nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒08‒19
fifty papers chosen by
Steve Ross
University of Connecticut

  1. What explains productivity differentials across spanish cities? By Díaz Serrano, Lluís
  2. Airport Improvements and Urban Growth By Nicholas Sheard
  3. School Quality and the Development of Cognitive Skills between Age Four and Six By Borghans, Lex; Golsteyn, Bart H.H.; Zölitz, Ulf
  4. The Effect of Natural Disasters on Housing Prices: An Examination of the Fourmile Canyon Fire By Katherine A. Kiel; Victor Matheson
  5. Physical Activity in School Travel: A Cross-Nested Logit Approach By Alireza Ermagun; David Levinson
  6. The cost of equity: Assessing transit accessibility and social disparity using total travel cost By Ahmed El-Geneidy; David Levinson; Ehab Diab; Genevieve Boisjoly; David Verbich; Charis Loong
  7. Same difference? Minority ethnic inventors, diversity and innovation in the UK By Max Nathan
  8. Municipal Fragmentation and Economic Performance of OECD TL2 Regions By David Bartolini
  9. Difference-in-Differences Techniques for Spatial Data: Local Autocorrelation and Spatial Interaction By Michael S. Delgado; Raymond J.G.M. Florax
  10. Ecological barriers and convergence: a note on geometry in spatial growth models By Giorgio Fabbri
  11. The Impact of Education on Personality - Evidence from a German High School Reform By Sarah Dahmann; Silke Anger
  12. Better residential than ethnic discrimination! By François Bonnet; Etienne Lalé; Mirna Safi; Etienne Wasmer
  13. Current account dynamics and the housing boom and bust cycle in Spain By Maas, Daniel; Mayer, Eric; Rüth, Sebastian
  14. Decentralizing education resources: school grants in Senegal By Pedro Carneiro; Oswald Koussihouèdé; Nathalie Lahire; Costas Meghir; Corina Mommaerts
  15. Land use dynamics and the environment By Carmen Camacho; Agustín Pérez-Barahona
  17. Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement By Timothy Conley; Nirav Mehta; Ralph Stinebrickner; Todd Stinebrickner
  18. The Housing Problem and Revealed Preference Theory: Duality and an application By Ivar Ekeland; Alfred Galichon
  19. Local government cooperation at work: A control function approach By Zineb Abidi; Edoardo Di Porto; Angela Parenti; Sonia Paty
  20. Geographical mobility and the labour market By Vives Coscojuela, Cecilia
  21. The impact of an accountability intervention with diagnostic feedback : evidence from Mexico By De Hoyos Navarro,Rafael E.; Garcia Moreno,Vicente A.; Patrinos,Harry Anthony
  22. ECONOMETRIC METHODS FOR LAND USE MICROSIMULATION By Nathalie Picard; Constantinos Antoniou
  23. Mortgage Interest Rate Types in Ireland By Kelly, Robert; Lyons, Paul; O'Toole, Conor
  24. How Teachers Respond to Pension System Incentives: New Estimates and Policy Applications By Shawn Ni; Michael Podgursky
  25. The distribution of school funding and inputs in England: 1993-2013 By Luke Sibieta
  26. On the Existence and Uniqueness of Equilibrium in the Bottleneck Model with Atomic Users By Hugo E. SILVA; Robin Lindsey; André De Palma; Vincent A.C. Van den BERG
  27. Road network structure and speeding using GPS data By Toshihiro Yokoo; David Levinson
  28. Performance Standards and Employee Effort: Evidence from Teacher Absences By Gershenson, Seth
  29. Estimating Quality Adjusted Commercial Property Price Indexes Using Japanese REIT Data By Diewert, W. Erwin; Nishimura , Kiyohiko G.; Shimizu, Chihiro; Watanabe, Tsutomu
  30. Left-behind children and return migration in China By Sylvie Démurger; Hui Xu
  31. Local Economic Impacts of Popular Music Concerts By Gabe, Todd; Lisac, Nicholas
  32. Congestion pricing: A mechanism design approach By Heller, C.-Philipp; Johnen, Johannes; Schmitz, Sebastian
  33. High-speed Rail Station, Service Innovations And Temporary Office Space For Mobile Workers By Marie Delaplace; Francesca Pagliara; Anne Aguilera
  34. Branch-and-Price-and-Cut for a Service Network Design and Hub Location Problem By Ann-Kathrin Rothenbächer; Michael Drexl; Stefan Irnich
  35. Spatial equity and high speed trains: the example of France By Dominique Bouf; Christian Desmaris
  36. Analyzing Multiday Route Choice Behavior using GPS Data By Wenyun Tang; David Levinson
  37. Information and Price Dispersion. Theory and Evidence By Dieter Pennerstorfer; Philipp Schmidt-Dengler; Nicolas Schutz; Christoph R. Weiss; Biliana Yontcheva
  38. Evaluating the "Safety In Numbers" Effect With Estimated Pedestrian Activity By Brendan Murphy; David Levinson; Andrew Owen
  39. Mortgages and Monetary Policy By Roman Sustek; Finn Kydland; Carlos Garriga
  40. Financing urban logistics projects. From public utility to public-private partnerships By Jesus Gonzalez-Feliu; Eichi Taniguchi; Bruno Faivre d'Arcier
  41. Exclusion bias in empirical social interaction models: causes, consequencs and solutions By Bet Helena Caeyers
  42. Fiscal decentralisation in times of financial crises By David Bartolini; Agnese Sacchi; Simone Salotti; Raffaella Santolini
  43. Human Capital Spillovers and the Geography of Intergenerational Mobility By Brant Abbott; Giovanni Gallipoli
  44. Sorting Within and Across French Production Hierarchies By Grigorios Spanos
  45. Do Social Networks Improve Chinese Adults' Subjective Well-being? By Lei, Xiaoyan; Shen, Yan; Smith, James P.; Zhou, Guangsu
  46. Trip-timing decisions and congestion with household scheduling preferences By André De Palma; Robin Lindsey; Nathalie Picard
  47. Cohort Effects and Their Influence on Car Ownership By Michael Iacono; David Levinson
  48. Airport Prices in a Two-Sided Market Setting: Major US Airports By Ivaldi, Marc; Sokullu, Senay; Toru, Tuba
  49. Heterogeneous Impact of Real Estate Prices on Firm Investment By HAZAMA Makoto; UESUGI Iichiro
  50. Single till or dual till at airports: a two-sided market By Estelle Malavolti

  1. By: Díaz Serrano, Lluís
    Abstract: This paper estimates the determinants of productivity differentials across urban areas in Spain. To do so we resort to Spanish Social Security administrative data (MCVL) matched with workers’ fiscal information. We use two-step approach that allows us to control for the confounding effects due to the sorting of more productive workers and more productive firms in bigger cities. Our results indicate that city size is a significant determinant of productivity differentials across Spanish urban areas. We estimate an elasticity of urban agglomeration of 3.3%, which is within the range of values already observed in other countries. We also find that the level of human capital, firm size and the level of industrial specialization also matters in order explain productivity differentials across Spanish cities. Keywords: Agglomeration, wages, productivity, city size. JEL codes: R10, R23, J31
    Keywords: Àrees metropolitanes, Espanya, Ciutats, Productivitat (Economia), Salaris, Economia regional, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2015
  2. By: Nicholas Sheard (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: This paper estimates the effects of airports on economic growth in the local areas they serve, using data from US metropolitan areas. It applies a novel identification technique that uses the overall development of the air transport network to identify changes in airport size that are not influenced by local factors. Airport size is found to have positive effects on local employment with an elasticity of 0.02 and on GDP with an elasticity of 0.035. This means that for every job created at the airport by an exogenous increase in traffic, there are three jobs created outside of the airport. Airport size is also found to have positive effects on local wages and on the number of firms. In addition there is a positive effect on the employment rate, the magnitude of which suggests that around half of jobs created by airport expansion represent a net increase in the employment of existing residents, while half are taken up by workers who migrate to the area.
