|
on Urban and Real Estate Economics |
| By: | Michael Amior; Jonathan Halket |
| Abstract: | Are households more likely to be homeowners when “housing risk” is higher? We show that home-ownership rates and loan-to-value (LTV) ratios at the city level are strongly negatively correlated with local house price volatility. However, causal inference is confounded by house price levels, which are systematically correlated with housing risk in an intuitive way: in cities where the land value is larger relative to the local cost of structures, house prices are higher and more volatile. We disentangle the contributions of high price levels from high volatilities by building a life-cycle model of home-ownership choices. We find that higher price levels can explain most of the lower home-ownership. Higher risk in the model leads to slightly lower home-ownership and LTV ratios in high land value cities. The relationship between LTV and risk is corroborated by LTV's negative correlation with price volatility in the data and highlights the importance of including other means of incomplete insurance in models of home-ownership. |
| Keywords: | home-ownership; housing risk; land share; loan-to-value; life-cycle |
| JEL: | D91 E21 R21 R31 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60635&r=ure |
| By: | Felix Weinhardt |
| Abstract: | Children who grow up in deprived neighborhoods underperform at school and later in life but whether there is a causal link remains contested. This study estimates the short-term effect of very deprived neighborhoods, characterized by a high density of social housing, on the educational attainment of fourteen years old students in England. To identify the causal impact, this study exploits the timing of moving into these neighborhoods. I argue that the timing can be taken as exogenous because of long waiting lists for social housing in high-demand areas. Using this approach, I find no evidence for negative short-term effects on teenage test scores. |
| Keywords: | Neighborhood externalities; Education; Urban policy |
| JEL: | I21 J18 J24 R29 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57825&r=ure |
| By: | Gabriel M. Ahfeldt |
| Abstract: | I define a composite amenity that provides aesthetic and consumption value to local residents: Urbanity. A novel data set of geo-tagged photos shared in internet communities serves as a proxy for urbanity. From the spatial pattern of house prices and photos I identify the value of urbanity in two of the largest cities in Europe: Berlin and London. I find an elasticity of indirect utility with respect to urbanity of about 1%. The aggregated willingness-to-pay equates to about $1bn per year in each city. The results demonstrate the important role cities play as centers of leisure, consumption, and beauty. |
| Keywords: | amenities; consumer city; hedonic analysis; photography geography; property prices |
| JEL: | N0 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59244&r=ure |
| By: | Eeckhout, Jan; Guner, Nezih |
| Abstract: | We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise revenue and is constrained by free mobility of labor across cities does not choose equal taxes for cities of different sizes. The optimal tax schedule is location specific and tax differences between large and small cities depends on the level of government spending and on the concentration of housing wealth. Our estimates for the US implies higher marginal rates in big cities, but lower than what is observed. Simulating the US economy under the optimal tax schedule, there are large effects on population mobility: the fraction of population in the 5 largest cities grows by 8.0% with 3.5% of the country-wide population moving to bigger cities. The welfare gains however are smaller. Aggregate consumption goes up by 1.53%. This is due to the fact that much of the output gains are spent on the increased costs of housing construction in bigger cities. Aggregate housing consumption goes down by 1.75%. |
| Keywords: | city size; general equilibrium; misallocation; population mobility; taxation |
| JEL: | H21 J61 R12 R13 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10352&r=ure |
| By: | Eeckhout, Jan (University College London); Guner, Nezih (MOVE, Barcelona) |
| Abstract: | We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise revenue and is constrained by free mobility of labor across cities does not choose equal taxes for cities of different sizes. The optimal tax schedule is location specific and tax differences between large and small cities depend on the level of government spending and on the concentration of housing wealth. Our estimates for the US imply higher marginal rates in big cities, but lower than what is observed. Simulating the US economy under the optimal tax schedule, there are large effects on population mobility: the fraction of population in the 5 largest cities grows by 8.0% with 3.5% of the country-wide population moving to bigger cities. The welfare gains however are smaller. Aggregate consumption goes up by 1.53%. This is due to the fact that much of the output gains are spent on the increased costs of housing construction in bigger cities. Aggregate housing consumption goes down by 1.75%. |
| Keywords: | misallocation, taxation, population mobility, city size, general equilibrium |
| JEL: | H21 J61 R12 R13 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8781&r=ure |
| By: | Rosa Sanchis-Guarner |
| Abstract: | An inflow of immigrants into a region affects house prices in three ways. In the short run, housing demand increases due to the increase in foreign-born population. In the long run, immigrants affect native location decisions and housing supply conditions. Previous research on the effect of immigration on local house prices has argued that the impact of immigrant demand cannot be separated from the demand changes due to native relocation or that the impact of immigrants on native mobility has no consequences on the estimates. In this paper I propose a methodology to pin down the immigrant demand effect. I apply it to Spanish data during the period 2002-2010 and I show that overlooking the impact of immigration on native mobility induces a sizeable bias in the short-run estimates. My results are robust to controlling for changes in housing supply. |
| Keywords: | immigration; housing markets; instrumental variables |
| JEL: | J61 R12 R21 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58341&r=ure |
| By: | Justiniano, Alejandro; Primiceri, Giorgio E; Tambalotti, Andrea |
| Abstract: | The housing boom that preceded the Great Recession was due to an increase in credit supply driven by looser lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical observations: the unprecedented rise in home prices and household debt, the stability of debt relative to house values, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing boom to looser borrowing constraints associated with lower collateral requirements. In fact, a slackening of collateral constraints at the peak of the lending cycle triggers a fall in home prices in our framework, providing a novel perspective on the possible origins of the bust. |
| Keywords: | collateral constraints; house prices; housing and credit boom; leverage restrictions |
| JEL: | E32 E44 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10358&r=ure |
| By: | Stephen Gibbons; Susana Mourato; Guilherme Mendes Resende |
| Abstract: | Using a hedonic property price approach,we estimate the amenity value associated with proximity to habitats, designated areas, domestic gardens and other natural amenities in England. There is a long tradition of studies looking at the effect of environmental amenities and disamenities on property prices. But, to our knowledge, this is the first nationwide study of the value of proximity to a large number of natural amenities in England. We analysed 1 million housing transactions over 1996–2008 and considered a large number of environmental characteristics. Results reveal that the effects of many of these environmental variables are highly statistically significant, and are quite large in economic magnitude. Gardens, green space and areas of water within the census ward all attract a considerable positive price premium. There is also a strong positive effect from freshwater and flood plain locations, broadleaved woodland, coniferous woodland and enclosed farmland. Increasing distance to natural amenities such as rivers, National Parks and National Trust sites is unambiguously associated with a fall in house prices. Our preferred regression specifications control for unobserved labour market and other geographical factors using Travel to Work Area fixed effects, and the estimates are fairly insensitive to changes in specification and sample. This provides some reassurance that the hedonic price results provide a useful representation of the values attached to proximity to environmental amenities in England. Overall, we conclude that the housing market in England reveals substantial amenity value attached to a number of habitats, designations, private gardens and local environmental amenities. |
| Keywords: | amenity value; hedonic price method (HPM); environmental amenities |
| JEL: | R14 J01 F3 G3 |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:49375&r=ure |
| By: | Gabriel M. Ahlfeldt |
| Abstract: | In this study I apply a gravity-type labor-market accessibility model to the Greater London Area to investigate house price capitalization effects. The spatial scope of labor-market effects is found to be about 60 minutes. Doubling accessibility increases the utility of an average household by about 12%. I combine the gravity approach with a transport decision model that takes into account the urban rail network architecture, allows for mode switching, and thus accounts for the effective accessibility offered by a station, to predict the property price effects of the 1999 Jubilee Line and DLR extension. A considerable degree of heterogeneity is predicted both in terms of the magnitude as well as the spatial extent of price effects around new stations. A quasi-experimental property price analysis reveals that the model performs well in predicting the effective capitalization effects, suggesting that the approach might be a viable ingredient in transport planning. |
| Keywords: | property prices; hedonic analysis; transport innovations; gravity equation |
| JEL: | H43 R40 R58 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:47131&r=ure |
| By: | Steve Gibbons; Henry G. Overman; Max Nathan |
| Abstract: | In most countries economic prosperity is very unevenly distributed across space: regions, cities and neighbourhoods seem to be very unequal, whether we look at average earnings, employment, education or almost any other socio-economic outcome. Regional, urban and neighbourhood policies are often based on concerns about these kinds of disparities, and reducing such disparities is a key policy objective in many countries. This paper considers the role of empirical analysis in informing the development of these policies. It is particularly concerned with issues arising in the quantitative evaluation of the impact of policy, the major barriers to more effective evaluation and how these might be addressed in future. |
