nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2015‒12‒08
fifty-five papers chosen by
Steve Ross
University of Connecticut

  1. Virginia Local Tax Rates: 2013 By John Knapp; Stephen Kulp
  2. Exploring the geography of China's airport networks: a hybrid complex-network approach By Zhengbin Dong; Wenjie Wu
  3. The effect of trade on agglomeration within regions By Carolina Guevara
  4. A Pair-Wise Analysis of Intra-City Price Convergence Within the Paris Housing Market By Mark J. Holmes; Jesus Otero; Theodore Panagiotidis
  5. Employment and technological change: on the geography of labour market adjustments By Luisa Gagliardi
  6. Moving people with ideas - innovation inter-regional mobility and firm heterogeneity By Riccardo Crescenzi; Luisa Gagliardi
  7. Why Does the Government Fail to Improve the Living Conditions of Migrant Workers in Shanghai? Reflections on the Policies and the Implementations of Public Rental Housing under Neoliberalism By Yang Shen
  8. Parental responses to public investments in children: evidence from a maximum class size rule By Fredriksson, Peter; Oosterbeek, Hessel; Öckert, Björn
  9. Young adults living with their parents and the influence of peers By Effrosyni Adamopoulou; Ezgi Kaya
  10. Fifty Shades of State: Quantifying Housing Market Regulations in Germany By Konstantin A. Kholodilin
  11. Decentralisation and school autonomy impact on the quality of education: the case of two MENA countries By Josep-Oriol Escardíbul; Nehal Helmy
  12. Is there real freedom of school choice? An analysis from Chile By Mauro Mediavilla; Adrián Zancajo
  13. The electoral migration cycle By Federico Revelli
  14. House prices: bubbles, exuberance or something else? Evidence from euro area countries By Rita Lourenço; Paulo M.M. Rodrigues
  15. The time value of housing: historical evidence from London residential leases By Philippe Bracke; Ted Pinchbeck; James Wyatt
  16. Robust location of new housing developments using a choice model By Juan Carlos Espinoza Garcia; Laurent Alfandari
  17. Measuring expectations from household surveys: new results on subjective probabilities of future house prices By Olympia Bover
  18. Regional convergence – theoretical approaches By Daniela, Antonescu
  19. A tractable city model for aggregative analysis By Chatterjee, Satyajit; Eyigungor, Burcu
  20. The economic value of local social networks By Frank Ethridge; Maryann Feldman; Tom Kemeny; Ted Zoller
  21. Using Land-Use Modelling to Statistically Downscale Population Projections to Small Areas By Michael P. Cameron; William Cochrane
  22. Asymptotic properties of imputed hedonic price indices By Olivier Schöni
  23. Spillover effects of local human capital stock on adult obesity: Evidence from German neighborhoods By Dang, Rui
  24. Innovation across cities By Kwok Tong Soo
  25. From periphery to core: measuring agglomeration effects using high-speed rail By Gabriel M. Ahlfeldt; Arne Feddersen
  26. Where Has All the Skewness Gone? The Decline in High-Growth (Young) Firms in the U.S. By Ryan A. Decker; John Haltiwanger; Ron S. Jarmin; Javier Miranda
  27. The supply side of household finance By Gabriele Foà; Leonardo Gambacorta; Luigi Guiso; Paolo Emilio Mistrulli
  28. Privacy, Trust and Social Network Formation By Alexia Gaudeul; Caterina Giannetti
  29. Gentrification and residential mobility in Philadelphia By Ding, Lei; Hwang, Jackelyn; Divringi, Eileen
  30. Assessment of Residents’ Attitudes and Satisfaction Before and After Implementation of a Smoke-free Policy in Boston Multiunit Housing By Slawa Rokicki; Gary Adamkiewicz; Shona Fang; Nancy Rigotti; Jonathan Winickoff; Douglas Levy
  31. Commercial bank failures during The Great Recession: the real (estate) story By Adonis Antoniades
  32. Air Pollution and Urban Structure Linkages: Evidence from European Cities By Miguel Cárdenas Rodríguez; Laura Dupont-Courtade; Walid Oueslati
  33. The Effect of Peer Observation on Consumption Choices: Experimental Evidence By Antonia Grohmann; Sahra Sakha
  34. Social Ties and the Efficiency of Factor Transfers By Beck, Ulrik; Bjerge, Benedikte; Fafchamps, Marcel
  35. The supply side of household finance By Gabriele Foà; Leonardo Gambacorta; Luigi Guiso; Paolo Emilio Mistrulli
  36. Credible Enforcement of Compulsory Schooling by Linking Welfare Payments to School Attendance: Lessons from Australia’s Northern Territory By Kyle Peyton; Moshe Justman
  37. Climate Change and Long-Run Discount Rates: Evidence from Real Estate By Giglio, Stefano W; Maggiori, Matteo; Ströbel, Johannes; Weber, Andreas
  38. Monetary and Macroprudential Policies under Fixed and Variable Interest Rates By Margarita Rubio
  39. Intergenerational Linkages in Household Credit By Ghent, Andra C.; Kudlyak, Marianna
  40. The role of component-wise boosting for regional economic forecasting By Lehmann, Robert; Wohlrabe, Klaus
  41. Does Transport Behavior Influence Preferences for Elektromobility? An Analysis Based on Person- and Alternative-Specific Error Components By Francisco J. Bahamonde-Birke
  42. Internal migration and public policy By Giuranno, Michele; Biswas, Rongili
  43. Gender Streaming and Prior Achievement in High School Science and Mathematics By Naomi Friedman-Sokuler; Moshe Justman
  44. The “Highway Effect” on Public Finance: Case of the STAR Highway in the Philippines By Yoshino, Naoyuki; Pontines, Victor
  45. The Roots of Regional Trust By Christoph Hauser; Gottfried Tappeiner; Janette Walde
  46. Crime and public procurement, evidence from municipalities By Giuseppe Albanese; Federico Antellini Russo; Roberto Zampino
  47. Mass Media and Social Change: Can We Use Television to Fight Poverty? By La Ferrara, Eliana
  48. Measuring regional innovation in one dimension: More lost than gained? By Matthias Siller; Christoph Hauser; Janette Walde; Gottfried Tappeiner
  49. Exposure to media and corruption perceptions By Lucia Rizzica; Marco Tonello
  50. Can Selective Immigration Policies Reduce Migrants' Quality? By Bertoli, Simone; Dequiedt, Vianney; Zenou, Yves
  51. The Gravity of High Skilled Migration Policies By Mathias Czaika; Christopher R Parsons
  52. Porter vs Krugman: History, Analysis and Critique of Regional Competiveness By Psofogiorgos, Nikolaos - Alexandros; Metaxas, Theodore
  53. Securitization and Credit Quality By Alper Kara; David Marques-Ibanez; Steven Ongena
  54. State Strategies for Coordinating Medicaid Services and Housing for Adults with Behavioral Health Conditions By Rebecca Kleinman; Matthew Kehn; Allison Wishon Siegwarth; Jonathan Brown
  55. Do large departments make academics more productive? Sorting and agglomeration economies in research By Clément Bosquet; Pierre-Philippe Combes

  1. By: John Knapp (Weldon Cooper Center for Public Service); Stephen Kulp (Weldon Cooper Center for Public Service)
    Abstract: This is the thirty-second edition of the Cooper Center annual publication on tax rates levied by Virginia local governments. In addition to information about tax rates, the publication contains details about tax administration, valuation methods and due dates. There is also information on water and sewer rates, waste disposal charges and numerous other aspects of local government finance. This comprehensive guide to local taxes is based on information gathered in the spring, summer, and early fall of 2013. The study includes all of Virginia's 39 independent cities and 95 counties and 133 of the 190 incorporated towns. The included towns account for 90 percent of the state population in towns. In addition to survey data, the study includes information from several outside sources, including two Department of Taxation studies, 2013 Legislative Summary and The 2011 Assessment/Sales Ratio Study, as well as Department of Taxation information on the assessed value of real estate by type of property. We also used the Comparative Report of Local Government Revenues and Expenditures, Year Ended June 30, 2012 from the state Auditor of Public Accounts, the Report on Proffered Cash Payments and Expenditures by Virginia Counties, Cities and Towns, 2011-2012 from the Commission on Local Government, and Virginia Enterprise Zone Program 2012 Grant Year Annual Report from the Department of Housing and Community Development. Additional sources included regional transportation commission information on taxes and fees.
