nep-ure New Economics Papers
on All new papers
Issue of 2014‒09‒08
forty papers chosen by
Steve Ross
University of Connecticut

  1. Does Regional Economic Growth Depend on Proximity to Urban Centres? By Rudiger Ahrend; Abel Schumann
  2. When is Competition Between Schools Beneficial? By OECD
  3. The Interaction of Mortgage Credit and Housing Prices in the US By Fabian Lindner
  4. Towards an evolutionary perspective on regional resilience By Boschma, Ron
  5. Benchmark Value Added Chains and Regional Clusters in German R&D Intensive Industries By Reinhold Kosfeld; Mirko Titze
  6. Causal relationship between asset prices and output in the US: Evidence from state-level panel Granger causality test By Furkan Emirmahmutoglu; Nicholas Apergis; Beatrice D. Simo-Kengne; Tsangyao Chang; Rangan Gupta
  7. The Effects of Shared School Technology Access on Students’ Digital Skills in Peru By German Bet; Julian Cristia; Pablo Ibarraran
  8. It's the economy, stupid: increasing fuel price is enough to explain Peak Car in Sweden By Bastian, Anne; Börjesson, Maria
  9. On the Distributive Costs of Drug-Related Homicides By Nicolas Ajzenman; Sebastian Galiani; Enrique Seira
  10. Does Technology in Schools Affect Repetition, Dropout and Enrollment? Evidence from Peru By Julian Cristia; Alejo Czerwonko; Pablo Garofalo
  11. The Effects of Air Pollution on Educational Outcomes: Evidence from Chile By Sebastian Miller; Mauricio Vela
  12. House Values and Proximity to a Landfill: A Quantile Regression Framework By Mario du Preez; Mehmet Balcilar; Aarifah Razak; Steven F. Koch; Rangan Gupta
  13. Financial Intermediation, House Prices and the Welfare Effects of the U.S. Great Recession By Dominique Menno; Tommaso Oliviero
  14. Forecasting US Real Private Residential Fixed Investment Using a Large Number of Predictors By Goodness C. Aye; Stephen M. Miller; Rangan Gupta; Mehmet Balcilar
  15. The great housing boom of China By Chen, kaiji; Wen, Yi
  16. Forecasting the U.S. Real House Price Index By Vasilios Plakandaras; Rangan Gupta; Periklis Gogas; Theophilos Papadimitriou
  17. Barriers to the implementation of environmental policies at the local level in China By Kostka, Genia
  18. Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment? By Paulo Bastos; Odd Rune Straume
  19. The Effect of In-Service Teacher Training on Student Learning of English as a Second Language By Rosangela Bando; Xia Li
  20. Adapting to Climate Change: Long-Term Effects of Drought on Local Labor Markets By Paulo Bastos; Matias Busso; Sebastian Miller
  21. Evolution of Monetary Policy in the US: The Role of Asset Prices By Beatrice D. Simo-Kengne; Stephen M. Miller; Rangan Gupta
  22. Crime, Punishment, and Schooling Decisions: Evidence from Colombian Adolescents By Ana Maria Ibanez; Catherine Rodriguez; David Zarruk
  23. Job polarization on local labor markets By Dauth, Wolfgang
  24. Temporal Causality between House Prices and Output in the U. S.: A Bootstrap Rolling-Window Approach By Wendy Nyakabawo; Stephen M. Miller; Mehmet Balcilar; Sonali Das; Rangan Gupta
  25. How scale and institutional setting explain the costs of small airports? -An application of spatial regression analysis By Tolga Ülkü; Vahidin Jeleskovic; Jürgen Müller
  26. The Effect of Weather-Induced Internal Migration on Local Labor Markets Evidence from Uganda By Eric Stobl; Marie-Anne Valfort
  27. Does Pre-primary Education Reach Those Who Need it Most? By OECD
  28. School autonomy and accountability in Thailand: a systems approach for assessing policy intent and implementation By Arcia, Gustavo; MacDonald, Kevin; Patrinos, Harry Anthony
  29. Why experience changes attitudes to congestion pricing: the case of Gothenburg By Börjesson, Maria; Eliasson, Jonas; Hamilton, Carl
  30. Tackling Labour Mismatches and Promoting Mobility in Hungary By Stéphane Sorbe
  31. Re-estimating the Gender Gap in Colombian Academic Performance By Juan Sebastian Munoz
  32. Forecasting US Real House Price Returns over 1831-2013: Evidence from Copula Models By Anandamayee Majumdar; Rangan Gupta
  33. Peak-hour Metro Rail Traffic Congestion Alleviation By Narayanaswami, Sundaravalli
  34. Cohort size and youth unemployment in Europe: a regional analysis By Duncan Roth and; John Moffat
  35. The effect of external knowledge sources and their geography on innovation in Knowledge Intensive Business Services (KIBS) SMEs; some Implications for de-industrialised regions in the UK By Maja Savic; Helen Lawton Smith; Ioannis Bournakis
  36. Enforcing Compulsory Schooling by Linking Welfare Payments to School Attendance: Lessons from Australia’s Northern Territory* By Moshe Justman; Kyle Peyton
  37. Decentralization and Accountability: The Curse of Local Underdevelopment By Fabiana Machado
  38. Is the Glass Half Empty or Half Full? School Enrollment, Graduation, and Dropout Rates in Latin America By Marina Bassi; Matias Busso; Juan Sebastian Munoz
  39. Politics under the Weather: Droughts, Parties and Electoral Outcomes By Paulo Bastos; Sebastian Miller
  40. Donations, risk attitudes and time preferences: A study on altruism in primary school children By Silvia Angerer; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter

  1. By: Rudiger Ahrend; Abel Schumann
    Abstract: This paper analyses the spatial patterns of regional economic growth in Europe over the 1995 to 2010 period. It finds that regions, which contain large urban agglomerations, have been growing significantly faster than those that do not. Furthermore, proximity to large urban agglomerations has been positively correlated to economic growth. Halving travel time to a large urban agglomeration is associated with a 0.2 to 0.4 percentage points increase in annual per capita growth. More generally, the study also shows that measures of population density are positively correlated to growth. Among the different measures, by far the best predictor of growth between 1995 and 2010 is the maximum population density of a region.