| Keywords: | spatial economics; evaluation; impact evaluation; econometrics; research design; public policy; economic development |
| JEL: | N0 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59230&r=ure |
| By: | Alejandro Justiniano; Giorgio E. Primiceri; Andrea Tambalotti |
| Abstract: | The housing boom that preceded the Great Recession was due to an increase in credit supply driven by looser lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical observations: the unprecedented rise in home prices and household debt, the stability of debt relative to house values, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing boom to looser borrowing constraints associated with lower collateral requirements. In fact, a slackening of collateral constraints at the peak of the lending cycle triggers a fall in home prices in our framework, providing a novel perspective on the possible origins of the bust. |
| JEL: | E32 E44 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20874&r=ure |
| By: | Stephen Redding; Matthew A. Turner |
| Abstract: | This paper surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multi-region model of economic geography that we use to understand the general equilibrium implications of transportation infrastructure improvements within and between locations for wages, population, trade and industry composition. Guided by the predictions of this model, we review the empirical literature on the effects of transportation infrastructure improvements on economic development, paying particular attention to the use of exogenous sources of variation in the construction of transportation infrastructure. We examine evidence from different spatial scales, between and within cities. We outline a variety of areas for further research, including distinguishing reallocation from growth and dynamics. |
| Keywords: | Highways; market access; railroads; transportation |
| JEL: | F15 R12 R40 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60288&r=ure |
| By: | Buzard, Kristy (Syracuse University); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (The Ohio State University); Smith, Tony E. (University of Pennsylvania) |
| Abstract: | We employ a unique data set to examine the spatial clustering of private R&D labs, and, using patent citations data, we provide evidence of localized knowledge spillovers within these clusters. Jaffe, Trajtenberg, and Henderson (1993, hereafter JTH) provide an aggregate measure of the importance of knowledge spillovers at either the state or metropolitan area level. However, much information is lost regarding differences in the localization of knowledge spillovers in specific geographic areas. In this article, we show that such differences can be quite substantial. Instead of using fixed spatial boundaries, we develop a new procedure — the multiscale core-cluster approach — for identifying the location and size of specific R&D clusters. This approach allows us to better capture the geographic extent of knowledge spillovers. We examine the evidence for knowledge spillovers within R&D clusters in two regions: the Northeast Corridor and California. In the former, we find that citations are from three to six times more likely to come from the same cluster as earlier patents than in comparable control samples. Our results are even stronger for labs located in California: Citations are roughly 10 to 12 times more likely to come from the same cluster. Our tests reveal evidence of the attenuation of localization effects as distance increases: The localization of knowledge spillovers is strongest at small spatial scales (5 miles or less) and diminishes rapidly with distance. At the smallest spatial scales, our localization statistics are generally much larger than JTH report for the metropolitan areas included in their tests. |
| Keywords: | Spatial clustering; R&D; Knowledge spillover; |
| JEL: | O31 R12 |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-3&r=ure |
| By: | Sabine D'Costa; Henry G. Overman |
| Abstract: | This paper is concerned with the urban wage premium and addresses two central issues about which the field has not yet reached a consensus: first, the extent to which sorting of high ability individuals into urban areas explains the urban wage premium and second, whether workers receive this wage premium immediately, or through faster wage growth over time. Using a large panel of worker-level data from Britain, we first demonstrate the existence of an urban premium for wage levels, which increases in city size. We next provide evidence of a city size premium on wage growth, but show that this effect is driven purely by the increase in wage that occurs in the first year that a worker moves to a larger location. Controlling for sorting on the basis of unobservables we find no evidence of an urban wage growth premium. Experience in cities does have some impact on wage growth, however. Specifically, we show that workers who have at some point worked in a city experience faster wage growth than those who have never worked in a city. |
| Keywords: | urban wage premium; agglomeration; cities; wage growth; worker mobility |
| JEL: | J31 R23 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59074&r=ure |
| By: | Tony Champion; Ian Gordon |
| Abstract: | This paper uses evidence from the (British) Longitudinal Study to examine the influence on occupational advancement of the city-region of residence (an escalator effect) and of relocation between city-regions (an elevator effect). It shows both effects to be substantively important, though less so than the sector of employment. Elevator effects are found to be associated with moves from slacker to tighter regional labour markets. Escalator effects, on the other hand, are linked with residence in larger urban agglomerations, though not specifically London, but also across most of the Greater South East and in second/third order city-regions elsewhere. Sectoral escalator effects are found to be particularly strong in knowledge-intensive activities, with concentrations of these, as of other advanced job types (rather than of graduate labour), contributing strongly to the more dynamic city-regional escalators. The impact of the geographic effects is found to vary substantially with both observed and unobserved personal characteristics, being substantially stronger for the young and for those whose unobserved attributes (e.g. dynamic human capital) generally boost rates of occupational advance. |
| JEL: | J1 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59245&r=ure |
| By: | Brueckner, Jan K. (University of California, Irvine); Calem, Paul S. (Federal Reserve Bank of Philadelphia); Nakamura, Leonard I. (Federal Reserve Bank of Philadelphia) |
| Abstract: | August 2013, Revised December 2014 Rapid house-price depreciation and rising unemployment were the main drivers of the huge increase in mortgage default during the downturn years of 2007 to 2010. However, mortgage default was also associated with an increased reliance on alternative mortgage products such as pay-option and interest-only adjustable rate mortgages (ARMs), which allow the borrower to defer principal amortization. The goal of this paper is to better understand the forces that spurred use of alternative mortgages during the housing boom and the resulting impact on default patterns, relying on a unifying conceptual framework to guide the empirical work. The conceptual framework allows borrowers to choose the extent of mortgage “backloading,” the postponement of loan repayment through various mechanisms that constitutes a main feature of alternative mortgages. The model shows that, when future house-price expectations become more favorable, reducing default concerns, mortgage choices shift toward alternative products. This prediction is confirmed by empirical evidence showing that an increase in past house-price appreciation, which captures more favorable expectations for the future, raises the market share of alternative mortgages. In addition, using a proportional-hazard default model, the paper tests the fundamental presumption that backloaded mortgages are more likely to default, finding support for this view. |
| Keywords: | Mortgage loans; Mortgages |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-1&r=ure |
| By: | Ngai, Liwa Rachel; Sheedy, Kevin D. |
| Abstract: | Using data on house sales and inventories of unsold houses, this paper shows that changes in sales volume are largely explained by changes in the frequency at which houses are put up for sale rather than changes in the length of time taken to sell them. Thus the decision to move house is key to understanding the volume of sales. This paper builds a model where homeowners chose when to move house, which can be seen as an investment in housing match quality. Since moving house is an investment with upfront costs and potentially long-lasting benefits, the model predicts that the aggregate moving rate depends on macroeconomic variables such as interest rates. The endogeneity of moving also means that those who move come from the bottom of the existing match quality distribution, which gives rise to a cleansing effect and leads to overshooting of housing-market variables. |
| Keywords: | endogenous moving; housing market; match quality investment; search and matching |
| JEL: | D83 E22 R21 R31 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10346&r=ure |
| By: | Jorge De la Roca; Gianmarco I. P. Ottaviano; Diego Puga |
| Abstract: | Higher ability workers benefit more from bigger cities while housing costs there are higher for everyone, and yet there is little sorting on ability. A possible explanation is that young individuals have an imperfect assessment of their ability, and, when they learn about it, early decisions have had a lasting impact and reduce their incentives to move. We formalize this idea through an overlapping generations model of urban sorting by workers with heterogenous ability and self-confidence, with the latter defined as individuals’ assessment of their own ability. We then test the location patterns predicted by the model over the life cycle on panel data from the National Longitudinal Survey of Youth 1979. We find that the city-size choices of individuals at different stages vary with ability and self-confidence in a way that closely matches our theoretical predictions. |
| Keywords: | Cities; sorting; agglomeration; self-confidence; learning |
| JEL: | R10 R23 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60525&r=ure |
| By: | Oscar Jorda (Federal Reserve Bank of San Francisco and University of California, Davis); Moritz Schularick (University of Bonn and Centre for Economic Policy Research and Hong Kong Institute for Monetary Research); Alan M. Taylor (University of California, Davis and National Bureau of Economic Research and Centre for Economic Policy Research) |
