nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒03‒16
forty-four papers chosen by
Steve Ross
University of Connecticut

  1. The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross Sections By Michael Brocker; Christopher Hanes
  2. Immigrant concentration in schools: Consequences for native and migrant students By Nicole Schneeweis
  3. Heterogeneity in house price dynamics By Gabriele Galati; Federica Teppa; Rob Alessie
  4. Did Housing Policies Cause the Postwar Boom in Homeownership? By Matthew Chambers; Carlos Garriga; Donald E. Schlagenhauf
  5. Highways and Development in the Peripheral Regions of China By Xu, Hangtian; Nakajima, Kentaro
  6. Does Sorting Students Improve Scores? An Analysis of Class Composition By Courtney A. Collins; Li Gan
  7. Regional income convergence in India: A Bayesian Spatial Durbin Model approach By Soundararajan, Pushparaj
  8. Knowledge-intensive employment growth in the Dutch Randstad and the German Rhine-Ruhr area: the impact of centrality and peripherality By Kronenberg, Kristin; Volgmann, Kati
  9. On Revenue Recycling and the Welfare Effects of Second-Best Congestion Pricing in a Monocentric City By Ioannis Tikoudis; Erik T. Verhoef; Jos N. van Ommeren
  10. The economic consequences of crime in Italy By O.A. Carboni; Claudio Detotto
  11. Long-Term Effects of Preschooling on Educational Attainments By Hideo Akabayashi; Ryuichi Tanaka
  12. House Prices, Collateral and Self-Employment By Manuel Adelino; Antoinette Schoar; Felipe Severino
  13. Veblen in the Metropolis: Land Use Proximity in United States Urban Landscapes. By E. Anthon Eff
  14. Incentivizing China’s Urban Mayors to Mitigate Pollution Externalities: The Role of the Central Government and Public Environmentalism By Siqi Zheng; Matthew E. Kahn; Weizeng Sun; Danglun Luo
  15. The Effect of Tuition Fees on Student Enrollment and Location Choice – Interregional Migration, Border Effects and Gender Differences By Björn Alecke; Claudia Burgard; Timo Mitze
  16. Migration, Capital Formation, and House Prices By Grossmann, Volker; Schäfer, Andreas; Steger, Thomas M.
  17. "Mixed oligopoly in education" By Cremer, Helmuth; Maldonado, Dario
  18. Spatial targeting of agri-environmental policy and urban development By Thomas Coisnon; Walid OUESLATI; Julien Salanié
  19. Self-Control Problems and Conspicuous Housing Consumption:Implications for Tax Policy By Aronsson, Thomas; Mannberg, Andrea
  20. Understanding household savings in China: the role of the housing market and borrowing constraints By Bussière, Matthieu; Kalantzis, Yannick; Lafarguette, Romain; Sicular, Terry
  21. School Starting Age and Crime By Landersø, Rasmus; Nielsen, Helena Skyt; Simonsen, Marianne
  22. Roads and Trade: Evidence from the U.S. By Gilles Duranton; Peter Morrow; Matthew Turner
  23. Infrastructure, Industrial Productivity and Regional Specialization in China By Jie Zhang
  24. Curricula tracking and central examinations: counterbalancing the Impact of social background on student achievement in 36 countries. By Bol, Thijs; Witschge, Jacqueline; Van de Werfhorst, Herman; Dronkers, Jaap
  25. KIPP Middle Schools: Impacts on Achievement and Other Outcomes. By Christina Clark Tuttle; Brian Gill; Philip Gleason; Virginia Knechtel; Ira Nichols-Barrer; Alexandra Resch
  26. Pure Ethnic Gaps in Educational Attainment and School to Work Transitions. When Do They Arise? By Stijn BAERT; Bart COCKX
  27. Spatial migration. By Carmen Camacho
  28. Should large Spanish municipalities be financially compensated? Costs and benefits of being a capital/central municipality By Núria Bosch; Marta Espasa; Daniel Montolio
  29. Experimental Evidence on the Effects of Home Computers on Academic Achievement among Schoolchildren By Fairlie, Robert W.; Robinson, Jonathan
  30. Teacher gender and student performance in mathematics. Evidence from Catalonia By Josep-Oriol Escardíbul; Toni Mora
  31. Robust Equilibria in Location Games By Berno Buechel; Nils Röhl
  32. Cooperation among local governments to deliver public services : a "structural" bivariate response model with fixed effects and endogenous covariate By Edoardo Di Porto; Vincent Merlin; Sonia Paty
  33. STEMWorkers, H1B Visas and Productivity in US Cities By Giovanni Peri; Kevin Shih; Chad Sparber
  34. Co-financing innovative projects in SMEs from Regional Operational Programmes. The case of Pomeranian region By Anna Golejewska; Damian Gajda
  35. A Nation Of Gamblers: Real Estate Speculation And American History By Edward L. Glaeser
  36. Crime and regional growth in Italy By Lanzafame, Matteo
  37. Should I stay or should I go? Exploring transition to discouragement By Gürbüz, Ayça Akarcay; Polat, Sezgin; Ulus, Mustafa
  38. Immigrant Group Size and Political Mobilization: Evidence from the European Migration By Allison Shertzer
  39. Integrating Family Support Services into Schools: Lessons from the Elev8 Initiative. By Angela Valdovinos D'Angelo; Lauren Rich; Jaclyn Kwiatt
  40. Crime, health and wellbeing – Longitudinal evidence from Mexico By Braakmann, Nils
  41. Where the Streets Have a Name: Income Comparisons in the US By Abel Brodeur; Sarah Flèche
  42. The differential role of social networks: Strategies and routes in Brazilian migration to Portugal and the Netherlands By Masja van Meeteren; Sonia Pereira
  43. Group Violence, Ethnic Diversity and Citizen Participation: Evidence from Indonesia By Christophe Muller; Marc Vothknecht
  44. Guilt aversion and peer effects in crime: experimental and empirical evidence from Bangladesh By Shoji, Masahiro

  1. By: Michael Brocker; Christopher Hanes
    Abstract: In the 1929-1933 downturn of the Great Depression, house values and homeownership rates fell more, and mortgage foreclosure rates were higher, in cities that had experienced relatively high rates of house construction in the residential real-estate boom of the mid-1920s. Across the 1920s, boom cities had seen the biggest increases in house values and homeownership rates. These patterns suggest that the mid-1920s boom contributed to the depth of the Great Depression through wealth and financial effects of falling house values. Also, they are very similar to cross-sectional patterns across metro areas around 2006.
