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on Urban and Real Estate Economics |
| By: | D'Acci, Luca |
| Abstract: | Environment, history and chance, shape people and cultures, which shape cities, which shape people and cultures, and so on, in a Systemic Retroactive Game. The quintessential essence of Isotropic (or Isobenefit) Urbanism is to solve Systemic Retroactive Game problems downstream rather than upstream and, also, to give a beautiful city to everyone, rather than just to the richer. Spatial Equilibrium assumptions, Underground Hedonic Theory and Isobenefit Lines, are shortly reminded in order to have a better vision of the Isotropic approach. The Isotropic City is the habitat of a virtual future society that aspires to live in a city where each individual can enjoy an equal level of wellbeing and advantage from the urban quality, services and job location. It is shown by a few visionary examples of virtual future societies habitats such as the Ring City (a city without the ‘city centre’, where the ‘city centre’ is all around the peripherical ring, or in a serial of rings), the Homogeneous City (a city where the ‘city centre’ is everywhere), the Annulus City (a city without any geometrical centre in the city) and the Punctiform City (an interconnected net of urban hyperdense ‘points’ throughout nature, parks and lands). Finally I will show some simulations on more realistic cases which could be of interest as support to urban and public policies in respect to a social wellbeing point of view as well as to urban theory such as urban economy (i.e., by the relation between an Isobenefit scenario and Property value), urban morphology (influence of different urban forms), urban sociology (how different location of centralities and amenities give advantage for social life and wellbeing of citizens). |
| Keywords: | Spatial Equilibrium, Urban Quality of Life, Urban Amenities and Centralities, Ideal City, Systemic Retroactive Game, Psycho-Economical Distance. |
| JEL: | R0 R12 R14 R38 R40 R52 R58 |
| Date: | 2013–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48994&r=ure |
| By: | Luca Guerrieri; Matteo Iacoviello |
| Abstract: | A model with collateral constraints displays asymmetric responses to house price changes. When housing wealth is high, collateral constraints become slack, and the response of consumption and hours to shocks that move house prices is positive yet small. When housing wealth is low, collateral constraints become tight, and the response of consumption and hours to house price changes is negative and large. This finding is corroborated using evidence from national, state-level, and MSA-level data. Wealth effects computed in normal times may underestimate the response to large house price declines. Debt-relief policies may be far more effective during protracted housing slumps. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1082&r=ure |
| By: | D'Acci, Luca |
| Abstract: | These pages briefly mention the assumption of indifference between residing in different locations which is embodied in spatial equilibrium. Sometimes, for a person, a pure indifference may result, namely gains and costs (monetary or not) are entirely compensated among locations; but sometimes not, and decisions are made on the basis of an overall gain, which implies that locations are not so indifferent for a specific person, even if they appear in equilibrium from a theoretical point of view. The reasoning ends by proposing the Macro Spatial Equilibrium and the Micro (or Subjective) Spatial Equilibrium. |
| Keywords: | Cities, Spatial Equilibrium, Urban Economics, Personal Isobenefit Lines, Property Value, Location Decisions, Subjective Spatial Equilibrium. |
| JEL: | A10 A12 A14 D1 R0 |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48984&r=ure |
| By: | Boschman, Sanne (Delft University of Technology); van Ham, Maarten (Delft University of Technology) |
| Abstract: | The selective inflow and outflow of residents by ethnicity is the main mechanism behind ethnic residential segregation. Many studies have found that ethnic minorities are more likely than others to move to ethnic minority concentration neighbourhoods. An important question which remains largely unanswered is to what extent this can be explained by own group preferences, or by other neighbourhood or housing market factors. By using longitudinal register data from the Netherlands, this study contributes to the literature on neighbourhood selection by ethnic minorities in two ways. First, it distinguishes between different ethnic minority groups where most studies look at the group as a whole. Second, it takes into account multiple dimensions of neighbourhoods where most other studies look at neighbourhoods one-dimensionally, which allows us to test the own group preferences hypothesis. Using a conditional logit model we find that housing market constraints can partly explain the selection of ethnic minorities into minority concentration neighbourhoods. Also own-group preferences are found to be important in explaining neighbourhood selection. There are, however, differences between ethnic minority groups. Own-group preferences and housing market constraints together explain why Surinamese and Antilleans select into minority concentration neighbourhoods. When these factors are taken into account, Turks and Moroccans are still found to select into concentration neighbourhoods of ethnic minorities other than their own ethnic group. |
