nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒11‒03
twenty papers chosen by
Steve Ross
University of Connecticut

  1. Driving Up Wages: The Effects of Road Construction in Great Britain By Rosa Sanchis-Guarner
  2. Does New Economic Geography Faithfully Describe Reality? By TABUCHI Takatoshi
  3. Optimal portfolio choice with predictability in house prices and transaction costs By Stefano Corradin; José L. Fillat; Carles Vergara-Alert
  4. Optimal Agglomerations in Dynamic Economics By William A. Brock; Anastasios Xepapadeas; Athanasios N. Yannacopoulos
  5. Migration, Cultural Diversity and Innovation: A European Perspective By Cristina Cattaneo
  6. School quality, labor markets and human capital investments : long-term impacts of an early stage education intervention in the Philippines By Yamauchi, Futoshi; Liu, Yanyan
  7. Impacts of an early stage education intervention on students'learning achievement : evidence from the Philippines By Yamauchi, Futoshi; Liu, Yanyan
  8. Performance Evaluation of Urban Local Governments: A Case for Indian Cities By Simanti Bandyopadhyay
  9. When does globalization lead to local adaptation? The emergence of hybrid Islamic schools in Turkey, 1985-2007 By Divarci A.; Boone Ch.; Van Witteloostuijn A.
  10. Life is Now! Time Discounting and Crime: Aggregate Evidence from the Italian Regions (2002-2007) By Sergio Beraldo; Raul Caruso; Gilberto Turati
  11. Taxation and public service provision: Taxes on road transport and fuel in Congo By Kambale Mirembe, Omer
  12. Fiscal Incentives and Environmental Infrastructure in China By Liu, Antung Anthony; Zhang, Junjie
  13. Gender Differences in Residential Mobility: The Case of Leaving Home in East Germany By Ferdinand Geissler; Thomas Leopold; Sebastian Pink
  14. Eyes Wide Shut? The U.S. House Market Bubble through the Lense of Statistical Process Control By Berlemann, Michael; Freese, Julia; Knoth, Sven
  15. Immigrant Networks and the Take-Up of Disability Programs: Evidence from U.S. Census Data By Delia Furtado; Nikolaos Theodoropoulos
  16. SPATIAL RETAIL PRICING STRATEGIES FOR BEER IN GERMANY By Empen, Janine; Glauben, Thomas; Loy, Jens-Peter
  17. Monetary Policy and the Housing Market: A Structural Factor Analysis By Mattéo Luciani
  18. Primary Education: Barriers to Entry and Bottlenecks to Completion By Albert, Jose Ramon G.; David, Clarissa
  19. How Distance to a Non-Residential Parent Relates to Child Outcomes By Astrid Würtz Rasmussen; Leslie S. Stratton
  20. The Effect of Social Fragmentation on Public Good Provision: an Experimental Study By Surajeet Chakravarty; Miguel A. Fonseca

  1. By: Rosa Sanchis-Guarner
    Abstract: This paper estimates the effects of road construction on individual labour market outcomes using micro-data from Great Britain between 2002 and 2008. To capture these effects, I use a measure of accessibility to employment through the road network at a very detailed geographical level. I test the effect of accessibility changes on weekly wages and hours worked. In order to tackle potential sources of bias, I use an instrumental variable which exploits the variation in employment accessibility stemming only from changes in minimum travel times between locations. I argue that, conditional on controls, small scale spatial variation in the accessibility impact of road construction can be considered to be exogenous because road schemes are aimed to improve connectivity and reduce congestion for wider and more distant areas. I further use home and work location specific individual fixed-effects to control for endogenous sorting of workers and I also restrict the sample to workers who are located very close to the projects. I find a positive impact of accessibility from work location on weekly wages and total hours worked but no effect of accessibility from home neither on wages nor hours, conditional on commuting time. These effects are not due to selection into employment as a result of road construction. I also find evidence of accessibility from home reducing commuting travel time. Increased spatial competition or agglomeration externalities are potential explanations for the findings.
