nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2013‒12‒15
57 papers chosen by
Steve Ross
University of Connecticut

  1. RETAIL CITY: Does accessibility to shops explain place attractiveness? By Öner, Özge
  2. Regional Mismatch and Labor Reallocation in an Equilibrium Model of Migration By Plamen Nenov
  3. Productive cities: Sorting, selection, and agglomeration By Kristian Behrens; Gilles Duranton; Frédéric Robert-Nicoud
  4. Interest Rate Fluctuations and Equilibrium in the Housing Market By Yavuz Arslan
  5. Independent Schools and Long-Run Educational Outcomes Evidence from Sweden´s Large Scale Voucher Reform By Böhlmark, Anders; Lindahl, Mikael
  6. Does Owner-Occupied Housing Affect Neighbourhood Crime? By Lauridsen, Jørgen; Nannerup, Niels; Skak, Morten
  7. Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies By Kenneth N. Kuttner; Ilhyock Shim
  8. Do Inventors Talk to Strangers? On Proximity and Collaborative Knowledge Creation By Crescenzi, Riccardo; Nathan, Max; Rodríguez-Pose, Andrés
  9. Efficiency Aspects of Government Secondary School Finances in New South Wales: Results from a Two-Stage Double-Bootstrap DEA at the School Level By Alfred A. Haug; Vincent C. Blackburn
  10. Survival of the Fittest in Cities: Urbanisation and Inequality By Kristian Behrens; Frédéric Robert-Nicoud;
  11. Self-reinforcing effects between housing prices and credit: an extended version By André K. Anundsen; Eilev S. Jansen
  12. Student mobility in low quality schools. Segmentation among the most vulnerable students By Marcela Perticara; Marcela Roman
  13. School meets street: exploring the links between low achievement, school exclusion and youth crime among African-Caribbean boys in London By Scott, James; Spencer, Liz
  14. Urban Density and Climate Change: A STIRPAT Analysis using City-level Data By Liddle, Brantley
  15. RETURNS TO LOCATION IN RETAIL: Investigating the relevance of market size and regional hierarchy By Öner, Özge
  16. Does Growing Up in a High Crime Neighborhood Affect Youth Criminal Behavior? By Anna Piil Damm; Christian Dustmann
  17. Spatial Nexus in Crime and Unemployment in Times of Crisis: Evidence from Germany By Povilas Lastauskas; Eirini Tatsi
  18. Housing Market Responses to Immigration; Evidence from Italy By Sona Kalantaryan
  19. Values, beliefs and economic behaviors: a regional approach By João Carlos Graça,; João Carlos Lopes; Cláudia Niza
  20. A Spatial Analysis of Agricultural Land Prices in Bavaria By Feichtinger, Paul; Salhofer, Paul
  21. ‘Small area estimates of Subjective Wellbeing: Spatial Microsimulation on the Australian Unity Wellbeing Index Survey’ By Itismita Mohanty; Robert Tanton; Yogi Vidyattama; Marcia Keegan; Robert Cummins
  22. Economic Transition and Private-Sector Labor Demand: Evidence from Urban China By Lakshmi Iyer; Xin Meng; Nancy Qian; Xiaoxue Zhao
  23. Imperfect Knowledge About Asset Prices and Credit Cycles By Pei Kuang
  24. Is There an Educational Penalty for Being Suspended from School? By Deborah A. Cobb-Clark; Sonja C. Kassenboehmer; Trinh Le; Duncan McVicar; Rong Zhang
  25. Large Scale Asset Purchases with segmented mortgage and corporate loan markets. By Meixing Dai; Frédéric Dufourt; Qiao Zhang
  26. The Influence of Diversity on the Formation, Survival and Growth of New Firms By Backman, Mikaela; Kohlhase, Janet
  27. Modeling Knowledge Networks in Economic Geography: A Discussion of Four Empirical Strategies By Tom Broekel; Pierre-Alexandre Balland; Martijn Burger; Frank van Oort
  28. Are there Housing Bubbles in South Africa? Evidence from SPSM-Based Panel KSS Test with a Fourier Function By Tsangyao Chang; Wen-Chi Liu; Goodness C. Aye; Rangan Gupta
  29. School inputs and skills: complementarity and self-productivity By Nicoletti, Cheti; Rabe, Birgitta
  30. Identification in a model of sorting with social externalities and the causes of urban segregation By Kasy, Maximilian
  31. Urbanization and Mortality Decline By Sanghamitra Bandyopadhyay; Elliott Green
  32. Impact of Duration of Primary Education on School Outcomes: A Cross-Country Analysis By Diaz-Serrano, Luis; Pérez, Jessica
  33. Students' Social Origins and targeted Grade Inflation By Alessandro Tampieri
  34. From smart specialisation to smart experimentation: Towards a new theoretical framework for EU regional policy By Benner, Maximilian
  35. Feasibility of Mortgage-Backed Securitization for the Underserved Housing Market in the Philippines By Ballesteros, Marife M.; Dulay, Daisy
  36. Influences of infrastructure and attitudes to health on value of travel time savings in bicycle journeys By Björklund, Gunilla; Mortazavi , Reza
  37. "High"-School: The Relationship between Early Marijuana Use and Educational Outcomes By Cobb-Clark, Deborah A.; Kassenböhmer, Sonja C.; Le, Trinh; McVicar, Duncan; Zhang, Rong
  38. Jailer of Freedom and Enemy of Growth? The Role of Personal and Social Identities in Educational Choices By Autiero, Giuseppina; O'Higgins, Niall
  39. Service-based versus Facility-based Competition in Local Access Networks By M. Bourreau; P. Dogan
  41. Culture and Taxes: Towards Identifying Tax Competition By Eugster, Beatrix; Parchet, Raphaël
  42. Widening Educational Disparities Outside of School: A longitudinal study of parental involvement and early elementary schoolchildren's learning time in Japan By MATSUOKA Ryoji; NAKAMURO Makiko; INUI Tomohiko
  43. Regional Convergence in Europe: A Dynamic Heterogeneous Panel Approach By Vogel, Johanna
  44. Impact of Duration of Primary Education on School Enrollment, Graduation and Drop-outs: A Cross- Country Analysis By Díaz Serrano, Lluís; Pérez, Jessica Helen
  45. Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life By Deckers, Thomas; Falk, Armin; Schildberg-Hörisch, Hannah
  46. Aging and Real Estate Prices: Evidence from Japanese and US Regional Data By Yumi Saita; Chihiro Shimizu; Tsutomu Watanabe
  47. Who gets the Top Jobs? The role of family background and networks in recent graduates' access to high status professions By Lindsey Macmillan; Claire Tyler; Anna Vignoles
  48. Ethnic Concentration and Extreme Right-Wing Voting Behavior in West Germany By Verena Dill
  49. Internal Geography, International Trade, and Regional Specialization By A. Kerem Coşar; Pablo D. Fajgelbaum
  50. The Regional Development Policy of Romania in the Post-Accession Period By Antonescu, Daniela
  51. Efficiency And Productivity Growth Across The Italian Regions: The Regional Divide Revisited By Pompei, Fabrizio
  52. Relative Standing and Life-Satisfaction: Does Unobserved Heterogeneity Matter? By Alem, Yonas
  53. Spillover Use and Innovation Success: What Role Does R&D Play? By Uwe Jirjahn
  54. Information Transmission and Vehicle Recalls: The Role and Regulation of Recall Notification Letter By Hugo Benitez-Silva; Yong-Kyun Bae
  55. Geographic Proximity and the Pro-trade Effect of Migration: State-level Evidence from Mexican Migrants in the United States By Michael Good
  56. Assessing Fiscal Capacity at the Local Government Level in South Africa By Margaret Chitiga-Mabugu; Nara Monkam
  57. The Lost Generation: Effects of Youth Labor Market Opportunities on Long-Term Labor Market Outcomes By Haaland, Venke Furre

  1. By: Öner, Özge (Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics)
    Abstract: This paper explores the role of retail as an amenity and how it contributes to place attractiveness. In this investigation the impact of accessibility to shops on average house prices is investigated using a fixed effect estimation. The analysis use data for Swedish municipalities through the years 2002-2008. The empirical design is constructed using the across-cities spatial equilibrium framework of Roback (1982), and house prices are assumed to reflect the attractiveness of municipalities. In order to capture the precise impact from retail access, mean wages, population density, unemployment, leisure service concentration, and municipal tax levels are controlled for. Results indicate a strong relationship between retail access and place attractiveness, where a retail-premium on house prices is found to be present for Swedish municipalities.
