nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒04‒11
57 papers chosen by
Steve Ross
University of Connecticut

  1. Regional Economic Activity in Turkey: A New Economic Geography Approach By Mehmet Burak Turgut
  2. Spatial disparities in hospital performance By Laurent Gobillon; Carine Milcent
  3. Unemployment in European Regions: Structural Problems vs. the Eurozone Hypothesis By Andersson, Åke E.; Andersson , David Emanuel; Hårsman, Björn; Daghbashyan, Zara
  4. Regional productivity effects of multinational firm affiliates By Andersson, Martin; Gråsjö, Urban; Karlsson, Charlie
  5. School Resources, Behavioral Responses and School Quality: Short-Term Experimental Evidence from Niger By Elizabeth Beasley; Elise Huillery
  6. Do School Budgets Matter? The Effect of Budget Referenda on Student Performance By Lee, Kyung-Gon; Polachek, Solomon
  7. Housing Supply Elasticity in Sydney Local Government Areas By Xiangling Liu; Glenn Otto
  8. The Power of Hydroelectric Dams: Agglomeration Spillovers By Severnini, Edson R.
  9. A Focused Look at Rural Schools Receiving School Improvement Grants. By Linda Rosenberg; Megan Davis Christianson; Megan Hague Angus; Emily Rosenthal
  10. Media clusters and metropolitan knowledge economy By Karlsson, Charlie; Rouchy, Philippe
  11. Peer Effects and Students’ Self-Control By Berno Buechel; Lydia Mechtenberg; Julia Petersen;
  12. Causal relationship between asset prices and output in the US: Evidence from state-level panel Granger causality test By Furkan Emirmahmutoglu; Nicholas Apergis; Beatrice D. Simo-Kengne; Tsangyao Chang; Rangan Gupta
  13. Friendship And Study Assistance Ties Of University Students By Oleg Poldin; Diliara Valeeva; Maria Yudkevich
  14. Housing and Relative Risk Aversion By Francesco Zanetti
  15. Optimal Agglomerations in Dynamic Economics By William Brock; Anastasios Xepapadeas; Athanasios Yannacopoulos
  16. Educational expenditure in South Africa: Evidence from the National Income Dynamics Study By Branson, Nicola; Kekana, Dineo; Lam, David
  17. Migration and the housing market By Nicholas Sander
  18. The Rise and Fall of R&D Networks By Mauro Napoletano; Mario V Tomasello; Antonios Garas; Frank Schweitzer
  19. Firm Knowledge, Neighborhood Diversity and Innovation By Wixe, Sofia
  20. Will a Driving Restriction Policy Reduce Car Trips? A Case Study of Beijing, China By Wang, Lanlan; Xu, Jintao; Zheng, Xinye; Qin, Ping
  21. "Commitment, Deficit Ceiling, and Fiscal Privilege" By Satoshi Baba
  22. Intra-household Decision Models of Residential and Job Location By Nathalie Picard; André De Palma; Ignacio Inoa
  23. Life-Satisfaction in Urban Ethiopia: The Role of Relative Poverty and Unobserved Heterogeneity By Alem, Yonas
  24. The Impact of Marginal Business Taxes on State Manufacturing By Richard Funderburg Author Workplace: University of Iowa; Timothy J. Bartik; Alan H. Peters
  25. Effect of an Accessibility Measure in a Model for Choice of Residential Location, Workplace, and Type of Employment By Ignacio Inoa; Nathalie Picard; André De Palma
  26. Beyond the SUTVA: how policy evaluations change when we allow for interactions among firms. By Augusto Cerqua; Guido Pellegrini
  27. Price and Quality Competition in Spatial Markets. The Case of Camping Sites By Dieter Pennerstorfer
  28. Forty Years of Immigrant Segregation in France, 1968-2007: How Different Is the New Immigration? By Pan Ké Shon, Jean-Louis; Verdugo, Gregory
  29. Cities, Tasks and Skills By Kok, Suzanne; ter Weel, Bas
  30. The Housing Problem and Revealed Preference Theory: Duality and an application By Ivar Ekeland; Alfred Galichon
  31. Does benefit/cost-efficiency influence transport investment decisions? By Eliasson, Jonas; Börjesson, Maria; Odeck, James; Welde, Morten
  32. Cross-border commuting and consuming: An empirical investigation By Thomas Y. Mathä; Alessandro Porpiglia; Michael Ziegelmeyer
  33. How Much Are Teachers Paid and How Much Does it Matter? By OECD
  34. Something New: Where do new industries come from? By Feldman, Maryann; Tavassoli, Sam
  35. Do Immigrants Bring Good Health? By Giuntella, Osea; Mazzonna, Fabrizio
  36. The Effect of Economic Reform and Industrial Policy in a Panel of Chinese Cities By Lin Shao; Fabrizio Zilibotti; Simon Alder
  37. Efficient Scale of Local Government in China: Quantile Regression Approach to County-Level Data By Mototsugu Fukushige; Yingxin Shi
  38. Human Capital and Regional Development By Nicola Gennaioli; Rafael LaPorta; Florencio Lopez-de-Silanes; Andrei Shleifer
  39. Using Spatial Econometric Techniques to Analyze the Joint Employment Decisions of Spouses By Kalenkoski, Charlene M.; Lacombe, Donald J.
  40. Household Fuel Choice in Urban Ethiopia: A Random Effects Multinomial Logit Analysis By Alem, Yonas; Beyene, Abebe D.; Kohlin, Gunnar; Mekonnen, Alemu
  41. Regional Differences in Perceived Corruption among Ukrainian Firms By Denisova-Schmidt, Elena; Huber, Martin
  42. Rumors and Social Networks By Francis Bloch; Gabrielle Demange; Rachel Kranton
  43. Consumer flexibility, data quality and location choice By Baye, Irina; Hasnas, Irina
  44. Immigrants and Firms' Productivity: Evidence from France By Mitaritonna, Cristina; Orefice, Gianluca; Peri, Giovanni
  45. The Impact of Adolescent Motherhood on Education in Chile By Berthelon, Matias; Kruger, Diana
  46. A closer look at some of the supply and demand factors influencing residential property markets By Elizabeth Watson
  47. Nonprofit Firms in a Linear City with Nonnegative Profits By Christopher Hoag; Kamal Lamsal
  48. Teacher incentives in South Africa: a theoretical investigation of the possibilities By Paula Armstrong
  49. Sorting Charles Tiebout: The Construction and Stabilization of Postwar Public Good Theory By John D. Singleton
  50. Fiscal Equalization, Tax Salience, and Tax Competition By Martin Altemeyer-Bartscher
  51. Which Peers Matter? The Relative Impacts of Collaborators, Colleagues, and Competitors By George J. Borjas; Kirk B. Doran
  52. Demand with Consumption Externalities By Finn Christensen
  53. "Channels of Peer Effects and Guilt Aversion in Crime: Experimental and Empirical Evidence from Bangladesh" By Masahiro Shoji
  54. The Stockholm congestion charges: an overview By Eliasson, Jonas
  55. Blissful Ignorance? A Natural Experiment on the Effect of Feedback on Students'Performance By Oriana Bandiera; Valentino Larcinese; Imran Rasul
  56. Case Study of South Carolina's Express Lane Eligibility. By Jennifer Edwards; Rebecca Kellenberg
  57. Case Study of Massachusetts' Express Lane Eligibility Processes. By Jennifer Edwards; Diana Rodin

  1. By: Mehmet Burak Turgut (University of Warsaw)
    Abstract: This paper studies the spatial economic activity in Turkey and estimates the correlation between wages and consumer demand across NUTS1 regions of Turkey. First, I estimate simple market potential function to test whether closeness to larger markets has impact on wages. Second, I estimate Krugman (1993) economic geography model to see the agglomeration forces in Turkey. The results suggest that wages are higher in the regions close to larger markets and low trade costs and high share of expenditure on manufactured goods are the forces of agglomeration in Turkey.
