nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒11‒28
thirty-one papers chosen by
Steve Ross
University of Connecticut

  1. Spatial frictions By Behrens, Kristian; Mion, Giordano; Murata, Yasusada; Suedekum, Jens
  2. Regulation and Housing Supply By Joseph Gyourko; Raven Molloy
  3. The Dynamics of Housing Prices By Sheridan Titman; Ko Wang; Jing Yang
  4. Private Education Market, Information on Test Scores and Tuition Practices By Firpo, Sergio; Ponczek, Vladimir; Possebom, Vítor Augusto
  5. A spatial Solow model with transport cost By Juchem Neto, Joao Plinio; Claeyssen, Julio Cesar Ruiz; Porto Junior, Sabino da Silva
  6. The Comparative Advantage of Cities By Donald R. Davis; Jonathan I. Dingel
  7. The determinants of spatial location of creative industries start-ups: Evidence from Portugal using a discrete choice model approach By Sara Cruz; Aurora A.C. Teixeira
  8. Mortgage Rates, Household Balance Sheets, and the Real Economy By Benjamin J. Keys; Tomasz Piskorski; Amit Seru; Vincent Yao
  9. Preserving History or Hindering Growth? The Heterogeneous Effects of Historic Districts on Local Housing Markets in New York City By Vicki Been; Ingrid Gould Ellen; Michael Gedal; Edward Glaeser; Brian J. McCabe
  10. Ethnic Differences in Realising Desires to Leave the Neighbourhood By Boschman, Sanne; Kleinhans, Reinout; van Ham, Maarten
  11. The Impact of Local Minimum Wages on Employment: Evidence from Italy in the 1950s By Guido de Blasio; Samuele Poy
  12. W.U.I. on Fire: Risk, Salience & Housing Demand By Shawn J. McCoy; Randall P. Walsh
  13. Does Gifted Education Work? For Which Students? By David Card; Laura Giuliano
  14. Regional determinants of firm entry in a developing country By Calá, Carla Daniela; Manjón-Antolín, Miguel; Arauzo-Carod, Josep-Maria
  15. The Evolution of Charter School Quality By Patrick L. Baude; Marcus Casey; Eric A. Hanushek; Steven G. Rivkin
  16. Clusters of Organic Operations and their Impact on Regional Economic Growth in the United States By Marasteanu, I. Julia; Jaenicke, Edward C.
  17. Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872 By Richard Hornbeck; Daniel Keniston
  18. Inputs in the Production of Early Childhood Human Capital: Evidence from Head Start By Christopher Walters
  19. Rent imputation for welfare measurement : a review of methodologies and empirical findings By Balcazar, Carlos Felipe; Ceriani, Lidia; Olivieri, Sergio; Ranzani, Marco
  20. Does Neighborhood Matter? A Micro-level Spatial Analysis of the Entry and Exit of Organic Farming Program in Southern Sweden By Liu, Xiangping; Smith, Henrik; Stjernman, Martin; Olsson, Ola; Sterner, Thomas
  21. Evidence and Persistence of Education Inequality in an Early-Tracking System: The German Case By Krause, Annabelle; Schüller, Simone
  22. Who honor the rules of federalism? Party system nationalization and fiscal performance. By Santiago Lago-Peñas; Agnese Sacchi; Pablo Simon-Cosano
  23. The Tax-Rate Elasticity of Local Business Profits By Frank M. Fossen; Viktor Steiner
  24. The persistence of firms' knowledge base: a quantile approach to Italian data By Alessandra Colombelli; Francesco Quatraro
  25. Unpublished Appendix:Ancillary Results and Robustness Checks on a Probit Model of Irish Mortgage Defaults By Gregory Connor; Thomas Flavin
  26. Are There Myths on Road Impact and Transport in Sub-Saharan Africa? By Monica Beuran; Marie Castaing Gachassin; Gaël Raballand
  27. Does local public ownership matter for the efficiency of water utilities? Evidence from Italy By Meryem Duygun; Silvia Pazzi; Emili Tortosa-Ausina; Simona Zambelli
  28. Experimental Evidence on Distributional Effects of Head Start By Marianne P. Bitler; Hilary W. Hoynes; Thurston Domina
  29. Urbanization and housing investment By Dasgupta, Basab; Lall, Somik V.; Lozano-Gracia, Nancy
  30. Peer Effects on Childhood and Adolescent Obesity in China By Nie, Peng; Sousa-Poza, Alfonso; He, Xiaobo
  31. Homeownership and Labour Market Outcomes: Micro versus Macro Performances By Beugnot, Julie; Lacroix, Guy; Charlot, Olivier

  1. By: Behrens, Kristian; Mion, Giordano; Murata, Yasusada; Suedekum, Jens
    Abstract: The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the toughness of competition in cities? The short answers are: no; yes; and it depends.
