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

  1. Privately Managed Public Secondary Schools and Academic Achievement in Trinidad and Tobago: Evidence from Rule-Based Student Assignments By Diether Beuermann; C. Kirabo Jackson; Ricardo Sierra
  2. What makes cities more productive? Agglomeration economies and the role of urban governance: evidence from 5 OECD countries By Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke
  3. Government quality and the economic returns of transport infrastructure investment in European regions. By Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
  4. Spillovers from immigrant diversity in cities By Thomas Kemeny; Abigail Cooke
  5. Parking Taxes as a Second Best Congestion Pricing Mechanism By Riley Wilson; Sebastián J. Miller
  6. Agglomeration, Urban Growth and Infrastructure in Global Climate Policy: A Dynamic CGE Approach By Fabio Grazi; Henri Waisman
  7. Is internal migration slowing? An analysis of four decades of NHSCR records for England and Wales By Tony Champion; Ian Shuttleworth
  8. Big plant closures and agglomeration economies By Jordi Jofre-Monseny; Maria Sánchez-Vidal; Elisabet Viladecans-Marsal
  9. Spillover Effects of Local Human Capital Stock on Adult Obesity: Evidence from German Neighborhoods By Rui Dang
  10. The effects of higher teacher pay on teacher retention By Sander Gerritsen; Sonny Kuijpers; Marc van der Steeg
  11. Optimal Taxation under Regional Inequality By Kessing, Sebastian G.; Lipatov, Vilen; Zoubek, J. Malte
  12. Transboundary Capital and Pollution Flows and the Emergence of Regional Inequalities By Simon Levin; A. Xepapadeas
  13. On The Origins of Gender Human Capital Gaps: Short and Long Term Consequences of Teachers Stereotypical Biases By Lavy, Victor; Sand, Edith
  14. Are people moving home less? An analysis of address changing in England and Wales, 1971-2011, using the ONS longitudinal study By Tony Champion; Ian Shuttleworth
  15. Private rental-led gentrification in England: displacement, commodification and dispossession By PACCOUD Antoine
  16. From barrier to resource? Modelling the border effects on metropolitan functions in Europe By SOHN Christophe; LICHERON Julien
  17. Early Childhood Education By Sneha Elango; Jorge Luis Garcia; James J. Heckman; Andres Hojman
  18. Theoretical and Practical Approaches of Innovation at Regional Level By Antonescu, Daniela
  19. Oil price shocks, road transport pollution emissions and residents' health losses in China By Sheng Yang; Ling-Yun He
  20. The network structure of city-firm relations By Antonios Garas; Celine Rozenblat; Frank Schweitzer
  21. Municipal Waste Collection: Market Competition and the EU Policy By Carlo Reggiani; Francesco Silvestri
  22. Tax Incentives and Job Creation in the Tourism Industry of Brazil By Grégoire Garsous; David Corderi; Mercedes Velasco
  23. The Effect of the Spanish Reconquest on Iberian Cities By David Cuberes; Rafael González-Val
  24. Modelling mode choice within couples By Nathalie Picard; Sophie Dantan; André De Palma
  25. Who do you blame in local finance? An analysis of municipal financing in Italy By Massimo Bordignon; Veronica Grembi; Santino Piazza
  26. The vertical city: the price of land and the height of buildings in Chicago 1870-2010 By Gabriel M. Ahlfeldt; Daniel P. McMillen
  27. Constitutions and Social Networks By Ana Mauleon; Nils Roehl; Vincent Vannetelbosch

  1. By: Diether Beuermann; C. Kirabo Jackson; Ricardo Sierra
    Abstract: Many nations allow private entities to manage publicly funded schools and grant them greater flexibility than traditional public schools. However, isolating the causal effect of attending these privately managed public schools relative to attending traditional public schools is difficult because students who attend privately managed schools may differ in unobservable ways from those who do not. This paper estimates the causal effect on academic outcomes in Trinidad and Tobago as a result of attending privately managed public secondary schools (assisted schools) relative to traditional public secondary schools. In Trinidad and Tobago, students are assigned to secondary schools based on an algorithm that created exogenous variation in school attendance, allowing us to remove self-selection bias. Despite large differences in teacher quality and peer quality across these school types, we find little evidence of any relative benefit in attending an assisted school between the ages of 10 and 15 in terms of dropout rates or examination performance at age 15.