    Keywords: Job accessibility, labour markets, roads, spatial sorting
    JEL: J31 R12
    Date: 2012–10
  2. By: TABUCHI Takatoshi
    Abstract: This paper shows that new economic geography models are capable of simulating the real-world tendency for urban agglomeration to the primate city. It is often observed that while regional populations were dispersed in early times, they have been increasingly concentrated into one capital region over recent years. The present paper thus demonstrates that multi-region, new economic geography models are able to simulate the real-world population distribution trends witnessed over the past few centuries.
    Date: 2012–10
  3. By: Stefano Corradin (European Central Bank); José L. Fillat (Federal Reserve Bank of Boston); Carles Vergara-Alert (IESE Business School)
    Abstract: We generalize the classic Grossman and Laroque (1990) (GL) model of optimal portfolio choice with housing and transaction costs by introducing predictability in house prices. As in the GL model, agents only move to more expensive (cheaper) houses when their wealth-to-housing ratios reach an optimal lower (upper) boundary. However, in our model, these boundaries are time-varying and depend on the dynamics of the expected growth rate of house prices. We find that households moving to a more expensive house in periods of high expected growth in house prices have significantly lower ex-ante wealth-to-housing ratios than those moving in periods of low expected growth. We also find that the share of wealth invested in risky assets is lower during periods of high expected growth in house prices and that it is higher right before moving during periods of low growth. The main implications of the model are robust to tests using household level data from the PSID and SIPP surveys. JEL Classification: G11, D11, D91, C61
    Keywords: Durable goods, transaction costs, housing returns predictability, optimal housing consumption and investment
    Date: 2012–09
  4. By: William A. Brock (Department of Economics, University of Wisconsin, USA); Anastasios Xepapadeas (Department of International and European Economic Studies, Greece); Athanasios N. Yannacopoulos (Department of Statistics Athens University of Economics and Business, Greece)
    Abstract: We study rational expectations equilibrium problems and social optimum problems in infinite horizon spatial economies in the con- text of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in infinite dimensional Hilbert spaces. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics.
    Keywords: Agglomeration, Spatial Spillovers, Spillover Induced Instability, Rational Expectations Equilibrium, Social Optimum, Monotone Operators
    JEL: C61 R11
    Date: 2012–09
  5. By: Cristina Cattaneo (Fondazione Eni Enrico Mattei (FEEM))
    Abstract: The paper investigates the determinants of cosmopolitan cities. The hypothesis tested empirically is whether gradual improvements in distant communication boost the generation of ethnically heterogeneous cities. Consequently to easier communication, movers increasingly rely on an enlarged community for identity transmission, rather than on localized peer effects of segregated environment. The empirical estimation provides support to the prediction of the model. A better access to the airports as well as improvements in internet communications are found to increase city ethnic diversity.
    Keywords: Multicutural Cities, Ethnic Diversity, Productivity
    JEL: R11 F22
    Date: 2012–09
  6. By: Yamauchi, Futoshi; Liu, Yanyan
    Abstract: This paper examines the long-term impacts of improved school quality at the elementary school stage on subsequent schooling investments and labor market outcomes using unique data from a recent survey that tracked students in the Philippines. The empirical results, which are based on a comparison of students who graduated from schools located in adjacent treatment and control areas before and after a school intervention, show significant differences in subsequent schooling investments, migration, and labor market earnings between females and males. That is, females study more (relative to males) and tend to migrate and earn more if they receive high-quality educational investments at an early stage. The above results are consistent with females'greater incentives to study, driven by their higher returns to schooling, especially after high school completion, observed in the labor market.
