nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒05‒19
57 papers chosen by
Steve Ross
University of Connecticut

  1. Dynamic Congestion and Urban Equilibrium By Sergejs Gubins; Erik T. Verhoef
  2. Economic Impacts of Cultural Diversity in the Netherlands: Productivity, Utility, and Sorting By Jessie Bakens; Peter Mulder; Peter Nijkamp
  3. Competitors, complementors, parents and places: Explaining regional agglomeration in the U.S. auto industry By Luis Cabral; Zhu Wang; Daniel Yi Xu
  4. The Law of Urban Growth and the Local Public Sector By John Hartwick
  6. The Link between Homeownership Motivation and Housing Satisfaction By Tan, Teck Hong; Khong, Kok Wei
  7. Can the Montersen-Pissarides Model Match the Housing Market Facts? By Gaetano Lisi
  8. The ABC of Housing Strategies: Are Housing Assistance Programs Effective in Enhancing Children's Well Being? By Jose Rosero
  9. Yardstick Competition among Portuguese Municipalities: The Case of Urban Property Tax (IMI) By José da Silva Costa; Armindo Cravalho
  10. The Vulnerability of Minority Homeowners in the Housing Boom and Bust By Patrick Bayer; Fernando Ferreira; Stephen Ross
  11. Sports Facilities, Agglomeration, and Urban Redevelopment By Humphreys, Brad; Zhou, Li
  12. The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands By Stefan P.T. Groot; Henri L.F. de Groot; Paolo Veneri
  13. Digital Urban Network Connectivity: Global and Chinese Internet Patterns By Emmanouil Tranos; Karima Kourtit; Peter Nijkamp
  14. Urbanization in the United States, 1800-2000 By Leah Platt Boustan; Devin Bunten; Owen Hearey
  15. 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
  16. Competition in Multi-Modal Transport Networks: A Dynamic Approach By Adriaan Hendrik van der Weijde; Erik T. Verhoef; Vincent van den Berg
  17. The Death of Distance Revisited: Cyberplace, Physical and Relational Proximities By Emmanouil Tranos; Peter Nijkamp
  18. Social Networks and Labor Market Inequality between Ethnicities and Races By Ott Toomet; Marco van der Leij; Meredith Rolfe
  19. Does High Home-Ownership Impair the Labor Market? By David G. Blanchflower; Andrew J. Oswald
  20. Multilevel Approaches and the Firm-Agglomeration Ambiguity in Economic Growth Studies By Frank G. van Oort; Martijn J. Burger; Joris Knoben; Otto Raspe
  21. Isolated Capital Cities, Accountability and Corruption: Evidence from US States By Filipe R. Campante; Quoc-Anh Do
  22. The Impact of Immigrant Concentration in Schools on Grade Retention in Spain: a Difference-in-Differences Approach By Pedraja Chaparro, Francisco; Santín González, Daniel; Simancas Rodríguez, Rosa
  23. Screening for Collusion: A Spatial Statistics Approach By Pim Heijnen; Marco A. Haan; Adriaan R. Soetevent
  24. Isolated Capital Cities and Misgovernance: Theory and Evidence By Filipe R. Campante; Quoc-Anh Do; Bernardo V. Guimaraes
  25. From city marketing to museum marketing and opposed By Metaxas, Theodore
  26. Residential Parking Permits and Parking Supply By Jos van Ommeren; Jesper de Groote; Giuliano Mingardo
  27. Geographic Concentration of Business Services Firms: A Poisson Sorting Model By Hans Koster; Jos N. van Ommeren; Piet Rietveld
  28. Local politics and economic geography By Berliant, Marcus; Tabuchi, Takatoshi
  29. Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input-Output Tables By Kristinn Hermannsson
  30. Regional Interest Rate Variations: Evidence from the Indonesian Credit Markets By Masagus M. Ridhwan; Henri L.F. de Groot; Piet Rietveld; Peter Nijkamp
  31. International Migration: A Global Complex Network By Emmanouil Tranos; Masood Gheasi; Peter Nijkamp
  32. The Effect of Metro Rail on Air Pollution in Delhi By Deepti Goel; Smriti Sharma
  33. Do “good neighbors” enhance regional performances in including disabled people in the labour market? A spatial Markov chain approach By Agovino, Massimiliano
  34. Social Interactions and Crime Revisited: An Investigation using Individual Offender Data in Dutch Neighborhoods By Wim Bernasco; Thomas de Graaff; Jan Rouwendal; Wouter Steenbeek
  35. Shared knowledge and the coagglomeration of occupations By Todd M. Gabe; Jaison R. Abel
  36. Revealed Competition for Greenfield Investments between European Regions By Martijn J. Burger; Bert van der Knaap; Ronald S. Wall
  37. Equilibrium at a Bottleneck when Long-Run and Short-Run Scheduling Preferences diverge By Stefanie Peer; Erik T. Verhoef
  38. Aggregation and The Estimated Effects of Local Economic Conditions on Health By Jason M. Lindo
  39. Access to Social Insurance in Urban China: A Comparative Study of Rural-Urban and Urban-Urban Migrants in Beijing By Zhiming Cheng; Ingrid Nielsen; Russell Smyth
  40. The On-Street Parking Premium and Car Drivers' Choice between Street and Garage Parking By Martijn Kobus; Eva Gutierrez Puigarnau; Piet Rietveld; Jos Van Ommeren
  41. Teacher Quality in Sub-Saharan Africa: Pupil-fixed effects estimates for twelve countries By Christopher F. Hein; Rebecca Allen
  42. Showing Off to the New Neighbors? Income, Socioeconomic Status and Consumption Patterns of Internal Migrants By Danzer, Alexander M.; Dietz, Barbara; Gatskova, Ksenia; Schmillen, Achim
  43. Girls' Education, Stipend Programs and their Effects on the Education of Younger Siblings By Lutfunnahar Begum; Asadul Islam; Russell Smyth
  44. The Power of a Bad Example - A Field Experiment in Household Garbage Disposal By Robert Dur; Ben Vollaard
  45. Intra-Firm Upward Mobility and Immigration By Javdani, Mohsen; McGee, Andrew
  46. Appraising the benefits of bottleneck removal in rail transport: a simplified CBA approach By Beria, Paolo; Grimaldi, Raffaele
  47. Coworker Networks in the Labour Market By Glitz, Albrecht
  48. Hotelling Models with Price-Sensitive Demand and Asymmetric Transport Costs: An Application to Public Transport Scheduling By Adriaan Hendrik van der Weijde; Erik T. Verhoef; Vincent A. C. van den Berg
  49. Why do borrowers make mortgage refinancing mistakes? By Sumit Agarwal; Richard J. Rosen; Vincent Yao
  50. A Radical Change in Traffic Law: Effects on Fatalities in the Czech Republic By Josef Montag
  51. Social Networks and the Decision to Insure By Cai, Jing; de Janvry, Alain; Sadoulet, Elisabeth
  52. Cultural Distance, Immigrants' Identity, and Labour Market Outcomes By Asadul Islam; Paul A. Raschky
  53. Who Moves and For How Long: Determinants of Different Forms of Migration By Borodak, Daniela; Piracha, Matloob
  54. Networks and Collective Action By Ramon Flores; Maurice Koster; Ines Lindner; Elisenda Molina
  55. Airlines' Strategic Interactions and Airport Pricing in a Dynamic Bottleneck Model of Congestion By Hugo E. Silva; Erik T. Verhoef; Vincent A.C. van den Berg
  56. The User Costs of Air Travel Delay Variability By Paul Koster; Eric Pels; Erik Verhoef
  57. Cost Recovery of Congested Infrastructure under Market Power By Erik T. Verhoef

  1. By: Sergejs Gubins (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam)
    Abstract: We consider a monocentric city where a traffic bottleneck is located at the entrance of the central business district. The commuters' choices of the departure times from home, residential location, and lot size, are all endogenous. We show that elimination of queuing time under optimal road pricing induces individuals to spend more time at home and to have larger houses, causing urban sprawl. This is opposite to the typical results of urban models with static congestion, which predict cities to become denser with road pricing.
