nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒11‒12
fifty papers chosen by
Steve Ross
University of Connecticut

  1. The Effect of Railway Travel on Urban Spatial Structure By Martijn I. Dr�es; Piet Rietveld†
  2. Can housing risk be diversified? A cautionary tale from the housing boom and bust By John Cotter; Stuart Gabriel; Richard Roll
  3. The Competitiveness of Global Port-Cities: The Case of Antofagasta, Chile By Olaf Merk
  4. Patents, Innovation and Economic Geography By Francesco LISSONI; Ernest MIGUELEZ
  5. A scale-free transportation network explains the city-size distribution By Berliant, Marcus; Watanabe, Hiroki
  6. Local Economic Conditions and the Nature of New Housing Supply By Christian A.L. Hilber; Jan Rouwendal; Wouter Vermeulen
  7. The Competitiveness of Global Port-Cities: The Case of Danube Axis (Bratislava, Štúrovo, Komárno), Slovak Republic By Marten van den Bossche; Olaf Merk; Jing Li
  8. Availability, Affordability and Volatility: the case of Hong Kong Housing Market By Leung, Charles Ka Yui; Tang, Edward Chi Ho
  9. Agglomeration effects on labor productivity: An assessment with microdata By Stephan Brunow; Uwe Blien
  10. Unveiling the House Price Movements and Financial Development By Akcay, Belgin; Yucel, Eray
  11. Employment and Technological Change: On the Geography of Labour Market Adjustments By Luisa Gagliardi
  12. Sweden’s School Choice Reform and Equality of Opportunity By Edmark, Karin; Frölich, Markus; Wondratschek, Verena
  13. Subsidies to Electricity Consumption and Housing Demand in Bogotá By Camila Casas
  14. Assessing the Effect of School Days and Absences on Test Score Performance By Esteban Aucejo; Teresa Foy Romano
  15. Regional industrial path development in different regional innovation systems: A conceptual analysis By Isaksen , Arne; Trippl , Michaela
  16. Inclusionary Zoning in a Monocentric City By Lehe, Lewis
  17. The case of Oresund (Denmark-Sweden) – Regions and Innovation: Collaborating Across Borders By Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
  18. Exploring regional differences in the regional capacity to absorb displacements By Nyström, Kristina; Viklund Ros, Ingrid
  19. Price Differentiation and Discrimination in Transport Networks By Adriaan Hendrik van der Weijde
  20. Determinants of Portuguese local governments’ indebtedness By Linda Gonçalves Veiga; Francisco José Veiga
  21. The Macro-Financial Implications of House Price-Indexed Mortgage Contracts By Hull, Isaiah
  22. Fiscal Policy Spillovers: Points of Employment to Places of Residence By Dupor, William D.; McCrory, Peter B.
  23. Spillover Dynamics for Systemic Risk Measurement using Spatial Financial Time Series Models By Francisco Blasques; Siem Jan Koopman; Andre Lucas; Julia Schaumburg
  24. Optimizing the position of bike sharing stations. The Milan case By Edoardo Croci; Davide Rossi
  25. Effect on the Finances of Local Governments in the Case of an Earthquake Occurring Directly Beneath the Tokyo Metropolitan Area: Projections by Year and Prefecture(in Japanese) By Takeshi MIYAZAKI
  26. Renewable Energy and Negative Externalities: The Effect of Wind Turbines on House Prices By Martijn I. Dr�es; Hans R.A. Koster
  27. Assessing Direct and Indirect Economic Impacts of a Flood Event Through the Integration of Spatial and Computable General Equilibrium Modelling By Lorenzo Carrera; Gabriele Standardi; Francesco Bosello; Jaroslav Mysiak
  28. Living standards and rural-urban height gap during the early stages of modern economic growth in Spain By José M. Martínez-Carrión; Pedro M. Pérez-Castroviejo; Javier Puche-Gil; Josep M. Ramon-Muñoz
  29. The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy By Pierre-Daniel Sarte; Fernando Parro; Esteban Rossi-Hansberg; Lorenzo Caliendo
  30. How Do Geographical and Organisational Proximity Influence the Relational Pattern of MNCs’ Global Innovation Networks: An In-depth Case Study By Liu, Ju
  31. Cost Benefit Analysis to assess urban mobility plans. Consumers’ surplus calculation and integration with transport models. By Beria, Paolo; Grimaldi, Raffaele
  32. International knowledge diffusion and its impact on the cost-effective clean-up of the Baltic Sea By Elofsson, Katarina
  33. On the intergenerational nature of criminal behavior By Bethencourt, Carlos; Kunze, Lars
  34. Economic importance of air transport and airport activities in Belgium – Report 2012 By Frank Van Nieuwenhove
  35. Are Fertility Responses to Local Unemployment Shocks Homogenous Across Social Strata? Evidence from England, 1994 to 2010 By Aksoy, Cevat Giray
  36. Border Region Bridge and Air Transport Predictability By Fullerton, Thomas M., Jr.; Mukhopadhyay, Somnath
  37. Gender, Geography and Generations: Intergenerational Educational Mobility in Post-reform India By Emran, M. Shahe; Shilpi, Forhad
  38. The Formation of a Core Periphery Structure in Heterogeneous Financial Networks By Daan in 't Veld; Marco van der Leij; Cars Hommes
  39. On the Existence and Uniqueness of Equilibrium in the Bottleneck Model with Atomic Users By Hugo Emilio Silva; Robin Lindsey; Andr� de Palma; Vincent A.C. van den Berg
  40. A System of Regionalized Public Accounts For Spain Methodology and Results for 2005 By Angel de la Fuente; Ramón Barberan; Ezequiel Uriel
  41. Peers at Work: From the Field to the Lab By Roel van Veldhuizen; Hessel Oosterbeek; Joep Sonnemans
  42. Degrees of freedom in road construction By Nyström, Johan; Lind , Hans; Nilsson , Jan-Eric
  43. The Economic Value of Iowa’s Public Universities By Swenson, David A.
  44. Impact of a Disaster on Land Price: Evidence from Fukushima Nuclear Power Plant Accident By Managi, Shunsuke; Tanaka, Kenta
  45. Education and Health Knowledge: Evidence from UK Compulsory Schooling Reforms By David W. Johnston; Grace Lordan; Michael A. Shields; Agne Suziedelyte
  46. Race and Gender Effects on Employer Interest in Job Applicants: New Evidence from a Resume Field Experiment By Cory Koedel; Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce
  47. Labour market regulation and fiscal parameters: A structural model for European régions. By Roberto Martino; Phu Nguyen-Van
  48. Fiscal Federalism in Four Federal Countries By Virkola, Tuomo
  49. Cooperation in traffic routing games on scale free wireless networks By Dávid Csercsik
  50. Economics of Migration of Students from the Arab Region to OECD countries By Driouchi, Ahmed

  1. By: Martijn I. Dr�es (VU University Amsterdam); Piet Rietveld† (University of Amsterdam)
    Abstract: We examine the effect of railway travel on urban spatial structure in a polycentric urban land use model. We focus on the role of access to the railway network. We find that if the number of train stations is limited, the degree of urbanization is higher around train stations, but the effect of railway travel on road congestion is small. By contrast, if train stations are omnipresent there is little effect on urban spatial structure, but a considerable decrease in congestion. With regard to the supply of train stations, these findings suggest that there is an important policy trade-off between congestion and urbanization.
