nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒03‒15
34 papers chosen by
Steve Ross
University of Connecticut

  1. The Vulnerability of Minority Homeowners in the Housing Boom and Bust By Patrick Bayer; Fernando Ferreira; Stephen L. Ross
  3. Migration and Regional Sorting of Skills By Tano, Sofia
  4. European market integration and the determinants of firm localization: The case of Poland By Gehringer, Agnieszka; Krenz, Astrid
  5. Back to the Future: Migration, Matching and the Power Couple Phenomenon in Sweden By Tano, Sofia; Westerlund, Olle; Nakosteen, Robert; Zimmer, Michael
  6. Market Potential and Regional Economic Growth in Spain, 1860-1930 By Julio Martínez-Galarraga; Daniel A. Tirado-Fabregat; Rafael González-Val
  7. Hedonic Price-Rent Ratios, User Cost, and Departures from Equilibrium in the Housing Market By Robert J. Hill; Iqbal A. Syed
  8. Using Bankruptcy to Reduce Foreclosures: Does Strip-down of Mortgages Affect the Supply of Mortgage Credit? By Wenli Li; Ishani Tewari; Michelle J. White
  9. Hospital Treatment Rates and Spill-Over Effects: Does Ownership Matter? By Badi H. Baltagi; Yin-Fang Yen
  10. How do banking crises affect aggregate consumption? Evidence from international crisis episodes By Gerlach-Kristen, Petra; O'Connell, Brian; O'Toole, Conor
  11. Benefits to elite schools and the formation of expected returns to education: Evidence from Mexico City By Ricardo Estrada; Jérémie Gignoux
  12. Academic peer effects with different group assignment policies : residential tracking versus random assignment By Garlick, Robert
  13. “Decomposition of Differences in PISA Results in Middle Income Countries” By Sandra Nieto; Raul Ramos
  14. Is crime in Turkey economically rational? By Lauridsen, Jørgen T.; Zeren, Fatma; Ari, Ayse
  15. "Social Isolation of Evacuees in Fukushima" (in Japanese) By Masahiro Shoji; Takayuki Akaike
  16. On universities' long-term effects on regional value creation and unemployment: The case of Germany By Kroll, Henning; Schubert, Torben
  17. Impact of intermittent screening and treatment for malaria among school children in Kenya : a cluster randomized trial By Halliday, Katherine E.; Okello, George; Turner, Elizabeth L.; Njagi, Kiambo; Mcharo, Carlos; Kengo, Juddy; Allen, Elizabeth; Dubeck, Margaret M.; Jukes, Matthew C.H.; Brooker, Simon J.
  18. Decentralization and Spatial Allocation Policy of Public Investment in Indonesia and Japan By Mitsuhiko Kataoka; Kodrat Wibowo
  19. Outcome Uncertainty, Governance Structure, and Attendance: A Study of the Korean Professional Football League By Young Hoon Lee; Hayley Jang
  20. Cultural diversity and cities – the intercultural integration approach By Irena Guidikova
  21. The Impact of Internal Migration on Local Labour Markets in Thailand By Eliane El Badaoui; Eric Strobl; Frank Walsh
  22. Ethnic Goods and Immigrant Assimilation By Abdulloev, Ilhom; Epstein, Gil S.; Gang, Ira N.
  23. The Effect of Large-Scale Retailers on Price Level: Evidence from Japanese data for 1977-1992 By SHIMOTSU Katsumi
  24. The impact of early childhood education on early achievement gaps : evidence from the Indonesia early childhood education and development (ECED) project By Jung, Haeil; Hasan, Amer
  26. Public Transit Bus Procurement: The Role of Energy Prices, Regulation and Federal Subsidies By Shanjun Li; Matthew E. Kahn; Jerry Nickelsburg
  27. Natural Disasters and the Birth, Life and Death of Plants: The Case of the Kobe Earthquake By Matthew A. Cole; Robert J R Elliott; Toshihiro Okubo; Eric Strobl
  28. 'Can't Get Enough': Prejudice, Contact Jobs and the Racial Wage Gap in the US By Laouénan, Morgane
  30. Understanding the Role of Time-Varying Unobserved Ability Heterogeneity in Education Production By Weili Ding; Steven F. Lehrer
  33. Conflict and segregation in networks: An experiment on the interplay between individual preferences and social influence By Penélope Hernández; Guillem Martínez-Canovas; Manuel Muñoz-Herrera; Lea Ellwardt
  34. Impact of Internal Migration on Political Participation in Turkey By Ali T. Akarca; Aysit Tansel

  1. By: Patrick Bayer (Duke University); Fernando Ferreira (University of Pennsylvania); Stephen L. Ross (University of Connecticut)
    Abstract: This paper examines mortgage outcomes for a large, representative sample of individual home purchases and refinances linked to credit scores in seven major US markets in the recent housing boom and bust. We find that among those with similar credit scores, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These differences are not explained by the likelihood of receiving a subprime loan or by differential exposure to local shocks in the housing and labor market and are especially pronounced for loans originated near the peak of the boom. There is also heterogeneity within minorities: black and Hispanics that live in areas with lower employment rates and that have high debt to income ratios are the driving force of the observed racial differences in foreclosures and delinquencies. Our findings suggest that those black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise serious concerns about homeownership as a mechanism for reducing racial disparities in wealth.