    Keywords: Virginia; taxes; tax rates; local government
    Date: 2014–01–15
  2. By: Zhengbin Dong; Wenjie Wu
    Abstract: Air networks are normal examples of transportation systems among ubiquitous big data networks in the dynamic nature. This is particularly the case in developing countries with rapid airport network expansions. This paper explores the structure and evolution of the trunk airport network of China (ANC) in major years during 1980s-2000s. We generalise the complex network approach developed in existing studies and further test for statistical properties of weighted network characteristics by using pair-wise traffic flows. The spatiotemporal decomposition of network metric plots and the visualization maps leads to a rich harvest of stylized ANC structures: (i) national hub-and-spoke patterns surrounding mega-cities; (ii) regional broker patterns surrounding Kunming and Urumqi, and (iii) local heterogeneous disparity patterns in isolated geographical cities, such as Lhasa, Lijiang, Huangshan, etc. These findings have important implications towards understanding the geo-political and economic forces at stake in shaping China's urban systems.
    Keywords: airport system; complex network; regional development; China
    JEL: O18 P25 R12
    Date: 2015–03
  3. By: Carolina Guevara (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 - Centre National de la Recherche Scientifique)
    Abstract: This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (regions-pecific time trends), congestion effects in main cities and road infrastructure within regions. Abstract This paper assesses for the first time the effect of regional trade openness on agglomeration within regions, using regional data on the trade of Colombia. The results of the panel model show that the effect of trade is sufficiently strong to shape the spatial configuration, a structure that rarely changes. The effect varies across regions. On the one hand, trade enhances spatial agglomeration within regions with large home market and location advantages. On the other hand, trade induces dispersion within regions that lack access to international trade or historical advantage. These results hold when controlling for the natural course of agglomeration (region-specific time trends), congestion effects in main cities and road infrastructure within regions.
    Keywords: trade openness,spatial concentration,intra-inequality,congestion,cities
    Date: 2015–11–25
  4. By: Mark J. Holmes (Department of Economics, Waikato University, New Zealand); Jesus Otero (Facultad de Economia, Universidad del Rosario, Colombia); Theodore Panagiotidis (Department of Economics, University of Macedonia, Greece; The Rimini Centre for Economic Analysis, Italy)
    Abstract: We examine long-run house price convergence across the twenty Paris districts using a quarterly dataset that spans from 1991 to 2014. Our econometric modeling exercise adopts a pair wise approach that is built on a probabilistic test for convergence based on house price differentials. We find that more than 50% of the intra-city house price differentials that can be computed are stationary. Our findings further reveal that the half-life of a shock to long-run price equilibrium is affected positively by unemployment, distance and housing supply.
    Date: 2015–11
  5. By: Luisa Gagliardi
    Abstract: This paper investigates the impact of technological change on local labour market outcomes in Britain. Using a newly assembled panel database for the period 2000-2007 and a directly observed measure of technological change based on patent records, the analysis suggests that employment levels are relatively lower in places that are more exposed to technological shocks depending on their existing industrial specialization. Results also suggest that the magnitude of the impact varies across locations and typologies of workers. The negative impact on employment is particularly evident in areas characterized by weaker agglomeration economies and specialization in mature industries and for intermediate skilled individuals employed in “routinary” activities
    Keywords: local labour market; employment; technological change; skills
    JEL: J24 O33 R12 R21 R23
    Date: 2014–10
  6. By: Riccardo Crescenzi; Luisa Gagliardi
    Abstract: This paper looks at the link between inter-regional mobility, innovation and firms’ behavioural heterogeneity in their reliance on localised external sources of knowledge. By linking patent data (capturing inventors’ inter-regional mobility) with firm-level data (providing information on firms’ innovation inputs and behaviour) a robust identification strategy makes it possible to shed new light on the geographical mobility-innovation nexus. The analysis of English firms suggests that firm-level heterogeneity – largely overlooked in previous studies - is the key to explain the innovation impact of inter-regional mobility over and above learning-by-hiring mechanisms. A causal link between inflows of new inventors into the local labour market and innovation emerges only for firms that make the use of external knowledge sources an integral part of their innovation strategies.
    Keywords: innovation; labour mobility; inter-regional migration; spillovers
    JEL: J61 O15 O31 R23
    Date: 2015–04
  7. By: Yang Shen
    Abstract: How to get affordable housing is the primary concern of many peasant migrants working in Shanghai. Although the central government has issued a series of policies regarding migrant housing in recent years, they are merely rhetoric and incapable to meet migrant workers' needs. This article aims to interrogate why the public housing policy cannot solve migrant housing problems and what neoliberalism means in housing provision. It is argued that the neoliberal approaches embedded in public rental housing implementation show that the government prioritises public rental housing for the middle class, which is considered important to the economy, and ignores the others. The prioritisation gives rise to the failure of providing affordable housing to peasant migrant workers. Living in safe and affordable housing is vital to their well-being and the sustainable economic growth in urban China. Policy advice is addressed in the conclusion.
    Keywords: public housing policies;peasant migrant workers;participant observation;neoliberalism;China
    Date: 2015–01–28
  8. By: Fredriksson, Peter (Stockholm university, IZA, IFAU and Uppsala center for Labor Studies (UCLS)); Oosterbeek, Hessel (University of Amsterdam); Öckert, Björn (IFAU and Uppsala Center for Labor Studies (UCLS))
    Abstract: We study differential parental responses to variation in class size induced by a maximum class size rule in Swedish schools. In response to an increase in class size: (i) only high-income parents help their children more with homework; (ii) all parents are more likely to move their child to another school; and (iii) only low-income children find their teachers harder to follow when taught in a larger class. These findings indicate that public and private investments in children are substitutes, and help explain why the negative effect of class size on achievement in our data is concentrated among low-income children.
    Keywords: class size; parental responses; social background; regression discontinuity
    JEL: C31 I21 I28 J24
    Date: 2015–12–02
  9. By: Effrosyni Adamopoulou (Bank of Italy); Ezgi Kaya (Cardiff Business School)
    Abstract: This paper focuses on young adults in the US living with their parents and studies the role of peers. Using data from the National Longitudinal Study of Adolescent Health we analyse the influence of high school friends on the nest-leaving decision of young adults. We achieve identification by exploiting the differences in the timing of leaving the parental home among peers, the individual-specific nature of the peer groups, and by including school and grade fixed effects. Our results indicate that there are statistically significant peer effects on the decision of young adults to leave parental home. This is true even after we control for labour and housing market conditions and for a comprehensive list of individual and family-of-origin characteristics that are not usually observed by the econometrician. We discuss various mechanisms and we confirm the robustness of our results through a placebo exercise. Our findings correspond with the increasing trend of young adults living with their parents that has been observed in the US during the last 50 years.
