nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒08‒23
84 papers chosen by
Steve Ross
University of Connecticut

  1. NILS Working paper no 181. Modelling house prices across Sydney with estimates for access, property size, public transport, urban density and crime By Abelson, Peter; Joyeux, Roselyne; Mahuteau, Stephane
  2. Agglomeration, Accessibility, and Productivity: Evidence for Urbanized Areas in the US By Daniel Graham; Patricia Melo; David Levinson
  3. Can metropolitan housing risk be diversified? A cautionary tale from the recent boom and bust By John Cotter; Stuart Gabriel; Richard Roll
  4. The Effect of School Choice on Intrinsic Motivation and Academic Outcomes By Justine S. Hastings; Christopher A. Neilson; Seth D. Zimmerman
  5. Airports and Urban Growth: Evidence from a Quasi-Natural Policy Experiment By Blonigen, Bruce A.; Cristea, Anca D.
  6. Re-examining the Decline in the US Saving Rate: The Impact of Mortgage Equity Withdrawal By Guglielmo Maria Caporale; Mauro Costantini; Antonio Paradiso
  7. Did housing policies cause the postwar boom in homeownership? By Carlos Garriga; Matthew Chambers; Don Schlagenhauf
  8. Foreclosure externalities: Some new evidence By Kristopher Gerardi; Eric Rosenblatt; Paul S. Willen; Vincent W. Yao
  9. Clusters, Convergence, and Economic Performance By Mercedes Delgado; Michael E. Porter; Scott Stern
  10. The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands By Stefan P.T. Groot; Henri L.F. de Groot; Paolo Veneri
  11. House Prices and Monetary Policy By Paulo Brito; Giancarlo Marini; Alessandro Piergallini
  12. New Multi-City Estimates of the Changes in Home Values, 1920-1940 By Price V. Fishback; Trevor Kollmann
  13. Policies to reduce traffic externalities in cities By De Borger B.; Proost S.
  14. Co-operation over Distance? The Spatial Dimension of Inter-organisational Innovation Collaboration By Anja Dettmann; Sidonia von Proff; Thomas Brenner
  15. The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs By Mayer, Thierry; Mayneris, Florian; Py, Loriane
  16. The ABC of Housing Strategies: Are Housing Assistance Programs Effective in Enhancing Children's Well Being? By Jose Rosero
  17. Do labour mobility and networks foster geographical knowledge diffusion? The case of European regions By Ernest Miguele; Rosina Moreno
  18. Heterogeneous skills and homogeneous land: Segmentation and agglomeration By Wrede, Matthias
  19. U.S. Micropolitan Area Growth: A Spatial Equilibrium Growth Analysis By Michael , Davidsson; Dan S., Rickman
  20. Regional Income Distribution in Portugal By Gertrudes Saúde Guerreiro
  21. Shrinking population and the urban hierarchy By Kim, Ho Yeon
  22. Spatial Dichotomies in Indonesia's Regional Development By Yogi Vidyattama
  23. A model of price swings in the housing market By Carlos Garriga; Rodolfo E. Manuelli; Adrian Peralta-Alva
  24. Rethinking Local Government Reliance on the Property Tax By James Alm; Robert D. Buschman; David L. Sjoquist
  25. Multilevel Approaches and the Firm-Agglomeration Ambiguity in Economic Growth Studies By Frank G. van Oort; Martijn J. Burger; Joris Knoben; Otto Raspe
  26. Why Has Regional Convergence in the U.S. Stopped? By Ganong, Peter; Shoag, Daniel
  27. A Comparative Analysis of Lottery, Charter, and Traditional Based Elementary Schools within the Anchorage school district By Matthew McCauley
  28. The Death of Distance Revisited: Cyberplace, Physical and Relational Proximities By Emmanouil Tranos; Peter Nijkamp
  29. Information frictions and housing market dynamics By Elliot Anenberg
  30. Housing Market Dynamics: Any News? By Sandra Gomes; Caterina Mendicino
  31. Explaining Reurbanization: Empirical Evidence of Intraregional Migration as a Long-term Mobility Decision from Germany By Gesa Matthes
  32. Shifting confidence in homeownership: the Great Recession By Anat Bracha; Julian C. Jamison
  33. Heterogeneity in High Math Achievement Across Schools: Evidence from the American Mathematics Competitions By Glenn Ellison; Ashley Swanson
  34. Career Pathway and Cluster Skill Development: Promising Models from the United States By Virginia Hamilton
  35. Regional variety and employment growth in Italian labour market areas: services versus manufacturing industries By Francesca Mameli; Simona Iammarino; Ron Boschma
  36. Long-Term Effects of Public Low-Income Housing Vouchers: Work, Neighborhood, Family Composition and Childcare Usage By Robert Haveman; Barbara Wolfe
  37. Estimating the Effects of Pronatal Policies on Residential Choice and Fertility By Ryo Nakajima; Ryuichi Tanaka
  38. Is the relationship between monetary policy and house prices asymmetric in South Africa? Evidence from a Markov-Switching Vector Autoregressive mode By Beatrice D. Simo - Kengne; Mehmet Balcilar; Rangan Gupta; Monique Reid; Goodness C. Aye
  39. Estimating the Effects of Friendship Networks on Health Behaviors of Adolescents By Jason M. Fletcher; Stephen L. Ross
  40. Migrants, Landlords and their Uneven Experiences of the Beijing Olympic Games By Bingqin Li; Hyun Bang Shin
  41. Citizen "Trust" as an Explanation of State Education Funding to Local School Districts By James Alm; Robert D. Buschman; David L. Sjoquist
  42. The Reform of Business Property Tax in Ontario: An Evaluation By Michael Smart
  43. Need, Merit, and Politics in Multilateral Aid Allocation: A District-Level Analysis of World Bank Projects in India By Peter Nunnenkamp, Hannes Öhler, Maximiliano Sosa Andrés
  44. 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
  45. Neighborhood Quality and Labor Market Outcomes: Evidence from Quasi-Random Neighborhood Assignment of Immigrants By Anna Piil Damm
  46. Lead Policy and Academic Performance: Insights from Massachusetts By Jessica Wolpaw Reyes
  47. Markov Chain Model of Land Use Change in the Twin Cities By Michael Iacono; David Levinson; Ahmed El-Geneidy; Rania Wasfi
  48. Inovation and the city: Review of the Auckland regional innovation system By Chen, EeMun
  49. Are Large Cities Educational Assets or Liabilities? By OECD
  50. The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model By Sunak, Yasin; Madlener, Reinhard
  51. The Time Between: Continuously-defined accessibility functions for schedule-based transportation systems By Paul Anderson; Andrew Owen; David Levinson
  52. House price expectations of households: A preliminary analysis of new survey data By Graham Howard; Özer Karagedikli
  53. Network structure and the journey to work: An intra-metropolitan analysis By Pavithra Parthasarathi; David Levinson
  54. Comparative Advantage, Scale Economy and Regional Specialization:An Empirical Analysis Based on China’s Industries By Lu, Zheng; Deng, Xiang
  55. On the economic effects of public infrastructure investment: A survey of the international evidence By Alfredo Pereira; Jorge Andraz
  56. Job Categories and Geographic Identity: A Category Stereotype Explanation for Occupational Agglomeration By Leung, Ming D.
  57. Rural Highway Expansion and Economic Development: Impacts on Private Earnings and Employment By Michael Iacono; David Levinson
  58. Organizational strategies, firms’ performance and spatial spillovers: the Canadian case in research and development. By Rosa, Julio Miguel
  59. Impact Evaluation of a Privately Managed Tuition-Free Middle school in a Poor Neighborhood in Montevideo By Ana I. Balsa; Alejandro Cid
  60. New Casinos and Local Labor Markets: Evidence from Canada By Humphreys, Brad; Marchand, Joseph
  61. Relative Accessibility and the Choice of Modes By Andrew Owen; Paul Anderson; David Levinson
  62. An empirical analysis on intergovernmental strategic interaction in tax policy: Evidence from capital taxation in Japan By Atsushi Kawamoto
  63. The Interplay of Standardized Tests and Incentives – An Econometric Analysis with Data from PISA 2000 and PISA 2009 By Christoph Helbach
  64. Regional Income Convergence in Portugal (1991-2002) By Gertrudes S. Guerreiro
  65. Revealed Competition for Greenfield Investments between European Regions By Martijn J. Burger; Bert van der Knaap; Ronald S. Wall
  66. Banks' Liability Structure and Mortgage Lending During the Financial Crisis By Jihad Dagher; Kazim Kazimov
  67. Bankruptcy resolution capacity and regional economic fluctuations By Uluc Aysun; Raman Khaddaria
  68. The Effect of Family Background on Student Effort By Kuehn, Zoe; Landeras, Pedro
  69. Factors influencing German house owners' preferences on energy retrofits By Achtnicht, Martin; Madlener, Reinhard
  70. Pareto or log-normal? A recursive-truncation approach to the distribution of (all) cities By Giorgio Fazio; Marco Modica
  71. Random Assignment Within Schools: Lessons Learned from the Teach For America Experiment. Education Finance and Policy, vol. 7, no. 2 By Steven Glazerman
  72. Channels of Influence By Lauren Cohen; Umit G. Gurun; Christopher J. Malloy
  73. A Long-Term Evaluation of the First Generation of the French Urban Enterprise Zones By P. GIVORD; S. QUANTIN; C. TREVIEN
  74. Knowledge, Location, and Internationalization: Empirical Evidence for Manufacturing SMEs By Anna Lejpras
  75. CREATING PLACE FOR THE DISPLACED: Migration and Urbanization in Asia By Beall, Jo; Kanbur, Ravi; Guha-Khasnobis, Basudeb
  76. Did the Americanization Movement Succeed? An Evaluation of the Effect of English-Only and Compulsory Schools Laws on Immigrants' Education By Adriana Lleras-Muney; Allison Shertzer
  77. Network Structure and Travel Time Perception By Pavithra Parthasarathi; David Levinson; Hartwig Hochmair
  78. Aircraft Noise, Health, and Residential Sorting: Evidence from Two Quasi-Experiments By Boes, Stefan; Nüesch, Stephan; Stillman, Steven
  79. Detecting Bubbles in Hong Kong Residential Property Market By Matthew S. Yiu; Jun Yu; Lu Jin
  80. Are Students More Engaged When Schools Offer Extracurricular Activities? By OECD
  81. When spatial equilibrium fails: is place-based policy second best? By Partridge, Mark D.; Rickman, Dan S.; Olfert, M. Rose; Tan, Ying
  82. The On-Street Parking Premium and Car Drivers' Choice between Street and Garage Parking By Martijn Kobus; Eva Gutierrez Puigarnau; Piet Rietveld; Jos Van Ommeren
  83. Route choice dynamics after a link restoration By Carlos Carrion; David Levinson
  84. Multi-agent Route Choice Game for Transportation Engineering By Xuan Di; Henry Liu; David Levinson

  1. By: Abelson, Peter; Joyeux, Roselyne; Mahuteau, Stephane
    Abstract: This paper examines the structure of house prices across the city, in this case Sydney, as an aid to urban development strategy and in particular to determine the potentially positive effects of public transport and negative effects of residential density on property prices. We model median house prices in 626 suburbs and achieve a high level of explanation. Distances from the CBD and from the coast are dominant factors in explaining house prices in Sydney. Predictably house and lot size are also highly significant factors. On the other hand a high propensity for violent crime significantly reduces property values. Over the whole city distance to rail station is not a statistically significant variable, but in suburb groups that are poorly served by other modes, median house prices fall significantly with increased distances to station. We found a similar but weaker result for access to high frequency buses. Contrary to expectation we found that higher density is marginally associated with higher median prices. However as the density variable is correlated (negatively) with median land area and, to a lesser extent, with distance to CBD, we would be cautious about concluding that density has no negative effect on house prices.