    Keywords: dynamic traffic congestion, urban equilibrium, road pricing, bottleneck model, monocentric model
    JEL: D62 R21 R41 R48
    Date: 2012–12–10
  2. By: Jessie Bakens (VU University Amsterdam); Peter Mulder (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper identifies the role of cultural diversity in explaining spatial disparities in wages and housing prices across Dutch cities, using unique individual panel data of home owners. We distinguish between the effects of interactions-based productivity, consumption amenities and sorting of heterogeneous home owners while controlling for interactions between the labor and housing market. We find that an increase in the cultural diversity of the population positively impacts equilibrium wages and housing prices, particularly in the largest and most densely populated cities. This result is largely driven by spatial sorting of individuals in both the labor and housing market. After controlling for home owner heterogeneity we find that increasing cultural diversity no longer impacts local labor markets and negatively impacts local housing markets. The latter result is likely to be driven by a negative causal effect of increased cultural diversity on neighb orhood quality that outweighs a positive effect of increased cultural diversity in consumption goods.
    Keywords: cultural diversity, immigrants, local amenities, sorting, housing prices, productivity
    JEL: J31 R21 R23 R31
    Date: 2012–03–19
  3. By: Luis 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.
    Keywords: Economic growth ; Regional economics ; Automobile industry and trade
    Date: 2013
  4. By: John Hartwick (Queen's University)
    Abstract: We set out a city as a price-taking exporter and importer with its own local structure (housing (land per household) and a local pure public good are produced endogenously). We improve labor efficiency in the export sector, observe a jump in the local wage, and trace the impact, particularly on production of the public good. In one case the population, output of the public good, and residential density expand (the law of urban growth) and in another, population, output of the public good and density contract.
    Keywords: small, open city, urban public sector, law of urban growth
    JEL: R23 H40 F43
    Date: 2013–05
  5. By: Erik T Verhoef (VU)
    Abstract: This paper considers second-best congestion pricing in the monocentric city, with endogenous residential density and endogenous labour supply. A spatial general equilibrium model is developed that allows consideration of the three-way interactions between urban density, traffic congestion and labour supply. Congestion pricing schemes are analyzed that are second-best ‘by design’ (and not because distortions exist elsewhere in the spatial economy), like cordon charging and flat kilometre charges. Both for Cobb-Douglas utility and for CES utility, the analyses suggest that the relative welfare losses from second-best pricing, compared to first-best pricing, are surprisingly small.
    Keywords: Traffic congestion; second-best pricing; urban structure; spatial general equilibrium
    JEL: R41 R48 D62
  6. By: Tan, Teck Hong; Khong, Kok Wei
    Abstract: It is reasonable to believe that the degree of housing satisfaction may depend on the motivation of home owning as motivation has been an important reason in the explanation of homeownership. There is little empirical evidence demonstrating how homeownership motivation, as defined by local amenities investment, social capital investment, residential stability, and financial benefits of home owning affect housing satisfaction in the Malaysian context. In this paper, Structural Equation Modeling (SEM) was used to examine the link between homeownership motivation and housing satisfaction. Results showed that social capital investment and residential stability of homeownership appears to be important determinants of housing satisfaction. The findings also indicated that interdependencies among homeownership motivation variables were important extensions of the housing satisfaction model because they help improve the ability of model to predict housing satisfaction.
    Keywords: Homeownership, Motivation, Housing Satisfaction, Structural Equation Modeling (SEM)
    JEL: R21 R31 R38
    Date: 2012–04–18
  7. By: Gaetano Lisi (Department of Economics and Law, University of Cassino and Southern Lazio)
    Abstract: In the housing markets three basic facts have been repeatedly reported by empirical studies: the existence of price dispersion, the positive correlation between housing price and timeon-the-market, and between housing price and trading volume. Since housing markets are characterised by a decentralised framework of exchange with important search and matching frictions, this paper examines whether the baseline search and matching model can account for these three basic facts. We find that the standard matching framework allows to obtain a direct relationship between market frictions and house prices which represents the key mechanism to explain the basic facts of the housing market.
    Keywords: Matching models, Housing markets, Time-on-the-market, Housing price dispersion, Trading volume
    JEL: R21 R31 J63
    Date: 2013–05
  8. By: Jose Rosero (University of Amsterdam)
    Abstract: This paper examines the effect of a housing assistance program on school enrollment, child labor and poverty reduction among poor families in Ecuador. Administrative data is merged to a household panel to link the history of a voucher application with socioeconomic information. Two empirical approaches are employed. First, I exploit variation in duration of the different stages to obtain a voucher and convert it into a house, using a sample of approved applicants. Second, I use variation across siblings that arises from the fact that siblings are exposed to the program at different ages. Results show that the program improves enrollment into post-compulsory education, decreases the probability that a child participates in the labor market and reduces the likelihood to live in poverty. Potential mediating factors are increased access to sanitation, better quality materials of the house and a reduced probability to live overcrowded.
    Keywords: Housing assistance programs, Housing voucher, Children, Fixed Effects, Within family estimators, Developing country, Ecuador
    JEL: H53 I28 I38 R21
    Date: 2012–07–19
  9. By: José da Silva Costa (Faculdade de Economia, Universidade do Porto.); Armindo Cravalho (Faculdade de Economia, Universidade do Porto.)
    Abstract: In this paper we gather empirical evidence on the existence of strategic interaction among Portuguese municipal executives when they set rates of property tax and in particular if we are in the presence of yardstick competition. For that purpose, we adopted the assumption of geographic interaction among Portuguese municipalities when setting rates of property tax. We have estimated, for evaluated and non-evaluated urban property, spatial lag models with two spatial dependency regimes (municipalities with and without a solid majority) and cross-section fixed effects coefficients. The results provide strong empirical evidence on the existence of strategic interaction among Portuguese municipalities when setting rates of municipal taxes and on the yardstick hypothesis.
    Keywords: Yarstick competition; Local Governments; Portugal.
    JEL: H71 H73
    Date: 2013–05
  10. By: Patrick Bayer; Fernando Ferreira; Stephen Ross
    Abstract: This paper examines mortgage outcomes for a large, representative sample of individual home purchases and refinances linked to credit scores in seven major US markets in the recent housing boom and bust. Among those with similar credit scores, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These differences are not readily explained by the likelihood of receiving a subprime loan or by differential exposure to local shocks in the housing and labor market and are especially pronounced for loans originated near the peak of the boom. Our findings suggest that those black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise serious concerns about homeownership as a mechanism for reducing racial disparities in wealth.
