nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒10‒11
35 papers chosen by
Steve Ross
University of Connecticut

  1. The impact of supply constraints on house prices in England By Christian A. L. Hilber; Wouter Vermeulen
  2. The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India By Karthik Muralidharan; Venkatesh Sundararaman
  3. Agglomeration Economies in Classical Music By Karol J. Borowiecki
  4. Do places of worship affect housing prices? Evidence from Germany By Sebastian Brandt; Wolfgang Maennig; Felix Richter
  5. The Short- and Long-term Effects of School Choice on Student Outcomes — Evidence from a School Choice Reform in Sweden By Wontratschek, Verena; Edmark, Karin; Frölich, Markus
  6. Relatedness and Technological Change in Cities: The rise and fall of technological knowledge in U.S. metropolitan areas from 1981 to 2010 By Ron Boschma; Pierre-Alexandre Balland; Dieter Franz Kogler
  7. Central Government's Infrastructure Investment across Chinese Regions: A Dynamic Spatial Panel Data Approach By Zheng, Xinye; Li, Fanghua; Song, Shunfeng; Yu, Yihua
  8. Homevoters vs. leasevoters: a spatial analysis of airport effects By Gabriel M. Ahlfeldt; Wolfgang Maennig
  9. Giving and sorting among friends: Evidence from a lab-in-the-field experiment By Binzel, Christine; Fehr, Dietmar
  10. Tax limits and local democracy By Federico Revelli
  11. Local representation and strategic voting: evidence from electoral boundary reforms By Tuukka Saarimaa; Janne Tukiainen
  12. Regional Borders and Trade in Asia By Woong Lee; Chankwon Bae
  13. Peer Effects in Endogenous Networks By Timo Hiller; Timo Hiller
  14. Merger and acquisition activity as driver of spatial clustering: the spatial evolution of the Dutch banking industry, 1850-1993 By Ron Boschma; Matté Hartog
  15. The Long-run and Intergenerational Education Impacts of Intergovernmental Transfers By Irineu de Carvalho Filho; Stephan Litschig
  16. Using Maps of City Analogues to Display and Interpret Climate Change scenarios and their uncertainty By Sebastian Kopf; Minh Ha-Duong; Stéphane Hallegatte
  17. Migration and Increasing Wage Inequality: Can Imperfect Competition Explain the Link? By Korpi, Martin
  18. Key Issues in Local Accessibility Measurement By Mathieu Bunel; Elisabeth Tovar
  19. Weak and strong cross-sectional dependence: a panel data analysis of international technology diffusion By Ertur, C.; Musolesi, A.
  20. Regional growth and regional decline By Holger Breinlich; Gianmarco I.P. Ottaviano; Jonathan R.W. Temple
  21. Culture-led City Brands as Economic Engines: Theory and Empirics By Beatriz Plaza; Pilar Gonzalez-Casimiro; Paz Moral-Zuazo; Courtney Waldron
  22. The Role of Coal Mine Regulation in Regional Development By Xu, Hangtian; Nakajima, Kentaro
  23. Discrimination based on place of residence and access to employment By Mathieu Bunel; Emilia Ene Jones; Yannick L'Horty; Pascale Petit
  24. Dress-up contest: a dark side of fiscal decentralization By Ruixin Wang; Wendun Wang
  25. Determinants of foreign technological activity in German regions - a count model analysis of transnational patents (1996-2009) By Eva Dettmann; Iciar Dominguez Lacasa; Jutta Guenther; Bjorn Jindra
  26. The determinants of Job Access Channels: Evidence from the Youth Labor Market in France By Jihan Ghrairi
  27. Optimizing intersections By Ruth EVERS; Stefan PROOST
  28. Who will use electric vehicles? By Dütschke, Elisabeth; Schneider, Uta; Peters, Anja
  29. Transportation Choices and the Value of Statistical Life By Gianmarco León; Edward Miguel
  30. Tax Me If You Can! Optimal Nonlinear Income Tax Between Competing Governments By Etienne Lehmann; Laurent Simula; alain trannoy
  31. The changing geography of gender in India By Scott Fulford
  32. Does cultural diversity help or hinder entrepreneurs? Evidence from eastern Europe and central Asia By Elena Nikolova; Dora Simroth
  33. Big Push or Big Grab? Railways, Government Activism and Export Growth in Latin America, 1865-1913. By Bignon, V.; Esteves, R.; Herranz-Loncán, A.
