nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒04‒25
77 papers chosen by
Steve Ross
University of Connecticut

  1. Socio-cultural Diversity and Urban Buzz By Daniel Arribas-Bel; Karima Kourtit; Peter Nijkamp
  2. Welfare Benefits of Agglomeration and Worker Heterogeneity By Coen Teulings; Ioulia Ossokina; Henri L.F. de Groot
  3. Spatial Heterogeneity in Hedonic House Price Models: The Case of Austria By Marco Helbich; Wolfgang Brunauer; Eric Vaz; Peter Nijkamp
  4. Indices of House Prices and Rent Prices of Residential Property in London, 1895-1939 By Luke Samy
  5. Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program By Schuetz, Jenny; Spader, Jonathan; Cortes, Alvaro
  6. The Effect of Railway Travel on Urban Spatial Structure By Martijn I. Dröes; Piet Rietveld†
  7. Border Effects in House Prices By Martin Micheli; Jan Rouwendal; Jasper Dekkers
  8. Historic Amenities and Housing Externalities: Evidence from The Netherlands By Hans R.A. Koster; Jan Rouwendal
  9. How Diverse can Spatial Measures of Cultural Diversity be? Results from Monte Carlo Simulations on an Agent-Based Model By Daniel Arribas-Bel; Peter Nijkamp; Jacques Poot
  10. Local Economic Conditions and the Nature of New Housing Supply By Christian A.L. Hilber; Jan Rouwendal; Wouter Vermeulen
  11. Homeownership, Unemployment and Commuting Distances By Yuval Kantor; Peter Nijkamp; Jan Rouwendal
  12. Firm Formation and Agglomeration under Monopolistic Competition By Stephan Brunow; Peter Nijkamp
  13. Identifying Booms and Busts in House Prices under Heterogeneous Expectations By Wilko Bolt; Maria Demertzis; Cees Diks; Cars Hommes; Marco van der Leij
  14. Urban sprawl and regional growth: first empirical evidence from Italian Regions By Giuseppe Di Liddo
  15. Second-best Urban Tolls in a Monocentric City with Housing Market Regulations By Ioannis Tikoudis; Erik T. Verhoef; Jos N. van Ommeren
  16. Transformations of Industrial Heritage: Insights into External Effects on House Prices By Mark van Duijn; Jan Rouwendal; Richard Boersema
  17. Agglomeration Economies in China: Locations and Effects By Chao Li; John Gibson
  18. High Performance in Complex Spatial Systems: A Self-Organizing Mapping Approach with Reference to The Netherlands By Karima Kourtit; Daniel Arribas-Bel; Peter Nijkamp
  19. Does Public Transit reduce Car Travel Externalities? By Martin W. Adler; Jos N. van Ommeren
  20. Location Choices of highly Educated Foreign Workers: the Importance of Urban Amenities By Or Levkovich; Jan Rouwendal
  21. Cultural Heritage and the Attractiveness of Cities: Evidence from Recreation Trips By Ruben van Loon; Tom Gosens; Jan Rouwendal
  22. Crowding Externalities from Tourist Use of Urban Space By Bart Neuts; Peter Nijkamp; Eveline van Leeuwen
  23. Crowding Out Effects of Refinancing on New Purchase Mortgages By Sharpe, Steve; Sherlund, Shane M.
  24. Parental human capital and effective school management : evidence from The Gambia By Blimpo,Moussa P.; Evans,David; Lahire,Nathalie
  25. On-the-Job Search and City Structure By Aico van Vuuren
  26. Towards a General Theory of Mixed Zones: The Role of Congestion By Yuval Kantor; Piet Rietveld; Jos van Ommeren
  27. Dynamic and static asking prices in the Sydney housing market By Peyman Khezr; Flavio Menezes
  28. Cultural Diversity and Cultural Distance as Choice Determinants of Migration Destination By Zhiling Wang; Thomas de Graaff; Peter Nijkamp
  29. Price Differentiation and Discrimination in Transport Networks By Adriaan Hendrik van der Weijde
  30. Is There an Asymmetric Impact of Housing on Output? By Tsung-Hsien Michael Lee; Wenjuan Chen; ;
  31. Network proximity in the geography of research collaboration By BERGE Laurent
  32. Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI By Teodora Dogaru; Martijn Burger; Bas Karreman; Frank van Oort
  33. Local Tax Limits, Student Achievement, and School-Finance Equalization By Davis, Matt; Vedder, Andrea; Stone, Joe
  34. Estimating the Benefits of Improved Rail Access; Geographical Range and Anticipation Effects By Hans R.A. Koster; Jos N. van Ommeren; Piet Rietveld
  35. Costly Location in Hotelling Duopoly By Jeroen Hinloopen; Stephen Martin
  36. Price Competition on Graphs By Pim Heijnen; Adriaan Soetevent
  37. The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing By Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
  38. Will Choice Hurt? Compared to What? School Choice Experiment in Estonia By Kaire Põder; Triin Lauri
  39. The Spatial Distribution of Creative Industries and Cultural Heritage in The Netherlands By Karima Kourtit; Jan Möhlmann; Peter Nijkamp; Jan Rouwendal
  40. Accessibility of Cities in the Digital Economy By Emmanouil Tranos; Aura Reggiani; Peter Nijkamp
  41. Spillover Dynamics for Systemic Risk Measurement using Spatial Financial Time Series Models By Francisco Blasques; Siem Jan Koopman; Andre Lucas; Julia Schaumburg
  42. Estimating the Skill Bias in Agglomeration Externalities and Social Returns to Education: Evidence from Dutch Matched Worker-Firm Micro-data By Stefan P.T. Groot; Henri L.F. de Groot
  43. Probabilistic Choice and Congestion Pricing with Heterogeneous Travellers and Price-Sensitive Demand By Paul Koster; Erik T. Verhoef; Simon Shepherd; David Watling
  44. Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level By Mesbah J. Motamed; Raymond J.G.M. Florax; William A. Masters
  45. The Value of Proximity to Water in Residential Areas By Jan Rouwendal; Ramona van Marwijk; Or Levkovich
  46. Assessment of Local Key Sectors in a Triple-Layer Spatial System By Eveline van Leeuwen; Yoshifumi Ishikawa; Peter Nijkamp
  47. Natural Gas Extraction, Earthquakes and House Prices By Hans R.A. Koster; Jos N. van Ommeren
  48. Door-to-Door Travel Times in RP Departure Time Choice Models: An Approximation Method based on GPS By Stefanie Peer; Jasper Knockaert; Paul Koster; Yin-Yen Tseng; Erik Verhoef
  49. Overreporting vs. Overreacting: Commuters' Perceptions of Travel Times By Stefanie Peer; Jasper Knockaert; Paul Koster; Erik Verhoef
  50. Renewable Energy and Negative Externalities: The Effect of Wind Turbines on House Prices By Martijn I. Dröes; Hans R.A. Koster
  51. From Islands to Hubs of Innovation: Connecting Innovative Regions By Andrea Caragliu; Peter Nijkamp
  52. Temporal, Spatial, Economic and Crime Factors in Illicit Drug Usage across European Cities By Jacques J.F. Commandeur; Suncica Vujic; Siem Jan Koopman; Barbara Kasprzyk-Hordern
  53. Commuters' Preferences for Fast and Reliable Travel By Paul Koster; Hans Koster
  54. The Rat Race between World Cities: In Search of Exceptional Places by Means of Super-Efficient Data Development Analysis By Karima Kourtit; Peter Nijkamp; Soushi Suzuki
  55. Crime, Employment and Social Welfare: an Individual-level Study on Disadvantaged Males By Geert Mesters; Victor van der Geest; Catrien Bijleveld
  56. Regional Inequality and Human Capital Quality: The Impact of Technology on the Arrival Rate of Employment Offers By Stilianos Alexiadis; Konstantinos Eleftheriou; Peter Nijkamp
  57. The Role of Cities in the Socio-Ecological Transition of Europe (ROCSET) By Thomas Sauer; Stephanie Barnebeck; Yannick Kalff; Judith Schicklinski
  58. Mobile Phone Data and Urban Analysis: An Exploratory Space – Time Study By Emmanouil Tranos; John Steenbruggen; Peter Nijkamp
  59. From boom to bust in the credit cycle: the role of mortgage credit By Bezemer, Dirk; Zhang, L
  60. In Search of Creative Champions in High-Tech Spaces By Karima Kourtit; Peter Nijkamp
  61. Space and Knowledge Spillovers in European Regions By Andrea Caragliu; Peter Nijkamp
  62. On the Existence and Uniqueness of Equilibrium in the Bottleneck Model with Atomic Users By Hugo Emilio Silva; Robin Lindsey; André de Palma; Vincent A.C. van den Berg
  63. Stochastic User Equilibrium Traffic Assignment with Price-sensitive Demand: Do Methods matter (much)? By Adriaan Hendrik van der Weijde; Vincent A.C. van den Berg
  64. Long-Run vs. Short-Run Perspectives on Consumer Scheduling: Evidence from a Revealed-Preference Experiment among Peak-Hour Road Commuters By Stefanie Peer; Erik Verhoef; Jasper Knockaert; Paul Koster; Yin-Yen Tseng
  65. The Formation of a Core Periphery Structure in Heterogeneous Financial Networks By Daan in 't Veld; Marco van der Leij; Cars Hommes
  66. Labor Market Conditions at School-leaving: Long-run Effects on Marriage and Fertility By Johanna Catherine Maclean; Reginald Covington; Asia Sikora Kessler
  67. Modelling R&D and Innovation Support Systems – Analysis of Regional Cluster Structures in Innovation in Portugal By Teresa de Noronha Vaz; Purificación Vicente Galindo; Peter Nijkamp
  68. Urbanization, Natural Amenities, and Subjective Well-Being: Evidence from U.S. Counties By Winters, John V.; Li, Yu
  69. Do Floods have Permanent Effects? Evidence from the Netherlands By Trond G. Husby; Henri L.F. de Groot; Marjan W. Hofkes; Martijn I. Dröes
  70. Airline Route Structure Competition and Network Policy By Hugo Emilo Silva; Erik T. Verhoef; Vincent van den Berg
  71. The effects of local government amalgamation on public spending and service levels. Evidence from 15 years of municipal boundary reform By Allers, Maarten; Geertsema, Bieuwe
  72. Will talent attraction and retention improve metropolitan labor markets? By Andreason, Stuart
  73. The Impact of Fractionalization on Cultural Distance Measures By John M Luiz
  74. Production Networks, Geography and Firm Performance By Bernard, Andrew B.; Moxnes, Andreas; Saito, Yukiko U.
  75. Collateral and Local Lending: Testing the Lender-Based Theory By Andrea Bellucci; Alexander Borisov; Germana Giombini; Alberto Zazzaro
  76. Behavioural Real Estate By Diego A. Salzman; Remco C.J. Zwinkels
  77. Implementation of the Teach For America Investing in Innovation Scale-Up By Marykate Zukiewicz; Melissa A. Clark; Libby Makowsky

  1. By: Daniel Arribas-Bel (VU University Amsterdam); Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: Cities have become playing grounds for competitive behaviour and rapid economic dynamics. But in many cities (or urban agglomerations) economic growth is mainly manifested in specific geographic areas, where creative people and innovative entrepreneurs are located. This paper offers first the foundation for analysing the so-called 'urban buzz' and its interlinked primary drivers. The paper will next develop an analytical framework for testing the buzz hypothesis, with a special reference to the importance of social networks in Amsterdam. In our empirical analysis, we use a unique data set on social network connectivity and spatial concentration in a city, based on location-sharing services through the use of Foursquare. Our urban buzz model shows clearly that buzz and socio-economic (cultural) diversity are closely connected phenomena.