    Keywords: peer effects, friends, living arrangements, leaving parental home
    JEL: D10 J12 J60 Z13
    Date: 2015–11
  10. By: Konstantin A. Kholodilin
    Abstract: The paper aims at measuring the rental housing market regulations in Germany between 1913 and 2015. Four classes of housing policy are considered: Rent controls, tenant protection, rationing of housing, and fostering of social housing. Based on a thorough analysis of federal and regional legislation, for each class, an index is constructed, increasing in degree of regulation. The average of class-specific indices make up a composite index. The index reflects dramatic increases in regulations during and immediately after the World Wars. Likewise, the 2010s are characterized by a surge in virtually all classes of regulations in Germany related to the growing housing scarcity in large cities due to intra- and international migration leading to a geographical mismatch between housing supply and demand.
    Keywords: Housing policy, rental housing, Germany, regulation index
    JEL: K23 N9 R30
    Date: 2015
  11. By: Josep-Oriol Escardíbul (Universidad de Barcelona & IEB); Nehal Helmy (The World Bank)
    Abstract: An effective institutional structure is a crucial tool for having a highly functioning education system and consequently, economic growth and development. We analyse the effects of decentralisation and school autonomy on the quality of education in two MENA countries (Jordan and Tunisia), by using the OECD PISA 2009 database. Results reveal that decentralisation has a positive impact on the quality of education in some decision-making areas, whereas most autonomy related variables are not significant. Accordingly, schools with more autonomy management and facing more competition do not lead to different results than others, while (public) ownership is positively significant only in Tunisia. However, private funding and accountability measures are positively associated with student achievement.
    Keywords: Education, decentralisation, school autonomy, Tunisia, Jordan, MENA, PISA
    JEL: H40 H52 I28
    Date: 2015
  12. By: Mauro Mediavilla (University of Valencia & IEB); Adrián Zancajo (Autonomous University of Barcelona & GEPS)
    Abstract: Between 1981 and 1990, Chile began to implement an education reform based on school choice and a financing system through vouchers. In theory, the system ensures complete freedom of choice of school by families. This paper attempts to identify the existence of factors that conditioned the enrolment process in the different types of schools existing nowadays in the Chilean educational system, the largest quasi-market of Latin America. Results show a social stratification and separation by schools and indicate how geographical distance and social composition are the most critical factors for families when choosing a school.
    Keywords: School choice, social class, quasi-markets, voucher, Chile
    JEL: I21 I28
    Date: 2015
  13. By: Federico Revelli
    Abstract: This paper puts forward a new test of Tiebout sorting that relies on the exogenous time structure of recurrent local elections. The test is based on the idea that the policy uncertainty that is associated with periodic competitive elections should be expected to induce delay of migration, thus generating an electoral migration cycle of relatively low rates of migration before the elec- tions, followed by relatively high rates of migration when electoral uncertainty is resolved. Conversely, interjurisdictional migration flows that are unrelated to local public service provision motives ought to be orthogonal to the timing of local elections. Empirically, I study sorting patterns across several thousands of peninsular Italy’s municipalities through the increasingly turbulent 2002-2013 decade. I find evidence of an electoral migration cycle in the sense that the timing of internal migration flows is systematically influenced by the schedule of recurrent mayoral elections.
    Keywords: Tiebout sorting, local elections, uncertainty
    JEL: D72 H77 C23
    Date: 2015–12
  14. By: Rita Lourenço; Paulo M.M. Rodrigues
    Abstract: The real estate market plays a crucial role in a country's economy. Since residential property is the most important component of households' wealth, real estate markets price trends can affect households' consumption and investment decisions via wealth effects. As real estate is often used as collateral for loans, changes in real estate prices affect households' debt and their ability to repay loans, and consequently also impact on the banking sector. As housing covers a basic human need, analyzing fluctuations in residential property prices is also important from a social perspective. Furthermore, since the construction industry is a main employer, investment in construction has a major influence on economic activity. Thus, developments in the real estate market have far-reaching implications on the economy as a whole as well as on financial stability. In this paper we use different methodologies with the objective of providing evidence regarding potential bubble/exuberant behaviour of economic agents in several European countries and the US, over the last four decades.
    JEL: C12 C22
    Date: 2015
  15. By: Philippe Bracke; Ted Pinchbeck; James Wyatt
    Abstract: Most housing transactions in London involve trading long leases of varying lengths. We exploit this feature to estimate the time value of housing --- the relationship between the value of a property and the length of time it will be owned for --- over the range 1-99 years. To do so, we compile a unique historical dataset from 1987 to 1992 to abstract from current institutional features of the UK system, for instance rights to extend leases that could confound our results. By applying hedonic techniques to these data we provide new evidence on how the market values leasehold properties. We find that the time value of housing over the range 1-99 is similar to an exponential shape, a finding that suggests sophisticated pricing behaviour in the London residential market. Digging deeper, however, we show that leasehold prices depart from this predictable pattern in a way that is consistent with a declining discount rate schedule
    Keywords: house prices; discount rates; historical data
    JEL: G12 R30
    Date: 2014–12
  16. By: Juan Carlos Espinoza Garcia (ESSEC Business School - Essec Business School); Laurent Alfandari (ESSEC Business School - Essec Business School)
    Abstract: We consider the issue of choosing a subset of locations to construct new housing developments maximizing the satisfaction of potential buyers. The allocation of demands to the selected locations is modeled by a choice model, based on the distance to the location, real-estate prices and incomes. We study two robust counterparts of the optimal location problem, where uncertainty lies on demand volumes for the rst one, and on customer preferences for the second one. In both cases, the parameters subject to uncertainty appear both in the objective function and constraints. The second robust model combines a scenario-based approach with nominal, price-centric and distance-centric scenarios on customers preferences, and an uncertainty budget approach that limits the number of cities that can deviate from the nominal scenario. Computational experiments are conducted on instances of the Paris region to analyze the tractability of the problem and its robust counterparts, and derive insights for the new housing development issue.
    Keywords: Housing,Robust Optimization, Multinomial Logit Choice Models, Facility Location
    Date: 2015–10–26
  17. By: Olympia Bover (Banco de España)
    Abstract: I analyse new data on subjective probabilistic expectations on house prices collected in the Spanish Survey of Household Finances. Households are asked to distribute ten points among five different scenarios for the change in the price of their homes over the next 12 months. This paper is the first empirical study to document the beliefs of a representative sample of households about the future value of their homes. It also reviews the methodology of expectation measurement and recent work on household subjective probabilities. I model individual subjective probability densities using splines, construct quantiles from those densities, and analyse how the heterogeneity in the individual distributions relates to differences in housing and household characteristics. An important result of the paper is that women are more optimistic about the evolution of house prices than men. Location at the postal code level accounts for a large fraction of the variation in the subjective distributions across households. Finally, I provide some results on how subjective expectations matter for predicting spending behaviour. Housing investment and car purchases are negatively associated with pessimistic expectations about future house price changes and with uncertainty about those expectations.
    Keywords: household subjective probabilistic expectations, house price expectations, gender bias, consumption, portfolio decisions
    JEL: C81 D84 D12 D14 R21
    Date: 2015–11
  18. By: Daniela, Antonescu
    Abstract: Within theoretical economic approaches, the convergence concept generated a great scientific literature elaborated at international , national and regional level . Also, the numerous studies from another field (economy , geography , history , sociology , and political science ) have an important impact of answers regarding the origin, evolution emergence, persistence, deepening, and more noticeable spatial inequalities in the field of incomes and standard living. The issues regarding convergence and dynamics of spatial distribution have an important role in the present economic literature, even though the approach of these topics remains still insufficiently explored and analysed. The regional convergence (along with nominal and institutional convergence) presents a special interest, considering the important gap between the new and old regions of EU Member-States. In this paper we limit approaching the field to main theoretical aspects regarding to regional convergence.
