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on Urban and Real Estate Economics |
| By: | Arthur Grimes (Motu Economic and Public Policy Research and the University of Auckland); Eyal Apatov (Motu Economic and Public Policy Research); Larissa Lutchman (The University of Auckland); Anna Robinson (Motu Economic and Public Policy Research) |
| Abstract: | We analyse impacts that infrastructure provision and other factors have on long run urban growth. Reflecting spatial equilibrium insights, growing cities have preferred attributes relative to other cities. These attributes may include natural characteristics, social amenities and transport infrastructure that have productive and/or amenity value. We outline a theoretical model that includes distance-related effects on individual utility and thence population location, and we test this model using historical data covering 1926 to 2006 across 56 New Zealand towns. Instruments dating back to 1880 are used to deal with potential endogeneity issues, and we use spatial-econometrics techniques to test for spatial spillovers between cities. |
| Keywords: | Infrastructure; city development; population growth; migration; spatial equilibrium |
| JEL: | H54 R12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:14_11&r=ure |
| By: | Leszczyński, Robert; Olszewski, Krzysztof |
| Abstract: | We analyse the determinants of house prices in the primary and secondary market of 17 largest cities in Poland during the 2002-2013 period. We find that prices are driven by economic fundamentals, such as income growth or rise in employment. Prices in the secondary market react to increases in the loan availability, that was driven by low interest rates resulting from FX denominated housing loans that were granted since 2006. This finding does not hold for the primary market, which is to a large extent financed with cash. We confirm empirically that the house appreciation in the past period has a strong effect on the current price, which confirms herding behaviour in the housing market. Another finding is that the secondary market has a stronger effect on the primary market than the other way around. This means that housing demand is satisfied in the first place from the secondary market, and if prices rise, potential buyers go to the primary market. Finally, we find that price increases in Warsaw spill over to the local markets of 16 regional cities. This finding is consistent with the contagion theory in the real estate market, according to which price increases in the centre lead to price increases in the periphery. |
| Keywords: | housing market, house prices, primary and secondary market, spillover effects |
| JEL: | E21 R21 R31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59017&r=ure |
| By: | Martin Micheli (RWI Essen, Germany); Jan Rouwendal (VU University Amsterdam, the Netherlands); Jasper Dekkers (VU University Amsterdam, the Netherlands) |
| Abstract: | We estimate the effect of the Dutch-German border on house prices. In the last 40 years the development of house prices in the Netherlands and Germany has been substantially different. While the Netherlands have been hit by two real estate cycles, prices in Germany have been extraordinary stable. We develop a model for studying house prices and the impact of the border. Then we study the development of Dutch house prices close to the German border in the period 1985-2013. Next, combining German and Dutch real estate datasets, we study the jump in the housing price occurring at the border. Using different estimation strategies, we find that ask prices of comparable housing drop by about 16% when one crosses the Dutch-German border. Given that price discounts from the last observed asking price are substantially larger in Germany, we interpret our findings as indicating the willingness of Dutch households to pay up to 26% higher house prices to live among the Dutch. |
| Keywords: | house prices, European integration, border effects |
| JEL: | R31 F15 R21 |
| Date: | 2014–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140141&r=ure |
| By: | Luis Delfim Santos (University of Porto, Faculty of Economics and cef.up); Isabel Martins (University of Porto, CEGOT) |
| Abstract: | Geographical Information Systems (GIS) are an essential tool to integrate and manage large amounts of data (statistical and graphical) and to visualise the modelling efforts of the contemporary city. The further use of spatial analysis methods, in particular the exploratory analysis of data and spatial econometric models, is a promising way forward to analyse urban reality. In this analysis, we used a conceptual model and a geographical database developed for the city of Porto (Portugal) under a previous research on the topic of intra-urban disparities in the local quality of life. The aim of this paper is to contribute to the interdisciplinary debate on the relevance and use of this type of techniques, which enable us to describe spatial distributions, identifying patterns of spatial association, concentration areas or hot spots, in order to look into distributive features such as concentration, persistence and transitions that might provide interesting interpretations of complex territorial structures, such as the cities. |
| Keywords: | urban disparities; spatial analysis; quality of life |
| JEL: | R58 O21 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:1403&r=ure |
| By: | Tomoya Mori (Institute of Economic Research, Kyoto University); Tony E. Smith (Department of Electrical and Systems Engineering, University of Pennsylvania) |
| Abstract: | The standard approaches to studying industrial agglomeration have been in terms of summary measures of the “degree of agglomeration” within each industry. But such measures often fail to distinguish between industries that exhibit substantially different spatial scales of agglomeration. In a previous paper, Mori and Smith [45] proposed a new pair of quantitative measures for distinguishing both the scale and degree of industrial agglomeration based on an explicit method for detecting spatial clusters. The first, designated as the global extent (GE) of industrial clusters, measures the spatial spread of these clusters (within a given country) in terms of the areal size of their essential containment, defined to be the (convex-solid) region containing the most significant subset of these clusters. The second, designated as the local density (LD) of industrial clusters, measures the spatial extent of individual clusters within their essential containment in terms of the areal share of that containment occupied by clusters. The central purpose of the present paper is to apply these two measures to the manufacturing industries in Japan, and to demonstrate how they can be used in combination to distinguish both the relative scale and degree of agglomeration exhibited by cluster patterns for each industry. In addition, the information provided by this pair of measures (GE, LD) is systematically compared to that of the most prominent summary measures currently in use. Finally, it is shown that these measures also support certain predictions of new economic geography models in the sense that shipping distances for establishments in each industry tend to be negatively (positively) correlated with the GE (LD) measures of agglomeration in these industries. |
