nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒04‒27
forty-five papers chosen by
Steve Ross
University of Connecticut

  1. Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry By Luís Cabral; Zhu Wang; Daniel Yi Xu
  2. The Costs of Agglomeration: Land Prices in French Cities By Pierre-Philippe Combes; Gilles Duranton; Laurent Gobillon
  3. New Economic Geography and the City By Carl Gaigné; Jacques-François Thisse
  5. The GST and mortgage costs: Australian evidence By Allen Huang; Benjamin Liu
  6. Social Capital, Industrial Districts and Regional Unemployment in Italy By Luca Andriani
  7. The impact of the Goods and Services Tax on mortgage costs of Australian credit unions By Benjamin Liu; Allen Huang
  8. The Out-of-Sample Forecasting Performance of Non-Linear Models of Regional Housing Prices in the US By Mehmet Balcilar; Rangan Gupta; Stephen M. Miller
  9. Housing and the Great Depression By Mehmet Balcilar; Rangan Gupta; Stephen M. Miller
  10. "Task Trade and the Size Distribution of Cities" By Kohei Nagamachi
  11. Endogenous Sources of Volatility in Housing Markets: The Joint Buyer-Seller Problem By Elliot Anenberg; Patrick Bayer
  12. Regional Effects of a Cluster-oriented policy measure. The Case of the InnoRegio program in Germany By Thomas Brenner; Carsten Emmrich; Charlotte Schlump
  13. Scientific Knowledge Dynamics and Relatedness in Bio-Tech Cities By Ron Boschma; Gaston Heimeriks; Pierre-Alexandre Balland
  14. The Demise of Walk Zones in Boston: Priorities vs. Precedence in School Choice By Umut M. Dur; Scott Duke Kominers; Parag A. Pathak; Tayfun Sönmez
  15. Lódzkie Region: Demographic Challenges Within an Ideal Location By Piotr Szukalski; Cristina Martinez-Fernandez; Tamara Weyman
  16. Fiscal Policy Shocks and the Dynamics of Asset Prices: The South African Experience By Goodness C. Aye; Mehmet Balcilar; Rangan Gupta; Charl Jooste; Stephen M. Miller; Zeynel Abidin Ozdemir
  17. Related Variety, Unrelated Variety and Technological Breakthroughs: an analysis of U.S. state-level patenting By Carolina Castaldi; Koen Frenken; Bart Los
  18. Misadventures in Regionalism: Reaffirming the Importance of Central Places in Regional Economic Development Assistance By Swenson, David A.; Eathington, Liesl
  19. Which Firms are Left in the Periphery? - Spatial Sorting of Heterogeneous Firms with Scale Economies in Transportation By Forslid, Rikard; Okubo, Toshihiro
  20. Residential Parking Permits and Parking Supply By Jos van Ommeren; Jesper de Groote; Giuliano Mingardo
  21. Does Tracking of Students Bias Value-Added Estimates for Teachers? By Ali Protik; Elias Walsh; Alexandra Resch; Eric Isenberg; Emma Kopa
  22. Speculating China economic growth through Hong Kong? Evidence from the stock market IPO and real estate markets By Leung, Charles Ka Yui; Tang, Edward Chi Ho
  23. Quasi-Experimental Evaluation of a Student Mentoring Program By Sandner, Malte
  24. European migration, national origin and long-term economic development in the US By Andrés Rodríguez-Pose; Viola von Berlepsch
  25. Majority Vote on Educational Standards By Robert Schwager
  26. Hospital Mergers: A Spatial Competition Approach By Kurt R. Brekke; Luigi Siciliani; Odd Rune Straume
  27. Design and Methods in the Early Head Start Study. By Richard A. Faldowski; Rachel Chazan-Cohen; John M. Love; Cheri Vogel
  28. Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life By Deckers, Thomas; Falk, Armin; Schildberg-Hörisch, Hannah
  29. Tourism in the Portuguese Rural Areas By Martinho, Vítor João Pereira Domingues
  30. Urbanization and poverty reduction -- the role of rural diversification and secondary towns By Christiaensen, Luc; De Weerdt, Joachim; Todo, Yasuyuki
  31. Towards an Age-Friendly City: The Constraints Preventing the Elderly's Participation in Community Programs in Akita City By Yoshihiko Kadoya
  32. The role of cable TV operators as a facility based competitor in the local broadband market: A case study from three competitive areas in Japan By Yonetani, Nami; Sugaya, Minoru
  33. Municipal driven fiber access network rollout By Van Ooteghem, Jan; Casier, Koen; Verbrugge, Sofie; Colle, Didier; Pickavet, Mario; De Heyn, Luc; Meersman, Raf; Rosseau, Bart
  34. Regionalization and its effects in Finland ? a regional AGE modelling analysis By Jussi Ahokas; Jouko Kinnunen; Juha Honkatukia; Antti Simola; Saara Tamminen
  35. The heterogeneous effects of workforce diversity on productivity, wages and profits By Andrea Garnero; François Rycx
  36. Demographic Transition and an Ageing Society: Implications for Local Labour Markets in Poland By Cristina Martinez-Fernandez; Tamara Weyman; Jolanta Perek-Białas; Iwona Sagan; Piotr Szukalski; Piotr Stronkowski
  37. Seat competitiveness and redistricting: Evidence from voting on municipal mergers By Janne Tukiainen; Tuukka Saarimaa
  38. Tax attractiveness and the location of German-controlled subsidiaries By Keller, Sara; Schanz, Deborah
  39. A Fresh Look at Capacity Development from Insiders’ Perspectives: A Case Study of an Urban Redevelopment Project in Medellín, Colombia By Sato, Mine
  40. Estimating the willingness to pay for the removal of a local undesirable land use: The case of the Manganese ore dump and oil tank farm in the Port Elizabeth Harbour By Mario Du Preez, Deborah Ellen Lee and Leann Cloete
  41. Firm's cooperation activities: The relevance of public research, proximity and personal ties - A study of technology-oriented firms in East Germany By Charlotte Schlump; Thomas Brenner
  42. Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance? By Erlend Berg; Maitreesh Ghatak; R Manjula; D Rajasekhar; Sanchari Roy
  43. Which Factors Determine the Level of Expenditure on Teaching Staff? By OECD
  44. Job Search Channels, Neighborhood Effects and Wages Inequality in Developing Countries: The Colombian Case By Garcia, Gustavo Adolfo; Nicodemo, Catia
  45. The butterfly and the elephant: local social innovation, the welfare state and new poverty dynamics By Stijn Oosterlynck; Yuri Kazepov; Andreas Novy; Pieter Cools; Eduardo Barberis; Florian Wukovitsch; Tatiana Saruis; Bernhard Leubolt

  1. By: Luís Cabral; Zhu Wang; Daniel Yi Xu
    Abstract: Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts.
