nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒09‒06
thirty-two papers chosen by
Steve Ross
University of Connecticut

  1. A privatized multifamily financing market By Charles S. Wilkins; Thomas W. White
  2. Immigration and property prices: Evidence from England and Wales By Braakmann, Nils
  3. Gibrat's law and the British Industrial Revolution By Alexander Klein; Tim Leunig
  4. The Dynamic Relationship between House Prices and Output: Evidence from US Metropolitan Statistical Areas By Nicholas Apergis; Beatrice D. Simo-Kengne; Rangan Gupta; Tsangyao Chang
  5. Matched panel data estimates of the impact of Teach First on school and departmental performance By Rebecca Allen; Jay Allnutt
  6. An investigation of housing affordability in the UK regions By Alberto Montagnoli; Jun Nagaysu
  7. Distant Event, Local Effects? Fukushima and the German Housing Market By Thomas K. Bauer; Sebastian Braun; Michael Kvasnicka
  8. The Preference for Larger Cities in China: Evidence from Rural-Urban Migrants By Xing, Chunbing; Zhang, Junfu
  9. Housing and Liquidity By Yu Zhu; Randall Wright; Chao He
  10. An Analysis of the Impact of Socioeconomic Disadvantage and School Quality on the Probability of School Dropout By Mahuteau, Stéphane; Mavromaras, Kostas G.
  11. Análisis de Estructuras Espaciales Persistentes. Desempleo Departamental en Argentina. By Herrera Gómez, Marcos
  12. Stabilisation Policy in a Model of Consumption, Housing Collateral and Bank Lending By Jagjit S. Chadha; Germana Corrado; Luisa Corrado
  13. Evolution of Monetary Policy in the US: The Role of Asset Prices By Beatrice D. Simo-Kengne; Stephen M. Miller; Rangan Gupta
  14. No federal guaranty for multifamily By Charles S. Wilkins; Thomas W. White
  15. Job Contact Networks and Wages of Rural-Urban Migrants in China By Long, Wenjin; Appleton, Simon; Song, Lina
  16. Start-up Complexity and the Thickness of Regional Input Markets By Dirk Christian Dohse; Andrea Vaona
  17. LM Tests of Spatial Dependence Based on Bootstrap Critical Values By Zhenlin Yang
  18. Child Labor and Learning By Emerson, Patrick M.; Ponczek, Vladimir; Portela Souza, André
  19. Imperfect Knowledge about Asset Prices and Credit Cycles By Pei Kuang
  20. Could Learning Strategies Reduce the Performance Gap Between Advantaged and Disadvantaged Students? By OECD
  21. Tax Limits and Local Democracy By Revelli, Federico
  22. How Can Teacher Feedback Be Used to Improve The Classroom Disciplinary Climate? By OECD
  23. Forecasting the US Real Private Residential Fixed Investment Using Large Number of Predictors By Goodness C. Aye; Rangan Gupta
  24. Regional Determinants of Establishments' Innovation Activities: A Multi-Level Approach By Bellmann, Lutz; Crimmann, Andreas; Evers, Katalin; Hujer, Reinhard
  25. Do House Prices Affect Consumption? A Re-assessment of the Wealth Hypothesis By Cristini, Annalisa; Sevilla, Almudena
  26. Innovation and Growth in Regions with Specific Geographical Features By Juliana Dahl
  27. Incorporating the Influence of Latent Modal Preferences in Travel Demand Models By Vij, Akshay
  28. Patent Licensing in Spatial Models By Yuanzhu Lu; Sougata Poddar
  29. The Rise and Fall of R&D Networks By Mauro V. Tomasello; Mauro Napoletano; Antonios Garas; Frank Schweitzer
  30. Was the African American great migration delayed by outlawing emigrant agents? By Kha Yen Prentice; László Kónya; David Prentice
  31. The global financial crisis and American wealth accumulation: The Fed needs a bubble watch By John H. Makin
  32. Economic effects of a temporary shutdown of an airport - Review and case study By De Langhe, Katrien; Struyf, Els; Sys, Christa; Van de Voorde, Eddy; Vanelslander, Thierry

  1. By: Charles S. Wilkins; Thomas W. White
    Abstract: We begin with a simple concept -- the American taxpayer should not be on the hook for the losses incurred by privately owned and operated businesses. Providing extensive government guarantees for multifamily lending is corporate welfare and crony capitalism and should be rejected as government policy.