    Keywords: Educational Assessment, Privately-Managed Public Secondary Schools, Academic achievement, Rule-Based Student Assignments
    Date: 2015–11
  2. By: Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke
    Abstract: This paper estimates agglomeration benefits across five OECD countries, and represents the first empirical analysis that combines evidence on agglomeration benefits and the productivity impact of metropolitan governance structures, while taking into account the potential sorting of individuals across cities. The comparability of results in a multi-country setting is supported through the use of a new internationally-harmonised definition of cities based on economic linkages rather than administrative boundaries. In line with the literature, the analysis confirms that city productivity increases with city size but finds that cities with fragmented governance structures tend to have lower levels of productivity. This effect is mitigated by the existence of a metropolitan governance body.
    Keywords: cities; productivity; governance; agglomeration economies
    JEL: H23 R12 R23 R50
    Date: 2015–07
  3. By: Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose
    Abstract: Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, in the case of Europe the relevant literature is increasingly failing to find a clear link between infrastructure investment and economic performance. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in EU regions during the period between 1995 and 2009. The results unveil a strong influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investments in motorways – the preferred option by local governments – yield significantly lower returns than the more humble but possibly more efficient secondary road. Government institutions also affect the returns of transport maintenance investment.
    Keywords: Transport infrastructure, Public capital investment, Economic growth, Institutions, Government quality, Regions, Europe.
    JEL: O43 R11 R40 R58
    Date: 2015–12
  4. By: Thomas Kemeny; Abigail Cooke
    Abstract: Using comprehensive longitudinal matched employer-employee data for the U.S., this paper provides new evidence on the relationship between productivity and immigration-spawned urban diversity. Existing empirical work has uncovered a robust positive correlation between productivity and immigrant diversity, supporting theory suggesting that diversity acts as a local public good that makes workers more productive by enlarging the pool of knowledge available to them, as well as by fostering opportunities for them to recombine ideas to generate novelty. This paper makes several empirical and conceptual contributions. First, it improves on existing empirical work by addressing various sources of potential bias, especially from unobserved heterogeneity among individuals, work establishments, and cities. Second, it augments identification by using longitudinal data that permits examination of how diversity and productivity co-move. Third, the paper seeks to reveal whether diversity acts upon productivity chiefly at the scale of the city or the workplace. Findings confirm that urban immigrant diversity produces positive and nontrivial spillovers for U.S. workers. This social return represents a distinct channel through which immigration generates broad-based economic benefits.
    Keywords: immigrants; diversity; productivity; spillovers; cities
    JEL: F22 J61 O18 O4
    Date: 2015–06
  5. By: Riley Wilson; Sebastián J. Miller
    Abstract: Growing vehicle use and congestion externalities have led many to consider alternative congestion pricing mechanisms, as road pricing often has high infrastructural costs and faces public opposition. This paper explores the role of parking taxation in reducing congestion by considering a natural experiment created by the progressive January 1, 2012 Chicago parking tax increase. Exploiting differences in vehicle use across income groups, it is estimated that the approximately $2 a day parking tax increase led to a 4-6 percent reduction in total vehicle trips in high-income areas, with the largest response seen on roads more heavily used by commuters. Also found are corresponding increases in use of public transit and a 3. 1 percent aggregate reduction in vehicle trips. It is concluded that parking taxes can help mitigate congestion externalities, although they are no more than about half as effective as more efficient congestion tolls.
    Keywords: Taxation, Income, Consumption & Saving, Wages, Development Banks, Congestion, Second-best pricing, Traffic, Parking, Parking tax, Parking demand, IDB-WP-614
    Date: 2015–10
  6. By: Fabio Grazi (Agence Française de Développement, Research Directorate); Henri Waisman (Centre International de Recherche sur l’Environnement et le Développement)
    Abstract: This paper presents an integrated model of urban agglomeration economies within a computable general equilibrium (CGE) model of global economic activity, energy use and carbon emissions to explore the theoretical and empirical nature of the interdependence of cities and the world economy in a climate policy context. Based on calibration data for 74 major OECD agglomerations, the integrated model is used to gauge the long-term impact of: i) global carbon pricing on urban systems and the economic activity; ii) urban infrastructure development on the economic costs of curbing carbon emissions. Importantly, it is found that combining urban infrastructure and carbon pricing allows for stringent emissions reduction targets, while still avoiding the economic and welfare costs of the carbon price only.