    JEL: L26 L6 R1
    Date: 2013–04
  2. By: Pierre-Philippe Combes (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM)); Gilles Duranton (Wharton School, University of Pennsylvania - University of Pennsylvania); Laurent Gobillon (INED - Institut National d'Etudes Démographiques Paris - INED, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études 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: We develop a new methodology to estimate the elasticity of urban costs with respect to city population using French land price data. Our preferred estimate, which handles a number of estimation concerns, stands at 0.041. Our approach also yields a number of intermediate outputs of independent interest such as a distance gradient for land prices and the elasticity of unit land prices with respect to city population. For the latter, our preferred estimate is 0.72.
    Keywords: urban costs; land prices; land use; agglomeration
    Date: 2012–11
  3. By: Carl Gaigné; Jacques-François Thisse
    Abstract: New economic geography (NEG) has proven to be very useful in dealing with a large number of issues. Yet, in this paper we do not discuss the canonical NEG models and their vast number of extensions. Rather, we provide an overview of recent developments in the NEG literature that build on the idea that the difference in the economic performance of regions is explained by the behavior and interactions between households and firms located within them. This means that we consider NEG models which take into account land markets, thereby the internal structure and industrial mix of urban agglomerations.
    Keywords: city size, city structure, firms location, households location
    JEL: R0
    Date: 2013
  4. By: Marie-Estelle Binet (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); François Facchini (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This article tackles one central issue in the regional science literature: the persistence of regional disparities in unemployment within national economies. Our approach is original as Okun's coefficients are estimated for each of the 22 administrative French regions over the period 1990-2008, taking into account cross-regional disparities in a panel data specification. Estimates show that the coefficients exhibit regional differences. Indeed, Okun's law is confirmed in fourteen regions, although it does not hold in the other eight regions. Finally, region-specific factors that explain the results that are not significant are identified, and policies to reduce unemployment in French regions are examined.
    Keywords: Okun's law, panel data, French regions, spatial heterogeneity
    Date: 2013–02–21
  5. By: Allen Huang; Benjamin Liu
    Keywords: Australian GST, mortgage costs, house affordability
    JEL: G21 G14 H25 G12
    Date: 2013–02
  6. By: Luca Andriani (Department of Management, Birkbeck University of London)
    Date: 2012–10
  7. By: Benjamin Liu; Allen Huang
    Keywords: Australian GST, mortgage costs of credit unions, housing affordability, lender pricing behaviour
    JEL: G21 G14 H25 G12
    Date: 2013–01
  8. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas)
    Abstract: This paper provides out-of-sample forecasts of linear and non-linear models of US and Census regions housing prices. The forecasts include the traditional point forecasts, but also include interval and density forecasts of the housing price distributions. The non-linear smooth-transition autoregressive model outperforms the linear autoregressive model in point forecasts at longer horizons, but the linear autoregressive model dominates the non-linear smooth-transition autoregressive model at short horizons. In addition, we generally do not find major differences in performance for the interval and density forecasts between the linear and non-linear models. Finally, in a dynamic 25-step ex-ante and interval forecasting design, we, once again, do not find major differences between the linear and nonlinear models.
    Keywords: Forecasting, Linear and non-linear models, US and Census housing price indexes
    JEL: C32 R31
    Date: 2012–08
  9. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas)
    Abstract: This paper considers the role of the real housing price in the Great Depression. More specifically, we examine structural stability of the relationship between the real housing price and real GDP per capita. We test for structural change in parameter values, using a sample of annual US data from 1890 to 1952. The paper examines the long-run and short-run dynamic relationships between the real housing price and real GDP per capita to determine if these relationships experienced structural change over the sample period. We find that temporal Granger causality exists between these two variables only for sub-samples that include the Great Depression. For the other sub-sample periods as well as for the entire sample period no relationship exists between these variables.
