nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒07‒14
37 papers chosen by
Steve Ross
University of Connecticut

  1. Inequality aversion, income redistribution and economic geography By Schaeffer, Y.; Charlot, S.
  2. The relationship between city center density and urban growth or decline By Kyle Fee; Daniel Hartley
  3. Filling the Gaps: Dentist Disparities along the Rural Urban Continuum By Terance J. Rephann; Tanya Wanchek
  4. Independent Schools and Long-Run Educational Outcomes: Evidence from Sweden's Large Scale Voucher Reform By Böhlmark, Anders; Lindahl, Mikael
  5. Housing Finance in Chile: Instruments, Actors, and Policies By Alejandro Micco; Eric Parrado; Bernardita Piedrabuena; Alessandro Rebucci
  6. Non-Manipulable House Allocation with Rent Control By Andersson, Tommy; Svensson, Lars-Gunnar
  7. The Competitiveness of Global Port-Cities: The Case of Hamburg, Germany By Olaf Merk; Markus Hesse
  8. A preliminary investigation of northern Ireland's housing market dynamics By Bond, Derek; Gallagher, Emer; Ramsey, Elaine
  9. Wages, rents, unemployment, and the quality of life By Wrede, Matthias
  10. Projection Bias in the Car and Housing Markets By Meghan R. Busse; Devin G. Pope; Jaren C. Pope; Jorge Silva-Risso
  11. Impact of Bilingual Education Programs on Limited English Proficient Students and Their Peers: Regression Discontinuity Evidence from Texas By Chin, A.; Daysal, N. Meltem; Imberman, S.A.
  12. Impact of Bilingual Education Programs on Limited English Proficient Students and Their Peers: Regression Discontinuity Evidence from Texas By Chin, Aimee; Daysal, N. Meltem; Imberman, Scott A.
  13. You Get What You Pay For: How Nordic Cities Are Financed By Jorgen Lotz
  15. Immigrant Homeownership and Immigration Status: Evidence from Spain By Amuedo-Dorantes, Catalina; Mundra, Kusum
  16. Giving a Second Chance: an After-School Program in a Shanty Town Matched against Parent Type By Cid, Alejandro
  17. Hard Evidence on Soft Skills By James J. Heckman; Tim D. Kautz
  18. Airports and the Production of Goods and Services By Sheard, Nicholas
  19. Geographic Access Rules and Investments By Bourreau, Marc; Cambini, Carlo; Hoernig, Steffen
  20. The demand for school meals: an analysis of stated choices by Swiss households By Massimo Filippini; Giuliano Masiero; Diego Medici
  21. The Role of Credit in Great Moderation: a Multivariate GARCH Approach By Grydaki, Maria; Bezemer, Dirk J.
  22. Peer Effects in Program Participation By Dahl, Gordon B.; Loken, Katrine V.; Mogstad, Magne
  23. Long-term effects of class size By Fredriksson, Peter; Öckert, Björn; Oosterbeek, Hessel
  24. Infrastructure and nation building: The regulation and financing of network transportation infrastructures in Spain (1720-2010) By Germà Bel
  25. The Effects of Bullying in Elementary School By Tine Louise Mundbjerg Eriksen; Helena Skyt Nielsen; Marianne Simonsen
  26. The impact of immigration on the greek labor market By Chletsos, Michael; Roupakias, Stelios
  27. Eating Behavior and Social Interactions from Adolescence to Adulthood By Luisa Corrado; Roberta Distante
  28. Bureaucratic Delay, Local-Level Monitoring, and Delivery of Small Infrastructure Projects: Evidence from a Field Experiment in Bolivia By Yanez-Pagans, Monica; Machicado, Carlos Gustavo
  29. The Power of a Bad Example - A Field Experiment in Household Garbage Disposal By Robert Dur; Ben Vollaard
  30. Size and Density Economies in Refuse Collection By Graziano Abrate; Fabrizio Erbetta; Giovanni Fraquelli; Davide Vannoni
  31. Factors Influencing German House Owners' Preferences on Energy Retrofits By Achtnicht, Martin; Madlener, Reinhard
  32. How Immigration May Affect U.S. Native Entrepreneurship: Theoretical Building Blocks and Preliminary Results By Duleep, Harriet; Jaeger, David A.; Regets, Mark
  33. Impact Evaluation of a Privately Managed Tuition-Free Middle school in a Poor Neighborhood in Montevideo By Cid, Alejandro; Balsa, Ana
  34. Family structure and children's education outcome: Evidence from Uruguay By Cid, Alejandro; Stokes, Charles
  35. Networks in Economics By Zenou, Yves
  36. Cooperation behaviour and innovation performance in the Nigerian manufacturing industry By Abiodun A. Egbetokun
  37. Referral networks and the allocation of talent By Pothier, David

  1. By: Schaeffer, Y.; Charlot, S.
    Abstract: Standard 'New Economic Geography' (NEG) models assume mobile individuals settle in the region where they can earn the highest real income. But recent economic studies on 'Happiness' have accumulated empirical evidence suggesting most individuals - not just the poor - dislike living in regions where income inequality is high. Using a Krugman-type model,augmented with housing costs, we introduce the notion of 'Local Inequality Aversion' and show how it matters to economic geography. On the one hand, mobile individuals suffer an endogenous regional disamenity - income inequality - which produces an agglomerative (dispersive) force when transport costs are high (low). On the other hand, local inequality aversion is likely to lead to some redistributive transfers which benefit both rich and poor : if so, an increase in aversion intensity favors increased agglomeration.