    Date: 2015–02
  3. By: Borghans, Lex (Maastricht University); Golsteyn, Bart H.H. (Maastricht University); Zölitz, Ulf (IZA)
    Abstract: This paper studies the extent to which young children develop their cognitive ability in high and low quality schools. We use a representative panel data set containing cognitive test scores of 4-6 year olds in Dutch schools. School quality is measured by the school's average achievement test score at age 12. Our results indicate that children in high-quality schools develop their skills substantially faster than those in low-quality schools. The results remain robust to the inclusion of initial ability, parental background, and neighborhood controls. Moreover, using proximity to higher-achieving schools as an instrument for school choice corroborates the results. The robustness of the results points toward a causal interpretation, although it is not possible to erase all doubt about unobserved confounding factors.
    Keywords: cognitive skills, child development, school quality
    JEL: I2 I24 J24
    Date: 2015–07
  4. By: Katherine A. Kiel (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: In September 2010, the Fourmile-Lefthand Canyon forest fire burned 6,181 acres, destroyed 169 homes, and caused $217 million in property damages making it by far the most expensive fire in Colorado history at the time. This paper examines how the fire affected housing prices in vulnerable neighboring areas that were not directly impacted by the fire, controlling for the property’s level of risk. This damaging fire may have increased home owners’ perceptions about the risk of living in forested areas subject to wildfires to a significant degree adding to the total direct economic losses from the fire. Utilizing a unique fire risk data set and a difference-in-difference approach, we test whether buyers of houses in areas with different risk levels prior to the fire adjust expectations differently. We find buyers in the highest risk area are most likely to change their perceptions in response to a fire with houses in these areas experiencing a statistically significant 21.9% decline in sale price.
    Keywords: disasters, forest fires, housing, climate change
    JEL: Q54 R11 R21
    Date: 2015–08
  5. By: Alireza Ermagun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper considers school access by both active (walk, bike), quasi-active (walk to transit) and non-active modes (car) in a two-level cross-nested logit framework. A sample of 3,272 middle and high school students was collected in Tehran. The results of the cross-nested logit model suggest that for people who choose walking, increasing a 1 percent in home-to-school distance reduces the probability of walking by 3.51 percent. While, this reduction is equal to 2.82 and 2.27 percent as per the multinomial and nested logit models, respectively. This is a direct consequence of the model specification that results in underestimating the effect of distance by 1.24 percent. It is also worth mentioning that, a one percent increase in home-to-school distance diminishes the probability of taking public transit by 1.04 among public transit users, while increases the probability of shifting to public transit from walking by 1.39 percent. Further, a one percent increase of the distance to public transport, decreases the probability of students' physical activity, approximately, 0.04 percent.
    Keywords: Public Transit; Active Mode of Travel; School Trips; Tehran
    JEL: C35 I12 J13 R14 R41 R42 R53
    Date: 2015
  6. By: Ahmed El-Geneidy; David Levinson; Ehab Diab; Genevieve Boisjoly; David Verbich; Charis Loong (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Social equity is increasingly incorporated as a long-term objective into urban transportation plans. Researchers used accessibility measures to assess equity issues, such as determining the amount of jobs reachable by marginalized groups within a defined travel time threshold and compare these measures across socioeconomic categories. However, allocating public transit resources in an equitable manner is not only related to travel time, but also related to the out-of- pocket cost of transit fares, which can represent a major barrier to accessibility for many disadvantaged groups. Therefore, this research proposes a set of new accessibility measures that incorporates both travel time and transit fares. It then applies those measures to determine whether people residing in socially disadvantaged neighborhoods in Montreal, Canada experience the same levels of transit accessibility as those living in other neighborhoods. Results are presented in terms of regional accessibility and trends by social indicator decile. Travel time accessibility measures estimate a higher number of jobs that can be reached compared to combined travel time and cost measures. However, the degree and impact of these measures varies across the social deciles. Compared to other groups in the region, residents of socially disadvantaged areas have more equitable accessibility to jobs using transit; this is reflected in smaller decreases in accessibility when fare costs are included. Generating new measures of accessibility combining travel time and transit fares provides more accurate measures that can be easily communicated by transportation planners and engineers to policy makers and the public since it translates accessibility measures to a dollar value.
    Keywords: Equity, Job accessibility, Transit fare, Travel time. Cost
    JEL: D63 J61 R14 R41 R42
    Date: 2015
  7. By: Max Nathan
    Abstract: Minority ethnic inventors play important roles in US innovation, especially in high-tech regions such as Silicon Valley. Do ‘ethnicity–innovation’ channels exist elsewhere? Ethnicity could influence innovation via production complementarities from diverse inventor communities, co-ethnic network externalities or individual ‘stars’. I explore these issues using new UK patents microdata and a novel name-classification system. UK minority ethnic inventors are spatially concentrated, as in the USA, but have different characteristics reflecting UK-specific geography and history. I find that the diversity of inventor communities helps raise individual patenting, with suggestive influence of East Asian-origin stars. Majority inventors may benefit from multiplier effects.
