nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒07‒21
25 papers chosen by
Steve Ross
University of Connecticut

  1. Atmospheric Pollution in Rapidly Growing Urban Centers: Spatial Policies and Land Use Patterns By Efthymia Kyriakopoulou; Anastasios Xepapadeas
  2. The Fiscal Cost of Weak Governance: Evidence from Teacher Absence in India By Karthik Muralidharan; Jishnu Das; Alaka Holla; Aakash Mohpal
  3. Housing, Finance and the Macroeconomy By Morris A. Davis; Stijn Van Nieuwerburgh
  4. The effects of scale, space and time on the predictive accuracy of land use models By Jean-Sauveur Ay; Raja Chakir; Julie Le Gallo
  5. Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms By Juan Carlos Suárez Serrato; Owen Zidar
  6. Railroad expansion and entrepreneurship: Evidence from Meiji Japan By John Tang
  7. The Value of Brownfield Remediation By Kevin Haninger; Lala Ma; Christopher Timmins
  8. Intra-household Decision Models of Residential and Job Location By Ignacio A. INOA; Nathalie PICARD; André de PALMA
  10. Not in my Community: Social Pressure and the Geography of Dismissals By Brunello, Giorgio; Bassanini, Andrea; Caroli, Eve
  11. Unhappy Cities By Edward L. Glaeser; Joshua D. Gottlieb; Oren Ziv
  12. The effects of local government amalgamation on public spending and service levels. Evidence from 15 years of municipal boundary reform. By Geertsema, J. Bieuwe; Allers, Maarten A.
  13. Improving Educational Outcomes in Developing Countries: Lessons from Rigorous Evaluations By Richard J. Murnane; Alejandro J. Ganimian
  14. The Market Value of Energy Efficiency in Buildings and the Mode of Tenure By Konstantin A. Kholodilin; Claus Michelsen
  15. The Real Estate and Credit Bubble: Evidence from Spain By Ozlem Akin; José G. Montalvo; Jaume García Villar; José-Luis Peydró; Josep Maria Raya
  16. Access to Higher Public Education and Locational Choices of Undocumented Migrants By Cebula, Richard; Nair-Reichert, Usha
  17. Regional and industrial mobility of workers leaving mature industries. A study of individuals who exit the Swedish shipbuilding industry 1970-2000 By Rikard Eriksson; Martin Henning; Anne Otto
  18. Spinoff and Clustering: a return to the Marshallian district By Lucia Cusmano; Andrea Morrison; Enrico Pandolfo
  19. Inherited social capital and residential mobility: A study using Japan panel data. By Eiji Yamamura; Yoshiro Tsutsui; Chisako Yamane; Shoko Yamane
  20. The influence of decentralized taxes and intergovernmental grants on local spending volatility. By Agnese Sacchi; Simone Salotti
  21. Is There a Stable Relationship between Unemployment and Future Inflation? Evidence from U.S. Cities By Fitzgerald, Terry J.; Nicolini, Juan Pablo
  22. Pay with Promises or Pay as You Go? Lessons from the Death Spiral of Detroit By Holmes, Thomas J.; Ohanian, Lee E.
  23. Rethinking spatial inequalities in development: the primacy of politics and power relations By Abdul-Gafaru Abdulai
  24. Functional outlier detection with a local spatial depth By Carlo Sguera; Pedro Galeano; Rosa E. Lillo
  25. Networks and Manufacturing Firms in Africa: Results from a Randomized Field Experiment By Marcel Fafchamps; Simon Quinn

  1. By: Efthymia Kyriakopoulou; Anastasios Xepapadeas
    Abstract: We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, production externalities, and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations. More specifically, we show that the joint implementation of a site-specific environmental tax and a site-specific labor subsidy can reproduce the optimum as an equilibrium outcome. The methodological approach followed in this paper allows for endogenous determination of land use patterns and is shown to provide more precise results compared to previous studies.
    Keywords: Spatial policies, agglomeration, land use, atmospheric pollution, environmental tax, labor subsidy.
