nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒09‒22
thirty-one papers chosen by
Steve Ross
University of Connecticut

  1. The Economics of Density: Evidence from the Berlin Wall By Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
  2. Noise Expectation and House Prices By Andreas Mense; Konstantin A. Kholodilin
  3. Monocentric cities, endogenous agglomeration, and unemployment disparities By Zierahn, Ulrich
  4. The Dynamics of House Price Capitalization and Locational Sorting: Evidence from Air Quality Changes By Corey Lang
  5. The Impact of Supply Constraints on House Prices in England By Christian A. L. Hilber; Wouter Vermeulen
  6. The impact of low emission zones on PM10 levels in urban areas in Germany By Christiane Malina; Frauke Fischer
  7. Rational Expectations in Urban Economics By Berliant, Marcus; Yu, Chi-Ming
  8. Shale Gas Development and Property Values: Differences across Drinking Water Sources By Lucija Muehlenbachs; Elisheba Spiller; Christopher Timmins
  9. Immigration and the school system By Facundo Albornoz; Antonio Cabrales; Esther Hauk
  10. The Out-of-Sample Forecasting Performance of Non-Linear Models of Regional Housing Prices in the US By Mehmet Balcilar; Rangan Gupta; Stephen M. Miller
  11. A Characterization of the Top Trading Cycles Mechanism for the School Choice Problem By Dur, Umut
  12. What Drags and Drives Mobility: Explaining Canada’s Aggregate Migration Patterns By David Amirault; Daniel de Munnik; Sarah Miller
  13. Cities and Growth: Human Capital Location Choice: Accounting for Amenities and Thick Labour Markets By Brown, W. Mark<br/> Scott, Darren
  14. An "extended" knowledge production function approach to the genesis of innovation in the European regions By Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
  15. An early warning system to predict the speculative house price bubbles By Dreger, Christian; Kholodilin, Konstantin A.
  16. Cultural diversity and plant-level productivity By Michaela Trax; Stephan Brunow; Jens Suedekum
  17. Chinese Urban Residential Construction to 2040 By Leon Berkelmans; Hao Wang
  18. Fiscal Policy Shocks and the Dynamics of Asset Prices: The South African Experience By Goodness C. Aye; Mehmet Balcilar; Rangan Gupta; Charl Jooste; Stephen M. Miller; Zeynel A. Ozdemir
  19. Long-Term Care and the Housing Market By Bell, David; Rutherford, Alasdair
  20. Migration, Congestion Externalities, and the Evaluation of Spatial Investments By Dinkelman, Taryn; Schulhofer-Wohl, Sam
  21. Regional innovation performance in Europe By Marta Foddi; Stefano Usai
  22. Ethnic Segregation in Germany By Albrecht Glitz
  23. Globalization and Regional Innovation in China By Hein Roelfsema; Yi Zhang
  24. Optimal Transport and Cournot-Nash Equilibria By Blanchet, Adrien; Carlier, Guillaume
  25. Market Access and Information Technology Adoption: Historical Evidence from the Telephone in Bavaria By Florian Ploeckl
  26. How Do Regulators Influence Mortgage Risk: Evidence from an Emerging Market By John Y. Campbell; Tarun Ramadorai; Benjamin Ranish
  27. Games on Networks By Jackson, Matthew O.; Zenou, Yves
  28. Using play to help families learn: Evaluation of Trafford Hall’s Playing 2 Learn Programme 2008-11 By Laura Lane; Liz Richardson
  29. The Location of Displaced New Orleans Residents in the Year After Hurricane Katrina By Narayan Sastry; Jesse Gregory
  30. English Deficiency and the Native-Immigrant Wage Gap By Alfonso Miranda; Yu Zhu
  31. Migration networks as a response to financial constraints: Onset and endogenous dynamics By Stark, Oded; Jakubek, Marcin

  1. By: Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
    Abstract: This paper develops a quantitative model of city structure to separate agglomeration forces, dispersion forces and fundamentals as determinants of location choices. The model remains tractable and amenable to empirical analysis because of stochastic shocks to worker productivity, which yield a gravity equation for commuting flows. To empirically disentangle alternative determinants of location choices, we use Berlin's division and reunification as a source of exogenous variation in the surrounding concentration of economic activity. Using disaggregated data on land prices, workplace employment and residence employment for thousands of city blocks for 1936, 1986 and 2006, we find that the model can account both qualitatively and quantitatively for the observed changes in city structure.
