nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒09‒05
fifty-six papers chosen by
Steve Ross
University of Connecticut

  1. Valuation of Urban Rail Service: Experiences from Tokyo, Japan By Hironori Kato
  2. Urban Infrastructure Investment and Rent-Capture Potentials By Vincent Viguié; Stéphane Hallegatte
  3. The Impacts of Urban Public Transportation: Evidence from the Paris Region By T. MAYER; T. TREVIEN
  4. Shops and the City: Evidence on Local Externalities and Local Government Policy from Big Box Bankruptcies By Shoag, Daniel; Veuger, Stan
  5. Valuing in-vehicle comfort and crowding reduction in public transport By Björklund, Gunilla; Swärdh, Jan-Erik
  6. Migration, Careers and the Urban Wage Premium: Does Human Capital Matter? By Korpi, Martin; Clark, William A.V.
  7. Partnering and the Viability of Affordable Housing Projects in London: Determining a causation By Oribuyaku, Damilola
  8. The Impact of Hazardous Industrial Facilities on Housing Prices: A Comparison of Parametric and Semiparametric Hedonic Price Models By C. GRISLAIN-LETRÉMY; A. KATOSSKY
  9. Network Effects, Ethnic Capital and Immigrants' Earnings Assimilation: Evidence from a Spatial, Hausman-Taylor Estimation By Maani, Sholeh A.; Wang, Xingang; Rogers, Alan
  10. Are catholic primary schools more effective than public primary schools? By Todd Elder; Christopher Jepsen
  11. The Effects of Test-based Retention on Student Outcomes over Time: Regression Discontinuity Evidence from Florida By Guido Schwerdt; Martin R. West; Marcus A. Winters
  12. The Impact of Housing Subsidies on the Rental Sector: the French Example By C. GRISLAIN-LETRÉMY; C. TREVIEN
  13. Moving to Opportunity or Isolation? Network Effects of a Randomized Housing Lottery in Urban India By Barnhardt, Sharon; Field, Erica; Pande, Rohini
  14. The Mediterranean Port Economy: The cases of Marseille and Mersin By Olaf Merk
  15. The role of regional sectoral specialization on the geography of innovation networks: a comparison between firms located in regions in developed and emerging economies By Plechero, Monica; Chaminade , Cristina
  16. Housing Tenure and Unemployment By Richard K. Green; Bingbing Wang
  17. The Logic of Agglomeration By Gilles Duranton; William R. Kerr
  18. Measuring Social Environment Mobility By S. T. LY; A. RIEGERT
  19. The Introduction of Academy Schools to England's Education By Andrew Eyles; Stephen Machin
  20. Urban Rail Development in Tokyo from 2000 to 2010 By Hironori Kato
  21. An Extrapolative Model of House Price Dynamics By Glaeser, Edward L.; Nathanson, Charles G.
  22. House Values and Proximity to a Landfill: A Quantile Regression Framework By Mario du Preez; Mehmet Balcilar; Aarifah Razak; Steven F. Koch; Rangan Gupta
  23. Mortgage Refinancing, Consumer Spending, and Competition: Evidence from the Home Affordable Refinancing Program By Sumit Agarwal; Gene Amromin; Souphala Chomsisengphet; Tomasz Piskorski; Amit Seru; Vincent Yao
  24. Same Place, Same Knowledge – Same People? The Geography of Non-Patent Citations in Dutch Polymer Patents By Dominik Heinisch; Önder Nomaler; Guido Buenstorf; Koen Frenken; Harry Lintsen
  25. Value Subtraction in Public Sector Production: Accounting versus Economic Cost of Primary Schooling in India By Pritchett, Lant; Aiyar, Yamini
  26. Middle School Math Acceleration and Equitable Access to 8th Grade Algebra: Evidence from the Wake County Public School System By Dougherty, Shaun; Goodman, Joshua; Hill, Darryl; Litke, Erica; Page, Lindsay
  27. Age, Demographics, and the Demand for Housing, Revisited By Richard K. Green; Hyojung Lee
  28. Startups, Financing and Geography– Findings from a survey By Bjuggren, Per-Olof; Elmoznino Laufer, Michel
  29. Traffic noise effects of property prices: hedonic estimates based on multiple noise indicators By Andersson, Henrik; Swärdh , Jan-Erik; Ögren , Mikael
  30. Early Math Coursework and College Readiness: Evidence from Targeted Middle School Math Acceleration By Dougherty, Shaun; Goodman, Joshua; Hill, Darryl; Litke, Erica; Page, Lindsay C.
  31. The Underutilized Potential of Teacher-to-Parent Communication: Evidence from a Field Experiment By Kraft, Matthew A.; Rogers, Todd
  32. Who Bears the Pen? Relative Income and Gender Gap in Mortgage Signing Order By Sumit Agarwal; Richard K. Green; Eric Rosenblatt; Vincent Yao; Jian Zhang
  33. Regional disparities in health outcome indicators : A study across Indian states By Mukhopadhyay, Debabrata
  34. Engendering Liveable Low-Carbon Smart Cities in ASEAN as an Inclusive Green Growth Model and Opportunities for Regional Cooperation By S. KUMAR
  35. R&D policies in France: New evidence from a NUTS3 spatial analysis By Montmartin, B.; Herrera, M.; Massard, N.
  36. The Home Selling Problem: Theory and Evidence By Merlo, Antonio; Ortalo-Magne, Francois; Rust, John
  37. Are there moderating effects of safety orientation on risky behaviours and expressed irritation in traffic? By Björklund, Gunilla; Wallén Warner, Henriette
  38. Uncertainty and the Geography of the Great Recession By Shoag, Daniel; Veuger, Stan
  39. New Findings on the Retention of Novice Teachers from Teaching Residency Programs By Tim Silva; Allison McKie; Philip Gleason
  40. Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets By Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz
  41. Economic incentives versus institutional frictions: migration dynamics within Europe By Chakrabarti, Anindya S.; Dutta, Aparna
  42. Leveraged Bubbles By Jordà, Òscar; Schularick, Moritz; Taylor, Alan M.
  43. Ethnolinguistic Background and Enrollment in Primary Education: Evidence from Kenya By Andrén, Daniela; Levin, Jörgen; Vimefall, Elin
  44. The impact of vocational schooling on human capital development in developing countries : evidence from China By Loyalka,Prashant Kumar; Huang,Xiaoting; Zhang,Linxiu; Wei,Jianguo; Yi,Hongmei; Song,Yingquan; Shi,Yaojiang; Chu,James
  45. First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision By Gill, David; Kissová, Zdenka; Lee, Jaesun; Prowse, Victoria L.
  46. Vetoing and inaugurating policy like others do: Evidence on spatial interactions in voter initiatives By Asatryan, Zareh; Havlik, Annika; Streif, Frank
  47. An Airline Merger and its Remedies: JAL-JAS of 2002 By DOI Naoshi; OHASHI Hiroshi
  48. Wealth Inequality and Homeownership in Europe By Leo Kaas; Georgi Kocharkov; Edgar Preugschat
  49. Managing congestion on Gold Coast beaches: An economic evaluation By Karin Josephine Andersson; Nathan Brierley; Feliks Hedstroem; Daniel Herr and Joshua Risson
  50. Differences in Borrowing Behaviour between Core and Peripheral Economies — Economic Environment versus Financial Perceptions By Weiou Wu; Apostolos Fasianos; Stephen Kinsella
  51. LTV and DTI Limits—Going Granular By Luis I. Jacome H.; Srobona Mitra
  52. The Impact of Cash Transfers on Local Economies By Stephanie Levy
  53. Do Gifts and Bequests Facilitate Homeownership and Firm Creation? By B. GARBINTI
  54. Does the Concern About Local Crime Affect Trust in the Police? By Joelson Oliveira Sampaio; Rodrigo De-Losso, Luciana Gross Cunha, Renan Gomes de Pieri
  55. Local Foods and Rural Economic Growth By Deller, Steven C.; Brown, Laura; Haines, Anna; Fortenbery, Randy
  56. Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship? By Field, Erica; Jayachandran, Seema; Pande, Rohini; Rigol, Natalia

  1. By: Hironori Kato
    Abstract: Promoting public transportation, which includes rail, metro, bus rapid transit, and bus services is one of the most popular urban transportation policies among transportation authorities in many countries. This popularity may reflect the social requirement to pursue a sustainable transportation system by motivating people to use an environmentally friendly transportation mode. In particular, the modal shift from the automobile to public transportation is highlighted in urban transportation planning because many cities have suffered from serious traffic congestion, which has caused economic losses as well as negative impacts on local, regional, and global environments. In order to attract individuals to use public transportation, the improvement of service is critical. This includes increasing service frequency, decreasing travel time, upgrading station facilities, and introducing higher-capacity vehicles.
