nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2012‒12‒10
24 papers chosen by
Steve Ross
University of Connecticut

  1. The Treatment Effect of Attending a High-Quality School and the Influence of Unobservables By Ronny Freier; Johanna Storck
  2. Socio-Spatial Transformations, Suburbanisation, and Voting Behaviour in the Vilnius Urban Region By Ubarevičienė, Rūta; Burneika, Donatas; van Ham, Maarten
  3. Assessing the determinants of Firms’ Competitiveness in Greece: A Structural Equation Modeling Analysis By Metaxas, Theodore; Economou, Athina
  4. The United States: An Economic Balance Sheet Analysis By DE KONING, Kees
  5. Border zone mass transit demand in Brownsville and Laredo By Fullerton, Thomas M., Jr.; Walke, Adam G.
  6. The Distributional Effects of Local Labor Demand and Industrial Mix: Estimates Using Individual Panel Data By Timothy J. Bartik
  7. The Homeownership Rate among the Elderly and the Life Cycle Hypothesis:European Evidence Using Individual and Household Data By Joaquín Alegre Martín; Llorenç Pou Garcias
  8. Accounting for non-annuitization By Pashchenko, Svetlana
  9. Tourism and regional growth in Europe By Raffaele Paci; Emanuela Marrocu
  10. Local social capital and geographical mobility By Quentin Max David; Alexandre Janiak; Etienne Wasmer
  11. Partisan targeting of inter-governmental transfers & state interference in local elections: evidence from Spain By Marta Curto-Grau (Universitat de Barcelona); Albert Sole-Olle (Universitat de Barcelona); Pilar Sorribas-Navarro(Universitat de Barcelona)
  12. Internal Migration and Life Satisfaction: Well-Being Effects of Moving as a Young Adult By Switek, Malgorzata
  13. Safety Valve or Sinkhole? Vocational Schooling in South Africa By Pugatch, Todd
  14. Local government expenditure and council size: Quasi-experimental evidence from Japan By Hirota, Haruaki; Yunoue, Hideo
  15. Evolution of innovation policy in Emilia-Romagna and Valencia: Similar reality, similar results? By López-Estornell,Manuel; Barberá-Tomás,David; García-Reche,Andrés; Mas-Verdú,Francisco
  16. Does Bayesian Shrinkage Help to Better Reflect What Happened during the Subprime Crisis? By Olfa Kaabia; Ilyes Abid; Khaled Guesmi
  17. Research cooperation within and across regional boundaries. Does innovation policy add anything? By Alberto Marzucchi; Davide Antonioli; Sandro Montresor
  18. The evolution toward vagueness of industrial district concept and its impact on regional innovation policy By López-Estornell, Manuel; Tortajada Esparza, Enrique; Martinez-Chafer, l
  19. Stratification of public universities and students's segretation By Joan Rosselló-Villalonga
  20. Welfare Migration By Corrado Giulietti; Jackline Wahba
  21. Regional Wage Convergence and Divergence: Adjusting Wages for Cost-of-Living Differences By Randall W. Eberts; Mark E. Schweitzer
  22. Kick It Like Özil? - Decomposing the Native-Migrant Education Gap By Annabelle Krause; Ulf Rinne; Simone Schüller
  23. Do institutional factors matter for improved solid waste management? By Yalew, Amsalu Woldie
  24. Productivity growth and job creation in the development process of industrial clusters By Sonobe, Tetsushi; Higuchi, Yuki; Otsuka, Keijiro

  1. By: Ronny Freier; Johanna Storck
    Abstract: This paper studies the effect of attending a high-quality secondary school on subsequent educational outcomes. The analysis is based on data from the German Socio-Economic Panel Study in which we observe children when they make their secondary school choice (between ages 10-12) and later when they self-report on their intentions with regard to their further educational path (between ages 16-17). To identify the treatment effect, we use a regression-control framework as well as an instrumental variable approach (based on local supply of schools). In a second step, we carefully examine the influence of unobservable characteristics, using the new technique proposed by Altonji, Elder, and Taber (2005b). Our findings suggest that unobservable characteristics are indeed crucial to the validity of the research design. While we find large positive and significant effects of attending a high-quality school, we cannot rule out that the estimates are not in fact driven by selection on unobservables.
