nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒05‒29
33 papers chosen by
Steve Ross
University of Connecticut

  1. What underlies localization and urbanization economies? Evidence from the location of new firms By Jordi Jofre-Monseny; Raquel Marín-López; Elisabet Viladecans-Marsal
  2. Rethinking the Federal Bias Toward Homeownership By Glaeser, Edward Ludwig
  3. Do Local Amenities Affect the Appeal of Regions in Europe for Migrants? By Ketterer, Tobias; Rodríguez-Pose, Andrés
  4. Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience By Anthony Briant; Miren Lafourcade; Benoît Schmutz
  5. Systematic and liquidity risk in subprime-mortgage backed securities By Mardi Dungey; Gerald P. Dwyer; Thomas Flavin
  6. Policy-induced Social Interactions and Schooling Decisions By Matteo Bobba; Jérémie Gignoux
  7. The trilogy of knowledge spillovers in French regions: a history of nature, channels and boundaries By Olivier Brossard; Inès Moussa
  8. Diversity, choice and the quasi-market: An empirical analysis of secondary education policy in England By S Bradley; Jim Taylor
  9. The Localization of Interfirm Transaction Relationships and Industry Agglomeration By Nakajima, Kentaro; Saito, Yukiko Umeno; Uesugi, Iichiro
  10. Transportation Infrastructure and Development in Ghana By Rémi Jedwab; Alexandre Moradi
  11. Why Did So Many People Make So Many Ex Post Bad Decisions? The Causes of the Foreclosure Crisis By Christopher L. Foote; Kristopher S. Gerardi; Paul S. Willen
  12. Wealth Effects or Economic Barometer: Why Do House Prices Matter for Psychological Health? By Anita Ratcliffe
  13. Income inequality and health: lessons from a refugee residential assignment program By Grönqvist, Hans; Johansson, Per; Niknami, Susan
  14. Voting on Road Congestion Policy By Russo, Antonio
  15. Isolated Capital Cities, Accountability and Corruption: Evidence from US States By Filipe R. Campante; Quoc-Anh Do
  16. Agglomeration and Markup By Lu, Yi; Tao, Zhigang; Yu, Linhui
  17. "Problems with Regional Production Functions and Estimates of Agglomeration Economies: A Caveat Emptor for Regional Scientists" By Jesus Felipe; John McCombie
  18. Ownership and wages: Spatial econometric approach By Ogorevc, Marko; Verbič, Miroslav
  19. Vertical disintegration and spatial co-localization: the case of Kibs in the Metropolitan Region of Milan By Roberto Antonietti; Giulio Cainelli; Claudio Lupi
  20. Productivity in innovation: the role of inventor connections and mobility By Favaro, Donata; Ninka, Eniel; Turvani, Margherita
  21. Spatial depth-based classification for functional data By Carlo Sguera; Pedro Galeano; Rosa E. Lillo
  22. Class Size and Teacher Effects in Higher Education By Gastón Illanes; Claudio Sapelli
  23. Synchronization between the business cycles of Mexico and the United States. New evidence from the analysis of regional coincident indexes By Marcelo Delajara
  24. The effect of Stackelberg cost reductions on spatial competition with heterogeneous firms By Matthew Beacham
  25. Door-to-Door Travel Times in RP Departure Time Choice Models: An Approximation Method based on GPS By Stefanie Peer; Jasper Knockaert; Paul Koster; Yin-Yen Tseng; Erik Verhoef
  26. Strategic behavior in Schelling dynamics: A new result and experimental evidence By Juan Miguel Benito; Pablo Brañas-Garza; Penélope Hernández; Juan A. Sanchis
  27. Migration Networks in Senegal By Isabelle Chort
  28. Does Immigration into Their Neighborhoods Incline Voters Toward the Extreme Right? The Case of the Freedom Party of Austria By Martin Halla; Alexander F. Wagner; Josef Zweimüller
  29. Voluntary amalgamation of local governments: the Swiss debate in the European context By Dafflon, Bernard
  30. Do borrower rights improve borrower outcomes? Evidence from the foreclosure process By Kristopher Gerardi; Lauren Lambie-Hanson; Paul S. Willen
  31. Care or Cash? The Effect of Child Care Subsidies on Student Performance By Black, Sandra; Devereux, Paul J.; Løken, Katrine; Salvanes, Kjell G
  32. The curse of the first-in-first-out queue discipline By Platz, Trine Tornøe; Østerdal, Lars Peter
  33. Cultural Proximity and Loan Outcomes By Raymond Fisman; Daniel Paravisini; Vikrant Vig

  1. By: Jordi Jofre-Monseny (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB)); Raquel Marín-López (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB)); Elisabet Viladecans-Marsal (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB))
    Abstract: The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries (three-digit level). First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. In a second step, we regress these estimates on industry characteristics that are related to the potential importance of three agglomeration theories, namely, labor market pooling, input sharing and knowledge spillovers. Localization effects are low and urbanization effects are high in knowledge-intensive industries, suggesting that firms (partly) locate in large cities to reap the benefits of inter-industry knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry-specific, suggesting that industries (partly) locate in specialized economic environments to share a common pool of specialized workers.