    Keywords: House prices, Spatial modelling, Public transport, Urban density,
    Date: 2012
  2. By: Daniel Graham; Patricia Melo; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper undertakes an empirical analysis with the aim of improving the current understanding of the relationship between labor productivity and urban agglomeration economies across a sample of urbanized areas in the US. Agglomeration economies are represented with driving time measures of employment accessibility to establish a direct account for the link between transport and agglomeration economies. The paper investigates the presence of nonlinearities in the relationship between labor productivity and agglomeration economies, and examines the spatial decay pattern of the effects arising from this relationship. The findings indicate that there is considerable nonlinearity in the relation between productivity and transport induced agglomeration effects, implying that the estimation of country-level aggregate elasticities is likely to misrepresent the actual magnitude of any productivity gains from urban agglomeration. The results also suggest that the magnitude of the productivity-agglomeration effects decays very rapidly with time and is very strong within 20 minutes driving time. This suggests that knowledge spillover externalities are likely to be a very important Marshallian source of agglomeration economies.
    Keywords: agglomeration economies, network accessibility, labor productivity
    JEL: J31 R12 R40
    Date: 2012
  3. By: John Cotter (UCD School of Business, University College Dublin); Stuart Gabriel (Anderson School of Business, University of California); Richard Roll (Anderson School of Business, University of California)
    Abstract: Geographic diversification is fundamental to risk mitigation among investors and insurers of housing, mortgages, and mortgage-related derivatives. To characterize diversification potential, we provide estimates of integration, spatial correlation, and contagion among US metropolitan housing markets. Results reveal a high and increasing level of integration among US markets over the decade of the 2000s, especially in California. We apply integration results to assess the risk of alternative housing investment portfolios. Portfolio simulation indicates reduced diversification potential and increased risk in the wake of estimated increases in metropolitan housing market integration. Research findings provide new insights regarding the synchronous non-performance of geographically-disparate MBS investments during the late 2000s.
    Keywords: integration, correlation, contagion, house price returns
    JEL: G10 G11 G12 G14 R12 R21
    Date: 2012–08–02
  4. By: Justine S. Hastings; Christopher A. Neilson; Seth D. Zimmerman
    Abstract: Using data on student outcomes and school choice lotteries from a low-income urban school district, we examine how school choice can affect student outcomes through increased motivation and personal effort as well as through improved school and peer inputs. First we use unique daily data on individual-level student absences and suspensions to show that lottery winners have significantly lower truancies after they learn about lottery outcomes but before they enroll in their new schools. The effects are largest for male students entering high school, whose truancy rates decline by 21% in the months after winning the lottery. We then examine the impact attending a chosen school has on student test score outcomes. We find substantial test score gains from attending a charter school and some evidence that choosing and attending a high value-added magnet school improves test scores as well. Our results contribute to current evidence that school choice programs can effectively raise test scores of participants. Our findings suggest that this may occur both through an immediate effect on student behavior and through the benefit of attending a higher-performing school.
    JEL: I20 I21 I24
    Date: 2012–08
  5. By: Blonigen, Bruce A.; Cristea, Anca D.
    Abstract: While significant work has been done to examine the determinants of regional development, there is little evidence on the contribution of air services toward this outcome. This paper exploits the unexpected market changes induced by the 1978 Airline Deregulation Act to bring new evidence on the link between airline traffic and local economic growth. Using data for almost 300 Metropolitan Statistical Areas (MSAs) over a two decade time period centered around the policy change, we exploit time variation in long-run growth rates to identify the effects of airline traffic on population, income and employment growth. Our results suggest that air service has a significant positive effect on regional growth, with the magnitude of the effects differing by MSA size and industrial specialization.
    Keywords: airline traffic; urban growth; regional development; Airline Deregulation Act; air transport
    JEL: R1 O18 R4
    Date: 2012–07–26
  6. By: Guglielmo Maria Caporale; Mauro Costantini; Antonio Paradiso
    Abstract: In this paper we examine the role of mortgage equity withdrawal in explaining the decline of the US saving rate, since when house prices rise and mortgage rates are low, homeowners have an incentive to withdraw housing equity and this may affect the saving rate. We estimate a Vector Error Correction (VEC) model including the saving rate, asset prices, equity withdrawal and interest rates and find that indeed mortgage equity withdrawal is a key determinant of the observed saving pattern.
    Keywords: Saving rate, Mortgage equity withdrawal, Asset prices, Mortgage rates, Vector Error Correction, Impulse response analysis
    JEL: C32 E21 O51
    Date: 2012
  7. By: Carlos Garriga; Matthew Chambers; Don Schlagenhauf
    Abstract: After the collapse of housing markets during the Great Depression, the U.S. government played a large role in shaping the future of housing finance and policy. Soon thereafter, housing markets witnessed the largest boom in recent history. The objective in this paper is to quantify the contribution of government interventions in housing markets in the expansion of U.S. homeownership using an equilibrium model of tenure choice. In the model, home buyers have access to a menu of mort- gage choices to finance the acquisition of a house. The government also provides special programs through provisions of the tax code. The parameterized model is consistent with key aggregate and distributional features observed in the 1940 U.S. economy and is capable of accounting for the boom in homeownership in 1960. The decomposition suggests that government policies have significant importance. For example, the expansion in maturity of the fixed-rate mortgage to 30 years can account for 25 percent of the increase. Housing policies, such as the introduction of the mortgage interest deduction, can account for 13 percent of the increase in homeownership.
    Keywords: Housing ; Home ownership
    Date: 2012
  8. By: Kristopher Gerardi; Eric Rosenblatt; Paul S. Willen; Vincent W. Yao
    Abstract: In a recent set of influential papers, researchers have argued that residential mortgage foreclosures reduce the sale prices of nearby properties. We revisit this issue using a more robust identification strategy combined with new data that contain information on the location of properties secured by seriously delinquent mortgages and information on the condition of foreclosed properties. We find that while properties in virtually all stages of distress have statistically significant, negative effects on nearby home values, the magnitudes are economically small, peak before the distressed properties complete the foreclosure process, and go to zero about a year after the bank sells the property to a new homeowner. The estimates are very sensitive to the condition of the distressed property, with a positive correlation existing between house price growth and foreclosed properties identified as being in "above average" condition. We argue that the most plausible explanation for these results is an externality resulting from reduced investment by owners of distressed property. Our analysis shows that policies that slow the transition from delinquency to foreclosure likely exacerbate the negative effect of mortgage distress on house prices.
    Date: 2012
  9. By: Mercedes Delgado; Michael E. Porter; Scott Stern
    Abstract: This paper evaluates the role of regional cluster composition in the economic performance of industries, clusters and regions. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of activity of that industry. At the same time, positive spillovers across complementary economic activities provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the size and “strength” (i.e., relative presence) of related economic sectors. Building on Porter (1998, 2003), we develop a systematic empirical framework to identify the role of regional clusters – groups of closely related and complementary industries operating within a particular region – in regional economic performance. We exploit newly available data from the US Cluster Mapping Project to disentangle the impact of convergence at the region-industry level from agglomeration within clusters. We find that, after controlling for the impact of convergence at the narrowest unit of analysis, there is strong evidence for cluster-driven agglomeration. Industries participating in a strong cluster register higher employment growth as well as higher growth of wages, number of establishments, and patenting. Industry and cluster level growth also increases with the strength of related clusters in the region and with the strength of similar clusters in adjacent regions. Importantly, we find evidence that new regional industries emerge where there is a strong cluster environment. Our analysis also suggests that the presence of strong clusters in a region enhances growth opportunities in other industries and clusters. Overall, these findings highlight the important role of cluster-based agglomeration in regional economic performance.
    JEL: L26 R11 R30
    Date: 2012–07
  10. By: Stefan P.T. Groot (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam, and Ecorys NEI); Paolo Veneri (OECD, Paris)
    Abstract: This study analyses the relation between education and commuting behaviour of Dutch workers. Results show that, ceteris paribus, higher educated workers commute further, both in terms of distance and time. In addition, higher educated workers are more frequent users of public transport and of bicycles. Furthermore, we find that higher educated workers are relatively more likely to commute towards agglomerated areas and areas that pay relatively high wages, while they are more likely to live in and commute from areas with higher land rents.
    Keywords: commuting; education; urban amenities; agglomeration
    JEL: R12 R21 R23
    Date: 2012–07–30
  11. By: Paulo Brito (Universidade Técnica de Lisboa, and UECE); Giancarlo Marini (Faculty of Economics, University of Rome "Tor Vergata"); Alessandro Piergallini (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: This paper analyzes global dynamics in an overlapping generations general equilibrium model with housing-wealth effects. It shows that monetary policy cannot burst rational bubbles in the housing market. Under monetary policy rules of the Taylor-type, there exist global self-fulfilling paths of house prices along a heteroclinic orbit connecting multiple equilibria. From bifurcation analysis, the orbit features a boom (bust) in house prices when monetary policy is more (less) active. The paper also demonstrates that boom or busts cannot be ruled out by interest-rate feedback rules responding to both inflation and house prices
    Keywords: House Prices; Housing-Wealth Effects; Monetary Policy Rules; Global Determinacy; Heteroclinic Orbits.
