nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒01‒03
forty papers chosen by
Steve Ross
University of Connecticut

  1. The Impact of Teacher Demographic Representation on Student Attendance and Suspensions By Holt, Stephen B.; Gershenson, Seth
  2. Housing equity, residential mobility and commuting By Bloze, Gintautas; Skak, Morten
  3. Flooded Cities By Kocornik-Mina, Adriana; McDermott, Thomas K.J.; Michaels, Guy; Rauch, Ferdinand
  4. Does improving Public Transport decrease Car Ownership? Evidence from the Copenhagen Metropolitan Area By Ismir Mulalic; Ninette Pilegaard; Jan Rouwendal
  5. MERCURE : Cheap Credit, Unaffordable Houses? By C. Labonne; C. Welter-Nicol
  6. Are Student Absences Worth the Worry in U.S. Primary Schools? By Gershenson, Seth; Jacknowitz, Alison; Brannegan, Andrew
  7. The Booming Socioeconomic Impacts of Shale: A Review of Findings and Methods in the Empirical Literature By Fleming, David; Komarek, Timothy; Partridge, Mark; Measham, Thomas
  8. Local and Spatial Cointegration in the Wage Curve - A Spatial Panel Analysis for German Regions By Reinhold Kosfeld; Christian Dreger
  9. Just Compensation for the Taking of Mortgage Loans By Katherine A. Pancak; Thomas J. Miceli
  10. The Specialisation of EU Regions in Fast Growing and Key Enabling Technologies By Rinaldo Evangelista; Valentina Meliciani; Antonio Vezzani
  11. Tenure security premium in informal housing markets : a spatial hedonic analysis By Nakamura,Shohei
  12. The Moderating Effect of Higher Education on Intergenerational Spatial Inequality By de Vuijst, Elise; van Ham, Maarten; Kleinhans, Reinout
  13. Urban Systems and Urban Development in the People’s Republic of China By Chen, Zhao; Lu, Ming
  14. Regional State Capacity and the Optimal Degree of Fiscal Decentralization By Antonio A. Bellofatto; Martín Besfamille
  15. Kindergarten for All: Long-run Effects of a Universal Intervention By Drange, Nina; Havnes, Tarjei; Sandsør, Astrid M. J.
  16. Exposing politicians’ ties to criminal organizations: the effects of local government dissolutions on electoral outcomes in southern Italian municipalities By Gianmarco Daniele; Benny Geys
  17. Ethnic Diversity and Trust: New Evidence from Australian Data By Mendolia, Silvia; Tosh, Alex; Yerokhin, Oleg
  18. Building synthetic indicators for aspects of territorial capital By Michela Martinoia; Tomaso Pompili
  19. Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach By Hector Nuñez; Dusan Paredes; Rafael Garduño Rivera
  20. Economic Gains for U.S. States from Educational Reform By Hanushek, Eric A.; Ruhose, Jens; Woessmann, Ludger
  21. Regional unemployment, marriage, and divorce By Rafael González-Val; Miriam Marcén
  22. Girls' Schooling Choices and Home Production: Evidence from Pakistan By Reis, Hugo
  23. External “energy” for regional industrial change: attraction and absorption of non-local knowledge for new path development By Trippl , Michaela; Grillitsch , Markus; Isaksen , Arne
  24. Household Location Decisions and the Value of Climate Amenities By Paramita Sinha; Maureen L. Cropper
  25. Seasonality in Australian capital city house and unit prices By Abbas Valadkhani; Andrew C Worthington; Russell Smyth
  26. Regional Inflation and Consumption Behaviors By Nagayasu, Jun
  27. Fighting Corruption in Education: What Works and Who Benefits? By Borcan, Oana; Lindahl, Mikael; Mitrut, Andreea
  28. Comparing small area techniques for estimating poverty measures By Federico Crescenzi; Gianni Betti; Francesca Gagliardi
  29. Monetary Policy when Households have Debt: New Evidence on the Transmission Mechanism By Cloyne, James; Ferreira, Clodomiro; Surico, Paolo
  30. Cross-Border Mergers and Acquisitions in Services: The Role of Policy and Industrial Structure By Alessandro Barattieri; Ingo Borchert; Aaditya Mattoo
  31. Mobility and Entrepreneurship: Evaluating the scope of knowledge-based theories of entrepreneurship By Fredriksen, Lars; Wennberg, Karl; Balachandran, Chanchal
  32. The political economy of municipal amalgamation: Evidence of common pool effects and local public debt By Feld, Lars P.; Fritz, Benedikt