    Date: 2014–04–14
  2. By: Vincent Viguié (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS); Stéphane Hallegatte (World Bank - World Bank)
    Abstract: In a context of rapid urbanization and energy transition, massive investments will be required to develop efficient public transport networks. Capturing the increase in land value caused by transport infrastructure (for example, through a betterment tax) appears a promising way to finance public transport. However, it is no trivial task, as it is difficult to anticipate the rent creation. This paper uses a simple city model based on urban economic theory to compute the rent created by improvements in public transport infrastructure in Paris, France. To apply in places where models or data are not available, a reduced form of the model is shown to provide acceptable approximations of the rent creation. Simulations confirm that land value capture can finance a significant part of transport investments. The simulations also show that value capture potentials are influenced by what happens in the entire agglomeration. Simultaneous infrastructure investments in different parts of the city play a significant role, as they change overall accessibility patterns. Evolutions taking place in other cities also have a comparable influence. Non-local effects can change the total potential for land value capture and multiply this potential by as much as a factor of two.
    Date: 2015–03–26
  3. By: T. MAYER (Sciences-Po,CEPII et CEPR); T. TREVIEN (Insee)
    Abstract: Evaluating the impact of transport infrastructure meets a major challenge since rail lines are not randomly located. We use the natural experiment offered by the opening and progressive extension of the Regional Express Rail (RER) between 1970 and 2000 in the Paris metropolitan region, and in particular the deviation from original plans due to budgetary constraints and technical reasons, in order to identify the causal impact of urban rail transport on firm location, employment and population growth. We use a difference-in-differences approach on a specific subsample, selected to avoid endogeneity bias which occurs when evaluating transportation effects. We find that the increase in employment is 12.8% higher in municipalities connected to the new network compared to the existing suburban rail network. Places located within 20 km from Paris are the only affected. While we find no effect on overall population growth, our results suggest that the commissioning of the RER may have increased the competition for land since high-skilled households are more likely to locate in the vicinity of a RER station.
    Keywords: Public policy evaluation, Public transportation, Firm and household location choices
    JEL: D04 H43 R42
    Date: 2015
  4. By: Shoag, Daniel (Harvard University); Veuger, Stan (?)
    Abstract: Large retailers have significant positive spillovers on nearby businesses, and both private and public mechanisms exist to attract them. We estimate these externalities using detailed geographic establishment data and exogenous variation from national chain bankruptcies. We show that local government policy responds to the size of these spillovers. When political boundaries allow local governments to capture more of the gains from these large stores, governments are more likely to provide retail subsidies. However, these public incentives also crowd out private mechanisms that subsidize these stores and internalize their benefits. On net, we find no evidence that government subsidies affect the efficiency of these large retailers' location choice as measured by the size of the externalities at a given distance, rather than within a certain border.
    Date: 2014–04
  5. By: Björklund, Gunilla (VTI); Swärdh, Jan-Erik (VTI)
    Abstract: The purpose of the present study is to estimate the WTP for comfort, i.e. to get a seat, and crowding reduction on board local public transport in Sweden, including the modes metro, tram, commuter train, and local bus. We use data from a stated preference-study conducted in the three largest urban areas of Sweden. Respondents were recruited both during a trip and from a web panel. The stated preference-questions consisted of four attributes: travel cost, travel time, seating or standing during the trip, and crowding level. Crowding level was illustrated by pictures showing different number of standing travelers per square meter. The estimated results suggest a WTP for seating of SEK 30 to 37 (SEK 10 approximately equal EUR 1) per hour depending on the crowding level. A reduction to no standing passengers from 4 and 8 standing passengers per square meter is valued SEK 12-13 and 27-32 respectively, depending on seating or standing condition. A reduction to no standing passengers from 1 standing passenger per square meter is not worth anything when the traveler is seating but SEK 8 when the traveler is standing. If we instead interpret our estimated results as value of travel time saving-multipliers, the worst travel condition in our study, i.e. standing in a crowding of 8 standing passengers per square meter, has a multiplier of about 2.1. All in all, our results seem plausible as they lies in the middle of comparable estimated results from earlier studies that have valuated comfort and crowding reductions. Finally, sensitivity analysis also show that the results seem to be both robust and in line with value of travel time savings-knowledge.
    Keywords: Public transport; Comfort; Crowding; Willingness to pay; Value of travel time savings
    JEL: C25 R41
    Date: 2015–09–02
  6. By: Korpi, Martin (The Ratio institute); Clark, William A.V. (California Center for Population Research, UCLA)
    Abstract: Using detailed Swedish full population data on regional migrants, this paper addresses the question of whether the urban wage premium, and “thick” labor market matching effects, are found only among the higher educated or across all educational groups, and whether the urban population threshold for these type of effects varies by educational category. Estimating initial wages, average wage level and wage growth 2001-2009, we find similar matching effects for all educational groups in the three largest metropolitan areas, but very weak effects for cities ranked 4th - 6th in the urban hierarchy. Our findings suggest that positive urban matching effects are not limited to those with higher education, but that there are distinct population thresholds for these type of effects, regardless of educational background.
    Keywords: Human capital; urban wage premium; domestic migration; market thickness; mobility; agglomeration economies
    JEL: J31 J61 R10 R12
    Date: 2015–08–27
  7. By: Oribuyaku, Damilola
    Abstract: It has been reported that strategic partnering can deliver savings of 30% while one-off, project partnering can deliver up an immediate 10%. Many researchers have however began to criticize the concept of partnering. Some are of the view that the concept has not been clearly defined and definitions are often too vague and overly optimistic (Eriksson, 2010). Others argue that the concept is one that sounds good as a theory but lacks the necessary contents needed for its implementation (Eriksson, 2010). This research focuses on the impacts of partnering on the supply of housing. This will be achieved by investigating the impact of partnering on the viability of affordable housing schemes in London. Upon analysis and interpretation of the data, the paper finds that partnering may affect viability through 6 key factors including: Long-Term Relationship, Economy, Transparency, Capability, Labour and Ideals. These findings suggests the need for local authorities to abandon the Best Price method of affordable housing procurement and the need for the stability of the UK economic environment in order to reduce risks and encourage partnering in the affordable housing sector.
    Keywords: Partnering;Affordable Housing;Housing;Viability
    JEL: H4 H42 R3 R31 R38
    Date: 2015–02–19
  8. By: C. GRISLAIN-LETRÉMY (Insee); A. KATOSSKY (Insee)
    Abstract: Households willingness to pay for prevention against industrial risks can be revealed by real estate markets. With highly detailed microdata, we study housing prices in the vicinity of hazardous industries located near three important French cities (Bordeaux, Dunkirk and Rouen). We show that the impact of hazardous plants on housing values strongly differs among the three studied areas, even if they all surround chemical and petrochemical industries. We compare the results from standard parametric hedonic property models and from a more flexible, semiparametric hedonic property model. We show that the parametric model may structurally lead to an important bias in the estimated value of the impact of hazardous plants on housing values and in its variations with respect to distance to the plants.
