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on Urban and Real Estate Economics |
| By: | Brahim Boualam |
| Abstract: | Does a better cultural milieu make a city more livable for residents and improve its business environment for firms? I address this question by computing a measure of cultural specialization based on detailed occupational data for 346 U.S. metropolitan areas. I then estimate hedonic wage and rent equations and ask if differences in the cultural environment across cities capitalize into housing price and wage differentials. Simple correlations replicate standard results from the literature: cities that are more specialized in cultural and artistic occupations enjoy higher factor prices. Using time-series data, controlling for observable and unobservable city characteristics, and implementing alternative specifications weaken the magnitude of this effect. Estimations correcting for reverse causality and endogeneity ultimately show that the impact of culture on city attractiveness is negligible at best. Even though the arts and culture might be appealing to some people and firms, such determinants are not strong enough to affect factor prices at the metropolitan level. |
| Keywords: | Urban economics, location choice, local amenities, culture. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:gen:geneem:13121&r=ure |
| By: | Lee, Sanghoon (University of British Columbia); Lin, Jeffrey (Federal Reserve Bank of Philadelphia) |
| Abstract: | We present theory and evidence highlighting the role of natural amenities in neighborhood dynamics, suburbanization, and variation across cities in the persistence of the spatial distribution of income. Our model generates three predictions that we confirm using a novel database of consistent-boundary neighborhoods in U.S. metropolitan areas, 1880{2010, and spatial data for natural features such as coastlines and hills. First, persistent natural amenities anchor neighborhoods to high incomes over time. Second, downtown neighborhoods in coastal cities were less susceptible to the suburbanization of income in the mid-20th century. Third, naturally heterogeneous cities exhibit spatial distributions of income that are dynamically persistent. |
| Keywords: | Neighborhood change; Suburbanization; Locational fundamentals; Multiple equilibria |
| JEL: | N90 O18 R23 |
| Date: | 2013–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:13-48&r=ure |
| By: | Ben said, Foued |
| Abstract: | The aim of this paper is to explain the density variation among coastal cities by the availability of amenities inside cities. A spatial index of cities attractiveness is computed using the Kulldorff scan statistic technique. Spatial pattern of density clusters revealed that north delegations are more attractive than south delegations and historical business centers of big cities become less attractive for residential population. To assess the spatial interdependence between delegations and the impact of amenities on spatial density pattern we use a spatial Durbin model. Estimation results show delegations with high level of basic amenities like health and educational amenities are the more attractive. Delegations with high level of luxury amenities like clinics kids clubs and post offices exert a positive spillover effect on surrounding delegations. The lack of hospitals in a typical delegation exerted a negative indirect effect on population density inside surrounding delegations. |
| Keywords: | : urban population density, amenities, coastal cities, spatial Durbin model, scan statistic. |
| JEL: | C21 J1 O18 R23 |
| Date: | 2014–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52961&r=ure |
| By: | Hubert JAYET (Université Lille 1, EQUIPPE); Glenn RAYP (Ghent University, SHERPPA); Ilse RUYSSEN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Ghent University, SHERPPA); Nadiya UKRAYINCHUK (Université de Lille 2, EQUIPPE) |
| Abstract: | This paper analyses migratory streams to Belgian municipalities between 1994-2007. The Belgian population register constitutes a rich and unique database of yearly migrant in inflows and stocks broken down by nationality, which allows us to empirically explain the location choice of immigrants at municipality level. Specifically, we aim at separating the network effect, captured by the number of previous arrivals, from other location-specific characteristics such as local labor or housing market conditions and the presence of public amenities. We expect labor and housing market variables to operate at different levels and develop a nested model of location choice in which an immigrant first chooses a broad area, roughly corresponding to a labor market, and subsequently chooses a municipality within this area. We find that the spatial repartition of immigrants in Belgium is determined by both network effects and local characteristics. The determinants of local attractiveness vary by nationality, as expected, but for all nationalities, they seem to dominate the impact of network effects. |
| Keywords: | International migration, Location choice, Network effects, Nested logit |
| Date: | 2014–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2014004&r=ure |
| By: | Yamauchi, Futoshi; Parandekar, Suhas |
| Abstract: | This paper examines inequality patterns of school and teacher resources as well as student performance in the Philippines. School and teacher resources, measured by pupil classroom and teacher ratios and per-pupil teacher salary, became more unequal over time. Strikingly, a large portion of the variation is attributed to their within-division distributions, especially the non-city areas in each province (rural schools), where pupil classroom and teacher ratios have significantly positive returns in terms of student test scores. Concavity built into the education production function implies that reallocation of teachers and classrooms within a division can potentially increase average test scores. The estimates also imply that it is optimal to deploy young, inexperienced teachers to rural schools and reassign them to urban schools when the teachers are more experienced. |
| Keywords: | Tertiary Education,Education For All,Primary Education,Teaching and Learning,Secondary Education |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6748&r=ure |
| By: | David J. Deming |
