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on Urban and Real Estate Economics |
| By: | Juan Carlos Hatchondo (Indiana University); Leonardo Martinez (IMF); Juan M. Sanchez (St. Louis Fed) |
| Abstract: | We present a model in which households facing income and housing-price shocks use long-term mortgages to purchase houses. Interest rates on mortgages reflect the risk of default. The model accounts for observed patterns of housing consumption, mortgage borrowing, and defaults. We use the model as a laboratory to evaluate default-prevention policies. While recourse mortgages make the penalty for default harsher and thus may lower the default rate, they also lower equity and increase payments and thus may increase the default rate. Introducing loan-to-value (LTV) limits for new mortgages increases equity and thus lowers the default rate, with negligible negative effects on housing demand. The combination of recourse mortgages and LTV limits reduces the default rate while boosting housing demand. Recourse mortgages with LTV limits are also necessary to prevent large increases in the mortgage default rate after large declines in the aggregate price of housing |
| Keywords: | mortgage, default, life cycle, recourse, LTV, housing price |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2015011&r=ure |
| By: | Bosker,Maarten; Deichmann,Uwe; Roberts,Mark |
| Abstract: | China has used two main spatial policies to shape its geographic patterns of development: restricted labor mobility through the Hukou residential registration system and massive infrastructure investment, notably a 96,000 kilometer national expressway network. This paper develops a structural new economic geography model to examine the impacts of these policies. Fitting the model to available data allows simulating counterfactual scenarios comparing each policy?s respective impact on regional economic development and urbanization patterns across China. The results suggest large overall economic benefits from constructing the national expressway network and abolishing the Hukou system. Yet, the spatial impacts of the two policies are very different. The construction of the national expressway network reinforced existing urbanization patterns. The initially lagging regions not connected to the network have not benefitted much from its construction. By contrast, removal of the Hukou restrictions, which Chinese policy makers are considering, would result in much more widespread welfare gains, allowing everyone to gain by moving to where he or sheis most productive. Removal of the Hukou restrictions would also promote urbanization in currently lagging (inland) regions, mostly by stimulating rural to urban migration. |
| Keywords: | Transport Economics Policy&Planning,National Urban Development Policies&Strategies,Economic Theory&Research,Population Policies,Labor Policies |
| Date: | 2015–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7350&r=ure |
| By: | Iwata, Shinichiro; Naoi, Michio |
| Abstract: | The literature has shown that an increase in housing wealth, driven by unexpected shocks to house prices, exerts a positive effect on the birthrates of homeowners. According to canonical models, a decrease in housing wealth has a symmetric negative impact on the fertility behavior of households. That is, housing gains and losses of the same size should have identical quantitative effects on fertility. In comparison, prospect theory suggests that people care more about housing losses than equivalent gains, leading to an asymmetric effect of housing wealth on the fertility decision. In our model, we weight the utility from childbirth by the utility from the price of housing, where the reference level is the house price in previous years. The theoretical model suggests that the probability of childbirth is kinked at a reference level of housing wealth and the wealth effects are discontinuously larger below this kink than above it. We test this theoretical prediction using longitudinal data on Japanese households. Consistent with this theoretical prediction, our empirical results show that the fertility responses of homeowners, as measured by the birth hazard rate, are substantially larger when housing wealth is below its reference level than when it is above its reference level. |
| Keywords: | childbirth; housing price; wealth; homeownership; reference-dependent preferences; loss aversion |
| JEL: | J13 R21 |
| Date: | 2015–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65360&r=ure |
| By: | Morgan, Peter (Asian Development Bank Institute); Regis, Paulo Jose (Asian Development Bank Institute); Salike, Nimesh (Asian Development Bank Institute) |
| Abstract: | Credit creation in the housing market has been a key source of systemic financial risk, and therefore is at the center of the debate on macroprudential policies. The loan-to-value (LTV) ratio is a widely used macroprudential tool aimed at moderating mortgage loan creation, and its effectiveness needs to be estimated empirically. This paper is unique in that it analyzes the effect of LTV on mortgage lending, the direct channel of influence, using a large sample of banks in 10 Asian economies. It uses estimation techniques to deal with the large presence of outliers in the data. Robust-to-outlier estimations show that economies with LTV polices have expanded residential mortgage loans by 6.7% per year, while non-LTV economies have expanded by 14.6%, which suggests LTV policies have been effective. |
| Keywords: | loan-to-value policy; residential mortgage loans; macroprudential policy; financial risk |
| JEL: | C23 E58 G21 G28 |