    Keywords: Calibration, Cities, Hybrid Energy-Economy Modeling, New Economic Geography, Trade and Transport, Urban Infrastructure, Welfare
    JEL: C68 R12 Q54
    Date: 2015–06
  7. By: Tony Champion; Ian Shuttleworth
    Abstract: This paper is prompted by the widespread acceptance that the rates of inter-county and inter-state migration have been falling in the USA and sets itself the task of examining whether this decline in migration intensities is also the case in the UK. It uses the inter-area migration matrices available for England and Wales from the National Health Service Central Register (NHSCR) which provides continuous monitoring since the 1970s by broad age group. The main methodological challenge, arising from changes in the geography of health areas for which the inter-area flows are given, is addressed by adopting the lowest common denominator of 80 areas. Care is also taken to allow for the effect of business cycles in producing short-term fluctuations on migration rates and to isolate the effect of a sharp rise in rates for 16-24 year olds in the 1990s, which is presumed to be related to the expansion of the university sector. The findings suggest that, unlike for the USA, there has not been a substantial decline in the intensity of internal migration between the first two decades of the study period and the second two. While there was a 3 per cent reduction in the overall rate of migration between the regions of England and Wales between 1975-1990 and 1996-2011 (omitting the 16-24s), the rate for within-region moves between areas was some 10 per cent higher in the latter period. The main evidence for decline relates to particular age groups of between-region migration, where the rate for those aged 65 and over shrank by a quarter and that for 0-15 year olds was down by a tenth. In general, however, if there has been any major decline in the intensity of address changing in England and Wales, it can only be for the shortest-distance (within area) moves that the NHSCR does not record.
    Keywords: internal migration; migration intensity; between-area moves; long-term trend; England and Wales
    JEL: J11 J61 O15 R23
    Date: 2015–07
  8. By: Jordi Jofre-Monseny; Maria Sánchez-Vidal; Elisabet Viladecans-Marsal
    Abstract: This paper analyses the effects of large manufacturing plant closures on local employment. Specifically, we estimate the net employment effects of the closure of 45 large manufacturing plants in Spain, which relocated abroad between 2001 and 2006. We run differences-in-differences specifications in which locations that experience a closure are matched to locations with similar pre-treatment employment levels and trends. The results show that when a plant closes, for each job directly lost in the plant closure, between 0.3 and 0.6 jobs are actually lost in the local economy. The adjustment is concentrated in incumbent firms in the industry that suffered the closure, providing indirect evidence of labor market pooling effects. We find no employment effects in the rest of manufacturing industries or in the services sectors. These findings suggest that traditional input-output analyses tend to overstate the net employment losses of large plant closures.
    Keywords: local employment; plant closures; input-output; agglomeration economies
    JEL: J23 R12 R23 R58
    Date: 2015–07
  9. By: Rui Dang
    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.
    Keywords: Obesity, local human capital externalities, control function, non-random sorting
    JEL: I00 R23
    Date: 2015
  10. By: Sander Gerritsen; Sonny Kuijpers; Marc van der Steeg
    Abstract: This paper investigates the effects of higher teacher pay for secondary school teachers on their teacher retention decision and enrollment in additional schooling. We exploit variation in teacher pay induced by the introduction of a new remuneration policy. This policy provided schools in an urbanized region with extra funds to place a larger share of teachers in a higher salary scale. We exploit this policy in an IV-setup to estimate the effects of higher teacher pay on our outcomes. The main finding is that we find no effects of higher teacher pay on the probability to stay in the teaching profession. The policy however succeeded in keeping a slightly larger share of teachers in the targeted region. In addition, our findings suggest that the policy increased teachers’ enrollment in bachelor or master degree programs from 2.3% to 3.2%. This finding is consistent with the setup of the policy in which one of the criteria for placement in a higher salary scale is that teachers would obtain extra qualifications or gain extra expertise.