    Keywords: cultural diversity, urban buzz, agglomeration, creativity, piazza, spatial dependence, social networks
    JEL: R1
    Date: 2013–08–06
  2. By: Coen Teulings (University of Cambridge, United Kingdom, and University of Amsterdam, the Netherlands); Ioulia Ossokina (CPB Netherlands Bureau for Economic Policy Analysis); Henri L.F. de Groot (VU University Amsterdam, the Netherlands)
    Abstract: The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these effects. The model is estimated using data on transport infrastructure, commuting behavior, wages, land use and land rents for 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits are shown to differ sharply by workers' educational attainment.
    Keywords: local public goods, agglomeration, spatial equilibrium, residential sorting, land rents
    JEL: H54 R13 R23
    Date: 2014–08–05
  3. By: Marco Helbich (University of Heidelberg, Germany); Wolfgang Brunauer (UniCredit Bank Austria AG, Austria); Eric Vaz (Ryerson University, Canada); Peter Nijkamp (VU University Amsterdam)
    Abstract: This discussion paper led to an article in <I>Urban Studies</I> (2014). Volume 51, issue 2, pages 390-411.<P> Modeling spatial heterogeneity (SH) is a controversial subject in real estate economics. Single-family-home prices in Austria are explored to investigate the capability of global and locally weighted hedonic models. Even if regional indicators are not fully capable to model SH and technical amendments are required to account for unmodeled SH, the results emphasize their importance to achieve a well-specified model. Due to SH beyond the level of regional indicators, locally weighted regressions are proposed. Mixed geographically weighted regression (MGWR) prevents the limitations of fixed effects by exploring spatially stationary and non-stationary price effects. Besides reducing prediction errors, it is concluded that global model misspecifications arise from improper selected fixed effects. Reported findings provide evidence that SH of implicit prices is more complex than can be modeled by regional indicators or purely local models. The existence of both stationa ry and non-stationary effects imply that the Austrian housing market is economically connected.
    Keywords: Spatial heterogeneity, real estate, house price models
    JEL: R1
    Date: 2013–10–18
  4. By: Luke Samy
    Abstract: Data from two different primary sources were used to construct indices of house prices (HPI) and rents (RRPI) of residential property located in London and the Home Counties between 1895 and 1939.  The indices were derived using the hedonics method of price index measurement, which extracts the variation in prices due to differences in the quality of dwellings that form the sample across different time periods.  Both nominal and real HPIs and RRPIs are reported in the paper, as well as simple summary statistics on the levels of house prices and rental values, years purchase and returns on housing for a selected number of boroughs in London over time.
    Keywords: housing, rents, inflation, building societies
    Date: 2015–04–14
  5. By: Schuetz, Jenny (Board of Governors of the Federal Reserve System (U.S.)); Spader, Jonathan (Abt Associates, Inc); Cortes, Alvaro (Abt Associates, Inc.)
    Abstract: During the 2007-2009 housing crisis, concentrations of foreclosed and vacant properties created severe blight in many cities and neighborhoods. The federal Neighborhood Stabilization Program (NSP) was established to help mitigate distress in hard-hit areas by funding the rehabilitation or demolition of troubled properties. This paper analyzes housing market changes in areas that received investments during the second round of NSP funding, focusing on seven large urban counties. Grantees used NSP to invest in census tracts with high rates of distressed and vacancy properties, and tracts that had previously received other housing subsidies. The median NSP tract received quite sparse investment, relative to the overall housing stock and the initial levels of distress. Analysis of housing market outcomes indicates the recovery has been uneven across counties and neighborhoods. In a few counties, there is some evidence that NSP2 activity is correlated with improved housing outcomes.
    Keywords: Foreclosures; Neighborhood revitalization; economic recovery; federal housing policy; housing markets
    JEL: H40 H70 R10 R30
    Date: 2015–03–04
  6. By: Martijn I. Dröes (VU University Amsterdam); Piet Rietveld† (University of Amsterdam)
    Abstract: We examine the effect of railway travel on urban spatial structure in a polycentric urban land use model. We focus on the role of access to the railway network. We find that if the number of train stations is limited, the degree of urbanization is higher around train stations, but the effect of railway travel on road congestion is small. By contrast, if train stations are omnipresent there is little effect on urban spatial structure, but a considerable decrease in congestion. With regard to the supply of train stations, these findings suggest that there is an important policy trade-off between congestion and urbanization.
    Keywords: general equilibrium; public transport; land use model; railway; sorting
    JEL: C68 D58 R13 R14 R4
    Date: 2014–04–29
  7. By: Martin Micheli (RWI Essen, Germany); Jan Rouwendal (VU University Amsterdam, the Netherlands); Jasper Dekkers (VU University Amsterdam, the Netherlands)
    Abstract: We estimate the effect of the Dutch-German border on house prices. In the last 40 years the development of house prices in the Netherlands and Germany has been substantially different. While the Netherlands have been hit by two real estate cycles, prices in Germany have been extraordinary stable. We develop a model for studying house prices and the impact of the border. Then we study the development of Dutch house prices close to the German border in the period 1985-2013. Next, combining German and Dutch real estate datasets, we study the jump in the housing price occurring at the border. Using different estimation strategies, we find that ask prices of comparable housing drop by about 16% when one crosses the Dutch-German border. Given that price discounts from the last observed asking price are substantially larger in Germany, we interpret our findings as indicating the willingness of Dutch households to pay up to 26% higher house prices to live among the Dutch.
    Keywords: house prices, European integration, border effects
    JEL: R31 F15 R21
    Date: 2014–10–23
  8. By: Hans R.A. Koster (VU University Amsterdam, the Netherlands); Jan Rouwendal (VU University Amsterdam, the Netherlands)
    Abstract: It has been argued that the growth of cities is increasingly determined by the presence of amenities. We study the economic effects of large scale subsidised investments in historic amenities, by looking at their impact on house prices. We aim to distinguish between the direct and indirect effect of investments. The latter implies a change in the behaviour of neighbours via changes in the level of maintenance of the house. We use a large nationwide dataset with housing transactions from 1985-2011 and data on investments in cultural heritage. To control for the fact that these investments are non-randomly distributed over space we use repeat sales. Furthermore, we construct an instrument based on yearly fluctuations in the size of national subsidy programmes to maintain cultural heritage. We show that a one million euro per square kilometre increase in investments in cultural heritage leads to a price increase of 1.5-3.0 percent of non-targeted buildings. We do not find evidence that the maintenance state of properties that are not eligible for subsidies are improved, suggesting that any price effect due to investments in cultural heritage is a direct effect of investments.
    Keywords: cultural heritage; historic amenities; housing externalities; hedonic pricing
    JEL: R30 R33
    Date: 2015–02–12
  9. By: Daniel Arribas-Bel (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (The University of Waikato, New Zealand)
    Abstract: Cultural diversity is a complex and multi-faceted concept. Commonly used quantitative measures of the spatial distribution of culturally-defined groups 'such as segregation, isolation or concentration indexes' are often only capable of identifying just one aspect of this distribution. The strengths or weaknesses of any measure can only be comprehensively assessed empirically. This paper provides evidence on the empirical properties of various spatial measures of cultural diversity by using Monte Carlo replications of agent-based modeling (MC-ABM) simulations with synthetic data assigned to a realistic and detailed geographical context of the city of Amsterdam. Schelling's classical segregation model is used as the theoretical engine to generate patterns of spatial clustering. The data inputs include the initial population, the number and shares of various cultural groups, and their preferences with respect to co-location. Our MC-ABM data generating process generates output maps that enable us to assess the performance of various spatial measures of cultural diversity under a range of demographic compositions and preferences. We find that, as our simulated city becomes more diverse, stable residential location equilibria are only possible when particularly minorities become more tolerant. We test whether observed measures can be interpreted as revealing unobserved preferences for co-location of individuals with their own group and find that the segregation and isolation measures of spatial diversity are shown to be non-decreasing in increasing preference for within-group co-location, but the Gini coefficient and concentration measures are not.
    Keywords: cultural diversity, spatial segregation, agent-based model, Monte Carlo simulation
    JEL: C63 J15 R23 Z13
    Date: 2014–07–03
  10. By: Christian A.L. Hilber (London School of Economics, United Kingdom); Jan Rouwendal (VU University Amsterdam, the Netherlands); Wouter Vermeulen (CPB Netherlands Bureau for Economic Policy Analysis, The Hague, the Netherlands)
    Abstract: We present a modified open monocentric city model that assumes that land is available for conversion into new housing throughout the city. The model predicts that positive local income shocks (i) increase the city’s share of multi-family housing in new construction and (ii) lead to the construction of smaller units. We exploit the metro area samples of the American Housing Survey from 1984 to 2004 and find support for both predictions. We confirm that the adjustment process is driven by migration and is hindered by strict local land use control. Our findings imply that tight regulation may hamper metro area level labor market adjustment to positive economic shocks not only through limits on the quantity of newly supplied units but also by constraining their type to single-family houses and larger units that may be less suitable for would-be-migrants.