    JEL: E62 H60 C20
    Date: 2012–08–01
  12. By: Price V. Fishback; Trevor Kollmann
    Abstract: The boom and bust in housing during the 2000s has led to renewed interest in the boom and bust in housing between 1920 and 1940. The most commonly used housing value series for this period is reported by Robert Shiller in Irrational Exuberance. We investigate the changes in housing values in cities between 1920 and 1940 using a variety of alternative sources with many more cities available for comparison than in the Shiller series. We find that all nominal housing value series show a strong decline between the late 1920s and the early 1930s. However, all of the series except the Shiller series imply that housing values in 1920 were well below the 1930 value and thus imply much stronger growth rates in housing values during the 1920s housing boom. Only the Shiller series predicts a strong recovery in housing values to within 5 percent of the 1930 level. All of the others suggest that nominal housing values in 1940 remained at least 18 percent below the 1930 values and several series suggest that values lurched downward between 1933 and 1940. The results suggest that a significant reconsideration of the operation of housing markets in the 1920s and 1930s is required.
    JEL: N32 N92 R30
    Date: 2012–08
  13. By: De Borger B.; Proost S.
    Abstract: This paper considers various policy measures to reduce traffic externalities in cities, including externality-reducing investments, tolls, emission standards, low emission zones, and bypass capacity to guide traffic around the city center. Using a simple model that distinguishes local and through traffic, we study the optimal use of these instruments by an urban government that cares for the welfare of its inhabitants, and we compare the results with those preferred by a federal authority that takes into account the welfare of all road users. Our results include the following. First, compared to the federal social optimum, we show that the city government will over-invest in externality-reducing infrastructure whenever this infrastructure increases the generalized cost of transit traffic. Second, comparing emission standards and road tolls, we find that cities with a lot of commuters will favor tolls, even though from the federal perspective standards are better. Third, when implementing low emission zones, the urban government will set both the fee for non-compliance and the standard at a higher level than the federal government. Moreover, at sufficiently high transit levels the urban government will prefer imposing a toll instead of implementing a low emission zone. Fourth, if the city can toll the urban infrastructure, it will only invest in bypass capacity when it is allowed to earn extra toll revenues on the bypass that exceed investment costs. Although the paper focuses on non-congestion externalities, most insights also hold in the presence of congestion.
    Date: 2012–07
  14. By: Anja Dettmann (Working Group on Economic Geography and Location Research, Philipps University Marburg); Sidonia von Proff (Working Group on Economic Geography and Location Research, Philipps University Marburg); Thomas Brenner (Working Group on Economic Geography and Location Research, Philipps University Marburg)
    Abstract: In the literature there is a controversy about the relevance of the spatial dimension in innovation collaboration. We examine the link between the spatial composition of group members and group characteristics which are important for performing innovation projects. To this end, we introduce a social-psychological approach to the field of economic geography. The empirical part is a longitudinal study of 49 inter-organisational innovation groups in Germany. We find that the share of regional partners is rather stable after a funded formation stage. Hence, policy measures aiming at inter-regional collaboration have to be employed at an early stage of group development.
    Keywords: innovation collaboration, collaboration over distance, network formation, Germany
    JEL: L14 R12 O38
    Date: 2012–07
  15. By: Mayer, Thierry; Mayneris, Florian; Py, Loriane
    Abstract: In this paper, we study the impact of a French enterprise zones program---the ``Zones Franches Urbaines'' (ZFUs) policy---on establishments' location decisions. Our empirical analysis is based on a micro-geographic dataset which provides exhaustive information on the location of establishments in France over the period 2000-2007 at the census block level. We use a difference in difference approach combining spatial and time differencing. We also do triple difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. Our results show that the French ZFU policy has a positive and sizable impact on location choices. However, we also find that the policy mostly generates displacement effects, in particular through relocation of firms from the un-treated to the treated part within municipalities. Finally, the impact is shown to be highly heterogeneous across zones, firms and industries. The overall cost of moving establishments within municipalities is relatively high.
    Keywords: enterprise zones; firm location
    JEL: R12 R38 R58
    Date: 2012–08
  16. By: Jose Rosero (University of Amsterdam)
    Abstract: This paper examines the effect of a housing assistance program on school enrollment, child labor and poverty reduction among poor families in Ecuador. Administrative data is merged to a household panel to link the history of a voucher application with socioeconomic information. Two empirical approaches are employed. First, I exploit variation in duration of the different stages to obtain a voucher and convert it into a house, using a sample of approved applicants. Second, I use variation across siblings that arises from the fact that siblings are exposed to the program at different ages. Results show that the program improves enrollment into post-compulsory education, decreases the probability that a child participates in the labor market and reduces the likelihood to live in poverty. Potential mediating factors are increased access to sanitation, better quality materials of the house and a reduced probability to live overcrowded.
    Keywords: Housing assistance programs; Housing voucher; Children; Fixed Effects; Within family estimators; Developing country; Ecuador
    JEL: H53 I28 I38 R21
    Date: 2012–07–19
  17. By: Ernest Miguele (Economics and Statistics Division, WIPO; AQR-IREA, University of Barcelona.); Rosina Moreno (AQR-IREA, University of Barcelona)
    Abstract: The goal of this paper is twofold: first, we aim to assess the role played by inventors’ cross-regional mobility and networks of collaboration in fostering knowledge diffusion across regions and subsequent innovation. Second, we intend to evaluate the feasibility of using mobility and networks information to build cross-regional interaction matrices to be used within the spatial econometrics toolbox. To do so, we depart from a knowledge production function where regional innovation intensity is a function not only of the own regional innovation inputs but also external accessible R&D gained through interregional interactions. Differently from much of the previous literature, cross-section gravity models of mobility and networks are estimated to use the fitted values to build our ‘spatial’ weights matrices, which characterize the intensity of knowledge interactions across a panel of 269 regions covering most European countries over 6 years.
    Keywords: inventors’ spatial mobility, co-patenting, gravity models, weights matrix, knowledge production function.
    JEL: C8 J61 O31 O33 R0
    Date: 2012–07
  18. By: Wrede, Matthias
    Abstract: This paper analyzes the effect of skill heterogeneity on regional patterns of production and housing in the presence of pecuniary externalities within a general-equilibrium framework, assuming monopolistic competition in intermediate goods markets. It shows that the interplay of heterogeneous skills and comparatively homogeneous land demand triggers skill segmentation and agglomeration. The core region that is more attractive to high skilled workers has a disproportionately large share of production at all levels of the supply chain. The paper extensively discusses welfare increasing tax policies. This paper also briefly studies how trade in intermediate goods and endogenous land demand affect segmentation and agglomeration. --
    Keywords: skill heterogeneity,land use,sorting,agglomeration
    JEL: R12 R13 R14 H22
    Date: 2012
  19. By: Michael , Davidsson; Dan S., Rickman
    Abstract: Because micropolitan areas have only relatively recently been defined, little is known about their comparative economic performance. Part of the interest in micropolitan areas stems from the successful ones often growing to become metropolitan areas. This paper examines micropolitan area growth during the 1990s, a period of strong national growth. A spatial equilibrium growth framework and estimated reduced-form regressions containing an extensive number of variables are used to assess the sources of differentials in micropolitan area growth. To varying degrees, at various levels, and through various channels, it is found that household amenity attractiveness, firm location considerations, and housing supply policies, all underlie micropolitan area growth differentials.
    Keywords: Micropolitan; Regional Growth; Amenities
    JEL: R10 R11 R23
    Date: 2012–07–31
  20. By: Gertrudes Saúde Guerreiro (Universidade de Évora, Departamento de Economia and CEFAGE-UE)
    Abstract: Concerns about inequality in income distribution have gained importance, encouraging the various studies that address specially inequality among individuals [see the studies of Rodrigues (1994, 1999 and 2008)]. Our research aims to address the problem of inequality in income distribution from a different perspective and we want to answer questions like if geography influences the pattern of inequality, or if the Portuguese’s standard of living depends on the place of residence, and finally, if the spatial units that make up the Portuguese territory have been converging in terms of income in the process of growth. The aim of this paper is to study the regional income differences among the regions and municipalities of Portugal. Our individuals are the territorial units. We intend to evaluate convergence or divergence in income growth using a static analysis, with conventional measures and other indicators, being aware the regional differences in economic performance. We find a growing inequality between regional incomes over the period 1990-2006. In our view, the distribution of earnings reflects only the actual distribution of economic activity in Portugal, particularly concentrated in the coastal and metropolitan areas of Lisboa and Porto. The economic specialization and level of education among the population of each territorial unit are also, of course, crucial for this asymmetry on earnings.
    Keywords: Income Distribution; Regional Inequality; Regional Convergence; Municipalities;Regional Data.
    JEL: D30 R10
    Date: 2012
  21. By: Kim, Ho Yeon
    Abstract: This paper examines whether population shrinkage leads to changes in urban hierarchy in terms of their relative size and function from the standpoint of the new economic geography. We find some salient patterns in which small cities in the agglomeration shadow become relatively bigger as medium industries spill over on them. This appears to be quite robust against a variation in the rate of natural change among cities. Thus, rank-size relationship and the urban hierarchy are partly disrupted as population shrinks. Regarding the welfare of the residents, a lower demand for land initially causes rent to go down, which boosts the utility. However, the illusion is short-lived because markets soon begin to shrink and suppress wages. We also find that it is better to maintain a slow pace of overall population decline in the long-term perspective. More importantly, it is crucial to sustain the relative livability of smaller cities to minimize the overall loss of utility.
    Keywords: South Korea, Economic geography, Population, Urban societies, Local economy, Industry, Population shrinkage, Rank-size rule, Central place theory
    JEL: R12 R23
    Date: 2012–08
  22. By: Yogi Vidyattama (NATSEM, University of Canberra)
    Abstract: For many years there has been a debate about the extent to which large spatial gaps in development exist in Indonesia, especially between the eastern and western parts of the country. To contribute to this issue, this study examines the significance of Indonesia’s spatial development distribution using regional GDP per capita and the Human Development Index as development indicators. Although the results from this study confirm that there are clusters of high and low developed areas within Indonesia, clusters of high regional GDP per capita are spreading in mining areas in both eastern and western Indonesia. Nevertheless, the distribution of the HDI confirms to some extent the existence of a spatial development gap in Indonesia.
