nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒08‒20
47 papers chosen by
Steve Ross
University of Connecticut

  1. Residential Vacancy in City Center: The Case of São Paulo By Vanessa Gapriotti Nadalin
  2. Regional Airports and Urban Development of Small Cities in the U.S.: A Case Study about Gainesville Regional Airport and its Effects on the Economic Development of Gainesville, Florida By Fabian Zepezauer
  3. Viet Nam Urban Development Sector Assessment, Strategy, and Roadmap By Asian Development Bank (ADB); ; ;
  4. Toward an Urban Housing Strategy By Richard K. Green
  5. Accessibility and the Allocation of Time: Changes in Travel Behavior 1990-2010 By Martin P. Brosnan; David Levinson
  6. How the location of urban consolidation and logistics facility has an impact on the delivery costs? An accessibility analysis By Jesus Gonzalez-Feliu; Josep-Maria Salanova Grau
  7. The home affordability challenge By Eaqub, Shamubeel
  8. Cultural Offer and Distance in a Spatial Interaction Model for Tourism By Roberto Patuelli; Maurizio Mussoni; Guido Candela
  9. How Feelings of Safety at School Affect Educational Outcomes By Johanna Lacoe
  10. Estimation of an Education Production Function under Random Assignment with Selection By Eleanor Jawon Choi; Hyungsik Roger Moon; Geert Ridder
  11. Agglomeration economies and optimal efficiency wage By Jellal, Mohamed
  12. Application of the MESS model in space-time analysis of the unemployment rate in Poland By Iwona Muller-Fraczek; Michal Bernard Pietrzak
  13. Do Rail Transit Stations Encourage Neighborhood Retail Activity? By Jenny Schuetz
  14. A Demonstration of Sustainability Arguments Using House Price Data By Kauko, Tom
  15. Cities of youth: Post-millennial cases of mobility and sociality By Hansen, Karen Tranberg
  16. Metropolitan areas of southern Poland and population migration movement By Michal Bernard Pietrzak; Justyna Wilk
  17. Integrating Schools for Centralized Admissions By Mehmet Ekmekci; M. Bumin Yenmez
  18. How do Housing Prices Adjust After an Environmental Shock? Evidence from a State-Mandated Change in Aircraft Noise Exposure By Almer, Christian; Boes, Stefan; Nuesch, Stephan
  19. Agglomeration and Innovation By Gerald Carlino; William R. Kerr
  20. School Starting Age and Crime By Rasmus Landersø; Helena Skyt Nielsen; Marianne Simonsen
  21. Accounting for Peer Effects in Treatment Response By Rokhaya Dieye; Habiba Djebbari; Felipe Barrera-Osorio
  22. Governance, Firm Size and Innovative Capacity: Regional Empirical Evidence for Germany By Berlemann, Michael; Jahn, Vera
  23. Interpretation of structural parameters for models with spatial autoregression. By Michal Bernard Pietrzak
  24. Gravity model as the tool for internal migration analysis in Poland in 2004-2010 By Michal Bernard Pietrzak; Justyna Wilk; Stanislaw Matusik
  25. Spillovers from agglomerations and inward FDI. A Multilevel Analysis on SSA domestic firms By Marco Sanfilippo; Adnan Seric
  26. Determinants of School Choice:Evidence from Rural Punjab, Pakistan By Hamna Ahmed; Sahar Amjad; Masooma Habib; Syed Ahsan Shah
  27. Survey on Decision Criteria of Buyers of Residential Buildings By Röder-Sorge, Marisa
  28. Rented vs. Owner-Occupied Housing and Monetary Policy By Margarta Rubio
  29. Do Banks Price Discriminate Spatially? Evidence from Small Business Lending in Local Credit Markets By Andrea Bellucci; Alexander Borisov; Alberto Zazzaro
  30. Alternative High Occupancy/Toll Lane Pricing Strategies and their Effect on Market Share By Michael Janson; David Levinson
  31. Do Art Galleries Stimulate Redevelopment? By Jenny Schuettz
  32. Agglomeration and Firm Turnover By Marjan Nasir
  33. Comparing Implementations of Estimation Methods for Spatial Econometrics By Roger Bivand; Gianfranco Piras
  34. Economic Centrality: How Much is Economics and How Much is Geography? By Nuno Crespo; M. Paula Fontoura; Nadia Simoes
  35. Education Transfers, expenditures and child labour supply in Indonesia: An evaluationof impacts and flypaper effects By Sumarto, Sudarno; de Silva, Indunil
  36. Nurture vs. Nurture: Endogenous Parental and Peer Effects and the Transmission of Culture By Daniel Vaughan   
  37. Does public spending improve educational resilience? A longitudinal analysis of OECD-PISA data By Tommaso Agasisti; Sergio Longobardi; Andrea Regoli
  38. Does the Link between Unemployment and Crime Depend on the Crime Level? A Quantile Regression Approach By Entorf, Horst; Sieger, Philip
  39. Life Cycle Costs of Dutch School Buildings By de Jong, Peter; Arkesteijn, Monique
  40. The psychology and economics of reverse mortgage attitudes: evidence from the Netherlands By Rik Dillingh; Henriette Prast; Maria Cristina Rossi; Maria Cesira Urzì Brancati
  41. The Announcement Effects of Regional Tourism Industrial Policy:The Case of the Hainan International Tourism Island Policy in China By Jianjun Sun; Su Zhang; Nobuyoshi Yamori
  42. The effect of weather-induced internal migration on local labor markets. Evidence from Uganda By Eric Strobl; Marie-Anne Valfort
  43. Developing a Comprehensive US Transit Accessibility Database By Andrew Owen; David Levinson
  44. Evolution of demand for leisure air transport in 2025, Synthesis Report By Isabelle Laplace; Nathalie Lenoir; Christine Cassan
  45. The City of London Office Bias By Lee, Stephen
  46. Human Capital Spillovers and Local Unemployment By Jung Hyun Choi; Richard K. Green
  47. Can Arts-Based Interventions Enhance Labor Market Outcomes among Youth? Evidence from a Randomized Trial in Rio de Janeiro By Calero, Carla; Corseuil, Carlos Henrique; Gonzales, Veronica; Kluve, Jochen; Soares, Yuri

  1. By: Vanessa Gapriotti Nadalin
    Abstract: São Paulo’s metropolitan area is one of the largest urban spaces in the world. As it happens with any other large metropolitan area, understanding its structure, problems and dynamics is not a simple task. The structure of cities has been studied by urban economics ever since von Thünen’s land use theory was adapted to urban contexts. Research on property and housing markets have followed a related but different approach. On the one hand, housing markets have been modeled with emphasis on the specific features of properties such as durability, heterogeneity, and construction costs. On the other hand, research on real estate finance has been developing and applying a variety of valuation methods, focusing on the supply and demand adjusting mechanisms and considering properties as assets. These three areas of investigation have not always been connected in a systematic manner. Yet, we argue that there is a case for integrating them due to their intrinsic spatial dimension. In the past decades, when the São Paulo became the national manufacturing centre, it has experienced great population growth. Many problems have emerged, especially those connected with housing such as illegal slums, flophouses, informal settlements, squatting and homelessness. This significant housing deficit indicates the need to search for alternatives in the provision of good quality housing. At the same time, there is a general spatial pattern of residential vacancy: high vacancies in central areas and low vacancies in suburbs. The city centre location advantages and urban amenities are a misuse of scarce resources. This paper attempts to contribute to this debate through an empirical analysis of the determinants of residential vacancy rates in São Paulo’s metropolitan area. We use a panel of census tract level data for the years 2000 and 2010 combining standard spatial econometric methods with hedonic modelling. Our results suggest that there are two main groups of determinants: one related to local characteristics of housing markets and another constituted by individual building features. We also estimate the city historical centre determinants separately from those of the suburbs, finding consistent differences.
