nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2014‒12‒13
43 papers chosen by
Steve Ross
University of Connecticut

  1. Public School Open Enrollment and Housing Capitalization By Gupta, Anubhab; Aradhyula, Satheesh
  2. Innovation of knowledge intensive service firms in urban areas By Hammer, Andrea
  3. Housing consumption and urbanization By Lozano-Gracia, Nancy; Young, Cheryl
  4. Conformism and Self-Selection in Social Networks By Vincent Boucher
  5. Transformations of Industrial Heritage: Insights into External Effects on House Prices By Mark van Duijn; Jan Rouwendal; Richard Boersema
  6. Temporary Shocks and Persistent Effects in the Urban System: Evidence from British Cities after the U.S. Civil War By W. Walker Hanlon
  7. Immigration and the Economy of Cities and Regions By Ethan Lewis; Giovanni Peri
  8. Teacher quality and student achievement: Evidence from a Dutch sample of twins By Sander Gerritsen; Erik Plug; Dinand Webbink
  9. College Admission and High School Integration By Fernanda Estevan; Thomas Gall; Patrick Legros; Andrew F. Newman
  10. Counting Rotten Apples: Student Achievement and Score Manipulation in Italian Elementary Schools By Erich Battistin; Michele De Nadai; Daniela Vuri
  11. Cities and the Environment By Matthew E. Kahn; Randall Walsh
  12. When do textbooks matter for achievement? Evidence from African primary schools By Maria Kuecken; Marie-Anne Valfort
  13. House Price Expectations By Niu, Geng; van Soest, Arthur
  14. Housing and health By Angel, Stefan; Bittschi, Benjamin
  15. On the Distributive Costs of Drug-Related Homicides By Nicolas Ajzenman; Sebastian Galiani; Enrique Seira
  16. The Impact of the German Autobahn Net on Regional Labor Market Performance: A Study Using Historical Instrument Variables By Möller, Joachim; Zierer, Marcus
  17. Voter Turnout and City Performance By Anna Lo Prete; Federico Revelli
  18. Housing Collateral, Credit Constraints and Entrepreneurship - Evidence from a Mortgage Reform By Thais Lærkholm Jensen; Søren Leth-Petersen; Ramana Nanda
  19. In Search of Labor Demand By Paul Beaudry; David A. Green; Benjamin M. Sand
  20. Foreclosure, Vacancy and Crime By Lin Cui; Randall Walsh
  21. Group Interaction in Research and the Use of General Nesting Spatial Models By Peter Burridge; J. Paul Elhorst; Katarina Zigova
  22. Isolated Capital Cities, Accountability and Corruption: Evidence from US States By Campante, Filipe Robin; Do, Quoc-Anh
  23. Innovation and firm collaboration: An exploration of survey data. By Bjerke, Lina; Johansson, Sara
  24. What Do Field Experiments of Discrimination in Markets Tell Us? A Meta Analysis of Studies Conducted since 2000 By Rich, Judy
  25. Which Club Should I Attend, Dad?: Targeted Socialization and Production By Facundo Albornoz; Antonio Cabrales; Esther Hauk
  26. The Impact of No Child Left Behind's Accountability Sanctions on School Performance: Regression Discontinuity Evidence from North Carolina By Thomas Ahn; Jacob Vigdor
  27. Long-term cost effectiveness of placing homeless seniors in permanent supportive housing By Bamberger, Joshua D.; Dobbins, Sarah
  28. Measuring Bank Contagion in Europe Using Binary Spatial Regression Models By Raffaella Calabrese; Johan A. Elkink; Paolo Giudici
  29. Local Effects of Payments for Environmental Services on Poverty By Robalino, Juan; Sandoval, Catalina; Villalobos, Laura; Alpizar, Francisco
  30. Unlocking the Potential of Teacher Feedback By OECD
  31. Focusing Law Enforcement When Offenders Can Choose Location By Tim Friehe; Thomas J. Miceli
  32. Length of Stay in the Host Country and Educational Achievement of Immigrant Students: The Italian Case By Di Liberto, Adriana
  33. Spatial and Cluster Analysis for Multifunctional Agriculture in New England Region By Marasteanu, I. Julia; Liang, Chyi-Lyi (Kathleen); Goetz, Stephan
  34. Managerial Practices and Students' Performance By Di Liberto, Adriana; Schivardi, Fabiano; Sulis, Giovanni
  35. Coaching disadvantaged young people: Evidence from firm level data By Mohrenweiser, Jens; Pfeiffer, Friedhelm
  36. Peer-Effects on Childhood Obesity: An Instrumental Variables Approach on Exogenously Assigned Peers By Asirvatham, Jebaraj; Thomsen, Michael; Nayga, Rodolfo M. Jr.; Rouse, Heather
  37. Reconstruction multipliers By Trezzi, Riccardo; Porcelli, Francesco
  38. Wealth shocks, unemployment shocks and consumption in the wake of the Great Recession By Christelis, Dimitris; Georgarakos, Dimitris; Jappelli, Tullio
  39. Birthplace Diversity and Productivity Spill-overs in Firms By Böheim, René; Horvath, Thomas; Mayr, Karin
  40. How can Paratransit Users be Attracted to Fixed-Route Bus Services? A Case Study on Accessibility to Transit in Chapel Hill and Carrboro By Tobias Kuttler
  41. Learning the Hard Way: The Effect of Violent Conflict on Student Academic Achievement By Brück, Tilman; Di Maio, Michele; Miaari, Sami H.