    Keywords: Agglomeration economies, manufacturing industries, localization economies, urbanization economies, specialization.
    JEL: L25 L60 R12 R30
    Date: 2012–05
  2. By: Glaeser, Edward Ludwig
    Abstract: The most fundamental fact about rental housing in the United States is that rental units are overwhelmingly in multifamily structures. This fact surely reflects the agency problems associated with renting single-family dwellings, and it should influence all discussions of rental housing policy. Policies that encourage homeowning are implicitly encouraging people to move away from higher density living; policies that discourage renting are implicitly discouraging multifamily buildings. Two major distortions shape the rental housing market, both of which are created by the public sector. Federal pro-homeownership policies, such as the home mortgage interest deduction, weaken the rental market and the cities where rental markets thrive. Local policies that discourage tall buildings likewise ensure that Americans have fewer rental options. The economic vitality of cities and the environmental consequences of large suburban homes with long commutes both support arguments for reducing these distortions.
    Date: 2011
  3. By: Ketterer, Tobias; Rodríguez-Pose, Andrés
    Abstract: This paper delves into the factors which determine the attractiveness of regions in Europe for migrants. Contrary to the literature on the US which has increasingly focused on the role of amenities, existing research in Europe tends to highlight the predominance of economic conditions as the main drivers of migration. Differentiating between economic, socio-demographic and amenity-related territorial features, we examine the appeal of various regional characteristics for migrants by analyzing net migration data for 133 European regions between 1990 and 2006. Our results show that, in addition to economic, human capital-related and demographic aspects, network effects and – in contrast to existing literature – different types of regional amenities exert an important influence on the relative attractiveness of sub-national territories across the European Union (EU). Our findings therefore indicate that locational choices in Europe may be much more similar to place-based preferences in the US than originally thought.
    Keywords: amenities; economic conditions; Europe; inter-regional migration; location choice; regions; social networks
    JEL: O15 R23
    Date: 2012–05
  4. By: Anthony Briant (SG-CIV - Secrétariat Général du Comité Interministériel des Villes - Ministère de la ville); Miren Lafourcade (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, ADIS - Analyse des Dynamiques Industrielles et Sociales - Département d'Economie - Université Paris XI - Paris Sud); Benoît Schmutz (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ADIS - Analyse des Dynamiques Industrielles et Sociales - Département d'Economie - Université Paris XI - Paris Sud, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique)
    Abstract: This paper providesempirical support to the intuitive statement that urban geography matters to the success or failure of place-based public policies, using the French enterprise zone program as a case study. According to the few existing evaluations, this program has only had a small positive average impact on firm and job creation rates. In addition, this impact was shown to be strongly heterogeneous across the treated neighborhoods may account for part of these results. We estimate a series of augmented difference-in-differences models in which we interact the treatment indicator with a series of original indicators of spatial isolation, wich account for severance, peripherality and disconnection to transportation networks within the urban area. Results indicate that isolation does matter to explain spatial differentials in job creation and firm settlement rates across enterprise zones: only accessible neighborhoods were able to draw benefits from tax breaks and social exemptions. moreover, whereas the program mostly worked through a displacement effect on pre-existing firms, we show that urban geography was a clear determinant of the decision to create new firms from scratch.