    Keywords: general equilibrium; public transport; land use model; railway; sorting
    JEL: C68 D58 R13 R14 R4
    Date: 2014–04–29
  2. By: John Cotter (UCD School of Business, University College Dublin and Anderson School of Management, University of California); Stuart Gabriel (Anderson School of Management, University of California); Richard Roll (California Institute of Technology)
    Abstract: This study evaluates the effectiveness of geographic diversification in reducing housing investment risk. To characterize diversification potential, we estimate spatial correlation and integration among 401 US metropolitan housing markets. The 2000s boom brought a marked uptrend in housing market integration associated with eased residential lending standards and rapid growth in private mortgage securitization. As boom turned to bust, macro factors, including employment and income fundamentals, contributed importantly to the trending up in housing return integration. Portfolio simulations reveal substantially lower diversification potential and higher risk in the wake of increased market integration.
    Keywords: integration, housing risk diversification, housing returns
    JEL: G10 G11 G12 G14 R12 R21
    Date: 2014–10–23
  3. By: Olaf Merk
    Abstract: This working paper offers an evaluation of the performance of ports of Antofagasta, an analysis of the impact of the ports on their territory and an assessment of policies 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 port on economic and environmental questions is studied and quantified where possible. The major policies governing the ports are assessed, along with policies governing transport and economic development, the environment and spatial planning. Based on the report’s findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the ports of Antofagasta.
    Keywords: transportation, regional growth, inter-regional trade, regional development, ports, urban growth
    JEL: D57 L91 R11 R12 R15 R41
    Date: 2013–09–30
  4. By: Francesco LISSONI; Ernest MIGUELEZ
    Abstract: In this paper we review 20 years of quantitative research in the geography of innovation, to whose advancement patent data have contributed in a decisive way. We know now that the importance attributed by the earliest studies to knowledge externalities as an agglomeration force was excessive. Localized knowledge flows exist, and explain agglomeration, but they are largely mediated by the labor market and markets for technologies. Besides, we know now that physical distance may affect knowledge diffusion, but so do social distance between inventors as well as inter- and intra-national borders. We also witness an ongoing widening of the research focus, from local/regional to international, with migration issues concerning inventors coming to the forefront.
    Keywords: economic geography, patents, intellectual property, innovation, inventors, spillovers, migration
    JEL: F22 J61 O31 R11 R12
    Date: 2014
  5. By: Berliant, Marcus; Watanabe, Hiroki
    Abstract: Zipf’s law is one of the best-known empirical regularities in urban economics. There is extensive research on the subject, where each city is treated symmetrically in terms of the cost of transactions with other cities. Recent developments in network theory facilitate the examination of an asymmetric transport network. In a scale-free network, the chance of observing extremes in network connections becomes higher than the Gaussian distribution predicts and therefore it explains the emergence of large clusters. The city-size distribution shares the same pattern. This paper decodes how accessibility of a city to other cities on the transportation network can boost its local economy and explains the city-size distribution as a result of its underlying transportation network structure.
    Keywords: Zipf’s law; City-size distribution; Scale-free network
    JEL: R12 R40
    Date: 2014–10–23
  6. By: Christian A.L. Hilber (London School of Economics, United Kingdom); Jan Rouwendal (VU University Amsterdam, the Netherlands); Wouter Vermeulen (CPB Netherlands Bureau for Economic Policy Analysis, The Hague, the Netherlands)
    Abstract: We present a modified open monocentric city model that assumes that land is available for conversion into new housing throughout the city. The model predicts that positive local income shocks (i) increase the city’s share of multi-family housing in new construction and (ii) lead to the construction of smaller units. We exploit the metro area samples of the American Housing Survey from 1984 to 2004 and find support for both predictions. We confirm that the adjustment process is driven by migration and is hindered by strict local land use control. Our findings imply that tight regulation may hamper metro area level labor market adjustment to positive economic shocks not only through limits on the quantity of newly supplied units but also by constraining their type to single-family houses and larger units that may be less suitable for would-be-migrants.
    Keywords: Local economic conditions, open monocentric city model, land conversion, housing supply, housing type, housing consumption, land use regulation, migration
    JEL: R11 R21 R31 R52
    Date: 2014–09–02
  7. By: Marten van den Bossche; Olaf Merk; Jing Li
    Abstract: This working paper offers an evaluation of the performance of the inland ports of the Slovak Republic within the framework of the Danube Axis, an analysis of the impact of the ports on their territory and an assessment of policies 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 port on economic and environmental questions is studied and quantified where possible. The major policies governing the ports are assessed, along with policies governing transport and economic development, the environment and spatial planning. Based on the report’s findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the inland ports of Slovak Republic.
    Keywords: transportation, regional growth, inter-regional trade, regional development, ports, urban growth
    JEL: D57 L91 R11 R12 R15 R41
    Date: 2013–09–27
  8. By: Leung, Charles Ka Yui; Tang, Edward Chi Ho
    Abstract: Housing prices in Hong Kong have gained international attention. This study suggests that the housing supply may be insufficient. Consistent with previous studies, we confirm that merely increasing the land supply may not increase the housing supply. We also find preliminary evidence for widening income inequality, which, when combined with unavailability, can lead to unaffordability in the housing market. Given the current housing supply elasticity with respect to price, Hong Kong is not more volatile than major cities in the United States. Thus, improving housing availability and thereby increasing housing supply elasticity, could effectively decrease housing price volatility.
    Keywords: Land policies, housing availability, housing affordability, housing volatility, Granger causality
    JEL: E30 R20 R52
    Date: 2014
  9. By: Stephan Brunow (IAB); Uwe Blien (IAB)
    Abstract: Urbanization and localization effects are known to boost the regional economy and its growth potential. The emergence of these effects is due to localized knowledge flows, the closeness to markets, but also due to the diversity of services and industries. All these effects have the potential to increase the productivity (and profitability) of firms. Whereas many studies have been conducted at the industry or the regional level, this paper adds to the existing literature by starting at the level of establishments and taking the interaction with the surrounding regions into account. This is possible by exploiting an exceptionally large establishment panel study and the employment statistics for Germany. The empirical analyses are carried out in two steps regressions in order to separate the characteristics of establishments from regional influences.