| Abstract: | Is there a link between loose monetary conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house price booms and busts with data spanning 140 years of modern economic history in the advanced economies. We exploit the implications of the macroeconomic policy trilemma to identify exogenous variation in monetary conditions: countries with fixed exchange regimes often see fluctuations in short-term interest rates unrelated to home economic conditions. We use novel instrumental variable local projection methods to demonstrate that loose monetary conditions lead to booms in real estate lending and house prices bubbles; these, in turn, materially heighten the risk of financial crises. Both effects have become stronger in the postwar era. |
| Keywords: | Financial Crises, Monetary Policy, Leverage, Credit, House Prices, Local Projections, Instrumental Variables |
| JEL: | C14 C38 E32 E37 E42 E44 E51 E52 F41 G01 G21 N10 N20 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:hkm:wpaper:312014&r=ure |
| By: | Wenjie Wu |
| Abstract: | Development of urban transport infrastructures is a key policy focus---particularly in countries like China which have experienced fast urbanisation over the past decade. While existing studies provide marginal values for rail access on the real estate market, little is known about the consequences of local public goods improvements for homeowners’ subjective wellbeing using reported happiness data. This paper uses a difference-in-difference method to empirically measure the impact of rail access on homeowners’ happiness. My identification strategy takes advantage of micro happiness survey data conducted before-and-after the opening of new rail stations in 2008 Beijing. I deal with the potential concern about the endogeneity in sorting effects by focusing on “stayers” and using non-market (fang gai) housings with pre-determined locations. I find the significantly heterogeneity in the effects from better rail access on homeowners’ happiness with respect to different dimensions of residential environment. The welfare estimates suggest that better rail access provided substantial benefits to homeowners’ happiness, but these benefits have strong social-spatial differentiations. These findings add to the evidence that transport improvement has an important role to play in influencing local residents’ subjective wellbeing. |
| Keywords: | happiness; transport improvement; geographical Information system; wellbeing; China |
| JEL: | D60 H41 R41 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57876&r=ure |
| By: | Debra Shepherd (Department of Economics, University of Stellenbosch) |
| Abstract: | This paper assesses the impact of teacher subject knowledge on student performance using a nationally representative dataset of grade 6 students in South Africa. Test scores in two subjects and correlated random error models are used to identify within-pupil across subject variation in performance. Teacher knowledge is estimated to have a positive impact on performance across both the poorer and wealthier subsets of schools once controlling for teacher unobservables. The results suggest that consideration needs to be given to contextual factors such as the quality of teacher training and the working environment within schools and their relationship to the manner in which teacher knowledge is transferred to students. |
| Keywords: | teacher content knowledge, correlated random errors model, within-student, South Africa |
| JEL: | C30 I21 I24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers233&r=ure |
| By: | Yu, Yihua; Wang, Jing; Tian, Xi |
| Abstract: | In the context of China without a median voter system, this study examines whether the “flypaper effect”, an unconditional lump-sum grant from the upper governments to the county governments increases spending in a greater proportion than an equivalent rise in local income, holds true in China. Using China’s county-level education data during 2007, the models have been estimated using a spatial econometric technique that accounts for spatial interaction behavior on public education expenditure across local governments. We find that, in the presence of spatial interdependence, there is no evidence of a “flypaper effect” when different spatial weighting schemes and the endogeneity problem of education grants are accounted for. Rather, the “anti-flypaper effect” is found. Important policy implications are drawn for China’s fiscal decentralization reform. |
| Keywords: | Flypaper effect, Grants, Local government expenditure, Spatial econometrics |
| JEL: | C23 H71 H77 R12 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61616&r=ure |
| By: | Gabriel M. Ahlfeldt; Kristoffer Moeller; Nicolai Wendland |
| Abstract: | To analyze the mutually dependent relationship between local economic performance and the demand for and supply of transport services, we employ the structural panel VAR method that is popular in the macroeconomic literature, but which has not previously been applied to the modeling of within-city dynamics of transportation. We focus on a within-city panel of Berlin, Germany, during the heyday of the construction of its dense public transit network (1880–1914). Our results suggest that economic outcomes and supply of transport infrastructure mutually determine each other. Both transport demand and supply seem to be driven more by firms than by residents. |
| Keywords: | transport; land use; Berlin; history; panel vector; autoregression |
| JEL: | N73 N74 R12 R14 R41 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57873&r=ure |
| By: | Kristoffer Moeller |
| Abstract: | Knowledge based firms like IT companies do neither have a capital- nor a land intensive production. They predominantly rely on qualified labour and increasingly depend on the location of its (potential) employees. This implies that it is more likely that firms follow workers rather than the other way around. Contributing to the literature of firm location and consumer cities I empirically test the amenity oriented firm location hypothesis. In particular I investigate whether Berlin internet start-up firms, representing a footloose knowledge-based service industry, locate in urban amenity-rich places. Identification builds on the sudden fall of the Berlin Wall. The intra-city analysis yields a significant impact of urban amenities on the location of internet start-up. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors whereas no effect can be observed for non-creative firms. |
| Keywords: | firm location; urban amenities; consumer city; internet start-ups; entrepreneurs; Berlin |
| JEL: | D20 L20 R30 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:57875&r=ure |
| By: | Stephen Gibbons; Olmo Silva; Felix Weinhardt |
| Abstract: | We use administrative data to estimate the effect of neighbourhood composition on teenagers’ educational and behavioural outcomes in England. We exploit a unique research design based on changes over time in neighbourhood composition experienced by residentially immobile students, where these changes arise purely through residential migration amongst other students in our dataset. The complete coverage of our data allows investigating heterogeneity and non-linearities in the effect of neighbourhood composition at an unprecedented level. Our results show that changes in neighbourhood composition have no effects on test scores but some effects on behavioural outcomes, which are heterogeneous for boys and girls |
| JEL: | C21 H75 I20 R23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:45248&r=ure |
| By: | Teresa Schlüter |
| Abstract: | This article establishes a link between the traditional labour economics and the urban economics literature by analyzing differences in working hours across regional labour market areas in the UK. Using a real wage index reflecting skill adjusted earnings net of quality adjusted house prices in Britain and panel data on working hours the effect of regional real wages on labour supply is assessed. The identification strategy relies on workers who move across 157 labour market areas in Britain and includes individual fixed effects. The main finding is that working hours are significantly higher in labour market areas that offer lower real wages. Decreasing real wages by £1000 results in an increase of working hours of 0.3 %. Real wage differentials can be seen as a proxy for the local amenity level. I can replicate my finding including a set of amenities instead of the real wage index. The effect is mainly due to labour supply decisions of low skilled workers who work significantly longer hours in low real wage areas than high skilled workers. This indicates that low skilled workers are willing to increase their labour supply in order to afford living in high amenity areas. |
| JEL: | N0 R14 J01 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58529&r=ure |
| By: | Sejeong Ha; Christian A. L. Hilber |
| Abstract: | We hypothesize that as the distance of a residential move increases, the cost of collecting information on the destination housing market rises, the amount and quality of information collected fall, and the chances of making an ill-informed housing purchase decision increases, reducing the likelihood of such a purchase. Since owning relative to renting is associated with a much larger financial commitment and much higher transaction costs, the propensity to own can be expected to decrease with the distance moved. Using data from the Survey of English Housing from 1993 to 2008, we document that, consistent with our prior, an increase in the distance moved by one standard deviation decreases the probability that a household owns the next home by 3.2 percentage points. |
| Keywords: | residential mobility; distance of residential relocation; information cost; investment risk; homeownership; tenure choice |
| JEL: | J61 R21 R23 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58307&r=ure |
| By: | Kopczuk, Wojciech; Munroe, David |
| Abstract: | Houses and apartments sold in New York and New Jersey at prices above $1 million are subject to the so-called 1% “mansion tax" imposed on the full value of the transaction. This policy generates a discontinuity (a “notch") in the overall tax liability. We rely on this and other discontinuities to analyze implications of transfer taxes in the real estate market. Using administrative records of property sales, we find robust evidence of substantial bunching and show that the incidence of this tax for transactions local to the discontinuity falls on sellers, may exceed the value of the tax, and is not explained by tax evasion (although supply-side quality adjustments may play a role). Above the notch, the volume of missing transactions exceeds those bunching below the notch. Interpreting our results in the context of an equilibrium bargaining model, we conclude that the market unravels in the neighborhood of the notch: its presence provides strong incentive for buyers and sellers in the proximity of the threshold not to transact. This effect, the identification and recognition of which is novel to this paper, is above and beyond the standard extensive margin response. When present, unraveling affects interpretation and estimation of bunching estimates. Finally, we show that the presence of the tax affects how the market operates away from the threshold—taxation increases price reductions during the search process and in the bargaining stage and weakens the relationship between listing and sale prices. We interpret these results as demonstrating that taxation affects the ultimate allocation in this search market. |