    Keywords: hedonic analysis, locally-weighted regression, urban housing markets, industrial risk
    JEL: C21 Q51 R52 R21
    Date: 2014
  9. By: Maani, Sholeh A. (University of Auckland); Wang, Xingang (University of Auckland); Rogers, Alan (University of Auckland)
    Abstract: Do ethnic enclaves assist or hinder immigrants in their economic integration? In this paper we examine the effect of 'ethnic capital' (e.g. ethnic network and ethnic concentration) on immigrants' earnings assimilation. We adopt a "spatial autoregressive network approach" to construct a dynamic network variable from micro-panel-data to capture the effects of spatial-ethnic-specific resource networks for immigrants. The spatial lag structure is combined with a Hausman-Taylor (1981) panel data model, which allows for some endogeneity. We examine the effects of ethnic capital and human capital using an eight-year Australian panel data set (HILDA). Results show that immigrants' labor market integration is significantly affected by the local concentration and resources of their ethnic group.
    Keywords: assimilation, ethnic capital, ethnic network, ethnic concentration, spatial autoregressive lag model, panel data
    JEL: J30 J31 Z13 Z18
    Date: 2015–08
  10. By: Todd Elder; Christopher Jepsen
    Abstract: This paper assesses the causal effects of Catholic primary schooling on student outcomes such as test scores, grade retention, and behavior. Catholic school students have substantially better average outcomes than do public school students throughout the primary years, but we present evidence that selection bias is entirely responsible for these advantages. Estimates based on several empirical strategies, including an approach developed by Altonji et al. (2005a) to use selection on observables to assessthe bias arising from selection on unobservables, imply that Catholic schools do not appreciably boost test scores. All of the empirical strategies point to sizeable negative effects of Catholic schooling on mathematics achievement. Similarly, we find very little evidence that Catholic schooling improves behavioral and other non-cognitive outcomes once we account for selection on unobservables.
    Keywords: Catholic schools; Achievement; Selection bias
    Date: 2014–03
  11. By: Guido Schwerdt; Martin R. West; Marcus A. Winters
    Abstract: Many American states require that students lacking basic reading proficiency after third grade be retained and remediated. We exploit a discontinuity in the probability of retention under Floridas test-based promotion policy to study the causal effect of retention on student outcomes over time. Although OLS estimates suggest negative effects on achievement, regression discontinuity estimates indicate large positive achievement effects and reduced retention probabilities in future years. After six years, the achievement gains from retention fade out entirely when retained students are compared to their same-age peers, but remain substantial when compared to peers in the same grade. Contrary to prior research based on observational data, we find that early grade retention has no effect on the probability that students graduate from high school.
    JEL: H52 I21 I28
    Date: 2015–08
  12. By: C. GRISLAIN-LETRÉMY (Insee); C. TREVIEN (Sciences Po et Crest-Insee)
    Abstract: Housing subsidies to tenants are a main tool for housing policy in France. They aim to limit the budget share of housing for eligible tenants or to improve their housing conditions for a given budget share. Despite the increasing budget allocated to housing subsidies since the end of the 1970s, the budget share of housing for low-income tenants has kept increasing, in particular in the private rental sector. We assess the impact of housing subsidies on price, quality and quantity in the private rental sector. To do so, we use an instrumental variable method based on a spatial discontinuity in the subsidy scheme. We show that housing subsidies had an inflationist impact in the 1990s and the 2000s. Besides, higher subsidies seem to have almost no effect on housing quality and to have no impact on the number of offered rental dwellings.
    Keywords: housing subsidies, tax incidence
    JEL: H22 R21 R31
    Date: 2014
  13. By: Barnhardt, Sharon (Indian Institute of Management); Field, Erica (Duke University); Pande, Rohini (Harvard University)
    Abstract: A housing lottery in an Indian city provided winning slum dwellers the opportunity to move into improved housing on the city's periphery. Fourteen years later, relative to lottery losers, winners report improved housing farther from the city center, but no change in family income or human capital. Winners also report increased isolation from family and caste networks and lower access to informal insurance. We observe significant program exit: 34% of winners never moved into the subsidized housing and 32% eventually exited. Our results point to the importance of considering social networks when designing housing programs for the poor.
    Date: 2015–08
  14. By: Olaf Merk
    Abstract: Ports are no longer perceived as main drivers of urban economic development. A variety of factors have been identified in the academic literature to contribute to urban economic growth, ranging from human capital, entrepreneurial culture, diversity and infrastructure to planning and governance. Port infrastructure is in many cases not even considered as a potential source of economic development. Whereas efficient ports have contributed to a substantial reduction in transportation costs, and thus stimulated external trade and related economic development, the general perception is that most of the gains of external trade have spread out to other regions than the port area or the port region (e.g. Gripaios and Gripaios, 1995). This is related to de-concentration of logistics activity and “port regionalisation” tendencies (Notteboom and Rodrigue, 2005). In contrast, negative impacts related to ports have unevenly affected port-cities, including socio-economic impacts related to a unskilled workforce needed to sustain a port-industrial complexes that have ceased to be labour-intensive. Economic benefits of ports were less ambiguous in the past, when port-cities dominated trade-oriented emerging capitalist economies, as eloquently described in Braudel (1979).
    Date: 2014–08
  15. By: Plechero, Monica (DEAMS – University of Trieste, Italy & CIRCLE, Lund University); Chaminade , Cristina (CIRCLE, Lund University)
    Abstract: Recently, there has been a rise of contributions in innovation and economic geography studies on how firms from specific industries and regional innovation systems (RISs) rely on international networks to innovate. So far, the focus has been on single cases, firms located in well-known RISs and international linkages, without really distinguishing those with geographically close partners from those with partners from distant locations. Using primary firm-level data, this article compares the patterns of collaboration for innovation in a selection of Swedish, Norwegian, Chinese and Indian regions with an ICT cluster specialization. The results show that firms in RISs in emerging economies tend to link more to innovation networks with a real global character, particularly in relation to new-to-the-world innovation. It also shows that firms in the most successful RISs in ICT clusters rely more than others on networks with organizations in close proximity.
    Keywords: Globalization; innovation networks; developed economies; emerging economies; China; India; Sweden; Norway; regional innovation system; cluster specialization; ICT; new-to-the-world innovation
    JEL: O18 O33
    Date: 2015–08–16
  16. By: Richard K. Green; Bingbing Wang
    Abstract: In this article, we test whether tenure choice influences employment. This influencemight arise through a number of channels, including transaction costs, lock-in effects, wealtheffects, externalities and commuting times. These factors could collectively have either a positiveor negative effect on employment outcomes. Using Current Population Survey panel data from1988 to 2013, we conclude that tenure rates do not statistically influence employment growthrates. Using Panel Study of Income Dynamics data from 1994 to 2011 and Survey of Income andProgram Participation data from 1995 to 2013, we conclude that home-owning does not increasepeoples’ unemployment probabilities or significantly increase people’s unemployment spells ordecrease people’s wages. But home-owning does affect employment by lengthening employmentdurations and increasing the likelihood of interstate moves. By investigating some features ofhome-owing- presence of mortgages, negative equity, wealth accumulation and attachment tocommunities-we conclude that having mortgages, negative equity and wealth accumulationmight affect job outcomes, largely in a positive direction.
    Keywords: Homeownership, Employment, mortgages, negative equity, wealth accumulation
    Date: 2015
  17. By: Gilles Duranton; William R. Kerr
    Abstract: This review discusses frontier topics in economic geography as they relate to firms and agglomeration economies. We focus on areas where empirical research is scarce but possible. We first outline a conceptual framework for city formation that allows us to contemplate what empiricists might study when using firm-level data to compare the functioning of cities and industries with each other. We then examine a second model of the internal structure of a cluster to examine possibilities with firm-level data for better exposing the internal operations of clusters. An overwhelming theme of our review is the vast scope for enhancements of our picture of agglomeration with the new data that are emerging.