    Keywords: Agglomeration, dispersion, density, cities
    JEL: N34 O18 R12
    Date: 2012–09
  2. By: Andreas Mense; Konstantin A. Kholodilin
    Abstract: In this paper, we examine the effects of an airport expansion on the prices of houses and flats located under the planned flight corridors. We focus on the role of expectations about the exposure to noise and find that proximity to the planned corridors significantly reduces real estate prices in the affected areas, by around 41% to 60%, depending on the sample. Hereby, the various plans of expanding Berlin-Brandenburg Inter- national airport are used as a source of exogenous variation.
    Keywords: Airport noise, housing prices, price expectations, quasi-experiment, spatial effects
    JEL: C21 L93 R31
    Date: 2012
  3. By: Zierahn, Ulrich
    Abstract: The literature on the wage curve provides considerable evidence in favor of a negative relationship between unemployment and wages. It is thus often seen as a refutation of the Harris-Todaro model, who point to a positive relationship. This paper shows that both strands of literature are special cases of a more general approach by combining a New Economic Geography model with monocentric cities and efficiency wages. Whether the relationship is positive or negative depends on the transportation costs between the cities and commuting costs within them. The model helps explain whether and under which conditions the agglomeration of economic activity is associated with higher unemployment and why controls for agglomeration should be included in wage curve regressions. --
    Keywords: New Economic Geography,Urban Economics,Efficiency Wages,Unemployment,Disparities,Regional Migration
    JEL: R12 R14 R23
    Date: 2012
  4. By: Corey Lang
    Abstract: Despite extensive use of housing data to reveal valuation of non-market goods, the process of house price capitalization remains vague. Using the restricted access American Housing Survey, a high-frequency panel of prices, turnover, and occupant characteristics, this paper examines the time path of capitalization and preference-based sorting in response to air quality changes caused by differential regulatory pressure from the 1990 Clean Air Act Amendments. The results demonstrate that owner-occupied units capitalize changes immediately, whereas rent capitalization lags. The delayed but sharp rent capitalization temporally coincides with evidence of sorting, suggesting a strong link between location choices and price dynamics.
    Keywords: Hedonic valuation, Capitalization, Sorting, Air Quality
    JEL: R23 R31 Q51 Q53
    Date: 2012–09
  5. By: Christian A. L. Hilber; Wouter Vermeulen
    Abstract: We explore the impact of different types of supply constraints on house prices in England by exploiting a unique panel dataset of 353 local planning authorities ranging from 1974 to 2008. Using exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints-measures, we find that: i) Regulatory constraints have a substantive positive long-run impact on the house price-earnings elasticity; ii) The effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; iii) Uneven topography has a quantitatively less meaningful impact; and iv) The effects of supply constraints are greater during boom than bust periods.
    Keywords: House prices, housing supply, supply constraints, land use regulation
    JEL: G12 R11 R21 R31 R52
    Date: 2012–09
  6. By: Christiane Malina (Institute of Spatial and Housing Economics, Muenster); Frauke Fischer (Institute of Transport Economics, Muenster)
    Abstract: High levels of particulate matter scaling less than 10 micrometers in diameter (PM10) in many urban areas have led to the introduction of binding PM10 limit values by the European Commission in 2005. Road transport in inner city areas is believed to be one of the main contributors to accumulated PM10 levels and, thus, is the focus of regulation. One of the strongest regulatory mechanisms to meet the new PM10 air quality standard is the introduction of low emission zones (LEZs) in Germany. This policy allows local authorities to define geographical areas in urban agglomerations as LEZs, into which vehicles that do not meet predetermined emission standards are prohibited from entering. This paper evaluates the effectiveness of LEZs on reducing PM10 levels in German cities. We employ a fixed effects panel data model to analyze the effects of LEZs on daily PM10 levels using data from 2000 to 2009. We take into account daily data for meteorological conditions and traffic volume. The results of the analysis reveal that the introduction of LEZs has significantly reduced daily PM10 levels in urban areas. We can also show that PM10 levels are significantly driven down further when LEZ standards in cities become more stringent over time.