    Keywords: Local economic conditions, open monocentric city model, land conversion, housing supply, housing type, housing consumption, land use regulation, migration
    JEL: R11 R21 R31 R52
    Date: 2014–09–02
  11. By: Yuval Kantor (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam)
    Abstract: More than a decade ago Oswald has formulated the thesis that homeownership increases unemployment. Empirical research on micro data has confirmed that unemployed homeowners are less inclined to move house in combination with accepting a new job elsewhere. However, in general for European countries, residential mobility associated with unemployment spells appears to be too small to be able to have a substantial impact on labour market outcomes. The present paper aims to make a new contribution to the scientific debate on Oswald’s thesis by addressing two complementary issues: risk attitudes of job seekers and commuting costs. We show that decreasing absolute risk aversion implies that the exit rate from unemployment is increasing in housing cost in the context of a standard job search model. In a spatial setting this is shown to imply that higher housing costs increase average commuting distances as well. We test these predictions on Dutch register data. Our empirical results show that outright homeowners have lower exit rates from unemployment than renters and are more reluctant to accept long commutes, which confirms Oswald’s thesis. However, highly leveraged homeowners have higher exit rates than renters and are more inclined to accept longer commutes, which confirms earlier findings in the literature.
    Keywords: homeownership, unemployment duration, spatial labour markets
    JEL: J6 R2
    Date: 2013–09–19
  12. By: Stephan Brunow (Institute for Employment Research (IAB) of the German Federal Employment Agency (BA), Nuremberg, Germany); Peter Nijkamp (VU University Amsterdam)
    Abstract: In the presence of agglomeration economies one might expect a relocation and concentration of industries. Then firm start-up activities may be assumed to reveal those effects. We introduce an empirical testable model inspired by the New Economic Geography and human capital externalities literature. The novelty of this paper is that it derives a measure of agglomeration economies founded on microeconomic analysis based on households' and firms' maximization behavior, namely the real market potential. Besides agglomeration forces, dispersion and human capital effects can be separated and explicitly controlled for. The paper sheds new light on the general mechanisms of intra-industrial agglomeration forces because it explicitly considers the regional distribution of economic activities. It offers clear evidence for the empirical relevance of the New Economic Geography.
    Keywords: New Economic Geography, Agglomeration, Externalities, Firm Formation
    JEL: L13 O41 R11 R3
    Date: 2013–09–06
  13. By: Wilko Bolt (De Nederlandsche Bank, the Netherlands); Maria Demertzis (De Nederlandsche Bank, the Netherlands, and European Commission); Cees Diks (University of Amsterdam, the Netherlands); Cars Hommes (University of Amsterdam, the Netherlands); Marco van der Leij (University of Amsterdam, the Netherlands)
    Abstract: We introduce heterogeneous expectations in a standard housing market model linking housing rental levels to fundamental buying prices. Using quarterly data we estimate the model parameters for eight different countries, US, UK, NL, JP, CH, ES, SE and BE. We find that the data support heterogeneity in expectations, with temporary endogenous switching between fundamental mean-reverting and trend-following chartists beliefs based on their relative performance. For all countries we identify temporary house price bubbles, amplified by trend extrapolation, and crashes reinforced by fundamentalists. The qualitative predictions of such non-linear models are very different from standard linear benchmarks, with important policy implications. The fundamental price becomes unstable, e.g. when the interest rate is set too low or mortgage tax deductions too high, giving rise to multiple non-fundamental equilibria and/or global instability.
    Keywords: housing prices, heterogenous agents model, bounded rationality, bubbles
    JEL: C53 R21 R31
    Date: 2014–12–22
  14. By: Giuseppe Di Liddo (Università di Bari e Università del Salento)
    Abstract: There are many factors inducing to think that urban sprawl can affect eco- nomic growth trough its negative effects on a number of relevant aspects of the economic activity. The negative effect may be due either by the increase in infrastructure's cost of provision within the national area and the reduction in productivity of farmland or by the increase in distortionary local taxes or subsi- dies. Furthermore, urbanization of remote rural area may also have important negative effects on public health. Using Italian regional data, this paper provides empirical evidence of the negative impact of urban sprawl on economic growth. The results suggest that reducing urban sprawl may leads to an increase in economic growth and that planning policies aimed to this intent are strongly recommended for Italy.
    Keywords: urban Sprawl, regional growth, Italian Regions
    JEL: R10 R14 H73 H77
  15. By: Ioannis Tikoudis (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam)
    Abstract: This paper investigates second-best congestion pricing in a monocentric city characterized by distortionary, rigid regulatory mechanisms in the housing market (building height restrictions, zoning and property taxation). The Pigouvian toll is shown to retain its optimality under any setting with quantity restrictions in the housing market. However, the extent of the quantity restriction determines the volume of the welfare gains in a non-monotonic fashion. This finding introduces a warning to cost-benefit analyses: our numerical results suggest that the actual gains of a road tax might be 40% lower than the gains predicted by a model that disregards maximum building height restrictions, and 80% higher than the gains suggested by a model that disregards zoning. In general, this implies that decision making on urban road pricing can ignore quantitative restrictions in the related markets of land, housing and labor insofar as the determination of optimal marginal tax rules is concerned; the tax levels stemming from those rules will be affected by the restrictions. However, this is not the case in the presence of a tax-induced distortion. Introducing an ad- valorem property tax on housing, we show that adjustments of the Pigouvian toll can lead to small, but not negligible welfare gains.
    Keywords: road pricing, building height restrictions, zoning, property tax, monocentric city, cost-benefit analysis
    JEL: R48 R52 R13 H21 H23 D61
    Date: 2015–01–15
  16. By: Mark van Duijn (VU University Amsterdam, and University of Groningen, the Netherlands); Jan Rouwendal (VU University Amsterdam, the Netherlands); Richard Boersema (Colliers International, Amsterdam)
    Abstract: Local policy makers seek ways to deal with abandoned industrial heritage in their jurisdictions. Much is demolished, but in some cases considerable investments are made to preserve the cultural aspects of industrial sites. The renewal plans are usually designed to stimulate urban renewal in the vicinity of these sites. Little seems to be known about the effectiveness of these policies and in this paper, we study whether the redevelopment of five industrial heritage sites caused positive external effects by investigating the development of house prices in nearby residential areas. We use a quasi‐experimental design by comparing quality‐adjusted house prices before the start, between the start and the completion and after the completion of the transformation. We find substantial effects of one site, which is the best-known example of renovated industrial heritage i n the Netherlands, but much smaller or no effects for the other sites. We also model the decay of these effects over time and space. We find different decay effects for each case. We conclude that industrial heritage sites do not necessarily cause negative external effects. If there are negative external effects present they disappear at the start of the transformation of the industrial heritage site, suggesting anticipation effects. Also, positive external effects on house prices after the redevelopment of industrial heritage are not necessarily present. The details of the transformation project (e.g. location, size of the site, size of the investment, focus on interior or exterior investments) seem to be important determinants that may cause the existence of positive external effects.
    Keywords: Industrial heritage, redevelopment, urban revitalization, external effects, hedonic prices
    JEL: C21 D62 H43 R0
    Date: 2014–09–12
  17. By: Chao Li (University of Waikato); John Gibson (University of Waikato)
    Abstract: The nature and location of urbanization economies and their effects on productivity per worker in China are examined. Unlike previous studies, more accurate resident-based measures of urban scale from the 2010 census are used. The size of urbanization economies is similar to those in other countries and they occur only in bigger cities and not in smaller towns, and operate only through tertiary sector activity. Efforts by government to disperse urbanization, through land use and migration restrictions and by stimulating construction and manufacturing in China’s counties, are unlikely to create beneficial agglomeration effects.
    Keywords: agglomeration; cities; population; productivity; urbanization; China
    JEL: R12 O15
    Date: 2014–04–01
  18. By: Karima Kourtit (VU University Amsterdam); Daniel Arribas-Bel (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This discussion paper resulted in an article in the <I>Annals of Regional Science</I> (2012). Volume 48, issue 2(SI), pages 501-527.<P> This paper addresses the performance of creative firms from the perspective of complex spatial systems. Based on an extensive high-dimensional database on both the attributes of individual creative firms in the Netherlands and a series of detailed regional facilitating and driving factors related, inter alia, to talent, innovation, skills, networks, accessibility and hardware, a new methodology called self-organizing mapping (SOM) is applied to identify and explain in virtual topological space, the relative differences between these firms and their business performance in various regions. It turns out that there are significant differences in the spatial and functional profile of large firms vis-à-vis SMEs across distinct geographical areas in the country.
    Keywords: complex spatial systems, self-organizing mapping, creative firms, talent, innovation, networks, accessibility, business performance, spatial and functional profiles, SMEs, large firms, geographical areas
    JEL: M1 Q5 R1 R10
    Date: 2013–12–09
  19. By: Martin W. Adler (VU University Amsterdam, the Netherlands); Jos N. van Ommeren (VU University Amsterdam, the Netherlands)
    Abstract: One of the main unanswered questions in the field of urban economics is to which extent subsidies to public transit are justified. We examine one of the main benefits of public transit, a reduction in car congestion externalities, the so-called congestion relief benefit, using quasi-natural experimental data on citywide public transit strikes for Rotterdam. On weekdays, a strike induces car speed to decrease only marginally on the highway ring road (by 3 percent) but substantially on inner city roads (by 10 percent). During rush hour, the strike effect is much more pronounced. The congestion relief benefit is substantial, equivalent to about half of the public transit subsidy. We demonstrate that during weekends, car speed does not change noticeable due to strikes. Further, we show that public transit strikes induce similar increases in number of cyclists as number of car travelers suggesting that bicycling-promoting policies to reduce car congestion externalities might be attractive.
    Keywords: transit subsidies, public transit, traffic congestion, congestion relief benefit, strike
    JEL: H76 J52 L92 R41
    Date: 2015–01–22
  20. By: Or Levkovich; Jan Rouwendal (VU University Amsterdam)
    Abstract: In the globalized economy the presence of migrants is essential for urban and regional growth, and it is therefore important to know what makes a city an attractive place for highly skilled migrants. This paper aims to shed light on this issue by considering the location choice of highly-educated foreign workers, and if and how their valuation of urban amenities differs from domestic workers. To do so, we apply a residential location-choice model to estimate the attractiveness of residential locations in the Dutch Randstad for low and high-skilled, domestic and foreign workers, and calculate and compare their willingness to pay for each of these amenities.
    Keywords: urban amenities, foreign workers
    JEL: R53 R11
    Date: 2014–07–22
  21. By: Ruben van Loon (VU University Amsterdam); Tom Gosens (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam)
    Abstract: Many cities are trying to attract tourists by investing in urban amenities. Cultural heritage is an important example and substantial investments are needed to keep ancient inner cities and characteristic monumental buildings in good shape. The costs of these policies are usually clear, the benefits are often much more difficult to assess. This paper attempts to fill part of this gap by studying the destination choices of urban recreation trips that have urban recreation as the main travel motive. We estimate a discrete choice model for destination choice that takes into account the potential importance of unobserved characteristics. The model allows us to compute the marginal willingness to travel for destinations offering more cultural heritage, which we measure as the area of the inner city that has a protected status because of the cultural heritage that is present there.