    Keywords: Mortgage, Foreclosure, Delinquency, Minority, Homeownership, Housing Bust, Wealth Disparities
    JEL: I38 J15 J71 R21
    Date: 2014–02
    Date: 2014
  3. By: Tano, Sofia (Department of Economics, Umeå School of Business and Economics)
    Abstract: This thesis consists of an introductory part and four papers. Paper [I] estimates jointly the choice of whether to enroll in education and the choice of location among young people. Being a particularly mobile group, the location choices of young individuals shape much of the regional distribution of human capital, growth, and local public sector budgets. Applying Swedish register data on nest leavers, we seek to determine factors deciding the education and location choice of young people. The results indicate a systematic selection higher education based on school grades and preferences for locations with higher per capita tax bases and with lower shares of elderly people. The importance of family networks for the choice of location is confirmed. Paper [II] examines how individual ability, reflected by the grade point average (GPA) from comprehensive school affects the probability of migration among university graduates. The econometric analysis applies detailed micro-data of two entire cohorts of young individuals retrieved from the Swedish population registers. The results indicate that individual abilities are strongly influential both concerning completion of a university degree and for the migration decision. In addition, we find a positive relationship between the GPA and migrating from regions with lower per capita tax bases and/or a relatively small share of highly educated individuals. Analogously, individuals with a high GPA tend to stay in more densely populated regions, suggesting a clustering of human capital vis-à-vis school grades. Paper [III] estimates the relationship between migration across labour market regions and the subsequent changes in earnings by using the GPA from the final year of comprehensive school as a proxy for ability. This measure aims to capture heterogeneity in the returns to migration for individuals conditional on education attainment. Using Swedish register data on young adults, a difference-in-difference propensity score matching estimator is applied to estimate income differences measured up to seven years after migration. The results show variation between different ability groups regarding the returns to regional migration. There are indications of larger gains for individuals holding top grades, while the bottom half seems to benefit less, or face slightly negative effects. Paper [IV] examines whether power couple formation and the location choice of such couples are driven by factors already inherent in young people during their formative school years. The paper also extends the analysis by modeling location choice among different sizes of labor market areas, given different power statuses of the couples. Based on analysis of Swedish register data, we produce evidence that power spouses evolve from the population of high achieving school age individuals; the latter is identified by high academic performance during their years of compulsory school. Regarding location choice, the results indicate that power couples display a relatively high tendency to migrate from their regions of origin to large cities.
    Keywords: Agglomeration; early markers; human capital; income; interregional migration; individual ability; location choice; marital matching; propensity score matching; regional clustering; skills; university graduates
    JEL: I21 I23 J12 J24 J31 J61 R23
    Date: 2014–03–04
  4. By: Gehringer, Agnieszka; Krenz, Astrid
    Abstract: The paper analyses empirically the determinants of firms´ localization in Poland. We use regional data of the sixteen Polish administrative regions over the period 2003 to 2010 to examine which role agglomeration forces and other factors played in explaining the choice to operate in a certain location. Our results suggest that agglomeration economies stemming in particular from the R&D sector, as well as human capital and the infrastructure positively influence the regional localization of firms. Poland´s accession to the European Union had a positive impact for the location decision of new firms in the Polish economy. --
    Keywords: localization,agglomeration economies,knowledge externalities,Polish regions,European integration
    JEL: F14 F15 F23 R11 R12
    Date: 2014
  5. By: Tano, Sofia (Department of Economics, Umeå School of Business and Economics); Westerlund, Olle (Department of Economics, Umeå School of Business and Economics); Nakosteen, Robert (University of Massachusetts, Amherst, USA); Zimmer, Michael (University of Evansville, USA)
    Abstract: This paper contributes to a recent and growing literature addressing the phenomenon of high-credentialed power couples. It seeks to determine the extent to which precursors of power couple formation and location choice of couples at midlife are evident in young people during their formative school years. Its second objective is to extend the analysis of location choice by modeling location choice among different sizes of labor market areas, given different power status of the couples. Based on analysis of Swedish register data, we produce evidence that power spouses evolve from the population of high achieving school age individuals, the latter identified by high academic performance during the years of compulsory schooling. Other factors such as parental education and family income also play a role. In addition, there appear to be regional disparities in the evolution of power couples. The evidence also points to the presence self-selection arising from unmeasured heterogeneity, both in spouse matching and to a lesser extent in location choice. Regarding location choice, the results indicate that power couples display a disproportionate tendency to migrate from their regions of origin to large cities.