    Keywords: Regional Indonesia, Regional Development, Spatial Distribution
    Date: 2012–07
  23. By: Carlos Garriga; Rodolfo E. Manuelli; Adrian Peralta-Alva
    Abstract: In this paper we use a standard neoclassical model supplemented by some frictions to understand large price swings in the housing market. We construct a two good general equilibrium model in which housing is a composite good produced using structures and land. We revisit the connection between changes in interest rates, credit conditions as measured by maximum loan-to-value ratios and expectations in influencing housing prices in a setting in which the stock of housing can be used as collateral for borrowing and credit markets are segmented. We find that changes in interest rates and credit conditions can generate significant price swings. Under rational expectations (perfect foresight) our model is able to explain 50% of the recent movements in U.S. house prices. When we allow shocks to expectations, the model’s ability to match the evidence increases significantly. Contrary to conventional wisdom, we show that standard asset pricing formulas seem to correctly describe the behavior of house prices if the appropriate pricing kernel is used.
    Keywords: Mortgages ; Housing - Prices
    Date: 2012
  24. By: James Alm (Department of Economics, Tulane University); Robert D. Buschman (Fiscal Research Center, Andrew Young School of Policy Studies, Georgia State University); David L. Sjoquist (Economics Department, Georgia State University)
    Abstract: Historically, local governments in the United States have relied on the property tax as one of their main sources of own-source revenues. However, the recent collapse of housing prices and the resulting negative impact on local government budgets suggest that it may be opportune to rethink this strategy. In this paper we document the overall decline in property values in the United States in recent years, and we find that the impact is in the aggregate negative but that the impact varies significantly by state and by locality. We also examine the impact on local government revenues, and we again find substantial regional and local variation. Indeed, our data indicate that substantial numbers of local governments seem to have avoided the significant and negative budgetary impacts seen most clearly for state and federal governments, at least to date. We then focus specifically on the State of Georgia, in order to determine the ways in which local governments have responded to the economic recession. Our empirical analyses indicates that there are several factors causing changes in property tax revenues, but the dominant factor is changes in housing prices, with some significant lags. We conclude that local government reliance on the property tax has in fact been an advantage for many local governments in the current economic environment, and that such reliance is likely to continue in at least some form for the immediate future.
    Keywords: property tax; state and local finance; tax limitations; assessment; tax base elasticity
    JEL: H2 H7 R3 R5
    Date: 2012–07
  25. By: Frank G. van Oort (Utrecht University); Martijn J. Burger (Erasmus University Rotterdam); Joris Knoben (Tilburg University); Otto Raspe (Netherlands Environmental Assessment Agency)
    Abstract: See also the publication in <A href="">'Journal of Economic Surveys'</A>, 26(3), 468-91.<p> Empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions. Both localization and urbanization economies are hypothesized to foster agglomeration and growth, but recent meta-analyses of this burgeoning body of empirical research show that the results are ambiguous. Recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space, aggregation, growth definitions, and the functional form of the models applied. Alternatively, in this paper, we argue that ambiguity may be due to a lack of research on firm-level performance in agglomerations. This research is necessary because the theories that underlie agglomeration economies are microeconomic in nature. Hierarchical or multilevel modeling, which allows micro levels and macro levels to be modeled simultaneously, is becoming an increasingly common practice in the social sciences. As illustrated by detailed Dutch data on firm-level productivity, employment growth and firm survival, we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration-firm performance relationship and for addressing spatial, sectoral and cross-level heterogeneity.
    Keywords: agglomeration economies; micro-macro link; multilevel analysis; productivity
    JEL: C21 O18 R1
    Date: 2012–02–16
  26. By: Ganong, Peter (Harvard University); Shoag, Daniel (Harvard University)
    Abstract: The past thirty years have seen a dramatic decrease in the rate of income convergence across U.S. states. This decline coincides with a similarly substantial decrease in population flows to wealthy states. We develop a model where labor mobility plays a central role in convergence and can quantitatively account for its disappearance. We then link this decline in directional migration to a large increase in housing prices and housing regulation in high-income areas. The model predicts that these housing market changes generate (1) a divergence in the skill-specific economic returns to living in rich places, (2) a decline in low-skilled migration to rich places and continued low-skilled migration to places with high income net of housing costs, (3) a decline in the rate of human capital convergence and (4) continued income convergence among places with unconstrained housing supply. Using Census data, we find support for the first three hypotheses. To test the fourth hypothesis, we develop a new state-level panel measure of housing supply regulations. Using this measure as an instrument for housing prices, we document the central role of housing prices and building restrictions in the end of income convergence.
    JEL: E24 J23 J24 R14 R23 R52
    Date: 2012–06
  27. By: Matthew McCauley (University of Alaska Anchorage)
    Abstract: The growing popularity of alternative choices to traditional-based public schools—such as public charter/lottery-based schools—has prompted nationwide research. In Anchorage, however, there are few quantitative studies that compare student performance across traditional public schools, charter schools, and lottery-based schools. The purpose of this project is to create and analyze panel data for all public elementary schools within the Anchorage School District and compare the achievement of charter/lottery with traditional-based schools. This will be done using public Terra Nova and SBA data from ASD for the years 2007–2010 in addition to U.S. Census data. Data will be imported into Stata, a robust statistical software application, and regression techniques will be used to compare student Terra Nova and SBA scores while controlling for other factors that also influence test scores.
    Date: 2012–08–01
  28. By: Emmanouil Tranos (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper studies the impact of physical distance and different relational proximity types on the formation of the Internet infrastructure. Although there is some anecdotal evidence on the 'end of geography' effect of the Internet, the relationship between physical space and the Internet has not been yet scrutinized. In addition, owing to the network nature of the Internet, the structure of the Internet infrastructure (the cyber-place) cannot be approached in a unidimensional way. Our paper builds upon recent studies in economic geography and relational proximities, and aims to study whether physical distance survives in virtual geography even after controlling for relational proximities. In order to do so, a unique and extensive database with geo-coded IP links is utilized. Based on this, a spatial interaction model with panel data specifications is constructed to study the impact of different types of proximity on the formation of cyber-place. The above analysis is framed by a complex network analysis exercise, which enhances our understanding of the complexity of the Internet infrastructure from a spatial network perspective. Our results indicate that physical distance, but also different relational proximities, have a significant impact on the intensity of the Internet infrastructure, highlighting the spatiality of the Internet.
    Keywords: death of distance; Internet geography; Internet infrastructure; distance; proximities; spatial interaction models
    JEL: C23 H54 L96
    Date: 2012–07–12
  29. By: Elliot Anenberg
    Abstract: This paper examines the effects of seller uncertainty over their home value on the housing market. Using evidence from a new dataset on home listings and transactions, I first show that sellers do not have full information about current period demand conditions for their homes. I incorporate this type of uncertainty into a dynamic search model of the home selling problem with Bayesian learning. Simulations of the estimated model show that information frictions help explain short-run persistence in price appreciation rates and a positive (negative) correlation between price changes and sales volume (time on market).
    Date: 2012
  30. By: Sandra Gomes; Caterina Mendicino
    Abstract: This paper quanti?es the importance of news shocks for housing market ?uctuations. To this purpose, we extend Iacoviello and Neri (2010)?s model of the housing market to include news shocks and estimate it using Bayesian methods and U.S. data. We ?nd that news shocks: (1) account for a sizable fraction of the variability in house prices and other macroeconomic variables over the business cycle and (2) signi?cantly contributed to booms and busts episodes in house prices over the last three decades. By linking news shocks to agents?expectations, we ?nd that house price growth was positively related to in?ation expectations during the boom of the late 1970?s while it was negatively related to interest rate expectations during the housing boom that peaked in the mid-2000?s. JEL Classication: C50, E32, E44.
    Keywords: bayesian estimation, news shocks, local identi?cation, housing market, ?nancial frictions, in?ation and interest rate expectations.
    Date: 2012–07
  31. By: Gesa Matthes
    Abstract: Following the discussion on reurbanization (changing intra-regional migration patterns), our research project treats transport-related consequences of this spatial development in German city regions. The hypothesis is that reurbanization bears potential to spread environmentally friendly ways of organizing daily mobility – but that the chance of those positive effects might be given away, if policy does not accompany the process adequately. The aim of this project is to assess the current impact of reurbanization on passenger transport in city regions and to find further potential to reduce motorized passenger kilometres in order to deduce first planning approaches. This paper focuses on the question whether a household decides to move or to stay in its current dwelling and also analyses how the results vary in time and space. After having deduced factors on the decision to move, a logistic regression is run on the SOEP-data. The analysis shows that observed differences in time are mainly due to difference in behaviour regarding the factors ‘number of employed persons’ and the event ‘birth’ whereas spatial variation is mainly due to structural differences.
    Keywords: Relocation, move, migration, reurbanization, transport
    JEL: O18 O21 R14 R21
    Date: 2012
  32. By: Anat Bracha; Julian C. Jamison
    Abstract: The authors study the responses to several questions related to real estate that were added to the Michigan Survey of Consumers in July and August 2011. In particular, they asked about attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. By matching the results to data (at the ZIP-code level) about relative house price declines during the recent crisis, they can study the relationship between the U.S. housing crash and the attitudes of individual consumers. They find that younger respondents are relatively less confident about homeownership after larger price declines, while older respondents are relatively more confident. In both cases, this is observed only for those with direct experience of loss (via themselves or someone close) during the crash. They find no effect on attitudes towards commuting, and they find that people who live in the high-decline areas believe it is appropriate to spend more on a mortgage.
    Keywords: Home ownership ; Mortgage loans ; Recessions
    Date: 2012
  33. By: Glenn Ellison; Ashley Swanson
    Abstract: This paper explores differences in the frequency with which students from different schools reach high levels of math achievement. Data from the American Mathematics Competitions is used to produce counts of high-scoring students from more than two thousand public, coeducational, non-magnet, non-charter U.S. high schools. High-achieving students are found to be very far from evenly distributed. There are strong demographic predictors of high achievement. There are also large differences among seemingly similar schools. The unobserved heterogeneity across schools includes a thick tail of schools that produce many more high-achieving students than the average school. Gender-related differences and other breakdowns are also discussed.
