory predicts that welfare generosity affects the number, composition and location of immigrants, the empirical evidence is rather mixed. We offer possible explanations for the existence of such mixed evidence and highlight that the literature so far has overlooked the presence of different migration regimes, as well as the possibility of reverse causality between welfare spending and immigration.
    Keywords: welfare spending, immigration
    JEL: H53 J61 J68
    Date: 2012–03
  35. By: Sarah Drought; Chris McDonald (Reserve Bank of New Zealand)
    Abstract: In this paper we use a range of statistical models to forecast New Zealand house price in ation. We address the issue of model uncertainty by combining forecasts using weights based on out-of-sample forecast performance. We consider how the combined forecast for house prices performs relative to both the individual model forecasts and the Reserve Bank of New Zealand's house price forecasts. We find that the combination forecast is on par with the best of the models for most forecast horizons, and has produced lower root mean squared forecast errors than the Reserve Bank's forecasts.
    JEL: E17 E37
    Date: 2011–11

This nep-ure issue is ©2012 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.