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on Urban and Real Estate Economics |
| By: | Adam Storeygard |
| Abstract: | How does isolation affect the economic activity of cities? Transport costs are widely considered an important barrier to local economic activity but their impact in developing countries is not well-studied. This paper investigates the role of inter-city transport costs in determining the income of sub-Saharan African cities. In particular, focusing on fifteen countries whose largest city is a port, I ask how important access to that city is for the income of hinterland cities. The lack of panel data on both local economic activity and transport costs has prevented rigorous empirical investigation of this question. I fill this gap with two new datasets. Satellite data on lights at nigh proxy for city economic activity, and new road network data allow me to calculate the shortest route between cities. Cost per unit distance is identified b plausibly exogenous world oil prices. The results show that an oil price increase of the magnitude experienced between 2002 and 2008 induces the income of cities near a major port to increase by 6.6 percent relative to otherwise identical cities one standard deviation farther away. Combined with external estimates, this implies an elasticity of city economic activity with respect to transport costs of -0.25 at that distance. Moreover, the effect differs by the surface of roads between cities. Cities connected to the port by paved roads are chiefly affected by transport costs to the port, while cities connected to the port by unpaved roads are more affected by connections to secondary centers. |
| Keywords: | Urbanization, Transport costs, Infrastructure, Roads, Sub-Saharan Africa |
| JEL: | F15 O18 R11 R12 R4 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0781&r=ure |
| By: | Shimizu, Chihiro; Yasumoto, Shinya; Asami, Yasushi; Clark, Terry Nichols |
| Abstract: | What brought the concentration of people to certain areas? And how much are households prepared to pay in exchange for being part of such concentrations? Focusing on the Tokyo metropolitan area, which is one of the world’s largest urban areas, this paper aggregates individual data relating to urban amenities in small areas and explores its relationship to population concentration, as well as clarifying its relationship to rent (housing service prices). It is understood from the obtained results that a concentration f urban amenities produces population concentration and also raises housing rent. In addition, it is shown that when measuring the degree of amenity concentration, it is the diversity of amenities, not simply the total number of amenities that is important. Concentration of diverse amenities enhances an area’s appeal, and as a result, households will seek to reside there even if rents are high. Among the various types of amenities, it was observed that amenities such as recreational classes, educational facilities and convenience facilities such as restaurants have positive externality. On the other hand, a clear negative relationship was found between housing rent and amenities with negative externality, such as cemeteries and video arcades. |
| Keywords: | amenity concentration, population concentration, housing service prices, hedonic approach, Geographic Information System (GIS) |
| JEL: | C31 R31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:9&r=ure |
| By: | Olaf Merk; Oguz Bagis |
| Abstract: | This working paper offers an evaluation of the performance of the port of Mersin, an analysis of the impact of the port on its territory and an assessment of policies and governance in this field. It examines port performance over the last decades and identifies the principal factors that have contributed to it. The effect of the ports on economic and environmental questions is studied and quantified where possible. The value added of the port cluster of Mersin is calculated and its interlinkages with other economic sectors in Turkey delineated. The major policies governing the ports are assessed, along with policies governing transport and economic development, the environment and spatial planning. These include measures instituted by the port authorities, as well as by local, regional and national governments. Governance mechanisms at these different levels are described and analysed. Based on the report’s findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the port of Mersin on its territory. |
| Keywords: | transportation, regional development, ports, input-output, urban growth, regional growth, inter-regional trade |
| JEL: | D57 L91 R11 R12 R15 R41 |
| Date: | 2013–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/1-en&r=ure |
| By: | Georgy Malginov (Gaidar Institute for Economic Policy); G. Sternik (Gaidar Institute for Economic Policy) |
| Abstract: | The situation in Russia’s residential housing market over the past year was largely determined by the near-stagnation macroeconomic situation and the current phase of market development, which resulted in a multi-vectored movement of prices in the housing markets of different cities, because in most of them the period of post-crisis recovery was already over, while some cities were still struggling with the consequences of the crisis |
| Keywords: | Russian economy, house construction, house prices |
| JEL: | R21 R31 R52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:202&r=ure |