    JEL: N1 N22 R31
    Date: 2013–02
  2. By: Nicole Schneeweis
    Abstract: In this paper, I study the impact of immigrant concentration in primary schools on educational outcomes of native and migrant students in a major Austrian city between 1980-2001. The outcome measures of interest are track attendance after primary education and grade repetition. Using variation in the fraction of students with migration background among adjacent cohorts within schools and drawing special attention to time trends, the analysis shows that migrant students suffer from school-grades with a higher share of migrant students, while natives are not affected on average. These negative spill-over effects are particularly strong between students from the same area of origin, indicating that peer groups in schools form along ethnic dimensions.
    Keywords: school choice, migrants, ethnic minorities, segregation
    JEL: I21 J15 J24
    Date: 2013–02
  3. By: Gabriele Galati; Federica Teppa; Rob Alessie
    Abstract: To what extent do house price dynamics differ across market segments? And what determines this heterogeneity? We address these questions by analysing a data set of individual houses and mortgages, based on a survey of about 2,000 Dutch households over the period 2003–2011. We estimate a dynamic panel data model of house price dynamics by means of the Arellano-Bond estimator. Three main empirical results emerge. First, we generally find that house price dynamics imply a convergence towards their long-run equilibrium value, as indicated by a negative serial correlation coefficient and a positive estimated mean reversion coefficient. Second, there is evidence that the housing market in the Netherlands is inefficient. Third, there is important heterogeneity across different market segments. We document that the speed of convergence of house price dynamics and the efficiency of housing markets depends on the geographical location and degree of urbanization, the type and year of construction of a house, the type of mortgage financing and households’ sentiment about the medium-term outlook for income.
    Keywords: Housing market dynamics; house prices; heterogeneity; survey data; panel analysis
    JEL: D14 G12 R32
    Date: 2013–02
  4. By: Matthew Chambers; Carlos Garriga; Donald E. Schlagenhauf
    Abstract: After the collapse of housing markets during the Great Depression, the U.S. government played a large role in shaping the future of housing finance and policy. Soon thereafter, housing markets witnessed the largest boom in recent history. The objective in this paper is to quantify the contribution of government interventions in housing markets in the expansion of U.S. homeownership using an equilibrium model of tenure choice. In the model, home buyers have access to a menu of mortgage choices to finance the acquisition of a house. The government also provides special programs through provisions of the tax code. The parameterized model is consistent with key aggregate and distributional features observed in the 1940 U.S. economy and is capable of accounting for the boom in homeownership in 1960. The decomposition suggests that government policies have significant importance. For example, the expansion in maturity of the fixed-rate mortgage to 30 years can account for 12 percent of the increase. Housing policies, such as the introduction of the mortgage interest deduction or the taxation of housing services can have significant effects on homeownership.
    JEL: E32 N1 R20
    Date: 2013–02
  5. By: Xu, Hangtian; Nakajima, Kentaro
    Abstract: This paper estimates the effects of highways (Gaosu Gonglu) on economic development in China’s county-level cities from 1998 to 2007, a period in which China experienced sharp growth in highway mileage, using a micro level data set on industry and highway placement and the double difference propensity score matching method. After extracting the core regions, empirical estimates indicate that highway placement promotes industrial development in related cities with higher output and more investments, and these results are robust to two different checks. However, county-level cities more than 300 km away from large cities do not benefit from new highways. Furthermore, highways tend to promote the development of heavy industry but not that of light industry. Labor productivity exhibits few positive effects.
    Keywords: transport infrastructure project, double di erence propensity score matching (DD-PSM), regional development
    JEL: H54 R12
    Date: 2013–01
  6. By: Courtney A. Collins; Li Gan
    Abstract: This paper examines schools’ decisions to sort students into different classes and how those sorting processes impact student achievement. There are two potential effects that result from schools creating homogeneous classes—a “tracking effect,” which allows teachers to direct their focus to a more narrow range of students, and a peer effect, which causes a particular student’s achievement to be influenced by the quality of peers in his classroom. In schools with homogeneous sorting, both the tracking effect and the peer effect should benefit high performing students. However, the effects would work in opposite directions for a low achieving student; he would benefit from the tracking effect, but the peer effect should decrease his score. This paper seeks to determine the net effect for low performing students in order to understand the full implications of sorting on all students. We use a unique student-level data set from Dallas Independent School District that links students to their actual classes and reveals the entire distribution of students within a classroom. We find significant variation in sorting practices across schools and use this variation to identify the effect of sorting on student achievement. Implementing a unique instrumental variables approach, we find that sorting homogeneously by previous performance significantly improves students’ math and reading scores. This effect is present for students across the score distribution, suggesting that the net effect of sorting is beneficial for both high and low performing students. We also explore the effects of sorting along other dimensions, such as gifted and talented status, special education status, and limited English proficiency.