    Keywords: Cultural heritage, recreation, city marketing
    JEL: C31 D12 R12 R22 L83
    Date: 2014–04–28
  22. By: Bart Neuts (KU Leuven, Belgium); Peter Nijkamp (VU University Amsterdam); Eveline van Leeuwen (VU University Amsterdam)
    Abstract: Popular urban tourist destinations are attracting large numbers of both overnight visitors and excursionists. Since urban cities perform a multitude of functions, the space requirements of tourists can, at times, interfere with those of local users. This paper addresses the issue of disutilities of space congestion through a dichotomous choice experiment model in order to offer a monetary valuation of tourist crowding in urban public space. A resident survey was carried out in the city of Amsterdam in order to estimate a random parameter logit model through which the residents’ willingness to pay to avoid unfavourable crowding situations can be assessed. Their willingness to pay in order to increase the use levels by visitors in the Dam area from ‘not at all crowded’ or ‘not crowded’ to ‘crowded’ was respectively €1.36 and €0.83 annually, while the mean willingness to pay for a decline in the use level from ‘very crowded’ to ‘crowded’ was estimated to be €11.06 a year. While tourism is only partly responsible for these crowding levels, the results demonstrate that the social effects of tourist consumption can be positive as well as negative, depending on the existing use level and attitudinal perceptions of residents.
    Keywords: public space, crowding, externalities, choice experiments, tourism, willingness to pay
    JEL: P25
    Date: 2013–09–20
  23. By: Sharpe, Steve (Board of Governors of the Federal Reserve System (U.S.)); Sherlund, Shane M. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: We present evidence that binding mortgage processing capacity constraints reduce mortgage originations to borrowers of low to modest credit quality. Mortgage processing capacity constraints typically bind when the demand for mortgage refinancing shifts outward, usually because of lower mortgage rates. As a result, high capacity utilization leads mortgage lenders to ration mortgage credit, completing mortgages that require less underwriting resources, and are thus less costly, to produce. This is hypothesized to have a particularly adverse impact on the ability of low- to modest-credit-quality borrowers to obtain mortgages. What is more, we show that, by lowering capacity utilization, a rise in interest rates can, under certain circumstances, induce an increase in mortgage originations to borrowers of low to modest credit quality. In particular, we find fairly large effects for purchasing borrowers of modest credit quality, in which we find that a decrease in capacity utilization of 4 applications per mortgage employee (similar to that observed from 2012 to 2013) could result in increased purchase mortgage originations, as the relaxed capacity constraint at least partially offsets the higher cost of mortgage credit.
    Keywords: Mortgages and credit; capacity constraint; refinancing
    JEL: G21
    Date: 2015–03–12
  24. By: Blimpo,Moussa P.; Evans,David; Lahire,Nathalie
    Abstract: Education systems in developing countries are often centrally managed in a top-down structure. In environments where schools have different needs and where localized information plays an important role, empowerment of the local community may be attractive, but low levels of human capital at the local level may offset gains from local information. This paper reports the results of a four-year, large-scale experiment that provided a grant and comprehensive school management training to principals, teachers, and community representatives in a set of schools. To separate the effect of the training from the grant, a second set of schools received the grant only with no training. A third set of schools served as a control group and received neither intervention. Each of 273 Gambian primary schools were randomized to one of the three groups. The program was implemented through the government education system. Three to four years into the program, the full intervention led to a 21 percent reduction in student absenteeism and a 23 percent reduction in teacher absenteeism, but produced no impact on student test scores. The effect of the full program on learning outcomes is strongly mediated by baseline local capacity, as measured by adult literacy. This result suggests that, in villages with high literacy, the program may yield gains on students'learning outcomes. Receiving the grant alone had no impact on either test scores or student participation.
    Keywords: Primary Education,Education For All,Secondary Education,Tertiary Education,Effective Schools and Teachers
    Date: 2015–04–13
  25. By: Aico van Vuuren (VU University Amsterdam)
    Abstract: We investigate an equilibrium search model in which the search frictions are increasing with the distance to the central business district allowing for on-the-job search and endogenous (monopsony) wage formation and land allocation. We find that there are many different possible outcomes with respect to the location of unemployed workers within a metropolitan area. The city structure of the decentralized market is only efficient when commuting costs of the employed workers are large. Policies reducing the rental costs of unemployed workers for locations close to the central business district can potentially increase welfare.
    Keywords: Search, city structure, urban economics
    JEL: J42 J60 J64 R10
    Date: 2015–02–02
  26. By: Yuval Kantor (VU University); Piet Rietveld (VU University); Jos van Ommeren (VU University)
    Abstract: Mixed commercial and residential land use is observed in most cities around the world. This is in contrast to a myriad of bid rent models, which predict that mixed land use does not occur. The main exception are the models by Fujita and Ogawa (1982) and Lucas and Rossi-Hansberg (2002) that predict the presence of a very restrictive type of mixed land use. The latter study derives the equilibrium distribution of residential and commercial land uses while allowing for endogenous agglomeration externalities. We extend this model by introducing a traffic congestion externality. We show that congestion induces a general type of mixed land use zone, which is comparable to the type of zone assumed in the model of Wheaton (2004). The interplay between these externalities is then demonstrated, as reduced congestion leads to commercial concentration and agglomeration gains.
    Keywords: land use, congestion, agglomeration, externalities
    JEL: R13
    Date: 2013–06–20
  27. By: Peyman Khezr (School of Economics, The University of Queensland); Flavio Menezes (School of Economics, The University of Queensland)
    Abstract: This paper investigates the impact of two commonly used asking price strategies on house sales prices. In particular, we compare a dynamic asking price, where the seller adjusts her asking price over time as she fails to sell her property, with a static asking price, where the seller sets an asking price and sticks to it until the property is sold. While this comparison is ambiguous from a theoretical perspective, our empirical study using a comprehensive data set on the properties sold in the greater Sydney region indicates that properties with a dynamic asking price sold, on average, for $25,400 less than properties with a static asking price, which is approximately four percent of the mean property price in our sample. In addition, we also show that, controlling for the asking price strategy, the duration of sale has a significant impact on sales prices.
    Keywords: asking price,dynamic pricing,housing market
    JEL: R31 R32
  28. By: Zhiling Wang; Thomas de Graaff; Peter Nijkamp (VU University Amsterdam)
    Abstract: This study analyses the impact of cultural composition on regional attractiveness from the perspective of migrant sorting behaviour. We use an attitudinal survey to quantify cultural distances between natives and immigrants in the area concerned, and estimate the migrants’ varying preferences for both cultural diversity and cultural distance. To account for regional unobserved heterogeneity, our econometric analysis employs artificial instrumental variables, as developed by Bayer et al. (2004). The main conclusions are twofold. On the one hand, cultural diversity increases regional attractiveness. On the other hand, average cultural distance greatly weakens regional attractiveness, even when the presence of network effect is controlled for.
    Keywords: migration, cultural diversity, cultural distance, destination choice, sorting
    JEL: R2 Z1
    Date: 2014–06–02
  29. By: Adriaan Hendrik van der Weijde (VU University Amsterdam)
    Abstract: This paper analyzes the effects of price differentiation and discrimination by a monopolistic transport operator, which sets fares in a congestible network. Using three models, with different spatial structures, we describe the operator’s optimal strategies in an unregulated market, a market where price differentiation is not allowed (i.e., ticket prices must be the same for all users), and a market where price discrimination is illegal (i.e., ticket prices must only differ with the marginal external costs of users), and analyze the welfare effects of uniform and non-discriminatory pricing policies. The three models allow us to consider three different forms of price differentiation and discrimination in networks: by user class, by origin-destination pair, and by route. We generalize the existing literature, in which groups usually only differ in their value of time, and hence, there is no distinction between differentiation and discrimination. In our models, users may also have different marginal external costs; we show how these two differences interact. We also show how non-differentiated and non-discriminatory policies may increase or decrease welfare, and that non-discrimination can be worse than non-differentiation. The network models show that results obtained for a single-link network can be generalized to a situation where operators price-discriminate or differentiate based on users’ origins and destinations, but not directly to a situation in which differentiation is based on route choices.
    Keywords: price differentiation, price discrimination, transport, networks, congestion
    JEL: L11 L51 L91
    Date: 2014–08–01
  30. By: Tsung-Hsien Michael Lee; Wenjuan Chen; ;
    Abstract: Numerous papers have tried to understand housing’s role in the economy and have not reached an agreement. In this paper we turn to the asymmetric relationship between housing and the overall economic activity. We find that the relation between building permits and GDP is regime-dependent. Causality analysis suggests that the housing variable leads output only in the regime associated with periods when the housing and business cycles are experiencing contractions. Our findings not only echo the argument that housing leads the business cycles, but also show that it has time-varying effect on the overall economic activity.
    Keywords: Housing, Business Cycles, Regime-switching, Causality
    JEL: C32 C34 E32
    Date: 2015–04
  31. By: BERGE Laurent
    Abstract: This paper deals with the questions of how network proximity influences the structure of inter-regional collaborations and how it interacts with geography. I first introduce a new, theoretically grounded measure of inter-regional network proximity. Then, I use data on European scientific co-publications in the field of chemistry between 2001 and 2005 to assess those questions. The main findings reveal that inter-regional network proximity is important in determining future collaborations but its effect is mediated by geography. Most importantly, a clear substitution pattern is revealed showing that network proximity benefits mostly international collaborations.
    Keywords: network proximity; gravity model; research collaboration; network formation; co-publication
    JEL: D85 O31 R12
    Date: 2015
  32. By: Teodora Dogaru (A Coruna University, Spain); Martijn Burger (Erasmus University Rotterdam); Bas Karreman (Erasmus University Rotterdam, ERIM); Frank van Oort (Utrecht University, the Netherlands)
    Abstract: In this paper, we analyse the sectoral and functional division of labour in Central and Eastern European (CEE) regions within the convergence debate. By analysing the investment decisions of multinational corporations in 49 NUTS-2 regions across 6 European CEE countries (Poland, Czech Republic, Slovakia, Hungary, Romania, and Bulgaria), we show that capital city regions not only receive more greenfield FDI but also attract a larger variety of investments in terms of sectors and functions. Capital cities are more likely to host higher-end sectors and functions, which provides an explanation for the existing regional disparities within CEE countries. These results highlight the importance of functional and sectoral divisions of labour in the view of regional profiling and contribute to the recent EU Cohesion Policy debate. Forthcoming in <A href="">Tijdschrift voor economische en sociale geografie</A>.