    Keywords: Regional economic activity, Turkey, economic geography model
    Date: 2014
  2. By: Laurent Gobillon (CEPR - Center for Economic Policy Research - CEPR, 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, INED - Institut National d'Etudes Démographiques Paris - INED); Carine Milcent (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, CEPREMAP - Centre pour la recherche économique et ses applications)
    Abstract: Using a French exhaustive dataset, this article studies the determinants of regional disparities in mortality for patients admitted to hospitals for a heart attack. These disparities are large, with an 80% difference in the propensity to die within 15 days between extreme regions. They may reflect spatial differences in patient characteristics, treatments, hospital characteristics and local healthcare market structure. To distinguish between these factors, we estimate a flexible duration model. The estimated model is aggregated at the regional level and a spatial variance analysis is conducted. We find that spatial differences in the use of innovative treatments play a major role whereas the local composition of hospitals by ownership does not have any noticeable effect. Moreover, the higher the local concentration of patients in a few large hospitals rather than many small ones, the lower the mortality. Regional unobserved effects account for around 20% of spatial disparities.
    Keywords: Spatial health disparities ; Economic geography ; Stratified duration model
    Date: 2013–09
  3. By: Andersson, Åke E. (Jönköping International Business School); Andersson , David Emanuel (Nottingham University Business School China); Hårsman, Björn (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Daghbashyan, Zara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: Unemployment rates differ dramatically across European regions. This paper analyses these differences by integrating institutional and spatial perspectives into a unified theoretical framework. An econometric model is then used to analyse differences among European NUTS2 regions. The results of random-effects models indicate that there are four key factors that explain regional unemployment rates. Flexible labour market regulations and above-average levels of interpersonal trust are institutional factors that reduce unemployment. Accessibility factors such as inter-regional transport connectivity and local access to skilled workers have similarly substantial effects. Whether a region belongs to the Eurozone or not seems to be less important.
    Keywords: unemployment; Euro; institutions; accessibility
    JEL: R10 R15 R23 R28
    Date: 2014–03–26
  4. By: Andersson, Martin (CITR, Blekinge Inst of Technology); Gråsjö, Urban (University West); Karlsson, Charlie (CITR, Blekinge Inst of Technology)
    Abstract: Multinational firms (MNFs) have been shown to have a set of defining characteristics. Compared to domestic firms, they have a larger fraction of skilled workers, higher R&D to sales ratios and established networks to knowledge sources in several different countries. As illustrated by the so-called ‘anchor-tenant’ hypothesis, they can be described as “knowledge spillover agents”. MNF affiliates, as defined in this paper, are firms that are part of large domestic and foreign MNFs. In this paper we test whether the local presence of MNF affiliates generate spillover effects on the local industry. The empirical analysis focuses on assessing whether the productivity of the regional manufacturing industry of non-affiliated firms is higher in regions with a large fraction of MNF affiliates. The analysis uses data on Swedish firms and is conducted on regional level as well as on firm level. The regressions show that local presence of MNFs in a region has a positive effect on Gross Regional Product (GRP) from non-MNFs. The paper also shows that regions where the low-productive non-MNFs are located appear to benefit the most from local presence of MNFs. The MNFs have, on the other hand, no effect on non-MNF productivity in regions where the high-productive non-MNFs are located.
    Keywords: Multinational firms; affiliates; productivity; R&D; knowledge; spillovers; skilled workers; region
    JEL: F23 J24 O33 R11
    Date: 2014–04–02
  5. By: Elizabeth Beasley; Elise Huillery (Département d'économie)
    Abstract: Increasing school resources has often shown disappointing effects on school quality in developing countries, a lack of impact which may be due to student, parent or teacher behavioral responses. We test the short-term impact of an increase in school resources under parental control using an experimental school grant program in Niger.
    JEL: H52 O15 I21 I28
    Date: 2013–04
  6. By: Lee, Kyung-Gon (Korean Labor Institute); Polachek, Solomon (Binghamton University, New York)
    Abstract: This paper analyzes how changes in school expenditures affect dropout rates and standardized test scores based on data from 465 school districts in New York during the 2003/04 to the 2008/09 school years. Past traditional regression approaches show inconsistent results of school expenditures because of an endogeneity problem. The regression discontinuity design used in this study isolates exogenous variation in school expenditures per pupil by comparing school districts where budget referenda passed and failed by narrow margins. The results indicate that increases in school expenditures reduce dropout rates but have limited effects on student test scores.
    Keywords: educational expenditures, school budget referenda, school dropout rates, student performance
    JEL: I20 I21 I22
    Date: 2014–03
  7. By: Xiangling Liu (School of Economics, Australian School of Business, the University of New South Wales); Glenn Otto (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: We report supply elasticity estimates of residential property (houses and apartments) for Local Government Areas (LGAs) in metropolitan Sydney. Using annual data for 1991-2012, the average supply elasticity estimate across all LGAs is 0.2 for houses and 0.8 for apartments. The supply ofhouses is inelastic in all 43 LGAs; in contrast apartment supply is elastic – greater than unity – in about one-third of LGAs. We develop a model to explain the cross-section variation in supply elasticity across LGAs. For houses, supply elasticity is negatively related to an LGA’s population density, the time taken by a Local Council to process a development application and to various measures of the amount of land in an LGA that is unavailable for new housing development. Variation in supply elasticity for apartments across LGAs is unrelated to any of the available regressors.