    JEL: I21
    Date: 2013–02
  7. By: Soundararajan, Pushparaj
    Abstract: A debate on the regional disparity is always an interesting topic. This study analysed the regional income disparity in India during 1980 – 2010, which contains pre, early and later reform periods. The study used per capita GSDP data from Central Statistical Organisation. First, the study reviewed various growth models and suggests that spatial durbin model of Fingleton and Lopez-Bazo(2006) is empirically useful. Second, this study estimated parameters of Bayesian Spatial Durbin Model and disscussed the convergence hypothesis in the light of LeSange and Fischer (2008) formulation. The study concludes that the later reform period has witnessed beta convergence due to feedback effect.
    Keywords: Convergence, Regional, Spatial Durbin Model and Bayesian
    JEL: C11 C21 R12
    Date: 2013–03–05
  8. By: Kronenberg, Kristin; Volgmann, Kati
    Abstract: This paper investigates to what extent the different subsectors of the knowledge economy are subject to sector-specific spatial patterns of employment dynamics, and whether these patterns are conditional upon the general economic climate in a particular region. To this end, we analyze and compare patterns of employment growth in the knowledge economy and its subsectors in the different settlement zones of the (growing) Dutch Randstad and the (declining) German Rhine-Ruhr area, thus investigating the impact of centrality respectively peripherality within a polycentric metropolitan region on municipal knowledge-intensive employment growth. Our results show that with respect to knowledge-intensive employment, both the Randstad and the Rhine-Ruhr area exhibit sector-specific spatial patterns of employment dynamics. Furthermore, centrality and peripherality are found to play important roles in determining municipal knowledge-intensive employment growth, suggesting that the location of a municipality within a metropolitan region affects its employment dynamics, and this impact differs both between sectors, and between regions being subject to either growth or decline.
    Keywords: employment growth, knowledge economy, settlement structure, the Netherlands, Germany, metropolitan region, centrality, peripherality
    JEL: O18 R11 R12
    Date: 2013–03–05
  9. By: Ioannis Tikoudis (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam)
    Abstract: This paper explores the interactions between congestion pricing and a tax-distorted labor market within a monocentric urban equilibrium model. We compute the efficiency gains of various second-best policies, i.e. combinations of toll schemes and revenue recycling programs, with a predetermined level of public revenue. We find that 35% of the space-varying road tax does not reflect marginal external congestion costs, but rather functions as a Ramsey-Mirrlees tax, i.e. an efficiency enhancing mechanism allowing space differentiation of the labor tax. Such a space-varying tax adds a quite different motivation to road pricing, since it can produce large welfare gains even in the absence of congestion. We show that both a cordon toll and a flat kilometer tax achieve over 80% of these gains when combined with specific types of revenue recycling, such as labor tax cuts or public transport subsidies. Sensitivity analysis shows that the optimal type of revenue recycling depends on the level of inefficiency in the provision of public transport prior to the introduction of congestion pricing.
    Keywords: Second-best road pricing; revenue recycling; monocentric city
    JEL: R41 R48 H23 H76 J20 R13 R14
    Date: 2013–02–21
  10. By: O.A. Carboni; Claudio Detotto
    Abstract: This paper employs provincial data to study the relationship between several crime typologies, namely murder, theft, robbery and fraud, and economic output in Italy. We employ a spatial econometric approach where the spatial proximity is defined by a measure of physical distance between locations, in order to take into account possible spill-over effects. The model used here combines a spatial autoregressive model with autoregressive disturbances. In modelling the outcome for each location depends on a weighted average of the outcomes of other locations. Outcomes are determined simultaneously. The results of the spatial two stage least square estimation suggest that the homicide rate has a negative impact on Italian gross domestic product while theft, robbery and fraud do not affect economic output and that there are beneficial spill-overs from neighbouring provinces.
    Keywords: spatial weights; spatial models; growth; crime; crowding-out effect
    JEL: K10 R11 O18 C31
    Date: 2013
  11. By: Hideo Akabayashi (Keio University); Ryuichi Tanaka (National Graduate Institute for Policy Studies)
    Abstract: Whether universal preschool education can eliminate the achievement gap among children in the long term has been debated in the United States and elsewhere. This paper offers new evidence from the experience of massive preschool education expansion in Japan. Using prefecture-level panel data, we estimate the effects of preschooling expansion on two measures of long-term educational achievement: high school and college advancement rates. We find that the expansion of both kindergarten and nursery schools have a significant positive impact on high school and college advancement rates, and the effect of attendance in nursery school is stronger than that in kindergarten.
    Date: 2013–02
  12. By: Manuel Adelino; Antoinette Schoar; Felipe Severino
    Abstract: This paper documents the role of the collateral lending channel to facilitate small business starts and self-employment in the period before the financial crisis of 2008. We document that between 2002 and 2007 areas with a bigger run up in house prices experienced a strong increase in employment in small businesses compared to employment in large firms in the same industries. This increase in small business employment was particularly pronounced in (1) industries that need little startup capital and can thus more easily be financed out of increases in housing as collateral; (2) manufacturing industries where goods are shipped over long distances, which rules out that local demand is driving the expansion. We show that this effect is separate from an aggregate demand channel that relies on home equity based borrowing leading to increased demand and employment creation.
    JEL: E24 G01 G30
    Date: 2013–03
  13. By: E. Anthon Eff
    Abstract: Some land uses are considered incompatible. When a parcel is bordered by parcels with incompatible land uses, external costs will impact the property owner. Collective action by property owners then results in land use regulations designed to restrict neighboring parcels from incompatible uses. The pattern of observed land use contiguities thus testifies to cultural notions regarding incompatible land uses. Using urban planning data, a GIS, and methods from social network analysis, this paper attempts to uncover the tacit rules of spatial proximity among land uses in a United States city. The most salient patterns are a separation between places of residence and places of work, a separation of single family homes from other residential land uses, a separation of rural land uses from everything else, and a separation of condominiums from everything else. The paper then attempts to tie these observed spatial patterns to ideas from Thorstein Veblen, Georg Simmel, and Mancur Olson. It is suggested that the United States urban landscape has been shaped by the ethos of the middle class under capitalism, especially the cult of the family and the need to display status.