    Keywords: Early markers; education; location choice; marital matching
    JEL: I21 J12 J24
    Date: 2014–02–27
  6. By: Julio Martínez-Galarraga (Universitat de València,València,Spain); Daniel A. Tirado-Fabregat (Universitat de València,València,Spain); Rafael González-Val (Universidad de Zaragoza, Zaragoza, Spain)
    Abstract: In this paper we employ parametric and nonparametric techniques to analyse the effect of the changes registered on regional market potential on the growth of Spanish regions during the period 1860-1930. The study of the Spanish experience during these years conforms a case study that allows analyzing whether the construction of new transport infrastructure, as well as the changes in trade policy, that affected the relative market potential of the Spanish regions, ended up shaping regional growth trajectories. In order to carry out the analysis we make use of new evidence on regional inequality patterns in the long term based on recent estimations of per capita GDP for NUTS III Spanish regions (provinces) and an a la Harris measure of regional market potential that takes into account the economic distance between territories according to the changes registered in transport networks, the variations in the actual transport costs and the tariff policy followed over the period. Our results show a clear positive influence of market potential on regional economic growth, particularly along the years 1900-1930.
    Keywords: market potential, New Economic Geography, regional growth, economic history
    JEL: R0 N9 O18 N64 F14
    Date: 2014–03
  7. By: Robert J. Hill (Karl-Franzens University of Graz); Iqbal A. Syed (University of New South Wales)
    Abstract: Disequilibrium in the housing market can be detected by comparing the actual price-rent ratio with its equilibrium counterpart obtained from the user-cost condition. Empirical implementation of this idea, however, is problematic because of quality differences between sold and rented dwellings. We develop a hedonic method that resolves this problem even in the presence of omitted variables. Applying this method to a data set consisting of 730,000 individual price and rent transactions we find that quality adjusting significantly reduces the actual price-rent ratio. We then insert these quality adjusted price-rent ratios into the user cost condition to check for departures from equilibrium.
    Keywords: House price and rent indexes; Quality adjustment; Hedonic imputation; Capital gains; Fisher index; Real estate market; Rental yield
    JEL: C43 E01 E31 R31
    Date: 2014–03
  8. By: Wenli Li; Ishani Tewari; Michelle J. White
    Abstract: We assess the credit market impact of allowing mortgage “strip-down”—that is, reducing the principal of underwater residential mortgages to the current market value of the property for homeowners in Chapter 13 bankruptcy. Our identification is provided by a series of U.S. Circuit Court of Appeals decisions in the early 1990’s that introduced mortgage strip-down in parts of the U.S., followed by a 1993 Supreme Court ruling that abolished it all over the U.S. We find that the Supreme Court decision led to a short-term reduction of 3% in mortgage interest rates and a short-term increase of 1% in mortgage approval rates, but only the approval rate effect persists in longer sample periods. In contrast, the circuit court decisions to allow strip-down did not have consistent effects on mortgage terms. We also show that strip-down had little effect on default rates by homeowners with existing mortgages. Taken together, these results suggest that mortgage lenders responded weakly to both the adoption and abolition of strip-down because strip-down had little effect on their profits from mortgage lending. According to these findings, re-introducing strip-down of mortgages in bankruptcy as a foreclosure-prevention program would have only small and transient effects on the supply of mortgage loans.