    Keywords: multifamily mortgage loans,multifamily housing,Housing policy,Housing Finance Reform,Housing finance
    JEL: A G R
    Date: 2013–08
  2. By: Braakmann, Nils
    Abstract: This paper investigates the link between immigration and property prices in England and Wales. Evidence from fixed effects and shift-share-based instrumental variable regressions suggests that an increase in the regional share of migrants (a) decreases prices at the lower end of the distribution up to the median and (b) has (almost) no effect on mean property prices or prices above the median. I also provide evidence on two mechanisms that explain these effects: (c) natives move out of regions as immigration increases and (d) the number of persons per room increases with the share of immigrants.
    Keywords: immigration; property prices; housing market; England; Wales
    JEL: J15 R21 R31
    Date: 2013–08–29
  3. By: Alexander Klein; Tim Leunig
    Abstract: This paper examines Gibrat’s law in England and Wales between 1801 and 1911 using 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 transport trevolution, 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
    JEL: N93 R12
    Date: 2013–08
  4. By: Nicholas Apergis (Department of Banking and Financial Management, University of Piraeus, Greece); Beatrice D. Simo-Kengne (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Tsangyao Chang (Department of Finance, Feng Chia University, Taichung, Taiwan)
    Abstract: This paper investigates the long-run and short-term dynamics of 351 US metropolitan statistical area housing prices in relation to personal income. We apply a panel cointegration approach on annual data from 1993 to 2011 and find a long-run relationship between local house prices and per capita personal income. The causal direction is then assessed based on an autoregressive distributed lag specification that also accommodates for error-correction. Results from Granger-causality tests reveal the existence of a bi-directional causality between real house prices and real per capita personal income over both long- and short-horizons. We conclude that changes in personal income can predict house price movements and vice versa.
    Keywords: Real house prices, Real personal income per capita, Panel cointegration, Panel causality
    JEL: C33 D31 R31
    Date: 2013–06
  5. By: Rebecca Allen (Institute of Education, University of London); Jay Allnutt (Teach First, London)
    Abstract: In this paper we evaluate whether the placement of Teach First’s carefully selected, yet inexperienced new teachers into deprived secondary schools in England has altered the educational outcomes of pupils at the age of 16. Our difference-in-difference panel estimation approach matches schools participating early on in the scheme to those within the same region. We find the programme has not been damaging to schools who joined and most likely produced school-wide gains in GCSE results in the order of 5% of a pupil standard deviation or around one grade in one of the pupil’s best eight subjects. We estimate pupil point-in-time fixed effect models to identify core subject departmental gains of over 5% of a subject grade resulting from placing a Teach First participant in a teaching team of six teachers.
    Keywords: teacher preparation; school performance; teacher effectiveness
    JEL: I20 I21 C23
    Date: 2013–09–03
  6. By: Alberto Montagnoli (Department of Economics, University of Stirling); Jun Nagaysu (Graduate School of Systems & Information engineering, University of Tsukuba, Japan)
    Abstract: The housing market has been extensively investigated in the literature; however, there is a lack of understanding of the fundamentals affecting housing affordability across UK regions as measured by the price to income ratio. The aim of this paper is twofold; firstly we calculate the affordability ratio based on individuals' incomes. Second we set off to ask which socio-economic factors could affect this ratio. The analysis finds a strong influence coming from the mortgage rate, the residents' age and academic qualifications. We also report a positive and significant effect from foreign capital coming to the UK. Finally, we record a non-negligible degree of heterogeneity across the twelve regions.