    JEL: J2 J6 L1 L2 L6 O1 O3 R10 R3
    Date: 2015–08
  18. By: S. T. LY (Paris School of Economics); A. RIEGERT (Insee)
    Abstract: Individuals experience a diversity of social environments throughout their lives. When measuring the degree to which different social groups are separated from each other, this fact is often overlooked: standard segregation indices always measure spatial separation at a given point in time. These segregation indices only tell one part of the story, just like income inequality indices do not take into account the fact that individuals are mobile across the income distribution throughout their lives. This paper introduces the notion of social environment mobility (SEM) and proposes tools and a methodology to analyze it. We show that unlike income mobility, SEM cannot erase segregation in the long run, and we derive an upper bound on SEM indices. We illustrate this concept using data on segregation in French middle schools. Our results show that SEM has a fairly high equalizing effect on within-school segregation but a low overall effect due to low mobility between schools.
    Keywords: Mobility, Segregation
    JEL: I24 D63 D85
    Date: 2015
  19. By: Andrew Eyles; Stephen Machin
    Abstract: We study the origins of what has become one of the most radical and encompassing programmes of school reform seen in the recent past amongst advanced countries - the introduction of academy schools to English secondary education. Academies are state schools that are allowed to run in an autonomous manner which is free from local authority control. Almost all academies are conversions from already existent state schools and so are school takeovers that enable more autonomy. Our analysis shows that this first round of academy conversions that took place in the 2000s generated significant improvements in the quality of pupil intake and in pupil performance. There is evidence of heterogeneity as improvements only occur for schools experiencing the largest increase in their school autonomy relative to their predecessor state. Analysis of mechanisms points to changes in head teachers and management structure as key factors underpinning these improvements in pupil outcomes.
    Keywords: Academies, pupil intake, pupil performance
    JEL: I20 I21 I28
    Date: 2015–08
  20. By: Hironori Kato
    Abstract: Tokyo is well known as a rail-oriented city where the huge traffic demand generated from the megacity is well supported by a sophisticated urban rail system. The results of the 2008 Person Trip Survey show that rail’s modal share was 30% as of 2008; the economy of Tokyo is highly dependent on an efficient urban rail network. As shown in Kato (2014), Tokyo’s urban rail market has unique characteristics: private rail companies provide many of the rail services, the rail network was developed under the guidance of the central government, rail users suffered from chronic traffic congestion for many years, and the rail market has recently been significantly influenced by a rapidly aging demographic. In spite of its uniqueness, the experiences of urban rail development in Tokyo could be useful for other OECD member countries.
    Date: 2014–04–16
  21. By: Glaeser, Edward L. (Harvard University); Nathanson, Charles G. (Northwestern University)
    Abstract: A modest approximation by homebuyers leads house prices to display three features that are present in the data but usually missing from perfectly rational models: momentum at one-year horizons, mean reversion at five-year horizons, and excess longer-term volatility relative to fundamentals. Valuing a house involves forecasting the current and future demand to live in the surrounding area. Buyers forecast using past transaction prices. Approximating buyers do not adjust for the expectations of past buyers, and instead assume that past prices reflect only contemporaneous demand, as with a capitalization rate formula. Consistent with survey evidence, this approximation leads buyers to expect increases in the market value of their homes after recent house price increases, to fail to anticipate the price busts that follow booms, and to be overconfident in their assessments of the housing market.
    Date: 2015–03
  22. By: Mario du Preez (Department of Economics, Nelson Mandela Metropolitan University, Port Elizabeth, 6001, South Africa); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10, Turkey); Aarifah Razak (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper explores the quantile treatment effects of proximity to a landfill site on housing values in the Nelson Mandela Bay Metropole (NMBM), South Africa, extending the research by Du Preez and Lottering (2009) who found a negative relationship to exist between proximity to a landfill site and mean housing values. Quantile regression analysis is used to account for the different implicit price functions that ‘wealthier’ and ‘poorer’ representative agents face. The results corroborate the findings of Du Preez and Lottering (2009) and further identify the negative relationship to be most pronounced at the lowest and highest quantiles of the house values distribution. Specifically, house values increase by an average of ZAR19 or US$1.81 (0.2 percent) for every 100 meters further away from the landfill site. At the lowest quantile (5 percent) house values increase by only 0.11 percent with every 100 meters of distance from the landfill site while at the highest quantile (95 percent), house values increase by 0,21 percent. This clearly demonstrates that ‘wealthier’ representative agents stand to gain more by being situated further away from landfill sites than ‘poorer’ representative agents. The suitability of the quantile treatment approach is confirmed by way of the Koenker and Xiao (2002) Location- Scale-Shift test statistics.
    JEL: Q57
    Date: 2014
  23. By: Sumit Agarwal; Gene Amromin; Souphala Chomsisengphet; Tomasz Piskorski; Amit Seru; Vincent Yao
    Abstract: We examine the ability of the government to impact mortgage refinancing activity and spur consumption by focusing on the Home Affordable Refinancing Program (HARP). The policy allowed intermediaries to refinance insufficiently collateralized mortgages by extending government credit guarantee on such loans. We use proprietary loan-level panel data from a large market participant with refinancing history and social security number matched consumer credit records of each borrower. A difference-in-difference empirical design reveals a substantial increase in refinancing activity by the program, inducing more than three million eligible borrowers with primarily fixed-rate mortgages – the predominant contract type in the U.S. – to refinance their loans. Borrowers received a reduction of around 140 basis points in interest rate due to HARP refinancing amounting to about $3,500 in annual savings per borrower. More than 20% of interest rate savings from refinancing was allocated to durable (auto) spending, with larger spending response among less wealthy and creditworthy. Regions more exposed to the program saw a relative increase in non-durable and durable consumer spending, a decline in foreclosure rates, and a faster recovery in house prices. A variety of identification strategies reveal that competitive frictions in the refinancing market may have hampered HARP’s impact. On average, these frictions reduced take-up rate among eligible borrowers by 10% and cut interest rate savings by 16 basis points, with both these effects being twice as large among the most indebted borrowers. These findings have implications for future policy interventions, pass-through of monetary policy through household balance sheets, and design of the mortgage market.
    JEL: E21 E65 G18 G21 H3 L85
    Date: 2015–08
  24. By: Dominik Heinisch; Önder Nomaler; Guido Buenstorf; Koen Frenken; Harry Lintsen
    Abstract: It has long been argued that geographic co-location supports knowledge spillovers. More recently, this argument has been challenged by showing that knowledge spillovers mainly flow through social networks, which may or may not be localized at various geographic scales. We further scrutinize the conjecture of geographically bounded knowledge spillovers by focusing on knowledge flows between academia and industry. Looking into citations to non-patent literature (NPL) in 2,385 Dutch polymer patents, we find that citation lags are shorter on average if Dutch rather than foreign NPLs are cited. However, when excluding individual and organizational self-citations, geographically proximate NPLs no longer diffuse faster than foreign NPLs. This suggests that knowledge is not “in the air” but transferred by mobile individuals and/or direct university-industry collaboration. Our findings moreover suggest an important role of international conferences in the diffusion of recent scientific knowledge.
    Keywords: Non-patent literature, citation lags, knowledge spillovers, university-industry interaction, polymer industry.
    JEL: O33 R10 L65
    Date: 2015–08
  25. By: Pritchett, Lant (Harvard University); Aiyar, Yamini (Center for Policy Research)
    Abstract: We combine newly created data on per student government expenditure on children in government elementary schools across India, data on per student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas. The combination of these three sources allows us to compare both the "accounting cost" difference of public and private schools and also the "economic cost"--what it would take public schools, at their existing efficacy in producing learning, to achieve the learning results of the private sector. We estimate that the "accounting cost" per student in a government school in the median state in 2011/12 was Rs. 14,615 while the median child in private school cost Rs. 5,961. Hence in the typical Indian state, educating a student in government school costs more than twice as much than in private school, a gap of Rs. 7,906. Just these accounting cost gaps aggregated state by state suggests an annual excess of public over private cost of children enrolled in government schools of Rs. 50,000 crores (one crore=10 million) or .6 percent of GDP. But even that staggering estimate does not account for the observed learning differentials between public and private. We produce a measure of inefficiency that combines both the excess accounting cost and a money metric estimate of the cost of the inefficacy of lower learning achievement. This measure is the cost at which government schools would be predicted to reach the learning levels of the private sector. Combining the calculations of accounting cost differentials plus the cost of reaching the higher levels of learning observed in the private sector state by state (as both accounting cost differences and learning differences vary widely across states) implies that the excess cost of achieving the existing private learning levels at public sector costs is Rs. 232,000 crores (2.78% of GDP, or nearly US$50 billion). It might seem counterintuitive that the total loss to inefficiency is larger than the actual budget, but that is because the actual budget produces such low levels of learning at such high cost that when the loss from both higher expenditures and lower outputs are measured it exceeds expenditures.