    Keywords: trade frictions,urban frictions,city-size distribution,productivity,markups
    JEL: F12 R12
    Date: 2014
  2. By: Joseph Gyourko; Raven Molloy
    Abstract: A wide array of local government regulations influences the amount, location, and shape of residential development. In this chapter, we review the literature on the causes and effects of this type of regulation. We begin with a discussion of how researchers measure regulation empirically, which highlights the variety of methods that are used to constrain development. Many theories have been developed to explain why regulation arises, including the role of homeowners in the local political process, the influence of historical density, and the fiscal and exclusionary motives for zoning. As for the effects of regulation, most studies have found substantial effects on the housing market. In particular, regulation appears to raise house prices, reduce construction, reduce the elasticity of housing supply, and alter urban form. Other research has found that regulation influences local labor markets and household sorting across communities. Finally, we discuss the welfare implications of regulation. Although some specific rules clearly mitigate negative externalities, the benefits of more general forms of regulation are very difficult to quantify. On balance, a few recent studies suggest that the overall efficiency losses from binding constraints on residential development could be quite large.
    JEL: H70 R10 R14 R31
    Date: 2014–10
  3. By: Sheridan Titman; Ko Wang; Jing Yang
    Abstract: We analyze the prices of owner-occupied housing in 97 metropolitan areas between 1980 and 2011. Our tests indicate that price changes exhibit positive serial correlation at the one year intervals, with subsequent reversals of price changes over longer intervals. Consistent with our simple model, regional differences in observed price patterns reflect differences in the serial correlation of the demand shocks as well as the elasticity of supply responses.
    JEL: R21 R31
    Date: 2014–08
  4. By: Firpo, Sergio (Sao Paulo School of Economics); Ponczek, Vladimir (Sao Paulo School of Economics); Possebom, Vítor Augusto (Sao Paulo School of Economics)
    Abstract: In this paper, we study the impact of disclosing information about school quality of private schools in Brazil on school choice. Particularly, we investigate whether test score disclosure affected private schools' tuition prices. In 2006, Brazil started to announce the schools' average test score of ENEM, a high school exit exam run by the federal government. Using longitudinal school data, we gauge the effect of test score disclosure on tuitions of private schools for three different schools levels (elementary, middle and high school). We find that the disclosure of schools' average test scores affects tuitions positively for all these three educational levels, but the effect is larger for high school tuitions. We also find that private education markets are local instead of national, since local ranks better predict tuition prices than national ranks. Finally, adjustments on prices did not follow immediately after the publication of scores but occurred gradually over time, revealing that the parents needed some time to trustfully associate results on the exam to new information on school quality.
    Keywords: educational markets, information provision, private schools, tuition practices, school quality
    JEL: O12 I21 L15 D82
    Date: 2014–09
  5. By: Juchem Neto, Joao Plinio; Claeyssen, Julio Cesar Ruiz; Porto Junior, Sabino da Silva
    Abstract: In this paper we introduce capital transport cost in an unidimensional unbounded economy described by a spatial Solow model with capital-induced labor migration. Proceeding with a linear stability analysis of its spatially homogeneous equilibrium solution, we show that exists a critical value for the capital transport cost where the dynamic behavior of the economy changes, provided the capital-induced labor migration intensity is big enough. On one hand, if capital transport cost is bigger than this critical value, the homogeneous equilibrium of the model is stable, and the economy converges to this spatially homogeneous state in the long run; on the other hand, if transport cost is smaller than this critical value, the equilibrium is unstable, and the economy may develop distinct spatio-temporal dynamics, including the formation of stable economic clusters and spatio-temporal economic cycles, depending on the other parameters of the model. This result, though obtained using a different formalism, is consistent with the main results of the standard core-periphery model used in the New Economic Geography literature, where a small transport cost is essencial to the formation of spatial economic agglomeration. Finally, we close this work validating the linear stability analysis results through numerical simulations, and verifying that the introduction of a positive transport cost in the model causes a break in the symmetry of the spatial economic agglomerations generated.
    Keywords: Spatial Solow Model, Regional Science, Economic Agglomeration, Economic Geography.