    Keywords: Particulate matter, low emission zones, panel data
    JEL: Q58 R49
    Date: 2012–08
  7. By: Berliant, Marcus; Yu, Chi-Ming
    Abstract: Canonical analysis of the classical general equilibrium model demonstrates the existence of an open and dense subset of standard economies that possess fully-revealing rational expectations equilibria. This paper shows that the analogous result is not true in urban economies under appropriate modifications for this field. An open subset of economies where none of the modified rational expectations equilibria fully reveals private information is found. There are two important pieces. First, there can be information about a location known by a consumer who does not live in that location in equilibrium, and thus the equilibrium rent does not reflect this information. Second, if a consumer's utility depends only on information about their (endogenous) location of residence, perturbations of utility naturally do not incorporate information about other locations conditional on the consumer's location of residence. Existence of equilibrium is proved. Space can prevent housing prices from transmitting information from informed to uninformed households, resulting in an inefficient outcome.
    Keywords: Urban Economics; General Equilibrium; Private Information; Rational Expectations
    JEL: R13 D82 D51
    Date: 2012–09–15
  8. By: Lucija Muehlenbachs; Elisheba Spiller; Christopher Timmins
    Abstract: While shale gas development can result in rapid local economic development, negative externalities associated with the process may adversely affect the prices of nearby homes. We utilize a triple-difference estimator and exploit the public water service area boundary in Washington County, Pennsylvania to identify the housing capitalization of groundwater risk, differentiating it from other externalities, lease payments to homeowners, and local economic development. We find that proximity to wells increases housing values, though risks to groundwater fully offset those gains. By itself, groundwater risk reduces property values by up to 24 percent.
    JEL: Q4 Q53
    Date: 2012–09
  9. By: Facundo Albornoz; Antonio Cabrales; Esther Hauk
    Abstract: Immigration is an important problem in many societies, and it has wide-ranging effects on the educational systems of host countries. There is now a large empirical literature, but very little theoretical work on this topic. We introduce a model of family immigration in a framework where school quality and student outcomes are determined endogenously. This allows us to explain the selection of immigrants in terms of parental motivation and the policies which favor a positive selection. Also, we can study the effect of immigration on the school system and how school quality may self-reinforce immigrants’ and natives’ choices.
    Keywords: Education, Immigration, School resources, Parental involvement, Immigrant sorting
    JEL: I20 I21 I28 J24 J61
    Date: 2012–01
  10. By: Mehmet Balcilar (Eastern Mediterranean University); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut)
    Abstract: This paper provides out-of-sample forecasts of linear and non-linear models of US and Census regions housing prices. The forecasts include the traditional point forecasts, but also include interval and density forecasts of the housing price distributions. The non-linear smooth-transition autoregressive model outperforms the linear autoregressive model in point forecasts at longer horizons, but the linear autoregressive model dominates the non-linear smooth-transition autoregressive model at short horizons. In addition, we generally do not find major differences in performance for the interval and density forecasts between the linear and non-linear models. Finally, in a dynamic 25-step ex-ante and interval forecasting design, we, once again, do not find major differences between the linear and nonlinear models.