    Keywords: built environment; symbolism; land use patterns
    JEL: R14 Z13
    Date: 2013–03
  14. By: Siqi Zheng; Matthew E. Kahn; Weizeng Sun; Danglun Luo
    Abstract: China’s extremely high levels of urban air, water and greenhouse gas emissions levels pose local and global environmental challenges. China’s urban leaders have substantial influence and discretion over the evolution of economic activity that generates such externalities. This paper examines the political economy of urban leaders’ incentives to tackle pollution issues. Based on a principal-agent framework, we present evidence consistent with the hypothesis that both the central government and the public are placing pressure on China’s urban leaders to mitigate externalities. Such “pro-green” incentives suggest that many of China’s cities could enjoy significant environmental progress in the near future.
    JEL: H23 H41 Q48 Q53 R5
    Date: 2013–03
  15. By: Björn Alecke; Claudia Burgard; Timo Mitze
    Abstract: This paper investigates the effects of tuition fees on the university enrollment and location decision of high school graduates in Germany. After a Federal Constitutional Court decision in 2005, 7 out of 16 German federal states introduced tuition fees for higher education. In the empirical analysis, we use the variation over time and across regions in this institutional change in order to isolate the causal effect of tuition fees on student enrollment and migration. Controlling for a range of regional- and university-specific effects, our results from Difference-in-Differences estimations show that there is generally no effect of tuition fees on internal enrollment rates. However, we find a redirecting effect on first-year students‘ migratory behavior as indicated by a signicant drop in the gross in-migration rates in fee-charging states. Further, our results point at a stronger migration response of male students, which, however, can mainly be attributed to a “border effect”. That is, interregional migration flows of male students are redirected from fee-charging universities to those universities that are geographically close by while being located in a non-charging neighboring state. Controlling for these border effects, the relocating trend in long-distance migration of university freshmen does not show any particular gender differences.
    Keywords: Tuition fees; gender differences; higher education; student migration; policy evaluation; Difference-in-Differences
    JEL: D04 I23 J16 R23
    Date: 2013–02
  16. By: Grossmann, Volker; Schäfer, Andreas; Steger, Thomas M.
    Abstract: We investigate the effects of interregional labor market integration in a two-sector, overlapping-generations model with land-intensive production in the non-tradable goods sector (housing). To capture the response to migration on housing supply, capital formation is endogenous, assuming that firms face capital adjustment costs. Our analysis highlights heterogeneous welfare effects of labor market integration. Whereas individuals without residential property lose from immigration due to increased housing costs, landowners may win. Moreover, we show how the relationship between migration and capital formation depends on initial conditions at the time of labor market integration. Our model is also capable to explain the reversal of migration during the transition to the steady state, like observed in East Germany after unification in 1990. It is also consistent with a gradually rising migration stock and house prices in high-productivity countries like Switzerland.
    Keywords: Capital formation; House prices; Land distribution; Migration; Welfare
    JEL: D90 F20 O10
    Date: 2013–02–21
  17. By: Cremer, Helmuth (TSE, IDEI); Maldonado, Dario (University Bogota)
    Abstract: This paper studies oligopolistic competition in education markets when schools can be private and public and when the quality of education depends on "peer group"effects. In the first stage of our game schools set their quality and in the second stage they fix their tuition fees. We examine how the (subgame perfect Nash) equilibrium allocation (qualities, tuition fees and welfare) is affected by the presence of public schools and by their relative position in the quality range. When there are no peer group effects, efficiency is achieved when (at least) all but one school are public. In particular in the two school case, the impact of a public school is spectacular as we go from a setting of extreme differentiation to an efficient allocation. However, in the three school case, a single public school will lower welfare compared to the private equilibrium. We then introduce a peer group effect which, for any given school is determined by its student with the highest ability. These PGE do have a significant impact on the results. The mixed equilibrium is now never efficient. However, welfare continues to be improved if all but one school are public. Overall, the presence of PGE reduces the effectiveness of public schools as regulatory tool in an otherwise private education sector.
    Keywords: Education, peer-group effects, mixed duopoly
    Date: 2013–02
  18. By: Thomas Coisnon (UMR GRANEM - UMR MA 49 – Université d'Angers et Agrocampus Ouest - Université d'Angers); Walid OUESLATI (UMR GRANEM - UMR MA 49 – Université d'Angers et Agrocampus Ouest - Université d'Angers); Julien Salanié (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - Institut national de la recherche agronomique (INRA) : UMR49)
    Abstract: Widespread public support exists for the provision of natural amenities, such as lakes, rivers or wetlands, and for efforts to preserve these from agricultural pollution. Agri-environmental policies contribute to these efforts by encouraging farmers to adopt environmentally friendly practices within the vicinity of these ecosystems. A spatially targeted agri-environmental policy promotes natural amenities and may thereby affect household location decisions. The purpose of this paper is to investigate the extent of these impacts on the spatial urban structure. We extend a monocentric city model to include farmers' responses to an agri-environmental policy. Our main findings are that the implementation of a spatially targeted agri-environmental policy may lead to some additional urban development, which could conflict with the aim of the policy.
    Keywords: Land development; Urban sprawl; Leapfrog; Land rent; Monocentric model; Farming; Agri-environmental policy; Spatial targeting; Agricultural pollution.