    Keywords: Urban amenities; housing market; retail sector
    JEL: L81 O18 P25
    Date: 2013–12–09
  2. By: Plamen Nenov (Norwegian Business School (BI))
    Abstract: This paper examines the importance of regional labor reallocation for unemployment and studies the link between inter-regional mobility and reallocation. I construct a multi-region economy with segmented labor markets, endogenously determined regional house prices, and limited worker mobility, and structurally estimate it using state level data for the U.S. The estimated model can account for the comovements of relative house prices and unemployment with gross out- and in-migration observed in a panel of U.S. states. The estimation reveals large reallocation barriers across local labor markets in the form of imperfect directed migration, relative house price differences compensating for labor market differences, and a high moving cost for unemployed workers. These reallocation barriers dampen the response of individual migration decisions to regional labor market differences and contribute to regional mismatch and to shifts in the U.S. Beveridge curve. I apply this framework to understand the reallocation effects of the recent housing bust in the U.S.
    Date: 2013
  3. By: Kristian Behrens; Gilles Duranton; Frédéric Robert-Nicoud
    Abstract: Large cities produce more output per capita than small cities. This higher productivity may occur because more talented individuals sort into large cities, because large cities select more productive entrepreneurs and firms, or because of agglomeration economies. We develop a model of systems of cities that combines all three elements and suggests interesting complementarities between them. The model can replicate stylized facts about sorting, agglomeration, and selection in cities. It also generates Zipf’s law for cities under empirically plausible parameter values. Finally, it provides a useful framework within which to reinterpret extant empirical evidence. Large cities produce more output per capita than small cities. This higher productivity may occur because more talented individuals sort into large cities, because large cities select more productive entrepreneurs and firms, or because of agglomeration economies. We develop a model of systems of cities that combines all three elements and suggests interesting complementarities between them. The model can replicate stylized facts about sorting, agglomeration, and selection in cities. It also generates Zipf’s law for cities under empirically plausible parameter values. Finally, it provides a useful framework within which to reinterpret extant empirical evidence.
    Keywords: sorting, selection, agglomeration, urban premium, city size, Zipf’s law
    Date: 2013–11
  4. By: Yavuz Arslan
    Abstract: I study the general equilibrium of the housing market in an economy populated by over-lapping generations of households. A contribution of the present paper is to solve for the housing market equilibrium in the presence of aggregate (interest rate) uncertainty with a realistic mortgage contract. In addition, households also face idiosyncratic uncertainty resulting from stochastic changes over the lifecycle in tastes (or need) for housing. In this environment, profit-maximizing banks offer fixed-rate mortgage (FRM) contracts to homebuyers. As seems plausible, each housing market transaction is subject to a fixed cost, which gives rise to S-s policy rules for housing transactions : existing homeowners change the size of their houses only if there is a sufficiently large change in the state of the economy (i.e., in interest rates, in their taste for housing, etc.). A plausibly calibrated version of the model is consistent with three empirically documented features of the housing market : (i) highly volatile housing prices and transaction volume, (ii) a strong positive correlation between transaction volume and housing prices, and (iii) a signi?cant negative relationship between interest rates and housing prices, which can rationalize a large part of the recent boom in housing prices in the U.S. and around the world.
    Keywords: House prices, Interest rates, Mortgage contracts
    JEL: D91 E21 G01 R21
    Date: 2013
  5. By: Böhlmark, Anders (Swedish Institute for Social Research, Stockholm University); Lindahl, Mikael (Swedish Institute for Social Research, Stockholm University)
    Abstract: -
    Keywords: school choice; independent schools; educational performance; external effects
    Date: 2013–12–04
  6. By: Lauridsen, Jørgen (Department of Business and Economics); Nannerup, Niels (Department of Business and Economics); Skak, Morten (Department of Business and Economics)
    Abstract: Economic as well as sociological theory bring some support to the hypothesis that personal home ownership per se makes individuals more responsible to society values and hence less inclined to commit offences against property or commit other kinds of crimes. Departing from this hypothesis, the present study seeks to provide empirical evidence for a link between levels of crime and local residential ownership rates. In the framework of a linear regression model and based on Danish municipality data, we establish empirical evidence for a negative relationship between local home ownership rates and local crime rates even when controlling for a broad range of economic and demographic variables.
    Keywords: Housing market; Violence crime; Simple crime; Neighbourhood deprivation
    JEL: C21 C23 C33 K42 P25 R31
    Date: 2013–12–03
  7. By: Kenneth N. Kuttner; Ilhyock Shim
    Abstract: Using data from 57 countries spanning more than three decades, this paper investigates the effectiveness of nine non-interest rate policy tools, including macroprudential measures, in stabilizing house prices and housing credit. In conventional panel regressions, housing credit growth is significantly affected by changes in the maximum debt-service-to-income (DSTI) ratio, the maximum loan-to-value ratio, limits on exposure to the housing sector and housing-related taxes. But only the DSTI ratio limit has a significant effect on housing credit growth when we use mean group and panel event study methods. Among the policies considered, a change in housing-related taxes is the only policy tool with a discernible impact on house price appreciation.
    JEL: G21 G28 R31
    Date: 2013–12
  8. By: Crescenzi, Riccardo (London School of Economics); Nathan, Max (London School of Economics); Rodríguez-Pose, Andrés (London School of Economics)
    Abstract: This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these 'proximities' on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes.
    Keywords: innovation, patents, proximities, cities, regions, knowledge spillovers, collaboration, ethnicity
    JEL: O31 O33 R11 R23
    Date: 2013–12
  9. By: Alfred A. Haug (Department of Economics, University of Otago, New Zealand); Vincent C. Blackburn (Finance and Investment New South Wales, Department of Education and Communities)
    Abstract: This study measures the efficiency of government secondary schools in New South Wales, Australia, using a recently developed methodology of two-stage semi-parametric modeling. In contrast to previous research comparing school performance, we control for prior academic achievement of students by looking at the changes in academic achievements over a two year period, at the school level, from 2008 to 2010, and employ detailed financial data for deriving the envelope for the production frontier of the schools. Using Simar and Wilson's (2007) double bootstrap procedure for data envelopment analysis (DEA), the study finds that schools with higher student retention rates, higher total student numbers, boys or girls only, and selective admissions do better than other schools. On the other hand, a negative influence comes from a school's location in provincial and outer metropolitan areas, a higher ratio of disadvantaged students at a school, and a school's specialization in areas such as languages, performing arts, sports, etc. A surprising result is that the socio-economic characteristics of the families of students attending the school has no significant effect on their academic performance, nor does the average of the years of service of the teachers at a specific school.