    Keywords: House market, affordability index, heterogeneity, panel data
    JEL: E31 E52
    Date: 2013–08
  7. By: Thomas K. Bauer; Sebastian Braun; Michael Kvasnicka
    Abstract: The Fukushima Daiichi accident in Japan in March 2011 caused a fundamental change in Germany’s energy policy which led to the immediate shut down of nearly half of its nuclear power plants. This paper uses data from Germany’s largest internet platform for real estate to investigate the effect of Fukushima on the German housing market. Using a difference-in-differences approach, we find that Fukushima reduced house prices near nuclear power plants that were in operation before Fukushima by almost 6%. House prices near sites that were shut down right after the accident even fell by 10.8%. Our results suggest that economic reasons are of prime importance for the observed fall in house prices near nuclear power plants.orex interventions. Our results indicate that only coordinated interventions seem to stabilize the Dollar-Yen exchange rate in a long-run perspective. This is a novel contribution to the literature.
    Keywords: Fukushima; nuclear power plants; housing prices; Germany
    JEL: R31 Q48 Q58
    Date: 2013–08
  8. By: Xing, Chunbing (Beijing Normal University); Zhang, Junfu (Clark University)
    Abstract: China has long aimed to restrict population growth in large cities but encourages growth in small and medium-sized cities. At the same time, various government policies favor large cities. We conjecture that larger cities in China have more urban amenities and a better quality of life. We thus predict that a typical rural-urban migrant is willing to give up some income in order to live in a larger city. We present a simple model in which rural-urban migrants choose destination cities to maximize utilities from consumption and urban amenities. Drawing data from a large-scale population survey conducted in 2005, we first estimate each migrant's expected earnings in each possible destination city using a semi-parametric method to correct for potential selection bias. We then estimate the typical migrant's preference for city population size, instrumenting population size with its lagged values to control for potential omitted-variables bias. From these estimation results, we calculate the typical migrant's willingness to pay to live in larger cities. Our results show that indeed rural-urban migrants strongly prefer cities with larger populations. We explore possible explanations for this preference and discuss the implications of these findings.
    Keywords: city size, urban amenities, rural-urban migration, hukou system, China
    JEL: O15 R12 R23
    Date: 2013–08
  9. By: Yu Zhu (University of Wisconsin - Madison); Randall Wright (University of Wisconsin); Chao He (Renmin University of China)
    Abstract: Housing, in addition to providing direct utility, facilitates credit transactions when home equity serves as collateral. We document big increases in home-equity loans coinciding with the start of the house-price boom, and suggest an explanation. When it is used as collateral, housing can bear a liquidity premium. Since liquidity is endogenous, even when fundamentals are deterministic and time invariant equilibrium house prices can display complicated patterns -- including cyclic, chaotic and stochastic trajectories -- some of which resemble bubbles. Our framework is tractable, with exogenous or with endogenous supply, and with exogenous or endogenous credit limits. Yet it captures several salient qualitative features of actual housing markets. Numerical work shows the model can also capture some, if not all, quantitative features, as well. The effects of monetary policy are also discussed.
    Date: 2013
  10. By: Mahuteau, Stéphane (NILS, Flinders University); Mavromaras, Kostas G. (NILS, Flinders University)
    Abstract: PISA scores are an internationally established indicator of student and school performance. This paper builds on the evidence that better PISA scores are known to be associated with better later life outcomes. It uses the Australian PISA micro-level data in combination with its longitudinal continuation in the LSAY data, to measure the degree to which individual PISA scores are associated with individual early school dropouts. It distinguishes between student and school factors and estimates a model of the propensity to drop out from school between ages 15 and 18. The paper finds that PISA scores are a good predictor of early dropout, and that individual and social disadvantage plays a crucial role in this relationship both directly and indirectly.
    Keywords: PISA, socioeconomic disadvantage, school dropout, student outcomes, multilevel modelling
    JEL: I24 I21
    Date: 2013–08
  11. By: Herrera Gómez, Marcos
    Abstract: This paper presents a collection of spatial econometrics tools to detect global and local spatial dependence. These tools are used to analyze the spatial structure of the unemployment rate in Argentina in Census 2001 and 2010. Detailed study enables identification and comparison of persistent spatial structures in the departamental distribution of unemployment.