| By: | Stuart S. Rosenthal (Syracuse University); Stephen L. Ross (University of Connecticut) |
| Abstract: | This paper reviews recent literature that considers and explains the tendency for neighborhood and city-level economic status to rise and fall. A central message is that although many locations exhibit extreme persistence in economic status, change in economic status as measured by various indicators of per capita income is common. At the neighborhood level, we begin with a set of stylized facts, and then follow with discussion of static and dynamic drivers of neighborhood economic status. This is mirrored at the metropolitan level. Durable but slowly decaying housing, transportation infrastructure, and self-reinforcing spillovers, all influence local income dynamics, as do enduring natural advantages, amenities and government policy. Three recurring themes run throughout the paper: (i) Long sweeps of time are typically necessary to appreciate that change in economic status is common; (ii) history matters; and (iii) a combination of static and dynamic forces ensure that income dynamics can and do differ dramatically across locations but in ways that can be understood. |
| Keywords: | Neighborhood income dynamics; city income dynamics; durable housing; transportation infrastructure; spillovers; persistence, path dependence, and cycles. |
| JEL: | R0 R1 R2 R3 R4 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2014-23&r=ure |
| By: | Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Kerr, William R. (Harvard University, Bank of Finland, and NBER) |
| Abstract: | Draft chapter for the forthcoming Handbook of Regional and Urban Economics, Vols. 5A and 5B This paper reviews academic research on the connections between agglomeration and innovation. The authors first describe the conceptual distinctions between invention and innovation. They then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and the authors discuss important findings from the literature about why this is so. The authors highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and they discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance). |
| Keywords: | Agglomeration; Clusters; Innovation; Invention; Entrepreneurship |
| JEL: | J2 J6 L1 L2 L6 O3 R1 R3 |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:14-26&r=ure |
| By: | Michal Bernard Pietrzak (Nicolaus Copernicus University, Poland); Justyna Wilk (Wroclaw University of Economics, Poland); Tomasz Kossowski (Adam Mickiewicz University in Poznan, Poland); Roger Bivand (Norwegian School of Economics (NHH) in Bergen, Norway) |
| Abstract: | The objective of this paper is to identify classes of regions presenting different economic situations and apply a join-count test to examine spatial dependences between these classes. The test examines spatial autocorrelation on the basis of qualitative data. The global join-count test indicates general interactions occurring between regions, while the local join-count test examines a tendency to form the spatial clusters (e.g. metropolitan areas). The study covers the situations of 66 Polish NUTS 3 regions in 2011. Regions were divided into two classes presenting relatively low and high levels of economic development. Taxonomic methods of multivariate data analysis were applied in the research. The global test proved spatial clustering of economically poor regions but was statistically insignificant as regards well-developed regions. Thus the join-count local join-count test was additionally applied. The test indicated the occurrence of five spatial clusters of NUTS 3 regions. Three of them include economically well-developed regions, while two of them present poor economic situations. Furthermore three spatial outliers (local growth centres), which deteriorate the economic situation of eastern Poland, were also recognized. |
| Keywords: | join-count test, spatial dependence, local indicators of spatial association (LISA), explorative spatial data analysis (ESDA), economic development |
| JEL: | C21 C51 J64 R11 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2014:no14&r=ure |
| By: | Fairlie, Robert |
| Abstract: | Using 1990 Census microdata, we explore ethnic, racial and immigrant differences in private school attendance. We find high rates of private school attendance among white natives, white immigrants, and Asian natives. In contrast, we find low private school rates among black and Hispanic natives and immigrants, Asian immigrants, and other natives. Variations in income per capita and especially parental education account for over 70% of the gap in private school attendance rates between white natives and all other groups. We discuss ramifications for racial, language, and socioeconomic segregation in America's schools, and possible effects of school vouchers on segregation. |
| Keywords: | Education, Social and Behavioral Sciences, education, private school, race, minorities, immigration, inequality |
| Date: | 2014–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt22q5w7dq&r=ure |
| By: | Steve Gibbons |
| Abstract: | Wind farms reduce house prices in postcodes where the turbines are visible, according to research by Steve Gibbons. Households are willing to pay £1,000 a year to avoid a large wind farm visible within 2km. His study notes that wind turbines are generally popular as a source of green energy but they face considerable opposition from the people who have to live near them. He uses local property markets as a way to value the visual impact of 'wind farms' and finds significant negative effects on house prices in postcodes where the turbines are visible. |