    JEL: C25 I21
    Date: 2012–08
  34. By: Virginia Hamilton
    Abstract: In the United States, local and regional government agencies have increasingly adopted industry cluster approaches to economic development and a similar move is surfacing in the employment and workforce development field. Career cluster/pathway approaches are important in a complex and fragmented labour market where employees no longer move in a straight line within one company, but rather move vertically and horizontally around a set of jobs. This paper provides examples of models that have been implemented at the local and state level. Then, some key lessons are drawn for policy makers regarding their use in skills development approaches.
    Date: 2012–08
  35. By: Francesca Mameli (University of Sassari); Simona Iammarino (London School of Economics and Political Science, and Science and Technology Policy Research (SPRU), University of Sussex); Ron Boschma (Utrecht University, Department of Economic Geography)
    Abstract: This paper investigates the effects of different forms of regional sectoral diversity on employment growth of Italian manufacturing and service industries
    Date: 2012–03
  36. By: Robert Haveman; Barbara Wolfe
    Abstract: Using a propensity score matching approach coupled with difference-in-differences regression analysis, we estimate the effect of receiving a low-income housing voucher on the employment and earnings, mobility, neighborhood quality, household/family composition and childcare utilization of a large longitudinal sample of low-income families in the U.S. We observe these effects over six years following voucher receipt. Our results indicate that voucher receipt has little effect on employment, but a negative effect on earnings. The negative earnings effect is largest in the years immediately following initial receipt, and fades out over time. Full-sample results show voucher receipt to have little effect on neighborhood quality in the short-term, but some positive long-term effects. We also find that voucher receipt is tied to a higher probability of change in household/family composition in the year of voucher receipt, but greater stability in subsequent years. The results of our propensity score matching procedure show voucher receipt to be tied to a greater take-up of public child care subsidies. Several robustness tests are run to support the reliability of our findings. We discuss the implications of our findings for research and policy.
    Date: 2012–07
  37. By: Ryo Nakajima (Yokohama National University); Ryuichi Tanaka (National Graduate Institute for Policy Studies)
    Abstract: In this paper, we estimate the impacts of local-government-sponsored pronatal policies on fertility by exploiting information on the geographical variation in policies across municipalities in Japan. We develop an empirical model that accommodates both the location and fertility choices of households to take into account their self-selected migration across municipalities. We estimate the structural parameters using cross-sectional microdata on Japanese households in metropolitan areas. The results suggest that self-selection may generate substantial upward bias in the estimated impacts of pronatal policies on fertility. We also find that, after controlling for self-selection bias, some types of noncash benefit pronatal policies significantly increase the probability of births occurring in metropolitan households, although the magnitudes differ significantly by revenue and birth parity.
    Date: 2012–07
  38. By: Beatrice D. Simo - Kengne (Department of Economics, University of Pretoria); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); Monique Reid (Department of Economics, University of Stellenbosch); 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) 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
  39. By: Jason M. Fletcher; Stephen L. Ross
    Abstract: This paper estimates the effects of friends’ health behaviors, smoking and drinking, on own health behaviors for adolescents while controlling for the effects of correlated unobservables between those friends. Specifically, the effect of friends’ health behaviors is identified by comparing similar individuals who have the same friendship opportunities because they attend the same school and make similar friendship choices, under the assumption that the friendship choice reveals information about an individual’s unobservables. We combine this identification strategy with a cross-cohort, within school design so that the model is identified based on across grade differences in the clustering of health behaviors within specific friendship patterns. Finally, we use the estimated information on correlated unobservables to examine longitudinal data on the on-set of health behaviors, where the opportunity for reverse causality should be minimal. Our estimates for both behavior and on-set are very robust to bias from correlated unobservables.
    JEL: I12
    Date: 2012–07
  40. By: Bingqin Li; Hyun Bang Shin
    Abstract: Hosting of mega-events such as the Olympic Games tends to be accompanied by voluminous media coverage on the negative social impact of the Games, and the people in the affected areas are often considered to be one victim group sharing similar experiences. The research in this paper tries to unpack the heterogeneous groups in a particular sector of the housing market, and gain a better understanding of how the Olympic Games affects different resident groups. We take the example of the Beijing Summer Olympic Games and resort to empirical findings in an attempt to critically examine the experience of migrant tenants and Beijing citizens (landlords in particular) in 'villages-in-the-city' (known as cheongzhongcun) by delivering their own first-hand accounts of city-wide preparation for the 2008 Beijing Summer Olympiad and the pervasive demolition threats to their neighbourhoods. The paper argues that the Beijing Summer Olympiad produced uneven, often exclusionary, Games experiences for a certain segment of urban population.
    Keywords: Beijing, Olympic Games, housing, marginality, patriotism, exclusion
    JEL: I31 D63 O18
    Date: 2012–07
  41. By: James Alm (Department of Economics, Tulane University); Robert D. Buschman (Fiscal Research Center, Andrew Young School of Policy Studies, Georgia State University); David L. Sjoquist (Economics Department, Georgia State University)
    Abstract: Many previous studies have examined the level of state grants to local K-12 school districts. However, these studies have not considered the role of citizen "trust" in state versus local governments as a factor. We hypothesize that the role of the state in funding education reflects citizen "trust" in the relative capabilities of governments. We measure "trust" directly via public opinion polls that capture citizen attitudes about the appropriate responsibilities of state versus local governments; we also measure "trust" indirectly, by the role of state government as revealed by its relative importance in overall service provision (net of K-12 spending). We find that the state share of K-12 education spending tends to be higher when there is greater citizen trust in state versus local governments.
    Keywords: property tax, state and local finance, fiscal federalism, education, public opinion, intergovernmental transfers
    JEL: H71 H75 H77
    Date: 2012–07
  42. By: Michael Smart (University of Toronto)
    Abstract: Business property taxes in Ontario have fallen dramatically in the past decade, due to a series of reforms mandated by the provincial government. In this paper, I discuss the likely impacts of the reforms on business location, wages, and land values, and the economic welfare of provincial residents. I use the reforms to estimate the responsiveness of business location and employment to local tax differentials. The reforms have caused a large shift in legal tax burdens from businesses to residents, particularly in Toronto and a few other cities. Based on my analysis, I conclude that the tax reform has had a small positive impact on employment in cities and on business productivity in Ontario.
    Keywords: business taxes, business location, intermunicipal competition
    JEL: H25 R33
    Date: 2012–07
  43. By: Peter Nunnenkamp, Hannes Öhler, Maximiliano Sosa Andrés
    Abstract: The targeting of foreign aid within recipient countries is largely unexplored territory. We help close this gap in empirical research on aid allocation by employing Poisson estimations on the determinants of the World Bank’s choice of project locations at the district level in India. The evidence of needs-based location choices is very weak, even though World Bank activities tend to concentrate in relatively remote districts. Spatial lags prove to be significant and positive pointing to regional clustering. Institutional conditions matter insofar as project locations cluster in districts belonging to states with greater openness to trade. We do not find any evidence that location choices are affected by political patronage at the state or district level. However, the World Bank prefers districts where foreign direct investors may benefit from projects related to infrastructure
    Keywords: aid allocation, World Bank, Indian districts, political constituency
    JEL: F35 F53
    Date: 2012–07
  44. 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
  45. By: Anna Piil Damm (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: Using survey information about characteristics of personal contacts linked with administrative register information on employment status one year later, I show that unemployed survey respondents with many employed acquaintances have a higher job finding rate. Settlement in a socially deprived neighborhood may, therefore, hamper individual labor market outcomes because of lack of employed contacts. I investigate this hypothesis by exploiting a unique natural experiment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municipalities quasirandomly, which successfully addresses the methodological problem of endogenous neighborhood selection. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Furthermore, their labor market outcomes are not affected by the overall employment rate of men living in the neighborhood, but positively affected by the employment rate of non-Western immigrant men and co-national men living in the neighborhood. This is strong evidence that immigrants find jobs in part through their employed immigrant and co-ethnic contacts in the neighborhood of residence and that a high quality of contacts increases the individual’s employment chances and annual earnings.
    Keywords: Residential job search networks, referral, contacts, neighborhood quality, labor market outcomes
    JEL: J60 J31 R30
    Date: 2012–08–13
  46. By: Jessica Wolpaw Reyes
    Abstract: Childhood exposure to even low levels of lead can adversely affect neurodevelopment, behavior, and cognitive performance. This paper investigates the link between lead exposure and student achievement in Massachusetts. Panel data analysis is conducted at the school-cohort level for children born between 1991 and 2000 and attending 3rd and 4th grades between 2000 and 2009 at more than 1,000 public elementary schools in the state. Massachusetts is well-suited for this analysis both because it has been a leader in the reduction of childhood lead levels and also because it has mandated standardized achievement tests in public elementary schools for almost two decades. The paper finds that elevated levels of blood lead in early childhood adversely impact standardized test performance, even when controlling for community and school characteristics. The results imply that public health policy that reduced childhood lead levels in the 1990s was responsible for modest but statistically significant improvements in test performance in the 2000s, lowering the share of children scoring unsatisfactory on standardized tests by 1 to 2 percentage points. Public health policy targeting lead thus has clear potential to improve academic performance, with particular promise for children in low income communities.
    JEL: I18 I29 J13 Q58
    Date: 2012–08
  47. By: Michael Iacono; David Levinson; Ahmed El-Geneidy; Rania Wasfi (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The set of models available to predict land use change in urban regions has become increasingly complex in recent years. Despite their complexity, the predictive power of these models remains relatively weak. This paper presents an example of an alternative modeling framework based on the concept of a Markov chain. The model assumes that land use at any given time, which is viewed as a discrete state, can be considered a function of only its previous state. The probability of transition between each pair of states is recorded as an element of a transition probability matrix. Assuming that this matrix is stationary over time, it can be used to predict future land use distributions from current data. To illustrate this process, a Markov chain model is estimated for the Minneapolis-St. Paul, MN, USA (Twin Cities) metropolitan region. Using a unique set of historical land use data covering several years between 1958 and 2005, the model is tested using historical data to predict recent conditions, and is then used to forecast the future distribution of land use decades into the future. We also use the cell-level data set to estimate the fraction of regional land use devoted to transportation facilities, including major highways, airports, and railways. The paper concludes with some comments on the strengths and weaknesses of Markov chains as a land use modeling framework, and suggests some possible extensions of the model.
