nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒06‒28
35 papers chosen by
Steve Ross
University of Connecticut

  1. Probabilistic flows of inhabitants in urban areas and self-organization in housing markets By Takao Hishikawa; Jun-ichi Inoue
  2. Regional variation in the elasticity of supply of housing, and its determinants: The case of a small sparsely populated country By Elias Oikarinen; Risto Peltola; Eero Valtonen
  3. Peer Effects Identified Through Social Networks: Evidence from Uruguayan Schools By Gioia De Melo
  4. Regional US house price formation: One model fits all? By André Kallåk Anundsen; Christian Heebøll
  5. Transportation Costs and the Spatial Organization of Economic Activity By Stephen J. Redding; Matthew A. Turner
  6. The Effect of High School Shootings on Schools and Student Performance By Beland, Louis-Philippe; Kim, Dongwoo
  7. The Impact of Attending Low-Achieving Schools on High-Performing Student Outcomes By Eric Parsons
  8. Estimating the future local public school expenditures in Japan - the impacts of scale diseconomies and the change in faculty age structure - By Nobuo Akai; Miki Suhara
  9. Spatial agglomeration and firm exit: a spatial dynamic analysis for Italian provinces By Giulio Cainelli; Sandro Montresor; Giuseppi Vittucci Marzetti
  10. Carbon price efficiency : lock-in and path dependence in urban forms and transport infrastructure By Avner, Paolo; Rentschler, Jun; Hallegatte, Stephane
  11. Housing Affordability: Lessons from the United States By Skidmore, Mark
  12. Household wealth in the euro area: The importance of intergenerational transfers, homeownership and house price dynamics By Thomas Y. Mathä; Alessandro Porpiglia; Michael Ziegelmeyer
  13. An examination of the drivers of spatial employment and population growth within the rural economy By Patton, Myles; Feng, Siyi
  14. 50 years of urbanization in Africa : examining the role of climate change By Henderson, J. Vernon; Storeygard, Adam; Deichmann, Uwe
  15. Odleg³osc ekonomiczna w modelowaniu zjawisk przestrzennych z wykorzystaniem modelu grawitacji By Michal Bernard Pietrzak, Justyna Wilk
  16. Metropolitan areas in central Poland and their impact on migration flows By Michal Bernard Pietrzak, Justyna Wilk
  17. Do better property rights improve local income?: Evidence from First Nations' treaties By Fernando M. Aragon
  18. Reflections on Measuring Urban Fiscal Health By Richard M. Bird
  19. Gender gaps in primary school achievement. A decomposition into endowments and returns to IQ and non-cognitive factors By Golsteyn B.H.H.; Schils T.
  20. Municipal Finance in India: Some Critical Issues By Simanti Bandyopadhyay
  21. Benchmarking public policy : methodological insights from measurement of school based management By Parandekar, Suhas D.
  22. Falling Short: Intergovernmental Transfers in China By Yongzheng Liu; Jorge Martinez-Vazquez; Baoyun Qiao
  23. Vulnerability and Resilience: Two Dimensions of Rurality By Freshwater, David
  24. The response of land markets to flood protection and flood experience: a hedonic price modeling on the Gironde estuary (France) By Dachary-Bernard, Jeanne; Rambonilaza, Tina; Lemarié-Boutry, Marie
  25. Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732–1860 By Mario J. Crucini; Gregor W. Smith
  26. Explaining the U-Shape of the Referral Hiring Pattern in a Search Model with Heterogeneous Workers By Yuliia Stupnytska
  27. A nonparametric approach to the decomposition of labor productivity in regional manufacturing By Juan Carlos Chávez; Luis Fernando López Ornelas  
  28. Sytuacja spoleczno-gospodarcza jako determinanta migracji wewnêtrznych w Polsce By Justyna Wilk, Michal Bernard Pietrzak, Stanislaw Matusik
  29. The impacts of temporary and anticipated tourism spending By Grant Allan; Patrizio Lecca; Kim Swales
  30. The Distributional Impacts of an Energy Boom in Western Canada By Marchand, Joseph
  31. Estimating sourcing premia with Italian regional data By Valeria Gattai; Valentina Trovato
  32. Mexican Migration to the United States: Underlying Economic Factors and Possible Scenarios for Future Flows By Daniel Chiquiar; Alejandrina Salcedo
  33. Do government private subsidies crowd out entrepreneurship ? By Islam, Asif
  34. The Analysis of Population Aging Phenomena in Poland in Spatial Perspective By Justyna Wilk, Michal Bernard Pietrzak
  35. Sunk Costs and the Measurement of Commercial Property Depreciation By W. Erwin Diewert; Kevin J. Fox

  1. By: Takao Hishikawa; Jun-ichi Inoue
    Abstract: We propose a simple probabilistic model to explain the spatial structure of the rent distribution of housing market in city of Sapporo. Here we modify the mathematical model proposed by Gauvin et. al. Especially, we consider the competition between two distances, namely, the distance between house and center, and the distance between house and office. Computer simulations are carried out to reveal the self-organized spatial structure appearing in the rent distribution. We also compare the resulting distribution with empirical rent distribution in Sapporo as an example of cities designated by ordinance. We find that the lowest ranking agents (from the viewpoint of the lowest `willing to pay') are swept away from relatively attractive regions and make several their own `communities' at low offering price locations in the city.