    Keywords: regional growth, spatial distribution of economic activity, population distribution and economic growth
    JEL: R11 R12
    Date: 2014–07–30
  2. By: OECD
    Abstract: In most school systems, over 50% of 15-year-olds students attend schools that compete with another school to attract students from the same residential area. Across countries and economies, performance is unrelated to whether or not schools have to compete for students. When choosing a school for their children, parents look at a range of criteria; for disadvantaged parents, cost-related factors often weigh as much as, if not more than, the factors related to the quality of instruction. School systems with low levels of competition among schools often have high levels of social inclusion, meaning that students from diverse social backgrounds attend the same schools. In contrast, in systems where parents can choose schools, and schools compete for enrolment, schools are often more socially segregated.
    Date: 2014–08
  3. By: Fabian Lindner
    Abstract: This paper looks at the relation between mortgage credit and housing values. It has become conventional wisdom in policy circles that credit growth led to the housing bubble in the US. However, this statement has not been empirically tested as of yet. The paper uses the Johansen procedure to estimate a long run relationship between mortgage credit and housing prices between 1984 and 2012 and analyzes the interactions between the variables. To this effect, two models with two different housing price variables are estimated. It is found that mortgage credit is weakly exogenous. Impulse-response functions, variance decompositions and out of sample forecast also show that mortgage credit drives housing prices and not vice versa. The paper also looks at the effect of short-term and long-term interest rates and does not find important influences of both on housing prices or mortgage credit. The role of monetary policy is not likely to have been very strong in the built-up of the housing bubble.
    Keywords: Housing Prices, Mortgage Markets, Monetary Policy
    JEL: E22 E44 E52 G21
    Date: 2014
  4. By: Boschma, Ron (CIRCLE, Lund University and Department of Economic Geography, Urban and Regional research centre Utrecht, Utrecht University)
    Abstract: This paper proposes an evolutionary perspective on regional resilience. We conceptualize resilience not just as the ability of a region to accommodate shocks, but we extend it to the long-term ability of regions to develop new growth paths. We propose a comprehensive view on regional resilience, in which history is key to understand how regions develop new growth paths, and in which industrial, network and institutional dimensions of resilience come together. Resilient regions are capable of overcoming a trade-off between adaptation and adaptability, as embodied in their industrial (related and unrelated variety), network (loosely coupled) and institutional (loosely coherent) structures.
    Keywords: regional resilience; related variety; networks; institutions; evolutionary economic geography
    JEL: B52 D85 L16 O18 R11
    Date: 2014–08–23
  5. By: Reinhold Kosfeld (University of Kassel); Mirko Titze (IWH)
    Abstract: Although the phase of euphoria seems to be over, policymakers and regional agencies have maintained their interest in cluster policy. Modern cluster theory provides reasons for positive external effects that may accrue from interaction in a group of proximate enterprises operating in common and related fields. While there is some progress in locating clusters, in most cases only limited knowledge on the geographical extent of regional clusters is established. The present paper presents a hybrid approach to cluster identification. While dominant buyer-supplier relations are derived by qualitative input-output analysis (QIOA) from national I-O tables, potential regional clusters are identified by spatial scanning. This procedure is employed to identify clusters of German R&D intensive industries. In a sensitivity analysis, good robustness properties of the hybrid approach are revealed with respect to variations in the quantitative cluster composition.
    Keywords: National cluster templates, regional clusters, qualitative input-output analysis (QIOA), spatial scanning
    JEL: R12 R15
    Date: 2014
  6. By: Furkan Emirmahmutoglu; Nicholas Apergis; Beatrice D. Simo-Kengne; Tsangyao Chang; Rangan Gupta
    Abstract: This paper investigates the causal relationship between asset prices and per capita output across 50 US states and the District of Columbia over 1975 to 2012. A bootstrap panel Granger causality approach is applied on a trivariate VAR comprising of real house prices, real stock prices and real per capita personal income (proxying output), which allows us to account not only for heterogeneity and cross-sectional dependence, but also for interdependency between the two asset markets. Empirical results reveal the existence of a unidirectional causality running from both asset prices to output. This confirms the leading indicator property of asset prices for the real economy, while also substantiating the wealth and/or collateral transmission mechanism. Moreover, the absence of reverse causation from the personal income per capita to both housing and stock prices tend to suggest that noneconomic fundamentals may have played an important role in the formation of bubbles in these markets.
    Keywords: house prices, stock prices, output, granger causality
    JEL: C32 G10 O18
    Date: 2014–08–29
  7. By: German Bet; Julian Cristia; Pablo Ibarraran
    Abstract: This paper analyzes the effects of increased shared computer access in secondary schools in Peru. Administrative data are used to identify, through propensity-score matching, two groups of schools with similar observable educational inputs but different intensity in computer access. Extensive primary data collected from the 202 matched schools are used to determine whether increased shared computer access at schools affects digital skills and academic achievement. Results suggest that small increases in shared computer access, one more computer per 40 students, can produce large increases in digital skills (0. 3 standard deviations). No effects are found on test scores in Math and Language.