| Keywords: | Housing prices, environment, wind farms, infrastructure |
| JEL: | R Q |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepcnp:433&r=ure |
| By: | Pierre-Alexandre Balland, David Rigby & Ron Boschma; David Rigby; Ron Boschma |
| Abstract: | We study the resilience of cities by analyzing their relative capacity to sustain the production of technological knowledge in the face of adverse events. Using patent applications in 366 Metropolitan Statistical Areas in the United States from 1975 to 2002, we analyze the vulnerability and response of cities to technological crises. We define episodes of technological crisis as periods of sustained negative growth in patenting activity. We find that the frequency, intensity and duration of technological crises vary considerably across American cities. We test whether the technological knowledge bases of cities, their network openness and institutional environment condition their resilience to technological crises. Econometric analysis suggests that cities with knowledge bases that are diverse, flexible and that have a high degree of relatedness to technologies in which they do not currently possess comparative advantage tend to avoid technological crises, have limited downturns in patent production and faster recovery. |
| Keywords: | urban resilience, technological crisis, related knowledge structure, institutions, inter-city networks |
| JEL: | O33 R11 L65 D83 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1419&r=ure |
| By: | Susana Katherine Chacón Espejo (Master in Regional Sciences - Department of Economics, Universidad Católica del Norte - Chile); Dusan Paredes Araya (IDEAR - Department of Economics, Universidad Católica del Norte - Chile) |
| Abstract: | The spatial income inequality in Latin American countries is a recent academic affair. Particularly, the case of Chile highlights around the world because it has one of the highest individual and spatial inequality rates. This article analyzes the spatial income inequality in Chile during 1992 2011 evaluating the role of the spatial labor sorting through multilevel models. The findings show that human capital doesn't allocate randomly across the space but its spatial concentration at the biggest urban centers impacts significantly the income inequality between counties. These findings motivate the discussion about spatial dimension of the inequality and suggest that policymakers should consider ways to spread human capital throughout the nation as an alternative to reduce spatial inequality. |
| Keywords: | Spatial income inequality, spatial labor sorting, human capital, multilevel regression. |
| JEL: | O15 O18 R12 R23 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:cat:dtecon:dt201317&r=ure |
| By: | Nakajima, Makoto (Federal Reserve Bank of Philadelphia); Telyukova, Irina A. (University of California–San Diego) |
| Abstract: | Supersedes Working Paper 13-27. Reverse mortgage loans (RMLs) allow older homeowners to borrow against housing wealth without moving. Despite growth in this market, only 2.1% of eligible homeowners had RMLs in 2011. In this paper, the authors analyze reverse mortgages in a calibrated life-cycle model of retirement. The average welfare gain from RMLs is $885 per homeowner. The authors’ model implies that low-income, low-wealth, and poor-health households benefit the most, consistent with empirical evidence. Bequest motives, nursing-home-move risk, house price risk, and loan costs all contribute to the low take-up. The Great Recession may lead to increased RML demand, by up to 30% for the lowest-income and oldest households. |
| Keywords: | Reverse Mortgage; Mortgage; Housing; Retirement; Home Equity Conversion Mortgage; HECM |
| JEL: | D91 E21 G21 J14 |
| Date: | 2014–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:14-27&r=ure |
| By: | Jorda, Oscar (Federal Reserve Bank of San Francisco); Schularick, Moritz (Wirtschaftswissenschaftlicher Fachbereich Rheinische Friedrich-Wilhelms-Universität Bonn); Taylor, Alan M. (University of California-Davis, Economics Dept.) |
| Abstract: | This paper unveils a new resource for macroeconomic research: a long-run dataset covering disaggregated bank credit for 17 advanced economies since 1870. The new data show that the share of mortgages on banks’ balance sheets doubled in the course of the 20th century, driven by a sharp rise of mortgage lending to households. Household debt to asset ratios have risen substantially in many countries. Financial stability risks have been increasingly linked to real estate lending booms which are typically followed by deeper recessions and slower recoveries. Housing finance has come to play a central role in the modern macroeconomy. |
| Keywords: | leverage; recessions; mortgage lending; financial crises; business cycles; local projections. |
| JEL: | C14 C38 C52 E32 E37 E44 E51 G01 G21 N10 N20 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2014-23&r=ure |
| By: | ANDERSSON, Tommy; EHLERS, Lars; 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 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montde:2014-05&r=ure |
| By: | Ying Jin; Richard Bullock; Wanli Fang |