    Keywords: housing supply, supply elasticity, development application, undevelopable land
    JEL: R31 R52
    Date: 2014–03
  8. By: Severnini, Edson R. (Carnegie Mellon University)
    Abstract: How much of the geographic clustering of economic activity is attributable to agglomeration spillovers as opposed to natural advantages? I present evidence on this question using data on the long-run effects of large scale hydroelectric dams built in the U.S. over the 20th century, obtained through a unique comparison between counties with or without dams but with similar hydropower potential. Until mid-century, the availability of cheap local power from hydroelectric dams conveyed an important advantage that attracted industry and population. By the 1950s, however, these advantages were attenuated by improvements in the efficiency of thermal power generation and the advent of high tension transmission lines. Using a novel combination of synthetic control methods and event-study techniques, I show that, on average, dams built before 1950 had substantial short run effects on local population and employment growth, whereas those built after 1950 had no such effects. Moreover, the impact of pre-1950 dams persisted and continued to grow after the advantages of cheap local hydroelectricity were attenuated, suggesting the presence of important agglomeration spillovers. Over a 50 year horizon, I estimate that at least one half of the long run effect of pre-1950 dams is due to spillovers. The estimated short and long run effects are highly robust to alternative procedures for selecting synthetic controls, to controls for confounding factors such as proximity to transportation networks, and to alternative sample restrictions, such as dropping dams built by the Tennessee Valley Authority or removing control counties with environmental regulations. I also find small local agglomeration effects from smaller dam projects, and small spillovers to nearby locations from large dams.
    Keywords: hydroelectric dams, agglomeration spillovers, employment growth, event-study analysis with synthetic control methods
    JEL: N92 R11 R12 Q42
    Date: 2014–03
  9. By: Linda Rosenberg; Megan Davis Christianson; Megan Hague Angus; Emily Rosenthal
    Keywords: SIG, School Improvement Grants, Rural Schools, Education
    JEL: I
    Date: 2014–04–30
  10. By: Karlsson, Charlie (CITR, Blekinge Inst of Technology); Rouchy, Philippe (CITR, Blekinge Inst of Technology)
    Abstract: Large media clusters have emerged in a limited number of large cities, characterizing the geographical concentration of the global media industry. This paper starts by exploring the effect of the rapid advancement of Information and Communication Technologies (ICT) had on the media economy. It concludes that the role of the “weightless economy” on media cluster has enhanced its production and distribution functions. We review the specificities of media cluster that ties agglomeration to creative, diversified attributes of production and distribution. The implication is that media firms hold strong tendencies to cluster in urban regions since they make full usage of its resources, namely its export capabilities and import transformation strength. Finally, we invite researchers to consider Jacobs’ metropolitan and global reciprocating system of city growth as a valid unit for analysing media clusters. The question leads envisaging if media clusters' strong metropolitan base allows them to grow further through globalised circuits. The paper concludes that large, media clusters drive on intellectually dense network of information, which can only be cultivated through large agglomerations existing capabilities. Consequently, the research question focuses upon the economic role of knowledge in media creation and export replacement. We emphasize the strength of Jacob’s model of media cluster for understanding its mechanism of value creation and endogenous system of globalisation.
    Keywords: Clustering; media industry; agglomeration; weightless economy; creative industry; globalization; regional development
    JEL: L82 R11
    Date: 2014–03–31
  11. By: Berno Buechel; Lydia Mechtenberg; Julia Petersen;
    Abstract: We conducted a multi-wave field experiment to study the interaction of peer effects and selfcontrol among undergraduate students. We use a behavioral measure of self-control based on whether students achieve study related goals they have set for themselves. We find that both self-control and the number of talented friends increase students’ performance. We then set out to test the theoretical prediction of Battaglini, Bénabou and Tirole (2005) that (only) sufficiently self-controlled individuals profit from interactions with peers. We find that peers with high self-control are more likely to connect to others, have a higher overall number of friends and have a higher number of talented friends. Moreover, positive news about self-controlled behavior of their peers increases students’ own perseverance. Hence, our findings are consistent with the model of Battaglini, Bénabou and Tirole. In addition, we find that female students are more likely to have high self-control, but do not outperform male students. One reason for this is that female students have a lower number of talented friends than their male counterparts, thereby profiting less from positive peer effects.
    Keywords: Self-control, Peer Influence, Social Networks, Goals, Time preferences, Procrastination, Willpower, School Performance, Experiment
    JEL: C93 D85 I21 J24
    Date: 2014–04
  12. By: Furkan Emirmahmutoglu (Department of Econometrics, Gazi University, Turkey); Nicholas Apergis (Department of Banking and Financial Management, University of Piraeus, Greece); Beatrice D. Simo-Kengne (Department of Economics, University of Pretoria); Tsangyao Chang (Department of Finance, Feng Chia University, Taichung, Taiwan); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper investigates the causal relationship between asset prices and per capita output across 50 US states and the District of Columbia over 1975 to 2012. A bootstrap panel Granger causality approach is applied on a trivariate VAR comprising of real house prices, real stock prices and real per capita personal income (proxying output), which allows us to account not only for heterogeneity and cross-sectional dependence, but also for interdependency between the two asset markets. Empirical results reveal the existence of a unidirectional causality running from both asset prices to output. This confirms the leading indicator property of asset prices for the real economy, while also substantiating the wealth and/or collateral transmission mechanism. Moreover, the absence of reverse causation from the personal income per capita to both housing and stock prices tend to suggest that non-economic fundamentals may have played an important role in the formation of bubbles in these markets.
    Keywords: House prices, stock prices, output, granger causality
    JEL: C32 G10 O18
    Date: 2014–03
  13. By: Oleg Poldin (National Research University Higher School of Economics); Diliara Valeeva (National Research University Higher School of Economics); Maria Yudkevich (National Research University Higher School of Economics)
    Abstract: We analyze the characteristics of the social networks of students studying in the economics department in one Russian university. We focus on student friendship and study assistance ties and demonstrate how these networks are connected with the individual characteristics of students and their peers. We find that the probability of a tie existing is explained by the gender homophily, and initial student assignment to the same exogenously defined study group. Students ask for help and form friendships with students who have similar academic achievements. Academically successful students are more popular in study assistance networks while there is no gender difference in student popularity in both networks. Our findings enhance the understanding of the role of friendship and study assistance ties in the formation of peer group effects
    Keywords: student achievement, social networks, peer group effects, higher education
    JEL: D85 I21 I23
    Date: 2014
  14. By: Francesco Zanetti
    Abstract: This paper derives closed-form and numerical solutions for relative risk aversion in a standard consumption-based model enriched with housing.� The presence of housing enables the household to hedge against unexpected shocks and may decrease relative risk aversion.� In addition, housing may generate state-dependent, time-varying risk aversion.
