nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒10‒03
25 papers chosen by
Steve Ross
University of Connecticut

  1. The Housing and Educational Consequences of the School Choice Provisions of NCLB: Evidence from Charlotte, NC By Stephen Billings; Eric J. Brunner; Stephen L. Ross
  2. An Empirical Analysis of Determinants of Multi-Dimensional Urban Sprawl By Joseph DeSalvo; Qing Su
  3. The Vulnerability of Minority Homeowners in the Housing Boom and Bust By Patrick Bayer; Fernando Ferreira; Stephen L. Ross
  4. Housing Dynamics over the Business Cycle By Finn E. Kydland; Peter Rupert; Roman Sustek
  5. The structure and dynamics of R and D collaborations in Europe and the USA (A longitudinal and comparative perspective) By Sidonia von Proff; Rafael Lata; Thomas Brenner
  6. Innovation and Regional Growth in Mexico: 2000-2010 By Andrés Rodríguez-Pose; Edna MaríaVillarreal Peralta
  7. Local skill concentrations and district employment growth: A Spatial simultaneous equation approach for India By Ishwarya Balasubramanian
  8. Who Are Poor and Do They Remain Poor? By Geoffrey M. Ducanes; Edita Abella Tan
  9. Spatial migration By Carmen Camacho
  10. Transferring Ownership of Public Housing to Existing Tenants : A Mechanism Design Approach By Tommy ANDERSSON; Lars EHLERS; Lars-Gunnar SVENSSON
  11. Where they go, what they do and why it matters: The importance of geographic accessibility and social class for decisions relating to higher education institution type, degree level and field of study By Darragh Flannery; John Cullinan
  12. Isolated Capital Cities, Accountability, and Corruption: Evidence from US States By Filipe R. Campante; Quoc-Anh Do
  13. Localized Technological Change and Efficiency Wages across European Regional Labour Markets By Cristiano Antonelli; Francesco Quatraro
  14. Shuttle Planning for Link Closures in Urban Public Transport Networks By van der Hurk, E.; Koutsopoulos, H.N.; Wilson, N.; Kroon, L.G.; Maroti, G.
  15. Interest-only mortgages in Ireland By Kelly, Jane; Kennedy, Gerard; McIndoe-Calder, Tara
  16. Spatial panel models for the analysis of land prices By Saguatti, Annachiara; Erickson, Kenneth; Gutierrez, Luciano
  17. Predicting Dwelling Prices with Consideration of the Sales Mechanism By David Genesove; James Hansen
  18. Regional issues on firm entry and exit in argentina: core and peripheral regions By Calá, Carla Daniela
  19. Downtown Curbside Parking Capacity By Richard Arnott; Eren Inci; John Rowse
  20. Food-processing industry as a basis for community dynamics and local socio-economic development. By Layal Bou-Antoun
  21. Financing Energy Efficiency Measures for Residential Building Stock : Scaling Up Energy Efficiency in Buildings in the Western Balkans By Bernd Kalkum
  22. Defending the municipal electric services against privatization : a case study of Frankfurt am Main during the Weimar period By Mori, Takahito
  23. Tracing Out Capital Flows: How Financially Integrated Banks Respond to Natural Disasters By Cortes, Kristle Romero; Strahan, Philip E.
  24. Does homeownership partly explain low participation in supplementary pension schemes? By Marco Santantonio; Costanza Torricelli; Maria Cesira Urzì Brancati
  25. Information Aggregation and Optimal Market Size By Kei Kawakami

  1. By: Stephen Billings (University of North Carolina-Charlotte); Eric J. Brunner (University of Connecticut); Stephen L. Ross (University of Connecticut)
    Abstract: We examine the housing market, residential mobility, and academic performance changes that occur soon after a school fails to achieve Adequate Yearly Progress (AYP) (for the second time) in the Charlotte, NC school district. Charlotte is a school district with substantial opportunities for school choice and a number of oversubscribed, high quality schools. To comply with the 2002 No Child Left Behind (NCLB) Act, students within the attendance zone of Title 1 schools that fail to meet AYP are given an advantage in the lotteries for oversubscribed schools. That advantage may create an incentive for households with strong preferences for school choice and/or school quality to move into the attendance zones of failing schools in order to improve their likelihood of being admitted into high performing, oversubscribed schools. Consistent with that notion, we find that housing prices and the incomes of new homebuyers rise in the highest quality neighborhoods within attendance zones of failing schools in comparison to trends in nearby neighborhoods just outside of the attendance zone. We also find that residential mobility decreases while the probability of attending a non-assigned traditional school or magnet school increases in these high quality neighborhoods. Further analysis reveals that the effect of failing designation on non-assigned school attendance is driven largely by the school choice decisions of new residents who are most likely to exploit the school choice advantages offered by a second failure to achieve AYP.