| Keywords: | Banks and Banking Reform Transport Economics Policy and Planning Social Protections and Labor - Labor Policies Economic Theory and Research Private Sector Development - E-Business Finance and Financial Sector Development Transport Macroeconomics and Economic Growth |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19989&r=ure |
| By: | Sunak, Yasin (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | Today’s investment decisions in large-scale onshore wind projects in Germany are no longer determined only by the investment’s economic benefit, but also by concerns associated to social acceptance. Despite a mostly positive attitude towards the expansion of wind power, local public concerns often stem from the belief that the proximity to large-scale wind farms may lead to a decrease in property prices. In particular, the change in landscape caused by the construction of a wind farm may have an adverse impact on the view from some properties, and thus may negatively affect their price. To investigate the potential devaluation of properties in Germany due to wind farms, we use a quasi-experimental technique and apply a spatial difference-in-differences approach to various wind farm sites in the federal state of North Rhine-Westphalia. We adopt a quantitative visual impact assessment approach to account for the adverse environmental effects caused by the wind turbines. To properly account for spatial dependence and unobserved variables biases, we apply augmented spatial econometric models. The estimates indicate that the asking price for properties whose view was strongly affected by the construction of wind turbines decreased by about 10-17%. In contrast, properties with a minor or marginal view on the wind turbines experienced no devaluation. |
| Keywords: | Wind power; Difference-in-differences; Visual impact; Spatial dependence |
| JEL: | Q42 Q51 R31 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2014_001&r=ure |
| By: | Miroslava Federicova |
| Abstract: | High-stakes admission exams to selective schools create incentives for more intensive study effort possibly increasing study achievements of students. Exploiting the exogenous change of a schooling system and using two waves of TIMSS survey data we find that high-stakes exams increase math test scores of ten-year-old students by 0.2 standard deviations. This effect additionally accrues by around 0.05 standard deviations for students in the top decile, i.e. students who apply for selective schools with the highest probability. Although the effects are similar for both genders, there are indications that girls exert higher study efforts than boys in a more competitive environment. The most perceptive to incentives are test items referring to the cognitive domain of reasoning requiring a deeper understanding of math problems. |
| Keywords: | high-stakes exams; students’motivation; achievement; |
| JEL: | I21 I24 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp517&r=ure |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2013wp01&r=ure |
| By: | Andros Kourtellos (Department of Economics, University of Cyprus, CY); Christa Marr (Department of Economics, Rollins College, USA); Chih Ming Tan (Department of Economics, University of North Dakota, USA) |
| Abstract: | This paper revisits the influential work by Chetty, Hendren, Kline, and Saez (2014) who attempt to explain the variation in intergenerational mobility across commuter zones in the US (i.e., spatial mobility) using nine classes of variables. We employ Bayesian model averaging methods that allow for model uncertainty to identify robust predictors of spatial mobility. In doing so we pay special attention to the specification of model and parameter priors. We also investigate the heterogeneous effects of these predictors on spatial mobility across commuter zones in different average income quintiles. Our findings suggest a more nuance and complex characterization of the spatial mobility process than that proposed by Chetty, Hendren, Kline, and Saez. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:20_14&r=ure |
| By: | Aziza Garsaa; Nadine Levratto |
| Abstract: | This paper seeks to shed some light on the relationship between individual performance and local context. We empirically address this question focusing on the employment growth rate of French manufacturing establishments geo-referenced at the employment area level, an economically consistent territorial division. Using an unbalanced panel of 149,929 plants over the period 2004-2010, we estimate different growth models including local specific variables controlled with company specific ones. The results confirm that the firm growth rate is influenced by the local context and that some features such as unemployment, agglomeration effects or skills matter significantly. The robustness checks performed on subsamples, however, show that the profile of the areas or the market (local or larger) may significantly affect the intensity of the link between a firm and its environment. |
| Keywords: | firm growth, geographical location, manufacturing industry, panel data. |
| JEL: | L25 R11 C23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-49&r=ure |
| By: | Rani Jeanne Dang (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Karine Roux (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - Université Nancy II : EA3942 - Université de Metz); Christian Longhi (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Damien Talbot (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS : UMR5113 - Université Montesquieu - Bordeaux IV); Catherine Thomas (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)) |