    Keywords: mode choice, mode shares, mixed logit, stated preference.
    JEL: R11 R12 R14 R41 R52
    Date: 2012
  48. By: Chen, EeMun (Ministry of Economic Development, New Zealand)
    Abstract: Place matters in innovation. New ideas – and the capability to translate them into innovative goods, services, processes or markets – rely on the sharing of knowledge and resources by a diverse range of players, including firms, suppliers, employees, universities and government research institutes. For this paper, a review was undertaken to examine the extent to which Auckland has all the actors, linkages, inputs and framework conditions required for innovation. A regional innovation system approach was used. The review found that innovation in Auckland is constrained by business and management capability; a general lack of collaboration between business, and between industry and education/research organisations; and a lack of coordinated planning and investment to address the growth needs in areas of competitive strength. A number of recommendations for action are made for central, regional and local government to improve Auckland’s innovation performance, and thus New Zealand’s innovation performance.
    Keywords: regional innovation; innovation system; Auckland
    JEL: O10 O20 R11
    Date: 2012–05–01
  49. By: OECD
    Abstract: Large cities are generally educational assets: in most countries, performance improves dramatically when only the scores of students in urban areas are considered, although this is not the case in some countries, such as Belgium, Slovenia, the United Kingdom and the United States. When comparing the performance of students in large cities, students in Portugal and Israel perform as well as those in Singapore, and students in Poland perform as well as those in Hong Kong.
    Date: 2012–06
  50. By: Sunak, Yasin (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: Wind power is the most important renewable energy source in many countries today, characterized by a rapid and extensive diffusion since the 1990s. However, it has also triggered much debate with regard to the impact on landscape and vista. Therefore, siting processes of wind farm projects are often accompanied by massive public protest, because of visual and aural impacts on the surrounding area. These mostly negative consequences are often reflected in property values and house prices. The aim of this paper is to investigate the impact of wind farms on the surrounding property values by means of a geographically-weighted hedonic pricing model. By comparing the predictive performance of standard Ordinary Least Squares (OLS) regression models and Geographically Weighted Regression (GWR) models, we find that, mainly due to a local clustering bias, global OLS estimation is inadequate for capturing the impacts of wind farm proximity on property prices. GWR reveals spatial non-stationarity of the variables and varying spatial patterns of the coefficient estimates across and within the city areas. Moreover, the GWR findings provide evidence for negative local effects of site proximity and of shadowing caused by wind turbines. The analysis was done for a study area in western Germany.
    Keywords: Wind power; Hedonic pricing; Spatial non-stationarity; Geographically Weighted Regression
    JEL: C31 Q24 Q42 R31
    Date: 2012–05
  51. By: Paul Anderson; Andrew Owen; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Accessibility is traditionally considered to be a property of a point or region in space, and to be invariant over time (or at least over some computationally convenient time interval). How- ever, a locations accessibility can vary over time on a wide range of scales. This temporal variation is especially significant for schedule-based transportation systems. Current measures of accessibility generally reflect the accessibility only at points in time corresponding to the departures of one or more trips; accessibility between these time points remains unconsidered and undefined. Consequently, these measures are insensitive to changes in route frequency and the distribution of trip departure times. Furthermore, these approaches ignore the disutility experienced by a system user who is limited to departing or arriving at scheduled times rather than at preferred times. As a result, they systematically overestimate the accessibility experienced by users of scheduled transportation systems. We establish new methods for representing the accessibility provided by a schedule-based transportation system from a specific location as a continuously-defined accessibility function (CDAF) of desired departure time, defined for all time points. Using schedule and route information from metropolitan transit providers, we demonstrate the application of these methods to gain new insight into the accessibility provided by real-world transportation systems. Four examples are developed to represent common service types in metropolitan transit networks. The results confirm that accessibility is significantly overestimated by measuring single points and show that trip frequency is more valuable for sustained accessibility than high accessibility on individual trips.
    Keywords: public transport, accessibility, scheduled transportation, mass transit
    JEL: R41 R42
    Date: 2012
  52. By: Graham Howard; Özer Karagedikli (Reserve Bank of New Zealand)
    Abstract: People's expectations of future house prices appear to be an important influence on house prices and the volume of house sales (Wheaton 1990; Berkovec and Goodman 1996). For example, Case and Shiller (2006) argue that expectations played a role in producing California's house price boom in the late 1980s. If house price expectations matter, then how people form those expectations, and how expectations respond to different shocks (for example, an unexpected increase in population) also matters. The Reserve Bank has often referred to the importance of house price expectations but unlike many other variables we have had little detailed data on these expectations for analysis.
    Date: 2012–02
  53. By: Pavithra Parthasarathi; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper aims to look at the variation of network structure within a metropolitan area and relate it to observed travel, measured here as the average travel time to work. The Minor Civil Divisions (MCD) within the Twin Cities (Minneapolis, St. Paul) metropolitan area are chosen for this analysis. Quantitative measures, compiled from various sources, are used to capture the various aspects of network structure within each MCD. The variation of these measures within the metropolitan area is analyzed using spatial analyses. The measures of network structure are then related to observed travel using statistical regression models. The results confirm a relation between network structure and travel and point to the importance of understanding the underlying street network structure.
    Keywords: network structure, journey to work, travel time, time perception, travel behavior
    JEL: R41 L91
    Date: 2012
  54. By: Lu, Zheng; Deng, Xiang
    Abstract: Current empirical studies on regional specialization mainly focused on measurement of China’s overall regional specialization level, while determinants of industrial geographical distribution, namely the regional specialization pattern, are just paid few attentions. This paper analyzed the regional specialization pattern empirically by employing statistical data of China two-digit industries from 1987 to 2007 through estimating a model which takes comparative advantage and scale economy as driven factors of industrial geographical concentration. Conclusions show that the overall regional specialization of Chinese industries increased between 1987 and 2007, however, it decreased obviously in 1990s. And, scale economy rather than comparative advantage arising from production cost is a long-run factor of China’s industrial geographical distribution.
    Keywords: Comparative Advantage Scale Economy Regional Specialization China
    JEL: R30 R12
    Date: 2012–05–20
  55. By: Alfredo Pereira (Department of Economics, College of William and Mary, Williamsburg, VA, USA); Jorge Andraz (Faculdade de Economia, Universidade do Algarve e CEFAGE-UE)
    Abstract: This paper is an up-to-date survey of the literature on the effects of public investment on economic performance and therefore constitutes a comprehensive starting reference for academic researchers and policy makers alike. This is particularly important at a time when widespread recession and public budgetary concerns have brought to the forefront of the policy debate the economic and budgetary effects of public investment. This paper presents a comprehensive discussion of the empirical research on the impact of public investment in infrastructure on economic performance in terms of both the methodological approaches and respective conclusions. It includes an integrated discussion of the methodological developments that successively have led to the estimation of production functions, cost and profit functions and, more recently, vector autoregressive models. It considers applications to both the U.S. and other countries at the national, regional, and industry levels. Finally, it identifies some important areas for future research and highlights the natural convergence of this literature with the macro literature on the effects of fiscal policies.
    Keywords: public investment, infrastructure, economic performance, evidence for the US, regional evidence, industry-specific evidence, international evidence.
    JEL: C01 E62 H54 O57
    Date: 2012
  56. By: Leung, Ming D.
    Abstract: I examine the phenomenon of occupational agglomeration – the observation that workers with similar skills tend to co-locate geographically. Extant explanations point to the fact that industries also tend to agglomerate – thereby creating a need for a particular type of employee to locate there. However, labor markets can pool even when propinquity to employers is not beneficial. I argue that particular types of work become associated with specific geographical locations. This association becomes a categorical stereotype – which leads employers to prefer employees from particular geographic regions because they will seem more appropriate – a form of “spatial signaling.†I test this theory in an online, virtual marketplace for freelancing services. I find that the greater the association between a particular job category and a country – what I termjob specific geographic identity– the more likelyanyfreelancer from that country will win a job in that category. I also find this effect is stronger when a freelancer has no previous relevant experience but a bad experience by a buyer (at this job/country intersection) can eliminate this positive effect. This effect holds net of other explanations such as spatial mismatch, knowledge spillovers, and input cost advantages.
    Keywords: Management Science, Economics, General, Occupational Agglomeration, Job Categories, Space, Labor Markets
    Date: 2012–06–01
  57. By: Michael Iacono; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: With the interstate system substantially complete, the majority of new investment in highways is likely to take the form of selective capacity expansion projects in urban areas, along with incremental expansions and upgrades to expressway or freeway standards of existing intercity highway corridors. This paper focuses specifically on the latter type of project, rural highway expansions designed to connect smaller outstate cities and towns, and examines their effects on industry-level private earnings and local employment. We examine three case study projects in rural Minnesota and use panel data on local earnings and employment to estimate the impacts of the improvements. Our results indicate that none of the projects studied generated statistically significant increases in earnings or employment, a finding we attribute to the relatively small time savings associated with the projects and the maturity of the highway network. We suggest that for rural highway expansion projects, as with other types of transportation projects, user benefits should be a primary evaluation criterion rather than employment impacts.
    Keywords: network expansion, economic evaluation, regional growth, rural development, economic development
    JEL: O18 R42
    Date: 2012
  58. By: Rosa, Julio Miguel (Maastricht University)
    Date: 2012
  59. By: Ana I. Balsa; Alejandro Cid
    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
  60. By: Humphreys, Brad (University of Alberta, Department of Economics); Marchand, Joseph (University of Alberta, Department of Economics)
    Abstract: The local labor market effects of casinos are examined by comparing the employment and earnings growth in areas with new casinos to the growth in areas with existing casinos and with no casinos, exploiting numerous casino openings across multiple locations in Canada over several time periods. The opening of a new casino is found to directly double employment and earnings in the local gambling industry within five years, with indirect positive spillovers limited to differential employment growth in closely related local industries. For every job created in the gambling industry, roughly one to two additional jobs are created in the hospitality industry. Increased gambling employment does not appear to crowd out other employment in the entertainment industry.
