nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒10‒20
27 papers chosen by
Steve Ross
University of Connecticut

  1. Locational signaling and agglomeration By Berliant, Marcus; Yu, Chia-Ming
  2. Monocentric Cities, Endogenous Agglomeration, and Unemployment Disparities By Ulrich Zierahn
  3. The impact of house prices on consumer credit: evidence from an internet bank By Rodney Ramcharan; Christopher Crowe
  4. The Impact of Urban Enterprise Zones on Establishments' Location Decisions: Evidence from French ZFUs By Thierry MAYER; Florian MAYNERIS; Loriane PY
  5. Regional Disparity, Transitional Dynamics and Convergence in China By Tsun Se Cheong; Yanrui Wu
  6. The Headmaster Ritual: The Importance of Management for School Outcomes By Böhlmark, Anders; Grönqvist, Erik; Vlachos, Jonas
  7. The Friends Factor: How Students’ Social Networks Affect Their Academic Achievement and Well-Being? By Victor Lavy; Edith Sand
  8. Are School Vouchers Associated with Equity in Education? By OECD
  9. Gulag, WWII and the Long-run Patterns of Soviet City Growth By Mikhailova, Tatiana
  10. Peer Effects in Risk Aversion By Ana I. Balsa; Néstor Gandelman; Nicolás Gonzalez
  11. The Impact of Immigration on the Educational Attainment of Natives By Hunt, Jennifer
  12. Intra-Provincial Inequality in China: An Analysis of County-Level Data By Tsun Se Cheong; Yanrui Wu
  13. Selection and Tracking in Secondary Education; A cross country analysis of student performance and educational opportunities By Korthals Roxanne
  14. Sharing Norm Pressures and Community Remittances: Evidence from a Natural Disaster in the Pacific Islands By Richard P.C Brown; Gareth Leeves; Prabha Prayaga
  15. The Patterns of Regional Inequality in China By Tsun Se Cheong
  16. Economic integration and agglomeration in a customs union in the presence of an outside region By Pasquale Commendatore; Ingrid Kubin; Carmelo Petraglia; Iryna Sushko
  17. The political economy of infrastructure planning in Sweden: supporting analyses By Jussila Hammes, Johanna
  18. Consumer Expertise or Credit Risk? An empirical analysis of mortgage pricing By Barrutia Legarreta, José María; Espinosa Alejos, María Paz
  19. Selection and tracking in secondary education: A cross country analysis of student performance and educational opportunities By Korthals Roxanne
  20. Education and Migration Choices in Hierarchical Societies: The Case of Matam, Senegal. By Auriol, Emmanuelle; Demonsant, Jean-Luc
  21. Child Education and the Family Income Gradient in China By Paul Frijters; Luo Chuliang; Xin Meng
  22. Do Single-Sex Schools Enhance Students’ STEM (Science, Technology, Engineering, and Mathematics) Outcomes? By Hyunjoon Park; Jere R. Behrman; Jaesung Choi
  23. Neighbourhood Effects Research at a Crossroads: Ten Challenges for Future Research By Maarten van Ham; David Manley
  24. The anatomy of a credit crisis: the boom and bust in farm land prices in the United States in the 1920s By Rodney Ramcharan; Raghuram Rajan
  25. Improved tests for spatial correlation By Robinson, Peter M.; Rossi, Francesca
  26. The Geography of the Great Recession By Enoch Hill; Alessandra Fogli; Fabrizio Perri
  27. Peers' influence on political choices: Evidence from random classroom assignments in college By Camila Campos; Fernanda L L de Leon

  1. By: Berliant, Marcus; Yu, Chia-Ming
    Abstract: Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at that location. When workers' marginal willingness to pay for housing is negatively correlated with their productivity, skill-biased technological change causes a core-periphery equilibrium where only the core-periphery (partially stratified) equilibria are stable. When workers' marginal willingness to pay for housing and their productivity are positively correlated, skill-biased technological improvements will never result in a core-periphery equilibrium. Location can at best be an approximate rather than a precise sieve for high-skill workers.