| Keywords: | segregation, neighbourhood selection, ethnicity, own-group preference, conditional logit, the Netherlands |
| JEL: | J15 R23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7526&r=ure |
| By: | Sjaak Braster (Erasmus University Rotterdam); Jaap Dronkers (Maastricht University) |
| Abstract: | According to Robert Putnam (2007) ethnic diversity in cities and neighborhoods does not lead to an increase of trust and social capital as previously predicted by intergroup contact theory (Pettigrew, 1998); instead it triggers a reaction of hunkering down that leads to a decrease in trust and social capital of both in-group and out-groups. But what happens if we focus on youngsters that are growing up in a multi-ethnic metropole, that are considering ethnic diversity as a something "normal", and that are bridging their ethnic differences by sharing a common street culture and language? In this article we use data about 905 pupils, 41 classes and 11 schools in a European metropole to confirm the hypothesis that in this specific context ethnic diversity in classrooms does lead to positive effects on educational performance. |
| Keywords: | ethnic diversity, educational performance, classroom effects, multi-ethnic cities |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1318&r=ure |
| By: | Randall Q. Akee (UCLA, Luskin School of Public Affairs); Timothy J. Halliday (UHERO, University of Hawaii at Manoa); Sally Kwak (U.S. Congress, Joint Committee on Taxation) |
| Abstract: | Due to the large social costs of juvenile crime, policymakers have long been concerned about its causes. In the 2009-10 school year, the State of Hawaii responded to fiscal strains by furloughing all school teachers employed by the Department of Education and cancelling class for seventeen instructional days. We examine the effects of this unusually short school year to draw conclusions about the relationship of time in school with juvenile crime rates. We calculate marginal effects from a negative binomial model and find that time off from school is associated with significantly fewer juvenile assault and drug-related arrests, although there are no changes in other types of crimes, such as burglaries. These results differ by region of the island and by average household incomes. |
| Keywords: | Education, Crime, Inequality |
| JEL: | J08 I24 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2013-7&r=ure |
| By: | D'Acci, Luca |
| Abstract: | The quintessence of the Isobenefit Urbanism presented here, is to offer fair, walkable and green cities. Its three cornerstones are Modernity, Humanity and Naturality, which are exposed by five principles. The latter, rather then describe The ideal city, which doesn’t exist outside our own minds, describe what a city should avoid in order to not become an unideal city. Isobenefit Cities do not aim to replace the historical town-city model, but to guide future cities growth and to replace the present, often unliveable, megacity typologies through a Modern Postmodern approach: steering the future (Modernism) by keeping diversities, cultures and history alive (Postmodernism), and considering the retroactive game between planning and citizens behaviours. In societal terms, the Isotropic approach aspires a reciprocal understating and awareness about our equality within and, especially, across societies. However, as for the urban point of view, this ambition for equality doesn’t mean an identical, global, unique culture which would signify reciprocal impoverishment. |
| Keywords: | Quality of life, Visionary Cities and Societies, Megacities alternatives, Futuristic Urbanism, Urban Development, Ideal City. |
| JEL: | R0 R12 R14 R19 R38 R40 R50 R52 R58 |
| Date: | 2013–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48993&r=ure |
| By: | Klein, Alexander (University of Kent); Leunig, Tim (London School of Economics) |
| Abstract: | This paper examines Gibrat’s law in England and Wales between 1801 and 1911using a unique data set covering the entire settlement size distribution.We find that Gibrat’s law broadly holds even in the face of population doubling every fifty years,an industrial and transportrevolution, and the absence of zoning laws to constrain growth. The result is strongest for the later period, and in counties most affected by the industrial revolution. The exception were villages in areas bypassed by the industrial revolution.We argue that agglomeration externalities balanced urban disamenities such as commuting costs and poor living conditions to ensure steady growth of many places, rather than exceptional growth of few. |