    Keywords: Two-stage data envelopment analysis; double-bootstrap; efficiency of high schools in New South Wales, Australia.
    JEL: C44 C61 H53 I21 I22
    Date: 2013–11
  10. By: Kristian Behrens; Frédéric Robert-Nicoud;
    Abstract: We develop a framework that integrates natural advantage, agglomeration economies, and firm selection to explain why large cities are both more productive and more unequal than small towns. Our model highlights interesting complementarities among those factors and it matches a number of key stylised facts about cities. A larger city size increases productivity via a selection process, and higher urban productivity provides incentives for rural-urban migration. Tougher selection increases both the returns to skills and earnings inequality in cities. We numerically illustrate a multi-city version of the model and explore the formation of new cities, the growth of existing cities, and changes in income inequality.
    Keywords: city size, urbanisation, agglomeration, firm selection, income inequality
    Date: 2013–07
  11. By: André K. Anundsen; Eilev S. Jansen (Statistics Norway)
    Abstract: The financial crisis has brought the interaction between housing prices and household borrowing into the limelight of economic policy debate. This paper examines the nexus of housing prices and credit in Norway within a structural vector equilibrium correcting model (SVECM) over the period 1986q2- 2008q4. The results establish a two-way interaction in the long-run, so that higher housing prices lead to a credit expansion, which in turn puts an upward pressure on housing prices. Interest rates influence housing prices indirectly through the credit channel. Furthermore, households’ expectations about future development in teir own income as well as in the Norwegian economy have a significant impact on housing price growth. Dynamic simulations show how shocks are propagated and amplified. When we augment the model to include the supply side, these effects are dampened. The paper is an extended version of Anundsen and Jansen (2013b) and it encompasses a previous Discussion Paper 651 (Anundsen and Jansen, 2011).
    Keywords: Housing prices; Household borrowing; Financial accelerator; Dynamic simulations
    JEL: C32 C52 E27 E44 G21 G28 R21 R31
    Date: 2013–10
  12. By: Marcela Perticara (Facultad de Economía y Negocios, Universidad Alberto Hurtado); Marcela Roman (CIDE, Universidad Alberto Hurtado)
    Abstract: This study addresses the phenomenon of permanence for long years of low performance (urban) schools, measured by SIMCE. We also analyze mobility of students to other schools of same or better quality. The results show that student´s mobility rates in these schools is almost 11%. Almost 30% of the students who change school go to a school of the same or worse quality. Students with greater probabilities of changing to better performance (higher quality) schools are those pertaining to groups with greater economic resources and cultural capital or better academic performance, which could account for strong segmentation that exists in the Chilean educational system.
    Keywords: Election of schools, Determinants of the change for low quality schools, outflow of students, Chile
    JEL: I2 O54
    Date: 2012–10
  13. By: Scott, James; Spencer, Liz
    Abstract: This paper explores the process that links low achievement, school exclusion and involvement in crime among African-Caribbean boys and young men. Based on qualitative interviews with pupils and teachers at a pioneering secondary school in London and also with African-Caribbean young men who had dropped out of or been excluded from other schools in the area, we identify key aspects of trouble at school and ways in which this can lead to trouble on the street. When students experience academic or behavioural problems they may drop out of or be formally excluded from school. Although schools are responsible for arranging alternative provision, in practice, once out of mainstream education, students are unlikely to gain academic qualifications and the problem of low achievement is exacerbated. They are then at a disadvantage in the job market, and their perceived lack of legitimate opportunities for making money may lead them to engage in crime. A complex interplay of factors appears to influence this low achievement school exclusion crime sequence, including the young persons family background, their neighbourhood, and the culture in which they are embedded. According to the students who took part in school interventions the main benefits of participation were seen as: being part of a community of support; improved motivation; higher academic achievement; the ability to express emotions constructively; and a greater sense of responsibility and self- worth. Our research suggests that by adopting an inclusive rather than exclusive policy, schools can buy time, retaining vulnerable young men within the educational system, keeping their options open until they have a chance to mature, rather than leaving them to the uncertainty of the street.
    Date: 2013–11–25
  14. By: Liddle, Brantley
    Abstract: Two important, increasing trends for those concerned about climate change to consider are urbanization/the importance of cities and energy used in transport—particularly energy used to achieve personal mobility. While national urbanization levels are not a good indicator of urban transport demand, there is an established negative relationship between urban density and such demand. This paper uses a consistent, well-known population-based framework (the STIRPAT model) and three separate, but highly related, datasets of cities from developed and developing countries (with observations from 1990, 1995, and 2001) to examine the relationship among private transport energy consumption, population, income, urban density, and several variables (e.g., network size and prices) that describe the nature of the public and private transport systems of those cities. The paper confirms the now well-established result that urban density is negatively correlated with urban private transport energy consumption. In terms of policies, improving private vehicle fuel efficiency, in particular, and increasing fuel price as well as other ownership/operating costs for private transport could have a substantial impact on lowering transport energy consumption. On the other hand, there is no evidence that further lowering the cost to riders of public transport would lower private transport energy consumption. For cities in developing countries, demographic variables (population size and urban density) are particularly important in determining private transport energy consumption. Also, private transport energy consumption is considerably less price sensitive in those developing country cities compared to cities in the most developed countries.
    Keywords: urban density; STIRPAT; transport energy demand; city-based data
    JEL: O18 Q50 Q54 R14 R40
    Date: 2013
  15. By: Öner, Özge (Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics)
    Abstract: This paper investigates returns to location in the retail sector and further analyzes the systematic variations across central and peripheral retail markets, as well as across different types of retailing activities. The empirical design utilizes individual level data, where the earnings of individuals working in the retail sector are used as a proxy for retail performance, which allows for a comparison across different types of retailing activities, although the sector as a whole is highly heterogeneous. In order to capture the urban-periphery interaction in retail markets, an accessible market potential measure is used, which allows for capturing the impact from potential demand in close proximity, in the region and from outside of the region separately. In the analysis, the impacts of spatial, store, and individual characteristics are analyzed for four types of retailing activities: food retailing, clothing, household retailing and specialized stores. The results are in line with previous theoretical arguments that rely on traditional location theories. There is a distinct variation between urban and peripheral retail markets, as well as between different types of retailing activities. Market size in close proximity is found to play an important role for stores selling goods for frequent purchase, whereas the relevant market extends beyond municipal borders for retailers selling goods for less frequent purchase. The competition effect is evident for non-central markets, driven from close proximity to large central markets.
    Keywords: Urban hierarchy; market accessibility; retail sector; location premium
    JEL: D31 E24 L81 P25
    Date: 2013–12–09
  16. By: Anna Piil Damm (Department of Economics and Business, Aarhus University); Christian Dustmann (University College London)
    Abstract: This paper investigates the effect of early exposure to neighborhood crime on subsequent criminal behavior of youth exploiting a unique natural experiment between 1986 and 1998 when refugee immigrants to Denmark were assigned to neighborhoods quasi-randomly. We find strong evidence that the share of young people convicted for crimes, in particular violent crimes, in the neighborhood increases convictions of male assignees later in life. No such effects are found for other measures of neighborhood crime including the rate of committed crimes. Our findings suggest social interaction as a key channel through which neighborhood crime is linked to individual criminal behavior.