    JEL: O40 R12
    Date: 2014–11–06
  6. By: Donald R. Davis; Jonathan I. Dingel
    Abstract: What determines the distributions of skills, occupations, and industries across cities? We develop a theory to jointly address these fundamental questions about the spatial organization of economies. Our model incorporates a system of cities, their internal urban structures, and a high-dimensional theory of factor-driven comparative advantage. It predicts that larger cities will be skill-abundant and specialize in skill-intensive activities according to the monotone likelihood ratio property. We test the model using data on 270 US metropolitan areas, 3 to 9 educational categories, 22 occupations, and 21 manufacturing industries. The results provide support for our theory's predictions.
    JEL: F11 F14 R12 R13
    Date: 2014–10
  7. By: Sara Cruz (CEF.UP, Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC; OBEGEF)
    Abstract: This paper assesses the location determinants of the newly created firms in the creative sector within the framework of Discrete Choice Models. Estimations using a conditional logit model, which incorporate spatial effects of neighbouring regions in the location choices of firms, yield the following results: i) the concentration of creative and knowledge-based activities, due to agglomeration economies, play an important role in location decisions of new creative establishments; ii) in contrast, the concentration of service-business activities has a negative impact on location choices, which may be due to the fact that creative firms privilege interdependencies with other activity sectors, such as innovation/ knowledge-based activities; iii) creative firms tend to favour a diversified industrial tissue and related variety, in order to enjoy from inter-sectorial synergies; iv) higher education at a regional level has a highly significant, positive effect on location decisions, while lower educational levels of human capital negatively affect those decisions, explained by the specific requirements that creative firms usually have of a highly skilled labour force; v) tolerant/ open environments attract creative activities; vi) creative firms tend to favour municipalities where the stock of knowledge and conditions for innovative activity are higher. Location decisions of creative firms also vary according to the creative sector they belong to and to their own characteristics, firm’s educational level or technology-intensity. Finally, municipality attributes are more important in terms of firms’ location decisions than the characteristics of nearby regions.
    Keywords: Spatial economics; industrial location; econometric models; creative industries.
    JEL: C01 R12 R30
    Date: 2014–10
  8. By: Benjamin J. Keys; Tomasz Piskorski; Amit Seru; Vincent Yao
    Abstract: This paper investigates the impact of lower mortgage rates on household balance sheets and other economic outcomes during the housing crisis. We use proprietary loan-level panel data matched to consumer credit records using borrowers' Social Security numbers, which allows for accurate measurement of the effects. Our main focus is on borrowers with agency loans, which constitute the vast majority of U.S. mortgage borrowers. Relying on variation in the timing of resets of adjustable rate mortgages, we find that a sizable decline in mortgage payments ($150 per month on average) induces a significant drop in mortgage defaults, an increase in new financing of durable consumption (auto purchases) of more than 10% in relative terms, and an overall improvement in household credit standing. New financing of durable consumption by borrowers with lower housing wealth responds more to mortgage payment reduction relative to wealthier households. Credit-constrained households initially use more than 70% of the extra liquidity generated by mortgage rate reductions to repay credit card debt-- a deleveraging response that can significantly restrict the ability of monetary policy to stimulate these households' consumption. These findings also qualitatively hold in a sample of less-prevalent borrowers with private non-agency loans. We then use regional variation in mortgage contract types to explore the impact of lower mortgage rates on broader economic outcomes. Regions more exposed to mortgage rate declines saw a relatively faster recovery in house prices, increased durable (auto) consumption, and increased employment growth, with responses concentrated in the non-tradable sector. Our findings have implications for the pass-through of monetary policy to the real economy through mortgage contracts and household balance sheets.
    JEL: D12 E20 E21 E51 E65 G21
    Date: 2014–10
  9. By: Vicki Been; Ingrid Gould Ellen; Michael Gedal; Edward Glaeser; Brian J. McCabe
    Abstract: Since Brooklyn Heights was designated as New York City's first landmarked neighborhood in 1965, the Landmarks Preservation Commission has designated 120 historic neighborhoods in the city. This paper develops a theory of heterogeneous impacts across neighborhoods and exploits variation in the timing of historic district designations in New York City to identify the effects of preservation policies on residential property markets. We combine an extensive dataset of residential transactions during the 35-year period between 1974 and 2009 with data from the Landmarks Preservation Commission on the location of the city's historic districts and the timing of the designations. Designation raises property values within historic districts, but only outside of Manhattan. In areas where the value of the option to build unrestricted is higher, designation has a less positive effect on property values within the district. Consistent with theory, properties just outside the boundaries of districts increase in value after designation. There is also a modest reduction in new construction in districts after designation.