    Keywords: secondary school choice, school quality instrumental variable estimation, selection on unobservables
    JEL: I20 I21
    Date: 2012
  2. By: Ubarevičienė, Rūta (Lithuanian Social Research Centre); Burneika, Donatas (Lithuanian Social Research Centre); van Ham, Maarten (Delft University of Technology)
    Abstract: This paper analyses the interrelationship between the process of suburbanization and a changing political and ethnic landscape in the Vilnius urban region. The region surrounding Vilnius city is dominated by Polish identity residents while those who suburbanise into the region are mainly ethnic Lithuanians. This may lead to potential tension and conflicts in the region which may find its expression in the voting behaviour of residents of the region. Using data from the 1997 and 2011 municipal elections we found that the share of votes for the Polish party in the region decreases over time, while the absolute number of votes for this party increases. At the same time we find increasing voting activity in the suburban ring. The changing electoral behaviour can be regarded as an indicator of a growing ethnic identity. The voting results also identify the zones of the most intense changes in the electoral behavior and thus indicate areas of potential social tensions between two ethnic groups.
    Keywords: suburbanisation, ethnicity, conflict, voting behaviour, electoral data, Lithuania
    JEL: D72 J15 R11 R14 R23
    Date: 2012–11
  3. By: Metaxas, Theodore; Economou, Athina
    Abstract: The paper investigates the importance of territorial characteristics/assets (i.e. agglomeration economies, urban infrastructure, factors of labor and cost, development policies, qualitative factors, inter alia) on small- and medium-sized firms’ competitiveness. The analysis uses primary data from 204 small- and medium-sized firms located in Thessaloniki (Greece). These firms operate in the sectors of industry, commerce and services. Through the use of Structural Equation Modeling (SEM) analysis, the importance of particular factors for the competitiveness of firms has been analyzed, coming out in valuable conclusions not only for the firms and the city of Thessaloniki considered but also for firms and areas with similar characteristics in Greece and the wider area of Balkans.
    Keywords: firms’ competitiveness; territorial characteristics/assets; Structural Equation Modeling (SEM) analysis; Greece
    JEL: R50 O18 R11
    Date: 2012
  4. By: DE KONING, Kees
    Abstract: The U.S financial crisis started in October 2005. The level of new home starts would have replaced the total owner occupied housing stock in 37 years. Much faster than desirable. Mortgage interest rates also went up in same month. In 2006 mortgage lending went on unabated, but housing values did not keep pace. Securitisation led to the well known liquidity crisis in 2008.The impression was given that investors could get out of mortgage risks on a daily basis. Banking crisis, economic crisis and government deficit funding crisis followed. The paper sets out why the crises were foreseeable, avoidable but are also solvable in the short term.
    Keywords: Balance Sheet of Households and Nonprofit Organizations;Individual households assets and liabilities and net worth;U.S mortgage markets; mortgage products; mortgage debts; consumer credits;types of households;banking roles;Fannie Mae and Freddy Mac; unemployment; country profit; banking supervisors;economic easing; econsystem
    JEL: G14 E44 E21 E32 G2 E24 O51 E00
    Date: 2012–11–28
  5. By: Fullerton, Thomas M., Jr.; Walke, Adam G.
    Abstract: This study examines whether economic conditions in Mexico influence public transportation ridership levels in the border cities of Brownsville and Laredo, Texas. Besides the standard variables generally utilized to model bus ridership, additional indicators included in the empirical analysis are northbound pedestrian traffic and the real exchange rate index. Seemingly unrelated regression parameter estimates suggest that the volume of pedestrian border crossings in both cities is positively related to changes in ridership. The real exchange rate index in Laredo is negatively related to fluctuations in ridership, implying that peso appreciation increases transit utilization in this border city.