| Keywords: | Gibrat’s law, city-size distribution, industrial revolution |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:145&r=ure |
| By: | Coulter, Rory (University of Cambridge); van Ham, Maarten (Delft University of Technology); Findlay, Allan M. (University of St. Andrews) |
| Abstract: | While researchers are increasingly reconceptualising international migration, less interest is being shown in rethinking the geographies of short-distance residential mobility and immobility. Short-distance moves are crucial for the structuration of everyday life, the operation of housing and labour markets and the (re)production of social inequalities. This paper argues that a deeper understanding of residential mobility and immobility can be gained by exploring developments in longitudinal analysis while seeking theoretical innovations derived from extending life course theories. Rethinking the geographies of residential mobility around notions of 'linked lives' will allow us to understand, critique and address major contemporary challenges. |
| Keywords: | biography, life course, linked lives, longitudinal analysis, relationality, residential mobility |
| JEL: | J61 R23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7525&r=ure |
| By: | Margarian, Anne |
| Abstract: | For the impartial observer of German regions, differences in regional industrial structures and prosperity are quite obvious. On the one hand, there are regions characterised by different industries, firm structures and labour qualification profiles. On the other hand, some of these regions are prosperous, dynamic and growing in terms of inhabitants, labor force and income while others suffer from high unemployment, low tax base and an unsatisfactory income situation. The link between the two observations is mainly acknowledged by theories of a Schumpeterian origin as it has frequently been observed that different industries differ in their propensity for innovation. Once the rigid assumptions of standard economic theory are consequentially dropped, it becomes evident that the regional industry mix might have significant implications for the local income distribution as well. Depending on the mobility of different kinds of labour it will thereby also affect regional development in terms of population dynamics. The present study asks, whether these postulated differentiated relationships between industrial structure and socio‐economic fundamentals can be identified statistically and whether they depend on agglomeration effects. Therefore, a cross‐sectional estimation with observations on district level (NUTS 3) is carried out in a mediated moderation approach. This approach allows for the differentiation between direct and indirect effects and for the identification of conditional effects, depending, for example, on regions' remoteness. The analysis starts with the creation of eight factors that efficiently describe districts' industrial structures. The factors are consistent with the industrial innovation type taxonomy created by Pavitt. In the final model the regional industrial structure, as described by these factors, explains socio‐economic fundamentals that indicate the regions' productivity, its income distribution and its population dynamics. -- Der unvoreingenommene Beobachter von Deutschlands Regionen bemerkt schnell die ausgeprägten Unterschiede in der regionalen Unternehmensstruktur und Einkommenssituation. Einerseits sind die Regionen durch verschiedene Branchenzusammensetzungen, Betriebsgrößenverteilungen und Qualifikationsstrukturen der Beschäftigten gekennzeichnet. Andererseits sind einige der Regionen wohlhabend, dynamisch und weisen eine positive Bevölkerungsentwicklung auf, während andere unter hoher Arbeitslosigkeit, geringen Steuereinnahmen und einer unbefriedigenden Einkommenssituation leiden. Der Zusammenhang zwischen den beiden Beobachtungen wird vor allem von Theorien Schumpeterianischen Ursprungs hergestellt, die auch auf der Beobachtung gründen, dass unterschiedliche Branchen sich in ihrer Innovationsneigung unterscheiden. Werden die strikten Annahmen der Standardökonomie einmal fallen gelassen, wird die Möglichkeit deutlich, dass die regionale Branchenzusammensetzung auch Einfluss haben kann auf die Einkommensverteilung in der Region. Abhängig von der unterschiedlichen Mobilität Beschäftigter verschiedener Bereiche steht die regionale Industriestruktur dann auch direkt im Zusammenhang zur lokalen Bevölkerungsdynamik. Diese Studie untersucht, ob diese erwarteten differenzierten Beziehungen zwischen der regionalen Industriestruktur und verschiedenen sozio‐ökonomischen Fundamentaldaten statistisch identifiziert werden können und ob sie von Agglomerationseffekten beeinflusst werden. Zu diesem Zweck wird eine Querschnittsanalyse basierend auf Beobachtungen auf Landkreisebene in einer "moderated mediation" Schätzung durchgeführt. Diese Schätzung ermöglicht die Unterscheidung zwischen direkten und indirekten Effekten und die Identifizierung bedingter Effekte, die zum Beispiel von der Zentralität von Regionen abhängen. Die Untersuchung beginnt mit der Bildung von acht Faktoren, die die regionale Industriestruktur effizient abbilden können. Diese Faktoren korrespondieren mit der branchenbezogenen Innovationstypen Taxonomie von Pavitt. Im Schätzmodell erklärt die regionale Industriestruktur, abgebildet durch die acht Faktoren, sozio‐ökonomische Daten zur regionalen Produktivität, Einkommensverteilung und Bevölkerungsentwicklung. |