    JEL: R12 R28 H71
    Date: 2012
  2. By: Kyle Fee; Daniel Hartley
    Abstract: In this paper we contrast the spatial patterns of population density and other demographic changes in growing versus shrinking MSAs from 1980 to 2010. We fi nd that, on average, shrinking MSAs show the steepest drop in population density near the Central Business District (CBD). Motivated by this fact, we explore the connection between changes in population density at the core of the MSA and MSA productivity. We find that changes in near-CBD population density are positively associated with per capita income growth at the MSA-level.
    Keywords: Regional economics ; Urban economics
    Date: 2012
  3. By: Terance J. Rephann (Center for Economic and Policy Studies); Tanya Wanchek (Center for Economic and Policy Studies)
    Abstract: This paper examines the distribution of dentists among U.S. counties along the rural-urban continuum. Dentist workforce availability has implications for oral health care access and utilization, which in turn can affect the quality of life, health, and productivity of rural residents. In addition, dentists form part of the non-tradable services sector, and its erosion may affect the vitality of rural economies. Nonmetropolitan counties have significantly lower levels of dentists per 100,000 residents than metropolitan areas and face the prospect of future attrition in the dentist workforce because of an aging workforce and increasing difficulty attracting newly minted dentists who favor more urbanized practice locations. The paper develops spatial econometric models of dentist location to help identify factors amenable to policy intervention. Results indicate that demand factors such as income, private insurance coverage, educational levels, and demographic composition play a role in dentist disparities. Also, private practice dentists tend to cluster near counties with urban areas consisting of at least 10,000 residents, higher net in-commuting, a greater presence of other health care and creative class professionals, and natural amenities. More stringent regulation for dental hygienists also boosts the relative quantity of dentists. Dental schools and public dentists are associated with a greater availability of private practice dentists.
    Keywords: dentists, distribution, spatial econometrics, rural-urban continuum
    JEL: I11 J44 R12
    Date: 2012–05–22
  4. By: Böhlmark, Anders (SOFI, Stockholm University); Lindahl, Mikael (Uppsala University)
    Abstract: This paper evaluates average educational performance effects of an expanding independent-school sector at the compulsory level by assessing a radical voucher reform that was implemented in Sweden in 1992. Starting from a situation where all public schools were essentially local monopolists, the degree of independent schools has developed very differently across municipalities over time as a result of this reform. We regress the change in educational performance outcomes on the increase in the share of independent-school students between Swedish municipalities. We find that an increase in the share of independent-school students improves average performance at the end of compulsory school as well as long-run educational outcomes. We show that these effects are very robust with respect to a number of potential issues, such as grade inflation and pre-reform trends. However, for most outcomes, we do not detect positive and statistically significant effects until approximately a decade after the reform. This is notable, but not surprising given that it took time for independent schools to become more than a marginal phenomenon in Sweden. We do not find positive effects on school expenditures. Hence, the educational performance effects are interpretable as positive effects on school productivity. We further find that the average effects primarily are due to external effects (e.g., school competition), and not that independent-school students gain significantly more than public-school students.
    Keywords: school choice, independent schools, educational performance, external effects
    JEL: I2 H4
    Date: 2012–06
  5. By: Alejandro Micco; Eric Parrado; Bernardita Piedrabuena; Alessandro Rebucci
    Abstract: The Chilean system of housing finance is a mixture of public and private elements that has arguably been very successful. This paper provides an up- to-date review of the main instruments, actors, and government policies of the Chilean system of housing finance. It concludes that, while the system is indeed functioning well, the increasingly important role of BancoEstado warrants further analysis of the role of public banks in a modern, fully developed housing finance system.
    JEL: E52 F33
    Date: 2012–05
  6. By: Andersson, Tommy (Department of Economics, Lund University); Svensson, Lars-Gunnar (Department of Economics, Lund University)
    Abstract: In many real-life house allocation problems, rents are bounded from above by price ceilings imposed by the government or a local administration. This is known as rent control. Because some price equilibria may be disqualified given such restrictions, a weaker equilibrium concept is suggested. Given the weaker notion, this paper defines an allocation mechanism, tailored to capture the specific features of housing markets with rent control, which always selects a weak price equilibrium. The main results demonstrate the existence of a weak price equilibrium and that the introduced allocation mechanism is efficient and non-manipulable for any given price ceiling. In its two bounding cases, the mechanism reduces to the weak version of the serial dictatorship mechanism (Svensson, 1994) and the competitive price mechanism (Demange and Gale, 1985), respectively. In this sense, the housing market with rent control, investigated in this paper, integrates two of the predominant models in the two-sided matching literature into a more general framework.