| Date: | 2015–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0528&r=ure |
| By: | Crafts, Nicholas; Klein, Alexander |
| Abstract: | We investigate the role of industrial structure in productivity growth in U.S. cities between 1880 and 1930 using a new dataset constructed from the Census of Manufactures. We find that increases in specialization were associated with faster productivity growth but that diversity only had positive effects on productivity performance in large cities. We interpret our results as providing strong support for the importance of Marshallian externalities. Industrial specialization increased considerably in U.S. cities in the early 20th century, probably as a result of improved transportation, and we estimate that this resulted in significant gains in labor productivity |
| Keywords: | agglomeration economies; industrial structure; Jacobian externalities; manufacturing productivity; Marshallian externalities |
| JEL: | N91 N92 R32 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10673&r=ure |
| By: | Karlsson , Charlie (Centre of Excellence in Science (CESIS), Jönköping International Business School, Blekinge In-stitute of Technology, & University of Southern Denmark.); Olsson, Michael (EFF, & University of Skövde) |
| Abstract: | In this paper, we first present how one can create functional economic regions. Then, we elaborate on the economic activity and spatial interaction, which forms functional regions, and the development of the system of functional regions. Our presentation shows that the economy is structured in functional regions, and hence it is important to use functional regions in economic studies, in order to produce correct results, and for regional policy, in order for the policy to be effective. We observe, that the often used NUTS-regions are very large compared to the functional regions. We argue, therefore, that the use of NUTS-regions ought to be replaced by the use of functional regions. This would lead to more reliable results and better policy outcomes. |
| Keywords: | Functional economic region; accessibility; infrastructure; network; regional policy; Europe |
| JEL: | R23 R32 R40 R58 |
| Date: | 2015–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0415&r=ure |
| By: | Paola Bertoli (University of Economics, Prague); Veronica Grembi (Copenhagen Business School & CEIS, University of Rome "Tor Vergata") |
| Abstract: | We assess the lifesaving effect of hospital proximity using data on fatality rates of road-traffic accidents. While most of the literature on this topic is based on changes in distance to the nearest hospital triggered by hospital closures and use OLS estimates, our identification comes from the exogenous variation in the proximity to cities that are allowed by law to have a hospital based on their population size. Our instrumental variable results, based on Italian municipalities data from 2000 to 2012, show that an increase by a standard deviation of distance to the nearest hospital (5 km) increases the fatality rate by 13.84% on the sample average. This is equal to a 0.92 additional death per every 100 accidents. We show that OLS estimates provide a downward biased measure of the real effect of hospital proximity because they do not fully solve spatial sorting problems. Proximity matters more when the road safety is low; the emergency service is not properly organized, and the nearest hospital has lower quality standards. |
| Keywords: | Access to care, Hospital Proximity, Road-Traffic Accidents, Instrumental Variables, Difference in Differences |
| JEL: | C26 I10 R41 |
| Date: | 2015–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:349&r=ure |
| By: | Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie) |
| Abstract: | We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision. |
| Keywords: | Isolated Capital Cities; Corruption; Accountability; US states |
| JEL: | D72 D73 H41 H83 K42 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4tc33icveb94nokk2rd2ettg0k&r=ure |
| By: | Obschonka, Martin; Stuetzer, Michael; Gosling, Samuel D.; Rentfrow, Peter J.; Lamb, Michael E.; Potter, Jeff; Audretsch, David B. |
| Abstract: | In recent years, modern economies have shifted away from being based on physical capital and towards being based on new knowledge (e.g., new ideas and inventions). Consequently, contemporary economic theorizing and key public policies have been based on the assumption that resources for generating knowledge (e.g., education, diversity of industries) are essential for regional economic vitality. However, policy makers and scholars have discovered that, contrary to expectations, the mere presence of, and investments in, new knowledge does not guarantee a high level of regional economic performance (e.g., high entrepreneurship rates). To date, this “knowledge paradox” has resisted resolution. We take an interdisciplinary perspective to offer a new explanation, hypothesizing that “hidden” regional culture differences serve as a crucial factor that is missing from conventional economic analyses and public policy strategies. Focusing on entrepreneurial activity, we hypothesize that the statistical relation between knowledge resources and entrepreneurial vitality (i.e., high entrepreneurship rates) in a region will depend on “hidden” regional differences in entrepreneurial culture. To capture such “hidden” regional differences, we derive measures of entrepreneurship-prone culture from two large personality datasets from the United States (N = 935,858) and Great Britain (N = 417,217). In both countries, the findings were consistent with the knowledge-culture-interaction hypothesis. A series of nine additional robustness checks underscored the robustness of these results. Naturally, these purely correlational findings cannot provide direct evidence for causal processes, but the results nonetheless yield a remarkably consistent and robust picture in the two countries. In doing so, the findings raise the idea of regional culture serving as a new causal candidate, potentially driving the knowledge paradox; such an explanation would be consistent with research on the psychological characteristics of entrepreneurs. |