    Keywords: Relative risk aversion, housing
    JEL: D81 E21 R21
    Date: 2014–01–15
  15. By: William Brock; Anastasios Xepapadeas; Athanasios Yannacopoulos
    Abstract: We study rational expectations equilibrium problems and social optimum problems in innite horizon spatial economies in the context of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in innite dimensional Hilbert spaces. We show that agglomerations may emerge, with any type of returns to scale (increasing or decreasing) and with the marginal productivity of private capital increasing or decreasing with respect to the spatial externality. This is a fairly general result indicating the importance of the network structure of the spatial externality relative to the properties of the aggregate production function. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics.
    Keywords: Agglomeration, spatial spillovers, spillover induced instability, rational expectations equilibrium, social optimum, monotone operators.
    Date: 2014–04–01
  16. By: Branson, Nicola (SALDRU, School of Economics, University of Cape Town); Kekana, Dineo (Saldru, University of Cape Town); Lam, David (University of Michigan)
    Abstract: Differential education expenditure by racial group was a pillar in the architecture of apartheid. School systems diverged by racial group, with large funding and curriculum differences (Fiske and Ladd, 2004). In 1994, spending on white learners was about 1.5 times the spending on urban African learners and more than four times the spending on rural African learners (Fiske and Ladd, 2004). Since 1994 much focus has been paid by government to redress these educational expenditure inequalities with policies such as the National Norms and Standards for School Funding (NNSSF) and the rollout of the no fee schools program disproportionately allocating state funds to low socioeconomic schools and the fee-exemption policy providing low income households and grant recipients access to free education. Little is however known about how these policies have affected household educational expenditure across the income distribution.
    Keywords: educational expenditure; South Africa; NIDS; National Income Dynamics Study
    Date: 2013
  17. By: Nicholas Sander (Reserve Bank of New Zealand)
    Abstract: Fluctuations in migration are a significant feature of New Zealand's economy. This note reports results of statistical modelling that analyses the relationship between permanent and long-term migration (and its components) and developments in the housing market.
    Date: 2013–12
  18. By: Mauro Napoletano (OFCE); Mario V Tomasello; Antonios Garas; Frank Schweitzer (Chair of Systems Design)
    Abstract: Drawing on a large database of publicly announced R&D alliances, we track the evolutionof R&D networks in a large number of economic sectors over a long time period (1986-2009). Our main goal is to evaluate temporal and sectoral robustness of the main statisticalproperties of empirical R&D networks. By studying a large set of indicators, we providea more complete description of these networks with respect to the existing literature. Wefind that most network properties are invariant across sectors. In addition, they do notchange when alliances are considered independently of the sectorsto which partners belong.Moreover, we find that many properties of R&D networks are characterized by a rise-and-fall dynamics with a peak in the mid-nineties. Finally, we show that suchproperties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation.
    Date: 2013–09
  19. By: Wixe, Sofia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School,)
    Abstract: This paper tests the importance of firm level knowledge and neighborhood diversity, as a source for localized knowledge spillovers, on firms propensity to innovate. Diversity is measured in terms of industries as well as employee education and occupation, of which the results show a positive neighborhood effect from diversity in education. In addition, an added positive effect from neighborhood diversity in education is found for firms with a larger share of highly educated employees, which points to the importance of absorptive capacity. However, firm characteristics, such as the knowledge of the own employees, provide to be the strongest determinants for the innovativeness of firms.
    Keywords: Knowledge; neighborhood diversity; education; skills; innovation
    JEL: J21 J24 O31 R32
    Date: 2014–04–03
  20. By: Wang, Lanlan; Xu, Jintao; Zheng, Xinye; Qin, Ping
    Abstract: A driving restriction policy, as a control-and-command rationing measure, is a politically acceptable policy tool to address traffic congestion and air pollution in some countries and cities. Beijing was the first city in China to implement this policy. A one-day-a-week driving restriction scheme was expected to take 20 percent of cars off the road every weekday. Using household survey and travel diary data, we analyze the short-term effect of the driving restriction policy on individual mode choice. The data also allow us to identify which demographic groups are more likely to break the rules. The estimates reveal that the restriction policy in Beijing does not have a significant influence on individual driving choices, as compared with its influence on public transit. The rule-breaking behavior is constant and pervasive. We found that 47.8 percent of the regulated car owners didn’t follow the rules and drove “illegally” to their destinations. On average, car owners who traveled during peak hours or for work trips, and those whose destinations were farther away from the city center or subway stations, were more likely to break the rules.
    Keywords: driving restriction policy, Beijing, mode choice, rule breaker Creation-Date: 2013-09-30
    JEL: Q58 R41 D01
  21. By: Satoshi Baba (Faculty of Economics, The University of Tokyo)
    Abstract:    Germany's urban land policy (kommunale Bodenpolitik) attracted the attention of foreign countries. There were also many contemporary publications about this policy in Germany because it was a precondition for city planning, which included housing and transportation policies. The aim of this paper is to clarify Frankfurt am Main's land policy at the turn of the twentieth century, especially under Franz Adickes' era. Adickes, the third senior mayor (1891-1912), carried out urban land policy as a consciously planned intervention in the land market. His land policy had two additional objectives: The first was securing land for administrative buildings and public facilities. The second was the facilitation of city extension and the preparation for future incorporation. Frankfurt's municipal land increased from 4,229.17 ha in 1900 to 6,370.19 ha in 1913. Land purchased by the city consisted of 11,649 estates during the period 1895-1915. Conversely, land sold during the same period consisted of only 2,465 estates because it was difficult to set land prices. As a result, the Erbbaurecht (Heritable Building Right) was utilized as a substitute measure for land sales. Though Frankfurt's urban land policy produced good results, it was forced to change owing to 'the predominance of purchasing policy' and increasing debt. Thus, the state government also became involved with the land and housing policies. The land policy shifted from the stage of 'social city' to that of 'social state' after World War I.
