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on Urban and Real Estate Economics |
| By: | Gabriel M. Ahlfeldt; Kristoffer Moeller; Nicolai Wendland |
| Abstract: | To analyze the mutually dependent relationship between local economic performance and the demand for and supply of transport services, we employ the structural panel VAR method that is popular in the macroeconomic literature, but which has not previously been applied to the modeling of within-city dynamics of transportation. We focus on a within-city panel of Berlin, Germany, during the heyday of the construction of its dense public transit network (1880-1914). Our results suggest that economic outcomes and supply of transport infrastructure mutually determine each other. Both transport demand and supply seem to be driven more by firms than by residents. |
| Keywords: | Transport, land use, Berlin, history, panel vector, autoregression |
| JEL: | R12 R14 R41 N73 N74 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0158&r=ure |
| By: | Estrada, Ricardo; Gignoux, Jérémie |
| 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 |
| JEL: | D83 D84 I21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1407&r=ure |
| By: | Özyurt, Selin |
| Abstract: | Following a hedonic framework, this paper constructs various transaction-based commercial property price indicators for the Netherlands. Using quarterly data from the Investment Property Databank (IPD), the analysis covers a total of 10,000 listed properties over the period 2001-2011. The study contributes to the empirical literature by introducing a spatial econometric methodology into a hedonic framework, via a spatially lagged explanatory variable (spatially lagged valuations per square metre). The results provide significant evidence of the presence of spatial dependence in unit valuations in all sub-sectors of the commercial property market, namely retail, office, industrial and residential. Accordingly, high (low) priced commercial properties tend to be geographically clustered rather than randomly distributed over space. The comparison of the alternative transaction-based indices shows a systematic upward bias in the baseline transaction-based indicator that relies solely on prior appraisals. In addition, compared to the baseline indicator, the spatially augmented transaction-based price indicator appears to fluctuate less and is more robust to small sample sizes. These results are robust for alternative spatial weights matrix specifications. JEL Classification: R30, C31, C21, R12 |
| Keywords: | commercial property prices, real estate economics, spatial dependence, spatial econometrics |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141627&r=ure |
| By: | Sven DAMEN; Frank VASTMANS; Erik BUYST |
| Abstract: | We propose that the borrower’s ability to pay through a mortgage is a long-run house price fundamental and …find convincing evidence by means of cointegration tests, granger causality, and an elasticity of house prices with respect to ability to pay close to one. Ability to pay incorporates the effect of a decreasing trend in interest rates, changes in mortgage interest deduction and the recent innovation in mortgage products. We apply the model to the United States of America, United Kingdom, Belgium, the Netherlands, Sweden, Norway, Finland and Denmark. The results provide an intuitive alternative to standard house price models. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces14.09&r=ure |
| By: | Şaziye Pelin Akyol; Kala Krishna |
| Abstract: | This paper investigates two main questions: i) What do applicants take into consideration when choosing a high school? ii) To what extent do schools contribute to their students’ academic success? To answer these questions, we model students’ preferences and derive demand for each school by taking each student’s feasible set of schools into account. We obtain average valuation placed on each school from market clearing conditions. Next, we investigate what drives these valuations by carefully controlling for endogeneity using a set of creative instruments suggested by our model. Finally, controlling for mean reversion bias, we look at each school’s value-added. We find that students infer the quality of a school from its selectivity and past performance on the university entrance exam. However, the evidence on the value- added by schools shows that highly valued or selective schools do not have high value- added on their students’ academic outcomes. |
| JEL: | I20 I21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20013&r=ure |
| By: | Dirk Dohse; Robert Gold |
| Abstract: | In recent decades, the ethnic composition of the European population has changed substantially, leading to a rapid increase of cultural diversity in the EU as a whole, at the level of individual member states, and at the regional level. This paper focusses on the regional level and investigates the relationship between cultural diversity and regional economic performance for the EU 27. Giving particular attention to regional innovation, GDP per capita, and its development over time, the paper finds that culturally more diverse regions are on average more innovative, which translates into higher growth and better economic performance. An important finding of this study is, however, that the positive effect of cultural diversity on regional economic performance is not present in all sub-samples of the European regions alike. |