    Keywords: Municipal Transit Demand; Border Economics; Applied Econometrics
    JEL: R15 R41
    Date: 2012–08–11
  6. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Keywords: local economic development, labor demand, industries
    JEL: R3 J23
  7. By: Joaquín Alegre Martín (Universitat de les Illes Balears); Llorenç Pou Garcias (Universitat de les Illes Balears)
    Abstract: One of the central predictions of the Life Cycle Hypothesis is that individuals run down their wealth during retirement. Although housing wealth is the largest component of total household wealth in most countries, empirical evidence supporting the decumulation hypothesis is mixed. In this paper we examine the housing tenure decision by the aged with microdata at both a household and individual level. The results, based on data from the European Community Household Panel for thirteen European countries, show that for nearly all countries (except for Germany and Denmark), the homeownership rate among the elderly does not decline with age, rejecting the Life Cycle Hypothesis. The results are robust to the (household or individual) level at which the data is analysed. The estimates also show a significant cohort effect for most European countries, so that the later the year of birth, the higher the homeownership rate.
    Keywords: homeownership rate, the elderly, age-cohort effects, Life Cycle Hypothesis.
    JEL: D12 D91 R21
    Date: 2012
  8. By: Pashchenko, Svetlana
    Abstract: Why don't people buy annuities? Several explanations have been provided by the previous literature: large fraction of preannuitized wealth in retirees' portfolios; adverse selection; bequest motives; and medical expense uncertainty. This paper uses a quantitative model to assess the importance of these impediments to annuitization and also studies three newer explanations: government safety net in terms of means-tested transfers; illiquidity of housing wealth; and restrictions on minimum amount of investment in annuities. This paper shows that quantitatively four explanations play a big role in reducing annuity demand: preannuitized wealth, minimum annuity purchase requirement, illiquidity of housing wealth, and bequest motives. The annuity purchase involves big upfront investment, especially if there is a minimum purchase restriction. This is binding for many, especially if housing is illiquid and part of wealth is preannuitized. While bequest motives significantly reduce the overall annuity demand, the model with a strong bequest motive cannot match the empirical fact that high-income people have the highest demand for annuities.
    Keywords: annuity puzzle; longevity insurance; adverse selection
    JEL: G11 G22 D91
    Date: 2012–11–19
  9. By: Raffaele Paci; Emanuela Marrocu
    Abstract: Tourism represents one of the most relevant and fast growing industry in the world and the economic literature has widely analysed at the country level the role of the international flows in the development process. However, it is essential to consider also the impact of domestic tourism as it constitutes the largest component and can significantly influence the growth process at the regional level. Therefore, the aim of this paper is to analyse the impact of both domestic and international tourism on the economic growth process for a wide set of 179 regions belonging to ten European countries, which are highly representative of total tourism flows in Europe. The econometric analysis is carried out for the period 1999-2009 and it is based on a spatial growth regression framework, where the growth rate of GDP per capita at the regional level depends on tourism flows in addition to the traditional production inputs like physical, human and technological capital. Besides controlling for the initial conditions, we also include covariates for geographical, industrial, social and institutional features of the regions. Results, robust to several robustness checks, show the positive effect of domestic and international tourism flows on regional growth.
    Keywords: regional economic growth; tourism flows; spatial dependence; Europe
    JEL: R11 L83 C31
    Date: 2012
  10. By: Quentin Max David; Alexandre Janiak; Etienne Wasmer
    Date: 2012–05–13
  11. By: Marta Curto-Grau (Universitat de Barcelona); Albert Sole-Olle (Universitat de Barcelona); Pilar Sorribas-Navarro(Universitat de Barcelona) (Universitat de Barcelona)
    Abstract: We examine whether state-level incumbents discriminate in the allocation of transfers in favour of local governments controlled by co-partisans, and whether the electoral prospects of local incumbents improve when they are aligned with the state incumbent. Using a new database covering around 3,000 Spanish municipalities during the period 2000-07 and a Regression Discontinuity design, we document a very strong and robust effect: in close races, municipalities aligned with the regional government obtain on average 83% more per capita transfers and their incumbents gain 10% more votes at the local elections. We also show that the effect of alignment is stronger: (i) when regional and local elections are held on the same day, (ii) in regions with less competitive regional elections, and (ii) in regions with more budget resources.