    Keywords: Great Depression, Real House Price, Real GDP per Capita, Structural change
    JEL: C32 E32 R31
    Date: 2013–04
  10. By: Kohei Nagamachi (Faculty of Economics, University of Tokyo)
    Abstract:       Taking account of the increasing importance of task trade in urban contexts, this paper provides a model of a system of cities in which ex ante identical locations specialize in tasks that differ in their skill intensity, resulting in a unique size distribution of cities. The necessary and sufficient condition for a power law including Zipf's law is derived, and a quantitative analysis shows that the model is consistent with the size distribution of U.S. cities. A welfare analysis is also conducted, suggesting that the welfare loss due to spatial inefficiency is fairly small.
    Date: 2013–04
  11. By: Elliot Anenberg; Patrick Bayer
    Abstract: This paper presents new empirical evidence that internal movement - selling one home and buying another - by existing homeowners within a metropolitan housing market is especially volatile and the main driver of fluctuations in transaction volume over the housing market cycle. We develop a dynamic search equilibrium model that shows that the strong pro-cyclicality of internal movement is driven by the cost of simultaneously holding two homes, which varies endogenously over the cycle. We estimate the model using data on prices, volume, time-on-market, and internal moves drawn from Los Angeles from 1988-2008 and use the fitted model to show that frictions related to the joint buyer-seller problem: (i) substantially amplify booms and busts in the housing market, (ii) create counter-cyclical build-ups of mismatch of existing owners with their homes, and (iii) generate externalities that induce significant welfare loss and excess price volatility.
    JEL: E32 R0 R21 R3 R31
    Date: 2013–04
  12. By: Thomas Brenner (Philipps-Universität Marburg); Carsten Emmrich; Charlotte Schlump (Philipps-Universität Marburg)
    Abstract: This paper examines regional effects of the InnoRegio program, which was conducted by the German Federal Ministry of Education and Research. The InnoRegio program has been a new tool of innovation policy with the aim to improve innovativeness in East Germany on the basis of prosperous regional networks. Besides the direct support of networks and innovation activities, the program was meant to trigger the regional development in East Germany. While existing studies examine whether the development of networks or cluster was successful, this paper focuses on the investigation of regional economic development. Using regional data, especially on employment and patents, we examine whether the involved industries have developed better in supported regions than in other (East) German regions. Developments are investigated for a time span including years before, during and after the policy measure. We find some positive effects in the regional development that can be assigned to the InnoRegio program.
    Keywords: cluster policy, InnoRegio program, cluster, networks, region, employment, innovation, policy evaluation
    JEL: C22 O12 O25 O33 R11 R28
    Date: 2013–01–04
  13. By: Ron Boschma; Gaston Heimeriks; Pierre-Alexandre Balland
    Abstract: This paper investigates the impact of scientific relatedness on knowledge dynamics in biotech at the city level during the period 1989-2008. We assess the extent to which the emergence of new research topics and the disappearance of existing topics in cities are dependent on their degree of scientific relatedness with existing topics in those cities. We make use of the rise and fall of title words in scientific publications in biotech to identify major cognitive developments within the field. We determined the degree of relatedness between 1,028 scientific topics in biotech by means of co-occurrence of pairs of topics in journal articles. We combined this relatedness indicator between topics in biotech with the scientific portfolio of cities (i.e. the topics on which they published previously) to determine how cognitively close a potentially new topic (or an existing topic) is to the scientific portfolio of a city. We analyzed knowledge dynamics at the city level by looking at the entry and exit of topics in the scientific portfolio of 276 cities in the world. We found strong and robust evidence that new scientific topics in biotech tend to emerge systematically in cities where scientifically related topics already exist, while existing scientific topics had a higher probability to disappear from a city when these were weakly related to the scientific portfolio of the city.
    Keywords: relatedness, co-occurrence analysis, knowledge dynamics, geography of biotech, title words
    JEL: O33 R11 L65 D83
    Date: 2013–04
  14. By: Umut M. Dur; Scott Duke Kominers; Parag A. Pathak; Tayfun Sönmez
    Abstract: School choice plans in many cities grant students higher priority for some (but not all) seats at their neighborhood schools. This paper demonstrates how the precedence order, i.e. the order in which different types of seats are filled by applicants, has quantitative effects on distributional objectives comparable to priorities in the deferred acceptance algorithm. While Boston's school choice plan gives priority to neighborhood applicants for half of each school's seats, the intended effect of this policy is lost because of the precedence order. Despite widely held impressions about the importance of neighborhood priority, the outcome of Boston's implementation of a 50-50 school split is nearly identical to a system without neighborhood priority. We formally establish that either increasing the number of neighborhood priority seats or lowering the precedence order positions of neighborhood seats at a school have the same effect: an increase in the number of neighborhood students assigned to the school. We then show that in Boston a reversal of precedence with no change in priorities covers almost three-quarters of the range between 0% and 100% neighborhood priority. Therefore, decisions about precedence are inseparable from decisions about priorities. Transparency about these issues—in particular, how precedence unintentionally undermined neighborhood priority—led to the abandonment of neighborhood priority in Boston in 2013.