  34. From pawn shops to banks : the impact of formal credit on informal households By Ruiz, Claudia
  35. Information Transmission and Vehicle Recalls: The Role and Regulation of Recall Notification Letters By Bae, Yong-Kyun; Benitez-Silva, Hugo

  1. By: Christian A. L. Hilber (London School of Economics & Spatial Economics Research Centre); Wouter Vermeulen (CPB Netherlands Bureau for Economic Policy Analysis & VU University & Spatial Economics Research Centre)
    Abstract: We explore the impact of different types of supply constraints on house prices in England by exploiting a unique panel dataset of 353 local planning authorities ranging from 1974 to 2008. Using exogenous variation from a policy reform, vote shares and historical density to identify the endogenous constraints-measures, we find that: i) Regulatory constraints have a substantive positive impact on the house price-earnings elasticity; ii) The effect of constraints due to scarcity of developable land is largely confined to highly urbanised areas; iii) Uneven topography has a quantitatively less meaningful impact; and iv) The effects of supply constraints are greater during boom than bust periods.
    Keywords: House prices, housing supply, supply constraints, land use regulation
    JEL: G12 R11 R21 R31 R52
    Date: 2013
  2. By: Karthik Muralidharan; Venkatesh Sundararaman
    Abstract: We present experimental evidence on the impact of a school choice program in the Indian state of Andhra Pradesh (AP) that featured a unique two-stage lottery-based allocation of school vouchers that created both a student-level and a market-level experiment. This design allows us to study both the individual and the aggregate effects of school choice (including spillovers). We find that private-school teachers have lower levels of formal education and training than public-school teachers, and are paid much lower salaries. On the other hand, private schools have a longer school day, a longer school year, smaller class sizes, lower teacher absence, higher teaching activity, and better school hygiene. After two and four years of the program, we find no difference between the test scores of lottery winners and losers on math and Telugu (native language). However, private schools spend significantly less instructional time on these subjects, and use the extra time to teach more English, Science, Social Studies, and Hindi. Averaged across all subjects, lottery winners score 0.13σ higher, and students who attend private schools score 0.23σ higher. We find no evidence of spillovers on public-school students who do not apply for the voucher, or on students who start out in private schools to begin with, suggesting that the program had no adverse effects on these groups. Finally, the mean cost per student in the private schools in our sample is less than a third of the cost in public schools. Our results suggest that private schools in this setting deliver (slightly) better test score gains than their public counterparts, and do so at substantially lower costs per student. More generally, our results highlight that ignoring heterogeneity among schools' instructional programs and patterns of time use may lead to incorrect inference on the impact of school choice on learning outcomes.
    JEL: C93 H44 H52 I21 O15
    Date: 2013–10
  3. By: Karol J. Borowiecki (Department of Business and Economics, University of Southern Denmark)
    Abstract: This study investigates agglomeration effects for classical music production in a wide range of cities for a global sample of composers born between 1750 and 1899. Theory suggests a trade-off between agglomeration economies (peer effects) and diseconomies (peer crowding). I test this hypothesis using historical data on composers and employ a unique instrumental variable – a measure of birth centrality, calculated as the average distance between a composer’s birthplace and the birthplace of his peers. I find a strong causal impact of peer group size on the number of important compositions written in a given year. Consistent with theory, the productivity gain eventually decreases and is characterized by an inverted U-shaped relationship. These results are robust to a large series of tests, including checks for quality of peers, city characteristics, various measures of composers’ productivity, and across different estimations in which also time-varying birth centrality measures are used as instrumental variables.
    Keywords: agglomeration economies, density effects, peer effects, productivity, urban history, cities, composer
    JEL: D24 J24 N90 R12 Z11
    Date: 2013–09
  4. By: Sebastian Brandt (Chair for Economic Policy, University of Hamburg); Wolfgang Maennig (Chair for Economic Policy, University of Hamburg); Felix Richter (Chair for Economic Policy, University of Hamburg)
    Abstract: Using hedonic pricing models, this paper analyzes the impact of places of worship on the prices of adjacent condominiums in Hamburg, Germany. This is the first study on this subject to have been conducted outside the United States. It is also the first work to examine the externalities of places of worship of all five world religions. Furthermore, it is the first study that analyzes the effect of bell ringing on the adjacent residential property prices. Controlling for spatial dependence and by using potentiality variables positive externalities of places of worship within a radius of 1,000m were identified. Compared to properties beyond this threshold, price premiums of 4.8% were detected for condominiums at distances of 100m to 200m to the next place of worship. The results also show that the positive externalities near mosques do not differ from those of places of worship of other religions and that the positive effect of churches continues to be felt even after they have been deconsecrated. The influence of church bell ringing on the prices of surrounding residential properties, however, could not be substantiated.
    Keywords: hedonic pricing; places of worship; external effects; residential property prices; Hamburg
    JEL: R12 R21 R31 R34 Z12
    Date: 2013–10–01
  5. By: Wontratschek, Verena (Research Institute of Industrial Economics (IFN)); Edmark, Karin (Research Institute of Industrial Economics (IFN)); Frölich, Markus (University of Mannheim)
    Abstract: This paper evaluates the effects of a major Swedish school choice reform. The reform in 1992 increased school choice and competition among public schools as well as through a large-scale introduction of private schools. We estimate the effects of school choice and competition, using precise geographical information on the locations of school buildings and children’s homes for the entire Swedish population for several cohorts affected at different stages in their educational career. We can measure the long-term effects up to age 25. We find that increased school choice had very small, but positive, effects on marks at the end of compulsory schooling, but virtually zero effects on longer term outcomes such as university education, employment, criminal activity and health.