    JEL: I21 I25 I28
    Date: 2015–06
  26. By: Dougherty, Shaun (University of CT); Goodman, Joshua (Harvard University); Hill, Darryl (Wake County Public Schools); Litke, Erica (Harvard University); Page, Lindsay (University of Pittsburgh)
    Abstract: School districts across the country have struggled to increase the proportion of students taking algebra by 8th grade, thought to be an important milestone on the pathway to college preparedness. We highlight key features of a research collaboration between the Wake County Public School System and Harvard University that have enabled investigation of one such effort to solve this problem. In 2010, the district began assigning middle school students to accelerated math coursework leading to 8th grade algebra on the basis of a clearly defined measured of prior academic skill. We document two important facts. First, use of this new rule greatly reduced the relationship between course assignment and student factors such as income and race while increasing the relationship between course assignment and academic skill. Second, using a regression discontinuity analytic strategy, we show that the assignment rule had strong impacts on the fraction of students on track to complete algebra by 8th grade. Students placed in accelerated math were exposed to higher-skilled peers but larger class sizes. We describe future plans for assessing impacts on achievement and high school course-taking outcomes.
    Date: 2014–06
  27. By: Richard K. Green; Hyojung Lee
    Abstract: The United States is aging, and many baby boomers are reaching or will soon reach theretirement age of sixty-five. On the other hand, the Millennials, the largest generation in the U.S.history, has faced the problems of high rents relative to incomes and volatility in housing market.Given the shifts, we are again seeing growing debates about how these changes in age structurewill affect housing and labor markets.To address these concerns, we revisit Green and Hendershott (1996) and analyze the linksbetween the willingness to pay for a constant-quality house and demographics using the Census2000 and 2005-2011 American Community Survey 1-Year Public Use Microdata Sample data.The results generally reconfirm what Green and Hendershott (1996) found: The massivedemographic shift will not result in another housing crisis. This is because the educational andincome levels of the current and future seniors are relatively higher than before, leading them toconsume more than previous generations. Also, the size of the Millennial generation will drivethe growth of aggregate housing demand, although the growth of per household housing demandmay be relatively modest.
    Keywords: Age, Cohort Effects, demographics, housing demand, Projections
    Date: 2015
  28. By: Bjuggren, Per-Olof (The Ratio institute and Jönköping School of Economics.); Elmoznino Laufer, Michel (The Ratio institute)
    Abstract: This paper investigates the importance of bank loans for the financing of startups and how location matters for expansion plans and financing. We will show that there has not been sufficient attention paid to legal form when distinguishing between the external and internal financing of startups. The focus will be on the corporate form of business and the implications of this legal form for what can be considered external financing. In the analysis of how location matters, we will draw upon the literature about agglomeration and knowledge spillovers. The two main questions posed are: How does the corporate form matter for what can be considered the external financing of startups, and how does location matter for expansion plans and financing? To provide empirical answers to these questions, both survey data and registry data have been used. The survey data are from a questionnaire sent out to startups listed in the files of the Swedish Jobs and Society Foundation. We looked at corporations founded during the period 2009-2013 that family firms in terms of ownership structure. The survey indicated that bank loans are rare and had to be backed up with personal assets used as collateral and personal guarantees of repayment for the majority of the firms who had used bank loans. Essentially, the entrepreneur personally takes most of the business risk. Bank loans have, to a large extent, the character of internal financing. Combining registry data with the qualitative data from the survey, we used regression analysis to further study differences due to location. The regression analysis showed that the degree of urbanization matters for plans for expansion. In the three most urbanized areas, the startup firms had plans to expand their business both at home and abroad. In the other urbanized areas, the focus was on expansion at home.
    Keywords: startups; bank loans; asymmetric information; the corporate form of business; agglomeration; functional region
    JEL: G21 G32 L26 M13 R12 R58
    Date: 2015–06–12
  29. By: Andersson, Henrik (Toulouse School of Economics (LERNA)); Swärdh , Jan-Erik (VTI); Ögren , Mikael (Göteborg university)
    Abstract: Valuation of traffic noise abatement based on hedonic pricing models of the property market has traditionally measured the noise as the equivalent, or another average, level. What is not captured in such a noise indicator is the maximum noise level of a vehicle passage. In this study, we incorporate the maximum noise level in the hedonic model letting the property price depend on both the equivalent noise level and the maximum noise level. Hedonic models for both rail and road noise are estimated. Data consists of characteristics of sold properties, property-specific noise calculation, and geographical variables. We use the hedonic approach to estimate the marginal willingness to pay (WTP) for maximum noise abatement where we model the effect as the maximum noise level subtracted with the equivalent noise level. Furthermore, we control for the equivalent noise level in the estimations. The estimated results show that including the maximum noise level in the model has influence on the property prices, but only for rail and not for road. This means that for road we cannot reject the hypothesis that WTP for noise abatement is based on the equivalent noise level only. For rail, on the other hand, we estimate the marginal WTP for the maximum noise level and it turns out to be substantial. Also, the marginal WTP for the equivalent noise levels seems to be unaffected by the inclusion of the maximum noise level in the model. More research of this novel topic is requested though.
    Keywords: Noise; Hedonic regression; Rail; Road; Equivalent level; Maximum level
    JEL: C21 C26 Q51 Q53
    Date: 2015–08–21
  30. By: Dougherty, Shaun (University of CT); Goodman, Joshua (Harvard University); Hill, Darryl (Wake County Public School System); Litke, Erica (Harvard University); Page, Lindsay C. (University of Pittsburgh)
    Abstract: To better prepare students for college-level math and the demands of the labor market, school systems have tried to increase the rigor of students' math coursework. The failure of universal "Algebra for All" models has led recently to more targeted approaches. We study one such approach in Wake County, North Carolina, which began using prior test scores to assign middle school students to an accelerated math track culminating in eighth grade algebra. The policy has reduced the role that income and race played in course assignment. A regression discontinuity design exploiting the eligibility threshold shows that acceleration has no clear effect on test scores but lowers middle school course grades. Acceleration does, however, raise the probability of taking and passing geometry in ninth grade by over 30 percentage points, including for black and Hispanic students. Nonetheless, most students accelerated in middle school do not remain so by high school and those that do earn low grades in advanced courses. This leaky pipeline suggests that targeted math acceleration has potential to increase college readiness among disadvantaged populations but that acceleration alone is insufficient to keep most students on such a track.
    Date: 2015–08
  31. By: Kraft, Matthew A. (Brown University); Rogers, Todd (Harvard University)
    Abstract: Parental involvement is correlated with student performance, though the causal relationship is less well established. This experiment examined an intervention that delivered weekly one-sentence individualized messages from teachers to the parents of high school students in a credit recovery program. Messages decreased the percentage of students who failed to earn course credit from 15.8% to 9.3%--a 41% reduction. This reduction resulted primarily from preventing drop-outs, rather than from reducing failure or dismissal rates. The intervention shaped the content of parent-child conversations with messages emphasizing what students could improve, versus what students were doing well, producing the largest effects. We estimate the cost of this intervention per additional student credit earned to be less than one-tenth the typical cost per credit earned for the district. These findings underscore the value of educational policies that encourage and facilitate teacher-to-parent communication to empower parental involvement in their children's education.
