nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒07‒15
sixty-six papers chosen by
Steve Ross
University of Connecticut

  1. Clustered housing cycles By Rubén Hernández-Murillo; Michael T. Owyang; Margarita Rubio
  2. Spatial indices of residential segregation By Maurizio Pisati
  3. Right Peer, Right Now? Endogenous Peer Effects and Achievement in Victorian Primary Schools By Duncan McVicar; Julie Moschion; Chris Ryan
  4. Efficiency and Effectiveness Review of the National Housing Authority Resettlement Program By Ballesteros, Marife M.; Egana, Jasmine V.
  5. A small model of equilibrium mechanisms in a city By André De Palma; Stef Proost; Saskia Van Der Loo
  6. The Vindication of Don Quijote: The impact of noise and visual pollution from wind turbines on local residents in Denmark By Cathrine Ulla Jensen; Toke Emil Panduro; Thomas Hedemark Lundhede
  7. Ethnic composition of schools and school performances in secondary education of Turkish migrant students in 7 countries and 19 European educational systems By Gert-Jan Veerman; Jaap Dronkers
  8. Towards a General Theory of Mixed Zones: The Role of Congestion By Yuval Kantor; Piet Rietveld; Jos van Ommeren
  9. The Long Shadow of Port Infrastructure in Germany – Cause or Consequence of Regional Prosperity? By Philipp Breidenbach; Timo Mitze
  10. Greening Growth in Luxembourg By Nicola Brandt
  11. House Prices Drive Current Accounts: Evidence From Property Tax Variations By François Geerolf; Thomas Grjebine
  12. The Legacy of Conflict – Regional Deprivation and School Performance in Northern Ireland By Neil T.N. Ferguson; Maren M. Michaelsen
  13. Scenario Planning for Cities using Cellular Automata Models: A Case Study By Caroline Bayr; Miriam Steurer; Rose-Gerd Koboltschnig
  14. A Second Look at Enrollment Changes after the Kalamazoo Promise By Brad J. Hershbein
  15. Land governance of suburban areas of Vietnam: Dynamics and contestations of planning, housing and the environment By Wit, J.W. de
  16. Geographical Variation in Project Cost Performance: The Netherlands versus Worldwide By Chantal C. Cantarelli; Bent Flyvbjerg; S{\o}ren L. Buhl
  17. The Footloose Entrepreneur Model with 3 Regions By José Gaspar; Sofia Balbina Santos Dias de Castro; João Correia da Silva
  18. The Effects of Resources Across School Phases: A Summary of Recent Evidence By Stephen Gibbons; Sandra McNally
  19. xsmle—A Command to Estimate Spatial Panel Models in Stata By Federico Belotti; Gordon Hughes; Andrea Piano Mortari
  20. Spatial Data Analysis in Stata: An Overview By Maurizio Pisati
  21. Temporal Causality between House Prices and Output in the U.S.: A Bootstrap Rolling-Window Approach By Wendy Nyakabawo; Stephen M. Miller; Mehmet Balcilar; Sonali Das; Rangan Gupta
  22. Measuring Cultural Diversity at a Regional Level By Dirk Dohse; Robert Gold
  23. Assessing the Regional Economic Impacts of Defense Activities – A Survey of Methods By Josselin Droff; Alfredo R. Paloyo
  24. Self-employment and Job Generation in Metropolitan Areas, 1969-2009 By André van Stel; Martin Carree; Emilio Congregado; Antonio Golpe
  25. Decentralization, Social Capital and Regional Convergence By Luciano Mauro; Francesco Pigliaru
  26. Access to Schooling and Staying in School in Sub-Saharan Africa By KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
  27. Adoption of Waste-Reducing Technology in Manufacturing: Regional Factors and Policy Issues By Giulio Cainelli; Massimiliano Mazzanti; Alessio D'Amato
  28. Diversity and Donations: The Effect of Religious and Ethnic Diversity on Charitable Giving By James Andreoni; A. Abigail Payne; Justin Smith; David Karp
  29. A Bayesian Perspective to Analyze Branch Location Patterns in Spanish Banking By Alamá Sabater Luisa; Conesa Guillén David; Forte Deltell Anabel; Tortosa-Ausina Emili
  30. Introduction to spatial-autoregressive models using Stata By David Drukker
  31. A fractal approach to identifying urban boundaries By TANNIER, Cécile; THOMAS, Isabelle; VUIDEL, Gilles; FRANKHAUSER, Pierre
  32. How big is the impact of infrastructure on trade? Evidence from meta-analysis By Celbis, Mehmet Güney; Nijkamp, Peter; Poot, Jacques
  33. Clusters and the New Growth Path for Europe By Christian Ketels; Sergiy Protsiv
  34. The Cost of Segregation in Social Networks By Nizar Allouch
  35. Risk-taking in social settings: Group and peer effects By Spiros Bougheas; Jeroen Nieboer; Martin Sefton
  36. Classroom Observations from Phase 2 of the Pennsylvania Teacher Evaluaiton Pilot: Assessing Internal Consistency, Score Variation, and Relationships with Value Added. By Elias Walsh; Stephen Lipscomb
  37. The Consequences of Using One Assessment System To Pursue Two Objectives By Derek Neal
  38. Asset Price Dynamics with Heterogeneous Beliefs and Local Network Interactions By Valentyn Panchenko; Sergiy Gerasymchuk; Oleg V. Pavlov
  39. Lurking in the Cities: Urbanization and the Informal Economy By Ceyhun Elgin; Cem Oyvat
  40. Determinants of Immigrant Homeownership: Examining their Changing Role during the Great Recession and Beyond By Mundra, Kusum; Uwaifo Oyelere, Ruth
  41. Road Connectivity and the Border Effect: Evidence from Europe By Henrik Braconier; Mauro Pisu
  42. Local Financial Development, Socio-Institutional Environment, and Firm Productivity: Evidence from Italy By Luigi Moretti
  43. State transfers at different moments in time: A spatial probit approach By Jacobs, Jan; Samarina, Anna; Heijnen, Pim; Elhorst, Paul
  44. Perspectives on Health Decentralization and Interjurisdictional Competition among Local Governments in the Philippines By Llanto, Gilberto M.; Kelekar, Uma
  45. Networks, Commitment, and Competence: Caste in Indian Local Politics By Kaivan Munshi; Mark Rosenzweig
  46. Geographical and Industrial Spillovers in entry decisions across export markets By Muñoz Sepulveda, Jesus Angel; Rodriguez, Diego
  47. Discomfort in mass transit and its implication for scheduling and pricing By André DE PALMA; Moez KILANI; Stefan PROOST
  49. The Determinants and Consequences of Friendship Composition By Jason M. Fletcher; Stephen L. Ross; Yuxiu Zhang
  50. The impact of networks, segregation and diversity on migrants' labour market integration By Thomas Horvath; Peter Huber
  51. Competition and Innovation: An inverted-U relationship using Japanese industry data By YAGI Michiyuki; MANAGI Shunsuke
  52. Geographic Access Rules and Investments By Marc Bourreau; Cambini Steffen
  53. Roadway and Infrastructure Design and Its Relation to Pedestrian and Bicycle Safety: Basic Principles, Applications, and Benefits By Ragland, David R; Grembek, Offer; Orrick, Phyllis; Felschundneff, Grace
  54. Kaldor's 1970 Regional Growth Model Revisited By A.P.Thirlwall
  55. Characteristics of Cost Overruns for Dutch Transport Infrastructure Projects and the Importance of the Decision to Build and Project Phases By Chantal C. Cantarelli; Eric J. E. Molin; Bert van Wee; Bent Flyvbjerg
  56. Using a Control Function to Resolve the Travel Cost Endogeneity Problem in Recreation Demand Models By Melstrom, Richard; Lupi, Frank
  57. A Guided Tour to (Real-Life) Social Network Elicitation. By Pablo Branas-Garza; Ramon Cobo-Reyes; Natalia Jimenez; Giovanni Pontiy
  58. Do the effects of R&D tax credits vary across industries? A meta-regression analysis By Castellacci, Fulvio; Lie, Christine
  59. Productivity, market selection and corporate growth: comparative evidence across US and Europe By Giovanni Dosi; Daniele Moschella; Emanuele Pugliese; Federico Tamagni
  60. Proximity strategies in outsourcing relations: the role of geographical, cultural and relational proximity in the European automotive industry By Alexander SCHMITT; Johannes VAN BIESEBROECK
  61. Religion and Risky Health Behaviors among U.S. Adolescents and Adults By Jason Fletcher; Sanjeev Kumar
  62. Linear Social Interactions Models By Blume, Lawrence E.; Brock, William A.; Durlauf, Steven N.; Jayaraman, Rajshri
  63. Migration and Economic Development in China: Evidence from the latest population census (Japanese) By MENG Jianjun
  64. Regional Policy Evaluation:Interactive Fixed Effects and Synthetic Controls By Gobillon, Laurent; Magnac, Thierry
  65. Social networks, employee selection and labor market outcomes By Hensvik, Lena; Nordström Skans, Oskar
  66. Cost overruns in Large-Scale Transportation Infrastructure Projects: Explanations and Their Theoretical Embeddedness By Chantal C. Cantarelli; Bent Flybjerg; Eric J. E. Molin; Bert van Wee

  1. By: Rubén Hernández-Murillo; Michael T. Owyang; Margarita Rubio
    Abstract: Past studies have argued that housing is an important driver of business cycles. Housing markets, however, are highly localized, while business cycles are often measured at the national level. We model a national housing cycle using a panel of cities while also allowing for idiosyncratic departures from the national cycle. These departures occur for clusters of cities that experience simultaneous idiosyncratic housing recessions. We estimate the clustered Markov-switching model proposed in Hamilton and Owyang (2012) using city-level building permits data, a series commonly used at the national level as a business cycle indicator. We find that cities do not form housing regions in the traditional, geographic sense. Instead, similarities in factors affecting the demand for housing (such as the average winter temperature and the unemployment rate) appear to be more important determinants of cyclical comovements than similarities in factors affecting the supply for housing (such as housing density and geographic constraints in the availability of developable land).