    Keywords: Agglomeration; Adverse Selection; Asymmetric Information; Locational Signaling
    JEL: R13 D82 D51
    Date: 2012–10–08
  2. By: Ulrich Zierahn (University of Kassel/ HWWI)
    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 effciency 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, Effciency Wages, Unemployment, Disparities, Regional Migration
    JEL: R12 R14 R23
    Date: 2012
  3. By: Rodney Ramcharan; Christopher Crowe
    Abstract: This paper shows that house price fluctuations can have a significant impact on credit markets well beyond the mortgage segment. Using new data from, a peer to peer lending site that matches borrowers and lenders to provide unsecured consumer loans, we find evidence that home owners in states with declining house prices face higher interest rates and greater rationing of credit, while also becoming delinquent faster. Investigating the mechanism, we find separate supply and demand effects, and especially large effects for those subprime borrowers whose balance sheets are likely to be most exposed to asset price declines. This evidence suggests that asset price fluctuations can play an important part in determining credit conditions and are thus a potentially significant mechanism for propagating macroeconomic shocks.
    Date: 2012
  4. By: Thierry MAYER (Sciences-Po, CEPII, CEPR); Florian MAYNERIS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Loriane PY (Banque de France)
    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: firm location, enterprise zones, spatial differencing
    JEL: R12 R38 R58
    Date: 2012–09–28
  5. By: Tsun Se Cheong (Business School, University of Western Australia); Yanrui Wu (Business School, University of Western Australia)
    Abstract: Most studies of regional inequality in China are based on provincial level data with a few papers focusing on intra-provincial regional inequality. The objective of this study is to fill the void in the literature by using county-level data which cover 1485 counties and county-level cities in 22 provinces for the period of 1997-2007. This paper makes several contributions to the literature. First, the disparity between city and county subgroups within each province is examined. Second, the transitional dynamics of regional inequality are investigated for different spatial groups using the Markov transition matrix approach. Third, the stochastic kernel technique is applied to investigate convergence of the county-level units as a whole. The findings in this paper show high persistence in many spatial groups. Thus the poor county-level units may remain relatively poor over time. The model provides very little evidence of convergence to the mean income in various spatial groups. The empirical analysis highlights differences in transitional dynamics between cities and counties.
    Date: 2012
  6. By: Böhlmark, Anders (Swedish Institute for Social Research (SOFI)); Grönqvist, Erik (Institute for Labour Market Policy Evaluation (IFAU)); Vlachos, Jonas (Research Institute of Industrial Economics (IFN))
    Abstract: The role of school principals largely resembles that of corporate managers and the leadership they provide are often viewed as a crucial component for educational success. We estimate the impact of individual principals on various schooling outcomes, by constructing a principal-school panel data set that allows us to track individual principals as they move between schools. We find that individual principals have a substantive impact on school policies, working conditions and student outcomes. Particularly, students who attend a school with a one standard deviation better principal receive on average 0.12 standard deviations higher test scores. Despite having very rich background information on principals, it is difficult to determine which principal characteristics that form the basis for successful school management. We also find a somewhat mixed picture on what management style characterizes a successful principal. We further show that the scope for principal discretion – for better or for worse – is larger in small schools, in voucher schools and in areas with more school competition.
    Keywords: Principals; School Management
    JEL: D10 I10 J10
    Date: 2012–10–10
  7. By: Victor Lavy; Edith Sand
    Abstract: In this paper, we estimate the influence of social relationships on educational attainment and social outcomes of students in school. More specifically, we investigate how losing different types of social relationships during the transition from elementary to middle school affect students' academic progress and general well-being. We use social relationships identified by the students themselves in elementary school, as part of a unique aspect of the Tel Aviv school application process which allows sixth-grade students to designate their middle schools of choice and to list up to eight friends with whom they wish to attend that school. The lists create natural “friendship hierarchies” that we exploit in our analysis. We designate the three categories of requited and unrequited friendships that stem from these lists as follows: (1) reciprocal friends (students who list one another); and for those whose friendship requests did not match: (2) followers (those who listed fellow students as friends but were not listed as friends by these same fellow students) and (3) non-reciprocal friends (parallel to followers). Following students from elementary to middle school enables us to overcome potential selection bias by using pupil fixed-effect methodology. Our results suggest that the presence of reciprocal friends and followers in class has a positive and significant effect on test scores in English, math, and Hebrew. However, the number of friends in the social network beyond the first circle of reciprocal friends has no effect at all on students. In addition, the presence of non-reciprocal friends in class has a negative effect on a student’s learning outcomes. We find that these effects have interesting patterns of heterogeneity by gender, ability, and age of students. In addition, we find that these various types of friendships have positive effects on other measures of well-being, including social and overall happiness in school, time allocated for homework, and whether one exhibits violent behavior.