| Keywords: | Industrial structure,Agglomeration effects,Peripheral rural regions,income distribution,Moderated mediation,Estimation,Branchenstruktur,Agglomerationseffekte,Landlich]periphere Regionen,Einkommensverteilung,Schatzung indirekter konditioneller Effekte |
| JEL: | R12 O14 O18 L16 C31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtiwp:1&r=ure |
| By: | Brunello, Giorgio (University of Padova); Fort, Margherita (University of Bologna); Weber, Guglielmo (University of Padova); Weiss, Christoph T. (University of Padova) |
| Abstract: | In the large empirical literature that investigates the causal effects of education on outcomes such as health, wages and crime, it is customary to measure education with years of schooling, and to identify these effects using the exogenous variation provided by school reforms increasing compulsory education and minimum school leaving age. If these reforms are correlated to changes in school quality, and school quality is an omitted variable, this identification strategy may fail. We test whether this is the case by using the information provided by two distinct test scores on mathematics and reading and find that we cannot reject the internal validity of this popular identification strategy. |
| Keywords: | human capital, instrumental variables, nested models |
| JEL: | C26 I2 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7533&r=ure |
| By: | Beugnot, Julie (Université Laval); Fortin, Bernard (Université Laval); Lacroix, Guy (Université Laval); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | This paper extends the standard work effort model by allowing workers to interact through networks. We investigate experimentally whether peer performances and peer contextual effects influence individual performances. Two types of network are considered. Participants in Recursive networks are paired with participants who played previously in isolation. In Simultaneous networks, participants interact in real-time along an undirected line. Mean peer effects are identified in both cases. Individual performances increase with peer performances in the recursive network. In the simultaneous network, endogenous peer effects vary according to gender: they are large for men but not statistically different from zero for women. |
| Keywords: | peer effects, social networks, work effort, piece rate, experiment |
| JEL: | C91 J16 J24 J31 M52 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7521&r=ure |
| By: | Liu, Yanyan; Yamauchi, Futoshi |
| Abstract: | Rapid population growth in many developing countries has raised concerns regarding food security and household welfare. To understand the consequences of population growth on in the general equilibrium setting, we examine the dynamics of population density and its impacts on household outcomes using panel data from Indonesia. More specifically we explicitly highlight the importance of migration to urban sectors in the analysis. Empirical results show that human capital in the household determines the effect of increased population density on per capita household consumption expenditure. The effect of population density is positive if the average educational attainment is high (above junior high school), while it is negative otherwise. |
| Keywords: | Population growth, Migration, Land ownership, Rural economy, economic growth, Education, High value agriculture, Land rights, rural areas, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1271&r=ure |
| By: | Caria, Antonia Stefano; Hassen, Ibrahim Worku |
| Abstract: | In this study we focus on exclusion from job contact networks, which constitutes a major disadvantage for labor market participants in settings where referral hiring is common and information about jobs hard to obtain. In a mid-size town in northern Ethiopia, where these mechanisms are at work, we observe that many individuals do not access local job contact networks. Models of strategic network formation and behavioral decision theory suggest that given the right incentives, job contact networks should be more inclusive. On these grounds we hypothesize that workers would link to peripheral peers when this maximizes their chances of referral and when self-regarding concerns are absent due to social preferences. |
| Keywords: | social network, Labor market, field experiment, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1282&r=ure |
| By: | Robin Burgess; Remi Jedwab; Edward Miguel; Ameet Morjaria; Gerard Padro i Miquel |