    Keywords: Enterprise Zones ; Spatial Isolation ; Transportation Accessibility ; Urban Severance
    Date: 2012–05
  5. By: Mardi Dungey; Gerald P. Dwyer; Thomas Flavin
    Date: 2011
  6. By: Matteo Bobba (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper considers a conditional cash transfer program targeting poor households in small rural villages and studies the effects of the geographic proximity between villages on individual enrollment decisions. Exploiting variations in the treatment status across contiguous villages generated by the randomized evaluation design, the paper finds that the additional effect stemming from the local density of neighboring recipients amounts to roughly one third of the direct effect of program receipt. Importantly, these spatial externalities are concentrated among children from beneficiary households. This suggests that the intervention has enhanced educational aspirations by triggering social interactions among the targeted population.
    Keywords: Spatial externalities ; Social interactions ; Peer effects ; Conditional cash transfers
    Date: 2011–11
  7. By: Olivier Brossard; Inès Moussa
    Abstract: We suggest three theoretical propositions on the nature, channels and boundaries of knowledge spillovers, and we test them with knowledge production functions estimated on French NUTS 3 regions over 2002–2008. Several novelties are introduced. First, we quantify external R&D to complement the usual internal R&D variable and assess the effect of knowledge nature on knowledge spillovers. Second, we construct several measures of the quantity and quality of regional knowledge diffusion channels and introduce them in our knowledge production functions. Third, we test several spatial panel specifications to assess robustness and evaluate the geographical boundaries of various types of knowledge spillovers. All methods converge to provide evidence for the following: 1) spillovers from internal R&D are larger than spillovers from external R&D; 2) the quantity and quality of regional knowledge transmission channels are important determinants of regional innovation; and 3) industrial and technological diversity produce positive knowledge externalities, not only locally but also in the neighbourhood of French regions.
    Keywords: Knowledge spillovers, innovation, R&D, clusters
    JEL: R12 R15
    Date: 2012–05
  8. By: S Bradley; Jim Taylor
    Abstract: This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasi-market following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use data for all state-funded secondary schools in England over the period 1992-2006. The empirical analysis, which is based on the application of panel data methods, indicates that the government and its agencies have substantially overestimated the benefits flowing from these three major reforms. Only about one-third of the improvement in GCSE exam scores during 1992-2006 is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. But there is evidence that resources have not been allocated efficiently.
    Date: 2012
  9. By: Nakajima, Kentaro; Saito, Yukiko Umeno; Uesugi, Iichiro
    Abstract: Using a unique dataset of more than 140,000 manufacturing firms in Japan containing information on their suppliers and customers, this paper looks at the physical distances between transaction partners to examine the localization of transaction relationships. We find the following. First, based on a counterfactual that controls for the location of firms and their potential partners, transaction relationships in about 90 to 95% of the 150 three-digit manufacturing industries can be labelled as localized at distances of 40km or less. This indicates that physical distance is a key factor in firms' choice of transaction partners. Second, based on a counterfactual that controls for the average distance of transaction relationships in the manufacturing sector as a whole, we find that in about 40?% of industries transaction relationships are localized at short distances of up to 40km. Third, the extent of industrial localization and the extent of the localization of transaction relationships are positively correlated. However, there are a number of exceptions and we provide potential explanations for these.