    Keywords: casinos; gambling; job multipliers; local economic development
    JEL: J21 L83 R11
    Date: 2012–07–01
  61. By: Andrew Owen; Paul Anderson; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: The factors influencing commute mode choice are a subject of ongoing research and policy. Existing literature explores a wide range of factors which may influence mode choice; many of these focus on demographic factors as well as user preferences and perception, thereby highlighting the unique characteristics of each mode. This analysis hypothesizes that mode share, the aggregate expression of individuals' mode choices, is determined in large part by more fundamental properties of transportation systems. Accessibility, which measures the ease of reaching destinations, is used as a tool for comparing modes which focuses on their properties as abstract transportation systems. It explores the potential to predict the relative commute shares of non-auto and auto modes from the relative accessibility provided by each. Using public data sources and methods selected for their simplicity and ease of interpretation, a model is estimated which accounts for 41% of the variation in commute mode share at the block group level in the Minneapolis--Saint Paul, MN metropolitan area.
    Keywords: accessibility, mode choice, travel behavior
    JEL: R41 R42 H43
    Date: 2012
  62. By: Atsushi Kawamoto (Policy Research Institute, the Ministry of Finance, Japan)
    Abstract: In this paper, the interrelationship between the capital tax policies of local governments is empirically investigated using a data set from Japan. Reaction functions of local governments, which relate their capital tax rates to those in competing governments and their characteristics, are estimated through both the instrumental variable method and maximum likelihood estimation. The results suggest that a positive relationship exists among local governments in Japan.
    Date: 2012–07
  63. By: Christoph Helbach
    Abstract: Since their first implementation in 2000, the PISA studies have attracted public attention and spurred the demand for institutional changes in schooling systems. The introduction of standardized student tests and of incentives for schools and teachers are notable examples of such institutional changes. This paper examines the effects of these particular developments. Identification is based on within-country variation between PISA 2000 and PISA 2009. The results indicate that comparing schools by means of standardized student test results is a promising measure, while evaluating teachers this way decreases the overall performance of a schooling system. The discussion provides possible explanations for these ambiguous findings.
    Keywords: Education economics; incentives; standardized tests; PISA
    JEL: I20 I21 I29
    Date: 2012–07
  64. By: Gertrudes S. Guerreiro (University of Évora, Economics Department and CEFAGE-UE)
    Abstract: Our research aims to address the problem of inequality in income distribution from a different perspective than the usual. We intend to verify if geography influences the pattern of inequality, that is, if the standard of living varies from region to region and if, in the process of growth, spatial units in Portugal have been converging in terms of most relevant variables, such as income. We search the answers to these questions by introducing the treatment of convergence between smaller territorial units, the municipalities as individuals. We intend to evaluate convergence or divergence in income growth and test empirically the theoretical hypothesis that ?-convergence, although necessary, is not a sufficient condition for ?-convergence. To study convergence, we use information about GDP and wages for NUTS III regions, and wages for municipalities. We observe spatial dependence between municipalities, so we estimate spatial econometric models to test convergence. With regard to conditional convergence between municipalities, the model most appropriate is the one which includes in the explanatory variables the weight of primary sector employment, leading us to conclude that this variable distinguishes the "steady state" of the small economies. Variables like the activity rate and percentage of active population with higher education also reveal highly significant on the growth of wages, reflecting the different contexts of the labor market at regional level.
    Keywords: Income Distribution; Regional Inequality; Regional Convergence; Spatial Econometrics.
    JEL: C21 E25 R12
    Date: 2012
  65. By: Martijn J. Burger (Erasmus University Rotterdam); Bert van der Knaap (Erasmus University Rotterdam); Ronald S. Wall (Institute for Housing and Urban Studies, Erasmus University Rotterdam)
    Abstract: In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of investments Combining insights from international economics, international business, and urban systems literature, we develop an indicator to measure revealed competition between territories for investments based on the overlap of investment portfolios of regions. Taking competition for greenfield investments between European regions as a test subject, we identify competitive market segments, derive the competitive threat a region faces from other regions, the competitive threat regions pose to other regions, and the most important market segments in which regions compete. We show that European regions with similar locational endowments pose a fiercer competitive thre at to one another. In addition, regions that are sufficiently large and distinctive, face the smallest average competitive threat from all other regions.
    Keywords: R12; F21; H70
    Date: 2012–07–06
  66. By: Jihad Dagher; Kazim Kazimov
    Abstract: We examine the impact of banks’ exposure to market liquidity shocks through wholesale funding on their supply of credit during the financial crisis in the United States. We focus on mortgage lending to minimize the impact of confounding demand factors that could potentially be large when comparing banks’ overall lending across heterogeneous categories of credit. The disaggregated data on mortgage applications that we use allows us to study the time variations in banks’ decisions to grant mortgage loans, while controlling for bank, borrower, and regional characteristics. The wealth of data also allows us to carry out matching exercises that eliminate imbalances in observable applicant characteristics between wholesale and retail banks, as well as various other robustness tests. We find that banks that were more reliant on wholesale funding curtailed their credit significantly more than retail-funded banks during the crisis. The demand for mortgage credit, on the other hand, declined evenly across wholesale and retail banks. To understand the aggregate implications of our findings, we exploit the heterogeneity in mortgage funding across U.S. Metropolitan Statistical Areas (MSAs) and find that wholesale funding was a strong and significant predictor of a sharper decline in overall mortgage credit at the MSA level.
    Keywords: Bank credit , Banking sector , Credit demand , Credit risk , Financial crisis , Global Financial Crisis 2008-2009 , Loans , Supply ,
    Date: 2012–06–13
  67. By: Uluc Aysun (University of Central Florida, Orlando, FL); Raman Khaddaria (University of Central Florida, Orlando, FL)
    Abstract: In this paper we uncover a relationship between regional economic fluctuations and bankruptcy resolution capacity and predict that its direction depends on the cyclicality of bankruptcy. If bankruptcy is countercyclical (procyclical), we predict that economic fluctuations should be more(less) severe in regions with lower judicial capacity. This is because in these regions, bank lending is more sensitive to judicial capacity and shocks that have a countercyclical (procyclical) effect on bankruptcy are amplified (mitigated) by more. We find evidence showing that bankruptcy is countercyclical and that in US states with lower judicial capacity, economic fluctuations are more severe.
    Keywords: judicial capacity, regional economic fluctuations, bankruptcy
    JEL: E02 E32 K35 R11
    Date: 2012–06
  68. By: Kuehn, Zoe; Landeras, Pedro
    Abstract: While students from more advantageous family backgrounds tend to perform better, it is not clear that they exert more effort compared to those from less advantageous family backgrounds. We build a model of students, schools, and employers to study the interaction of family background and effort exerted by the student in the education process. Academic qualifications, which entail an income premium in the labor market, are noisily determined by effort and the student's ability to benefit from education, which in turn depends on her family background and innate talent. In a situation where schools set the optimal passing standard, two factors turn out to be key in determining the relationship between effort and family background: (i) the student's risk aversion and (ii) the degree with which family background alters the student's marginal productivity of effort. We show that when the degree of risk aversion is relatively low (high) compared to the sensitivity of the marginal productivity of the student's effort with respect to her family background, the relation between effort and family background is positive (negative) and students from more advantageous family backgrounds exert more (less) effort. Considering Spanish data and controlling for school fixed effects, we find that an improvement in parental education from not having completed compulsory education to holding a university degree is associated to around 15% more effort by the student(approximately 1 hour and 20 minutes of additional weekly homework). We also find empirical evidence consistent with our assumption that students' marginal productivity of effort varies with family background.
    Keywords: student effort; family background; risk aversion; educational standards
    JEL: D81 I21 I28
    Date: 2012–08
  69. By: Achtnicht, Martin; Madlener, Reinhard
    Abstract: In this paper, we identify key drivers and barriers for the adoption of building energy retrofits 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 retrofitting their homes, but also faced a choice experiment involving different energy retrofit measures. Overall, both the descriptive and econometric results show that house owners who are able to afford it financially, for whom it is profitable, and for whom there is a favorable opportunity, are more likely to undertake energy retrofit 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 retrofit,Choice experiment,Energy effciency,Residential buildings
    JEL: C25 D12 Q40
    Date: 2012
  70. By: Giorgio Fazio; Marco Modica
    Abstract: Traditionally, it is assumed that the population size of cities in a country follows a Pareto distribution. This assumption is typically supported by finding evidence of Zipf's Law. Recent studies question this finding, highlighting that, while the Pareto distribution may fit reasonably well when the data is truncated at the upper tail, i.e. for the largest cities of a country, the log-normal distribution may apply when all cities are considered. Moreover, conclusions may be sensitive to the choice of a particular truncation threshold, a yet overlooked issue in the literature. In this paper, then, we reassess the city size distribution in relation to its sensitivity to the choice of truncation point. In particular, we look at US Census data and apply a recursive-truncation approach to estimate Zipf's Law and a non-parametric alternative test where we consider each possible truncation point of the distribution of all cities. Results confirm the sensitivity of results to the truncation point. Moreover, repeating the analysis over simulated data confirms the difficulty of distinguishing a Pareto tail from the tail of a log-normal and, in turn, identifying the city size distribution as a false or a weak Pareto law.
    Keywords: City size distribution; Pareto and Log-normal; Zipf's Law; Kolmogorov- Smirnov; Recursive analysis
    JEL: C46 D30 R12
    Date: 2012–07
  71. By: Steven Glazerman
    Abstract: This article discusses the trade-offs associated with study designs that involve random assignment of students within schools and describes the experience from one such study of Teach For America (TFA). The article concludes that within-school random assignment studies such as the TFA evaluation are challenging but may also be feasible and generate useful evidence.
    Keywords: Random Assignment, Teach For America, Education Programs, Students
    JEL: I
    Date: 2012–04–30
  72. By: Lauren Cohen; Umit G. Gurun; Christopher J. Malloy
    Abstract: We demonstrate that simply by using the ethnic makeup surrounding a firm’s location, we can predict, on average, which trade links are valuable for firms. Using customs and port authority data on the international shipments of all U.S. publicly-traded firms, we show that firms are significantly more likely to trade with countries that have a strong resident population near their firm headquarters. We use the formation of World War II Japanese Internment Camps to isolate exogenous shocks to local ethnic populations, and identify a causal link between local networks and firm trade links. Firms that exploit their local networks (strategic traders) see significant increases in future sales growth and profitability, and outperform other importers and exporters by 5%-7% per year in risk-adjusted stock returns. In sum, our results document a surprisingly large impact of immigrants’ economic role as conduits of information for firms in their new countries.