    JEL: R14 R38 H23
    Date: 2014–07–06
  2. By: Karthik Muralidharan; Jishnu Das; Alaka Holla; Aakash Mohpal
    Abstract: We construct a new nationally-representative panel dataset of schools across 1297 villages in India and find that the large investments in public primary education over the past decade have led to substantial improvements in input-based measures of school quality, including infrastructure, pupil-teacher ratios, and monitoring. However, teacher absence continues to be high, with 23.6 percent of teachers in public schools across rural India being absent during unannounced visits to schools. Improvements in school infrastructure and service conditions are not correlated with lower teacher absence. We find two robust correlations in the nationally-representative panel data that corroborate findings from smaller-scale experiments. First, reductions in pupil-teacher ratios are correlated with increased teacher absence. Second, increases in the frequency of inspections are strongly correlated with lower teacher absence. We estimate that the fiscal cost of teacher absence in India is around $1.5 billion per year, and that investing in better governance by hiring more inspectors to increase the frequency of monitoring could be over ten times more cost effective at increasing teacher-student contact time (net of teacher absence) than hiring more teachers.
    JEL: H52 I21 M54 O15
    Date: 2014–07
  3. By: Morris A. Davis; Stijn Van Nieuwerburgh
    Abstract: In this chapter, we review and discuss the large body of research that has developed over the past 10-plus years that explores the interconnection of macroeconomics, finance, and housing. We focus on three major topics -- housing and the business cycle, housing and portfolio choice, and housing and asset returns -- and then review the recent literature that studies housing and the macroeconomy during the great housing boom and bust of 2000-2010. Our emphasis is on calibrated models that can be compared to data. In each section, we discuss the important questions, the typical set of tools used, and the insights that result from important papers. Although great progress has been made in understanding the important role that housing plays in understanding macroeconomic phenomena, work remains. For example, economists cannot fully explain all of the volatility in house prices during the unprecedented boom and bust period of 2000-2010. At the end of the chapter, we discuss a new literature that assesses the macroeconomic effects and welfare implications of housing policies.
    JEL: E3 E6 G12 G18 R2 R3
    Date: 2014–07
  4. By: Jean-Sauveur Ay; Raja Chakir; Julie Le Gallo
    Abstract: The econometric literature about modeling land use choices is highly heterogeneous with respect to the scale of the data, and to the structure of the models in terms of the effects of space and time. This paper proposes a joint evaluation of each of these three elements by estimating a broad spectrum of individual and aggregate, spatial and aspatial, short and long run econometric models on the same detailed French dataset. Considering four land use classes (arable crops, pasture, forest, and urban), all the models are compared in terms of both in- and out-of-sample predictive accuracy. We argue that the aggregate scale allows to model more effectively the effect of space by using spatial econometric models. We show that modeling spatial autocorrelation allow to have very accurate predictions which can even outperform individual models when the appropriate predictors are used. We also found some strong interactions between the effects of scale, space and time which can be of major interest for applied researchers.
    Keywords: Land use models, spatial econometrics, predictive accuracy, aggregate and individual data
    JEL: Q15 Q24 R1 C21
    Date: 2014–07–04
  5. By: Juan Carlos Suárez Serrato; Owen Zidar
    Abstract: This paper estimates the incidence of state corporate taxes on workers, landowners, and firm owners in a spatial equilibrium model in which corporate taxes affect the location choices of both firms and workers. Heterogeneous, location-specific productivities and preferences determine the mobility of firms and workers, respectively. Owners of monopolistically competitive firms receive economic profits and may bear the incidence of corporate taxes as heterogeneous productivity can make them inframarginal in their location choices. We derive a simple expression for equilibrium incidence as a function of a few estimable parameters. Using variation in state corporate tax rates and apportionment rules, we estimate the reduced-form effects of tax changes on firm and worker location decisions, wages, and rental costs. We then use minimum distance methods to recover the parameters that determine equilibrium incidence as a function of these reduced-form effects. In contrast to previous assumptions of infinitely mobile firms and perfectly immobile workers, we find that firms are only approximately twice as mobile as workers over a ten-year period. This fact, along with equilibrium impacts on the housing market, implies that firm owners bear roughly 40% of the incidence, while workers and land owners bear 35% and 25%, respectively. Finally, we derive revenue-maximizing state corporate tax rates and discuss interactions with other local taxes and apportionment formulae.