    JEL: D8 J0
    Date: 2012–10
  8. By: OECD
    Abstract: <UL> <LI>Privately managed schools tend to attract more advantaged student populations; but the difference between the socio-economic profiles of public and private schools is narrowed when privately managed schools receive higher levels of public funding.</LI> <LI>The difference between the socio-economic profiles of publicly and privately managed schools tends to be twice as large in school systems that use universal vouchers as in systems that use targeted vouchers.</LI></UL>
    Date: 2012–09
  9. By: Mikhailova, Tatiana
    Abstract: This paper analyzes the geographical patterns of city growth in the Soviet Union and the Russian Federation in relation to the Stalinist policies of the 1930s to 1950s, and WWII. Using a unique data set on the locations of Gulag camps, and on the evacuation of industrial enterprises during WWII, I estimate the effect of these factors on city growth throughout the Soviet and post-Soviet period. The cities where Gulag camps were located grew significantly faster than similar cities without camps. WWII events (location of the frontlines, evacuation) also affected local population growth, but their impact diminished with time and disappeared completely after 25 years. In contrast, the effect of Gulag camps has been permanent.
    Keywords: Cities; USSR; Gulag; WWII
    JEL: P25 R12 R11
    Date: 2012–09–09
  10. By: Ana I. Balsa; Néstor Gandelman; Nicolás Gonzalez
    Abstract: Using data on Uruguayan adolescents, we estimate peer effects in risk attitudes. Relative risk aversion is elicited in an experimental setting. Identification is based on parents not being able to choose the class within the school of their choice. After controlling for school-grade fixed effect and addressing endogeneity due to simultaneity, we find a significant and quantitative large impact of peers on individuals risk aversion. An increase in one standard deviation of the group risk aversion produces an increase in 44-64% on an individual risk aversion. These findings enhance the importance of multiplicative effects related to risk behavior.
    Keywords: risk aversion; peer effects; instrumental variables
    JEL: I12 D1
    Date: 2012
  11. By: Hunt, Jennifer
    Abstract: Using a state panel based on census data from 1940-2010, I examine the impact of immigration on the high school completion of natives in the United States. Immigrant children could compete for schooling resources with native children, lowering the return to native education and discouraging native high school completion. Conversely, native children might be encouraged to complete high school in order to avoid competing with immigrant high-school dropouts in the labor market. I find evidence that both channels are operative and that the net effect is positive, particularly for native-born blacks, though not for native-born Hispanics. An increase of one percentage point in the share of immigrants in the population aged 11-64 increases the probability that natives aged 11-17 eventually complete 12 years of schooling by 0.3 percentage points, and increases the probability for native-born blacks by 0.4 percentage points. I account for the endogeneity of immigrant flows by using instruments based on 1940 settlement patterns.
    Keywords: Education; Immigration
    JEL: I21 J15
    Date: 2012–10
  12. By: Tsun Se Cheong (Business School, University of Western Australia); Yanrui Wu (Business School, University of Western Australia)
    Abstract: This study applies a decomposition technique to analyze China’s regional inequality using county-level data. It is shown that inter-provincial inequality increased significantly during 1997-2007. It is also shown that, although inter-county-level-unit inequality within all the provinces remained more or less the same during the period considered, its contribution to the overall inequality (based on the Theil-T index) amounted to about 60% in 2007. This means that intra-provincial regional inequality is the crux of the problem of regional inequality in China. According to the estimates of the Theil-T index, the increase in intra-provincial regional inequality contributed to 63% of the increase in overall inequality during over the period covered, whereas the provinces of Jiangsu, Hebei and Inner Mongolia together contributed 47%. The county-level data is then divided into city and county subgroups. Further decomposition based on the Theil-T index shows that the inter-county inequality component contributed a much higher proportion than the inter-city inequality component, whereas the component of the inequality between the city and county subgroups contributed the least to the intra-provincial regional inequality. The results from the decomposition also suggest that each province has its own characteristics and evolution pattern of inequality. The decomposition of the intra-provincial regional inequality for each province shows that provinces in the central and western zones should focus on the alleviation of inter-county inequality, while provinces in the north-eastern zone should concentrate on inter-city inequality. The provinces in the eastern zone should focus on both inter-county and inter-city inequalities. The provinces of Fujian, Jiangsu, Henan, Guizhou, and Qinghai should pay attention to the inequality between city and county subgroups.