    Date: 2014–06
  2. By: Elias Oikarinen (Department of Economics, University of Turku); Risto Peltola; Eero Valtonen
    Abstract: Previous empirical investigations provide evidence of substantial regional variation in the supply elasticity of housing, and show that the elasticity and its variation across cities within the U.S. are significantly influenced by regulatory supply constraints, city level population, population density, and geographic constraints. This paper studies empirically if these findings apply to a country that is notably different from the U.S. with respect to its population density, typical city size, geographic and cultural coherence, and regulatory constraints, i.e., Finland. Based on data for the period 1987-2011, our findings are largely in line with those reported for the U.S. The results support the theoretical models indicating that the supply elasticity is largely a local phenomenon, i.e., dependent mainly on city specific factors rather than the abundance of undeveloped land at the country level. The long-term supply elasticity substantially varies across Finnish cities. The city size, zoning policies, and geographic constraints are found to be the most important factors causing regional elasticity differences, accounting for some 80% of the elasticity variation.
    Keywords: housing; supply; price; elasticity; regions
    JEL: R31 R52
    Date: 2014–05
  3. By: Gioia De Melo
    Abstract: his paper represents the first application of a novel strategy to estimate peer effects in education in a developing country. It provides evidence on peer effects in standardized tests by exploiting a unique data set on social networks in Uruguayan primary schools. The identification method enables one to solve the reflection problem via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled for via classroom fixed effects. I find significant endogenous effects in reading, math scores (and mixed evidence on science): a one-standard deviation increase in peers' scores increases own scores by about 40 percent of a standard deviation. Simulation exercises show that, in a context of socioeconomic segregation in which students are assigned to public schools according to their neighborhood of residence, peer effects may amplify educational inequalities.
    Keywords: Peer effects, education, social networks, inequality
    JEL: I21 I24 O1
    Date: 2014–02
  4. By: André Kallåk Anundsen; Christian Heebøll (Norges Bank)
    Abstract: Does a "one model fits all" approach apply to the econometric modeling of regional house price determination? To answer this question, we utilize a panel of 100 US Metropolitan Statistical Areas over the period 1980q1-2010q2. For each area we estimate a separate cointegrated VAR model, focusing on differences in the effect of subprime lending and lagged house price appreciation. Our results demonstrate substantial differences in the importance of subprime lending for house price determination across regional housing markets. Specifically, we find a greater impact of subprime lending in areas with a high degree of physical and regulatory restrictions on land supply. Likewise, lagged house price appreciation - interpreted as capturing an adaptive expectation channel - is found to be more important in areas where the supply of dwellings is more constrained, in areas located in a state with non-recourse lending and in more populous areas. Our results also suggest that disequilibrium constellations are restored more slowly in areas located in a state with non-recourse lending.
    Keywords: Cointegration, Panel heterogeneity, Regional house price dynamics, Subprime lending
    JEL: C32 C51 C52 G01 R21 R31
    Date: 2014–05–27
  5. By: Stephen J. Redding; Matthew A. Turner
    Abstract: This paper surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multi-region model of economic geography that we use to understand the general equilibrium implications of transportation infrastructure improvements within and between locations for wages, population, trade and industry composition. Guided by the predictions of this model, we review the empirical literature on the effects of transportation infrastructure improvements on economic development, paying particular attention to the use of exogenous sources of variation in the construction of transportation infrastructure. We examine evidence from different spatial scales, between and within cities. We outline a variety of areas for further research, including distinguishing reallocation from growth and dynamics.
    JEL: F15 R12 R40
    Date: 2014–06
  6. By: Beland, Louis-Philippe; Kim, Dongwoo
    Abstract: We analyze how fatal shootings in high schools affect schools and students using data from shooting databases, school report cards, and the Common Core of Data. We examine schools’ test scores, enrollment, and number of teachers, as well as graduation, attendance, and suspension rates at schools that experienced a shooting, employing a difference-in-differences strategy that uses other high schools in the same district as the comparison group. Our findings suggest that homicidal shootings significantly decrease the enrollment of students in grade 9 (the high-school entrance grade), and test scores in math and English. Using student-level data from California, we confirm that shootings also lower test results for students that remain enrolled. We find no statistically significant effect on suicidal shootings on all outcome variable of interest.