    Keywords: Neighborhood effects, criminal convictions, social interactions, random allocation
    JEL: J0 H43
    Date: 2013–12
  17. By: Povilas Lastauskas; Eirini Tatsi
    Abstract: Space is important. The recent global financial crisis has vividly pointed to spatial patterns in economies’ reactions to the global economic shocks. This paper focuses on labor market responses and its interactions with criminal activities in a causal and spatial framework. We study the case of Germany as evidently this country’s economy has demonstrated resilience during the whirl of economic crisis. Our contribution is twofold: first, we lay down a parsimonious labor market model with search frictions, criminal opportunities, and, unlike earlier analyzes, productivity shocks which are important in explaining empirical regularity of criminal engagement. Second, we seek empirical support using data on the 402 German districts for 2009-2010, the years following the global financial crisis, in a setting that allows not only crime spatial multipliers but also inherent endogeneity of unemployment. Adverse income shocks clearly unfold a spatial nexus between unemployment and crime rates. More specifically, we find that youth unemployment plays a prominent role in explaining property crime, namely housing burglary. Our results are in line with previous research: neglecting endogeneity of unemployment understates its impact and employing the youth unemployment share instead of rate points to distinctive effects. The analysis offers important implications for countries that are currently undergoing fiscal consolidation and are experiencing high unemployment rates.
    Keywords: Crime, Unemployment, Spatial Econometrics, Economic Crisis
    JEL: C31 J64 K42 R10
    Date: 2013–09–12
  18. By: Sona Kalantaryan
    Abstract: In this study I empirically examine the impact of immigration on the dynamics of housing prices across Italian provinces from 1996 till 2007. The massive debate upon the impact of current intensive immigration flows on the wellbeing of the native Italian population and Europeans in general is mainly focused on labor market outcomes which is, however, only one of the channels though which the real income and wealth can alter. This paper contributes to our understanding of the influence that recent intensive immigration flows have on the Italian economy by estimating its impact on the housing market. Moreover, it exploits different methodological approach with respect to the approach dominating in migration literature. Using the number of valid residence permits as a measure of immigration stock and the self-reported housing values from the Survey of Households Income Wealth in Italy I find that the increase in the concentration of immigrants in the Italian provinces has a positive but declining effect on the average housing prices in provinces. The obtained results also indicate that an increase of in immigrant population leads to an increase in average housing prices. The performed Difference and System GMM estimations confirm both the positive response of average housing prices to the increase in immigrant population and the non-linearity of its response to immigrants’ concentration in all specifications.
    Keywords: Housing market, Immigration, GMM, House prices, Italy
    Date: 2013–11
  19. By: João Carlos Graça,; João Carlos Lopes; Cláudia Niza
    Abstract: The purpose of this paper is to identify relationships between value orientations, beliefs and economic behaviors of agents, on one side, and differences between levels of economic development, on the other. Empirical analysis is based on a sample of Portuguese municipalities and correspondent parishes, organized in groups set by an urban-versus-rural typology and according to levels of development as measured by GDP per capita. Different value orientations, beliefs and behaviors were identified. Four clusters were thereby considered, generically correspondent to “stabilization”, “economic nationalism”, “entrepreneurship” and “consumerism”. These clusters are related to the spatial dimensions considered.
    Keywords: Values, beliefs, economic behaviors, Portuguese regions
    Date: 2013–12
  20. By: Feichtinger, Paul; Salhofer, Paul
    Abstract: This paper empirically analyses a dataset of more than 11,000 agricultural land sales transactions between 1999 and 2007 in order to identify the factors influencing agricultural land prices in Bavaria. The authors confirm strong spatial relationships in their dataset, and conclude that neglecting this leads to biased estimates, especially if aggregated data are used. They therefore use a general spatial model combining a spatial lag and a spatial error model, and find that the price of a specific plot increases by 32 cents/m2 when average sales prices in surrounding areas increase by €1.Research results also confirm the strong influence of land quality, urban pressure and land market structure, and that the involvement of public authorities as seller or buyer increases sales prices. The authors find that the Fischler Reform did not considerably change the market and its determinants.
    Date: 2013–06
  21. By: Itismita Mohanty (NATSEM, University of Canberra); Robert Tanton (NATSEM, University of Canberra); Yogi Vidyattama (NATSEM, University of Canberra); Marcia Keegan (NATSEM, University of Canberra); Robert Cummins (Deakin University)
    Abstract: Subjective wellbeing is an indicator of how satisfied a person is with their life. It is becoming accepted as an indicator of happiness and overall wellbeing. This paper uses spatial microsimulation methods to estimate small area subjective wellbeing (SWB) in Australia. The procedure uses the Australian Unity Wellbeing Index survey and the 2011 Census data to derive small area estimates of SWB. Validation of the results shows that high and normal levels of SWB compare well to another source of SWB for small areas in the Murray Darling Basin, but levels of low SWB are not predicted as well, possibly due to the effect of local factors not available for the modelling on reducing SWB. Aggregate estimates compare well to HILDA estimates of SWB at a State level. These estimates are now available from the Australian Urban Research Infrastructure Network (AURIN) at the University of Melbourne..
    Keywords: Wellbeing, Regional welfare, Spatial Microsimulation
    JEL: I31 R13 C63
    Date: 2013–12
  22. By: Lakshmi Iyer; Xin Meng; Nancy Qian; Xiaoxue Zhao
    Abstract: This paper studies the policy determinants of economic transition and estimates the demand for labor in the infant private sector in urban China. We show that a reform that untied access to housing in urban areas from working for the state sector accounts for more than a quarter of the overall increase in labor supply to the private sector during 1986-2005. Using the reform to instrument for private-sector labor supply, we find that private-sector labor demand is very elastic. We provide suggestive evidence that the reform equalized wages across sectors and reduced private-sector rents.
    JEL: J2 O18 P2 P3
    Date: 2013–12
  23. By: Pei Kuang
    Abstract: This paper develops an equilibrium model with a housing collateral constraint in which rational agents are uncertain about the collateral price process. Bayesian learning by agents can endogenously generate booms and busts in collateral prices and significantly strengthen the role of the collateral constraint as an amplification mechanism through the interaction of agents' price beliefs, price realizations 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. The learning model can quantitatively account for the recent US boom-bust cycle in house prices, household debt and aggregate consumption dynamics during 2001-2008. The paper also demonstrates that the leveraged economy with a higher steady state leverage ratio is more prone to self-inforcing learning dynamics.
    Keywords: Boom-Bust, Collateral Constraints, Learning, Leverage, Housing
    JEL: D83 D84 E32 E44
    Date: 2013–11
  24. By: Deborah A. Cobb-Clark (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)); Sonja C. Kassenboehmer (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)); Trinh Le (Department of Economics, The University of Waikato); Duncan McVicar (Queen's University Management School, Queen's University, Belfast); Rong Zhang (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: Suspension from school is a commonly-used, yet controversial, school disciplinary measure. This paper uses unique survey data to estimate the impact of suspension on the educational outcomes of those suspended. It finds that while suspension is strongly associated with educational outcomes, the relationship is unlikely to be causal, but rather stems from differences in the characteristics of those suspended compared to those not suspended. Moreover, there is no evidence that suspension is associated with larger educational penalties for young people from disadvantaged family backgrounds compared to those from more advantaged family backgrounds. These results hold regardless of whether self-reported suspension or mother-reported suspension is considered. The absence of a negative causal impact of suspension on educational outcomes suggests that suspension may continue to play a role in school discipline without harming the educational prospects of those sanctioned.