    JEL: C78 D50 D61 I21
    Date: 2013–04
  15. By: Piotr Szukalski; Cristina Martinez-Fernandez; Tamara Weyman
    Abstract: This paper outlines the findings of the Poland case study of the Lódzkie region for the international project, Local scenarios of demographic change. The Lódzkie region is located in the central part of Poland, at the intersection of several major arterial roads; Berlin-Moscow and Gdansk-Vienna. Despite the excellent location, the region is affected by several demographic challenges, partly related to the region’s proximity to Warsaw, the Polish capital city. The official strategic documents for regional development have been focused on “hard” infrastructure development, with limited attention being paid to current or future demographic and social challenges, such as the declining and ageing population, which pose significant obstacles to future regional development. Profound public interest in demographic change, however, has resulted in the creation of a plan for 2013-2014 to forestall this predicted depopulation, and also, in the preparation of a demographic development strategy for the following years.
    Date: 2013–04–18
  16. By: Goodness C. Aye (Department of Economics, University of Pretoria, Pretoria); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); Charl Jooste (Department of Economics, University of Pretoria, Pretoria); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas); Zeynel Abidin Ozdemir (Department of Economics, Gazi University)
    Abstract: This study assesses how fiscal policy affects the dynamics of asset markets, using Bayesian vector autoregressive models. We use sign restrictions to identify government revenue and government spending shocks, while controlling for generic business cycle and monetary policy shocks. In addition to examining the effects of anticipated and unanticipated revenue and spending shocks, we also analyse three types of fiscal policy scenarios: a deficit-financed spending increase, a balanced budget spending increase (financed with higher taxes), and a deficit-financed tax cut (revenue decreases but government spending stays unchanged). Using South African quarterly data from 1966:Q1 to 2011:Q2, we show that a deficit spending shock does not affect house prices, but temporarily exerts a positive effect on stock prices. With a deficit-financed tax cut shock, house prices increase persistently while stock prices increase quickly, but only temporarily. A balanced budget shock permanently decreases house prices and temporarily reduces stock prices.
    Keywords: Bayesian Sign-Restricted VAR, fiscal policy, housing prices, stock prices
    JEL: C32 E62 G10 H62
    Date: 2012–08
  17. By: Carolina Castaldi; Koen Frenken; Bart Los
    Abstract: We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography.
    Keywords: recombinant innovation, regional innovation, superstar patents, technological variety, evolutionary economic geography
    JEL: O31 R11
    Date: 2013–02
  18. By: Swenson, David A.; Eathington, Liesl
    Abstract: Multiâ€jurisdictional regional planning and problem solving approaches have been the mainstay in rural development efforts in recent decades, and regional partnerships are often a prerequisite for state or federal funding. The authors believe that many such initiatives utilize regions of convenience rather than regions of substance. This paper describes a shift in our preferred geography for providing research and technical assistance in nonmetropolitan areas in Iowa. This shift has led us, at least regarding rural development assistance, to move towards emphasizing the provision of community development services to regionallyâ€important nonmetropolitan urban centers, i.e., central places that clearly serve as trade, employment, and service nodes, and away from a broader regional focus that attempts to find solutions and objectives that are agreeable to multiple, yet still intensely competitive, communities.
    Keywords: Sustainability; central place; regionalism; triple bottom line
    Date: 2013–04–23
  19. By: Forslid, Rikard (Dept. of Economics, Stockholm University); Okubo, Toshihiro (Kobe University)
    Abstract: This paper introduces scale economies or density economies in transportation in a trade and geography model with heterogeneous firms. This relatively small change to the standard model produces a new pattern of spatial sorting among …firms. Contrary to the existing literature, our model produces the result that firms of intermediate productivity relocate to the large core region, whereas high and low productivity firms remain in the periphery. Trade liberalisation leads to a gradual relocation to the core, with the most productive firms remaining in the periphery.
    Keywords: heterogeneous …firms; transportation costs; scale economies
    JEL: F12 F15
    Date: 2013–04–17
  20. By: Jos van Ommeren (VU University Amsterdam); Jesper de Groote (VU University Amsterdam); Giuliano Mingardo (Erasmus University Rotterdam)
    Abstract: We estimate welfare losses of policies that provide on-street parking permits to residents almost free of charge in shopping districts. Our empirical results indicate that parking supply is far from perfectly price elastic, implying that there are substantial welfare losses related to under-priced parking permits. Our results suggest that the provision of residential parking permits in shopping districts induces a yearly deadweight loss of at least euro 500 per permit, which is about 30% of the supply cost of a parking place in shopping districts.
    Keywords: parking supply; residential parking permit; deadweight loss
    JEL: R41 R48
    Date: 2013–04–12
  21. By: Ali Protik; Elias Walsh; Alexandra Resch; Eric Isenberg; Emma Kopa
    Keywords: Value-Added, Students, Teachers, Estimates
    JEL: I
    Date: 2013–03–30
  22. By: Leung, Charles Ka Yui; Tang, Edward Chi Ho
    Abstract: This paper argues that since China closes her asset markets, investors turn to Hong Kong instead. The initial public offerings (IPO) of Chinese firms in the Hong Kong stock market and the local housing market of Hong Kong improve the prediction of each other, as they may serve as a coordinator of herds among investors. Alternative explanations such as the “production conjecture” and “underlying factor conjecture” are found to be inconsistent with the data. Our results are also consistent with the increasing importance of Chinese tourists in the world. Directions for future research are also discussed.