    Keywords: political parties, inter-governmental transfers, pork barrel politics
    JEL: D72 C2
    Date: 2012
  12. By: Switek, Malgorzata (University of Southern California)
    Abstract: Migration typically leads to higher income, but its association with life satisfaction remains unclear. Is migration accompanied by an increase in life satisfaction? If it is, is the increase in income responsible or are other life domains driving the satisfaction changes? These two questions are addressed using longitudinal data from a Swedish Young Adult Panel Study for 1999 and 2009. Comparing migrants to non-migrants, it is found that internal migration is accompanied by an increase in life satisfaction. This increase is observed for both, migrants who move due to work and those who move due to non-work reasons. This finding holds regardless of other life transitions that may accompany migration, such as marriage and joining the labor market. However, different factors account for the increase in life satisfaction for work and non-work migrants. For non-work migrants, it is greater housing satisfaction that leads to an improvement in life satisfaction. Moreover, no increase in income relative to non-migrants is found for this group. For work migrants, although their income increases compared with non-migrants, this increase does not seem to explain the differential improvement in life satisfaction because of a lack of improvement in their economic satisfaction (compared to non-migrants). Rather, it is the higher relative status arising from occupational advancement that seems to contribute to the higher life satisfaction for work migrants.
    Keywords: internal migration, life satisfaction, relative status, housing satisfaction
    JEL: J0 J61 O15 R23
    Date: 2012–11
  13. By: Pugatch, Todd (Oregon State University)
    Abstract: As an alternative to traditional academic schooling, vocational schooling in South Africa may serve as a safety valve for students encountering difficulty in the transition from school to work. Yet if ineffective, vocational schooling could also be a sinkhole, offering little chance for success on the labor market. After defining the terms "safety valve" and "sinkhole" in a model of human capital investment with multiple schooling types, I test for evidence of these characteristics using a panel of urban youth in South Africa. I find support for the safety valve role of vocational schooling, with a small increase in vocational enrollment in response to grade failure, compared to a decline of 38 percentage points for academic enrollment. In contrast, I find no evidence that vocational schooling is a sinkhole, with wage and employment returns at least as large as those for academic schooling. The results suggest that vocational schooling plays an important role in easing difficult school to work transitions for South African youth.
    Keywords: human capital investment, vocational schooling, youth unemployment, South Africa
    JEL: I25 J24 J31 O12
    Date: 2012–11
  14. By: Hirota, Haruaki; Yunoue, Hideo
    Abstract: In order to evaluate a fiscal common-pool problem, this paper focuses on the relationship between local government council size and its expenditure. Generally, local councilors internalize the benefit of public projects targeted at their political jurisdictions, but underestimate and prefer to externalize the cost of public projects due to the national subsidy system. When council sizes become larger, their expenditure might be larger because of the selfish behavior of local council members. This paper estimates the positive effect of local council size on local government expenditure using a dataset of 13,989 municipalities in Japan over a period of 6 years. In Japan, local council size is a deterministic and discontinuous function of municipal population size under legal rules. We pay attention to this exogenous discontinuity and apply a regression discontinuity design to consider an endogeneity bias. The results show that the larger the size of the local council the larger the size of expenditure they undertake. In particular, we find that growing small municipalities tend to increase their expenditures, so that for example, 1% increases in local council size lead to about 1.2% increases of expenditures by small municipalities. Our results show that the fiscal common-pool problem is produced in small municipalities.