  42. The economic value of location data: Conditions for big data secondary markets By Koguchi, Teppei; Jitsuzumi, Toshiya
  43. Can geography lock a society in stagnation? By Nguyen Thang Dao; Julio Davila

  1. By: Gupta, Anubhab; Aradhyula, Satheesh
    Abstract: Economic literature on real estate markets, especially that on house prices, shows that houses cost more in better school districts. This paper evaluates the effect of open-enrollment (OE) in public school districts on house prices. We demonstrate a way for removing unobserved heterogeneity for the fixed effects by using a difference in sales model. In addition to estimating the mean effects using a difference model, we also estimate the effects of OE on median and quartile house prices. Many studies have used hedonic models for explaining house prices. Typically, these models use house and neighborhood characteristics, and school and school district characteristics for explaining house prices. Others have relied on cross-sectional identification of relationship between house prices and variables that can be used as a proxy for perceived school quality in different school districts. The most important feature of these studies has been to disentangle the effects of schools on house prices from other implicit characteristics. Bogart and Cromwell (2000) compared the sale prices of houses on either side of a school-district boundary to attribute the differences in prices to better schools. Since the variation in house prices might also be due to some other unobserved neighborhood quality, the results might be biased. Black (1999) used boundary dummies to control for unobserved neighborhood characteristics and found that there is a premium for schools with better test scores, attendance rates and other unobserved school quality characteristics. Some other studies have also used school level data to attribute the premium in single family home prices using distance to school as an explanatory variable and in some cases assigning each house a school level data. Under OE, children are not restricted to attend public schools in their own school district. Instead, OE allows students from anywhere to attend schools in a district that adopts OE. With the introduction and popularity of OE in many states in the U.S., an immediate question concerns the price premium for houses in better school districts. Because enrollment in schools is no longer restricted to homeowners in that particular district, one might expect the premium for better schools to depreciate over time. This effect could be magnified with the advent of charter schools, magnet schools and the expansion of private schools. The literature on the impact of OE varies widely, and has focused on issues like impact on parental decision making, difference in education deliverance, equity in forms of economic outcomes and other ethnic outcomes, mobilization of homebuyers (Goldhaber, 1999), goals of integration and OE (Smith, 1995), supply of and demand for educational choice (Funkhouser and Colopy, 1994), early effects of OE on significant changes in district open enrollments (Rubenstein, 1992). Reback's (2005) work is the first attempt to evaluate the effect of OE on house prices. He found that residential properties appreciated significantly in those districts from where students were able to transfer and declined in those which accepted transfer students. He controlled for the unobserved heterogeneity for the fixed effects by considering the effect on percentage change between the assessed price and actual sale prices in two different years of the percentage changes in explanatory variables. This paper evaluates the effect of school characteristics on house values capitalization via the impact of OE at the district level. Using district dummies for school characteristics, this paper assesses the impact of OE on single family home prices. As is standard in the hedonics literature, we have used the log-linear models for estimation. We explore several model specifications and the results are quite robust to the different specifications. The dataset used is from 6 school districts in and around Tucson Metropolitan area in Pima County, Arizona for 2001-2012, and draws on data from the Pima County Assessor's Office, Pima County GIS, Arizona Department of Education Research and Evaluation, along with proprietary OE numbers from the Catalina Foothills School District (CFSD) which is considered the best school district in the study region. It contains information on all single-family houses sold in this time period, their characteristics, school district dummies, boundary dummies and other variables characterizing the economy. For the houses in the boundary outside of CFSD, we consider separately the effects on the two school districts which share their boundary with CFSD. The dataset also contains houses that were sold more than once, and we use these houses for the difference model which controls for the fixed effects in differences. We control for unobserved heterogeneity by using a difference model. Specifically, we only consider houses that are sold more than once in the time period and use differences of log of sales prices as the dependent variable. Regressors include differences in OE numbers and differences in other time-varying explanatory variables. The differencing washes out time invariant house characteristics and the unobserved heterogeneity by controlling for the differences in fixed effects. The intuition behind the results is that it identifies the mean effect of differences in OE numbers on differences in sale prices by controlling for other observed and unobserved house characteristics. We also identify the houses on boundaries of the school districts and use boundary dummies to capture the effect of OE on the houses which share the boundary but are otherwise identical. In this paper we also explored the effects on median-priced houses by quantile regression as we expect the housing market to be segregated by price. Preliminary results show that OE significantly increases house prices for school districts bordering the CFSD but this effect is not same for the two different neighboring districts. However, the house prices within the CFSD boundary are not significantly affected by OE, on an average. This is mostly attributed to the capacity constraint on OE numbers in school districts. All these analyses also show that houses along the boundaries are significantly different from those that are closer to the center of a district. This validates that OE does not have similar effects on all houses in a school district. This paper also presents the marginal effects of OE for different specifications. Evidence of the impact of school characteristics on real estate markets, anecdotal and empirical, is critical for reassessment with the expansion of OE in public school districts. It also remains to be seen whether parents are still willing to pay a premium for better school districts with the advent of OE. This will have non-trivial policy implications for public school decision makers, realtors and individuals. While this paper does not attempt to identify other school characteristics which people are willing to pay for, it does evaluate the impact of OE in house values. The difference approach used in this paper controls for unobserved heterogeneity. It also looks in detail at how the houses on the school district boundary differ from the ones that are away from the boundary. Finally, this paper considers different segments of the housing market and emphasizes on the median effects. The overall results obtained are robust to the model specifications explored, lending strength to our findings.
    Keywords: House prices, Open Enrollment, District Boundary, Hedonic Regressions, Demand and Price Analysis, Research Methods/ Statistical Methods, C21, I20, R21,
    Date: 2014
  2. By: Hammer, Andrea
    Abstract: This paper investigates the agglomeration of Knowledge Intensive Service (KIS) firms in urban areas. In accordance with the Regional Innovation Systems approach it is argued that cities provide crucial innovation advantages working as centripetal forces for KIS. Applying multivariate logit regressions to a company survey of the city of Karlsruhe, the second largest city of the German federal state of Baden-Württemberg, shows positive effects of local cooperation and urban infrastructures on the innovation probability of KIS firms. However, the effects vary with the type of innovation pursued, thus demonstrating a high complexity of local relations conducive to KIS firm innovation.