    Keywords: Animal spirits conjecture, production conjecture, underlying factor conjecture, causality, wealth effect
    JEL: G10 R20 R33
    Date: 2013–04
  23. By: Sandner, Malte
    Abstract: This paper presents evidence from a natural-experiment which evaluates the effectiveness of a student mentoring program. The mentoring includes several compulsory, scheduled, faceto- face appointments between a mentor and a student in the first study year. All mentors are graduated and employed by the institution. For the evaluation, I use the fact that the mentoring is only offered to students in an economics and management program, whereas it is not offered to students in an industrial engineering program. However, students in both programs take the same classes and write the same exams in their first study year. I find that the mentoring program significantly decreases the failure rates in the first semester exams.
    Keywords: PStudent Mentoring, Natural Experiment
    JEL: I21 I28
    Date: 2013–04
  24. By: Andrés Rodríguez-Pose; Viola von Berlepsch
    Abstract: Have Irish, German or Italian settlers arriving in the US at the turn of the 20th century left an institutional trace which determines economic development differences to this day? Does the national origin of migrants matter for long-term development? This paper explores whether the distinct geographical settlement patterns of European migrants according to national origin affected economic development across US counties. It uses micro-data from the 1880 and 1910 censuses in order to identify where migrants from different nationalities settled and then regresses these patterns on current levels of economic development, using both OLS and instrumental variable approaches. The analysis controls for a number of factors which would have determined both the attractiveness of different US counties at the time of migration, as well as current levels of development. The results indicate that while there is a strong and positive impact associated with overall migration, the national origin of migrants does not make a difference for the current levels of economic development of US counties.
    Keywords: Migration, National/Ethnic Origin, Institutions, Culture, Economic Development, Counties, USA
    JEL: F22 O15 R23 N91
    Date: 2013–04
  25. By: Robert Schwager (Georg-August University, Göttingen, Germany)
    Abstract: The direct democratic choice of an examination standard, i.e., a performance level required to graduate, is evaluated against a utilitarian welfare function. It is shown that the median preferred standard is inefficiently low if the marginal cost of reaching a higher performance reacts more sensitively to ability for high than for low abilities, and if the right tail of the ability distribution is longer than the left tail. Moreover, a high number of agents who choose not to graduate may imply that the median preferred standard is inefficiently low even if these conditions fail.
    Keywords: examination, school, drop-outs, democracy, median voter.
    JEL: I21 D72 I28
    Date: 2013–03
  26. By: Kurt R. Brekke (Department of Economics and Centre and Health Economics Bergen, Norwegian School of Economics); Luigi Siciliani (Department of Economics and Centre for Health Economics, University of York, Heslington); Odd Rune Straume (Department of Economics, University of Minho)
    Abstract: Using a spatial competition framework with three ex ante identical hospitals, we study the effects of a hospital merger on quality, price and welfare. The merging hospitals always reduce quality, but the non-merging hospital responds by reducing quality if prices are fixed and increasing quality if not. The merging hospitals increase prices if demand responsiveness to quality is sufficiently low, whereas the non-merging hospital always increases its price. If prices are endogenous, a merger leads to higher average prices and quality in the market. A merger is harmful for total patient utility but can improve social welfare under price competition.
    Keywords: Hospital mergers; Spatial Competition; Antitrust
    JEL: I11 I18 L13 L44
    Date: 2013
  27. By: Richard A. Faldowski; Rachel Chazan-Cohen; John M. Love; Cheri Vogel
    Keywords: Early Head Start, Methods, School Readiness
    JEL: I
    Date: 2013–02–28
  28. By: Deckers, Thomas (University of Bonn); Falk, Armin (University of Bonn); Schildberg-Hörisch, Hannah (University of Bonn)
    Abstract: We study the effect of real versus nominal income on life satisfaction. According to economic theory real income, i.e., nominal income adjusted for purchasing power, should be the relevant source of life satisfaction. Previous work, however, has only studied the impact of nominal income. We use a novel data set comprising about 7 million data points that are used to construct a price level for each of the about 400 administrative districts in Germany. We estimate a fixed effects model that controls for individual and local heterogeneity other than the price level. Our results show that higher price levels significantly reduce life satisfaction for individuals in the four lowest deciles of the income distribution. Furthermore, our findings suggest that people do not perceive money as neutral: the loss in life satisfaction caused by a higher price level is much larger than the loss in life satisfaction induced by a corresponding decrease in nominal income. Our results provide an argument in favor of regional indexation of government transfer payments such as social welfare benefits.