    Date: 2014–07
  2. By: Fabian Zepezauer
    Date: 2013–03–29
  3. By: Asian Development Bank (ADB); (Southeast Asia Department, ADB); ;
    Abstract: This urban development sector assessment, strategy, and road map (ASR) documents the strategic investment priorities of the Government of Viet Nam and the Asian Development Bank. The ASR has identified three priority areas: (i) development of corridor cities and towns to contribute to the transformation of regional transport corridors in the Greater Mekong Subregion into full-fledged economic corridors, (ii) development of secondary cities and towns as regional economic hubs to foster balanced regional development and to strengthen rural–urban links, and (iii) integrated transit-oriented development to reduce environmental pollution and traffic congestion.
    Keywords: adb, asian development bank, asdb, asia, pacific, poverty asia, vietnam population, vietnam gdp, viet nam, urbanization, urban residents, migration, traffic, transportation, urban transport, urban development, wastewater, drainage systems, congestion, roadmap, hanoi, Ho Chi Minh, da nang, metropolis, hai pong
    Date: 2012–08
  4. By: Richard K. Green
    Abstract: This essay will examine the development of housing strategies for low and moderate income countries by framing a set of questions, attempting to answer those questions, considering the policy implications of the questions, and developing strategies for dealing with those policy implications.The questions we consider come naturally from various bifurcations of housing fundamentals. Costs come from either land or improvements. Tenure ranges from owning to renting, with some gradients in between. Finance comes from equity and debt. Beyond these bifurcations, we consider settlement patterns of the poor. In some instances, the poor settle in centrally located slums, such as Dharavi and Makoko; in other instances, such as Mexico City, they settle in peri-urban areas.
    Keywords: urban housing, housing strategy
    Date: 2014
  5. By: Martin P. Brosnan; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Using detailed travel surveys conducted by the Metropolitan Council of the Minneapolis/St Paul (Twin Cities) Region in Minnesota for 1990, 2000-2001, and 2010-2011, this paper conducts a detailed analysis of journey-to-work times, activity allocation and accessibility. This study corroborates previous studies showing that accessibility is a significant factor in commute durations. Adjusting land use patterns to increase the number of workers in job-rich areas and the number of jobs in labor-rich areas is a reliable way of reducing auto commute durations. The finding that accessibility and commute duration have a large affect on the amount of time spent at work shows that activity patterns are influenced by transportation and the urban environment in very impactful ways. The descriptive results of this analysis show a measurable decline in the time people spend outside of their homes as well as the amount of time people spend in travel over the past decade. Although trip distances per trip are not getting any shorter, the willingness to make those trip is declining, and as a result fewer kilometers are being traveled and less time on average is being allocated to travel.
    Keywords: Accessibility, Transport Geography, Travel Behavior, Networks
    JEL: R40
    Date: 2014
  6. By: Jesus Gonzalez-Feliu (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - École Nationale des Travaux Publics de l'État [ENTPE] - Université Lumière - Lyon II); Josep-Maria Salanova Grau (Hellenic Institute or Transport - Center of Research and Technologie Hellas)
    Abstract: Urban consolidation is a popular subject in city logistics. Moreover, public authorities need adapted decision support methods to analyse the interaction between their land-use choices and the transformations in trip behaviour, for both personal and commercial trips. This paper proposes a simulation method to carry out a land-use and transport interaction analysis based on the notion of accessibility, and applies it to the real urban network of Lyon. First, a literature review on accessibility and simulation of goods flows is made. Second, the proposed method is presented on the form of a sequential procedure. First, a demand generation model estimated the weekly number of demands to deliver to each customer, to what we convert the generated number of deliveries into a daily number of freight transport demands including a quantity of goods to deliver and a customer, via an empirical procedure. Then, a spatial analysis to choose the most suitable sets of potential logistics facilities is proposed. Finally, each platform is associated to a distance-based accessibility indicator. Computational results are presented and discussed. Finally, recommendations to public authorities for their land-use policy assessment in terms of impacts on freight transport are proposed.
    Keywords: urban consolidation; simulation; scenario assessment; distance-based accessibility
    Date: 2014
  7. By: Eaqub, Shamubeel (New Zealand Institute of Economic Research)
    Abstract: New Zealand’s crippling home affordability rates cannot be fixed by a single solution such as changing immigration policy or urban planning rules, or imposing a capital gains tax or lending ratios. The report explains that New Zealand’s obsession with home ownership is one of the key reasons that it took so long for New Zealand’s economy to recover after the 2008 Global Financial Crisis. “Our reliance on future capital gains to pay for debt-funded spending caused a long hangover when households realised they needed to pay off the mortgage.”