| Keywords: | Industrial Agglomeration, Cluster analysis, Spatial patterns of agglomeration, Shipment distances, New economic geography |
| JEL: | C49 L60 R12 R14 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:904&r=ure |
| By: | Ruben van Loon (VU University Amsterdam); Tom Gosens (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam) |
| Abstract: | Many cities are trying to attract tourists by investing in urban amenities. Cultural heritage is an important example and substantial investments are needed to keep ancient inner cities and characteristic monumental buildings in good shape. The costs of these policies are usually clear, the benefits are often much more difficult to assess. This paper attempts to fill part of this gap by studying the destination choices of urban recreation trips that have urban recreation as the main travel motive. We estimate a discrete choice model for destination choice that takes into account the potential importance of unobserved characteristics. The model allows us to compute the marginal willingness to travel for destinations offering more cultural heritage, which we measure as the area of the inner city that has a protected status because of the cultural heritage that is present there. |
| Keywords: | Cultural heritage, recreation, city marketing |
| JEL: | C31 D12 R12 R22 L83 |
| Date: | 2014–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140049&r=ure |
| By: | Brinkman, Jeffrey (Federal Reserve Bank of Philadelphia) |
| Abstract: | The share of high-skilled workers in U.S. cities is positively correlated with city size, and this correlation strengthened between 1980 and 2010. Furthermore, during the same time period, the U.S. economy experienced a significant structural transformation with regard to industrial composition, most notably in the decline of manufacturing and the rise of high-skilled service industries. To decompose and investigate these trends, this paper develops and estimates a spatial equilibrium model with heterogeneous firms and workers that allows for both industry-specific and skill-specific technology changes across cities. The estimates imply that both supply and demand of high-skilled labor have increased over time in big cities. In addition, demand for skilled labor in large cities has increased somewhat within all industries. However, this aggregate increase in skill demand in cities is highly concentrated in a few industries. The finance, insurance, and real estate sectors alone account for 35 percent of the net change over time. |
| Keywords: | Production; Amenities; Cities; Skilled labor |
| JEL: | J21 J61 R12 |
| Date: | 2014–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:14-32&r=ure |
| By: | Deltas, George; De Silva, Dakshina G.; McComb, Robert P. |
| Abstract: | We use geocoded administrative data from Texas on all business establishments to estimate the effects of localization economies on the spatial persistence of industrial employment for the software industry. We decompose this persistence into components arising from entry rates, firm growth, and exit rates. Unlike previous research that has used geographies based on county and MSA divisions, this analysis takes place at a very high level of spatial resolution in which the industrial composition is identified within areas as small as one mile in radius. The choice of the software industry allows us to isolate the effects arising from human capital spillovers and the effects arising from the labor pool channel from other sources of agglomeration economies. Moreover, the decomposition of the employment persistence in entry, growth and exit, and the high level of spatial resolution allow us to distinguish between these two effects and has a number of other advantages. The results suggest that a location, defined as a 1-mile radium circle, with an initial concentration of software industry employment, retains a disproportionate number of software industry employees 6 years later. Software industry employment in the surrounding area has a small and often insignificant effect, i.e., any agglomeration effects dissipate rapidly over space. The results are not driven by higher growth rates of software establishments in high concentration locations or by differences in the survival probabilities. Rather, they are fully accounted for by two factors: (i) the retention of jobs lost by an establishment in a location by other establishments in that same location and (ii) an increased propensity of software establishments to enter in or near locations with prior software establishment presence. The entry effect diminishes sharply beyond one mile. These findings are mostly consistent with labor channel effects, including the possibility of spin-offs locating near existing firms, but disembodied human capital spillovers might also be present to some extent. |
| Keywords: | Agglomeration economies, labor pools, knowledge spillovers, firm growth |
| JEL: | R12 |
| Date: | 2014–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58751&r=ure |
| By: | Nagayasu, Jun |
| Abstract: | We empirically analyze regional inflation using data from Japan where there is no regulation to impede the free movement of labor, capitals, goods and services across regions. In particular, our analysis will focus on the geographical location of regions and the productivity effect as explanation for the dynamics of regional inflation. Technically, given that home inflation is often affected by that of neighbors, spatial models have been employed in order to explicitly capture this spillover effect. Similarly, the productivity spillover is modelled in the specification. Then we find that both spatial location and productivity are important determinants of regional inflation. Furthermore inflation persistence is reported to play an important role in explaining regional data. |
| Keywords: | Regional inflation, Balassa-Samuelson effect, transaction costs, spatial econometric models |
| JEL: | E3 F3 R1 |
| Date: | 2014–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59220&r=ure |
| By: | William H. Rogers (Department of Economics, University of Missouri-St. Louis); Anne E. Winkler (Department of Economics, University of Missouri-St. Louis) |