    Keywords: House allocation; rent control; rationing; weak price equilibrium; priority efficiency; non-manipulability
    JEL: C71 C78 D63 D71 D78
    Date: 2012–06–28
  7. By: Olaf Merk; Markus Hesse
    Abstract: This working paper offers an evaluation of the performance of the Port of Hamburg, as well as an analysis of the port?s impact on its territory and an assessment of relevant policies and governance. It examines port performance in the last decade and identifies the principal factors that have contributed to it. In addition, the report studies the potential for synergies between the Hamburg and Bremerhaven ports. The study also considers the effect of these ports on economic and environmental questions. The value added of the port cluster of Hamburg is calculated, and its linkages with other economic sectors and regions in Germany are delineated. Specifically, the paper outlines the impact of the port?s operations, and shows how its activities spill over into other regions. The report also assesses major policies governing the port, as well as transport and economic development, the environment and spatial planning. These policies include measures instituted by the port authority and local, regional and national governments. Governance mechanisms at these different levels are described and analysed. Based on the report?s findings, proposed recommendations aim to improve port performance and increase the positive effects of the port on its territory.
    JEL: D57 L91 R11 R12 R15 R41
    Date: 2012–06–27
  8. By: Bond, Derek; Gallagher, Emer; Ramsey, Elaine
    Abstract: In this paper recent developments in dynamic econometric methodology are used to explore the possibility of asset bubbles in the Northern Ireland housing market. This market is interesting as its house price trajectory is quite unlike any neighbouring market. In recent years it seems to have been influenced both by the general UK market and the Republic of Ireland's housing market. The dynamics of the market are explored through univariate analysis, using sequential unit root tests and fractional integration. The findings provide an indication of the principle developments in the market and could provide the basis for further causal analysis.
    Keywords: House prices; Northern Ireland; Asset Bubbles; Sequential Unit Root tests; fractional integration; fundamental value
    JEL: G1 C5 C22 E3
    Date: 2012–07–03
  9. By: Wrede, Matthias
    Abstract: Combining a spatial equilibrium model with a search-matching unemployment model, this paper analyzes the willingness to pay for regional amenities and the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. The results are compared with those obtained from the Rosen-Roback approach. Furthermore, the paper shows that the wage curve is negatively sloped for quasi-linear utility. Specifically, the wage rate increases and the unemployment ratio decreases in response to an increase in the amenity level if the amenity is marginally more beneficial to producers than to consumers. As an illustration of the unemployment-adjusted quality-of-life measure, the quality of life in West German counties is estimated. --
    Keywords: quality of life,residential mobility,unemployment,job search,matching
    JEL: R12 R13 R14 H73 J61 J64
    Date: 2012
  10. By: Meghan R. Busse; Devin G. Pope; Jaren C. Pope; Jorge Silva-Risso
    Abstract: Projection bias is the tendency to overpredict the degree to which one’s future tastes will resemble one’s current tastes. We test for evidence of projection bias in two of the largest and most important consumer markets – the car and housing markets. Using data for more than forty million vehicle transactions and four million housing purchases, we explore the impact of the weather on purchasing decisions. We find that the choice to purchase a convertible, a 4-wheel drive, or a vehicle that is black in color is highly dependent on the weather at the time of purchase in a way that is inconsistent with classical utility theory. Similarly, we find that the hedonic value that a swimming pool and that central air add to a house is higher when the house goes under contract in the summertime compared to the wintertime.
    JEL: D03 D12 L62
    Date: 2012–07
  11. By: Chin, A.; Daysal, N. Meltem; Imberman, S.A. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Texas requires a school district to offer bilingual education when its enrollment of limited English proficient (LEP) students in a particular elementary grade and language is twenty or higher. Using school panel data, we find a significant increase in the probability that a district offers bilingual education above this 20-student cutoff. Using this discontinuity as an instrument for district bilingual education provision, we find that bilingual education programs do not significantly impact the standardized test scores of students with Spanish as their home language (comprised primarily of ever-LEP students). However, there are significant positive spillover effects to their non-LEP peers.
    Keywords: Bilingual education.
    JEL: I21 J24
    Date: 2012
  12. By: Chin, Aimee (University of Houston); Daysal, N. Meltem (Tilburg University); Imberman, Scott A. (Michigan State University)
    Abstract: Texas requires a school district to offer bilingual education when its enrollment of limited English proficient (LEP) students in a particular elementary grade and language is twenty or higher. Using school panel data, we find a significant increase in the probability that a district offers bilingual education above this 20-student cutoff. Using this discontinuity as an instrument for district bilingual education provision, we find that bilingual education programs do not significantly impact the standardized test scores of students with Spanish as their home language (comprised primarily of ever-LEP students). However, there are significant positive spillover effects to their non-LEP peers.