    Keywords: Business cycles ; Housing ; Economic indicators
    Date: 2013
  2. By: Maurizio Pisati (Università degli Studi di Milano-Bicocca)
    Date: 2013–07–08
  3. By: Duncan McVicar (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Julie Moschion (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Chris Ryan (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper presents estimates of endogenous peer effects in pupils’ school achievement using data on national test scores, across multiple subjects and cohorts, for the population of primary school pupils in Years 3 and 5 (aged 7/8 and 9/10 years) in the Australian state of Victoria. Identification is achieved via school-grade fixed effects and instrumental variables (IV), exploiting plausibly random differences in the age distribution of peers and their gender mix across cohorts. The results provide strong evidence for the existence of endogenous peer effects across all subjects, with the IV estimates close in magnitude to the corresponding fixed-effects estimates, although less precisely estimated. In reading, for example, a one point increase in peers’ average test scores leads to between a .14 and .39 point increase in own test score, with similar ranges across other subjects.
    Keywords: Endogenous peer effects, school achievement, education, Australia
    JEL: I21 I24 J24
    Date: 2013–06
  4. By: Ballesteros, Marife M.; Egana, Jasmine V.
    Abstract: This paper examines the effectiveness and efficiency of implementation of the National Housing Authority (NHA) resettlement programs. The review focuses on the recent operations of NHA covering the period between 2003 and 2011, which covers one of the largest resettlement projects of NHA involving about 93,000 families for the North and South Rail infrastructure project. During this period, the resettlement program received about 85 percent of NHA budget. NHA has executed the development of 88 resettlement projects nationwide of which 45 project sites are located in Metro Manila and the peripheral areas (or the Greater Manila Area) and 43 in the regions. The dominant scheme in GMA is the Completed Housing Project (CHP) with more than 70 percent (32 sites) of total projects developer constructed. The balance consists of Incremental Housing Projects (IHP) (6 sites) and mixed projects (7 sites), which combined the CHP and IHP methods. By location, there are more in-city projects (68 sites) than off-city projects (20 sites). However, in-city projects are dominant only in the regions and provinces outside Metro Manila. In the highly urbanized cities of Metro Manila, large-scale resettlement was not provided due to land constraints. Based on actual cost per unit, it costs less to produce a unit of housing using the CHP scheme than IHP by about 17 percent or about PHP 25,000 per unit, on the average. However, cost benefit ratio analysis shows that IHP is more cost effective considering the value of developments and the greater participation and investments of households and community in maintenance of housing estates. Between in-city and off-city CHP projects, the average total project cost is higher for in-city projects compared to off-city projects mainly due to higher cost of land but in-city projects are more sustainable and acceptable to both households and local government units (LGUs). It is recommended that the most effective and efficient approach to resettlement is a combined approach of in-city and incremental housing. However, there are necessary conditions that require specific actions not only from NHA but other stakeholders as well to implement this approach such as: (1) land for socialized housing has to be made available by the LGU or national government especially in highly urbanized cities such as Metro Manila; (2) the feasibility of vertical developments in-city should be considered; and (3) the need for the NHA to improve the production process for incremental housing.
    Keywords: Philippines, housing, resettlement program
    Date: 2013
  5. By: André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan); Stef Proost (Center for Economic Studies - CES - KU Leuven - CES - KU Leuven); Saskia Van Der Loo (Center for Economic Studies - CES - KU Leuven - CES - KU Leuven)
    Abstract: We use a simple economy with two interconnected geographical zones. Individuals can live and work in one of the two zones or can commute between them. This model is used to explore the dynamics of housing and work decisions after a permanent shock in labour demand occurred in one of the two zones. We illustrate the role of the different levels of expectation of developers and government transport agencies for the equilibrium on the housing and the labour markets. The model is used to identify better Cost-Benefit rules for transport invest-ments and the role of coordination between housing and transport decisions.
    Keywords: urban economics, transport, housing, dynamic land use
    Date: 2013–07–03
  6. By: Cathrine Ulla Jensen; Toke Emil Panduro (Department of Food and Resource Economics, University of Copenhagen); Thomas Hedemark Lundhede (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: In this article we quantify the marginal external effects of nearby land based wind turbines on property prices capitalized through traded residential properties located within 2,500 meters or less. We succeed in separating the effect of noise and visual pollution from wind turbines. This was achieved by using a dataset covering 21 municipalities and consisting of 12,640 traded residential properties sold in the period 2000-2011. We model the hedonic price function in two steps. First we detrend data across municipalities using a pooled cross sectional model which allows for different price trends across municipalities. Second we control for spatial autocorrelation by using explicit spatial models. Properties affected by noise and visual pollution from wind turbines are identified using Geographical Information Systems. Our results show that wind turbines have a significant negative impact on the price schedule of neighboring residential properties. The visual pollution accounts for 3.15% of the residential sales price. The price premium declines with distance by about 0.242% of the sales price for every 100 meters. The effect of noise depends on the noise level emitted and ranges from 3% to 7% of the sale price for residential properties.
    Keywords: Valuation, wind turbines, spatial autocorrelation, hedonic house price modeling
    Date: 2013–07
  7. By: Gert-Jan Veerman (University of Amsterdam, The Netherlands); Jaap Dronkers (Maastricht University, The Netherlands)
    Abstract: This article examines the effect of the ethnic school composition on school performances in secondary education for Turkish students, using both cross-national PISA 2009 and Swiss national PISA 2009 data. We argue how social capital theory beside other theories can explain a part of the ethnic composition effect. We employ three indicators of the ethnic composition of a school: the native share, the share of co-ethnics and the ethnic diversity (we employ a residualized score of diversity on the proportion of migrants). Our results show no effect of the proportion of natives on math performances. Furthermore, we show a negative association between ethnic diversity and math performances. Nevertheless, we find a positive association between ethnic diversity and reading performances in The Netherlands. Children of Turkish decent have higher math performances if they are in an educational system with a larger community of co-ethnics and if they are in an educational system with native students with average higher school performances. Finally we find no association between an early comprehensive labor agreement and math performances.
    Keywords: ethnic composition, Turkish migrant students, ethnic diversity, social capital
    Date: 2013–07
  8. By: Yuval Kantor (VU University); Piet Rietveld (VU University); Jos van Ommeren (VU University)
    Abstract: Mixed commercial and residential land use is observed in most cities around the world. This is in contrast to a myriad of bid rent models, which predict that mixed land use does not occur. The main exception are the models by Fujita and Ogawa (1982) and Lucas and Rossi-Hansberg (2002) that predict the presence of a very restrictive type of mixed land use. The latter study derives the equilibrium distribution of residential and commercial land uses while allowing for endogenous agglomeration externalities. We extend this model by introducing a traffic congestion externality. We show that congestion induces a general type of mixed land use zone, which is comparable to the type of zone assumed in the model of Wheaton (2004). The interplay between these externalities is then demonstrated, as reduced congestion leads to commercial concentration and agglomeration gains.