    Keywords: No Child Left Behind, Annual Yearly Progress, School Choice, Residential Location Choice, Mobility, Lottery
    JEL: H75 I24 I28 R21 R28
    Date: 2014–08
  2. By: Joseph DeSalvo (Department of Economics, University of South Florida); Qing Su (Department of Marketing, Economics and Sports Business, Northern Kentucky University)
    Abstract: This paper applies a simultaneous equation model to examine the impact of a variety of factors on four dimensions of urban sprawl: spatial size, sprawl index, and daily vehicle miles traveled per capita. The regression results indicate that the transportation cost has a negative impact on urban sprawl in terms of spatial size, land consumption per capita and daily VMT. The impact of household income on spatial size, land consumption per capita and daily vehicle miles traveled per capita are U-shaped. The impact of number of household is mixed: it has a positive impact on spatial size and daily VMT, but a negative impact on land consumption per capita. Urban growth boundary has a negative and statistically significant impact while minimum lot size has a positive impact on two dimensions of urban sprawl (spatial size and land consumption per capita). Regression results also indicate that among the variables that capture the political, social and geographic characteristics of an area, the amount of intergovernmental transfers as a percentage of local revenue has a positive and statistically impact on all four dimensions of urban sprawl while the percentage of urban fringe area overlying aquifers has such an impact on three dimensions (spatial size of an area, sprawl index, and land consumption per capita). The violent crime rate in the central cities has a positive and statistically significant impact on two dimensions of urban sprawl (spatial size and land consumption per capita).
    Keywords: multi-dimensional urban sprawl; simultaneous equation model; urban growth boundary; minimum lot size; violent urban crime rate in central city
    JEL: R10
    Date: 2013–11
  3. By: Patrick Bayer (Duke University); Fernando Ferreira (The Wharton School, University of Pennsylvania); Stephen L. Ross (University of Connecticut)
    Abstract: This paper examines mortgage outcomes for a large, representative sample of individual home purchases and refinances linked to credit scores in seven major US markets in the recent housing boom and bust. We find that among those with similar credit scores, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These differences are not explained by the likelihood of receiving a subprime loan or by differential exposure to local shocks in the housing and labor market and are especially pronounced for loans originated near the peak of the boom. There is also heterogeneity within minorities: black and Hispanics that live in areas with lower employment rates and that have high debt to income ratios are the driving force of the observed racial differences in foreclosures and delinquencies. Our findings suggest that those black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise serious concerns about homeownership as a mechanism for reducing racial disparities in wealth.
    Keywords: mortgage, foreclosure, deliquency, homeownership, minority
    JEL: I38 J15 J71 R21
    Date: 2014
  4. By: Finn E. Kydland (Department of Economics, University of California-Santa Barbara (UCSB); National Bureau of Economic Research (NBER)); Peter Rupert (Department of Economics, University of California-Santa Barbara (UCSB)); Roman Sustek (School of Economics and Finance Queen Mary; Centre for Macroeconomics (CFM))
    Abstract: Housing construction, measured by housing starts, leads GDP in a number of countries. Measured as residential investment, the lead is observed only in the US and Canada; elsewhere, residential investment is coincident. Variants of existing theory, however, predict housing construction lagging GDP. In all countries in the sample, nominal interest rates are low ahead of GDP peaks. Introducing fully-amortizing mortgages and an estimated process for nominal interest rates into a standard model aligns the theory with the observations on starts; one-period loans are insu±cient to generate the lead. Longer time to build then makes residential investment cyclically coincident.