    Keywords: regional convergence
    JEL: C1 C10 R50
    Date: 2014–11–01
  19. By: Chatterjee, Satyajit (Federal Reserve Bank of Philadelphia); Eyigungor, Burcu (Federal Reserve Bank of Philadelphia)
    Abstract: An analytically tractable city model with external increasing returns is presented. The equilibrium city structure is either monocentric or decentralized. Regardless of which structure prevails, intracity variation in endogenous variables displays exponential decay from the city center, where the decay rates depend only on parameters. Given population, the equilibrium of the model is generically unique. Tractability permits explicit expressions for when a central business district (CBD) will emerge in equilibrium, how external increasing returns affect the steepness of downtown rent gradients, and how wages and welfare vary with population. An application to urban growth boundary is presented.
    Keywords: Agglomeration economies; Central business district; Rent gradient; Urban growth
    JEL: R30 Z10
    Date: 2015–10–17
  20. By: Frank Ethridge; Maryann Feldman; Tom Kemeny; Ted Zoller
    Abstract: The idea that local social capital yields economic benefits is fundamental to theories of agglomeration, and central to claims about the virtues of cities. However, this claim has not been evaluated using methods that permit more confident statements about causality. This paper examines what happens to firms that become affiliated with a highly-connected local individual or “dealmaker.” We adopt a quasi-experimental approach, combining difference-in-differences and propensity score matching to address selection and identification challenges. The results indicate that firms who link to highly-connected local dealmakers are rewarded with substantial gains in employment and sales when compared to a control group.
    Keywords: cities; economic development; social networks; social capital
    JEL: L14 O12 O18 R11
    Date: 2015–01
  21. By: Michael P. Cameron (University of Waikato); William Cochrane (University of Waikato)
    Abstract: Local government planners, property developers, large businesses and other stakeholders typically require good quality projections of the spatial distribution of the future population at the small-area level. Many approaches are available to project future populations, but all suffer from limitations due to their strict underlying assumptions or limited availability of data. In this paper we apply a novel approach to small-area population projection that combines cohort-component projections at the district level with grid-based land use projections at a fine (four-hectare) geographical scale. In our approach, residential population is directly estimated in the land use model, while a separate statistical model is used to link non-residential population to non-residential land use (by type). The model can then be used to project future small-area populations using projections of future land use from the land use model. We compare four data and model specifications for the statistical modelling, using either absolute land use area or principal components as explanatory variables, and using either OLS or Spatial Durbin model specifications. All four model combinations perform reasonably well for the Waikato Region of New Zealand, with good in-sample (2006) and out-of-sample (2013) properties. However, a naïve model based on constant shares of growth outperforms all four of our models in terms of forecast accuracy and bias. Notwithstanding the underperformance relative to a naïve model, our results suggest that land use modelling may still be useful, because the model is understandable by local authority planners and elected officials, and generates greater stakeholder ‘buy-in’ than black-box or naïve approaches.
    Keywords: population projections; small-area projections; forecasting; land use
    JEL: C53 J11 Q56 R23 R52
    Date: 2015–11–30
  22. By: Olivier Schöni
    Abstract: Hedonic price indices are currently considered to be the state-of-the-art approach to computing constant-quality price indices. In particular, hedonic price indices based on imputed prices have become popular both among practitioners and researchers to analyze price changes at an aggregate level. Although widely employed, little research has been conducted to investigate their asymptotic properties and the influence of the econometric model on the parameters estimated by these price indices. The present paper therefore tries to fill the actual knowledge gap by analyzing the asymptotic properties of the most commonly used imputed hedonic price indices in the case of linear and linearizable models. The obtained results are used to gauge the impact of bias adjusted predictions on hedonic imputed indices in the case of log-linear hedonic functions with normal distributed errors.
    Keywords: price indices; hedonic regression; imputation; asymptotic theory
    JEL: C21 C41 C53
    Date: 2014–10
  23. By: Dang, Rui
    Abstract: This paper is the first to estimate the causal effect of local human capital stock on individual adiposity and adds to the existing literature on estimating human capital externalities at the neighborhood level. We explore the possible causal pathways that college-educated neighbors exert on individual body weight, with the results revealing small yet significant human capital spillover effects. Among all adults, a percentage point increase in the neighborhood college graduates share results in a decrease of individual body mass index by 0.0026 log points, as well as a decrease of the individual likelihood of being overweight by 0.77 percentage points. Among high school graduates and college graduates, a percentage point increase in the neighborhood college graduates share results in a decrease of individual likelihood of being overweight by approximately 0.83 percentage points.
    Abstract: Diese Studie bewertet zunächst die kausalen Auswirkungen von lokalem Bildungskapital auf individuelle Adipositas-Fälle und ergänzt die bestehende Literatur über die Auswirkungen des geschätzten Bildungskapitals auf Nachbarschaftsebene. Wir untersuchen die möglichen kausalen Zusammenhänge, dass Nachbarn mit Hochschulbildung Einfluss auf das individuelle Körpergewicht haben, mit dem Ergebnis kleiner, jedoch signifikanter Auswirkungen auf das Bildungskapital. Unter sämtlichen Erwachsenen teilt der Anstieg von einem Prozentpunkt unter Hochschulabsolventen in der Nachbarschaft die Ergebnisse mit der Abnahme des individuellen Body-Mass-Index in Höhe von 0.0026 Protokollpunkten, ebenso wie eine Abnahme der individuellen Wahrscheinlichkeit von Übergewicht in Höhe von 0.77 Prozentpunkten. Unter den Abiturienten und Hochschulabsolventen teilt der Anstieg von einem Prozentpunkt unter Hochschulabsolventen in der Nachbarschaft die Ergebnisse mit der individuellen Wahrscheinlichkeit zur Übergewichtigkeit in Höhe von 0.83 Prozentpunkten.
    Keywords: obesity,local human capital externalities,control function,non-random sorting
    JEL: I00 R23
    Date: 2015
  24. By: Kwok Tong Soo
    Abstract: This paper examines the distribution of patenting activity across cities in the OECD, using a sample of 218 cities from 2000 to 2008. We obtain three main results. First, patenting activity is more concentrated than population and GDP. Second, patenting activity is less persistent than population and GDP. Third, patenting exhibits mean-reversion, and is positively associated with GDP, the fragmentation of local government, and population density. Our results suggest that policymakers can influence the amount of innovative activity through the use of appropriate policies.
    Keywords: Patents, Zipf’s Law, transition probability, dynamic panel data
    JEL: R1 O3
    Date: 2015
  25. By: Gabriel M. Ahlfeldt; Arne Feddersen
    Abstract: We analyze the economic impact of the German high-speed rail (HSR) connecting Cologne and Frankfurt, which provides plausibly exogenous variation in access to surrounding economic mass. We find a causal effect of about 8.5% on average of the HSR on the GDP of three counties with intermediate stops. We make further use of the variation in bilateral transport costs between all counties in our study area induced by the HSR to identify the strength and spatial scope of agglomeration forces. Our most careful estimate points to an elasticity of output with respect to market potential of 12.5%. The strength of the spillover declines by 50% ever 30 minutes of travel time, diminishing to 1% after about 200 minutes. Our results further imply an elasticity of per-worker output with respect to economic density of 3.8%, although the effects seem driven by worker and firm selection.