    Keywords: land use, congestion, agglomeration, externalities
    JEL: R13
    Date: 2013–06–20
  9. By: Philipp Breidenbach; Timo Mitze
    Abstract: Transport infrastructure is viewed as an important determinant of regional growth and development. While this prediction especially holds from a theoretical perspective based on endogenous growth theories, from an empirical perspective it is not easy to verify this causal link, though. The main reason for this diffi culty is that it is hard to measure whether transport infrastructure is indeed the exogenous driver of regional development or whether it is rather an endogenous reflection of the higher transportation demand in prospering regions. In this paper, we analyse the long-run effect of port facilities on regional income levels in Germany. Since it is very likely that the “reversed causality” problem applies to our sample setting, we use an identification strategy that is based on exogenous longrun instruments. In particular, port facilities built before the industrial revolution (about 1850 in Germany) can be seen as an adequate instrument for current port infrastructure since they are exogenous to recent economic development. Using German regional data for 1991–2008, our results hint at a positive correlation between port locations and regional per capita GDP, but do not provide evidence for a causal relationship. For the regional variation of population levels as a more general indicator for agglomeration effects, the causal relationship running from port infrastructure provision to increasing population levels holds nonetheless.
    Keywords: Port infrastructure; regional income; causal effects; IV
    JEL: C26 R12 R40
    Date: 2013–07
  10. By: Nicola Brandt
    Abstract: With strong economic growth overall and an increasingly important role as a regional economic centre, Luxembourg is experiencing mounting environmental pressures. This is mainly a result of a growing population and a rapid increase in transport, which is dominated by the car, as the number of workers commuting within Luxembourg and from across the border has risen rapidly. Ensuing environmental pressures are sizable, including through CO2 emissions, air pollution and land use changes. Large-scale commuting, combined with low fuel taxes compared to neighbouring countries, has entailed rapid increases in greenhouse gas emissions, which are higher in Luxembourg in per capita terms than almost anywhere else in the OECD. Sound housing policies, urban and transport planning to limit urban sprawl and to promote public transport, and measures to better internalise environmental externalities will be needed to ensure that Luxembourg’s economic growth is compatible with environmental and economic sustainability and the well-being of its population. This working paper relates to the 2012 OECD Economic Survey of Luxembourg (
    Keywords: green growth, transport policies, fuel taxes, urban sprawl, water management
    JEL: H23 H24 Q25 Q53 Q58
    Date: 2013–06–25
  11. By: François Geerolf; Thomas Grjebine
    Abstract: We study the causal link between house prices and current accounts. Across time and countries, we find a very large and significant impact of house prices on current accounts. In order to rule out endogeneity concerns, we instrument house prices for a panel of countries, using property tax variations. A 10% instrumented appreciation in house prices leads to a deterioration in the current account of 1.7% of GDP. These results are very robust to the inclusion of the determinants of current accounts. Following a house price increase, private savings decrease, through wealth effects rather than consumer-finance based mechanisms, while non-residential investment rises through a relaxation of financing constraints for firms.
    Keywords: Current accounts
    JEL: F32 F36 F40
    Date: 2013–06
  12. By: Neil T.N. Ferguson; Maren M. Michaelsen
    Abstract: The relationship between deprivation and educational outcomes has been the subject of a long-running and deep debate in the economic literature. Recent discussions have focused on causality, with experimental and quasi-experimental approaches taken, yet, predominantly, the literature continues to proxy deprivation with measures of wealth. This paper explores a much wider measure and identifi es a causal relationship between regional deprivation and school performance in Northern Ireland. Combining panel data on Key Stage II results from each of Northern Ireland's primary schools with the 2005 Northern Ireland Multiple Deprivation Measure, we show the net negative impact of this wider measure, whilst an extension explores the impacts of each single domain. Using an error-component two-stage least squares model, we account for school and neighbourhood selection and the potential endogeneity of our deprivation measure, showing spatial variation in historical violence, which occurred during The Troubles, to be a valid instrument for deprivation. Our results confirm the negative impact of deprivation frequently found in the literature but also that, when the impacts of other deprivation domains are accounted for, education and crime deprivation, and not financial deprivation, play a significant role in determining outcomes. This confirms the limitations of using wealth as a proxy for neighbourhood deprivation, whilst suggesting that policies focusing only on income redistribution will be unsuccessful in improving education outcomes of those exposed to deprivation.
    Keywords: Violent conflict; regional deprivation; human capital accumulation; Northern Ireland
    JEL: I24 R23
    Date: 2013–06
  13. By: Caroline Bayr (Joanneum Research, Graz); Miriam Steurer (Karl-Franzens University of Graz); Rose-Gerd Koboltschnig (Joanneum Research, Graz)
    Abstract: We show how small to medium sized cities can make use of the cellular automata (CA) approach to integrate land use data and other GIS based data with inter-active scenario evaluation. In our model development we put particular focus on the interdependency between transport infrastructure supply and population density. Due to their close connection with the field of Geography most CA models concentrate on land use changes only. How the CA model can be used in practice by city planners is generally not discussed. Also, population changes in cells and the associated pressures on infrastructure networks are generally not included. In this paper we first build and use a CA model to illustrate land use change. We then apply OLS regression as well as linear optimization techniques to allocate population growth into cells in a way that observes the stylized facts established by the standard Urban Economics literature (population growth in a particular cell is dependent on its distance to the city centre as well as its quality with respect to public transport ease). Third we show applications that illustrate how a CA model can be used for scenario planning in cities. Our CA model can be used to generate maps of future land use patterns for different potential future scenarios. It provides a fast and very economical way to compare alternative strategic plans and development rules for a small to medium sized city. For our sample town, Austria’s second largest city Graz, we develop five different long-term scenarios. The model output for each scenario can then be used as input for infrastructure planning procedures. We illustrate some examples: ex-ante transport infrastructure evaluation, graphic representation of the spatially differentiated structure of the population, evaluation of existing zoning rules, evaluation of infrastructure capacities (e.g. sewage system).
    Date: 2013–06
  14. By: Brad J. Hershbein (W.E. Upjohn Institute for Employment Research)
    Abstract: While previous research has documented how the Kalamazoo Promise, the most prominent and generous place-based college scholarship program, increased enrollment in Kalamazoo Public Schools, this paper qualifies and quantifies the characteristics of students who were induced to enter—or stay—in the district. In particular, it analyzes the origins and destinations, socioeconomic composition, and school-level sorting behavior associated with student flows around the time of the Promise announcement. These dimensions are more subtle than changes in the volume of students or measures of their individual success, but they are equally important to understand for communities exploring the feasibility of place-based scholarships as a local economic development tool. The findings suggest considerable economic benefits not just for the school district but for the broader metropolitan area.
    Keywords: Kalamazoo Promise, place-based scholarship, local economic development, enrollment, migration, selection
    JEL: I21 I25 J61 O18 R10
    Date: 2013–06
  15. By: Wit, J.W. de
    Abstract: After the Doi Moi (‘renovation’) reforms in Vietnam from 1986, land ownership rules were adjusted, effectively terminating former land collectivisation efforts. While land ownership remained fully under the control of the state, a 1993 land law conferred 20-year leaseholds to most farmers. They could now utilize farm land individually, and sell, swap and mortgage the land in a situation similar to private ownership. These leaseholds are now expiring and a new 2013 land law is in the making. This paper was initially written for UNDP Vietnam which supports Vietnam to help formulate a strong new land law, and brings out the complexities of land governance in the suburban areas of fast expanding Vietnamese cities. It first considers the present and changing land use of suburban areas and the key stakeholders involved here – powerful State Owned Enterprises, farmers, bureaucrats and communist party leaders. Planning practices are then assessed – and seen to be both rigid and complex, with different departments at various levels working at cross purposes under conditions of conflicting rules, laws and weak capacities. This is one reason for the dominance of informal arrangements and widespread corruption, where powerful actors benefit hugely and illegally from conditions of opacity and informal networks. Overall outcomes are that cities expand in a haphazard (‘leapfrog’) and inefficient manner, with insufficient attention for timely and adequate infrastructure, the environment and for people’s welfare as in social amenities and parks. As a result of lopsided incentive systems, it is the state which foregoes huge incomes and faces more costly investments, while many suburban farmers are affected through (arbitrary) land acquisition and inadequate compensation.
    Keywords: planning;Vietnam;environment;urban housing;land governance;suburban land
    Date: 2013–06–28
  16. By: Chantal C. Cantarelli; Bent Flyvbjerg; S{\o}ren L. Buhl
    Abstract: Cost overruns in transport infrastructure projects know no geographical limits, overruns are a global phenomenon. Nevertheless, the size of cost overruns varies with location. In the Netherlands, cost overruns appear to be smaller compared to the rest of the world. This paper tests whether Dutch projects perform significantly better in terms of cost overruns than other geographical areas. It is concluded that for road and tunnel projects, the Netherlands performs similarly to the rest of the world. For rail projects, Dutch projects perform considerably better, with projects having significantly lower percentage cost overruns in real terms (11%) compared to projects in other North West European countries (27%) and in other geographical areas (44%). Bridge projects also have considerably smaller cost overruns: 7% in the Netherlands compared with 45% in other NW European countries and 27% in other geographical areas. In explaining cost overruns, geography should therefore clearly be taken into consideration.