| Abstract: | Value-added models (VAMs) are increasingly used to measure school effectiveness. Yet random variation in school attendance is necessary to test the validity of VAMs, and to guide the selection of models for measuring causal effects of schools. In this paper, I use random assignment from a public school choice lottery to test the predictive power of VAM specifications. In VAMs with minimal controls and two or more years of prior data, I fail to reject the hypothesis that school effects are unbiased. Overall, many commonly used VAMs are accurate predictors of student achievement gains. |
| JEL: | I2 I21 I24 J24 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19803&r=ure |
| By: | Diaz-Lanchas, Jorge (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Llano, Carlos (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.) |
| Abstract: | Recent research has determined the existence of a border effect on trade flows within a country associated to agglomeration economies, the size of the spatial unit of reference, as well as to alternative measures of transport costs. Using a micro-database on road freight shipments within Spain for the period 2003-2007, we consistently decompose the total value of municipal freight flows into the extensive and intensive margins at the European Nuts-5 (municipal), 3 (provincial) and 2 (regional) levels and study the impeding effect of actual generalized transport costs (as opposed to proxies given by the standard measures of distance and travel time). Establishing the superiority of this generalized measure of transport costs, we confirm the accumulation of trade flows up to a transport cost value of 330 euros, and conclude that this high density is not explained by the existence of administrative limits (border effects) but to significant changes in the trade flows-transport costs relationship. While this high density of trade coincides with low level administrative borders (municipal and provincial) as there is a positive and significant effect associated to them on all trade decomposition, it is not significant, or even negative, at a larger regional level. To support this hypothesis, we identify significant thresholds in the trade flows-transport costs relationship that are calculated by way of the Chow test of structural change. These breakpoints allow us to split the sample and control for successive administrative borders in both the extensive and intensive margins. Relying on these thresholds we define relevant market areas corresponding to specific transport costs values that portrait a consistent urban hierarchy system of the largest Spanish cities within a radius of about 330 euros, thereby providing clear evidence of the predictions made by the central place theory. |
| Keywords: | Municipal Freight Flows; Transport Costs; Breakpoints; Market Areas; Urban Hierarchy; Central Place Theory. |
| JEL: | F14 F15 O18 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpaper:201310&r=ure |
| By: | Ali Protik; Steven Glazerman; Julie Bruch; Bing-ru Teh |
| Keywords: | TTI, Low-Perrforming Schools, Behavioral Responses, Teachers |
| JEL: | I |
| Date: | 2013–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7996&r=ure |
| By: | Constant, Amelie F. (George Washington University, Temple University); Schüller, Simone (IRVAPP); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | Ethnic groups tend to agglomerate and assemble, mostly in urban areas. While ethnic clustering is critically debated in societies and the consequences for economic outcomes are under debate in research, the process is not yet well understood. A separate literature has also examined the cultural and ethnic identity of immigrants and how these affect their economic performance and societal integration. However, an unexplored channel connects ethnic clustering with ethnic identity formation. Therefore this paper examines the role of ethnic geographic clustering in the sociocultural integration of immigrants. It employs survey data from the German Socio-Economic Panel, combined with disaggregated information at a low geographical level from the unexploited German full census of 1970 and 1987. We employ the exogenous placement of immigrants during their recruitment in the 1960s and 1970s and find that local co-ethnic concentration affects immigrants' cultural integration. Residential ethnic clustering strengthens immigrants' retention of an affiliation with their respective country of origin and weakens identification with the host society. The effects are nonlinear and only become significant at relatively high levels of co-ethnic concentration for the minority identity and at very low levels of local concentration for the majority identity. Our findings are robust to the use of an instrumental variable approach. |
| Keywords: | ethnic minorities, residential segregation, ethnic identity, spatial dispersion, ethnic enclaves |
| JEL: | J15 R23 Z10 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7868&r=ure |
| By: | Yamauchi, Futoshi |
| Abstract: | This paper aims to estimate the impact of school-based management on students'test scores in the Philippines. Estimation results using double differencing combined with propensity score matching show that school-based management increases the average national achievement test score by 4.2 points over three years. The increase in mathematics reached 5.7 points. This is larger than the estimate previously reported from the Philippines, probably because the sample schools had learned about implementation of school-based management from experiences accumulated in other provinces that introduced it earlier. The empirical results also show that schools with experienced principals and teachers are eager to introduce school-based management. |
| Keywords: | Education For All,Tertiary Education,Primary Education,Teaching and Learning,Secondary Education |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6747&r=ure |
| By: | David Albouy; Andrew Hanson |