    Keywords: Forecasting, Linear and non-linear models, US and Census housing price indexes
    JEL: C32 R31
    Date: 2012–08
  11. By: Dur, Umut
    Abstract: Abstract This paper characterizes the top trading cycles mechanism for the school choice problem. Schools may have multiple available seats to be assigned to students. For each school a strict priority ordering of students is determined by the school district. Each student has strict preference over the schools. We first define weaker forms of fairness, consistency and resource monotonicity. We show that the top trading cycles mechanism is the unique Pareto efficient and strategy-proof mechanism that satisfies the weaker forms of fairness, consistency and resource monotonicity. To our knowledge this is the first axiomatic approach to the top trading cycles mechanism in the school choice problem where schools have a capacity greater than one.
    Keywords: Top Trading Cycles Mechanism; School Choice Problem
    JEL: C78 I20 D78 D61
    Date: 2012–09–15
  12. By: David Amirault; Daniel de Munnik; Sarah Miller
    Abstract: Using census data at the economic region level from 1991 to 2006 and a gravity model framework, this paper examines the factors that influence migration within Canada. Results from both Poisson pseudo-maximum likelihood and negative binominal regression models suggest that provincial borders are statistically significant barriers to migration but the magnitude of their effect varies by model specification. The regression results also indicate that differences in employment rates, household incomes and language are important in explaining migration between Canadian economic regions. We also find evidence that the negative effect of distance on migration may be declining over time.
    Keywords: Econometric and statistical methods; Labour markets; Regional economic developments
    JEL: J61 R23
    Date: 2012
  13. By: Brown, W. Mark<br/> Scott, Darren
    Abstract: A growing literature has found a positive association between human capital and long-run employment growth across cities. These studies have increased interest in understanding the location choices of university degree-holders, a group often used as a proxy measure of human capital. Based on data from the 2001 Canadian Census of Population, this paper investigates determinants of the location choices of degree- and non-degree-holders. With a multinomial logit model, it tests a series of hypotheses about the differential effects of thick labor markets and amenities on the location choice of these groups across metropolitan and non-metropolitan areas in Canada.
    Keywords: Labour, Population and demography, Mobility and migration
    Date: 2012–08–30
  14. By: Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
    Abstract: The paper looks at the genesis of innovation in the EU regions in order to shed light on the link between innovative inputs (R&D and Human Capital) and the genesis of economically valuable knowledge. The "traditional" regional Knowledge Production Function (KPF) is innovatively developed in three complementary directions. First, the KPF is "augmented" in order to control for all possible "unobservable" and "immeasurable" time varying factors that influence the genesis of innovation (i.e. localised institutional and relational factors, regional innovation policies). Second, a semi-parametric approach that relaxes any arbitrary assumption on the "shape" of the KPF is adopted. Finally, the assumption of homogeneity in the impact of R&D and Human Capital is relaxed by explicitly accounting for the differences between "core" and "peripheral" regions. The econometric results confirm the importance of accounting for time varying unobserved heterogeneity through the adoption of a "random growth" specification: R&D efforts exert a significant influence on innovation only after controlling for regional specific time varying unobserved factors. In addition the semi-parametric approach uncovers significant threshold effects for both R&D expenditure and Human Capital and highlights a strong complementary between these two factors. However, "core" regions benefit from a persistent advantage in terms of the "productivity" of their innovation inputs. This has important implications for the EU innovation policies at the regional level.
    Keywords: Innovation, Regions, Knowledge production function, Europe, Semi-parametric models