    Keywords: regional disparities, Central and Eastern Europe, greenfield FDI
    JEL: F23 R12 R58
    Date: 2014–03–28
  33. By: Davis, Matt; Vedder, Andrea; Stone, Joe
    Abstract: Evidence that local tax and expenditure limits (TELs) for public K-12 schools lower student achievement is widely attributed to the effects of reduced funding, but our results cast doubt on reduced funding as the primary explanation for negative effects of TELs in the context of school-finance equalization (SFE) and instead suggest the importance of predictable funding. Students in districts subject to more severe local tax limits in Oregon score less well on eighth-grade tests in mathematics, but reduced funding is not the reason. Our analysis expands prior work by accounting for the extent to which TELs are actually binding, as well as for both pecuniary and non-pecuniary effects of TELs. Distinguishing pecuniary and non-pecuniary effects allows us to document that the negative effect of TELs in Oregon is not due to reduced expenditures. The state’s school-finance equalization (SFE) tends to offset funding differentials, so TELs have no significant effect on funding, but even if TELs did affect funding, the negative effect of TELs on achievement is significant even if district expenditures are held constant. Instead, the negative effect of more restrictive TELs appears to work by disrupting local planning. We isolate this effect by distinguishing the more uncertain first year of each biennial budget from the second year. Our quasi-experimental design accounts for district and year fixed effects, as well as for district-specific variations in expenditures and student attributes. Results are robust to a placebo test to reveal spurious correlation and to several alternative specifications.
    Keywords: taxes expenditures, limitations, students,achievement, school finance equalization
    JEL: H0 J0
    Date: 2015–01
  34. By: Hans R.A. Koster (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam); Piet Rietveld (VU University Amsterdam, the Netherlands)
    Abstract: In this paper we investigate the effects of new railway stations on house prices using an extensive repeated sales dataset over a period of 13 years. We employ semiparametric panel data techniques allowing for anticipation effects of station openings. We show that a kilometre reduction in distance to the nearest railway station increases property values by about 1.5 - 2 percent. The geographical range of the effect is about 3.5 kilometres. Ignoring anticipation effects in the estimation procedure leads to a large downward bias for short time period datasets. We do not find any significant house price adjustment effects after station openings.
    Keywords: House prices; Anticipation effects; Repeated sales; Railway development; Semiparametric
    JEL: R21 R40 R41 R42
  35. By: Jeroen Hinloopen (University of Amsterdam); Stephen Martin (Krannert School of Management, Purdue University, West Lafayette, Indiana, United States of America)
    Abstract: We introduce a cost of location into Hotelling’s (1929) spatial duopoly. We derive the general conditions on the cost-of-location function under which a pure strategy price-location Nash equilibrium exists. With linear transportation cost and a suitably specified cost of location that rises toward the center of the Hotelling line, symmetric equilibrium locations are in the outer quartiles of the line, ensuring the existence of pure strategy equilibrium prices. With quadratic transportation cost and a suitably specified cost of location that falls toward the center of the line, symmetric equilibrium locations range from the center to the end of the line.
    Keywords: Horizontal product differentiation, spatial competition, cost of location
    JEL: D21 D43 L13
    Date: 2013–07–30
  36. By: Pim Heijnen (University of Groningen); Adriaan Soetevent (University of Groningen)
    Abstract: This paper extends Hotelling's model of price competition with quadratic transportation costs from a line to graphs. We derive an algorithm to calculate firm-level demand for any given graph, conditional on prices and firm locations. These graph models of price competition may lead to spatial discontinuities in firm-level demand. We show that the existence result of D'Aspremont et al. (1979) does not extend to simple star graphs and conjecture that this non-existence result holds more generally for all graph models with two or more firms that cannot be reduced to a line or circle.
    Keywords: spatial competition, Hotelling, graphs
    JEL: D43 L10 R12
    Date: 2014–10–02
  37. By: Sebastian Galiani; Paul J. Gertler; Raimundo Undurraga
    Abstract: A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of well-being improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.
    JEL: I31
    Date: 2015–04
  38. By: Kaire Põder (Tallinn University of Technology); Triin Lauri (Tallinn University)
    Abstract: This article presents empirical analysis of the effects of school choice policy in Estonia. We show that relying on market and giving autonomy to the schools over student selection without any central priority matching or other central guidelines will produce admission tests, even in elementary school level. The latter will bring with it intensive prep-schooling. Our contribution is to show that in the current case choice-policy experiment will produce between schools segregation effects based on residential and background characteristics. However, the interpretation of these effects is complex because, when compared with the pre-market, topped-off voucher-based residential choice model, it diminishes segregation based on income and family socio-economic status.
    Date: 2014–01–30
  39. By: Karima Kourtit (VU University Amsterdam); Jan Möhlmann (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam)
    Abstract: This paper aims to investigate whether the spatial pattern of creative industries in the Netherlands has a relationship with the presence of cultural heritage or, in a more general sense, cultural capital. It first shows how the creative sector developed between 1994 – 2009 in relation to other Dutch sectors. Additionally, it analyses the urban dimension of the creative industry by focussing on the four large urban agglomerations in the Netherlands. And finally, it addresses the question whether a relationship exists between the share of the creative industry and the stock of cultural heritage at the level of municipalities. The results show a positive correlation between local cultural heritage and the presence of the creative industry at the municipality level.
    Keywords: creative industries, cultural heritage, cultural industry
    JEL: R1 R12
    Date: 2013–12–09
  40. By: Emmanouil Tranos (VU University Amsterdam); Aura Reggiani (University of Bologna, Italy); Peter Nijkamp (VU University Amsterdam)
    Abstract: See also the article in <I>Cities</I> (2013). Volume 30, pages 59-67.<P> This paper introduces a new measure to approach the accessibility of places in the frame of the digital economy. Information and Communication Technologies (ICTs) and the Internet are not equally spread around places and this heterogeneity affects spatial configuration. Despite the wide societal changes due to ICTs and the extensive interest in accessibility studies, these two themes have not yet come together in order to study the digital accessibility (DA) of places. Adopting an infrastructural perspective and a potential accessibility framework, a DA measure – embedding different types of impedance distance functions – is calculated for cities in Europe. Spatial Interaction Model and Complex Network Analysis are employed to calibrate and validate the DA results. The outcome of this approach is a new urban hierarchy which reveals a core-periphery pattern in Europe owing to digital accessibility.
    Keywords: digital accessibility, Internet geography, potential accessibility, impedance functions
    JEL: O1 L63
    Date: 2013–10–10
  41. By: Francisco Blasques; Siem Jan Koopman; Andre Lucas; Julia Schaumburg (VU University Amsterdam)
    Abstract: We introduce a new model for time-varying spatial dependence. The model extends the well-known static spatial lag model. All parameters can be estimated conveniently by maximum likelihood. We establish the theoretical properties of the model and show that the maximum likelihood estimator for the static parameters is consistent and asymptotically normal. We also study the information theoretic optimality of the updating steps for the time-varying spatial dependence parameter. We adopt the model to empirically investigate the spatial dependence between eight European sovereign CDS spreads over the period 2009--2014, which includes the European sovereign debt crisis. We construct our spatial weight matrix using cross-border lending data and include country-specific and Europe-wide risk factors as controls. We find a high, time-varying degree of spatial spillovers in the sovereign CDS spread data. There is a downturn in spatial dependence after the first half of 2012, which is consistent with policy measures taken by the European Central Bank. The findings are robust to a wide range of alternative model specifications.
    Keywords: Spatial correlation, time-varying parameters, systemic risk, European debt crisis, generalized autoregressive score
    JEL: C13 C32 C53 E17
    Date: 2014–08–14
  42. By: Stefan P.T. Groot (Centraal Planbureau, The Hague, the Netherlands); Henri L.F. de Groot (VU University Amsterdam, the Netherlands)
    Abstract: This paper employs a unique set of micro-data covering almost one third of the Dutch labor force, to estimate the relationship between agglomeration externalities and the level of education. While the positive relationship between economic density and productivity and wages has long been established in the economic literature, less is known about the effects of density on the productivity of different types of workers. This paper shows that there is substantial heterogeneity in the relationship between density and productivity for workers with different types of education. Apart from estimating the impact of aggregate density, we also estimate whether the composition of the local labor market in terms of education is related to the productivity of different types of workers. Using the presence of universities as an instrument, we estimate the effect of the supply of university graduates on wages, i.e. the social return to education.
    Keywords: agglomeration, education, knowledge-spillovers, wages, local labor markets
    Date: 2014–07–11
  43. By: Paul Koster; Erik T. Verhoef (VU University Amsterdam, the Netherlands); Simon Shepherd; David Watling (University of Leeds, United Kingdom)
    Abstract: This paper deals with first-best and second-best congestion pricing of a stylised two-link network with probabilistic route choice of travellers. Travellers may have heterogeneous values of travel times and may differ in their idiosyncratic route preferences. We derive first-best and second-best tolls taking into account how the overall network demand responds to generalized costs including the tolls that are levied. We show that with homogeneous values of times the welfare losses of second-best pricing, of one link only, may be smaller if route choice is probabilistic. Furthermore, we show that with heterogeneous values of times, common second-best tolls and group-differentiated tolls can be very close when route choice is governed by random utility maximisation, leading to low welfare losses from the inability to differentiate tolls.
    Keywords: Stochastic User Equilibrium, Second-best Congestion Pricing, Preference Heterogeneity, Scale Heterogeneity, Probabilistic Choice
    JEL: R40 R41 R48
    Date: 2014–06–27
  44. By: Mesbah J. Motamed (United States Department of Agriculture, United States); Raymond J.G.M. Florax (Purdue University, United States; and VU University Amsterdam, the Netherlands); William A. Masters (Tufts University, United States)
    Abstract: This paper addresses the timing of a location's historical transition from rural to urban activity. We test whether urbanization occurs sooner in places with higher agricultural potential and comparatively lower transport costs, using worldwide data that divide the earth's surface at half-degree intervals into 62,290 cells. From an independent estimate of each cell's rural and urban population history over the last 2,000 years, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for unobserved heterogeneity across countries through fixed effects and using a variety of spatial econometric techniques, we find a robust association between earlier urbanization and agro-climatic suitability for cultivation, having seasonal frosts, better access to the ocean or navigable rivers, and lower elevation. These geographic correlations become smaller in magnitude as urbanization proceeds, and there is some variance in effect sizes across continents. Aggregating cells into countries, we show that an earlier urbanization date is associated with higher per capita income today. "Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level" has been published in the "Journal of Economic Growth" (DOI 10.1007/s10887-014-9104-x).