    Date: 2013–02
  19. By: Aronsson, Thomas (Department of Economics, Umeå School of Business and Economics); Mannberg, Andrea (Department of Economics, Umeå School of Business and Economics)
    Abstract: During the latest decades, household mortgage loans have increased substantially in many countries. We develop an OLG model where housing is a positional consumption good (such that housing choices are partly driven by relative consumption concerns), and where the consumers are also characterized by a preference for immediate gratification due to quasi-hyperbolic discounting. The purpose is to examine how a paternalistic government may reach its preferred resource allocation through a mix of taxes/subsidies on capital income and housing wealth. Our results show that the optimal policy typically implies a marginal savings-subsidy, while the marginal housing wealth may either be taxed or subsidized. Upward social comparisons imply a possible scenario where the housing wealth of the young generation is subsidized and the housing wealth of the middle-aged generation is taxed at the margin.
    Keywords: Conspicuous consumption; self-control problem; housing; optimal taxation
    JEL: D03 D62 H21 H23
    Date: 2013–02–28
  20. By: Bussière, Matthieu; Kalantzis, Yannick; Lafarguette, Romain; Sicular, Terry
    Abstract: This paper examines the role of rising housing prices and borrowing constraints as determinants of China's high household saving rate, especially among young households. Using a life-cycle model of saving behavior in the presence of borrowing constraints, we show that the relationship between housing prices and saving exists only under certain conditions and for certain groups of households. Specifically, when the return on financial instruments is low (which is the case in China), the saving rate of young households may increase with housing prices. This relationship, moreover, is non-linear and depends on the level of wealth. Employing an empirical strategy motivated by the theoretical model, we analyze a dataset of over six thousand Chinese urban households spanning the years 1995, 2002 and 2007. We find evidence that higher housing prices do in fact increase the saving rates of young households. We also find evidence for the predicted non-linearity.
    Keywords: saving rates, housing market, China, global imbalances, borrowing constraints
    JEL: C81 D91 E21 O16
    Date: 2013–02–26
  21. By: Landersø, Rasmus (Rockwool Foundation Research Unit); Nielsen, Helena Skyt (Aarhus University); Simonsen, Marianne (Aarhus University)
    Abstract: This paper investigates the effects of school starting age on crime while relying on variation in school starting age induced by administrative rules; we exploit that Danish children typically start first grade in the calendar year they turn seven, which gives rise to a discontinuity in children's school starting age. Analyses are carried out using register-based Danish data. We find that higher age at school start lowers the propensity to commit crime, but that this reduction is caused by incapacitation while human capital accumulation is unaffected. Importantly, we also find that the individuals who benefit most from being old-for-grade are those with high latent abilities whereas those with low latent ability seem to be unaffected by being old-for-grade in school.
    Keywords: old-for-grade, school start, criminal charges, violence, property crime
    JEL: I21 K42
    Date: 2013–02
  22. By: Gilles Duranton; Peter Morrow; Matthew Turner
    Abstract: We estimate the effect of interstate highways on the level and composition of trade for us cities. Highways within cities have a large effect on the weight of city exports with an elasticity of approximately 0.5. We find little effect of highways on the total value of exports. Consistent with this, we find that cities with more highways specialize in sectors producing heavy goods.
    Keywords: interstate highways, transportation costs, trade and specializartion
    JEL: F14 R41 R49
    Date: 2013–03–08
  23. By: Jie Zhang (Graduate School of Economics, Keio University)
    Abstract: Infrastructure can affect sectoral productivity and lead to industrial structure changes. Under the framework of Harrigan (1997), this study provides an empirical analysis of the effect of infrastructure on China's industry-level productivity and regional specialization during the period of 1987-2007. We calculate the total factor productivity of 9 manufacturing industries in 28 provinces and study the effects of roads networks, telecommunications, and electric power supply on regional variations in sectoral TFP. We also examine the effect of these infrastructures on the sectoral output share across provinces. By using a structure model of infrastructure accumulation and the 3SLS estimation strategy to control for endogeneity of infrastructure provisions, we find that telecommunications and electric power have positive effects on sectoral TFP performance, while road networks and telecommunications help to explain the regional comparative advantage and production specialization.
    Date: 2013–02
  24. By: Bol, Thijs; Witschge, Jacqueline; Van de Werfhorst, Herman; Dronkers, Jaap
    Abstract: Tracked educational systems are associated with a greater social inequality in children’s educational achievement. Until now research has assumed that the impact of tracking on the inequality of educational opportunity is independent of other educational institutional features. Using data from the 2006 PISA survey, we study how central examinations affect the association between tracking and inequality. We find that parent’s social class has a larger effect on student achievement in systems without central examinations, whereas in systems with central examinations this relationship is attenuated. We argue that central examinations help hold schools accountable for their performance, thereby making it more likely for schools to allocate students to tracks and reward them on the basis of objective indicators, thereby reducing the impact of parental status on children’s performance.
    Keywords: tracking, stratification, inequality of educational opportunity, PISA
    JEL: I21 I24 I28
    Date: 2013–02
  25. By: Christina Clark Tuttle; Brian Gill; Philip Gleason; Virginia Knechtel; Ira Nichols-Barrer; Alexandra Resch
    Abstract: This report shows that Knowledge Is Power Program (KIPP) middle schools have significant and substantial positive impacts on student achievement in four core academic subjects: reading, math, science, and social studies. One of the report’s analyses confirms the positive impacts using a rigorous randomized experimental analysis that relies on the schools’ admissions lotteries to identify comparison students, thereby accounting for students’ prior achievement, as well as factors such as student and parent motivation. The latest findings from Mathematica’s multiyear study of KIPP middle schools, the report is the most rigorous large-scale evaluation of KIPP charter schools to date, covering 43 KIPP middle schools in 13 states and the District of Columbia. Student outcomes examined included state test results in reading and math, test scores in science and social studies, results on a nationally normed assessment that includes measures of higher-order thinking, and behaviors reported by students and parents.