    Keywords: Shootings, Student performance, Education
    JEL: I29 J13 K4
    Date: 2014–06–16
  7. By: Eric Parsons (Department of Economics, University of Missouri-Columbia)
    Abstract: This paper follows a cohort of initially high-performing Missouri students from grade-3 through grade-9 and examines whether school “mismatch†affects high-performing student outcomes. Specifically, the study explores the effect that attending a low-achieving school has on initially high-performing students’ subsequent standardized exam scores, as well as the grade in which they first take Algebra I. Two key findings emerge. First, attending a low-achieving school does not affect the standardized exam performance of initially high-performing students once school quality (as measured by value-added) is accounted for. Second, high-performing students who attend low-achieving schools are more likely to take Algebra I later relative to their counterparts who attend higher-achieving schools.
    Keywords: economics of education, high performing students, mismatch, exam score performance
    JEL: I20 I24 I28
    Date: 2014–04–15
  8. By: Nobuo Akai (Osaka School of International Public Policy, Osaka University); Miki Suhara (Strategic Planning Office, Institute of Academic Initiatives, Osaka University)
    Abstract: Decrease in the future number of students due to the low birth rate could affect public educational expenditures in Japan? Is there any regional difference? This paper simulates the future amount of local public primary, junior high, and high school expenditures in each Japanese prefecture. More specifically, we focus on faculty costs which consist of quite a large share of school expenditures. We examine the effect of economies of scale through the change in class/school size, and the impact of the shift in the faculty age distribution on the future faculty costs per student. We also investigate regional disparities concerning the future fiscal burden.
    Keywords: the Industrial Revolution; local educational expenditure, faculty costs, scale diseconomies, regional disparity
    JEL: H52 H72 I22
    Date: 2014–06
  9. By: Giulio Cainelli (University of Padova); Sandro Montresor (University of Bologna); Giuseppi Vittucci Marzetti (University of Milano - Bicocca)
    Abstract: The paper investigates the effect of spatial agglomeration on firm exit in a dynamic framework. Using a large dataset at the industry-province level for Italy (1998-2007), we estimate a spatial dynamic panel model via a GMM estimator and analyze the short-run impact of specialization and variety on firm exit. Specialization negatively affects firm exit rates in the short-run. The effect is particularly significant for low-tech firms. The impact of variety on firm mortality rates at the industry level is instead less clear, although still negative and significant for low-tech firms.
    Keywords: Firm exit, Localization, Spatial agglomeration, Specialization, Variety. Classification-JEL: R11, R12, L11, G20.
    Date: 2013–10
  10. By: Avner, Paolo; Rentschler, Jun; Hallegatte, Stephane
    Abstract: This paper investigates the effect of carbon or gasoline taxes on commuting-related CO2 emissions in an urban context. To assess the impact of public transport on the efficiency of the tax, the paper investigates two exogenous scenarios using a dynamic urban model (NEDUM-2D) calibrated for the urban area of Paris: (i) a scenario with the current dense public transport infrastructure, and (ii) a scenario without. It is shown that the price elasticity of CO2 emissions is twice as high in the short run if public transport options exist. Reducing commuting-related emissions thus requires lower (and more acceptable) tax levels in the presence of dense public transportation. If the goal of a carbon or gasoline tax is to change behaviors and reduce energy consumption and CO2 emissions (not to raise revenues), then there is an incentive to increase the price elasticity through complementary policies such as public transport development. The emission elasticity also depends on the baseline scenario and is larger when population growth and income growth are high. In the longer run, elasticities are higher and similar in the scenarios with and without public transport, because of larger urban reconfiguration in the latter scenario. These results are policy relevant, especially for fast-growing cities in developing countries. Even for cities where emission reductions are not a priority today, there is an option value attached to a dense public transport network, since it makes it possible to reduce emissions at a lower cost in the future.
    Keywords: Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Climate Change Economics,Transport in Urban Areas,Transport and Environment
    Date: 2014–06–01
  11. By: Skidmore, Mark
    Abstract: Over the last two decades, New Zealand experienced a threefold increase in housing prices. The largest surge in prices in recent years occurred between 1998 and 2007, a period of housing price growth in many developed economies. Since 2007, housing price growth remained flat until 2011, and then prices once again embarked on an upward trend. However, recent housing price growth has been concentrated in Auckland and Christchurch. The purpose of this report is to compare and contrast New Zealand housing trends and policies with those of United States. The report summarizes lessons learned from the United States and highlights data needs and research questions that may require further consideration in order to better understand housing markets in New Zealand.