  33. Do freight transport time savings translate to benefit for transport consuming companies? By Sambracos, Evangelos; Ramfou, Irene
  34. The Effect of Linguistic Proximity on the Occupational Assimilation of Immigrant Men in Canada By Alicia Adsera; Ana Ferrer
  35. Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies By Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
  36. Learning Entrepreneurship From Other Entrepreneurs? By Guiso, Luigi; Pistaferri, Luigi; Schivardi, Fabiano
  37. Peer Pressure and Externalities: Evidence from a field experiment By Bruno Cardinale Lagomarsino; Matías Gutman; Lucía Freira; María Laura Lanzalot; Maximiliano Lauletta; Leandro Malchik; Felipe Montaño Campos; Bianca Pacini; Martín Rossi; Christian Valencia
  38. Cultural Transmission of Civic Attitudes By Daniel Miles-Touya; Máximo Rossi
  39. Municipalities and Social Economy.Lessons from Portugal By João Salazar LEITE
  40. Transport efficiency, downstream R&D, and spillovers By Takauchi, Kazuhiro

  1. By: Holt, Stephen B. (American University); Gershenson, Seth (American University)
    Abstract: Representative bureaucracy theory is central to public administration scholarship due to the likely relationship between the demographic composition of the public workforce and both the actual and perceived performance of public organizations. Primary school classrooms provide an ideal context in which to test the predictions of representative bureaucracy theory at the micro (student) level. Specifically, since parents have at least some agency over primary school students' daily attendance, absences reflect parental assessments of their child's school, classroom, and teacher. The representativeness of the teacher workforce, and specifically that of the student's classroom teacher, is therefore likely to influence student absenteeism. Similarly, student suspensions reflect students' relationships with their teacher, students' comfort level in the classroom, and teachers' discretion in the referral of misbehavior. These academically and socially important outcomes provide convenient, objective measures of behaviors that are likely influenced by street-level representation. Using longitudinal student-level administrative data from the North Carolina, we use a two-way (student and classroom) fixed effects strategy to identify the impact of student-teacher demographic mismatch on primary school students' absences and suspensions. We find that representation among street-level bureaucrats significantly decreases both absenteeism and suspensions and that these effects can be given a causal interpretation. The introduction of two-way fixed effects estimators to public administration scholarship is a secondary contribution of the current study.
    Keywords: representative bureaucracy, student absences, elementary education, teacher workforce
    JEL: I2
    Date: 2015–12
  2. By: Bloze, Gintautas (Department of Leadership and Corporate Strategy); Skak, Morten (Department of Business and Economics)
    Abstract: Highly productive economies require a flexible labor force with workers that move in accordance with the changing demand for goods and services. In times with falling housing prices, home owning workers’ mobility may be hampered by a lock-in effect from low and negative equity. This paper explores the effect of housing equity on homeowners’ residential mobility and their commuting pattern. We merge administrative registers for the Danish population and properties and get highly reliable micro data for our analysis. We compare the lock-in of homeowners with high LTV ratios under a booming economy with the lock-in when the economy is in recession. Low and negative equity reduces residential mobility, with similar relative effects in boom and slump periods. The negative impact on labor market flexibility from low equity lock-in is stronger when the economy is in recession and housing prices are falling. We show that this is mitigated by a comparatively high propensity to commute for locked-in homeowners when the labor market tightens.