    Keywords: Interfirm transactions, agglomeration, transaction distance
    JEL: R11
    Date: 2012–03
  10. By: Rémi Jedwab (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, LSE - London School of Economics and Political Science - LSE); Alexandre Moradi (Sussex University - Sussex University)
    Abstract: We study the impact of transportation infrastructure on agriculture and development in colonial Ghana. Two railway lines were built between 1901 and 1923 to connect the coast to mining areas and the large hinterland city of Kumasi. This unintendedly opened vast expanses of tropical forest to cocoa cultivation, allowing Ghana to become the world's largest producer. This attracted migrants to producing areas and the economic surplus drove urbanization. Using data at a very fine spatial level, we find a strong effect of railroad connectivity on cocoa production due to reduced transportation costs. We then show that the economic boom in cocoa-producing areas was associated with demographic growth and urbanization. We _nd no spurious effect from lines that were not built yet, and lines that were planned but never built. We show that our results are robust to considering nearest neighbor estimators. Lastly, railway construction has durably transformed the economic geography of Ghana, as railway districts are more developed today, despite thirty years of marked decline in rail transportation.
    Keywords: Railroads ; Trade Costs ; Urbanization ; Africa
    Date: 2011–07
  11. By: Christopher L. Foote; Kristopher S. Gerardi; Paul S. Willen
    Abstract: We present 12 facts about the mortgage crisis. We argue that the facts refute the popular story that the crisis resulted from finance industry insiders deceiving uninformed mortgage borrowers and investors. Instead, we argue that borrowers and investors made decisions that were rational and logical given their ex post overly optimistic beliefs about house prices. We then show that neither institutional features of the mortgage market nor financial innovations are any more likely to explain those distorted beliefs than they are to explain the Dutch tulip bubble 400 years ago. Economists should acknowledge the limits of our understanding of asset price bubbles and design policies accordingly.
    JEL: D14 D18 D53 D82 G01 G38
    Date: 2012–05
  12. By: Anita Ratcliffe (Department of Economics, The University of Sheffield)
    Abstract: This paper investigates whether house prices are linked to mental health outcomes, and whether this association arises through wealth effects or whether third factors such as area amenities or economic conditions drive both house prices and psychological health. These alternative explanations have contrasting implications for the effect of house prices on the well-being of homeowners and non-homeowners, which are exploited in the empirical analysis. I document a positive association between house prices and the mental health of homeowners and non-homeowners, which is not consistent with wealth effects. Further analysis indicates that house prices matter via a role as an economic barometer.
    Keywords: Psychological health; house prices; wealth; economic conditions
    JEL: I1 D12
    Date: 2012
  13. By: Grönqvist, Hans (Swedish Institute for Social Research (SOFI)); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Niknami, Susan (Swedish Institute for Social Research (SOFI))
    Abstract: This paper examines the effect of income inequality on health for a group of particularly disadvantaged individuals: refugees. Our analysis draws on longitudinal hospitalization records coupled with a settlement policy where Swedish authorities assigned newly arrived refugees to their first area of residence. The policy was implemented in a way that provides a source of plausibly random variation in initial location. The results reveal no statistically significant effect of income inequality on the risk of being hospitalized. This finding holds also for most population subgroups and when separating between different types of diagnoses. Our estimates are precise enough to rule out large effects of income inequality on health.
    Keywords: Income inequality; Immigration; Quasi-experiment
    JEL: I10 J15
    Date: 2012–05–05
  14. By: Russo, Antonio
    Abstract: We study the political economy of urban traffic policy. We consider a city and its suburbs. The city decides, by majority voting, on a parking charge in the Central Business District (CBD) and restrictions on road space dedicated to cars. City and suburbs vote on road pricing in the CBD. Results include the following. When the majority of city voters prefers cars to public transport sufficiently more than the average voter, car charges and space restrictions are smaller than optimal. If the suburbs' voters have stronger preferences for cars than the city's, road pricing has the lowest political support among the instruments we consider. Tax exporting and imperfect government coordination may inflate total charges. This is welfare enhancing if it compensates for voters' opposition to car restraining policies. Earmarking charge revenues for public transport is welfare enhancing only if they are topped up by extra funds from a national government.