    Keywords: life satisfaction, price index, neutrality of money, redistribution
    JEL: D60 C23 D31
    Date: 2013–04
  29. By: Martinho, Vítor João Pereira Domingues
    Abstract: The tourism in the rural areas is an important contribution to the local economies and an additional income for the traditional local activities as the agricultural sector. Some traditional rural activities, as the agriculture, sometimes and in some locations are not sufficient to provide an acceptable return to their promoters. So the different forms of tourism in rural zones, as the small industry and others sectors, are important contributions to the economic activity in the rural areas. This study pretends to analyze some information and statistical data about the several forms of tourism in the Portuguese rural areas, namely tourism accommodation, rural tourism, agritourism, village tourism, country house and rural hotel. There were used data from 2004 to 2008 available in the Statistics of Portugal (INE) for the Portuguese NUTs II. These data were analyzed with econometric methods, namely, spatial econometrics and panel data analysis. --
    Keywords: Tourism,Portugal,Rural areas,Econometric analysis
    JEL: O18 L83 C20
    Date: 2013
  30. By: Christiaensen, Luc; De Weerdt, Joachim; Todo, Yasuyuki
    Abstract: A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania during 1991/4-2010 shows that about one in two individuals/households who exited poverty did so by transitioning from agriculture into the rural nonfarm economy or secondary towns. Only one in seven exited poverty by migrating to a large city, although those moving to a city experienced on average faster consumption growth. Further analysis of a much larger cross-country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural-urban dichotomy and focusing instead more on how best to urbanize and develop the rural nonfarm economy and secondary towns.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth,Population Policies
    Date: 2013–04–01
  31. By: Yoshihiko Kadoya
    Abstract: The inclusion of the elderly in community life is a major factor in achieving an age-friendly city. However, there has been little research investigating the constraints preventing the elderly's interaction with society. With that in mind, this paper is pioneering the investigation of such constraints using the results from the "Questionnaire towards an Age-Friendly City" by Akita City Government in Japan, a member of the World Health Organization (WHO)'s Global Network of Age-friendly Cities and Communities. This paper reveals two policy implications. First, living with someone encourages elderly to interact with society. Second, the elderly's ability to be mobile fosters their social participation.
    Date: 2013–04
  32. By: Yonetani, Nami; Sugaya, Minoru
    Abstract: --
    Date: 2012
  33. By: Van Ooteghem, Jan; Casier, Koen; Verbrugge, Sofie; Colle, Didier; Pickavet, Mario; De Heyn, Luc; Meersman, Raf; Rosseau, Bart
    Abstract: A citywide fiber to the home network would certainly bring about a lot of advantages for the municipality. Still the operators tend to hold off, partly because of the very high deployment costs and often also because there is a medium high bandwidth network available. This is also the case for the city of Ghent in which an FTTH network is not available and does not seem to be planned in the near future. In this paper we investigate to which degree the municipality can play a role in triggering the rollout of FTTH or less extensive a fiber to the business rollout by initiating the first steps in the deployment. If a city plans to connect its own public buildings first, such as governmental offices and city services and in extension hospitals, schools, museums and other public care or recreational centers, it could already open up some of the advantages of an FTTH network to its citizens. One step further, the city could take a more foresighted deployment scenario into account, in which more ducts and feeders are deployed and some detours are allowed, to enable a faster and cheaper rollout towards businesses and/or residential customers. In this paper we investigate three rollout scenarios with varying focus and amount of foresight: sequential (noncoupled) rollouts; optimized for municipal, public and business areas; fully optimized network for all buildings in the city. The final scenario targets thus a future proof network topology for the whole city. The results of this study shows a much lower final cost when considering a full optimal rollout plan from the start for all buildings in your city. The potential value will also be higher, as the cost for furthermore rolling out towards a business and full FTTH network for inhabitants will be much lower. In addition a geomarketing methodology should be used selecting the most optimal areas focusing first on connecting municipal and other public buildings. --
    Keywords: Techno-economics,network dimensioning,municipal network,geomarketing
    Date: 2012
  34. By: Jussi Ahokas; Jouko Kinnunen; Juha Honkatukia; Antti Simola; Saara Tamminen
    Abstract: Regional structural change is currently among the greatest challenges facing the public sector in many EU countries. In countries like Finland, where the public sectors have a large role in providing educational, health and social services, structural change rapidly becomes a fiscal problem. Demography is directly linked to the demand for public services and to the potential growth of regional economies. On the one hand, ageing increases the demand for age-related services; on the other, it decreases labour supply, limiting the growth potential of many regions. <br><br> The state?s main tools for regional policies consist of both direct subsidies to the regions, as well as a mechanism reallocating tax revenues between poor and rich municipalities. However, the welfare costs of funding subsidies to poorer regions may be considerable. Thus, instruments not involving changes in spending have been preferred. Here, we consider the relocation of certain functions of the central government to the periphery ? regionalization ? as an instrument for coping with regional structural change. An improvement in regional municipal finances should also reduce the transfers received from the central government. This study aims at evaluating the effects of regionalization on regional development in recent years and in the near future. The study is related to an ongoing evaluation of the financial relations between the central government and local authorities. <br><br> Regionalization has in practice meant the relocation of central government jobs. We can cover the relocation of jobs quite accurately, and also had a data to make a plausible valuation of the number of employees that actually relocated with the jobs. Moreover, we are able to calculate state transfers to municipalities at the level of individual municipalities within each region. However, to capture all the implications of relocation to regional economies, we extend the model to take into account the average size and age profile of the families of those who relocate. In this way, we obtain an estimate of the effects of regionalization on demand for public services locally, as well as on the overall effect on local population, labour supply and state, municipal and social security funds? budget balances. <br><br> We analyse regionalization at the level of the twenty regions of Finland, using a dynamic, regional, AGE model. Our main finding is that regionalization has negative overall economic effects for Finland ? it decreases national product and employment, deteriorates the fiscal balance and increases state transfers to municipalities. However, these effects are small by magnitude. We found that the cumulative decrease in GDP until 2018 was a bit less than 0.05 percentages. The policy altogether succeeds in leveling regional disparities. We also find that while regionalization has been beneficial for many regions by creating new jobs and increasing municipal tax revenues, it has also used resources wastefully as there has been double efforts during the transition period.