    Keywords: Knowledge Intensive Services,Regional Innovation Systems,urban innovation,innovation in services,local cooperation,urban infrastructure
    JEL: R48 L92 Q55
    Date: 2014
  3. By: Lozano-Gracia, Nancy; Young, Cheryl
    Abstract: Rapid urbanization in Sub-Saharan Africa places immense pressure on urban services to meet the needs of the burgeoning urban population. Although several country- or city-level reports offer insight into the housing challenges of specific places, little is known about regional patterns affecting housing markets. This lack of clear knowledge on the relative importance of the factors influencing households'housing demand in countries in Sub-Saharan Africa inhibits policy makers, researchers, the private sector, and development partners from making informed decisions when addressing affordable housing provision and the rapid increase in and growth of informal settlements. To shed light on the contours of housing patterns and impediments impacting the region's households, this paper provides a systematic review of housing conditions in Sub-Saharan Africa. By drilling down into the housing issues in the region from the perspective of the household, the paper analyses the trade-offs households make in allocating their budgets over time to housing and other amenities and provides a first approximation at understanding the differences in households'expenditure patterns and housing decisions across countries. The findings suggest that rather than emphasizing policies that purport to increase expenditures on housing at this stage of development, policy makers in Sub-Saharan Africa should focus on extending access to basic services and strengthening coordination between land use planning and service provision. As incomes increase, this focus would allow households the opportunity to access houses that are equipped with basic infrastructure and help countries move toward better overall quality of housing.
    Keywords: Housing&Human Habitats,National Urban Development Policies&Strategies,Urban Housing and Land Settlements,Transport Economics Policy&Planning,Urban Housing
    Date: 2014–11–01
  4. By: Vincent Boucher
    Abstract: I present a model of conformism in social networks that incorporates both peer effects and self-selection. I find that equilibrium behaviors are linked through the Laplacian matrix of the equilibrium network. I show that conformism has positive social value and that social welfare can be bounded by network centrality and connectivity measures. I apply the model using empirical data on high school student participation in extracurricular activities. I find that the local effects of conformism (i.e. endogenous peer effect for a fixed network structure) range from 7.5% to 45%, depending on the number of peers that an individual has. Simulations show that the optimal policies of an inequality-averse policy-maker change in relation to the size of a school. Small schools should encourage shy students to integrate more with other students, while large schools should focus on promoting role models within the school.
    Keywords: Conformism, peer effects, network formation
    JEL: D85 C31
    Date: 2014
  5. By: Mark van Duijn (VU University Amsterdam, and University of Groningen, the Netherlands); Jan Rouwendal (VU University Amsterdam, the Netherlands); Richard Boersema (Colliers International, Amsterdam)
    Abstract: Local policy makers seek ways to deal with abandoned industrial heritage in their jurisdictions. Much is demolished, but in some cases considerable investments are made to preserve the cultural aspects of industrial sites. The renewal plans are usually designed to stimulate urban renewal in the vicinity of these sites. Little seems to be known about the effectiveness of these policies and in this paper, we study whether the redevelopment of five industrial heritage sites caused positive external effects by investigating the development of house prices in nearby residential areas. We use a quasi‐experimental design by comparing quality‐adjusted house prices before the start, between the start and the completion and after the completion of the transformation. We find substantial effects of one site, which is the best-known example of renovated industrial heritage i n the Netherlands, but much smaller or no effects for the other sites. We also model the decay of these effects over time and space. We find different decay effects for each case. We conclude that industrial heritage sites do not necessarily cause negative external effects. If there are negative external effects present they disappear at the start of the transformation of the industrial heritage site, suggesting anticipation effects. Also, positive external effects on house prices after the redevelopment of industrial heritage are not necessarily present. The details of the transformation project (e.g. location, size of the site, size of the investment, focus on interior or exterior investments) seem to be important determinants that may cause the existence of positive external effects.
    Keywords: Industrial heritage, redevelopment, urban revitalization, external effects, hedonic prices
    JEL: C21 D62 H43 R0
    Date: 2014–09–12
  6. By: W. Walker Hanlon
    Abstract: Urban economies are often heavily reliant on a small number of dominant industries, leaving them vulnerable to negative industry-specific shocks. This paper analyzes the long-run impacts of one such event: the large, temporary, and industry-specific shock to the British cotton textile industry caused by the U.S. Civil War (1861-1865), which dramatically reduced supplies of raw cotton. Because the British cotton textile industry was heavily concentrated in towns in Northwest England, I compare patterns in these cotton towns to other English cities. I find that the shock had a persistent negative effect on the level of city population lasting at least 35 years with no sign of diminishing. Decomposing the effect by industry, I show that the shock to cotton textiles was transmitted to other local firms, leading to increased bankruptcies and long-run reductions in employment. This transmission occurred primarily through the link to capital suppliers, such as machinery and metal-goods producers. Roughly half of the reduction in city-level employment growth was due to the impact on industries other than cotton textiles.
    JEL: F14 N63 N93 R12
    Date: 2014–09
  7. By: Ethan Lewis; Giovanni Peri
    Abstract: In this chapter we analyze immigration and its effect on urban and regional economies focusing on productivity and labor markets. While immigration policies are typically national, the effects of international migrants are often more easily identified on local economies. The reason is that their settlements are significantly concentrated across cities and regions, relative to natives. Immigrants are different from natives in several economically relevant skills. Their impact on the local economy depends on these skills. We emphasize that to evaluate correctly such impact we also need to understand and measure the local adjustments produced by the immigrant flow. Workers and firms take advantage of the opportunities brought by immigrants and respond to them trying to maximize their welfare. We present a common conceptual frame to organize our analysis of the local effects of immigration and we describe several applications. We then discuss the empirical literature that has tried to isolate and identify a causal impact of immigrants on the local economies and to estimate the different margins of response and the resulting outcomes for natives of different skill types. We finally survey promising recent avenues for advancing this research.