| Keywords: | Regional Development, Cultural Diversity, Measurement Issues |
| JEL: | M13 O18 R11 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2014:m:3:d:0:i:58&r=ure |
| By: | Devin Bunten; Matthew E. Kahn |
| Abstract: | In the typical asset market, an asset featuring uninsurable idiosyncratic risk must offer a higher rate of return to compensate risk-averse investors. A home offers a standard asset's risk and return opportunities, but it also bundles access to its city's amenities|and to its climate risks. As climate change research reveals the true nature of these risks, how does the equilibrium real estate pricing gradient change when households can sort into different cities? When the population is homogeneous, the real estate pricing gradient instantly reflects the "new news". With population heterogeneity, an event study research design will underestimate the valuation of climate risk for households in low-risk cities while overestimating the valuation of households in high-risk areas. |
| JEL: | Q54 R3 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20018&r=ure |
| By: | Sumit Agarwal; Gene Amromin; Itzhak Ben-David; Souphala Chomsisengphet; Yan Zhang |
| Abstract: | Loss mitigation actions (e.g., liquidation or renegotiation) for delinquent mortgages might be hampered by the conflicting goals of claim holders with different levels of seniority. Although similar agency problems arise in corporate bankruptcies, the mortgage market is unique because in a large share of cases junior claimants, in their role as servicers, exercise operational control over loss mitigation actions on mortgages owned by senior claimants. We show that servicers are less likely to act on the first lien mortgage owned by investors when they themselves own the second lien claim secured by the same property. When they do act, such servicers’ choices are skewed towards actions that maximize the value of their junior claims, favoring modification over liquidation and short sales and deeds-in-lieu over foreclosures. We also show that such servicers find it more difficult to avoid taking actions on second lien loans when first liens are modified and that they do not modify their second lien loans on more concessionary terms. We show that these actions transfer wealth from first to second liens and moderately increase borrower welfare. |
| JEL: | G21 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20015&r=ure |
| By: | Cretu, Daniela; Iova, Radu Andrei; Lascar, Elena |
| Abstract: | The infrastructure constitutes a support element, with particular importance for supporting all economic and socio- cultural activities. The infrastructure covers both structural field, giving unity to the system unit and the spatial field, thus achieving a viable or not territorial configuration , which is reflected by different levels of accessibility in the physical, technical, economic or socio –cultural area. An important aspect for the development of the region, including the rural area, is the social infrastructure with reference to houses, education and health system. In this respect, in the present paper we propose the analysis of the social infrastructure, namely, house building , education and the health infrastructure, using as research methods, documenting, analyzing and processing the secondary analysis. The ascending dynamics of new house building in the rural area, can be combined with the dynamics of the population mobility and increasing economic importance of agricultural activities at social levels. The infrastructure for education is well represented in the region and thus it can support the development in good conditions of the educational act. From the analyzed data, it results a deficiency of providing health infrastructure in the rural area, this situation requiring major investments made with projects funded under various development programs. |
| Keywords: | regional development, social infrastructure, houses fund, development potential |
| JEL: | Q0 Q01 |
| Date: | 2013–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55000&r=ure |
| By: | Marta Olazabal; Sonia De Gregorio Hurtado; Eduardo Olazabal; Filomena Pietrapertosa; Monica Salvia; Davide Geneletti; Valentina D?Alonzo; Efrén Feliú; Senatro Di Leo; Diana Reckien |