    Keywords: regionalization, regional policies, structural change
    JEL: R53 R13
    Date: 2013–04–10
  35. By: Andrea Garnero; François Rycx
    Abstract: We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.
    Keywords: Labour diversity; productivity; wages; linked panel data;; GMM
    JEL: D24 J24 J31 M12
    Date: 2013–04–17
  36. By: Cristina Martinez-Fernandez; Tamara Weyman; Jolanta Perek-Białas; Iwona Sagan; Piotr Szukalski; Piotr Stronkowski
    Abstract: This report outlines the findings of the Poland case study for the combined study regions of Lódzkie, Malopolska and Pomorskie for the international project, Local scenarios of demographic change. The demographic situation is changing significantly within Poland with two major trends occurring, population decline and population ageing, as a result of decreasing fertility rates and increased life expectancy. However, the Polish case study revealed the complexity of demographic challenges with each region experiencing different issues associated with socio-economic context such as: population ageing experienced in all three study regions; and population shrinkage in Lódzkie. These differences in demographic situations require a territorial, local and regional strategy co-ordinated policy response with national policy efforts. Policy themes and recommendations focus on sustainable economic development, family policy, ageing workforce, silver economy, and skills and education.
    Date: 2013–04–18
  37. By: Janne Tukiainen; Tuukka Saarimaa
    Abstract: We analyze how (anticipated) changes in the competitiveness of the seats of municipal councilors affect their voting behavior over municipal mergers. The competitiveness of the seats changes because the merger changes the composition of political competitors and the number of available seats in the next election. We use this variation for identification and find that the smaller the increase in the competitiveness of a councilor's seat, the more likely he is to vote for the merger. These effects are not related to the behavioral responses of the voters, but arise from the councilors? desire to avoid electoral competition.
    Keywords: Seat competitiveness, local politics, municipal mergers
    JEL: D72 C36 C35 C34 H77 H11
    Date: 2013–03–24
  38. By: Keller, Sara; Schanz, Deborah
    Abstract: This paper analyzes whether taxation has an influence on the location decisions of multinational enterprises. As a tax measure, we employ the Tax Attractiveness Index (see Keller and Schanz 2013). This index covers 18 different tax factors, such as the taxation of dividends and capital gains, withholding taxes, the existence of a group taxation regime, and thin capitalization rules. Our count data regression analysis is based on a novel hand-collected data set consisting of the subsidiaries of German DAX30 companies. Controlling for non-tax effects, we find that a country's tax environment as measured by the Tax Attractiveness Index has a significantly positive effect on the number of Germancontrolled subsidiaries located there. Hence, our study implies that location decisions depend on a bundle of tax factors as captured by the index. In a second step, we show that the location decisions of German DAX30 companies cannot be explained by the statutory tax rate alone. In contrast, withholding taxes, double treaty networks, and special holding regimes seem to play a decisive role in location decisions. Previous studies examining only the influence of statutory tax rates may thus have underestimated the effects of taxation on the activities of multinational companies. --
    Keywords: tax attractiveness,location decision,multinational enterprise,count data model
    Date: 2013
  39. By: Sato, Mine
    Abstract: In contrast to the current discussion on Capacity Development (CD), which is mostly made from the donors’ aid-effectiveness point of view, this paper attempts to explore what foreign donors can learn about CD by tracing the endogenous and long-running CD process from insiders’ perspectives. As a case study, an urban redevelopment project called MIB in Medellín City in Colombia is examined. After clarifying the initial context of urban poverty in Colombia, the paper traces the six phases of the MIB project: institutional preparation and awareness enhancement, conception of the inclusive-urbanism idea, planning of the MIB, construction/reconstruction of the residences, resettlement of residents, and scaling-up. Then the paper makes an in-depth analysis of the whole process, focusing on five key CD factors identified by Hosono et al. (2011): stakeholder ownership, mutual learning, specific drivers, scaling-up, and roles of external actors. From the analysis, the paper proposes four major lessons on CD research and practice in the future. First, we need to change our timeframe through which we look at the CD process. The MIB experience shows that the process can be far longer than what has been assumed by donors and researchers. Second, the current project-centered periodization of development assistance and the overwhelming focus on the project period should be reconsidered. In the MIB, the project implementation phase took only five years in a total process of 30 years. Third, the MIB case shows that documentation of previous projects and seminars, which occur in the pre-project phase under donors’ auspices, can greatly help local specialists conceive of new ideas. Fourth, the post-project phase also merits greater attention in identifying constraints to sustainability and replicability of the project concerned and to explore what external actors can do to overcome the constraints. The paper concludes by pointing out the necessity of accumulating similar kinds of case studies on the CD process made from insiders’ perspectives.
    Keywords: Capacity Development , urban redevelopment , social urbanism , Medellín , Colombia
    Date: 2013–03–29
  40. By: Mario Du Preez, Deborah Ellen Lee and Leann Cloete
    Abstract: This paper examines the Nelson Mandela Bay public’s willingness to pay (WTP) for the removal of a local undesirable land use, the manganese ore dumps and the oil tank farm situated within the boundaries of the Port Elizabeth harbour, Eastern Cape, South Africa, by means of the contingent valuation method. Both a non-parametric and parametric estimate of the WTP is derived. Estimated WTP for the removal of this disamenity ranges from R47.09 to R93.21 per household. The aggregate WTP ranges from R13 489 683 to R26 701 496. Due to the sensitivity of the parametric estimate of WTP to functional form specification and the distribution of the random part of preferences, the less restricted non-parametric WTP estimate (R47.09) is more appropriate. The results of this study show that policy-makers should take heed of the importance communities attach to the location of pollution-creating activities in urban areas.