    JEL: F22 J61 R23
    Date: 2014–08
  8. By: Sander Gerritsen; Erik Plug; Dinand Webbink
    Abstract: This paper examines the causal link that runs from classroom quality to student achievement using data on twin pairs who entered the same school but were allocated to different classrooms in an exogenous way. In particular, we apply twin fixed-effects estimation to assess the effect of teacher quality on student test scores from second through eighth grade, arguing that a change in teacher quality is probably the most important classroom intervention within a twin context. In a series of estimations using measurable teacher characteristics, we find that: (a) the test performance of all students improve with teacher experience; (b) teacher experience also matters for student performance after the initial years in the profession; (c) the teacher experience effect is most prominent in earlier grades; (d) the teacher experience effects are robust to the inclusion of other classroom quality measures, such as peer group composition and class size; and (e) an increase in teacher experience also matters for career stages with less labor-market mobility which suggests positive returns to on the job training of teachers.
    JEL: I2 J4
    Date: 2014–11
  9. By: Fernanda Estevan; Thomas Gall; Patrick Legros; Andrew F. Newman
    Abstract: This paper examines possible effects of college admission policy on general equilibrium outcomes at the high school stage. Specifically, we investigate whether a policy that bases college admission on relative performance at high school could modify in the aggregate the degree of segregation in schools, by inducing some students to relocate to schools that offer weaker competition. In a matching model, such high school arbitrage will occur in equilibrium and typically result in desegregating high schools, if schools are segregated with regards to socio-economic characteristics that are correlated with academic performance and race. This is supported by empirical evidence on the effects of the Texas Top Ten Percent Law, indicating that a policy designed to support diversity at the college level in fact achieved high school desegregation, unintentionally generating incentives for some students to choose schools strategically.
    Keywords: matching; affirmative action; education; college admission; high school desegregation; Texas Top Ten Percent
    JEL: C78 I23 D45 J78
    Date: 2014–11–06
  10. By: Erich Battistin (Queen Mary University of London and FBK-IRVAPP); Michele De Nadai (University of Padova); Daniela Vuri (University of Rome "Tor Vergata")
    Abstract: We derive bounds for the average of math and language scores of elementary school students in Italy correcting for pervasive score manipulation. Information on the fraction of manipulated data is retrieved from a natural experiment that randomly assigns external monitors to schools. We show how bounds can be tightened imposing restrictions on the measurement properties of the manipulation indicator developed by the government agency charged with test administration and data collection. We additionally assume that manipulation is more likely in those classes at the lower end of the distribution of true scores. Our results show that regional rankings by academic performance are reversed once manipulation is properly taken into account.
    Keywords: Corrupt sampling, Measurement error, Nonparametric bounds, Partial identification
    JEL: C14 C31 C81 I21 J24
    Date: 2014–11
  11. By: Matthew E. Kahn; Randall Walsh
    Abstract: This paper surveys recent literature examining the relationship between environmental amenities and urban growth. In this survey, we focus on the role of both exogenous attributes such as climate and coastal access as well as endogenous attributes such as local air pollution and green space. A city's greenness is a function of both its natural beauty and is an emergent property of the types of households and firms that locate within its borders and the types of local and national regulations enacted by voters. We explore four main issues related to sustainability and environmental quality in cities. First, we introduce a household locational choice model to highlight the role that environmental amenities play in shaping where households locate within a city. We then analyze how ongoing suburbanization affects the carbon footprint of cities. Third, we explore how the system of cities is affected by urban environmental amenity dynamics and we explore the causes of these dynamics. Fourth, we review the recent literature on the private costs and benefits of investing in "green" buildings. Throughout this survey, we pay careful attention to empirical research approaches and highlight what are open research questions. While much of the literature focuses on cities in the developed world, we anticipate that similar issues will be of increased interest in developing nation's cities.
    JEL: Q4 Q5 R1 R3 R4
    Date: 2014–09
  12. By: Maria Kuecken (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Marie-Anne Valfort (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: Using a within-student analysis, we find no average impact of textbook access (ownership or sharing) on primary school achievement. Instead, it is only for students with high socioeconomic status that one form of textbook access - sharing - has a positive impact.
    Keywords: Textbooks; Educational quality; Sub-Saharan Africa; SACMEQ
    Date: 2013–06–01
  13. By: Niu, Geng (Southwestern University of Finance and Economics); van Soest, Arthur (Tilburg University)
    Abstract: Utilizing new survey data collected between 2009 and 2014, this paper analyzes American households' subjective expectations on future home values. We explore the relationship between house price expectations, local economic conditions, and households' individual characteristics. We examine the heterogeneity in expectations based on panel data models. In particular, we estimate the individual- and time-specific subjective probability distributions for five-year-ahead home values. House price expectations vary significantly over time, and are positively related to past housing returns and perceived economic conditions. There is large variation in both the central tendency and the uncertainty of expectations on future home values across individuals, which is associated with several socio-economic and demographic factors. Comparing expectations and realizations shows that households only partially anticipated the large downward changes in home values in the time period 2009-2011.
    Keywords: subjective expectations, house price, survey data
    JEL: D84 R31 E31
    Date: 2014–10
  14. By: Angel, Stefan; Bittschi, Benjamin
    Abstract: Deprived housing conditions have long been recognized as a source of poor health. Nevertheless, there is scant empirical evidence of a causal relationship between housing and health. The literature identifies two different pathways by which housing deprivation affects health, namely, neighborhood effects and the effects of the individual dwelling unit. However, a joint examination of both pathways is absent from the literature. Moreover, endogeneity is a substantial concern in analyses of these two problems. Thus far, studies addressing endogeneity concerns have done so through experimental design or instrumental variables. While the first approach suffers from problems of external validity, we demonstrate the substantial diffculty in identifying robust and reliable instruments for the latter. Consequently, we adopt an alternative strategy to identify the causal effects of housing on health in 21 European countries by estimating fixed-effect models and considering both sources of endogeneity, neighborhoods and dwellings. Furthermore, using the panel dimension of our data, we reveal the accumulation dynamics of poor housing conditions. Our results indicate that living in poor housing is the chief socioeconomic determinant of health over the four-year observation period and that bad housing is a decisive, causal transmission pathway by which socioeconomic status affects health.