| Abstract: | The housing and labor market crises of the late 2000s left few families and individuals unscathed. In the wake of these events, evidence points to more “doubling-up” of families in the same household. To what extent have these crises affected individuals’ decisions to live independently? What differentiates this study from others is the careful attention paid to the role of housing market conditions – as measured by MSA-level housing prices, rents, and foreclosure rates – on this decision. The empirical analysis is conducted by appending data on area-level conditions for 85 of the largest MSAs in the United States to individual-level data from the ACS PUMS on living arrangements of young adults ages 22 to 34 living in these MSAs. The analysis spans the period 2005 (pre-crisis) through 2011. Within this time period, all MSAs experienced a rise in housing prices, a peak, and then a decline. Regarding the area-level variables, we find a robust statistically significant effect for rent only. Our broader conclusion is that it is individual-level factors, not area-level conditions that largely lie behind young adults’ living arrangement decisions. |
| Keywords: | Living Arrangements, Labor Market, Housing Market, Foreclosures. |
| JEL: | J12 R23 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:msl:workng:1005&r=ure |
| By: | Augustyniak, Hanna; Åaszek, Jacek; Olszewski, Krzysztof; Waszczuk, Joanna |
| Abstract: | This paper presents a simple disequilibrium model in the primary housing market, calibrated to the Warsaw market. Our aim is to point out that the primary housing market, due to the long construction process is always in disequilibrium, which has important policy implications. We discuss the last housing cycle and show how a combination of slight demand shocks with short-term rigid supply leads to strong fluctuations of house prices and new construction. The primary market can create a significant distress to the economy, because when house prices rise, this sector attracts capital and workers and is able to generate excessive supply, which finally can lead to the burst of the price bubble. The cyclical character is a permanent feature of the property market and can be explained by the inelasticity of supply. Market participants form price and demand expectations based on past observations. This causes frequent cycles that, under specific conditions, can lead to economic crises. We believe that the model describes the reality of the primary housing market better than equilibrium models do, so it can be useful for central banks and financial supervision institutions in the analysis of the impact of fiscal and monetary policy and regulations on the real estate market. |
| Keywords: | Cycles in the housing market, disequilibrium, imbalances, banking sector, banking regulations. |
| JEL: | E32 E37 E44 R21 R31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59018&r=ure |
| By: | Plamen Nenov (Norwegian Business School (BI)); Espen Moen (Norwegian Business School-BI) |
| Abstract: | Housing transactions by existing homeowners take two steps, a purchase of a new property and sale of the old housing unit. These two decisions are not independent, and their sequence may depend on the state of the housing market. This paper shows how the sequence of buyer-seller decisions depends on, and in turn, affects housing market conditions in an equilibrium search-and-matching model of the housing market. Under a simple payoff condition, we show that the decisions to "buy first" or "sell first" among existing homeowners are strategic complements - homeowners prefer to "buy first" whenever there are more buyers than sellers in the market. This behavior leads to multiple steady state equilibria and to dynamic equilibria featuring low frequency self-fulfilling fluctuations in house prices and time on the market. The model is broadly consistent with stylized facts about the housing market. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:471&r=ure |
| By: | Ejermo, Olof (CIRCLE, Lund University); Hansen, Høgni Kalsø (Department of Geosciences and Natural Resource Management, Geography Section, University of Copenhagen) |
| Abstract: | Using the whole population and almost all individuals in Sweden listed as inventors, we study how the probability of being listed on a patent as inventor is influenced by the density of other future inventors residing in the same region, while controlling for demographic and sector effects along with the educational characteristics of parents. We focus on three such densities: a) future inventors in the municipality around the time of birth, b) future inventors around the time of graduation from high school and c) future inventors at graduation from higher education. We find suggestive evidence that co-locating with future inventors impact on the probability of becoming an inventor in some cases. The most consistent of these effects is found for place of higher education, with some positive effects also most likely coming from birthplace, whereas no consistent positive effect is found from the individuals’ high school location. Formative influences to become an inventor therefore seem mainly to derive from family upbringing, birth region and from local milieu effects derived from conscious choices into higher education. |
| Keywords: | inventor; time-space; regional unevenness; context; local milieu |
| JEL: | I21 J24 O18 O31 O33 R12 Y91 |
| Date: | 2014–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2014_015&r=ure |
| By: | Enrique Lopez Bazo (European Commission – JRC - IPTS); Fabio Manca (European Commission – JRC - IPTS) |
| Abstract: | This paper describes the semi-endogenous growth approach used in the dynamic spatial general equilibrium model RHOMOLO. We illustrate here how regional R&D expenditures can be used to explain Total Factor Productivity differentials across regions and how shocks to the former end up affecting regional economic performances and economic convergence. As to do so, the current contribution provides econometric estimates of the relationship between regional productivity and R&D intensity by applying the technology catch-up model proposed by Benhabib and Spiegel (2005) to the EU-regional context. We then use the estimated elasticities within the DSCGE framework while also building a simple simulation example to illustrate the potential of the model in capturing the heterogeneous income effects produced a shock to regional R&D expenditures. |
| Keywords: | TFP, R&D, CGE model, regional policy |
| JEL: | C51 C68 O47 R12 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc80872&r=ure |
| By: | Chisako Yamane (Department of Economics, Okayama Shoka University); Shoko Yamane (Department of Economics, Kindai University); Yoshiro Tsutsui (Faculty of Economics, Konan University) |
| Abstract: | In this paper we analyze the relation between the preferred prefecture to live and their regional characteristics in Japan using the data of questionnaire survey conducted by GCOE program of Osaka University in 2009 and 2010. We found: 1) Most people are satisfied with the current residential prefecture and they are unwilling to leave there. 2) Okinawa is the most popular prefecture in Japan when we normalize population size. 3) Multinomial logit regression reveals that the natural environment, home prefecture bias, and the convenience of daily life greatly determine the preferred prefecture. |
| Keywords: | migration, regional characteristics, multinomial logit model, Japan |
| JEL: | R23 R10 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1434&r=ure |