    Keywords: Road pricing; parking charges; majority voting; multiple government
    Date: 2012–05
  15. By: Filipe R. Campante (Harvard Kennedy School, Harvard University); Quoc-Anh Do (School of Economics, Singapore Management University)
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states. In particular, this is the case when we use the variation induced by the exogenous location of a state’s centroid to instrument for the concentration of population around the capital city. We then show that different mechanisms for holding state politicians accountable are also affected by the spatial distribution of population: newspapers provide greater coverage of state politics when their audiences are more concentrated around the capital, and voter turnout in state elections is greater in places that are closer to the capital. Consistent with lower accountability, there is also evidence that there is more money in state-level political campaigns in those states with isolated capitals. We find that the role of media accountability helps explain the connection between isolated capitals and corruption. In addition, we provide some evidence that this pattern is also associated with lower levels of public good spending and outcomes.
    Keywords: Corruption; Accountability; Population Concentration; Capital Cities; US State Politics; Media; Turnout; Campaign Contributions; Public Good Provision
    JEL: D72 D73 L82 R12 R50
    Date: 2012–05
  16. By: Lu, Yi; Tao, Zhigang; Yu, Linhui
    Abstract: Agglomeration brings costs (e.g., intensified local competition) as well as benefits (e.g., knowledge spillover). It is important to examine the net impact of agglomeration to understand the geographic distribution of economic activities. In this study, we use firm markup (defined as the ratio of price over marginal cost) to capture the net impact of agglomeration. Using data from Chinese manufacturing firms in the 1998-2005 period, we first recover the markup ratio for each firm following De Locker and Warzynski (2012), and then use changes in industrial affiliation as a quasi-experiment to identify the impact of agglomeration on firm markup. Our difference-in-differences (DID) estimation shows that agglomeration has a negative impact on firm markup, suggesting that the devastating competition effect dominates the beneficial spillover effect in Chinese context. Moreover, we find that the impact of agglomeration on firm markup varies across different industries and types of firms.
    Keywords: Agglomeration; Firm Markup; Difference-in-Differences Estimation; Spillover effect; Competition effect
    JEL: L25 D21 R11
    Date: 2011–06
  17. By: Jesus Felipe; John McCombie
    Abstract: Over the last 20 years or so, mainstream economists have become more interested in spatial economics and have introduced largely neoclassical economic concepts and tools to explain phenomena that were previously the preserve of economic geographers. One of these concepts is the aggregate production function, which is also central to much of regional growth theory. However, as Franklin Fisher, inter alios, has shown, the conditions necessary to aggregate microproduction functions into an aggregate production function are so stringent that in all probability the aggregate production function does not exist. This paper shows that the good statistical fits commonly found empirically are solely due to the use of value data and an underlying accounting identity. The result is that the estimates obtained cannot be regarded as providing evidence of the underlying technological structure of the spatial economy, including the aggregate elasticity of substitution, the degree of returns to scale, and the rate of technical progress.
    Keywords: Accounting Identity; Agglomeration Economies; Regional Aggregate Production Functions
    JEL: B50 O4 R11
    Date: 2012–05
  18. By: Ogorevc, Marko; Verbič, Miroslav
    Abstract: The aim of our paper is to disentangle the relationship between ownership and wages using cross-section data for Slovenian medium size and large companies, where we account for spatial dependencies in wage determination. Space here is not considered in geographical context, but as a set of relations between firms originating from the same owner. Using a detailed database on Slovenian ownership, we apply a spatial econometric approach to detect any ownership-based wage spillovers, while accounting for different standard factors, such as size, capital intensity and productivity, and also some ownership-based variables, such as ownership concentration and ratio of cash-flow to control rights. Our results indicate that ownership is an important factor in explaining differences in wage levels. Many large owners divert cash-flow into their own pockets which has a detrimental effect on wages and indicates that this behaviour induced by owners is not sustainable.
    Keywords: spatial econometrics; ownership; wage differentials; sustainability
    JEL: J31 G32 C21
    Date: 2012–05
  19. By: Roberto Antonietti; Giulio Cainelli; Claudio Lupi
    Abstract: In this paper we explore the relation between vertical disintegration and the co-localization of knowledge intensive business service (Kibs) in the metropolitan region of Milan, using micro-geographic data and nonparametric methods. Our main results are that: (i) compared to other manufacturing and service industries, Kibs show a natural tendency to cluster; (ii) this tendency increases with the degree of vertical disintegration of Kibs.