    Keywords: bilingual education
    JEL: I21 J24
    Date: 2012–06
  13. By: Jorgen Lotz (Ministry of Finance, Denmark)
    Abstract: The Nordic countries are small, unitary, and have largely homogeneous populations. Municipalities are the most important agents in the decentralized public sector and the middle tier (the county level) is losing importance. The expenditure of Nordic local authorities exceeds that in Canada by 10 percent of GDP. The difference represents the effect of local income taxes. Large local expenditures are for kindergartens, primary schools, social welfare, care for the elderly, and culture. These welfare functions are not, however, local public goods; local governments serve mostly as agents for the delivery of national public services. This situation creates complicated problems of control. Amalgamations in several Nordic countries have been carried out to improve the capacity of local authorities to deliver services. Other approaches include joint production and contracting out. The local income tax is a big revenue-raiser, but has some undesirable side effects. Some Nordic countries have a company tax, but this tax raises questions of accountability and fairness, and has been phased out in several places. Nordic countries use methods of tax base equalization which transfer contributions from wealthy jurisdictions to poorer ones. Equalization also involves complicated efforts to deal with the special expenditure needs of cities.
    Keywords: Denmark, Finland, Iceland, Norway, Sweden, decentralization, social welfare, municipal amalgamation, local income tax, tax base equalization
    JEL: H2 H7 R1 R5
    Date: 2012–03
  14. By: Beatrice D. Simo-Kengne (Department of Economics, University of Pretoria); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, North Cyprus,via Mersin 10, Turkey); Rangan Gupta (Department of Economics, University of Pretoria); Monique Reid (Department of Economics, Stellenbosch University); Goodness C. Aye (Department of Economics, University of Pretoria)
    Abstract: This paper examines asymmetries in the impact of monetary policy on the middle segment of the South African housing market from 1966:M2 to 2011:M12. We use Markov-switching vector autoregressive (MS-VAR) models in which parameters change according to the phase of the housing cycle. The results suggest that monetary policy is not neutral as house price growth decreases substantially with a contractionary monetary policy. We find that the impact of monetary policy is larger in bear regime than in bull regime; indicating the role of information asymmetry in reinforcing the financial constraint of economic agents. As expected, monetary policy reaction to a positive house price shock is found to be stronger in the bull regime. This suggests that central banker reacts more in bull regime in order to prevent potential crisis related to the subsequent bust in house prices bubbles which are more prominent in bull markets. These results substantiate important asymmetries in the dynamics of house prices in relation to monetary policy, vindicating the advantages of generating regime dependent impulse response functions.
    Keywords: Monetary policy, House prices, Regime switching
    JEL: C22 C32 E52 R31
    Date: 2012–07
  15. By: Amuedo-Dorantes, Catalina (San Diego State University, California); Mundra, Kusum (Rutgers University)
    Abstract: Because of the many advantages of homeownership for immigrants and for the communities where immigrants reside, a variety of countries have implemented policies that facilitate immigrant homeownership. Although these policies hinge on immigration status, the link between immigration status and homeownership is yet to be carefully explored. Using a recent survey of immigrants in Spain, we find that permanent residents from the EU15 enjoy the highest homeownership rates, even after accounting for a wide range of individual and family characteristics known to impact housing ownership. Permanent residents from countries outside the EU15, temporary residents and undocumented immigrants are, respectively, 12 percentage-points, 29 percentage-points and 33 percentage-points less likely to own a home than permanent residents from the EU15. Overall, the findings highlight the differences in homeownership by immigrant status, possibly reflecting differences in cultural adaptation and integration across immigrants in host country.
    Keywords: immigrant homeownership, immigration status, Spain
    JEL: R21 J61
    Date: 2012–06
  16. By: Cid, Alejandro
    Abstract: Most discussion of after-school programs in shanty towns has focused on estimating their average effects. The results of these programs are inconclusive and the explanation may be that the effects are heterogeneous. In this paper, we study the influence of how heterogeneity in the type of parents involved in the program affects the performance of their children at school. We measure performance at school according to academic achievement, behavior and grade retention. In line with previous literature, we employ the number of books at home as a proxy for parent type. By using random assignment to evaluate an after-school program in a developing-country shanty town, we find that it is effective in raising children’s school achievement for those with a committed parent type. Thus, this paper provides evidence that the knowledge of the distribution of effects is crucial to guiding public policy and it is not enough just to change the environment in which young people spend their after school hours, increasing time in safe, supervised settings, it is also necessary to take parenting type into account.
    Keywords: after-school; education; impact evaluation; randomized experiment
    JEL: I21
    Date: 2012
  17. By: James J. Heckman; Tim D. Kautz
    Abstract: This paper summarizes recent evidence on what achievement tests measure; how achievement tests relate to other measures of "cognitive ability" like IQ and grades; the important skills that achievement tests miss or mismeasure, and how much these skills matter in life. Achievement tests miss, or perhaps more accurately, do not adequately capture, soft skills—personality traits, goals, motivations, and preferences—that are valued in the labor market, in school, and in many other domains. The larger message of this paper is that soft skills predict success in life, that they causally produce that success, and that programs that enhance soft skills have an important place in an effective portfolio of public policies.