| Abstract: | Tax benefits to owner-occupied housing provide incentives for housing consumption, offsetting weaker disincentives of the property tax. These benefits also help counter the penalty federal taxes impose on households who work in productive high-wage areas, but reinforce incentives to consume local amenities. We simulate the effects of these benefits in a parameterized model, and determine the consequences of various tax reforms. Reductions in housing tax benefits generally reduce inefficiency in consumption, but increase inefficiency in location decisions, unless they are accompanied by tax-rate reductions. The most efficient policy would eliminate most tax benefits to housing and index taxes to local wage levels. |
| JEL: | H24 H77 R13 R21 R31 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19815&r=ure |
| By: | Hyun-Soo Choi; Harrison Hong; Jeffrey Kubik; Jeffrey P. Thompson |
| Abstract: | Using data on household portfolios and mortgage originations, we find that households residing in a city with few publicly traded firms headquartered there are more likely to own an investment home nearby. Households in these areas are also less likely to own stocks. This only-game-in-town effect is more pronounced for households living in high credit quality areas, who can access financing to afford a second home. This effect also becomes pronounced for households living in low credit quality areas after 2002 when securitization made it easier for these households to buy second homes. Cities with few local stocks have in equilibrium higher price-to-rent ratios, making it more attractive to rent, and lower (primary residence) homeownership rates. |
| JEL: | G02 G11 G12 R21 R3 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19798&r=ure |
| By: | Janeba, Eckhard; Osterloh, Steffen |
| Abstract: | Despite the well-developed empirical literature on local tax competition, little is known about the actual spatial structure of inter-municipal competition. Assuming that competition takes place only among neighbours (as in the empirical literature) is at odds with the theoretical approaches where all jurisdictions compete simultaneously. In this paper we use a survey conducted among mayors in the German state of Baden-Württemberg to show that the perceived intensity of competition for firms varies considerably between jurisdictions and can mainly be explained by the size and location of the jurisdiction. Based on these findings, we develop a sequential tax competition model in which urban centres compete with other urban centres and rural jurisdictions in their own neighbourhood. This model predicts that larger jurisdictions do not necessarily rely more on capital taxes; in case they face strong competition with more distant competitors, larger cities even have lower capital taxes. In addition, we discuss how the model compares to a standard simultaneous approach and show that results from our sequential model are in line with trends in local taxation in Baden-Württemberg. -- |
| Keywords: | local tax competition,survey,intensity of competition,asymmetric tax competition |
| JEL: | H71 H73 H77 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:12005r&r=ure |
| By: | Diette, Timothy M. (Washington and Lee University); Uwaifo Oyelere, Ruth (Georgia Tech) |
| Abstract: | The influx of immigrants has shifted the ethnic composition of public schools in many states including North Carolina. Recent evidence from North Carolina suggests that increases in Limited English students' concentration have led to a slight decline in performance solely for students at the top of the achievement distribution. The heterogeneous peer effects by achievement level lead us to explore in this paper whether the increased immigration has differential effects by gender and race. Utilizing fixed effects methods that allow us to address possible endogeneity with respect to the schools' students attend, we find heterogeneous peer effects of limited English students on natives' performance in math and reading. Specifically, we find no peer effects on white females but small negative effects on males and blacks on average. |
| Keywords: | immigrants, student achievement, peer effects, education, race, gender, limited English students |
| JEL: | I20 I21 J15 J24 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7856&r=ure |
| By: | Hart, Cassandra M. D. (University of California, Davis); Sojourner, Aaron J. (University of Minnesota) |
| Abstract: | This paper studies the relationship between teacher unionization and student achievement. Generally stable patterns of teacher unionization since the 1970s have historically presented challenges in measuring the effects of unionization on educational production. However, the blossoming of the charter school sector in recent decades provides fertile ground for study because while most charters are non-union, teachers at some charters have unionized. Using a generalized difference-in-difference approach combining California union certification data with student achievement data from 2003-2012, we find that, aside from a one-year dip in achievement associated with the unionization process itself, unionization does not affect student achievement. |
| Keywords: | teacher, labor union, student achievement, charter school, education, labor productivity |
| JEL: | I21 J5 J45 J24 H75 D24 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7887&r=ure |
| By: | Kondo, Kazumine |
| Abstract: | This paper examines whether Japanese regional banks entering the banking market in other prefectures, including neighboring prefectures, can increase their lending-based income. To stimulate local economies and support local small- and medium-sized enterprises (SMEs), the current Japanese government’s policies for regional banks require these banks to engage in region-based relationship banking practices. In this study, three lending-based income measures were used as dependent variables, and estimation was made using panel data from Japanese regional banks. As a result, it was determined that regional banks that enter markets in other prefectures experience positive effects in all three lending-based income measures. Moreover, it was determined that regional banks whose headquarters are located in non-urban areas derive greater benefit from their loan businesses upon entry into other prefectures, including neighboring prefectures, where economic activity is more vibrant than regional banks whose headquarters are located in urban areas. |
| Keywords: | regional banks, non-urban regional banks, region-based relationship banking, entries into other prefectures, lending-based income |