    JEL: I21 I22 I28
    Date: 2015–12
  11. By: Kessing, Sebastian G. (University of Siegen and CESifo); Lipatov, Vilen (Compass Lexecon Brussels and CESifo); Zoubek, J. Malte (University of Siegen)
    Abstract: Combining an intensive labor supply margin with an extensive, productivity-enhancing migration margin, we determine how regional inequality and labor mobility shape optimal redistribution. We propose the use of delayed optimal-control techniques to obtain optimal tax formulae with location-dependent productivity and two-dimensional heterogeneity. Our baseline simulations using the productivity differences between large metropolitan and other regions in the US indicate that productivity-increasing internal migration can constitute a quantitatively important constraint on redis-tribution. Allowing for regionally di¤erentiated taxation with location-dependent productivity, we find that marginal tax rates in high (low) productivity regions should be corrected downwards (upwards) relative to a no-migration benchmark.
    Keywords: Optimal taxation, redistribution, regional inequality, migration, multidimensional screening, delayed optimal control JEL Classification: H11, J45, R12
    Date: 2015
  12. By: Simon Levin (Department of Ecology and Evolutionary Biology, Princeton University, Beijer Institute of Ecological Economics and RFF University); A. Xepapadeas (Athens University of Economics and Business, Department of International and European Economic Studies and Beijer Institute of Ecological Economics)
    Abstract: We seek to explain the emergence of spatial heterogeneity regarding development and pollution on the basis of interactions associated with the movement of capital and polluting activities from one economy to another. We use a simple dynamical model describing capital accumulation along the lines of a ?fixed-savings-ratio Solow-type model capable of producing endogenous growth and convergence behavior, and pollution accumulation in each country with pollution diffusion between countries or regions. The basic mechanism underlying the movements of capital across space is the quest for locations where the marginal productivity of capital is relatively higher than the productivity at the location of origin. The notion that capital moves to locations of relatively higher productivity but not necessarily from locations of high concentration to locations of low concentration, does not face difficulties associated with the Lucas paradox. We show that, for a wide range of capital and pollution rates of flow, spatial heterogeneity emerges even between two economies with identical fundamental structures. These results can be interpreted as suggesting that the neoclassical convergence hypothesis might not hold under differential rates of fl?ow of capital and polluting activities among countries of the same fundamental structure.
    Keywords: Transboundary Flows, Capital, Pollution, Diffusion, Turing Instability, Spatial Heterogeneity
    JEL: O44 R12 Q52 C65
    Date: 2015–07
  13. By: Lavy, Victor (University of Warwick, Hebrew University and NBER); Sand, Edith (Bank of Israel)
    Abstract: In this paper, we estimate the effect of primary school teachers’ gender biases on boys’ and girls’ academic achievements during middle and high school and on the choice of advanced level courses in math and sciences during high school. For identification, we rely on the random assignments of teachers and students to classes in primary schools. Our results suggest that teachers’ biases favoring boys have an asymmetric effect by gender-positive effect on boys’ achievements and negative effect on girls’. Such gender biases also impact students’ enrollment in advanced level math courses in high school—boys positively and girls negatively. These results suggest that teachers’ biased behavior at early stage of schooling have long run implications for occupational choices and earnings at adulthood, because enrollment in advanced courses in math and science in high school is a prerequisite for post-secondary schooling in engineering, computer science and so on. This impact is heterogeneous, being larger for children from families where the father is more educated than the mother and larger on girls from low socioeconomic background
    Keywords: JEL Classification:
    Date: 2015
  14. By: Tony Champion; Ian Shuttleworth
    Abstract: Expectations of migration and mobility steadily increasing in the longer term, which have a long currency in migration theory and related social science, are at odds with the latest US research showing a marked decline in internal migration rates. Given the similarity in demographic, economic and social trends between the USA and the UK, this paper reports the results of research that investigates whether the latter has been experienced any similar change in more recent decades. Using the Office for National Statistics Longitudinal Study (ONS-LS) of linked census records, it examines the evidence provided by its 10-year migration indicator, with particular attention to a comparison of the first and latest decades available, 1971-1981 and 2001-2011. This suggests that, as in the USA, there has been a marked reduction in the level of shorter-distance (less than 10km) moving that has involved almost all types of people. In contrast to this and to US experience, however, the propensity of people to make longer-distance address changes between decennial censuses has declined much less, though the 2.6% fall between the 1970s and the 2000s may be an underestimate owing to the inclusion of moves to and from university in the latest decade. This finding is consistent with the results of a companion study which analysed data on migration between the health areas of England and Wales (Champion and Shuttleworth, 2015). There is therefore a strong case for now probing the causes of the sharp reduction in shorter-distance moving in Britain as well as the USA, as well as for investigating why the two countries differ in terms of their experience of longer-distance migration trends.