    JEL: D01 I20
    Date: 2012–06
  18. By: Sheard, Nicholas (Dept. of Economics, Stockholm University)
    Abstract: This paper estimates the effects of airport infrastructure on local employment in the manufacturing and service sectors, using data from the United States. The effects are relevant to the evaluation of airport construction or improvement projects as these often aim to attract firms or improve conditions for existing local firms by making travel to and from the local area more convenient. To address the endogeneity problem that results from demand-driven airport expansion, the 1944 National Airport Plan of the Civil Aeronautics Administration is used to instrument for the current distribution of airports. The Plan had a strong effect on where airports were constructed in the decades following its adoption, but apparently allocated airports for reasons otherwise exogenous to current industry shares. Airport size is found to have a positive effect on local employment in tradable services, with an elasticity of approximately 0.1, and a negative effect on manufacturing. There is no measurable effect on non-tradable services.
    Keywords: Air transport; services trade; infrastructure
    JEL: F14 H54 R41
    Date: 2012–07–05
  19. By: Bourreau, Marc; Cambini, Carlo; Hoernig, Steffen
    Abstract: We analyze competition between vertically integrated infrastructure operators that provide access in different geographical areas. A regulator may impose a uniform access price, set local access rates, or deregulate access locally. We analyze the impact of these alternative regulatory regimes on network investments. While cost-based access leads to both suboptimal rollout and duplication, uniform access prices bring too much duplication. Deregulation in competitive areas can spur investment and lead to social optimum, or call for continued regulatory intervention, depending on the resulting wholesale equilibrium.
    Keywords: geographical access regulation; infrastructure investment; Next generation networks
    JEL: L51 L96
    Date: 2012–06
  20. By: Massimo Filippini (Department of Economics, University of Lugano; ETH, Zurich, Switzerland); Giuliano Masiero (Department of Economics and Technology Management, University of Bergamo, Italy; Department of Econonomics, University of Lugano, Switzerland); Diego Medici (Department of Economics, University of Lugano)
    Abstract: In this paper we investigate households' demand for school meals using a stated preferences approach. Data are collected through phone-structured interviews to 905 residents with children in the German-speaking region of Switzerland during 2007. A Poisson model with random effects is used to explore factors affecting the demand for meals at school. The results show that meals price, household income, satisfaction with the current childcare service, family composition, and the area of residence significantly affect the number of school meals demanded. We estimate that the willingness to pay for a school meal is about 11.60 Swiss francs and does not depend on household income.
    Keywords: Demand, school meals service, panel count data, Poisson regression, random effects, willingness to pay
    JEL: D12 H31 H42 J13
    Date: 2012–05
  21. By: Grydaki, Maria; Bezemer, Dirk J.
    Abstract: During the Great Moderation, financial innovation in the U.S. increased the size and scope of credit flows supporting the growth of wealth. We hypothesize that spending out of wealth came to finance a wider range of GDP components such that it smoothed GDP. Both these trends combined would be consistent with a decrease in the volatility of output. We suggest testable implications in terms of both growth of credit and output and volatility of growth. In a multivariate GARCH framework, we test this view for home mortgages and residential investment. We observe unidirectional causality in variance from total output, residential investment and non-residential output to mortgage lending before, but not during the Great Moderation. These findings are consistent with a role for credit dynamics in explaining the Great Moderation.
    Keywords: great moderation; mortgage credit; multivariate GARCH; causality
    JEL: C51 C32 C52 E44
    Date: 2012–06–28
  22. By: Dahl, Gordon B. (University of California, San Diego); Loken, Katrine V. (University of Bergen); Mogstad, Magne (University College London)
    Abstract: The influence of peers could play an important role in the take up of social programs. However, estimating peer effects has proven challenging given the problems of reflection, correlated unobservables, and endogenous group membership. We overcome these identification issues in the context of paid paternity leave in Norway using a regression discontinuity design. Our approach differs from existing literature which attempts to measure peer effects by exploiting random assignment to peer groups; in contrast, we study peer effects in naturally occurring peer groups, but exploit random variation in the "price" of a social program for a subset of individuals. Fathers of children born after April 1, 1993 in Norway were eligible for one month of governmental paid paternity leave, while fathers of children born before this cutoff were not. There is a sharp increase in fathers taking paternity leave immediately after the reform, with take up rising from 3% to 35%. While this quasi-random variation changed the cost of paternity leave for some fathers and not others, it did not directly affect the cost for the father's coworkers or brothers. Therefore, any effect on the brother or the coworker can be attributed to the influence of the peer father in their network. Our key findings on peer effects are four-fold. First, we find strong evidence for substantial peer effects of program participation in both workplace and family networks. Coworkers and brothers are 11 and 15 percentage points, respectively, more likely to take paternity leave if their peer father was induced to take up leave by the reform. Second, the most likely mechanism is information transmission about costs and benefits, including increased knowledge of how an employer will react. Third, there is essential heterogeneity in the size of the peer effect depending on the strength of ties between peers, highlighting the importance of duration, intensity, and frequency of social interactions. Fourth, the estimated peer effect gets amplified over time, with each subsequent birth exhibiting a snowball effect as the original peer father's influence cascades through a firm. Our findings demonstrate that peer effects can lead to long-run equilibrium participation rates which are substantially higher than would otherwise be expected.