| Keywords: | housing market; incidence; transaction tax |
| JEL: | H2 H7 R3 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10375&r=ure |
| By: | Nicholas Bloom; Renata Lemos; Raffaella Sadun; John Van Reenen |
| Abstract: | We collect data on operations, targets and human resources management practices in over 1,800 schools educating 15-year-olds in eight countries. Overall, we show that higher management quality is strongly associated with better educational outcomes. The UK, Sweden, Canada and the US obtain the highest management scores closely followed by Germany, with a gap to Italy, Brazil and then finally India. We also show that autonomous government schools (i.e. government funded but with substantial independence like UK academies and US charters) have significantly higher management scores than regular government schools and private schools. Almost half of the difference between the management scores of autonomous government schools and regular government schools is accounted for by differences in leadership of the principal and better governance. |
| Keywords: | Management; pupil achievement; autonomy; principals |
| JEL: | I2 L2 M2 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60605&r=ure |
| By: | Tony Champion; Mike Coombes; Ian R. Gordon |
| Abstract: | In the urban resurgence accompanying the growth of the knowledge economy, second-order cities appear to be losing out to the principal city, especially where the latter is much larger and benefits from substantially greater agglomeration economies. The view that any city can make itself attractive to creative talent seems at odds with the idea of a country having just one ‘escalator region’ where the rate of career progression is much faster, especially for in-migrants. This paper takes the case of England, with its highly primate city-size distribution, and tests how its second- order cities (in size order, Birmingham, Manchester, Leeds, Newcastle, Bristol, Sheffield, Liverpool, Nottingham and Leicester) compare with London as human- capital escalators. The analysis is based on the ONS Longitudinal Study of linked census records, primarily for 1991-2001, and uses one key indicator of upward social mobility, the transition from White Collar Non-core to White Collar Core. For non- migrants, the transition rates for all the second-order cities are found to fall well short of London’s. In only one case – Manchester – is the rate significantly higher than the average for other areas outside the Greater South East (GSE) and its performance is matched by the non-London part of the GSE. Those moving to the second-order cities during the decade experienced much stronger upward social mobility than their non-migrants. This ‘migrant premium’ was generally similar to that for London, suggesting that it results from people moving only after they have secured a better job. If so, second-order cities cannot rely on the speculative migration of talented people but need suitable jobs ready for them to access. |
| Keywords: | human-capital escalator; second-order cities; England; ONS Longitudinal Study; career progression; city region |
| JEL: | J24 J61 J62 R23 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58447&r=ure |
| By: | Pierre-Alexandre Balland; David L. Rigby |
| Abstract: | There is consensus among scholars and policy makers that knowledge is one of the key drivers of long-run economic growth. It is also clear from the literature that not all knowledge has the same value. However, too often in economic geography and cognate fields we have been obsessed with counting knowledge inputs and outputs rather than assessing the quality of knowledge produced. In this paper we measure the complexity of knowledge across patent classes and we map the distribution and the evolution of knowledge complexity across U.S. cities from 1975 to 2004. We build on the 2-mode structural network analysis proposed by Hidalgo and Hausmann (2009) to develop a knowledge complexity index (KCI) for Metropolitan Statistical Areas (MSAs). The KCI is based on more than 2 million patent records from the USPTO, and combines information on the technological structure of 366 MSAs with the 2-mode network that connects cities to the 438 primary (USPTO) technology classes in which they have Relative Technological Advantage (RTA). The complexity of the knowledge structure of cities is based on the range and ubiquity of the technologies they develop. The KCI indicates whether the knowledge generated in a given city can be produced in many other places, or if it is so sophisticated that it can be produced only in a few select locations. We find that knowledge complexity is unevenly distributed across the U.S. and that cities with the most complex technological structures are not necessarily those that produce most patents. |
| Keywords: | Knowledge complexity, cities, patents, network analysis, economic geography, United States |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1502&r=ure |
| By: | Giulia Faggio; Olmo Silva |
| Abstract: | We study the link between self-employment and some salient aspects of entrepreneurship – namely business creation and innovation – in urban and rural labour markets. In order to do so, we combine individual and firm-level data for Britain aggregated at the Travel-to-Work Area level. We find that a higher incidence of self-employment positively and strongly correlates with business creation and innovation in urban areas, but not in rural areas. We also document that more rural than urban workers become self-employed in areas with comparably poor labour market opportunities, although this heterogeneity is not evident when focussing on entrepreneurship. Finally, we show that the misalignment between self-employment and our proxies for entrepreneurship in rural areas disappears once we account for local labour market conditions. Our results suggest that self-employment, business creation and innovation are well lined-up in urban areas because they capture the same economic phenomenon – namely, genuine entrepreneurship. This is not the case for rural areas. |
| Keywords: | entrepreneurship; self-employment; spatial distribution |
| JEL: | R14 J01 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59968&r=ure |
| By: | Thomas Kemeny |
| Abstract: | This paper reviews a growing literature investigating how ‘immigrant’ diversity relates to urban economic performance. As distinct from the labor-supply focus of much of the economics of immigration, this paper reviews work that examines how growing heterogeneity in the composition of the workforce may beneficially or harmfully affect the production of goods, services and ideas, especially in regional economies. Taking stock of the existing literature, the paper argues that the low-hanging fruit in this field has now been picked, and lays out a set of open issues that need to be taken up in future research in order to fulfil the promise of this work. |
| Keywords: | diversity; immigration; cities; regional economic performance |
| JEL: | J28 J31 O15 O18 O31 O4 R0 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58458&r=ure |
| By: | Nagamachi, Kohei |
| Abstract: | Resorting to the method proposed by Matsuyama (2013), this paper develops a static equi- librium model of a system of cities in which ex ante identical locations specialize in stages of production different in the degree of dependence on routine and nonroutine local services sec- tors, the latter of which is tied to an agglomeration force due to monopolistic competition a ́ la Dixit and Stiglitz (1977). The model is simple in that the system is summarized by a second-order differential equation, which has a unique non-degenerate city size distribution with the comove- ment of income, population, factor prices, and urban diversity as observed for the U.S. cities. Two examples of use of the model are then illustrated: analyses of welfare gain from functional specialization and optimal income redistribution, the latter of which provides an important impli- cation of an increasing importance of interactive activities in a modern developed economy for income redistribution. Although extending the model makes the model analytically intractable, it is still characterized by a differential equation easily solved with a numerical method and thus useful for further analyses. |
| Keywords: | functional specialization, system of cities, optimal income redistribution policy |
| JEL: | F12 R12 R13 |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61497&r=ure |
| By: | Ortega, Francesc (Queens College, CUNY); Tanaka, Ryuichi (National Graduate Institute for Policy Studies Japan) |
| Abstract: | This paper reviews the recent literature on the effects of immigration on the public education of the host country, emphasizing the political economy implications. In particular, we are interested on what happens to enrollment in public schools and the quality of education in these schools. Our review of the literature, which includes both quantitative and empirical studies, suggests the following conclusions. First, immigration has triggered native flight toward private schools in a wide variety of contexts. Some studies also find that the households that switch to private schools tend to be those with higher socio-economic status. Secondly, because of these changes in school choices, one consequence of large-scale immigration is that it appears to undermine the political support for public education, resulting in a deterioration in the funding and quality of public schools that seems to affect negatively the educational outcomes of disadvantaged native students. We offer some suggestions for policies that might help mitigate the negative consequences of immigration outlined above so that host countries can maximize the overall economic benefits of immigration. |
| Keywords: | education, public school, immigration, naturalization |
| JEL: | D7 F22 H52 H75 J61 I22 I24 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8778&r=ure |
| By: | Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Grünwald, Luise |