    Date: 2012
  13. By: Korthals Roxanne (METEOR)
    Abstract: This paper examines the effect of tracking in secondary school on student performance and educational opportunities, taking into account whether prior performance is considered when students are selected in the different tracks. The sample consists of data from the Programme for International Student Assessment 2009 for around 185,000 students in 31 comparable countries. The results are controlled for student- and school-level confounders. The results indicate that when tracking is implemented, it does not have a direct relation with performance. However, system and school interactions reveal that a highly differentiated system is best for student performance when schools always take into account prior performance to decide on student acceptance. In systems with a fewtracks, admission rules have less of an impact and tracking is only mildly associated with performance. Equality of opportunity is best provided for in a system with many tracks, especially when schools always consider entrance requirements. However, caution is warranted in interpreting these results since selection issues could play a role.
    Keywords: education, training and the labour market;
    Date: 2012
  14. By: Richard P.C Brown (School of Economics, The University of Queensland); Gareth Leeves; Prabha Prayaga (School of Economics, The University of Queensland)
    Abstract: Migrants are often subject to social pressures to remit beyond their own households, to share the benefits of migration with the wider community in their home country; these are ‘community remittances’. We hypothesize that community sharing norm pressures are stronger in locations with more extensive home-community networks. We also postulate that the responsiveness of remittances to sharing pressures is subject to diminishing returns, attributable to a donor fatigue effect. Using customized survey data from three Polynesian migrant groups in metropolitan and regional Australia, we estimate double-hurdle regression models of community remittances. To identify the effects of sharing norm pressures we exploit an exogenous (cyclone) shock to home country incomes affecting one sub-group. We find strong evidence in support of the postulated responsiveness of community remittances to location-related differences in sharing norm pressures, and the presence of a donor fatigue effect. The policy implications are discussed.
    Date: 2012–10–01
  15. By: Tsun Se Cheong (Business School, University of Western Australia)
    Abstract: This paper presents the inequality measures for different spatial groupings in China from 1997 to 2007. The intra-provincial inequality within each province, that is, the inequality amongst the county-level units within each province, is derived. It is found that the levels of inequality in the nation, the coastal and inland regions, the four economic zones, and most of the provinces increased over the study period. The levels of inequality amongst the county-level units in the eastern and western zones were higher than that in the other zones over the study period. The results show that the provinces with a high level of inequality are mostly situated in the northern part of China. The provinces are observed to have very different patterns of inequality, even if they are in the same economic zone. Moreover, it is found that Jiangsu had the highest level of intra-provincial regional inequality in 2007.
    Date: 2012
  16. By: Pasquale Commendatore (University of Naples “Federico II”, Italy); Ingrid Kubin (Department of Economics, Vienna University of Economics and Business); Carmelo Petraglia (University of Basilicata, Italy); Iryna Sushko (Institute of Mathematics, National Academy of Sciences of Ukraine)
    Abstract: New Economic Geography (NEG) models do not typically account for the presence of regions other than the ones involved in the integration process. We explore such a possibility in a Footloose Entrepreneur (FE) model aiming at studying the stability properties of long-run industrial location equilibria. We consider a world economy composed by a customs union of two regions (regions 1 and 2) and an “outside region” which can be regarded as the rest of the world (region 3). The effects of economic integration on industrial agglomeration within the customs union are studied under the assumption of a constant distance between the customs union itself and the third region. The results show that higher economic integration does not always implies the standard result of full agglomeration of FE models. This incomplete agglomeration outcome is due to the fact that the periphery region keeps a share of industrial activities in order to satisfy a share of “external demand”. That is, the deindustrialization process brought about by economic integration in the periphery of the union is mitigated by the demand of consumers living in the rest of the world. In general, the market size of the third region affects the number of the long-run equilibria, as well as their stability properties. In addition to the standard outcomes of FE models, we describe the existence of two asymmetric equilibria characterised by unequal distribution of firms between regions 1 and 2, with no full agglomeration though. Interestingly, these equilibria are stable and therefore can be regarded as a likely long-run equilibrium state of the economy.