| Keywords: | Innovation; Personality; Knowledge; Culture; Entrepreneurship; Psychology; Regions; Cities |
| JEL: | L26 M13 O3 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65323&r=ure |
| By: | Judith Schicklinski |
| Abstract: | Why are civil society dynamics concerning green spaces across European cities so interesting for socio-ecological transition? All over Europe self-organized civil society movements are emerging to tackle local challenges, becoming active players in local governance processes. These social experiments have even been intensified as a result of tight public local budgets. Their activities contribute to the functioning and well-being of a European society aiming for sustainability. Preserving the availability of bio-diverse green spaces is crucial for the socio-ecological transition of cities since besides providing recreational opportunities for city dwellers, they yield essential ecological benefits from cleaning the air to reducing noise, but also provide habitat for many species and plants and reduce local vulnerabilities to extreme climate events. In cities in which local governments have severe difficulties in affording the provision of green space, new self-organized initiatives have emerged for maintaining and even developing them. Initiatives such as urban gardening have proven that people are able to cooperate, to organize themselves and to take over responsibility for green spaces as well as even introducing new practices that support the socio-ecological transition. This Milestone will contribute to the questions: -how can citizen groups contribute to maintain existing green spaces which are available and accessible for all and possibly being expanded whilst assuring biodiversity and allowing diverse use for local needs (re-creation, community-based food-production, neighbourhood culture, common intergenerational and intercultural learning etc.) at the same time; -which policy framework allows for a constructive colaboration between local authorities, administration, economic actors and citizens, enabling innovative solutions in the area of urban food production, green-space management and participative urban development. |
| Keywords: | Citizen participation, Civil society, Green spaces, Local governance, Self-organisation, Social innovation, Socio-ecological transition, Urban green commons |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2015:m:6:d:0:i:102&r=ure |
| By: | Blimpo, Moussa P. (University of Oklahoma); Gajigo, Ousman (World Bank); Pugatch, Todd (Oregon State University) |
| Abstract: | We assess the impact of large-scale fee elimination for secondary school girls in The Gambia on the quantity, composition, and achievement of students. The gradual rollout of the program across geographic regions provides identifying variation in the policy. The program increased access to secondary education substantially without harming learning outcomes. We find an increase of around 50% in the number of girls and boys taking the high school exit exam from a low baseline, as well as a 0.1 standard deviations gain in test scores in response to the program. This result is notable in a setting where expanded access could put additional strains on limited resources and the quality of schools. These findings suggest that financial constraints remain serious barriers to post-primary education and that efforts to expand access to secondary education need not come at the expense of learning in low-income countries like The Gambia. |
| Keywords: | secondary school, school fee elimination, gender gap, Gambia |
| JEL: | O15 I21 C93 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9129&r=ure |
| By: | Vincenzo Andrietti |
| Abstract: | I exploit the quasi-experimental setting offered by a recent reform of the German educational system that reduced the length of academic-track high school by one year without reducing curricular content to investigate how the resulting increase in learning intensity affected student achievement. Using 2000-2009 PISA data and a differences-in-differences approach, I find robust evidence that the reform significantly improved (on average by 0.10-0.11 standard deviations) the reading, mathematics, and science literacy skills acquired by academic-track high school students upon treatment. A more direct estimate of the effects of the increased learning intensity - as measured by state- and grade-specific variation in weekly instructional hours - corroborates the latter finding. Furthermore, I find that the effect on reading skills is driven by girls, while the performance of students that experienced grade retention is significantly worsened after the reform. Finally, although there is no evidence of a significant average effect of the reform on high school grade retention, I do find evidence of heterogenous effects: High school grade retention increases significantly for students with a migration background and for students in the former East states. |
| Keywords: | G8 , PISA , Student Achievement , Cognitive skills , Grade retention , Academic-track high school , Learning intensity |