    JEL: A0 R0
    Date: 2014–09
  10. By: Boschman, Sanne (Delft University of Technology); Kleinhans, Reinout (Delft University of Technology); van Ham, Maarten (Delft University of Technology)
    Abstract: Selective mobility into and out of neighbourhoods is one of the driving forces of segregation. Empirical research has revealed who wants to leave certain types of neighbourhoods or who leaves certain neighbourhoods. A factor which has received little attention so far is that some residents will have a desire to leave their neighbourhood, but are unable to do so. The residential mobility literature shows that the discrepancy between moving desires and actual mobility is larger for ethnic minorities than for natives. This paper uses a unique combination of register data and survey data. We combine data from a large housing survey in the Netherlands (WoON) with longitudinal register data from the Netherlands (SSB), which contains individual level information on residential mobility histories. This allows us to study which households with a wish to leave their neighbourhood are actually successful, and to which neighbourhoods they move. A more thorough insight in who wants to leave which neighbourhoods but is unable to do so will contribute to a better understanding of the drivers of segregation, especially in the context of the debate on voluntary segregation versus segregation due to a lack of choice. We find that ethnic minority groups are less likely to realise a desire to leave their neighbourhood and that if they succeed in moving from an ethnic minority concentration or poverty neighbourhood, they are more likely to end up in another minority concentration or poverty neighbourhood than native residents.
    Keywords: ethnic minorities, selective mobility, segregation, neighbourhoods, moving desires
    JEL: J15 R23
    Date: 2014–09
  11. By: Guido de Blasio (Bank of Italy); Samuele Poy (FBK-IRVAPP)
    Abstract: This paper measures the impact of wage zones - minimum wage differentials at the province level - on Italy's local labor markets during the 1950s. Using a spatial regression discontinuity design, it finds that for the industrial sectors covered under wage zones there was an increase in employment when one crossed the border from a high-wage province into a low-wage one; the effect diminished, however, as the distance from the boundary increased. The paper also illustrates that the impact on the overall (non-farm) private sector, which includes both covered and uncovered sectors, was basically zero. On balance, the scheme generated some reallocation of economic activity, albeit confined to areas close to the province border.
    Keywords: Minimum wages, Regional economic activity, Regression discontinuity
    JEL: C14 J38 R11
    Date: 2014–11
  12. By: Shawn J. McCoy; Randall P. Walsh
    Abstract: We investigate the effects of wildfires on risk perceptions by quantifying the impact of severe wildfires on housing price and transaction dynamics. Our empirical results are interpreted through the lens of a parsimonious model of sorting between locations that vary in their perceived level of fire risk. The model allows us to infer the evolution of risk perceptions among potential sellers and buyers of properties located in the proximity of large wildfire events. Our empirical analysis is based on a multi-dimensional characterization of the potential linkages between fire events and risk perceptions which incorporates measures of both proximity and burn scar views as well as a properties latent wildfire risk. Our analysis provides a connection between changes in underlying risk perceptions and the observed differences in housing price and quantity dynamics across properties that differ in both their spatial relationship to wild fire events (views vs. proximity) and their latent risk for wildfire.
    JEL: H23 Q5 R31
    Date: 2014–10
  13. By: David Card; Laura Giuliano
    Abstract: Education policy makers have struggled for decades with the question of how to best serve high ability K‐12 students. As in the debate over selective college admissions, a key issue is targeting. Should gifted and talented programs be allocated on the basis of cognitive ability, or a broader combination of ability and achievement? Should there be a single admission threshold, or a lower bar for disadvantaged students? We use data from a large urban school district to study the impacts of assignment to separate gifted classrooms on three distinct groups of fourth grade students: non-disadvantaged students with IQ scores ≥130; subsidized lunch participants and English language learners with IQ scores ≥116; and students who miss the IQ thresholds but scored highest among their school/grade cohort in state-wide achievement tests in the previous year. Regression discontinuity estimates based on the IQ thresholds for the first two groups show no effects on reading or math achievement at the end of fourth grade. In contrast, estimates based on test score ranks for the third group show significant gains in reading and math, concentrated among lower-income and black and Hispanic students. The math gains persist to fifth grade and are also reflected in fifth grade science scores. Our findings suggest that a separate classroom environment is more effective for students selected on past achievement - particularly disadvantaged students who are often excluded from gifted and talented programs.