    JEL: I21 I28
    Date: 2014–01
  8. By: Bastian, Anne (KTH); Börjesson, Maria (KTH)
    Abstract: It has long been well-known that economic variables such as GDP and fuel price as well as socio-demographic characteristics and spatial distribution are key factors explaining car use trends. However, due to the recently observed plateau of total car travel in many high income countries, it has been argued that other factors, such as changes in preferences, attitudes and life-styles, have become more important drivers of car use. This would imply that traditional variables are no longer enough for explaining car travel trends. However, in this paper we show that economic variables alone can explain the observed car use trends in Sweden 2002-2012. We also find that urban populations, in particular those with low incomes, respond stronger to fuel price increases and economic downturn, i.e. are reducing car travel more. Among high income urban populations, however, we find signs of saturation in car ownership and distances driven. This underscores the importance of accounting for differences in accessibility with other travel modes and income distribution when explaining the Peak Car phenomenon.
    Keywords: Peak Car; Fuel price elasticity; Transport model; Urban car travel
    JEL: R40
    Date: 2014–08–25
  9. By: Nicolas Ajzenman; Sebastian Galiani; Enrique Seira
    Abstract: There are few reliable estimates of the effects of violence on economic outcomes. This study exploits the manifold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug- related homicides on housing prices. Using an unusually rich dataset that provides national coverage on housing prices and homicides and exploits within- municipality variation, the study finds that the burden of violence affects only the poor. An increase in homicides equivalent to one standard deviation leads to a 3 percent decrease in low-income housing prices. Moreover, the effect on housing prices of long-term increases in crime is 40 percent larger.
    JEL: I3 K4
    Date: 2014–01
  10. By: Julian Cristia; Alejo Czerwonko; Pablo Garofalo
    Abstract: Many developing countries are allocating significant resources to expanding technology access in schools. Whether these investments will translate into measurable educational improvements remains an open question because of the limited evidence available. This paper contributes to filling that gap by exploiting a large-scale public program that increased computer and Internet access in secondary public schools in Peru. Rich longitudinal school-level data from 2001 to 2006 are used to implement a differences-in-differences framework. Results indicate no statistically significant effects of increasing technology access in schools on repetition, dropout and initial enrollment. Large sample sizes allow ruling out even modest effects.
    JEL: I21 I28
    Date: 2014–01
  11. By: Sebastian Miller; Mauricio Vela
    Abstract: In addition to the morbidity and mortality concerns of outdoor air pollution, studies have shown that air pollution also generates problems for children`s cognitive performance and human capital formation. High concentrations of pollutants can affect children’s learning process by exacerbating respiratory illnesses, fatigue, absenteeism and attention problems. The purpose of this work is to analyze the possible contemporary effects of PM10 and other different air pollutants on standardized test scores in Chile. It examines results for 3,880 schools in the Metropolitan, Valparaiso and O’Higgins regions for children in fourth, eight and tenth grades between 1997 and 2012. Data for particulate matter (PM10 and PM2. 5), carbon monoxide (CO), nitrogen oxide (NOx) and ozone (O3) were interpolated at school level using a kriging methodology. The results suggest that higher annual P M10 and O3 levels are clearly associated with a reduction in test scores. Nonetheless, as of 2012 many municipalities in these Chilean regions are still exceeding the annual P M10 international standard quality norm (50 micrograms per cubic meter) by 15 micrograms per cubic meter on average. Efforts to reduce pollution below this norm in the most polluted municipalities would account for improvements in reading and math test scores of 3. 5 percent and 3. 1 percent of a standard deviation, respectively.
    JEL: H23 I25 Q51 Q53
    Date: 2013–12
  12. By: Mario du Preez (Department of Economics, Nelson Mandela Metropolitan University, Port Elizabeth, 6001, South Africa.); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10, Turkey); Aarifah Razak (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper explores the quantile treatment effects of proximity to a landfill site on housing values in the Nelson Mandela Bay Metropole (NMBM), South Africa, extending the research by Du Preez and Lottering (2009) who found a negative relationship to exist between proximity to a landfill site and mean housing values. Quantile regression analysis is used to account for the different implicit price functions that ‘wealthier’ and ‘poorer’ representative agents face. The results corroborate the findings of Du Preez and Lottering (2009) and further identify the negative relationship to be most pronounced at the lowest and highest quantiles of the house values distribution. Specifically, house values increase by an average of ZAR19 or US$1.81 (0.2 percent) for every 100 meters further away from the landfill site. At the lowest quantile (5 percent) house values increase by only 0.11 percent with every 100 meters of distance from the landfill site while at the highest quantile (95 percent), house values increase by 0,21 percent. This clearly demonstrates that ‘wealthier’ representative agents stand to gain more by being situated further away from landfill sites than ‘poorer’ representative agents. The suitability of the quantile treatment approach is confirmed by way of the Koenker and Xiao (2002) Location- Scale-Shift test statistics.
    JEL: Q57
    Date: 2014–08
  13. By: Dominique Menno; Tommaso Oliviero (CSEF, University of Naples Federico II.; CSEF, University of Naples)
    Abstract: This paper quantifies the welfare effects of the aggregate house price collapse during the U.S. Great Recession for leveraged and un-leveraged U.S. households. We calibrate a dynamic general equilibrium model to the U.S. economy and simulate the 2007-2009 Great Recession as a contemporaneous shock to interest rate spread and aggregate income that quantitatively account for the observed collapse in house prices. As a consequence of the loss in housing wealth, our estimates show that borrowers lost significantly more than savers in terms of welfare. The worsened conditions in the financial intermediation sector in the Great Recession forced borrowers to de-leverage, and generated a pure redistribution from savers to borrowers. This amplified the welfare losses of borrowers while caused a relative welfare gain for savers.