    Keywords: Residential investment, housing starts, business cycle, mortgage costs, time to build
    JEL: E22 E32 R21 R31
    Date: 2014–08
  5. By: Sidonia von Proff (Economic Geography and Location Research, Philipps-University, Marburg); Rafael Lata (Foresight and Policy Development Department, Austrian Institute of Technology (AIT), Vienna); Thomas Brenner (Economic Geography and Location Research, Philipps-University, Marburg)
    Abstract: Today it is generally accepted that innovation, knowledge creation, and the diffusion of new knowledge are crucial factors for economic growth at the regional, national, as well as supra-national level, and that successful innovation is increasingly based on interactions and collaborative research activities between research actors. This study focuses on diverse dimensions of distance shaping R and D collaborations in Europe and the US during the time period 1999 to 2009. We take a comparative perspective by analyzing two different R and D collaboration networks (patents and publications) and two different economic areas, namely Europe and the US, in order to examine differences in collaboration activities. In particular, we investigate how the collaboration intensity between regions has been influenced by spatial, technological, and cultural distance and whether these distances have lost importance over time in the distinct networks. The study adopts a panel spatial interaction modeling perspective. In doing so, we explicitly take account of spatial autocorrelation issues of flows by means of Eigenvector spatial filtering techniques. European coverage is achieved by using 1260 NUTS-3 regions of the 25 pre-2007 EU member-states, as well as Norway and Switzerland. The US coverage is attained by using 955 core based statistical areas (CBSAs). The results reveal how collaborative knowledge creation and the spatial range of knowledge diffusion differs between Europe and the US, and provide direct evidence on the differences in cooperation patterns between different types of collaborative R and D from a longitudinal and comparative perspective
    Keywords: R and D Networks, Patents, Publications, Spatial Interaction Modeling, Eigenvector Spatial Filtering, distance
    JEL: C23 O38 L14 R15
    Date: 2014–09–14
  6. By: Andrés Rodríguez-Pose; Edna MaríaVillarreal Peralta
    Abstract: This paper looks at the factors driving regional growth in Mexico, paying special attention to the potentially growth-enhancing role of innovation and innovation policy. The analysis combines innovation variables with indicators linked to the formation of adequate social conditions for innovation (the social filter), and spillovers for 31 Mexican states and the Mexico City capital district (the Distrito Federal) during the period 2000-2010. The results indicate that regional economic growth across Mexican states stems from direct investment in R&D in areas with favorable social filters and which can benefit not only from knowledge spillovers, but also from being surrounded by rich neighbors with good social conditions. The results stress that, although Mexican innovation policy has been relatively well targeted in order to generate greater economic growth, its relatively modest size may have undermined the attainment of its main objectives.
    Keywords: economic growth, innovation, social economic conditions, regional convergence, Mexico
    JEL: R11 R12 O32 O33
    Date: 2014–08
  7. By: Ishwarya Balasubramanian (Indira Gandhi Institute of Development Research)
    Abstract: The focus of this paper is to explore the role of spatial distribution of skills in explaining differential growth rates of employment across Indian districts between the years 2001 and 2011 by using data from Census of India. To measure skills across districts, we use the skill-content of occupations and the occupational distribution of workers across districts. We then model employment and population growth simultaneously taking into account spatial correlation of the endogenous variables. We find that a one standard deviation increase in (cognitive) skills is associated with 0.52 standard deviation increase in the growth rate of male main workers and a 0.42 increase in the growth rate of male non-farm main workers. However, female employment has significantly decreased in initially skilled regions.
    Keywords: Skills, Occupation, Employment Growth, Education
    JEL: J24 E24 J21 R12
    Date: 2014–08
  8. By: Geoffrey M. Ducanes (School of Economics, University of the Philippines Diliman); Edita Abella Tan (School of Economics, University of the Philippines Diliman)
    Abstract: This paper examines the link between poverty and income, on the one hand, and human capital and location, on the other. In the process, the paper proposes a shift in the household indicator of human capital from the usual education of the household head to the education of the most educated member. The paper finds poverty to be most severe and persistent for households with low human capital, and that the effect of human capital varies substantially across locations. Additionally, the paper finds that low human capital households tend to underinvest in the human capital of school-age members, thus likely perpetuating poverty.
    Keywords: human capital, poverty, chronic poverty, regional development, enrolment rates
    JEL: I32 J24 I21 R11
    Date: 2014–06
  9. By: Carmen Camacho (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: We develop a model economy adapting Hotelling's migration law to make individuals react to the gradient of their indirect utility. In a first version, individuals respond uniquely to utility differences. In a second phase, we insert our migration law as a dynamic constraint in a spatial model of economic growth in which a policy maker maximizes overall welfare. In both cases we prove the existence of a unique solution under certain assumptions and for each initial distribution of human capital. We illustrate some extremely interesting properties of the economy and the associated population dynamics through numerical simulations. In the decentralized case in which a region enjoys a temporal technological advantage, an agglomeration in human capital emerges in the central area, which does not coincide with the technologically advanced area. In the complete model, initial differences in human capital can trigger everlasting inequalities in physical capital.