    Keywords: social interactions, peer effects, program participation
    JEL: D62 J13 I38
    Date: 2012–06
  23. By: Fredriksson, Peter (Stockholm University, IZA, IFAU, and UCLS); Öckert, Björn (Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala University and UCLS); Oosterbeek, Hessel (University of Amsterdam)
    Abstract: This paper evaluates the long-term effects of class size in primary school. We use rich data from Sweden and exploit variation in class size created by a maximum class size rule. Smaller classes in the last three years of primary school (age 10 to 13) are beneficial for cognitive and non-cognitive ability at age 13, and improve achievement at age 16. Most importantly, we find that smaller classes have positive effects on completed education, wages, and earnings at age 27 to 42. The estimated wage effect is much larger than any imputed estimate of the wage effect, and is large enough to pass a cost-benefit test.
    Keywords: Class size; regression discontinuity; cognitive skills; non-cognitive skills; educational attainment; earnings
    JEL: C31 I21 I28 J24
    Date: 2012–07–05
  24. By: Germà Bel (Faculty of Economics, University of Barcelona)
    Abstract: This paper analyzes Spanish infrastructure policy since the early 1700s: Road building in the eighteenth century, railway creation and expansion in the nineteenth, motorway expansion in the twentieth, and high speed rail development in the twenty-first. The analysis reveals a long-term pattern, in which infrastructure policy in Spain has been driven not by the requirements of commerce and economic activity, but rather by the desire to centralize transportation around the country’s political capital. As commerce has been unable to sustain the development of this policy, regulation and subsidies from the national budget have regularly been used to decide the priorities regarding infrastructure creation and to fund the development, maintenance, and operation of the networks.
    Keywords: Infrastructure, Transportation, Railroads and Other Surface Transportation, Government Policy. JEL classification:L91, L92, L98
    Date: 2010–09
  25. By: Tine Louise Mundbjerg Eriksen (Department of Economics and Business, Aarhus University, Denmark); Helena Skyt Nielsen (Department of Economics and Business, Aarhus University, Denmark); Marianne Simonsen (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: Bullying is a widespread social phenomenon. We show that both children who are being bullied and children who bully suffer in terms of long-term outcomes. We rely on rich survey and register-based data for children born in a region of Denmark during 1990-1992, which allows us to carefully consider possible confounders. Evidence from a number of identification strategies suggests that the relationship is causal. Besides the direct effect bullying may have on the child in the longer run, we show that an additional mechanism can arise through teacher perceptions of short-run abilities and behavior.
    Keywords: Victim, Perpetrator, Antisocial Behavior, Crime, Education, Mental Health
    JEL: I14 I21
    Date: 2012–07–06
  26. By: Chletsos, Michael; Roupakias, Stelios
    Abstract: This paper applies the “spatial correlations” methodology in order to investigate the impact of immigrants on the labor market performance of natives. We use information on 13 local labor markets for the period 1988-2008. The data are drawn from the Greek Labor Force Survey. We address the endogeneity of immigrants’ location choices by using an instrumental variables methodology. Our results provide empirical evidence that immigrants do not displace the indigenous workers. Also, there is evidence that: (i) medium skilled unemployment declines with immigration and (ii) labor force participation rises due to immigration.
    Keywords: immigration; unemployment; participation
    JEL: E24 J61
    Date: 2012–07–08
  27. By: Luisa Corrado (Department of Economics; Faculty of Economics, University of Rome; University of Cambridge); Roberta Distante (Department of Economics)
    Abstract: This paper analyzes the importance of social ties for eating behavior of US youth. We propose a novel approach that addresses identification of social endogenous effects. We overcome the problem of measuring the separate impact of endogenous and contextual effects on individual Body Mass Index (BMI) in a dynamic linear-in-means model, where individual- and group-specifi?c unobservable effects are controlled for. We show that the main drivers of eating behavior are habituation and imitation effects. Imitation effects explain most of the variation in BMI of individuals who were normal-weight and overweight during adolescence. Obese adolescents, instead, become future obese adults through wrong habits enforced by imitative behavior.