    JEL: F22 F23 H2 H22 H25 H32 H71 J23 J3 R23 R30 R58
    Date: 2014–07
  6. By: John Tang
    Abstract: Railroads in Meiji Japan are credited with facilitating factor mobility as well as access to human and financial capital, but the impact on firms is unclear. Using a newly developed firm-level dataset and a difference-in-differences model that exploits the temporal and spatial variation of railroad expansion, I assess the relationship between railways and firm activity across Japan. Results indicate that railroad expansion corresponded with increased firm activity, particularly in manufacturing, although this effect is mitigated in less populous regions. These findings are consistent with industrial agglomeration in areas with larger markets and earlier development among both new and existing establishments.
    JEL: L26 N75 O53
    Date: 2013
  7. By: Kevin Haninger; Lala Ma; Christopher Timmins
    Abstract: The U.S. Environmental Protection Agency Brownfields Program awards grants to redevelop contaminated lands known as brownfields. This paper estimates cleanup benefits based on a nationally representative sample of brownfields using a variety of quasi-experimental techniques. To our knowledge, this is the first paper that combines non-public EPA administrative records with high-resolution, high-frequency housing data to estimate the effects of brownfield cleanup across the entire federal Brownfields Program. We find increases in property values accompanying cleanup, ranging from 4.9% to 11.1%; for a welfare interpretation that does not rely on the intertemporal stability of the hedonic price function, a double-difference matching estimator finds even larger effects of up to 32.2%. Our various specifications lead to the common conclusion that Brownfields Program cleanups yield a positive, statistically significant, but highly-localized effect on housing prices.
    JEL: Q51 R11
    Date: 2014–07
  8. By: Ignacio A. INOA; Nathalie PICARD; André de PALMA (Université de Cergy-Pontoise, THEMA; Université de Cergy-Pontoise, THEMA; Ecole Polytechnique, Departement d’Economie)
    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
    JEL: R21 R31 C35
    Date: 2014
  9. By: Monica Martinez-Bravo (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: The extension of mass education not only affects the level of education of the labor force, but also raises the average education of local politicians. This paper investigates the impact of a large program of school construction in Indonesia on local governance and public good provision. By using a panel dataset of 10,000 villages and exploiting the staggered timing of local elections, I isolate the effects driven by changes in local governance. The results suggest that the school construction program led to important increases in the provision of public goods. Furthermore, the results are heterogeneous across villages: public goods experienced stronger increases in villages where there was a particular demand for that type of public good. I provide evidence that the results are driven by the increase in the level of education of the village head, which suggests that the level of human capital of local politicians is a key ingredient of public good provision in developing countries.
    Keywords: Political leaders, education, local elections.
    JEL: D72 H75 O12 P16
    Date: 2014–07
  10. By: Brunello, Giorgio; Bassanini, Andrea; Caroli, Eve
    Abstract: There is growing evidence that social pressure shapes firms' behavior. Given how sensitive communities are to downsizing, this suggests that firms are likely to be under strong social pressure when considering reducing employment. Using French linked employer-employee data, we show that social pressure induces firms to refrain from dismissing at short distance from their headquarters. More specifically, we find that, within firms, secondary establishments located further away from headquarters have higher dismissal rates than those located closer, taking into account the possible endogeneity of plant location. We also find that the positive effect of distance on dismissals increases with the visibility of the firm in the local community of its headquarters. This effect is also stronger the greater the degree of selfishness of the community in which the headquarters are located. This suggests that local social pressure at headquarters is a key determinant of the positive relationship between distance to headquarters and dismissals. We show that our results cannot be entirely accounted for by alternative explanations of the distance-dismissal relationship that are put forward in the literature.
    Keywords: Personnel Management; Labor Demand; employment policies; social pressure;
    JEL: M12 M51 J23 J63 R12
    Date: 2014–06
  11. By: Edward L. Glaeser; Joshua D. Gottlieb; Oren Ziv
    Abstract: There are persistent differences in self-reported subjective well-being across U.S. metropolitan areas, and residents of declining cities appear less happy than other Americans. Newer residents of these cities appear to be as unhappy as longer term residents, and yet some people continue to move to these areas. While the historical data on happiness are limited, the available facts suggest that cities that are now declining were also unhappy in their more prosperous past. One interpretation of these facts is that individuals do not aim to maximize self-reported well-being, or happiness, as measured in surveys, and they willingly endure less happiness in exchange for higher incomes or lower housing costs. In this view, subjective well-being is better viewed as one of many arguments of the utility function, rather than the utility function itself, and individuals make trade-offs among competing objectives, including but not limited to happiness.