    Keywords: innovation; cultural diversity; minority ethnic inventors patents; cities
    JEL: J15 O31 R11
    Date: 2014–05–10
  8. By: David Bartolini
    Abstract: The present work investigates the relationship between municipal fragmentation and regional per capita GDP growth rate, using a panel of OECD TL2 regions in the period 1996-2011. According to the fiscal decentralisation literature, fragmentation should enhance growth as local government closer to citizens can implement policies that better match their needs, thus providing services and public goods in a more efficient way. The presence of many local governments, however, may create problems in terms of overlapping functions, (dis)economies of scale, and policy fragmentation. The results of the empirical analysis show that municipal fragmentation has a negative impact on per capita GDP growth, thus supporting the view that costs prevail on benefits. The introduction of regional territorial characteristic – namely, the share of population living in rural areas – provides a different picture, however. The negative impact of fragmentation decreases with the share of population living in rural areas. Indeed, in extremely “rural” regions the effect turns mildly positive. This is because the costs and benefits of fragmentation have a different weight in urban and rural regions. The key insight is the different distribution of the population over the territory: more concentrated in urban than in rural regions. This implies that, for a given level of municipal fragmentation overlapping of function is more severe in urban regions (where people are likely to commute over municipal boundaries) than in rural area. In the same vein, for the same level of municipal fragmentation access to the local government is more difficult in rural areas (where people is sparsely located within municipal boundaries) than in urban areas. The policy implications of the analysis are twofold. Firstly, reducing municipal fragmentation may have a heterogeneous impact within the country, thus raising concern for one-size-fits-all policies of municipal agglomeration in favour of a place-based approach to institutional reform. For instance, the principle guiding municipal amalgamation should not be the average municipal size at the country level, but it should be weighted for the rural/urban characteristics of each region. Secondly, the analysis suggests that processes of agglomeration of people should be accompanied by a consistent amalgamation of the local administration, otherwise representing an obstacle to the full realisation of agglomeration economies.
    Keywords: institutions, regional growth, local governments
    JEL: R11 R50
    Date: 2015–07
  9. By: Michael S. Delgado (Purdue University, United States); Raymond J.G.M. Florax (VU University Amsterdam, the Netherlands, and Purdue University, United States)
    Abstract: We consider treatment effect estimation via a difference-in-difference approach for data with local spatial interaction such that the outcome of observed units depends on their own treatment as well as on the treatment status of proximate neighbors. We show that under standard assumptions (common trend and ignorability) a straightforward spatially explicit version of the benchmark difference-in-differences regression is capable of identifying both direct and indirect treatment effects. We demonstrate the finite sample performance of our spatial estimator via Monte Carlo simulations.
    Keywords: Difference-in-differences; Monte Carlo simulation; program evaluation; spatial autocorrelation; spatial interaction
    JEL: C21 C53
    Date: 2015–07–30
  10. By: Giorgio Fabbri (EPEE - Université d'Evry-Val d'Essonne)
    Abstract: We introduce an AK spatial growth model with a general geographical structure. The dynamics of the economy is described by a partial differential equation on a Riemannian manifold. The morphology interacts with the spatial dynamics of the capital and is one determinant of the qualitative behavior of the economy. We characterize the conditions on the geographical structure that guarantee convergence of the detrended capital across locations in the long run, and those inducing spatial capital agglomeration.
    Date: 2015–05–27
  11. By: Sarah Dahmann (German Institute for Economic Research (DIW Berlin)); Silke Anger (Volkswirtschaftslehre Otto-Friedrich Universität Bamberg)
    Abstract: This paper investigates the short-term effects of a reduction in the length of high school on students' personality traits using a school reform carried out at the state level in Germany as a quasi-natural experiment. Starting in 2001, academic-track high school (Gymnasium) was reduced from nine to eight years in most of Germany's federal states, leaving the overall curriculum unchanged. This enabled students to obtain a university entrance qualification (Abitur) after a total of only 12 rather than 13 years of schooling. We exploit the variation in the length of academic-track high school over time and across states to identify the effect of schooling on students' Big Five personality traits and on their locus of control. Using rich data on adolescents and young adults from the German Socio-Economic Panel (SOEP) study, our estimates show that shortening high school caused students on average to be more extroverted and less emotionally stable. Our estimates point to important heterogeneous effects. In addition to differences between East and West Germany, we find that male students and students from disrupted families showed stronger personality changes following the reform: they became more agreeable and more extroverted, respectively. We conclude that the educational system plays an important role in shaping adolescents' personality traits.
    Keywords: Non-cognitive Skills, Big Five, Locus of Control, Skill Formation, High School Reform
    JEL: I21 I28 J24
    Date: 2015–05
  12. By: François Bonnet (PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier); Etienne Lalé (University of Bristol [Bristol]); Mirna Safi (OSC - Observatoire sociologique du changement - CNRS - Sciences Po); Etienne Wasmer (Sciences Po)
    Abstract: This article investigates discrimination and the interplay of residential and ethnic stigma on the French housing market using two different methods, paired-testing au- dit study of real estate agencies and face-to-face interviews with real estate agents. The juxtaposition of their findings leads to a paradox: interviews reveal high levels of ethnic discrimination but little to none residential discrimination, while the audit study shows that living in deprived suburbs is associated with a lower probability of obtaining an appointment for a housing vacancy but ethnic origin (signaled by the candidate’s name) has no significant discriminatory effect. We have three priors po- tentially consistent with this apparent paradox and re-evaluate their likelihood in light of these findings: (i) agents make use of any statistical information about insolvency, including residency; (ii) there are two distinct and independent taste discriminations, one about space and one about ethnicity; (iii) these two dimensions exist and comple- ment each other.
    Date: 2015–02
  13. By: Maas, Daniel; Mayer, Eric; Rüth, Sebastian
    Abstract: We investigate the drivers of the negative correlation between housing markets and the current account in Spain. By employing robust sign restrictions, which we derive from a DSGE model for a currency union, we analyze the effects of domestic pull and foreign push factors in the mixed frequency VAR framework. Savings glut, risk premium, and house price expectations shocks are capable of generating the negative co-movement of housing markets and the current account in the data. In contrast, and counter-factual to the Spanish housing boom, financial easing shocks predict a decline in residential investment. Among the four identified shocks, savings glut shocks have most explanatory power for real house prices, residential investment, and the current account. We also reveal an important role of risk premium and house price expectations shocks for housing markets, whereas financial easing shocks do not explain sizeable fluctuations in the key variables.
    Keywords: current account,housing markets,monetary union
    JEL: E32 F32
    Date: 2015
  14. By: Pedro Carneiro (Institute for Fiscal Studies and cemmap and UCL); Oswald Koussihouèdé (Institute for Fiscal Studies); Nathalie Lahire (Institute for Fiscal Studies); Costas Meghir (Institute for Fiscal Studies and Yale University); Corina Mommaerts (Institute for Fiscal Studies)
    Abstract: The impact of school resources on the quality of education in developing countries may depend crucially on whether resources are targeted efficiently. In this paper we use a randomized experiment to analyze the impact of a school grants program in Senegal, which decentralized a portion of the country's education budget. We find large positive effects on test scores at younger grades that persist at least two years. We show that these effects are concentrated among schools that focused funds on human resources improvements rather than school materials, suggesting that teachers and principals may be a central determinant of school quality.