    Keywords: Region, labor productivity, agglomeration effects, MAR-, Jacobs-effects
    Date: 2014–09
  10. By: Akcay, Belgin; Yucel, Eray
    Abstract: Today, it is widely recognized that housing price boom-bust cycles lay at the heart of the latest global financial crisis. A housing boom is commonly defined as a period in which a housing price exceeds its fundamental value. Like most of the European Union member countries, many economies experienced the housing boom during the period of 2000–2006. Moreover, housing booms turned into busts in many countries at about the same period, causing a deep crisis. Our aim in this paper is to look for the determinants of housing price cycles and to investigate the relationship between housing boom-bust cycles and indicators of housing development. For this, we first detect the turning points of housing prices and identify housing price boom-bust cycles for 27 European countries and the US from 1995 to 2013 using quarterly data and a judgmentally augmented version of the dating procedure due to Ball (1994). Having obtained a categorization of boom versus boom-bust countries, in the second step, we reveal the relationships between housing cycles, macroeconomic factors and financial development by means of panel probit analysis.
    Keywords: European Union; House prices; Boom-bust cycles; Financial development
    JEL: C51 C58 E44 G01
    Date: 2014–08–04
  11. By: Luisa Gagliardi
    Abstract: This paper investigates the impact of technological change on local labour market outcomes in Britain. Using a newly assembled panel database for the period 2000-2007 and a directly observed measure of technological change based on patent records, the analysis suggests that employment levels are relatively lower in places that are more exposed to technological shocks depending on their existing industrial specialization. Results also suggest that the magnitude of the impact varies across locations and typologies of workers. The negative impact on employment is particularly evident in areas characterized by weaker agglomeration economies and specialization in mature industries and for intermediate skilled individuals employed in "routinary" activities
    Keywords: Local labour market, employment, technological change, skills
    JEL: R12 R23 R21 O33 J24
    Date: 2014–10
  12. By: Edmark, Karin (Uppsala Center for Labor Studies); Frölich, Markus (University of Mannheim); Wondratschek, Verena (Centre for European Economic Research)
    Abstract: This study analyses whether the Swedish school choice reform, enacted in 1992, had different effects on students from different socio-economic backgrounds. We use detailed geographical data on students’ and schools’ locations to construct measures of the degree of potential choice. This allows us to study the effects of choice opportunities among public schools, whereas previous studies have focused on newly opened private schools. Our results suggest small positive or no effects of choice opportunities, depending on specification and outcome. We find no strong evidence of differences between subgroups; if anything, effects tend to be slightly more positive for disadvantaged groups, such as students from low-income families. Taken together, the results indicate that students from a socio-economically disadvantaged or immigrant background were not harmed by the reform.
    Keywords: school choice; school competition; treatment evaluation; cognitive and non-cognitive skills
    JEL: C21 I24
    Date: 2014–06–23
  13. By: Camila Casas
    Abstract: In this paper, I estimate the demand for housing in Bogotá, modeling electricity consumption explicitly to take into account the crossed subsidies included in Colombian utility rates. I use household level data on housing prices, observable dwelling attributes, and demographic variables to recover the willingness to pay for housing characteristics following the three-step estimation procedure suggested by Bajari and Kahn (2005). First, I regress the price of housing against different observable dwelling characteristics to recover the implicit price of each feature. Next, I infer household-specific preference parameters from the utility maximizing first-order conditions, where a household’s utility depends on these observable characteristics. Finally, I analyze the relationship between demographic variables and the taste parameters estimated in the previous step. In order to study the impact of subsidies on households’ housing decisions, I focus on the impact of changes in the price of electricity on the choice of dwelling size. I find that subsidized households choose bigger dwellings than they would in the absence of subsidies, while those who are taxed choose smaller ones.
    Keywords: Housing Demand, Hedonic Prices, Subsidies, Stratification.
    JEL: H2 H4 I3 R21
    Date: 2014–10–09
  14. By: Esteban Aucejo; Teresa Foy Romano
    Abstract: While instructional time is viewed as crucial to learning, little is known about the effectiveness of reducing absences relative to increasing the number of school days. In this regard, this paper jointly estimates the effect of absences and length of the school calendar on test score performance. Using administrative data from North Carolina public schools, we exploit a state policy that provides variation in the number of days prior to standardized testing and find substantial differences between these effects. Extending the school calendar by ten days increases math and reading test scores by only 0.8% and 0.2% of a standard deviation, respectively; a similar reduction in absences would lead to gains of 5.8% and 3% in math and reading. We perform a number of robustness checks including utilizing u data to instrument for absences, family-year fixed effects, separating excused and unexcused absences, and controlling for a contemporaneous measure of student disengagement. Our results are robust to these alternative specifications. In addition, our findings indicate considerable heterogeneity across student ability, suggesting that targeting absenteeism among low performing students could aid in narrowing current gaps in performance.
    Keywords: Absences, days, schools, teachers
    JEL: I20
    Date: 2014–09
  15. By: Isaksen , Arne (Department of Working Life and Innovation, University of Agder); Trippl , Michaela (CIRCLE, Lund University)
    Abstract: The notion of path dependent regional industrial development has recently received increasing attention in economic geography, innovation studies and related fields. A core idea is that pre-existing industrial and institutional structures constitute the regional environment in which current activities occur and new activities arise. This may lead to a high degree of inertia of industrial structures and reflects the persistence of region-specific institutions, social forms and cultural traditions. The aim of this paper is to take a more nuanced view on regional economic development and to explore conceptually how various types of regions can renew themselves by moving beyond existing paths. Scholarly contributions to regional industrial path development have often emphasised firm-specific routines, norms and tacit knowledge that first of all underpin path extension, i.e., incremental product and process innovations in existing industries and along established technological paths. The paper extends this approach by looking at alternative paths that point to different forms of transformation of regional economies. A distinction between path renewal (branching of existing industries into different but related ones) and path creation (emergence of new industries) is drawn. The paper also extends the mainly micro-level and firm-based views of evolutionary economic geography with an institutional perspective, offered by the regional innovation system (RIS) concept. This enables us to capture the influence of the wider regional environment on the innovation capability of firms. We distinguish between different types of RISs: i) organisationally thick & diversified RISs, ii) organisationally thick & specialised RISs, and iii) organisationally thin RISs. The paper analyses in a conceptual way the relation between these RIS types and forms of regional industrial path development. We demonstrate that various types of regions, with their specific RISs, tend to transform themselves in different ways, i.e., they can be expected to embark on different development paths. We also discuss adequate policy approaches for the various types of regions.
    Keywords: Regional industrial path development; regional innovation systems; innovation policy
    JEL: O18 O38 R11
    Date: 2014–09–28
  16. By: Lehe, Lewis
    Abstract: To show how inclusionary zoning alters development, the author finds the most profitable housing design to build on vacant lots at each location in a monocentric city under different regulatory regimes. Section 1 sets up the model by specifying renter's preferences, geography and building parameters. Section 2 solves the developer's profit-maximization problem at each location under each regime. Finally, in Section 3, a numerical simulation confirms the effects predicted by theory and gives a picture of their magnitude.