| By: | Eva U. B. Kibele (Max Planck Institute for Demographic Research, Rostock, Germany); Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Rembrandt D. Scholz (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | While regional mortality inequalities in Germany tend to be relatively stable in the short run, over the course of the past century marked changes have occurred in the country’s regional mortality patterns. These changes include not only the re-emergence of stark differences between eastern and western Germany after 1970, which have almost disappeared again in the decades after Germany’s unification in 1990; but also substantial changes in the patterns in northern and southern Germany. By the end of the 19th century, the northern regions in Germany had the highest life expectancy levels, while the southern regions had the lowest. Today, this mortality pattern is reversed. In this paper, we study these long-term trends in spatial mortality disparities in Germany since 1900, and link them with theoretical considerations and existing research on the possible determinants of these pattern. Our findings support the view that the factors which contributed to shape spatial mortality variation have changed substantially over time, and suggest that the link between regional socioeconomic conditions and mortality outcomes strengthened over the last 100 years. |
| Keywords: | Germany, mortality, socio-economic conditions, spatial analysis |
| JEL: | J1 Z0 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2014-009&r=ure |
| By: | Morescalchi, Andrea |
| Abstract: | Oswald's thesis posits that workers who own their own home should have longer unemployment spells due to restricted mobility, but repeatedly the reverse is found. We contribute to shed light on this puzzle in two key ways. First, we show that the thesis holds when stated in terms of search intensity instead of unemployment. In a job search model with moving costs we show that unemployed homeowners search less than renters. We confirm this result empirically using UK LFS data. Second, we provide evidence that homeowners select search methods associated with shorter unemployment spells, suggesting that they search more effciently. |
| Keywords: | job search, search methods, housing tenure, homeownership, Oswald effect. |
| JEL: | J61 J64 R21 R23 R29 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59079&r=ure |
| By: | Karahan, Fatih (Federal Reserve Bank of New York); Rhee, Serena |
| Abstract: | Interstate migration in the United States has declined by 50 percent since the mid-1980s. This paper studies the role of the aging population in this long-run decline. We argue that demographic changes trigger a general equilibrium effect in the labor market, which affects the migration rate of all workers. We document that an increase in the share of middle-aged workers (those ages 40 to 60) in the working-age population in one state causes a large fall in the migration rate of all workers in that state, regardless of their age. To understand this finding, we develop an equilibrium search model of many locations populated by workers whose moving costs differ. Firms prefer hiring local workers with high moving costs as they command lower wages due to their lower outside option. An increase in the share of middle-aged workers causes firms to recruit more from the local labor market instead of hiring from other locations, which increases the local job-finding rate and reduces everyone’s migration rate (“migration spilloversâ€). Our model reproduces remarkably well several cross-sectional facts between population flows and the age structure of the labor force. Our quantitative analysis suggests that population aging accounts for about half of the observed decline, of which 75 percent is attributable to the general equilibrium effect. |
| Keywords: | interstate migration; labor mobility; population aging |
| JEL: | D83 J11 J24 J61 R12 R23 |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:699&r=ure |
| By: | Stefan P.T. Groot (Centraal Planbureau, The Hague, the Netherlands); Henri L.F. de Groot (VU University Amsterdam, the Netherlands) |
| Abstract: | This paper employs a unique set of micro-data covering almost one third of the Dutch labor force, to estimate the relationship between agglomeration externalities and the level of education. While the positive relationship between economic density and productivity and wages has long been established in the economic literature, less is known about the effects of density on the productivity of different types of workers. This paper shows that there is substantial heterogeneity in the relationship between density and productivity for workers with different types of education. Apart from estimating the impact of aggregate density, we also estimate whether the composition of the local labor market in terms of education is related to the productivity of different types of workers. Using the presence of universities as an instrument, we estimate the effect of the supply of university graduates on wages, i.e. the social return to education. |
| Keywords: | agglomeration, education, knowledge-spillovers, wages, local labor markets |
| Date: | 2014–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140088&r=ure |
| By: | Covi, Giovanni |
| Abstract: | The paper aims at investigating the possible trajectories of regional clusters (industrial districts or local systems) in order to depict feasible strategies to cope with globalization. First, same relevant stylized facts on the new structure of global market are presented in order to illustrate the new competitive framework the SME must face. Second, the concept of ‘complete productive process’ is introduced to characterize the special setting is necessary for the survival of the regional systems of SME. Said briefly, a local cluster needs to co-produce values, capabilities, institutions: its very identity. Since local systems are essentially ‘cognitive systems’, they need to go global not as single firm but as a system. To accomplish this difficult task they must resort to a collective and cooperative behaviour. The paper tries to fill this gap introducing the concept of ‘Collective Local Entrepreneurship’, a reference point, a device to whom anchor the strategic pragmatism necessary to regional clusters to cope with globalization. The renewal of the local ‘ecosystems’ within the international networks (at all different levels) appears to be a general objective. A strong public-private partnership emerges as a strategic commitment. In this perspective the paper tries to capture, as a conclusion, the potential dynamics of the four evolutionary trajectories, which the regional clusters are called upon to deal with. |
| Keywords: | Industrial clusters; innovation; knowledge; industrial policy; entrepreneurship. |
| JEL: | L22 L26 O25 O31 |
| Date: | 2014–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59092&r=ure |
| By: | Nannan Yuan (Graduate School of Economics, Kobe University); Shigeyuki Hamori (Graduate School of Economics, Kobe University); Wang Chen (Graduate School of Economics, Kobe University) |