    Keywords: Overweight, Obesity, Peer Effects, Social Networks, Personal History, Dynamic Linear-in-means Mode
    JEL: D10 D71 I19 J11 Z13
    Date: 2012–06–19
  28. By: Yanez-Pagans, Monica (World Bank); Machicado, Carlos Gustavo (INSEAD)
    Abstract: This paper examines bureaucratic delay within the allocation of small infrastructure projects by sub-municipal governments in Bolivia, and it presents a randomized field experiment designed to improve public service delivery by promoting voice, transparency, and accountability among grassroots organizations. The experiment consists of randomly providing sub-municipal governments with a mailing tracking system, which provides public officials and grassroots organizations real- time information about the processing of small infrastructure projects requests by sub-municipal governments. The objective of this intervention is twofold. First, is to facilitate the involvement of grassroots organizations in the process of reviewing, tracking, and monitoring small infrastructure project allocations. Second, is to explicitly alter the probability of detecting inefficient administrative practices within district councils and, therefore, to implicitly increase the expected cost of engaging in such practices among public officials. The findings of this paper suggest that monitoring tools that promote access to information by citizens might play a critical role in improving public service delivery outcomes. Yet, in settings where mechanisms of local accountability are subject to be captured by local elites or are weak, monitoring tools might have limited capacity to improve outcomes. In such settings, major transparency related reforms might be needed to improve public service delivery outcomes.
    Keywords: Bolivia, transparency, accountability, local-level monitoring, bureaucratic delay
    JEL: D73 C93 H76
    Date: 2012–06
  29. By: Robert Dur (Erasmus University Rotterdam, CESifo, and IZA); Ben Vollaard (Tilburg University, CentER, and TILEC)
    Abstract: Field-experimental studies have shown that people litter more in more littered environments. Inspired by these findings, many cities around the world have adopted policies to quickly remove litter. While such policies may avoid that people follow the bad example of litterers, they may also invite free-riding on public cleaning services. This paper reports the results of a natural field experiment where, in a randomly assigned part of a residential area, the frequency of cleaning was reduced from daily to twice a week during a three-month period. Using high-frequency data on litter at treated and control locations before, during, and after the experiment, we find strong evidence that litter begets litter. However, we also find evidence that some people start to clean up after themselves when public cleaning services are diminished.
    Keywords: littering; public services; free-riding; field experiment
    JEL: C93 H40 K42
    Date: 2012–07–03
  30. By: Graziano Abrate (Department of Business Management and Environment, University of Eastern Piedmont); Fabrizio Erbetta (Department of Business Management and Environment, University of Eastern Piedmont); Giovanni Fraquelli (Department of Business Management and Environment, University of Eastern Piedmont); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: The focus of the paper is to analyze the costs of solid waste collection by applying a well-behaved multiproduct cost function model to a sample of more than 500 Italian municipalities. Beyond shedding light on the presence and on the extent of size (or scale) economies, our aim is to investigate in depth the issue of economies of density, which is still an underexplored topic in the literature. Our cost function specification, by being able to estimate several measures of density economies (such as output density economies, vertical density economies and horizontal density economies), allows to capture the impact of different urbanization models on the costs of refuse collection and disposal. The results of the estimates highlight the presence of output density economies as well as horizontal density economies. Conversely, there is significant and robust evidence of the existence of vertical density diseconomies, which suggests that congestion problems in densely populated councils are severely affecting garbage collection costs. Finally, there is evidence of diseconomies of size, which suggests that aggregating the refusal collection operations of several municipalities would not bring savings in the average costs.
    Keywords: Solid waste, density economies, cost functions.
    JEL: D24 H42 L32 L99
    Date: 2012–07
  31. By: Achtnicht, Martin (Centre for European Economic Research (ZEW)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: In this paper, we identify key drivers and barriers for the adoption of building energy retro fits in Germany, which is promoted by public policy as an important measure to address the future challenges of climate change and energy security. We analyze data from a 2009 survey of more than 400 owner-occupiers of single-family detached, semidetached, and row houses in Germany, that was conducted as a computer-assisted personal interview (CAPI). In the survey, respondents were asked directly for reasons for and against retrofi tting their homes, but also faced a choice experiment involving different energy retrofi t measures. Overall, both the descriptive and econometric results show that house owners who are able to afford it fi nancially, for whom it is profi table, and for whom there is a favorable opportunity, are more likely to undertake energy retro fit activities. Based on an estimated mixed logit error component model, we also simulate the incentive effects of different policy options, such as public subsidies and energy tax increases.
    Keywords: Building energy retro fit; Choice experiment; Energy efficiency; Residential buildings
    JEL: C25 D12 Q40
    Date: 2012–06
  32. By: Duleep, Harriet (College of William and Mary); Jaeger, David A. (CUNY Graduate Center); Regets, Mark (National Science Foundation)
    Abstract: This paper describes the theoretical underpinnings and provides empirical evidence for a model that predicts a positive impact of immigration on entrepreneurial activity. Immigrants, we hypothesize, facilitate innovation and entrepreneurship by being willing and able to invest in new skills. At the heart of this theoretical prediction is the observation that human capital not immediately valued in the U.S. labor market is useful for learning new skills. Because immigrants face a lower opportunity cost of investing in new skills or methods, this "transfer" of source-specific skills to the U.S. may lead immigrants to be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants (even if they are not self-employed) may prove to be areas in which entrepreneurship and innovation are easier to accomplish. Our theory offers a unique perspective on the contributions of immigrants to economic development beyond traditional perspectives that focus on low-cost immigrant labor or immigrant entrepreneurship.