    Keywords: New Zealand; housing policy; home ownership
    JEL: E20 R21 R31
    Date: 2014–08–05
  8. By: Roberto Patuelli (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Maurizio Mussoni (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Guido Candela (Department of Economics, University of Bologna, Italy)
    Abstract: Culture is more and more considered as an important driver of tourism. However, it is critical, for policymakers, to evaluate the potential returns from investments in culture and generally cultural offer, in particular in multiregion settings with a potentially inefficient distribution of cultural offer. Our paper focuses on the role of distance (between the tourist’s origin and destination regions) in mediating the tourism impact of cultural offer. This research question is investigated by means of a spatial interaction model, applied to the case of Italian domestic tourism. We find that distance indeed matters: a destination’s endowment in culture appears to be more attractive for long-distance tourists, while an origin region’s endowment seems to dinsincentivate long-distance trips to a greater extent.
    Keywords: cultural offer; domestic tourism; spatial interaction model; distance; spatial competition
    JEL: C23 L83 R12 Z10
    Date: 2014–05
  9. By: Johanna Lacoe
    Abstract: Persistent racial and ethnic gaps in educational achievement have focused policy attention on school climate and safety as important elements of educational performance. In a special issue of Educational Researcher focused on safety and order in schools, Cornell and Mayer (2010) argue that school safety and school order are fundamental to studies of the achievement gap, teacher attrition, and student engagement. This paper represents the first large-scale analysis of how feelings of safety at school affect educational outcomes. If student safety affects achievement there may be educational benefits of policies aimed at improving safety and order in schools and classrooms. Academic attainment is a critical step toward future success in adult life, increasing employment and earnings and the probability of other stabilizing life events such as marriage. Studies show that early childhood test scores are positively correlated with future labor market outcomes (Currie & Thomas, 1999). Yet, black and Hispanic students consistently underperform on standardized tests compared to white and Asian students (U.S. Department of Education, 2004, 2008). These racial gaps persist even as test scores have risen for all students. Gaps in achievement extend to college enrollment and completion rates and as a result, whites are more than twice as likely to earn a bachelor’s degree as blacks (Western, 2006). Educational gaps translate into differences in wealth accumulation over the life-course, differing rates of marriage (Schneider, 2011), and disparities in future health outcomes (Freudenberg & Ruglis, 2007; Fiscella & Kitzman, 2009). Lower educational attainment is associated with an increased probability of arrest and incarceration: the risk of imprisonment is five times greater for black men with no college degree compared to white men with the same level of education (Lochner & Moretti, 2004; Western, 2006). Identifying the factors that contribute to these gaps is critical to narrowing disparities in later-life outcomes
    Keywords: school safety, education
    Date: 2013
  10. By: Eleanor Jawon Choi; Hyungsik Roger Moon; Geert Ridder
    Abstract: This paper estimates an education production function using data on the College Scholastic Ability Test (CSAT) score and high school characteristics from Seoul, Korea.1 A unique institutional feature of the high school system in Seoul is that on entering high school students are randomly assigned to schools within each school district. The main contribution of our study is to derive a school production function by aggregating the individuals’ potential outcome functions that depend on observed and unobserved school inputs interacted with heterogeneous and unobserved individual abilities. The school production function derived under random assignment and under the assumption that there are no cohort effects has three unique features that have not been considered in previous studies. First, its average (over students) coefficients on school inputs do not differ by school or over time, but by district. This is a consequence of the endogenous sorting of students between districts 2. combined with the random assignment to schools within districts. Second, it allows unobserved school effects to be potentially correlated with observed ones. Third, the weighted average of the district-specific school input effects with weights equal to the fraction of the population in the districts is equal to the average partial effect (APE) of school inputs on individual academic achievement. To estimate the school production function coefficients, we first obtain district-specific coefficients using the fixed effect estimation method in school level panel data for each district and compute the weighted average described above. The empirical findings are (i) the school production function coefficients do differ between districts, which may be due to potentially endogenous sorting of students or unobserved differences in district characteristics, (ii) our estimate of the single-sex school effect is much larger than that found in previous studies most of which assumed constant school input coefficients across districts and did not consider school fixed effects.
    Keywords: education
    Date: 2014
  11. By: Jellal, Mohamed
    Abstract: In this paper we consider a model of optimal efficiency and agglomeration economies .Given the presence of urban and social externalities and in the absence of corrective policy, the efficiency wage chosen in decentralized market economy is too high. Indeed, in her optimal choice of wage and employment, the representative firm does not take into account of these agglomeration positive externalities which leads to a sub optimal city size. We have shown that an optimal wage employment allocation exists and can be implemented through a subvention taxation policy if it is available.
    Keywords: Efficiency Wages, Solow Condition, Agglomeration Economies, Optimal City Size, Subvention Taxation Policy
    JEL: H21 H23 J31 J64 J68 R0
    Date: 2014–08–08
  12. By: Iwona Muller-Fraczek (Nicolaus Copernicus University, Poland); Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland)
    Abstract: The purpose of the article was a space-time analysis of the unemployment rate in polish poviats. In the research we use a model in which spatial dependence is represented in the exponential form, based on the neighborhood matrix. This model, called the Matrix Exponential model, was proposed by J.P. LeSage and R.K. Pace in 2007. It is characterized by simplicity of estimation, which can compete with other known approaches. The presented analysis was a continuation of previous purely spatial studies (Müller-Fr¹czek, Pietrzak 2011b). This article consists of three parts. Each of them provides an analysis of the unemployment rate registered in Poland at the end of the years 2004-2009. In the first part the unemployment rate was analyzed for each year separately. Almost linear changes of parameters of the space models, allowed us to build a space-time matrix exponential model MESS. It was described in the second part of the article. In the last part the results, obtained using the MESS model, were confronted with an approach based on space-time autoregressive model.