    Keywords: internal migration; migration intensity; long-term trend; England and Wales; longitudinal study; microdata
    JEL: J11 J61 O15 R23
    Date: 2015–07
  15. By: PACCOUD Antoine
    Abstract: While central to early gentrification studies, the idea that social and tenure changes were inseparably linked to displacement has recently fallen out of research in the field. This has led to difficulties in the context of a recent shift in the tenure trajectory associated with gentrification. While the process has historically been linked to an increase in home ownership in the UK, the situation today is marked by the return of the private rental sector, a return associated with the rise of buy-to-let investors, the loss of social housing and quickly escalating rents. Gentrification operating in the UK today must thus be thought of as private rental-led gentrification ? transitions to private rental in the context of social upscaling. This is shown through a detailed comparison of small-area social and tenure data from the 2001 and 2011 UK Censuses. While this tenure shift has been documented in gentrifying areas over the years, little is known about its impacts on local neighbourhoods. This is a dangerous blind-spot as private rental-led gentrification is more pernicious than gentrification linked to ownership: it is currently more widespread and likely to displace poorer residents, creates commodified spaces and its production dispossesses low-income owners.
    Keywords: Gentrification; Displacement; Private rental sector; Tenure; England; London
    Date: 2015–12
  16. By: SOHN Christophe; LICHERON Julien
    Abstract: This paper examines the effects of state borders on the performance of metropolitan areas in Europe. A multi-dimensional conceptualization of border effects is elaborated and empirically tested with the help of statistical modelling. The results suggest that Swiss cases and metropolitan areas recently integrated into the EU benefit the most from their border setting. When considering specific effects, a recent opening of the border as a new contact factor and significant differentiation factors have positive impacts on metropolitan functions. Alternatively, the spatial proximity of the border and its long-standing opening have negative impacts.
    Keywords: Border effects; metropolitan functions; border metropolitan areas; Europe
    Date: 2015–12
  17. By: Sneha Elango (The University of Chicago); Jorge Luis Garcia (The University of Chicago); James J. Heckman (The University of Chicago); Andres Hojman (The University of Chicago)
    Abstract: This paper organizes and synthesizes the literature on early childhood education and childcare. In it, we go beyond meta-analysis and reanalyze primary data sources in a common framework. We consider the evidence from means-tested demonstration programs, large-scale means-tested programs and universal programs without means testing. We discuss which programs are eective and whether, and for which populations, these programs should be subsidized by governments. The evidence from high-quality demonstration programs targeted toward disadvantaged children shows bene cial eects. Returns exceed costs, even accounting for the deadweight loss of collecting taxes. When proper policy counterfactuals are constructed, Head Start has bene cial eects on disadvantaged children compared to home alternatives. Universal programs bene t disadvantaged children.
    Keywords: early childhood education, childcare, evaluation of social programs
    JEL: J13 I28 C93
    Date: 2015–12
  18. By: Antonescu, Daniela
    Abstract: During the last period, innovation represented the core topic of a wide number of studies and analyses due to the potential impact it could have on the development level of a country or a region. This aspect is relatively easy to explain: innovation represents an important source of regional/national competitiveness, a modern factor of growth and economic resilience, but also the fundamental objective of the current programming period and of the Europe 2020 Strategy. According to theory, innovation is a process that takes place predominantly at micro-economic level. Still, its approach at regional level gains increasingly more room within economic approaches starting from the premise that innovative performances of a company depend directly and to a large share on the endogenous local potential, but also on a combination of factors of influence, determined by the specifics and conditions of the area. The study intends to analyse from the theoretical and practical viewpoint the role of the innovation process within economic development and growth at regional and national level.