    JEL: I21 I24
    Date: 2014–09
  14. By: Calá, Carla Daniela; Manjón-Antolín, Miguel; Arauzo-Carod, Josep-Maria
    Abstract: We analyse the determinants of firm entry in developing countries using Argentina as an illustrative case. Our main finding is that although most of the regional determinants used in previous studies analysing developed countries are also relevant here, there is a need for additional explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity). We also find evidence of a core-periphery pattern in the spatial structure of entry that seems to be mostly driven by differences in agglomeration economies. Since regional policies aiming to attract new firms are largely based on evidence from developed countries, our results raise doubts about the usefulness of such policies when applied to developing economies.
    Date: 2014
  15. By: Patrick L. Baude; Marcus Casey; Eric A. Hanushek; Steven G. Rivkin
    Abstract: Studies of the charter school sector typically focus on head-to-head comparisons of charter and traditional schools at a point in time, but the expansion of parental choice and relaxation of constraints on school operations is unlikely to raise school quality overnight. Rather, the success of the reform depends in large part on whether parental choices induce improvements in the charter sector. We study quality changes among Texas charter schools between 2001 and 2011. Our results suggest that the charter sector was initially characterized by schools whose quality was highly variable and, on average, less effective than traditional public schools. However, exits from the sector, improvement of existing charter schools, and positive selection of charter management organizations that open additional schools raised average charter school effectiveness over time relative to traditional public schools. Moreover, the evidence is consistent with the belief that a reduction in student turnover as the sector matures, expansion of the share of charters that adhere to a No Excuses philosophy, and increasingly positive student selection at the times of both entry and reenrollment all contribute to the improvement of the charter sector.
    JEL: I21 I24 I28
    Date: 2014–10
  16. By: Marasteanu, I. Julia; Jaenicke, Edward C.
    Abstract: The purpose of this paper is to examine the impact of clusters of certified organic operations on county-level general economic indicators in order to assess the potential of organic clustering as an economic development tool. We first identify clusters of organic operations using the Local Moran’s I test statistic, which tests the null hypothesis of no spatial autocorrelation, and data from the National Organic Program and the U.S. Census. We then use these spatially defined clusters, as well as county-level data from publicly available sources such as the U.S. Census, the Bureau of Labor Statistics, the USDA’s Census of Agriculture, and the USDA’s Agricultural Resource Management Survey (ARMS), to analyze the impact of clustering on county-level economic indicators. To do this, we use a treatment effects model in which the dependent variable is a county-level economic indicator and the treatment is being in a cluster of organic operations. For comparison, we also perform these analyses for general agricultural establishments.
    Keywords: Organic Agriculture, Regional Economic Development, Spatial Econometrics, Hotspots, Treatment Effects, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Q13, R11,
    Date: 2014
  17. By: Richard Hornbeck; Daniel Keniston
    Abstract: Historical city growth, in the United States and worldwide, has required remarkable transformation of outdated durable buildings. Private land-use decisions may generate inefficiencies, however, due to externalities and various rigidities. This paper analyzes new plot-level data in the aftermath of the Great Boston Fire of 1872, estimating substantial economic gains from the created opportunity for widespread reconstruction. An important mechanism appears to be positive externalities from neighbors' reconstruction. Strikingly, gains from this opportunity for urban redevelopment were sufficiently large that increases in land values were comparable to the previous value of all buildings burned.
    JEL: H23 K11 N31 N91 O18 R3
    Date: 2014–09
  18. By: Christopher Walters
    Abstract: Studies of small-scale "model" early-childhood programs show that high-quality preschool can have transformative effects on human capital and economic outcomes. Evidence on the Head Start program is more mixed. Inputs and practices vary widely across Head Start centers, however, and little is known about variation in effectiveness within Head Start. This paper uses data from a multi-site randomized evaluation to quantify and explain variation in effectiveness across Head Start childcare centers. I answer two questions: (1) How much do short-run effects vary across Head Start centers? and (2) To what extent do inputs, practices, and child characteristics explain this variation? To answer the first question, I use a selection model with random coefficients to quantify heterogeneity in Head Start effects, accounting for non-compliance with experimental assignments. Estimates of the model show that the cross-center standard deviation of cognitive effects is 0.18 test score standard deviations, which is larger than typical estimates of variation in teacher or school effectiveness. Next, I assess the role of observed inputs, practices and child characteristics in generating this variation, focusing on inputs commonly cited as central to the success of model programs. My results show that Head Start centers offering full-day service boost cognitive skills more than other centers, while Head Start centers offering frequent home visiting are especially effective at raising non-cognitive skills. Head Start is also more effective for children with less-educated mothers. Centers that draw more children from center-based preschool have smaller effects, suggesting that cross-center differences in effects may be partially due to differences in counterfactual preschool options. Other key inputs, including the High/Scope curriculum, teacher education, and class size, are not associated with increased effectiveness in Head Start. Together, observed inputs explain about one-third of the variation in Head Start effectiveness across experimental sites.