    Keywords: industrial agglomeration, three-region NEG models, footloose entrepreneurs
    JEL: C62 F12 F2 R12
    Date: 2012–10
  17. By: Jussila Hammes, Johanna (VTI)
    Abstract: We study factors affecting the choice of objects to be included in the National Transport Infrastructure Plans for 2004-2015 and for 2010-2021 in Sweden, controlling for the CBA results. The present working paper contains both a comparative analysis between the two Plans, and sensitivity analyses for the econometric regressions of the 2010-21 Plan conducted in Jussila Hammes (forthcoming). We find that the centre-right government tended to favour those counties that voted for it. Both a centre-right and a centre-left government have favoured rail investments over road. Lobbying also matters; projects with co-financing from the local municipality(ies) have a greater probability of being included in the Plan. Industry lobbying has at best a borderline significant effect and affects the probability of a project being included in the Plan positively.
    Keywords: Transport infrastructure plan; Lobbying; Co-financing; Freight benefits; Politics
    JEL: D61 D72 L98
    Date: 2012–10–04
  18. By: Barrutia Legarreta, José María; Espinosa Alejos, María Paz
    Abstract: Loan mortgage interest rates are usually the result of a bank-customer negotiation process. Credit risk, consumer cross-buying potential, bundling, financial market competition and other features affecting the bargaining power of the parties could affect price. We argue that, since mortgage loan is a complex product, consumer expertise could be a relevant factor for mortgage pricing. Using data on mortgage loan prices for a sample of 1055 households for the year 2005 (Bank of Spain Survey of Household Finances, EFF-2005), and including credit risk, costs, potential capacity of the consumer to generate future business and bank competition variables, the regression results indicate that consumer expertise-related metrics are highly significant as predictors of mortgage loan prices. Other factors such as credit risk and consumer cross-buying potential do not have such a significant impact on mortgage prices. Our empirical results are affected by the credit conditions prior to the financial crisis and could shed some light on this issue.
    Keywords: credit risk, interest rates dispersion, mortgage loan pricing, consumer expertise, knowledge
    Date: 2012
  19. By: Korthals Roxanne (ROA rm)
    Abstract: This paper examines the effect of tracking in secondary school on student performanceand educational opportunities, taking into account whether prior performance isconsidered when students are selected in the different tracks. The sample consistsof data from the Programme for International Student Assessment 2009 for around185,000 students in 31 comparable countries. The results are controlled for student- andschool-level confounders. The results indicate that when tracking is implemented, it doesnot have a direct relation with performance. However, system and school interactionsreveal that a highly differentiated system is best for student performance when schoolsalways take into account prior performance to decide on student acceptance. In systemswith a few tracks, admission rules have less of an impact and tracking is only mildlyassociated with performance. Equality of opportunity is best provided for in a systemwith many tracks, especially when schools always consider entrance requirements.However, caution is warranted in interpreting these results since selection issues couldplay a role.
    Keywords: labour market entry and occupational careers;
    Date: 2012
  20. By: Auriol, Emmanuelle; Demonsant, Jean-Luc
    Abstract: This paper examines determinants of schooling in traditional hierarchical societies with an established history of outmigration. In the village, a ruling caste controls local political and religious institutions. For children who do not belong to the ruling caste, migration is a strategy to increase social mobility, a process that is enhanced by formal schooling. Since formally educated migrants tend not to return to the home community, the ruling caste seeks to develop family loyalty by choosing religious education instead. The theory hence predicts that the social status of the family has a significant impact on the parental educational choices of future migrant children. Children from the ruling caste who are encouraged by their parents to migrate have a lower probability of being sent to formal school than children from the low caste. The theoretical predictions are tested on data from the Matam region in Senegal, a region where roughly one of every two children has ever attended school.
    JEL: I21 O12 O15 O17 Z13
    Date: 2012–05
  21. By: Paul Frijters (School of Economics, The University of Queensland); Luo Chuliang; Xin Meng
    Abstract: This paper looks at the relation between education and family income using a 2008-2009 survey of nearly 10,000 children in 15 cities and nine provinces throughout China. We use school test scores on mathematics and language, as well as parent-reported educational progress, out-of-pocket expenses, and self-reported quality of schooling. Across all measures, children from wealthier families do better, but the gap is much smaller for older children than younger children in rural areas and is almost entirely gone at the end of secondary school. In Chinese cities and in Western countries like the US the opposite is the case, with the gap between children from poor and rich households staying constant or even widening as the kids get older. Our explanation is that it takes a generation of universal education for ability, education, and parental income to become highly correlated, which will already have happened in Chinese cities and in Western countries, but is only just now happening in rural areas in China. Accordingly, the relation between family income and child ability increases over generations, reducing future education and income mobility.