    Keywords: School suspension, school discipline, educational achievement, educational attainment, causal effect
    JEL: I24 I28
    Date: 2013–10
  25. By: Meixing Dai; Frédéric Dufourt; Qiao Zhang
    Abstract: We introduce Large Scale Asset Purchases (LSAPs) in a New-Keynesian DSGE model that features distinct mortgage and corporate loan markets. We show that following a significant disruption of financial intermediation, central-bank purchases of mortgage-backed securities (MBS) are less effective at easing credit market conditions and stabilizing economic activity than outright purchases of corporate bonds. Moreover, the size of the effects crucially depends on the extent to which credit markets are segmented, i.e. to which a "portfolio balance channel" is at work in the economy. More segmented credit markets imply larger, but more local effects of particular asset purchases. With strongly segmented credit markets, large scale purchases of MBS are useful to stabilize the housing market but do little to mitigate the contractionary effect of the crisis on employment and output.
    Keywords: Financial frictions, mortgage-backed securities (MBS), corporate bonds, unconventional monetary policy, large scale asset purchases (LSAPs), portfolio balance channel, credit spreads.
    JEL: E32 E44 E52 E58
    Date: 2013
  26. By: Backman, Mikaela (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, Centre for Entrepreneurship and Spatial Economics (CEnSE), & Royal Institute of Technology (KTH)); Kohlhase, Janet (University of Houston)
    Abstract: Our paper investigates how diversity of the labor force influences the rate of new firm formation and the performance of new firms in urban areas. A diversified labor force within the firm and in the external environment influences the formation, survival and growth of firms. We explore these issues with both aggregate data at the municipal level and individual data at the firm level for the years 1993-2010. We measure diversity using entropy measures that account for a wider range of differences than is typically used. Our empirical analysis finds a positive influence of diversity of the labor force on the rate of new firm formation at the municipal level. At the level of an individual firm, we find that the diversity of the firm’s labor force is positively associated with the survival and growth of new firms. Our results add to the literature on the workings of agglomeration economies through variations in human capital, information spillovers and innovation.
    Keywords: Diversity; labor force; education; occupation; industry; new firms; formation; survival; growth
    JEL: C31 C33 L25 L26 R10
    Date: 2013–12–09
  27. By: Tom Broekel; Pierre-Alexandre Balland; Martijn Burger; Frank van Oort
    Abstract: The importance of network structures for the transmission of knowledge and the diffusion of technological change has been emphasized in economic geography. Since network structures drive the innovative and economic performance of actors in regional contexts, it is crucial to explain how networks form and evolve over time and how they facilitate inter-organizational learning and knowledge transfer. The analysis of relational dependent variables, however, requires specific statistical procedures. In this paper, we discuss four different models that have been used in economic geography to explain the spatial context of network structures and their dynamics. First, we review gravity models and their recent extensions and modifications to deal with the specific characteristics of networked relations. Second, we discuss the quadratic assignment procedure that has been developed in mathematical sociology for diminishing the bias induced by network dependencies. Third, we present exponential random graph models that not only allow dependence between observations, but also model such network dependencies explicitly. Finally, we deal with dynamic networks, by introducing stochastic actor oriented models. Strengths and weaknesses of the different approaches are discussed together with domains of applicability for the analysis of (knowledge) network structures and their dynamics.
    Keywords: Economic geography, knowledge networks, network models, quadratic assignment procedure, gravity model, exponential random graph model, stochastic actor-oriented model
    JEL: R11 O32 D85
    Date: 2013–12
  28. By: Tsangyao Chang (Department of Finance, Feng Chia University, Taichung, Taiwan); Wen-Chi Liu (Department of Finance, Da-Yeh University, Changhua, Taiwan); Goodness C. Aye; Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This study applies Panel KSS Test with a Fourier function through the Sequential Panel Selection Method, proposed by Chortareas and Kapetanios (2009), to test whether housing bubbles exist in South Africa using the ratio of housing price to income in 9 provinces (i.e., Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, North West, Northern Cape, and Western Cape). Whereas other panel-based unit root tests are joint tests of a unit root for all members of a panel and are incapable of determining the mix of integrated of order zero (I(0)) series and integrated of order one (I(1)) series in a panel setting, the SPSM-based panel KSS with a Fourier function can clearly identify how many and which series in the panel are stationary processes by classifying a whole panel into a group of stationary and non-stationary series. The empirical results from several traditional panel-based, as well as standard pure time-series unit root tests, indicate that house price/income ratios for the nine provinces studied here are either stationary or non-stationary. However, results from the SPSM-based panel KSS with a Fourier function unequivocally indicate that house price/income ratios are stationary for the 9 provinces under study. These results indicate that housing bubbles do not exist in the 9 provinces of South Africa. Our test results have important economic and policy implications for South Africa.
    Keywords: House Prices, Income, Panel KSS Unit Root Test, Fourier function, Sequential Panel Selection Method, Non-Stationary
    JEL: C23 R21
    Date: 2013–11
  29. By: Nicoletti, Cheti; Rabe, Birgitta
    Abstract: Using administrative data on schools in England, we estimate an education production model of cognitive skills at the end of secondary school. We provide empirical evidence of selfproductivity of skills and of complementarity between secondary school inputs and skills at the end of primary school. Our inference relies on idiosyncratic variation in school expenditure and child fixed effect estimation that controls for the endogeneity of past skills. The persistence in cognitive ability is 0.22 and the return to school expenditure is three times higher for students at the top of the past attainment distribution than for those at the bottom.
    Date: 2013–12–04
  30. By: Kasy, Maximilian
    Date: 2012–01
  31. By: Sanghamitra Bandyopadhyay; Elliott Green
    Abstract: We investigate the relationship between mortality decline and urbanization, which has hitherto been proposed by demographers but has yet to be tested. Using pooled-OLS, fixed effects first differences and long differences we find evidence for a robust negative correlation between crude death rates and urbanization. The use of Granger causality tests and instrumental variables suggest that this relationship is causal. Our preliminary results suggest that mortality decline causes urbanization through the creation of new cities rather than promoting urban growth in already-extant cities.
    Keywords: Urbanization, Mortality Decline, Demography, Population Growth
    JEL: J11 N90 O18 R00
    Date: 2013–11
  32. By: Diaz-Serrano, Luis (Universitat Rovira i Virgili); Pérez, Jessica (Universitat Rovira i Virgili)
    Abstract: Using panel data for non-OECD countries covering the period 1970-2012, this paper analyzes the impact of the duration of primary education on school enrollment, drop-outs and completion rates. The empirical results show that for children in elementary school one additional grade of primary education has a negative impact on enrollment rate, while the effect on drop-outs is positive. Analogously, we also observed that an additional grade in primary education reduces the enrollment rate in secondary education. These results are in line with the fertility model approach; that is, in developing and underdeveloped countries parents do not have incentive to send children to school given the high perceived present economic value of children.