    Keywords: Housing, Land use regulation, Economic development,
    Date: 2014
  12. By: Thomas Y. Mathä; Alessandro Porpiglia; Michael Ziegelmeyer
    Abstract: Results from the Eurosystem Household Finance and Consumption Survey reveal substantial variation in household net wealth across euro area countries that await explanation. This paper focuses on three main factors for the wealth accumulation process, i) homeownership, ii) housing value appreciation and iii) intergenerational transfers. We show that these three factors, in addition to the common household and demographic factors, are relevant for the net wealth accumulation process in all euro area countries, and moreover that, using various decomposition techniques, differences therein, in particular in homeownership rates and house price dynamics, are important for explaining wealth differences across euro area countries.
    Keywords: household wealth, homeownership, property prices, inheritance, euro area
    JEL: D31 E21 O52 C42
    Date: 2014–06
  13. By: Patton, Myles; Feng, Siyi
    Abstract: Regional employment and population change have displayed considerable spatial disparities within Northern Ireland in recent years. It is important to gain a better understanding of the causes of these spatial disparities to facilitate the development of effective policies to promote economic growth within the rural economy. Growth equilibrium models provide a means to examine the multiple, integrated economic, social and geographical factors that contribute to economic growth and analyse their synergistic effect on each other (Adelaja et al., 2009). This modelling framework has been developed to analyse the interaction of economic phenomena occurring in spatial dimensions and account for interdependencies between population and employment change. This study applies the growth equilibrium model framework to analyse the linkages between population and employment patterns and other exogenous determinants of spatial growth within Northern Ireland. The analysis is based on ward level data over the period 2001 to 2007. The analysis suggests that employment and population growth are interdependent. An increase in population has a positive impact on employment, while an increase in employment has a positive impact on population. Moreover, there is evidence that the spatial spillover effects are significant, indicating that changes in employment/population growth in one region has knock-on impacts on neighbouring regions.
    Keywords: Rural development, regional growth and growth equilibrium model, Community/Rural/Urban Development, International Relations/Trade, Labor and Human Capital, Research Methods/ Statistical Methods, Q1, R1, R2,
    Date: 2014–04
  14. By: Henderson, J. Vernon; Storeygard, Adam; Deichmann, Uwe
    Abstract: This paper documents a significant impact of climate variation on urbanization in Sub-Saharan Africa, primarily in more arid countries. By lowering farm incomes, reduced moisture availability encourages migration to nearby cities, while wetter conditions slow migration. The paper also provides evidence for rural-urban income links. In countries with a larger industrial base, reduced moisture shrinks the agricultural sector and raises total incomes in nearby cities. However, if local cities are entirely dependent on servicing agriculture so their fortunes move with those of agriculture, reduced moisture tends to reduce local urban incomes. Finally, the paper shows that climate induces employment changes within the rural sector itself. Drier conditions induce a shift out of farm activities, especially for women, into non-farm activities, and especially out of the workforce. Overall, these findings imply a strong link between climate and urbanization in Africa.
    Keywords: Science of Climate Change,Climate Change Mitigation and Green House Gases,Population Policies,Climate Change Economics,Water Conservation
    Date: 2014–06–01
  15. By: Michal Bernard Pietrzak, Justyna Wilk (Nicolaus Copernicus University, Wroc³aw University of Economics, Poland)
    Abstract: The paper discusses the issue of an economic distance and its significance in modeling phenomena occurring in regional space. Economic distances between regions were deter-mined and their influence on internal migration flows in Poland in the period 2000-2010 was examined. The period before Poland’s accession to the EU, as well as two periods re-ferring to the changes in economic trend and the intensity of domestic migrations, was considered. The economic distance is one of the most significant determinants of internal migration flows. In comparison to the geographical distance, it undergoes changes in time and space. Furthermore it affects the intensity of flows between regions in the opposite di-rection. Higher economic distance results in more intensive interactions between regions.
    Keywords: economic distance, regional development, gravity model, internal migrations
    JEL: C21 J11 O11 O15 R11 R23
    Date: 2014–03
  16. By: Michal Bernard Pietrzak, Justyna Wilk (Nicolaus Copernicus University, Wroc³aw University of Economics, Poland)
    Abstract: The objective of the paper is to identify subregions (NUTS 3) of the central part of Poland pretending to metropolitan areas, as well as to study their impact on the domestic migration flows. Their social and economic situations in 2008 were determined on the basis of the composite measure values. Their participation in the domestic migration flows in the period 2008-2010, considering the directions, range and intensity of flows, was also examined. Only Warsaw is the completely shaped metropolitan area in Poland. The city demonstrates the highest economic potential and therefore the strongest migration flows and dependences with other subregions. The cities of Poznañ and £ódŸ and also the Bydgosko-Toruñski subregion can be recognized as developing metropolitan areas. These subregions represent significant economic centres; however migration flows related to them demonstrate mainly regional importance.