| Abstract: | Many studies have focused on the role played by geographical location in the emergence and building of localised learning capacities (Maskell and Malmberg, 1999). In this perspective, empirical studies have demonstrated that the innovation dynamics of clusters result from the quality of interactions and coordination inside the cluster as well as interactions with external, often global, networks. In this context, knowledge exchange between firms and institutions are claimed to be the main drivers of spatial agglomeration (Canals et al., 2008). Hence, cluster policies have followed the main idea that geographic proximity facilitates collective innovation in that firms can capture knowledge externalities more easily. This idea is in fact very attractive but contains some limitations (Suire and Vicente, 2007): if some clusters are successful, others seem to decline. Therefore, in order to understand the territorial dynamics of clusters, the analysis of the specific nature of knowledge and information flows within a cluster is crucial. The objective of this paper is to enhance the analysis of the role of cognitive and relational dimensions of interactions in territorial dynamics of innovation. We focus on the key sub-process of innovation: knowledge creation, which is above all a social process based on two key complex social mechanisms: the exchange and the combination of knowledge (Nahapiet and Goshal, 1996). We suggest building a theoretical framework that hinges on these two key mechanisms. In this line, we apply Boisot's I-Space model (Boisot, 1998) for the diffusion and exchange of knowledge and suggest completing the model by introducing the concept of architectural knowledge (Henderson and Clark, 1990) so as to take into consideration the complexity of the combination process. This analysis is conducted through the illustrative analysis of three different case studies. We will draw upon the case of Aerospace Valley Pole of Competitiveness (PoC), the Secured Communicating Solutions PoC, and the Fabelor Competence Cluster. The cases show that the existence of architectural knowledge is pivotal to territorial innovation. |
| Keywords: | architectural knowledge, I-Space model, territorial innovation, geographical clusters |
| Date: | 2014–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00929802&r=ure |
| By: | Daganzo, Carlos F; Lehe, Lewis J |
| Keywords: | Engineering, congestion pricing, trip length, tolls, policy |
| Date: | 2014–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt9vz1b9rs&r=ure |
| By: | Andrea Amaral (ISEG, University of Lisbon); Margarida Abreu (ISEG, University of Lisbon and UECE); Victor Mendes (CMVM and CEFAGE-UE) |
| Abstract: | We use a spatial Probit model to study the effect of contagion between banking systems of different countries. Applied to the late 90’s banking crisis in Asia we show that the phenomena of contagion is better seized using a spatial than a traditional Probit model. Unlike the latter, the spatial Probit model allows one to consider the cascade of cross and feedback effects of contagion that result from the outbreak of one initial crisis in one country or system. These contagion effects may result either from business connections between institutions of different countries or from institutional similarities between banking systems. |
| Keywords: | Spatial probit; Banking crises; Contagion. |
| JEL: | C21 C25 G01 G21 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2014_05&r=ure |
| By: | Mikel Navarro (Orkestra – University of Deusto); Juan José Gibaja (University of Deusto); Susana Franco (Orkestra – University of Deusto); Asier Murciego (Orkestra – University of Deusto); Carlo Gianelle (European Commission – JRC - IPTS); Alexander Kleibrink (European Commission – JRC - IPTS); Fatime Barbara Hegyi (European Commission – JRC - IPTS) |
| Abstract: | One of the most basic conditions required for drawing lessons from regional benchmarking is to compare homogeneous regions and learn from equivalents. This condition is not met when regions for comparison are chosen based on their high performance, overlooking their regional context or structural conditions. This paper aims to provide a new methodology for the identification of homogeneous regions for regional benchmarking; identifying groups of homogeneous regions using variables that are similar in nature; focusing solely on structural conditions, thereby overcoming the flaws produced by mixing variables of a different nature (comparing structural indicators with performance and / or behavioural indicators). Thus, regional benchmarking can be of great help in making strategic decisions within the process of the design and implementation of regional Research and Innovation Strategies for Smart Specialisation (RIS3), taking into account the relative position of the region to other regions in Europe. Following the RIS3 approach of looking beyond the regional administrative boundaries, benchmarking based on structural similarity enables the region to identify its competitive advantages through systematic comparisons with other regions or to map the national and international context in search of examples to learn from, or to mark a difference with. |