    JEL: O32 R11 C14 C23
    Date: 2012–09–06
  15. By: Dreger, Christian; Kholodilin, Konstantin A.
    Abstract: In this paper, the authors construct country-specific chronologies of house price bubbles for 12 OECD countries over the period 1969:Q1-2009:Q4. These chronologies are obtained using a combination of fundamental and filter approaches. The resulting speculative bubble chronology is the one providing the highest concordance between these two techniques. In addition, the authors suggest an early warning system based on three alternative approaches: signaling approach, logit, and probit models. It is shown that the latter two models allow much more accurate predictions of house price bubbles than the signaling approach. The prediction accuracy of the logit and probit models is high enough to make them useful in forecasting the future speculative bubbles in the housing market. Thus, this method can be used by policymakers in their attempts to timely detect house price bubbles and to attenuate their devastating effects on the domestic and world economy. --
    Keywords: house prices,early warning system,OECD countries
    JEL: C25 C33 E32 E37
    Date: 2012
  16. By: Michaela Trax (Mercator School of Management, University of Duisburg-Essen); Stephan Brunow (Institute for Employment Research (IAB)); Jens Suedekum (Mercator School of Management, University of Duisburg-Essen)
    Abstract: Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if “cultural diversity†affects total factor productivity. We distinguish diversity in the establishment’s workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers –either in the establishment or in the region –does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.
    Keywords: Cultural diversity, plant-level productivity, knowledge spillovers.
    JEL: R23 J21 J31
    Date: 2012–09
  17. By: Leon Berkelmans (Reserve Bank of Australia); Hao Wang (Reserve Bank of Australia)
    Abstract: This paper projects Chinese urban residential construction out to 2040. The paper argues that the extraordinary growth of recent years will not continue, but that construction will stabilise at a high level. This augurs well for steel demand, especially as steel intensity is expected to increase. These projections are subject to upside and downside risks, which are discussed. In addition, this paper argues that official figures understate the extent of urban residential construction.
    Keywords: China; residential construction
    JEL: E22 R31
    Date: 2012–09
  18. By: Goodness C. Aye (Department of Economics, University of Pretoria); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, North Cyprus,via Mersin 10, Turkey); Rangan Gupta (Department of Economics, University of Pretoria); Charl Jooste (Department of Economics, University of Pretoria); Stephen M. Miller (College of Business, University of Las Vegas, Nevada); Zeynel A. Ozdemir (Department of Economics, Gazi University, Besevler, 06500 Ankara, Turkey)
    Abstract: This study assesses how fiscal policy affects the dynamics of asset markets, using Bayesian vector autoregressive models. We use sign restrictions to identify government revenue and government spending shocks, while controlling for generic business cycle and monetary policy shocks. In addition to examining the effects of anticipated and unanticipated revenue and spending shocks, we also analyse three types of fiscal policy scenarios: a deficit-financed spending increase, a balanced budget spending increase (financed with higher taxes), and a deficit-financed tax cut (revenue decreases but government spending stays unchanged). Using South African quarterly data from 1966:Q1 to 2011:Q2, we show that a deficit spending shock does not affect house prices, but temporarily exerts a positive effect on stock prices. With a deficit-financed tax cut shock, house prices increase persistently while stock prices increase quickly, but only temporarily. A balanced budget shock permanently decreases house prices and temporarily reduces stock prices.
    Keywords: Bayesian Sign-Restricted VAR, fiscal policy, housing prices, stock prices
    JEL: C32 E62 G10 H62
    Date: 2012–09
  19. By: Bell, David; Rutherford, Alasdair
    Abstract: This paper examines the combined effects of population ageing and changes in long-term care policy on the housing market. Those needing care prefer to receive it at home rather than in institutional settings. Public authorities prefer to provide care in residential settings which are generally lower cost than institutional care. The trend away from institutional provision towards care at home is endorsed by national governments and by the OECD. Nevertheless, as the number requiring care increases, this policy shift will maintain the level of housing demand above what it would otherwise be. It will also have distributional consequences with individuals less likely to reduce their housing equity to pay for institutional care, which in turn will increase the value of their bequests. Empirical analysis using the UK Family Resources Survey and the British Household Panel Survey shows that household formation effects involving those requiring long-term care are relatively weak and unlikely to significantly offset the effects of this policy shift on the housing market and on the distribution of wealth.