    Keywords: metropolitan areas, migration flows, economic development, central Poland
    JEL: J11 O11 R11 R23
    Date: 2014–03
  17. By: Fernando M. Aragon (Simon Fraser University)
    Abstract: This paper examines the effect of an improvement in property rights on a local economy. It uses the case of First Nations' modern treaties. These treaties are an important institutional reform that clarifies ownership of land and natural resources near Aboriginal communities. Using confidential micro-data, I find evidence of a positive impact of modern treaties on real household income. The effect is driven by employment income and spreads among workers in industries not directly affected by the reform. I also find an increase in real wages and housing costs. These results are consistent with property right reforms creating a positive demand shock that affects the whole local economy. This is a yet understudied mechanism through which better property rights can generate positive local spillovers.
    Keywords: property rights, institutions, local development
    JEL: O12 O18 P48
    Date: 2014–04
  18. By: Richard M. Bird (University of Toronto)
    Abstract: This paper considers several distinct but related aspects of what we are doing when we attempt to measure and evaluate the fiscal health of cities: How is the fiscal health of cities defined in the literature? How is this concept related to fiscal sustainability? How may fiscal health be measured in practice? And to what extent may fiscal health indicators be interpreted as representing local fiscal effort or performance?
    Keywords: Social cohesion, FDI, Institutions, Religion in politics, Ethnic tensions, Conflicts, Panel data models, Fixed effects, Instrumental variables estimation, System GMM.
    Date: 2014–06–09
  19. By: Golsteyn B.H.H.; Schils T. (GSBE)
    Abstract: In elementary school, girls typically outperform boys in languages and boys typically outperform girls in math. The determinants of these differences have remained largely unexplored. Using rich data from Dutch elementary schools, we decompose the differences in achievement into gender differences in endowments and returns to IQ and non-cognitive factors. This descriptive analysis is a thought experiment in which we show the consequences for school performance if girls and boys would have similar resources and take similar advantage of these resources. Our findings indicate that gender differences in resources with respect to social and instrumental skills and need for achievement can explain part of the differences in performance. Boys seem to be better equipped with these resources. Additionally, boys and girls employ their skills differently. Girls take more advantage of their IQ than boys. Yet, the largest part of this parameter effect is left unexplained by IQ and non-cognitive factors.
    Keywords: Analysis of Education; Education and Inequality;
    JEL: I21 I24
    Date: 2014
  20. By: Simanti Bandyopadhyay (National Institute of Public Finance and Policy)
    Abstract: TWith the help of the available literature, the paper attempts to assess critically the main problems of municipal finances in India and to bring out the challenges that the municipalities face with respect to revenue generation and expenditure management. The main findings suggest that the urban local bodies in India are confronted with lack of proper decentralization of functions and finances, inadequate revenue generation, expenditure shortfalls leading to poor service delivery. It also analyses the suggestions and recommendations that have been offered in the literature to cope with these critical challenges relating to urban finance.
    Date: 2014–05–22
  21. By: Parandekar, Suhas D.
    Abstract: This working paper presents a benchmarking analysis of School Based Management (SBM) using empirical data from the Philippines. School based management is widely used as a policy tool in many countries that seek to improve the quality of service delivery through decentralization. School based management typically takes many years to have an impact on educational outcomes, but policy makers need to know sooner how well the policy is being implemented. The paper extends the well-known Rasch methodology from the literature on student achievement, including the Programme for International Student Assessment, to the measurement of the implementation of school based management by computing a Rasch measure of the implementation of school based management. To test whether the resulting benchmarked measure is plausible and has practical policy value, the measure is tested for correlations with standardized measures of personality and political skills of school principals, developed in the psychology and political science literatures. The paper will be useful for readers interested in studying school based management as well as those interested more generally in the methodology of benchmarking implementation of public policy where the ultimate results are subject to long implementation periods. The methodology presented in this paper can be applied to enhance the rigor of the ongoing Systems Approach for Better Education Results (SABER) exercise to benchmark educational policies in various domains. That exercise is set to become one of the flagship policy analytical tools being developed by the World Bank and partner agencies.