    Keywords: Migration; spatial dynamics; economic growth; parabolic PDE; optimal control
    Date: 2013–02
  10. By: Tommy ANDERSSON; Lars EHLERS; Lars-Gunnar SVENSSON
    Abstract: This paper explores situations where tenants in public houses, in a specific neighborhood, are given the legislated right to buy the houses they live in or can choose to remain in their houses and pay the regulated rent. This type of legislation has been passed in many European countries in the last 30-35 years (the U.K. Housing Act 1980 is a leading example). The main objective with this type of legislation is to transfer the ownership of the houses from the public authority to the tenants. To achieve this goal, selling prices of the public houses are typically heavily subsidized. The legislating body then faces a trade-off between achieving the goals of the legislation and allocating the houses efficiently. This paper investigates this specific trade-off and identifies an allocation rule that is individually rational, equilibrium selecting, and group non-manipulable in a restricted preference domain that contains "almost all" preference profiles. In this restricted domain, the identified rule is the equilibrium selecting rule that transfers the maximum number of ownerships from the public authority to the tenants. This rule is preferred to the current U.K. system by both the existing tenants and the public authority. Finally, a dynamic process for finding the outcome of the identified rule, in a finite number of steps, is provided.
    Keywords: public housing, existing tenants, equilibrium, minimum equilibrium prices, maximum trade, group non-manipulability, dynamic price process
    JEL: C71 C78 D71 D78
    Date: 2014
  11. By: Darragh Flannery (Department of Economics, University of Limerick); John Cullinan (School of Business and Economics, National University of Ireland, Galway)
    Abstract: The factors influencing the decision of school leavers to participate in higher education has been extensively investigated previously. This has mainly focused on the influence of characteristics such as parental education level, social class and spatial factors on the decision to participate in higher education at a broad level. However, given the influence the type of tertiary education pursued may have on future labour market outcomes, an understanding of the factors behind more specific higher education outcomes decisions is important. Within this context, this paper focuses on the influence of geographic accessibility and social class on young people when making decisions relating to higher education institution type, degree level and field of study pursued using a rich Irish dataset. We estimate this relationship using a bivariate probit framework and controlling for a range of other variables we find evidence of significant spatial and socio-economic effects on these higher education outcomes.
    Keywords: higher education institution type, degree level, field of study, geographic accessibility, social class
    Date: 2013–02
  12. By: Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie)
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
    JEL: D72 D73 H41 H83 K42 R23
    Date: 2014–08
  13. By: Cristiano Antonelli (Department of Economics, University of Turin - University of Turin); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: Localized technological change and efficiency wages across European regional labour markets, Regional Studies. Internal labour markets and industrial relations in Continental Europe are characterized by substantial rigidity of employed labour engendered by the tight conditions of regional labour markets. This rigidity affects both the rate and the direction of technological change. The increase of wages induces the localized introduction of biased technological change with clear effects on productivity levels. The empirical evidence across a sample of European regions confirms the significant role of the changes in wages both on the increase of the output elasticity of labour and on multifactor productivity.
    Keywords: Induced approaches, Localized technological change, Efficiency wages, Multifactor productivity growth, Regional labour markets
    Date: 2013–12–02
  14. By: van der Hurk, E.; Koutsopoulos, H.N.; Wilson, N.; Kroon, L.G.; Maroti, G.
    Abstract: Urban Public Transport systems must periodically close certain links for main- tenance, which can have significant effects on the service provided to passengers. In practice, the effects of closures are mitigated by replacing the link with a simple shuttle service. However, alternative shuttle services could reduce inconvenience at lower op- erating cost. This paper proposes a model to select shuttle lines and frequencies under budget constraints. A new formulation is proposed that allows a minimal frequency restriction on any line that is operated, and minimizes passenger inconvenience cost, including transfers and frequency-dependent waiting time. This model is applied to a shuttle design problem based on a real world case study of the MBTA network of Boston (USA). The results show that additional shuttle routes can reduce passenger delay in comparison to the standard industry practice, while also distributing delay more equally over passengers, at the same operating budget. The results are robust under different assumptions about passenger route choice behavior. Computational experiments show that the proposed formulation, coupled with a preprocessing step, can be solved faster than prior formulations.