    Date: 2013–07
  17. By: José Gaspar (CEF.UP and Faculdade de Economia, Universidade do Porto); Sofia Balbina Santos Dias de Castro (CMUP e Faculdade de Economia, Universidade do Porto); João Correia da Silva (CEF.UP and Faculdade de Economia, Universidade do Porto)
    Abstract: We study a 3-region version of the Footloose Entrepreneur model by Forslid and Ottaviano (J Econ Geogr, 2003). We focus on the analysis of stability of three types of long-run equilibria: agglomeration, dispersion and partial dispersion. We find that the 3-region model exhibits more tendency for agglomeration and less tendency for dispersion than the 2-region model. We show numerical evidence suggesting that equilibria with partial dispersion are always unstable. We also discuss the existence and robustness of bifurcations in the 3-region model.
    Keywords: Core-Periphery, Footloose Entrepreneur, Three Regions
    JEL: R10 R12 R23
    Date: 2013–07
  18. By: Stephen Gibbons; Sandra McNally
    Abstract: This report provides analyses of recent academic evidence on the causal effects of resources in schooling on students' outcomes.
    Keywords: education, school resources, government policy, pupil premium, education funding, inequality, OECD
    Date: 2013–06
  19. By: Federico Belotti (University of Rome "Tor Vergata"); Gordon Hughes (University of Edinburgh); Andrea Piano Mortari (University of Rome "Tor Vergata")
    Abstract: Econometricians have begun to devote more attention to spatial interactions when carrying out applied econometric studies. The new command we are presenting, xsmle, fits fixed- and random-effects spatial models for balanced panel data for a wide range of specifications: the spatial autoregressive model, spatial error model, spatial Durbin model, spatial autoregressive model with autoregressive disturbances, and generalized spatial random effect model with or without a dynamic component. Different weighting matrices may be specified for different components of the models and both Stata matrices and spmat objects are allowed. Furthermore, xsmle calculates direct, indirect, and total effects according to Lesage (2008), implements Lee and Yu (2010) data transformation for fixed-effects models, and may be used with mi prefix when the panel is unbalanced.
    Date: 2013–07–03
  20. By: Maurizio Pisati (Università degli Studi di Milano-Bicocca)
    Date: 2013–07–09
  21. By: Wendy Nyakabawo (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut); Mehmet Balcilar (Eastern Mediterranean University); Sonali Das (Council for Scientific and Industrial Research); Rangan Gupta (University of Pretoria)
    Abstract: This paper examines the causal relationships between the real house price index and real GDP per capita in the U.S., using the bootstrap Granger (temporal) non-causality test and a fixed-size rolling-window estimation approach. We use quarterly time-series data on the real house price index and real GDP per capita, covering the period 1963:Q1 to 2012:Q2. The full-sample bootstrap non-Granger causality test result suggests the existence of a unidirectional causality running from the real house price index to real GDP per capita. A wide variety of tests of parameter constancy used to examine the stability of the estimated vector autoregressive (VAR) models indicate short- and long-run instability. This suggests that we cannot rely on the full-sample causality tests and, hence, this warrants a time-varying (bootstrap) rolling-window approach to examine the causal relationship between these two variables. Using a rolling window size of 28 quarters, we find that while causality from the real house price to real GDP per capita occurs frequently, significant, but less frequent, evidence of real GDP per capita causing the real house price also occurs. These results imply that while the real house price leads real GDP per capita, in general (both during expansions and recessions), significant feedbacks also exist from real GDP per capita to the real house price.
    Keywords: Real house price, Real GDP per capita, Bootstrap, Time-Varying Causality
    JEL: C32 E32 R31
    Date: 2013–06
  22. By: Dirk Dohse; Robert Gold
    Abstract: This paper discusses alternative measures of cultural diversity to be used in subsequent investigations of the impacts of cultural diversity on regional development in Europe. It derives indicators for the measurement of cultural diversity from the literature and describes possible adjustments and refinements. Finally, the discussed measures and weights are applied in order to provide a first descriptive overview of cultural diversity in in Europe at the regional (NUTS-2) level.
    Keywords: Regional development, cultural diversity, measurement issues
    JEL: M13 O18 R11
    Date: 2013–06
  23. By: Josselin Droff; Alfredo R. Paloyo
    Abstract: Defense activities exercised in a specific region may alter the region’s economic performances. An accurate assessment of the potential economic impacts of defense activities within a specific area is therefore a valuable undertaking, especially for regional planners who may want to prepare for changes. The variety in the methodological landscape, counting, among others, input–output models, economic base models, Keynesian regional multipliers, fixed-effects estimators, and casestudy approaches inspired by geography, sociology, or political science may pose a dilemma. In this paper, we detail the historical and theoretical background of each method, as well as select exemplary cases where these methods were successfully or inappropriately applied. By examining old and “new” methods based on the extant literature in regional economics, we aim to construct a methodological typology that could be extremely valuable to all stakeholders.
    Keywords: Defense activities; public planning; regional impact methods
    JEL: O18 R11 R15
    Date: 2013–06
  24. By: André van Stel; Martin Carree; Emilio Congregado; Antonio Golpe
    Abstract: Many regional development policy initiatives assume that entrepreneurial activities promote economic growth. Empirical research has presented rationale for this argument showing that small firms create proportionally more new jobs than large ones. However, little research has been performed on the issue of net job generation at the urban level, particularly when self-employment is considered as an indicator of entrepreneurial activities. This paper investigates to what extent U.S. metropolitan areas in the 1969-2009 period characterized by relatively high rates of self-employment also have shown relatively high rates of subsequent total employment growth. The analysis corrects for the influence of sectoral composition, wage level, educational attainment, presence of research universities and size of the metropolitan area to measure the extent to which the number and quality of self-employed in a region contribute to total employment growth. It finds the relationship between self-employment rates and subsequent total employment growth to be positive on average during the forty-year period but to weaken over time.
    Date: 2013–04–18
  25. By: Luciano Mauro (Università di Trieste, Italy, Dipartimento di Scienze Economiche Aziendali, Statistiche e Matematiche); Francesco Pigliaru (Università di Cagliari and CRENoS, Italy Dipartimento di Scienze Economiche e Aziendali)
    Abstract: By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly through the functioning of local institutions, decentralization enhances (hampers) growth wherever social capital is high (low). We define our hypothesis within a growth model with public capital, and use the North-South divide in Italy to assess the quantitative plausibility of our model. A calibration exercise shows that it accounts for the major swings in the Italian regional divide since 1861.
    Keywords: Social Capital, Convergence, Economic Growth
    JEL: O4 N9 R5
    Date: 2013–06
  26. By: KUEPIE Mathias; SHAPIRO David; TENIKUE Michel
    Abstract: This study jointly investigates factors driving the processes of accessing and staying in school in sub-Saharan Africa. We explicitly account for the fact that staying in school or its converse, dropping out, is observed only among children who ever attend school. We use data from Demographic and Health Surveys from 12 countries. We find that access to school is typically lower for females, rural youth, and those from poorer households. Conditional on having ever attended school, these factors, as well as age in grade ? an indicator of performance in school ? typically help account for staying in school. We also find that, keeping girls at school is very sensitive to school performance: girls with comparatively weak performance in school are more likely than their male counterparts to drop out of school, while girls who do relatively well in school are more likely to remain in school than boys, other things equal.
    Keywords: Access to education; ; school dropout; ; sub-Saharan Africa; ; school delay
    JEL: I20 I21 O15
    Date: 2013–07
  27. By: Giulio Cainelli; Massimiliano Mazzanti; Alessio D'Amato
    Abstract: We present a joint theoretical-empirical investigation to assess the adoption by manufacturing firms of innovations aimed at increasing recycling and, consequently, reducing the use of material and waste in production processes. According to the recent emphasis on the 'external' factors stimulating innovation which often may be more important than the classic drivers, such as R&D, we address the role of local influences, such as policy environments and regional structural features. First, we analyse firms’ innovation adoption choices in a simplified technology adoption model augmented by discussions in the environmental innovation (EI) literature that rationalize the research hypotheses underlying empirical models. We frame our empirical analysis on an original integration of data from a firm survey (EU CIS2008 survey of manufacturing firms) and regional level waste related information obtained from Italian environmental agency waste reports. The EU CIS2008 was the first of these surveys to ask for information on EI adoption in the waste sector. Our econometric analysis shows that firms adopt EI on the basis of some relational factors, while drivers such as R&D have no impact. The evidence of our study supports the role of regional factors related to waste management and policy. For example, firms located in regions with better separated waste collection and waste tariff diffusion systems are more likely to adopt EI. Networking and agglomeration economies do not seem to have any effect.