    Keywords: Spatial Autocorrelation, LISA, Getis-Ord Test, Symbolic Entropy, Unemployment
    JEL: C12 C21 J64
    Date: 2013–08
  12. By: Jagjit S. Chadha; Germana Corrado; Luisa Corrado
    Abstract: We decompose aggregate consumption by modelling both savers and their links to collateral constrained borrowers through a bank which prices credit risk. Savers own both firms and the commercial bank while borrowers require loans from the commercial bank to effect their consumption plans. The bank lends at a premium over the interest rate on central bank money in proportion to the riskiness of assets, the demand for loans, the asset price and the quantity of housing collateral. We show that even though house price do not represent wealth, aggregate consumption is not independent of movements in house prices. We consider the case for employing macro-prudential policy jointly with monetary and fiscal policy in order to minimise losses for a representative household.
    Keywords: Credit constrained households; housing collateral; asset prices; bank lending; default risk; macro-prudential; fiscal and monetary policy
    JEL: E31 E40 E51
    Date: 2013–09
  13. By: Beatrice D. Simo-Kengne (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut); Rangan Gupta (University of Pretoria)
    Abstract: This paper investigates whether changes in monetary transmission mechanism respond to variations in asset prices. We distinguish between bull and bear markets and employ a TVP-VAR approach with stochastic volatility to assess the evolution of the monetary policy in relation to housing and stock prices. We measure the relative importance of housing and stock prices in the conduct of monetary policy and their possible feedback effects over both time and horizon and across regimes. Empirical results from annual data on the US spanning the period from 1890 to 2012 indicate that monetary policy responds more strongly to asset prices during bull regimes. While the bigger monetary effect of stock price shocks occurs prior to the 1970s, monetary policy appears to respond more strongly to housing price than stock price shocks after the 1970s. Similarly, contractionary monetary policy exerts a larger effect on both asset categories during bull markets. Particularly, larger negative responses of house prices to monetary policy shocks occur after the 1980s, corresponding to the bull regime in the housing market. Conversely, the stock-price effect of monetary policy shocks dominates before the 1980s, where stock-market booms achieved more importance.
    Keywords: Monetary policy, house prices, stock prices, TVP-VAR
    JEL: C32 E52 G10
    Date: 2013–08
  14. By: Charles S. Wilkins; Thomas W. White
    Abstract: No Federal Guaranties in Multifamily. Period. Everyone now agrees that it was a bad idea to have an implicit federal guaranty for the multifamily activities of Fannie Mae and Freddie Mac. The public debate is now focused on the question of whether there should be explicit federal guarantees for at least some multifamily loans, in at least some market conditions.
    Keywords: multifamily mortgage loans,multifamily housing,Housing finance,Fannie Mae and Freddie Mac
    JEL: A G R
    Date: 2013–08
  15. By: Long, Wenjin (University of Nottingham); Appleton, Simon (University of Nottingham); Song, Lina (University of Nottingham)
    Abstract: In nationally representative household data from the 2008 wave of the Rural to Urban Migration in China survey, nearly two thirds of rural-urban migrants found their employment through family members, relatives, friends or acquaintances. This paper investigates why the use of social network to find jobs is so prevalent among rural-urban migrants in China, and whether migrants face a wage penalty as a result of adopting this job search method. We find evidence of positive selection effects of the use of networks on wages. Users of networks tend to be older, to have migrated longer ago and to be less educated. In addition, married workers and those from villages with more out-migrant are more likely to use networks, while those without local residential registration status are less likely. Controlling for selectivity, we find a large negative impact of network use on wages. Using job contacts brings open access to urban employment, but at the cost of markedly lower wages.