    Keywords: School choice; School competition; Treatment evaluation; Cognitive and non-cognitive skills
    JEL: C21 I20
    Date: 2013–10–07
  6. By: Ron Boschma; Pierre-Alexandre Balland; Dieter Franz Kogler
    Abstract: This paper investigates by means of USPTO patent data whether technological relatedness was a crucial driving force behind technological change in 366 U.S. cities from 1981 to 2010. Based on a three-way fixed effects model, we find that the entry probability of a new technology in a city increases by 30 percent if the level of relatedness with existing technologies in the city increases by 10 percent, while the exit probability of an existing technology decreases by 8 percent.
    Keywords: relatedness, technological change, urban diversification, U.S. cities, technology space
    JEL: O33 R11 L65 D83
    Date: 2013–09
  7. By: Zheng, Xinye; Li, Fanghua; Song, Shunfeng; Yu, Yihua
    Abstract: This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central government's investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.
    Keywords: Infrastructure investment; efficiency-equity tradeoff; spatial interaction
    JEL: C33 H54 R0
    Date: 2013–10–06
  8. By: Gabriel M. Ahlfeldt (London School of Economics and Political Science (LSE) & Spatial Economics Research Centre (SERC)); Wolfgang Maennig (University of Hamburg)
    Abstract: We use a public referendum on a new air traffic concept in Berlin, Germany as a natural experiment to analyze how the interaction of tenure and capitalization effects shapes the outcome of direct democracy processes. We distinguish between homevoters, i.e., voters who are homeowners, and leasevoters, i.e., voters who lease their homes. We expect the former to be more likely to support or op-pose initiatives that positively or negatively affect the amenity value of a neighborhood because some of the related benefits or costs of the latter are neutralized by adjustments in market rents (capitalization). Our empirical results are in line with our theoretical expectations and imply that public votes on local public goods do not necessarily reflect the spatial distribution of welfare effects in mixed-tenure environments.
    Keywords: Referendum, homevoters, leasevoters, NIMBYism, rents, noise, airports, Berlin
    JEL: D61 D62 H41 H71 L83 I18 R41 R58
    Date: 2013
  9. By: Binzel, Christine; Fehr, Dietmar
    Abstract: Among residents of an informal housing area in Cairo, we examine how dictator giving varies by the social distance between subjects - friend versus stranger - and by the anonymity of the dictator. While giving to strangers is high under anonymity, we find - consistent with Leider et al. (2009) - that (i) a decrease in social distance increases giving, (ii) giving to a stranger and to a friend is positively correlated, and (iii) more altruistic dictators increase their giving less under non-anonymity than less altruistic dictators. However, friends are not alike in their altruistic preferences, suggesting that an individual's intrinsic preferences may not necessarily be shaped by his (or her) peers. Instead, reciprocal motives seem important, indicating that social relationships may be valued differently when individuals are financially dependent on them. --
    Keywords: giving,reciprocity,social distance,networks, sorting
    JEL: C93 D64 L14 O12
    Date: 2013
  10. By: Federico Revelli (University of Torino)
    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 limitations 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.
    Keywords: Local elections, voter turnout, tax and expenditure limitations, fiscal decentralization
    JEL: D72 H77 C23
    Date: 2013
  11. By: Tuukka Saarimaa (Government Institute for Economic Research VATT); Janne Tukiainen (Government Institute for Economic Research VATT & Helsinki Center of Economic Research (HECER))
    Abstract: We use Finnish local election voting data to analyze whether voters value local representation and act strategically to guarantee it. To identify such preferences and behavior, we exploit municipal mergers as natural experiments, which increase the number of candidates and parties available to voters and intensify political competition. Using difference-in-differences strategy, we find that voters in merged municipalities start to concentrate their votes to local candidates despite the larger choice set, whereas the vote distributions in the municipalities that did not merge remain the same. Moreover, the concentration effect is clearly larger in municipalities that are less likely to gain local representation in the post-merger councils. We also find that the effect increases both as the geographical distance and income heterogeneity between merging municipalities increases. We interpret these results as evidence of both preferences for local representation and strategic voting.