    Keywords: Ageing; Demographic change; Housing market; Long-term care
    Date: 2012–06
  20. By: Dinkelman, Taryn; Schulhofer-Wohl, Sam
    Abstract: Evaluations of new infrastructure in developing countries typically focus on direct effects, such as the impact of an electrification program on household energy use. But if new infrastructure induces people to move into an area, other local publicly provided goods may become congested, offsetting the benefit of the infrastructure. We use a simple model to show how to measure the net benefit of a place-based program without data on land prices -- an indicator that is commonly used to measure congestion in developed countries but that often cannot be used in poor countries because land markets are missing or land prices are badly measured. Our model shows that congestion externalities are especially large when land markets are missing. To illustrate, we estimate the welfare impact of a recent household electrification program in South Africa. Congestion externalities from migration reduced local welfare gains by half.
    Keywords: congestion effects; migration; program evaluation; rural infrastructure; South Africa; welfare
    JEL: H23 H43 H54 O15 O18 R13
    Date: 2012–09
  21. By: Marta Foddi; Stefano Usai
    Abstract: Europe 2020 strategy and the initiative “Innovation Union” call for a particular attention at the territorial dimension of innovation and knowledge creation. The heterogeneity across regions in their capacity to create knowledge and innovation, but also in their abilities to exploit ideas and technologies available across the European territory, motivates in-depth analyses of the territorial dimension of the knowledge economy. This paper investigates the nature of knowledge production and diffusion among regions in 29 EU countries and tries to assess its effectiveness. The analysis follows a two-step analytical route. Firstly, as a preliminary analysis, we estimate a knowledge production function (Griliches, 1979 and many others) with the usual parametric methods, in order to find out which are the main determinants of knowledge production at the regional level in Europe. Secondly, based on these findings, we apply DEA to assess the degree of efficiency of European regions in their use of internal and external inputs for the production of new knowledge and ideas. This allows to provide a ranking of the innovative performance of EU regions for two points in time, the beginning of the current century and the second part of this decade. Such rankings will be evaluated thanks to the Malmquist productivity index in order to assess the relative importance of its main components. According to the Data Envelopment Analysis, we found further evidence of a dualistic (centre vs periphery) pattern in the regional innovation activities, with the highest efficient territories located in the most central or economically strategic areas of the continent. On the contrary, the application of the Malmquist productivity index shows that productivity dynamics has been extremely differentiated across regions in terms of both magnitude and intrinsic features. We, again, observe important differences between the core and periphery of Europe and most specifically between the countries which are rich and industrialized and form the so called “Old Europe” and those which are relatively poor and have entered the European Union quite recently.
    Keywords: innovation; human capital; spatial spillovers; European regions; DEA
    JEL: C13 C61 O33 R11
    Date: 2012
  22. By: Albrecht Glitz (Universitat Pompeu Fabra and Barcelona GSE)
    Abstract: This paper provides a comprehensive description of the nature and extent of ethnic segregation in Germany. Using matched employer-employee data for the universe of German workers over the period 1975 to 2008, I show that there is substantial ethnic segregation across both workplaces and residential locations and that the extent of segregation has been relatively stable over the last 30 years. Workplace segregation is particularly pronounced in agriculture and mining, construction, and the service sector, and among low-educated workers. Ethnic minority workers are segregated not only from native workers but also from workers of other ethnic groups, but less so if they share a common language. From a dynamic perspective, for given cohorts of workers, the results show a clear pattern of assimilation, reminiscent of typical earnings assimilation profiles, with immigrants being increasingly less likely to work in segregated workplaces with time spent in the host country.
    Keywords: Ethnic Minorities, Residential Segregation, Workplace Segregation.
    JEL: J61 J63 J31
    Date: 2012–09
  23. By: Hein Roelfsema; Yi Zhang
    Abstract: This paper explores the connection between the external opening of China and differences in innovation across Chinese regions. Controlling for locational advantages and fixed regional characteristics, for the period 1995-2010 overall we find that regions that have increased most the connections to the world market have become more innovative when compared to other regions. By interacting regional characteristics with openness, we find a U-shaped relation between regional income levels and innovation, where both the lower middle-income and the most advanced regions gain from globalization in terms of increased innovation and productivity. In relative terms, the higher middle-income regions gain less from globalization than the other regions. By examining the nature of international activities across regions, we conjecture that differences in the ownership structures of foreign investments and the nature of linkages between foreign and domestic firms are at the hart of this finding, as the higher middle-income regions have higher outsourcing levels and thus benefit less from foreign technology transfers.