| Abstract: | "Theoretical and empirical contributions on export behavior highlight the importance of firms' productivity and their levels of economies of scale on firms' export success in 'foreign' markets. In the context of agglomeration economies, firms enjoy productivity gains when they are located close to competitors or upstreaming industries and they benefit from knowledge spillovers and other positive externalities. In such a stimulating environment, firms become more prone to be exporters. Beyond the role played by externalities, firms may benefit when they employ a diverse workforce and when the interaction of distinct knowledge and related problem-solving abilities increases productivity and secures export success. In this paper, we ask whether German firms (i. e., establishments) benefit from localization and urbanization externalities and face higher export proportions. We also control for a variety of establishment characteristics and workforce diversity. For this purpose, a comprehensive German data set that combines survey data and administrative data is used. While controlling for firm heterogeneity in a fractional response model, we provide evidence that manufacturing establishments and smaller establishments (up to 250 employees) benefit most from externalities and especially from knowledge spillover. There is weak evidence supporting the benefit of workforce diversity; however, that factor could explain between-establishment variation." (Author's abstract, IAB-Doku) ((en)) |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201503&r=ure |
| By: | Ebenstein, Avraham; Lavy, Victor; Roth, Sefi |
| Abstract: | Cognitive performance is critical to productivity in many occupations and potentially linked to pollution exposure. We evaluate this potentially important relationship by estimating the effect of pollution exposure on standardized test scores among Israeli high school high-stakes tests (2000-2002). Since students take multiple exams on multiple days in the same location after each grade, we can adopt a fixed effects strategy estimating models with city, school, and student fixed effects. We focus on fine particulate matter (PM2.5) and carbon monoxide (CO), which are considered to be two of the most dangerous forms of air pollution. We find that while PM2.5 and CO levels are only weakly correlated with each other, both exhibit a robust negative relationship with test scores. We also find that PM2.5, which is thought to be particularly damaging for asthmatics, has a larger negative impact on groups with higher rates of asthma. For CO, which affects neurological functioning, the effect is more homogenous across demographic groups. Furthermore, we find that exposure to either pollutant is associated with a significant decline in the probability of not receiving a Bagrut certificate, which is required for college entrance in Israel. The results suggest that the gain from improving air quality may be underestimated by a narrow focus on health impacts. Insofar as air pollution may lead to reduced cognitive performance, the consequences of pollution may be relevant for a variety of everyday activities that require mental acuity. Moreover, by temporarily lowering the productivity of human capital, high pollution levels lead to allocative inefficiency as students with lower human capital are assigned a higher rank than their more qualified peers. This may lead to inefficient allocation of workers across occupations, and possibly a less productive workforce. |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10302&r=ure |
| By: | Gabriel M. Ahlfeldt; Georgios Kavetsos |
| Abstract: | Professional sports facilities are among the most expensive development projects. Assessing the external effects related to these and the channels through which these effects operate is a challenging task. We propose a strategy to value the external effects stadia deliver to their neighbourhoods based on the variation of property prices. Our strategy allows for unobserved spatial heterogeneity, anticipation effects, and disentangles the stadium’s function as a sports facility from its form as a physical structure that (visually) dominates the neighbourhood. We apply this strategy to two of the largest stadium projects of the recent decade, the New Wembley and the Emirates Stadium in London. Our results suggest there are positive stadium effects on property prices, which are large compared to construction costs. Notable anticipation effects are found immediately following the announcement of the stadium plans. We further argue that stadium architecture plays a role in promoting positive spillovers to the neighbourhood. |
| Keywords: | neighbourhood amenities; property prices; sport; stadium impact |
| JEL: | F3 G3 |
| Date: | 2014–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:47352&r=ure |
| By: | Jonathan Reades; Duncan Smith |
| Abstract: | Reades J. and Smith D. A. Mapping the ‘space of flows’: the geography of global business telecommunications and employment specialization in the London mega-city-region, Regional Studies. Telecommunications has radically reshaped the way that firms organize industrial activity. And yet, because much of this technology – and the interactions that it enables – is invisible, the corporate ‘space of flows’ remains poorly mapped. This article combines detailed employment and telecoms usage data for the South-east of England to build a sector-by-sector profile of globalization at the mega-city-region scale. The intersection of these two datasets allows a new empirical perspective on industrial geography and regional structure to be developed. |
| Keywords: | globalization telecommunications; firm location; land use patterns; distribution of economic activity; England |
| JEL: | N0 R14 J01 L91 L96 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55812&r=ure |
| By: | Johanna Catherine Maclean (Department of Economics, Temple University); Terrence D. Hill (Department of Sociology, The University of Utah) |
| Abstract: | In this study we test whether leaving school in an economic downturn impacts self-esteem. Self-esteem is an important dimension of non-cognitive skill that economists have recently begun to examine. Previous work documents that leaving school in a downturn persistently depresses career outcomes, and career success is an important determinant of self-esteem. We model responses to the Rosenberg Self-esteem Scale as a function of the state unemployment rate at school-leaving. We address the potential endogeneity of time and location of school- leaving with instrumental variables. Our results suggest that leaving school in an economic downturn lowers self-esteem men but effects do not emerge until middle adulthood, and are particularly strong for white and high skill men. |
| Keywords: | self-esteem, non-cognitive skills, school-leaving, macroeconomic fluctuations |
| JEL: | I1 I12 J2 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1505&r=ure |
| By: | Nijkamp, Peter (VU University Amsterdam); Poot, Jacques (University of Waikato) |
| Abstract: | Cultural diversity – in various forms – has in recent years turned into a prominent and relevant research and policy issue. There is an avalanche of studies across many disciplines that measure and analyse cultural diversity and its impacts. Based on different perspectives and features of the available data, a great variety of diversity indicators have emerged. The present paper aims to highlight some critical issues involved in applying such measures of cultural diversity. A selection of commonly used or recently advocated measures are reviewed. Measures of population diversity can be calculated at different spatial scales and used to analyse spatio-temporal heterogeneity. Additionally, there is a growing interest in measuring spatial dependence, particularly in the form of segregation or clusters. We conclude that there will be in the future considerable scope for adopting multidimensional and cultural distance-weighted measures of diversity. Such measures will be increasingly calculated by means of rich geo-referenced longitudinal micro data. However, adopted measures must be better motivated by behavioural theories. Further research on the determinants and impacts of observed measures of diversity is also likely to be fruitful, particularly in a dynamical setting. |
| Keywords: | diversity, dissimilarity measurement, ethnicity, culture, segregation, polarization, fractionalization |
| JEL: | C00 D63 J15 R23 Z13 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8782&r=ure |
| By: | Giulia Faggio |
| Abstract: | This paper assesses the local labour market impact of a UK public sector relocation initiative labeled the Lyons Review. The review resulted in the dispersal of more than 25,000 civil servants out of London and the South East towards other UK destinations. The objective of the paper is to detect whether inflows of public sector jobs have crowded out private sector activity or stimulated the local provision of additional jobs in the private sector. By applying a difference-in-difference approach, I evaluate the policy impact comparing areas in close proximity to a relocation site with areas further away. I find that the dispersal of public sector workers that followed the implementation of the Lyons Review had a positive impact on local services with a negative, but weaker, impact on manufacturing. |
| Keywords: | economic development; regional labour markets; regional government policy; job displacement |
| JEL: | J61 O1 R23 R58 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58530&r=ure |
| By: | Jens Boysen-Hogrefe; Nils Jannsen; Carsten-Patrick Meier |
| Abstract: | We investigate whether recoveries following normal recessions differ from recoveries following recessions that are associated with either banking crises or housing crises. Using a parametric panel framework that allows for a bounce-back in the level of output during the recovery, we find that normal recessions are followed by strong recoveries in advanced economies. This bounce-back is absent following recessions associated with banking crises and housing crises. Consequently, the permanent output losses of recessions associated with banking crises and housing crises are considerably larger than those of normal recessions |
| Keywords: | Business cycle; recovery; banking crisis; housing crisis |
| JEL: | E32 C33 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1984&r=ure |
| By: | Erlend Berg; R Manjula |
| Abstract: | This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to at pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent. |
| Keywords: | public services; information constraints; incentive pay; social proximity; knowledge transmission |
| JEL: | N0 |
| Date: | 2013–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58167&r=ure |
| By: | Laura Jaitman; Stephen Machin |
| Abstract: | We study a high profile public policy question on immigration, namely the link between crime and immigration, presenting new evidence from England and Wales in the 2000s. For studying immigration impacts, this period is of considerable interest as the composition of migration to the UK altered dramatically with the accession of Eastern European countries (the A8) to the European Union in 2004. As we show, this has important implications for ensuring a causal impact of immigration can be identified. When we are able to implement a credible research design with statistical power, we find no evidence of an average causal impact of immigration on crime, nor do we when we consider A8 and Non-A8 immigration separately. We also study London by itself as the immigration changes over time in the capital city were large. Again, we find no causal impact of immigration on crime from our spatial econometric analysis and also present evidence from unique data on arrests of natives and immigrants in London which shows no immigrant differences in the likelihood of being arrested. |