    JEL: I20 I21 I24
    Date: 2015–04
  32. By: Sumit Agarwal; Richard K. Green; Eric Rosenblatt; Vincent Yao; Jian Zhang
    Abstract: The major empirical challenge for estimating the driving force of the gender difference is theomitted variable bias because the proposed factor is usually intertwined with other observableand unobservable characteristics. This paper adopts a novel approach to tackle this identificationproblem and examines how the relative income defines gender roles in the context of mortgagesigning order. We first document that men sign first 89% of the time when a mixed-gendercouple applies for a housing loan. The signing order reflects purely behavioral preferences, asthere is no difference in the legal rights or obligations of either the first or second borrowers. Weshow that relative income is the major determinant of the observed gender gap in signing orderand we exclude other possible explanations such as discrimination, loan officer bias and socialnorms. To isolate relative income from differences in other dimensions, we compare the signingorder of the mixed- and same-gender couples and find that the effects of relative income not onlypersists but also are fairly comparable between the two groups. Finally, we provide consistentmacro-level evidences by both cross-sectional and dynamic analysis and show that gender gap insigning order is higher in states with larger gender wage gap and experiences a declining trendover time.
    Keywords: Relative Income, Gender Bias, Mortgage Application, Household Finance
    Date: 2015
  33. By: Mukhopadhyay, Debabrata
    Abstract: This paper focuses on the disparities that persist in India’s health sector across different states. Following the conventional measures of regional inequality such as standard deviation and coefficient of variation, we investigate the spatial variations across the Indian states in terms of three basic health indicators viz. infant mortality rate (IMR), under five mortality and maternal mortality rates. We analyzed the temporal variations of regional disparities of IMR for the period 1998 to 2012. A multiple cross regression of IMR on medical and non-medical conditions show the role of socio-economic and the health infrastructure as significant in determining health outcomes.
    Keywords: Health Outcome Indicators, Infant mortality rate, Under five mortality rate, maternal mortality rate Regional disparities
    JEL: I14
    Date: 2015–08–17
  34. By: S. KUMAR (Asian Institute of Technology)
    Abstract: This paper discusses the status, opportunities, and modalities for engendering liveable low-carbon smart cities in ASEAN as an inclusive green growth model and the opportunities for regional cooperation. Rapid economic growth and increases in urban population in the Association of Southeast Asian Nations (ASEAN) cities will require the consumption of a huge amount of resources which will damage the local and global environment and produce an enormous amount of waste if not handled appropriately. Such environmentally unsustainable growth undermines public health and safety, comfort and liveability, and more importantly is a barrier to achieving global targets for emission reduction. Transforming cities to make them liveable through low-carbon green growth will not only increase the comfort for the city dwellers by improving liveability, but also minimise greenhouse gas (GHG) emissions. Already, initiatives have been taking place in ASEAN to encourage cities to promote green growth through practicing environmental sustainability. Such initiatives are often implemented on a project basis, which are short term and lack a sustaining impact in the region. A well-constructed, city-level, and market-driven framework that allows for participation of all stakeholders and that has a built-in monitoring and evaluation system with well-thought-out measurable indicators to track performance would be useful to systematically transform ASEAN cities. Regional cooperation, such as through facilitating knowledge sharing, has a role to play in strengthening low-carbon green growth development in the region. Therefore, during 2015–2025, the ASEAN Socio-Cultural Community (ASCC) will provide an excellent opportunity to spearhead such activities in a systematic and consistent manner, be a model, and show the world the benefits of low-carbon city development.
    Keywords: : Smart cities, climate change, green growth, ASEAN
    JEL: Q4 Q3 Q28 Q5
    Date: 2015–09
  35. By: Montmartin, B.; Herrera, M.; Massard, N.
    Abstract: The French policy-mix for R&D and innovation has deeply evolved in recent years and is nowadays, one of the most generous and market-friendly system in the world. This paper investigates the (evolutive) effects of this policy-mix by using a unique database containing information on the amount of R&D tax credit, regional, national and European subsidies received by firms in all French metropolitan NUTS3 regions over the period 2001-2011. By estimating a Spatial Durbin model with regimes and fixed effects, we provide new evidence on the efficiency of the French policy-mix. First, a yardstick competition between NUTS3 regions for R&D investment driven by negative spatial spillovers is found. Second, it seems that national subsidies are the only instrument able to generate a significant leverage effect on privately-financed R&D. Third, due to the context of spatial competition, the three other policies studied (Tax Credit, Regional and European subsidies) do not generate significant leverage or crowding-out effect. Fourth, we highlight the presence of structural breaks in our data that correspond to the last two important reforms of the French tax credit. Consequently, the effect of R&D policies and especially R&D tax credit are likely to change over time and influence ex-post evaluation results.
    JEL: H25 O31
    Date: 2015
  36. By: Merlo, Antonio (Rice University); Ortalo-Magne, Francois (University of WI); Rust, John (Georgetown University)
    Abstract: This paper formulates and solves the problem of a homeowner who wants to sell her house for the maximum possible price net of transactions costs (including real estate commissions). The optimal selling strategy consists of an initial list price with subsequent weekly decisions on how much to adjust the list price until the home is sold or withdrawn from the market. The solution also yields a sequence of reservation prices that determine whether the homeowner should accept offers from potential buyers who arrive stochastically over time with an expected arrival rate that is a decreasing function of the list price. We estimate the model using a rich data set of complete transaction histories for 780 residential properties in England introduced by Merlo and Ortalo-Magne (2004). For each home in the sample, the data include all listing price changes and all offers made on the home between initial listing and the final sale agreement. The estimated model fits observed list price dynamics and other key features of the data well. In particular, we show that a very small "menu cost" of changing the listing price (estimated to equal 10 thousandths of 1% of the house value, or approximately 10 GBP for a home worth 100,000 GBP), is sufficient to explain the high degree of "stickiness" of listing prices observed in the data.
    JEL: H50
    Date: 2014–05
  37. By: Björklund, Gunilla (VTI); Wallén Warner, Henriette (VTI)
    Abstract: The first aim of the present study was to investigate the moderating effects of safety skills on the relationship between perceptual-motor skills and risky driving behaviours (i.e. speeding in urban areas, speeding in rural areas and tendencies to overtake). The second aim was to examine the moderating effects of safety skills on the relationship between irritations evoked by different driving behaviours (i.e. progress impeded, reckless driving and direct hostility) and expressed irritation by same behaviours. A sample of 100 Swedish drivers completed a questionnaire including the Driver Skill Inventory (DSI), a Swedish version of the Driving Anger Scale (Swe-DAS), as well as questions about expressed irritation and risky driving behaviours. The results showed that safety skills made significant contributions to the prediction of risky driving behaviours (i.e. speeding in urban areas, speeding in rural areas and tendencies to overtake) so that higher safety skills was associated with less risky driving behaviours. Irritation evoked by different driving behaviours (i.e. progress impeded, reckless driving and direct hostility) made significant contributions to the prediction of expressed irritation by the same behaviours, so that higher levels of irritation were associated with more often expressed irritation. No moderation effects of safety orientation could be found on risky driving behaviours or on irritation in traffic, with the exception of a small interaction effect between safety skills and irritation evoked by progress impeded.
    Keywords: Safety skills; Perceptual-motor skills; Risky driving behaviours; Irritation; Driver Skill Inventory; Driving Anger Scale
    JEL: R41
    Date: 2015–09–02
  38. By: Shoag, Daniel (Harvard University); Veuger, Stan (American Enterprise Institute)
    Abstract: We document the link between increased levels of economic and policy uncertainty and unemployment at the state-level during the 2007-2009 recession. The cross sectional variation in uncertainty robustly matches the distribution of employment outcomes during this period. When we instrument for this cross sectional variation using preexisting institutions, we find evidence for a causal role for uncertainty in increasing unemployment. A simple model of hiring and firing under uncertainty rationalizes these results, and the within-state distribution of effects across industries, occupations, and individuals is consistent with this model's predictions. Together, these results suggest that increased uncertainty contributed to the severity of the Great Recession.