    Keywords: Co-localization, Kibs, Nonparametric methods, Vertical disintegration
    JEL: R12 L80
    Date: 2012
  20. By: Favaro, Donata; Ninka, Eniel; Turvani, Margherita
    Abstract: We study the transmission of knowledge arising from working relationships established by inventors, and its impact on firms’ innovation production. The study’s contribution to the literature is twofold. First, we consider those relationships that originate through inventor connections (”multi-applicant” inventors) and inventor mobility. Second, we analyse their effect on companies’ innovation production. The study focuses on the role played by geographical proximity, and the dynamic effects of knowledge flows. The geographical question is dealt with on a detailed level, by measuring knowledge spillovers observed within the same Local Labour System (LLS), between different LLSs of the region and, finally, with extra-regional LLSs. Dynamics are captured by measuring inventor mobility and connections occurring up to 20 years before patent filing. The analysis is carried out on the Italian region of Veneto and is based upon the original OECD REGPAT database of patent applications filed at the European Patent Office. The manual procedure we used to clean the data allows us to resolve some issues raised in the literature. Our results show that the impact of working relationships on innovation production depends on both geography and dynamics. Therefore, we can not conclude that productivity effects of knowledge flows occurring through the labour market are localized. However, we can conclude that working relationships have sizable productivity effects on innovation, either in the short or in the long run, depending on the geographical distance.
    Keywords: labour mobility; inventor connections; knowledge diffusion; innovation; geographical proximity;
    JEL: J61 J24 O3
    Date: 2012–05–20
  21. By: Carlo Sguera; Pedro Galeano; Rosa E. Lillo
    Abstract: Functional data are becoming increasingly available and tractable because of the last technological advances. We enlarge the number of functional depths by defining two new depth functions for curves. Both depths are based on a spatial approach: the functional spatial depth (FSD), that shows an interesting connection with the functional extension of the notion of spatial quantiles, and the kernelized functional spatial depth (KFSD), which is useful for studying functional samples that require an analysis at a local level. Afterwards, we consider supervised functional classification problems, and in particular we focus on cases in which the samples may contain outlying curves. For these situations, some robust methods based on the use of functional depths are available. By means of a simulation study, we show how FSD and KFSD perform as depth functions for these depth-based methods. The results indicate that a spatial depthbased classification approach may result helpful when the datasets are contaminated, and that in general it is stable and satisfactory if compared with a benchmark procedure such as the functional k-nearest neighbor classifier. Finally, we also illustrate our approach with a real dataset.
    Keywords: Depth notion, Spatial functional depth, Supervised functional classification, Depth-based method, Outliers
    Date: 2012–05
  22. By: Gastón Illanes; Claudio Sapelli
    Abstract: Using student evaluations as a learning measure, we estimate and compare class size and teacher effects for higher education, with emphasis on determining whether a comprehensive class size reduction policy that draws on the hiring of new teachers is likely to improve educational outcomes. We find that teacher effects far outweigh class size effects, and that young teachers and first time teachers perform significantly worse than their peers. Furthermore, we study whether teacher effects are correlated with observables, and find no significant variables beyond being a full time teacher. Overall, these findings suggest that at the higher education level the optimal strategy is to have large classrooms with highly qualified teachers.
    Keywords: Class size, teacher effects, student evaluations
    JEL: I21 I23 I28
    Date: 2012
  23. By: Marcelo Delajara
    Abstract: In this paper we analyze the synchronization between the business cycles of US and Mexican regions. Regional economic activity in Mexico is measured using regional coincident indexes recently developed at Banco de México, while US aggregate economic activity is measured with the national coincident index of the Federal Reserve Bank of Philadelphia. The framework for the empirical analysis is the structural linear times series model. We find a regional pattern in the covariance between cyclical disturbances in the US and in the Mexican regions: it is higher in the Northern than in the Central and Southern regions of the country. We also find that the elasticity of Mexican regional economic activity with respect to the US's aggregate economic activity exhibits a similar pattern. Moreover, while the variance of the business cycles in the Northern, North-Central, and Central regions is mostly associated with shocks to the US economy, in the Southern region it is mostly related to specific shocks to the Mexican economy.