| JEL: | G21 |
| Date: | 2014–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:52978&r=ure |
| By: | Gilles Dufrénot (DEFI, Château Lafarge, Route des Milles, F-13290, Aix-en-Provence, Les Milles, France); Adelya Ospanova (DEFI, Château Lafarge, Route des Milles, F-13290, Aix-en-Provence, Les Milles, France); Alain Sand-Zantman (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the e-ffect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the speci-cities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before -first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership. |
| Keywords: | Transition economies, Kazakhstan, Macroeconomic stabilization, Central Asian CIS countries |
| JEL: | O11 P20 P51 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1344&r=ure |
| By: | Florence Goffette-Nagot (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon); Modibo Sidibé (Duke University, Department of Economics - Duke University (Durham, USA)) |
| Abstract: | The public housing sector provides housing units at below-market rents, potentially allowing its tenants to save for a downpayment more quickly than they would have otherwise. In this paper, we analyze the effect of a spell in public housing on age at first-time homeownership using the French Housing Survey. We use a pseudo-panel approach that takes into account the specificities of the local housing market, to derive individual tenure transitions from multiple cross-sections data. Using an IV strategy to control for a potential selection into public housing, we jointly estimate public housing tenancy and duration before first-time homeownership, and take into account unobserved heterogeneity. Our results indicate that a spell in public housing increases the hazard to homeownership, supporting the idea that, in France, the public housing policy provides an important pathway to homeownership. |
| Keywords: | Homeownership; Public housing; Tenure choice; Duration model; Unobserved heterogeneity |
| Date: | 2014–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00925717&r=ure |
| By: | Andrea Morescalchi (IMT Lucca Institute for Advanced Studies); Fabio Pammolli (IMT Lucca Institute for Advanced Studies); Orion Penner (IMT Lucca Institute for Advanced Studies); Alexander M. Petersen (IMT Lucca Institute for Advanced Studies); Massimo Riccaboni (IMT Lucca Institute for Advanced Studies) |
| Abstract: | Recent studies on the geography of knowledge networks have documented a negative impact of physical distance and institutional borders upon research and development (R&D) collaborations. Though it is widely recognized that geographic constraints and national borders impede the diffusion of knowledge, less attention has been devoted to the temporal evolution of these constraints. In this study we use data on patents filed with the European Patent Office (EPO) for OECD countries to analyze the impact of physical distance and country borders on inter-regional links in four different networks over the period 1988-2009: (1) co-inventorship, (2) patent citations, (3) inventor mobility and (4) the location of R&D laboratories. We find the constraint imposed by country borders and distance decreased until mid-1990s then started to grow, particularly for distance. We further investigate the role of large innovation "hubs" as attractors of new collaboration opportunities and the impact of region size and locality on the evolution of cross-border patenting activities. The intensity of European cross-country inventor collaborations increased at a higher pace than their non-European counterparts until 2004, with no significant relative progress thereafter. Moreover, when analyzing networks of geographical mobility, multinational R&D activities and patent citations we cannot detect any substantial progress in European research integration above and beyond the common global trend. |
| Keywords: | Geography of knowledge, Networks of Innovators, European integration, Spatial proximity, Cross-border collaboration, Gravity model |
| JEL: | O31 O38 R12 R23 D89 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ial:wpaper:1/2014&r=ure |
| By: | Alex Chinco; Christopher Mayer |
| Abstract: | This paper uses transactions-level deeds records to examine how out-of-town second house buyers contributed to mispricing in the housing market. We document that out-of-town second house buyers behaved like misinformed speculators and drove up both house price and implied-to-actual rent ratio (IAR) appreciation rates in cities like Phoenix, Las Vegas, and Miami in the mid 2000s. Our analysis has 3 parts. First, we give evidence that out-of-town second house buyers behaved like misinformed speculators. Compared to local second house buyers, out- of-town second house buyers had worse exit timing (i.e., were likely misinformed) and were also less able to consume the dividend from their purchase (i.e., were likely speculators). Second, we show that increases in out-of-town second house buyer demand predict increases in future house price appreciation rates and IAR appreciation rates. A 10%pt increase in the fraction of sales made to out-of-town second house buyers is associated with a 6%pt increase in house price appreciation rates and a 9%pt increase in IAR appreciation rates over the course of the next year in that city. Third, we address the issue of reverse causality using a novel econometric strategy. The key insight is that an increase in the fundamental value of owning a second house in Phoenix is a common shock to the investment opportunity set of all potential second house buyers. If changes to fundamentals were driving both price dynamics as well as out-of-town second house buyer demand, we would expect to see large jumps in house price and IAR appreciation rates preceded by increases in out-of-town second house buyer demand from across the country. The data do not display this symmetric response, and are thus inconsistent with reverse causality. We conclude by discussing both the economic magnitudes of out-of-town second house buyer flows and the broader applicability of our econometric approach. |
| JEL: | G14 R3 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19817&r=ure |