    JEL: G21 K2 K35
    Date: 2014–03
  9. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Yin-Fang Yen (School of Public Administration, Southwestern University in Finance and Economics, China)
    Abstract: This paper studies the effect of hospital ownership on treatment rates allowing for spatial correlation among hospitals. Competition among hospitals and knowledge spillovers generate significant externalities which we try to capture using the spatial Durbin model. Using a panel of 2342 hospitals in the 48 continental states observed over the period 2005 to 2008, we find significant spatial correlation of medical service treatment rates among hospitals. We also get mixed results on the effect of hospital ownership on treatment rates that depends upon the market structure where the hospital is located and which varies by treatment type.
    Keywords: Spatial Lag, Hospital Ownership, Spillover Effects, Panel Data
    JEL: I10 C21
    Date: 2014–01
  10. By: Gerlach-Kristen, Petra; O'Connell, Brian; O'Toole, Conor
    Abstract: This paper considers the effect of systemic financial crises on aggregate consumption. Using a sample of 23 countries over 32 years, we find that consumption growth seems lower during banking crises, crises following credit booms and crises following house price booms. Moreover, the response to income growth seems to change, which may be due to credit constraints. In the long run, consumption appears to be linked to income, housing and other financial wealth.
    Keywords: Financial Crises/Consumption/Housing Wealth/Panel Error Correction Model/Weak Exogeneity
    Date: 2014–10
  11. By: Ricardo Estrada (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We study the effects of admission into elite public high schools in Mexico City on students' expected earnings, arguing these effects provide an indication of the value-added those schools produce. Using data for the centralized and exam-based allocation of students into schools and an adapted regression discontinuity design strategy, we find that admission substantially increases learning achievement, and also the future earnings and returns students expect from a college education, but no effect on the earnings expected with high school education alone. This suggests that students believe that the benefits from their elite education are complements to a college education.
    Keywords: Elite high schools ; Earnings expectations ; Returns to education ; Beliefs formation
    Date: 2014–02–26
  12. By: Garlick, Robert
    Abstract: This paper studies the relative academic performance of students tracked or randomly assigned to South African university dormitories. Tracked or streamed assignment creates dormitories where all students obtained similar scores on high school graduation examinations. Random assignment creates dormitories that are approximately representative of the population of students. Tracking lowers students'mean grades in their first year of university and increases the variance or inequality of grades. This result is driven by a large negative effect of tracking on low-scoring students'grades and a near-zero effect on high-scoring students'grades. Low-scoring students are more sensitive to changes in their peer group composition and their grades suffer if they live only with low-scoring peers. In this setting, residential tracking has undesirable efficiency (lower mean) and equity (higher variance) effects. The result isolates a pure peer effect of tracking, whereas classroom tracking studies identify a combination of peer effects and differences in teacher behavior across tracked and untracked classrooms. The negative pure peer effect of residential tracking suggests that classroom tracking may also have negative effects unless teachers are more effective in homogeneous classrooms. Random variation in peer group composition under random dormitory assignment also generates peer effects. Living with higher-scoring peers increases students'grades and the effect is larger for low-scoring students. This is consistent with the aggregate effects of tracking relative to random assignment. However, using peer effects estimated in randomly assigned groups to predict outcomes in tracked groups yields unreliable predictions. This illustrates a more general risk that peer effects estimated under one peer group assignment policy provide limited information about how peer effects might work with a different peer group assignment policy.
    Keywords: Tertiary Education,Secondary Education,Teaching and Learning,Primary Education,Educational Sciences
    Date: 2014–02–01
  13. By: Sandra Nieto (Faculty of Economics, University of Barcelona); Raul Ramos (Faculty of Economics, University of Barcelona)
    Abstract: Our objective is to analyse the role of teacher and school quality to explain differences in students’ educational outcomes. With this aim, we use PISA microdata for 10 middle income and 2 high income countries and we apply decomposition methods in order to identify the role of these factors for different groups of students. Our results show that school and teacher quality and better practices matter even in different institutional settings. From a policy perspective, this evidence supports actions addressed at improving both factors in order to reduce cross-country differences but also between students at the top and bottom distribution in terms of socio-economic characteristics.