    Keywords: KIPP, Middle Schools, Achievement, Education
    JEL: I
    Date: 2013–02–27
  26. By: Stijn BAERT (Ghent University); Bart COCKX (Ghent University, Université Catholique de Louvain (IRES), CESIfo and IZA)
    Abstract: This article decomposes the observed gaps in educational attainment and school-to-work transitions between grandchildren of natives and immigrants in Belgium into (i) differences in observed family endowments and (ii) a residual “pure ethnic gap”. It innovates by explicitly taking delays in educational attainment into account, by identifying the moments at which the pure ethnic gaps arise, by disentangling the decision to continue schooling at the end of a school year from the achievement within a particular grade, and by integrating the language spoken at home among observed family endowments. The pure ethnic gap in educational attainment is found to be small if delays are neglected, but substantial if not and for school-to-work transitions. It is shown that more than 20% of the pure ethnic gap in graduating from secondary school without delay originates in tenth grade. Language usage explains only part of the gap in school-to-work transitions for low educated.
    Keywords: dynamic discrete choice, dynamic selection bias, educational attainment, school-to-work transitions, ethnic minorities, discrimination
    JEL: C35 J15 J70
    Date: 2013–03–01
  27. By: Carmen Camacho (Centre d'Economie de la Sorbonne)
    Abstract: We develop a model economy adapting Hotelling's migration law to make individuals react to the gradient of their indirect utility. In a first version, individuals respond uniquely to utility differences. In a second phase, we insert our migration law as a dynamic constraint in a spatial model of economic growth in which a policy maker maximizes overall welfare. In both cases we prove the existence of a unique solution under certain assumptions and for each initial distribution of human capital. We illustrate some extremely interesting properties of the economy and the associated population dynamics through numerical simulations. In the decentralized case in which a region enjoys a temporal technological advantage, an agglomeration in human capital emerges in the central area, which does not coincide with the technologically advanced area. In the complete model, initial differences in human capital can trigger everlasting inequalities in physical capital.
    Keywords: Migration, spatial dynamics, economic growth, parabolic PDE, optimal control.
    JEL: J6 C61 R11 R12 R13
    Date: 2013–02
  28. By: Núria Bosch (Universitat de Barcelona & IEB); Marta Espasa (Universitat de Barcelona & IEB); Daniel Montolio (Universitat de Barcelona & IEB)
    Abstract: This paper analyse the costs and benefits of being a capital or central municipality, where central costs are understood to be incurred specifically as a result of the problems large municipalities located at the centre of an urban agglomeration face and capital costs are understood to result from the presence of regional and/or central government institutions in the municipality. However, these two qualities might also be beneficial to municipalities, resulting in a direct increase in their fiscal capacity. Here, by estimating an equation of the expenditure needs and the fiscal capacity of Spanish municipalities with more than 75,000 inhabitants, we find that the central costs incurred by large municipalities are offset by their greater fiscal capacity, but that the same is not true for municipalities that serve as political/administrative capitals.
    Keywords: Local financing, large municipalities, central and capital costs and benefits, expenditure needs, fiscal capacity
    JEL: H72 H77 R51
    Date: 2013
  29. By: Fairlie, Robert W. (University of California, Santa Cruz); Robinson, Jonathan (University of California, Santa Cruz)
    Abstract: Computers are an important part of modern education, yet large segments of the population – especially low-income and minority children – lack access to a computer at home. Does this impede educational achievement? We test this hypothesis by conducting the largest-ever field experiment involving the random provision of free computers for home use to students. 1,123 schoolchildren grades 6-10 in 15 California schools participated in the experiment. Although the program significantly increased computer ownership and use, we find no effects on any educational outcomes, including grades, standardized test scores, credits earned, attendance and disciplinary actions. Our estimates are precise enough to rule out even modestly-sized positive or negative impacts. The estimated null effect is consistent with survey evidence showing no change in homework time or other "intermediate" inputs in education for treatment students.
    Keywords: computers, education, experiment
    JEL: I24
    Date: 2013–02
  30. By: Josep-Oriol Escardíbul (University of Barcelona & IEB); Toni Mora (Universitat Internacional de Catalunya & IEB)
    Abstract: This paper analyses the impact of teacher gender towards students’ test results in a blinded Math test administered to students in Catalonia (Spain). The data for this analysis are drawn from a sample of secondary school students who participated in an international blind-test known as the “Mathematical Kangaroo” in 2008. The estimation considers a two-stage procedure since participation on the test leads to the presence of sample selection. Results show a correlation between female teacher gender and student results. Moreover, students with female teachers have a higher probability of participating in the “Kangaroo” test (in this case, the effect being more marked among male students).
    Keywords: Grading, teacher gender, two-stage procedure, gender stereotypes
    JEL: I28 J16
    Date: 2013
  31. By: Berno Buechel (University of Hamburg); Nils Röhl (University of Paderborn)
    Abstract: In the framework of spatial competition, two or more players strategically choose a location in order to attract consumers. It is assumed standardly that consumers with the same favorite location fully agree on the ranking of all possible locations. To investigate the necessity of this questionable and restrictive assumption, we model heterogeneity in consumers' distance perceptions by individual edge lengths of a given graph. A profile of location choices is called a ``robust equilibrium'' if it is a Nash equilibrium in several games which differ only by the consumers' perceptions of distances. For a finite number of players and any distribution of consumers, we provide a full characterization of all robust equilibria and derive structural conditions for their existence. Furthermore, we discuss whether the classical observations of minimal differentiation and inefficiency are robust phenomena. Thereby, we find strong support for an old conjecture that in equilibrium firms form local clusters.