    Keywords: Mobility; Commuting; LTV ratio; Home equitiy; Mortgage lock-in
    JEL: G21 J61 R23 R51
    Date: 2015–12–15
  3. By: Kocornik-Mina, Adriana; McDermott, Thomas K.J.; Michaels, Guy; Rauch, Ferdinand
    Abstract: Does economic activity relocate away from areas that are at high risk of recurring shocks? We examine this question in the context of floods, which are among the costliest and most common natural disasters. Over the past thirty years, floods worldwide killed more than 500,000 people and displaced over 650,000,000 people. This paper analyzes the effect of large scale floods, which displaced at least 100,000 people each, in over 1,800 cities in 40 countries, from 2003-2008. We conduct our analysis using spatially detailed inundation maps and night lights data spanning the globe's urban areas. We find that low elevation areas are about 3-4 times more likely to be hit by large floods than other areas, and yet they concentrate more economic activity per square kilometer. When cities are hit by large floods, the low elevation areas also sustain more damage, but like the rest of the flooded cities they recover rapidly, and economic activity does not move to safer areas. Only in more recently populated urban areas, flooded areas show a larger and more persistent decline in economic activity. Our findings have important policy implications for aid, development and urban planning in a world with rising urbanization and sea levels.
    Keywords: climate change; flooding; urban recovery; urbanization
    JEL: Q54 R11
    Date: 2015–12
  4. By: Ismir Mulalic (Technical University Denmark, Denmark); Ninette Pilegaard (Technical University Denmark, Denmark); Jan Rouwendal (VU University Amsterdam, the Netherlands)
    Abstract: Car ownership is lower in urban areas, which is probably related to the availability of better public transport. Better public transport thus may offer the possibility to relieve the many problems (congestion, health, and parking) associated with the presence of cars in urban areas. To investigate this issue, we develop and estimate a model for the simultaneous choice of a residential area and car ownership. The model is estimated on Danish register data for single-earner and dual-earners households in the greater Copenhagen metropolitan area. We pay special attention to accessibility of the metro network which offers particularly high quality public transport. Simulations based on the estimated model show that for the greater Copenhagen area a planned extension of the metro network decreases car ownership by 2-3%. Our results suggest also a substantial increase in t he interest for living in areas close to the metro network, that affects the demographic composition of neighbourhoods.
    Keywords: car ownership; public transport; residential sorting
    JEL: R4 R1 D1
    Date: 2015–12–24
  5. By: C. Labonne; C. Welter-Nicol
    Abstract: We use variations in the Interest Free Loan policy (“IFL” hereafter) in France to assess the causal relationship between credit availability, housing prices and homeownership. The IFL subsidy varies at the municipality level and has been reformed three times between 2009 and 2011. We handle endogeneity between housing prices and policy by sampling municipalities bordering administratively defined policy areas. Using a loan-level dataset, we find IFLs allow a positive housing credit shock, channeled into housing prices. We find a high elasticity of housing prices to housing credit when we instrument the latter variable by the IFL, between 0.4 and 0.7 depending on the estimation strategy. We also test for the effect of credit conditions on homeownership. We approximate credit market selection by the difference between borrowers’ and average income. We find an exogenous – IFL induced – increase in LTV reduces credit selection.
    Keywords: Housing Credit, Interest-Free Loan, Real estate prices, Homeownership.
    JEL: G21 R28
    Date: 2015
  6. By: Gershenson, Seth (American University); Jacknowitz, Alison (American University); Brannegan, Andrew (Aspire Public Schools)
    Abstract: Student absences are a potentially important, yet understudied, input in the educational process. Using longitudinal data from a nationally-representative survey and rich administrative records from North Carolina, we investigate the relationship between student absences and academic performance. Generally, student absences are associated with modest but statistically significant decreases in academic achievement. The harmful effects of absences are approximately linear, and are two to three times larger among fourth and fifth graders in North Carolina than among kindergarten and first-grade students in the nationally representative Early Childhood Longitudinal Study. In both datasets, absences similarly reduce achievement in urban, rural, and suburban schools. In North Carolina, the harm associated with student absences is greater among both low-income students and English language learners, particularly for reading achievement. Also, in North Carolina, unexcused absences are twice as harmful as excused absences. Policy implications and directions for future research are discussed.