    Keywords: Globalization, Innovation, Regional Development, China
    JEL: F14 F21 F23 O33 O53
    Date: 2012–09
  24. By: Blanchet, Adrien (GREMAQ, TSE); Carlier, Guillaume (CEREMAD, Dauphine)
    Abstract: We study a class of games with a continuum of players for which Cournot-Nash equilibria can be obtained by the minimisation of some cost, related to optimal transport. This cost is not convex in the usual sense in general but it turns out to have hidden strict convexity properties in many relevant cases. This enables us to obtain new uniqueness results and a characterisation of equilibria in terms of some partial differential equations, a simple numerical scheme in dimension one as well as an analysis of the inefficiency of equilibria.
    Keywords: Cournot-Nash equilibria, mean-field games, optimal transport, externalities, Monge-Amp`ere equations, convexity along generalised geodesics.
    Date: 2012
  25. By: Florian Ploeckl
    Abstract: Information technology, like the telephone, influences market access; this paper answers the question about a reverse effect, does market access affect information technology, in particular its adoption? Using the introduction of the telephone in Bavaria, I demonstrate with a rank, order and stock effects diffusion model how market access affects the diffusion of local telephone exchanges over towns as well as the rate of adoption of telelphone lines within towns. The results of a duration analysis show that market access speeds up the diffusion, a spatial correlation specification demonstrates that this is not just a geographic effect. The rate of adoption within towns is also affected by the adoption of lines in other towns, the results indicate that about 4% of all lines are due to the ability to call outside your local exchange network. Market access is therefore shown to impact the adoption of technology.
    Keywords: Information technology adoption, Market access, Spatial diffusion, Bavaria, Telephone
    JEL: L92 N73 N93 O33
    Date: 2012
  26. By: John Y. Campbell; Tarun Ramadorai; Benjamin Ranish
    Abstract: To understand the effects of regulation on mortgage risk, it is instructive to track the history of regulatory changes in a country rather than to rely entirely on cross-country evidence that can be contaminated by unobserved heterogeneity. However, in developed countries with fairly stable systems of financial regulation, it is difficult to track these effects. We employ loan-level data on over a million loans disbursed in India over the 1995 to 2010 period to understand how fast-changing regulation impacted mortgage lending and risk. We find evidence that regulation has important effects on mortgage rates and delinquencies in both the time-series and the cross-section.
    JEL: G21
    Date: 2012–09
  27. By: Jackson, Matthew O.; Zenou, Yves
    Abstract: We provide an overview and synthesis of the literatures analyzing games where players are connected via a network structure. We study, in particular, the impact of the structure of the network on individuals’ behaviors. We focus on the game theoretic modeling, but also include some discussion of analyses of peer effects, as well as applications to diffusion, employment, crime, industrial organization, and education.