    Keywords: accessibility; agglomeration; high-speed rail; market potential; transport policy
    JEL: R12 R38 R48
    Date: 2015–03
  26. By: Ryan A. Decker; John Haltiwanger; Ron S. Jarmin; Javier Miranda
    Abstract: The pace of business dynamism and entrepreneurship in the U.S. has declined over recent decades. We show that the character of that decline changed around 2000. Since 2000 the decline in dynamism and entrepreneurship has been accompanied by a decline in high-growth young firms. Prior research has shown that the sustained contribution of business startups to job creation stems from a relatively small fraction of high-growth young firms. The presence of these high-growth young firms contributes to a highly (positively) skewed firm growth rate distribution. In 1999, a firm at the 90th percentile of the employment growth rate distribution grew about 31 percent faster than the median firm. Moreover, the 90-50 differential was 16 percent larger than the 50-10 differential reflecting the positive skewness of the employment growth rate distribution. We show that the shape of the firm employment growth distribution changes substantially in the post-2000 period. By 2007, the 90-50 differential was only 4 percent larger than the 50-10, and it continued to exhibit a trend decline through 2011. The reflects a sharp drop in the 90th percentile of the growth rate distribution accounted for by the declining share of young firms and the declining propensity for young firms to be high-growth firms.
    Date: 2015–11
  27. By: Gabriele Foà; Leonardo Gambacorta; Luigi Guiso; Paolo Emilio Mistrulli
    Abstract: We propose a new, data-based test for the presence of biased financial advice when households choose between fixed and adjustable rate mortgages. If households are wary, the relative cost of the two types should be a sufficient statistic for a household contract choice: the attributes of the bank that makes the loan should play no role. If households rely on banks' advice to guide their choice, banks may be tempted to bias their counsel to their own advantage. In this case bank-specific supply characteristics will play a role in the household's choice above any role they play through relative prices. Testing this hypothesis on a sample of 1.6 million mortgages originated in Italy between 2004 and 2010, we find that the choice between adjustable and fixed rates is significantly affected by change in banks' supply factors, especially in periods during which banks do not change the relative price of the two mortgage types. This supports the view that banks are able to affect customers' mortgage choices not only by pricing but also through an advice channel.
    Keywords: Mortgage choice, financial advice, household finance
    Date: 2015–12
  28. By: Alexia Gaudeul (Department of Economics, Georg-August-Universität Göttingen); Caterina Giannetti (Jena Graduate School Human Behaviour in Social and Economic Change)
    Abstract: We study in the laboratory the impact of private information revelation on the selection of partners when forming individual networks. Our experiment combines a "network game" and a "public-good game". In the network game, individuals decide with whom to form a link with, while in the public-good game they decide whether or not to contribute. The variations in our treatments allow us to identify the effect of revealing one's name on the probability of link formation. Our main result suggests that privacy mechanisms affect partner selection and the consequent structure of the network: when individuals reveal their real name, their individual networks are smaller but their profits are higher. This indicates that the privacy costs of revealing personal information are compensated by more productive links.
    Keywords: privacy, social networks, public goods, trust
    JEL: D12 D85
    Date: 2015–12–01
  29. By: Ding, Lei (Federal Reserve Bank of Philadelphia); Hwang, Jackelyn (Princeton University); Divringi, Eileen (Federal Reserve Bank of Philadelphia)
    Abstract: Gentrification has provoked considerable debate and controversy about its effects on neighborhoods and the people residing in them. This paper draws on a unique large-scale consumer credit database to examine the mobility patterns of residents in gentrifying neighborhoods in the city of Philadelphia from 2002 to 2014. We find significant heterogeneity in the effects of gentrification across neighborhoods and subpopulations. Residents in gentrifying neighborhoods have slightly higher mobility rates than those in nongentrifying neighborhoods, but they do not have a higher risk of moving to a lower-income neighborhood. Moreover, gentrification is associated with some positive changes in residents’ financial health as measured by individuals’ credit scores. However, when more vulnerable residents (low-score, longer-term residents, or residents without mortgages) move from gentrifying neighborhoods, they are more likely to move to lower-income neighborhoods and neighborhoods with lower values on quality-of-life indicators. The results reveal the nuances of mobility in gentrifying neighborhoods and demonstrate how the positive and negative consequences of gentrification are unevenly distributed.
    Keywords: Gentrification; Residential mobility; Credit scores; Displacement
    JEL: D14 J11 J6 R23
    Date: 2015–10–15
  30. By: Slawa Rokicki; Gary Adamkiewicz; Shona Fang; Nancy Rigotti; Jonathan Winickoff; Douglas Levy
    Abstract: In 2012, the Boston Housing Authority (BHA) in Massachusetts implemented a smoke-free policy prohibiting smoking within its residences. We sought to characterize BHA resident experiences before and after the smoke-free policy implementation, and compare them to that of nearby residents of the Cambridge Housing Authority (CHA), which had no such policy. We recruited a convenience sample of nonsmoking residents from the BHA and CHA. We measured residents’ awareness and support of their local smoking policies before and 9-12 months after the BHA’s policy implementation, as well as BHA respondents’ attitudes towards the smoke-free policy. We assessed tobacco smoke exposure (TSE) via saliva cotinine, airborne apartment nicotine, and self-reported number of days smelling smoke in the home. We evaluated predictors of general satisfaction at follow-up using linear regression. At follow-up, 91% of BHA respondents knew that smoking was not allowed in apartments and 82% were supportive of such a policy in their building. BHA residents believed enforcement of the smoke-free policy was low. Fifty-one percent of BHA respondents indicated that other residents “never” or “rarely” followed the new smoke-free rule and 41% of respondents were dissatisfied with policy enforcement. Dissatisfaction with enforcement was the strongest predictor of general housing satisfaction, while objective and self-reported measures of TSE were not predictive of satisfaction. At follow-up, 24% of BHA participants had complained to someone in charge about policy violations. Resident support for smoke-free policies is high. However, lack of enforcement of smoke-free policies may cause frustration and resentment among residents, potentially leading to a decrease in housing satisfaction. Smoke-free housing laws are becoming increasingly prevalent, yet little is known about satisfaction and compliance with such policies post-implementation. We evaluated non-smoking residents’ attitudes about smoke-free rules and their satisfaction with enforcement one year after the Boston Housing Authority implemented its comprehensive smoke-free policy. We found that while residents were supportive of the policy, they believed enforcement was low, a perception that was associated with a drop in housing satisfaction. Our findings point to a desire for smoke-free housing among public housing residents, and the importance of establishing systems and guidelines to help landlords monitor and enforce these policies effectively.
    Keywords: Smoking, Public Housing, Policy Evaluation, Smoke-free Policy, Biomarkers
    JEL: I10
    Date: 2015–12
  31. By: Adonis Antoniades
    Abstract: The primary driver of commercial bank failures during the Great Recession was exposure to the real estate sector, not aggregate funding strains. The main "toxic" exposure was credit to non-household real estate borrowers, not traditional home mortgages or agency MBS. Private-label MBS contributed to the failure of large banks only. Failed banks skewed their portfolios towards product categories that performed poorly on aggregate. In addition, within each product category they held assets of lower quality than those held by survivor banks.