    Keywords: Housing,Health,Europe,EU-SILC data,Fixed-effects model
    JEL: I14 I18 I38
    Date: 2014
  15. By: Nicolas Ajzenman (Harvard Kennedy School); Sebastian Galiani (University of Maryland); Enrique Seira (Centro de Investigación Económica (CIE), Instituto Tecnológico Autónomo de México (ITAM))
    Abstract: We are first paper to study the economic effects of drug-trafficking organization violence. We exploit the manyfold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug-related homicides on house prices. We use an unusually rich dataset that provides national coverage on house prices and homicides and exploit within-municipality variations. We find that the impact of violence on housing prices is borne entirely by the poor sectors of the population. An increase in homicides equivalent to one standard deviation leads to a 3% decrease in the price of low-income housing. In spite of this large burden on the poor, the willingness to pay in order to reverse the increase in drug-related crime is not high. We estimate it to be approximately 0.1% of Mexico’s GDP
    Keywords: Drug-related homicides; Costs of crime; Poverty.
    JEL: K4 I3
    Date: 2014
  16. By: Möller, Joachim (Institute for Employment Research (IAB), Nuremberg); Zierer, Marcus (University of Regensburg)
    Abstract: This paper analyzes the impact of the German autobahn net on the economic performance of German regions. To address endogeneity and reverse causation problems, we use historical instrument variables, i.e. a plan of the railroad net in 1890 and a plan of the autobahn net in 1937. We find a statistically and economically significant causal effect of transport infrastructure investments as measured by changes in the length of the autobahn net of West German NUTS 3 areas on regional employment and the wage bill.
    Keywords: transport infrastructure, regional labor market performance, historical instrumental variables, reverse causation, new economic geography
    JEL: L91 N73 N74 R11 R40 R49
    Date: 2014–10
  17. By: Anna Lo Prete (Department of Economics and Statistics, University of Torino); Federico Revelli (Department of Economics and Statistics, University of Torino)
    Abstract: We study the impact of exogenous variation in Italian municipal elections'voter turnout rates on city performance scores and elected mayors' indicators of valence. First, we build a simple model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote, and if they actually turn out to vote. We show that the cost of voting depresses voter turnout, yet can raise the chances of selecting higher valence candidates and thereby improve government performance. Em- pirically, city performance is measured along a number of dimensions including a unique index of overall urban environmental quality, and mayors'valence is proxied by variables reflecting their professional experience and competence. The staggered nature of the municipal election schedule allows us to exploit exogenous variation in voter turnout rates through the 2000s due to the pres- ence of concomitant regional, general and European parliament elections, and to weather conditions (rainfall) on the election day. The results from a number of specifications and quality of policy-making indicators consistently point to a negative impact of voter turnout rates on the performance of cities and the valence of mayors.
    Keywords: local elections, voter turnout, urban environmental quality, weather
    JEL: D72 H72 C26
    Date: 2014–11
  18. By: Thais Lærkholm Jensen; Søren Leth-Petersen; Ramana Nanda
    Abstract: We study how a mortgage reform that exogenously increased access to credit had an impact on entrepreneurship, using individual-level micro data from Denmark. The reform allows us to disentangle the role of credit access from wealth effects that typically confound analyses of the collateral channel. We find that a $30,000 increase in credit availability led to a 12 basis point increase in entrepreneurship, equivalent to a 4% increase in the number of entrepreneurs. New entrants were more likely to start businesses in sectors where they had no prior experience, and were more likely to fail than those who did not benefit from the reform. Our results provide evidence that credit constraints do affect entrepreneurship, but that the overall magnitudes are small. Moreover, the marginal individuals selecting into entrepreneurship when constraints are relaxed may well be starting businesses that are of lower quality than the average existing businesses, leading to an increase in churning entry that does not translate into a sustained increase in the overall level of entrepreneurship.
    JEL: D14 D31 G21 G28 L26
    Date: 2014–10
  19. By: Paul Beaudry; David A. Green; Benjamin M. Sand
    Abstract: We propose and estimate a novel specification of the labor demand curve incorporating search frictions and the role of entrepreneurs in new firm creation. Using city-industry variation over four decades, we estimate the employment - wage elasticity to be -1 at the industry-city level and -0.3 at the city level. We show that the difference between these estimates likely reflects the congestion externalities predicted by the search literature. Also, holding wages constant, an increase in the local population is associated with a proportional increase in employment. These results provide indirect information about the elasticity of job creation to changes in profits.
    JEL: J23
    Date: 2014–10
  20. By: Lin Cui; Randall Walsh
    Abstract: This paper examines the impact of residential foreclosures and vacancies on violent and property crime. To overcome confounding factors, a difference-in-difference research design is applied to a unique data set containing geocoded foreclosure and crime data from Pittsburgh, Pennsylvania. Results indicate that while foreclosure alone has no effect on crime, violent crime rates increase by roughly 19% once the foreclosed home becomes vacant -an effect that increases with length of vacancy. We find weak evidence suggesting a potential vacancy effect for property crime that is much lower in magnitude.