    Date: 2015–03
  39. By: Tim Silva; Allison McKie; Philip Gleason
    Abstract: This brief updates earlier study findings regarding the extent to which teachers trained through teaching residency programs (TRPs) funded through the U.S. Department of Education’s Teacher Quality Partnership grants program are retained in their districts and schools.
    Keywords: Teachers, teacher preparation, teaching residency, teacher residency, teacher retention, novice teachers
    JEL: I
    Date: 2015–08–19
  40. By: Andrabi, Tahir (Pomona College); Das, Jishnu (World Bank Development Research Group); Khwaja, Asim Ijaz (Harvard University)
    Abstract: We study the impact of providing school and child test scores on subsequent test scores, prices, and enrollment in markets with multiple public and private providers. A randomly selected half of our sample villages (markets) received report cards. This increased test scores by 0.11 standard deviations, decreased private school fees by 17 percent and increased primary enrollment by 4.5 percent. Heterogeneity in the treatment impact by initial school quality is consistent with canonical models of asymmetric information. Information provision facilitates better comparisons across providers, improves market efficiency and raises child welfare through higher test scores, higher enrollment and lower fees.
    JEL: D22 D82 I25 L15 L22 O12
    Date: 2014–10
  41. By: Chakrabarti, Anindya S.; Dutta, Aparna
    Abstract: The immobility puzzle in European Union takes the form that the observed level of migration within Europe is substantially less than is expected in an union which allows free labor mobility, indicating that there are possibly institutional barriers inhibiting migration. In order to pin down the missing mass of migrants, we propose a theory of cross-region migration in a multi-region setting with heterogeneity in sectoral compositions, productivity and endowments of productive inputs. Migration arises as the result of adjustment process of workers in response to uneven region and sector-specific shocks in factor productivity. When tested on U.S. which we consider to be a benchmark for institutional homogeneity, this model explains substantial part of variability in both the nominal and the relative levels of state-to-state migration. However, for Europe, the model explains the relative ow network well but predicts a higher nominal ow than is seen in the data illustrating the puzzle. Following the hypothesis that heterogeneity across European countries in institutional factors induce a friction on such labor reallocation process driven by economic incentives, we use dyadic regression to analyze the effects of pair-wise institutional distances which broadly captures various types of socio-cultural and political differences between countries, on the missing mass of migrants. Linguistic differences appear to be an important factor explaining the gap.
  42. By: Jordà, Òscar; Schularick, Moritz; Taylor, Alan M.
    Abstract: What risks do asset price bubbles pose for the economy? This paper studies bubbles in housing and equity markets in 17 countries over the past 140 years. History shows that not all bubbles are alike. Some have enormous costs for the economy, while others blow over. We demonstrate that what makes some bubbles more dangerous than others is credit. When fueled by credit booms, asset price bubbles increase financial crisis risks; upon collapse they tend to be followed by deeper recessions and slower recoveries. Credit-financed housing price bubbles have emerged as a particularly dangerous phenomenon.
    Keywords: bank lending; boom; bust; crises; debt overhang; local projections
    JEL: C14 C32 E44 E51 G01 N10 N20
    Date: 2015–08
  43. By: Andrén, Daniela (Örebro University School of Business); Levin, Jörgen (Örebro University School of Business); Vimefall, Elin (Örebro University School of Business)
    Abstract: In Kenya, educational enrollment rates increased significantly for both girls and boys after 2003, when primary education became free of charge. Unfortunately, approximately one million school-aged children are still not enrolled in school. Earlier literature provides empirical evidence that educational opportunities differ among children, due to poverty, gender, rural area of residence and disability. Our paper con-tributes to the literature by providing empirical evidence of the importance of children’s ethnolinguistic background for their probability of being in school. Estimates from a three-level random intercept probit model using data from the Kenya Integrated Household Budget Survey 2005/06 reveal that Somali and Maasai children are least likely to be in school. A separate analysis by child’s gender shows that compared to Kikuyu children both girls and boys from the Somali and Maasai groups, but also Mijikenda and Swahili girls, have a lower probability to be in school. This might be an indication that gender norms are stronger in these groups.
    Keywords: School-aged Children; School enrollment; Free Primary Education; Ethnolinguistic Background; Kenya; Three-level Random Intercept Model;
    JEL: A00 I24 I28
    Date: 2015–08–17
  44. By: Loyalka,Prashant Kumar; Huang,Xiaoting; Zhang,Linxiu; Wei,Jianguo; Yi,Hongmei; Song,Yingquan; Shi,Yaojiang; Chu,James
    Abstract: A number of developing countries are currently promoting vocational education and training (VET) as a way to build human capital and strengthen economic growth. The primary aim of this study is to understand whether VET at the high school level contributes to human capital development in one of those countries?China. To fulfill this aim, a longitudinal data on more than 10,000 students in vocational high school (in the most popular major, computing) and academic high school from two provinces of China are used. First, estimates from instrumental variables and matching analyses show that attending vocational high school (relative to academic high school) substantially reduces math skills and does not improve computing skills. Second, heterogeneous effect estimates also show that attending vocational high school increases dropout, especially among disadvantaged (low-income or low-ability) students. Third, vertically scaled (equated) baseline and follow-up test scores are used to measure gains in math and computing skills among the students. The results show that students who attend vocational high school experience absolute reductions in math skills. Taken together, the findings suggest that the rapid expansion of vocational schooling as a substitute for academic schooling can have detrimental consequences for building human capital in developing countries such as China.
    Keywords: Education For All,Secondary Education,Tertiary Education,Effective Schools and Teachers,Primary Education
    Date: 2015–08–18
  45. By: Gill, David (University of Oxford); Kissová, Zdenka (PricewaterhouseCoopers LLP); Lee, Jaesun (Cornell University); Prowse, Victoria L. (Cornell University)
    Abstract: Rank-order relative-performance evaluation, in which pay, promotion and symbolic awards depend on the rank of workers in the distribution of performance, is ubiquitous. Whenever firms use rank-order relative-performance evaluation, workers receive feedback about their rank. Using a real-effort experiment, we aim to discover whether workers respond to the specific rank that they achieve. In particular, we leverage random variation in the allocation of rank among subjects who exerted the same effort to obtain a causal estimate of the rank response function that describes how effort provision responds to the content of rank-order feedback. We find that the rank response function is U-shaped. Subjects exhibit 'first-place loving' and 'last-place loathing', that is subjects increase their effort the most after being ranked first or last. We discuss implications of our findings for the optimal design of firms' performance feedback policies, workplace organizational structures and incentives schemes.
    Keywords: relative performance evaluation, relative performance feedback, rank order feedback, dynamic effort provision, real effort experiment, flat wage, fixed wage, taste for rank, status seeking, social esteem, self esteem, public feedback, private feedback
    JEL: C23 C91 J22 M12
    Date: 2015–08
  46. By: Asatryan, Zareh; Havlik, Annika; Streif, Frank
    Abstract: A sizeable literature studies whether governments strategically interact with each other through policy-diffusion, learning, fiscal and yardstick competition. This paper asks whether, in the presence of direct democratic institutions, spatial interactions additionally result from voters' direct actions. The proposed mechanism is that the voters' actions in vetoing a decision or inaugurating a preferred policy by a binding initiative in their jurisdiction can potentially have spillover effects on the actions of voters and special interest groups of neighboring jurisdictions. Utilizing data on around 1,800 voter-petitions across over 12,000 German municipalities in 2002-09, we find that a jurisdiction's probability of hosting a petition is positively driven by the neighbors' direct democratic activity. These effects are persistent, and are stronger for more visible instruments of direct democracy. The interactions are also mostly driven by petitions in same or similiar policy areas, and are stronger in towns with relatively more per capita newspapers.