    Keywords: social network, job contact, wage, rural-urban migrants, switching regression, China
    JEL: J24 J31 O15
    Date: 2013–08
  16. By: Dirk Christian Dohse; Andrea Vaona
    Abstract: Although there is a large and rapidly growing literature on the determinants of regional variation in new firm formation, relatively little is known about the interrelation between the characteristics of start-up firms and urban structure. It is only recently that scholars of urban economics have suggested a theoretical link between the thickness of regional input markets and the complexity of feasible start-ups. The current paper classifies start-ups in different industry groups according to their complexity and analyzes the impact of regional input market thickness on the frequency of start-ups with different degrees of complexity. We find that thicker input markets do indeed foster more complex start-ups, but that some inputs are more important than others
    Keywords: Entrepreneurship, Start-up complexity, Thick markets, Regional analysis
    JEL: L26 D22 R12 M13 O31
    Date: 2013–06
  17. By: Zhenlin Yang (School of Economics, Singapore Management University)
    Abstract: To test the existence of spatial dependence in an econometric model, a convenient test is the Lagrange Multiplier (LM) test. However, evidence shows that, infinite samples, the LM test referring to asymptotic critical values may suffer from the problems of size distortion and low power, which become worse with a denser spatial weight matrix. In this paper, residual-based bootstrap methods are introduced for asymptotically refined approximations to the finite sample critical values of the LM statistics. Conditions for their validity are clearly laid out and formal justifications are given in general, and in details under several popular spatial LM tests using Edgeworth expansions. Monte Carlo results show that when the conditions are not fully met, bootstrap may lead to unstable critical values that change significantly with the alternative, whereas when all conditions are met, bootstrap critical values are very stable, approximate much better the finite sample critical values than those based on asymptotics, and lead to significantly improved size and power. The methods are further demonstrated using more general spatial LM tests, in connection with local misspecification and unknown heteroskedasticity.
    Keywords: Asymptotic refinements; Bootstrap; Edgeworth expansion; LM Tests; Spatial dependence; Size; Power; Local misspecification; heteroskedasticity; Wild bootstrap.
    JEL: C12 C15 C18 C21
    Date: 2013–05
  18. By: Emerson, Patrick M. (Oregon State University); Ponczek, Vladimir (Sao Paulo School of Economics); Portela Souza, André (Sao Paulo School of Economics)
    Abstract: This paper investigates the impact of working while in school on learning outcomes through the use of a unique micro panel dataset of students in the São Paulo municipal school system. The potential endogeneity of working decisions and learning outcomes is addressed through the use of a difference-in-difference estimator and it is shown that the results are robust. A negative and significant effect of working on learning outcomes in both math and Portuguese is found. The effects of child work from the benchmark regressions range from 3% to 8% of a standard deviation decline in test score which represents a loss of about a quarter to a half of a year of learning on average. Additionally, it is found that this effect is likely due to the interference of work with the time kids can devote to school and school work.
    Keywords: child labor, learning, proficiency, education
    JEL: J13 I21
    Date: 2013–08
  19. By: Pei Kuang (University of Birmingham)
    Abstract: I develop an equilibrium model with collateral constraints in which rational agents are uncertain and learn about the equilibrium mapping between fundamentals and collateral prices. Bayesian updating of beliefs by agents can endogenously generate booms and busts in collateral prices and largely strengthen the role of collateral constraints as an amplification mechanism through the interaction of agents?' beliefs, collateral prices and credit limits. Over-optimism or pessimism is fueled when a surprise in price expectations is interpreted partially by the agents as a permanent change in the parameters governing the collateral price process and is validated by subsequently realized prices. I show that the model can quantitatively account for the recent US boom-bust cycle in house prices, household debt and aggregate consumption dynamics during 2001-2008. I also demonstrate that the leveraged economy with a higher steady state leverage ratio is more prone to self-reinforcing learning dynamics.