    Keywords: Educational outcomes, teacher and school quality, PISA, decomposition methods, middle-income countries. JEL classification: J24, I21, I25
    Date: 2014–03
  14. By: Lauridsen, Jørgen T. (Department of Business and Economics); Zeren, Fatma (Inonu University); Ari, Ayse (Istanbul University)
    Abstract: The study investigates whether crime in Turkey is governed by economic rationality. An economic model of rational behaviour claims that the propensity to commit criminal activities is negatively related to risk of deterrence. Potential presence of higher risk profiles for certain population segments is investigated. Panel data aggregated to sub-regional levels and observed annually for the years 2008 to 2010 are applied. Controls for endogeneity among criminal activity level and risk of deterrence, intra-regional correlation, inter-temporal heterogeneity and spatial spillover are exerted. A positive effect of risk of deterrence on criminal activity is found which conflicts with the hypothesised economic rationality. Certain population segments are identified as obvious target groups for regional policy initiatives aiming to reduce criminal activities. These are in particular unemployed and males. On the other hand, educational attainment, poverty and youngsters are less obvious target groups, while the relationship between population density and crime is ambiguous. Finally, spatial spillover patters related to criminal activities seem to be highly relevant, thus implying that while initiatives toward criminal activities may well be formed at the regional level, coordination across regions might obviously be called for.
    Keywords: Crime; risk of deterrence; Turkey; panel data; spatial spillover
    JEL: C21 C23 K42
    Date: 2014–03–03
  15. By: Masahiro Shoji (Faculty of Economics, Seijo University); Takayuki Akaike (Iwaki Liaison Council to Support the Disaster-Victims of 3.11)
    Abstract: This study uncovers the issue of social isolation of the evacuees in Fukushima by using unique survey data collected from 569 households who evacuated temporary housing. The data show that 30% of the respondents could not have conversation with their neighbor s at all when they moved to the housing, and 60% could communicate with less than three. While the situation has been improved and the proportion of the respondents who communicate with less than three neighbors is 25% as of September 2013, still 5% do not ta lk with anybody. It is shown that young and introversive individuals as well as those who moved to the housing later than their neighbors and who did not know anybody when they moved are more likely to be isolated. I also find that the severity of social isolation significantly depends on the supporti ng activity by community leaders and supporting organizations. Give n these findings, this study attempts seven recommendations.
    Date: 2014–02
  16. By: Kroll, Henning; Schubert, Torben
    Abstract: It is widely believed that universities exert notable effects on their regional socio-economic environment. So far, much of the empirical evidence supporting this claim is based on case studies. While such studies often give a detailed picture of the contributions of individual universities for their specific environments, almost no figures are available for effects of Higher Education Institutions (HEI) on the macroeconomic or economy-wide level. This paper seeks to fill this gap by using spatial panel-data models in order to identify the impact that HEIs have on value creation and unemployment in Germany. Other than prior studies, we do not seek to identify only direct effects (e.g. demand side effects caused by HEI investment) but we seek to identify the effects in terms of wider knowledge generation. Corresponding with this broad view we find evidence of strong effects on regions' GDP. HEIs contribute to Germany's GDP with 600bn per annum, i.e. about one fourth of the total value creation. 92% of this effect, however, is due to spillovers between regions. Thus the spatial distribution of the effects is rather flat. We also find that while in the short-run HEIs increase the unem-ployment rate, they lower it by on average 3.5% in the medium to long-run. --
    Date: 2014
  17. By: Halliday, Katherine E.; Okello, George; Turner, Elizabeth L.; Njagi, Kiambo; Mcharo, Carlos; Kengo, Juddy; Allen, Elizabeth; Dubeck, Margaret M.; Jukes, Matthew C.H.; Brooker, Simon J.