    Keywords: Tertiary Education,Education For All,Secondary Education,Primary Education,Access to Finance
    Date: 2012–10–01
  7. By: Yamauchi, Futoshi; Liu, Yanyan
    Abstract: This paper examines the impact of a large supply-side education intervention in the Philippines, the Third Elementary Education Project, on students'national achievement test scores. It finds that the program significantly increased student test scores at grades 4 to 6. The estimation indicates that two-year exposure to the program increases test scores by about 4.5 to 5 score points. Interestingly, the mathematics score is more responsive to the education reform than are other subjects. The analysis also finds that textbooks, instructional training of teachers, and new classroom construction particularly contributed to these outcomes. The empirical results imply that early-stage investment improves student performance at later stages in the elementary school cycle, which suggests that social returns to such an investment are greater than what the current study demonstrates.
    Keywords: Education For All,Tertiary Education,Primary Education,Teaching and Learning,Secondary Education
    Date: 2012–10–01
  8. By: Simanti Bandyopadhyay (Indian Council For Research On International Economic Relations)
    Abstract: The paper assesses the performances of the urban local bodies in the state of Karnataka in India.We use non parametric Data Envelopment Analysis as a tool to measure technical efficiencies of the ULBs. If we compare the services in a particular size class of city with the norms we find that in the smallest size class it is water supply which has the minimum shortfall from norms, in the medium size cities it is road density which is closest to the norms and in the largest city size class it is the solid waste management which performs the best with zero shortfall from norms. On an average for all the services there is a shortage of 57 per cent of the ONM expenditure norms, the shortage being the highest (64 per cent) in the biggest size class of cities. If we compare across size classes we find that bigger cities have on an average higher proportions of ONM expenditures while both salary and establishment components show higher proportions in smaller cities. This is indicative to the fact that bigger cities are incurring more productive expenses than the smaller ones. We find that the overall average collection efficiency of property taxes is only 62 per cent which is the lowest in the smallest size class and the highest in the medium size class with little variation across cities. We find that only 27.5 per cent of the ONM expenditure requirements can be fulfilled by the own revenues once the potential for the latter is fully realised. This proportion is higher in bigger cities with moderately high variation across cities. As far as the ONM cost coverage is concerned we find that on an average the ULBs in Karnataka can finance 50 per cent of the ONM costs on basic services through their own revenues with a very high variation in the proportions across cites. We find that the ULBs on an average can reduce 27 per cent of their expenditures on ONM, labor and establishment to provide the same levels of services provided currently by them. We also find that there can be additional savings particularly on establishment and labor expenditures to operate at the maximum efficiency levels. We find that the extent of problem of unproductive spending and under-provision of services is more pronounced in smaller cities.
    Date: 2012–10–20
  9. By: Divarci A.; Boone Ch.; Van Witteloostuijn A.
    Abstract: Neo-institutionalist perspectives of globalization envision the homogenization of the world through global cultural, economic and political dynamics, while glocalization theory highlights how local cultures may adapt or resist global forces. Based on these theories, we analyze when, where, and why local hybrid organizational forms do emerge as a reaction to globalization. We suggest that the impact of globalization on the emergence and expansion of hybrid organizational forms, which reflect local adaptations of global forms, depend on three types of moderators: the experience of the local community with alternative organizational forms, the motivation of the local community to adapt, and, finally, the fit between global and local ideas, values and practices. We test our hypotheses with data of the high school education system in Turkey from 1990 to 2007, a period in which Turkey experienced a growing impact of globalization.
    Date: 2012–09
  10. By: Sergio Beraldo (Department of Theories and Methods of Social and Human Sciences, University of Napoli "Federico II", Italy); Raul Caruso (Institute of Economic Policy, Catholic University of the Sacred Heart, Milan, Italy); Gilberto Turati (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: This paper tests the relationship between time preferences and crime rates as posited by Davis (1988), whose theoretical analysis suggests that individuals’ attitude towards the future significantly affect their propensity to commit crime. Our empirical analysis is based on a panel of Italian regions for the period 2002-2007. Various proxies for time preferences are considered: the consumer credit share out of the total amount of loans to households, the share of obese individuals out of the total population, and the rate of marriages out of the total population. In line with the theoretical prediction, our empirical analysis confirms that where people are more impatient and discount the future more heavily, property and violent crimes are higher. Results are robust to a number of alternative specifications including covariates drawn from the literature on the determinants of crime.