    Keywords: fiscal common-pool problem; local council size; government expenditure; regression discontinuity design
    JEL: H11 H72 D72
    Date: 2012
  15. By: López-Estornell,Manuel; Barberá-Tomás,David; García-Reche,Andrés; Mas-Verdú,Francisco
    Abstract: This paper examines the evolution of regional innovation policy in Emilia-Romagna, and Valencia, regions with similar economic features that implemented similar innovation policies in the 1970s and 1980s. We investigate whether their similarities have led to similar targets, policy tools and governance developments. We show that innovation policy in both regions suffered from the effects of privatization, budget constraints and changes to manufacturing during the 1990s and highlight the consequences. Although Emilia-Romagna experienced deeper change to its innovation policy, privatizations and/or the replacement of public funds promoted commercial approaches and induced market failures in both regions. The worst effects of these policies were the implementation of less risky innovation projects, the shift towards extra-regional projects and markets, and the favouring of large firms.
    Keywords: innovation policy, industrial district
    Date: 2012–11–29
  16. By: Olfa Kaabia; Ilyes Abid; Khaled Guesmi
    Abstract: We study the contagion effects of a U.S. housing shock on OECD countries over the period of the subprime crisis. Considering a large database containing national macroeconomic, financial, and trade dynamic variables for 17 OECD countries, we evaluate forecasting accuracy, and perform a structural analysis exercise using VAR models of different sizes: a standard VAR estimated by OLS and a MEDIUM and LARGE VARs estimated by a Bayesian shrinkage procedure. Our main findings are that: First, the largest specification outperforms the smallest one in terms of forecast accuracy. Second, the MEDIUM VAR outperforms both the LARGE BVAR and the SMALL VAR in the case of structural analysis. So the MEDIUM VAR is sufficient to provide plausible impulse responses, and reproduce more realistically what happened during the subprime crisis. Third, the Bayesian shrinkage procedure is preferable to the standard OLS estimation in the case of an international contagion study.
    Keywords: Contagion, subprime crisis, OECD housing markets, VAR/ BVAR models and Bayesian shrinkage
    JEL: F47 C11 C32
    Date: 2012
  17. By: Alberto Marzucchi (Catholic University of Milan); Davide Antonioli (University of Ferrara); Sandro Montresor (JRC-IPTS)
    Abstract: The paper aims to show how policy makers can stimulate firms' cooperation with research organisations in innovation. We argue that the administration of an R&D subsidy can be effective. Furthermore, this should be more so for extra-regional than intra-regional cooperation. The firms' propensity to extend cooperation across the region is assumed to increase with the amount of support. However, the support must overcome a threshold, for firms to cover the fixed costs of distant interactions. These research hypotheses are tested with respect to a sample of firms in a region of Italy. Propensity score matching is applied to identify the impact of the subsidy receipt. A generalised propensity score technique is employed to investigate the effect of an increasing amount of support. All the hypotheses are not rejected. Firms' cooperation is policy sensitive, but the size of the support is crucial for its effects.
    Keywords: Industry-Research Cooperation, Regional Innovation Systems, Behavioural Additionality
    JEL: O32 O38 R11 R58
    Date: 2012–11
  18. By: López-Estornell, Manuel; Tortajada Esparza, Enrique; Martinez-Chafer, l
    Abstract: The paper discusses the development of the industrial district policy in Italy and the different roles of regions in its implementation, and provides an initial assessment of the relationship between regional districts and innovation policies. First, we provide an overview of Italian national legislation on industrial districts since 1991 and the changes that have resulted. Next, we examine the evolution of industrial district policy in Veneto, in the context of the Italian framework. The regional government implemented its industrial district policy in the late 1990s and it has yielded some results which deserve attention. Second, we look at the benefits and limitations of district policy governance in Veneto region and focus on the links between regional district and innovation policies. To achieve a first assessment of district preferences in terms of policy, the paper discusses the specific arrangements in five industrial districts in different sectors, and the support provided by regional government. Our findings show that innovation projects are of limited relevance in strategies of industrial districts. A recommendation for policy is that cluster initiatives should be aligned to the specific economic features of the territory. Problems arise when national governments and international organizations assume that ‘one size fits all’.