    Date: 2014–02
  22. By: Nathalie Picard (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); André De Palma (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ENS Cachan - École Normale Supérieure de Cachan - École normale supérieure [ENS] - Cachan); Ignacio Inoa (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: Residential location decision is often a household joint decision involving several decision-makers. These different decision-makers usually have diverging preferences, especially in dual-earner households, when spouses work at different locations. Since about half a century, literature on residential location has studied in great detail the influence of socio-demographic characteristics (and in particular the differences between females and males or between multiple-worker and single-worker households). However, there is no research devoted to the within-family joint decision process leading to residential location decision (and work-place decisions). In the context of Paris Area, we analyze differences between spouses' values of commuting times and show that spouses' disparities in commuting decisions is a key element in the intra-household decision process. The single-worker household approach leaves aside by construction important intra-household considerations that influence commuting time and accessibility to jobs. We review different models useful to study intra-household decisions in dual-earner households. To do that, we base our analysis on the framework introduced by Chiappori, de Palma, Picard, and Inoa (2013), which applies the collective approach of household behavior(Chiappori, 1988; Chiappori, 1992) to describe residential location choice of dual-earner households. This collective approach has been used in several economic fields, but not in urban and transport economics so far. Furthermore, we argue that the framework developed by Inoa, Picard, and de Palma (2013), can also be adapted to analyze the joint residential and job location decisions in a two-worker household. The analysis is based on two accessibility variables (one for each spouse) embedded in a three-level nested Logit model which is used to study the interdependence of residential and workplace locations, while accounting for variation of preferences for job types across individuals.
    Keywords: intra-household interaction, residential location, Paris region
    Date: 2014–03–24
  23. By: Alem, Yonas
    Abstract: Unlike most studies of subjective well-being in developing countries, we use a fixed effects regression on three rounds of rich panel data to investigate the impact of relative standing on life satisfaction of respondents in urban Ethiopia. We find a consistently large negative impactof relative standing -- both relative to others and to oneself over time -- on subjective well-being. However, controlling for unobserved heterogeneity through a fixed effects model reduces the impact of the relative standing variables on subjective well-being by up to 24 percent and reduces the impact of economic status by about 40 percent. Our findings highlight the need to be cautious in interpreting parameter estimates from subjective well-being regressions based on cross-sectional data, as the impact of variables may not be disentangled from that of unobserved heterogeneity.
    Keywords: life satisfaction, urban Ethiopia, relative standing, fixed effects
    JEL: O12 I30 I31
    Date: 2014–03–05
  24. By: Richard Funderburg Author Workplace: University of Iowa; Timothy J. Bartik (W.E. Upjohn Institute for Employment Research); Alan H. Peters (University of New South Wales Author Name: Peter S. Fisher Author Workplace: University of Iowa)
    Keywords: REGIONAL ISSUES, Business incentives, Tax incentives, Regional and urban studies
    JEL: R1
  25. By: Ignacio Inoa (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise); Nathalie Picard (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); André De Palma (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ENS Cachan - École Normale Supérieure de Cachan - École normale supérieure [ENS] - Cachan)
    Abstract: A three-level nested logit model for the choice of residential location, workplace, and type of employment is used to assess the effect of an individual-specific measure of accessibility to employments that takes into account the attractiveness of different occupations when the choice of workplace is anticipated in the decision of residential location. The model allows for variation in the preferences for types of employment across individuals and accounts for individual heterogeneity of preferences at each choice level in education, age, gender, and children. Using data from the Île-de-France region, it shows that the individual specific accessibility measure is an important determinant of the choice of residential location and its effect differs along the life cycle. The attractiveness of the types of employment is a better predictor of the workplace location than the usual total number of employments.
    Keywords: residential location, employment location, accessibility, nested logit, Île-de-France.
    Date: 2014–03–24
  26. By: Augusto Cerqua (Dipartimento di Scienze Sociali ed Economiche, Sapienza University of Rome); Guido Pellegrini (Dipartimento di Scienze Sociali ed Economiche, Sapienza University of Rome)
    Abstract: The shortage of studies on spatial spillovers of industrial policies is rather surprising considering that such policies are usually designed for generating spatial externalities. In this paper we propose a new framework that partially relaxes the SUTVA and allows contrasting the positive agglomeration effects with the negative cross-sectional substitution and the crowding-out effect. The global evaluation of the ATT and the spillover parameters shifts the spotlight from the policy effect on subsidised firms to the global effect of the industrial policy on the targeted territory. Analysing a capital subsidy policy in Italy we find a positive and large effect of the policy on subsidised firms in terms of investment, turnover, and employment; however, the employment growth is in part determined to the detriment of affected untreated firms located in the very proximity of one or more treated firms that belong to the same sector of activity.
    Keywords: SUTVA; spillovers; policy evaluation; public subsidies; business support policy.
    JEL: C14 H23 R58
    Date: 2014–04
  27. By: Dieter Pennerstorfer (WIFO)
    Abstract: This paper investigates the influence of competition on price and product quality among Austrian camping sites, a market charactised by both horizontal (spatial) and vertical product differentiation. Theoretically, the effect of competition on quality is ambiguous and depends on the degree of cost substitutability between output and quality. Estimating a system of equations shows that intense competition has a positive impact on product quality and a negative effect on prices (conditional on quality). As high quality is associated with high prices, the total effect of competition on prices is quite small.
    Keywords: Spatial competition, price and quality competition, retail markets, camping sites
    Date: 2014–04–02
  28. By: Pan Ké Shon, Jean-Louis (CREST-LSQ); Verdugo, Gregory (Bank of France)
    Abstract: Analysing restricted access census data, this paper examines the long-term trends of immigrant segregation in France from 1968 to 2007. Similar to other European countries, France experienced a rise in the proportion of immigrants in its population that was characterised by a new predominance of non-European immigration. Despite this, average segregation levels remained moderate. While the number of immigrant enclaves increased, particularly during the 2000s, the average concentration for most groups decreased because of a reduction of heavily concentrated census tracts and census tracts with few immigrants. Contradicting frequent assertions, neither mono-ethnic census tract nor ghettoes exist in France. By contrast, many immigrants live in census tracts characterised by a low proportion of immigrants from their own group and from all origins. A long residential period in France is correlated with lower concentrations and proportion of immigrants in the census tract for most groups, though these effects are sometimes modest.
    Keywords: immigration, spatial segregation, France
    JEL: J61
    Date: 2014–03
  29. By: Kok, Suzanne (CPB Netherlands Bureau for Economic Policy Analysis); ter Weel, Bas (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This research applies a task-based approach to measure and interpret changes in the employment structure of the 168 largest US cities in the period 1990-2009. As a result of technological change some tasks can be placed at distance, while others require proximity. We construct a measure of task connectivity to investigate which tasks are more likely to require proximity relative to others. Our results suggest that cities with higher shares of connected tasks experienced higher employment growth. This result is robust to a variety of other explanations including industry composition, routinisation, and the complementarity between skills and cities.
    Keywords: occupations, tasks, cities, employment
    JEL: J20 J30 O30
    Date: 2014–03
  30. By: Ivar Ekeland (Université Paris-Dauphine - Paris IX); Alfred Galichon (Département d'économie)
    Abstract: This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat’s theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat’s efficiency index.