| Abstract: | Several studies have focused on the relationship between stock and house prices, but they reached contradictory conclusions. This paper contributes to the literature by analyzing the effects of stock prices on house prices with panel data of 28 regions in China for the 2003:Q1 to 2012:Q4 period. Compared with the previous studies, we explain these contrasting effects by distinguishing between the long- and short-run effects of stock prices. Our main results show that stock prices have a negative effect on house prices in the long run but positive effects in the short run. Furthermore, we determine that high market openness and low composition risk account for the opposite short-run effects of stock prices. |
| Keywords: | house prices, stock prices, dynamic relationship |
| JEL: | G32 E31 E44 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1428&r=ure |
| By: | Miao, Jianjun (Boston University); Wang, Pengfei (Hong Kong University of Science and Technology); Zha, Tao (Federal Reserve Bank of Atlanta) |
| Abstract: | n the U.S. economy during the past 25 years, house prices exhibit fluctuations considerably larger than house rents, and these large fluctuations tend to move together with business cycles. We build a simple theoretical model to characterize these observations by showing the tight connection between price-rent fluctuation and the liquidity constraint faced by productive firms. After developing economic intuition for this result, we estimate a medium-scale dynamic general equilibrium model to assess the empirical importance of the role the price-rent fluctuation plays in the business cycle. According to our estimation, a shock that drives most of the price-rent fluctuation explains 30 percent of output fluctuation over a six-year horizon. |
| Keywords: | asset pricing; financial frictions; working capital; cutoff productivity; heterogeneous firms; endogenous TFP; house price; liquidity constraint |
| JEL: | E22 E32 E44 |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2014-15&r=ure |
| By: | Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan |
| Abstract: | The Top Technology Region/Eindhoven-Leuven-Aachen triangle (TTR-ELAt) is an initiative to support cross-border collaboration in a densely populated network of small and medium-sized cities located at the heart of western Europe with an annual economic output of USD 244 billion. The collaboration spans three countries, four science and technology policy regimes and six sub-regions. The collaboration centres on a shared recognition of technological strengths (chemicals and advanced materials, high-tech systems and health sciences). The area seeks to better capitalise on its skilled workforce, multinational enterprises and strong research facilities. While building on decades of cross-border activities, the TTR-ELAt seeks to overcome cumbersome governance issues to create the benefits of agglomeration with complementarity expertise so as to increase international attractiveness. 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 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/22-en&r=ure |
| By: | Carvallo, Oscar; Pagliacci, Carolina |
| Abstract: | Which structural macroeconomic shocks have typified rising house prices? What ultimate factors have compromised financial stability and risk? These questions are answered for the Venezuelan economy by estimating a FAVAR model with macroeconomic, banking and asset price variables. We find that real house prices only respond to demand shocks occurring at aggregate or sectorial level. Most significant house price growths also take place with greater financial exposure to mortgages and real domestic currency depreciations, two factors that potentially magnify rising house prices. Monetary expansions from fiscal origin also increase house prices. In terms of banks’ performance, we find that credit is directed toward firms for expansionary supply shocks, but toward household spending, on goods or housing, for expansionary demand shocks. In all these cases, banking leverage increases, but mainly when shocks have a significant effect on output. Rising risk and financial instability stem from the combination of growing interest rates and domestic currency appreciation, two events that provide incentives for banks to re-arrange portfolio allocation at the cost of a higher volatility of returns. Increasing risk seems to be strongly conditioned by abrupt reductions in banks’ liabilities. |
| Keywords: | macroeconomic shocks, housing market, financial stability, banking assets, portfolio allocation |
| JEL: | E32 E44 R31 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58711&r=ure |
| By: | Jan Rouwendal (VU University Amsterdam); Ramona van Marwijk (Kadaster); Or Levkovich (VU University Amsterdam) |
| Abstract: | Proximity to water is appreciated by households. Hedonic analyses that try to measure the value of this amenity are potentially biased by omitted variables as locations close to the water may be selected by households with higher incomes who construct more luxury houses. Since it is difficult to observe all relevant characteristics, the coefficient for proximity to water may be biased upwards. We circumvent this problem by exploiting a specific characteristic of the Dutch system of planned residential development: often a number of identical houses are constructed close to each other. By comparing the values of such identical houses, we can measure the effect of proximity to water under almost ideal circumstances. The results show a significant impact of this amenity, but of a smaller magnitude than was suggested by many earlier studies, thereby confirming the conjectured presence of omitted variable bias. |
| Keywords: | hedonic analysis, local amenities, ommited variable bias |
| JEL: | D12 D61 R21 |
| Date: | 2014–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140047&r=ure |
| By: | Hännikäinen, Jari |
| Abstract: | We analyze the predictive content of the mortgage spread for U.S. economic activity. We find that the spread contains predictive power for real GDP and industrial production. Furthermore, it outperforms the term spread and Gilchrist– Zakrajsek spread in a real-time forecasting exercise. However, the predictive ability of the mortgage spread varies over time. |
| Keywords: | mortgage spread, forecasting, real-time data |
| JEL: | C53 E37 E44 |
| Date: | 2014–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58360&r=ure |
| By: | Christopher P Roth |
| Abstract: | I use a randomised conditional cash transfer program from Indonesia to provide evidence on peer effects in consumption of poor households. I combine this with consumption visibility data from Indonesia to examine whether peer effects in consumption differ by a good’s visibility. In line with a model of conspicuous consumption, I find that the expenditure share of visible (nonvisible) goods rises (falls) for untreated households in treated sub-districts, whose reference group visible consumption is exogenously increased. Finally, I provide evidence on the mechanisms underlying the estimated spillovers using data on social interactions and social punishment norms. In line with Veblen’s (1899) claim that conspicuous consumption is more prevalent in societies with less social capital, I show that the peer effects in visible goods are larger in villages and for households with lower levels of social activities. |