    Keywords: Housing Wealth, Heterogeneous Agents, Welfare, Leverage
    JEL: D31 D58 D90 E21 E30 E44
    Date: 2014–08–28
  14. By: Goodness C. Aye; Stephen M. Miller; Rangan Gupta; Mehmet Balcilar
    Abstract: This paper employs classical bivariate, factor augmented (FA), slab-and-spike variable selection (SSVS)-based, and Bayesian semi-parametric shrinkage (BSS)-based predictive regression models to forecast US real private residential fixed investment over an out-ofsample period from 1983:Q1 to 2011:Q2, based on an in-sample estimates for 1963:Q1 to 1982:Q4. Both large-scale (188 macroeconomic series) and small-scale (20 macroeconomic series) FA, SSVS, and BSS predictive regressions, as well as 20 bivariate regression models, capture the influence of fundamentals in forecasting residential investment. We evaluate the ex-post out-of-sample forecast performance of the 26 models using the relative average Mean Square Error for one-, two-, four-, and eight-quarters-ahead forecasts and test their significance based on the McCracken (2004, 2007) MSE-F statistic. We find that, on average, the SSVS-Large model provides the best forecasts amongst all the models. We also find that one of the individual regression models, using house for sale (H4SALE) as a predictor, performs best at the four- and eight-quarters-ahead horizons. Finally, we use these two models to predict the relevant turning points of the residential investment, via an ex-ante forecast exercise from 2011:Q3 to 2012:Q4. The SSVS-Large model forecasts the turning points more accurately, although the H4SALE model does better toward the end of the sample. Our results suggest that economy-wide factors, in addition to specific housing market variables, prove important when forecasting in the real estate market.
    Keywords: Private residential investment, predictive regressions, factoraugmented models, Bayesian shrinkage, forecasting
    JEL: C32 E22 E27
    Date: 2014–08–29
  15. By: Chen, kaiji (Economics Department, Emory University.); Wen, Yi (Federal Reserve Bank of St. Louis)
    Abstract: This paper provides a theory to explain the paradoxical features of the great housing boom in China —the persistently faster-than-GDP housing price growth, exceptionally high capital returns, and excessive vacancy rates. The expectation that high capital returns driven mainly by resource reallocation are not sustainable in the long run can induce the very productive entrepreneurs to speculate in housing during economic transition. This creates a self-fulfilling growing housing bubble, which can create severe resource misallocation. A calibrated version of the theory accounts quantitatively for both the growth dynamics of house prices and other salient features of the recent Chinese experience.
    Keywords: Housing Bubble; Resource Misallocation; Chinese Economy; Development; Economic Transition.
    JEL: E22 E23 O11 O16 P23 P24 R31
    Date: 2014–08–22
  16. By: Vasilios Plakandaras; Rangan Gupta; Periklis Gogas; Theophilos Papadimitriou
    Abstract: The 2006 sudden and immense downturn in U.S. House Prices sparked the 2007 global financial crisis and revived the interest about forecasting such imminent threats for economic stability. In this paper we propose a novel hybrid forecasting methodology that combines the Ensemble Empirical Mode Decomposition (EEMD) from the field of signal processing with the Support Vector Regression (SVR) methodology that originates from machine learning. We test the forecasting ability of the proposed model against a Random Walk (RW) model, a Bayesian Autoregressive and a Bayesian Vector Autoregressive model. The proposed methodology outperforms all the competing models with half the error of the RW model with and without drift in out-of-sample forecasting. Finally, we argue that this new methodology can be used as an early warning system for forecasting sudden house prices drops with direct policy implications.
    Keywords: house prices, forecasting, machine learning, Support Vector Regression.
    JEL: C32 C53 R31
    Date: 2014–08–29
  17. By: Kostka, Genia
    Abstract: China's national leaders have recently made a priority of changing lanes from a pollution-intensive, growth-at-any-cost model to a resource-efficient and sustainable one. The immense challenges of rapid urbanization are one aspect of the problem. Central-local government relations are another source of challenges, since the central government's green agenda does not always find willing followers at lower levels. This paper identifies barriers to a more comprehensive implementation of environmental policies at the local level in China's urban areas and suggests ways to reduce or remove them. The research focuses particularly on the reasons for the gap between national plans and policy outcomes. Although environmental goals and policies at the national level are quite ambitious and comprehensive, insufficient and inconsistent local level implementation can hold back significant improvements in urban environmental quality. By analyzing local institutional and behavioral obstacles and by highlighting best-practice examples from China and elsewhere, the paper outlines options that can be used at the national and local levels to close the local"environmental implementation gap."The findings emphasize the need to create additional incentives and increase local implementation capacities.
    Keywords: Environmental Economics&Policies,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Climate Change Economics,Public Sector Management and Reform
    Date: 2014–08–01
  18. By: Paulo Bastos; Odd Rune Straume
    Abstract: This paper examines whether an expansion in the supply of public preschool crowds out private enrollment, using rich data for municipalities in Brazil from 2000-2006, where federal transfers to local governments change discontinuously with given population thresholds. Results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no effects on the quantity or quality of private provision. These findings are consistent with a theory in which households differ in willingness to pay for preschool services, and private suppliers optimally adjust prices in response to an expansion of lower-quality, free-of-charge public supply.