    Keywords: innovation, research, regional development, Strategy 2020, innovative region
    JEL: O3 O38 R1 R10 R12 R58
    Date: 2015–11–03
  19. By: Sheng Yang; Ling-Yun He
    Abstract: China's rapid economic growth resulted in serious air pollution, which caused substantial losses to economic development and residents' health. In particular, the road transport sector has been blamed to be one of the major emitters. During the past decades, fluctuation in the international oil prices has imposed significant impacts on the China's road transport sector. Therefore, we propose an assumption that China's provincial economies are independent "economic entities". Based on this assumption, we investigate the China's road transport fuel (i.e., gasoline and diesel) demand system by using the panel data of all 31 Chinese provinces except Hong Kong, Macau and Taiwan. To connect the fuel demand system and the air pollution emissions, we propose the concept of pollution emissions elasticities to estimate the air pollution emissions from the road transport sector, and residents' health losses by a simplified approach consisting of air pollution concentrations and health loss assessment models under different scenarios based on real-world oil price fluctuations. Our framework, to the best of our knowledge, is the first attempt to address the transmission mechanism between the fuel demand system in road transport sector and residents' health losses in the transitional China.
    Date: 2015–12
  20. By: Antonios Garas; Celine Rozenblat; Frank Schweitzer
    Abstract: How are economic activities linked to geographic locations? To answer this question, we use a data-driven approach that builds on the information about location, ownership and economic activities of the world's 3,000 largest firms and their almost one million subsidiaries. From this information we generate a bipartite network of cities linked to economic activities. Analysing the structure of this network, we find striking similarities with nested networks observed in ecology, where links represent mutualistic interactions between species. This motivates us to apply ecological indicators to identify the unbalanced deployment of economic activities. Such deployment can lead to an over-representation of specific economic sectors in a given city, and poses a significant thread for the city's future especially in times when the over-represented activities face economic uncertainties. If we compare our analysis with external rankings about the quality of life in a city, we find that the nested structure of the city-firm network also reflects such information about the quality of life, which can usually be assessed only via dedicated survey-based indicators.
    Date: 2015–12
  21. By: Carlo Reggiani (School of Social Sciences - Economics, University of Manchester); Francesco Silvestri (Department of Economics and Management, University of Ferrara)
    Abstract: Two of the main pillars of the EU waste collection policy are the Proximity Principle and Self-Sufficiency Principle. According to those, waste should be disposed as close as possible to where it has been produced. The effect of such provision is to increase the market power of local disposers, with possible undesirable consequences for other firms in the vertical chain. We show through a simple spatial model that one effect of the Proximity Principle and Self-Sufficiency Principle is to provide an incentive to collectors and waste producers to increase the amount of separated waste.
    Keywords: EU Municipal Waste Policy, Self-Sufficiency Principle, Proximity Principle
    JEL: Q53 L13 L44
    Date: 2015–10
  22. By: Grégoire Garsous; David Corderi; Mercedes Velasco
    Abstract: In recent decades, a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies. The main objective of these programs is to increase local investment and employment, as tourism activities are labor intensive. Little evidence is available, however, to assess the effect of these policies on job creation. This paper analyzes a fiscal incentives program that the Brazilian federal government introduced in 2002 to develop the tourism industry in the undeveloped region of Northeast Brazil. It provides evidence that income tax credits had a significant positive effect on job creation. We find that local employment in the tourism industry was on average 34 percent higher in those municipalities that benefited from the program.
    Keywords: Tourism, Tax incentives, Taxation, Fiscal Policy, Investment, Labor markets
    Date: 2015–11
  23. By: David Cuberes (Clark University); Rafael González-Val (Universidad de Zaragoza and Institut d’Economia de Barcelona)
    Abstract: This paper studies the effect of the Spanish Reconquest, a military campaign that aimed to expel the Muslims from the Iberian Peninsula, on the population of its most important cities. The almost four centuries of Reconquest offer a “quasi-natural” experiment to study the persistence of population shocks at the city level. Using a generalized difference in differences approach, we find that the Reconquest had an average significant negative effect on the relative population of the main Iberian cities even after controlling for a large set of country and city-specific geographical and economic indicators, as well as city-specific time trends. Nevertheless, our results show that this negative shock was short-lived, vanishing within the first one hundred years after the onset of the Reconquest. These results can be interpreted as weak evidence on the negative effect that war and conflict have on urban primacy. They also suggest that the locational fundamentals that determined the relative size of Iberian cities before the Reconquest were more important determinants of the fate of these cities than the direct negative impact that the Reconquest had on their population.