    Keywords: Quality of education; Decentralization; School resources; Child Development; Clustered Randomized Control Trials
    JEL: H52 I22 I25 O15
    Date: 2015–03
  15. By: Carmen Camacho (CNRS, Université Paris 1 Panthéon-Sorbonne - [-]); Agustín Pérez-Barahona (ECO-PUB - Economie Publique - Institut national de la recherche agronomique (INRA) - AgroParisTech, Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X)
    Abstract: This paper builds a benchmark framework to study optimal land use, encompassing land use activities and environmental degradation. We focus on the spatial externalities of land use as drivers of spatial patterns: land is immobile by nature, but local actions affect the whole space since pollution flows across locations resulting in both local and global damages. We prove that the decision maker problem has a solution, and characterize the corresponding social optimum trajectories by means of the Pontryagin conditions. We also show that the existence and uniqueness of time-invariant solutions are not in general guaranteed. Finally, a global dynamic algorithm is proposed in order to illustrate the spatial-dynamic richness of the model. We find that our simple set-up already reproduces a great variety of spatial patterns related to the interaction between land use activities and the environment. In particular, abatement technology turns out to play a central role as pollution stabilizer, allowing the economy to reach a time-invariant equilibrium that can be spatially heterogeneous.
    Date: 2014–10–13
  16. By: Gabriel Lang (MIA-Paris - Mathématiques et Informatique Appliquées - AgroParisTech - Institut national de la recherche agronomique (INRA)); Eric Marcon (ECOFOG - Ecologie des forêts de Guyane - UAG - Université des Antilles et de la Guyane - AgroParisTech - Institut national de la recherche agronomique (INRA) - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - CNRS); Florence Puech (RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11)
    Abstract: For a decade, distance-based methods have been widely employed and constantly improved in the field of spatial economics. These methods are a very useful tool for accurately evaluating the spatial distribution of plants or retail stores, for example (Duranton and Overman, 2008). In this paper, we introduce a new distance-based statistical measure for evaluating the spatial concentration of economic activities. To our knowledge, the m function is the first relative density function to be proposed in the economics literature. This tool supplements the typology of distance-based methods recently drawn up by Marcon and Puech (2012). By considering several theoretical and empirical examples, we show the advantages and the limits of the m function for detecting spatial structures in economics.
    Date: 2015–07–27
  17. By: Timothy Conley; Nirav Mehta; Ralph Stinebrickner; Todd Stinebrickner
    Abstract: We develop and estimate an equilibrium model of study time choices of students on a social network. We examine how network structure interacts with student characteristics to affect academic achievement. Due to data limitations, few papers examine the mechanisms through which peer effects operate. The model is designed to exploit unique data collected in the Berea Panel Study. Study time data allow us to quantify an intuitive mechanism for social interactions: the cost of own study time may depend on friend study time. Social network data allow study time choices and resulting academic achievement to be embedded in an equilibrium framework. We find friend study time strongly affects own study time, and, therefore, student achievement. Not taking into account equilibrium behavior would drastically understate the effect of peers. Sorting on friend characteristics appears important in explaining variation across students in study time and achievement, and determines the aggregate achievement level.
    JEL: H0 I20 J0
    Date: 2015–07
  18. By: Ivar Ekeland (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - CNRS - Université Paris IX - Paris Dauphine); Alfred Galichon (ECON - Département d'économie - Sciences Po)
    Abstract: This paper exhibits a duality between the theory of revealed preference of Afriat and the housing allocation problem of Shapley and Scarf. In particular, it is shown that Afriat's theorem can be interpreted as a second welfare theorem in the housing problem. Using this duality, the revealed preference problem is connected to an optimal assignment problem, and a geometrical characterization of the rationalizability of experiment data is given. This allows in turn to give new indices of rationalizability of the data and to define weaker notions of rationalizability, in the spirit of Afriat's efficiency index.
    Date: 2013–11
  19. By: Zineb Abidi (CREM - Centre de Recherche en Economie et Management - CNRS - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1); Edoardo Di Porto (University of Naples Federico II [Naples] - University of Naples Federico II); Angela Parenti (IMT Institute of Advanced Studies); Sonia Paty (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon)
    Abstract: Abstract.We analyze voluntary coalition formation using a unique panel data for 1,056 municipalities in the French region of Brittany between 1995 and 2002. We use a control function approach to develop a binary discrete choice model with spatial interactions. We find that a municipality’s decision to cooperate over the provision local public goods depends on the decisions of its neighbours. Comparison with spatial econometrics models (SAR and Durbin) shows that the decision to cooperate is over estimated by these more traditional models. The results are in line with the recent applied spatial economics literature but are derived for a discrete choice model setting.
    Date: 2014
  20. By: Vives Coscojuela, Cecilia
    Abstract: This paper studies the e ect of home-owners' migration costs on migration and unemployment in an economy where workers move both for work- and nonwork- related reasons. To this end, a search model with heterogeneous locations is developed and calibrated to the U.S. economy. Consistent with the empirical evidence, the model predicts that home-owners have a lower unemployment rate than renters despite their higher migration costs. The result is due to home-owners' higher transition rate to employment and lower transition rate to unemployment.In addition, the model generates lower inequality in home-owners' local unemployment rates than in renters'. In line with this result, it is documented that, for the period 1996-2013, home-owners had less unemployment dispersion across metropolitan areas than renters.
    Keywords: mobility, home-ownership, unemployment, labour
    JEL: R23 J64 J61
    Date: 2015–05
  21. By: De Hoyos Navarro,Rafael E.; Garcia Moreno,Vicente A.; Patrinos,Harry Anthony
    Abstract: In 2009, the Mexican state of Colima implemented a low-stakes accountability intervention with diagnostic feedback among 108 public primary schools with the lowest test scores in the national student assessment. A difference-in-difference and a regression discontinuity design are used to identify the effects of the intervention on learning outcomes. The two alternative strategies consistently show that the intervention increased test scores by 0.12 standard deviations only a few months after the program was launched. When students, teachers, and parents in a school know that their scores are low, and this triggers a process of self-evaluation and analysis, the process itself may lead to an improvement in learning outcomes. Information on quality, without punitive measures but within a supportive and collaborative environment, appears to be sufficient to improve learning outcomes.
    Keywords: Education For All,Secondary Education,Tertiary Education,Effective Schools and Teachers,Primary Education
    Date: 2015–08–13
  22. By: Nathalie Picard (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS); Constantinos Antoniou (National Technical University of Athens)
    Abstract: Typically, urban development models have been based on aggregate principles. UrbanSim (Waddell et al. 2003) is among a new breed of models that use microsimulation in an effort to overcome the limitations of earlier models and provide a more dynamic and detailed paradigm. The advantages and disadvantages of using microsimulation are not within the scope of this chapter, but the main implication is that more data, as well as more detailed ones are required for microsimulation than for aggregate models. In the context of the SustainCity project (, three European cities (Brussels, Paris and Zürich, described in other chapters of this handbook) have been modelled using the land use microsimulation platform UrbanSim. This platform relies on various models interacting with each other, to predict long–term urban development. The aim of this chapter is to provide some econometric insight into this process. A common set of notations and assumptions are first defined, and the more common model structures (linear regression, multinomial logit, nested logit, mixed MNL and latent variable models) are described in a consistent way. Special treatments and approaches that are required due to the specific nature of the data in this type of applications (i.e. involving very large number of alternatives, and often exhibiting endogeneity, correlation, and (pseudo–)panel data properties) are discussed. For example, importance sampling, spatial econometrics, Geographically Weighted Regression (GWR) and endogeneity issues are covered. Specific examples of the following models: (i) household location choice model, (ii) jobs location/firmography, (iii) real estate price model, and (iv) land developmentmodel, are demonstrated in the context of the case studies in Brussels, Paris and Zürich. Finally, lessons learned in relation to the econometric models from these case studies are summarized.