    JEL: I21 J24
    Date: 2014–10
  19. By: Balcazar, Carlos Felipe; Ceriani, Lidia; Olivieri, Sergio; Ranzani, Marco
    Abstract: As well acknowledged in the literature, housing is often the dominant consumption good for most households. As such, it should be included in a comprehensive welfare aggregate to measure people's living standards accurately. However, assigning a value to the flow of the dwelling for homeowners and nonmarket tenants is problematic. Over the last decades several estimation techniques have been proposed and implemented by practitioners covering from very simple to sophisticated approaches. This paper provides an extensive review of different methods to impute rent, commonly used for welfare analysis. It also gives an overview of how this problem has been addressed by other economic domains, namely national accounts, price indices, purchasing power parities, and taxation. Finally, after setting up a theoretical framework, the paper summarizes the empirical findings about the distributional impact of including imputed rents in welfare aggregates.
    Keywords: Economic Theory&Research,Housing&Human Habitats,Rural Poverty Reduction,Regional Economic Development
    Date: 2014–11–01
  20. By: Liu, Xiangping; Smith, Henrik; Stjernman, Martin; Olsson, Ola; Sterner, Thomas
    Abstract: We investigate farmers’ decision to engage in organic production. Our objective is to identify the key factors that promote or hinder the update of organic farming. In particular, we focus on neighborhood factors and the spatial allocation of organic land parcels. A rich spatial panel data of all agricultural parcels is compiled and the information on land use, soil quality, biodiversity, local landscapes, and neighborhood characteristics are extracted using ArcGIS techniques. We carry out both cross-sectional analyses and panel data models. In the cross –sectional analysis, we focus on the duration that a parcel stays in organic production: to temporarily enroll into organic farming program for subsidy or to convert to organic production permanently. In the panel data model, we analyze whether a parcel stays in organic production in a period by assuming there is or there is no temporary correlation. We find that neighborhood characteristics do have significant effects on farmers’ decision. Such effects manifest in the following four areas: 1) a farm with a higher share of organic land in its adjacent neighborhood is more likely to be organic temporarily or permanently; 2) a neighborhood with a higher share of ley and grass land, hence, a higher potential for biological control, can promote conversion to organic production; 3) a parcel with a larger shared border per unit area with other parcels are less likely to be engaged in organic production; and 4), a neighborhood with abundant floral species and more floral spices that are suitable to traditional agricultural production has more parcels being converted to organic production. We also find that highly productive land is less likely to be enrolled into organic farming programs, which confirms the finding from literature that profits is an important factor that affects farmers’ decision. Farmers tend to convert parcels that are far away from their houses to organic while keep the parcels close by in conventional production. Small farms and farms that are more diversified are more likely to be shifted to organic production. Our findings are hence in favor of the policy suggestions on agglomeration payments in biodiversity conservation.
    Keywords: Organic farming, Neighborhood effect, Neighboring effect, Edge effect, Biodiversity, Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy, Q01, Q18, Q24, Q38, Q57, Q58,
    Date: 2014
  21. By: Krause, Annabelle (IZA); Schüller, Simone (IRVAPP)
    Abstract: This article reviews empirical evidence on the early tracking system in Germany and the educational inequalities associated with it. Overall, the literature confirms the existence of considerable social, ethnic, gender- and age-related inequalities in secondary school track placement. Studies on tracking timing and track allocation mechanisms reveal that postponement of the selection decision and binding teacher recommendations may reduce certain (mainly social) inequalities. Furthermore, recent evidence concerning long-term consequences of tracking on labor market outcomes suggests that sizeable built-in flexibilities in the German system succeed in compensating for initial (age-related) education inequalities. The paper concludes with an outline and discussion of the most promising pathways for future research in order to help design inequality-reducing policy recommendations.