    JEL: D00 I00 J00 R00
    Date: 2014–07
  12. By: Geertsema, J. Bieuwe; Allers, Maarten A. (Groningen University)
    Abstract: We use difference-in-difference estimation to study how municipal amalgamation affects local government spending and public service levels in the Netherlands. Employing different models, different control groups and a number of robustness tests, we find no significant effect on aggregate spending. We explore whether this finding is a result of amalgamation effects working in opposite directions for different types of municipalities, cancelling each other out. However, the amalgamation effect for small municipalities does not differ significantly from that for large ones, and the effect for municipalities with homogeneous preferences does not differ from that for jurisdictions with heterogeneous preferences. We also investigate whether amalgamation leads to better public services instead of lower spending. As it turns out, amalgamation reduces spending on administration, but there is no corresponding spending increase on public services. Finally, amalgamation does not raise house prices, which we would expect were it to improve public services
    Date: 2014
  13. By: Richard J. Murnane; Alejandro J. Ganimian
    Abstract: This paper describes four lessons derived from 115 rigorous impact evaluations of educational initiatives in 33 low- and middle-income countries. First, reducing the costs of going to school and providing alternatives to traditional public schools increase attendance and attainment, but do not consistently increase student achievement. Second, providing information about school quality and returns to schooling generally improves student attainment and achievement, but building parents’ capacity works only when focused on tasks they can easily learn to perform. Third, more or better resources do not improve student achievement unless they change children’s daily experiences at school. Finally, well-designed incentives for teachers increase their effort and improve the achievement of students in very low performance settings, but low-skilled teachers need specific guidance to reach minimally acceptable levels of instruction.
    JEL: I21 I24 I25 I32
    Date: 2014–07
  14. By: Konstantin A. Kholodilin; Claus Michelsen
    Abstract: Concerns about global warming and growing scarcity of fossile fuels require substantial changes in energy consumption patterns and energy systems, as targeted by many countries around the world. One key element to achieve such transformation is to increase energy efficiency of the housing stock. In this context, it is frequently argued that private investments are too low in the light of the potential energy cost savings. However, heterogenous incentives to invest in energy efficiency, particularly for owner-occupants and landlords, may serve as one explanation. This is particularly important for countries with a large rental sector, like Germany. Nevertheless, previous literature largely focuses on the pay offs owner-occupants receive, leaving out the rental market. This paper addresses this gap by comparing the capitalization of energy efficiency in selling prices (rents) for both types of residences. For this purpose data from the Berlin housing market are analyzed in hedonic regressions. The estimations reveal that energy efficiency is well capitalized in apartment prices and rents. The comparison of implicit prices and the net present value of energy cost savings/rents reveals that investors anticipate future energy and house price movements reasonably. However, in the rental segment, the value of future energy cost savings exceeds tenants' implicit willingness to pay by factor 2.98. This can either be interpreted as a result of market power of tenants, uncertainty in the rental relationship, or the "landlord-tenant dilemma."
    Keywords: Energy efficiency, house price capitalization, rental/owner-occupied housing, hedonic analysis
    JEL: R21 R31 Q40
    Date: 2014
  15. By: Ozlem Akin; José G. Montalvo; Jaume García Villar; José-Luis Peydró; Josep Maria Raya
    Abstract: We analyze the determinants of real estate and credit bubbles using a unique borrower-lender matched dataset on mortgage loans in Spain. The dataset contain real estate credit and price conditions (loan principal and spread, and the appraisal and market price) at the mortgage level, matched with borrower characteristics (such as income, labor status and contract) and the lender identity, over the last credit boom and bust. We find that lending standards are softer in the boom than in the bust. Moreover, despite some adjustment in lending conditions in the good times depending on borrower risk, the results suggest too soft lending standards and excessive risk-taking in the boom. For example, mortgage spreads for non-employed are identical to employed borrowers during the boom. Banks with worse corporate governance problems soften even more the standards. Finally, we analyze the mechanism by which banks could increase the supply of mortgage loans despite of regulatory restrictions on LTVs. The evidence is consistent with banks encouraging real estate appraisal firms to introduce an upward bias in appraisal prices (29%), to meet loan-to-value regulatory thresholds (40% of mortgages are just bunched on these limits), thus building-up the credit and the real estate bubble.