    Abstract: This paper investigates the effects of intermittent screening and treatment of malaria on the health and education of school children in an area of low-to-moderate malaria transmission. A cluster randomized trial was implemented with 5,233 children in 101 government primary schools on the south coast of Kenya in 2010-12. The intervention was delivered to children randomly selected from classes 1 and 5 who were followed up twice across 24 months. Once during each school term, public health workers used malaria rapid diagnostic tests to screen the children. Children who tested positive were treated with a six-dose regimen of artemether-lumefantrine. Given the nature of the intervention, the trial was not blinded. The primary outcomes were anemia and sustained attention and the secondary outcomes were malaria parasitaemia and educational achievement. The data were analyzed on an intention-to-treat basis. Anemia in this setting in Kenya, intermittent screening and treatment, as implemented in this study, is not effective in improving the health or education of school children. Possible reasons for the absence of an impact are the marked geographical heterogeneity in transmission, the rapid rate of reinfection following artemether-lumefantrine treatment, the variable reliability of malaria rapid diagnostic tests, and the relative contribution of malaria to the etiology of anemia in this setting.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Primary Education,Adolescent Health,Educational Sciences
    Date: 2014–02–01
  18. By: Mitsuhiko Kataoka (Department of Economics, Chiba Keizai University, Chiba, Japan); Kodrat Wibowo (Department of Economics, Padjadjaran University)
    Abstract: Public investment is a fundamental response of government to the existing imbalances between subnational regions. Especially, the question concerning the allocation policy of public investment more receives a great deal of public attentions along with the decentralization process, because economic growth is inevitably uneven in its subnational impacts and decentralization has effects on the change in the allocations across the subnational governments and regions. This study explores the public investment allocation policy that either emphasizes efficiency, equity, or redistribution or strives to strike a balance between these three policy directions under the trade-off restrictions. We employ a new benchmark index, “equity–growth allocation share,” defining regional public investment allocation, given equal public capital growth across regions. We apply this method to Indonesia’s and Japan’s pre- and post-decentralization eras, beset by efficiency–equity trade-offs between uneven regional development and balanced growth policy. We found two major observations that contrast between two countries. First, as excessive economic activity regions in two countries, the capital region in Japan mostly shows the highest returns on public capital where the Java-Bali region does not. Second, Indonesia shows a structural change investment concentration in the Java-Bali region before and after decartelization regime while the Japan’s government pursues the pro-efficiency allocation policy under the decentralization process.
    Keywords: Public investment, Decentralization, Efficiency–equity trade-off,Indonesia, Japan
    JEL: N95 O23 R11 R53
    Date: 2014–02
  19. By: Young Hoon Lee (Department of Economics, Sogang University, Seoul); Hayley Jang (Department of Economics, Sogang University, Seoul)
    Abstract: In this study, we comprehensively analyzed the attendance determinants of the Korean Professional Football League (K-League) using panel data from 15 individual teams during the 1987?2011 seasons. The K-League has some unique characteristics that other leagues, particularly those in North America and Europe, do not possess. The governance structure is heterogeneous, including both multiple-supporter-owned and major-corporation-owned teams. Additionally, the regulation authority shifted over the time period studied from broadly regional to city based. The results of this study suggested that the home-and-away match system with a host city attracted greater attendance than the system with multiple host cities, and the supporter-owned teams attracted more fans than did large-company-owned clubs when other attendance determinants were held constant. Outcome uncertainty for attendance determination was significant, not only statistically but also economically.
    Date: 2014
  20. By: Irena Guidikova
    Abstract: Research has convincingly demonstrated that diversity of cultural backgrounds and associated differences in skills, education and abilities can be a rich resource for companies and creative teams but also for the social and economic development of societies. The challenge is to conceive and implement public policies and institutions that make it possible to realise the positive potential of diversity. The Intercultural integration policy paradigm which takes up this challenge has been developed and tested by the Council of Europe in a range of cities across the continent. The article introduces this paradigm as well as a series of examples of how it translates into different policy areas.
    Keywords: Diversity, diversity advantage, local policy, integration, inclusion
    Date: 2014–01
  21. By: Eliane El Badaoui; Eric Strobl; Frank Walsh
    Abstract: We estimate the impact of internal migration on local labour markets in Thailand.Using an instrumental variable approach based on weather and distance we estimate an exogenous measure of the net migration in ow into each region. Our results show that instrumenting for the possible endogeneity of net inward migration is crucial to the analysis. The results suggest substantial adjustments in hours worked and weekly wages in response to short term changes in labour supply for low skilled males. We find no effect on high skilled workers. A theoretical section shows that a reduction in hours per worker in response to an increase in inward migration is consistent with the predictions of a standard search model.
    Keywords: Internal migration, Labour markets, Thailand
    JEL: O15 J10
    Date: 2014
  22. By: Abdulloev, Ilhom (Open Society Institute Assistance Foundation, Tajikistan); Epstein, Gil S. (Bar-Ilan University); Gang, Ira N. (Rutgers University)
    Abstract: Some immigrants try to keep their ethnicity hidden while others become ever deeply more mired in their home culture. We argue that among immigrants this struggle manifests itself in the ethnic goods they choose to consume. Different types of ethnic goods have vastly different effects on immigrant assimilation. We develop a simple theoretical model useful for capturing the consequences of this struggle, illustrating it with examples of Central Asian assimilation into the Muscovite economy.