| Keywords: | Conspicuous Consumption, Peer Effects, Relative Concerns, Spillovers,Social Interactions, Social Norms |
| JEL: | D12 C21 I38 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2014-29&r=ure |
| By: | Xiang Han (Southern Methodist University) |
| Abstract: | We consider the standard indivisible object allocation problem without monetary transfer and allow each object to have a weak priority over agents. It is well known that generally in such a problem stability (or no justified-envy) is not compatible with efficiency. We characterize the priority structures for which a stable and efficient assignment always exists, as well as the priority structures which admit a stable, efficient and (group) strategy-proof rule. While house allocation and housing market are two classical allocation problems that admit a stable, efficient and group strategy-proof rule, any priority-augmented allocation problem with more than three objects admits such a rule if and only if it is decomposable into a sequence of subproblems, each of which has the house allocation or the housing market structure. |
| Keywords: | Indivisible object, priority, house allocation, housing market, stability, group strategy-proofness |
| JEL: | C78 D71 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1408&r=ure |
| By: | Jacques J.F. Commandeur (VU University Amsterdam, the Netherlands); Suncica Vujic (University of Antwerp, Belgium); Siem Jan Koopman (VU University Amsterdam, the Netherlands); Barbara Kasprzyk-Hordern (University of Bath, United Kingdom) |
| Abstract: | We analyze the illicit drug usage by inhabitants and visitors of European cities. Our statistical analyses are by means of linear mixed models. The data on illicit drug usage of cocaine, ecstasy, amphetamines, methamphetamines, and cannabis are collected through wastewater samples from the inlet of 21 sewage treatment plants spread over 11 European countries. The data set represents nineteen cities, services a population of approximately 15 million inhabitants and covers a one-week period in 2011. The patterns of illicit drug usage are examined with respect to temporal (daily) and spatial variations, as well as in relation to economic wealth (gross domestic product) and criminological (drug offenses recorded by police) factors. In a joint statistical analysis, we find that cocaine and ecstasy are typically recreational drugs that are consumed during the weekend. Inhabitants of Western European countries consume more cocaine than inhabitants of Eastern European countries. This finding cannot be explained by political divisions between West and East. We also find evidence that higher usage of ecstasy is associated with medium-sized cities, economic prosperity, and a lower number of drug offenses.On the other hand, higher usage of methamphetamine is associated with medium-sized cities and low economic wealth. |
| Keywords: | Sewage biomarker analysis, ANOVA, Linear mixed models, Wastewater-based epidemiology |
| JEL: | C33 I15 |
| Date: | 2014–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140135&r=ure |
| By: | Pyddoke, Roger (VTI); Creutzer, Christopher (Swedish Competition Authority) |
| Abstract: | This paper studies household car ownership in urban and rural areas in Sweden using register data for all adult Swedes from 1999 to 2008. Data for individuals are linked to members of the same household, allowing us to estimate models of households. Multinomial ordered probit models for households’ private car ownership in Sweden are estimated and used to compare urban and rural households with respect to sensitivity of car ownership. The central result from comparing urban and rural households is that rural households are less likely to exit from car ownership and more likely to increase car ownership than comparable urban households. This supports the notion that rural households are more dependent on their cars than urban households. Rural car ownership is also more sensitive to fuel price changes and the number of adults in the household. Compared with other countries, our results indicate that Swedish households’ car ownership is very resistant to change. The status of the previous year’s car ownership as well as car ownership status in 1999 is dominant factors for household car ownership in 2008. Households with young adults are more likely to cease their car ownership and households with senior members are only slightly more likely to cease car ownership than middle-aged households. Households with higher income are less likely to cease car ownership then lower income households and more likely to increase their car ownership. Permanent income, defined as the average income over the period, has a larger positive impact on car ownership than current income. |
| Keywords: | Car ownership; Household; Income; Fuel price; Urban; Rural; Gender |
| JEL: | D12 D31 R41 |
| Date: | 2014–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2014_021&r=ure |
| By: | Salvador del Saz-Salazar; Leandro García-Menéndez; Olaf Merk |
| Abstract: | In times of increasing environmental awareness, the port-city relationship has gained a new meaning since ports have been seen as the origin of both negative and positive externalities affecting the public wellbeing. While the former are the result of port expansion, the latter are the result of transforming obsolete port areas into recreational facilities. Therefore, in order to support effective policy-making, in this research is emphasized the need of measuring these environmental externalities. Considering their non-market nature, the contingent valuation method is introduced as an economic tool capable of overcoming this obstacle. Thus, the cases of two ports in Spain, namely Valencia and Castellón, are reviewed. The policy implications of this are discussed with the aim to improve the understanding of the changing relationship between ports and cities. |
| Keywords: | port-city relationship, port expansion, waterfront redevelopment, contingent valuation, economic appraisal, environmental externalities |
| JEL: | H41 Q51 Q58 R14 |
| Date: | 2013–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/24-en&r=ure |
| By: | Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan |
| Abstract: | The island of Ireland, which includes both Ireland and Northern Ireland (United Kingdom), is home to 6.4 million people and has a combined economic output of USD 205 billion. Several cross-border institutions were created in response to the 1998 Belfast/Good Friday Agreement to recreate functional economic linkages across the border. InterTradeIreland is a rare example internationally of a cross-border entity to promote trade and innovation that is co-funded by respective governments. These efforts have led to stability in funding such programmes. The differences between the public sector driven economy in Northern Ireland and the dual economy of Ireland (outward looking multinationals and the local small and medium-sized enterprise base) are a challenge 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: | 2013–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/20-en&r=ure |