| By: | Hawranek, Franziska; Schanne, Norbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper analyzes job referral effects that are based on residential location. We use georeferenced record data for the entire working population (liable to social security) and the corresponding establishments in the Rhine-Ruhr metropolitan area, which is Germany's largest (and EU's second largest) metropolitan area. We estimate the propensity of two persons to work at the same place when residing in the same neighborhood (reported with an accuracy of 500m×500m grid cells), and compare the effect to people living in adjacent neighborhoods. We find a significant increase in the probability of working together when living in the same neighborhood, which is stable across various specifications. We differentiate these referral effects for socioeconomic groups and find especially strong effects for migrant groups from former guestworker countries and new EU countries. Further, we are able to investigate a number of issues in order to deepen the insight on actual job referrals: distinguishing between the effects on working in the same neighborhood and working in the same establishment - probably the more accurate measure for job referrals - shows that the latter yield overall smaller effects. Further, we find that clusters in employment although having a significant positive effect play only a minor role for the magnitude of the referral effect. When we exclude short distance commuters, we find the same probabilities of working together, which reinforces our interpretation of this probability as a network effect." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsvermittlung, informelle Kommunikation, soziales Netzwerk - Auswirkungen, soziale Umwelt, Beschäftigungseffekte, Arbeitsort, Wohnort, Inländer, Einwanderer, ausländische Arbeitnehmer, Arbeitsplatzwahl, peer group, Integrierte Erwerbsbiografien, Rhein-Region, Ruhrgebiet, Nordrhein-Westfalen, Bundesrepublik Deutschland |
| JEL: | J20 R23 |
| Date: | 2014–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201401&r=ure |
| By: | Rebecca Herman; Cheryl Graczewski; Susanne James-Burdumy; Matthew Murray; Irma Perez-Johnson; Courtney Tanenbaum |
| Keywords: | school turnaround, School Improvement Grants, school operational authority, support for turnaround, monitoring of turnaround |
| JEL: | I |
| Date: | 2013–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7997&r=ure |
| By: | Seth Freedman; Ginger Zhe Jin |
| Abstract: | We examine whether social networks facilitate online markets using data from a leading peer-to-peer lending website. Borrowers with social ties are consistently more likely to have their loans funded and receive lower interest rates. However, most social loans do not perform better ex post, except for loans with endorsements from friends contributing to the loan or loans with group characteristics most likely to provide screening and monitoring. We also find evidence of gaming on borrower participation in social networks. Overall, our findings suggest that return-maximizing lenders should be careful in interpreting social ties within the risky pool of social borrowers. |
| JEL: | D53 D82 L81 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19820&r=ure |
| By: | Mayneris, F.; Py, L. |
| Abstract: | We propose in this paper a critical review of the literature on urban enterprise zones. The results that emerge from the papers published over the last twenty years vary a lot across studies. Several explanations can account for these apparently conflicting results. Technical tools and empirical methods for the evaluation of such policies have greatly improved since the 1990’s. Moreover, it seems that the efficiency of urban enterprise zones depends on zone characteristics, industrial sector and policy design. Further research in this area should try to better take into account general equilibrium effects, in order to provide a more accurate measure of the welfare implications of these policies. |
| Keywords: | enterprise zones, literature review, heterogeneous effects. |
| JEL: | R12 R38 R58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:474&r=ure |
| By: | Daron Acemoglu; Camilo García-Jimeno; James A. Robinson |
| Abstract: | We study the direct and spillover effects of local state capacity using the network of Colombian municipalities. We model the determination of local and national state capacity as a network game in which each municipality, anticipating the choices and spillovers created by other municipalities and the decisions of the national government, invests in local state capacity and the national government chooses the presence of the national state across municipalities to maximize its own payoff. We then estimate the parameters of this model using reduced-form instrumental variables techniques and structurally (using GMM, simulated GMM or maximum likelihood). To do so we exploit both the structure of the network of municipalities, which determines which municipalities create spillovers on others, and the historical roots of local state capacity as the source of exogenous variation. These historical instruments are related to the presence of colonial royal roads and local presence of the colonial state in the 18th century, factors which we argue are unrelated to current provision of public goods and prosperity except through their impact on their own and neighbors’ local state capacity. Our estimates of the effects of state presence on prosperity are large and also indicate that state capacity decisions are strategic complements across municipalities. As a result, we find that bringing all municipalities below median state capacity to the median, without taking into account equilibrium responses of other municipalities, would increase the median fraction of the population above poverty from 57% to 60%. Approximately 57% of this is due to direct effects and 43% to spillovers. However, if we take the equilibrium response of other municipalities into account, the median would instead increase to 68%, a sizable change driven by equilibrium network effects. |
| JEL: | H4 H7 P16 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19813&r=ure |
| By: | Bloze, Gintautas (Department of Leadership and Corporate Strategy); Skak, Morten (Department of Business and Economics) |