    Keywords: bank failures, Great Recession, real estate, mortgage-backed securities, credit lines, credit growth
    Date: 2015–11
  32. By: Miguel Cárdenas Rodríguez; Laura Dupont-Courtade; Walid Oueslati
    Abstract: This paper investigates the relationship between local air pollution and urban structure with an emphasis on urban fragmentation. Using a unique dataset of 249 Large Urban Zones (LUZ) across Europe, a Bayesian Model Averaging selection method is employed to empirically identify the determinants of within-LUZ concentration of three air pollutants: NO2, PM10 and SO2 for the year 2006. Several indices of land use are considered among possible determinants. These are supplemented by a dataset on various economic, demographic and meteorological variables that can explain the variation of air pollution. The results of this econometric analysis support the hypothesis that urban structure has significant effects on pollution concentration. In particular, they suggest that fragmented urban areas experience higher concentrations of NO2 and PM10 and that densely populated urban areas suffer from higher SO2 concentration. The findings suggest that policies favouring continuous urban areas may result in environmental improvements.<BR>Ce rapport s’intéresse à la relation entre la pollution atmosphérique locale et la structure des villes en s’attachant plus particulièrement à la fragmentation urbaine. On applique une méthode d'analyse bayésienne des modèles pour identifier, à partir d’un ensemble de données unique couvrant 249 zones urbaines élargies (LUZ) d’Europe, les facteurs qui déterminent les concentrations de trois polluants atmosphériques (NO2, PM10 et SO2) dans ces zones, pour l’année 2006. Plusieurs indices d’occupation des sols figurent parmi les possibles déterminants. Ils sont complétés par un ensemble de données sur différentes variables économiques, démographiques et météorologiques qui pourraient expliquer les variations de la pollution atmosphérique. Les résultats de cette analyse économétrique confirment l’hypothèse selon laquelle la structure du tissu urbain a des effets importants sur les concentrations de polluants. En particulier, les résultats indiquent des concentrations plus élevées de NO2 et de PM10 dans les espaces urbains fragmentés et des concentrations plus élevées de SO2 dans les zones urbaines densément peuplées. Ces résultats donnent à penser que la mise en oeuvre de politiques favorisant la continuité de l’espace urbain pourrait être bénéfique pour l’environnement.
    Keywords: air pollution, Bayesian model averaging, fragmentation, urban sprawl, étalement urbain, pollution atmosphérique
    JEL: Q52 Q58 R52
    Date: 2015–12–03
  33. By: Antonia Grohmann; Sahra Sakha
    Abstract: This paper investigates the impact of peer observation on the consumption decisions of rural households in Thailand using a lab-in-the-field experiment. We find that those groups that observe each other show lower within group standard deviation in their decisions. Thus, we find evidence for conformity. Further, we find that individual's consumption choice is influenced by the group choice controlling for large number of individual, household, and village characteristics. We find that unfamiliarity of the product is counteracted by peer effects. Finally, we find evidence of treatment heterogeneity with regards to cognitive ability and village size.
    Keywords: Consumption, Peer Effects, Conformity
    JEL: D12 C21 C92
    Date: 2015
  34. By: Beck, Ulrik; Bjerge, Benedikte; Fafchamps, Marcel
    Abstract: We introduce a novel way of testing whether social and geographical proximity helps or hinders efficiency-enhancing factor transfers. The approach is implemented empirically using unusually rich data collected in The Gambia. We find that membership to the same ethnic group or kinship network is associated with fewer efficient transfers. This is primarily driven by land transfers from a few large land-owners. If the presence of large landowners is controlled for, the finding is reversed. There are more efficiency-enhancing land transfers between kin-related households and between neighbors. Labor transfers are not found to equilibrate factor ratios across households. But we do not rule out that they serve a beneficial role, e.g., to deal with unanticipated health shocks. Allocative efficiency in land and labor is not achieved at the village level, which suggests that social ties are not sufficiently fluid to permit a fully efficient reallocation of factors of production within villages.
    Keywords: allocative efficiency; factor markets; land markets; social networks
    JEL: C21 D85 O12
    Date: 2015–11
  35. By: Gabriele Foà (Yale University); Leonardo Gambacorta (Bank for International Settlements); Luigi Guiso (Einaudi Institute for Economics and Finance); Paolo Emilio Mistrulli (Bank of Italy)
    Abstract: We propose a new, data-based test for the presence of biased financial advice when households choose between fixed and adjustable rate mortgages. If households are wary, the relative cost of the two types should be a sufficient statistic for a household contract choice: the attributes of the bank that makes the loan should play no role. If households rely on banks' advice to guide their choice, banks may be tempted to bias their counsel to their own advantage. In this case bank-specific supply characteristics will play a role in the household's choice above any role they play through relative prices. Testing this hypothesis on a sample of 1.6 million mortgages originated in Italy between 2004 and 2010, we find that the choice between adjustable and fixed rates is significantly affected by change in banks' supply factors, especially in periods during which banks do not change the relative price of the two mortgage types. This supports the view that banks are able to affect customers' mortgage choices not only by pricing but also through an advice channel.
    Keywords: mortgage choice, financial advice, household finance
    JEL: D14 E43 G11 G12 G21
    Date: 2015–11
  36. By: Kyle Peyton (Department of Political Science, Yale University; and Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Moshe Justman (BGU)
    Date: 2015
  37. By: Giglio, Stefano W; Maggiori, Matteo; Ströbel, Johannes; Weber, Andreas
    Abstract: The optimal investment to mitigate climate change crucially depends on the discount rate used to evaluate the investment’s uncertain future benefits. The appropriate discount rate is a function of the horizon over which these benefits accrue and the riskiness of the investment. In this paper, we estimate the term structure of discount rates for an important risky asset class, real estate, up to the very long horizons relevant for investments in climate change abatement. We show that this term structure is steeply downward-sloping, reaching 2.6% at horizons beyond 100 years. We explore the implications of these new data within both a general asset pricing framework that decomposes risks and returns by horizon and a structural model calibrated to match a variety of asset classes. Our analysis demonstrates that applying average rates of return that are observed for traded assets to investments in climate change abatement is misleading. We also show that the discount rates for investments in climate change abatement that reduce aggregate risk, as in disaster-risk models, are bounded above by our estimated term structure for risky housing, and should be below 2.6% for long-run benefits. This upper bound rules out many discount rates suggested in the literature and used by policymakers. Our framework also distinguishes between the various mechanisms the environmental literature has proposed for generating downward-sloping discount rates.
    Keywords: asset pricing; climate change; cost-benefit analysis; declining discount rates; environmental economics; real estate
    JEL: G11 G12 R30
    Date: 2015–11
  38. By: Margarita Rubio
    Abstract: In this paper, I analyze the ability of monetary policy to stabilize both the macroeconomy and nancial markets under two different scenarios: fixed and variable-rate mortgages. I develop and solve a New Keynesian dynamic stochastic general equilibrium model that features a housing market and a group of constrained individuals who need housing collateral to obtain loans. A given share of constrained households borrows at a variable rate, while the rest borrows at a fixed rate. I consider two alternative ways of introducing a macroprudential approach to enhance nancial stability: one in which monetary policy, using the interest rate as an instrument, responds to credit growth; and a second one in which the macroprudential instrument is instead the loan-to-value ratio (LTV). Results show that when rates are variable, a countercyclical LTV rule performs better to stabilize financial markets than monetary policy. However, when they are fixed, even though monetary policy is less effective to stabilize the macroeconomy, it does a good job to promote financial stability.
    Keywords: Fixed/Variable-rate mortgages, monetary policy, macroprudential policy, LTV, housing market, collateral constraint
    Date: 2015
  39. By: Ghent, Andra C. (University of Wisconsin, Madison); Kudlyak, Marianna (Federal Reserve Bank of Richmond)
    Abstract: We document economically important correlations between children’s future credit outcomes and their parents’ credit risk scores, default, and the extent of credit constraints – intergenerational linkages in household credit. Using observations on siblings, we find that the linkages are due to unobserved household heterogeneity rather than parental credit conditions directly affecting children’s credit outcomes. In particular, in the sample of siblings, there is no correlation between parental and child credit attributes after controlling for household fixed effects. The linkages are stronger in cities with lower intergenerational income mobility, implying that common factors drive both. Finally, existing measures of state-level educational policy interventions appear to have limited effects on the strength of intergenerational linkages.