    Keywords: Electoral boundary reform, local representation, municipality mergers, strategic voting
    JEL: C21 C23 D72 H73 H77
    Date: 2013
  12. By: Woong Lee (KIEP - Korea Institute for International Economic Policy); Chankwon Bae
    Abstract: This paper investigates the effect of regional borders on trade in Asia. The regional borders define the three regions of Asia : South, Southeast, and East Asia. Regional trade indicates the flows of trade within a region, whereas regional border trade means trade across regions. A gravity model is augmented with the region dummies to estimate the regional border effects that capture any and all time-invariant factors promoting or impeding regional trade. The main finding is that regional border effects are asymmetric on the three regions in Asia. There is a large and significant regional border effect on South Asia, small on Southeast Asia, and negligibly negative on East Asia. The significant and positive regional border effect in South Asia suggests that countries share intrinsic factors facilitating trade between the countries in this region. Although the regional border effect of Southeast Asia is positive, its magnitude shows little difference between its regional trade and regional border trade. Finally, the estimate on East Asia presents a completely different picture from the actual data. It implies that there exist some factors leading to active regional border trade between East Asia and other Asian regions.
    Keywords: Border Effect, Regional Borders, Natural Trading Partners, the gravity model
    JEL: F13 F14 F15
    Date: 2013–09
  13. By: Timo Hiller; Timo Hiller
    Abstract: This paper presents a simple model of strategic network formation with local complementarities in effort levels and positive local externalities for a general class of payoff functions. Results are obtained for one-sided and two-sided link creation. In both cases (pairwise) Nash equilibrium networks are nested split graphs, which are a strict subset of core-periphery networks. The relevance of the convexity of the value function (gross payoffs as a function of neighbours' effort levels when best responding) in obtaining nested split graphs is highlighted. Under additional assumptions on payoffs, we show that the only efficient networks are the complete and the empty network. Furthermore, there exists a range of linking cost such that any (pairwise) Nash equilibrium is inefficient and for a strict subset of this range any (pairwise) Nash equilibrium network structure is different from the efficient network. These findings are relevant for a wide range of social and economic phenomena, such as educational attainment, criminal activity, labor market participation, and R&D expenditures of rms.
    Keywords: Strategic network formation, peer effects, strategic complements, positive externalities.
    JEL: D62 D85
    Date: 2013–09
  14. By: Ron Boschma; Matté Hartog
    Abstract: This paper investigates the extent to which merger and acquisition activity contributed to the spatial clustering of the Dutch banking industry in Amsterdam. This analysis is based on a unique database of all banks in the Netherlands that existed in the period 1850-1993. We found that spatial clustering of the Dutch banking industry was not driven by the fact that banks performed better in the Amsterdam region: being located in Amsterdam decreased rather than increased the survival chance of banks. However, banks in Amsterdam were disproportionally active in acquiring other banks outside Amsterdam. Experience in M&As accumulated mainly in the Amsterdam region, which in turn had a positive impact on the survival chance of banks located there. Our findings suggest that M&A activity was a driving force behind the spatial clustering of the Dutch banking industry between 1850 and 1993.
    Keywords: industrial dynamics, cluster, mergers and acquisitions, banking sector, evolutionary economic geography
    JEL: O18 R00 R11
    Date: 2013–09
  15. By: Irineu de Carvalho Filho; Stephan Litschig
    Abstract: This paper provides regression discontinuity evidence on long-run and intergenerational education impacts of a temporary increase in federal transfers to local governments in Brazil. Revenues and expenditures of the communities benefiting from extra transfers temporarily increased by about 20% during the 4 year period from 1982 to the end of 1985. Schooling and literacy gains for directly exposed cohorts established in previous work that used the 1991 census are attenuated but persist in the 2000 and 2010 censuses. Children and adolescents of the next generation---born after the extra funding had disappeared---show gains of about 0.08 standard deviation across the entire score distribution of two nationwide exams at the end of the 2000s. While we find no evidence of persistent improvements in school resources, we document discontinuities in education levels, literacy rates and incomes of test takers' parents that are consistent with intergenerational human capital spillovers.
    Keywords: intergovernmental grants, human capital, test scores, regression discontinuity
    JEL: H40 H72 I21 O15
    Date: 2013–09
  16. By: Sebastian Kopf (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech); Stéphane Hallegatte (METEO-FRANCE - Météo-France - Météo France)
    Abstract: We describe a method to represent the results of climate simulation models with analogues. An analogue to a city A is a city B whose climate today represents A's simulated future climate. Climates were characterized and compared non-parametrically, using the 30-years distribution of three indicators : Aridity Index, Heating Degree Days and Cooling Degree Days. Analogy was evaluated statistically with the two-samples Kolmogorov-Smirnov test, generalized to 3 dimensions. We looked at the climate of 12 European cities at the end of the century under an A2 climate change scenario. We used two datasets produced with high-resolution regional climate simulation models from the Hadley Center and Meteo France. Climate analogues were generally found southward of present locations, a clear warming trend even if much model and scenario uncertainty remains. Climate analogues provide an intuitive way to show the possible effects of climate change on urban areas, offering a holistic approach to think about how cities adapt to different climates. Evidence of its communication value comes from the reuse of our maps in teaching and in several European mass-media.