    Keywords: Social and Behavioral Sciences, Zoning, Regulation, Housing costs, Price controls, Affordability
    Date: 2014–11–03
  17. By: Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
    Abstract: The Oresund is the most well-known example of European cross-border collaboration, building on the metropolitan area around Copenhagen and, across the sound, southern Sweden with the cities of Malmö, Lund and Helsingborg. Cross-border integration intensified following the opening of a fixed-link bridge/tunnel in 2000. Commuting, student flows and cross-border residency have been on the rise in this knowledge-intensive area. Cross-border cluster efforts have had varying degrees of longevity, with Medicon Valley being the most internationally known brand. After hitting a plateau in terms of integration, the area is seeking renewed inspiration for cross-border efforts. This case study is part of the project Regions and Innovation: Collaborating Across Borders. A summary of this working paper appears in a report of the same name.
    JEL: L52 L53 O14 O18 O38 R11 R58
    Date: 2013–12–11
  18. By: Nyström, Kristina (The Ratio Institute and The Royal Institute of Technology); Viklund Ros, Ingrid (The Royal Institute of Technology)
    Abstract: Every year there is a substantial turbulence in an economy with respect to new firm formation and business closures. Each year, according to Tillväxtanalys (2009), about 100 000 Swedish employees lose their job due to a business closure. However, the share of firm closures vary substantially across Swedish regions (Nyström, 2007; 2009) and consequently the number of workers affected by the firm closure can be expected to vary across regions. In this paper we explore the patterns of regional displacements and to what extent there are differences in the regional capacity to re-employ displaced workers within one year. We use individual-firm level data to identify all establishment closures and re-employments in Sweden during the period 2001-2009. On average the share of displaced workers is 1.22 percent, but the regional variation is substantial. We find that the regional share of re-employments within the region where the displaced worker was employed varies between 15 and 85 percent. We do not find any correlation between the share of displacements and the capacity to absorb displaced workers.
    Keywords: Displacements; exit. Labor mobility; regional development
    JEL: J00 R10
    Date: 2014–10–07
  19. By: Adriaan Hendrik van der Weijde (VU University Amsterdam)
    Abstract: This paper analyzes the effects of price differentiation and discrimination by a monopolistic transport operator, which sets fares in a congestible network. Using three models, with different spatial structures, we describe the operator’s optimal strategies in an unregulated market, a market where price differentiation is not allowed (i.e., ticket prices must be the same for all users), and a market where price discrimination is illegal (i.e., ticket prices must only differ with the marginal external costs of users), and analyze the welfare effects of uniform and non-discriminatory pricing policies. The three models allow us to consider three different forms of price differentiation and discrimination in networks: by user class, by origin-destination pair, and by route. We generalize the existing literature, in which groups usually only differ in their value of time, and hence, there is no distinction between differentiation and discrimination. In our models, users may also have different marginal external costs; we show how these two differences interact. We also show how non-differentiated and non-discriminatory policies may increase or decrease welfare, and that non-discrimination can be worse than non-differentiation. The network models show that results obtained for a single-link network can be generalized to a situation where operators price-discriminate or differentiate based on users’ origins and destinations, but not directly to a situation in which differentiation is based on route choices.
    Keywords: price differentiation, price discrimination, transport, networks, congestion
    JEL: L11 L51 L91
    Date: 2014–08–01
  20. By: Linda Gonçalves Veiga (Universidade do Minho - NIPE); Francisco José Veiga (Universidade do Minho - NIPE)
    Abstract: Using an extensive dataset covering all Portuguese local governments (308), this paper analyzes the determinants of municipal deficits and debt. The results clearly indicate the existence of a political budget cycle, but there is no evidence that fiscal policy is used strategically to condition the decisions of subsequent governments. Furthermore, local governments that enjoy larger support in the town-hall and for which there is party similarity between the mayor and the prime-minister have larger budget balances. Finally, larger shares of investment and of interest payments in expenditures, and higher unemployment rates increase indebtedness, while higher private sector wages, more construction licenses, and greater percentages of the municipal area assigned to urban use are associated with lower indebtedness.
    Keywords: public debt, budget deficits, local governments, Portugal
    JEL: D7 H7 P16
    Date: 2014
  21. By: Hull, Isaiah (Research Department, Central Bank of Sweden)
    Abstract: A standard, no-recourse mortgage contract does not adjust when the value of the underlying collateral falls. Consequently, shocks that lower house prices may trigger one of the necessary conditions for default: negative equity. A common alternative contract attempts to prevent default by imposing full-recourse. This may cause individuals who believe they are likely to default to rent; however, it does not prevent those who buy from experiencing negative equity. I consider a contract that instead precludes negative equity by tying outstanding debt to an index of house prices. This is done in an incomplete markets model that is calibrated to match U.S. micro and macro data. I find that switching to the house price indexed contract reduces the default rate from .72% to .11% and expands homeownership rates among the young and the poor, but pushes up the equilibrium minimum mortgage rate by 90 basis points. The volatility of net cash flows to financial intermediaries also increases slightly under the new contract.
    Keywords: Default; Mortgages; Interest Rates; Heterogeneous Agents; Incomplete Markets
    JEL: E21 E43 G21
    Date: 2014–09–01
  22. By: Dupor, William D. (Federal Reserve Bank of St. Louis); McCrory, Peter B. (Federal Reserve Bank of St. Louis)
    Abstract: In this paper, we study the effects of interregional spillovers from the government spending component of the American Recovery and Reinvestment Act of 2009 (the Recovery Act). Using cross-county Census Journey to Work commuting data, we cluster U.S. counties into local labor markets, each of which we further partition into two subregions. We then compare differential labor market outcomes and Recovery Act spending at the regional and subregional levels using instrumental variables. Among pairs of subregions, we find evidence of fiscal policy spillovers. For example, $1 of Recovery Act spending in a large subregion increases its own wage bill by $0.79 and increases the wage bill in its neighboring subregion by $0.59. We find similar spillover effects when we replace the wage bill with employment as our measure of economic activity. Next, we build a dynamic equilibrium trade model with interregional commuting capable of propagating these spillovers across regions.
    Keywords: fiscal policy; spillovers; the American Recovery and Reinvestment Act.