    Keywords: waste and material reduction technology; innovation adoption; firm behaviour; waste policy; regional frameworks; agglomeration economies
    JEL: D22 Q53 Q55
    Date: 2013–06–21
  28. By: James Andreoni; A. Abigail Payne; Justin Smith; David Karp
    Abstract: We explore the effects of local ethnic and religious diversity on private donations to charity. We find that an increase in religious or ethnic diversity decreases donations. The ethnicity effect is driven by non-minorities and blacks, and is strongest in high income, low education areas. The religious effect is driven by Catholics, and is concentrated in high income, high education areas. We find no evidence that diversity affects the fraction of households that donate. Our results provide a parallel to the negative effects of diversity on publicly provided goods, and opens new challenges for fundraisers and policy makers.
    JEL: H41 R23 J11
    Date: 2013–07
  29. By: Alamá Sabater Luisa (Jaume I Universtity); Conesa Guillén David (University of Valencia); Forte Deltell Anabel (Jaume I University); Tortosa-Ausina Emili (INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY JAUME I)
    Abstract: We analyze the determinants of bank branch location in Spain controlling for geography explicitly. After a long period of intense expansion, most savings banks are now involved in merger processes. However, given the contributions of this type of bank to combatting financial exclusion, this process might exacerbate the consequences of the crisis for some social groups. Related problems such as new banking regulation initiatives, or the current excess capacity in the sector, add further relevance to this problem. We address the issue from a Bayesian spatial perspective, which has several advantages over other methodologies used in previous studies. Specifically, the techniques we choose allow us to assess with some precision whether over-branching or under-branching have taken place. Results suggest that both phenomena exist in the Spanish banking sector, although implications for the three types of banks in the industry (commercial banks, savings banks, credit unions) differ.
    Keywords: Bank, Bayesian statistics, branch, municipality.
    JEL: G21 R10 C11
    Date: 2013–07
  30. By: David Drukker (StataCorp)
    Abstract: This session offers an introduction to spatial econometrics using some user-written Stata commands. I will discuss the estimation and interpretation of the parameters in the cross-sectional spatial-autoregressive model. Data management issues pertaining to spatial-weighting matrices used in the analysis will also be addressed.
    Date: 2013–07–08
  31. By: TANNIER, Cécile; THOMAS, Isabelle; VUIDEL, Gilles; FRANKHAUSER, Pierre
  32. By: Celbis, Mehmet Güney (UNU-MERIT / MGSoG, Maastricht University); Nijkamp, Peter (Vrije Universiteit Amsterdam); Poot, Jacques (University of Waikato)
    Abstract: Low levels of infrastructure quality and quantity can create trade impediments through increased transport costs. Since the late 1990s an increasing number of trade studies have taken infrastructure into account. The purpose of the present paper is to quantify the importance of infrastructure for trade by means of meta-analysis and meta-regression techniques that synthesize various studies. The type of infrastructure that we focus on is mainly public infrastructure in transportation and communication. We examine the impact of infrastructure on trade by means of estimates obtained from 36 primary studies that yielded 542 infrastructure elasticities of trade. We explicitly take into account that infrastructure can be measured in various ways and that its impact depends on the location of the infrastructure. We estimate several meta-regression models that control for observed heterogeneity in terms of variation across different methodologies, infrastructure types, geographical areas and their economic features, model specifications, and publication characteristics. Additionally, random effects account for between-study unspecified heterogeneity, while publication bias is explicitly addressed by means of the Hedges model. After controlling for all these issues we find that a 1 per cent increase in own infrastructure increases exports by about 0.6 per cent and imports by about 0.3 per cent. Such elasticities are generally larger for developing countries, land infrastructure, IV or panel data estimation, and macro-level analyses. They also depend on the inclusion or exclusion of various common covariates in trade regressions
    Keywords: Infrastructure, Trade, Transportation, Communication, Public Capital, Public Goods, Meta-Analysis
    JEL: O18 F10 H54 R53 C10 F19 R49
    Date: 2013
  33. By: Christian Ketels; Sergiy Protsiv
    Abstract: This paper outlines elements of a conceptual framework that clarifies the role that clusters play relative to government policies and actions of individual companies in supporting the emergence of 'High Road'-strategies that lead to better New Growth Path-related outcomes. It then focuses on creating a new set of data that can start shedding light on the empirical relevance of this framework. The first main section of the paper draws on a new set of employment and wage data across European clusters. The data is used to analyze whether cluster presence is significantly correlated with higher wages, which as an indicator of higher productivity, are likely to signal the presence of 'High Road'-strategies. We then take a closer look at the scale of the relationship relative to location-specific and other effects. We find cluster presence to be significantly related to higher wages, with the effect being moderate but meaningful. This suggest that cluster presence enhances the ability of economic activities to deliver high performance, but is unlikely to be able to substitute weak business environment conditions. The second section then deploys a wide range of regional performance data collected for the European Competitiveness Index and the European Cluster Observatory. We create indicators for New Growth Path performance and its main dimensions, and classify European regions by their performance patterns. This provides critical insights into the compatibility of the different economics, social, and ecological objectives pursued. We then relate these outcomes to the presence of strong cluster portfolios and strong business environment conditions. Both are most strongly associated with stronger economic outcomes, with lower impact on other dimensions of the New Growth Path. The third section creates a new dataset of cluster initiative intensity at the regional and cluster category-level. It also classifies close to 1000 cluster initiatives in Europe by their engagement in New Growth Path-related activities. We then deploy this data to test the impact of cluster initiatives on regional New Growth Path-performance. Overall, we find evidence consistent with clusters playing a role in making 'High Road'-strategies more likely to emerge. We also find evidence that European regions differ in their strategies towards these goals, with some being able to pursue all three dimensions in parallel. Cluster initiatives widely engage in New Growth Path-related activities, indicating their potential as a tool in mobilizing joint action in these areas.
    Keywords: Clusters, competitiveness, economic growth path, economic strategy, European economic policy, globalisation, industrial policy, new technologies, SMEs
    JEL: D04 L16 L52 R58
    Date: 2013–07
  34. By: Nizar Allouch (, Queen Mary, University of London, School of Economics and Finance, UK)
    Abstract: This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an “asymptotic neutrality” of redistributive policies.
    Keywords: Public Goods, Segregated Society, Private Provision, Networks, Bonacich Transfer Index
    JEL: C72 D31 H41
    Date: 2013–05
  35. By: Spiros Bougheas (School of Economics, University of Nottingham); Jeroen Nieboer (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham)
    Abstract: We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risktaking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers.
    Keywords: experimental economics, choice under risk, advice, social influence, peer effects
    Date: 2013–04
  36. By: Elias Walsh; Stephen Lipscomb
    Keywords: Pennsylvania , Teacher Evaluation, Consistency, Variation, Value Added, Education, Teaching
    JEL: I
    Date: 2013–05–31
  37. By: Derek Neal
    Abstract: Education officials often use one assessment system both to create measures of student achievement and to create performance metrics for educators. However, modern standardized testing systems are not designed to produce performance metrics for teachers or principals. They are designed to produce reliable measures of individual student achievement in a low-stakes testing environment. The design features that promote reliable measurement provide opportunities for teachers to profitably coach students on test taking skills, and educators typically exploit these opportunities whenever modern assessments are used in high-stakes settings as vehicles for gathering information about their performance. Because these coaching responses often contaminate measures of both student achievement and educator performance, it is likely possible to acquire more accurate measures of both student achievement and education performance by developing separate assessment systems that are designed specifically for each measurement task.
    JEL: I20 I21
    Date: 2013–07
  38. By: Valentyn Panchenko (School of Economics, the University of New South Wales); Sergiy Gerasymchuk (ING Group); Oleg V. Pavlov (Department of Social Science and Policy Studies, Worcester Polytechnic Institute)
    Abstract: In this paper we investigate the effects of network topologies on asset price dynamics. We introduce network communications into a simple asset pricing model with heterogeneous beliefs. The agents may switch between several belief types according to their performance. The performance information is available to the agents only locally through their own experience and the experience of other agents directly connected to them. We model the communications with four commonly considered network topologies: a fully connected network, a regular lattice, a small world, and a random graph. The results show that the network topologies influences asset price dynamics in terms of the regions of stability, amplitudes of fluctuations and statistical properties.