    Date: 2014–08–25
  15. By: Kelly, Jane (Central Bank of Ireland); Kennedy, Gerard (Central Bank of Ireland); McIndoe-Calder, Tara (Central Bank of Ireland)
    Abstract: This Economic Letter analyses original interest-only mortgages in Ireland. While interest-only arrangements have been widely used as a means of temporary forbearance to deal with the current mortgage arrears crisis, mortgages were also originated on interest-only terms during the height of the boom. The analysis shows that original interest-only mortgages were mainly issued to buy-to-let (BTL) investors on tracker mortgages, between 2005-2008 at high loan- to-value ratios (LTVs). They are more likely to be to Dublin borrowers and for apartments than standard mortgages and the arrears rates are higher. A signicant number are due to revert to principal-and-interest repayments in the next few years. The resulting higher repayments could lead to an increase in mortgage arrears.
    Date: 2014–07
  16. By: Saguatti, Annachiara; Erickson, Kenneth; Gutierrez, Luciano
    Abstract: The paper investigates the determinants of cropland value in 12 selected Midwestern U.S.A. States in the years 1971- 2009. We adopt the Ricardian Present Value Model (PVM) as the theoretical framework, and therefore focus on the relationship between land value and cash rents, expecting to find a positive one. In order to model the spatial effects that characterize the data, we estimate a spatial dynamic panel data model with fixed individual effects. The employed dataset represents an improvement with respect to earlier studies because it refers to a rather homogeneous sample of States and only to cropland rather than farmland in general, and also excludes the value of buildings from the value of farmland. Also, net, rather than gross, cash rents per acre of cropland are used, as this reflects the net return to the landowner. Our results allow the computation of short and long run cropland value elasticity to cash rents, whose close-to-1 value appears to support the PVM. We also highlight the importance of taking spatial effects into consideration when addressing this field of analysis.
    Keywords: farmland values, cash rents, present value model, spatial econometrics., Agricultural Finance, Financial Economics, Research Methods/ Statistical Methods, C23, G12, Q14,
    Date: 2014
  17. By: David Genesove (Hebrew University of Jerusalem); James Hansen (Reserve Bank of Australia)
    Abstract: Using dwelling prices in Australia's two largest cities, we consider whether the way in which a property is sold, either through an auction or a private-treaty negotiation, is informative for predicting dwelling prices. We find evidence to suggest that average prices of dwellings sold at auction are informative for forecasting growth in average private-treaty prices and average sales prices overall. In contrast, we find little evidence to suggest that dwellings sold through private-treaty are similarly informative. Interpreting these results using two models of price determination – an English auction where buyer values are positively correlated, and inferred through the auction process, and a private-treaty sale where the price is determined by a Nash bargain – we find that auction prices better reflect a common trend in prices and are therefore more useful when forecasting. In contrast, private-treaty prices are affected by shocks that are specific to that mechanism of trade, such as changes in the relative strength of the bargaining positions of buyers and sellers, or changes to the dispersion of valuations. These shocks appear to reduce the usefulness of private-treaty prices for forecasting or measuring short-run movements in the common price trend.
    Keywords: real estate prices; auction prices; private-treaty prices
    JEL: D44 R31
    Date: 2014–09
  18. By: Calá, Carla Daniela
    Abstract: This work focuses on two fundamental and relevant questions: a) are there any differences in the regional determinants of entry and exit between developed and developing economies?; b) are there any differences in the regional determinants of entry and exit between core and peripheral regions within a single country? To address these issues, we take as a starting point a set of determinants that are generally found to be statistically significant in regional entry and exit studies using data from developed countries (e.g., demand, education, density and industrial structure). Then, we add some factors that, while potentially important in developing countries, are never considered by studies on developed countries. This is the case, for example, of the size of the informal economy, the extent of poverty or the usage of idle capacity after an economic crisis. Finally, we explore the existing of a core-periphery pattern, that is, we test whether the same factors affect entry and exit in a similar way in central and peripheral provinces.
    Keywords: Dinámica Empresarial; Creación de Empresas; Cese de Actividad; Relación Centro-Periferia; Economía Regional; Argentina;
    Date: 2014–05
  19. By: Richard Arnott (Department of Economics, University of California, Riverside); Eren Inci (Department of Economics, Sabanci University); John Rowse (Department of Economics, University of Calgary)
    Abstract: In downtown areas, what proportion of curbside should be allocated to parking? In contrast to most previous work on the economics of parking, this paper focuses on optimal curbside parking capacity in both first-best (where pricing is efficient) and second-best (where pricing is inefficient) environments. It considers first the situation where there is only curbside parking, and then the situation where there may be both curbside and private garage parking. For each situation, it examines the short run in which curbside parking capacity is fixed and the long run in which it is a policy variable. Creation-Date: 2013-4
    Keywords: Parking, curbside parking, parking capacity, garage parking, traffic congestion, cruising for parking
    JEL: D04 L91 R41 R48
  20. By: Layal Bou-Antoun (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I)
    Abstract: The idea behind this paper is to counter traditional thinking on economic and social development that considers development as dependent byproduct of macroeconomic policies led by governments, or as a sole byproduct of entrepreneurial dynamics on the micro level. The idea we are defending here is that the "Community" as defined by German sociologist Ferdinand Tönnies, (a tighter and more cohesive social entity) is a context where the "social" and "economic" are less separated and where the spatial dimension becomes more significant. This context could be an adequate analytical framework and a tool for regional development in the context of a developing country like Lebanon.