    JEL: E52 E62
    Date: 2014–10–22
  23. By: Francisco Blasques; Siem Jan Koopman; Andre Lucas; Julia Schaumburg (VU University Amsterdam)
    Abstract: We introduce a new model for time-varying spatial dependence. The model extends the well-known static spatial lag model. All parameters can be estimated conveniently by maximum likelihood. We establish the theoretical properties of the model and show that the maximum likelihood estimator for the static parameters is consistent and asymptotically normal. We also study the information theoretic optimality of the updating steps for the time-varying spatial dependence parameter. We adopt the model to empirically investigate the spatial dependence between eight European sovereign CDS spreads over the period 2009--2014, which includes the European sovereign debt crisis. We construct our spatial weight matrix using cross-border lending data and include country-specific and Europe-wide risk factors as controls. We find a high, time-varying degree of spatial spillovers in the sovereign CDS spread data. There is a downturn in spatial dependence after the first half of 2012, which is consistent with policy measures taken by the European Central Bank. The findings are robust to a wide range of alternative model specifications.
    Keywords: Spatial correlation, time-varying parameters, systemic risk, European debt crisis, generalized autoregressive score
    JEL: C13 C32 C53 E17
    Date: 2014–08–14
  24. By: Edoardo Croci; Davide Rossi
    Abstract: Bike Sharing systems are rapidly spreading around in European cities. Bike sharing is a new type of public transportation based on the use of public bikes to cover relatively short distances in urban areas. It is used both in conjunction with traditional public transport to complete the “last mile”, or in alternative for its flexibility. Usage fees are usually very low, compared to other means of transport, as costs of service are often covered by advertising. In this work we will focus on the case of Milan where the bike sharing system, called "BikeMi", was introduced in 2008 and has already reached over 200 stations and 3.000 bikes with 1.8 million travels in 2013. The aim of the paper is to assess which attractors influence the use of bike sharing stations. The paper also examines the different effect of proximity and visibility of bike sharing stations from attractors. An econometric analysis is performed, based on the data set of use of the system and on GIS information on the position of bike sharing stations and attractors. The main results suggest that the presence of metro and train stations, universities, museums, cinema and restricted traffic areas in correspondence of bike sharing stations significantly increase use. On the other hand the presence of tram and bus stops and theatres does not and has an opposite influence. With respect to visibility, there is a positive effect for tram, bus and metro stops, theatres and cinemas. On the other hand, universities and museums show a negative correlation. The results appear robust to the inclusion of time and other possible confounding variables, such as weather conditions. The analysis supports the relevance of the role of urban planning for the best positioning of bike sharing stations and the need to carefully consider the features of surrounding environment to optimise the distribution of bike sharing stations in a territory.
    Keywords: bike sharing, sustainable mobility, urban mobility
    JEL: D04 Q58 R42
    Date: 2014
  25. By: Takeshi MIYAZAKI
    Abstract: Very few studies have made projections by local government unit or number of years elapsed after an earthquake disaster occurring directly beneath the Tokyo metropolitan area (northern Tokyo Bay earthquake) for the amount of the burden that local governments would bear, the amount that would be spent from general revenue revenues, or the amount of change that would be made to the ordinary local allocation tax. Therefore, I estimated the impact of an earthquake occurring directly beneath the Tokyo metropolitan area on the finances of local governments. The estimation revealed the following insights. First, the financial burden that local governments would bear for earthquake disaster related projects in the case of the earthquake would be 24.3–30.4 trillion yen over five years, and in the third year after the earthquake disaster, the burden ratio to general revenue resources would be 33.6–42.1% and the ratio to the total amount of the local allocation tax would be 32.5–39.8%, which indicates great financial burdens for the central and local governments. Second, the burden that local governments would bear for rehabilitation projects would have little effect on the finances of local governments, whereas the burden for reconstruction projects would have an immense effect on the finances of local governments. Third, the Tokyo Metropolitan Government would bear the greatest burden of the local governments in the case of an earthquake occurring directly beneath the Tokyo metropolitan area, but Saitama Prefecture would bear the least burden.
    Date: 2013–01
  26. By: Martijn I. Dr�es (University of Amsterdam, VU University Amsterdam, and the Amsterdam School of Real Estate, the Netherlands); Hans R.A. Koster (VU University Amsterdam)
    Abstract: In many countries, wind turbines are constructed as part of a strategy to reduce dependence on fossil fuels. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby houses. A unique house price dataset covering the period 1985-2011 is used, including the exact location of all wind turbines built in the Netherlands. We find that house prices within a two kilometer radius of a turbine, after it has been constructed, decrease by about 1.4 to 2.3 percent on average. We find anticipation effects up to three years in advance of the construction of a wind turbine. We provide further evidence that the external costs of a wind turbine are at least 10 percent of its construction cost.
    Keywords: renewable energy; wind turbines; externalities; house prices
    JEL: R31 Q42 Q15 L94
    Date: 2014–09–18
  27. By: Lorenzo Carrera (Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice and Euro-Mediterranean Centre on Climate Change); Gabriele Standardi (Fondazione Eni Enrico Mattei and Euro-Mediterranean Centre on Climate Change); Francesco Bosello (Fondazione Eni Enrico Mattei, Euro-Mediterranean Centre Climate Change and University of Milan); Jaroslav Mysiak (Fondazione Eni Enrico Mattei and Euro-Mediterranean Centre on Climate Change)
    Abstract: In this paper we developed and tested an integrated methodology for assessing direct and indirect economic impacts of flooding. The methodology combines a spatial analysis of damage to physical stocks with a general economic equilibrium approach using a regionally-calibrated (to Italy) version of a Computable General Equilibrium (CGE) global model. We applied the model to the 2000 Po river flood. To account for the uncertainty in the induced effects on regional economies, we explored three disruption and two recovery scenarios. The results prove that: i) indirect losses are a significant share of direct losses, and ii) the model is able to capture both positive and negative economic effects of a disaster in different areas of the same country. The assessment of indirect impacts is essential for a full understanding of the economic outcomes of natural disasters.
    Keywords: Flood Risk, Indirect Impacts, Computable General Equilibrium, Natural Disasters
    JEL: Q5 Q54
    Date: 2014–10
  28. By: José M. Martínez-Carrión; Pedro M. Pérez-Castroviejo; Javier Puche-Gil; Josep M. Ramon-Muñoz
    Abstract: This paper examines the urban-rural differences of the height during the early stages of modern economic growth and industrialization in Spain. Its aim is to explore the extent of the urban penalty, and the changes of biological welfare in the cities and villages, in the rural and urban areas. We use height data of military recruitment records between 1857 and 1936, that provide information on the health and net nutrition of cohorts 1837-1915. We note that previous studies reported higher penalty in rural areas than in cities, and that the height deteriorated in the most industrialized cities due to unhealthy environments, child labor and spread of infections. The new data shows that in some rural areas had better nutritional status that in urban areas with better care resources, so the rural-urban gap was more diverse than we thought, not only by environmental factors but institutions. Data suggests more research on height by social classes in the diverse Spanish geography.