| Abstract: | An increasing number of households consume housing beyond the primary home as owners of a second home. Economic studies of second homeownership are still very scarce, and the present empirical study fills this gap to some extent. It is based on Danish survey data combined with administrative register data and presents estimations of the probability of owning a second home, the decision to let the second home and the number of let weeks per year. Also income elasticities for primary and second housing demand are estimated. We find a conventional monotonic increase in demand elasticities for primary housing demand for non-owners of second homes; however, owners of second homes have the highest income elasticity in the middle income group. |
| Keywords: | Second home; Homeownership; Letting; Income elasticity; Denmark |
| JEL: | D71 D85 R20 Z13 |
| Date: | 2014–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2014_001&r=ure |
| By: | Diewert, Erwin; Shimizu, Chihiro |
| Abstract: | The paper uses hedonic regression techniques in order to decompose the price of a house into land and structure components using real estate sales data for Tokyo. In order to get sensible results, a nonlinear regression model using data that covered multiple time periods was used. Collinearity between the amount of land and structure in each residential property leads to inaccurate estimates for the land and structure value of a property. This collinearity problem was solved by using exogenous information on the rate of growth of construction costs in Tokyo in order to get useful constant quality subindexes for the price of land and structures separately. |
| Keywords: | House price indexes, land and structure components, time dummy hedonic regressions, spline functions, flexible functional forms, Fisher ideal indexes |
| JEL: | C2 C23 C43 D12 E31 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:3&r=ure |
| By: | Laséen, Stefan (Monetary Policy Department, Central Bank of Sweden); Strid, Ingvar (Monetary Policy Department, Central Bank of Sweden) |
| Abstract: | "Leaning against the wind" – a tighter monetary policy than necessary for stabilizing inflation around the inflation target and unemployment around a long-run sustainable rate – has been justified as a way of reducing household indebtedness. In a recent paper Lars Svensson claims that this policy is counterproductive, since a higher policy rate actually leads to an increase (and not a decrease) in real debt and the debt-to-GDP ratio. In this note we offer some comments and extensions to Svensson´s analysis. In particular, we take Svensson´s debt model to the data and show that it provides an incomplete account of short term debt dynamics. Further, the overall analysis of the effects of monetary policy on debt rests on the rather strong assumption that debt is independent of the policy rate, conditional on housing prices. The policy responses advocated by Svensson can therefore be questioned. More importantly, our exercises with a modified model of debt dynamics enables further understanding of how different assumptions affect the assessment of the effects of monetary policy on debt. |
| Keywords: | House prices; Mortgage Debt; Monetary policy; Bayesian Estimation; Structural VAR |
| JEL: | C32 E21 E31 E32 E44 E52 R21 R31 |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0283&r=ure |
| By: | Facchini, Giovanni (University of Nottingham); Patacchini, Eleonora (Syracuse University); Steinhardt, Max (Helmut Schmidt University, Hamburg) |
| Abstract: | Using novel information from the German Socio-Economic Panel for the period 1996-2011, we document that migrants with a German friend are more similar to natives than those without a local companion along several important dimensions, including engagement in social activities, concerns about the economy, interest in politics and broad policy issues like the environment, crime and xenophobia. When looking at the determinants of friendship acquisition, we find that the acquisition of a new job is the cause (rather than the product) of social network variations. Other factors driving the acquisition of a native friend include the number of years the migrant has spent in the country, the birth of a child, residential mobility and additional education in the host country. |
| Keywords: | culture, migration, friendship formation, ethnic minorities |
| JEL: | A14 J15 J61 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7881&r=ure |
| By: | Dennis Guignet |
| Abstract: | Numerous nonmarket valuation studies have examined the impacts of environmental commodities on house prices, but little attention has been given to how shifts in these commodities affect the occurrence of home transactions, and the resulting welfare implications. Using a novel theoretical framework and an empirical analysis of homes impacted by petroleum releases from underground storage tanks, this paper demonstrates that changes in environmental quality can significantly impact a household’s decision to sell their home, and that this change in behavior has important implications towards theoretical welfare measures and empirical estimates. A discrete time duration model is estimated using a panel of single-family homes from 2000 to 2007. The dependent variable is the annual occurrence of a sale at each individual home. I find that contamination and cleanup activities in close proximity significantly impact the probability that a home is sold. Most striking is that this probability is reduced by about 50% during ongoing cleanup. This finding is most pronounced among lower quality homes and where an exposure pathway is present. |
| Keywords: | housing market, property transactions, discrete time duration model , hedonic analysis, leaking underground storage tanks, groundwater contamination |
| JEL: | D62 I18 Q51 Q53 R20 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201401&r=ure |
| By: | Saita, Yumi; Shimizu, Chihiro; Watanabe, Tsutomu |
| 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. |
| Keywords: | aging, dependency ratio, declining population, real estate prices |
| JEL: | G12 J11 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:2&r=ure |
| By: | Wong, SK; Chau, KW; Karato, K; Shimizu, Chihiro |