    Keywords: Tertiary Education,Education For All,Primary Education,Teaching and Learning,Educational Sciences
    Date: 2014–06–01
  22. By: Yongzheng Liu (School of Finance Renmin, University of China); Jorge Martinez-Vazquez (International Center for Public Policy. Andrew Young School of Policy Studies, Georgia State University); Baoyun Qiao (China Academy of Public Finance and Policy, Central University of Finance and Economics)
    Abstract: The main objective of the paper is to propose a framework in which fiscal health conditions can be assessed and the main determinants affecting fiscal health can be identified, inspite of severe data constraints. The paper draws on big urban agglomerations in India as well as smaller cities as a sample and attempts to identify the difference, if any, in the main determinants for variations in fiscal health conditions across different size classes of cities. To compensate for the lack of statistical rigor in the estimations of expenditure needs and revenue capacities, we propose a framework which analyses the ratio of expenditure needs to revenue capacity by fitting an econometric model. It is a two-step method, in the first stage we estimate the expenditure need and revenue capacity separately by simple methods discussed above. In the second stage we take the ratio of expenditure need and revenue capacity as an indicator of financial performance of a ULB and fit an econometric model to explain the performance of ULBs on the basis of factors which are likely to affect the performance of the ULBs. We find that the role of the higher tiers of the government is important in bigger and smaller size class of cities in their financial management. However, for bigger cities we find that the own source revenues can also play an important role in bringing down the fiscal ratio. In the smaller ULBs the role of the demand indicators is not that prominent but the cost indicators play a relatively prominent role. In case of bigger agglomerations, the demand indicators are more prominent than the cost indicators.
    Date: 2014–05–27
  23. By: Freshwater, David
    Abstract: The paper provides an overview of the treatment of risk in economics as a way to connect the concept of risk, as used by economists, to the concern of other social science disciplines with how the parallel concepts of vulnerability and resilience affect rural and regional development. These latter two terms have become popular in the economic geography, rural sociology, disaster management and regional studies literature, but typically have not been considered in a formal way. The paper provides examples from three threads of economics literature – household studies of vulnerability, macroeconomic studies of vulnerability and growth, and the literature on small states, volatility and economic growth, to suggest how standard economic models of risk management can be applied to rural development problems in OECD countries. Applying these concepts may lead to some alternative conclusions about the desirability of common rural development strategies, such as, diversification forming clusters or expanding local supply chains.
    Keywords: rural development, risk management, vulnerability, resilience, portfolio, regional growth, Community/Rural/Urban Development, Risk and Uncertainty, D81, R11, R58, O40,
    Date: 2014–06–25
  24. By: Dachary-Bernard, Jeanne; Rambonilaza, Tina; Lemarié-Boutry, Marie
    Abstract: We develop a hedonic price model on the Gironde estuary (south of France) in order to test the impact of vulnerability to flooding on land prices. The original contribution of our analysis relies on distinguishing the respective impact of two non-structural measures on land prices - the preventive strategy consisting in a flood hazard zoning and the curative response to flood events consisting in orders for natural disaster to initiate financial compensation. This analysis is conducted on three different segments of land market (agricultural, vineyards and residential segments). We pay a particular attention to the respective importance of attractiveness factors from vulnerability ones to explain land price. We use a two-step method to estimate the model, starting with a semi-parametric model (based on the distance to the estuary) followed by a feasible generalized spatial two-stage least squares (FGS2SLS) with which we correct the model from spatial autocorrelation and endogeneity. Our main results indicate that both zoning measure and institutional response to vulnerability to flooding have a significant impact on prices, but in an opposite direction. We discuss the policy implications related to flooding prevention in regards to land use changes.
    Keywords: vulnerability to flooding, land prices, hedonic pricing method, Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, Q54, R21, Q15, C31,
    Date: 2014–04
  25. By: Mario J. Crucini; Gregor W. Smith
    Abstract: We study the role of distance and time in statistically explaining price dispersion for 14 commodities from 1732 to 1860. The prices are reported for US cities and Swedish market towns, so we can compare international and intranational dispersion. Distance and commodity-specific fixed effects explain a large share—roughly 60%—of the variability in a panel of more than 230,000 relative prices over these 128 years. There was a negative "ocean effect": international dispersion was less than would be predicted using distance, narrowing the effective ocean by more than 3000 km. The absolute effect of distance declined over time beginning in the 18th century. This process of convergence was broad- based, across commodities and locations (both national and international). But there was a major interruption in convergence in the late 18th and early 19th centuries, at the time of the Napoleonic Wars, stopping the process by two or three decades on average.