    Date: 2013–09–30
  17. By: Korpi, Martin (Ratio)
    Abstract: In this paper, we test two hypotheses as regarding potential effects of domestic and international migration on wage inequality. One related to the possibility of wage competition, and another alternative hypothesis related to fixed set-up costs and indivisibilities for different types of industries within the local labour market. Using detailed information on Swedish local labour markets, derived from Swedish full population data, for 1993 and 2003, a panel model of percent changes in inequality is estimated. Thereby controlling for local level fixed effects as well as other competing explanations, the results suggest that positive net migration may affect income dispersion regardless of possible negative wage competition.
    Keywords: Income inequality; local labour markets; business diversification; international migration
    JEL: D61 F22 J31 J40 R12
    Date: 2013–09–24
  18. By: Mathieu Bunel (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Elisabeth Tovar (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense)
    Abstract: This methodological paper shows that using different local job accessibility models (LJAs) leads to significantly different empirical appreciations of job accessibility. Matching several exhaustive micro data sources on the Paris region municipalities, the paper benchmarks a representative set of LJA measurement models used in the recent literature and an original model where job availability is fully estimated according to a set of individual characteristics, job competition is fully modelled on the local labour market and frontier effects are controlled for. We show that the model-induced empirical differences are spatially differentiated across the Paris region municipalities, and that failing to fully estimate job availability may lead to overestimation of the job accessibility levels of underprivileged municipalities.
    Keywords: job accessibility measurement, Paris region, geo-referenced micro-data
    Date: 2013
  19. By: Ertur, C.; Musolesi, A.
    Abstract: This paper provides an econometric examination of geographic R&D spillovers among countries by focusing on the issue of cross-sectional dependence. By applying several unit root tests, we first show that when the number of lags of the autoregressive component of augmented Dickey Fuller test-type specifications or the number of common factors is estimated in a model selection framework, the variables (total factor productivity and R&D capital stocks) appear to be stationary. Then, we estimate the model using two complementary approaches, focusing on spatial autoregressive errors and unobserved common correlated factors. These approaches account for different types of cross-sectional dependence and are related to the concepts of weak and strong cross-sectional dependence recently developed in the literature.
    JEL: C23 C5 F0 O3
    Date: 2013
  20. By: Holger Breinlich; Gianmarco I.P. Ottaviano; Jonathan R.W. Temple
    Abstract: Since the early 1990s, there has been a renaissance in the study of regional growth, spurred by new models, methods and data. We survey a range of modelling traditions, and some formal approaches to the ?hard problem? of regional economics, namely the joint consideration of agglomeration and growth. We also review empirical methods and fi?ndings based on natural experiments, spatial discontinuity designs, and structural models. Throughout, we give considerable attention to regional growth in developing countries. Finally, we highlight the potential importance of processes that are speci?c to regional decline, and which deserve greater research attention.
    Date: 2013–07–06
  21. By: Beatriz Plaza (University of the Basque Country UPV/EHU, Spain); Pilar Gonzalez-Casimiro (University of the Basque Country UPV/EHU, Spain); Paz Moral-Zuazo (University of the Basque Country UPV/EHU, Spain); Courtney Waldron
    Abstract: Cultural re-imaging through iconic art museums aims to create symbolic capital for a place in the form of creative images, reputation, and associations with innovation. While literature has long identified architectural uniqueness as a potential driver of brand competitiveness, we argue diffusion of that image is equally important. This work draws upon economic concepts from other cultural industries (such as film, music, and art) to develop a framework for understanding how cultural brands are built: how reproducible images of singular architecture accumulate in the media to strengthen a brand. We then test an art brand´s impact on visitors. This work aims to offer evidence that the Guggenheim Museum Bilbao brand generates tourism to the city of Bilbao. By understanding how iconic cultural structures create symbolic capital, policy makers may better tailor similar culture-led branding strategies to other places.
    Keywords: Iconic Art Museums, Image Markets, Urban Economics, Branding Effectiveness
    JEL: Z1 R1
    Date: 2013–10
  22. By: Xu, Hangtian; Nakajima, Kentaro
    Abstract: In response to the high mortality rates and low productivity in coal mining, China began regulating coal mines in the 1990s, which has reshaped its coal economy. We empirically investigate the relationship between coal mine regulation and economic growth in China. Using two difference-in-difference approaches to compare the pre- and post-regulation periods, as well as regions with and without rich coal endowment, we find that regulation positively affects regional economy. This result is further illustrated using an OLS estimation that uses mortality rate in coal mining as a proxy for measuring the quality of regulation. The impacts are not limited only to the intra-coal industry but also spillover to the economy of related regions by relieving the crowding-out effects of coal abundance, that is, resource abundance tends to crowd out investment, human capital and innovation in non-resource sectors and thus hinders economic growth.