    Keywords: immigration, innovation, entrepreneurship, human capital investment, skill transferability, opportunity cost, learning transferability
    JEL: J15 J24 J39 J61 L26
    Date: 2012–06
  33. By: Cid, Alejandro; Balsa, Ana
    Abstract: Using a randomized trial, we evaluate the impact of a free privately-managed middle school in a poor neighborhood. The research compares over time adolescents randomly selected to enter Liceo-Jubilar and those that were not drawn in the lottery. Besides positive impacts on expectations, we find better educational outcomes in the treatment group relative to control subjects. The features of Liceo-Jubilar -autonomy of management, capacity for innovation, and adaptation to the context- contrast with the Uruguayan highly centralized and inflexible public education system. Our results shed light on new approaches to education that may contribute to improve opportunities for disadvantaged adolescents in developing countries. Unlike the experiences of charter schools in developed countries, Liceo-Jubilar does not have autonomy regarding the formal school curricula nor depends on public funding by any means.
    Keywords: Education; Field Experiment; Poverty; Impact Evaluation
    JEL: I21
    Date: 2012
  34. By: Cid, Alejandro; Stokes, Charles
    Abstract: As the developed world has experienced a shift away from the traditional two-biological parent family, scholars have sought to understand how children are faring in non-traditional homes. Debate has arisen over assertions that children from non-traditional families do less well in school. Concerns about selection issues as well as a paucity of cross-cultural evidence, have led some scholars to question the influence of family structure on educational attainment. Using data from the 2006 Uruguayan household survey, we evaluate the relationship of family structure with children’s education using two different methods to deal with selection problems, an instrumental variables approach and propensity score matching. Both approaches yield evidence that growing up in non-traditional family structures seems to be negative related with the schooling of Uruguayan boys, with more muted results for girls. Interestingly, Uruguay is a developing country with two peculiarities, that is, a culture that experienced fairly rapid modernization in terms of institutions –including family transition-, especially compared with other South American nations, and meanwhile an intriguing high level of school drop-out, unusually high for Uruguay’s overall level of development.
    Keywords: academic achievement; family structure; instrumental variables; propensity score; selection effects
    JEL: J12
    Date: 2012
  35. By: Zenou, Yves
    Abstract: We provide an overview on networks in economics. We first look at the theoretical aspects of network economics using a game-theoretical approach. We derive some results on games on networks and network formation. We also study what happens when agents choose both links and actions. We then examine how these models can be used to address some applied and empirical-relevant questions by mainly focusing on labor-market networks and crime networks. We provide some empirical evidence on these two types of networks and address some policy implications of the models.
    Keywords: criminal networks; games on networks; labor networks; network formation; Social networks
    JEL: A14 C72 D85
    Date: 2012–06
  36. By: Abiodun A. Egbetokun (Friedrich-Schiller University, Graduate College "Economics of Innovative Change", and National Centre for Technology Management (Federal Ministry of Science and Technology), Obafemi Awolowo University, Nigeria)
    Abstract: Analysing the relationship between firms' openness to external knowledge and their innovation performance is nothing new. What is new is studying how this relationship fares in latecomer economic contexts such as Nigeria, and that is the focus of this paper. Using unique micro-level innovation data, it is shown, as the existing literature suggests, that firms are more likely to innovate when they access external knowledge either through formal or through informal interactions. However, innovative firms that exploit external knowledge do not necessarily enjoy greater innovation benefits than those that do not. Thus, while openness to external knowledge might help firms to become better at innovating, it does not assist them in reaping the benefits derivable from their innovation efforts. Moreover, different innovation types are essentially the same with respect to the effect that network resources have on them. Thus, it makes little sense to engage network partners selectively for certain innovation types at the expense of others.
    Keywords: innovation, networking, openness, collaboration, external knowledge, Nigeria, manufacturing industry
    JEL: O31 L14 L60
    Date: 2012–07–09
  37. By: Pothier, David
    Abstract: We study a model of occupational choice where workers must rely on their social contacts to acquire job vacancy information. Contrary to the existing literature, we allow for worker heterogeneity in terms of their idiosyncratic skill-types. In this case, the allocation of talent (the matching of skills to tasks) becomes a welfare-relevant consideration. A worker’s skill-type determines both his relative cost of specialising in different occupations and his productivity on the job. The model shows that relying on word-of-mouth communication for job search generates both positive externalities (due to improved labour market matching) and negative externalities (due to a poor allocation of talent). Which effect dominates depends on the prop- erties of the job search and productivity functions. Taking into account worker heterogeneity shows that the degree of occupational segregation in competitive labour markets is generally not efficient.
    Keywords: Labour Markets; Social Networks
    JEL: J01 Z13 J70
    Date: 2012–07–06

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