| Abstract: | Cities are widely recognised as being pivotal to fight climate change. They magnify the drivers of climate change, experience the impacts and also concentrate the highest room for action. Although urban areas are broadly claimed to be climate leaders, there is no archetype of right actions given the highly contextual differences among them. Yet, the how and why cities respond to global environmental challenges in the context of increasingly competitive economies needs further research. In this paper we aim at advancing in this regard by assessing the state of the art on urban climate actions in two European Mediterranean Countries: Spain and Italy that face similar climate change challenges. Based on an extensive review of documents, we analyse mitigation and adaptation plans of 26 Spanish and 32 Italian Urban Audit cities, as representative samples. Our results show relevant differences between Spanish and Italian cities in terms of the starting time of their climate actions as well their implementation. We concur with existing literature in that mitigation is more advanced than adaptation actions and take evidence in both countries and we also demonstrate that international and national networking initiatives are being instrumental in engaging cities in climate action. |
| Keywords: | urban climate action; mitigation plan; adaptation plan; Spain; Italy; Urban Audit |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2014-03&r=ure |
| By: | Guido de Blasio (Bank of Italy); Samuele Poy (FBK-IRVAPP) |
| Abstract: | This paper measures the impact of wage zones – minimum wage differentials at the province level – on Italy's local labor markets during the 1950s. Using a spatial regression discontinuity design, it finds that for the industrial sectors covered under wage zones there was an increase in employment when one crossed the border from a high-wage province into a low-wage one; the effect diminished, however, as the distance from the boundary increased. The paper also illustrates that the impact on the overall (non-farm) private sector, which includes both covered and uncovered sectors, was basically zero. On balance, the scheme generated some reallocation of economic activity, albeit confined to areas close to the province border. |
| Keywords: | minimum wages, regional economic activity, regression discontinuity |
| JEL: | C14 J38 R11 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_953_14&r=ure |
| By: | Sonia De Gregorio Hurtado; Marta Olazabal; Monica Salvia; Filomena Pietrapertosa; Eduardo Olazabal; Davide Geneletti; Valentina D?Alonzo; Efrén Feliú; Senatro Di Leo; Diana Reckien |
| Abstract: | Cities are widely recognised as being pivotal to fight climate change. Cities magnify the drivers of climate change, experience the impacts and also concentrate the highest room for action. Given the 70% of the global emissions that cities are responsible for, national governments are unable to meet their international commitments for addressing mitigation and adaptation without the action and cooperation of cities. In turn, the capacity of local governments to address climate change is largely determined by the institutional architecture within which they are integrated. As a result, the relationship between the different arenas of authority and the integration of cities in national and international networks is considered critical in shaping the global capacity to govern climate change. This work aims to understand how multi-level climate governance and alliances of cities (national and international) are influencing the climate change capacity and performance of municipalities. This has been done by focusing on two national contexts of the European Union, Italy and Spain, in which climate policy, multi-level governance frameworks, the effects of the national and international networks of cities, and the climate response of cities are analysed through an extensive review of scientific and grey literature, and institutional documents. The results concur with existing literature on the importance of constructing collaborative multi-level climate frameworks at the national scale, that fully integrate the local level, in order to support cities to develop consistent climate action and raise awareness of the responsibility they have in this policy field. |
| Keywords: | urban climate action; multi-level governance; networks of cities; mitigation; adaptation; Italy; Spain. |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2014-02&r=ure |
| By: | Olivier Brette (INSA Lyon; CNRS Environnement Ville Société (EVS); University of Lyon); Thomas Buhler (University of Franche-Comté; CNRS ThéMA); Nathalie Lazaric (GREDEG CNRS; University of Nice Sophia Antipolis); Kevin Marechal (Université Libre de Bruxelles, CESSE-ULB; Belgian National Fund for Research (FNRS)) |
| Abstract: | This paper adds to the growing empirical evidence on the importance of habits in governing human behaviour, and sheds new light on individual inertia in relation to transportation behaviour. An enriched perspective rooted in Veblenian evolutionary economics (VEE) is used to construct a theoretical framework in order to analyse the processes at play in the formation and reinforcement of habits. The empirical study explores more specifically the synchronic processes strengthening the car-using habit. In addition to underlining the shortcomings of a ‘decision theory’ perspective to address urban transportation behaviours, we find that synchronic habits can have a significant effect on behavioural inertia. Our results suggest the existence of positive feedback between the development of synchronic habits, qualitative perceptions of driving times and reinforcement of the car-using habit. The paper points out also that the diachronic dimension of habits would constitute another promising domain for further research on behavioural inertia in transportation. |