    JEL: F16 F30 G14
    Date: 2012–08
  73. By: P. GIVORD (Insee-Crest); S. QUANTIN (Dares); C. TREVIEN (Insee)
    Abstract: This paper provides new empirical assessment evidence on the efficiency of locally-targeted tax incentives in revitalizing distressed areas. We focus on the first generation of the French Enterprise Zone intiative, implemented in 1997 in continental France. We use new georeferenced panel data at the firm level over a twelve-year period. The zone designation process suggests two empirical strategies: difference-in-differences regressions with subclassification on the propensity score and regression discontinuity design. Both methods yield similar results. We highlight a strong positive impact of the Entreprise Zone policy on employment and business location during the first years of the policy. However, this favourable assessment has to be moderated because it seems mostly due to firms that are less prone to stimulate either local employment or economic activities. In addition, after some years, the early positive results are reduced as the increase in business locations is partially offset by more frequent business discontinuations.
    Keywords: Enterprise Zones, Local Employment, Propensity Score Matching, Evaluation
    JEL: C23 H71 R5
    Date: 2012
  74. By: Anna Lejpras
    Abstract: This paper investigates the links between locational conditions, innovative capabilities and internationalization of manufacturing SMEs. Two modes of foreign market servicing are explored: exporting activity and relocating of selected business activities abroad. The empirical analysis employs two probit models based on survey of about 3,000 firms. The results reveal that the outputs of SMEs' innovative activities-i.e., product innovations and patent applications-enhance exporting propensity as expected. Nevertheless, the input-side indicator-R&D intensity-appears to exert no impact. Further, the locational factor proximity to research institutions promotes SMEs' engagement in exporting. Regarding the determinants of selective relocations abroad, the findings show that SMEs with a high degree of R&D are less likely to separate production from other operations and relocate it abroad. Moreover, manufacturing SMEs assessing the proximity to research facilities, as well as support from various regional authorities and other bodies as important and good-quality locational conditions, exhibit a significantly lower likelihood to relocate selected activities abroad. Indeed, emphasizing the role of institutional setting in firm activity, our findings coincide in this respect with the previous literature focused on innovative milieu, learning regions and regional innovation systems.
    Keywords: Export, innovation, location, manufacturing SMEs, selective relocation abroad
    JEL: R30 O30 M16 L25
    Date: 2012
  75. By: Beall, Jo; Kanbur, Ravi; Guha-Khasnobis, Basudeb
    Keywords: Community/Rural/Urban Development, Public Economics,
    Date: 2012–04
  76. By: Adriana Lleras-Muney; Allison Shertzer
    Abstract: In the early twentieth century, education legislation was often passed based on arguments that new laws were needed to force immigrants to learn English and “Americanize.” We provide the first estimates of the effect of statutes requiring English as the language of instruction and compulsory schooling laws on the school enrollment, work, literacy and English fluency of immigrant children from 1910 to 1930. English schooling statutes did increase the literacy of foreign-born children, though only modestly. Compulsory schooling and continuation school laws raised immigrants’ enrollment and the effects were much larger for children born abroad than for native-born children.
    JEL: I28 K30 N32
    Date: 2012–08
  77. By: Pavithra Parthasarathi; David Levinson; Hartwig Hochmair (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Road networks have an underlying structure. This structure is defined by the layout, arrangement and the connectivity of the individual network elements, the road segments and their intersections. The differences in network structure exist across and within networks. Travelers perceive and respond to these differences in underlying network structure and complexity. This paper extends the analysis to understanding the underlying theory of why network structure influences travel. Specifically the focus is on the influence of network structure on travel time perception. The hypothesis here is that network design influences traveler perceptions, more specifically the perceptions of travel distance and time. This perception of travel distance and time in turn influences the actual travel by affecting choice of destination, mode, route, and whether to engage in activities.
    Keywords: network structure, time perception, travel behavior
    JEL: R41 L91
    Date: 2012
  78. By: Boes, Stefan (University of Bern); Nüesch, Stephan (University of Zurich); Stillman, Steven (University of Otago)
    Abstract: We explore two unexpected changes in flight regulations to identify the causal effect of aircraft noise on health. Detailed yearly noise metrics are linked with panel data on health outcomes using exact address information. Controlling for individual and spatial heterogeneity, we find that aircraft noise significantly increases sleeping problems, weariness and headaches. Our pooled models substantially underestimate the detrimental health effects, which suggests that individuals self-select into residence based on their unobserved noise sensitivity and idiosyncratic vulnerability. Generally, we show that the combination of fixed effects and quasi-experiments is very powerful to identify causal effects in epidemiological field studies.
    Keywords: health, noise pollution, selection bias, fixed effects, quasi-experimental data
    JEL: I10 Q53 C23
    Date: 2012–07
  79. By: Matthew S. Yiu (ASEAN + 3 Macroeconomic Research Office); Jun Yu (Sim Kee Boon Institute for Financial Economics, School of Economics and Lee Kong Chian School of Business); Lu Jin (Hong Kong Monetary Authority)
    Abstract: This study uses a newly developed bubble detection method (Phillips, Shi and Yu, 2011) to identify real estate bubbles in the Hong Kong residential property market. Our empirical results reveal several positive bubbles in the Hong Kong residential property market, including one in 1995, a stronger one in 1997, another one in 2004, and a more recent one in 2008. In addition, the method identifies two negative bubbles in the data, one in 2000 and the other one in 2001. These empirical results continue to be valid for the mass segment and the luxury segment. However, the method finds a bubble in early 2011 in the overall market as well as in the mass segment but not in the luxury segment. This result suggests that the bubble in early 2011 in the Hong Kong real estate market came more strongly from the mass segment under the demand pressure from end‐users of small‐to‐medium sized apartments.
    Keywords: asset bubble; residential property prices; right‐tailed unit root test; explosive behaviour; price‐to‐rent ratio
    JEL: C22 G12 R31
    Date: 2012–08
  80. By: OECD
    Abstract: Science project. The very phrase is nearly synonymous with hands-on learning, learning-by-doing, collaboration. Are students more engaged and do they perform better in science if their school encourages them to work on science projects, participate in science fairs, belong to a science-related club or go on science-related field trips – in addition to teaching them the mandatory science curriculum? To find out, PISA 2006 asked school principals about what kinds of extracurricular science activities they offered their students and linked their responses with students’ performance on the PISA science test.
    Date: 2012–07
  81. By: Partridge, Mark D.; Rickman, Dan S.; Olfert, M. Rose; Tan, Ying
    Abstract: Place-based or geographically-targeted policy has been promoted as a way to help poor regions and the poor people who live there. Yet, such policy has often been attacked by economists as slowing needed economic adjustments, redirecting resources to lower productivity regions, and supporting political agendas rather than economic prosperity. The spatial equilibrium model in particular predicts that people readily move to the locations providing the highest expected utility, suggesting that policy interventions only impede needed adjustments. Given the high mobility of Americans, the spatial equilibrium model should then be most applicable to the US. We review the empirical evidence on whether the spatial equilibrium model applies and find that, even in the United States, people are not as mobile as the model suggests and that economic shocks have rather persistent effects. Although this suggests the potential need for place-based policy, we describe the informational and political economy conditions that need to be met before place-based policy can be effective.
    Keywords: Place-based policy; spatial equilibrium
    JEL: R13 R12
    Date: 2012–07–21
  82. By: Martijn Kobus (VU University Amsterdam); Eva Gutierrez Puigarnau (VU University Amsterdam); Piet Rietveld (VU University Amsterdam); Jos Van Ommeren (VU University Amsterdam)
    Abstract: We introduce a methodology to estimate the effect of parking prices on car drivers' choice between street and garage parking. Our key identifying assumption is that the marginal benefit of parking duration does not depend on this choice. The endogeneity of parking duration is acknowledged in the estimation procedure. We apply the methodology to an area where cruising for parking is absent, street parking is ubiquitous and garage parking is discretely located over space. So, in this area, the average distance to the final destination is longer for garage parking than for street parking. We find that drivers are willing to pay a premium for street parking which ranges from euro 0.35 to euro 0.58. Given a parking duration of one hour, we find that the demand for street parking is extremely price elastic: the price elasticity of demand for the share of street parking is -4. However, the price elasticity is much smaller for shorter parking durations. Our estimates imply that even small reductions in street parking prices induce a strong increase in the stock of cars parked on-street. Our estimates also imply that a policy which contains an on-street premium (so street prices exceed garage prices) is welfare improving, because drivers with longer parking durations are induced to use parking locations that are, on average, farther away.
    Keywords: street parking; garage parking
    JEL: R48
    Date: 2012–04–20
  83. By: Carlos Carrion; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Carrion and Levinson (2012) studied the bridge choice behavior of commuters before and after a new bridge opened to the public. This bridge replaced the previously collapsed I-35W bridge in the metro area of Minneapolis-St. Paul. The original I-35W bridge collapsed on August 1st 2007, and the replacement bridge opened to the public on September 18th 2008. This study extends Carrion and Levinson (2012) by considering explicitly the day-to-day behavior of travelers, and by also considering the previously excluded subjects that are transitioning between bridge alternatives not including the I-35W bridge. The primary results indicate that the subjects react to day-to-day travel times on a specific route according to thresholds. These thresholds help discriminate whether a travel time is within an acceptable margin or not, and travelers may decide to abandon the chosen route depending on the frequency of travel times within acceptable margins. The secondary results indicate that subjects previous experience, and perception of the alternatives also influence their decision to abandon the chosen route.
    Keywords: route choice, GPS data, choice dynamics, equilibration.
    JEL: R41 R48
    Date: 2012
  84. By: Xuan Di; Henry Liu; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: In undergraduate transportation engineering courses, traffic assignment is a difficult concept for both instructors to teach and for students to learn, because it involves many mathematical derivations and computations. We have designed a multiplayer game to engage students in the process of learning route choice, so that students can visualize how the traffic gradually reach user equilibrium (UE). For one scenario, we employ a Braess' Paradox, and explore the phenomenon during the game-play. We have done the case-control and before-after comparisons. The statistical results show that, students who played the game improve their understanding of the Braess' Paradox more than those who did not play. Among game players, younger students benefit more in their learning; while those who are not comfortable with exploring a phenomenon on their own think this game not as effective as those who prefer hands-on learning experiences.
    Keywords: route choice, traffic assignment, user equilibrium, equilibration, education, Braess' Paradox
    JEL: A22 R41
    Date: 2012

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