    Keywords: Booms and Busts, Collateral Constraints, Learning, Leverage, Housing
    JEL: D83 D84 E32 E44
    Date: 2013–01–01
  20. By: OECD
    Abstract: <ul> <li>Students who know how to summarise information tend to perform better in reading. </li> <li>If disadvantaged students used effective learning strategies to the same extent as students from more advantaged backgrounds do, the performance gap between the two groups would be almost 20% narrower. </li></ul>
    Date: 2013–06
  21. By: Revelli, Federico (University of Turin)
    Abstract: Based on a theoretical model where state limits on local government policy elicit a move from private value (position issue) to common value (valence issue) voting, I exploit exogenous variation in tax limitation rules in over 7,000 Italian municipalities during the 2000s to show that fiscal restraints provoke a fall in voter turnout and number of mayor candidates, and a rise in elected mayors’ valence proxy and win margins. The evidence is compatible with the hypothesis of hierarchical tax imitations fading the ideological stakes of local elections and favoring valence-based party line crossing, thus questioning the influential accountability postulate of the fiscal decentralization lore
    Date: 2013–07
  22. By: OECD
    Abstract: <ul> <li>Teachers – especially new ones – report that one of their greatest areas of need relates to improving classroom disciplinary climate. </li> <li>Many teachers are not provided feedback on their classroom disciplinary climate through formal or informal appraisals. </li> <li>Feedback on classroom disciplinary climate can help to improve both teacher self-efficacy and the overall quality of the classroom learning environment. </li></ul>
    Date: 2013–03
  23. By: Goodness C. Aye (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper employs classical bivariate, factor augmented (FA), slab and spike variable selection (SSVS)-based, and Bayesian semiparametric shrinkage (BSS)-based predictive regression models to forecast the US real private residential fixed investment series over an out of sample period of 1983Q1 to 2011Q2, based on an in-sample of 1963Q1-1982Q4. Both large-scale (with 188 macroeconomic series) and small-scale (20 macroeconomic series) FA, SSVS and BSS predictive regressions, besides 20 bivariate regression models, are used in order to capture the influence of fundamentals in forecasting residential investment. We evaluate the ex post out-of-sample forecast performance of the 26 models using the relative average Mean Square Error for one-, two-, four- and eight-quarters-ahead forecasts and test their significance based on the McCracken (2004, 2007) MSE-F statistic. We find that, on average, the SSVS-Large model is the best amongst all the models. We also find that one of the individual regression models (based on house for sale as a predictor, H4SALE) performed best at the four- and eight-quarters-ahead horizons. Finally, we use these two models to predict the relevant turning points of the residential investment, via an ex ante forecast exercise from 2011Q3 to 2012Q4. The SSVS-Large model forecasts the turning points more accurately, though the H4SALE model did better towards the end of the sample. Our results suggest that it is best to consider economy-wide factors, in addition to specific housing market variables, when evaluating the real estate market.
    Keywords: Private residential investment, predictive regressions, factor-augmented models, Bayesian shrinkage, forecasting
    JEL: C32 E22 E27
    Date: 2013–08
  24. By: Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Crimmann, Andreas (Institute for Employment Research (IAB), Nuremberg); Evers, Katalin (Institute for Employment Research (IAB), Nuremberg); Hujer, Reinhard (Goethe University Frankfurt)
    Abstract: This paper analyses the determinants of different innovation types. Beside a wide range of firm characteristics also the effects of regional factors are estimated using three-level random effect logit models which account for the clustered and longitudinal structure of the data. The analyses contain three regional variables: the unemployment rate, the assessment of the region with reference to proximity to research and technology centres and universities and the rate of graduates in mathematics, informatics, natural sciences and technological sciences (MINT-graduates). The empirical basis is the IAB-Establishment Panel Survey 2006 to 2010. Process and radical innovations are significant affected by the unemployment rate and the share of MINT-graduates. The unemployment rate has also for some of the innovation combos a significant effect. The proportion of MINT-graduates is relevant for the probability of all 4 innovation types simultaneously.