    Date: 2013
  11. By: Humphreys, Brad (University of Alberta, Department of Economics); Zhou, Li (University of Alberta, Department of Economics)
    Abstract: We develop a monopolistic competition model of urban service consumption and production that includes spatial structure and property values. The model shows that the introduction of a new professional sports facility and team generates agglomeration effects that change the mix of services and property values, and increases local welfare, part of which is transferred to the team as subsidies for the construction of the facility. The distributional consequences of the new facility and the implications of property tax based financing for the subsidy are analyzed.
    Keywords: agglomeration effects; sports facilities; subsidies
    JEL: H71 L83 R13 R58
    Date: 2013–04–19
  12. By: Stefan P.T. Groot (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam, and Ecorys NEI); Paolo Veneri (OECD, Paris)
    Abstract: This study analyses the relation between education and commuting behaviour of Dutch workers. Results show that, ceteris paribus, higher educated workers commute further, both in terms of distance and time. In addition, higher educated workers are more frequent users of public transport and of bicycles. Furthermore, we find that higher educated workers are relatively more likely to commute towards agglomerated areas and areas that pay relatively high wages, while they are more likely to live in and commute from areas with higher land rents.
    Keywords: commuting, education, urban amenities, agglomeration
    JEL: R12 R21 R23
    Date: 2012–07–30
  13. By: Emmanouil Tranos (VU University Amsterdam); Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: The majority of cities in our world is not only connected through conventional physical infrastructure, but increasingly through modern digital infrastructure. This paper aims to test whether digital connectivity leads to other linkage patterns among world cities than traditional infrastructure. Using a generalized spatial interaction model, this paper shows that geography (and distance) still matters for an extensive set of world cities analysed in the present study. With a view to the rapidly rising urbanization in many regions of our world, the attention is next focused on the emerging large cities in China in order to test the relevance of distance frictions - next to a broad set of other important explanatory variables - for digital connectivity in this country. Various interesting results are found regarding digital connectivity within the Chinese urban system, while also here geography appears to play an important role.
    Keywords: Digital Networks, Internet, Connectivity, World Cities, Death of Distance, Centrality, Small-World Networks, Clustering, Gravity Model
    JEL: O18 H54 P25
    Date: 2012–11–16
  14. By: Leah Platt Boustan; Devin Bunten; Owen Hearey
    Abstract: This handbook chapter seeks to document the economic forces that led the US to become an urban nation over its two hundred year history. We show that the urban wage premium in the US was remarkably stable over the past two centuries, ranging between 15 and 40 percent, while the rent premium was more variable. The urban wage premium rose through the mid-nineteenth century as new manufacturing technologies enhanced urban productivity; then fell from 1880 to 1940 (especially through 1915) as investments in public health infrastructure improved the urban quality of life; and finally rose sharply after 1980, coinciding with the skill- (and apparently also urban-) biased technological change of the computer revolution. The second half of the chapter focuses instead on the location of workers and firms within metropolitan areas. Over the twentieth century, both households and employment have relocated from the central city to the suburban ring. The two forces emphasized in the monocentric city model, rising incomes and falling commuting costs, can explain much of this pattern, while urban crime and racial diversity also played a role.
    JEL: N91 N92 R0
    Date: 2013–05
  15. 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
  16. By: Adriaan Hendrik van der Weijde (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Vincent van den Berg (VU University Amsterdam)
    Abstract: We analyse the behaviour of market participants in a multi-modal commuter network where roads are not priced, but public transport has a usage fee, which is set while taking the effects on the roads into account. In particular, we analyse the difference between markets with a monopolistic public transport operator, which operates all public transport links, and markets in which separate operators own each public transport link. To do so, we consider a simple transport network consisting of two serial segments and two parallel congestible modes of transport. We obtain a reduced form of the public transport operator's optimal fare setting problem and show that, even if the total travel demand is inelastic, serial Bertrand-Nash competition on the public transport links leads to different fares than a serial monopoly; a result not observed in a static model. This results from the fact that trip timing decisions, and therefore the generalized prices of all commuters, are influenced by all fares in the network. We then use numerical simulations to show that, contrary to the results obtained in classic studies on vertical competition, monopolistic fares are not always higher than duopolistic fares; the opposite can also occur. We also explore how different parameters influence the price differential, and how this affects welfare.
    Keywords: Public transport, congestion, market structure, market design
    JEL: L10 L92 R41 R48
    Date: 2012–11–01
  17. By: Emmanouil Tranos (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper studies the impact of physical distance and different relational proximity types on the formation of the Internet infrastructure. Although there is some anecdotal evidence on the 'end of geography' effect of the Internet, the relationship between physical space and the Internet has not been yet scrutinized. In addition, owing to the network nature of the Internet, the structure of the Internet infrastructure (the cyber-place) cannot be approached in a unidimensional way. Our paper builds upon recent studies in economic geography and relational proximities, and aims to study whether physical distance survives in virtual geography even after controlling for relational proximities. In order to do so, a unique and extensive database with geo-coded IP links is utilized. Based on this, a spatial interaction model with panel data specifications is constructed to study the impact of different types of proximity on the formation of cyber-place. The above analysis is framed by a complex network analysis exercise, which enhances our understanding of the complexity of the Internet infrastructure from a spatial network perspective. Our results indicate that physical distance, but also different relational proximities, have a significant impact on the intensity of the Internet infrastructure, highlighting the spatiality of the Internet.
    Keywords: death of distance, Internet geography, Internet infrastructure, distance, proximities, spatial interaction models
    JEL: C23 H54 L96
    Date: 2012–07–12
  18. By: Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics)
    Abstract: This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps.
    Keywords: social networks, wage differential, homophily, segregation, race, minorities
    JEL: J71 J31 Z13
    Date: 2012–11–13
  19. By: David G. Blanchflower (Peterson Institute for International Economics); Andrew J. Oswald (University of Warwick)
    Abstract: The authors explore the hypothesis that high home-ownership damages the labor market. The results are relevant to, and may be worrying for, a range of policymakers and researchers. The authors find that rises in the home-ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. The elasticity exceeds unity: A doubling of the rate of home-ownership in a US state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? The authors show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. The argument is not that owners themselves are disproportionately unemployed. Evidence suggests, instead, that the housing market can produce negative 'externalities' upon the labor market. The time lags are long. That gradualness may explain why these important patterns are so little-known.
    Keywords: Natural rate of unemployment, labor market, housing market, structural, business cycles, mobility
    JEL: I1 I3
    Date: 2013–05
  20. By: Frank G. van Oort (Utrecht University); Martijn J. Burger (Erasmus University Rotterdam); Joris Knoben (Tilburg University); Otto Raspe (Netherlands Environmental Assessment Agency)
    Abstract: See also the publication in <A href="">'Journal of Economic Surveys'</A>, 26(3), 468-91.<p> Empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions. Both localization and urbanization economies are hypothesized to foster agglomeration and growth, but recent meta-analyses of this burgeoning body of empirical research show that the results are ambiguous. Recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space, aggregation, growth definitions, and the functional form of the models applied. Alternatively, in this paper, we argue that ambiguity may be due to a lack of research on firm-level performance in agglomerations. This research is necessary because the theories that underlie agglomeration economies are microeconomic in nature. Hierarchical or multilevel modeling, which allows micro levels and macro levels to be modeled simultaneously, is becoming an increasingly common practice in the social sciences. As illustrated by detailed Dutch data on firm-level productivity, employment growth and firm survival, we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration-firm performance relationship and for addressing spatial, sectoral and cross-level heterogeneity.