    Keywords: assimilation, migrants, culture, ethnic goods
    JEL: J15
    Date: 2014–02
  23. By: SHIMOTSU Katsumi
    Abstract: Since its enactment in 1974 until its easing in the 1990s, the Large-Scale Retail Store Law ( Daikibo Kouri Tenpo Ho ) strictly regulated the entry of large-scale retailers in cities in Japan to protect local small and medium incumbent stores. This paper investigates the effect of large-scale retailers on the price level in Japan using city-level panel data from 1977 to 1992, the period when the Large-Scale Retail Store Law exercised strong entry restrictions. Using fixed effects estimation and instrumental variable estimation, we find that the presence of large-scale retailers, measured by their floor area relative to that of all of the retailers, has a negative effect on the price index of agricultural products, mass-produced food products, textiles, and durable goods. The estimation results suggest that a 10% increase in the relative floor area of large-scale retailers reduces the price level by around 0.3%-1.3%.
    Date: 2014–03
  24. By: Jung, Haeil; Hasan, Amer
    Abstract: This paper assesses whether the Indonesia Early Childhood Education and Development project had an impact on early achievement gaps as measured by an array of child development outcomes and enrollment. The analysis is based on longitudinal data collected in 2009 and 2010 on approximately 3,000 four-year-old children residing in 310 villages located in nine districts across Indonesia. The study begins by documenting the intent-to-treat impact of the project. It then compares the achievement gaps between richer and poorer children living in project villages with those of richer and poorer children living in non-project villages. There is clear evidence that in project villages, the achievement gap between richer and poorer children decreased on many dimensions. By contrast, in non-project villages, this gap either increased or stayed constant. Given Indonesia's interest in increasing access to early childhood services for all children, and the need to ensure more efficient spending on education, the paper discusses how three existing policies and programs could be leveraged to ensure that Indonesia's vision for holistic, integrated early childhood services becomes a reality. The lessons from Indonesia's experience apply more broadly to countries seeking to reduce early achievement gaps and expand access to pre-primary education.
    Keywords: Primary Education,Educational Sciences,Youth and Governance,Street Children,Housing&Human Habitats
    Date: 2014–02–01
    Date: 2014
  26. By: Shanjun Li; Matthew E. Kahn; Jerry Nickelsburg
    Abstract: The U.S. public transit system represents a multi-billion dollar industry that provides essential transit services to millions of urban residents. We study the market for new transit buses that features a set of non-profit transit agencies purchasing buses primarily from a few domestic bus makers. Unlike private vehicles, the fuel economy of public buses is irresponsive to fuel price changes. To understand this finding, we build a model of bus fleet management decisions of local transit agencies that yields testable hypotheses. Our empirical analysis of bus fleet turnover and capital investment suggests that transit agencies: (1) do not respond to energy prices in either their scrappage or purchase decisions; (2) respond to environmental regulations by scrapping diesel buses earlier and switch to natural gas buses; (3) prefer purchasing buses from manufacturers whose assembly plants are located in the same state; (4) exhibit significant brand loyalty or lock-in effects; (5) favor domestically produced buses when they have access to more federal funding.
    JEL: R41 R48
    Date: 2014–03
  27. By: Matthew A. Cole; Robert J R Elliott; Toshihiro Okubo; Eric Strobl
    Abstract: In recent years, natural disasters from Hurricane Katrina to the Fukushima earthquake have grabbed the attention of the public, policymakers and academics. In this paper we contribute to this relatively new literature and examine the impact of the 1995 Kobe earthquake on the survival of manufacturing plants, their post-earthquake economic performance, and the birth of new plants. Using geo-coded plant location and unique building-level surveys we are able to identify for the first time the actual damage to the building where each plant was located at the time of the earthquake. Including plant and building-characteristics as well as district-level variables to control for spatial dependencies, our results show that damaged plants were considerably more likely to fail than undamaged plants and that this effect persisted for up to seven years. Further analysis shows that surviving plants experienced a reduction in total employment and value added as a result of earthquake damage. However, we also find some evidence of creative destruction with the average surviving plant experiencing a time limited increase in productivity following the earthquake. On average, earthquake damage tended to deter plant births, although severe damage in an area appears to have acted as a stimulus to births.