    JEL: D12 I21 I28 L21 O15
    Date: 2013–11
  19. By: Rosangela Bando; Xia Li
    Abstract: In-service teacher training aims to improve the supply of public education. A randomized experiment was conducted in Mexico to test whether teacher training could increase teacher efficiency in public secondary schools. After seven and a half months of exposure to a trained teacher, students improved their English. This paper explores two mechanisms through which training can affect student learning. First, trained teachers improved their English by 0.35 standard deviations in the short run. Teachers in the control group caught up with treatment teachers by the end of the school year in part because teachers in the treatment group reduced out-of-pocket expenditures to learn English in 53 percent. Second, teachers changed classroom practices by providing more opportunities for students to actively engage in learning. This evidence suggests that teacher training may be effective at improving student learning and that teacher incentives may play a role in mediating its effects.
    Keywords: Primary & Secondary Education, Teacher Education & Quality, Secondary education, English as a second language, Teacher training, Analysis of education, Human capital formation
    Date: 2014–07
  20. By: Paulo Bastos; Matias Busso; Sebastian Miller
    Abstract: We examine the long-term impacts of drought on local labor markets in Brazil. Us- ing rainfall data going back over a century, we build contemporaneous and historical drought indices for more than 3,000 local areas, and examine them in conjunction with five waves of population census data spanning 1970-2010. Results from a difference- in-differences design reveal that increased drought frequency in the previous decade reduces local value added, employment and wages in the agricultural sector; leads to job losses and pay cuts in the local manufacturing and services sectors; and induces out-migration, especially among younger cohorts, leading to relative population de- cline. These findings are in line with standard general-equilibrium theory featuring imperfect labor mobility across space.
    JEL: J61 N96 O15 Q54 R11 R23
    Date: 2013–12
  21. By: Beatrice D. Simo-Kengne; Stephen M. Miller; Rangan Gupta
    Abstract: This paper investigates whether changes in monetary transmission mechanism respond to variations in asset prices. We distinguish between bull and bear markets and employ a TVP- VAR approach with stochastic volatility to assess the evolution of the monetary policy in relation to housing and stock prices. We measure the relative importance of housing and stock prices in the conduct of monetary policy and their possible feedback effects over both time and horizon and across regimes. Empirical results from annual data on the US spanning the period from 1890 to 2012 indicate that monetary policy responds more strongly to asset prices during bull regimes. While the bigger monetary effect of stock price shocks occurs prior to the 1970s, monetary policy appears to respond more strongly to housing price than stock price shocks after the 1970s. Similarly, contractionary monetary policy exerts a larger effect on both asset categories during bull markets. Particularly, larger negative responses of house prices to monetary policy shocks occur after the 1980s, corresponding to the bull regime in the housing market. Conversely, the stock-price effect of monetary policy shocks dominates before the 1980s, where stock-market booms achieved more importance.
    Keywords: Monetary policy, house prices, stock prices, TVP-VAR
    JEL: C32 E52 G10
    Date: 2014–08–29
  22. By: Ana Maria Ibanez; Catherine Rodriguez; David Zarruk
    Abstract: This paper uses a natural policy experiment to estimate how changes in the costs of engaging in criminal activity may influence adolescents' decisions in crime participation and school attendance. The study finds that, after an exogenous decrease in the severity of judicial punishment imposed on Colombian adolescents, crime rates in Colombian municipalities increased. This effect appears to be larger in municipalities with a higher proportion of adolescents between 14 and 15 years of age. The study provides suggestive evidence that one possible transmission channel for this effect is a decrease in the effort of the police force to capture teenage suspects. The study also finds that the probability that boys of this same age group attend school decreased following the change in the juvenile justice system. This effect is stronger for boys from homes where the heads of household are less educated.
    JEL: D19 I25 K14
    Date: 2013–06
  23. By: Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The labor markets of most industrialized countries are polarized. This means that employment has grown in jobs at the upper and lower tails of the wage distribution, while employment in the middle part of the distribution has stagnated or declined. However, there exists no measure that allows a quantitative comparison across different labor markets as yet. I propose a straightforward way to measure the actual magnitude of job polarization. To demonstrate its application, I use this measure to compare polarization across German local labor markets. Job polarization almost exclusively occurs in urban areas where the hypothesis of routine biased technological change is most likely to prevail." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitsmarkt, lokale Ökonomie, regionaler Vergleich, Beschäftigungsentwicklung, Lohnhöhe, Westdeutschland, Bundesrepublik Deutschland
    JEL: J31 J24 R23
    Date: 2014–08–14
  24. By: Wendy Nyakabawo; Stephen M. Miller; Mehmet Balcilar; Sonali Das; Rangan Gupta
    Abstract: This paper examines the causal relationships between the real house price index and real GDP per capita in the U.S., using the bootstrap Granger (temporal) non-causality test and a fixed-size rolling-window estimation approach. We use quarterly time-series data on the real house price index and real GDP per capita, covering the period 1963:Q1 to 2012:Q2. The full-sample bootstrap non-Granger causality test result suggests the existence of a unidirectional causality running from the real house price index to real GDP per capita. A wide variety of tests of parameter constancy used to examine the stability of the estimated vector autoregressive (VAR) models indicate short- and long-run instability. This suggests that we cannot rely on the full-sample causality tests and, hence, this warrants a time-varying (bootstrap) rolling-window approach to examine the causal relationship between these two variables. Using a rolling window size of 28 quarters, we find that while causality from the real house price to real GDP per capita occurs frequently, significant, but less frequent, evidence of real GDP per capita causing the real house price also occurs. These results imply that while the real house price leads real GDP per capita, in general (both during expansions and recessions), significant feedbacks also exist from real GDP per capita to the real house price.