    Keywords: asset pricing, local interactions, networks, random graph, small world, heterogeneous beliefs, price dynamics
    JEL: C45 C62 C63 D84 G12
    Date: 2013–06
  39. By: Ceyhun Elgin; Cem Oyvat
    Date: 2013–10
  40. By: Mundra, Kusum (Rutgers University); Uwaifo Oyelere, Ruth (Georgia Tech)
    Abstract: The Great Recession had significant economic effects both in the U.S. and around the world. There is evidence that homeownership rates declined during this period, though some immigrants were less severely affected compared to natives. In this paper we investigate the role of several factors in reducing the vulnerability of immigrants in the face of the economic crisis and increasing the probability of their homeownership. Specifically we examine to what extent birthplace networks, savings, length of stay in the U.S., and citizenship status affect the probability of homeownership before the recession and to what extent these impacts have changed since the recession. Using data from Current Population Survey for the years 2000 – 2012 our results suggest that birthplace networks have a significant effect on homeownership and this effect further increases after the onset of recession. Moreover the impact of birthplace network on homeownership is stronger for citizens and those who are not recent immigrants. We also find a decline in the impact of saving and length of stay on the probability of homeownership during 2007-2012 compared to earlier years. In contrast we find an increase in the impact of being a citizen on immigrant homeownership during this period.
    Keywords: Great Recession, home ownership, birthplace networks, savings, years in the U.S., citizenship status
    JEL: R20 R23 J11 J15
    Date: 2013–06
  41. By: Henrik Braconier; Mauro Pisu
    Abstract: Several studies have reported a large negative effect of national borders on the volume of trade. We provide new estimates of the border effect for continental Europe using road rather than great circle – or “as-crows-fly” – distance. Road distances for 48 180 European city pairs have been extracted from Bing Maps Routing Services. As our dataset also has information on travel time, we are able to consider costs related to time in addition to those depending on distance. We find that for the same great circle distance and the same city size, the road distance between two cities located in the same country is around 10% shorter than that between cities located in different ones. Travel speed is also higher between cities in the same country. We find that by using measures based on the actual road distance rather than the great circle distance, the negative effect of international borders on goods trade in a standard gravity equation is lowered by around 15%. Time-related trade costs account for an additional 10% reduction in the border effect. Overall these results point to the importance of road networks – and road transport policy in general – to enhance market integration.<P>La connectivité routière et l'effet frontière : données concernant l'Europe<BR>Plusieurs études font état d’un effet négatif très prononcé des frontières nationales sur le volume des échanges. Nous livrons de nouvelles estimations de l’effet frontière en Europe continentale en utilisant les distances routières au lieu des distances orthodromiques – c’est-à-dire « à vol d’oiseau ». Les distances routières de 48 180 paires de villes européennes sont issues du service de calcul d’itinéraires de Bing Cartes. Étant donné que notre ensemble de données comporte aussi des informations sur les temps de trajet, nous sommes en mesure de prendre en compte les coûts liés au temps, en plus de ceux qui dépendent de la distance. Nous constatons qu’à distance orthodromique et taille d’agglomération égales, la distance routière entre deux villes d’un même pays est inférieure de 10 % environ à celle qui sépare des villes situées dans des pays différents. De même, la distance est parcourue plus rapidement lorsque les villes se trouvent dans le même pays. Nous observons qu’en utilisant des mesures établies sur la distance routière effective, plutôt que sur la distance orthodromique, l’effet négatif des frontières internationales sur les échanges de marchandises dans une équation de gravité standard diminue d’environ 15 %. Les coûts des échanges liés à la durée des trajets sont à l’origine d’une réduction supplémentaire de 10 % de l’effet frontière. Dans l’ensemble, ces résultats font ressortir l’importance des réseaux routiers – et de la politique du transport routier en général – pour renforcer l’intégration des marchés.
    Keywords: international trade, distance, gravity, road transport, travel time, transport routier, échanges internationaux, distance, temps de trajet, gravité
    JEL: F14 F15 R49
    Date: 2013–07–01
  42. By: Luigi Moretti (University of Padova)
    Abstract: This paper investigates the effects of local financial development and quality of socioinstitutional environment on firmÕs productivity in Italy. We argue that social capital, judicial efficiency, and the presence of criminal organizations might impact the real economy through three channels: i) they have a direct impact through the creation of a business environment; ii) they have an indirect impact, as they are among the main determinants of private credit development and lending risk conditions; iii) they might act as constraints to the effects of financial development on the real economy through misallocation of credit to highly profitable investments. We study the Italian case, using firm level data for productivity and taking advantage of the variation in terms of banking sector development, judicial efficiency, and social capital among Italian provinces. After controlling for potential endogeneity, our empirical results confirm that the real effects of financial development are conditional on the quality of socioinstitutional environment. In particular, we find that i) a larger local banking market has higher positive effects on firm productivity when the socio-institutional environment is sufficiently developed; ii) an improvement of lending condition (reduction of lending rates) has higher effects when the socio-institutional environment is not developed. These evidences highlight that an improvement of socio-institutional environment might spur a virtuous cycle.
    Date: 2013–06
  43. By: Jacobs, Jan; Samarina, Anna; Heijnen, Pim; Elhorst, Paul (Groningen University)
    Abstract: This paper adopts a spatial probit approach to explain interaction effects among geographical units when the dependent variable takes the form of a binary response variable and state transfers occur at different moments in time. The model has two spatially lagged variables, one for units that are still in state 0 and one for units that already transferred to state 1. The parameters are estimated on observations for those units that are still in state 0 at the start of the different time periods, whereas observations on units after they transferred to state 1, just as in the literature on duration modeling, are discarded. Consequently, neighboring units that did not yet transfer may have a different impact than units that already transferred. We illustrate our approach with an empirical study of the adoption of in ation targeting for a sample of 58 countries over the period 1985-2008.
    Date: 2013
  44. By: Llanto, Gilberto M.; Kelekar, Uma
    Abstract: It has only been in the recent years that developing countries are increasingly decentralizing the provision of health care to their local governments. This paper explores some key issues related to health decentralization in the Philippines identified in literature and in course of interviews with country officials working in the health care area. Issues of planning and budgeting of health plans, revenue and expenditure assignments in a decentralized health system are discussed. In addition, issues specific to the determinants of local government health spending are closely examined. One of the key questions closely examined is whether there are any incentives for local governments to compete through spending on health in a decentralized system. The question of spatial competition is addressed through an empirical analysis that attempts to test the presence of horizontal and vertical fiscal interactions among local governments in the Philippines using local government health expenditures data. While there is a consistent positive interaction among municipalities in health spending, the interaction of municipalities with provinces is positive but weakly significant. The positive fiscal interaction among local governments is explained as a result of potential competition for health care inputs.
    Keywords: Philippines, local health care, health decentralization, fiscal competition, horizontal fiscal interaction, vertical fiscal interaction, Local Government Code of 1991
    Date: 2013
  45. By: Kaivan Munshi; Mark Rosenzweig
    Abstract: This paper widens the scope of the emerging literature on economic networks by assessing the role of caste networks in Indian local politics. We test the hypothesis that these networks can discipline their members to overcome political commitment problems, enabling communities to select their most competent representatives, while at the same time ensuring that they honor the public goods preferences of their constituents. Using detailed data on local public goods at the street level and the characteristics of constituents and their elected representatives at the ward level over multiple terms, and exploiting the random system of reserving local council seats for caste groups, we find that caste discipline results in the election of representatives with superior observed characteristics and the provision of a significantly greater level of public goods. This improvement in political competence occurs without apparently diminishing leaders' responsiveness to the preferences of their constituents, although the constituency is narrowly defined by the sub-caste rather than the electorate as a whole.
    JEL: H11 H4 O12 O43
    Date: 2013–07
  46. By: Muñoz Sepulveda, Jesus Angel; Rodriguez, Diego
    Abstract: This paper addresses sequential entry decisions in export markets. It focuses on externalities derived from previous export activity in countries close to those for which a potential entry decision is taken (geographical spillovers) and externalities derived from previous presence of other firms in the same industry (industrial spillovers). The empirical analysis uses Spanish microdata for the period 2000-2010 in a gravity function framework that also integrates country and firm characteristics. The results suggest the positive effect of both geographical and industrial spillovers to explain entry decisions in export markets, though both are smaller in magnitude than the effects coming from previous presence.
    Keywords: Sequential entry, spillovers, export activity
    JEL: F10 F14
    Date: 2013–07–05
  47. By: André DE PALMA; Moez KILANI; Stefan PROOST
    Abstract: This paper proposes an analytical formulation of discomfort in mass transit and discusses its micro-economic properties. The formula we introduce reflects real situations faced by the passengers, it has nice mathematical properties and it is easy to compute. The discomfort formulation is used to analyze optimal scheduling and pricing of transit in a dynamic model.