    Keywords: Afriat's theorem; Indivisible allocations; Optimal assignment; Revealed preferences
    JEL: D11 C60 C78
    Date: 2013–11
  31. By: Eliasson, Jonas (KTH); Börjesson, Maria (KTH); Odeck, James (NTNU, Trondheim); Welde, Morten (NTNU, Trondheim)
    Abstract: We explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants’ decisions are strongly affected by projects’ benefit-cost ratios, with a stronger effect for more expensive projects, while politicians’ decisions are only weakly affected, and only for small projects. In both countries, governments tend to favour investments in regions where they enjoy strong local electoral support. Using cost efficiency as a final selection criterion seems to filter out many inefficient projects already at an early stage of the planning process. We argue that even if political decisionmakers are apparently mostly governed by other concerns than cost efficiency, civil servants at the administrations should not shy away from preparing efficient project suggestions for decisionmakers to choose from.
    Keywords: Cost benefit analysis; Project appraisal; Public decision making; Transport investments
    JEL: H43 R42 R48
    Date: 2014–04–01
  32. By: Thomas Y. Mathä; Alessandro Porpiglia; Michael Ziegelmeyer
    Abstract: This paper analyses empirically how cross-border consumption varies across product and services categories and across household characteristics. It focuses on the part of crossborder sales that arise due to work-related cross-border crossings; it analyses the crossborder consumption behaviour of cross-border commuter households residing in Belgium, France and Germany and working in Luxembourg. In total, it is estimated that these households spend ?925 million per annum in Luxembourg, reflecting about 17% of their gross annual income from Luxembourg and contributing about 10% to total household final consumption expenditure in Luxembourg. Cross-border consumption expenditure is shown to depend on individual and household characteristics, such as total household income, the number of cross-border commuters in the household, distance between home and work, as well as price level (index) differences between Luxembourg and its neighbouring countries. Cross-border commuters take advantage of existing arbitrage opportunities.
    Keywords: Cross-border shopping, commuting, consumption, expenditure, households
    JEL: F15 R12 R23 J61
    Date: 2014–03
  33. By: OECD
    Abstract: Teachers’ salaries increased in real terms between 2000 and 2011 in virtually all OECD countries, but mostly remain below those of other tertiary-educated workers. Statutory salaries for lower secondary school teachers with 15 years of experience are 35% higher than starting salaries in OECD countries. Among OECD countries, education systems that pay teachers more relative to their national income per capita tend to perform slightly better in mathematics as shown by the PISA study. An increasing number of countries are now targeting salary increases to attract high-level graduates in the profession, to retain the best teachers or to assign the most experienced teachers to disadvantaged schools.
    Date: 2014–04
  34. By: Feldman, Maryann (Department of Public Policy, University of North Carolina at Chapel Hill, Chapel Hill, NC, USA); Tavassoli, Sam (CITR, Blekinge Inst of Technology)
    Abstract: The focus of this paper is on the question of how new industries originate in places. There is often confusion between the process of diffusion and the locational factors that give rise to early stage creative discovery. There is a long and distinguished literature that considers the diffusion of ideas. Diffusion is important as it influences the general uptake and implementation of ideas across geography but it is a different process than our focus here. We advance the argument that the creation of new industries is a process that has inherently geographic features. Something new is created out of prior knowledge but a more complex process is required to develop an industry and reap the economic benefits.
    Keywords: new industries; Schmookler scissor; locational factors
    Date: 2014–03–31
  35. By: Giuntella, Osea (University of Oxford); Mazzonna, Fabrizio (University of Lugano)
    Abstract: This paper studies the effects of immigration on health. We merge information on individual characteristics from the German Socio-Economic Panel with detailed local labor market characteristics for the period 1984 to 2009. We exploit the longitudinal component of the data to analyze how immigration affects the health of both immigrants and natives over time. Immigrants are shown to be healthier than natives upon their arrival ("healthy immigrant effect"), but their health deteriorates over time spent in Germany. We show that the convergence in health is heterogeneous across immigrants and faster among those working in more physically demanding jobs. Immigrants are significantly more likely to work in strenuous occupations. In light of these facts, we investigate whether changes in the spatial concentration of immigrants affect natives' health. Our results suggest that immigration reduces residents' likelihood to report negative health outcomes by improving their working conditions and reducing the average workload. We show that these effects are concentrated in blue-collar occupations and are larger among low educated natives and previous cohorts of immigrants.
    Keywords: immigration, health
    JEL: F22 I10 J15 J61
    Date: 2014–03
  36. By: Lin Shao (Washington University of St. Louis); Fabrizio Zilibotti (University of Zurich); Simon Alder (University of Zurich)
    Abstract: We use the establishment of Special Economic Zones in China to estimate the effect of economic reforms on GDP. A panel of 270 Chinese cities from 1988 to 2010 allows us to exploit the variation in the establishment of zones across time and space. The results from our baseline fixed effects specification suggest that the establishment of a major zone led to an increase in the level of GDP between 6% and 10%, depending on the type of zone. This result is similar in a sub-sample of inland provinces, where the selection of cities in which zones were established was more transparent. Decomposing GDP into physical capital, efficient labor, and TFP shows that the effect of the zones went mainly through the accumulation of physical capital. Using electricity consumption and light intensity as two alternative measures for economic activity partly confirms these results.
    Date: 2013
  37. By: Mototsugu Fukushige (Graduate School of Economics, Osaka University); Yingxin Shi (Department of Economics & Management, Dalian Nationalities University)
    Abstract: We investigate the effects of urban and rural populations and area sizes on the expenditures of the prefecture-level local government. We found the following three results. The first relates to the expenditure for urban populations. At around 220,000 people, per capita local government expenditure is minimized in our simulation. The second is that the expenditure for rural populations is proportional to the population size. The third finding is that the expenditure in accordance with the areas is also proportional to the area size. This cost structure is the reason why Chinafs recent rapid urbanization increases prefectural governmentfs fiscal distress.
    Keywords: Efficient scale, Local government, Quantile regression, China
    JEL: H40 H72 R51
    Date: 2014–04
  38. By: Nicola Gennaioli; Rafael LaPorta; Florencio Lopez-de-Silanes; Andrei Shleifer
    Abstract: We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world’s surface and 96 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data.