    Keywords: Household Finance; Intergenerational Mobility; Credit Constraints; Income Inequality
    JEL: D14 E21 G10
    Date: 2015–11–05
  40. By: Lehmann, Robert; Wohlrabe, Klaus
    Abstract: This paper applies component-wise boosting to the topic of regional economic forecasting. By using unique quarterly gross domestic product data for one German state for the period from 1996 to 2013, in combination with a large data set of 253 monthly indicators, we show how accurate forecasts obtained from component-wise boosting are compared to a simple benchmark model. We additionally take a closer look into the algorithm and evaluate whether a stable pattern of selected indicators exists over time and four different forecasting horizons. All in all, boosting is a viable method for forecasting regional GDP, especially one and two quarters ahead. We also find that regional survey results, indicators that mirror the Saxon economy and the Composite Leading Indicators by the OECD, get frequently selected by the algorithm.
    Keywords: boosting; regional economic forecasting; gross domestic product
    JEL: C53 E17 E37 R11
    Date: 2015–12–03
  41. By: Francisco J. Bahamonde-Birke
    Abstract: The interconnection among different choices by the same decision-maker is fairly well established in the literature. Along this line, this paper aims to identify how preferences for electromobility are affected by mode choices for regular trips. With this purpose in mind, a framework based on person- and alternative-specific error components (covariances) is proposed. The method aims to include individual-specific error components associated with the alternatives of a given experiment into another, and to analyze how the preference for a certain alternative in a given choice situation affects the individual’s preferences in another choice situation. The data for the analysis originates from two discrete choice experiment conducted in Austria during February 2013 (representative sample). Here, individuals were asked to state their preferences in the contexts of transport mode choice and vehicle purchase situations. The results indicate the existenceof a strong correlation between the individuals’ preferences in both experiments. This way, individuals favoring private transport also favor conventional vehicles over electric alternatives, while individuals preferring public or non-motorized modes ascribe a higher utility to electric vehicles, especially to pure battery electric vehicles.
    Keywords: Electric Vehicles, Travel Behavior, Modal Choice, Correlation, Panel Structure, Error Components
    JEL: R40 C35 C50
    Date: 2015
  42. By: Giuranno, Michele; Biswas, Rongili
    Abstract: This paper studies the relation between internal migration and public spending on public goods. We describe centralized public policy when a central government is comprised of elected representatives from local electoral districts. Internal migration determines the median voter in the districts. The median voters decide the equilibrium policy through bargaining. We find the conditions under which exogenous inter-jurisdictional migration results in larger or smaller public spending. The paper also studies whether and when inter-regional migration leads to the efficient policy outcome. We find that the efficient size of government spending depends on the way internal migration leads to convergence among the regional median incomes and the national average income.
    Date: 2015–12
  43. By: Naomi Friedman-Sokuler (BGU); Moshe Justman (BGU)
    Keywords: gender streaming, comparative advantage, gender gap in mathematics, Israel, secondary school
    JEL: I2 J24 J16
    Date: 2015
  44. By: Yoshino, Naoyuki (Asian Development Bank Institute); Pontines, Victor (Asian Development Bank Institute)
    Abstract: In this study, we examine the impact of the STAR highway located in Batangas province, Philippines, on the public finance of the cities and municipalities through which it directly passes. Specifically, we exploit a unique, disaggregated dataset on tax (property and business taxes) as well as non-tax revenues (regulatory fees and user charges) of the cities and municipalities in the Batangas province. We find, based on our two specifications of a modified difference-in-difference model, that the STAR highway had a robust, statistically significant, and economically growing impact on business taxes. We also find that this so-called “highway effect” also extends to municipalities located in a neighboring province to Batangas. Furthermore, based on more careful inspection and robustness checks, it appears that the STAR highway had a significant impact not only on business taxes, but also on property taxes and regulatory fees. These findings support the widely held belief that infrastructure investments matter; further, our micro-case study suggests that infrastructure investments can indirectly boost tax and non-tax revenues through their power to reduce transportation costs and enhance the activity of firms and workers located along the highway.
    Keywords: Infrastructure investment; public finance; STAR highway
    JEL: H54 H71 O22 R11
    Date: 2015–11–30
  45. By: Christoph Hauser; Gottfried Tappeiner; Janette Walde
    Abstract: Social trust is increasingly seen as an important determinant of economic growth and social prosperity in regions and nations. Even in a comparatively homogeneous area such as Europe, there are stark sub-national differences in levels of generalized trust. It is thus of crucial importance to identify the driving forces of regional trust and analyze the dynamics of its formation. The present paper considers these issues based on three waves of the European Values Study. Evidence is provided to demonstrate that values of regional trust remain substantially stable over an approx. 20-year period and are modified only through spatially correlated random noise processes. This finding is consistent with additional analyses identifying slow-moving factors that are responsible for the spatial distribution of trust scores and are buried deep in the cultural background of a society. Hence, in spite of its economic significance, social trust does not appear to be amenable to political intervention in the short to medium term.
    Keywords: social capital, European regions, spatial econometrics
    JEL: C21 R10 Z13
    Date: 2015–11
  46. By: Giuseppe Albanese (Banca d'Italia); Federico Antellini Russo (Luiss “Guido Carli”); Roberto Zampino (Consip)
    Abstract: The paper analyzes the link between the centralized purchasing of goods and services by municipalities and the context in which these administrations operate. While taking into account a number of factors that can lead to a greater or lesser use of Consip, the work focuses on the link between that choice and the local crime rate. The empirical analysis shows that, in low-crime areas only, an increase in crime is positively correlated with the frequency with which municipalities entrust vendor selection to a third party in order to attempt to limit the risk of inefficiency (passive waste) that would otherwise arise. The relationship is the inverse in high-crime areas, suggesting a growing willingness by municipalities to maintain autonomous control over purchasing, which may be linked to the possibility of extracting some of the rents produced from this activity (active waste).
    Keywords: crime, fraud and corruption, efficiency, public procurement, local finance
    JEL: D73 E24 H57 H72 H83
    Date: 2015–09
  47. By: La Ferrara, Eliana
    Abstract: This paper explores the potential use of entertainment media programs for achieving development goals. I propose a simple framework for interpreting media effects that hinges on three channels: (i) information provision, (ii) role modeling and preference change, and (iii) time use. I then review the existing evidence on how exposure to commercial television and radio affects outcomes such as fertility preferences, gender norms, education, migration and social capital. I complement these individual country studies with cross-country evidence from Africa and with a more in-depth analysis for Nigeria, using the Demographic Health Surveys. I then consider the potential educational role of entertainment media, starting with a discussion of the psychological underpinnings and then reviewing recent rigorous evaluations of edutainment programs. I conclude by highlighting open questions and avenues for future research.
    Keywords: edutainment; soap operas; television
    JEL: J13 O12
    Date: 2015–11
  48. By: Matthias Siller; Christoph Hauser; Janette Walde; Gottfried Tappeiner
    Abstract: In both academic literature and political discussions the concept of innovation is recognized as an essential ingredient in economic development and competitiveness for firms, regions, and nations. Innovation also ranks at the top of policy agendas in the field of regional policy. Therefore, the attractiveness of an appropriate innovation index for ranking regions and further developing them along a more or less objective measurement scale is evident. However, whether such rankings help convey a better understanding of innovation and its drivers, or whether they are merely a special type of ‘beauty contest’ with little substance is the focus of our analyses. To deny the latter, the innovation output indicators used for the composite index have to be appropriate representatives of the underlying innovation concept and each indicator has to be driven by the same impact factors. If this is not the case, interpretation of the index inevitably gives rise to partly inappropriate policy recommendations. In order to demonstrate this claim we elaborate a set of innovation indicators at the regional level based on the theoretical concept of the OECD document ‘The Measurement of Scientific and Technological Activities, Proposed Guidelines for Collecting and Interpreting Technological Innovation Data’ known as the ‘Oslo Manual’ (OECD, 2005) and their empirical implementation in the Community Innovation Survey. Additionally, innovation drivers well established in the literature are collected to estimate their impact on each innovation indicator as well as on the composite index derived from the innovation indicators. The question whether innovation should be measured as a multidimensional concept and investigated using various indicators or whether simplifying innovation to a one-dimensional concept is appropriate is clearly answered in favor of the multidimensional approach. Surprisingly, this is not due to the multidimensionality of the indicators themselves (all statistical measures indicate that the considered variables are sufficiently represented by one component), but to our first evidence that the innovation output indicators are driven by various impact factors and can therefore be influenced by various political strategies. According to these findings any type of innovation ranking is of very limited use.