    Keywords: lending standards, credit supply, excessive risk-taking, bank incentives, conflicts of interest, moral hazard, prudential policy, financial crises, real estate bubble
    JEL: G01 G21 G28
    Date: 2014–07
  16. By: Cebula, Richard; Nair-Reichert, Usha
    Abstract: Many states have experienced a large influx of undocumented migrants in recent years. This has created new demands on higher educational systems at the state level. Some states have passed legislation to restrict the access of undocumented migrants to higher public education whereas others provide access in various forms including in-state tuition. Our research examines a related issue that has not been researched much, namely, the impact of educational access on the location decisions of undocumented migrants in the US. Undocumented migrants appear to locate in states with high average median real per capita incomes. There is also evidence of clustering of undocumented migrants in states with large migrant networks. The effect of educational access on the percentage of undocumented workers in a state is mixed and small in most specifications, a finding perhaps indicative of a trade-off between competing priorities the choice of location.
    Keywords: undocumented migration; illegal immigration; migrant clustering; higher public education access
    JEL: H26 J61 J62 J69
    Date: 2014–07–03
  17. By: Rikard Eriksson; Martin Henning; Anne Otto
    Abstract: This paper follows the industry employment histories of all individuals at some point affiliated with the dismantling Swedish shipbuilding industry 1970-2000. We analyse the situation of the individual workers leaving shipbuilding through investigating to what extent they were employed at all, tended to move to related sectors inside or outside the region, and whether such moves were beneficial for the individuals. By cross-using German and Swedish data, our findings indicate a notable impact of regional industrial structure on the movement and success of individuals, and that individuals moving from shipbuilding to related sectors benefit more from moving than others.
    Date: 2014–07
  18. By: Lucia Cusmano; Andrea Morrison; Enrico Pandolfo
    Abstract: The origin and growth of industrial clusters have attracted the attention of scholars and policy makers since the early era of industrialisation. The seminal work by Alfred Marshall has represented the foundation for a rich strand of literature, whose late expansion and refinement were inspired by the experiences of localised development in emerging regions. This is the case of Italian industrial districts, which have emerged as a territorial model of industrial agglomeration, decentralised production and flexible specialisation. Recently, the traditional explananda of the emergence of clusters have been reconsidered. The evidence about the growth of clusters in areas that did not have obvious natural advantages, nor the first comers’ benefits of early agglomeration economies, has inspired a different conceptualisation, which draws consistently from the evolutionary perspective on industrial dynamics. Klepper (2001, 2010) shows that more successful firms have higher spin-off rates and their spin-offs tend to outperform competitors. Organizational reproduction and heredity are thus identified as the primary forces underlying clustering. The present paper investigates the emergence and evolution of an Italian industrial district, the Sassuolo tile district, one of the largest and most successful ceramic districts in the world, and a paradigmatic example of Italian Marshallian district. Overall, our findings confirm that organizational reproduction and heredity represent primary mechanisms of clustering. However, our results also show that spin-offs do not perform better than non-spin-offs. It appears that, in dense industrial environments and social networks, competitive advantages can also be acquired or built through other channels.
    Date: 2014–07
  19. By: Eiji Yamamura; Yoshiro Tsutsui; Chisako Yamane; Shoko Yamane
    Abstract: Empirical results based on individual-level data from Japan were studied to determine the effect of social capital on the willingness to leave onefs residential area. It was found that social capital accumulated through onefs own experience in a residential area is not the only factor that reduces willingness to leave. Social capital inherited from onefs parents also negatively influences the desire to move..
    Date: 2014–07
  20. By: Agnese Sacchi; Simone Salotti
    Abstract: We study what affects the volatility of sub-central spending in 20 OECD countries. The evidence based on data from 1972 to 2007 shows that the volatility of intergovernmental grants from upper levels is positively associated with the volatility of local expenditure. On the contrary, the volatility of local tax revenues - mainly that of property taxes - exerts the opposite effect. Thus, making local governments rely more on grants than own taxes seems to adversely affect the stability of their spending, while allowing them to autonomously levy taxes on responsive tax bases provides incentives to smooth their expenditure.