    Keywords: Economic growth, economic geography, urbanization, agriculture, transportation
    JEL: C21 N50 O11 O18 R1
    Date: 2014–01–02
  45. By: Jan Rouwendal (VU University Amsterdam); Ramona van Marwijk (Kadaster); Or Levkovich (VU University Amsterdam)
    Abstract: Proximity to water is appreciated by households. Hedonic analyses that try to measure the value of this amenity are potentially biased by omitted variables as locations close to the water may be selected by households with higher incomes who construct more luxury houses. Since it is difficult to observe all relevant characteristics, the coefficient for proximity to water may be biased upwards. We circumvent this problem by exploiting a specific characteristic of the Dutch system of planned residential development: often a number of identical houses are constructed close to each other. By comparing the values of such identical houses, we can measure the effect of proximity to water under almost ideal circumstances. The results show a significant impact of this amenity, but of a smaller magnitude than was suggested by many earlier studies, thereby confirming the conjectured presence of omitted variable bias.
    Keywords: hedonic analysis, local amenities, ommited variable bias
    JEL: D12 D61 R21
    Date: 2014–04–22
  46. By: Eveline van Leeuwen (VU University Amsterdam); Yoshifumi Ishikawa (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This article addresses the differentiated impacts of various sectors and branches in a multi-layer regional system. As a case-study the Cairngorms National Park (CNP) in Scotland is used. In this area, policy makers ”at different administrative levels” strongly emphasize the need for new sustainable economic development. We use a novel combination of stakeholder analysis with household questionnaires and interregional input-output analysis to define the most important local key-sectors as carriers for local sustainability. The methodological vehicle employed is based on microsimulation. This paper demonstrates how, even for small areas such as the CNP in Scotland, survey information combined with secondary data and existing input-output tables can be integrated into a useful policy tool.
    Keywords: Input-output analysis, microsimulation, key-sectors, Scotland, multi-regional
    JEL: R1
    Date: 2013–09–20
  47. By: Hans R.A. Koster (VU University Amsterdam, the Netherlands); Jos N. van Ommeren (VU University Amsterdam, the Netherlands)
    Abstract: The production of natural gas is strongly increasing around the world. Long-run negative external effects of extraction are understudied and often ignored in social) cost-benefit analyses. One important example is that natural gas extraction leads to soil subsidence and subsequent induced earthquakes that may occur only after a couple of decades. We show that induced earthquakes that are noticeable to residents generate substantial non-monetary economic effects, as measured by their effects on house prices, also when house owners are fully compensated for damage to their houses. To address the issue that earthquakes do not occur randomly over space, we use temporal variation in the occurrence of noticeable earthquakes while controlling for the occurrence of earthquakes that cannot be felt by house owners. We find that earthquakes that are noticeable with peak ground velocities of above half a cm/s lead to price decreases of 1.2 percent. The total non-monetary costs of induced earthquakes for Groningen are about € 150 million, about € 500 per household. The results also indicate that the non-monetary costs of are in the same order of magnitude as the monetary damage costs.
    Keywords: natural gas extraction, earthquakes, house prices, hedonic price analysis
    JEL: Q54 Q32 R30 R33
    Date: 2015–03–23
  48. By: Stefanie Peer (VU University Amsterdam); Jasper Knockaert (VU University Amsterdam); Paul Koster (VU University Amsterdam); Yin-Yen Tseng (VU University Amsterdam); Erik Verhoef (VU University Amsterdam)
    Abstract: A common way to determine values of travel time and schedule delay is to estimate departure time choice models, using stated preference (SP) or revealed preference (RP) data. The latter are used less frequently, mainly because of the difficulties to collect the data required for the model estimation. One main requirement is knowledge of the (expected) travel times for both chosen and unchosen departure time alternatives. As the availability of such data is limited, most RP-based scheduling models only take into account travel times on trip segments rather than door-to-door travel times, or use very rough measures of door-to-door travel times. We show that ignoring the temporal and spatial variation of travel times, and, in particular, the correlation of travel times across links may lead to biased estimates of the value of time (VOT). To approximate door-to-door travel times for which no complete measurement is possible, we develop a method that relates travel times on links with continuous speed measurements to travel times on links where relatively infrequent GPS-based speed measurements are available. We use geographically weighted regression to estimate the location-specific relation between the speeds on these two types of links, which is then used for travel time prediction at different locations, days, and times of the day. This method is not only useful for the approximation of door-to-door travel times in departure time choice models, but is generally relevant for predicting travel times in situations where continuous speed measurements can be enriched with GPS data.
    Keywords: Valuation of travel time and schedule delays, door-to-door travel times, departure time choice, revealed preference (RP) data, door-to-door travel times, geographically weighted regression (GWR), GPS data,
    JEL: C14 C25 R48
    Date: 2011–12–22
  49. By: Stefanie Peer (VU University Amsterdam, and Institute for the Environment and Regional Development, Vienna University of Economics and Business, Austria); Jasper Knockaert (VU University Amsterdam); Paul Koster (VU University Amsterdam); Erik Verhoef (VU University Amsterdam)
    Abstract: We asked participants of a large-scale, real-life peak avoidance experiment to provide estimates of their average in-vehicle travel time for their morning commute. Comparing these reported travel times to the corresponding actual travel times, we find that travel times are overstated by a factor of 1.5 on average. We show that driver- and link-specic characteristics partially explain the overstating. Using stated and revealed preference data, we investigate whether the driverspecific reporting errors are consistent with the drivers' scheduling behavior in reality as well as in hypothetical choice experiments. For neither case, we find robust evidence that drivers behave as if they misperceived travel times to a similar extent as they misreported them, implying that reported travel times do neither represent actual nor perceived travel times truthfully. The results presented in this paper are thus a strong caveat against the uncritical use of reported travel time data in transport research and policy.
    Keywords: travel time perception, reported travel times, valuation of travel time, departure time choices, peak avoidance experiment, panel latent class models, revealed preference (RP) data
    JEL: C25 D83 D84 R41
    Date: 2013–08–26
  50. By: Martijn I. Dröes (University of Amsterdam, VU University Amsterdam, and the Amsterdam School of Real Estate, the Netherlands); Hans R.A. Koster (VU University Amsterdam)
    Abstract: In many countries, wind turbines are constructed as part of a strategy to reduce dependence on fossil fuels. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby houses. A unique house price dataset covering the period 1985-2011 is used, including the exact location of all wind turbines built in the Netherlands. We find that house prices within a two kilometer radius of a turbine, after it has been constructed, decrease by about 1.4 to 2.3 percent on average. We find anticipation effects up to three years in advance of the construction of a wind turbine. We provide further evidence that the external costs of a wind turbine are at least 10 percent of its construction cost.
    Keywords: renewable energy; wind turbines; externalities; house prices
    JEL: R31 Q42 Q15 L94
    Date: 2014–09–18
  51. By: Andrea Caragliu (Politecnico di Milano, Italy); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper enters the debate on the islands of innovation through the lens of the standard Lucas (1988) growth model. It begins with a review of the theoretical details of the model and of the ensuing main empirical results, which can be identified when estimating such model on a sample of 261 EU27 NUTS2 regions. Next, empirical results are interpreted in the light of recent EU innovation and education policies. Our results point to the paramount importance of taking into account patterns of connectivity between “islands” of innovation and other regions. On the basis of our empirical estimates, we claim that future further concentration of innovative activity could achieve maximum returns by enhancing connectivity between spatial innovation leaders and lagging regions. This situation may be characterised as targeting “hubs”, rather than “islands”, of innovation, and is in agreement with “open innovation policy”.
    Keywords: human capital, cognitive capital, knowledge spillovers, islands of innovation
    JEL: C21 E24 R11
    Date: 2013–09–12
  52. By: Jacques J.F. Commandeur (VU University Amsterdam, the Netherlands); Suncica Vujic (University of Antwerp, Belgium); Siem Jan Koopman (VU University Amsterdam, the Netherlands); Barbara Kasprzyk-Hordern (University of Bath, United Kingdom)
    Abstract: We analyze the illicit drug usage by inhabitants and visitors of European cities. Our statistical analyses are by means of linear mixed models. The data on illicit drug usage of cocaine, ecstasy, amphetamines, methamphetamines, and cannabis are collected through wastewater samples from the inlet of 21 sewage treatment plants spread over 11 European countries. The data set represents nineteen cities, services a population of approximately 15 million inhabitants and covers a one-week period in 2011. The patterns of illicit drug usage are examined with respect to temporal (daily) and spatial variations, as well as in relation to economic wealth (gross domestic product) and criminological (drug offenses recorded by police) factors. In a joint statistical analysis, we find that cocaine and ecstasy are typically recreational drugs that are consumed during the weekend. Inhabitants of Western European countries consume more cocaine than inhabitants of Eastern European countries. This finding cannot be explained by political divisions between West and East. We also find evidence that higher usage of ecstasy is associated with medium-sized cities, economic prosperity, and a lower number of drug offenses.On the other hand, higher usage of methamphetamine is associated with medium-sized cities and low economic wealth.
    Keywords: Sewage biomarker analysis, ANOVA, Linear mixed models, Wastewater-based epidemiology
    JEL: C33 I15
    Date: 2014–10–16
  53. By: Paul Koster (VU University Amsterdam); Hans Koster (VU University Amsterdam)
    Abstract: We employ a semi-parametric estimation approach to analyse observed and unobserved heterogeneity in the value of travel time and schedule delay. Our econometric approach allows for the estimation of unobserved and observed heterogeneity in preferences in a flexible way, meaning that we do not put any structure on how individual characteristics (such as income and age) relate to values of time and schedule delay. Using data from a stated choice experiment, we illustrate the estimation approach and find that there is substantial heterogeneity in the willingness to pay for reductions in travel time and schedule delay. For our data, unobserved heterogeneity is more important than heterogeneity related to individual characteristics.
    Keywords: local maximum likelihood, heterogeneity, scheduling, semiparametric Logit, latent class, normalised entropy criterion, value of time, value of reliability
    JEL: R4 C14 C23
    Date: 2013–05–28
  54. By: Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Soushi Suzuki (Hokkai-Gakuen University, Sapporo, Japan)
    Abstract: See the article in <I>Computers Environment and Urban Systems</I> (2013). Volume 38, pages 67-77.<P> This paper aims to provide a new methodological and empirical contribution to the rising literature on the relative performance and benchmarking of large cities in a competitive world. On the basis of a recent detailed database on many achievement criteria of 35 major cities in the world, it seeks to arrive at a relative performance ranking of these cities by using Data Envelopment Analysis (DEA). A novel element is the use of a new type of ‘Super-Efficiency DEA’ to identify unambiguously the high performers ('exceptional places’) in the group of world cities investigated. This new productivity-based approach is complemented with two new directions in DEA research, viz. a Distance Friction Method and a Context-Dependent method.