    Date: 2013–02
  48. By: Mary M. Kritz; Douglas T. Gurak; Min-Ah Lee
    Abstract: Immigrants have a markedly higher likelihood of migrating internally if they live in new estinations. This paper looks at why that pattern occurs and at how immigrants’ out-migration to new versus traditional destinations responds to their labor market economic and industrial structure, nativity origins and concentration, geographic region, and 1995 labor market type. Confidential data from the 2000 and 1990 decennial censuses are used for the analysis. Metropolitan and non-metropolitan areas are categorized into 741 local labor markets and classified as new or traditional based on their nativity concentrations of immigrants from the largest Asian, Caribbean and Latin American origins. The analysis showed that immigrants were less likely to migrate to new destinations if they lived in areas of higher nativity concentration, foreign-born population growth, and wages but more likely to make that move if they were professionals, agricultural or blue collar workers, highly educated, fluent in English, and lived in other new destinations. While most immigrants are more likely to migrate to new rather than traditional destinations that outcome differs sharply for immigrants from different origins and for some immigrants, particularly those from the Caribbean, the dispersal process to new destinations has barely started.
    Date: 2013–06
  49. By: Jason M. Fletcher; Stephen L. Ross; Yuxiu Zhang
    Abstract: This paper examines the demographic pattern of friendship links among youth and the impact of those patterns on own educational outcomes using the friendship network data in the Add Health. We develop and estimate a reduced form matching model to predict friendship link formation and identify the parameters based on across-cohort, within school variation in the “supply” of potential friends. Our model provides novel evidence on the impact of small changes in peer demographic composition on the pattern of friendship links. The evidence suggests, for example, that increases in the share of African-American or Hispanic students leads to reductions in the incidence of cross race friendships. We then use the predicted friendship links from the model in an instrumental variable analysis of the effects of friends’ socioeconomic status, as measured by parental education, on own grade point average outcomes. Although the conditional correlation between friendship composition and grade point average suggests large associations between friends’ characteristics and own grades, this effect is robust only for females in the instrumental variable analysis. We then present evidence that the GPA effects are driven by science and English grades and a mechanism is likely through non-cognitive factors.
    JEL: I20 I21 J24
    Date: 2013–07
  50. By: Thomas Horvath; Peter Huber
    Abstract: We analyse the role of ethnic networks, segregation and diversity of a region on migrants’ success in integration into the host countries’ labour markets. We find a robust negative impact of ethnic networks on unemployment probabilities of the foreign born and a positive one on employment probabilities. In addition a similarly robust positive impact of ethnic diversity on the unemployment probabilities and a negative one on employment probabilities is found. With respect to over-education our results are less robust, but in their majority point to a negative impact of ethnic networks on the probability of over-educated employment and an insignificant or positive impact of diversity. Segregation at the country level, by contrast, remains an insignificant determinant of both the probability of unemployment and of overeducated employment in most specifications and all three variables seem to be only very weakly correlated to the probability of being detached from the labour market and to the probability of being in education.
    Keywords: Integration, networks, diversity
    JEL: D83 J71 R23
    Date: 2013–07
  51. By: YAGI Michiyuki; MANAGI Shunsuke
    Abstract: This study replicates a model of Aghion et al. ("Competition and Innovation: An inverted-u relationship," <i>Quarterly Journal of Economics</i> 2005; 120(2):701-728), which suggests that an inverted-U relationship exists between competition and innovation. We apply patent data and a competition measure based on Japanese firm-level and industry-average data from 1964 to 2006. In a constant slope model using a full dataset, we find the same inverted-U relationship as did Aghion-Bloom-Blundell-Griffith-Howitt (ABBGH). In decade and industry fixed-effects slope models, we find the inverted-U relationship to be fragile.
    Date: 2013–07
  52. By: Marc Bourreau; Cambini Steffen
    Abstract: We analyse competition between vertically-integrated operators who build infrastructure and provide access in different geographical areas. Under full commitment, the regulator sets socially-optimal access rates that depend on the local degree of infrastructure competition. If he can only commit to implementing a single access price, the regulator can impose a uniform access price or deregulate access in competitive areas. While uniform access pricing leads to suboptimal investment, deregulation can spur investment. Still, deregulation is not an ideal solution to the commitment problem, as it tends to involve multiple and inefficient equilibria at the wholesale level, with either too little or too much investment.
    Keywords: Next generation networks, Infrastructure investment, Geographical access regulation, Deregulation
    JEL: L51 L96
    Date: 2013–04
  53. By: Ragland, David R; Grembek, Offer; Orrick, Phyllis; Felschundneff, Grace
    Abstract: Road deaths are forecast to double by 2020, with the burden falling most heavily on low- and middle-income countries and, within those countries, on the most vulnerable and poorest road users. Half of the 1.2 million people killed and 50 million injured in road crashes each year are pedestrians, motorcyclists, bicyclists, and users of unsafe public transport; and more than 90 percent are from low- and middle-income countries. Because these are the areas where rapid motorization is taking place, the issue of safety in increasingly multi-modal environments is now of critical importance, particularly for pedestrians and bicyclists, since as vulnerable road users (VRU), they comprise a large proportion of injuries and deaths, and similar strategies for prevention of injuries and fatalities for these two groups are available. Although a great deal of additional research is needed to determine the costs and benefits of various proposed solutions, some basic principles can be identified to guide roadway and infrastructure design for improved pedestrian and bicyclist safety. The three broad but separate strategies for reducing the probability of an injury or fatality are: (i) reducing exposure, (ii) reducing the probability of a collision given exposure, and (iii) reducing the probability of injury given a collision. The purpose of this paper is to describe and illustrate these principles, discuss issues related to each one, and discuss the benefits—indeed, imperativeness—of the application of these principles by planners and traffic engineers.
    Keywords: Public Health, Other, International Public Health/International Health, Transportation and Highway Engineering
    Date: 2013–07–01
  54. By: A.P.Thirlwall
    Abstract: Kaldor's 1970 paper 'The Case for Regional Policies' was republished in the sixtieth anniversary volume of the Scottish Journal of Political Economy. This paper reflects on the model after more than forty years, and argues that even though it has been criticised for its deterministic nature, it has lost none of its relevance. It predates the ideas of so-called 'new' growth theory, and the new economic geography of Krugman, and provides at least a partial explanation of why growth rates and levels of per capita income between regions and between countries can continue to persist and even widen in contrast to the predictions of orthodox equilibrium theory.
    Keywords: Regional Growth; Kaldor; Uneven Development; Cumulative Causation
    JEL: O18 R11
    Date: 2013–07
  55. By: Chantal C. Cantarelli; Eric J. E. Molin; Bert van Wee; Bent Flyvbjerg
    Abstract: Using a methodology similar to that used the in the worldwide research, the cost performance of Dutch large-scale transport infrastructure projects is determined. In the Netherlands, cost overruns are as common as cost underruns but because cost overruns are larger than cost underruns projects on average have a cost overrun of 16.5%. The focus on one country further enabled to consider cost overruns during different project development phases. It turned out that in the Netherlands the majority of the cost overrun occurs in the pre-construction phase (the period between the formal decision to build and the start of construction). The frequency as well as the magnitude of pre-construction cost overrun is significantly higher than in the construction phase. The used methodology of calculating cost overruns does however not take lock-in into account. This phenomenon shows that the real decision to build was taken much earlier in the decision-making process. Since estimated costs are usually lower during these earlier stages, the cost overruns based on this real decision to build are likely to be much higher. Cost overruns presented in studies are therefore often underestimated and the problem of cost overruns is much larger than we think.
    Date: 2013–07
  56. By: Melstrom, Richard; Lupi, Frank
    Abstract: This paper proposes using a control function to correct for endogeneity in recreation demand models. The control function approach is contrasted with the method of alternative specific constants (ASCs), which has been cautiously promoted in the literature. As an application, we consider the case of travel cost endogeneity in the demand for Great Lakes recreational fishing. Using data on Michigan anglers, we employ a random utility model of site choice. We show that either ASCs or the control function can correct for travel cost endogeneity, although we find that the model with ASCs produces significantly weaker results. Overall, compared with traditional approaches control functions may offer a more flexible means to eliminate endogeneity in recreation demand models.
    Keywords: Recreation demand, random utility model, travel cost method, travel cost endogeneity, control function, alternative specific constants, recreational fishing
    JEL: Q22 Q25 Q26
    Date: 2012–08
  57. By: Pablo Branas-Garza (Middlesex University London); Ramon Cobo-Reyes (Universidad de Granada); Natalia Jimenez (Universidad de Granada); Giovanni Pontiy (Universidad de Alicante and LUISS Guido Carli, Roma)
    Abstract: Limited attention has been devoted on how (real-life) social networks are elicited and mapped, even less from the viewpoint of mechanism design. This paper surveys the few mechanisms that have been proposed by the experimental literature to this purpose. These mechanisms differ in their incentive structure, as well as in the means of reward they employ. We compare these elicitation devices on the basis of the estimated differences in the characteristics of the induced networks, such as the number of (mutual) links, correspondence and accuracy. Our main conclusion is that the elicited network architecture is itself dependent on the nature (and the structure) of the incentives. This, in turn, should provide the social scientist with guidelines on the most appropriate device to use, depending on the research objectives.