| By: | Odolinski , Kristofer (VTI); Smith , Andrew S.J. (University of Leeds, UK) |
| Abstract: | This is the first paper in the literature to formally study the cost impact of competitive tendering in rail maintenance. Sweden progressively opened up the market for rail maintenance services, starting in 2002. We study the cost impacts based on an unbalanced panel of contract areas between 1999 and 2011, using econometric techniques. We conclude that competitive tendering reduced costs by around 12%. This cost reduction was not associated with falling quality as measured by track quality class, track geometry or train derailments. We conclude that the gradual exposure of rail maintenance to competitive tendering in Sweden has been beneficial. |
| Keywords: | Railway; Infrastructure; Maintenance; Tendering; Contract; Cost |
| JEL: | H54 L92 |
| Date: | 2014–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2014_017&r=ure |
| By: | Rik de Boer; Rosamaria Bitetti |
| Abstract: | This Working Paper studies ways to stimulate the private rental sector (PRS) of the housing market – and compares experiences with policies and reforms in Germany, the Netherlands, Finland and the Czech Republic. Although in many countries the PRS has decreased in importance since the Second World War, there are signs of a growing importance and possible ‘revival’ of the PRS. A well-functioning PRS and neutrality in housing policies can improve the functioning of the housing market – by promoting residential mobility, increasing housing options for households and generating competitive supply and affordable prices. The PRS can have positive effects on the economy and labour mobility and reduce inefficiencies and risks of owner-occupied and social housing. Trade-offs between goals in housing policies, and regulatory impediments to a level playing field between segments of the housing market (owner-occupancy, social rental, private rental) are analysed. The article outlines policy options in promoting a well-functioning PRS: lessons are drawn on tenancy security, rent-setting regulations, social housing, demand subsidies, fiscal measures for rental and owner-occupied housing and barriers for PRS supply. Experiences from the countries show that it is hard to create a level playing field – there are inefficiencies in all four countries. Nonetheless, there are many positive experiences of stimulating the PRS: reforms in Finland and the Czech Republic stimulated the PRS to become a competitive and important part of the housing market, and Dutch policies are adapted to stimulate a level playing field. The ‘resilience’ of the German housing system during the economic crisis shows that the large PRS and tenure neutrality have important stabilising effects on the German economy. Relancer le secteur locatif privé du marché du logement ? : Leçons tirées des expériences allemande, finlandaise, tchèque et néerlandaise Nous étudions dans ce Document de travail les mesures pouvant être prises pour stimuler le secteur locatif privé du marché du logement, et comparons les données d'expérience relatives aux politiques publiques et aux réformes mises en oeuvre en Allemagne, aux Pays-Bas, en Finlande et en République tchèque. Bien que l'importance du secteur locatif privé ait diminué dans de nombreux pays depuis la Seconde Guerre mondiale, certains signes montrent qu'il reprend de l'importance et qu'il est possible de le « relancer ». Un secteur locatif privé fonctionnant bien et des politiques du logement neutres peuvent améliorer le fonctionnement du marché de l'immobilier d'habitation – en favorisant la mobilité résidentielle, en élargissant l'éventail des possibilités de logement offertes aux ménages, et en débouchant sur une offre concurrentielle et des prix abordables. Le secteur locatif privé peut avoir des effets positifs sur l'économie et la mobilité des travailleurs, et réduire les problèmes d'inefficience et les risques inhérents aux logements occupés par leurs propriétaires et au logement social. Les arbitrages à opérer entre les différents objectifs des politiques du logement, et les obstacles réglementaires à l'application de règles du jeu équitables entre les différents segments du marché de l'immobilier d'habitation (logements occupés par leurs propriétaires, logement locatif social, logement locatif privé) sont analysés. L'article expose les options envisageables pour favoriser le bon fonctionnement du secteur locatif privé : des leçons sont tirées concernant la sécurité d'occupation, les règles de fixation des loyers, le logement social, les mécanismes de subventionnement de la demande, les mesures budgétaires en faveur du logement locatif et des propriétaires occupants, ainsi que les obstacles qui limitent l'offre sur le secteur locatif privé. L'expérience des pays considérés montre qu'il est difficile de mettre en place des règles du jeu équitables, puisqu'on observe des problèmes d'inefficience dans chacun des quatre pays examinés. Néanmoins, on relève de nombreux exemples positifs de stimulation du secteur locatif privé : les réformes mises en oeuvre en Finlande et en République tchèque ont permis au secteur locatif privé de devenir un segment concurrentiel et important du marché du logement, tandis que les politiques appliquées aux Pays-Bas sont adaptées pour égaliser les conditions de concurrence. La « résilience » dont a fait preuve le système allemand en matière de logement pendant la crise économique montre que l'ampleur du secteur locatif privé et la neutralité de l'action publique vis-à-vis du mode d'occupation des logements ont d'importants effets stabilisants sur l'économie allemande. |
| Keywords: | Germany, labour mobility, Czech Republic, housing finance, Finland, housing prices, social rental, Netherlands, housing market, housing policies, private rental, logement locatif privé, mobilité de la main-d’oeuvre, Finlande, République tchèque, marché du logement, prix des logements, politique du logement, financement du logement, logement locatif social, Pays-Bas, Allemagne |
| JEL: | E21 G21 H24 L74 R21 R31 R38 R52 |
| Date: | 2014–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1170-en&r=ure |
| By: | Dahlberg, Mattias (Tax Law, Uppsala University); Önder, Ali Sina (Uppsala Center for Fiscal Studies) |
| Abstract: | Due to the Nordic Tax Treaty, commuters pay their income taxes where they earn income. This creates problems in local government finances in Scania County of Sweden, because the number of commuters received on both sides of the Öresund Strait is not symmetric, but the flow from Scania County of Sweden into Copenhagen County of Denmark is about 25 times as large as the other way around. This paper aims to document as ymmetries in commuter flows in the Öresund Region and the loss in income tax revenue due to the asymmetric magnitudes in the flow of commuters. We propose renewed negotiations between Sweden and Denmark on the income taxation in the Öresund Region in order to sustain local public services in the region. |