    Keywords: spatial econometrics, spatial autocorrelation, spatial model MESS, space-time analysis of the unemployment rate, spatial dependence
    JEL: C21 R11 R23 J64
    Date: 2013–02
  13. By: Jenny Schuetz
    Abstract: Over the past 20 years, California has made substantial investments in intra-metropolitan passenger rail infrastructure, expanding existing systems and building new ones. According to advocates of New Urbanism, such investment should encourage the growth of mixed-use transit-oriented development, defined as a high-density mix of residential and commercial uses within walking distance of rail stations. Little research to date has examined whether rail investment stimulates retail activity, which is a key component of mixed-use development. In this paper, I test whether the opening of new rail stations across California’s four largest metropolitan areas has affected retail employment within one-quarter mile of the stations, compared to similar neighborhoods around older stations or with no rail stations. Results indicate that new rail stations were located in areas with initially high employment density, somewhat outside the city centers. The impact of new stations on nearby retail activity varies within and across metropolitan areas. While new station openings are not significantly associated with retail employment across all MSAs, in the Los Angeles and Sacramento MSAs new stations are negatively associated with retail. Newly opened stations are positively associated with retail employment around suburban stations, but have a negative relationship near downtown stations.
    Keywords: Transit-oriented development; economic development; retail location
    Date: 2014
  14. By: Kauko, Tom
    Abstract: Real estate is today seen through the widespread sustainability discourse where buildings and land use occupies a core position. Land and buildings are also subject to sustainability evaluations along environmental, social, cultural and economic dimensions. In this paper cross-sectional data on house prices and sales volumes from Budapest, Hungary, for the period 2000-09 are analysed using time-windows generated by the self-organizing map (SOM) algorithms. In particular, upper-market cases are related to sustainable innovations insofar as such exist, which is examined using interviews and field inspection. The results however suggest that such features are largely absent in the period of data collection, although future markets are likely to be different in this respect.
    Date: 2013
  15. By: Hansen, Karen Tranberg
    Abstract: With a focus on cities in eastern and southern Africa, this paper draws on recent scholarship and my own research in Lusaka, Zambia, to analyse pathways for, and challenges to, greater social mobility for youth against the background of economic, politica
    Keywords: youth, urban space, social mobility, sociality, sexual relations
    Date: 2014
  16. By: Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland); Justyna Wilk (Wroc³aw University of Economics, Poland)
    Abstract: The relations between metropolitan areas of southern Poland and domestic population migration flows in the period of 2008-2010 were discussed in this paper. Southern Polish regions demonstrate low intensity of intraregional population movements while interregional flows are quite significant, within considering territory. The majority of migration flows occur in relation to the cities of Wroc³aw and Cracow, as regards neighbouring as well as remaining regions of Poland, due to their economic potential and metropolitan character.
    Keywords: internal migration, metropolitan area, synthetic measure of development
    JEL: J11 O11 R11 R23
    Date: 2013–02
  17. By: Mehmet Ekmekci; M. Bumin Yenmez
    Abstract: As school districts integrate charter schools for centralized admissions in Denver, New Orleans, Newark and Washington D.C., some charter schools have stayed out of the system. This is counterintuitive as centralized clearinghouses are deemed beneficial to schools as well as students. We provide a new framework to study the incentives of a school to join a clearinghouse and we show that each school prefers to remain out of the system when others join it for the standard mechanisms used in practice for student assignment. Therefore, our analysis provides an explanation of why some charter schools have evaded the clearinghouse. To overcome this issue, we propose two schemes that can be used by policymakers to incentivize schools to join the system, which achieves the desired integration of schools to the clearinghouse.
  18. By: Almer, Christian; Boes, Stefan; Nuesch, Stephan
    Date: 2013
  19. By: Gerald Carlino; William R. Kerr
    Abstract: This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    JEL: J2 J6 L1 L2 L6 O3 O4 R1 R3
    Date: 2014–08
  20. By: Rasmus Landersø (Rockwool Foundation Research Unit & Department of Business and Economics, Aarhus University); Helena Skyt Nielsen (Department of Business and Economics, Aarhus University); Marianne Simonsen (Department of Business and Economics, Aarhus University)
    Abstract: This paper investigates the effects of school starting age on crime while relying on variation in school starting age induced by administrative rules; we exploit that Danish children typically start first grade in the calendar year they turn seven, which gives rise to a discontinuity in childrens’ school starting age. Analyses are carried out using register-based Danish data. We find that higher age at school start lowers the propensity to commit crime, but that this reduction is caused by incapacitation while human capital accumulation is unaffected. Importantly, we also find that the individuals who benefit most from being old-for-grade are those with high latent abilities whereas those with low latent ability seem to be unaffected by being old-for-grade in school.
    Date: 2013–09
  21. By: Rokhaya Dieye (Université Laval - Department of Economics); Habiba Djebbari (Université Laval - Department of Economics, AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Felipe Barrera-Osorio (Havard Graduate School of Education - Harvard University)
    Abstract: When one's treatment status affects the outcomes of others, experimental data are not sufficient to identify a treatment causal impact. In order to account for peer effects in program response, we use a social network model. We estimate and validate the model on experimental data collected for the evaluation of a scholarship program in Colombia. By design, randomization is at the student-level. Friendship data reveals that treated and untreated students interact together. Besides providing evidence of peer effects in schooling, we find that ignoring peer effects would have led us to overstate the program actual impact.
    Keywords: education; social network; impact evaluation
    Date: 2014–07
  22. By: Berlemann, Michael (Helmut Schmidt University, Hamburg); Jahn, Vera (Helmut Schmidt University, Hamburg)
    Abstract: Successful innovation is a precondition for economic prosperity. While various potential determinants of innovative activity have been considered, little empirical evidence is yet available for the influence of firm governance issues. This paper aims at filling this gap in the literature by studying whether the relative importance of owner-managed small and medium sized enterprises has an effect on regional innovative capacity. We therefore combine patent data with data from the firm database of Creditreform, containing information on the governance structure of regional operating enterprises. Using a cross section of German NUTS-3-regions, we identify a significantly positive relation between the relative importance of owner-managed SMEs and innovative capacity. This finding is highly robust when controlling for spatial correlations.
    Keywords: innovation; owner-managed firms; SMEs; Germany
    JEL: C21 D23 O31
    Date: 2014–07–28
  23. By: Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland)
    Abstract: The main purpose of the article is to consider a important issue of spatial econometrics which is a proper interpretation of structural parameters of econometric models with spatial autoregression. The problem will be considered based on the example of the spatial SAR model. Another purpose of the article is to make an overview of measures of average spatial impact proposed by the subject literature (see Lesage and Pace 2009). The analysis will include such measures as Average Total Impact to an Observation, Average Total Impact from an Observation, Average Indirect Impact to an Observation, Average Indirect Impact from an Observation and Average Direct Impact. Having considered the above issues, I will introduce a set of three original measures that allow interpretation of the strength of the impact of the explanatory processes within the spatial SAR model which take the forms of average direct impact, average indirect impact and average induced impact. The use of this set of measures will be illustrated with the example of the analysis of the unemployment rate in Poland. It must be emphasized that the presented set of measures may also be designated for other spatial models. With the knowledge of the empirical form of the model and of the spatial weight matrix, the set of measures introduced simplifies significantly the complex procedure of the interpretation of the structural parameters for spatial models to the use of merely three values.