    Keywords: community, local development, wine industry, Bekaa, Lebanon
    Date: 2014–04–25
  21. By: Bernd Kalkum
    Keywords: Environment - Climate Change Mitigation and Green House Gases Finance and Financial Sector Development - Access to Finance Energy - Energy Production and Transportation Urban Development - Urban Environment Macroeconomics and Economic Growth - Climate Change Economics
    Date: 2014–05
  22. By: Mori, Takahito
    Abstract: It has been generally assumed in the study of German urban history that the municipal electric services were brought to an end by the growth of regional power networks during the Weimar period. However, municipal electric services were not completely replaced by regional power systems. So, this paper examines, on the basis of a case study of Frankfurt am Main, how the municipal electric services were able to sustain themselves as an autonomous system against the expanding influence of regional power networks based on private capital during the Weimar period. Frankfurt tried not only to enlarge its power stations but also to utilize the waterpower and brown coal obtained nearby the city, with a view to defending its autonomy against the Rheinisch-Westfälisches Elektrizitätswerk AG. These attempts enabled Frankfurt to preserve its autonomous electric services until the second half of the 20th century, though it owed a lot to the assistance from Preussenelektra, the national electric power company of Prussia.
    Keywords: "Electric War", "Electric Peace", Frankfurt am Main, Preußenelektra, RWE
    Date: 2014–09
  23. By: Cortes, Kristle Romero (Federal Reserve Bank of Cleveland); Strahan, Philip E. (Federal Reserve Bank of Cleveland)
    Abstract: Multi-market banks reallocate capital when local credit demand increases after natural disasters. Following such events, credit in unaffected but connected markets declines by about 50 cents per dollar of additional lending in shocked areas, but most of the decline comes from loans in areas where banks do not own branches. Moreover, banks increase sales of more-liquid loans in order to lessen the impact of the demand shock on credit supply. Larger, multi-market banks appear better able than smaller ones to shield credit supplied to their core markets (those with branches) by aggressively cutting back lending outside those markets.
    Keywords: Financial Integration; Branch Banking; Securitization
    JEL: G20 G21
    Date: 2014–09–12
  24. By: Marco Santantonio; Costanza Torricelli; Maria Cesira Urzì Brancati
    Abstract: We used nine waves of the Bank of Italy’s Survey on Household income and Wealth (1995-2012) to investigate a possible trade-off between homeownership and individual participation in a supplementary pension scheme. Italy lends itself to this type of investigation because the Italian public pension system has been heavily reformed in the period, providing in principle incentives for participation, and the homeownership rate is very high. The impact of homeownership is captured in two ways: by a dummy for being homeowner and by an index defined as the share of housing wealth over total wealth. Our results show that indeed, after controlling for a vast array of socio-economic characteristics and allowing for unobserved individual heterogeneity, both measures of homeownership are negatively associated with participation in supplementary pension schemes and that such an effect does not disappear even after the 2007 reform.
    Keywords: pension plan participation, retirement planning, housing investment
    JEL: D91 H55
    Date: 2014–09
  25. By: Kei Kawakami
    Abstract: This paper studies a rational expectations model of trading where strategic traders face information asymmetries and endowment shocks. We show that negative partici- pation externalities arise due to an endogenous interaction between information aggre-gation and multiple trading motives. Moreover, the negative externalities are strong enough to make optimal market size ?nite. In a decentralized process of market for- mation, multiple markets can survive due to the negative externalities among traders. The model also predicts: (i) that only in a su¢ ciently large market the equilibrium multiplicity due to self-ful?lling trading motives can arise, (ii) that a high correlation in endowment shocks can make markets extremely illiquid.
    Keywords: Asymmetric information, Aggregate shock, Imperfect competition, Market fragmentation, Multiple equilibria, Network externality puzzle, Price impact.
    Date: 2014

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