| Keywords: | European cohesion policy, Structural Funds, smart specialisation, regional benchmarking, structural similarity, policy learning |
| JEL: | C43 R12 R58 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc89819&r=ure |
| By: | Point E.; Capitaine G.; Clerc V.; LE Quéau L. |
| Abstract: | In a context of declining housing sales and decreasing prices, the annual survey on housing finance carried out by the Autorité de Contrôle prudentiel et de Résolution (ACPR) recorded a 27.6% decrease in loans extended in 2012. Outstanding loans experienced their lowest annual growth since 2001 (+2.4%). The market remains characterised by strong fundamentals, in line with the assessments made by the Joint Forum and the International Monetary Fund, even though some risk indicators stabilised at high levels: - In 2012, the maturity of new loans at origination remained similar to 2011 at 19.8 years. However, the effective maturity, which take early redemptions into account, increased by almost 5 months to 13.3 years; - The proportion of the most indebted borrowers (i.e. with a debt service ratio above 35%) in the production decreased slightly in 2012 and the average debt service ratio was stable at 30.5%, although it remained at its highest level since 2001; - Since 2005, the proportion of fixed-rate loans has increased to reach almost 90%. Uncapped floating-rate loans, which entail the highest risk for borrowers, only accounted for 3% of total loans at the end of 2012. Interest-only loans continued to represent a very scarce proportion of the production (0.44% in 2012); - Almost every home loan is covered by a guarantee that has been issued by a credit institution or an insurance company in most cases; - The average loan-to-value (LTV) ratio at origination, i.e. the amount of the loan for home buying to the property purchase price, decreased by almost 2 points as compared to 2011; nevertheless at 79.9%, it remained higher than its 2008 trough (75.5%). Several other trends deserve attention: - The average loan amount increased faster than real estate prices in 2012, supposedly reflecting the continuing decline of interest rates over the year; - The ratio of non-performing housing loans grew again in 2012, but, at 1.47%, it still remained below the average ratio of non-performing loans; nevertheless, delinquency rates vary significantly from one segment to another, owners-buyers as well as floating-rate loans exhibiting the highest levels; - The average coverage ratio stabilised at 22% of specific allowances for loans to total gross impaired loans, a level still significantly lower than the average coverage ratio for all types of loans (51.5%); - While banks benefit from borrowers frequently taking out insurance against death or work disability, they are still exposed to unemployment risk as only a small fraction of their customers has subscribed a job-loss insurance; - The cost of risk on housing loans, which had continued to decrease in 2011 from its 2009 peak, rose by almost 50% in 2012, from 0.043% to 0.061% of gross outstanding loans, but it still remains at a very low level. In this context, the main market participants generally recorded a low to medium risk level. In 2012, the ACPR performed on-site examinations in French credit institutions. The purpose was to assess banks’ strategies regarding housing finance, their underwriting standards and the quality of risk management. These audits highlighted that, despite noticeable improvements, risks monitoring and internal control still called for a strengthening. A significant downward adjustment cannot be excluded given the strong increase in property prices since 1998. Credit institutions thus must make sure that interest rates on housing loans fully take into account funding costs, operating expenses and expected cost of risk. They must also avoid aggressive pricing strategies so as to ensure healthy conditions of competition. Borrowers’ debt service must stay limited to a reasonable proportion of their disposable income, and credit institutions have to pay attention to the LTV at origination as well as periodically thereafter. Finally, any excessive lengthening of loan maturities should be avoided. |
| Keywords: | housing loans, loan amount, loan maturity, loan-to-value ratio, debt service ratio, first-time borrowers, owners-buyers, loan transfers, buy-to-let, non-performing loans, coverage ratio, interest rate margin. |
| JEL: | G21 R21 R31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:analys:18&r=ure |
| By: | Shimizu, Chihiro |
| Abstract: | How exactly should one estimate property investment returns? Investors in property aim to maximize capital gains from price increases and income generated by the property. How are the returns on investment in property determined based on its characteristics, and what kind of market characteristics does it have? Focusing on the Tokyo commercial property market and residential property market, the purpose of this paper was to break down and measure the micro-structure of property investment returns in as much detail as possible. In Japan, the characteristics of property suitable for investment are dubbed “kin-shin-dai” (close, new, and large). That is, investors believe that investment returns are high for properties that are very convenient in terms of transportation (close to the city center), new buildings (relatively new properties), and large-scale real estate (large design or floor