| JEL: | I21 I28 D04 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1506&r=ure |
| By: | Xin Meng (Research School of Economics, CBE, Australian National University); Chikako Yamauchi (GRIPS) |
| Abstract: | In the past 15 years, around 160 million Chinese rural workers migrated to cities for work. Because of restrictions on migrant access to local health and education system, many migrant children are left-behind in rural villages and growing up without parental care. This paper examines how parental migration affects children's health and education outcomes in the long run. Using the Rural-Urban Migration Survey in China (RUMiC) data, we measure the share of children's lifetime during which parents were away from home. We instrument this measure of parental absence with weather changes in their home villages when parents were aged 16-25, or when they were most likely to initiate migration. Results show a sizable adverse impact of exposure to parental migration on the health and education outcomes of children, in particular boys. We also find that what the literature has always done (using contemporaneous measure for parental migration) is likely to underestimate the effect of exposure to parental migration on children's outcomes. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:15-07&r=ure |
| By: | McAndrews, James J. (Federal Reserve Bank of New York) |
| Abstract: | Remarks at the Fourth Annual Stress Test Modeling Symposium, Federal Reserve Bank of Boston, Boston, Massachusetts. |
| Keywords: | stress testing; Comprehensive Capital Analysis and Review (CCAR); DFAST stress tests; economic cycles; fire sales; spillover; feedback effects; Comprehensive Liquidity Analysis and Review (CLAR); Lucas Critique; stress scenarios; Office of Federal Housing Enterprise Oversight (OFHEO) |
| JEL: | E58 |
| Date: | 2015–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsp:173&r=ure |
| By: | Quynh Chau Pham; Benjamin Liu; Eduardo Roca |
| Keywords: | Bank mortgage rates, cash rate, international funding cost |
| JEL: | E43 G21 E58 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:gri:fpaper:finance:201504&r=ure |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | We explore the role of different types of self-employment for a persistence of the regional level of entrepreneurship over time. Our analysis for West German regions shows relatively strong effects for the historical self-employment rate in the non-agricultural sector, particularly in knowledge-intensive industries on current levels of new business formation. While self-employment by males shows a statistically significant relationship, the self-employment rate of females remains statistically insignificant. Also, no statistically significant effect can be found for the share of homeworkers that can be regarded a rather weak form of entrepreneurship. |
| Keywords: | Entrepreneurship, self-employment, new business formation, entrepreneurship culture, persistence |
| JEL: | L26 R11 O11 |
| Date: | 2015–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2015-008&r=ure |
| By: | Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie); Bernardo Guimaraes (Sao Paulo School of Economics) |
| Abstract: | Motivated by a novel stylized fact - countries with isolated capital cities display worse quality of governance - we provide a framework of endogenous institutional choice based on the idea that elites are constrained by the threat of rebellion, and that this threat is rendered less effective by distance from the seat of political power. In established democracies, the threat of insurgencies is not a binding constraint, and the model predicts no correlation between isolated capitals and misgovernance. In contrast, a correlation emerges in equilibrium in the case of autocracies. Causality runs both ways: broader power sharing (associated with better governance) means that any rents have to be shared more broadly, hence the elite has less of an incentive to protect its position by isolating the capital city; conversely, a more isolated capital city allows the elite to appropriate a larger share of output, so the costs of better governance for the elite, in terms of rents that would have to be shared, are larger. We show evidence that this pattern holds true robustly in the data. We also show that isolated capitals are associated with less power sharing, a larger income premium enjoyed by capital city inhabitants, and lower levels of military spending by ruling elites, as predicted by the theory. |
| Keywords: | Capital Cities; Governance; Institutions; Conflict; Civil War; Revolutions; Insurgencies; Population Concentration; Democracy; Power Sharing; Inefficient Institutions |
| JEL: | D02 D74 O18 R12 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/gac8g25hn9gdbnog775lou0p2&r=ure |
| By: | Soon, Ryoo (Department of Finance and Economics, Adelphi University); |
| Abstract: | This paper examines macroeconomic dynamics of household debt and housing prices. Drawing on Minsky's insights into financial instability and cycles, our framework combines household debt dynamics with behavioral asset price dynamics in a Keynesian macro model. We show that endogenous boom-bust cycles can emerge through the interaction between household debt and housing price dynamics. The resulting long waves are combined with a Kaldorian model of short-run business cycles. |
| Keywords: | household debt, asset bubble, limit cycle, financial instability hypothesis |
| JEL: | E12 E32 E44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2015-08&r=ure |
| By: | Fafchamps,Marcel; Koelle,Michael Rene; Shilpi,Forhad J. |