    Keywords: Rural-Urban Gap, Height, Biological Well-being, Living Standard, Spanish industrialization
    JEL: N33 D63 I12 I31
    Date: 2014–10
  29. By: Pierre-Daniel Sarte (Federal Reserve Bank of Richmond); Fernando Parro (Federal Reserve Board); Esteban Rossi-Hansberg (Princeton University); Lorenzo Caliendo (Yale University)
    Abstract: We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we calibrate the model and carry out a variety of counterfactual experiments that allow us to gauge the impact of regional and sectoral productivity changes. We find that such changes can have dramatically different effects depending on the sectors and regions affected. In extreme cases, increases in productivity can have negative effects on real GDP (although welfare effects remain positive).
    Date: 2014
  30. By: Liu, Ju (CIRCLE, Lund University)
    Abstract: This paper explores the influencing mechanism of geographical and organisational proximity/distance on the intra-firm relations and external linkages in multinational companies’ (MNCs) global innovation networks (GINs). It adopts an in-depth case study method and employs social network analysis to study the relational pattern of the case GINs and to understand how the relations are organised and why they are organised in a certain pattern. It is found that the intra-firm relations of both case MNCs’ GINs are similarly organised in a global way. The external linkages in the two case GINs are organised in different ways (global vs local) which depend on the dominant knowledge is science-based or engineering-based. Two influencing mechanisms, namely complementary effect and conditional reinforcing effect, are found and discussed. Evidences in practice are identified.
    Keywords: Global innovation network; MNC; Geographical proximity; Organisational proximity; Social network analysis
    JEL: D85 F23 L62 L63
    Date: 2014–09–10
  31. By: Beria, Paolo; Grimaldi, Raffaele
    Abstract: Transport mobility plans, especially at the urban scale, are commonly produced by administrations. However, the decisions involved are often taken on a qualitative basis or, at best, by setting some indicators and verifying how much a plan or a scenario reaches the politically decided targets (e.g. “increasing by 10% the use of bikeâ€). However, given that decisions on plans involve relevant public investments and may also determine radical changes in users’ costs, a more quantitative and comprehensive approach to the evaluation is needed. Cost Benefit Analysis is the tool commonly used to assess public expenditure, but its application to mobility plans introduces further practical and theoretical complexity. The aim of the paper is to discuss how CBA can be used to assess complex and multi-modal mobility plans (involving for example both infrastructural investments and lighter sustainable mobility policies). Firstly we will discuss which are the complexities involved by plan assessments vs. infrastructure assessments. Secondly, we will revise the available approaches, namely the Generalised Costs comparison approach, the Rule of Half and the logsum functions for the perfect integration between CBA and transport models. Thirdly, we will comment the main advantages and problems of the last approach, namely, the logsum, clarifying why it is the most suitable for the assessment of plans made of a broad range of policies and actions. Finally, we will outline an ongoing application for the assessment of the SUMP (Sustainable Urban Mobility Plan) of Milan’s municipality.
    Keywords: cost benefit analysis; transport planning; transport models; rule of half; logsum; Milan; Italy
    JEL: D61 R42 R48
    Date: 2014
  32. By: Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: This paper analyzes the implications of international knowledge diffusion for the costs of Baltic-wide policy to reduce nutrient emissions to the Baltic Sea. In particular, the impact on the distribution of abatement and costs over time and space is investigated, and the relative importance of knowledge spillovers between countries and nutrient spillovers between marine basins is examined. Using a spatial and dynamic cost-effectiveness model over the Baltic Sea drainage basin, it is shown that theoretically, the presence of knowledge spillovers could imply that abatement can be cost-effective even if the cost is comparatively high and the impact on water quality is zero. The empirical simulations show that a more likely outcome is that higher knowledge dispersal leads to a further concentration of abatement to countries with large, low-cost abatement opportunities.
    Keywords: Baltic Sea; knowledge spillovers; learning rate; nitrogen.
    JEL: Q52 Q53 Q55
    Date: 2014–09–26
  33. By: Bethencourt, Carlos; Kunze, Lars
    Abstract: Empirical evidence suggests that family background and parental criminality are strong predictors of an individuals’ criminal behavior. The aim of this paper is to account for this intergenerational nature of criminal behavior within a simple theoretical model. Drawing on the literature of cultural transmission, we model the dynamics of moral norms of good conduct (honest behavior). Individuals’ criminal behavior and morality are strategic complementarities that reinforce each other. We establish the existence of multiple steady states and provide conditions on the socialization process under which both types - honest and dishonest - survive in the long run even though parents commit crime but at the same time agree that honesty is desirable. Our model provides a novel explanation of why crime is highly concentrated in specific areas and also why crime rates tend to be persistent over time. An empirical application reveals that our model can account for the differential reductions in property crime rates across US federal states since the 1980s.
    Keywords: crime, cultural transmission
    JEL: D91 H26 Z13
    Date: 2014–09–04
  34. By: Frank Van Nieuwenhove (National Bank of Belgium, Microeconomic Information Department)
    Abstract: This study assesses the economic importance of air transport and airport activities in Belgium in terms of value added, employment and investment over the 2009-2012 period 1 . The sector considered embraces not only the activities directly connected with air transport, but also all the activities that take place on site at the six Belgian airports (Antwerp, Brussels, Charleroi, Kortrijk, Liège and Ostend). The study reviews the direct and indirect effects of the sector on the basis of microeconomic data (mainly obtained from the Central Balance Sheet Office) and macroeconomic data (from the National Accounts Institute). It also includes an analysis of the social balance sheet and certain ratios using Central Balance Sheet Office data. In 2012, air transport and airport activities generated € 5.6 billion in direct and indirect value added (i.e. 1.5 % of Belgian GDP) and employed 66,200 people in full-time equivalents (FTEs) either directly or indirectly (1.7 % of domestic employment). Brussels Airport is the country’s biggest airport in terms of passenger traffic, but has seen its leading position somewhat eroded by Charleroi, which with Ryanair has staged robust growth in the low-cost segment. Meanwhile, Liège has assumed the position of leading cargo airport and currently accounts for over half of total cargo traffic to and from Belgium. Charleroi and Liège are the fastest growing airports in terms of value added and employment. With the exception of Ostend, the Flemish regional airports have also proved resilient on both counts, while Brussels Airport may be described as holding more or less steady.
    Keywords: air transport, airport activities, sector analysis, indirect effects, employment, value added, investment
    JEL: C67 D40 J21 L93 R15 R34 R41
    Date: 2014–11
  35. By: Aksoy, Cevat Giray
    Abstract: Are fertility responses to local unemployment homogenous across sub-demographic groups? This paper investigates how changes in local unemployment rates affect household fertility decisions in England while taking sub-demographic differences into account. Recognizing that labor market status is a major determinant of child rearing decision, and assuming that children are normal goods, this paper hypothesizes that an increase in male and female unemployment will have different effects on the current period fertility. Using the Labor Force Survey and Birth Statistics data from the Office for National Statistics, this study shows that female unemployment tends to increase births whereas male unemployment has the opposite effect. More importantly, reported results indicate that unemployment and fertility relation exhibits strong age group and educational attainment gradients. In addition, a persistent counter-cyclical fertility pattern has also been documented at the ceremonial county level.