    Keywords: direct democracy,spatial spillovers,policy diffusion,citizen preferences
    JEL: D72 D78 R50
    Date: 2015
  47. By: DOI Naoshi; OHASHI Hiroshi
    Abstract: This paper investigates the economic impacts of the merger between Japan Airlines (JAL) and Japan Air System (JAS) in October 2002 and its remedial measures. This paper performs simulation analyses using an estimated structural model in which airlines set both fares and flight frequencies on each route in the domestic market. By comparing supply models, the hypothesis that the merger caused a collusion among airlines is rejected. The marginal-cost estimates for the merging airlines significantly declined primarily through the expansion of its domestic network. The simulation estimates suggest that, although the merger increased the total social surplus for all domestic routes by 6.8%, it increased fares and decreased consumer surplus on the JAL-JAS duopoly routes. This paper also evaluates remedial measures associated with the merger.
    Date: 2015–08
  48. By: Leo Kaas (Department of Economics, University of Konstanz, Germany); Georgi Kocharkov (Department of Economics, University of Konstanz, Germany); Edgar Preugschat (Technical University Dortmund, Germany)
    Abstract: The recently published Household Finance and Consumption Survey has revealed large differences in wealth inequality between the countries of the Euro area. We find a strong negative correlation between wealth inequality and homeownership rates across countries. We use two decomposition methods to shed more light on this correlation. First, a Gini decomposition by homeownership status shows that the negative relationship is mostly driven by large between-group inequality across owners and renters. Second, to control for other observables, we conduct a detailed counterfactual decomposition of cross-country inequality differences. We confirm the major role for homeownership rates in accounting for the wealth inequality differences. Our analysis suggests that the cross-country variation is mostly driven by differences in the savings behavior of households in the bottom half of the wealth distribution and that those differences in savings are to a large extent channeled through housing wealth.
    Keywords: Wealth Inequality, Homeownership, Housing, Euro Area
    JEL: D31 E21 G11
    Date: 2015–08–27
  49. By: Karin Josephine Andersson; Nathan Brierley; Feliks Hedstroem; Daniel Herr and Joshua Risson
    JEL: H00
    Date: 2015–04
  50. By: Weiou Wu (University of Limerick); Apostolos Fasianos (University of Limerick); Stephen Kinsella (University of Limerick)
    Abstract: Using the Eurosystem Household Finance and Consumption (HFCS) data, this paper identifies the key differences in borrowing behaviour between core and peripheral nations. As such, we focus on non-collateralized debt such as credit card loans, bank overdrafts and other forms of non-collateralized debt, which reflect daily borrowing behaviour more closely than does mortgage debt. We examine the differences in levels and prevalence of these debts, and break down these differences into two major components: financial perceptions and the economic environment. We aim to explain to what extent these influences contribute to the differences in debt ownership and levels of holding between core and peripheral countries in Europe. We found that differences in financial perceptions do contribute to the differences in debt in a significant way, while the economic environment contributes little to this outcome. Households in the European periphery are much more conducive to debt if they have the same financial perceptions as those in the core countries in Europe.
    Keywords: Household Debt, Counterfactual Decomposition, Demography, Risk Preference and Financial Expectation.
    Date: 2015–08–21
  51. By: Luis I. Jacome H.; Srobona Mitra
    Abstract: There is increasing interest in loan-to-value (LTV) and debt-service-to-income (DTI) limits as many countries face a new round of rising house prices. Yet, very little is known on how these regulatory instruments work in practice. This paper contributes to fill this gap by looking closely at their use and effectiveness in six economies—Brazil, Hong Kong SAR, Korea, Malaysia, Poland, and Romania. Insights include: rapid growth in high-LTV loans with long maturities or in the number of borrowers with multiple mortgages can be signs of build up in systemic risk; monitoring nonperforming loans by loan characteristics can help in calibrating changes in the LTV and DTI limits; as leakages are almost inevitable, countries strive to address them at an early stage; and, in most cases, LTVs and DTIs were effective in reducing loan-growth and improving debt-servicing performances of borrowers, but not always in curbing house price growth.
    Keywords: Housing;Financial stability;Macroprudential Policy;Central banks and their policies;loan-to-value ratios, debt-service-to income ratios, house price growth, credit growth, credit, loans, loan, mortgage, debt, Financial Markets and the Macroeconomy, Government Policy and Regulation, credit growth.,
    Date: 2015–07–15
  52. By: Stephanie Levy (IPC-IG)
    Abstract: In this special edition of Policy in Focus, leading authors and practitioners present their research on how cash transfers can impact the local economy when implemented in a developing country. The aim is to gather and review research results and evidence, obtained from various methodologies ranging from randomised control trials (RCTs) to village economy models and general equilibrium analysis, applied on small-scale programmes to larger-scale policies in Latin America, Africa and South-East Asia. The economic impact of social transfers is analysed here through their effects on investment, productivity, prices, employment and trade and through more general equilibrium effects of redistributive policies. (…)
    Keywords: Impact, Cash Transfers, Local Economies
    Date: 2015–05
  53. By: B. GARBINTI (Insee)
    Abstract: Issues about wealth distribution between generations are of great political concern. In France, researchers have emphatized the fact that wealth is mainly hold by the elder and that young generations inherit later and later. Fiscal measures aiming at mitigating this generational gap have been voted to create incentives for donations. I study here the impact of intergenerational transmissions on two components of households behavior: do they lead to a greater propensity to purchase a primary residence and to create or buy out a firm? Using Patrimoine Survey 2009-2010, I show that households who received a gift or a bequest buy more often their primary residence. For the creation or the buyout of a firm, gifts also exhibit a significant effect while bequests do not. Donations received before 35 have a stronger effect on these two outcomes which tends to suggest that early gifts are the most useful ones. The link between gifts and home-ownership is also found stronger since the rise in the real estate prices that occurred in the 2000s. I use a discrete time duration model, complemented with a split population one in order to take into account heterogeneity in household behavior. Causal effect of donations is also assessed with an instrumental variable method. The number of siblings is used as an instrument and enables to evaluate a local effect on the population of people born from a wealthy family. On this subpopulation, the causal effect is found stronger than the ones computed thank to other models.
    Keywords: intergenerational transfers, primary residence, firm creation, duration model, split population model
    JEL: D64 D91
    Date: 2014
  54. By: Joelson Oliveira Sampaio; Rodrigo De-Losso, Luciana Gross Cunha, Renan Gomes de Pieri
    Abstract: This paper investigates local crime’s concern effect on confidence in the police using Two Least Square Regressions having as instrumental variable the individual distance to police stations. We explore data from the Confidence in Justice Survey conducted for the period at 2013 to 2014 at state of Sao Paulo. We find that an increase at the total crimes registered reduces confidence on police. Such results are more effusively in some crimes like drug dealing and rape. Exploring heterogeneities in the results we find that black are more sensitive to crime rate changes even living in similar neighborhoods in what respect to security. Results also show that who has already had prior experience with the police is less sensitive independently of the quality of police job at the time.
    Keywords: Trust in the Police; Institutions; Criminality.
    JEL: G12
    Date: 2015–08–12
  55. By: Deller, Steven C. (University of WI); Brown, Laura (University of WI); Haines, Anna (University of WI); Fortenbery, Randy (WA State University)
    Abstract: In this paper we explore the impact of local foods on economic growth using a Barro-type framework. We address model uncertainty by using a Spatial Bayesian Model Averaging (SMBA) approach and check for robustness of results on local foods by employing several metrics of local foods. Results suggest that higher levels of local foods weakly lead to lower levels of income growth. The results are not robust implying that our thinking about how to define and quantify local foods needs further attention.
    Date: 2014–02
  56. By: Field, Erica (Duke University); Jayachandran, Seema (Northwestern University); Pande, Rohini (Harvard University); Rigol, Natalia (MIT)
    Abstract: Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? We offered two days of business counseling to a random sample of customers of India's largest women's bank. A random sub-sample was invited to attend with a friend. The intervention had a significant immediate impact on participants' business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility.
    Date: 2015–04

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