    Date: 2014–12–08
  23. By: Kelly, Robert (Central Bank of Ireland); Lyons, Paul (Central Bank of Ireland); O'Toole, Conor (Central Bank of Ireland)
    Abstract: This letter profiles interest rate types across the Irish mortgage market. We attempt to answer the following questions: (1) what interest rate types were contracted between borrowers and banks at loan origination and how have these evolved over time? (2) for each distinct interest rate type, are there differences in the loan and borrower characteristics and did these change over the credit cycle? and (3) how do mortgage burdens of households differ across interest rate types?. We find that the choice of fixed rate loans at origination is greater for younger, first time borrowers. The fixed rate is typically less than 5 years with 81 per cent transitioning to variable rates after the expiry of the agreed fixed rate term. In comparison, loans originating on variable contracts exhibit a low propensity to change rate type. A special variable rate with fixed margin over a reference rate ("Tracker") dominates the mortgage market at the height of the boom with the largest loans and greatest proportion of self-employed borrowers. Since Tracker loans have benefited most from the low interest rate environment, we analyse if there are differences across rate type in terms of mortgage servicing costs. We find while Tracker loans are associated with lower median installments, differences vis-a-vis fixed and SVR installments vary by mortgage origination year and current house prices.
    Date: 2015–07
  24. By: Shawn Ni (University of Missouri - Columbia); Michael Podgursky (University of Missouri - Columbia)
    Abstract: Rising costs of public employee pension plans are a source of ?scal stress in many cities and states and have led to calls for reform. To assess the economic consequences of plan changes it is important to have reliable statistical models of employee retirement behavior. The authors estimate a structural model of teacher retirement using administrative panel data. A Stock-Wise option value model provides a good ?t to the data and predicts well out-of-sample on the e?ects of pension enhancements during the 1990s. The structural model is used to simulate the e?ect of alternatives to the current de?ned bene?t plan.
    Keywords: teacher pensions, school staffing, school finance.
    JEL: I21 J26 J38
    Date: 2015–08
  25. By: Luke Sibieta (Institute for Fiscal Studies)
    Abstract: School funding per pupil increased substantially between 1999-00 and 2012-13 in England. It also became more varied across schools with higher levels of funds targeted at more deprived schools. Real-terms increases in funding per pupil were much larger for the most deprived group of primary and secondary schools (83% and 93%, respectively) as compared with the least deprived primary and secondary schools (56% and 59%). In this paper, we decompose these increases in funding per pupil into the amount explained by quantities of different types of staff per pupil, their price and changes in non-staffing costs. We find that some of these increases in funding per pupil translated into larger numbers of teachers per pupil and a higher real-terms cost per teacher (about 20-30% of the increase in funding per pupil). However, a much larger portion of the increases in funding can be accounted for by higher levels and increased variation in the use of teaching assistants (largely lower skilled staff), other non-teaching staff and non-staff inputs (such as learning resources, professional services and energy). Furthermore, there is also evidence to suggest that differences in expenditure between the most and least deprived schools are smaller than differences in funding, with more deprived secondary schools running slightly larger surpluses. Increased use of non-teaching staff was partly an intended policy shift by policymakers at the time. However, we argue that the scale of the changes in inputs are more likely to reflect rigidities, the flexibility of contracts and uncertainty over future funding allocations.
    Keywords: School finance
    JEL: H52 I20 I22
    Date: 2015–03
  26. By: Hugo E. SILVA (Department of Spatial Economics, Faculty of Economics and Business Administration, Free University, De Boelelaan 1105, 1081 HV Amsterdam, Netherlands - affiliation inconnue); Robin Lindsey (University of British Columbia (CANADA) - University of British Columbia (CANADA)); André De Palma (ENS Cachan - École normale supérieure - Cachan, Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X); Vincent A.C. Van den BERG (Tinbergen Institute - Tinbergen Institute)
    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 system 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 either centralized traffic control or time-varying congestion tolls.
    Date: 2015–05–06
  27. By: Toshihiro Yokoo; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper analyzes the relationship between road network structure and the percentage of speeding using GPS data collected from 152 individuals over a 7 day period. To investigate the relationship, we develop an algorithm and process to match the GPS data and GIS data accurately. Comparing actual travel speed from GPS data with posted speed limits we measure where and when speeding occurs, by whom. We posit that road network structure shapes the decision to speed. Our result shows that the percentage of speeding, which is calculated by travel distance, is large in high speed limit zones (e.g. 60 mph ) and low speed limit zone (less than 25 mph); in contrast, the percentage of speeding is much lower in the 30 - 50 mph zone. The results suggest driving pattern depends on the road type. We also find that if there are many intersections in the road, average link speed (and speeding) drops. Long links are conducive to speeding.
    Keywords: GPS data, speeding, travel behavior
    JEL: K42 R41 R42
    Date: 2015
  28. By: Gershenson, Seth (American University)
    Abstract: The 2001 No Child Left Behind Act (NCLB) increased accountability pressure in U.S. public schools by threatening to impose sanctions on Title-1 schools that failed to make Adequate Yearly Progress (AYP) in consecutive years. Difference-in-difference estimates of the effect of failing AYP in the first year of NCLB on teacher effort in the subsequent year suggest that on average, teacher absences in North Carolina fell by about 10% and the probability of being absent 15 or more times fell by about 20%. Reductions in teacher absences were driven by within-teacher increases in effort.
    Keywords: performance standards, employee effort, teacher absences, accountability, NCLB
    JEL: J45 J48 J22 I2
    Date: 2015–07
  29. By: Diewert, W. Erwin; Nishimura , Kiyohiko G.; Shimizu, Chihiro; Watanabe, Tsutomu
    Abstract: The paper proposes a new method to estimate quality adjusted commercial property price indexes using real estate investment trust (REIT) data. The method is based on the present value approach, but the way in which current operating income and the capitalization rate are estimated differs from the traditional method. The traditional method uses a hedonic regression with appraisal information on properties as the dependent variable in order to estimate the capitalization factor. We compare this method with a method that replaces appraisal information with stock market valuations (adjusted for debt). We also run alternative hedonic regressions, restricting the sample of properties to those which are associated with new rental contracts, which may contain more information on future cash flows from properties. Using a dataset with prices and cash flows for about 400 commercial properties included in Japanese REITs for the period 2001 to 2013, we find that our price index signals turning points much earlier than an appraisal-based price index. Our results suggest that the share prices of REITs provide useful information in constructing commercial property price indexes.