    Keywords: coal mine regulation, crowding-out effects, mortality rate, resource curse, regional development
    JEL: L71 O43 P28 Q32 R11
    Date: 2013–09
  23. By: Mathieu Bunel (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Emilia Ene Jones (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Yannick L'Horty (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris-Est Créteil Val-de-Marne (UPEC) : EA437 - Université Paris-Est Marne-la-Vallée (UPEMLV)); Pascale Petit (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), EPEE - Centre d'Etudes des Politiques Economiques - Université d'Evry-Val d'Essonne)
    Abstract: The purpose of this study is to assess the degree of employment discrimination against young people in the Ile-de-France region according to their place of residence by considering several spatial scales in order to measure the effect of the reputation of the administrative department or county (specifically Paris and Seine-Saint-Denis), the town or municipality, and of the local neighborhood. The evaluation is carried out using experimental testing-type data that we developed following a protocol that allows us to examine the specific effects associated with each of these three spatial scales on access to employment, as well as their combined effects. We are interested in discrimination regarding two specific occupations within the restaurant/catering industry, namely waiters and cooks, and we consider the impact of two levels of qualification. For each of these profiles, we constructed six fictional candidacies consisting of young men who were similar with the exception of the testing feature which differentiates them, namely their place of residence. Between October 2011 and February 2012, we studied 2,988 candidacies that were submitted in response to 498 job offers posted in the Ile-de-France region. This study consists of a statistical and econometric analysis of the responses that we obtained to these applications.
    Keywords: access to employment ; discrimination ; testing ; neighbourhood effects ; experiments
    Date: 2013–09
  24. By: Ruixin Wang (CentER, Tilburg University); Wendun Wang (Erasmus University Rotterdam)
    Abstract: A `dress-up contest' is a competition for the best public image, and fiscal decentralisation can lead to such contests between local governments. In this paper we model the dress-up contest and investigate how it a effects social welfare. We show that yardstick competition (due to fiscal decentralisation) forces local governments to allocate more resources to more visible public goods (such as cash assistance) than less visible goods (such as vendor payments) and thus starts dress-up contests. The resulting distortion of resource allocation causes a structural bias in public expenditure and further hurts social welfare. To empirically verify our theoretical model, we employ U.S. state-level data from 1992 to 2008, and we estimate the panel data model using various econometric approaches. The empirical results provide strong evidence that fiscal decentralisation can lead to distortion in public expenditure arising from dress-up contests. We also find that this distortion increases the regional poverty rate.
    Keywords: Fiscal decentralization, yardstick competition, dress-up contest, functional coefficient model
    JEL: D72 H75 H77
    Date: 2013
  25. By: Eva Dettmann (Halle Institute for Economic Research (IWH), Department of Structural Change, Kleine Markerstrasse 8, 06108, Halle (Saale), Germany); Iciar Dominguez Lacasa (Halle Institute for Economic Research (IWH), Department of Structural Change, Kleine Markerstrasse 8, 06108, Halle (Saale), Germany); Jutta Guenther (Halle Institute for Economic Research (IWH), Department of Structural Change, Kleine Markerstrasse 8, 06108, Halle (Saale), Germany and Friedrich Schiller University Jena Faculty of Economics, Carl-Zeiss-Str. 3, 07743 Jena, Germany); Bjorn Jindra (Halle Institute for Economic Research (IWH), Department of Structural Change, Kleine Markerstrasse 8, 06108, Halle (Saale), Germany and Copenhagen Business School, Department of International Economics and Management, Solbjerg Plads 3, DK-2000 Frederiksberg, Denmark and University of Sussex, Science and Technology Policy Research (SPRU) Famer, Brighton, BN1 9SL, United Kingdompostion)
    Abstract: This paper analyses the determinants of spatial distribution of foreign technological activity across 96 German regions (1996-2009). We identify foreign inventive activity by applying the ‘cross-border-ownership concept’ to transnational patent applications. The descriptive analysis shows that foreign technological activity more than doubled during the observation period with persistent spatial heterogeneity in Germany. Using a pooled count data model, we estimate the effect of various sources for externalities on the extent of foreign technological activity across regions. Our results show that foreign technological activity is attracted by technologically specialised sectors of regions. In contrast to existing findings this effect applies both to foreign as well as domestic sources of specialisation. We show that the relation between specialization and foreign technological activity is non-linear and that it is influenced by sectoral heterogeneity. Externalities related to technological diversification attract foreign R&D only into ‘higher order’ regions.