    Keywords: games on networks; games with incomplete information; graphical games; network games; peer effects.; social networks
    JEL: A14 C72 D85
    Date: 2012–09
  28. By: Laura Lane; Liz Richardson
    Abstract: The report describes the results of a three-year evaluation by LSE Housing and Communities of a family learning programme called Playing 2 Learn. The Playing 2 Learn programme was open to vulnerable families from low income communities across England. It was delivered by a charity, Trafford Hall, home of the National Communities Resource Centre between 2008 and 2011. It consisted of 26 residential weekend events with 795 adult and child family members from a total of 205 families attending. The weekends used creative, low cost play activities to promote play-based learning. The evaluation used baseline data collected by the programme, self-reported short-, medium- and longer-term outcomes based on written feedback from 62% of participating families, in-depth interviews with the purposive sample of 20 families, assessments from referral agencies, interviews with delivery staff, and observations of the residential events. It finds that the families participating in the programme experienced a series of pressures that undermined their ability to engage positively and spend time with their children at home, including family breakdown and formation, pressures of low-incomes, health and behavioural issues. Outcomes for families from the programme were assessed under four themes. First, there was improved family interaction over the short-, medium- and longer-terms, for example reading together and doing messy play. Second, parents' and carers' attitudes towards and input into children's opportunities for play were also improved, including getting new ideas for affordable play activities and continuing to use them up to two years after attending the weekends. To the extent that the evaluation was able to measure, the impacts on younger children's ability to learn were much more limited. Fourthly, there were positive impacts on parents' and carers' participation in the community for around a quarter of respondents, and wider impacts on parents' and carers' self-esteem and confidence, primarily through the support of meeting other families in similar situations. The report concludes that the value of the residential setting was to help families to experience new challenges. The experiential hands-on approach helped to generate long-lasting impacts. Many of the families on the programme were going through tough times that play alone could not resolve. The Programme succeeded in its goals to be a 'snapshot removed from the everyday', on which families could draw for inspiration when they return to their often challenging daily lives.
    Keywords: Family intervention, family learning, play, vulnerable families, evaluation
    JEL: I31
    Date: 2012–08
  29. By: Narayan Sastry; Jesse Gregory
    Abstract: Using individual data from the restricted version of the American Community Survey, we examined the displacement locations of pre-Katrina adult residents of New Orleans in the year after the hurricane. Over half (53%) of adults had returned to—or remained in—the New Orleans metropolitan area, with just under one-third of the total returning to the dwelling in which they resided prior to Katrina. Among the remainder, Texas was the leading location with almost 40% of those living away from the metropolitan area (18% of the total), followed by other locations in Louisiana (12%), the South region of the US other than Louisiana and Texas (12%), and elsewhere in the U.S. (5%). Black adults were considerably more likely than nonblack adults to be living elsewhere in Louisiana, in Texas, and elsewhere in the South. The observed race disparity was not accounted for by any of the demographic or socioeconomic covariates in the multinomial logistic regression models. Consistent with hypothesized effects, we found that young adults (25–39 years of age) were more likely to move further away from New Orleans and that adults born outside Louisiana were substantially more likely to have relocated away from the state.
    Date: 2012–09
  30. By: Alfonso Miranda; Yu Zhu
    Abstract: We focus on the effect of English deficiency on the native-immigrant wage gap for employees in the UK using the first wave of the UK Household Longitudinal Survey (Understanding Society). We show that the wage gap is robust to controls for age, region of residence, educational attainment and ethnicity, particularly for men. However, English as Additional Language (EAL) is capable of explaining virtually all the remaining wage gap between natives and immigrants. Using the interaction of language of country of birth and age-at-arrival as instrument, we find strong evidence of a causal effect of EAL on the native-immigrant wage gap.
    Keywords: native-immigrant wage gap; English as Additional Language (EAL); age-at-arrival
    JEL: J15 J61
    Date: 2012–09
  31. By: Stark, Oded; Jakubek, Marcin
    Abstract: A migration network is modeled as a mutually beneficial cooperative agreement between financially-constrained individuals who seek to finance and expedite their migration. The cooperation agreement creates a network: “established” migrants contract to support the subsequent migration of others in exchange for receiving support themselves. When the model is expanded to study cooperation between more than two migrants, it emerges that there is a finite optimal size of the migration network. Consequently, would-be migrants in the sending country will form a multitude of networks, rather than a single grand network.
    Keywords: Migration networks, Schedule of migration, Sequential migration, Affinity, Interpersonal bonds, Cost of migration, Community/Rural/Urban Development, Institutional and Behavioral Economics, Labor and Human Capital, D01, D71, D90, F22, F24, J61, O15,
    Date: 2012–08

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