    Keywords: spatial econometrics, measures of average impact, SAR model, SDM model, spatial autocorrelation
    JEL: C21 R11 R23
    Date: 2013–02
  24. By: Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland); Justyna Wilk (Wroclaw University of Economics, Poland); Stanislaw Matusik (University School of Physical Education in Krakow, Poland)
    Abstract: Population migration is a long-lasting process affected by many factors. The analysis of its effects is a typical research approach to its interpretation. The object of the paper is to investigate migration phenomenon by means of gravity model application. It helps to explain variations in the level of migration flows between and within regions, to determine its effects and reasons including geographical factor. The analysis covers internal migration in Poland in the period of 2004-2010. Inter- and intraregional flows at NTS-2 level were considered. Two periods of time regarding economic situation in Poland were specified: 2004-2007, 2008-2010. Key economic factors (GDP, capital expenditures, unemployment, wages and salaries) were used as explanatory variables. Distances between regions were determined on their centroids. The research results confirmed that regional economic indicators are the determinants of internal migration directions in Poland whilst overall economic situation affects its intensity. The regions featuring relatively good economic situation are the centres of population inflow (particularly from neighbouring locations) whereas the other perform the role of “demographic resources” for better developed voivodships.
    Keywords: gravity model, internal migration, economic determinants of migration
    JEL: J11 O11 R11 R23
    Date: 2013–05
  25. By: Marco Sanfilippo; Adnan Seric
    Abstract: This paper adopts multilevel analysis to analyse the agglomeration-performance nexus for domestic firms in Sub-Saharan Africa. We show that contextual factors such as country, city and industry together explain up to 30% of the variance in firms’ productivity. Our results show also that African firms can take advantage from agglomeration externalities when they locate in cities more densely populated by firms specialized in different sectors (urbanization economies), while their performance worsen when they face direct competition from firms in the same industry. These effects are similar in the services and the manufacturing industries, even if in the latter positive spillovers are found to be conditional to the presence of backward and foreign linkages with nearby firms. Finally, we are also able to show that these effects are magnified when domestic firms locate close to foreign multinationals, especially those coming from the South.
    Keywords: Agglomeration economies, Firms’ heterogeneity, Sub-Saharan Africa
    JEL: D22 F23 O14
    Date: 2014–07
  26. By: Hamna Ahmed (Lahore School of Economics, Lahore, Pakistan.); Sahar Amjad (Lahore School of Economics, Lahore, Pakistan.); Masooma Habib (Lahore School of Economics, Lahore, Pakistan.); Syed Ahsan Shah (Lahore School of Economics, Lahore, Pakistan.)
    Abstract: The objective of this study is to understand why parents in rural areas choose low-cost private schools when free public schools are available. The study employs data from the Privatization in Education Research Initiative (PERI) School Choice Survey, 2011. The sample under study comprises 5–18-year-old children enrolled in private or public schools at the primary, secondary, or high school level in eight rural tehsils across Punjab, Pakistan. Our methodology entails specifying a probability choice model to understand what determines school choice in a rural setting. The variable of interest is parents’ perceptions of their child’s competence, the quality of the child’s school, and the employment opportunities available to the child. The model also controls for a range of child-, parent-, and household-specific characteristics. Five main factors emerge as important determinants of private school choice. These include the socioeconomic status of the household, the degree of a school’s accessibility, the cost of schooling, parents’ perceptions of school quality, and their perceptions of the available employment opportunities in the region.
    Keywords: School choice, private, public, perceptions, school quality, employment opportunities, wealth, access, cost of schooling, Punjab, Pakistan.
    JEL: I21 I25 O12
    Date: 2013
  27. By: Röder-Sorge, Marisa
    Abstract: Although there are several speculations on factors that might be important for the buying decision of private customers when buying a residential building, purchasers of privately owned buildings have not been asked about those factors so far.Therefore, a survey in the rural parts of Hesse (Germany) has been started in which every purchaser of a residential building gets a questionnaire. They are asked which pieces of information on their property, e.g. reference prices, building license, copy of an entry in the cadastral register etc., they had when buying their piece of real estate. Furthermore, there are questions on the impact of several factors on their buying decision like e.g. purchasing price, connection to local trains and buses, living close to schools and shops.The intention of the study is to figure out which information buyers have about their future land property and which factors are important for their buying decision. Moreover, statistical methods will be used to check whether there is a relationship between the known pieces of information or the important factors for the buying decision and the age of the purchasers, their educational background or the size of the district where the property belongs to.Finally, the results will be compared to the findings of other studies.
    Date: 2013
  28. By: Margarta Rubio
    Abstract: The aim of this paper is to show how housing tenure (rented vs. owner-occupied) affects monetary policy. In order to do that, I propose a dynamic stochastic general equilibrium model with housing, both owned and rented. First, I analyze how, in the model, preference parameters, fiscal incentives and institutional factors determine the rental market share and the residential debt-to-GDP ratio. Then, within this framework, I study how the transmission and optimality of monetary policy differ depending on these factors. From a positive perspective, impulse responses illustrate differences in the monetary transmission mechanism. In normative terms, results show that when the relative size of the rental market is larger, monetary policy is more stabilizing. An optimal monetary policy analysis also suggests that in this case, monetary policy should respond more aggressively to inflation and disregard output, since the financial accelerator effects are weaker.
    Keywords: Housing market, rental, owner-occupied housing, monetary policy
    Date: 2014
  29. By: Andrea Bellucci (University of Naples Federico II); Alexander Borisov (University of Cincinnati); Alberto Zazzaro (Polytechnic University of Marche, Money and Finance Research group (MoFiR, Ancona) and CASMEF (Rome))
    Abstract: In this paper we explore the effects of bank-borrower physical proximity on price and non-price aspects of small business lending in local credit markets. Along the price dimension, our analysis reveals that interest rates increase with bank-borrower distance and decrease with the distance between borrower and other competing banks. Along the quantity dimension, we observe that more distant borrowers are more likely to experience binding credit limits. We also show that the quantity effects of bank-borrower distance are concentrated among less transparent firms. Our findings are consistent with pricing based on marginal costs that reflect information-based factors, and are in contrast to the established paradigm, where banks adopt spatial discriminatory pricing rules when lending to small-sized enterprises.