    Keywords: local spending volatility, local revenues, property taxes, intergovernmental grants.
    JEL: E62 H71 H77 R50
    Date: 2014–07
  21. By: Fitzgerald, Terry J. (Federal Reserve Bank of Minneapolis); Nicolini, Juan Pablo (Federal Reserve Bank of Minneapolis)
    Abstract: This paper makes two straightforward points that we argue are central to understanding the literature and debate surrounding the stability of the Phillips curve. First, the endogeneity of monetary policy implies that aggregate data are largely uninformative as to the existence of a stable relationship between unemployment and future inflation. Second, if the NAIRU model is assumed to be true, regional data can be used to identify the structural relationship between unemployment and future inflation. We find that a 1 percentage point increase in the unemployment rate is associated with a roughly 0.3 percentage point decline in inflation over the next year.
    Keywords: Endogenous monetary policy; Stability of the Philips Curve
    JEL: E52 E58
    Date: 2014–05–30
  22. By: Holmes, Thomas J. (Federal Reserve Bank of Minneapolis); Ohanian, Lee E. (Federal Reserve Bank of Minneapolis)
    Abstract: As part of compensation, municipal employees typically receive promises of future benefits. Motivated by the recent bankruptcy of Detroit, we develop a model of the equilibrium size of a city and use it to analyze how pay-with-promises schemes interact with city growth. The paper examines the circumstances under which a death spiral arises, where cutbacks of city services and increases in taxes lead to an exodus of residents, compounding financial distress. The model is put to work to analyze issues such as the welfare effects of having cities absorb pension risk and how unions affect the likelihood of a death spiral.
    Keywords: City growth; Pay with promises; Death spiral; Defined benefit pension plans; Retiree health benefits; Detroit
    JEL: H20 H75 R23 R51
    Date: 2014–07–14
  23. By: Abdul-Gafaru Abdulai
    Abstract: This paper offers a political explanation to the problem of spatial inequality in developing countries, paying particular attention to the implications of patronage politics and inter-elite power relations for the spatial distribution of public goods. After showing that existing explanations of spatial inequality are at best partial, the paper argues that prospects for overcoming spatial inequalities in the clientelist-driven political environments of developing countries depend substantially on the ways in which elites from lagging regions are incorporated into ruling coalitions, and how such forms of incorporation shape their influence over resource allocation decisions and policy agenda more broadly. The paper also departs from much of the existing literature on spatial inequality by emphasising the need to understand 'powerlessness' on the part of lagging regions as stemming not necessarily from their political exclusion from political decision making structures, but also from their incorporation into such structures on terms that potentially underpin their poverty. Based on this argument, the paper proposes a new framework for exploring the deeper and more structural underpinnings of spatial inequality in developing countries.
    Date: 2014
  24. By: Carlo Sguera; Pedro Galeano; Rosa E. Lillo
    Abstract: This paper proposes methods to detect outliers in functional datasets. We are interested in challenging scenarios where functional samples are contaminated by outliers that may be difficult to recognize. The task of identifying a typical curves is carried out using the recently proposed kernelized functional spatial depth (KFSD). KFSD is a localdepth that can be used to order the curves of a sample from the most to the least central. Since outliers are usually among the least central curves, we introduce three new procedures that provide a threshold value for KFSD such that curves with depth values lower than the threshold are detected as outliers. The results of a simulation study show that our proposals generally out perform a battery of competitors. Finally, we consider areal application with environmental data consisting in levels of nitrogen oxides
    Keywords: Functional depths, Functional outlier detection, Kernelized functional spatial depth, Nitrogen oxides, Smoothed resampling
    Date: 2014–06
  25. By: Marcel Fafchamps; Simon Quinn
    Abstract: We run a novel field experiment to link managers of African manufacturing firms. The experiment features exogenous link formation, exogenous seeding of information and exogenous assignment to treatment and placebo. We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find some limited evidence of diffusion of management practices, particularly in terms of firm formalisation and innovation. Such diffusion appears to be a combination of diffusion of innovation and simple imitation
    JEL: D22 L26 O33
    Date: 2014

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