    Keywords: agglomeration economies, micro-macro link, multilevel analysis, productivity
    JEL: C21 O18 R1
    Date: 2012–02–16
  21. By: Filipe R. Campante; Quoc-Anh Do
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability, and in contrast with the alternative hypothesis that it might forestall political capture. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms over state politics: newspaper coverage, voter knowledge and information, and turnout. We also find evidence against the capture hypothesis: isolated capitals are associated with more money in state-level campaigns. Finally, we show that isolation is linked with worse public good provision.
    JEL: D72 D73 L82 R12 R23 R50
    Date: 2013–05
  22. By: Pedraja Chaparro, Francisco; Santín González, Daniel; Simancas Rodríguez, Rosa
    Abstract: Since the late 1990s, Spain has played host to a sizeable flow of immigrants who have been absorbed into the compulsory stage of the education system. In this paper, our aim is to assess the impact of that exogenous increase in the number of immigrant students from 2003 to 2009 on grade retention using Spanish data from PISA 2003 and 2009. For this purpose, we use the difference-in-differences method (DiD), capable of detecting whether the immigrant concentration has had a significant effect on student performance. Within this framework, the control group will be the schools without sampled immigrants from 2003 to 2009 and the treatment group will be schools with immigrant students that experienced a significant increase of immigrants throughout this period. As the percentage of immigrants is different across schools, the DiD methodology is adapted to deal with a dose treatment. What we are looking for then is not simply the average effect of there being or not being foreign students at the school, but the effect of their concentration. In this way, the effect of immigrants joining schools can be isolated and estimated through a DiD dose estimator controlling by other educational variables that also influence school performance. Our results evidenced that their arrival does not on average decrease school promotion rates with respect to 2003 and is even beneficial to native students. Although the concentration of immigrant students at the same school does have a negative impact on immigrant students generating more grade retention, native students are unaffected until concentrations of immigrant students are higher.
    Keywords: difference in differences, immigration, education, PISA
    JEL: H41 I21
    Date: 2013
  23. By: Pim Heijnen (University of Groningen); Marco A. Haan (University of Groningen); Adriaan R. Soetevent (University of Amsterdam)
    Abstract: We develop a method to screen for local cartels. We first test whether there is statistical evidence of clustering of outlets that score high on some characteristic that is consistent with collusive behavior. If so, we determine in a second step the most suspicious regions where further antitrust investigation would be warranted. We apply our method to build a variance screen for the Dutch gasoline market.
    Keywords: collusion, variance screen, spatial statistics, K-function
    JEL: C11 D40 L12 L41
    Date: 2012–06–18
  24. By: Filipe R. Campante; Quoc-Anh Do; Bernardo V. Guimaraes
    Abstract: Motivated by a novel stylized fact – countries with isolated capital cities display worse quality of governance – we provide a framework of endogenous institutional choice based on the idea that elites are constrained by the threat of rebellion, and that this threat is rendered less effective by distance from the seat of political power. In established democracies, the threat of insurgencies is not a binding constraint, and the model predicts no correlation between isolated capitals and misgovernance. In contrast, a correlation emerges in equilibrium in the case of autocracies. Causality runs both ways: broader power sharing (associated with better governance) means that any rents have to be shared more broadly, hence the elite has less of an incentive to protect its position by isolating the capital city; conversely, a more isolated capital city allows the elite to appropriate a larger share of output, so the costs of better governance for the elite, in terms of rents that would have to be shared, are larger. We show evidence that this pattern holds true robustly in the data. We also show that isolated capitals are associated with less power sharing, a larger income premium enjoyed by capital city inhabitants, and lower levels of military spending by ruling elites, as predicted by the theory.
    JEL: D02 D74 D78 R12
    Date: 2013–05
  25. By: Metaxas, Theodore
    Abstract: European cities today need to confront the challenges of the current socio economic changes. In this framework the role of city marketing becomes essential especially during the socio economic crisis. City marketing is important because it is related to procedures connected with city global competition, tourist attraction, urban management, urban government and the special identity of cities (city branding). Many European cities take initiatives either creative or innovative to improve their competitiveness through cultural and tourism development/growth. Further, the majority of applied city marketing policies concern the culture and tourism. City marketing have encounter criticism like a)replace urban planning, b) emphasis on profit, c) emphasis on tourism attraction, d) regenerate socio geographical inequalities. In Greece only recently city marketing has been developed while even more new phenomenon is the process of field studies. The first case study is the Pilot Strategic Planning of City Marketing in Nea Ionia Magnisia which is part of the CultMark programme “Cultural heritage, local identity and place marketing for sustainable development” (contacted under INTERREG IIIc in five European locations during 2004-2006 (Nea Ionia, Magnisia (leader partner), UK, Kainou/Finland, Rostok-TLM/Germany and Pafos/Cyprus. Museums are one of the top/main categories of cultural locations which contribute to the cultural and tourism development of cities. Cities benefit from the existence of museums in specific ways but in order to work effectively it is necessary to be promoted in an organized way and with a strategic perspective which will be implemented by a Strategic Pilot Marketing Plan. A second case study is the unique Museum of Tobacco in Kavala, Greece. The scope of it is to show how the museum could contribute as a unique “tourism and cultural good/product to reinforce the city image and its development under a Strategic Marketing Plan for the city with main axe the Museum. This paper uses data from recent primary field studies contacted on enterprises, citizens of the city and visitors in order to form a strategic frame in which the (intrinsic) promotion of the Museum will work effectively on the general development of the Museum and the city of Kavala.
    Keywords: cultural planning, tourism development, Strategic Pilot Marketing Plan, Nea Ionia Magnisia, Tabacco Museum of Kavala
    JEL: O21 R58 R59
    Date: 2013
  26. 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
  27. By: Hans Koster (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: This paper examines the effects of specialisation (within-sector clustering) and diversity (between-sector clustering) on business services profitability and location choice. We apply a semiparametric Poisson sorting model allowing for firm-specific effects. We find that for most firms, profitability of business services firms is substantially higher close to specialised clusters of business services firms. A standard deviation increase in business services specialisation leads to on average a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. It is also profitable for most business services firms to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Almost all firms either benefit from within-sector clustering or between-sector clustering. Within-sector clusters are particularly profitable for large mature firms, whereas between-sector clusters are relatively more profitable for smaller innovative firms.
    Keywords: Sorting; Agglomeration Economies; Specialisation; Diversity; Heterogeneity; Semiparametric Estimation
    JEL: R12 R14 R39
    Date: 2011–06–06
  28. By: Berliant, Marcus; Tabuchi, Takatoshi
    Abstract: We consider information aggregation in national and local elections when voters are mobile and might sort themselves into local districts. Using a standard model of private information for voters in elections in combination with a New Economic Geography model, agglomeration occurs for economic reasons whereas voter stratification occurs due to political preferences. We compare a national election, where full information equivalence is attained, with local elections in a three-district model. We show that full information equivalence holds at a stable equilibrium in only one of the three districts when transportation cost is low. The important comparative static is that full information equivalence is a casualty of free trade. When trade is more costly, people tend to agglomerate for economic reasons, resulting in full information equivalence in the political sector. Under free trade, people sort themselves into districts, most of which are polarized, resulting in no full information equivalence in these districts. We examine the implications of the model using data on corruption in the legislature of the state of Alabama and in the Japanese Diet.