    Keywords: Business cycles, coincident indexes, co-movement, Mexico, United States.
    JEL: E32 E37 R11
    Date: 2012–05
  24. By: Matthew Beacham
    Abstract: This article extends the theory of spatial competition by allowing firms to endogenously select their operating costs within a Hotelling (1929) framework. A three-stage duopoly model is examined in which the firms compete in cost reduction, locations and finally prices. Furthermore, it is assumed that firms are identical except with respect to their cost reducing technologies and one firm has a Stackelberg leadership advantage in the cost-reduction stage. The model implies two results that are unique within the literature. First, if a firm possesses both an efficieny and investment timing advantage, it always becomes the dominant firm in the product market in all relevant respects. Second, if an ex ante inefficient firm has an investment timing advantage it can only become the ex post market leader if and only if the a priori efficiency gap is not too large. Consequently, these results suggest that a firm's ability to innovate - in terms of both efficiency and timing - play a large part in determining the composition of the final product market.
    Keywords: Location model; Asymmetric firms; Stackelberg game; Endogenous cost selection
    JEL: L13 R32
    Date: 2012–05
  25. By: Stefanie Peer (VU University Amsterdam); Jasper Knockaert (VU University Amsterdam); Paul Koster (VU University Amsterdam); Yin-Yen Tseng (VU University Amsterdam); Erik Verhoef (VU University Amsterdam)
    Abstract: A common way to determine values of travel time and schedule delay is by estimating departure time choice models using revealed preference (RP) data. The estimation of such models requires that (expected) travel times are known for both chosen as well as unchosen departure time alternatives. As the availability of such data is limited, most departure time choice studies only take into account travel times on trip segments rather than door-to-door travel times, or use very rough measures of door-to-door travel times. We show that ignoring the temporal and spatial variation of travel times, and in particular, the correlation of travel times across links may lead to biased estimates of the value of time. To approximate door-to-door travel times for which no complete measurement is possible, we develop a model that relates travel times on links with continuous speed measurements to travel times on links where relatively sparse GPS-based speed measurements are available. We use geographically weighted regression to estimate the location-specific relation between the speeds on these two types of links, which is then used for travel time prediction at different locations, days, and times of the day. This method is not only useful for the calculation of door-to-door travel times in departure time choice models but is generally relevant for predicting travel times in situations where continuous speed measurements should be enriched with GPS data.
    Keywords: Scheduling model; revealed preference data; door-to-door travel times; geographically weighted regression; GPS
    JEL: C14 C25 R48
    Date: 2011–12–22
  26. By: Juan Miguel Benito (Universidad Pública de Navarra); Pablo Brañas-Garza (Universidad de Granada); Penélope Hernández (ERI-CES); Juan A. Sanchis (ERI-CES)
    Abstract: In this paper we experimentally test Schelling's (1971) segregation model and confirm the striking result of segregation. In addition, we extend Schelling's model theo- retically by adding strategic behavior and moving costs. We obtain a unique subgame perfect equilibrium in which rational agents facing moving costs may find it optimal not to move (anticipating other participants' movements). This equilibrium is far for full segregation. We run experiments for this extended Schelling model. We find that the percentage of strategic players dramatically increases with the cost of moving and that the degree of segregation depends on the distribution of rational subjects.
    Keywords: Subgame perfect equilibrium, segregation, experimental games
    Date: 2012–03
  27. By: Isabelle Chort (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper investigates the importance and role of migration networks in Senegal using a new nationally representative survey conducted in 2006-2007. Using a sample of 1707 Senegalese households I explore potentially differential effects of networks on international migration depending on their characteristics in terms of composition and destination. Results from logit and multinomial logit regressions show that household networks seem to be destination-specific and have a greater positive influence on migration than community networks. Networks also seem to have heterogeneous effects on migration depending on gender, household wealth or size which is consistent with previous findings in the literatureand backs up a networks effects story.