    Date: 2012–10–01
  22. By: Hyunjoon Park (Department of Sociology and Education, University of Pennsylvania); Jere R. Behrman (Department of Economics and Sociology, University of Pennsylvania); Jaesung Choi (Department of Economics, University of Pennsylvania)
    Abstract: Despite women’s significant improvement in educational attainment, underrepresentation of women in Science, Technology, Engineering, and Mathematics (STEM) college majors persists in most countries. We address whether one particular institution – single-sex schools – may enhance female – or male – students’ STEM careers. Exploiting the unique setting in Korea where assignment to all-girls, all-boys or coeducational high schools is random, we move beyond associations to assess causal effects of single-sex schools. We use administrative data on national college entrance mathematics examination scores and a longitudinal survey of high school seniors that provide various STEM outcomes (mathematics and science interest and self-efficacy, expectations of a four-year college attendance and a STEM college major during the high school senior year, and actual attendance at a four-year college and choice of a STEM major two years after high school). We find significantly positive effects of all-boys schools consistently across different STEM outcomes, whereas the positive effect of all-girls schools is only found for mathematics scores.
    Keywords: Africa, Economic Shocks, Child Schooling
    JEL: N37 E30 I21
    Date: 2012–09–18
  23. By: Maarten van Ham; David Manley
    JEL: R10 I31
    Date: 2012
  24. By: Rodney Ramcharan; Raghuram Rajan
    Abstract: Does credit availability exacerbate asset price inflation? What channels could it work through? What are the long run consequences? In this paper we address these questions by examining the farm land price boom (and bust) in the United States that preceded the Great Depression. We find that credit availability likely had a direct effect on inflating land prices. Credit availability may have also amplified the relationship between the perceived improvement in fundamentals and land prices. When the perceived fundamentals soured, however, areas with higher ex ante credit availability suffered a greater fall in land prices, and experienced higher bank failure rates. Land prices stayed low for a number of decades after the bust in areas that had higher credit availability, suggesting that the effects of booms and busts induced by credit availability might be persistent. We draw lessons for regulatory policy.
    Date: 2012
  25. By: Robinson, Peter M.; Rossi, Francesca
    Abstract: We consider testing the null hypothesis of no spatial autocorrelation against the alternative of first order spatial autoregression. A Wald test statistic has good first order asymptotic properties, but these may not be relevant in small or moderate-sized samples, especially as (depending on properties of the spatial weight matrix) the usual parametric rate of convergence may not be attained. We thus develop tests with more accurate size properties, by means of Edgeworth expansions and the bootstrap. The finite-sample performance of the tests is examined in Monte Carlo simulations.
    Keywords: Spatial Autocorrelation; Ordinary Least Squares; Hypothesis Testing; Edgeworth Expansion; Bootstrap
    JEL: C12 C21
    Date: 2012–06–22
  26. By: Enoch Hill; Alessandra Fogli; Fabrizio Perri
    Abstract: This paper documents, using county level data, some geographical features of the US business cycle over the past 30 years, with particular focus on the Great Recession. It shows that county level unemployment rates are spatially dispersed and spatially correlated, and documents how these characteristics evolve during recessions. It then shows that some of these features of county data can be generated by a model which includes simple channels of transmission of economic conditions from a county to its neighbors. The model suggests that these local channels are quantitatively important for the amplification/muting of aggregate shocks.
    JEL: E32 R12
    Date: 2012–10
  27. By: Camila Campos (Insper); Fernanda L L de Leon (University of East Anglia)
    Abstract: Social networks are believed to a§ect individuals’ political views; however, quantifying this e§ect and understanding the channels behind this influence are empirically challenging. This study investigates peer e§ects on political behavior, using a self-collected survey among freshmen from the largest university in Brazil. The identification relies on the random assignment of freshmen to classrooms. We found that a relevant peer influence occurs through classmates’ political involve- ment, increasing students’ political participation, knowledge and moving their ideologies toward the center. Other mechanisms of influence, such as social pres- sure to adopt certain views or reinforcement of one’s own preferences, were not observed in the data.
    Date: 2012–10–07

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