    Keywords: determinants of innovation, regional effects, multilevel modelling
    JEL: D21 O30 R15
    Date: 2013–08
  25. By: Cristini, Annalisa (University of Bergamo); Sevilla, Almudena (Queen Mary, University of London)
    Abstract: This paper undertakes a comparison exercise to disentangle what drives the opposite findings regarding the effect of house prices on consumption documented in two papers using the same data set for the UK. On the one hand, Campbell and Cocco (2007) find that old owners are the most benefited by a house price increase and young renters the least, confirming the so-called wealth hypothesis. On the other hand, Attanasio, Blow, Hamilton, and Leicester (2009) find that house prices have the same impact on consumption across age groups, consistent with the so-called common factor hypothesis. First, we confirm that the findings in both papers can be reproduced. Second, we rule out a number of potential reasons related to the basic data construction, and provide evidence that the functional form (i.e., an Euler equation of consumption vs. a reduced form life-cycle model) and not data aggregation considerations (household level data vs. synthetic cohort data) may be at the root of the conflicting results in the two papers. Our findings revive the debate of whether there is an effect of house prices on consumption.
    Keywords: consumption, house prices, wealth hypothesis, common factor hypothesis
    JEL: D13
    Date: 2013–08
  26. By: Juliana Dahl
    Abstract: Since the year 2000, innovation and the path towards a “knowledge-based” economy have become prominent concepts in the European policy sphere. Although fostered by the goal of the innovationoriented Lisbon Strategy, it remains questionable in how far the situation of being the “most competitive economy” favours the diverse territories in the European Union. In this matter, very little is known about the ability to translate innovation into regional growth in territories with geographical disadvantages. The present paper discusses the intensified emphasis of the European policy approach towards innovation and its adequacy to the need of regions with unfavourable geographical features. This thorough discussion aims to shed some light on the issue of whether the EU’s twin goals for 2007-2013, to achieve global competitiveness and cohesion, are suitable for areas with geographical limitations
    Keywords: European Regional Development Fund, Innovation, Regional Policy, Specific Geographical Features
    JEL: O31
    Date: 2013–05
  27. By: Vij, Akshay
    Abstract: Latent modal preferences, or modality styles, are defined as behavioral predispositions towards a certain travel mode or set of travel modes that an individual habitually uses. They are reflective of higher-level orientations, or lifestyles, that are hypothesized to influence all dimensions of an individual’s travel and activity behavior. For example, in the context of travel mode choice different modality styles may be characterized by the set of travel modes that an individual might consider when deciding how to travel, her sensitivity, or lack thereof, to different level-of-service attributes of the transportation (and land use) system when making that decision, and the socioeconomic characteristics that predispose her one way or another. Travel demand models currently in practice assume that individuals are aware of the full range of alternatives at their disposal, and that a conscious choice is made based on a tradeoff between perceived costs and benefits associated with alternative attributes. Heterogeneity in the choice process is typically represented as systematic taste variation or random taste variation to incorporate both observable and unobservable differences in sensitivity to alternative attributes. Though such a representation is convenient from the standpoint of model estimation, it overlooks the effects of inertia, incomplete information and indifference that are reflective of more profound individual variations in lifestyles built around the use of different travel modes and their concurrent influence on all dimensions of individual and household travel and activity behavior.  The objectives of this dissertation are three-fold: (1) to develop a travel demand model framework that captures the influence of modality styles on multiple dimensions of individual and household travel and activity behavior; (2) to test that the framework is both methodologically flexible and empirically robust; and (3) to demonstrate the value of the framework to transportation policy and practice.
    Keywords: Engineering
    Date: 2013–08–01
  28. By: Yuanzhu Lu (China Economics and Management Academy, Central University of Finance and Economics, China); Sougata Poddar (Department of Economics, Faculty of Business and Law, Auckland University of Technology)
    Abstract: We show that a two-part tariff licensing contract is always optimal to the insider patentee in spatial models irrespective of the size of the innovation or any pre-innovation cost asymmetries. The result provides a simple justification of the prevalence of two-part tariff licensing contracts in industries.