| Keywords: | Crime; Immigration; Enclaves; A8 |
| JEL: | F22 K42 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59328&r=ure |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia); Kata Mihaly; Jonah E. Rockoff |
| Abstract: | This article reviews the literature on teacher value-added. Although value-added models have been used to measure the contributions of numerous inputs to educational production, their application toward identifying the contributions of individual teachers has been particularly contentious. Our review covers articles on topics ranging from technical aspects of model design to the role that value-added can play in informing teacher evaluations in practice, highlighting areas of consensus and disagreement in the literature. Although a broad spectrum of views is reflected in available research, along a number of important dimensions the literature is converging on a widely-accepted set of facts. |
| Keywords: | Value-added models, VAM, teacher evaluation, education production |
| JEL: | J45 M52 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1501&r=ure |
| By: | Neil Lee; Max Nathan |
| Abstract: | A growing body of research is making links between diversity and the economic performance of cities and regions. Most of the underlying mechanisms take place within firms, but only a handful of organization-level studies have been conducted. We contribute to this underexplored literature by using a unique sample of 7,600 firms to investigate links among cultural diversity, innovation, entrepreneurship, and sales strategies in London businesses between 2005 and 2007. London is one of the world's major cities, with a rich cultural diversity that is widely seen as a social and economic asset. Our data allowed us to distinguish owner/partner and wider workforce characteristics, identify migrant/minority-headed firms, and differentiate firms along multiple dimensions. The results, which are robust to most challenges, suggest a small but significant “diversity bonus” for all types of London firms. First, companies with diverse management are more likely to introduce new product innovations than are those with homogeneous “top teams.” Second, diversity is particularly important for reaching international markets and serving London's cosmopolitan population. Third, migrant status has positive links to entrepreneurship. Overall, the results provide some support for claims that diversity is an economic asset, as well as a social benefit. |
| Keywords: | cultural diversity; innovation; entrepreneurship; management; immigration; economic development; diasporas; cities; London |
| JEL: | N0 |
| Date: | 2013–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:52363&r=ure |
| By: | Coda Moscarola, Flavia; Colombino, Ugo; Figari, Francesco; Locatelli, Marilena |
| Abstract: | A tax shifting from labour income to housing taxation is generally advocated on efficiency grounds. However, most of the empirical literature focuses on the distributional implications of property tax reforms without paying much attention to potential consequences on the labour market. The aim of this paper is to fill this gap by investigating the effects of a tax shifting from labour income to property, guaranteeing revenue neutrality, and to assess the consequences of labour market equilibrium, both on occupation rates and income distribution. We propose to consider a hypothetical tax reform in Italy which uses the revenue of the tax on house property (actually implemented in 2012) for increasing tax credits on low incomes and making them refundable. In order to evaluate the reform we have developed a structural model of household labour supply which takes into account the labour market equilibrium conditions. Overall, the simulated policy provides a more effective income support and better inc |
| Date: | 2014–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em20-14&r=ure |
| By: | Clément Bosquet; Pierre-Philippe Combes |
| Abstract: | We study the effect of a large set of department characteristics on individual publication records. We control for many individual time-varying characteristics, individual fixed-effects and reverse causality. Department characteristics have an explanatory power that can be as high as that of individual characteristics. The departments that generate most externalities are those where academics are homogeneous in terms of publication performance and have diverse research fields, and, to a lesser extent, large departments, with more women, older academics, star academics and foreign co-authors. Department specialisation in a field also favours publication in that field. More students per academic does not penalise publication. At the individual level, women and older academics publish less, while the average publication quality increases with average number of authors per paper, individual field diversity, number of published papers and foreign co-authors. |
| Keywords: | productivity determinants; economic geography; networks; economics of science; selection and endogeneity |
| JEL: | I3 J24 R12 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58306&r=ure |
| By: | Görlitz, Katja (Free University of Berlin); Gravert, Christina (University of Gothenburg) |
| Abstract: | This paper evaluates the effects of a high school curriculum reform that was introduced in one German state on high school dropout. The reform increased the standards of the curriculum by reducing the freedom of choice in course selection (amongst other things) resulting in an increase in the level and the weekly teaching hours in the subjects German, a foreign language, mathematics and natural sciences. Using a quasi-experimental evaluation design exploiting variation across time and states, we identify the reform effect on students' probability to graduate from high school. The results show that high school dropout rates have increased for males and females alike. However, the effect for males vanishes two years after reform implementation, while it remains persistent for females even after three years. |
| Keywords: | high school curriculum reform, high school dropout, school performance |
| JEL: | D04 I21 I28 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8766&r=ure |
| By: | Peter M. Robinson; Francesca Rossi |
| Abstract: | For testing lack of correlation against spatial autoregressive alternatives, Lagrange multiplier tests enjoy their usual computational advantages, but the (χ2) first-order asymptotic approximation to critical values can be poor in small samples. We develop refined tests for lack of spatial error correlation in regressions, based on Edgeworth expansion. In Monte Carlo simulations, these tests, and bootstrap tests, generally significantly outperform χ2-based tests. |
| Keywords: | bootstrap; Edgeworth expansion; finite-sample corrections; Lagrange multiplier test; spatial autocorrelation |
| JEL: | C0 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:56049&r=ure |
| By: | Booij, Adam S. (University of Amsterdam); Leuven, Edwin (University of Oslo); Oosterbeek, Hessel (University of Amsterdam) |
| Abstract: | This paper estimates peer effects originating from the ability composition of tutorial groups for undergraduate students in economics. We manipulated the composition of groups to achieve a wide range of support, and assigned students – conditional on their ability – randomly. The data support a specification in which the group composition is captured by the mean and standard deviation of prior ability and their squares and interactions. Estimates from this specification imply that students of low and medium ability gain on average 0.2 SD units of achievement from switching from ability mixing to three-way tracking. Their dropout rate is reduced by 15 percentage points (relative to a mean of 0.6). High-ability students are unaffected. Analysis of survey data indicates that in tracked groups, low-ability students have more positive interactions with other students, and are more involved. We find no evidence that teachers adjust their teaching to the composition of groups. |
| Keywords: | peer effects, tracking, post-secondary education, field experiment |
| JEL: | I22 I28 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8769&r=ure |
| By: | Arthur Grimes (Motu Economic and Public Policy Research); Ian Mitchell (Livingston Associates) |
| Abstract: | Dwelling prices are determined in the long run by the total costs of a development, where costs include regulatory costs, including costs of delay and uncertainty. We outline a conceptual framework for the development process and then develop a real options model of housing development that indicates more formally how regulatory policies and regulatory practices affect development decisions. We apply these insights to the design of a survey of property developers active in the Auckland market, with an emphasis on the ‘affordable’ part of the market. In surveying developers, we aim to elicit their views regarding the impacts that planning rules and regulations have on total development costs. We do not attempt to value the corresponding benefits of the planning rules and regulations, so this study is not a cost: benefit analysis of council planning approaches; rather it documents the costs of the rules and regulations – as perceived by developers – to provide a basis for benefits to be compared. Almost 90% of surveyed developers have been affected by delays or uncertainties related to regulation. Regulations that have had major effects on the actual building costs of apartments include: building height limits, balcony requirements, conforming to Council’s desired mix of apartment typologies and minimum floor to ceiling heights. Major cost effects on developing residential sections and standalone dwellings include: infrastructure contributions not related to the specific development, section size requirements, extended consent processes and urban design considerations stemming from Council’s urban designers. Reserve and development contributions and Watercare levies affect the costs of both types of development. Excluding the cost of Watercare and reserve and development contributions, the typical cost range of the total impact of regulations is estimated to vary between $32,500 and $60,000 per dwelling in a subdivision. In terms of affordable apartments, assuming the total internal floor area remains the same and no deck is built, the impact on total cost typically is estimated to range between $65,000 and $110,000 per apartment. |
| Keywords: | Residential property development; planning rules; delay; uncertainty; Auckland |