    Keywords: Commercial property price indexes, REIT, quality adjusted price index, hedonic regressions, Tobin’s q, risk premium.
    JEL: C23 C43 E31 G19 R21
    Date: 2015–08–04
  30. By: Sylvie Démurger (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS); Hui Xu (Beijing Normal University / Beijing)
    Abstract: This paper examines how left-behind children influence migration duration in China. We first present a simple illustrative model that incorporates economic and non-economic motives to migration duration. Using individual data from a survey carried out in Wuwei county (Anhui province) in 2008, we find that migrant parents of children in primary school tend to delay their return, a result we interpret as illustrating the need for migrant parents to accumulate money for their offspring's education. In contrast, parental time appears substitutable by coresiding grandparents who contribute to delay the parents' return, especially mothers, when they have children below the age of 12.
    Date: 2015
  31. By: Gabe, Todd; Lisac, Nicholas
    Abstract: This study examines the local economic impacts of popular music concerts held between 2010 and 2012 in Bangor, Maine. A regression analysis of the relationship between monthly taxable retail sales—e.g., restaurant and lodging sales—in the Bangor region and the number of attendees is used to estimate local spending per concertgoer on meals and accommodations. Results suggest that an estimated 29 to 31 percent of attendees spend the night in the local area, which is very similar to the share of concertgoers who travel more than two hours to attend shows. The local economic impacts of 41 popular music concerts—featuring artists such as Bob Dylan, Barenaked Ladies, Def Leppard, Jason Aldean, and Godsmack—between 2010 and 2012 is an estimated $30.7 million in output, a yearly average of 156 full-time and part-time jobs, and a combined $9.7 million in labor income.
    Keywords: Popular Music Concerts, Economic Impact Analysis, Taxable Retail Sales, Tourism
    JEL: R11 R15 Z11
    Date: 2013–10
  32. By: Heller, C.-Philipp; Johnen, Johannes; Schmitz, Sebastian
    Abstract: We study road congestion as a mechanism design problem. In our basic model we analyze the allocation of a set of drivers among two roads, one of which may be congested. An additional driver on the congestible road imposes an externality on the other drivers by increasing their travel time. Each driver is privately informed about her value of time and asked to report that value to the mechanism designer, who assigns drivers to roads. With a finite number of drivers, there is aggregate uncertainty and the efficient allocation is ex ante unknown. Setting a single Pigouvian price is then not optimal. However, the efficient allocation is implementable by a Vickrey-Clarke-Groves price schedule that lets each driver pay the externality she imposes on other drivers. This allows drivers to pay to have other drivers use the slow road instead of the congestible road. As the number of drivers becomes large, there is a single optimal Pigouvian price that leads to an efficient allocation. However, finding this price requires the mechanism designer to either know the precise distribution of the value of time or the use of our mechanism. We analyze some extensions and apply our model to various congestion problems arising in other contexts.
    Keywords: mechanism design,congestion pricing,VCG mechanism,externalities,value of time
    JEL: D82 D62 R48 R41
    Date: 2015
  33. By: Marie Delaplace (LAB'URBA - LAB'URBA - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée - Institut d'Urbanisme de Paris (IUP)); Francesca Pagliara (University of Naples Federico II Department of Civil, Architectural and Environmental Engineering); Anne Aguilera (LVMT UMR T9403 - Laboratoire Ville, Mobilité, Transport - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - UPEM - Université Paris-Est Marne-la-Vallée - École des Ponts ParisTech (ENPC) - PRES Université Paris-Est)
    Abstract: Major investments on High Speed Rail (HSR) systems have been carried out all over the world. The existing and planned lines generate many expectations in served cities in terms of economic growth. In particular, HSR is intended to increase the number of business travellers and to foster economic activity by encouraging the development of offices in and around the railway stations. Using innovation service theories, we show that HSR service can be analysed as service innovations. Based on the case study of France and Italy, we sustain that these innovations can be of interest of both public and private actors in terms of urban renewal. We show that, in these two countries, there is the same kind of "behaviour" with respect to these innovations in terms of producing temporary office spaces in and around rail stations. The result is that HSR stations become working spaces and therefore important "places".
    Date: 2014–04–14
  34. By: Ann-Kathrin Rothenbächer (Department of Economics, Johannes Gutenberg-Universitaet Mainz, Germany); Michael Drexl (Department of Economics, Johannes Gutenberg-Universitaet Mainz, and Fraunhofer Centre for Applied Research on Supply Chain Services SCS, Nuernberg, Germany); Stefan Irnich (Department of Economics, Johannes Gutenberg-Universitaet Mainz, Germany)
    Abstract: In the context of combined road-rail freight transport, we study the integrated tactical planning of hub locations and the design of a frequency service network. We consider a number of real-world constraints such as multiple transshipments of requests at hubs, transport time limits for requests, request splitting, and outsourcing possibilities. To our knowledge, the combination of problem features we deal with has not been described before. We present a path-based model and solve it with a branch-and-price-and-cut algorithm. Computational experiments show that large realistic instances from a major German rail freight company can be solved close to optimality within one hour on a standard desktop computer, allowing our algorithm to be used for practical planning purposes.
    Keywords: Service Network Design, Hub Location, Intermodal Transport, Branch-and-Price-and-Cut
    Date: 2015–07–06
  35. By: Dominique Bouf (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE]); Christian Desmaris (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE], IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon)
    Abstract: This paper is aiming at qualifying the high speed trains in operation in France, with regards to spatial equity. To that end we begin by examining some of the various concepts enclosed in this polysemic word. Increased accessibility was one objective of the development of high speed rail. Thus we estimate a simple model to measure the possible effect of high speed rail on French regions. We did find a positive effect on GDP per capita and demographic growth. In a sense this is because they are growth-promoting that High speed lines are unfair. Beyond that, the pricing system set up by the train operator is based on yield management and intermodal competition. This results in a peculiar and singularly unfair pricing structure.
    Date: 2015
  36. By: Wenyun Tang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Understanding variability in daily behavior is one of the most important missions in travelbehavior modeling. In traditional method, in order to find the differences, respondents were asked to list the used multiday paths. The quality of results is sensitive to the accuracy of respondents’ memories. However, few empirical studies of revealed route characteristics, chosen by the travelers day-to-day, have been reported in the literature. In this study, accurate Global Position Systems (GPS) and Geographic Information System (GIS) data were employed to reveal multiday routes people used, to study multiday route choice behavior for the same origin-destination (OD) trips. Travelers are classified into three kinds based on their route types. A two-stage route choice process is proposed. After analyzing the characteristics of different types of travelers, a neural network was adopted to classify travelers and model route choice behavior. An empirical study using GPS data collected in Minneapolis-St. Paul metropolitan area was carried out in the following part. It finds that most travelers follow the same route during commute trips on successive days. The results indicate that neural network framework can classify travelers and model route choice well.