    Keywords: Distance, Bank lending, Pricing, Interest rate, Credit availability.
    JEL: G21 G32 L11
    Date: 2013
  30. By: Michael Janson; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: High Occupancy/Toll (HOT) Lanes typically charge a varying to single occupant vehicles (SOVs), with the toll increasing during more congested periods. The toll is usually tied to time of day or to the density of vehicles in the HOT lane. The purpose of raising the toll with congestion is to discourage demand enough to maintain a high level of service (LOS) in the HOT lane. Janson and Levinson (2014) demonstrated that the HOT toll may act as a signal of downstream congestion (in both general purpose (GP) and HOT lanes), causing an increase in demand for the HOT lane, at least at lower prices. This paper builds off that research and explores alternative HOT lane pricing strategies, including the use of GP density as a factor in price to more accurately reflect the value of the HOT lane. In addition, the paper explores the potential effect these strategies would have on the HOT lane vehicle share through a partial equilibrium analysis. This analysis demonstrates the change in demand elasticity with price, showing the point at which drivers switch from a positive to negative elasticity.
    Keywords: Toll Roads, Road Pricing, Transportation Economics, Travel Behavior, Networks
    JEL: R40
    Date: 2014
  31. By: Jenny Schuettz
    Abstract: New York City is often held up as a successful example of arts-led economic development. Case studies have documented the influx of avant-garde artists and galleries into several neighborhoods, including Greenwich Village, SoHo, and Chelsea, followed by yuppies and boutiques. Some researchers have used these examples to argue that artists and galleries can spur gentrification. An alternative hypothesis is that galleries locate in neighborhoods with higher levels of amenities. In this paper, I examine whether concentrations of galleries are associated with redevelopment of surrounding neighborhoods, conditional on initial neighborhood amenities. Results suggest that while physical conditions do affect gallery location choices, the presence of galleries has little impact on subsequent changes in the built environment. Historic districts, museums, parks and commercial-friendly zoning are positively associated with new gallery openings, although the relationships vary across neighborhoods. Proximity to prior galleries is strongly predictive of new gallery openings. Using historic gallery locations to instrument for current galleries, the analysis finds little evidence that gallery presence is associated with neighborhood redevelopment.
    Keywords: retail location, economic development, amenities, Art Galleries
    Date: 2013
  32. By: Marjan Nasir (Lahore School of Economics, Lahore, Pakistan.)
    Abstract: The geographic and industrial concentration of firms affects firm turnover, as highlighted in research on industrial organization. This study conducts a firm-level analysis to determine the impact of agglomeration on firm entry and exit in domestic industries in Punjab, Pakistan. The study also illustrates how some industries exist in clusters while others are highly dispersed. The results suggest that firm entry and exit is higher in highly agglomerated industries.
    Date: 2013
  33. By: Roger Bivand (Norwegian School of Econonomics); Gianfranco Piras (Regional Research Institute, West Virginia University)
    Abstract: Recent advances in the implementation of spatial econometrics model estimation techniques have made it desirable to compare results, which should correspond between implementations across software applications for the same data. These model estimation techniques are associated with methods for estimating impacts (emanating effects), which are also presented and compared. This review constitutes an up to date comparison of generalized method of moments (GMM) and maximum likelihood (ML) implementations now available. The comparison uses the cross sectional US county data set provided by Drukker, Prucha, and Raciborski (2011c, pp. 6-7). The comparisons will be cast in the context of alternatives using the MATLAB Spatial Econometrics toolbox, Stata, Python with PySAL (GMM) and R packages including sped, sphet and McSpatial.
    Keywords: spatial econometrics, maximum likelihood, generalized method of moments, estimation, R, Stata, Python, MATLAB
    JEL: C21 C4 C5
    Date: 2013–01
  34. By: Nuno Crespo; M. Paula Fontoura; Nadia Simoes
    Abstract: Proximity to the markets is a key determinant of the location of firms because distance still matters, as recently reported in the literature. In this paper, based on an adapted version of the most standard centrality index we propose a decomposition method which allows isolating the influence of: (i) internal and external factors; (ii) economic and geographical aspects. In order to illustrate our methodology, we consider data for 171 countries. This empirical example leads to the conclusion that the centrality level of the countries derives from different sources, requiring therefore different policy interventions in order to improve it.
    Keywords: gcentrality, peripherality, economic geography, distance.
    JEL: F14 R30
    Date: 2014–06
  35. By: Sumarto, Sudarno; de Silva, Indunil
    Abstract: In this paper we investigate how the receipt of educational transfers, scholarships and related assistance programmes affects the labour supply of children and the marginal spending behaviour of households on children’s educational goods. We use a nationally representative household survey of unusual scope and richness from Indonesia. We found strong evidence of educational cash transfers and related assistance programmes significantly decreasing the time spent by children on income-generating activities in Indonesia. Households receiving educational transfers, scholarships and assistance were also found to spend more at the margin on voluntary educational goods. These results were stronger on children living in poor families. The findings of this study lend support to the growing view in the literature that educational transfers, scholarships and related assistance can actually have a positive impact on economic development by increasing the level of investment in human capital. Our results are particularly relevant for understanding the role of cash transfers and education assistance in middle-income countries, where enrolment rates are already at satisfactory levels, but the challenge is to keep post-primary students in school. Finally, the principle message that emerges from the study is: there are quantitatively non-negligible, average gains from educational transfers and support programmes on household education spending and child labour, especially for the poor.
    Keywords: Cash transfers, child labour, education expenditure, flypaper effect.
    JEL: I2 I24 I28
    Date: 2013–12–04
  36. By: Daniel Vaughan   
    Abstract: I propose a model of cultural transmission where children interact strategically with each other with the only desire to fit in, and parents purposefully socialize their children to their own culture. In the empirical section I estimate parental and peer effects using US teenager data on religious attitudes and alcohol consumption from the Add Health study. I find that, controlling for individual and school observables, children attitudes are a weighted average of their parents' and peers' attitudes, with the latter generally dominating. I then show that these are stable in time with now signs of fading away in the transition from adolescence to adulthood. Finally, the comparative statics allow me to separate endogenous from exogenous parental effects.