space). Therefore, this paper first measured how the asset prices, income, and asset price-income ratios (discount rate) that comprise property investment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Much of the information available on the property investment market is property price information determined by property appraisers. However, it is known that property appraisal prices are unable to appropriately reflect actual property market trends. Therefore, using enterprise value data for REIT investment management companies comprised of REIT investment unit prices (share prices) available on capital markets, this paper proposed a method of estimating property investment returns corresponding to changes in capital markets, as well as clarifying the distortion in property investment returns that are formed based on property appraisal prices. Looking at the results obtained, for commercial property, as building floor space increased, it had the effect of raising both the income and price while lowering the discount rate. In particular, compared to residential property, the results showed that a higher investment return can be obtained from commercial property by investing in larger-scale properties. Building age lowered the asset price and income for both commercial and residential property, but the effect was especially strong for residential property. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset markets and those formed by capital markets, and the results showed that a greater difference was generated while the market was shrinking. This finding suggests that looking at property investment returns that are estimated based on asset market information alone could lead to erroneous investment decisions. |
| Keywords: | Present Value Model, discount rate, quality-adjusted price index, hedonic approach, heterogeneity, Tobin’s q, Risk premium |
| JEL: | E3 G19 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:12&r=ure |
| By: | Diewert, Erwin; Shimizu, Chihiro |
| Abstract: | The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country and related price indexes for the land and structure components of a commercial property are required in the Balance Sheet accounts of the country for the calculation of the Multifactor Productivity of the Commercial Property Industry. The paper uses a variant of the builder’s model that has been used to construct Residential Property Price Indexes. Geometric depreciation rates are estimated for commercial offices in Tokyo using assessment data for REITs. The problems associated with the decomposition of asset value into land and structure components are addressed. The problems associated with depreciating capital expenditures on buildings and with measuring the loss of asset value due to early retirement of the structure are also addressed. |
| Keywords: | Commercial property price indexes, System of National Accounts, Balance Sheets, methods of depreciation, land and structure price indexes, demolition depreciation |
| JEL: | C2 C23 C43 D12 E31 R21 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:8&r=ure |
| By: | Shew Fan Liu (School of Economics, Singapore Management University, Singapore, 178903); Zhenlin Yang (School of Economics, Singapore Management University, Singapore, 178903) |
| Abstract: | In studying the asymptotic and finite-sample properties of quasi-maximum likelihood (QML) estimators for the spatial linear regression models, much attention has been paid to the spatial lag dependence (SLD) model; little has been given to its companion, the spatial error dependence (SED) model. In particular, the effect of spatial dependence on the convergence rate of the QML estimators has not been formally studied, and methods for correcting finite-sample bias of the QML estimators have not been given. This paper fills in these gaps. Of the two, bias correction is particularly important to the application of this model. Contrary to the common perceptions, both the large and small sample behaviors of the QML estimators for the SED model can be different from those for the SLD model in terms of the rate of convergence and the magnitude of bias. Monte Carlo results show that the bias can be severe and the proposed bias correction procedure is very effective. |
| Keywords: | Asymptotics; Bias Correction; Bootstrap; Concentrated estimating equation; Monte Carlo; Spatial layout; Stochastic expansion |
| JEL: | C10 C15 C21 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:15-2014&r=ure |
| By: | Harry H. Kelejian (Department of Economics, University of Maryland); Gianfranco Piras (Regional Research Institute, West Virginia University) |
| Abstract: | Weighting matrices are typically assumed to be exogenous. However, in many cases this exogeneity assumption may not be reasonable. In these cases, typical model specifications and corresponding estimation procedures will no longer be valid. In this paper we specify a spatial panel data model which contains a spatially lagged dependent variable in terms of an endogenous weighting matrix. We suggest an estimator for the regression parameters, and demonstrate its consistency and asymptotic normality. We also suggest an estimator for the large sample variance-covariance matrix of that distribution. We then apply our results to an interstate panel data cigarette demand model which contains an endogenous weighting matrix. Among other things, our results suggest that, if properly accounted for, the bootlegging effect of buyers, or “agents” for them, crossing state borders to purchase cigarette turns out to be positive and significant. |