| Abstract: | Since real estate is heterogeneous and infrequently traded, the repeat sales model has become a popular method to estimate a real estate price index. However, the model fails to adjust for depreciation, as age and time between sales have an exact linear relationship. This paper proposes a new method to estimate an age-adjusted repeat sales index by decomposing property value into land and structure components. As depreciation is more relevant to the structure than land, the property’s depreciation rate should depend on the relative size of land and structure. The larger the land component, the lower is the depreciation rate of the property. Based on housing transactions data from Hong Kong and Tokyo, we find that Hong Kong has a higher depreciation rate (assuming a fixed structure-to-property value ratio), while the resulting age adjustment is larger in Tokyo because its structure component has grown larger from the first to second sales. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:5&r=ure |
| By: | Konstantin Gluschenko |
| Abstract: | This paper studies the behavior of the entire distribution of consumer prices across Russian regions over the decade of 2001–2010. The analysis uses non-parametric techniques, exploiting the distribution dynamics approach. The results obtained evidence that regional relative prices in Russia remained fairly stable during 2001-2010. No significant changes are found in price dispersion and cross-region price distribution over this time span. Rank mobility was very low with seasonal surges. The pattern of quantity mobility manifests neither convergence nor divergence of regional prices. However, a long-run price distribution has an unpleasant feature, predicting potential emergence of a price convergence club in the Russian Far East. |
| Keywords: | price convergence; price dispersion; price mobility; market integration; stochastic kernel |
| JEL: | P22 R10 R15 |
| Date: | 2013–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2013-1061&r=ure |
| By: | Bosch, Mariano (Inter-American Development Bank); Farré, Lídia (IAE Barcelona (CSIC)) |
| Abstract: | This paper investigates the relationship between immigration and the size of the informal or underground economy. Using regional variation for the Spanish provinces we find that the massive immigration wave between 2000 and 2009 is highly correlated to the share of unregistered employment, a proxy for the size of the underground or informal labor market. We estimate that a 10 percentage points increase in the share of immigrants in a region generates between a 3 and 8 percentage points increase in unregistered employment. We also find that the controversial regularization of illegal aliens conducted in 2005 substantially reduced the number of illegal workers but did not affect the relationship between immigration and informality. |
| Keywords: | immigration, informal economy, amnesty |
| JEL: | J61 O17 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7843&r=ure |
| By: | Margherita Comola (Paris School of Economics (Université Paris 1 Panthéon-Sorbonne)); Mariapia Mendola (University of Milan Bicocca and Centro Studi Luca d’Agliano) |
| Abstract: | This paper provides the first direct evidence on the determinants of link formation among immigrants in the host society. We use a purposely-designed survey on a representative sample of Sri Lankan immigrants living in Milan to study how migrants form social links among them and the extent to which this network provides them material support along three different dimensions: accommodation, credit, job-finding. Our results show that both weak and strong ties are more likely to exist between immigrants who are born in close-by localities at origin. The time of arrival has a U-shaped effect: links are more frequent between immigrants arrived at the same time, and between long-established immigrants and newcomers. Once the link is formed, material support is provided mainly to relatives while early migrant fellows are helpful for job finding. |
| Keywords: | Migration, Networks, Sri-Lanka, Milan |
| JEL: | J15 D85 C45 |
| Date: | 2013–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:353&r=ure |
| By: | Morissette, Rene Chan, Winnie Lu, Yuqian |
| Abstract: | Canada's oil reserves are concentrated in three Canadian provinces: Alberta, Saskatchewan, and Newfoundland and Labrador. Oil prices received by Canadian oil producers more than doubled between 2001 and 2008. The proportion of young men employed in the oil industry differs markedly across provinces and education levels. Taken together, these facts suggest that the increases in world oil prices observed between 2001 and 2008 may have induced cross-educational and cross-provincial variation in labour demand and male wage growth in Canada. Using data from the Canadian Labour Force Survey, this study exploits this variation in wage growth in order to estimate the elasticity of young men's labour market participation and school enrollment with respect to wages. |
| Keywords: | Education, training and learning, Labour, Students, Employment and unemployment, Educational attainment, Wages, salaries and other earnings |
| Date: | 2014–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2014353e&r=ure |
| By: | Carlotta Balestra; Joyce Sultan |
| Abstract: | Housing is a core element of people’s material living standards. It is essential to meet basic needs, such as for shelter from weather conditions, and to offer a sense of personal security, privacy and personal space. Good housing conditions are also essential for people’s health and affect childhood development. Further, housing costs make up a large share of the household budget and constitute the main component of household wealth. Residential satisfaction is a broad concept, and is associated with multidimensional aspects including physical, social, and neighbourhood factors, as well as psychological and sociodemographic characteristics of the residents. By taking advantage of two household surveys (the EU-SILC ad hoc module on housing for European countries; and the Gallup World Poll for OECD countries and other major economies), this paper uses ordered probit analysis to explore the link between households’ residential satisfaction and a number of variables related to individuals, the households to which they belong, and the characteristics of the dwelling and neighbourhood where they live. The major findings of this analysis show a complex relationship between residential satisfaction and housing characteristics