    Keywords: industrial district policy, innovation policy
    Date: 2012–11–29
  19. By: Joan Rosselló-Villalonga (Universitat de les Illes Balears)
    Abstract: We present a model which allows us to show that strati?cation of public universities according to the quality they o¤er and the quality of students they select is a plausible result even in a public university system where tuition fees are uniform and decided by the administration. This result is similar to that observed in private and competitive university systems. We prove that it is very unlikely that segregation and strati?cation could be avoided by subsidizing those universities that are more ine¢ cient. We show also that even if strati?cation and segregation could be removed with subsidies, it would be at the cost of ?xing quality limits at the whole university system
    Keywords: school choice, state and federal aid
    JEL: H42 I28
    Date: 2012
  20. By: Corrado Giulietti (IZA - Institute for the Study of Labor); Jackline Wahba (University of Southampton and IZA)
    Abstract: This chapter reviews and discusses major theories and empirical studies about the welfare magnet hypothesis, i.e. whether immigrants are more likely to move to countries with generous welfare systems. Although economic theory predicts that welfare generosity affects the number, composition and location of immigrants, the empirical evidence is rather mixed. We offer possible explanations for the existence of such mixed evidence and highlight that the literature so far has overlooked the presence of different migration regimes, as well as the possibility of reverse causality between welfare spending and immigration.
    Keywords: immigration, welfare spending
    JEL: H53 J61 J68
    Date: 2012–11
  21. By: Randall W. Eberts (W.E. Upjohn Institute for Employment Research); Mark E. Schweitzer
    Keywords: wage differential, cost-of-living, regional issues
    JEL: J31
  22. By: Annabelle Krause; Ulf Rinne; Simone Schüller
    Abstract: We investigate second generation migrants and native children at several stages in the German education system to analyze the determinants of the persistent native-migrant gap. One part of the gap can be attributed to differences in socioeconomic background and another part remains unexplained. Faced with this decomposition problem, we apply linear and matching decomposition methods. Accounting for differences in socioeconomic background, we find that migrant pupils are just as likely to receive recommendations for or to enroll at any secondary school type as native children. Comparable natives, in terms of family background, thus face similar difficulties as migrant children. Our results point at more general inequalities in secondary schooling in Germany which are not migrant-specific.
    Keywords: Migration, education, human capital, Germany, tracking
    JEL: J15 J24 I21
    Date: 2012
  23. By: Yalew, Amsalu Woldie
    Abstract: There is non-changing behavior of residents in cooperating and contributing for improved solid waste management in spite of increasing provision of solid waste management services in many urban areas. This paper starts from a hypothesis that institutional factors (interventions) are missing. We considered the case of issuing laws and creating awareness about the health and economic burdens due to improper waste management. We applied a paired-t test to test our hypothesis. We find that institutional factors, creating awareness and introducing rules, significantly increase household’s willingness to pay for improved solid waste management services. We find also increasing awareness is more influential than issuing laws. The findings do have important policy implications in reducing not only solid waste management problems but also many other environmental problems in developing countries.
    Keywords: Solid waste management; Rules; Awareness; experimental research; t-test
    JEL: Q53
    Date: 2012–11–20
  24. By: Sonobe, Tetsushi; Higuchi, Yuki; Otsuka, Keijiro
    Abstract: Poor management has long been suspected as a major constraint on job creation in the manufacturing sector in low-income countries. In this sector, countless micro and small enterprises in industrial clusters account for a large share of employment. This paper examines the roles of industrial clusters, managerial capacities, and entrepreneurship in improving productivity and creating jobs, by reviewing the literature and case studies, including recent experiments. It finds that managerial capacities are a major determinant of firms'employment sizes and productivity growth, and that it is high innovative capacities, accompanied by high managerial capacities, that boost cluster-based industrial development.
    Keywords: Labor Policies,Labor Markets,E-Business,Microfinance,Economic Theory&Research
    Date: 2012–11–01

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