| JEL: | K29 R31 R38 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:15_02&r=ure |
| By: | Albornoz-Crespo, Facundo; Cabrales, Antonio; Hauk, Esther |
| 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: | cultural identity; immigrant sorting; network formation; parental involvement; peer effects |
| JEL: | I20 I28 J15 J24 J61 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10321&r=ure |
| By: | Seth Gershenson (American University) |
| Abstract: | The 2001 No Child Left Behind Act (NCLB) increased accountability pressure in U.S. public schools by threatening to impose sanctions on Title 1 schools that failed to make adequate yearly progress (AYP) in consecutive years. Difference-in-difference estimates of the effect of failing AYP in the first year of NCLB on teacher effort in the subsequent year suggest that, on average, teacher absences in North Carolina fell by about 10 percent, and the probability of being absent 15 or more times fell by about 30 percent. Reductions in teacher absences were driven by within-teacher increases in effort and were larger among more effective teachers. |
| Keywords: | Performance standards,employee effort, teacher absences, accountability No Child Left Behind |
| JEL: | J45 J48 J22 I2 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:15-217&r=ure |
| By: | Miguel A. Delgado; Peter M. Robinson |
| Abstract: | We develop non-nested tests in a general spatial, spatio-temporal or panel data context. The spatial aspect can be interpreted quite generally, in either a geographical sense, or employing notions of economic distance, or even when parametric modelling arises in part from a common factor or other structure. In the former case, observations may be regularly-spaced across one or more dimensions, as is typical with much spatio-temporal data, or irregularly-spaced across all dimensions; both isotropic models and non-isotropic models can be considered, and a wide variety of correlation structures. In the second case, models involving spatial weight matrices are covered, such as "spatial autoregressive models". The setting is sufficiently general to potentially cover other parametric structures such as certain factor models, and vector-valued observations, and here our preliminary asymptotic theory for parameter estimates is of some independent value. The test statistic is based on a Gaussian pseudo-likelihood ratio, and is shown to have an asymptotic standard normal distribution under the null hypothesis that one of the two models is correct. A small Monte Carlo study of …finite-sample performance is included. |
| Keywords: | on-nested test; spatial correlation; pseudo maximum likelihood estimation |
| JEL: | J1 |
| Date: | 2013–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58169&r=ure |
| By: | Mitsakis, Evangelos; Stamos, Iraklis; Basbas, Socrates; Aggelakis, Miron; Aifadopoulou, Georgia |
| Abstract: | This paper aims at the estimation of road traffic induced environmental pollutants for the city of Thessaloniki, based on travel time detections of a point-to-point detection system. The hourly and daily pollutant emissions (NOx, CO, HC) and fuel consumption (FC) were estimated based on the COPERT model and include hot emissions of passengers’ cars circulating in high hierarchy links of the transport network. The system detections (travel time) were correlated based on each path’s length, in order to determine the average vehicle speed per analyzed time interval, which was the main determinant for calculating traffic induced emissions. The paper concludes with a sensitivity analysis based on link capacity and the prevailing traffic flow characteristics for optimally determining the vehicle speed and flow that minimize environmental pollutants. |
| Keywords: | traffic induced pollutants point-to-point detection system environmental modeling |
| JEL: | R40 R41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61543&r=ure |
| By: | Behrens, Kristian; Bougna, Théophile; Brown, W. Mark |
| Abstract: | We provide evidence for the effects of changes in transport costs, international trade exposure, and input-output linkages on the geographical concentration of Canadian manufacturing industries. Increasing transport costs, stronger import competition, and the spreading out of upstream suppliers and downstream customers are all strongly associated with declining geographical concentration of industries. The effects are large: changes in trucking rates, in import exposure, and in access to intermediate inputs explain between 20% and 60% of the observed decline in spatial concentration over the 1992–2008 period. |
| Keywords: | geographical concentration; input-output linkages; international trade exposure; transport costs; trucking rates |
| JEL: | C23 L60 R12 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10356&r=ure |
| By: | Bosker, Maarten; Garretsen, Harry; Marlet, Gerard; van Woerkens, Clemens |
| Abstract: | The Netherlands is one of the most flood prone countries in the world. It also has the best flood defenses in the world that are built to make floods an extremely rare event. This paper uses the unique Dutch setting to provide evidence on the price and perception of rare environmental disasters. In particular, it allows us to precisely identify whether houses in areas that would flood, in case the Dutch flood defenses fail, cost less than otherwise equal homes that do not run any risk. We do this using a border-discontinuity design that heavily relies on the (spatial) detail of our unique dataset covering every housing transaction over the period 1999-2011. Despite €1.1 billion publicly spent on flood protection each year, we find a 1% flood risk price discount on houses in flood prone areas. The median household living in a flood prone area would be willing to pay an additional €69 per year to be fully insured against flood risk. Our estimate implies that people’s perceived flood risk is substantially higher than the official protection levels at which the government claims to uphold the country’s flood defenses. |
| Keywords: | house prices; implicit insurance; rare flood disasters |
| JEL: | D8 Q54 R21 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10307&r=ure |
| By: | Battal Dogan |
| Abstract: | School choice programs aim to give students the option to choose their school. At the same time, underrepresented minority students should be favored to close the opportunity gap. A common way to achieve this is to have a majority quota at each school, and to require that no school be assigned more majority students than its majority quota. An alternative way is to reserve some seats at each school for the minority students, and to require that a reserve seat at a school be assigned to a majority student only if no minority student prefers that school to her assignment. However, fair rules based on either type of affirmative action suffer from a common problem: a stronger affirmative action may not benefit any minority student and hurt some minority students. First, we show that this problem is pervasive: the problem disappears only if the minority students "mostly" have priority over the majority students. Then, we uncover the root of this problem: for some minority students, treating them as minority students does not benefit them, but possibly hurts other minority students. We propose a new assignment rule (Modified deferred acceptance with minority reserves), which treats such minority students as majority students, achieves affirmative action, and never hurts a minority student without benefiting another minority student. |
| Keywords: | school choice; affirmative action; minimal responsiveness |
| JEL: | C78 D71 D78 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:15.02&r=ure |
| By: | Gianmarco I. P. Ottaviano |
| Abstract: | This brief essay provides a selective discussion of how in recent years economists in the neoclassical tradition have addressed the questions whether and how immigration affects native workers’ labour market outcomes. In particular, it discusses: the distinction between the displacement, productivity and amenity effects of immigration; the issues that arise in using wage changes to identify those effects; and the problem of assessing a causal link from immigration to natives’ labour market outcomes. |
| Keywords: | Immigration; wages; productivity; cultural diversity |
| JEL: | F22 J31 J61 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60444&r=ure |
| By: | Gabriel M. Ahlfeldt; Kristoffer Moeller; Sevrin Waights; Nicolai Wendland |
| Abstract: | Provided there are positive external benefits attached to the historic character of buildings, owners of properties in designated conservation areas benefit from a reduction in uncertainty regarding the future of their area. At the same time, the restrictions put in place to ensure the preservation of the historic character limit the degree to which properties can be altered and thus impose a cost to their owners. We test a simple theory of the designation process in which we postulate that the optimal level of designation is chosen so as to Pareto-maximize the welfare of local owners. The implication of the model is that a) an increase in preferences for historic character should increase the likelihood of a designation, and b) new designations at the margin should not be associated with significant house price capitalization effects. Our empirical results are in line with these expectations. |
| Keywords: | designation; difference-in-difference; RDD-DD; England; gentrification; heritage; property value |
| JEL: | H23 H31 R40 R58 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58349&r=ure |
| By: | Giovanni Mastrobuoni |
| Abstract: | More policing reduces crime but little is known about the mechanism. Does policing deter crime by reducing its attractiveness, or because it leads to additional arrests of recurrent criminals? This paper provides evidence of a direct link between policing and arrests. During shift changes a peculiar redeployment of police patrols belonging to seperate police forces disrupts policing and lowers the likelihood of clearing robberies with an arrest by 30 percent. There is no evidence that criminals exploit these dips in police performance. A back of the envelope calculation suggests that incapacitation explains 2/3 of the elasticity between robberies and policing. |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:758&r=ure |
| By: | Ruth Lupton; Alex Fenton; Amanda Fitzgerald |