    Keywords: primary education, school achievement, political institutions, educational reforms
    JEL: I21 I25 I28
    Date: 2013–12
  33. By: Alessandro Tampieri (CREA, University of Luxembourg)
    Abstract: Grade inflation or soft grading is acommon feature of the educational systems of many countries. In this paper I analyse grade inflation in a setting where students differ in social background, a firm decides its hiring strategy and the schools grading policy can be targeted according to student type. A targeted grade inflation may exacerbate the job opportunities of disad- vantaged students compared to advantaged students. This result emerges since the school has an incentive in inflating grades for a larger proportion of students coming from an advantaged social background,
    Keywords: soft grading, social background, signalling
    JEL: D82
    Date: 2013
  34. By: Benner, Maximilian
    Abstract: The idea of smart specialisation has gained high prominence in the discourse about EU regional policy. In the coming program period from 2014 to 2020 it is expected to be a major pillar of EU structural funds. The notion of smart specialisation incorporates some basic principles of evolutionary economics and centers on the idea of an entrepreneurial discovery process of new trajectories on the regional level. It does not, however, sufficiently take into account the relevance of individual agents, their actions, and their relations with each other in the identification, creation, development, and destruction of technological and economic trajectories. For this, a focus on micro-level dynamics that provide the base for experimentation is needed. This paper suggests developing smart specialisation into smart experimentation, a concept that is anchored not only in evolutionary economics, but also in relational economic geography.
    Keywords: regional policy, structural policy, smart specialisation, clusters, EU structural funds
    JEL: O18 O25 O33 R11 R12 R58
    Date: 2013–12–02
  35. By: Ballesteros, Marife M.; Dulay, Daisy
    Abstract: This paper draws lessons from international practices to determine the feasibility of developing mortgage-backed securitization (MBS) to expand housing finance to the underserved market in the country. Despite the risks of securitization, as evidenced by the recent US subprime crisis, the huge beneficial effects of opening up the capital market to individual investors and to borrowers that were previously out of reach is well-acknowledged in literature. Several countries developed MBS to facilitate and promote housing finance. The international best practices show that efficient securitization can be established based on: (1) clear regulatory framework; (2) prudent underwriting and valuation process; (3) reliable credit rating companies to mitigate moral hazards and adverse selection risks; and (4) the need for originators to have adequate capital so that warranties and representations can be taken seriously. In particular, the US subprime crisis highlights a major lesson that needs to be avoided, that is, the use of securitization as a tool for balance sheet arbitrage instead of funding and investments in the real economy. In the country, the National Home Mortgage Corporation (NHMFC) was established with the same intent as the US Fannie Mae and Freddie Mac. However, after three decades of existence, it was only in 2007 that NHMFC laid the building blocks to operate as a secondary mortgage institution (SMI). The corporation`s initial securitization issuances were successful and twice oversubscribed. However, to enable NHMFC to efficiently function as an SMI, government needs to undertake the following: (1) strengthen the housing finance industry and rationalize the role of HGC, HDMF, and NHMFC; (2) support NHMFC to improve its balance sheet and strengthen its organizational capabilities; (3) develop standardized housing loan documents and quality underwriting through mortgage insurance; (4) integrate/create credit information data base for all housing loan borrowers; (5) provide incentives to securitization through tax exemptions, reactivation of NHMFC limited sovereign guarantee, recognition of MBS bonds and NHMFC issuances as compliance to statutory liquidity requirements of financial institutions, etc; and (6) automation of MBS servicing and reporting.
    Keywords: housing finance, Philippines, mortgage-backed securitization
    Date: 2013
  36. By: Björklund, Gunilla (VTI); Mortazavi , Reza (Dalarna University)
    Abstract: In this paper we investigate how attitudes to health and exercise in connection with cycling influence the estimation of values of travel time savings in different kinds of bicycle environments (mixed traffic, bicycle lane in the road way, bicycle path next to the road, and bicycle path not in connection with the road). The results, based on two Swedish stated choice studies, suggest that the values of travel time savings are lower when cycling in better conditions. Surprisingly, the respondents do not consider cycling on a path next to the road worse than cycling on a path not in connection to the road, indicating that they do not take traffic noise and air pollution into account in their decision to cycle. No difference can be found between cycling on a road way (mixed traffic) and cycling in a bicycle lane in the road way. The results also indicate that respondents that include health aspects in their choice to cycle have lower value of travel time savings for cycling than respondents that state that health aspects are of less importance, at least when cycling on a bicycle path. The appraisals of travel time savings regarding cycling also differ a lot depending on the respondents’ alternative travel mode. The individuals who stated that they will take the car if they do not cycle have a much higher valuation of travel time savings than the persons stating public transport as the main alternative to cycling.
    Keywords: Value of travel time savings; Cyclists; Infrastructure; Attitudes; Health
    JEL: R40
    Date: 2013–12–10
  37. By: Cobb-Clark, Deborah A. (University of Melbourne); Kassenböhmer, Sonja C. (Melbourne Institute of Applied Economic and Social Research); Le, Trinh (University of Waikato); McVicar, Duncan (Melbourne Institute of Applied Economic and Social Research); Zhang, Rong (Melbourne Institute of Applied Economic and Social Research)
    Abstract: We use unique survey data linked to nearly a decade of administrative welfare data to examine the relationship between early marijuana use (at age 14 or younger) and young people's educational outcomes. We find evidence that early marijuana use is related to educational penalties that are compounded by high-intensity use and are larger for young people living in families with a history of welfare receipt. The relationships between marijuana use and both high school completion and achieving a university entrance score appear to stem from selectivity into the use of marijuana. In contrast, early marijuana use is associated with significantly lower university entrance score for those who obtain one and we provide evidence that this effect is unlikely to be driven by selection. Collectively, these findings point to a more nuanced view of the relationship between adolescent marijuana use and educational outcomes than is suggested by the existing literature.
    Keywords: educational attainment, educational achievement, cannabis, marijuana, socioeconomic disadvantage, welfare receipt
    JEL: I20 I24 I10 I18
    Date: 2013–12
  38. By: Autiero, Giuseppina (University of Salerno); O'Higgins, Niall (University of Salerno)
    Abstract: This paper develops a theoretical and empirical model on the influence of identity on educational choices which extends the existing literature in several directions. The theoretical model proposed here allows schooling choices to be independently influenced by both personal and social identities and, in contrast to previous work, the proposed empirical counterpart is derived directly from the theoretical model. The use of UK's British Cohort Study on individuals born in 1970 allows us to identify with precision the relevant explanatory factors and to appropriately control for potentially confounding factors. Both social and personal identities are found to have substantial and statistically significant effects on educational participation decisions and these impacts are robust to a variety of specifications. The key implication is that socio-psychological factors play an important role in children's school performance through their direct influence on the utility derived from studying.
    Keywords: identity, educational choice, locus of control
    JEL: D01 I21 J24
    Date: 2013–12
  39. By: M. Bourreau; P. Dogan
  40. By: Irina Starodubrovskaya (Gaidar Institute for Economic Policy)
    Abstract: Nowadays, the issue of inefficient social expenditures is not just a local item of social policy, rather it comes as far as the macroeconomic level, being considered in discussions about sources of financing of the national long-term development strategy.
    Keywords: Russian economy, regional economy, social expenditure, social polic
    JEL: H5 H7
    Date: 2013
  41. By: Eugster, Beatrix; Parchet, Raphaël
    Abstract: We propose a difference-in-differences strategy to identify the existence of interjurisdictional tax competition, and to estimate its spatial reach. Our strategy rests on differences between desired tax levels, determined by culture-specific preferences, and equilibrium tax levels, determined by interjurisdictional fiscal externalities as well as by preferences. While fiscal preferences differ systematically and demonstrably between French-speaking and German-speaking Swiss regions, we find that local income tax burdens do not change discretely at the language border but exhibit smooth spatial gradients. The slope of these gradients implies that tax competition constrains tax choices of jurisdictions with a preference for higher taxes up to a distance of around 20 kilometers. Hence, tax competition does constrain income taxation by local governments but its effect is confined to a small spatial scale.