| Abstract: | Central place theory predicts that agglomeration can arise from external shocks. This paper investigates whether gold mining is a catalyst for proto-urbanization in rural Ghana. Using cross-sectional data, the analysis finds that locations within 10 kilometers from gold mines have more night light and proportionally higher employment in industry and services and in the wage sector. Non-farm employment decreases at 20?30 kilometers distance to gold mines. These findings are consistent with agglomeration effects that induce non-farm activities to coalesce in one particular location. This paper finds that, over time, an increase in gold production is associated with more wage employment and apprenticeship, and fewer people employed in private informal enterprises. It also finds that the changes arising from increasing gold production are not reversed when large gold mines shrink. However this pattern cannot be ascribed unambiguously to agglomeration effects, given an increase in informal mining after formal mines decrease output is also observed. |
| Keywords: | Labor Markets,Transport Economics Policy&Planning,Population Policies,Mining&Extractive Industry (Non-Energy),Climate Change Mitigation and Green House Gases |
| Date: | 2015–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7347&r=ure |
| By: | Osea Giuntella (University of Oxford, IZA); Catia Nicodemo (University of Oxford, CHSEO, IZA); Carlos Vargas Silva (University of Oxford, COMPAS) |
| Abstract: | This paper analyzes the effects of immigration on access to health care in England. Linking administrative records from the Hospital Episode Statistics (2003-2012) with immigration data drawn from the UK Labor Force Survey, we analyze how immigrant inflows affected waiting times in the National Health Service. We find that immigration reduced waiting times for outpatient referrals and did not have significant effects on waiting times in Accident and Emergency (A&E) and elective care. However, there is evidence that immigration increased waiting times for outpatient referrals in more deprived areas outside London. These effects are concentrated in the years immediately following the 2004 EU enlargement and vanish in the medium-run (e.g., 3 to 4 years). Our findings suggest that these regional disparities are explained by both differences in the health status of immigrants moving into different local authorities and in natives’ internal mobility across local authorities. |
| Keywords: | Immigration, waiting times, access to health care, welfare |
| JEL: | I10 J61 |
| Date: | 2015–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:econwp:1504&r=ure |
| By: | Benjamin Faber; Rosa Sanchis-Guarner; Felix Weinhardt |
| Abstract: | Governments are making it a priority to upgrade information and communication technologies (ICT) with the aim to increase available internet connection speeds. This paper presents a new strategy to estimate the causal effects of these policies, and applies it to the questions of whether and how ICT upgrades affect educational attainment. We draw on a rich collection of microdata that allows us to link administrative test score records for the population of English primary and secondary school students to the available ICT at their home addresses. To base estimations on exogenous variation in ICT, we notice that the boundaries of usually invisible telephone exchange station catchment areas give rise to substantial and essentially randomly placed jumps in the available ICT across neighboring residences. Using this design across more than 20,000 boundaries in England, we find that even very large changes in available internet speeds have a precisely estimated zero effect on educational attainment. Guided by a simple model we then bring to bear additional microdata on student time and internet use to quantify the potentially opposing mechanisms underlying the zero reduced form effect. We find that jumps in the available ICT have no significant effect on student time spent studying online or offline, or on their productivity. Finally, while faster connections appear to increase student consumption of online content, we find that the elasticity of student demand for online content with respect to its time cost is negative but bounded by -1. |
| JEL: | D83 I20 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21306&r=ure |
| By: | Williams, John C. (Federal Reserve Bank of San Francisco) |
| Abstract: | Presentation to Pacific Community Ventures, San Francisco, California, May 4, 2015 |
| Date: | 2015–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfsp:137&r=ure |
| By: | Klimczuk, Andrzej |
| Abstract: | The complexity of population ageing effect is a significant challenge at a regional and local level. Adaptation activities require the cooperation of local governments, business entities and non-governmental organizations. The article describes the dimensions of interventions, typology of “shrinking regions” and two initiatives: Regions for All Ages and SEN@ER - Silver Economy Network of European Regions. In addition, essay discusses the dilemmas of creating special regional strategies with their implementation factors and barriers in the construction of silver economies. It is supplemented by some conclusions from the analysis of selected regional development strategies in Poland. Summary sets out possible directions for further research for national institutions. |
| Keywords: | Social cohesion; Local and Regional Development; Cross-Sector Cooperation; Shrinking Regions; Silver Economy; Silver Market; Regions for All Ages |
| JEL: | J14 O18 P48 R58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65372&r=ure |