    Keywords: information aggregation in elections; informative voting; new economic geography; local politics
    JEL: D72 D82 R12
    Date: 2013–05–15
  29. By: Kristinn Hermannsson (Department of Econonics, Fraser of Allander Institute, University of Strathclyde)
    Abstract: 1 Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input-Output Tables Dr Kristinn Hermannsson, Fraser of Allander Institute, Department of Economics, University of Strathclyde Abstract It is a well-established fact in the literature on simulating Input-Output tables that mechanical methods for estimating intermediate trade lead to biased results where cross-hauling is underestimated and Type-I multipliers are overstated. Repeated findings to this effect have led to a primary emphasis on advocating the accurate estimation of intermediate trade flows. This paper reviews previous research and argues for a qualification of the consensus view: When simulating IO tables, construction approaches need to consider spill-over effects driven by wage and consumption flows. In particular, for the case of metropolitan economies, wage and consumption flows are important if accurate Type-II multipliers are to be obtained. This is demonstrated by constructing an interregional Input-Output table, which captures interdependencies between a city and its commuter belt, nested within the wider regional economy. In addition to identifying interdependencies caused by interregional intermediate purchases, data on subregional household incomes and commuter flows are used to identify interdependencies from wage payments and household consumption. The construction of the table is varied around a range of assumptions on intermediate trade and household consumption to capture the sensitivity of multipliers.
    Keywords: Input-Output; Location Quotients; Commuting; Consumption; Glasgow; Scotland.
    JEL: C67 R12 R15 R23
    Date: 2013–05
  30. By: Masagus M. Ridhwan (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam); Piet Rietveld (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper explores the determinants of regional differences in interest rates based on a simple theoretical model of loan pricing. The model demonstrates how risks, costs, market concentration and scale economies jointly determine the bank's interest rates. Using recent data of the Indonesian local credit markets, we find that regional interest rate variations are positive and significantly affected by the banks' risk factor, the operating costs, and market concentration. Scale economies negatively affect the interest rates. These findings help to explain geographical segmentation in loan markets.
    Keywords: regional capital mobility, loan pricing, interest rates, Indonesia
    JEL: R51 E43 C33
    Date: 2012–07–18
  31. By: Emmanouil Tranos (VU University Amsterdam); Masood Gheasi (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: Migration has become a prominent research theme in geography and regional science and it has been approached from various methodological angles. Nonetheless, a common missing element in most migration studies is the lack of awareness of the overall network topology, which characterizes migration flows. Although gravity models focus on spatial interaction - in this case migration - between pairs of origins and destinations, they do not provide insights into the topology of a migration network. In the present paper, we will employ network analysis to address such systemic research questions, in particular: How centralized or dispersed are migration flows and how does this structure evolve over time? And how is migration activity clustered between specific countries, and if so, do such patterns change over time? Going a step further than exploratory network analysis, this paper estimates international migration models for OECD countries based on a dual ap proach: gravity models estimated using conventional econometric approaches such as panel data regressions as well as network-based regression techniques such as MRQAP. The empirical results reveal not only the determinants of international migration among OECD countries, but also the value of blending network analysis with more conventional analytic methods.
    Keywords: immigration, gravity model, complex networks, community detection, MRQAP
    JEL: F22 O15 D85
    Date: 2012–11–16
  32. By: Deepti Goel (Department of Economics, Delhi School of Economics, Delhi, India); Smriti Sharma (Food and Resource Economics Department, University of Florida, P.O. Box 110240 IFAS Gainesville, FL32611, U.S.A.)
    Abstract: In this paper we investigate the effect of the Delhi Metro, an intra-city mass rail transit system, on air pollution within Delhi. To identify effects on pollution, we exploit the discontinuous jumps in metro ridership, each time the network is extended. Our identifying assumption is that in the absence of the extension there would be a smooth transition in pollution levels. We find strong evidence to show that the Delhi Metro has resulted in reductions of two important vehicular emissions, namely, nitrogen dioxide and carbon monoxide. We estimate a cumulative impact of a 35 percent reduction in CO levels for the region around ITO (a major traffic intersection in Delhi). This is suggestive of a traffic diversion effect, where people are switching from private modes of travel to the Delhi Metro. Given, documented evidence on the adverse health effects of air pollution, our findings suggest that these indirect benefits must be considered in any cost-benefit analysis of a rapid mass transport system.
    Date: 2013–04
  33. By: Agovino, Massimiliano
    Abstract: The purpose of this study is to examine whether the performance of regions in providing employment of disabled people according to Law 68/99 can be affected by the performance of neighbouring regions. Hence, we propose a two-step analysis focusing on the Italian regions for the years 2000-2009. In the first step, we verify by means of the Stochastic Frontier Approach that the regions of Central and Northern Italy are more efficient in the matching process between demand and supply of jobs for disabled people than the regions of Southern Italy. Then, the efficiency results are analyzed using a Markov Spatial Transition Matrix in order to provide insights into the transitions of regions between efficiency levels, taking their local context into account. The results of this analysis show that good neighbors are important in promoting the improvement of the performance of the regions. However, the effects produced by bad neighbors should not be underestimated, especially when they are concentrated in an area of the country and have a time-space persistence. The effect of a persistent dualism on the performance of the regions with respect to the application of Law 68/99 is a problem that must be seriously considered by policy makers; especially when the regions with a low efficiency score are surrounded by neighbors with poor efficiency score and show an unhealthy poorly performing labour market.
    Keywords: Disabled People, Public Policy, Non-Labour Market Discrimination, Stochastic Frontier Approach, Spatial Markov Chain.
    JEL: C23 C61 J14 J48
    Date: 2013–05
  34. By: Wim Bernasco (NSCR); Thomas de Graaff (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam); Wouter Steenbeek (NSCR)
    Abstract: Using data on the age, sex, ethnicity and criminal involvement of 14.3 million residents aged 10-89 residing in 4,007 neighborhoods in the Netherlands, this article tests whether an individual's decision whether or not to be involved in crime is affected by the number of criminals in the neighborhood. Controlling for unobserved neighborhood heterogeneity and endogeneity of this decision, a small positive effect is found on violent crime, but not on property crime. The results suggest that individual characteristics and other neighborhood characteristics play a much greater role in an individual's decision to be involved in crime.
    Keywords: social interactions, neighborhoods, crime
    JEL: R1 R2
    Date: 2012–10–11
  35. By: Todd M. Gabe; Jaison R. Abel
    Abstract: This paper provides an empirical analysis of the extent to which people in different occupations locate near one another, or coagglomerate. We construct pairwise Ellison-Glaeser coagglomeration indices for U.S. occupations and use these measures to investigate the factors influencing the geographic concentration of occupations. The analysis is conducted separately at the metropolitan area and state levels of geography. Empirical results reveal that occupations with similar knowledge requirements tend to coagglomerate and that the importance of this shared knowledge is larger in metropolitan areas than in states. These findings are robust to instrumental variables estimation that relies on an instrument set characterizing the means by which people typically acquire knowledge. An extension to the main analysis finds that, when we focus on metropolitan areas, the largest effects on coagglomeration are due to shared knowledge about the subjects of engineering and technology, arts and humanities, manufacturing and production, and mathematics and science.