    Keywords: Tax competition, fiscal federalism, culture
    JEL: H31 H71 Z10
    Date: 2013–11
  42. By: MATSUOKA Ryoji; NAKAMURO Makiko; INUI Tomohiko
    Abstract: This study attempts to further our understanding of social-class-based differences of school-aged children's effort levels by shedding light on the beginning of the inequality. Using four waves (from 1st to 4th grade students) of the Longitudinal Survey of Babies in the 21st Century collected in Japan, this study investigates how the effort gap emerges and widens in the first four years of compulsory education. The results of hierarchical linear model (HLM) growth curve analyses indicate that college-educated parents demonstrate "concerted cultivation" (Lareau 2003, 2011). Parental education background, a proxy of social class, relates to the usage of shadow education (i.e., cram schools and long distance learning), the length of a child's time spent on television viewing/video gaming, and the degree of parents' involvement in the child's learning at home. Findings of a hybrid fixed effects model show that these social-class-related parenting practices are associated with the levels and changes in children's learning time.
    Date: 2013–12
  43. By: Vogel, Johanna
    Abstract: This paper studies the effects of allowing for heterogeneous slope coefficients in the Mankiw, Romer and Weil (1992) model, based on panel data for 193 EU-15 regions from 1980 to 2005. We first estimate the model using conventional pooled panel data estimators, based on data at five-year intervals, allowing at most intercepts to differ across regions. Then we relax the restriction of homogeneous slope coefficients by estimating separate time-series models for each region based on annual data, using Pesaran and Smith's (1995) mean group estimator. To account for spatial dependence, we employ the common correlated effects approach of Pesaran (2006). Our empirical analysis indicates important differences across regions in the speed of adjustment to region-specific long-run paths for the level of income per capita. Allowing for heterogeneous coefficients doubles the speed of adjustment to 22% per year on average compared to the homogenous case, which suggests downward bias in the latter. We also find a positive and significant effect of the rate of investment, although the implied capital elasticity and the estimated long-run effect of investment are smaller than expected.
    Keywords: Convergence, European regions, dynamic heterogeneous panels, mean group estimation, cross-section dependence
    JEL: C23 O40 R11
    Date: 2013–12
  44. By: Díaz Serrano, Lluís; Pérez, Jessica Helen
    Abstract: Using a panel data for non-OECD countries covering the period 1970-2012, this chapter analyzes the impact of the duration of primary education on school enrollment, drop-out and completion rates. The empirical results show that for children in elementary school one ad- ditional grade of primary education have a negative impact on the enrollment rate, while the e ect on drop-outs is positive. Analogously, it is obtained that an additional grade in primary education reduces the enrollment rate in secondary education. These results are in line with the fertility model approach, that is, in developing and underdeveloped countries parents do not have incentive to send children to school given the high perceived economic value of children.
    Keywords: Educació primària, Rendiment escolar, Fracàs escolar, 37 - Educació. Ensenyament. Formació. Temps lliure,
    Date: 2013
  45. By: Deckers, Thomas; Falk, Armin; Schildberg-Hörisch, Hannah
    Abstract: According to economic theory, real income, i.e., nominal income adjusted for purchasing power, should be the relevant source of life satisfaction. Previous work, however, has only studied the impact of inflation adjusted nominal income and not taken into account regional differences in purchasing power. Therefore, we use a novel data set to study how regional price levels affect satisfaction with life. The data set comprises about 7 million data points that are used to construct a price level for each of the 428 administrative districts in Germany. We estimate pooled OLS and ordered probit models that include a comprehensive set of individual level, time-varying and time-invariant control variables as well as control variables that capture district heterogeneity other than the price level. Our results show that higher price levels significantly reduce life satisfaction. Furthermore, we find that a higher price level tends to induce a larger loss in life satisfaction than a corresponding decrease in nominal income. A formal test of neutrality of money, however, does not reject neutrality of money. Our results provide an argument in favor of regional indexation of government transfer payments such as social welfare benefits.
    Keywords: Life satisfaction; price index; neutrality of money
    JEL: D60 C23 D31
    Date: 2013–10–15
  46. By: Yumi Saita (Hitotsubashi University); Chihiro Shimizu (Reitaku University and University of British Columbia); Tsutomu Watanabe (The University of Tokyo)
    Abstract: In this paper, we empirically investigate how real estate prices are affected by aging. We run regional panel regressions for Japan and the United States. Our regression results show that, both in Japan and the U.S., real estate prices in a region are inversely correlated with the old age dependency ratio, i.e. the ratio of population aged 65+ to population aged 20-64, in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan than in the U.S. Based on the regression result for Japan and the population forecast made by a government agency, we estimate the demographic impact on Japanese real estate prices over the next 30 years. We find that it will be -2.4 percent per year in 2012-2040 while it was -3.7 percent per year in 1976-2010, suggesting that aging will continue to have downward pressure on land prices over the next 30 years, although the demographic impact will be slightly smaller than it was in 1976-2010 as the old age dependency ratio will not increase as much as it did before.
    Date: 2013–12
  47. By: Lindsey Macmillan (Department of Quantitative Social Science, Institute of Education, University of London); Claire Tyler (Department of Quantitative Social Science, Institute of Education, University of London); Anna Vignoles (Faculty of Education, University of Cambridge)
    Abstract: There is currently a debate in policy circles about access to "the upper echelons of power" (Sir John Major, ex Prime Minister, 2013). This research seeks to understand the relationship between family background and early access to top occupations. We find that privately educated graduates are a third more likely to enter into high status occupations than state educated graduates from similarly affluent families and neighbourhoods. A modest part of this difference is driven by educational attainment with a larger part of the story working through the university that the privately educated graduates attend. Staying on to do a Masters and higher degree is also a (smaller) part of the picture. We explore one potential mechanism which is often posited as a route in accessing top jobs: the role of networks. We find that although networks cannot account for the private school advantage, the use of networks provides an additional advantage over and above background and this varies by the type of top occupation that the graduate enters. A private school graduate who uses personal networks to enter into a top managerial position has a 1.5 percentage point advantage (on a baseline 6.1%) over a state school graduate who uses other ways to find their job.
    Keywords: intergenerational mobility, social mobility, networks
    JEL: J62 L14
    Date: 2013–12–04
  48. By: Verena Dill
    Abstract: Using data from the German Socio-Economic Panel (SOEP) and administrative data from 1996 to 2009, I investigate the question whether or not right-wing extremism of German residents is affected by the ethnic concentration of foreigners living in the same residential area. My results show a positive but insignificant relationship between ethnic concentration at county level and the probability of extreme right-wing voting behavior for West Germany. However, due to potential endogeneity issues, I additionally instrument the share of foreigners in a county with the share of foreigners in each federal state (following an approach of Dustmann/Preston 2001). I find evidence for the interethnic contact theory, predicting a negative relationship between foreigners’ share and right-wing voting. Moreover, I analyze the moderating role of education and the influence of cultural traits on this relationship.