    Keywords: foreign direct investment, technology, Europe, patent information
    JEL: O32 O33 R12
    Date: 2013
  26. By: Jihan Ghrairi (ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - CNRS : UMR7017 - Université Paris II - Panthéon-Assas, TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV))
    Abstract: This article aims to study youth employability on the job access channel that provided their entry into the labor market. We examine the determinants of the formal and informal job access channels. For this purpose, we estimate a Multinomial Logit model of access channels controlling for selection bias. We use the youth sample of the French National Labor Force Survey (Enquête "Emploi") conducted by the INSEE. Our data provide a set of relevant variables required to identify the model which allows us to study different characteristics of young individuals that affect their access to the current job through a particular channel. First, we notice that young graduates access to their current jobs more often through direct applications and social networks. We find that, in 2010, referred young workers are more likely to be less educated man immigrants, living in rural areas and hired by large firms. However, immigrants were less likely to obtain a job through public employment agencies while the origin effect was not significant in 2007. Moreover, we find that the probability of finding a job through professional contacts increases significantly with the education level for both years (stronger effects for university graduates).
    Keywords: job access channels; social networks ; multinomial logit ; selection bias
    Date: 2013–06
  27. By: Ruth EVERS; Stefan PROOST
    Abstract: In this paper we optimize the regulation of an intersection of two routes connecting one origin-destination pair and study the effects of priority rules, traffic lights and tolls. We show that when the intersection is regulated by a priority rule the optimal policy is generally to block one of the two routes. When the intersection is regulated by traffic lights, it can only be optimal to leave both routes open when both routes are subject to congestion or if a toll is levied.
    Date: 2013–10
  28. By: Dütschke, Elisabeth; Schneider, Uta; Peters, Anja
    Abstract: Electric vehicles (EVs) are currently seen as an important means to make transport more sustainable; however, so far, only a few EVs are actually on the roads. This paper tries to identify likely early private users of EVs based on a narrative review of results from earlier studies by the authors. Two usage scenarios are analyzed: (1) the traditional model of car use where the EV is bought or leased by the household whose members drive the vehicle (individual usage), and (2) concepts where EVs are used as part of shared fleets (collective usage). Findings indicate that, for both scenarios, likely early users are highly educated middle-aged men. Those who live with their family in rural or suburban regions seem to be more interested in owning an EV; for those living in urban areas, carsharing might be an attractive alternative. Other likely user groups are also discussed in the paper. --
    Date: 2013
  29. By: Gianmarco León; Edward Miguel
    Abstract: This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water). Travelers choose from among multiple transport options – namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns in order to generate some of the first revealed preference VSL estimates from Africa. The data also allows us to compare VSL estimates for travelers from 56 countries, including 20 African and 36 non -African countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularly job earnings, can largely account for the difference between Africans and non-Africans ; Africans in the sample typically earn somewhat less. There is little evidence that individual VSL estimates are driven by a lack of information, predicted life expectancy, or cultural norms around risk-taking or fatalism. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for a variety of public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.
    Keywords: value of statistical life, risk taking behavior, Africa, Sierra Leone
    JEL: J17 O18
    Date: 2013–09
  30. By: Etienne Lehmann (TEPP - Travail, Emploi et Politiques Publiques - CNRS : FR3435 - Université Paris-Est Marne-la-Vallée (UPEMLV), CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - CNRS : UMR7017 - Université Paris II - Panthéon-Assas); Laurent Simula (University of Upssala - University of Upssala); alain trannoy (EHESS - École des hautes études en sciences sociales - École des Hautes Études en Sciences Sociales [EHESS])
    Abstract: We investigate how potential tax-driven migrations modify the Mirrlees income tax schedule when two countries play Nash. The social objective is the maximin and preferences are quasilinear in income. Individuals differ both in skills and migration costs, which are continuously distributed. We derive the optimal marginal income tax rates at the equilibrium, extending the Diamond-Saez formula. The theory and numerical simulations on the US case show that the level and the slope of the semi-elasticity of migration on which we lack empirical evidence are crucial to derive the shape of optimal marginal income tax. Our simulations show that potential migrations result in a welfare drop between 0.4% and 5.3% for the worst-off and an average gain between 18.9% and 29.3% for the top 1%.
    Keywords: Optimal Income Tax; Income Tax competition; Migration; Labor Mobility; NashEquilibrium Tax Schedules
    Date: 2013–09–24
  31. By: Scott Fulford (Boston College)
    Abstract: This paper examines the changing distribution of where women and girls live in India at the smallest scale possible: India's nearly 600,000 villages. The village level variation in the proportion female is far larger than the variation across districts. Decomposing the variance, I show that village India is becoming more homogeneous in its preferences for boys even as that preference becomes more pronounced. A consequence is that 70% of girls grow up in villages where they are the distinct minority. Most Indian women move on marriage, yet marriage migration has almost no gender equalizing influence. Further, by linking all villages across censuses, I show that most changes in village infrastructure are not related to changes in child gender. Gaining primary schools and increases in female literacy decrease the proportion of girls. The results suggests that there are no easy policy solutions for addressing the increasing masculinization of Indian society.