  39. By: Kalenkoski, Charlene M. (Texas Tech University); Lacombe, Donald J. (West Virginia University)
    Abstract: Studies of the joint time-use decisions of spouses have relied on joint estimation of time-use equations, sometimes assuming correlated errors across spouses' equations and sometimes directly examining the effects of one spouse's time use on another's, relying on panel data or instrumental variables techniques to account for endogeneity. However, panel data often are not available and available instruments often are not satisfactory, making examination of the direct relationship between spouses' time use difficult. Spatial econometric techniques applied to cross-sectional data do not require instrumental variables. This study estimates a Spatial Autoregressive (SAR) Model to examine the labor hours of husbands and wives in dual-earner couples using the 2012 Annual Social and Economic Supplement to the Current Population Survey (ASEC). In this model, each spouse is treated as a direct “neighbor” of the other in a spatial weight matrix and non-spouses are treated as non-neighbors. Estimates of both the own- and cross-wage effects on labor hours and an estimate of the direct relationship between spouses' labor hours are obtained.
    Keywords: employment, intrahousehold allocation of time, own- and cross-wage effects, spatial econometrics
    JEL: J22 D13
    Date: 2014–03
  40. By: Alem, Yonas; Beyene, Abebe D.; Kohlin, Gunnar; Mekonnen, Alemu
    Abstract: We use three rounds of a rich panel data set to investigate the determinants of household fuel choice and energy transition in urban Ethiopia. We observe that energy transition did not occur following economic growth in Ethiopia during the past decade. Regression results from a random effects multinomial logit model, which controls for unobserved household heterogeneity, show that households’ economic status, price of alternative energy sources, and education are important determinants of fuel choice in urban Ethiopia. The results also suggest the use of multiple fuels, or “fuel stacking behavior.” We argue that policy makers could target these variables to encourage transition to cleaner energy sources.
    Keywords: urban Ethiopia, energy choice, random effects multinomial logit
    JEL: C25 Q23 Q42 O13
    Date: 2013–10–10
  41. By: Denisova-Schmidt, Elena; Huber, Martin
    Abstract: This paper investigates regional differences in the perception of corruption and informal practices among Ukrainian firms. Using two different data sets from Ukraine we show that perceived corruption differs significantly across regions, even when taking into account the size, industry, workforce composition, and other characteristics of the firms based on propensity score matching. In particular, perceived corruption is highest in the eastern areas and lowest in the western region, which points to distinct business practices that may be rooted in the different political, cultural, and historical development of Ukrainian regions.
    Keywords: Corruption, Informal Practices, Regionalism, Ukraine
    JEL: C21 D73 K42 O17 P2
    Date: 2014–04
  42. By: Francis Bloch (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Gabrielle Demange (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, 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)); Rachel Kranton (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, 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))
    Abstract: Why do people spread rumors? This paper studies the transmission of possibly false information---by rational agents who seek the truth. Unbiased agents earn payoffs when a collective decision is correct in that it matches the true state of the world, which is initially unknown. One agent learns the underlying state and chooses whether to send a true or false message to her friends and neighbors who then decide whether or not to transmit it further. The papers hows how a social network can serve as a filter. Agents block messages from parts of the network that contain many biased agents; the messages that circulate may be incorrect but sufficiently informative as to the correct decision.
    Keywords: Bayesian updating ; Rumors ; Misinformation ; Social networks
    Date: 2014–03
  43. By: Baye, Irina; Hasnas, Irina
    Abstract: We analyze firms' location choices in a Hotelling model with two-dimensional consumer heterogeneity, along addresses and transport cost parameters (flexibility). Firms can price discriminate based on perfect data on consumer addresses and (possibly) imperfect data on consumer flexibility. We show that firms' location choices depend on how strongly consumers differ in flexibility. Precisely, when consumers are relatively homogeneous, equilibrium locations are socially optimal regardless of the quality of customer flexibility data. However, when consumers are relatively differentiated, firms make socially optimal location choices only when customer flexibility data is perfect. These results are driven by the optimal strategy of a firm on its turf, monopolization or market-sharing, which in turn depends on consumer heterogeneity in flexibility. Our analysis is motivated by the availability of customer data, which allows firms to practice third-degree price discrimination based on both consumer characteristics relevant in spatial competition, addresses and transport cost parameters. --
    Keywords: Location Choice,Price Discrimination,Customer Data
    JEL: D43 L13 R30 R32
    Date: 2014
  44. By: Mitaritonna, Cristina (CEPII, Paris); Orefice, Gianluca (CEPII, Paris); Peri, Giovanni (University of California, Davis)
    Abstract: Immigrants may complement native workers, increase productivity, allow specialization 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 firms use immigrants. Allowing firms to have differential fixed cost in hiring immigrants we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and firm's productivity. Using micro-level data on French firms, 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 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 of the firms. Finally 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 department.
    Keywords: immigrants, firms, productivity, heterogeneity, fixed costs of hiring
    JEL: F22 E25 J61
    Date: 2014–03
  45. By: Berthelon, Matias (Universidad Adolfo Ibañez); Kruger, Diana (Universidad Adolfo Ibañez)
    Abstract: We analyze the effect of having a child in adolescence on high school completion, educational attainment, and college enrollment in a developing country setting using nine repeated rounds of Chilean household surveys that span the 1990–2009 period. We control for selection bias and household unobservables of teen motherhood with two approaches: different estimation methods – propensity score matching and family fixed effects for a large sub-sample of sisters – and three different samples. Results reveal that adolescent motherhood reduces the probability of high school completion by between 18 to 37 percent. Furthermore, effects are heterogeneous across education groups: teen motherhood has larger negative effects on high school completion and years of schooling among poor and low-education households. Our results imply that policies aimed at reducing early childbearing will have important short-term effects on young women's education outcomes.
    Keywords: education, teen pregnancy, adolescent motherhood, youth, high school, Chile
    JEL: O15 J13 I25
    Date: 2014–03
  46. By: Elizabeth Watson (Reserve Bank of New Zealand)
    Abstract: This note takes a closer look at some factors that influence demand and supply in residential property markets, and goes on to consider how such factors might be relevant in interpreting current New Zealand developments.
    Date: 2013–12
  47. By: Christopher Hoag; Kamal Lamsal
    Abstract: In a linear city model of firm location, firms have altruistic objective functions that consist of a linear combination of maximizing profits and producing output, although firms are constrained to earn nonnegative profits. If firms place sufficient weight on maximizing profits, then firms locate at the ends of the linear city, just as in the firm location game under profit maximization. If firms place sufficient weight on producing output, then firms will locate at the median of the linear city, just as in the candidate voting game.
    Keywords: Nonprofit, Linear City
    JEL: L13 L31
    Date: 2014–04
  48. By: Paula Armstrong (Department of Economics, University of Stellenbosch)
    Abstract: This paper investigates different theoretical models of incentives for teachers in education. It highlights key characteristics likely to render incentives successful in encouraging productive behaviour, provides evidence of where these systems have been successfully and unsuccessfully implemented internationally and the likelihood of successful implementation of teacher incentive programmes in South Africa.