    Keywords: spatial competition, Hotelling-Downs, networks, graphs, Nash equilibrium, median, minimal differentiation
    JEL: C72 D49 P16 D43
    Date: 2013–02
  32. By: Edoardo Di Porto (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies); Vincent Merlin (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Sonia Paty (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: Cooperation among local governments has been encouraged to enable the aggregation of resources and improved public sector efficiency. However, if cooperation through the joint delivery of local public services is likely to be welfare enhancing for the agglomeration, but will lead to losses for one of the parties, it is unlikely that the losing municipality will cooperate. Using a unique panel dataset of 30,000 French municipalities for 1995-2003, we estimate the relationship between cooperation decision and the fiscal revenues raised to provide local public goods. We employ a new econometric strategy based on Lee (1978), developing a non linear method controlling for fixed effect, endogenous covariates and cluster standard error. We find evidence that a positive difference between the expected fiscal revenues of a cooperating locality and the actual revenues realized by an isolated locality significantly increases the probability of joining an inter-municipal community.
    Keywords: inter-municipal cooperation; fiscal revenues; bivariate response variable; panel data; endogeneity
    Date: 2013–02–12
  33. By: Giovanni Peri (UC, Davis); Kevin Shih (UC, Davis); Chad Sparber (Colgate University)
    Abstract: Scientists, Technology professionals, Engineers, and Mathematicians (STEM workers) are the fundamental inputs in scientific innovation and technological adoption. Innovation and technological adoption are, in turn, the main drivers of productivity growth in the U.S. In this paper we identify STEM workers in the U.S. and we look at the effect of their growth on the wages and employment of college and non-college educated labor in 219 U.S. cities from 1990 to 2010. In order to identify a supply-driven and heterogenous increase in STEM workers across U.S. cities, we use the dependence of each city on foreign-born STEM workers in 1980 (or 1970) and exploit the introduction and variation (over time and across nationalities) of the H-1B visa program, which expanded access to U.S. labor markets for foreign-born college-educated (mainly STEM) workers. We find that H-1B-driven increases in STEM workers in a city were associated with significant increases in wages paid to both STEM and non-STEM college-educated natives. Non-college educated show no significant wage or employment effect. We also find evidence that STEM workers caused cities to experience higher housing prices for college graduates, increased specialization in high human capital sectors, and a rise in the concentration of natives in cognitive occupations. The magnitudes of these estimates imply that STEM workers contributed significantly to total factor productivity growth in the U.S. and across cities and — to a lesser extent — to the growth in skill-bias between 1990 and 2010.
    Keywords: STEMWorkers, H-1B, Foreign-Born, Productivity, College-Educated, Wage, Employment.
    JEL: J61 F22 O33 R10
    Date: 2013–03
  34. By: Anna Golejewska (Faculty of Economics, University of Gdansk); Damian Gajda (Faculty of Management, University of Gdansk)
    Abstract: The aim of the article is to analyse use of the EU Structural Funds for innovative projects in SMEs from Regional Operational Programme of Pomorskie Voivodeship for 2007-2013. In the analysis we use the data from the Pomerania Development Agency Inc. In the first section we described conditions and rules of grants awarding. The next section contains short description of firms in Pomeranian region and the analysis of granted projects. The results confirmed significant diversity of total values of projects, awarded grants and branches. So far, only small part of them has been implemented in high-technology sectors. With regard to the number of projects, the majority has been implemented using own funds. The results show high concentration of projects in Tri-City Agglomeration. According to our findings, firms rather carefully cooperate with external partners in implementing projects.
    Keywords: entrepreneurship, regional analysis, innovativeness, EU Structural Funds
    JEL: D22 R11 O3
    Date: 2013–02
  35. By: Edward L. Glaeser
    Abstract: The great housing convulsion that buffeted America between 2000 and 2010 has historical precedents, from the frontier land boom of the 1790s to the skyscraper craze of the 1920s. But this time was different. There was far less real uncertainty about fundamental economic and geographic trends, making the convulsion even more puzzling. During historic and recent booms, sensible models could justify high prices on the basis of seemingly reasonable projections about stable or growing prices. The recurring error appears to be a failure to anticipate the impact that elastic supply will eventually have on prices, whether for cotton in Alabama in 1820 or land in Las Vegas in 2006. Buyers don’t appear to be irrational but rather cognitively limited investors who work with simple heuristic models, instead of a comprehensive general equilibrium framework. Low interest rates rarely seem to drive price growth; under-priced default options are a more common contributor to high prices. The primary cost of booms has not typically been overbuilding, but rather the financial chaos that accompanies housing downturns.
    JEL: D0 N0 R0
    Date: 2013–02
  36. By: Lanzafame, Matteo
    Abstract: Building on standard growth-theory models, this paper provides an empirical investigation of the effects of crime on regional economic performance in Italy, as measured by labour productivity growth. Our analysis relies on a panel of annual data on the Italian regions and, contrary to previous studies in the field, adopts a flexible and efficient panel estimation approach which controls for parameter heterogeneity, cross-section dependence and variable endogeneity via mean-group estimation, multifactor modelling and Granger-causality methods. Our results strongly support the hypothesis that crime has significant negative effects on regional growth in Italy.
    Keywords: Crime, regional growth, panel data, multifactor modeling.
    JEL: C23 O40 R10
    Date: 2013–02
  37. By: Gürbüz, Ayça Akarcay (Galatasaray University Economic Research Center); Polat, Sezgin (Galatasaray University Economic Research Center); Ulus, Mustafa (Galatasaray University Economic Research Center)
    Abstract: Over the last decade, alongside high unemployment rates, the number of discouraged workers remained high in Turkey indicating a structural problem of the labor market. Moreover, the ratio of men among discouraged workers is particularly important compared to other OECD countries where the discouragement is thought to be related to gender issues. Discouraged worker literature mainly investigates differences in the transition rates from unemployment and discouragement into employment. Few studies, however, explicitly explore who becomes discouraged and why. In the Turkish labor market, the average transition from unemployment into discouragement is important and displays vast inter-regional disparities implying that local labor market (LLM) conditions matter. This paper aims to address factors affecting transition to discouragement in the Turkish labor market using pooled cross-section data from household labor force surveys for the period between 2006 and 2011, considering individual and household characteristics, as well as various LLM conditions. Our findings indicate that low qualifications and poor market conditions both lead to higher discouragement.