    Keywords: multiday travel behavior, day-to-day modeling, route choice behavior, GPS data, neural networks
    JEL: C45 R41 R42
    Date: 2015
  37. By: Dieter Pennerstorfer (WIFO); Philipp Schmidt-Dengler (WIFO); Nicolas Schutz; Christoph R. Weiss; Biliana Yontcheva
    Abstract: We examine the relationship between information and price dispersion in the retail gasoline market. We first show that the clearinghouse models in the spirit of Stahl (1989) generate an inverted-U relationship between information and price dispersion. We construct a new measure of information based on precise commuter data from Austria. Regular commuters can freely sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. We use detailed information on gas station level price to construct various measures of price dispersion. Our empirical estimates of the relationship are in line with the theoretical predictions.
    Date: 2015–08–10
  38. By: Brendan Murphy; David Levinson; Andrew Owen (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Pedestrian and bicyclist collision risk assessment offers a powerful and informative tool in urban planning applications, and can greatly serve to inform proper placement of improvements and treatment projects. However, sufficiently detailed data regarding pedestrian and bicycle activity are not readily available for many urban areas, and thus the activity levels and collision risk levels must be estimated. This study builds upon other current work by the authors regarding pedestrian and bicycle activity estimation based on centrality and accessibility metrics, and extends the analysis techniques to estimation of pedestrian collision risk. The Safety In Numbers phenomenon, which refers to the observable effect that pedestrians become safer when there are more pedestrians present in a given area, i.e. that the individual per-pedestrian risk of a collision decreases with additional pedestrians, is a readily observed phenomenon that has been studied previously. The effect is investigated and observed in acquired traffic data, as well as estimated data, in Minneapolis, Minnesota.
    Keywords: safety, walking, safety-in-numbers, crashes, traffic counts, network structure, accessibility
    JEL: J28 R14 R41 R42
    Date: 2015
  39. By: Roman Sustek (Queen and Mary University of London); Finn Kydland (University of California, Santa Barbara); Carlos Garriga (Federal Reserve Bank of St. Louis)
    Abstract: Mortgages are a prime example of long-term nominal loans. As a result, under incomplete asset markets, monetary policy affects household decisions through the cost of new mortgage borrowing and the value of payments on outstanding debt. These channels are distinct from the transmission through the real interest rate. A general equilibrium model incorporating these features is developed. Persistent monetary policy shocks, resembling the level factor in the nominal yield curve, have larger real effects than transitory shocks. The transmission is stronger under adjustable- than fixed-rate mortgages. Higher inflation benefits homeowners under FRMs but hurts them under ARMs.
    Date: 2015
  40. By: Jesus Gonzalez-Feliu (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE]); Eichi Taniguchi (The University of Tokyo [Toyo] - The University of Tokyo ( Japan)); Bruno Faivre d'Arcier (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE])
    Abstract: Urban goods movement and urban logistics started to be defined as a scientific discipline 20 years ago, where several actions in research, development, policy and deployment were started to be coordinated. However, most of the innovations and projects presented in that field are stopped or reduced because of a common constraint that becomes its worst enemy: the financing mechanisms. Although many studies deal with urban logistics, only a few of them show the difficulties at financing, but without entering in detail on the financing mechanisms. This chapter aims to present the main financing issues in urban logistics. First, the main categories of funding strategies that can be applied to urban logistics are presented, focusing on public-private interactions and collaborations. After that, a scenario assessment using a cost benefit analysis framework shows the different interests and issues of each category of stakeholders, and the main advantages and limits of each category of investment and financing strategies. Then, the fields of urban logistics that seem the most adapted to public-private collaboration in terms of financing are identified and commented. As a conclusion, guidelines for researchers and practitioners to take into account financing issues in urban logistics decision support are proposed.
    Date: 2014–10–15
  41. By: Bet Helena Caeyers
    Abstract: This paper formalises an unproven source of ordinary least squares estimation bias in standard linear-in-means peer effects models.  I derive a formula for the magnitude of the bias and discuss its underlying parameters.  I show the conditions under which the bias is aggravated in models adding cluster fixed effects and demonstate how it affects inference and interpertation of estimation results.  Further, I reveal that two-stage least squares (2SLS) estimation strategies eliminate the bias and provide illustrative simulations.  The results may explain some counter-intuitive findings in the social interaction literature, such as the observation of OLS estimates of endogenous peer effects that are larger than their 2SLS counterparts.
    Date: 2014–01–13
  42. By: David Bartolini; Agnese Sacchi; Simone Salotti; Raffaella Santolini
    Abstract: The virtues of fiscal decentralisation are usually assessed against the provision of local public goods, little is said about its impact on public finances. There is, however, a growing concern that central governments losing control over part of the budget could negatively affect public finances, especially in times of adverse financial conditions. The present work shows that these concerns are misplaced. The empirical investigation on 19 OECD countries, over the period 1980-2010, shows that expenditure decentralisation improves the central budget balance without prejudice for local budgets, thus improving the overall country’s fiscal position. This effect is reinforced when combined with tax autonomy. During periods of financial crises, the disciplinary role of fiscal decentralisation appears to be even stronger, raising concerns about the recentralisation trend recently pursued by some advanced economies precisely to face fiscal distress and economic stagnation.
    Keywords: Fiscal decentralisation; government budget balance; banking crisis.
    JEL: G01 H6 H7
    Date: 2015–07
  43. By: Brant Abbott (Yale University); Giovanni Gallipoli (UBC)
    Abstract: We develop and estimate an equilibrium model of geographic variation in the intergenerational earnings elasticity (IGE). The theory extends the Becker-Tomes model, introducing a production sector in which human capital inputs are strategic complements. We show that the equilibrium return to human capital investments is lower in places where strategic complementarity is more intense, and that this is associated with less intergenerational persistence (lower IGEs). Furthermore, optimal education policies are more progressive where these complementarities are stronger, leading to a negative correlation between progressive public policy and IGEs. Using microdata we construct various location-specific measures of skill complementarity and document that the patterns of geographic variation in IGEs are consistent with our hypothesis. Quantitatively, geographic differences in skill complementarity account for up to 1/5 of cross-country variation in intergenerational earnings persistence. Governments in countries where prominent industries exhibit greater skill complementarities tend to spend larger fractions of GDP on public education, suggesting that underlying technology differences may indirectly explain an even larger proportion of cross-country IGE variation.