    Keywords: incentives, teachers
    JEL: I2 J5
    Date: 2014
  49. By: John D. Singleton
    Abstract: A substantial and diverse literature in economics traces its intellectual roots to Charles Tiebout's 1956 article, "The Pure Theory of Local Expenditure." Its present recognition frequently attributed to originating the idea of "voting with your feet," however, contrasts sharply with its obscurity during Tiebout's academic career, which was tragically cut short by his passing in 1968. Penned as a qualification to Paul Samuelson's "pure theory," the article failed to influence the stabilization of postwar public good theory, despite Tiebout's engagement with key figures in its construction. Moreover, his death preceded the application of its central mechanism to public, urban, and environmental topics via hedonic, sorting, and computational general equilibrium models. Viewed in this way, the history of Tiebout's article, and thereby the history of public economics, has remarkably little to do with Tiebout himself. Professionally, though, the article reflected Tiebout's lifelong interest in issues of local economies and governance. The social and political context of urban sprawl and political fragmentation that accompanied the rapid growth of metropolitan area, such as Chicago, Los Angeles, and Seattle, raised novel questions in local public finance for researchers before a knowledge community existed to credit their work. For Tiebout, it stimulated his collaboration with Vincent Ostrom and Robert Warren and later involvement in the burgeoning interdisciplinary field of regional science.
    Keywords: public goods, Charles Tiebout, Tiebout sorting, James Buchchanan, Richard Musgrave, Paul Samuelson
    Date: 2013
  50. By: Martin Altemeyer-Bartscher
    Abstract: Jurisdictions that engage in inter-regional tax competition usually try to attenuate competitive pressures by substituting salient tax instruments with hidden ones. On this effect, we investigate the efficiency consequences of inter-regional tax competition and fiscal equalization in a federal system when taxpayers fail to optimally react on shrouded attributes of local tax policy. If the statuary tax rate is a relatively salient instrument and taxpayers pay low attention to the quality and the frequency of tax enforcement, the underlying substitution of tax instruments with the aim of reducing the perceived tax price may suppress the under-exploitation of tax bases that is typically triggered by fiscal equalization.
    Keywords: fiscal equalization, tax salience, tax competition, fiscal federalism, tax-cut-cum-base-broadening policy
    JEL: H77 H22 H30
    Date: 2014–03
  51. By: George J. Borjas; Kirk B. Doran
    Abstract: Many economists believe knowledge production generates positive spillovers among knowledge producers. The available evidence, however, is mixed. We argue that spillovers can exist along three dimensions (idea, geographic, and collaboration space). To isolate the key channel through which knowledge spills over, we use a unique data set to examine the impact of a large post-1992 exodus of Soviet mathematicians on the output of the non-émigrés. Although the data reveal strong competitive effects in idea space, there is evidence of knowledge spillovers in collaboration space, when high-quality researchers directly engage with other researchers in the joint production of new knowledge.
    JEL: D83 J24 O31
    Date: 2014–03
  52. By: Finn Christensen (Department of Economics, Towson University)
    Abstract: This paper studies stability and slope properties of market demand when disaggregated consumption externalities exist. Equilibrium is stable when feedback effects are limited, where feedback effects exist when own demand is indirectly affected by own consumption. Market demand is downward sloping if consumption externalities are not too strong and negative consumption externalities are not too varied. Under purely positive consumption externalities market demand is downward sloping in any stable equilibrium. Demand may be stable and upward sloping when negative consumption externalities exist. Under purely negative consumption externalities, upward sloping demand requires at least one "spoiler" whose consumption has a cumulatively large negative effect on others' demand.
    Keywords: Demand, consumption externalities, bandwagon and snob effects,network effects, strategic complements and substitutes, interdependent preferences, congestion, feedback effects, stability, slope of market demand, moderate social influence.
    JEL: D11
    Date: 2014–04
  53. By: Masahiro Shoji (Faculty of Economics, Seijo University)
    Abstract:    This study empirically disentangles the channels of peer effects in crime through an experiment conducted in rural Bangladesh. The first part of this study assumes that individuals exhibit guilt aversion, which predicts the peer effects via guilt sensitivity and belief. By incorporating peer effects in a take-away game, the criminal player is informed about the victim player's belief only in the treatment group, so that the peer effects in the treatment group are driven only through guilt sensitivity. The experime ntal results suggest that peer effects affect and bring about changes in belief. The second part elicits guilt sensitivity to test guilt aversion. I find robust supporting evidence for my results, and reject the alternatives such as pure altruism and trustw orthiness. Finally, external validity is also confirmed: the criminal behaviour of subjects in the experiment is correlated with their attitude towards illegal activities in the real wo rld, and individuals are less likely to suffer from property crime in villages with a higher guilt sensitivity neighbourhood.
    Date: 2014–02
  54. By: Eliasson, Jonas (KTH)
    Abstract: Congestion charges were introduced in Stockholm in 2006 as a seven-month trial, followed by a referendum where a majority voted in favour of the charges. This led to the reintroduction of congestion charges in August 2007, and they have been operational since then. The system has attracted worldwide attention worldwide, both because it achieved substantial congestion reductions, and because the system overcame fierce initial hostility, surviving a heated and complicated political and legal process, and eventually gaining support by more than 2/3 of the population and all political parties. This report summarises the story of the Stockholm congestion charges, pointing out experiences and lessons learnt.
    Keywords: Congestion charges; Stockholm; Sustainable transport
    JEL: H23 H54 R41 R48
    Date: 2014–04–01
  55. By: Oriana Bandiera; Valentino Larcinese; Imran Rasul
    Abstract: We provide evidence on whether providing university students with feedback on their past exam performance affects their future exam performance. Our identification strategy exploits a natural experiment in a leading UK university where different departments have historically different rules on the provision of feedback to their students. We find the provision of feedback has a positive effect on students’ subsequent test scores: the mean impact corresponds to 13% of a standard deviation in test scores. The impact of feedback is stronger for more able students and for students who have less information to start with about the academic environment, while no subset of individuals is found to be discouraged by feedback. Our findings suggest that students have imperfect information on how their effort translates into test scores and that the provision of feedback might be a cost?effective means to increase students' exam performance. Keywords: feedback, incentives, students' performance, university education.
    Date: 2014
  56. By: Jennifer Edwards; Rebecca Kellenberg
    Keywords: ELE Evaluation, Express Lane Eligibility Evaluation, South Carolina, CHIPRA
    JEL: I
    Date: 2013–11–22
  57. By: Jennifer Edwards; Diana Rodin
    Keywords: ELE Evaluation, Express Lane Eligibility Evaluation, Massachusetts, CHIPRA
    JEL: I
    Date: 2013–11–19

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