    Keywords: Cultural transmission, endogenous preferences, Add Health study, preference for conformity, endogenous socialization
    JEL: D19 J13 J15
    Date: 2013–04
  37. By: Tommaso Agasisti (Politecnico di Milano School of Management, Italy); Sergio Longobardi (University of Naples Parthenope, Italy); Andrea Regoli (University of Naples Parthenope, Italy)
    Abstract: “Resilient students” are those who, despite their disadvantaged background, are able to obtain good educational results. This paper proposes a statistical procedure for identifying the proportion of resilient students for countries participating to OECD Programme for International Students Assessment (PISA) various years; then, it employs a longitudinal analysis (i.e. a set of fixed-effects [FE] models) to study the determinants of this proportion. While an important stream of the literature pointed at demonstrating that educational funding is not correlated with higher average performances of students, our findings suggest that it can help disadvantaged students in overcoming their penalizing starting conditions, at least when considering the proportion of public expenditure invested in education as a share of total public spending.
    Keywords: Resilient students, FE models
    JEL: I21
    Date: 2014–07
  38. By: Entorf, Horst (Goethe University Frankfurt); Sieger, Philip (Goethe University Frankfurt)
    Abstract: Two alternative hypotheses – referred to as opportunity- and stigma-based behavior – suggest that the relationship between unemployment and crime also depends on preexisting local crime levels. In order to analyze conjectured nonlinearities between both variables, we are using quantile regressions applied to German county panel data. While both conventional OLS and quantile regressions confirm the positive link between unemployment and crime for property crimes, results for assault differ with respect to the method of estimation. Whereas conventional mean regressions do not show any significant effect (which would confirm the usual result found for violent crimes in the literature), quantile regression uncovers that size and importance of the relationship are conditional on the crime rate: The partial effect is significantly positive for moderately low and median quantiles of local assault rates.
    Keywords: unemployment, crime, quantile regression, market of offences
    JEL: C21 E24 C33
    Date: 2014–07
  39. By: de Jong, Peter; Arkesteijn, Monique
    Abstract: There is a gap between investment and maintenance of public school buildings in the Netherlands. This gap is caused by separated responsibility for the financing of the accommodation for the primary and secondary schools. Municipalities finance the construction of these schools and school boards are responsible for the operation costs of the school building. According to In 't Veld (2010) this split-up results in higher costs during the lifetime. The purpose of this article is to show the integral approach captured in life cycle cost (LCC) in order to achieve to a better balanced system. The research conducted nine case studies of secondary school buildings, which are newly build between 2005 and 2008. The schools were examined in terms of buildings characteristics, building costs and operations costs. With the aid of the Dutch sustainability measurement tool 'GPR-Gebouw' the sustainability score of the schools is determined.For the construction sector in the Netherlands can be concluded that it is generally acknowledged that sustainability is more expensive, however, studies indicate this is not unequivocally. An elaborated research of Davis Langdon reveals within a given spread of building costs an equal spread of certified buildings (Morris & Matthiessen, 2007). Our study found at least no clear relationship that sustainable schools have higher investment needs and shows a positive effect of sustainable measurements on the life cycle costs of secondary schools.There is an on-going discussion on ratios in this matter. Evans (1998) stated that there is a ratio of 1:5:200 between the construction costs, operating expenses and corporate operating costs. This ratio has already been further defined and reduced by Hughes (2004) and Ive (2007). The scenario analysis of our study shows that the operating costs still have a larger share in the life cycle costs than the investment costs. The difference between the investment and operating according to this study is by far not as impressive as stated by Evans, but still worthwhile to keep focus on LCC in policies for school development.
    Date: 2013
  40. By: Rik Dillingh (University of Tilburg, Ministry of Social Affairs and Employment, and Netspar); Henriette Prast (University of Tilburg, CentER, Netspar); Maria Cristina Rossi (University of Turin and CeRP-Collegio Carlo Alberto, CEPS/INSTEAD and Netspar); Maria Cesira Urzì Brancati (University of Modena and Reggio Emilia and CeRP-Collegio Carlo Alberto)
    Abstract: This paper presents the results from a survey on the attitudes toward reverse mortgages of homeowners aged 45 and over in the Netherlands. We find that there is substantial potential interest in reverse mortgages, especially for the purpose of being able to live more comfortably and not worry about money until death, or to be able to spend a large sum of money upon retirement on hobbies, home improvements or traveling. A similar study has been done for Italy, where results differ from those related to the Netherland. For Italian households a reverse mortgage is primarily seen as a last resort. We use two different frames for suggestions on the use of the loan – own consumption versus bequest - and find that the latter significantly raises interest in reverse mortgages of people with a bequest wish. We interpret this as evidence that people are unaware of the potential of reverse mortgages to optimize the timing of bequests. Women are less interested, while demand is highest among those around retirement age, depends positively on the ratio of housing wealth over income and on the perceived riskiness of future pensions, and negatively on the expected replacement ratio. We find a counterintuitive result for bequest timing, as people are more interested if the age difference with the oldest child is larger.
    Date: 2013–11
  41. By: Jianjun Sun (College of Tourism Hainan University,China); Su Zhang (School of Economics, Central University of Finance and Economics, China); Nobuyoshi Yamori (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: China's Hainan Island has a rich diversity of attractions and opportunities for nature-based tourism, outdoor recreation, and sporting activities. Moreover, Hainan Island has a natural and socioeconomic base and environment, hosting the implementation of a tourism industrial policy. On December 31, 2009, China's State Council announced to the world the national policy of the establishment of Hainan International Tourism Island. Hence, China's Hainan Island is well suited for investigating the announcement effects of regional tourism industrial policy on the market values of firms in a tourist destination region. Based on a sample of 19 listed firms in Hainan, or Hainan concept firms, consisting of various industries, we explore the announcement effects of the national policy of Hainan International Tourism Island using an event-study approach. Two statistical methods, mean adjusted and market-model adjusted, are employed to calculate the daily abnormal returns and the cumulative abnormal returns. The results with and without considering the clustering issue show that, first, the averages of (standardized) accumulative abnormal returns are not different from zero prior to the announcement; second, the (standardized) accumulative abnormal returns of Hainan concept stock continuously go up over trading days after the announcement of a regional tourism industrial policy. As a robustness check, we also investigate the effect of the policy on Guangdong concept listed firms. We find no significant impacts of the policy announcement on the Guangdong concept listed firms. In sum, these findings indicate that regional tourism industrial policy is valuable not only to the tourism industry in the destination region but also to other industries in that region.