    Keywords: Real house price, Real GDP per capita, Bootstrap, Time-Varying Causality
    JEL: C32 E32 R31
    Date: 2014–08–29
  25. By: Tolga Ülkü (University of Berlin); Vahidin Jeleskovic (University of Kassel); Jürgen Müller (University of Berlin)
    Abstract: One of the main pillars of efficient airport operations is cost-minimization. Unit costs of operation with respect to the level of passengers served are a possible proxy to measure the cost efficiency of an airport. Due to compound production framework and sophisticated political-economic environment of airports, estimation of airport costs requires detailed specifications. Airport cost functions should be able to explain the total costs with the main inputs labor, material and capital as well as by taking the airport specific characteristics into account. In this paper, we apply such an approach and focus on airport specific characteristics. We use a spatial regression methodology to explain how these drive the unit costs and analyze the spatial relationship among the dependent variables. Two separate data samples from Norwegian and French airports are used in this research to test various hypotheses. Because a large number of regional airports in both countries cannot reach financial break-even, our first research question deals with the effects of subsidies, which often follow regional and political considerations. One must therefore find an efficient way to maintain these airports without any distortions on the incentives. When evaluating the relationship between subsidies and unit costs, we find negative effect of subsidies on airport cost efficiency. Second, we evaluate the importance of economies of scale by focusing on the relationship between airport size and unit costs. Finally, the results of spatial regression show that a denser spatial distribution of airports results in higher unit costs as a consequence of lower capacity utilization, indicating the negative effect of spatial competition on airport unit costs within an airport network.
    Keywords: Airport costs, airport subsidies, spatial regression, scale economies
    JEL: C23 C51 R11 R42
    Date: 2014
  26. By: Eric Stobl; Marie-Anne Valfort
    Abstract: Relying on census data collected in 2002 and historical weather data for Uganda, this paper estimates the impact of weather-induced internal migration on the probability for non-migrants living in the destination regions to be employed. Consistent with the prediction of a simple theoretical model, the 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.
    JEL: E24 J21 J61 Q54 R23
    Date: 2014–08–29
  27. By: OECD
    Abstract: Attendance in pre-primary education is associated with better student performance later on. Fifteen-year-old students in 2012 were more likely than 15-year-olds in 2003 to have attended at least one year of pre-primary education. The gap in pre-primary attendance rates between socio-economically advantaged and disadvantaged pupils is growing.
    Date: 2014–06
  28. By: Arcia, Gustavo; MacDonald, Kevin; Patrinos, Harry Anthony
    Abstract: There is a consensus on the need for Thailand to reform its education system to be able to compete with other high performing countries in the region. In terms of learning outcomes, the most recent evidence from the Programme for International Student Assessment shows little improvement over time. This paper uses the World Bank's Systems Approach for Better Education Results (SABER) approach in Thailand to contrast policy intent and policy implementation in school autonomy and accountability. The policy implementation data were obtained from a survey of school principals of the schools that participated in the Programme for International Student Assessment and merged the data sets. First, the study analyzes the gap between policy intent and policy implementation. Then it examines the effect of the gaps on various schooling outcomes while controlling for covariates. The analysis finds significant differences between the Systems Approach for Better Education Results indicators of policy intent and policy implementation in all areas assessed by the indicators. Schools in Thailand exercise more flexibility in their personnel management in practice than what is intended by policy; student assessments need to address issues of content, reliability, and validity and school accountability needs to improve the interpretation of student assessments to make schools more accountable. There is a positive association between the Programme for International Student Assessment scores and school autonomy and accountability.
    Keywords: Education For All,Tertiary Education,Disability,Teaching and Learning,Primary Education
    Date: 2014–08–01
  29. By: Börjesson, Maria (KTH); Eliasson, Jonas (KTH); Hamilton, Carl (KTH)
    Abstract: Many cities have seen public support for congestion charges increase substantially after charges have been introduced. Several alternative explanations of this phenomenon have been suggested, but so far little evidence has been available to assess the relative importance of these explanations. We study attitudes to congestion pricing in Gothenburg before and after congestion charges were introduced in January 2013. Attitudes to the charges did indeed become more positive after the introduction, just as in previous cities. Using a two-wave postal survey, we are able to separate contributions to the attitude change from a number of sources: benefits and costs being different than anticipated, use of hypothecated revenues, reframing processes, and changes in related attitudes such as attitudes to environment, equity, taxation and pricing measures in general. We conclude that the dominant reason for the attitude change is status quo bias, rather than any substantial changes in beliefs or related attitudes, although some of these factors also contribute to some extent. Contrary to a common belief, nothing of the attitude change is due to benefits being larger than anticipated.