    Keywords: Contingent valuation, willingness to pay, dichotomous choice, parametric estimation, non-parametric estimation
    Date: 2013
  41. By: Charlotte Schlump (Philipps-Universität Marburg); Thomas Brenner (Philipps-Universität Marburg)
    Abstract: Cooperation in innovation processes has become crucial for the competitiveness of many firms. This paper focuses on technology-oriented East German firms and analyses details of their cooperation behaviour by studying the relationships between geographic and social proximity, the importance and frequency of cooperative interaction and the attributes of innovation cooperation partners that influence the importance of cooperation. Data is collected in two questionnaires and analysed by regressions. It is found, among other results, that cooperation that is established via personal contacts is, on average, more helpful and important for firms but involves less frequent interaction.
    Keywords: cooperation, firm, East Germany, policy
    JEL: D20 I28 O32 R11
    Date: 2013–04–22
  42. By: Erlend Berg; Maitreesh Ghatak; R Manjula; D Rajasekhar; Sanchari Roy
    Abstract: This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to flat pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent.
    Keywords: public services, information constraints, incentive pay, social proximity, knowledge transmission
    JEL: C93 D83 I38 M52 O15 Z13
    Date: 2013
  43. By: OECD
    Abstract: <UL> <LI>The higher the level of education, the higher the salary cost of teachers per student. In Belgium (Flemish Community), France and Spain, the difference in the annual salary cost between the primary and upper secondary levels of education exceeds USD 1 800 in 2010. </LI> <LI>Between 2000 and 2010, the salary cost of teachers per student increased in nearly all countries at the primary and lower secondary levels of education and, on average, by one-third and one quarter respectively. </LI> <LI>Changes over time in the level of salary cost of teachers are mainly driven by teachers’ salaries; class size is the second main driver. </LI> <LI>Similar levels of expenditure among countries can mask a variety of contrasting policy choices. </LI></UL>
    Date: 2013–03
  44. By: Garcia, Gustavo Adolfo (Autonomous University of Barcelona); Nicodemo, Catia (University of Oxford)
    Abstract: This paper analyses the relationship between social networks and the job search behaviour of individuals. Networking is not only based on friends and relatives but also on neighbourhood. The geographic closeness is associated to social interactions. Individuals who are in physical and social proximity share the same sources of information, because they divide individual characteristics or because they learn from one another's behaviour. Using data from Colombia in 2009 we explore how neighbourhoods have an effect on the channel used to search for a job (formal vs informal). People tend to opt for a formal or informal channel depending on the channel selected by employed people in their neighbourhood. In addition, we study the wage premium in using a formal or informal channel, exploring the inequality that can arise using a different job search method. Our results show that the neighbourhood affects the individual's job search method and referral workers earn less wage at the bottom of the wage distribution with respect to non-referred workers. At the top of the wage distribution the difference observed is due to different characteristics between the two groups. Colombia presents persistent high levels of informality and inequality. These features impose important social and economic costs such as low tax collection, low employee protection and deficiencies in the labour intermediation process with strong informational asymmetries in the job search. New policies to regulate the labour market are need.
    Keywords: neighborhood effects, formal and informal networks, job search, quantile regression
    JEL: J64 J31 J24 P23 J6 J7 J0
    Date: 2013–04
  45. By: Stijn Oosterlynck; Yuri Kazepov; Andreas Novy; Pieter Cools; Eduardo Barberis; Florian Wukovitsch; Tatiana Saruis; Bernhard Leubolt
    Abstract: This paper surveys the literature on localized socially innovative policies and actions aimed at overcoming poverty and social exclusion. The authors show how these local forms of social innovation emerged in the late 1970s against the backdrop of the crisis and transformation of the Western welfare state, the emergence of new social risks and the transition from the Fordist to the knowledge based economy. The paper aims to learn about new or older but as yet too often overlooked poverty and social exclusion dynamics from the locally embedded and collective responses to it by civil society associations, local state institutions and/or social entrepreneurs. The paper first develops a definition of social innovation as it applies to the fight against poverty and social exclusion. In a second part the authors put social innovation in its historical context by discussing three different strands of social innovation research and practice, namely: (1) social innovation as a critique of the territorial innovation model underlying the knowledge-based economy; (2) social innovation as a critique on the bureaucratic nature of the welfare state; and (3) socially innovative forms of neighbourhood development as a response to the urban crisis. The third section of the paper then zooms in on the process dimensions of social innovation for each of the three strands discussed in the second part. The authors propose the metaphor of ‘the elephant and the butterfly’ to think through the relationship between localized forms of socially innovative actions and initiatives on the one hand and the macro-level institutions of the welfare state and dialectical interplay between state institutions and civil society associations on the other. The paper concludes with a preliminary list of social needs, trends in poverty and the reconfiguration of welfare institutions and policies that are revealed by place-based socially innovative practices.
    Keywords: Europe, Social innovation, welfare state, urban crisis, knowledge-based economy, poverty, social exclusion
    JEL: D31 O52
    Date: 2013–04

This nep-ure issue is ©2013 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.