    Keywords: Industrial location ; Professional employees ; Metropolitan areas - Statistics ; Information theory ; Labor market ; Geography
    Date: 2013
  36. By: Martijn J. Burger (Erasmus University Rotterdam); Bert van der Knaap (Erasmus University Rotterdam); Ronald S. Wall (Institute for Housing and Urban Studies, Erasmus University Rotterdam)
    Abstract: In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of investments Combining insights from international economics, international business, and urban systems literature, we develop an indicator to measure revealed competition between territories for investments based on the overlap of investment portfolios of regions. Taking competition for greenfield investments between European regions as a test subject, we identify competitive market segments, derive the competitive threat a region faces from other regions, the competitive threat regions pose to other regions, and the most important market segments in which regions compete. We show that European regions with similar locational endowments pose a fiercer competitive thre at to one another. In addition, regions that are sufficiently large and distinctive, face the smallest average competitive threat from all other regions.
    Keywords: territorial competition, greenfield investments, Europe
    JEL: R12 F21 H70
    Date: 2012–07–06
  37. By: Stefanie Peer (VU Amsterdam); Erik T. Verhoef (VU Amsterdam)
    Abstract: We consider equilibrium and optimum use of a Vickrey road bottleneck, distinguishing between long-run and short-run scheduling preferences in an otherwise stylized scheduling model. The preference structure reflects that there is a distinction between the (exogenous) 'long-run preferred arrival time', which would be relevant if consumers were unconstrained in the scheduling of their activities, versus the 'short-run preferred arrival time', which is the result of an adaptation of travel routines in the face of constraints caused by, in particular, time-varying congestion levels. We characterize the unpriced equilibrium, the social optimum as well as second-best situations where the availability of the pricing instruments is restricted. All of them imply a dispersed distribution of short-run preferred arrival times. The extent of dispersion in the unpriced equilibrium, however, is higher than socially optimal.
    Keywords: bottleneck model; scheduling decisions; travel routines; long-run vs. short-run
    JEL: D80 R48 R41 H21
    Date: 2013–02–14
  38. By: Jason M. Lindo
    Abstract: This paper considers the relationship between local economic conditions and health with a focus on different approaches to geographic aggregation. After reviewing the tradeoffs associated with more- and less-disaggregated analyses–including an investigation of the migratory response to changing economic conditions–I update earlier state-level analyses of mortality and infant health and then consider how the estimated effects vary when the analysis is conducted at differing levels of geographic aggregation. This analysis reveals that more-disaggregated analyses severely understate the extent to which downturns are associated with improved health. Further investigation reveals that county economic conditions have an independent effect on mortality but that state and regional economic conditions are stronger predictors. I also leverage county-level data to explore heterogeneity in the link between county economic conditions and health across states, demonstrating that local downturns lead to the greatest improvements in health in low-income states.
    JEL: E32 I10 J20
    Date: 2013–05
  39. By: Zhiming Cheng; Ingrid Nielsen; Russell Smyth
    Abstract: Since 1958 the hukou (household registration) system has assigned Chinese citizens either a rural or urban status. Some studies argue that the rural-to-urban migrants in China who do not have urban hukou are not entitled to urban social insurance schemes, due to institutional discrimination, which applies differing treatment to urban and rural hukou (chengxiang fenge). Although rural-urban migrants participate less in the social insurance system than their counterparts with urban hukou, a closer examination of recent policy developments shows that migrants actually do have the legal right to access the system. This implies that discrimination between rural and urban workers has been declining, and distinctions based on household registration status are less able to explain China's current urban transition. This paper provides a new way of examining Chinese migrants' social insurance participation, by adopting a framework that includes both rural-to-urban migrants and urban-to-urban migrants, which are an important, but less studied, migrant group. Among our key findings are that urban migrants are more likely to sign a labour contract than rural migrants; urban migrants have higher participation rates in social insurance than rural migrants; having a labour contract has a greater impact than hukou status in determining whether Beijing's floating population accesses social insurance; and urban migrants who have signed a labour contract have higher participation rates in social insurance than either rural migrants or urban migrants without a labour contract.
    Keywords: rural-to-urban migrants, urban-to-urban migrants, social insurance, labour contract
    Date: 2013–05
  40. By: Martijn Kobus (VU University Amsterdam); Eva Gutierrez Puigarnau (VU University Amsterdam); Piet Rietveld (VU University Amsterdam); Jos Van Ommeren (VU University Amsterdam)
    Abstract: We introduce a methodology to estimate the effect of parking prices on car drivers' choice between street and garage parking. Our key identifying assumption is that the marginal benefit of parking duration does not depend on this choice. The endogeneity of parking duration is acknowledged in the estimation procedure. We apply the methodology to an area where cruising for parking is absent, street parking is ubiquitous and garage parking is discretely located over space. So, in this area, the average distance to the final destination is longer for garage parking than for street parking. We find that drivers are willing to pay a premium for street parking which ranges from euro 0.35 to euro 0.58. Given a parking duration of one hour, we find that the demand for street parking is extremely price elastic: the price elasticity of demand for the share of street parking is -4. However, the price elasticity is much smaller for shorter parking durations. Our estimates imply that even small reductions in street parking prices induce a strong increase in the stock of cars parked on-street. Our estimates also imply that a policy which contains an on-street premium (so street prices exceed garage prices) is welfare improving, because drivers with longer parking durations are induced to use parking locations that are, on average, farther away.
    Keywords: street parking; garage parking
    JEL: R48
    Date: 2012–04–20
  41. By: Christopher F. Hein (Department of Quantitative Social Science, Institute of Education, University of London); Rebecca Allen (Department of Quantitative Social Science, Institute of Education, University of London)
    Abstract: This paper estimates the relationship between teacher characteristics and teacher quality by applying point-in-time pupil-fixed effects. It uses a large cross-sectional dataset of grade 6 teaching and learning in 12 sub-Saharan countries. The findings are generally in line with the existing literature that finds such observable characteristics to be weak predictors that significantly differ in their effects across countries. Teacher subject competency test scores, the only consistent predictor of teacher quality across African countries in other studies, are only significant in the Seychelles. Contrary to US studies, we do not find consistent returns to teacher experience. Our estimates suggest that teacher characteristics are complementary rather than mutually exclusive. The analysis presented here provides comparable estimates of within-school variation of teacher quality and unique lower-bound estimates of teaching ability.
    Keywords: Teacher Quality, Teacher Characteristics, Africa, SACMEQ, Complementarity
    JEL: I20 I21 I25 O15 O55 O57
    Date: 2013–05–13
  42. By: Danzer, Alexander M. (University of Munich); Dietz, Barbara (Institute for East and Southeast European Studies, Regensburg); Gatskova, Ksenia (Institute for East and Southeast European Studies, Regensburg); Schmillen, Achim (Institute for Employment Research (IAB), Nuremberg)
    Abstract: This paper analyses incomes and socioeconomic status of internal migrants over time and in comparison to their new neighbors and investigates whether status consumption is a way for newly arrived city dwellers to signal their social standing. Using a novel dataset from the emerging economy of Kazakhstan we find that internal migrants earn an income and status premium for their move. In a comparison to indigenous city dwellers their earnings and household incomes are not significantly different; however, mobile households report a significantly higher subjective socio-economic status. Exploiting expenditure data, we find that recent migrant households gain status from using visible consumption to impress their new neighbors. This signaling might be used as adaptation to the new economic and social environment or to gain access to social capital.