| By: | Ronan C. Lyons (Department of Economics, Trinity College Dublin; Spatial Economics Research Centre, London School of Economics); Sean Lyons (Economic & Social Research Institute (Dublin); Department of Economics, Trinity College Dublin); Sarah Stanley |
| Abstract: | This paper is an empirical study of the relationship between the energy performance rating of residential homes in the Dublin market between 2009 and 2014 and their market prices, controlling for building type, size, age, and location. Initial results suggest that energy efficiency has a significant, positive relationship with list price. A 50-point improvement in the Energy Performance Indicator (kWh/m2/yr) is associated with a 1.5% higher list price. Alternatively, using the Building Energy Rating metric, a one-point improvement in the 15-point scale from G to A1 yields a list price increase of 1%. This mirrors findings for efficiency price premiums on a nationwide basis from Hyland et al. (2013). We also find that it is important to include controls for the age of the dwelling to avoid biased energy efficiency estimates in the hedonic model. |
| Keywords: | domestic building energy ratings; hedonic valuation; Ireland |
| JEL: | Q51 R31 Q58 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0415&r=ure |
| By: | Petra Gerlach-Kristen; Seán Lyons |
| Abstract: | Mortgage arrears arise if a household faces affordability problems and/or is in negative equity. Because widespread arrears pose a risk to the stability of banks and limit households' future access to credit, a crucial question is how monetary or macroprudential policies influence their incidence. We use a European household data set to analyse what drives arrears and find that affordability problems, such as unemployment, low income and high mortgage payments, matter, which suggests that monetary policy has an impact. Households facing the dual trigger of affordability problems and negative equity are more likely to go into longer-term arrears; macroprudential regulation preventing high loan-to-value (LTV) ratios can thus also have an impact. |
| Keywords: | Arrears, negative equity, monetary policy, loan-to-value ratios |
| JEL: | D14 E58 G28 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2015-05&r=ure |
| By: | Federico Boffa (Free University of Bolzano‐Bozen, Faculty of Economics and Management); Amedeo Piolatto (Universitat de Barcelona); Giacomo Ponzetto (CREI, Universitat Pompeu Fabra, and Barcelona GSE) |
| Abstract: | The classic theory of scal federalism suggests that different people should have different governments. Yet, separate local governments with homogeneous constituents often end up doing poorly. This paper explains why and answers three questions: when regions are heterogeneous, what determines if power should be centralized or decentralized? How many levels of government should there be? How should state borders be drawn? We develop a model of political agency in which voters differ in their ability to monitor rent-seeking politicians. We find that rent extraction is a decreasing but convex function of the share of informed voters, because voter information improves monitoring but also reduces the appeal of holding office. As a consequence, information heterogeneity makes centralization appealing as a way of reducing rent extraction. Conversely, taste heterogeneity prompts decentralization as a way of matching local preferences. We also explain why the proliferation of government tiers harms efficiency. We find economies of scope in accountability: a single government in charge of many policies has better incentives than many special-purpose governments splitting its budget. Thus, a federal system is desirable only if information varies enough across regions. Our model implies that optimal borders should cluster by tastes but also ensure diversity of information. Quantitatively, our fi ndings suggest excessive government fragmentation in the United States. |
| Keywords: | federalism, government accountability, imperfect information, interregional heterogeneity, elections |
| JEL: | D72 D82 H73 H77 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps30&r=ure |
| By: | Enrico Spolaore; Romain Wacziarg |
| Abstract: | We explore the interrelationships between various measures of cultural distance. We first discuss measures of genetic distance, used in the recent economics literature to capture the degree of relatedness between countries. We next describe several classes of measures of linguistic, religious, and cultural distances. We introduce new measures of cultural distance based o differences in average answers to questions from the World Values Survey. Using a simple theoretical model we hypothesize that ancestral distance, measured by genetic distance, is positively correlated with linguistic, religious, and cultural distance. An empirical exploration of these correlations shows this to be the case. This empirical evidence is consistent with the view that genetic distance is a summary statistic for a wide array of cultural traits transmitted intergenerationally. |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0812&r=ure |
| By: | Rajesh Sharma |