| Abstract: | Ethnic favoritism is seen as antithetical to development. This paper provides credible quantifi cation of the extent of ethnic favoritism using data on road building in Kenyan districts across the 1963-2011 period. Guided by a model it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism. Across the 1963 to 2011 period, we fi nd strong evidence of ethnic favoritism: districts that share the ethnicity of the president receive twice as much expenditure on roads and have four times the length of paved roads built. This favoritism disappears during periods of democracy. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:45&r=ure |
| By: | Kristopher Gerardi; Kyle F. Herkenhoff; Lee E. Ohanian; Paul S. Willen |
| Abstract: | Using new household-level data, we quantitatively assess the roles that job loss, negative equity, and wealth (including unsecured debt, liquid assets, and illiquid assets) play in default decisions. In sharp contrast to prior studies that proxy for individual unemployment status using regional unemployment rates, we find that individual unemployment is the strongest predictor of default. We find that individual unemployment increases the probability of default by 5–13 percentage points, ceteris paribus, compared with the sample average default rate of 3.9 percent. We also find that only 13.9 percent of defaulters have both negative equity and enough liquid or illiquid assets to make one month's mortgage payment. This finding suggests that "ruthless" or "strategic" default during the 2007–09 recession was relatively rare and that policies designed to promote employment, such as payroll tax cuts, are most likely to stem defaults in the long run rather than policies that temporarily modify mortgages. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2013-04&r=ure |
| By: | Hou, Xiaohui; Hong, Seo Yeon |
| Abstract: | Using a panel survey, this paper investigates how the increase in food prices in Pakistan in 2008-2010 affected children's school enrollment and labor. The causal identification relies on geographical variations in the price of food (wheat). The results show that the negative impacts of food price increase on school enrollment differ by gender, economic status, and the presence of siblings. The negative effects on school do not directly correspond to the increase in child labor because the transition from being idle to labor activity or from school to being idle are significant, particularly among the poor girls. The results also show that children in households with access to agricultural land are not affected by higher food prices. The analyses reveal a more dynamic picture of the impact of food price increase on child status and contribute to broader policy discussion to mitigate the impact of crises on children's education. |
| Keywords: | Food&Beverage Industry,Markets and Market Access,Youth and Governance,Street Children,Primary Education |
| Date: | 2013–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6566&r=ure |
| By: | Berg, Erland (University of Oxford); Ghatak, Maitreesh (London School of Economics); Manjula, R (ISEC); Rajasekhar, D (ISEC); Roy, Sanchari (University of Warwick) |
| Abstract: | This paper studies the interaction of incentive pay and social distance in the dissemination of information.We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives,but also preferences over dealing with one social group relative to another. In a randomised field experiment under taken across 151 villages in South India,local agents were hired to spread information about a public health insurance programme.Relative to flat pay,incentive pay improves knowledge transmission to households that are socially distant from the agent,but not to households similar to the agent. |
| Keywords: | public services,information constraints,incentive pay, social proximity,knowledge transmission |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:133&r=ure |
| By: | D'Acci, Luca |
| Abstract: | These couple of pages discuss upon the retroactive influence (Systemic Retroactive game, or SyR) between people’s behaviour and environment. The latter is intended as physical environment (type of cities, climate, geography…), normative environment (laws), moral environment (religions, families cultures), values and life styles (politics-economics systems, families and neighbourhood habits). Individual behaviours can generate an emergent phenomenon (Autonomous Post-Emergence, or APE) which becomes ‘independent’ from them even if maintained and changeable from them, and which influences (top-down feedback) the individual behaviours, which influence it, which influences them, which influence it... Market-economy, globalization, religions, cities, political-economics systems, are example of APE. The characters of people and societies are built throughout history by an interconnected mix among geography, climate, trades and chance: all together create a specific economic-moral-religious-political system rather than another, therefore the APE is born and starts its SyR dance with its own creators: is Consumerism created by our consumption needs, or are our consumption needs created by Consumerism? Do religions and political-economic systems create our personal values and uses, or vice versa? In a certain way, it is a mix of both: the APE and its agents influence and mutually change each other in their SyR dance-tension: urbs is the physical result of civitas; in turn urbs influences civitas which influences urbs… The discussion ends by defining a Modern Postmodern vision, mixing the positive contributions of both bottom-up (Postmodern) and top-down (Modern) philosophies. |