    Keywords: absolute and relative welfare, income, status consumption, signaling model, conspicuous consumption, adaptation, internal migration, emerging economy, rural-urban migration
    JEL: P36 I31 R23
    Date: 2013–04
  43. By: Lutfunnahar Begum; Asadul Islam; Russell Smyth
    Abstract: This paper examines the link between the Female Secondary School Stipend Program in Bangladesh, its effects on schooling of girls, and the subsequent impact on the education of their younger siblings. The stipend program was introduced nationwide in 1994, and affected girls in rural areas who were of secondary school age (grades 6-10) in 1994 or later, but not boys of the same cohort. We examine the effect of educational attainment of older siblings on schooling outcomes of younger siblings. We also examine the role of the gender of older siblings on the schooling outcomes of younger siblings. We find that the education of older siblings has a positive effect on the schooling of younger siblings, and that the effect is stronger on younger brothers than on younger sisters. When we take into account the endogeneity of education of older siblings, we find that their gender composition generally has no effect on the schooling attainment of younger siblings. The instrumental variable estimates, using stipend program eligibility as an instrument, suggest that the completed years of schooling by younger siblings would increase by about 0.13 years if the education of older siblings increased by one year. The intent-to-treat effect suggests that the stipend program increased schooling by 2.6 years. This implies about a 10 per cent increase in the schooling of younger siblings if elder siblings participated in the program. Our results suggest that school programs that benefit children's education could bring both short- and long-term gains, not only directly to the affected children, but also indirectly to their siblings.
    Keywords: Girls' education, stipend program, siblings' schooling, Bangladesh
    JEL: J16 H52 I28 D13
    Date: 2013–05
  44. By: Robert Dur (Erasmus University Rotterdam, CESifo, and IZA); Ben Vollaard (Tilburg University, CentER, and TILEC)
    Abstract: Field-experimental studies have shown that people litter more in more littered environments. Inspired by these findings, many cities around the world have adopted policies to quickly remove litter. While such policies may avoid that people follow the bad example of litterers, they may also invite free-riding on public cleaning services. We are the first to show that both forces are at play. We conduct a natural field experiment where, in a randomly assigned part of a residential area, the frequency of cleaning was drastically reduced during a threemonth period. We find evidence that some people start to clean up after themselves when public cleaning services are diminished. However, the tendency to litter more dominates. We also find evidence for persistency in these responses after the treatment has ended.
    Keywords: littering, public services, free-riding, field experiment
    JEL: C93 H40 K42
    Date: 2012–07–03
  45. By: Javdani, Mohsen (University of British Columbia, Okanagan); McGee, Andrew (Simon Fraser University)
    Abstract: We examine how immigrants in Canada fare in terms of promotions relative to their native peers. Using linked employer-employee data and firm effects, we identify the extent to which differences in promotion outcomes result from immigrants sorting into firms offering "dead-end" jobs versus facing intra-firm barriers to advancement. We find that while white immigrants experience broadly similar promotion outcomes relative to their white native peers, visible minority immigrants – particularly those in their first five years in Canada – are substantially less likely to have been promoted and have been promoted fewer times with their employers than their white native peers. Newly arrived female visible minority immigrants sort into firms offering "dead end" jobs, but most of the differences in promotion outcomes between immigrants and their native peers result from intra-firm differences in promotion outcomes. The findings imply that policies that do not tackle barriers to advancement within firms may be insufficient to address the difficulties faced by immigrants in the labor force.
    Keywords: promotions, immigration
    JEL: J61 J71
    Date: 2013–04
  46. By: Beria, Paolo; Grimaldi, Raffaele
    Abstract: The removal of infrastructure bottlenecks is widely considered among the most profitable interventions, in socio-economic terms, and rail transport is not an exception. However, as outlined for example by RailPAG (2005), the measurement of the related benefits is difficult and no specific manuals indications seem to exist. From a general point of view, by removing a rail bottleneck we expect at least two kinds of benefits: direct benefits to transport users and external benefits to the rest of society (environmental externalities, accidents and congestion) due to the avoidance of possible shift to more impactful transport modes. The first effect is particularly hard to correctly evaluate, especially without a complete transport model, and thus CBAs currently performed might often result biased. The aim of this paper is to propose a simplified approach to estimate the effects of a capacity constraints for a simple rail network, and assess its removal through a CBA. In the first part, we briefly analyse the transport economics literature on the issue. In the following we introduce the proposed methodology, based on the use of a standard logit model, to measure the rail users’ generalised costs with and without the capacity constraint, and the consequent users and social surplus variation. The model is specified initially for a single link and then extended to a more complex network. Then, we outline the other elements to be included into a CBA in addition to surplus variation: rail service performance improvements, external costs associated to road shift and possible wider economic effects. We also discuss the effect of regulation in the distribution of calculated surplus variations.
    Keywords: Cost Benefit Analysis; bottleneck; rail; saturation; assessment; infrastructure
    JEL: D61 R41 R42
    Date: 2013–05–10
  47. By: Glitz, Albrecht (Universitat Pompeu Fabra)
    Abstract: This paper studies the effect of coworker-based networks on individual labour market outcomes. I analyse how the provision of labour market relevant information by former coworkers affects the employment probabilities and, if hired, the wages of male workers who have previously become unemployed as the result of an establishment closure. To identify the causal effect of an individual worker's network on labour market outcomes, I exploit exogenous variation in the strength of these networks that is due to the occurrence of mass-layoffs in the establishments of former coworkers. The empirical analysis is based on administrative data that comprise the universe of workers employed in Germany between 1980 and 2001. The results suggest a strong positive effect of a higher employment rate in a worker's network of former coworkers on his re-employment probability after displacement: a 10 percentage point increase in the prevailing employment rate in the network increases the re-employment probability by 7.5 percentage points. In contrast, there is no evidence of a statistically significant effect on wages.
    Keywords: networks, labour markets, employment, wages
    JEL: J63 J64
    Date: 2013–05
  48. By: Adriaan Hendrik van der Weijde (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Vincent A. C. van den Berg (VU University Amsterdam)
    Abstract: We formulate a horizontal differentiation model with price-sensitive demand and asymmetric transport costs, in the context of transport scheduling. Two competitors choose fares and departure times in a fixed time interval. Consumers are distributed uniformly along the interval; their location indicates their desired departure time. In a standard Hotelling model, locations are chosen before prices. In our context, the opposite order is also conceivable, but we show that it does not result in a Nash equilibrium; the same is true for a game in both variables are chosen simultaneously. We also discuss Stackelberg game structures and second-best regulation. We conclude that the addition of price-sensitive demand results in equilibria in the traditional Hotelling model with price setting; there, services are scheduled closer together than optimal. We also show that it is possible to include asymmetric schedule delay functions. Our results show that departure times can be strategic instruments. Optimal regulatory strategies depend on the value of schedule delay, and on whether the regulator can commit.
    Keywords: horizontal differentiation, scheduling, transport
    JEL: L11 L51 L91 R40
    Date: 2012–11–08
  49. By: Sumit Agarwal; Richard J. Rosen; Vincent Yao
    Abstract: Refinancing a mortgage is often one of the biggest and most important financial decisions that people make. Borrowers need to choose the interest rate differential at which to refinance and, when that differential is reached, they need to take the steps to refinance before rates change again. The optimal differential is where the interest saved by refinancing equals the sum of refinancing costs and the option value of refinancing. Using a unique panel data set, we find that approximately 59% of borrowers refinance sub-optimally – with 52% of the sample making errors of commission (choosing the wrong rate), 17% making errors of omission (waiting too long to refinance), and 10% making both errors. Financially sophisticated borrowers make smaller mistakes, refinancing at rates closer to the optimal rate and waiting less after mortgage rates reach the borrowers’ trigger rates. Evidence suggests borrowers learn from their refinancing experiences as they make smaller mistakes on their second refinancing than on their first one.