    Keywords: educational inequality, tracking, school system, Germany
    JEL: I24 I28 J24
    Date: 2014–10
  22. By: Santiago Lago-Peñas; Agnese Sacchi; Pablo Simon-Cosano
    Abstract: This paper explores the impact of decentralization on countries’ fiscal outcomes paying attention to one aspect usually neglected in the literature: the relevance of self-interested local politics. Relevance that can be proxied by the nationalization of political party systems, namely the extent to which parties compete nationally oriented. Based on a sample of developed and developing countries over the period 1970-2011, our findings are twofold. First, fiscal decentralization has a positive effect on general governments' primary balance. Second, primary balance is negatively affected by the nationalization of party systems only when the latter is extremely weak.
    Keywords: Government primary balance, fiscal decentralization, regional authority, party system nationalization.
    JEL: H62 H74 H77
    Date: 2014–11
  23. By: Frank M. Fossen; Viktor Steiner
    Abstract: Local business profits respond to local business tax (LBT) rates that vary across municipalities. We estimate that a one percent increase in the LBT rate decreases the LBT base by 0.45 percent, based on the universe of German LBT return files, which include corporations and unincorporated businesses. However, the fiscal equalization scheme largely compensates municipalities for the loss in the LBT base when they increase the LBT rate. Our estimates suggest that using taxrevenue data instead of tax return data, as commonly done in the literature, results in a significant bias of the elasticity away from zero.
    Keywords: Local business tax, corporate tax, tax responsiveness, tax-rate elasticity
    JEL: H25 H71
    Date: 2014
  24. By: Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: The paper investigates the patterns of persistence of innovation and of the properties of firms' knowledge base (KB) across a sample of Italian firms in the period 1998-2006. The analysis draws upon a theoretical representation of knowledge as a collective good, stemming from the recombination of knowledge bits that are fragmented and dispersed across economic agents. On this basis, we derived properties of the KB like the coherence, the cognitive distance and the variety, and investigated their patterns of persistence over time. The empirical analysis is implemented by exploring the autocorrelation structure of such properties within a quantile regression framework. The results suggest that the properties of knowledge are featured by somewhat peculiar patterns as compared with knowledge stock, and that such evidence is also heterogeneous across firms in different quantiles.
    Keywords: persistence, innovation, knowledge coherence, variety, cognitive distance, quantile regression, autocorrelation
    Date: 2014–04–23
  25. By: Gregory Connor (Department of Economics, Finance and Accounting, NUI, Maynooth); Thomas Flavin (Department of Economics, Finance and Accounting, NUI, Maynooth)
    Abstract: This unpublished appendix provides ancillary empirical results and some simple robustness checks on the probit model of Irish mortgage defaults presented in Connor and Flavin (2014) hereafter referred to as CF. The document is organized in three sections; first we present our robustness tests; second, we include ancillary tables to complement the results reported in CF; and third, we discuss the absence of “cures” (that is, successful workouts) in our sample.
    Date: 2014
  26. By: Monica Beuran (World Bank - Washington District of Columbia (United States)); Marie Castaing Gachassin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Gaël Raballand (World Bank - Washington District of Columbia (United States))
    Abstract: As planned large investments in road infrastructure continue to be high on the agenda of many African countries, only few of these countries have actually ammended their investments strategy. In many cases, there seems to be a preference for a status quo that can easily be explained by political economy factors driving the policies in the sector. This paper first presents data on the state of roads in Sub-Saharan Africa (length, density, condition) as well as on investments in the sector over the last decades. It then demonstrates how most countries' strategies are based on some misperceptions and recommends some changes to improve the developmental impact of roads investments. Better prioritization of investments, better procurement and contract management, better projects implementation and better monitoring are still needed, in spite of the efforts observed in the last 10 years.
    Keywords: Transport; roads; Sub-Saharan Africa; strategy; infrastructure; procurement
    Date: 2013–05
  27. By: Meryem Duygun (Business School, Hull University, UK); Silvia Pazzi (School of Management, University of Leicester, UK); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universidad Jaume I, Castellón, Spain); Simona Zambelli (Dipartimento di Scienze Aziendali, Università di Bologna, Italy)
    Abstract: This study explores the impact of ownership types on efficiency of Italian water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, a recent study argues that this relationship can be further complicated by the effect of organisational and environmental variables. The current study aims to contribute to the debate about the impact of ownership structure on efficiency by including the effect of size and geographical location combining efficiency (obtained via nonparametric methods) with cluster analysis. The results show that ownership does not have a significant effect on efficiency per se; however the combination of size and geographical location provides interesting insights on the difference observed in the efficiency. Therefore, the paper argues that administrative reforms for institutional settings should consider a set of variables that characterise each organisation.