| Keywords: | weighting matrices, econometrics, estimation, |
| JEL: | C01 C21 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2013wp02&r=ure |
| By: | Francisco J. Bahamonde-Birke; Uwe Kunert; Heike Link; Juan de Dios Ortúzar |
| Abstract: | In January 2013 the interurban passenger transport market in Germany was liberalized and several coach carriers emerged offering an alternative to the Deutsche Bahn, a state owned rail monopoly. The coach carriers have attempted to position themselves not just through lower prices but also through product differentiation, for example marketing their services as the most ecological way to travel. Hence, it is important to consider attitudes and perceptions when analyzing this market. One year after liberalization we conducted a stated-choice experiment among students and employees at the Technical University of Berlin, where participants had to choose between different interurban public transport alternatives (regional and intercity trains or interurban coaches). Additionally, the experiment gathered perception and attitudinal indicators used to construct latent variables. Our results show that attitudes and perceptions indeed affect the way individuals choose between different transport modes and, therefore, they must be taken into account when analyzing the interurban passenger market in Germany. |
| Keywords: | Liberalization, Coach Market, Latent Variables, Hybrid Discrete Choice Modelling, Attitudes and Perceptions |
| JEL: | R41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1415&r=ure |
| By: | Ohanian, Lee E. (Federal Reserve Bank of Minneapolis); Holmes, Thomas J. (Federal Reserve Bank of Minneapolis) |
| Abstract: | Pay-with-promises compensation plans accumulate liability for future employee benefits, such as retiree health insurance. A simple economic model demonstrates that such plans can exacerbate fiscal crises faced by cities that experience external economic shocks, such as the departure of a major employer. City leaders often raise taxes and/or reduce public services to pay off legacy employee debts, and such steps encourage residents to move out, reducing the tax base and raising fiscal stress. Pay-as-you-go compensation plans are more prudent; they settle liabilities to employees paycheck by paycheck. |
| Date: | 2014–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmep:14-4&r=ure |
| By: | John T. Addison (University of South Carolina, Durham University, GEMF-University of Coimbra, and IZA Bonn); McKinley L. Blackburn (University of South Carolina); Chad D. Cotti (University of Wisconsin-Oshkosh and University of Connecticut) |
| Abstract: | Recent attempts to incorporate spatial heterogeneity in minimum-wage employment models have been attacked for using overly simplistic trend controls, and for neglecting the potential impact on employment growth. We investigate whether such considerations call into question our earlier findings of statistically insignificant employment effects for the restaurant-and-bar sector. We find that a focus on employment levels is still appropriate, and nonlinear trend controls do not dislodge our limited support for the existence of minimum-wage effects. |
| Keywords: | minimum wages, employment, employment change, spatial controls. |
| JEL: | J23 J38 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-17.&r=ure |
| By: | Swarnodeep Homroy; Kwok Tong Soo |
| Abstract: | Using data on a student group project in which groups are exogenously formed, we examine the potential productivity gains from employing work-teams which are diverse in terms of gender, nationality and ability. We find no significant effect of diversity on overall team performance, except when the team members are from different socio-cultural backgrounds. More importantly, we find that students who have worked in more diverse teams experience a subsequent improvement in individual productivity. These individual productivity gains hold for both domestic and foreign students, and for students of different levels of ability. Our results suggest a mechanism by which diversity enhances individual and collective performance. |
| Keywords: | Group composition, diversity, performance |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:65528509&r=ure |
| By: | Mohamed El Hedi Arouri (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR6221 - Université d'Orléans); Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Cuong Nguyen-Viet (Chercheur Indépendant - Aucune); Agnès Soucat (Chercheur Indépendant - Aucune) |
| Abstract: | The objective of this paper is to investigate the impacts of urbanization on human capital andeconomic growth in Africa. It seeks to contribute to the urbanization-growth debate byinvestigating how urbanization is linked to human capital accumulation and economic growth.More precisely, compared to previous studies on the urbanization-growth nexus, we (i) focusexclusively on African countries; (ii) consider both direct and indirect channels through whichurbanization may influence economic activity and (iii) examine a long period including theevolutions observed in the recent years. |
| Keywords: | urbanization; economic growth; human capital |
| Date: | 2014–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01068271&r=ure |