    Keywords: Congestion pricing; Acceptability; Attitudes; Gothenburg
    JEL: H23 H54 R41 R48
    Date: 2014–08–25
  30. By: Stéphane Sorbe
    Abstract: Significant labour market mismatches and insufficient mobility penalise employment and productivity. Mismatches have above all a skills dimension, with an excess of low-skilled workers and a possible lack of skilled workers in certain domains. Reducing the high tax wedge on low salaries and avoiding excessive minimum wage increases would support demand for low-skilled labour. In the longer term, upgrading the labour supply requires improving educational outcomes, especially of disadvantaged students, and making the school-to-work transition less abrupt. To facilitate good matching and enhance sectoral mobility, a somewhat longer duration of unemployment benefits and an upscaled Public Employment Service would be of value, as well as greater focus on reintegration in the public works programme and more efficient and developed lifelong learning. Besides skills mismatches, important geographic mismatches are illustrated by high and persistent regional disparities in the unemployment rate. Mobility is hampered by the underdevelopment of the rental housing market, while there is room to enhance the efficiency of public transport to further support commuting. Améliorer l'adéquation offre-demande de travail et promouvoir la mobilité en Hongrie D’importants déséquilibres du marché du travail et une mobilité insuffisante pénalisent l'emploi et la productivité. Les inadéquations de main d’oeuvre concernent surtout les compétences, avec un excès de travailleurs peu qualifiés et un possible manque de travailleurs qualifiés dans certains domaines. Réduire le coin fiscal élevé sur les bas salaires et éviter des augmentations excessives du salaire minimum soutiendraient la demande de main-d'oeuvre peu qualifiée. À plus long terme, la mise à niveau de l'offre de travail passe par l’amélioration des résultats scolaires, en particulier des étudiants défavorisés, et par une transition moins abrupte des études à l'emploi. Pour faciliter une bonne allocation de main d’oeuvre et d'améliorer la mobilité sectorielle, une durée un peu plus longue des prestations de chômage et un meilleur Service public de l'emploi seraient utiles, ainsi qu’un accent plus prononcé sur la réintégration dans le programme de travaux publics et une formation continue plus efficace et mieux développée. Outre l'inadéquation des compétences, d’importants déséquilibres géographiques sont illustrés par la persistance de fortes disparités régionales du taux de chômage. La mobilité est entravée par le sous-développement du marché du logement locatif et il serait possible d’améliorer l’efficacité des transports publics pour davantage encourager les déplacements domicile-travail.
    Keywords: Hungary, housing, education, skills, labour mismatches, public works, transport, tax wedge, compétences, transport, éducation, Hongrie, marché du travail, coin fiscal, logement
    JEL: I28 J24 J61 J64
    Date: 2014–06–04
  31. By: Juan Sebastian Munoz
    Abstract: This paper presents evidence of the relationship between the disparity in the academic performance of boys and girls in Colombia and the country’s excessively high school dropout rates. By using the OLS and trimming for bounds techniques, and based on data derived from the PISA 2009 database, the presented findings show that the vast majority of this gender-related performance gap is explained by selection problems in the group of low-skilled and poor male students. In particular, the high dropout rate overestimates male performance means, creating a selection bias in the regular OLS estimation. In order to overcome this issue, unobservable male students are simulated and bounding procedures used. The results of this analysis suggest that low-income men are vulnerable to dropping out of school in the country, which leads to overestimating the actual performance levels of Colombian men.
    JEL: I21 I25 J16 J24
    Date: 2014–01
  32. By: Anandamayee Majumdar (Center of Advanced Statistics and Econometrics, Soochow University, China); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: Given the existence of non-normality and nonlinearity in the data generating process of real house price returns over the period of 1831-2013, this paper compares the ability of various univariate copula models, relative to standard benchmarks (naive and autoregressive models) in forecasting real US house price over the annual out-of-sample period of 1859-2013, based on an in-sample of 1831-1858. Overall, our results provide overwhelming evidence in favor of the copula models (Normal, Student’s t, Clayton, Frank, Gumbel, Joe and Ali-Mikhail-Huq) relative to linear benchmarks, and especially for the Student’s t copula, which outperforms all other models both in terms of in-sample and out-of-sample predictability results. Our results highlight the importance of accounting for non-normality and nonlinearity in the data generating process of real house price returns for the US economy for nearly two centuries of data.
    Keywords: House Price, Copula Models, Forecasting
    JEL: C22 C53 R3
    Date: 2014–08
  33. By: Narayanaswami, Sundaravalli
    Abstract: Dubai Metro is the city railway transport under the Road and Transport Authority (RTA) of Dubai. It is operated as a cyclic schedule on fixed O-D pairs and two lines. The two lines are (i) the Red line which runs between Rashidiya and Jebel Ali and (ii) the Green line which operates between Al Qusias and Creek. Union and Khalid bin Waleed are the two cross-over stations between the two lines. Operational times are based on week days and weekends and the headways are based on peak hour and off-peak hours of the day. Light rails are used in Dubai Metro and each train has five cabins. On both lines, headways are designed at 90 seconds, whereas currently operated headway during peak hours is 3.5 minutes. A high ridership is observed during the last working day and particularly during peak hours, leading to severe over-crowding. To reduce over-crowding and alleviate congestions, three types of strategic solutions are available. (i) Reduce peak hour headways (ii) Increase number of cabins in trains operated during peak hours. (iii) Increase number of services between modified O-D pairs with denser traffic. The problem domain is modeled as a directed transit network and further as an LP formulation with a focus on the third solution for the Red line, under an assumption of known demand. Nodes represent arrival/departure times at each station and two types of arcs represent storage and movement of train cabins, respectively. Constraints on (i) consistency of flow, (ii) non-negativity of flow, (iii) indivisibility, (iv) demand satisfiability and (v) bounds are proposed. The objective has two components: (i) To minimize the number of train cabins in the system and (ii) To minimize the total car miles run by all trains in a schedule cycle. The LP Model developed for the third proposed solution is tested with actual data extracted in September 2012 using an open package LP/MILP IDE for Win32, namely GUSEC. Partial results are obtained and reported. Several interesting questions have arisen out of our model and we are trying to analyze some of them. Attempts continue (i) to acquire, test and evaluate validated data from RTA, (ii) apply the proposed model to green line and study congestion alleviation of red and green lines in a combined manner and (iii) evaluate the model against other possible solutions.