    Keywords: Salop Model, Hotelling Model, Costs, Innovation,PAtent Licensing
    JEL: D43 D45 L13
    Date: 2013–07
  29. By: Mauro V. Tomasello; Mauro Napoletano; Antonios Garas; Frank Schweitzer
    Abstract: Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D networks in a large number of economic sectors over a long time period (1986- 2009). Our main goal is to evaluate temporal and sectoral robustness of the main statistical properties of empirical R&D networks. By studying a large set of indicators, we provide a more complete description of these networks with respect to the existing literature. We find that most network properties are invariant across sectors. In addition, they do not change when alliances are considered independently of the sectors to which partners belong. Moreover, we find that many properties of R&D networks are characterized by a rise-and-fall dynamics with a peak in the mid-nineties. Finally, we show that such properties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation.
    Date: 2013–09–03
  30. By: Kha Yen Prentice (School of Economics, La Trobe University); László Kónya (School of Economics, La Trobe University); David Prentice (School of Economics, La Trobe University)
    Abstract: The question of why more African Americans did not migrate earlier out of the stagnant and repressive South after emancipation remains open. Previous work has highlighted the role of demand and supply conditions. At the time, though there was much concern about the role of emigrant agents who actively recruited African Americans to migrate away from their homes such that several states introduced emigrant agent laws to effectively drive them out of business. In this paper we provide the first estimates of the quantitative significance of these agents to African American migration. Specifically, we take advantage of a natural experiment provided by different outcomes in court cases in Georgia and Alabama, which resulted in Alabama being prevented from re-introducing these laws between 1882 and 1903 while Georgia's laws remained. Analyzing gross migration out of the two states, we find that the emigrant agent laws had no direct effect on migration. Though there is some limited evidence that the sensitivity of migration flows to economic differences within the South was lower if an emigrant agent law was in place. This suggests that small changes to the emigrant agentlaws are unlikely to have led to an earlier Great Migration. Interestingly we also find that the increase in migration began before 1920 which provides some support for the supply-based explanations.
    Keywords: Great Migration, Emigrant Agents, Gravity Models, African Americans, Southern Labor Markets, Labor Market Regulation.
    JEL: N31 N41 N91 K31 J61 R23
    Date: 2013
  31. By: John H. Makin (American Enterprise Institute)
    Abstract: The global finanacial crisis destroyed over one-fifth of accumulated American wealth in just one year: 2008. That huge loss was on top of a significant 1.62 percent wealth loss in 2007. Both the US stock market bubble burst in 2000 and the housing bubble implosion of 2008 contributed to the current situation, reinforcing the need for a Federal Reserve "bubble watch" program.
    Keywords: the Federal Reserve,global economic outlook,financial crisis,economic wealth
    JEL: A E
    Date: 2013–08
  32. By: De Langhe, Katrien; Struyf, Els; Sys, Christa; Van de Voorde, Eddy; Vanelslander, Thierry
    Abstract: Airports are crucial nodes, ensuring the economic activity in a region. This paper reports on the direct and indirect effects of a temporary shutdown of an airport. Airports can be closed for several reasons and this can have major effects on different stakeholders. Therefore, this paper offers an analysis of this issue, so that all stakeholders can prepare themselves for the case a shutdown occurs, and will be able to take measures. Firstly, the effects of a temporary shutdown are discussed in general. Therefore, a definition of an airport shutdown is constructed and an overview is made of all possible causes that can lead to a temporary shutdown. Then, an airport typology is set up, including possible implications for each type of disturbance as well as a set of relevant stakeholders. Next, an overview is made of all possible effects for all stakeholders. Secondly, this theory is applied upon a specific case study at Brussels Airport. The effects of hurricane Sandy in the USA on the regional Flemish airports and Brussels Airport are analyzed. This case study shows that several passenger and cargo flights are canceled at Brussels Airport, while the regional Flemish airports are not affected. Based on the method proposed in this paper, stakeholders can quantify the monetary effects for themselves. The analysis indicates that the shutdown of an airport can cause important consequences for several stakeholders. Furthermore, the findings suggest that a temporary shutdown of an airport can disrupt the economic activity in a region. Knowledge of the possible consequences is most interesting for policymakers and stakeholders.
    Date: 2013–08

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