    Keywords: Earthquake, natural disaster, survival analysis, productivity
    JEL: Q54 R10 R12 D22 L10 L25 M13 C01
    Date: 2014–02–25
  28. By: Laouénan, Morgane (IRES, Université catholique de Louvain)
    Abstract: The wage gap between African-Americans and white Americans is substantial in the US and has slightly narrowed over the past 30 years. Today, blacks have almost achieved the same educational level as whites. There is reason to believe that discrimination driven by prejudice plays a part in explaining this residual wage gap. Whereas racial prejudice has substantially declined over the past 30 years, the wage differential has slightly converged overtime. This 'prejudice puzzle' raises other reasons in explaining the absence of convergence of this racial differential. In this paper, I assess the impact which of the boom of jobs in contact with customers has on blacks' labor market earnings. I develop a search-matching model with bargaining to predict the negative impact which of the share of these contact jobs has on blacks' earnings in the presence of customer discrimination. I test this model using the IPUMS, the General Social Survey and the Occupation Information Network. My estimates show that black men's relative earnings are lower in areas where the proportions of prejudiced individuals and of contact jobs are high. I also estimate that the decreased exposure to racial prejudice is associated with a higher convergence of the residual gap, whereas the expansion of contact jobs partly explains the persistence of the gap.
    Keywords: wage differential, racial prejudice, search model
    JEL: J15 J61 R23
    Date: 2014–02
    Date: 2014
  30. By: Weili Ding; Steven F. Lehrer
    Abstract: Unobserved ability heterogeneity has long been postulated to play a key role in human capital development. Traditional strategies to estimate education production functions do not allow for varying role or development of unobserved ability as a child ages. Such restrictions are highly inconsistent with a growing body of scientific evidence; moreover, in order to obtain unbiased parameter estimates of observed educational inputs, researchers must properly account for unobserved skills that may be correlated with other inputs to the production process. To illustrate our empirical strategy we use experimental data from Tennessee’s Student/Teacher Achievement Ratio experiment, known as Project STAR. We find that unobserved ability is endogenously developed over time and its impact on cognitive achievement varies significantly between grades in all subject areas. Moreover, we present evidence that accounting for time-varying unobserved ability across individuals and a more general depreciating pattern of observed inputs are both important when estimating education production functions.
    JEL: C23 I21
    Date: 2014–02
    Date: 2014
    Date: 2014
  33. By: Penélope Hernández (ERI-CES); Guillem Martínez-Canovas (ERI-CES); Manuel Muñoz-Herrera (University of Groningen); Lea Ellwardt (University of Groningen)
    Abstract: We examine the interplay between a person's individual preference and the social influence others exert. We provide a model of network relationships with conflicting preferences, where individuals are better off coordinating with those around them, but not all prefer the same action. We test our model in an experiment, varying the level of conflicting preferences between individuals. Our findings suggest that preferences are more salient than social influence, under conflicting preferences: subjects relate mainly with others who prefer the same. This leads to two undesirable outcomes: network segregation and social inefficiency. The same force that helps people individually hurts society.
    Keywords: Heterogeneity, Social Networks, Formation, Equilibrium selection
    JEL: C62 C72 D82 D85
    Date: 2014–01
  34. By: Ali T. Akarca (Department of Economics, University of Illinois at Chicago); Aysit Tansel (Department of Economics, METU)
    Abstract: During last sixty years, Turkish population moved from one province to another at the rate of about 7-8 percent per five-year interval. As a consequence of this massive internal migration, population residing in a province other than the one they were born in increased from 12 percent in 1950 to 39 percent in 2011. Impact of this population instability on provincial turnout rates in 2011 parliamentary election is studied, controlling for the effects of other socio-economic, demographic, political and institutional factors. Consequences of migration both at destinations and origins are considered. According to robust regressions estimated, the relationship between turnout and education is inverse U-shaped, and between turnout and age, U-shaped. The latter reflects generational differences as well. Large population, large number parliament members to be elected from a constituency, participation by large number of parties, and existence of a dominant party depress the turnout rate. A percentage increase in the proportion of emigrants among the people born in a province reduces turnout rate in that province by 0.13 percentage points, while a percentage increase in the ratio of immigrants in the population of a province reduces it by 0.06 percentage points. However, at destinations where large numbers of immigrants from different regions are concentrated, the opportunity afforded to immigrants to elect one of their own, reduces the latter adverse impact significantly and in some cases turns it to positive.
    Keywords: election turnout, internal migration, political participation, Turkey, voter behavior.
    JEL: D72 J61
    Date: 2014–03

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