    Keywords: efficiency, water utilities, ownership, size, geographical location
    JEL: H4 H7 H83
    Date: 2014
  28. By: Marianne P. Bitler; Hilary W. Hoynes; Thurston Domina
    Abstract: This study provides the first comprehensive analysis of the distributional effects of Head Start, using the first national randomized experiment of the Head Start program (the Head Start Impact Study). We examine program effects on cognitive and non-cognitive outcomes and explore the heterogeneous effects of the program through 1st grade by estimating quantile treatment effects under endogeneity (IV-QTE) as well as various types of subgroup mean treatment effects and two-stage least squares treatment effects. We find that (the experimentally manipulated) Head Start attendance leads to large and statistically significant gains in cognitive achievement during the pre-school period and that the gains are largest at the bottom of the distribution. Once the children enter elementary school, the cognitive gains fade out for the full population, but importantly, cognitive gains persist through 1st grade for some Spanish speakers. These results provide strong evidence in favor of a compensatory model of the educational process. Additionally, our findings of large effects at the bottom are consistent with an interpretation that the relatively large gains in the well-studied Perry Preschool Program are in part due to the low baseline skills in the Perry study population. We find no evidence that the counterfactual care setting plays a large role in explaining the differences between the HSIS and Perry findings.
    JEL: H52 I20 I38
    Date: 2014–08
  29. By: Dasgupta, Basab; Lall, Somik V.; Lozano-Gracia, Nancy
    Abstract: This paper provides the first systematic empirical assessment of the pace at which housing investment has responded to rising demand from urbanization. The assessment used National Accounts Statistics to build a data set of residential housing investment for more than 90 countries. The data set explicitly accounts for investment by households, the government, and the private sector. The analysis finds that housing investment follows an S-shaped trajectory taking off around per capita GDP of about $3,000 (US$2005) and tapering down at per capita GDP around $36,000 (US$2005). The analysis also finds that between 2001 and 2011, housing investment in low-income economies averaged 4.56 percent of gross domestic product and 9.12 percent in upper-middle-income economies. An important finding is that countries in Sub-Saharan Africa have housing elasticities similar to comparable low-income and lower-middle-income economies. In financing housing investment, the paper finds that developing countries tend to rely much more on domestic savings and government debt, whereas high-income Organisation for Economic Co-operation and Development countries lever capital markets by tapping foreign savings. Not only does excessive reliance on domestic savings and government debt increase the sensitivity of housing investment to the cyclicality of growth of gross domestic product, it also can potentially crowd out investments in health and education.
    Keywords: Non Bank Financial Institutions,Economic Theory&Research,Emerging Markets,Investment and Investment Climate,Debt Markets
    Date: 2014–11–01
  30. By: Nie, Peng (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim); He, Xiaobo (University of Adelaide)
    Abstract: Using data from the China Health and Nutrition Survey (CHNS), this study analyzes peer effects on obesity in a sample of 3- to 18-year-old children and adolescents in China. Even after a rich set of covariates and unobserved individual heterogeneity are controlled for, it is evident that such peer effects do indeed exist. These effects are stronger in rural areas, among individuals at the upper end of the BMI distribution, and especially among females. All else being equal, female adolescents whose peers have a higher BMI are less likely to consider themselves overweight, suggesting that peer effects may be working through changed societal bodyweight norms.
    Keywords: peer effects, children and adolescents, BMI, China
    JEL: I10 I15 J13 C14
    Date: 2014–10
  31. By: Beugnot, Julie (Université de Franche Comté); Lacroix, Guy (Université Laval); Charlot, Olivier (University of Cergy-Pontoise)
    Abstract: In this paper we investigate Oswald's hypothesis according to which higher homeownership rates increase aggregate unemployment rates. To this end, we develop a matching model à la Pissarides (2000) in which homeowners are assumed to be less mobile than tenants. Based on numerical simulations, we analyze both macroeconomic and microeconomic labour market outcomes following an (exogenous) increase in homeownership rates. We show that (1) Oswald's hypothesis does not always hold as it depends crucially on the importance of mobility costs; (2) while higher homeownership may harm macroeconomic labour market performances, individual performances always improve following an increase in homeownership rates.
    Keywords: stochastic job matching, Oswald's hypothesis, homeownership, unemployment, mobility
    JEL: J41 J61 J64 E24
    Date: 2014–10

This nep-ure issue is ©2014 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.