    Keywords: world cities; city performance; Data Envelopment Analysis
    JEL: C8 O1
    Date: 2013–08–01
  55. By: Geert Mesters; Victor van der Geest; Catrien Bijleveld (VU University Amsterdam)
    Abstract: We test economic and sociological theories for the relationship between employment and crime, where social welfare is used as an identifying mechanism. We consider a sample of disadvantaged males from The Netherlands who are observed between ages 18 and 32 on a monthly time scale. We simultaneously model the offending, employment and social welfare variables using a dynamic discrete choice model, where we allow for state dependence, reciprocal effects and time-varying unobserved heterogeneity. We find significant negative bi-directional structural effects between employment and property crime. Robustness checks show that only regular employment is able to significantly reduce the offending probability. Further, a significant uni-directional effect is found for the public assistance category of social welfare on property offending. The results highlight the importance of economic incentives for explaining the relationship between employment and crime for disadvantaged individuals. For these individuals the crime reducing effects from the public assistance category of social welfare equivalent to those from employment, which suggests the importance of financial gains. Further, the results suggest that stigmatizing effects from offending reduce the future employment probability.
    Keywords: dynamic discrete choice, strain, social control, state dependence, reciprocal, unobserved heterogeneity
    JEL: K42 C32 C33
    Date: 2014–07–22
  56. By: Stilianos Alexiadis (Ministry of Rural Development & Foods, Athens, Greece); Konstantinos Eleftheriou (University of Piraeus, Greece); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper aims to provide a conceptual and operational context for analysing regional inequalities. It does so by utilizing a ‘search & matching’ framework. The model, developed in this paper, maps the way in which individuals are distributed according to: 1) the abilities of individuals to perform certain, specified, tasks; and 2) the degree of regional specialization. The impacts of advances in information technology are examined explicitly in this model. While the relevant theoretical and empirical literature analyses the impact of technological progress with respect to changes in regional productivity, the present model takes an alternative perspective. This model is focused, explicitly, upon changes in the arrival of job offers and employment opportunities. The way in which individuals decide about employment, as an aftermath of changes in information technology, is constructed using the aforementioned framework. Consequently, this approach provides an account for the distribution of ‘human capital’ (from the perspective that individuals acquire jobs in sectors in which they are more productive) across regions, and, by extension, for the persistence of regional inequalities. Regional inequalities are attributed to possible mismatches, leading individuals to accept job offers from sectors in which they are less productive. Simulation experiments, then, complement the theoretical framework, while some preliminary empirical evidence using a sample of NUTS-2 and NUTS-3 regions in Europe, is also presented.
    Keywords: Regional inequalities, human capital, technological progress, search & matching
    JEL: J24 J61 R10
    Date: 2013–10–11
  57. By: Thomas Sauer; Stephanie Barnebeck; Yannick Kalff; Judith Schicklinski
    Abstract: Taking into account the potentially different starting and framework conditions of cities in different regions of the European Union, we present a new approach for sustainability transition analysis with a special focus on the governance of urban common-pool resources. The aim is to identify the conditions which are supportive for innovative institutional arrangements, like self-organised and co-operative forms of governance for urban resource systems like energy, water and green spaces. This report explores these conditions systematically focussing on the overarching research question: What is the transformative role of institutional diversification and innovation in the governance of core urban common pool resources? The role of the resource systems energy, urban green spaces and drinking water is empirically analysed in field studies of 40 European cities, exploring the potential for local self-organisation and socio-ecological transition.
    Keywords: Beyond GDP, Biophysical constraints, Common-pool resources, Energy, Green spaces, Water, Multi-level governance, Urban commons, Socio-ecological transition, Sustainable cities, Sustainable urban transitioning
    JEL: Q56 R11 D70
    Date: 2015–03
  58. By: Emmanouil Tranos (VU University Amsterdam); John Steenbruggen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper discusses the value that data from mobile phone providers can bring into urban analysis. The novel argument is that the pervasiveness of mobile phone telephony has transformed mobile phones from a communications device to a tool for socio-spatial research. Put simply, mobile phone providers can potentially gather relevant data on a very refined spatio-temporal scale for every 85 out of 100 inhabitants in the world. Such data can include basic information about personal communication patterns, interactions and mobility which can enable researchers to better understand spatial human behavior, the predictability of which is well documented. These advances that have mostly taken place in the complexity science domain, which largely focuses on individual behavioural patterns, can also result in applications in the spatial analysis domain. This paper has two aims. Firstly, we critically discuss the existing state of the art of urban analysis based on big data from mobile phone operators. Based on this review, the paper takes a methodological turn to present some preliminary urban analysis results using data from a mobile phone operator in Amsterdam, The Netherlands.
    Keywords: Economics
    JEL: O1 L63
    Date: 2013–09–30
  59. By: Bezemer, Dirk; Zhang, L (Groningen University)
    Date: 2014
  60. By: Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: The business performance of firms in the creative high-tech sector shows much variation. This paper examines whether the geographical location of such business firms influences the performance of these firms. The overarching analysis framework of this paper emerges from the recently developed Strategic Performance Management (SPM) concept for individual firms, which in the present study is extended with spatial meso-attributes related to the location of these firms. SPM aims to improve the firms’ competitive performance through the application of strict internal management principles. Our study thus adopts a micro-business perspective on the organizational determinants of a firm’s economic performance and its links with distinct spatial entrepreneurship conditions and general economic moderator variables. The present study focuses on both large and small and medium-sized (SME) firms, mainly operating in the creative high-tech sector in the Netherlands. The research methodology uses stepwise the following analytical tools: multivariate analysis of an extensive micro- and meso-data set on the internal performance of firms and regional covariates; Data Envelopment Analysis (DEA) and its recent extension to super-efficient DEA for mapping out in a comparative way the achievements of both regions and firms; a GIS-oriented statistical analysis to identify geographically-discriminating factors in the firms’ performance; and the design and estimation of a Structural Equations Model (SEM) for assessing the performance of the firms concerned (using what is called the ‘flying disc’ model). Our results show significant differences in the performance of large vis-à-vis SME firms that have adopted SPM, while their geographical position in the country, in general, also plays a significant role.
    Keywords: creative industries, high-tech sector, Data Envelopment Analysis (DEA), super-efficient DEA, principal component analysis, Structural Equations Model, flying disc model
    JEL: M19 M21 Q5 Q56 R10 R11 R12 R15
    Date: 2013–12–09
  61. By: Andrea Caragliu (Politecnico di Milano, Italy); Peter Nijkamp (VU University Amsterdam)
    Abstract: Usually, the diffusion of a non-rival market knowledge externality - called a Knowledge Spillover (KS) - is related to geographical proximity. In this paper we explore the channels through which knowledge spreads. Compared with earlier work on KS measures, this study makes a step forward by calculating KS (as a balance of positive and negative absolute knowledge flows) on the basis of different proximity matrices. In particular, we focus on the relational, social, technological, and cognitive channel, along with the traditional geographical channel. In the light of previous studies on KS, we examine: (i) which types of proximity enhance or hamper the outward flow of knowledge; and (ii) whether the local endowment of absorptive capacity reduces such a flow. Our results show that KSs vary across alternative definitions of proximity. The parameter estimates of such a KS model show interesting patterns, with geographical and cognitive proximity having the highest explanatory power am ong all the types of proximity considered. Local absorptive capacity is found to be negative only when a region is surrounded by regions with similarly high levels of absorptive capacity. Furthermore, outward KSs decrease as geographical, relational, social, technological and cognitive distance increase. This points to the emergence or existence of large clusters of regions <I>('absorptive capacity clubs')</I>, where relational, social, technological and cognitive proximity lock-in maximizes the returns to local investment in R&D.
    Keywords: knowledge spillover, total factor productivity, proximity, absorptive capacity, knowledge production function
    JEL: R1 D8
    Date: 2013–09–20
  62. By: Hugo Emilio Silva (VU University Amsterdam); Robin Lindsey (University of British Columbia); André de Palma (University of British Columbia, Canada); Vincent A.C. van den Berg (VU University Amsterdam, the Netherlands)
    Abstract: This paper investigates the existence and uniqueness of equilibrium in the Vickrey bottleneck model when each user controls a positive fraction of total traffic. Users simultaneously choose departure schedules for their vehicle fleets. Each user internalizes the congestion cost that each of its vehicles imposes on other vehicles in its fleet. We establish three results. First, a pure strategy Nash equilibrium (PSNE) may not exist. Second, if a PSNE does exist, identical users may incur appreciably different equilibrium costs. Finally, a multiplicity of PSNE can exist in which no queuing occurs but departures begin earlier or later than in the social optimum. The order in which users depart can be suboptimal as well. Nevertheless, by internalizing self-imposed congestion costs individual users can realize much, and possibly all, of the potential cost savings from eit her centralized traffic control or time-varying congestion tolls.
    Keywords: Bottleneck model, Large users, Atomic users, Existence of Equilibrium, Uniqueness of Equilibrium
    Date: 2014–06–27
  63. By: Adriaan Hendrik van der Weijde (VU University Amsterdam); Vincent A.C. van den Berg (VU University Amsterdam)
    Abstract: We compare three stochastic user equilibrium traffic assignment models multinomial probit, nested logit, and generalized nested logit), using a congestible transport network. We test the models in two situations: one in which they have theoretically equivalent coefficients, and one in which they are calibrated to have similar traffic flows. In each case, we examine the differences in traffic flows between the SUE models, and use them to evaluate policy decisions, such as profit-maximizing tolling or second-best socially optimal tolling. We then investigate how the optimal tolls, and their performance, depend on the model choice, and hence, how important the differences between models are. We show that the differences between models are small, as a result of the congestibility of the network, and that a better calibration does not always lead to better traffic flow predictions. As the outcomes are so similar, it may be better to use computationally more efficient logit models instead of probit models, in at least some applications, even if the latter is preferable from a conceptual viewpoint.