    Keywords: Time Preferences, Property Crime, Violent Crime, Italian Regions, Panel data
    JEL: D99 K42 Z13
    Date: 2012–10
  11. By: Kambale Mirembe, Omer
    Keywords: Taxation, DRC, Congo
    Date: 2012–10
  12. By: Liu, Antung Anthony (Resources for the Future); Zhang, Junjie
    Abstract: This paper provides evidence that China's system of tax revenue sharing is an important explanation for differences in the rate of sewage treatment plant construction among its cities. As a result of the 1994 tax reform, Chinese cities retained different shares of their value-added tax (VAT). Exploiting the persistence of this sharing system, we use the VAT share in 1995 as an instrument for the present fiscal incentives. We find that a 10 percentage point increase in the VAT sharing rate resulted in a 13.8 percent increase in the construction of sewage treatment capacity. This result suggests that fiscal incentives can play an important role in the provision of pollution-reducing infrastructure.
    Keywords: sewage, water pollution, China pollution, fiscal federalism, tax sharing, tax federalism, China VAT sharing
    JEL: H4 H54 H77 Q53 Q56
    Date: 2012–09–21
  13. By: Ferdinand Geissler; Thomas Leopold; Sebastian Pink
    Abstract: This paper investigates gender differences in the spatial mobility of young adults when initially leaving their parental home. Using individual data from 11 waves (2000-2010) of the SOEP, we examine whether female home leavers in East Germany move across greater distances than males and whether these differences are explained by the gender gap in education. Our results reveal that female home leavers in East Germany are exceptionally mobile. This effect is attributable to their higher propensity of moving to West Germany. Education does not explain these gender differences.
    JEL: C23 J61 R23
    Date: 2012
  14. By: Berlemann, Michael (Helmut Schmidt University, Hamburg); Freese, Julia (Helmut Schmidt University, Hamburg); Knoth, Sven (Helmut Schmidt University, Hamburg)
    Abstract: While most economists agree that the recent worldwide financial crises evolved as a consequence of the US house price bubble, the related literature yet failed to deliver a consensus on the question when exactly the bubble started developing. The estimates in the literature range in between 1997 and 2002, while applications of market-based-procedures deliver even later dates. In this paper we employ the methods of statistical process control (SPC) to date the likely beginning of the bubble. The results support the view that the bubble on the US house market already emerged as early as 1996. We also show that SPC in general might be a useful tool in constructing early warning systems for asset price bubbles.
    Keywords: statistical process control; real estate; asset prices bubbles; early warning systems
    JEL: C32 E44
    Date: 2012–10–23
  15. By: Delia Furtado; Nikolaos Theodoropoulos
    Abstract: This paper examines the role of ethnic networks in disability program take-up among working-age immigrants in the United States. We find that even when controlling for country of origin and area of residence fixed effects, immigrants residing amidst a large number of co-ethnics are more likely to receive disability payments when their ethnic groups have higher take-up rates. Although this pattern can be partially explained by cross-group differences in satisfying the work history or income and asset requirements of the disability programs, we also find that social norms and, to a lesser extent, information sharing play important roles.
    Date: 2012–10
  16. By: Empen, Janine; Glauben, Thomas; Loy, Jens-Peter
    Abstract: The market for beer in Germany is special for many reasons, e.g. the purity law, the large number of breweries, or consumers who are highly loyal to local brands. To what extent brand loyalty affects spatial pricing strategies, is the main question of this article. We employ weekly retail scanner data for Germany from 2000 to 2001. We find that discounts are higher and offered more often the closer the brands are sold to the brewery they originate from. In addition, average prices are also lower on home markets. According to Anderson and Kumar (2007) this strategy is chosen because promotions generate new loyal customers who repay in periods of regular prices. Thus, loyalty of consumers may be endogenous. Alternatively, retailers use local beer brands as loss leaders, which can also explain the observed regional pricing strategies.