    Keywords: Ethnic concentration, extreme right-wing voting, group threat, interethnic contact
    JEL: D72 R23 J15
    Date: 2013
  49. By: A. Kerem Coşar; Pablo D. Fajgelbaum
    Abstract: We introduce an internal geography to the canonical model of international trade driven by comparative advantages to study the regional effects of external economic integration. The model features a dual-economy structure, in which locations near international gates specialize in export-oriented sectors while more distant locations do not trade with the rest of the world. The theory rationalizes patterns of specialization, employment, and relative incomes observed in developing countries that opened up to trade. Our empirical analysis based on industry-level data from Chinese prefectures demonstrates that international trade is an important driver of industry location within China as the theory implies.
    JEL: F11 R12
    Date: 2013–12
  50. By: Antonescu, Daniela (Romanian Academy, National Institute of Economic Research)
    Abstract: The general objective of this study is to evaluate regional disparities and the territorial convergence under the impact of the cohesion policy, in the context of the European Union integration. The specific objectives on which the research included in this work focused are the following: specific objectives: (i) analysis and interpretation of main theories of regional science, evolution and influence factors, main representatives; (ii) analysis of regional disparities in Romania in different fields of activity; (iii) analysis of convergence at regional level within the European Union; (iv) assessing the impact of implementing regional policy in Romania; and (v) suggestions regarding a possible model of regional strategy for the future programming period, from the perspective of the Europe 2020 Strategy. The study contains certain quantitative and qualitative estimates on the economic effects generated by Structural Funds at regional level in Romania. The data and information presented in the research paper regarding the gross impact of allocated resources are verified by computing first an average level of obtained effects. By using currently existing qualitative and quantitative data and some analysis techniques of territorial convergence recognised at international level, the study presents the trends at regional and local level in certain fields of activity.
    Keywords: regional convergence, economic and social cohesion, regional programmes and policies, territorial disparities, evaluation
    JEL: R11 R12 F02
    Date: 2013–12
  51. By: Pompei, Fabrizio
    Abstract: In this paper we study the efficiency and total factor productivity growth of Italian regions by implementing a bootstrap Data Envelopment Analysis method. This approach allows us to perform a sensitivity analysis of the efficiency scores at regional level, in which human capital is included besides traditional inputs. Higher levels of average years of schooling were important for efficiency and TFP growth in the Northern and Central regions. Conversely, the overall scarce human capital accumulation in Southern regions negatively affected their performances. However, both DEA and analysis of decomposition of productivity growth, conducted by means of Malmquist’s index, highlighted that also in Southern regions, in which the growth rate of human capital and TFP was remarkable, the contribution of the improvement in pure efficiency to economic growth was totally nonessential.
    Keywords: Italian regions, Productivity, Data Envelopment Analysis
    JEL: O3 O4 R11
    Date: 2013–12–09
  52. By: Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impact of relative standing - both relative to others and to oneself over time - on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity.
    Keywords: life satisfaction; urban Ethiopia; relative standing; fixed effects
    JEL: I30 I31 O12
    Date: 2013–12–10
  53. By: Uwe Jirjahn
    Abstract: Based on data from Germany, this study finds a positive link between using knowledge spillovers from rivals and innovation success in establishments without R&D but not in establishments with R&D. This supports the hypothesis that rivals’ knowledge is more valuable to establishments that are below the frontier of technology and product development.
    Keywords: Corporate Spillover asymmetry, R&D, Learning, Product innovation
    JEL: L60 O31 O32
    Date: 2012
  54. By: Hugo Benitez-Silva (Department of Economics, Stony Brook University); Yong-Kyun Bae (Department of Global Studies, Pusan National University, Busandaehang-ro, 63beon-gil 2, Geumjeong-gu, Busan, Korea.)
    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 L62 L51
    Date: 2013–10
  55. By: Michael Good
    Abstract: I estimate the effect that migrants have on international trade between states of current residence and states of origin. The pro-trade effect of migration has been thoroughly examined since the mid-1990s, connecting both destination countries with origin countries and destination sub-national divisions with origin countries, respectively. However, a recent emphasis on the importance of geographic proximity to the migration-trade link leads me to pose the questions of how localized the trade-enhancing effect of migrants actually may be and how proximity matters for this relationship. My analysis provides the first results as to the migration-trade nexus at the state level for both places of destination and origin, relying on a unique data set allowing the mapping of Mexican-born migrants' US states of residence to Mexican states of origin; this ensures a more precise measurement of both migrant networks and other potential determinants of international trade, including the distance and mass variables fundamental to the standard gravity model. In addition to an augmented gravity model, I employ generalized propensity scores in examining the potential of nonlinearities in the migration-trade relationship. Furthermore, I unmask the distinct levels of geographic proximity that a single migration estimate disguises, estimating statistically significant elasticities of exports to both in-state and neighboring-state migration. These figures are not only qualitatively but also quantitatively important, corresponding to partial contributions of $1984 (in-state) and $538 (neighboring-state) to annual exports between respective US and Mexican states associated with each average additional migrant.
    JEL: F1 F2 J6
    Date: 2013–12–08
  56. By: Margaret Chitiga-Mabugu (Human Sciences Research Council, Pretoria, South Africa); Nara Monkam (Department of Economics, University of Pretoria)
    Abstract: In recent years, local governments in South Africa have faced daunting challenges, notably significant service delivery backlogs, poor financial management, corruption, and poor capacity due to lack of skills. As a result, numerous municipalities are deemed to be in financial distress, and already questions have been raised concerning their capability to efficiently deliver on expected outcomes on a sustainable basis and to cope with economic shocks. In this context, South Africa has embarked upon a comprehensive review of the local government equitable share (LES) formula which constitutes the main unconditional grant that accrues to municipalities. The objective of this paper is to assess fiscal disparities across municipalities using a comprehensive approach to measuring fiscal capacity. In assessing the overall level of fiscal capacity, the paper uses the Representative Revenue System (RRS) and the Representative Expenditure System (RES) methodologies. To the best of our knowledge, such comprehensive measures of fiscal capacity at the municipal level have yet to be applied in the South African context. Additionally, the contribution of this paper lies mainly in that it provides a more systematic measure of municipal fiscal capacity that should be taken into account in the revision and improvement of the current LES formula to ensure that the LES funds are equitably distributed. Furthermore, an appropriate measure of fiscal capacities across municipalities in South Africa will provide the Municipal Demarcation Board with a tool to re-determine municipal boundaries based on objective and empirical evidence rather than political considerations.
    Keywords: Fiscal capacity, Revenue capacity, Expenditure need, Revenue effort, RRS, RES
    JEL: H11 H20 H71 H72 H77
    Date: 2013–11
  57. By: Haaland, Venke Furre (UiS)
    Abstract: The labor market conditions that youth face at the typical age of labor market entry can impact their success in the labor market. Utilizing registry data for all Norwegian males born in 1961–1975, I demonstrate that local unemployment rates at the typical age of graduation from compulsory school (age 16) and high-school (age 19) have persistent, negative effects on males’ earnings, employment, and disability pension utilization when measured as late as age 35. With data on every male IQ, I am able to study how labor market conditions at age of graduation have varying effects for low- and high-ability males. As expected, low-ability males are particularly vulnerable to business cycles at the time of labor market entry. For low-ability youth, a 1 percentage point increase in the local unemployment rate at age 16 reduces earnings at age 35 by about 4 percent and increases the likelihood of being on disability pension by about 20 percent.
    Keywords: .
    JEL: A10
    Date: 2013–12–10

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