| Abstract: | Teacher morale can have a positive effect on pupil’s attitude and learning. It makes teaching more pleasant for teachers and creates an environment that is more conducive to learning. There are several factors that may affect teachers’ morale such as changes imposed by the govt., working conditions, lack of power to enforce discipline and perception created by media and society. Teacher morale can be shaken and raised by giving treatment to some variables that effect teacher morale. There had been several studies pertaining to the teacher’s morale and school related variables, but there are various other variables that may affect teacher morale. One of the variables that may affect their morale is their family factor. Key words: teacher, teachers morale, family |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2015-06-08&r=ure |
| By: | Annette Alstadsæter (University of Oslo); Salvador Barrios (European Commission – Joint Research Center); Gaëtan Nicodème (European Commission); Agnieszka Maria Skonieczna (European Commission); Antonio Vezzani (European Commission – Joint Research Center) |
| Abstract: | Patent boxes have been heavily debated for their role in corporate tax competition.This paper uses firm-level data for the period 2000-2011 for the top 2,000 corporate R&D investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes. We also exploit a new and original dataset on patent box features such as the conditionality on performing research in the country and their scope. We find that patent boxes have a strong effect on attracting patents mostly due to their favourable tax treatment, especially so for high quality patents. Patent boxes with a large scope in terms of tax base definition have also stronger effects on the location of patents. The size of the tax advantage offered through patent box regimes are found to deter local innovative activities while R&D development conditions tend to attenuate this adverse effect. Our simulations show that on average countries imposing such development conditions tend to grant a tax advantage which is slightly larger than optimal from a local R&D impact perspective. |
| Keywords: | Corporate taxation, patent boxes, location, patents, R&D, nexus approach |
| JEL: | F21 F23 H25 H73 O31 O34 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0057&r=ure |
| By: | Mohammadi, Ali (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Broström, Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Franzoni, Chiara (Politecnico di Milano) |
| Abstract: | In this paper, we study how workforce composition is related to firm’s radical innovation. Previous studies have argued that teams composed by individuals with diverse background are able to perform more information processing and make a deeper use of the information, which is important to accomplish complex tasks. We suggest that this argument can be extended to the level of the aggregate workforce of high technology firms. Our theoretical interest is focused on the extent to which insights from the literatures on science and invention can be applied to firms’ abilities to achieve radical innovation. In particular, we argue that having a set of employees with greater ethnical and higher education diversity is associated with superior radical innovation performance. Using a sample of 3,888 Swedish firms, we find that greater workforce ethnic diversity is positively correlated to the share of a firm’s turnover generated by radical innovation, while it is neutral to incremental innovation. Greater diversity in terms of higher educational disciplinary background of the workforce is positively correlated to the share of turnover generated by both radical and incremental innovation. Contrary to our hypothesis, we also find that having more external collaborations reduces the importance of a workforce with a diverse disciplinary background, while the importance of ethnic diversity is hold unchanged. Our findings hold after using alternatives measures of dependent and independent variables, alternative sample sizes, and alternative estimation techniques including panel data, and structural equation modeling for simultaneous estimation of diversity, R&D intensity and external search. |
| Keywords: | Ethnic diversity; Education diversity; External search; Radical innovation |
| JEL: | J15 J24 J61 O32 |
| Date: | 2015–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0413&r=ure |
| By: | Alstadsaeter, Annette; Barrios, Salvador; Nicodème, Gaëtan; Skonieczna, Agnieszka Maria; Vezzani, Antonio |
| Abstract: | Patent boxes have been heavily debated for their role in corporate tax competition. This paper uses firm-level data for the period 2000-2011 for the top 2,000 corporate research and development (R&D) investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes. We also exploit a new and original dataset on patent box features such as the conditionality on performing research in the country, and their scope. We find that patent boxes have a considerable effect on attracting patents, mostly because of their favourable tax treatment, especially for high-quality patents. Patent boxes with a large scope in terms of tax base definition also have stronger effects on the location of patents. The size of the tax advantage offered through patent box regimes is found to deter local innovative activities, whereas R&D development conditions tend to attenuate this adverse effect. Our simulations show that, on average, countries imposing such development conditions tend to grant a tax advantage that is slightly greater than optimal from a local R&D impact perspective. |
| Keywords: | corporate taxation; location; nexus approach; patent boxes; patents; R&D |
| JEL: | F21 F23 H25 H73 O31 O34 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10679&r=ure |
| By: | Cherrie Bucknor |