    JEL: J18 R14 R3
    Date: 2014–10
  21. By: Peter Burridge (Department of Economics and Related Studies, University of York, UK); J. Paul Elhorst (Faculty of Economics and Business, University of Groningen, The Netherlands); Katarina Zigova (Department of Economics, University of Konstanz, Germany)
    Abstract: This paper tests the feasibility and empirical implications of a spatial econometric model with a full set of interaction effects and weight matrix defined as an equally weighted group interaction matrix applied to research productivity of individuals. We also elaborate two extensions of this model, namely with group fixed effects and with heteroskedasticity. In our setting the model with a full set of interaction effects is overparameterised: only the SDM and SDEM specifications produce acceptable results. They imply comparable spillover effects, but by applying a Bayesian approach taken from LeSage (2014), we are able to show that the SDEM specification is more appropriate and thus that colleague interaction effects work through observed and unobserved exogenous characteristics common to researchers within a group.
    Keywords: Spatial econometrics, identifcation, heteroskedasticity, group fixed effects, interaction effects, research productivity
    JEL: C21 D8 I23 J24
    Date: 2014–09–17
  22. By: Campante, Filipe Robin; Do, Quoc-Anh
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
    Date: 2014
  23. By: Bjerke, Lina (Jönköping International Business School (JIBS), Economics, Finance and Statistics.); Johansson, Sara (Jönköping International Business School (JIBS), and Centre of Excellence for Science and Innovation Studies (CESIS).)
    Abstract: Recent literature on firm innovation emphasize the importance of combinations of different knowledge sources in innovation processes. Moreover, the literature on firm collaboration has evolved stepwise: (1) knowledge networks tend to be geographically bounded, and (2) proximity in other dimensions than physical distance, such as cognitive and organisational proximity, may influence the evolution and influences of networks. The results from this empirical study support these ideas by indicating that firms’ probability to innovate is enhanced when they collaborate. However, not all types of collaborations are as important. By using data from a survey on innovation and collaboration of 636 firms in the county of Jönköping, Sweden, we find that extra-regional collaboration matters the most for the innovation performance of these firms. Moreover, collaborations tend to be most favourable for innovation when the collaborators involved has some organisational or cognitive proximity. Collaborations that imply vertical linkages in the value added chain appear to more important than horizontal linkages.
    Keywords: Innovation; innovation networks; innovation survey; proximity; firm collaboration
    JEL: C83 O31 R10
    Date: 2014–11–07
  24. By: Rich, Judy (University of Portsmouth)
    Abstract: Sixty-seven field experiments of discrimination in markets conducted since 2000 across seventeen countries were surveyed. Significant and persistent discrimination was found on all bases in all markets. High levels of discrimination were recorded against ethnic groups, older workers, men applying to female-dominated jobs and homosexuals in labour markets. Minority applicants for housing needed to make many more enquiries to view properties. Geographical steering of African-Americans in US housing remained significant. Higher prices were quoted to minority applicants buying products. More information made no significant improvement to minority applicant outcomes. Clear evidence of statistical discrimination was found only in product markets.
    Keywords: field experiments, discrimination, survey, meta analysis
    JEL: J7 C93
    Date: 2014–10
  25. By: Facundo Albornoz; Antonio Cabrales; Esther Hauk
    Abstract: We study a model that integrates productive and socialization efforts with network choice and parental investments. We characterize the unique symmetric equilibrium of this game. We first show that individuals underinvest in productive and social effort, but that solving only the investment problem can exacerbate the misallocations due to network choice, to the point that it may generate an even lower social welfare if one of the networks is sufficiently disadvantaged. We also study the interaction of parental investment with network choice. We relate these equilibrium results with characteristics that we find in the data on economic co-authorship and field transmission between advisors and advisees.
    Keywords: peer effects, network formation, cultural identity, parental involvement, immigrant sorting
    JEL: I20 I28 J15 J24 J61
    Date: 2014–11
  26. By: Thomas Ahn; Jacob Vigdor
    Abstract: Comparisons of schools that barely meet or miss criteria for adequate yearly progress (AYP) reveal that some sanctions built into the No Child Left Behind accountability regime exert positive impacts on students. Estimates indicate that the strongest positive effects associate with the ultimate sanction: leadership and management changes associated with school restructuring. We find suggestive incentive effects in schools first entering the NCLB sanction regime, but no significant effects of intermediate sanctions. Further analysis shows that gains in sanctioned schools are concentrated among low-performing students, with the exception of gains from restructuring which are pervasive. We find no evidence that schools achieve gains among low-performing students by depriving high-performing students of resources.
    JEL: I2
    Date: 2014–09
  27. By: Bamberger, Joshua D. (University of California, San Francisco); Dobbins, Sarah (San Francisco Department of Public Health)
    Abstract: This paper demonstrates that the greatest reduction in health care costs after placement in supportive housing is seen among chronically homeless adults and seniors who are frequent users of the health care system. Employing data from Mission Creek Apartments, a senior affordable housing project in San Francisco with 51 units reserved for homeless seniors, the researchers estimated savings to Medicaid and Medicare from avoiding placing these seniors in a skilled nursing facility of $9.2 million over 7 years. Their findings support the conclusion that permanent supportive housing can be a highly cost-effective placement option for homeless seniors exiting skilled nursing facilities, particularly as they approach the end of life, and points to the importance of this housing option for managed care organizations that are increasingly taking on the financial responsibility for the health care of this population.
    Date: 2014–07
  28. By: Raffaella Calabrese (Essex Business School, University of Essex); Johan A. Elkink (University College Dublin); Paolo Giudici (Department of Economics and Management, University of Pavia)
    Abstract: The recent European sovereign debt crisis clearly illustrates the importance of measuring the contagion effects of bank failures. Indeed, to better understand and monitor contagion risk, the European Central Bank is assuming the supervision of the largest banks in each of the member states. We propose a measure of contagion risk based on the spatial autocorrelation parameter of a binary spatial autoregressive model. Using different specifications of the interbank connectivity matrix and of the determinants of bank failures, we estimate the contagion parameter for banks within the Eurozone, between 1996 and 2012. We provide evidence of high levels of systemic risk due to contagion.
    Keywords: Contagion risk, spatial autoregressive models, European banks, binary data.