including neighbourhood’s features. Individual and household socio-demographic characteristics (e.g. age, gender, education) play a secondary role once dwelling and neighbourhood features are controlled for. Understanding the factors that lead to satisfaction with housing and residential environment is key for planning successful and effective housing policies. Le logement est un aspect essentiel des conditions de vie matérielles. Il doit à la fois répondre aux besoins fondamentaux, en offrant notamment un abri contre les intempéries, et donner aux individus un sentiment de sécurité et un espace d’intimité. Les conditions de logement jouent également un rôle capital dans la santé des individus et le développement des enfants. Par ailleurs, le coût du logement représente une part importante du budget des ménages et constitue leur principal patrimoine. La notion de satisfaction vis-à-vis du logement est un concept large, multidimensionnel, et incluant des facteurs physiques et sociaux ainsi que certaines caractéristiques psychologiques et sociodémographiques des résidents. Combinant deux enquêtes différentes sur les conditions de vie des ménages (le module EU-SILC sur le logement et l’enquête Gallup World Poll sur les pays de l’OCDE ainsi que sur les économies majeures), ce papier fait usage d’une analyse en probit ordonné afin d’explorer le lien entre la satisfaction des ménages vis-à-vis de leur logement et un ensemble de facteurs ayant attrait à la situation personnelle des individus ainsi que les caractéristiques de leur logement et de la zone de résidence. Cet article caractérise une relation complexe entre la satisfaction vis-à-vis du logement et ces caractéristiques ainsi que certains aspects du voisinage. Les caractéristiques sociodémographique du ménage (comme l’âge, le genre, le niveau d’éducation…) n’ont finalement qu’un rôle mineur dans l’explication de la satisfaction pour le logement. Une bonne compréhension des facteurs visant à un accroissement de la satisfaction vis-à-vis du logement est essentielle pour l’élaboration de politiques effectives sur le logement. |
| Keywords: | well-being, housing satisfaction, neighbourhood, surveys, household, bien-être, satisfaction à l’égard du logement, zone de résidence, ménage, enquête |
| Date: | 2013–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stdaaa:2013/5-en&r=ure |
| By: | João Leão (Office for Strategy and Studies (GEE), Portuguese Ministry of Economy; ISCTE- University Institute of Lisbon); Guida Nogueira (Office for Strategy and Studies (GEE), Portuguese Ministry of Economy) |
| Abstract: | The youth unemployment rate in Europe increased to very high levels after the great recession of 2008, reaching 23% in European Union and 45% in southern European countries. We examine the causes of the high youth unemployment rate which is consistently bigger than the overall unemployment rate. The empirical evidence shows that the youth unemployment rate depends crucially of the level of the overall unemployment rate and on the variation of the unemployment rate. |
| Keywords: | Keywords: Southern Europe, unemployment, youth unemployment. |
| JEL: | E24 J64 J13 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0051&r=ure |
| By: | Bat Batjargal |
| Abstract: | What is the interrelationship among formal institutions, social networks, and new venture growth? Drawing on the theory of institutional polycentrism and social network theory, we examine this question using data on 637 entrepreneurs from four different countries. We find the confluence of weak and inefficient formal institutions to be associated with a larger number of structural holes in the entrepreneurial social networks. While the effect of this institutional order on the revenue growth of new ventures is negative, a network’s structural holes have a positive effect on the revenue growth. Furthermore, the positive effect of structural holes on the revenue growth is stronger in an environment with a more adverse institutional order (i.e., weaker and more inefficient institutions). The contributions and implications of these findings are discussed. |
| Keywords: | Institutional polycentrism, networks, new venture growth, Institutions, Networks, Entrepreneurship, New ventures, and Emerging economies |
| JEL: | B52 C12 D02 L26 M13 |
| Date: | 2013–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2013-1060&r=ure |
| By: | Michael Stein; Daniel Piazolo; Stoyan V. Stoyanov |
| Abstract: | This study focuses on global real estate return distributions. For our analysis, we employ the class of stable distributions that has become prominent in the real estate literature. We add to the literature by undertaking a global-scale analysis for the first time. By using data since the early 1990s, we show that there is considerable variation in the tail weights of return distributions, both between countries as well as among sectors within the countries. It is important to note that the tail parameters vary over time as well. Our results strengthen the recently discovered notion about non-constant tail parameters in stable distributions, which contradicts earlier findings about constant tail parameters. Additionally, we argue that merely changes over time were to be discovered, rather than pure methodological facts driving the variation, which is in contrast to the initial assumption associated with constant tail parameters. Our results provide an extensive overview of the tailedness of global real estate markets and offer a comprehensive insight into differing market distributions. |
| Keywords: | Real Estate return distributions; stable distributions, tail dependence |
| JEL: | G01 G10 G12 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0465&r=ure |
| By: | Kurt van Dender; Martin Clever |
| Abstract: | Over the past 10 to 15 years, the growth of passenger vehicle travel volumes has decelerated in several high-income economies and, in some, growth has stopped or turned negative. Drawing from work presented to and discussions at the ITF Roundtable on long-run trends in travel demand, held in November 2012, this paper presents evidence on known causes of this change in growth rates and discusses knowledge gaps, hypothetical explanations and policy implications. |
| Date: | 2013–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2013/9-en&r=ure |