| Abstract: | As documented in parts one and two of this series, young blacks are completing high school and college at higher rates than in the past. This third installment and subsequent reports will examine whether these increases in educational attainment have led to better labor market outcomes. The data show that education does make a difference. College-educated young blacks have higher employment rates than less-educated blacks. However, blacks overall still suffer from lower employment rates than whites. This gap in employment rates increased during the recent recession and is still larger than its pre-recession level. |
| Keywords: | black, white, unemployment, college, education, employment, recovery |
| JEL: | J J1 J15 J11 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2015-16&r=ure |
| By: | Yann Algan (Département d'économie); Quoc-Anh Do (Département d'économie); Nicolò Dalvit (Departement d'Economie de Sciences Po, LIEPP); Alexis Le Chapelain (Département d'économie); Yves Zenou (Research Institute of Industrial Economics) |
| Abstract: | This paper shows how a public policy shapes convergence of beliefs through newly-formed social networks, with a focus on political opinion. We use a unique natural experiment that randomly assigns students into first-year groups at a French college that forms future top politicians. Pairs of students in the same group are much more likely to become friends. The randomized group membership serves as instrumental variable in a dyadic regression of differences in beliefs on friendship. We find that students’ political opinions converge particularly strongly between friends, reaching 11% of a standard deviation only after 6 months. Convergence is strongest among pairs least likely to become friends without the randomized exposure, or friends whose characteristics are the most different. While there is evidence of homophily in network formation, it does not seem to affect the estimates of convergence, except among very similar friends. The same strategy shows that a longer network distance implies slower convergence. |
| Keywords: | Political Beliefs; Peers; Social Networks; Convergence; Homophily; Belief Transmission; Learning; Diffusion; Natural Experiment |
| JEL: | C93 D72 Z13 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/78vacv4udu92eq3fec89svm9uv&r=ure |
| By: | FUJII Daisuke; NAKAJIMA Kentaro; SAITO Yukiko |
| Abstract: | This paper investigates the relationships between the determinants of industrial coagglomeration and establishment-level productivity. For each pair of industries, we first construct the degree of coagglomeration and indices for three factors of coagglomeration: inter-firm transactions, knowledge spillover, and labor market pooling. We then examine the correlation between these three factors and the degree of coagglomeration. Overall, inter-firm transactions and labor market pooling are positively correlated with the degree of coagglomeration whereas knowledge spillover has no significant relationship with it. We also find that the determinants of coagglomeration are quite different across industries. Further, we examine the relationships between these factors and establishment-level productivity. We find that the determinants of coagglomeration are not necessarily positively associated with the productivity of establishments. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15077&r=ure |
| By: | Broström , Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Karlsson, Staffan (Swedish Research Council & Royal Institute of Technology (KTH)) |
| Abstract: | This paper accounts for the development of the academic endavour to determine the firm-level relationship between investments in R&D and productivity. The impact of 28 highly cited publications within this line of study is investigated using a combination of bibliometric techniques and citation function analysis. We show how the attention paid to this line of research broadens and deepens in parallel to the diffusion of innovation as a research theme during 2000s. Our findings also suggest that the attraction of scholarly attention is driven by combination of broadening interest in the central research question under study and boundary-pushing methodological contributions made in the key contributions. |
| Keywords: | innovation; productivity; R&D; citation analysis; bibliometric analysis |
| JEL: | B21 B23 B41 C38 D24 |
| Date: | 2015–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0414&r=ure |
| By: | Thomas Flavin (Department of Economics, Finance and Accounting, Maynooth University.); Lisa Sheenan (Central Bank of Ireland, Spencer Dock, Dublin 1, Ireland.) |
| Abstract: | Though relatively small, the subprime mortgage-backed securities market is often identified as the source of the crisis that swept through the U.S. financial system from 2007 onwards. We investigate if its role in the propagation of the crisis was due to contagion or interdependence. Using a Markov-switching VAR with time-varying transition probabilities, we analyze the transmission of shocks across the financial system. We find little evidence of asset correlation changes between normal and crisis regimes and those that do occur are predominantly associated with liquidity variables. Otherwise, relationships are stable across market conditions, implying that the U.S. financial crisis was due to cross-market interdependencies rather than contagion. There is limited evidence that the deteriorating quality of the underlying assets can explain the transition from 'normal' market conditions to a high-volatility regime although his is not consistent across model specifications. |
| Keywords: | Financial Crisis; Contagion; Subprime mortgage-backed securities; Markov-switching VAR. |
| JEL: | G01 G10 G2 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n260-15.pdf&r=ure |