    Keywords: Migration ; Migrant Networks ; Senegal
    Date: 2012–04
  28. By: Martin Halla; Alexander F. Wagner; Josef Zweimüller
    Abstract: This paper explores one potentially important channel through which immigration may drive support for extreme right-wing parties: the presence of immigrants in one’s neighborhood. We study the case of the Freedom Party of Austria (FPÖ). Under the leadership of Jörg Haider, this party increased its share of votes from less than 5 percent in the early 1980s to 27 percent by the year 1999. Using past regional settlement patterns as a source of exogenous variation, we find a significantly positive effect of the residential proximity of immigrants on FPÖ votes, explaining roughly a quarter of the cross-community variance in FPÖ votes. It is the presence of low- and medium-skilled immigrants that drives this result; high-skilled immigrants have no (or even a negative) effect on FPÖ votes.
    Keywords: Immigration, political economy, voting
    JEL: P16 J61
    Date: 2012–05
  29. By: Dafflon, Bernard (Department of Economics)
    Abstract: The debate about the amalgamation of local government units stems from the fact that their political borders (the institutional territory) do no longer coincide with the functional territory required for an efficient provision of most local public services. And both do not correspond with the relational territory which arises out of the private and professional activities of LGUs' residents as they commute daily or periodically for work, shopping and leisure. The core question of this paper is how to reform the institutional and functional territories in such a way that public services are delivered efficiently, according to local preferences and in a way that responds to the needs expressed in the larger relational territory. The paper is divided in six sections. Section one summarizes the debate about LGUs' amalgamation in the Swiss context. Section two tackles the fundamental problem: if too many LGUs are too small, when is small too small and why? Horizontal cooperation is one possible solution, but it creates serious problems in terms of principal-agent, democracy, information asymmetry and moral hazard, explained in Section 3. Section 4 presents the core concept of “noyaux durs” which is one of the effective approaches to LGUs amalgamation. Section 5 details the cantonal financial incentives that are needed to encourage voluntary amalgamation, besides a cantonal planning strategy and technical help in the process of amalgamation. Section 6 concludes with some notes on the performance of the system.
    Keywords: amalgamation of communes; local government; merger; noyaux fort; participative democracy; principal-agent; size of communes; territorial organization; voluntary versus compulsory amalgamation of communes
    JEL: H11 H72 H73
    Date: 2012–05–14
  30. By: Kristopher Gerardi; Lauren Lambie-Hanson; Paul S. Willen
    Date: 2011
  31. By: Black, Sandra; Devereux, Paul J.; Løken, Katrine; Salvanes, Kjell G
    Abstract: Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children’s longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children’s academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children’s scholastic aptitude.
    Date: 2012–05
  32. By: Platz, Trine Tornøe (Department of Business and Economics); Østerdal, Lars Peter (Department of Business and Economics)
    Abstract: We consider a congested facility where agents can line up at any time they wish after the facility opens (like airplane boarding, or drivers leaving stadium parking lots after a sports event). We show that in Nash equilibrium, within the general family of stochastic queue disciplines with no capacity waste, the focal first-in-first-out (FIFO) queue discipline is the worst while the last-in-first-out (LIFO) discipline is best.
    Keywords: Bottleneck; queue discipline; Nash equilibrium; FIFO; LIFO; welfare
    JEL: C72 D62 R41
    Date: 2012–05–23
  33. By: Raymond Fisman; Daniel Paravisini; Vikrant Vig
    Abstract: We present evidence that shared codes, religious beliefs, ethnicity - cultural proximity - between lenders and borrowers improves the efficiency of credit allocation. We identify in-group preferential treatment using dyadic data on the religion and caste of bank officers and borrowers from a bank in India, and a rotation policy that induces exogenous matching between officers and borrowers. Cultural proximity increases lending on both intensive and extensive margins and improves repayment performance, even after the in-group officer is replaced by an out-group one. Further, cultural proximity increases loan dispersion and reduces loan to collateral ratios. Our results imply that cultural proximity mitigates informational problems that adversely affect lending, which in turn relaxes financial constraints and improves access to finance.
    JEL: D82 G21 J15
    Date: 2012–05

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