    Keywords: Spatial Pricing, Regional Brands, Brand Loyalty, Beer, Germany, Räumliche Preissetzung, Regionale Marken, Markentreue, Bier, Deutschland, Agricultural Finance, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2012
  17. By: Mattéo Luciani
    Abstract: This paper studies the role of the Federal Reserve’s policy in the recent boom and bustof the housing market, and in the ensuing recession. By estimating a Structural DynamicFactor model on a panel of 109 US quarterly variables from 1982 to 2010, we find that,although the Federal Reserve’s policy between 2002 and 2004 was slightly expansionary,its contribution to the recent housing cycle was negligible. We also show that a morerestrictive policy would have smoothed the cycle but not prevented the recession. Wethus find no role for the Federal Reserve in causing the recession.
    Keywords: structural factor model; business cycle; monetary policy; housing
    JEL: C32 E32 E52 R20
    Date: 2012–10
  18. By: Albert, Jose Ramon G.; David, Clarissa
    Abstract: To improve the country`s standing on achieving the Millennium Development Goals on Education and Education for All targets, it is important to examine various economic and sociocultural demand-side factors that hinder children from attending and completing primary school, as well as maximizing their learning when they are in school. In this report, we look into two major issues regarding universal primary education, viz., late school entry and dropping out before completion of elementary, which are tied to a variety of factors related to demand for education. This paper focuses on a select few that appear to have substantial consequences on school attendance: perceptions about school readiness of children, economic factors (poverty and costs of education), differences in expectations between boys and girls, and education of mothers. Supply barriers also exacerbate these problems, particularly in a system that suffers continuous shortages of various education inputs. The examination in this paper includes reports using available national survey data and primary observations made during field visits and interviews in various areas of the country. This paper identifies and discusses the most pertinent factors related to why preprimary-aged children not in school are viewed as being too young for schooling, why primary-aged children not in school reportedly lack interest in schooling, and what puts some primary-aged students more at risk of dropping out than others.
    Keywords: poverty, Philippines, out-of-school children,dropouts, primary education, school readiness, gender disparities, input deficits
    Date: 2012
  19. By: Astrid Würtz Rasmussen (Department of Economics and Business, Aarhus University, Denmark); Leslie S. Stratton (Virginia Commonwealth University)
    Abstract: Family courts now encourage both parents to maintain contact with their children following separation/divorce, driven by the belief that such contact benefits the child. We test this assumption with a population sample of children from nonnuclear families in Denmark, using distance between non-residential parents and their children to proxy for contact. The results indicate significantly better educational and behavioral outcomes for children at a greater distance. Failing to control for endogeneity biases the results in favor of more proximate parents. These findings suggest that policy efforts to keep separated parents geographically closer for their children’s sake may not be advantageous.
    Keywords: Child outcomes, parental separation, distance
    JEL: D13 I12 I21 J12 J13
    Date: 2012–10–24
  20. By: Surajeet Chakravarty (Department of Economics, University of Exeter); Miguel A. Fonseca (Department of Economics, University of Exeter)
    Abstract: We study the role of social identity in determining the impact of social frag- mentation on public good provision using laboratory experiments. We nd that as long as there is some degree of social fragmentation, increasing it leads to lower public good provision. This is mainly because the share of those who contribute fully to the public good diminishes with social fragmentation, while the share of free-riders is unchanged, which suggests social identity preferences drive our result, as opposed to self-interest. Importantly, socially homogeneous groups do not generate the highest contributions: some social diversity is actually welfare-improving. Finally, social fragmentation is felt differently for visible minorities, whose contributions are higher than minority groups whose actions are not identiable.
    Keywords: Social Identity, Public Goods, Social Fragmentation, Experiments.
    JEL: C92 D02 D03 H41
    Date: 2012

This nep-ure issue is ©2012 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.