    Date: 2015
  44. By: Grigorios Spanos (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: The objective of this paper is to examine the assignment of workers to layers and firms. In particular, I use an administrative dataset of French workers to study the organization of firms. First, I test whether higher ability workers are employed in the higher layers of firms. Second, I test whether there is positive assortative matching between workers in the different layers of firms. Third, I test whether higher ability workers allow their managers to increase their span of control and employ larger teams. To do this, I first classify employees as residing in different organizational layers such as production and administrative workers, supervisors, senior managers, and owners and CEOs, using occupational codes. From a panel wage regression I then obtain estimates of workers’ ability as in Abowd et al. (1999). I then study how workers sort into layers and across layers with other workers. I emphasize three results. First, higher ability workers are employed in the higher layers of firms. Second, I find evidence of positive assortative matching between workers in the different layers of firms. Third, I find different mechanisms are behind the sorting pattern observed in the data. I find evidence that higher ability workers limit their managers’ span of control, and I also find weak evidence that higher ability workers allow their managers to increase their span of control and employ larger teams.
    Date: 2015–06
  45. By: Lei, Xiaoyan (Peking University); Shen, Yan (Peking University); Smith, James P. (RAND); Zhou, Guangsu (Peking University)
    Abstract: This paper studies relationships between social networks, health and subjective well-being (SWB) using nationally representative data of the Chinese Population – the Chinese Family Panel Studies (CFPS). Our data contain SWB indicators in two widely used variants – happiness and life-satisfaction. Social network variables used include kinship relationships measured by marital status, family size, and having a genealogy; ties with friends/relatives/neighbors measured by holiday visitation, frequency of contacts, and whether and value gifts given and received; total number and time spent in social activities, and engagement in organizations including the communist party, religious groups, and other types. We find that giving and receiving gifts has a larger impact on SWB than either just giving or receiving them. Similarly the number of friends is more important than number of relatives, and marriage is associated with higher levels of SWB. Time spent in social activities and varieties of activities both matter for SWB but varieties matters more. Participation in organization is associated with higher SWB across such diverse groups as being a member of the communist party or a religious organization. China represents an interesting test since it is simultaneously a traditional society with long-established norms about appropriate social networks and a rapidly changing society due to substantial economic and demographic changes. We find that it is better to both give and receive, to engage in more types of social activities, and that participation in groups all improves well-being of Chinese people.
    Keywords: China, social networks, subjective well-being
    JEL: O10 O53
    Date: 2015–07
  46. By: André De Palma (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X, ENS Cachan - École normale supérieure - Cachan); Robin Lindsey (Sauder - Sauder School of Business [British Columbia] - University of British Columbia); Nathalie Picard (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS, Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X)
    Abstract: Most traffic congestion models assume that agents make trip-timing decisions independently and receive payoffs at the origin and destination that do not depend on whether other agents are present. We depart from this paradigm by considering a variant of Vickrey's bottleneck model of the morning commute in which individuals live as couples and value time at home more when together than when alone. We show that the costs of congestion can be higher than for a comparable population of individuals living alone. The costs can be even higher if spouses collaborate with each other when choosing their departure times. To calibrate the model we estimate trip-timing preferences for married and unmarried men and women in the Greater Paris region.
    Date: 2015–01–19
  47. By: Michael Iacono; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: Recent trends in the United States suggest a movement toward saturation of vehicle ownership. This paper examines this trend through an analysis of car ownership in the Minneapolis- St. Paul, Minnesota (USA) metropolitan region. Data from pooled cross-sectional household surveys are used to calibrate a model of car ownership that includes birth cohort effects to capture unobserved variations in preference toward car ownership across generations. Declines in household size and worker status have significant impacts in limiting the growth of car ownership, but they are also coupled by an apparent softening of preferences toward ownership among young adults.
    Keywords: car ownership; cohort; generational effect; aging; income; saturation; United States
    JEL: J11 R14 R41 R42
    Date: 2015
  48. By: Ivaldi, Marc; Sokullu, Senay; Toru, Tuba
    Abstract: This paper analyzes the rationale of airport business models. First, it provides evidence that the airports should be considered as two sided markets because of significant network externalities between the airlines and the passengers. This result invalidates the traditional approach where the airport-airline-passenger relationship is considered as vertically integrated, taking passengers as final consumers. Second, a testing procedure aimed at eliciting the real business model of airports demonstrates that the major U.S. airports do not internalize the externalities existing between airlines and passengers. We find that these airports set profit maximizing prices for the non-aeronautical services to passengers and Ramsey prices for the aeronautical services to airlines. Given these results, we conduct a welfare analysis by simulating the implementation of profit maximizing prices when an airport fully accounts for the two-sidedness of its activities. In particular, we show that the impact on social welfare is not independent on the specific features of each airport and that the privatization of airports cannot be considered as the only solution for airports.
    Keywords: Two-sided markets, Airport pricing, Airport regulation
    Date: 2015–05
  49. By: HAZAMA Makoto; UESUGI Iichiro
    Abstract: Focusing on real estate and other fixed tangible assets, we study how the heterogeneous effects of real estate prices influence real estate investment behavior. Theoretically, expectations of declining real estate prices reduce not only overall fixed tangible investment through a collateral channel but also real estate investment through intertemporal substitution of demand. By employing a unique dataset on firms' land transactions and overall investment in Japan during the period 1997-2006, we examine these predictions and find the following. First, the entire fixed tangible asset investment is positively associated with the growth rate of land prices, which is the evidence for the collateral channel. In contrast, land investment has no statistically significant relationships with land price growth. Second, a decomposition of land investment into land purchases and sales shows that land sales actually decrease when the growth rate of land prices falls. Third, large firms and firms that acquired land during and shortly after the bubble period tend to reduce land sales. This is consistent with Geltner's (2014) argument that potential sellers of land set their reservation prices at their purchase prices and are reluctant to sell land in the face of a persistent drop in its price.
    Date: 2015–07
  50. By: Estelle Malavolti (TSE - Toulouse School of Economics - Toulouse School of Economics, LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - PRES Université de Toulouse - Ecole Nationale de l'Aviation Civile)
    Abstract: Big airports profits are more and more often coming from commercial activities such as retailing. However, commercial services are relatively far from the original mission of the airport: providing airlines with aviation services such as ground handling, terminal management or airside operations, and being regulated for that because of an obvious dominant position with respect to airlines. For this reason, one can advocate for the separation of the two activities, i.e. for a dual till approach, in which only the aeronautical activity is regulated. We, instead, suggest that a single till regulation, in which the total profit of the airport is examined, is relevant because it allows to take into account the externalities existing between retailing and aeronautical services. Using a two-sided market approach (Armstrong 2006, Rochet-Tirole 2003, 2006), we show that the airport is a platform which makes the shops and the passengers meet. The retailing activity depends on how many passengers are circulating and connecting at the airport, as well as the time they spent in the airport, while passengers value the least connecting time as possible. We show that the aeronautical tax can be either higher or lower under single till depending on whether the impact of the passengers demand or of the waiting time is the more important for the shops.
    Date: 2015–01–26

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