| Keywords: | Habit, Behaviour, Urban transportation, Mode choice, Synchronic, Diachronic |
| JEL: | B52 D01 D11 D12 R40 R49 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-10&r=ure |
| By: | Ehrmann, Michael; Ziegelmeyer, Michael |
| Abstract: | Mortgages constitute the largest part of household debt. An essential choice when taking out a mortgage is between fixed-interest-rate mortgages (FRMs) and adjustable-interest-rate mortgages (ARMs). However, so far, no comprehensive cross-country study has analysed what determines household demand for mortgage types, a task that this paper takes up using new data for the euro area. Our results support the hypothesis of Campbell and Cocco (2003) that the decision is best described as one of household risk management: income volatility reduces the take-out of ARMs, while increasing duration and relative size of the mortgages increase it. Controlling for other supply factors through country fixed effects, loan pricing also matters, as expected, with ARMs becoming more attractive when yield spreads rise. The paper also conducts a simulation exercise to identify how the easing of monetary policy during the financial crisis affected mortgage holders. It shows that the resulting reduction in mortgage rates produced a substantial decline in debt burdens among mortgage-holding households, especially in countries where households have higher debt burdens and a larger share of ARMs, as well as for some disadvantaged groups of households, such as those with low income. JEL Classification: D12, E43, E52, G21 |
| Keywords: | adjustable-rate mortgage, fixed-rate mortgage, household finance, monetary policy, mortgage choice |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141631&r=ure |
| By: | David Utting |
| Abstract: | This paper summarises key themes and research findings from papers presented at an event hosted by CASE on 23rd January 2014: - Blanden, J. & Macmillan, L. (2014) Education and Intergenerational Mobility: Help or Hindrance? CASEpaper (forthcoming) - Chowdry, H., Crawford, C., Dearden, L., Goodman, A. & Vignoles, A. (2013) Widening participation in higher education: analysis using linked administrative data. Journal of the Royal Statistical Society (Series A), Vol. 176, Part 2, pp. 431-457. - Crawford, C. (2012) Socioeconomic gaps in HE participation: how have they changed over time? London: Institute for Fiscal Studies. - Whitty, G. & Anders, J. (2014) (How) did Labour narrow the achievement and participation gap? LLAKES Research Paper 46. London: Institute of Education. |
| Keywords: | education, social mobility, HE, GCSE, School,intergenerational, mobility, widening participation, gap, achievement, participation |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:spccrn:08&r=ure |
| By: | Yamada, Tomoaki |
| Abstract: | In this study, using Japanese household panel data, we analyze how well idiosyncratic income risks are shared by regions. We find that geographic mobility influences individual consumption growth rates, suggesting that complete asset markets fail to exist. We reject the full insurance hypothesis for both urban and rural areas and find that the extent of risk sharing differs significantly by region. |
| Keywords: | Risk sharing; Consumption insurance; Geographic mobility |
| JEL: | D12 D31 E21 |
| Date: | 2014–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54886&r=ure |
| By: | Peiró Palomino Jesús (Universidad Jaime I); Forte Deltell Anabel (Jaume I University); Tortosa-Ausina Emili (INSTITUTO VALENCIANO DE INVESTIGACIONES ECONÓMICAS (Ivie) UNIVERSITY JAUME I) |
| Abstract: | This working paper analyzes the role of different elements of social capital in economic growth for a sample of 85 European regions during the period 1995-2008. Despite the remarkable progress that social capital and European regional economic growth literatures have experienced over the last two decades, initiatives combining the two are few, and entirely yet to come for the post-1990s period. Recent improvements in data availability allow this gap in the literature to be closed, since they enable the researcher to consider the traditionally disregarded Central and Eastern European regions. This is particularly interesting, since they are all transition economies that recently joined the European Union, with relatively low levels of social capital. On the methodological side, we follow the Bayesian paradigm, which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty, leading to a deeper understanding of the relationships being investigated. Contrary to other contributions for the European context, results suggest, among other findings, that trust and social norms might have some implications for regional growth, whereas the role of active participation in groups remains unclear. |
| Keywords: | Bayesian inference, economic growth, European regions, social capital |