    JEL: N70
    Date: 2014–06
  26. By: Yuliia Stupnytska (Center for Mathematical Economics, Bielefeld University; Center for Mathematical Economics, Bielefeld University)
    Abstract: This paper presents a search model with heterogeneous workers, social networks and endogenous search intensity. There are three job search channels available to the unemployed: costly formal applications and two costless informal channels - through family and professional networks. The gain from being employed is increasing in the productivity, so the lowest motivation for preparing formal applications is proved to be among the least productive worker types. We assume that professional contacts exhibit a strong degree of homophily, thus it is profitable for firms to direct their network search towards the more productive incumbent employees. So the probability of a professional referral is increasing in the productivity of the worker, which mitigates the incentives to use the formal channel of search. Therefore, the model predicts that workers in the right (left) tail of the productivity distribution have the highest propensity of finding a job with a help of professional (family) contacts, whereas the formal channel of search is mostly utilized by workers in the middle range of the distribution. This explains the U-shaped referral hiring pattern in the model. The endogenous sorting of workers across channels also implies that professional (family) referrals are associated with wage premiums (penalties) compared to the formal channel of search. The average effect of referrals on wages is, however, ambiguous and depends on the relative proportions of high and low productivity types in the population. These findings help to explain the contradicting empirical evidence concerning the effect of referrals on wages.
    Keywords: endogenous search intensity, family contacts, professional networks, U-shape, referral puzzle, wage premiums and penalties
    JEL: J23 J31 J38 J64
    Date: 2014–06
  27. By: Juan Carlos Chávez; Luis Fernando López Ornelas  
    Abstract: This study decomposes both the labor productivity gap and the labor productivity growth into the contributions of technical efficiency, capital deepening and technological change for Mexican manufacturing at the regional level. In order to do so, we apply a methodology that combines two literatures: the nonparametric construction of production frontiers and the general decomposition approach developed by Shorrocks (2012) which is based on the Shapley value. The results indicate that regional differences in labor productivity are mainly attributed to technical efficiency, and, to a lesser extent, to regional differences in capital deepening. Moreover, labor productivity growth was not homogeneous across regions over the period 1998-2008. In both the north and the south, the increase in labor productivity was mainly driven by technical efficiency, while technological change was the most influential factor on labor productivity growth in the central regions.
    Keywords: Capital intensity, Labor productivity, Technical efficiency, Technological change, Manufacturing, Shapley value
    JEL: J24 L60 R1
    Date: 2013–07
  28. By: Justyna Wilk, Michal Bernard Pietrzak, Stanislaw Matusik (Wroc³aw University of Economics, Nicolaus Copernicus University, University School of Physical Education in Krakow, Poland)
    Abstract: Internal population migration flows constitute an inherent element of the market economy. Under relatively stable political conditions, the nature of internal migration is reflected in economic reasons as a result of the regional socio-economic situation. The subject of this paper was to examine relationships between socio-economic situation and internal migration phenomena in Poland. The investigation covers the period of time after Poland’s accession to the EU, with two sub-periods reflect in economic cycle. Inter- and intraregional (NTS-2) migration flows were characterized by a set of migration coefficients. Their implementations were referred to the values of composite measures describing socio-economic situation of Polish regions (NTS-2) and its particular aspects.
    Keywords: regional development, internal migration, synthetic measure of development
    JEL: J11 O11 R11 R23
    Date: 2013–05
  29. By: Grant Allan (Department of Economics, University of Strathclyde); Patrizio Lecca (Department of Economics, University of Strathclyde); Kim Swales (Department of Economics, University of Strathclyde)
    Abstract: Part of the local economic impact of a major sporting event comes from the associated temporary tourism expenditures. Typically demand-driven Input-Output (IO) methods are used to quantify the impacts of such expenditures. However, IO modelling has specific weaknesses when measuring temporary tourism impacts; particular problems lie in its treatment of factor supplies and its lack of dynamics. Recent work argues that Computable General Equilibrium (CGE) analysis is more appropriate and this has been widely applied. Neglected in this literature however is an understanding of the role that behavioural characteristics and factor supply assumptions play in determining the economic impact of tourist expenditures, particularly where expenditures are temporary (ie of limited duration) and anticipated (ie known in advance). This paper uses a CGE model for Scotland in which agents can have myopic- or forward-looking behaviours and shows how these alternative specifications affect the timing and scale of the economic impacts from anticipated and temporary tourism expenditure. The tourism shock analysed is of a scale expected for the Commonwealth Games to be held in Glasgow in 2014. The model shows how "pre-shock" and "legacy" effects - impacts before and after the shock - arise and their quantitative importance. Using the forward-looking model the paper calculates the optimal degree of pre-announcement.