| Keywords: | Complex Systems, Modern Postmodernism, Bottom-up, Top-down, City, Modern Postmodern Urbanism. |
| JEL: | C70 D01 D03 D70 O18 O20 O21 R00 R14 R38 R50 R52 R58 |
| Date: | 2013–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48991&r=ure |
| By: | Georganas, Sotiris (Royal Holloway, University of London); Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton) |
| Abstract: | Peer effects arise in situations where workers observe each other's work activity. In this paper we disentangle the effect of observing a peer from that of being observed by a peer, by setting up a real effort experiment in which we manipulate the observability of performance. In particular, we randomize subjects into three groups: in the first one subjects are observed by another subject, but do not observe anybody; in the second one subjects observe somebody else's performance, but are not observed by anybody; in the last group subjects work in isolation, neither observing, nor being observed. We consider both a piece rate compensation scheme, where pay depends solely on own performance, and a team compensation scheme, where pay also depends on the performance of other team members. Overall, we find some evidence that subjects who are observed increase productivity at least initially when compensation is team based, while we find that subjects observing react to what they see in a non-linear but monotonic way when compensation is based only on own performance. |
| Keywords: | peer effects, piece rate, team incentives, real-effort experiment |
| JEL: | D03 J24 M52 M59 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7523&r=ure |
| By: | Olper, A.; Raimondi, V.; Cavicchioli, D.; Vigani, M. |
| Keywords: | International Relations/Trade, Labor and Human Capital, Research Methods/ Statistical Methods, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iatr13:152328&r=ure |
| By: | Aytek Malkhozov; Philippe Mueller; Andrea Vedolin; Gyuri Venter |
| Abstract: | We study the feedback from hedging mortgage portfolios on the level and volatility of interest rates. We incorporate the supply shocks resulting from hedging into an otherwise standard dynamic term structure model, and derive two sets of predictions which are strongly supported by the data: First, the duration of mortgage-backed securities (MBS) positively predicts excess bond returns, especially for longer maturities. Second, MBS convexity increases yield and swaption implied volatilities, and this effect has a hump-shaped term structure. Empirically, neither duration, nor convexity are spanned by yield factors. A calibrated version of our model replicates salient features of first and second moments of bond yields |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp722&r=ure |
| By: | Boes, Stefan (University of Lucerne); Stillman, Steven (University of Otago) |
| Abstract: | This paper examines the impact of a reduction in the legal drinking age in New Zealand from 20 to 18 on alcohol use, and alcohol-related hospitalisations and vehicular accidents among teenagers. We use both a difference-in-differences approach and a regression discontinuity design (RDD) to examine the impact of the law change. Our main findings are that lowering the legal drinking age did not appear to have led to, on average, an increase in alcohol consumption or binge drinking among 15-17 or 18-19 year-olds. However, there is evidence that the law change led to a significant increase in alcohol-related hospital admission rates for 18-19 year-olds, as well as for 15-17 year-olds. While these increases are large in relative magnitude, they are small in the absolute number of affected teenagers. Finally, we find no evidence for an increase in alcohol-related vehicular accidents at the time of the law change for any teenagers. In an important methodological contribution, we show that one approach commonly used to estimate the impact of changing the legal drinking age on outcomes, an RDD that compares individuals just younger than the drinking age to those just older, has the potential to give misleading results. Overall, our results support the argument that the legal drinking age can be lowered without leading to large increases in detrimental outcomes for youth. |
| Keywords: | drinking age, alcohol consumption, hospitalization, vehicular accidents, New Zealand |
| JEL: | I18 K42 C25 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7522&r=ure |