    Date: 2014–11
  29. By: Robalino, Juan; Sandoval, Catalina; Villalobos, Laura; Alpizar, Francisco
    Abstract: We estimate local effects of Payment for Environmental Services (PES) programs on poverty in Costa Rica between 2007 and 2009. Using household surveys and spatial geographic data, we are able to control for socioeconomic and geographic characteristics at the individual and census tract level. We find that the effects are insignificant at a national level. However, this reflects countervailing forces. We find that PES coverage increases poverty in low-slope places and decreases poverty in high-slope places. These results are robust to demographic characteristics of the individuals. However, the magnitudes of the impacts are very low, even when they are statistically significant. We conclude that the PES program has not increased or decreased poverty substantially in Costa Rica. Policymakers could increase the impact on poverty by focusing their efforts in low-slope areas; however, as others have shown, such a focus could also reduce the impact on avoided deforestation.
    Keywords: payment for environmental services, poverty, impact evaluation, conservation policies, heterogeneous effects
    JEL: Q58 Q56 Q24
  30. By: OECD
    Abstract: <ul> <li> Across countries and economies participating in the OECD Teaching and Learning International Survey (TALIS), a majority of teachers report receiving feedback on different aspects of their work in their schools. </li> <li> Teacher feedback has a developmental focus, with many teachers reporting that it leads to improvements in their teaching practices, and other aspects of their work. </li> <li> However, not all feedback is seen as meaningful: nearly half of the teachers across TALIS countries report that teacher appraisal and feedback systems in their school are largely undertaken simply to fulfil administrative requirements. </li> <li> Teachers who consider that they receive meaningful feedback on their work also tend to have more confidence in their own abilities and to have higher job satisfaction. </li></ul>
    Date: 2014–09
  31. By: Tim Friehe (University of Bonn); Thomas J. Miceli (University of Connecticut)
    Abstract: This paper incorporates the reality that the bulk of law enforcement is decentralized while sanctions are chosen centrally, and explores the implications for the socially optimal sanction level. The presence of interregional externalities in the form of crime diversion induces socially excessive law enforcement incentives at the local level. We show that the adverse repercussions of uncoordinated enforcement decisions at the local level may be ameliorated by setting a nonmaximal sanction at the central level. In other words, we establish that the decentralization of law enforcement may effectively constrain socially optimal sanction levels.
    Keywords: crime, deterrence, federalism, spillovers, optimal sanctions
    JEL: K42
    Date: 2014–11
  32. By: Di Liberto, Adriana (University of Cagliari)
    Abstract: Using Italian data on language standardized tests for three different levels of schooling we investigate if the observed gap in educational attainments in 1st generation immigrants tends to lower the longer they stay in Italy, and if younger children tend to catch up faster than their older schoolmates. The analysis shows that the significant gap in language skills observed between 1st and 2nd generation immigrant students is mainly due to both the negative performance of immigrant children newly arrived in Italy, and the immigrant students' area of origin. Comparing the results across the different grades, we also find that this gap narrows at a different pace in the early or later years of an immigrant student's life. Overall, our results suggest the presence of a 'critical' age above which 1st generation immigrant students face a negative impact on their school performance, and that institutional and cultural factors play a role on immigrant language skills acquisition.
    Keywords: immigrant students, educational attainment, age at immigration
    JEL: J15 I21
    Date: 2014–10
  33. By: Marasteanu, I. Julia; Liang, Chyi-Lyi (Kathleen); Goetz, Stephan
    Abstract: The purpose of the research presented in this poster is to investigate factors impacting farmers’ decisions to engage in multifunctional activities, which are hypothesized to enhance the sustainability and prosperity of farms and their communities. To achieve this research goal, we break it up into two specific objectives. The first objective is to identify statistically significant hot spots of farms participating in multifunctional activities (i.e., clusters of zipcodes with highly correlated, large numbers of farms participating in multifunctional activities). To complete this objective, we use the results of a short, postcard survey completed by small and medium sized farms in the northeastern United States. The survey contains four questions related to multifunctional practices (specifically, agritourism, direct sales, value added products and off-farm income) and also provides the zip codes of the respondents. Using the Geographic Information Systems software (GIS), we find statistically significant hot spots of farms participating in multifunctional activities based on the Local Moran’s I test statistic for spatial autocorrelation (Anselin, 1995). We perform these analyses for different types of multifunctional activities. Our second objective is to investigate the variables that are correlated with the distribution of farms participating in multifunctional activities, while controlling for the possibility of spatial autocorrelation. To complete this objective, we use Spatial Autoregressive Models (LeSage, 1998). Our independent variables consist of county/sub-county level variables related to demographics, economics, climate, and policy. Most of these variables can be obtained from publicly available sources such as the Census of Agriculture, the U.S. Census, and the Bureau of Economic Analysis, to name a few. The results of this research may have implications for policies related to encouraging farm participation in multifunctional activities.
    Keywords: Multifunctional Activities, Diversified Farming, Spatial Econometrics, Hotspots, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Farm Management, Q12, Q13, Q18,
    Date: 2014
  34. By: Di Liberto, Adriana (University of Cagliari); Schivardi, Fabiano (Bocconi University); Sulis, Giovanni (University of Cagliari)
    Abstract: We study the effects of managerial practices in schools on students' outcomes. We measure managerial practices using the World Management Survey, a methodology that enables us to construct robust measures of management quality comparable across countries. We find substantial heterogeneity in managerial practices across six industrialized countries, with more centralized systems (Italy and Germany) lagging behind the more autonomous ones (Canada, Sweden, the UK, the US). For Italy, we are able to match organizational practices at the school level with students' outcomes in a math standardized test. We find that managerial practices are positively related to students' outcomes. The estimates imply that if Italy had the same managerial practices as the UK (the best performer), it would close the gap in the math OECD-PISA test with respect to the OECD average. We argue that our results are robust to selection issues and show that they are confirmed by a set of IV estimates and by a large number of robustness checks. Overall, our results suggest that policies directed at improving students' cognitive achievements should take into account principals' selection and training in terms of managerial capabilities.