    Keywords: economic impact, CGE modelling, mega-events
    JEL: C68 L83 R11 R13
    Date: 2014–06
  30. By: Marchand, Joseph
    Abstract: In the energy-rich region of Western Canada, inequality rose over the past two decades, while poverty declined, begging the question of whether the recent energy boom was a contributing factor. This study uses measures of inequality and poverty across local labor markets that vary in energy extraction intensity to identify these distributional impacts. The evidence shows that, overall, the boom increased inequality and decreased poverty. There are, however, a few notable cases where these relationships are reversed. The significance and relative magnitude of growth across and between distributional segments were consistent with these findings.
    Keywords: distribution, energy boom, inequality, local labor markets, poverty
    JEL: J31 Q33 R23
    Date: 2014–06–16
  31. By: Valeria Gattai; Valentina Trovato
    Abstract: This paper explores the link between sourcing and performance for a representative sample of manufacturing firms located in Lombardy, the leading economic region in Italy. Survey estimation methods, applied to the authors’ original database, reveal that there exist some performance premia for firms engaged in foreign, rather than domestic and in- rather than out- sourcing. This result is robust to different specifications, samples, performance measures and definitions of sourcing strategies.
    Keywords: Sourcing, Premia, Regional data, Manufacturing industry, Italy
    JEL: D23 F23 L23
    Date: 2014–06
  32. By: Daniel Chiquiar; Alejandrina Salcedo
    Abstract: In this paper we examine some economic factors that have influenced migration flows from Mexico to the United States since 1990 for the purpose of constructing scenarios on how such flows could evolve in the near term. In particular, we link the behavior of migration to changes in sectoral growth in the US, as well as to a heterogeneous participation of Mexican workers in employment by sector. To forecast future migration flows, we propose and estimate a model of demand for Mexican labor by US sector and use it to construct possible scenarios for migration flows. While the estimation is subject to a high degree of uncertainty, the main conclusion is that net migration flows of Mexicans to the United States over the coming years are likely to increase compared to what was observed during the recent global economic crisis, but that such flows are very unlikely to reach the levels registered during the 1990s.
    Keywords: Migration flows, labor demand, US sectoral growth
    JEL: O15 J23 J61 J82
    Date: 2013–11
  33. By: Islam, Asif
    Abstract: Although several studies have found a negative relationship between government spending and entrepreneurship, much debate remains regarding the components of government spending responsible for this association. This paper contributes to the literature by specifically exploring the relationship between government private subsidies and entrepreneurship. By combining macroeconomic government spending data with individual level entrepreneurship data, the paper finds a negative association between the share of private subsidies and entrepreneurship. However, findings are less straightforward when the analysis delves deeper into the components of private subsidies and their association with different kinds of entrepreneurship.
    Keywords: Urban Economics,Taxation&Subsidies,Economic Theory&Research,Emerging Markets,Education for the Knowledge Economy
    Date: 2014–06–01
  34. By: Justyna Wilk, Michal Bernard Pietrzak (Wroc³aw University of Economics, Nicolaus Copernicus University, Poland)
    Abstract: The processes of socio-economic development are continuously accompanied by the process of population aging. It is seen as a growing of the percentage share of people aged 65 and over in the general population. It covers the majority of European Union countries and also refers to Poland. The objective of the paper is to analyze the population aging phenomenon in spatial perspective. The study was carried out for 66 subregions (NUTS 3) and covered the period 1995-2012. Poland is characterized by a strong spatial diversification regarding the senior citizens share and its growth rate, and also determinants exerting impact on the demographic aging processes. The demographically youngest and slowest aging population lives in south-eastern and also central Poland. The most intensive population aging processes are seen in the selected subregions of south-western Poland. Here, we observe extremely low fertility, demographically old working-age population and also significant migration outflow of younger people.
    Keywords: population aging, socio-economic development, spatial approach, taxonomic analysis, regression analysis
    JEL: C38 C51 J11
    Date: 2014–03
  35. By: W. Erwin Diewert (University of British Columbia and School of Economics, Australian School of Business, the University of New South Wales); Kevin J. Fox (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: This paper develops a new framework for measuring prices and quantities of commercial properties. In particular, it addresses problems associated with obtaining separate estimates for the land and structure components of a property. A key contribution is to address the problem of estimating structure depreciation taking into account the fixity of the structure. We find that structure depreciation is determined primarily by the cash flows that the property generates rather than physical deterioration of the building.
    Keywords: Property price indexes, net operating income, discounted cash flow, System of National Accounts, Balance Sheets, land and structure prices, goodwill amortization, intangible assets
    JEL: C2 C23 C43 D12 E31 R21
    Date: 2014–06

This nep-ure issue is ©2014 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.