    Keywords: Locational Fundamentals, City Growth, Lock-in Effects, Warfare and Cities
    JEL: R12 N9
    Date: 2015–09
  24. By: Nathalie Picard (Université Paris Saclay, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - Université de Cergy Pontoise, Department of Economics, Ecole Polytechnique - CNRS - Centre National de la Recherche Scientifique - Polytechnique - X); Sophie Dantan (ENS Cachan - École normale supérieure - Cachan, Université Paris Saclay); André De Palma (ENS Cachan - École normale supérieure - Cachan, Department of Economics, Ecole Polytechnique - CNRS - Centre National de la Recherche Scientifique - Polytechnique - X, Université Paris Saclay)
    Abstract: We analyze couples mode choice, with an application in Paris region. When spouses’ commuting decisions are assumed to be independent – the standard assumption – the model poorly reproduces intra-household decisions. We set up a model of joint decision, which provides more plausible results and exhibits a greater predictive power. We estimate the determinants of the bargaining power (spouses’ age, nationality, type of job contract, tenure status and number of children) using a collective model. To control remaining endogeneity issues, we finally model the joint choice of car ownership and mode choice. Values of time are computed for driving alone and together.
    Keywords: endogeneity, collective models,Commuting, mode choice, unitary models, car ownership
    Date: 2015–10
  25. By: Massimo Bordignon (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Veronica Grembi; Santino Piazza
    Abstract: In a political agency model, we study the effect of introducing a less transparent tax tool for the financing of local governments. We show that lower quality politicians would use more the less transparent tax tool to enhance their probability of re-election. This prediction is tested by studying a reform that in 1999 allowed Italian municipalities to partially substitute a more accountable source of tax revenue (the property tax) with a less transparent one (a surcharge on the personal income tax of residents). Using a Difference in Difference approach, we show that in line with theory, Mayors at their first term in power adopted a higher surcharge on the personal income tax and reduced the property tax rate significantly more than Mayors in their final term..
    Keywords: Fiscal federalism, Tax transparency, Agency Model, Property tax.
    JEL: H71 H77 D78
    Date: 2015–12
  26. By: Gabriel M. Ahlfeldt; Daniel P. McMillen
    Abstract: We analyze the determinants of building heights in Chicago by combining a micro-geographic data set on tall buildings with a unique panel of land prices covering 140 years. Consistent with the predictions of classic urban economics models, we find that developers respond to increasing land prices by increasing density, i.e. building taller. In 2000, the elasticity of height with respect of land price was about 45% for tall commercial buildings and 30% for tall residential buildings. As expected given significant improvement in construction technology over time, we find that the height elasticity approximately doubled over the last 100 years. We find evidence for dissipative height competition within cities, as excessively tall buildings are significantly less likely to be constructed near to each other than other buildings. Proximity to scenic amenities creates an extra incentive to outrival competitors, particularly in the residential market.
    Keywords: Chicago; density; height; land value; skyscraper
    JEL: R20 R30
    Date: 2015–07
  27. By: Ana Mauleon (CEREC, Saint-Louis University ?Brussels and CORE, University of Louvain, Belgium); Nils Roehl (University of Paderborn and Bielefeld University, Germany); Vincent Vannetelbosch (CORE, University of Louvain and CEREC, Saint-Louis University ?Brussels, Belgium)
    Abstract: The objective of the paper is to analyze the formation of social networks where individuals are allowed to engage in several groups at the same time. These group structures are interpreted here as social networks. Each group is supposed to have specific rules or constitutions governing which members may join or leave it. Given these constitutions, we consider a social network to be stable if no group is modified any more. We provide requirements on constitutions and players’ preferences under which stable social networks are induced for sure. Furthermore, by embedding many-to-many matchings into our setting, we apply our model to job markets with labor unions. To some extent the unions may provide job guarantees and, therefore, have influence on the stability of the job market.
    Keywords: Social Networks, Constitutions, Stability, Many-to-Many Matchings
    JEL: C72 C78 D85
    Date: 2015–06

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