| Abstract: | When he came to power in 1997, Tony Blair reacted to widening disparities between poorer and richer neighbourhoods by declaring that no one in future decades should be seriously disadvantaged by where they lived. This paper reviews the policies that Labour pursued and assesses how close it came to realising Blair’s vision. It draws on speeches, policy documents, government website and evaluation reports, and on new analysis of administrative and survey data. We find that Labour’s neighbourhood initial policy approach - the cross departmental National Strategy for Neighbourhood Renewal, with its ‘floor targets’ below which no neighbourhood should fall – was distinctive, although after 2007 there was a move away from this approach towards a narrower focus on economic regeneration, at large spatial scales, and on the reduction of worklessness. Evaluations report that the policies pursued represented value for money and there were trends towards positive outcomes. Physical environments and services got better during Labour’s term in office – a direct result of the policies enacted. Gaps between poorer and richer areas also improved in many individual outcomes, although these cannot be so readily attributed to neighbourhood policy per se. All gaps remained large in 2010, suggesting that Blair’s vision was not fully realised: which is, perhaps, not surprising in the context of sustained income inequalities. |
| Keywords: | neighbourhood; regeneration; renewal; spatial; New Labour |
| JEL: | H76 I38 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58086&r=ure |
| By: | Di Liberto, Adriana (University of Cagliari); Sideri, Marco (University of Cagliari) |
| Abstract: | We study the connection between economic performance and the quality of government institutions for the sample of 103 Italian NUTS3 regions, including new measures of institutional performance calculated using data on the provision of different areas of public services. In order to address likely endogeneity problems, we use the histories of the different foreign dominations that ruled Italian regions between the 16th and 17th century and over seven hundred years before the creation of the unified Italian State. Our results suggest that past historical institutions play a significant role on the current public administration quality and show that the latter makes a difference to the economic performance of regions. Overall, our analysis confirms that the quality of institutions matters for development, and that history can be used to find suitable instruments. |
| Keywords: | economic development, institutions, history, instrumental variables |
| JEL: | O11 O43 C26 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8776&r=ure |
| By: | Graham Floater; Philipp Rode; Alexis Robert; Chris Kennedy; Dan Hoornweg; Roxana Slavcheva; Nick Godfrey |
| Abstract: | Urbanisation is one of the most important drivers of productivity and growth in the global economy. Between 2014 and 2050, the urban population is projected to increase by around 2.5 billion people, reaching 66% of the global population. By 2030, China’s cities alone will be home to nearly 1 billion people. India, Nigeria and Indonesia will also experience rapid population growth. If managed well, the potential benefits of this urban growth are substantial. The economic potential is driven by raised productivity resulting from the concentration of people and economic activities in cities that leads to a vibrant market and fertile environment for innovation in ideas, technologies and processes. Similarly, well-managed cities in high income countries could continue to concentrate national economic growth, through re-densification and the roll out of innovative infrastructure and technologies. |
| JEL: | R14 J01 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60775&r=ure |
| By: | pablo guerron-quintana (Federal Reserve Bank of Philadelphia); Grey Gordon (Indiana University) |
| Abstract: | Bonds are an important source of funding for municipalities. As financing for big budget construction projects or surprise shortfalls in tax revenue, bonds help smooth tax burden across time. There is good reason for this smoothing: if residents feel their tax burden is excessive, they can migrate. The ability of residents to migrate significantly hampers the ability of local governments to raise taxes, and, in the extreme, can lead to default. We document the relationship between bonds, default, and migration in the data. We then construct an islands model that captures these facts while allowing for endogenous migration, taxation, debt issuance, and default. [TO BE DONE:] We assess the short run, long run, and welfare costs of default in our model and explore macro-prudential policies that can mitigate these costs. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:868&r=ure |
| By: | Carlo Menon; Guido de Blasio |
| Abstract: | The paper investigates the effect of local economic conditions on crime. The study focuses on Italy’s local labor markets and analyzes the short-term response of crime to the severe slump of 2007-2009. It shows that the downturn led to a significant increase in economic-related offenses that do not require particular criminal skills or tools (namely, thefts); on the other hand, for offenses for which specific skills and criminal experience are essential (say, robberies) the impact of the crisis was negative. The results also suggest that: i) labor market institutions (i.e. wage supplementary schemes and pro-worker contractual arrangements) had a role in slowing down the effect of the economy on crime; ii) the link between the downturn and crime was weaker in areas where the presence of organized crime is relatively more intensive. |
| Keywords: | crime; economic crises; Italy |
| JEL: | E32 K14 K42 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58314&r=ure |
| By: | Joshua D. Rauh (Stanford University) |
| Abstract: | This paper studies the evolution of city-level pension liabilities over the period 2009-2013 for ten large U.S. municipalities: New York City, Los Angeles, Chicago, Houston, Philadelphia, Jacksonville, San Francisco, Baltimore, Boston, and Atlanta. Despite increases in public equity valuations of around 75 percent over this time period and public attention called to pension reform, the difference between liabilities under governmental accounting measures and the market value of assets fell by an average of less than 2%. Implementing a market value of liability (MVL) approach that values liabilities using bond yields rather than expected returns on assets, unfunded liabilities rose in all ten cities, and the total rose by 40%, from $277 billion to $359 billion. I provide a roadmap of policy options to address city-level pension imbalances in light of the fact that pension liabilities have continued to grow despite an environment of very robust returns on pension fund assets. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:hoo:wpaper:15101&r=ure |
| By: | Katie Bates; Alice Belotti; Anne-Marie Brady; Emma Glassey; Ben Grubb; Eileen Herden; Laura Lane; Julia Oliveira; Anne Power; Bert Provan; Nicola Serle; Rosie Walker |
| Abstract: | LSE Housing and Communities conducted in-depth interviews with 62 residents of Newham in Stratford, East Ham, Royal Docks, Canning Town, Forest Gate and Manor Park, between March and July 2013, and 60 households between October 2013 and January 2014, of whom 38 were from the original sample. This final report presents the findings from these 122 face-to-face, recorded interviews with households on low incomes and 12 life-stories from representative cases. The report uncovers detailed evidence about the financial management skills of low-income residents; the causes, consequences and prevalence of debt; the impact of welfare reform on people’s lives and resilience; and how people struggle to manage. |
| JEL: | N0 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58039&r=ure |
| By: | Giulia Faggio; Olmo Silva; William C. Strange |
| Abstract: | Many prior treatments of agglomeration either explicitly or implicitly suppose that all industries agglomerate for the same reasons, with traditional Marshallian (1890) factors affecting all industries similarly. An important instance of this approach is the extrapolation of the agglomeration experience of one key sector or cluster to the larger economy. Another is the pooling of data to look at common tendencies in agglomeration. This paper uses UK establishment level data on coagglomeration to document heterogeneity across industries in the microfoundations of agglomeration economies. The pattern of heterogeneity that we document is consistent with both traditional Marshallian theories and with alternative approaches that emphasize the adaptive and organizational aspects of agglomeration. *Disclaimer: This work was based on data from the Business Structure Database and the Quarterly UK Labour Force Survey, produced by the Office for National Statistics (ONS) and supplied by the Secure Data Service at the UK Data Archive. The data are Crown Copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the data in this work does not imply the endorsement of ONS or the Secure Data Service at the UK Data Archive in relation to the interpretation or analysis of the data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. |
| Keywords: | agglomeration; microfoundations; heterogeneity; clusters |
| JEL: | R0 R2 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58426&r=ure |
| By: | Luciana Lazzeretti (Dipartimento di Scienze per l'Economia e l'Impresa); Francesco Capone (Dipartimento di Scienze per l'Economia e l'Impresa) |
| Abstract: | Over the last decade, the debate on Evolutionary Economic Geography has been enriched thanks to the ecological approach and its application to the concept of resilience to social systems. Resilience is not only the capacity to absorb shocks and maintain functions, but also includes the capacity for renewal, reorganisation and development. This “adaptive capacity” may be consider in creative approaches as a “creative capacity” able to generate ideas and innovations after a shock, in a creative milieu such a creative city. This paper aims to contribute to the still under-researched debate on resilience and innovation, integrating the resilience approach with the creative one, and developing the still neglected idea of a creative and resilient city. We focus on the city of Florence and on the innovations in conservation sciences developed after the 1966 flood. Combining these perspectives, we consider the city of art as a creative and resilient system, not only to absorb shocks, but also to transform ad renew itself through a “creative adaptive capacity”, where the cultural and art heritage may be both a source for innovation and a source for resilience. We investigate lateral and transversal innovations developed from cross-fertilisation processes in the scientific and humanistic knowledge embedded in the territory. In particular, we focus on the innovations in chemistry in conservation sciences of cultural heritage developed by a scientific network rooted in Florence. The flood was the starting point for the rise of a new innovative trajectory, forming a new scientific niche in modern conservation sciences. |
| Keywords: | Resilience, restoration, cultural heritage, chemical innovations, flood, Florence |
| JEL: | O31 L65 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpmmos:wp2015_01.rdf&r=ure |
| By: | [multiple or corporate authorship]. |
| JEL: | N0 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60480&r=ure |