    Keywords: Marriage migration; Sex ratios; Son preference; Geographic distribution of women; Asia; India
    JEL: O15 J12 J16
    Date: 2013–09–30
  32. By: Elena Nikolova (EBRD); Dora Simroth (European School of Management and Technology)
    Abstract: This paper studies the effect of religious and linguistic diversity in a given locality on individual entrepreneurial behaviour, and finds that cultural diversity and entrepreneurship follow an inverted U-shaped pattern. We make three theoretical contributions. Unlike previous research, we are able to analyse both the attempt to establish an entrepreneurial business (‘entrepreneurial trial’) and success of entrepreneurs. Moreover, we argue that the two types of diversity matter at different stages of entrepreneurship – religious diversity is tightly linked to entrepreneurial trial, while linguistic heterogeneity affects entrepreneurial success. In addition, by identifying a non-linear relationship between diversity and entrepreneurship, we put into perspective previous research that is divided on whether cultural heterogeneity positively or negatively affects firm, regional and country performance. We use a new survey data set that covers more than 30,000 households in eastern Europe and central Asia (the Life in Transition Survey 2010).
    Keywords: entrepreneurship, transition region, diversity
    JEL: L26 P31 Z12
    Date: 2013–06
  33. By: Bignon, V.; Esteves, R.; Herranz-Loncán, A.
    Abstract: Railways were one of the main engines of the Latin American trade boom before 1914. Railway construction often required financial support from local governments, which depended on their fiscal capacity. But since the main government revenues were trade-related, this generated a two-way feedback between government revenues and railways with a potential for multiple equilibria. The empirical tests in this paper support the hypothesis of a positive two-way relationship. The main implication of our analysis is that the build-up of state capacity was a necessary condition for railway expansion and, given the importance of the export sector in these economies, for economic growth and divergence in the region.
    Keywords: Railways; Latin America; Export growth; Government revenues.
    JEL: H54 N46 N76 O38 O54
    Date: 2013
  34. By: Ruiz, Claudia
    Abstract: This paper examines the effects of expanding access to credit on the decisions and welfare of households. It focuses on the entry of Banco Azteca, the first bank in Mexico targeting households from the informal sector. Panel data suggest that informal households in municipalities with Banco Azteca branches experienced several changes in their saving, credit and consumption patterns. In order to estimate the impact of Azteca's entry, the paper develops a dynamic model of household choices in which the bank is endogenously selecting the municipalities for branch openings. The analysis finds that in municipalities in which the bank entered, households were better able to smooth their consumption and accumulate more durable goods even though the overall proportion of households that save went down by 6.6 percent. These results suggest that the use of savings as a buffer on income fluctuations declines once formal credit is available. What is more, these effects vary across households. Among informal households, those who never receive formal job offers have the highest decline in saving rates. The model is also used to evaluate a legislation to cap interest rates levied by formal credit institutions. Simulations suggest that if the Mexican government were to cap the interest rate of Azteca at the rate for traditional banks, Azteca would stop operating in the poorest and least populated municipalities.
    Keywords: Access to Finance,Banks&Banking Reform,Small Area Estimation Poverty Mapping,Economic Theory&Research,Debt Markets
    Date: 2013–10–01
  35. By: Bae, Yong-Kyun; Benitez-Silva, Hugo
    Abstract: Using data on correction rates for vehicle recalls in the United States from 2007 to 2010, we investigate information transmission from manufacturers to owners regarding the defects of recalled vehicles. We pay special attention to the role of the language manufacturers use to convey each recall's seriousness in the letters they send to owners to explain the nature of the defects in their vehicles, and the possible consequences if the defects are not fixed. We find that recalls linked to riskier defects, defined by the type of equipment affected in the vehicles, are associated with higher correction rates. Interestingly, the content of recall notification letters plays an important role in increasing correction rates because the letters convey information to owners above and beyond baseline information about which part of their vehicles can present problems. We also find that, in a number of cases, the language that manufacturers use to explain the risks to owners are worryingly milder than the descriptions the National Highway Traffic Safety Administration (NHTSA) use, resulting in significantly lower correction rates. We conclude that information transmission to owners regarding recalls should be more clearly regulated since the language affects drivers' likelihood of taking their cars to be fixed. We advocate that the NHTSA return to the pre-2001 practice of assigning hazard levels to all recalls, and that the agency consider making sure manufacturers clearly communicate recall rating information to vehicle owners. Our results indicate that these practices would result in higher correction rates, remove faulty cars from the roads, and, consequently, save lives.
    Keywords: Safety Regulation, Vehicle Defects, Automobile Recalls, Transmission of Information, Consumer Behavior
    JEL: D01 L51 L62
    Date: 2013–10–04

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