| Keywords: | Labor Taxation; Commuting; Model Tax Convention; Nordic Tax Treaty; Source vs.Residence Principle |
| JEL: | H24 H61 H71 J61 K34 |
| Date: | 2014–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uufswp:2014_011&r=ure |
| By: | Bayen, Alexandre |
| Abstract: | Traffic data is used to estimate current traffic conditions so that travelers and agencies can make better decisions about how to use and manage the transportation network. This research explores the fusion of probe data (vehicle speed and direction) with loop data (density, speed, and count) in the context of producing overall network speed and travel time estimates. Speed and travel time estimates are useful in many circumstances, but current system control strategies (ramp metering, for example) require density data. While it is difficult to significantly increase the quantity of loop detectors on state highways, the penetration rate of probe data is continually increasing. Multiple data sources with various characteristics were fused by running probe and loop data through the Mobile Millennium highway model, generating velocity maps and travel times. The performance of data sources both individually and when fused was evaluated. It was found that the highest quality estimates are achieved by combining probe data and loop detector data. |
| Keywords: | Engineering, Automatic data collection, Algorithms, Cost effectiveness, Data fusion, Data quality, Detection, Traffic speed, Traffic density, Traffic volume |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt1t95h8s2&r=ure |
| By: | Olivier Schöni |
| Abstract: | Hedonic price indices are currently considered to be the state-of-the-art approach to computing constant-quality price indices. In particular, hedonic price indices based on imputed prices have become popular both among practitioners and researchers to analyze price changes at an aggregate level. Although widely employed, little research has been conducted to investigate their asymptotic properties and the influence of the econometric model on the parameters estimated by these price indices. The present paper therefore tries to fill the actual knowledge gap by analyzing the asymptotic properties of the most commonly used imputed hedonic price indices in the case of linear and linearizable models. The obtained results are used to gauge the impact of bias adjusted predictions on hedonic imputed indices in the case of log-linear hedonic functions with normal distributed errors. |
| Keywords: | Price indices, hedonic regression, imputation, asymptotic theory |
| JEL: | C21 C43 C53 C58 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0166&r=ure |
| By: | Giorgio Fagiolo; Gianluca Santoni |
| Abstract: | This note revisits the role of migrant social networks as determinants of bilateral-migration flows. We do so using a new database that covers about 190 world countries and features more accurate estimates of bilateral flows than those employed so far. Our battery of gravity- model exercises show that the impact of social networks is consistent and significant over different specifications, and in line with previous estimates. Furthermore, in presence of migrant networks at destination, geographical distance counts in explaining the absence of a migration corridor only when such networks have very small sizes. |
| Keywords: | International Migration; Gravity Models; Stocks vs Flows; Migrant Social Networks. |
| Date: | 2014–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2014/20&r=ure |
| By: | Raul Ramos (Faculty of Economics, University of Barcelona); Vicente Royuela (Faculty of Economics, University of Barcelona) |
| Abstract: | The evolution of income inequality is becoming a great concern all over the World, particularly since the start of the Great Recession. In this work we analyse the main trends of income inequality in Europe over the last decade, both at the national and regional level. Our results point to a large diversity in inequality patterns, as we observe both increases and decreases in inequality both at the regional and at the national level. The EU2020 Strategy aims achieving an inclusive economic growth, benefitting the largest possible number of people. We briefly analyse the main factors impacting inequality and finally derive several policy implications. |
| Keywords: | Inequality, Globalisation, Technological change, European regions. JEL classification: R11, R12, O15, O3, F61 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201425&r=ure |
| By: | Francis Bloch (Centre d'Economie de la Sorbonne - Paris School of Economics); David Cantala (El Colegio de Mexico) |
| Abstract: | This paper analyzes the optimal allocation of objects which arrive sequentially to agents organized in a waiting list. Applications include the assignment of social housing, deceased donor organs and daycare slots. A mechanism is a probability distribution over all priority orders which are consistent with the waiting list. We consider three efficiency criteria: first order stochastic dominance in the vector of agents' values, the probability of misallocation and the expected waste. We show that the strict seniority order dominates uniform random order according to the two first criteria, and the uniform random order dominates strict priority according to the third criterion. If agents values are perfectly correlated, strict priority dominates all other probabilistic mechanisms for all agents values. |
| Keywords: | Dynamic matching, queuing, queuing disciplines, social housing, organ transplant. |
| JEL: | C78 D83 R31 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:14066&r=ure |
| By: | Sheely, Ryan (Harvard University) |
| Abstract: | Political Scientists have produced a substantial body of theory and evidence that explains variation in the availability of local public goods in developing countries. Existing research cannot explain variation in how these goods are maintained over time. I develop a theory that explains how the interactions between government and community institutions shape public goods maintenance. I test the implications of this theory using a qualitative case study and a randomized field experiment that assigns communities participating in a waste management program in rural Kenya to three different institutional arrangements. I find that localities with no formal punishments for littering experienced sustained reductions in littering behavior and increases in the frequency of public clean-ups. In contrast, communities in which government administrators or traditional leaders could punish littering experienced short-term reductions in littering behavior that were not sustained over time. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp13-051&r=ure |