    Keywords: stochastic user equilibrium, traffic assignment, probit, generalized nested logit, tolling
    JEL: C63 R41 R48
    Date: 2013–12–20
  64. By: Stefanie Peer (VU University Amsterdam); Erik Verhoef (VU University Amsterdam); Jasper Knockaert (VU University Amsterdam); Paul Koster (VU University Amsterdam); Yin-Yen Tseng (VU University Amsterdam)
    Abstract: Earlier studies on scheduling behavior have mostly ignored that consumers have more flexibility to adjust their schedule in the long run than in the short run. We introduce the distinction between long-run choices of travel routines and short-run choices of departure times, using data from a real-life peak avoidance experiment. We find that participants value travel time higher in the long-run context, supposedly because changes in travel time can be exploited better through the adjustment of routines. Schedule delays are valued higher in the short run, reflecting that scheduling restrictions are typically more binding in the short run.
    Keywords: long-run vs. short-run; scheduling decisions; valuation of travel time; valuation of schedule delays; revealed preference data; car travel; peak avoidance
    JEL: C25 D03 D80 R48
    Date: 2011–12–22
  65. By: Daan in 't Veld (University of Amsterdam); Marco van der Leij (University of Amsterdam, and De Nederlandsche Bank, the Netherlands); Cars Hommes (University of Amsterdam, the Netherlands)
    Abstract: Recent empirical evidence suggests that financial networks exhibit a core periphery network structure. This paper aims at giving an economic explanation for the emergence of such a structure using network formation theory. Focusing on intermediation benefits, we find that a core periphery network cannot be unilaterally stable when agents are homogeneous. The best-response dynamics converge to a unique unilaterally stable outcome ranging from an empty to denser networks as the costs of linking decrease. A core periphery network structure can form endogenously, however, if we allow for heterogeneity among agents in size. We show that our model can reproduce the observed core periphery structure in the Dutch interbank market for reasonable parameter values.
    Keywords: financial networks, core periphery structure, network formation models
    JEL: D85 G21 L14
    Date: 2014–07–28
  66. By: Johanna Catherine Maclean (Department of Economics, Temple University); Reginald Covington (Mathematica Policy Research); Asia Sikora Kessler (Department of Health Promotion, University of Nebraska Medical Center)
    Abstract: In this study, we assess the long-run impact of labor market conditions at the time of school-leaving on marriage and fertility outcomes. We draw data from the National Longitudinal Survey of Youth 1979. Our sample left school between 1976 and 1989, and we use variation in the state unemployment rate at the time of school-leaving to identify persistent effects. We find that men who left school when the state unemployment rate was high are less likely to be married and have children at age 45, but are more likely to be divorced. Women, however, are more likely to have children.
    Keywords: marriage; fertility; school-leaving; business cycles
    JEL: J1 J2
    Date: 2015–04
  67. By: Teresa de Noronha Vaz (University of the Algarve, Faro, Portugal); Purificación Vicente Galindo (University of the Algarve, Faro, Portugal); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper offers a new methodology to identify R&D and innovation clusters, on the basis of a regional analysis of innovation support systems in Portugal. Using a web-based inventory of R&D and innovation agencies, an extensive data base is created. This data set is next analyzed by means of Principal Coordinates Analysis followed by a Logistic Biplot approach (leading to Voronoi mappings) in order to design a systematic typology of innovation clusters in the main regions in Portugal. A striking result is the significant difference in innovation systems at regional level in Portugal. The paper is concluded with policy recommendations.
    Keywords: R&D and innovation, regional innovation systems, principal coordinates analysis, logistic biplot, Voronoi mapping, public policy
    JEL: Q55 Q16
    Date: 2013–08–02
  68. By: Winters, John V. (Oklahoma State University); Li, Yu (Oklahoma State University)
    Abstract: This paper examines the effects of county-level urbanization and natural amenities on subjective well-being (SWB) in the U.S. SWB is measured using individual-level data from the Behavioral Risk Factor Surveillance System (BRFSS) which asks respondents to rate their overall life satisfaction. Using individual-level SWB data allows us to control for several important individual characteristics. The results suggest that urbanization lowers SWB, with relatively large negative effects for residents in dense counties and large metropolitan areas. Natural amenities also affect SWB, with warmer winters having a significant positive effect on self-reported life-satisfaction. Implications for researchers and policymakers are discussed.
    Keywords: subjective well-being, urbanization, population density, amenities, quality of life
    JEL: I00 Q00 R00
    Date: 2015–04
  69. By: Trond G. Husby (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam); Marjan W. Hofkes (VU University Amsterdam); Martijn I. Dröes (VU University Amsterdam)
    Abstract: This study investigates the short- and long-run impact on population dynamics of the major flood in the Netherlands in 1953. A dynamic difference-in-differences analysis reveals that the flood had an immediate negative impact on population growth, but limited long term effects. In contrast, the resulting flood protection programme (Deltaworks), had a persisting positive effect on population growth. As a result, there has been an increase in population in flood prone areas. This discussion paper led to a publication in <A href="">Journal of Regional Science</A>.
    Keywords: regional population dynamics, natural disasters, flood risk management
    JEL: H12 J10 N34 Q54 R23
    Date: 2013–10–10
  70. By: Hugo Emilo Silva (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam); Vincent van den Berg (VU University Amsterdam)
    Abstract: This paper resulted in a publication in <A HREF=""><I>Transportation Research Part B: Methodological</I></A>, 2014, 67, 320-343.<P> This paper studies whether a regulator needs to correct the route structure choice by carriers with market power in the presence of congestion externalities, in addition to correct their pricing. We account for passenger benefits from increased frequency, passenger connecting costs, airline endogenous hub location and route structure strategic competition. We find that, for some parameters, an instrument directly aimed at regulating route structure choice may be needed to maximize welfare, in addition to per-passenger and per-flight tolls designed to correct output inefficiencies. This holds true when the regulator is constrained to set non-negative tolls, but also for the case of unconstrained tolling.
    Keywords: Route structure competition, Aviation policy, Hub-and-spoke networks, Fully-connected networks
    JEL: H2 L13 L93 R4
    Date: 2013–11–26
  71. By: Allers, Maarten; Geertsema, Bieuwe (Groningen University)
    Date: 2014
  72. By: Andreason, Stuart (Federal Reserve Bank of Atlanta)
    Abstract: Since the early 1990s, metropolitan entities and local governments have targeted incentives, policies, and investments with the goal of highly educated and skilled workers to locate in their communities. These efforts focus on attracting workers who hold a bachelor’s degree or higher and have had a profound effect on the form and management of metropolitan areas, but there is not clear evidence that growth in bachelor’s or higher degree attainment improves metropolitan labor market outcomes. I use an outcomes-based cluster-discriminant analysis to test whether or not metropolitan areas with growth in bachelor’s or higher degree (BA+) attainment from 1990 to 2010 that is above the national average experienced improvements in the local labor market. Increased BA+ attainment leads to two distinct set of local labor market outcomes: one in which earnings per job increases but inequality, unemployment, and poverty rates rise, and the other in which income inequality growth is low and unemployment and poverty rates decline but earnings per job are stagnant or negative. I find evidence that “educational segregation,” restrictive land-use policies, crime, and changes in military employment all predict outcomes.
    Keywords: educational attainment; metropolitan labor markets; labor market outcomes; talent attraction and retention
    JEL: J10 O21 R11
    Date: 2015–04–17
  73. By: John M Luiz
    Abstract: We examine the impact of ethno-linguistic fractionalization (ELF) on existing cultural measures employed in various social sciences. Not only do high levels of fractionalization affect the use of statistical means to account for cultural distance, we show that it is not constant and therefore the dynamics of change need to be addressed. This provides us with an opportunity to bridge the cultural distance and institutional distance literature as institutions impact upon culture and MNEs, and institutional development is, in turn, affected by these. We call for a more realistic assessment of what is being captured in cultural measures and for recognition of the complexity of the notion of identity formation and its dynamics. Countries may have different underlying cultural schisms, including ELF, and its introduction will allow for a richer exploration of distance and diversity in the social sciences.
    Keywords: Cultural distance, entho-linguistic fractionalization, cultural measures
    JEL: Z10 M16 O10
    Date: 2015
  74. By: Bernard, Andrew B.; Moxnes, Andreas; Saito, Yukiko U.
    Abstract: This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.
    Keywords: firm-to-firm neworks; infrastructure; productivity; trade
    JEL: D22 D85 F14 L10 L14 R12
    Date: 2015–04
  75. By: Andrea Bellucci (Institute for Applied Economic Research (IAW) at the University of Tubingen); Alexander Borisov (University of Cincinnati); Germana Giombini (University of Urbino, Italy, and MoFiR, Ancona); Alberto Zazzaro (Polytechnic University of Marche, MoFiR and CSEF)
    Abstract: In this paper we empirically test the recent lender-based theory for the use of collateral in bank lending. Based on a proprietary dataset of loan contracts written by a local bank in competitive credit markets, we use the physical proximity between borrowers and the lending branch of the bank to capture its information advantage and the magnitude of collateral-related transaction costs. Overall, our results seem more consistent with several classic borrower-based explanations rather than with the lender-based view. We show that, conditional on obtaining credit from the local bank, more distant borrowers experience higher collateral requirements and lower interest rates. Moreover, competitive pressure from transaction lenders does not magnify the importance of lender-to-borrower distance. Our findings are also obtained with estimation techniques that allow for endogenous loan contract terms and joint determination of collateral and interest rates. JEL Classification: G21, G32, L11
    Keywords: Distance, Collateral, Interest Rate, Bank lending.
    Date: 2015–04–18
  76. By: Diego A. Salzman (London South Bank University, London, United Kingdom, and University of Amsterdam); Remco C.J. Zwinkels (Erasmus University Rotterdam)
    Abstract: The behavioural approach to decision making under uncertainty combines insights from psychology and sociology into economic decision making. It steps away from the normative homo economicus and introduces a positive approach to human decision making under uncertainty. We provide an overview of the main themes in the behavioural real estate literature from the perspective of different market participants. It can be concluded that there seems to be general agreement that behavioural studies can help explain the inefficiency of real estate markets, but a large component of behavioural decision making in the property markets seems to be undiscovered.
    Keywords: real estate markets, market participants, behavioural decision making
    JEL: G02 R31 R33
    Date: 2013–07–16
  77. By: Marykate Zukiewicz; Melissa A. Clark; Libby Makowsky
    Abstract: Teach For America (TFA) is a nonprofit organization that seeks to improve educational opportunities for disadvantaged students by recruiting and training teachers to work in low-income schools. In 2010, TFA launched a major expansion effort, funded in part by a five-year Investing in Innovation (i3) Scale-Up grant of $50 million from the U.S. Department of Education’s Office of Innovation and Improvement. This report examines TFA’s implementation of the i3 scale-up in the first and second years of the grant.
    Keywords: Teach For America, Investing in Innovation, Scale-Up, Implementation
    JEL: I
    Date: 2015–03–30

This nep-ure issue is ©2015 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.