    Keywords: Social Networks, Experimental Economics
    JEL: C93 D85
    Date: 2013
  58. By: Castellacci, Fulvio; Lie, Christine
    Abstract: This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. We focus on one specific aspect that has not received sufficient attention in previous research: the sectoral dimension. Our meta-regression analysis (MRA) sets up a new database collecting a large number of firm-level studies on the effects of R&D tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature. The main result of the MRA analysis is indeed that sectors matter. Micro-econometric studies that have focused on a sub-sample of high-tech industries have on average obtained a smaller estimated effect of R&D tax credits. The paper proposes a simple framework to investigate why the effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research.
    Keywords: R&D tax credits; R&D policy; sectors; meta-regression analysis
    JEL: H25 H32 O32 O38
    Date: 2013–07
  59. By: Giovanni Dosi; Daniele Moschella; Emanuele Pugliese; Federico Tamagni
    Abstract: This paper presents a broad set of empirical regularities about selection and market shares reallocation in manufacturing industries of France, Germany, UK and USA. We first disentangle the contribution to industry-level productivity growth of within-firm productivity changes and between-firms reallocation of shares. The evidence corroborates that within-firm learning prevails over competitive selection. Second, we address the strength of reallocation by exploring if and to what extent firm growth rates are shaped by relative productivity levels in deviation from industry average and by the over time variation of productivities themselves. The econometric analysis accounts for both the dynamic dimension of the selection process and idiosyncratic firm-specific factors. We find that changes, rather than relative levels, are the dominant productivity-related determinant of relative growth rates.
    Keywords: firms heterogeneity, sectoral productivity decomposition, corporate growth, productivity, market selection, firm-industry dynamics
    Date: 2013–07–08
  60. By: Alexander SCHMITT; Johannes VAN BIESEBROECK
    Abstract: Trends towards international fragmentation of production and modular process technologies have increased the importance of proximity in the supply chain of sophisticated manufactured goods. Using a rich and novel data set for the European automotive industry, we simultaneously evaluate the relative importance of geographical, cultural and relational proximity in sourcing strategies. The estimates indicate that each dimension provides an independent benefit and also which measures have the largest relative importance. We also find that the positive effects attributed to some measures reflect past relationships rather than predict new ones. In particular, co-location and a low cultural distance should be interpreted as outcomes of a sourcing strategy, not as predictors for sourcing success. We investigate to what extent firms from different countries follow different strategies and which choices suppliers can make to boost their attractiveness as outsourcing partner.
    Date: 2013–02
  61. By: Jason Fletcher; Sanjeev Kumar
    Abstract: Recent studies analyzing the effects of religion on various economic, social, health and political outcomes have been largely associational. Although some attempts have been made to establish causation using instrument variable (IV) or difference-in-difference (DID) methods, the instruments and the spatial and temporal variations used in these studies suffer from the usual issues that threaten the use of these identification techniques—validity of exclusion restrictions, quality of counterfactuals in the presence of spatial assortative sorting of people, and concern about omitted variable bias in the absence of information on family level unobservables and child-specific investment by families. During the adolescent years, religious participation might be a matter of limited choice for many individuals, as it is often heavily reliant on parents and family background more generally. Moreover, the focus of most of the studies has been on religious rites and rituals i.e., religious participation or on the intensity of participation. Using the National Longitudinal Study of Adolescent Health, this paper analyzes the effects of a broad set of measures of religiosity on substance use at different stages of the life course. In contrast to previous studies, we find positive effects of religion on reducing all addictive substance use during adolescence, but not in a consistent fashion during the later years for any other illicit drugs except for crystal meth and marijuana.
    JEL: Z12
    Date: 2013–07
  62. By: Blume, Lawrence E. (Department of Economics, Cornell University, Ithaca, USA, and Santa Fe Institute and IHS Vienna); Brock, William A. (Economics Department, University of Wisconsin-Madison, USA and University of Missouri, Columbia); Durlauf, Steven N. (Department of Economics, University of Wisconsin-Madison, USA); Jayaraman, Rajshri (European School of Management and Technology, Berlin, Germany)
    Abstract: This paper provides a systematic analysis of identification in linear social interactions models. This is both a theoretical and an econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game that describes individual choices in the presence of social interactions. The equilibrium strategy profiles are linear. Standard models in the empirical social interactions literature are shown to be exact or approximate special cases of our general framework, which in turn provides a basis for understanding the microeconomic foundations of those models. We consider identification of both endogenous (peer) and contextual social effects under alternative assumptions on a priori information about network structure available to an analyst, and contrast the informational content of individual-level and aggregated data. Finally, we discuss potential ramifications for identification of endogenous group selection and differences between the information sets of analysts and agents.
    Keywords: Social interactions, identification, incomplete information games
    JEL: C21 C23 C31 C35 C72 Z13
    Date: 2013–06
  63. By: MENG Jianjun
    Abstract: The greatest feature of the Chinese economy since the launch of its reform and open-door policies is that its economic resources, including human resources, goods, and capital, have become truly liquid nationwide under a market economy for the first time in the history of Chinese economic development. This process of becoming liquid has transformed China from a traditional or planned economy into a market economy, and has provided the driving force for the reallocation of new economic resources.<br />This paper examines the economic development and interregional migration in China using the migration statistics in the latest (sixth) national population census, conducted in 2010. More specifically, it analyzes regional distribution and migration trends in recent years, and highlights their characteristics by examining the population migration in three levels: cities, towns, and villages. The paper then attempts to examine the relationships between the various factors of the interregional migration and economic development in each region, and the process and mechanism for reallocating economic resources in China under a market economy.
    Date: 2013–06
  64. By: Gobillon, Laurent (INED and Paris School of Economics); Magnac, Thierry (TSE)
    Abstract: In this paper, we investigate the use of interactive effect or linear factor models in regional policy evaluation. We contrast treatment effect estimates obtained by Bai (2009)'s least squares method with the popular difference in difference estimates as well as with estimates obtained using synthetic control approaches as developed by Abadie and coauthors. We show that difference in differences are generically biased and we derive the support conditions that are required for the application of synthetic controls. We construct an extensive set of Monte Carlo experiments to compare the performance of these estimation methods in small samples. As an empirical illustration, we also apply them to the evaluation of the impact on local unemployment of an enterprise zone policy implemented in France in the 1990s.
    Keywords: Policy evaluation, Linear factor models, Synthetic controls, Economic geography, Enterprise zones
    Date: 2013–07
  65. By: Hensvik, Lena (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nordström Skans, Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: The paper studies how social job finding networks affect firms' selection of employees and the setting of entry wages. Our point of departure is the Montgomery (1991) model of employee referrals which suggests that it is optimal for firms to hire new workers through referrals from their most productive existing employees, as these employees are more likely to know others with high unobserved productivity. Empirically, we identify the networks through coworker links within a rich matched employer-employee data set with cognitive and non-cognitive test scores serving as predetermined indicators of individual productivity. The results corroborate the Montgomery model's key predictions regarding employee selection patterns and entry wages into skill intensive jobs. Incumbent workers of high aptitude are more likely to be linked to entering workers. Firms also acquire entrants with higher ability scores but lower schooling when hiring linked workers supporting the notion that firms use referrals of productive employees in order to attract workers with better qualities in dimensions that would be difficult to observe at the formal market. Furthermore, the abilities of incumbent workers are reflected in the starting wages of linked entrants, suggesting that firms use the ability-density of social networks when setting entry wages. Overall the results suggest that firms use social networks as a signal of worker productivity, and that workers therefore benefit from the quality of their social ties.
    Keywords: Referrals; wage inequality; employer learning; cognitive skills
    JEL: J24 J31 J64 M51 Z13
    Date: 2013–06–26
  66. By: Chantal C. Cantarelli; Bent Flybjerg; Eric J. E. Molin; Bert van Wee
    Abstract: Managing large-scale transportation infrastructure projects is difficult due to frequent misinformation about the costs which results in large cost overruns that often threaten the overall project viability. This paper investigates the explanations for cost overruns that are given in the literature. Overall, four categories of explanations can be distinguished: technical, economic, psychological, and political. Political explanations have been seen to be the most dominant explanations for cost overruns. Agency theory is considered the most interesting for political explanations and an eclectic theory is also considered possible. Nonpolitical explanations are diverse in character, therefore a range of different theories (including rational choice theory and prospect theory), depending on the kind of explanation is considered more appropriate than one all-embracing theory.
    Date: 2013–07

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