    Date: 2013
  50. By: Josef Montag
    Abstract: I evaluate the effects of a new road traffic law in the Czech Republic that became effective on July 1, 2006. The law introduced tougher punishments through the introduction of a demerit point system and a manifold increase in fines, together with an augmented authority of traffic police. I find a sharp, 33.3 percent, decrease in accident-related fatalities during the first three post-reform months. This translates into 51 to 204 saved lives with 95 percent certainty. The decline was, however, temporary; estimates of the effects going beyond the first year are around zero. Unique data on traffic police activity reveal that police resources devoted to traffic law enforcement gradually declined and were shifted towards general law enforcement.
    Keywords: traffic law; traffic fatalities; policy evaluation; deterrence, enforcement;
    JEL: I12 I18 K42 R41
    Date: 2013–02
  51. By: Cai, Jing; de Janvry, Alain; Sadoulet, Elisabeth
    Abstract: Using data from a randomized experiment in rural China, this paper studies the influence of social networks on weather insurance adoption and the mechanisms through which social networks operate. To quantify network effects, the experiment offers intensive information sessions about the insurance product to a random subset of farmers. For untreated farmers, the effect of having an additional treated friend on take-up is equivalent to granting a 15% reduction in the insurance premium. By varying the information available about peers’ decisions and using randomized default options, the experiment shows that the network effect is driven by the diffusion of insurance knowledge rather than purchase decisions.
    Keywords: Social network, Insurance demand, Learning
    JEL: D12 D83 G22 O33
    Date: 2013–05–09
  52. By: Asadul Islam; Paul A. Raschky
    Abstract: Consistent estimates of the effect of ethnic identity on labor market outcomes is complicated by the endogenous relationship between performance on the labor market and attitudes towards ethnic identity. This paper uses measures of genetic and linguistic distance between an immigrants' home and host countries as instruments for ethnic identity. We find some evidence for adverse effects of home country identity on male immigrants' unemployment likelihood. Our results also suggest that a stronger host country identity only has a systematic effect on female employment and job satisfaction. Overall, ethnic identity appears to play only a negligible role in immigrants' labour market performance.
    Keywords: Ethnic Identity, Labor Market Outcomes, Instrumental Variables
    JEL: F22 J15 J16 Z10
    Date: 2013–05
  53. By: Borodak, Daniela (France Business School); Piracha, Matloob (University of Kent)
    Abstract: This paper analyses the determinants and correlates of different forms of migration, including circular, temporary and permanent. Using Moldovan data we show that age, education, number of children in a household and social as well as economic development in the region of origin play a crucial role in the decision to migrate permanently or on temporary/circular basis. We believe that understanding who moves and whether temporarily or circularly will help formulate more effective migration policies both in the sending and receiving countries.
    Keywords: circular migration, return migration, nested logit, Moldova
    JEL: C35 F22 J61
    Date: 2013–05
  54. By: Ramon Flores (Universidad Carlos III de Madrid); Maurice Koster (University of Amsterdam); Ines Lindner (VU University Amsterdam); Elisenda Molina (Universidad Carlos III de Madrid)
    Abstract: This paper proposes a new measure for a group's ability to lead society to adopt their standard of behavior, which in particular takes account of the time the group takes to convince the whole society to adopt their position. This notion of a group's power to initiate action is computed as the reciprocal of the resistance against it, which is in turn given by the expected absorption time of a related finite state partial Markov chain that captures the social dynamics. The measure is applicable and meaningful in a variety of models where interaction between agents is formalized through (weighted) binary relations. Using Percolation Theory, it is shown that the group power is monotonic as a function of groups of agents. We also explain the differences between our measure and those discussed in the literature on Graph Theory, and illustrate all these concerns by a thorough analysis of two particular cases: the Wolfe Primate Data and the 11S hijackers' network.
    Keywords: Collective action, Social networks, Influence and diffusion models, Network intervention, Group centrality measures
    JEL: C79 D01 D71
    Date: 2012–03–29
  55. By: Hugo E. Silva (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Vincent A.C. van den Berg (VU University Amsterdam)
    Abstract: This paper analyzes airlines' strategic interactions and airport efficient pricing, with a deterministic bottleneck model of congestion, in Cournot-Nash competition and in sequential competition where a Stackelberg leader interacts with perfectly competitive airlines. We show that the internalization of self-imposed congestion by non-atomistic carriers is consistent with earlier literature based on static models of congestion, but the congestion tolls are not. The tolls derived for fully atomistic airlines achieve the social optimum, when charged to all carriers, in the simultanous setting as well as in the sequential setting. We also find that alternative efficient pricing schemes exist for the sequential competition between a dominant airline and a competitive follower. The analysis suggests that airport congestion pricing has a more signicant role than what previous studies have suggested. Moreover, the financial deficit under optimal pricing may be less severe than what earlier studies suggest, as congestion toll revenues may cover optimal capacity investments. Political feasibility would be enhanced as ecient congestion charges do not depend on market shares and therefore may not be perceived as inequitable.
    Keywords: Airport pricing, Congestion, Bottleneck model
    JEL: H23 L50 L93 R48
    Date: 2012–05–25
  56. By: Paul Koster (VU University Amsterdam); Eric Pels (VU University Amsterdam); Erik Verhoef (VU University Amsterdam)
    Abstract: We derive the expected user costs of US domestic air travel delay variability taking into account scheduling behavior of travelers. Travelers do not only consider mean arrival delays, but also face scheduling costs because they arrive too early or too late at their destination. The model allows travelers to anticipate arrival delay variability by choosing an earlier flight. We show that the expected user costs of US air traffic delays are underestimated by 16% if arrival delay variability is ignored.
    Keywords: air traffic delay, travel time variability, scheduling, value of reliability
    JEL: R4
    Date: 2013–04–09
  57. By: Erik T. Verhoef (VU University Amsterdam)
    Abstract: The famous Mohring-Harwitz theorem states that, under certain technical conditions, the degree of self-financing of congested infrastructure is equal to the elasticity of the capacity cost function in the optimum, so that under neutral scale economies exact self-financing applies. Although the theorem has been proven to remain valid for various extensions of the basic set-up for which it was originally derived, it breaks down when the infrastructure is used by operators with market power when competing in Cournot fashion, the case in point often being oligopolistic airlines at a congested airport. This paper proposes a regulatory scheme, not involving lump-sum payments or budget constraints in the optimal pricing problem, that restores self-financing for congested infrastructure for this market form. What is more, under the proposed scheme, exact self-financing applies independent of the elasticity of the capacity cost function. The result remains true both for the case where operators treat the tolls parametrically, and for 'manipulable' tolls, designed to account for the fact that operators with market power can be expected to be aware of, and exploit, the fact that toll are not truly parametric, but instead depend on their own behaviour.
    Keywords: Congestion pricing, capacity choice, self-financing infrastructure, market power, airport congestion
    JEL: R41 R48 D62
    Date: 2012–07–06

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