| JEL: | Z13 C15 R10 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fbb:wpaper:2014130&r=ure |
| By: | Antonio Accetturo (Bank of Italy) |
| Abstract: | This paper studies the impact of citizens’ human capital on the characteristics of elected politicians in democratic elections for the post of mayor. By using a change in the rules for Italian mayoral elections and a difference-in-differences estimator, I find that cities endowed with a larger amount of human capital tend to elect mayors that have a higher educational attainment and that were previously employed in skill-intensive jobs. This result is quantitatively small but robust to omitted variables or selection issues. |
| Keywords: | human capital externalities, political selection, cities |
| JEL: | D7 I20 H8 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_956_14&r=ure |
| By: | Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri |
| Abstract: | Immigrants may complement native workers, allow reallocation by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firmes use immigrants. Allowing firms to have differential fixed cost in hiring immigrants, because of different information and access to their network, we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and productivity. Using micro-level data on French firms during the period 1995-2005, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially low (or zero) level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances (for extensive and intensive margin) of the firms. While these outcomes depend on the firm share of immigrants in employment we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations that is common to all firms in the district. Supply-driven increase in foreign born workers in a department (location) implies a re-allocation of native workers towards communication and cognitive intensive tasks. |
| Keywords: | immigrants;firms;productivity;heterogeneity;fixed cost of hiring |
| JEL: | F22 E25 J61 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2014-09&r=ure |
| By: | Ge Jiang; Simon Weidenholzer |
| Abstract: | We study the impact of swtiching costs on the long run outcome in 2x2 conordination games played in the circular city model oflocal interactions. For low levels of switiching costs the predictions are in line with the previous literature and the risk dominant convention is the unique long run equilibrium. For intermediate levels of switching costs the set oflong run equilibria still contain the risk dominant convention but may also contain conventions that are not risk dominant. For high levels of switching costs also non-monomorphic states will be included in the set of long run equilibria. Finally, we reconcile our result with a recent paper by Norman (2009) by considering the case of large interaction neighborhoods in large populations. |
| Date: | 2014–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:746&r=ure |
| By: | Ajay Agrawal; John McHale; Alexander Oettl |
| Abstract: | The growing peer effects literature pays particular attention to the role of stars. We decompose the causal effect of hiring a star in terms of the productivity impact on: 1) co-located incumbents and 2) new recruits. Using longitudinal university department-level data we report that hiring a star does not increase overall incumbent productivity, although this aggregate effect hides offsetting effects on related (positive) versus unrelated (negative) colleagues. However, the primary impact comes from an increase in the average quality of subsequent recruits. This is most pronounced at mid-ranked institutions, suggesting implications for the socially optimal spatial organization of talent. |
| JEL: | I23 J24 O31 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20012&r=ure |
| By: | Pacheco, Francisca; Sanchez, Rafael; Villena, Mauricio |
| Abstract: | Previous empirical works on municipal efficiency have mostly used cross-sectional data which makes it impossible to separate unobserved heterogeneity from inefficiency. Furthermore, they have also typically used a two stages approach which has been widely criticized as the assumptions made in the first stage are violated in the second stage, generating biased results. We present one of the first longitudinal parametric studies that analyze municipal efficiency and its determinants using a one step procedure. Furthermore, we are the first of this kind that analize overall efficiency as well as efficiency by clusters of municipalities in order to reduce heterogeneity. We use administrative datasets of Chilean municipalities for the 2008-2010 period and our results suggest that Chilean municipalities have on average an inefficiency level of 30% with a significant variance between clusters of municipalities. Also, our results suggest that socio-economic, fiscal and political variables affect municipal efficiency. In particular, we found that municipalities with tighter budget constraints are associated with more efficient municipalities. |
| Keywords: | Stochastic Frontiers, Efficiency, Municipalities, Budget |
| JEL: | H72 O54 |
| Date: | 2014–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:54918&r=ure |