    Keywords: Unemployment, Fertility
    JEL: J13 J19 J23
    Date: 2014–06–01
  36. By: Fullerton, Thomas M., Jr.; Mukhopadhyay, Somnath
    Abstract: Border region transportation forecast analysis is fraught with difficulty. In the case of El Paso, Texas and Ciudad Juarez, Chihuahua, Mexico, dual national business cycles and currency market fluctuations further complicate modeling efforts. Incomplete data samples and asymmetric data reporting conventions further confound forecasting exercises. Under these conditions, a natural alternative to structural econometric models to consider is neural network analysis. Neural network forecasts of air transportation and international bridge activity are developed using a multi-layered perceptron approach. Those out-of sample simulations are then compared to previously published forecasts produced with a system of simultaneous econometric equations. Empirical results indicate that the econometric approach is generally more accurate. In several cases, the two sets of forecasts are found to contain complementary information.
    Keywords: Regional Transport Demand; Neural Networks; Econometric Forecasting
    JEL: C53 R41
    Date: 2013–04–11
  37. By: Emran, M. Shahe; Shilpi, Forhad
    Abstract: The existing studies report substantial improvements in educational mobility in post-reform India using intergenerational regression coefficient (IGRC) across age cohorts in a cross-section survey. In contrast, our estimates of sibling (SC) and intergenerational (IGC) correlations for the same age cohort from two surveys show strong persistence, stronger than in Latin America, which remained largely unchanged from 1991/92-2006. Only the women in urban areas experienced substantial improvements, with the lower caste urban women benefitting the most. As measures of mobility, IGC and SC are more informative and robust than IGRC, and the widely accepted conclusions based on IGRC alone may be misleading.
    Keywords: Intergenerational Mobility, Education, Equality of Opportunity, Sibling Correlation, Intergenerational Correlation, Economic Liberalization, Rural-Urban Inequality, Gender Gap, India
    JEL: I0 I3 O1
    Date: 2014–09–03
  38. By: Daan in 't Veld (University of Amsterdam); Marco van der Leij (University of Amsterdam, and De Nederlandsche Bank, the Netherlands); Cars Hommes (University of Amsterdam, the Netherlands)
    Abstract: Recent empirical evidence suggests that financial networks exhibit a core periphery network structure. This paper aims at giving an economic explanation for the emergence of such a structure using network formation theory. Focusing on intermediation benefits, we find that a core periphery network cannot be unilaterally stable when agents are homogeneous. The best-response dynamics converge to a unique unilaterally stable outcome ranging from an empty to denser networks as the costs of linking decrease. A core periphery network structure can form endogenously, however, if we allow for heterogeneity among agents in size. We show that our model can reproduce the observed core periphery structure in the Dutch interbank market for reasonable parameter values.
    Keywords: financial networks, core periphery structure, network formation models
    JEL: D85 G21 L14
    Date: 2014–07–28
  39. By: Hugo Emilio Silva (VU University Amsterdam); Robin Lindsey (University of British Columbia); Andr� de Palma (University of British Columbia, Canada); Vincent A.C. van den Berg (VU University Amsterdam, the Netherlands)
    Abstract: This paper investigates the existence and uniqueness of equilibrium in the Vickrey bottleneck model when each user controls a positive fraction of total traffic. Users simultaneously choose departure schedules for their vehicle fleets. Each user internalizes the congestion cost that each of its vehicles imposes on other vehicles in its fleet. We establish three results. First, a pure strategy Nash equilibrium (PSNE) may not exist. Second, if a PSNE does exist, identical users may incur appreciably different equilibrium costs. Finally, a multiplicity of PSNE can exist in which no queuing occurs but departures begin earlier or later than in the social optimum. The order in which users depart can be suboptimal as well. Nevertheless, by internalizing self-imposed congestion costs individual users can realize much, and possibly all, of the potential cost savings from eit her centralized traffic control or time-varying congestion tolls.
    Keywords: Bottleneck model, Large users, Atomic users, Existence of Equilibrium, Uniqueness of Equilibrium
    Date: 2014–06–27
  40. By: Angel de la Fuente; Ramón Barberan; Ezequiel Uriel
    Abstract: This paper develops a methodology for the construction of a System of Regionalized Public Accounts (SRPA) using a burden-benefit approach and applies this methodology to the year 2005. The SRPA provides a detailed picture of the regional distribution of the tax burden and of the benefits arising from public expenditure and can be used to make homogeneous comparisons across regions in terms of many budgetary aggregates. This new statistical tool allows a much richer analysis of the regional incidence of public sector activity than the standard approach based on the calculation of regional net fiscal balances that has been used in many previous studies.
    Keywords: Spain, regional fiscal balances, regionalized public accounts
    JEL: H10 H60
    Date: 2014–08
  41. By: Roel van Veldhuizen (WZB Berlin Social Science Center); Hessel Oosterbeek (Universiteit van Amsterdam); Joep Sonnemans (Universiteit van Amsterdam)
    Abstract: In an influential study, Mas and Moretti (2009) find that “worker effort is positively related to the productivity of workers who see him, but not workers who do not see him”. They interpret this as evidence that social pressure can reduce free riding. In this paper we report an attempt to reproduce the findings of Mas and Moretti in a lab experiment. Lab experiments have the advantage that they can shut down alternative channels through which workers can influence the productivity of colleagues whom they observe. Although the subjects in our experiment are aware of the productivity of others and although there is sufficient scope for subjects to vary their productivity, we find no evidence of the type of peer effects reported by Mas and Moretti. This suggests that their findings are less generalizable than has been assumed.
    Keywords: peer effects, experiment, laboratory experiment
    JEL: C91 J24
    Date: 2014–04–29
  42. By: Nyström, Johan (VTI); Lind , Hans (KTH); Nilsson , Jan-Eric (VTI)
    Abstract: One policy that is believed to increase the rate of innovation and the level of productivity is to move from Design-bid-build contracts (DBB) to Design-Build contracts (DB). A common view is that the latter provides the contractor more degrees of freedom to enable innovation. This hypothesis consists of two steps, first that DB actually has more degrees of freedom and secondly that more degrees of freedom leads to more innovation. This paper focuses on the first step and is based on a review of five road construction projects – two labelled DBB and three DB. It is demonstrated that there is a gap between the textbook definition of the two types of contracts and the actual design of the examples. The degrees of freedom for the contractor are restricted in both DB and DBB contracting and no significant difference in this dimension could be established. Based on this lack of difference in the five projects, the expectation of innovation for the labelled contracts cannot be settled. Some possible rational reasons for the client to restrict the degrees of freedom are also suggested.