    Keywords: Announcement effects, Tourism, Regional industrial policy, Tourism industrial identity, Hainan
    JEL: O25 R11
    Date: 2014–07
  42. By: Eric Strobl (Ecole Polytechnique [Palaiseau] - Ecole Polytechnique); Marie-Anne Valfort (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: Relying on census data collected in 2002 and historical weather data for Uganda, we estimate the impact of weather-induced internal migration on the probability for non-migrants living in the destination regions to be employed. Consistent with the pre- diction of a simple theoretical model, our results reveal a larger negative impact than the one documented for developed countries. They further show that this negative impact is significantly stronger in Ugandan regions with lower road density and therefore less conducive to capital mobility: a 10 percentage points increase in the net in-migration rate in these areas decreases the probability of being employed of non-migrants by more than 10 percentage points.
    Keywords: weather shocks, internal migration, labor market, Sub-Saharan Africa
    Date: 2013–10
  43. By: Andrew Owen; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper discusses the development of a national public transit accessibility evaluation framework, focusing on lessons learned, data source evaluation and selection, calculation methodology, and examples of accessibility evaluation results. In both practice and in research, accessibility evaluation remains experimental and methodologically fragmented. This heightens the “first mover†risk for agencies seeking to implement accessibility-based planning practices, as they must select a method which might produce results that can only be interpreted locally. Development of a common baseline accessibility metric could advance the use of accessibility- based planning. The accessibility evaluation framework described here builds on methods developed in earlier project, extended for use on a national scale and at the Census block level. Application on a national scale involves assembling and processing a comprehensive national database of public transit network topology and travel times. This database incorporates the significant computational advancement of calculating accessibility continuously for every minute within a departure time window of interest. Values for contiguous departure time spans can then be averaged or analyzed for variance over time. This significantly increases computational complexity, but provides a very robust representation of the interaction between transit service frequency and accessibility at multiple departure times.
    Keywords: Accessibility, Big Data, Transit, Databases, Travel Behavior, Networks
    JEL: R40
    Date: 2014
  44. By: Isabelle Laplace (M3 Systems - M3 Systems); Nathalie Lenoir (LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - Ecole Nationale de l'Aviation Civile - PRES Université de Toulouse); Christine Cassan (Elysées Consulting - Elysées Consulting)
    Abstract: The purpose of the DEMAND 2025 study is to explore what can be assumed today about the main features of the demand for leisure air transport in 2025 ? leisure meaning all travel purposes except business, i.e. when the expense is a discretionary choice. An original methodology has been devoted to the study, and applied to the case of the French population, one of the top 5 European populations for leisure air traffic in EU15 in 2003.Determining how leisure air travel demand will evolve in the future requires an understanding of how passengers make their decisions to travel and how their behaviour and needs will evolve. That is why two complementary approaches have been used in this study: an economic approach and a sociological approach, using the EUROCONTROL STATFOR scenarios for the description of the general context in 2025.This innovative methodology has provided answers to two categories of questions:
    Keywords: air travel;leisure;demand features;scenarios
    Date: 2014–07–15
  45. By: Lee, Stephen
    Abstract: It is well known that institutional investors are noticeably overweight in the City of London office market and substantially underweight in offices in the rest of the UK. An economically sensible way to measure this bias is to calculate the additional required return on offices outside the City of London necessary to tilt the intuition's allocation away from that observed. In other words, in a world without any bias, this number would reveal how much return offices outside of the City of London would have to exceed those in the City to motivate investors to diversify their holdings into other markets. Using quarterly data from 2001-2011 the results indicate that this bias is large and cannot be easy explained by lot size, illiquidity, and familiarity.
    Date: 2013
  46. By: Jung Hyun Choi; Richard K. Green
    Abstract: This paper examines the magnitude of human capital spillovers on unemployment. Using bothindividual and metropolitan level data, we find that the adult population share of collegegraduates is negatively associated with the unemployment rate. More specifically, we find thatthose who reside in MSAs with higher shares of college graduates are more likely to beemployed, even after controlling for individual, MSA and state level factors including individual’sown education level. The likelihood of being unemployed falls further for the non-collegegraduates compared to the college graduates. We also find that MSAs with higher shares ofcollege graduates have lower average unemployment rates. This education spillover is nottransitory but is an important factor that explains long-term divergences in the MSAunemployment rates.
    Keywords: education; umemployment
    Date: 2014
  47. By: Calero, Carla (Inter-American Development Bank); Corseuil, Carlos Henrique (Institute for Applied Economic Research (IPEA), Brazil); Gonzales, Veronica (Inter-American Development Bank); Kluve, Jochen (Humboldt University Berlin, RWI); Soares, Yuri (Inter-American Development Bank)
    Abstract: This paper provides findings of a small-scale, innovative labor training program that uses expressive arts and theatre as a pedagogical tool. The corresponding life skills training component is combined with a technical component teaching vocational skills. To our knowledge, this is the first paper to rigorously evaluate the effectiveness of a training program constructed around expressive arts. Using a randomized assignment of favela youth into program and control groups, we look at the short-run treatment effects on a comprehensive set of outcomes including employment and earnings as well as measures of personality traits and risk behavior. We find positive short-run employment and earnings impacts five months after the program finalized; no impacts are found for shorter periods. These short-run impacts are economically very large, compared to those typically found in the literature: a 33.3 per cent increase in the probability of being employed, and a 23.6 per cent increase in earnings. We find no evidence of significant program impacts on other outcomes, including personality-related traits, providing evidence that these traits may not be malleable for young adults in the short-run. We argue that the estimated labor market impacts are due to a combination of both skills formation and signaling of higher quality workers to employers.
    Keywords: labor market training, youths, randomized controlled trial, life skills
    JEL: J24 J68 I38
    Date: 2014–05

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