  34. By: Duncan Roth and (University of Marburg); John Moffat (University of Durham)
    Abstract: Will the projected decline in the youth share of European countries’ populations alleviate the currently high levels of youth unemployment in Europe? Economic theory predicts that in the absence of perfectly competitive labour markets, changes in the relative size of age groups will cause changes in age-specific unemployment rates. In light of the expected development of the youth population’s size over the coming decades, this paper utilises the existing heterogeneity in the structure of youth populations across European countries and regions to identify the effect of nationally and regionally defined age-cohort size on the probability of young individuals being unemployed. To account for the possibility that individuals self-select into areas of low unemployment, the empirical analysis employs an instrumental variables estimator to identify the causal effect of age-cohort size. The results show that individuals in larger cohorts are more likely to be unemployed and that this effect is more pronounced when analysis is conducted at the regional level. While shrinking youth cohorts therefore have the potential to contribute to improving the current youth unemployment situation, this mechanism should not be relied in isolation upon due to the relatively greater importance of changes in the macroeconomic environment.
    Keywords: Capacity Markets, Cohort size, unemployment, regional labour markets, causal effect, instrumental variables, EU-SILC
    JEL: J10 J21 R23
    Date: 2014
  35. By: Maja Savic (Department of Economics and International Development); Helen Lawton Smith (Department of Management, Birkbeck University of London); Ioannis Bournakis (Department of Management, Birkbeck University of London)
    Date: 2014–08
  36. By: Moshe Justman (Department of Economics, Ben Gurion University; Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and ARC Centre for Children and Families over the Life Course); Kyle Peyton (Department of Political Science, Yale University; and Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: Efforts to enforce compulsory schooling by linking welfare assistance to school attendance are rarely successful in themselves. One reason is a lack of credibility: targeted families may anticipate that welfare administrators will be reluctant to withdraw support when attendance does not improve. Australia's School Enrolment and Attendance through Welfare Reform Measure (SEAM) demonstrates the impact of a credible threat. Targeting the Indigenous population of the Northern Territory, its credibility stemmed from the extreme circumstances created by the Northern Territory Emergency Response Act and from the troubled history of race relations in Australia. We show, using a difference-in-difference analysis of standardized test data (NAPLAN), that SEAM had a substantial, immediate impact: in its first year it triggered an increase in test participation rates of 16- 20 percentage points over pre-SEAM levels; and it significantly increased the share of tested cohorts achieving national minimum standards by 5-10 percentage points. However, welfare payments were rarely withheld from truant families and participation rates fell in subsequent years, though remaining significantly above pre-SEAM levels. This suggests that initiatives such as SEAM will not be fully effective in the longer term unless accompanied by measures that increase parents’ and children’s appreciation of the value of schooling.
    Keywords: Australia, Indigenous population, Northern Territory Emergency Response, SEAM, compulsory schooling, linking school attendance to welfare payments
    JEL: I25 I38
    Date: 2014–08
  37. By: Fabiana Machado
    Abstract: Decentralization of provision of public services has been an important item in the agenda of developing countries. While some scholars and practitioners argue that decentralization is associated with improvements in provision due to higher accountability, others note its potential pitfalls. In particular, decentralization to local communities characterized by poverty, low levels of education, and inequality may lead to low accountability and higher susceptibility to political capture. This paper explores these dynamics empirically, taking advantage of the fact that in Brazilian municipalities primary education is provided by schools under municipal as well as under state management. The performance of these two types of school in the same municipalities is compared in terms of their levels of inputs and the efficiency of service delivery using non-parametric data envelopment analysis (DEA). The results suggest that there are indeed drawbacks to decentralization in municipalities where inequality is higher and education and political participation are lower.
    JEL: H41 H75
    Date: 2013–06
  38. By: Marina Bassi; Matias Busso; Juan Sebastian Munoz
    Abstract: This paper uses 113 household surveys from 18 Latin American countries to document patterns in secondary school graduation rates over the period 1990– 2010. It is found that enrollment and graduation rates increased dramatically during that period, while dropout rates decreased. Two explanations for these patterns are provided. First, countries implemented changes on the supply side to increase access, by increasing the resources allocated to education and designing policies to help students staying in school. At the same time, economic incentives to stay in school changed, since returns to secondary education increased over the 1990s. Despite this progress, graduation rates are low, and there persist remarkable gaps in educational outcomes in terms of gender, income quintiles, and regions within countries. In addition, wage returns have recently stagnated, and the quality of education in the region is low, casting doubts on whether the positive trend is sustainable in the medium term.
    Date: 2013–10
  39. By: Paulo Bastos; Sebastian Miller
    Abstract: The increased occurrence of extreme weather conditions leading to drought is a key development challenge. This paper studies how these extreme events interact with the political process at the local level using rich administrative data for drought declarations and mayoral elections in Brazil. While accounting for current and historical rainfall patterns, the paper finds that that: i) municipalities led by a mayor affiliated with the President’s party are more likely to receive formal drought declarations prior to the municipal election; and ii) receiving a drought declaration reinforces the electoral advantage of incumbent mayors running for reelection. These results are robust to the inclusion of a rich set of controls for municipal attributes.
    JEL: D72 Q54
    Date: 2013–10
  40. By: Silvia Angerer; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter
    Abstract: We study in a sample of 1,070 primary school children, aged seven to eleven years, how altruism in a donation experiment is related to children’s risk attitudes and intertemporal choices. Examining such a relationship is motivated by theories of reciprocal altruism that provide a cornerstone for understanding human social behavior. We find that higher risk tolerance and patience in intertemporal choice increase, in general, the level of donations, albeit the effects are non-linear. We confirm earlier results that altruism increases with age during childhood and that girls are more altruistic than boys. Having older brothers makes subjects less altruistic.
    Keywords: Altruism, donations, risk attitudes, intertemporal choices, experiment, children
    JEL: C91 D03 D63 D64
    Date: 2014–08

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