    Keywords: Discouraged workers; Local labor market; Transition; Cross-section data; Job search
    JEL: C31 J21 J64 R23
    Date: 2013–03–10
  38. By: Allison Shertzer
    Abstract: The United States absorbed nearly 22 million immigrants from Europe between 1880 and 1915. How did these immigrants, largely from undemocratic European states, become integrated into the American political system? This paper uses a newly assembled dataset of urban populations in the United States prior to World War I to investigate the decision of newly arrived immigrants to mobilize politically, focusing on the citizenship choice of foreign-born individuals in city wards. I find that immigrants were more likely to become politically active as their ethnic group’s share of the electorate grew, particularly in wards where the Democratic Party likely needed the vote of new immigrants to win elections.
    JEL: D72 J15 N31
    Date: 2013–02
  39. By: Angela Valdovinos D'Angelo; Lauren Rich; Jaclyn Kwiatt
    Keywords: Family Support, Schools, Elev8 Initiative, Low-Income Families
    JEL: I C
    Date: 2013–01–30
  40. By: Braakmann, Nils
    Abstract: This paper uses variation in victimization probabilities between individuals living in the same community to shed new light on the costs of crime. I use panel data from the Mexican Family Life Survey for 2002 and 2005 and look at the impact of within-community differences in victimization risk on changes in self-rated and mental health. My results from fixed effects and instrumental variable estimations point towards substantial negative health effects of actual victimization, which might help to explain the existence of compensating differentials in wages or house prices found in earlier studies.
    Keywords: cost of crime; victimization; health
    JEL: H40 I10 I12 K00 K42 R23
    Date: 2013–01–21
  41. By: Abel Brodeur (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Sarah Flèche (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper analyses how neighbors' income affect agents' well-being using unprecedented data from the BRFSS and the City of Somerville. We conduct a multi-scale approach at the county, ZIP code and street-levels and find that the association between well-being and neighbors' income follows an inverted U-shaped pattern in the size of the area. We find a negative relationship between well-being and neighbors' income in the county of residence, but the opposite at the ZIP code-level. Our results are consistent with the fact that agents enjoy living in a rich ZIP code but also having poor faraway neighbors since they have preferences for high social status. We test explicitly this interpretation by including amenities and the relative rank in the local income distribution in our model. At the street-level, we find a negative association between neighbors' income and self-reported well-being indicating the presence of income comparisons between very close neighbors.
    Keywords: Income comparisons ; Rank ; Relative utility ; Social interactions ; Social staut ; Well-being
    Date: 2013–02–27
  42. By: Masja van Meeteren (Erasmus University Rotterdam); Sonia Pereira (Institute of Geography and Spatial Planning, University of Lisbon)
    Abstract: This paper draws on qualitative and quantitative data on the migration experiences of Brazilians living in Portugal and the Netherlands to reflect and expand upon the existing knowledge on the role of social networks in migration processes. We consider different migrant profiles based on principal migration motives to identify differentiated socio-demographic profiles and relate these to migration strategies. We show that differences in the ways migrants access and use social networks in their migration projects can be related to these different migration motives and profiles. Simultaneously, we compare two distinct immigration contexts both in terms of contemporary immigration regimes and working opportunities and historical links to Brazil. Our findings demonstrate that migration scholars need to move beyond the narrow conceptualisation of social networks based on community or kin relationships, to consider multiple configurations involving different agents – both in the origin and destination countries – at different stages of the migration process. In addition, we show that future analyses would benefit from taking into account the differences between migrants driven by distinct motivations in different places.
    Keywords: Social networks, immigration, migration motives, Portugal, Brazil, Netherlands
    Date: 2013–03
  43. By: Christophe Muller (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Marc Vothknecht (DIW Berlin - German Institute for Economic Research)
    Abstract: We study the impact of violent conflict on social capital, as measured by citizen participation in community groups, defined by four activity types: governance, social service, infrastructure development and risk-sharing. Combining household panel data from Indonesia with conflict event information, we find an overall decrease in citizen contributions in districts affected by group violence in the early post-Suharto transition period. However, participation in communities with a high degree of ethnic polarization is less affected, and is even stimulated for local governance and risk-sharing activities. Moreover, individual engagement appears to depend on the involvement of other members from the same ethnic group, which points toward building of intra-ethnic social networks in the presence of violence. Finally, our results show the danger of generalization when dealing with citizen participation in community activities. We find a large variety of responses depending on the activity and its economic and social functions. We also find large observed and unobserved individual heterogeneities of the effect of violence on participation. Once an appropriate nomenclature of activities is used and controls for heterogeneity are applied, we find that the ethnic and social configuration of society is central in understanding citizen participation.
    Keywords: Violent Conflict; Citizen Participation; Local Public Goods
    Date: 2013–02
  44. By: Shoji, Masahiro
    Abstract: I conducted an artefactual field experiment to identify whether guilt reduces crime, and how the crime reduction effects of guilt change due to peer effects. Guilt aversion predicts the occurrence of peer effects caused by changes in guilt sensitivity and belief. I found supporting evidence of changes in belief. My experiment is novel in that it develops an approach to elicit guilt sensitivity. Using this data, I show behavioural patterns consistent with guilt aversion but not with pure altruism or trustworthiness. The external validity of guilt sensitivity is also shown.
    Keywords: Guilt aversion; crime; experiment; external validity; peer effects; broken windows theory
    JEL: C91 C93 D63 K42
    Date: 2013–03–05

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