    Keywords: Innovation; Contracting; Design Bid Build (DBB); Design and Build (DB)
    JEL: D86 H57 L74
    Date: 2014–10–24
  43. By: Swenson, David A.
    Abstract: This analysis measures the economic value of Iowa’s public universities – The University of Iowa, Iowa State University, and the University of Northern Iowa.� There are two dimensions evaluated: the overall worth of operating the universities as educational and service institutions and the value of student spending in their respective area economies.� This analysis incorporates a number of best practices for measuring the worth of universities to regional economies.
    Keywords: economic impact; university economic impact; input output analysis
    Date: 2014–10–09
  44. By: Managi, Shunsuke; Tanaka, Kenta
    Abstract: The Great East Japan Earthquake, which occurred on March 11, 2011, triggered the Fukushima nuclear power plant accident. This study estimates the economic damage caused by the radioactive contamination from the plant using a hedonic approach. Our estimation results show that an increase of 1 decreases the land price by 3.39% on average in Fukushima and Miyagi prefectures. Specifically, damage due to the radiation effect is estimated to cost approximately 64.1 billion yen in Fukushima. In addition, our result shows that commercial and business areas are more sensitive than residential areas to the radiation quantity.
    Keywords: Disaster,Hedonic model,Nuclear power plant accident, Land use type
    JEL: Q52 R19
    Date: 2014–10
  45. By: David W. Johnston; Grace Lordan; Michael A. Shields; Agne Suziedelyte
    Abstract: We investigate if there is a causal link between education and health knowledge using data from the 1984/85 and 1991/92 waves of the UK Health and Lifestyle Survey (HALS). Uniquely, the survey asks respondents what they think are the main causes of ten common health conditions, and we compare these answers to those given by medical professionals to form an index of health knowledge. For causal identification we use increases in the UK minimum school leaving age in 1947 (from 14 to 15) and 1972 (from 15 to 16) to provide exogenous variation in education. These reforms predominantly induced adolescents who would have left school to stay for one additionally mandated year. Naïve ordinary least squares estimates suggest that education significantly increases health knowledge, with a one-year increase in schooling increasing the health knowledge index by 15% of a standard deviation. In contrast, estimates from instrumental-variable models show that increased schooling due to the education reforms did not significantly affect health knowledge: a one-year increase in schooling is estimated to decrease the health knowledge index by 0.1% of a standard deviation. This main result is robust to numerous specification tests and alternative formulations of the health knowledge index. Further research is required to determine whether there is also no causal link between higher levels of education - such as post-school qualifications - and health knowledge.
    Keywords: Education, health, knowledge, compulsory schooling, causality
    JEL: I20 I10 I12
    Date: 2014–09
  46. By: Cory Koedel (Department of Economics, University of Missouri-Columbia); Rajeev Darolia; Paco Martorell; Katie Wilson; Francisco Perez-Arce
    Abstract: We sent nearly 9,000 fictitious resumes to advertisements for job openings in seven major cities in the United States across six occupational categories. We randomly assigned names to the resumes that convey race and gender but for which a strong socioeconomic connotation is not implicated. We find little evidence of systematic employer preferences for applicants from particular race and gender groups
    Keywords: Employment, Discrimination, Race/Ethnicity, Gender, Field Experiment
    JEL: J71 C93
    Date: 2014–10–20
  47. By: Roberto Martino; Phu Nguyen-Van
    Abstract: Deregulation of the labour market and public budget balance are usually consid- ered a fundamental requirement for economic performance. This study analyses the long term relationship between these indicators and gross value added (GVA) for a panel of European regions from 1995 to 2008. Following Olley and Pakes (1996) and Levinsohn and Petrin (2003), a structural equation is estimated using a two stages semi-parametric procedure. Results suggest no univocal evidence of a detri- mental effect of labour protection on long term GVA, while public deficit spending is positively associated with higher output. A negative relationship with debt arises only for economies with very high debt/GDP ratios.
    Keywords: Labour protection; convergence criteria; production function; European Union.
    JEL: C20 E23 O47 R11
    Date: 2014
  48. By: Virkola, Tuomo
    Abstract: This paper provides a characterization of the fiscal policy framework in four established federal countries with heterogeneous intergovernmental relations and demographic characteristics: Canada, Germany, Switzerland and the United States. We consider the implications of fiscal federalism from three different perspectives. First, we study the allocation of expenditure responsibilities and revenue generating instruments to different levels of government (federal, state and local) and discuss the role of intergovernmental transfers schemes and fiscal rules in each country. Second, we study the implementation of macroeconomic stabilization policy across different levels of government. Third, we discuss the evidence on the degree of inter-state risk sharing and the role of federal transfers in smoothing regional income shocks in federal countries. We conclude with the main implications to the euro area and to the debate on common fiscal instruments.
    Keywords: fiscal federalism, fiscal union, risk sharing
    JEL: E62 H60 H70
    Date: 2014–10–31
  49. By: Dávid Csercsik (Game Theory Research Group, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Pázmány Péter Catholic University)
    Abstract: Local routing protocols in scale free networks have been extensively studied. In this paper we consider a wireless contextualization of this routing problem and analyze on the one hand how cooperation affects network efficiency, and on the other hand the stability of cooperation structures. Cooperation is interpreted as local exchange of topological information between cooperating agents, and the payoff of a certain node is defined based on its energy consumption during the routing process. We show that if the payoff of the nodes is the energy saving compared to the all-singleton case, basically coalitions are not stable. We introduce coalitional load balancing and net reward to enhance coalitional stability and thus the more efficient operation of the network. As in the proposed model cooperation strongly affects routing dynamics of the network, externalities will arise and the game is defined in a partition function form.
    Keywords: partition function form games, networks, local routing
    JEL: C71 L14 L96
    Date: 2014–06
  50. By: Driouchi, Ahmed
    Abstract: Abstract: Economic studies on migration of skilled labor are mainly related to those trained in the country of origin but are increasingly including students trained abroad that return or not to their home countries. There are incentives and constraints that are provided by both origin and destination countries but the living conditions and the expected relative wages appear to be the most important sources of attraction of students to migrate. The restrictions of access to some schools such as those of medical sciences and architecture could be also driving further migration. The internationalization of the education system and the delocalization of universities in relation to globalization and trade in services are also encouraging these movements. These directions are likely to be expanded under the high levels of unemployment and the expected low local wages. This paper expands early models of skilled labor migration to account for students. Empirical investigations based on Arab countries are pursued. They show clearly the importance of this movement and its determination mainly by the differences in relative expected wages and the anticipated living conditions.
    Keywords: Keywords: Migration, students, Arab World, OECD, theory, applications.
    JEL: J6 O1
    Date: 2014–09–24

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