    Keywords: management, productivity, school principals, cognitive skills
    JEL: L2 I2 M1 O32
    Date: 2014–09
  35. By: Mohrenweiser, Jens; Pfeiffer, Friedhelm
    Abstract: In Germany, apprenticeship training firms currently face a shrinking number of qualified school-leavers because of smaller birth cohorts and an increasing proportion of school leavers aiming for higher education. This paper investigates whether a programme that supports firms to train disadvantaged youth can reduce recruiting difficulties in apprentice training firms. Based on unique firm-level data from the metal and electronic industry in Baden-Württemberg from 2010 to 2013, we apply instrumental variable and difference-in-difference estimations and find no significant short-term causal impact of the programme.
    Keywords: disadvantaged youth,apprenticeship training,programme evaluation
    JEL: J11 J24 M51 L60
    Date: 2014
  36. By: Asirvatham, Jebaraj; Thomsen, Michael; Nayga, Rodolfo M. Jr.; Rouse, Heather
    Abstract: This study investigates whether peers are a contributing factor in childhood body-weight outcomes. Using an instrumental variables method on exogenously assigned peers, we find that the weight of peers within the same grade and school significantly impacts body mass index (BMI) z-score of an individual student. A typical student’s BMI z-score increases when facing heavier peers. The size of the peer-effect, however, is very modest. For a percentage point increase in the proportion of obese students in the same grade, a typical student’s BMI z-score increases by only 0.00341 standard deviations.
    Keywords: peer-effects, childhood obesity, social networks, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics, D10, I10, Z13,
    Date: 2014
  37. By: Trezzi, Riccardo (Board of Governors of the Federal Reserve System (U.S.)); Porcelli, Francesco (University of Exeter)
    Abstract: A law issued to allocate reconstruction grants following the 2009 "Aquilano" earthquake has resulted in a large and unanticipated discontinuity across municipalities with comparable damages. Using diff-in-diff analysis we estimate the "local spending" and the "local tax" multipliers--according to the composition of the stimulus--controlling for the negative supply shock generated by the event. The stimulus prevented a fall in economic activity and the multiplicative effects of tax cuts are estimated much higher than those of spending. Our results underline the importance of countercyclical fiscal interventions and suggest the most effective composition of such a stimulus.
    Keywords: Natural disasters; fiscal multipliers; Mercalli scale
    JEL: C36 E62 H70
    Date: 2014–10–01
  38. By: Christelis, Dimitris; Georgarakos, Dimitris; Jappelli, Tullio
    Abstract: We use data from the 2009 Internet Survey of the Health and Retirement Study to examine the consumption impact of wealth shocks and unemployment during the Great Recession in the US. We find that many households experienced large capital losses in housing and in their financial portfolios, and that a non-trivial fraction of respondents have lost their job. As a consequence of these shocks, many households reduced substantially their expenditures. We estimate that the marginal propensities to consume with respect to housing and financial wealth are 1 and 3.3 percentage points, respectively. In addition, those who became unemployed reduced spending by 10 percent. We also distinguish the effect of perceived transitory and permanent wealth shocks, splitting the sample between households who think that the stock market is likely to recover in a year's time, and those who do not. In line with the predictions of standard models of intertemporal choice, we find that the latter group adjusted much more than the former its spending in response to financial wealth shocks.
    Keywords: Wealth Shocks,Unemployment,Consumption,Great Recession
    JEL: E21 D91
    Date: 2014
  39. By: Böheim, René (University of Linz); Horvath, Thomas (WIFO - Austrian Institute of Economic Research); Mayr, Karin (University of Vienna)
    Abstract: We determine workforce composition and wages in firms in the presence of productivity spill-overs between co-workers. In equilibrium, workers' wages depend on the production structure of firms, own group size, and aggregate workforce composition in the firm. We estimate the wage effects of workforce diversity and own group size by birthplace and the implied production structure in Austrian firms using a comprehensive matched employer-employee data set. In our data, we identify a positive effect of workforce diversity and a negative effect of own group size on wages, which suggest that workers of different birthplaces are complements in production on average.
    Keywords: workforce composition, productivity spill-overs, worker group size
    JEL: D21 D22 F22 J31
    Date: 2014–09
  40. By: Tobias Kuttler
    Date: 2014–06–16
  41. By: Brück, Tilman (SIPRI); Di Maio, Michele (University of Naples Parthenope); Miaari, Sami H. (Tel Aviv University)
    Abstract: We study the effect of the Israeli-Palestinian conflict on the probability to pass the final high-school exam for Palestinian students in the West Bank during the Second Intifada (2000-2006). By exploiting within-school variation in the number of conflict-related Palestinian fatalities during the academic year, we show that the conflict reduces the probability to pass the final exam and to be admitted to the university. We also provide evidence of the heterogeneous effects of the conflict in terms of ability of the student and type of violent event the student is exposed to. Finally, we discuss possible transmission mechanisms explaining our main result.
    Keywords: academic achievement, high-school, Second Intifada, violent conflict, fatalities, West Bank, Palestine, Israel
    JEL: I20 O15 F51
    Date: 2014–10
  42. By: Koguchi, Teppei; Jitsuzumi, Toshiya
    Date: 2014
  43. By: Nguyen Thang Dao (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique); Julio Davila (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We extend Galor and Weil (2000) by including geographical factors in order to show that under some initial conditions, an economy may be locked in Malthusian stagnation and never take off. Specifically, we characterize the set of geographical factors for which this happens, and this way we show how the interplay of the available "land", its suitability for living, and its degree of isolation, determines whether an economy can escape stagnation.
    Keywords: Geographical factors; loss of technology; human capital
    Date: 2013–04

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