    Keywords: Regional innovation, Innovation dimensions, Patent applications, Community Innovation Survey
    JEL: R11 O31 O33
    Date: 2015–11
  49. By: Lucia Rizzica (Bank of Italy); Marco Tonello (Bank of Italy)
    Abstract: We analyse the impact of exposure to corruption news on individuals’ perceptions about the extent of the phenomenon. To this purpose, we take information on individuals’ perceptions of the likelihood that corruption events may occur in everyday life and combine it with a dataset containing the number of news items related to corruption that appeared on the homepages of the websites of the 30 most widely read national and local newspapers on the day on which the individual was interviewed. Results show that increasing potential exposure to corruption news by one standard deviation causes an increase in corruption perception of about 3.5 per cent and a decrease in trust in justice effectiveness of about 5.2 per cent. We suggest that these effects are mainly driven by a persuasive mechanism rather than by a learning process so that individuals’ perceptions about corruption appear to be biased by media content.
    Keywords: corruption perceptions, media, newspapers
    JEL: D84 K42 K49
    Date: 2015–11
  50. By: Bertoli, Simone (CERDI, University of Auvergne); Dequiedt, Vianney (CERDI, University of Auvergne); Zenou, Yves (Stockholm University)
    Abstract: Destination countries can adopt selective immigration policies to improve migrants' quality. Screening potential migrants on the basis of observable characteristics also influences their self-selection on unobservables. We propose a model that analyzes the effects of selective immigration policies on migrants' quality, measured by their wages at destination. We show that the prevailing pattern of selection on unobservables influences the effect of an increase in selectivity, which can reduce migrants' quality when migrants are positively self-selected on unobservables. We also demonstrate that, in this case, the quality-maximizing share of educated migrants declines with the scale of migration.
    Keywords: migrants' quality, self-selection, selective policies
    JEL: F22 J61
    Date: 2015–11
  51. By: Mathias Czaika (International Migration Institute); Christopher R Parsons (Business School, The University of Western Australia)
    Abstract: Despite the almost ubiquitously held belief among policy makers that immigration policies aimed at attracting high-skilled workers meet their desired aims, academics continue to debate their efficacy. This paper presents a comprehensive assessment on the effectiveness of such policies. We combine a unique new data set of annual bilateral high-skilled immigration labour flows for 10 OECD destinations between 2000 and 2012, with new databases comprising both unilateral and bilateral policy instruments, to examine which types, and combinations, of policies are most effective in attracting and selecting high skilled workers using a micro-founded gravity framework. Points-based systems are much more effective in attracting and selecting high-skilled migrants in comparison with requiring a job offer, labour market tests or working in shortage listed occupations. Financial incentives yield better outcomes in ‘demand-driven’ systems than when combined with points-based systems however. Offers of permanent residency, while attracting the highly skilled, overall reduce the human capital content of labour flows since they prove more attractive to non-high skill workers. Bilateral recognition of diploma and social security agreements, foster greater flows of high skilled workers and improve the skill selectivity of immigrant flows. Conversely, double taxation agreements deter high skilled migrants, although they do not alter the overall skill selectivity. Higher skilled wages increase the number and skill selectivity of labour flows, whereas higher levels of unemployment exert the opposite effects. Migrant networks, contiguous borders, common language and freedom of movement, while encouraging greater numbers of high skilled workers, exert greater effects on non-high skilled workers, thereby reducing the skill content of labour flows. Greater geographic distances however, while deterring both types of workers, affect the high skilled less, thereby improving the selection on skills. Our results are robust to a variety of empirical specifications, accounting for destination specific amenities, multilateral resistance to migration and the endogeneity of immigration policies.
    Date: 2015
  52. By: Psofogiorgos, Nikolaos - Alexandros; Metaxas, Theodore
    Abstract: The subject of this study is to determine the competitiveness through an interdisciplinary approach of the theories of the new economic geography and regional economy. This article describes in detail the theory of competitiveness, which is defined differently by many authors, with particular emphasis on opposing views of Michael Porter and Paul Krugman. One of the first writers who stressed the importance of the geographical position was Michael Porter. In his model, the author emphasizes that the geographical concentration of firms enhances productivity, innovation and export sector. Following this theory, many authors have focused on the research of the "location problem ", which led to better connection of economics and geography. The result of these activities is the new guidelines that have been developed, such as the new theory of economic geography and regional economy. The new economic geography is mainly related to the Nobel prized, Paul Krugman, whose theories often conflict with those of Porter. This study initially sets out the views of both authors, in terms of competitiveness and then attempts to make a comparative analysis between the theories they developed.
    Keywords: Michael Porter, Paul Krugman, Regional Competitiveness
    JEL: R11 R19 R38
    Date: 2015–12
  53. By: Alper Kara (Loughborough University); David Marques-Ibanez (Board of Governors of the Federal Reserve System; Bangor University); Steven Ongena (University of Zrich)
    Abstract: Banks are usually better informed on the loans they originate than other financial intermediaries. As a result, securitized loans might be of lower credit quality than otherwise similar non- securitized loans. We assess the effect of securitization activity on credit quality employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that, at issuance, banks do not select and securitize loans of lower credit quality. Following securitization, however, the credit quality of borrowers whose loans are securitized deteriorates by more than those in the control group. We find tentative evidence suggesting that poorer performance by securitized loans might be linked to banks reduced monitoring incentives.
    Keywords: Securitization; syndicated loans; credit risk
    JEL: G21 G28
    Date: 2015–11
  54. By: Rebecca Kleinman; Matthew Kehn; Allison Wishon Siegwarth; Jonathan Brown
    Abstract: This Issue Brief describes the strategies used by four states—Louisiana, Massachusetts, Tennessee, and Illinois—to improve the link between Medicaid and housing services for adult Medicaid beneficiaries with behavioral health conditions.
    Keywords: Medicaid services, state strategies, housing, behavioral health
    JEL: I
    Date: 2015–04–30
  55. By: Clément Bosquet; Pierre-Philippe Combes (Université de Cergy-Pontoise, THEMA)
    Abstract: We study how departments' characteristics impact academics' quantity and quality of publications in economics. Individual time-varying characteristics and individual fixed-effects are controlled for. Departments' characteristics have an explanatory power at least equal to a fourth of that of individual characteristics and possibly as high as theirs. An academic's quantity and quality of publications in a field increase with the presence of other academics specialised in that field and with the share of the field's output in the department. By contrast, department's size, proximity to other large departments, homogeneity in terms of publication performance, presence of colleagues with connections abroad, and composition in terms of positions and age matter at least for some publication measures but only when individual fixed effects are not controlled for. This suggests a role for individual positive sorting where these characteristics only attract more able academics. A residual negative sorting between individuals' and departments' unobserved characteristics is simultaneously exhibited.
    Keywords: Research productivity, Local externalities, Skills sorting, Peer effects, Co-author networks, Economics of science.
    JEL: R23 J24 I23
    Date: 2015

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