    Keywords: student absences, attendance, achievement gaps, education production function
    JEL: I21
    Date: 2015–12
  7. By: Fleming, David; Komarek, Timothy; Partridge, Mark; Measham, Thomas
    Abstract: The U.S. shale boom has been joined by many other countries producing various unconventional fossil fuels (UFF) in the past decade. This new UFF industry differs from previous energy extraction by its rapid growth and sparse geographic nature, making the analysis of its socioeconomic consequences for extractive regions key for better regional planning and policy making. As such, the shale literature has boomed in recent years with numerous empirical studies evaluating and analysing different socioeconomic impacts from across the globe. This paper provides the first in-depth literature review of the growing body of empirical studies analysing the local impacts of shale (and other UFF) extraction, especially examining employment, income, population, housing, human and social capital effects and the co-existence of the industry with other productive activities. We find a quite surprising range of findings that in several occasions are contradictory, prompting more questions to many important issues. Given this broad range of results, we also focus on critical empirical considerations within this literature that are important to consider in future quantitative assessments of UFF impacts. Finally we provide some policy considerations and lines of future research.
    Keywords: shale, economics, fossil fuels, policy, regional planning, socioeconomic effects
    JEL: J0 J48 Q4 Q48 R11
    Date: 2015–12
  8. By: Reinhold Kosfeld; Christian Dreger
    Abstract: The wage curve introduced by Blanchflower and Oswald (1990, 1994) postulates a negative correlation between wages and unemployment. Empirical results focus on particular theoretical channels establishing the relationship. Panel models mostly draw on unionized bargaining or the efficiency wage hypothesis. Spatial econometric approaches can be rationalized by monopsonistic competition. However, the approaches either ignore the issue of nonstationarity or treat the data as if it were nonspatial. In this paper, we adopt a global cointegration approach recently proposed by Bienstock and Felsenstein (2010) to account for nonstationarity of regional data. By specifying a spatial error correction model (SpECM), equilibrium adjustments are considered in both space and time. Applying the methodology for West German labour markets, we find strong evidence for the existence of a long-run wage curve with spatial effects.
    Keywords: Wage curve, regional labour markets, spatial panel models, global cointegration analysis
    JEL: J30 J60 C33 R15
    Date: 2015
  9. By: Katherine A. Pancak (University of Connecticut); Thomas J. Miceli (University of Connecticut)
    Abstract: Government seizure of residential mortgage loans by eminent domain is currently being discussed as a way to refinance loans where the debt owed exceeds the current value of the collateral. Given the broad judicial interpretation of public use, just compensation may be the sole viable constitutional check on this novel takings proposal. This article contributes to the present debate by providing a framework for thinking about compensation for mortgage loan takings. Legal precedent suggests a range of possible judicial findings based on either the value of the underlying real estate collateral or the value of the outstanding loan debt. An economic perspective shows that compensation should lie somewhere in the range suggested by the various legal theories, but exactly where depends on borrowers’ unobservable valuations of the underlying real estate.
    JEL: G21 K11 K35
    Date: 2015–10
  10. By: Rinaldo Evangelista (University of Camerino); Valentina Meliciani (University of LLUIS Carli); Antonio Vezzani (European Commission – JRC - IPTS)
    Abstract: In the context of the Europe 2020 objective of establishing in the EU a smart, sustainable and inclusive economy, European regions have been called to design and implement national and regional 'Research and Innovation Strategies for Smart Specialisation' (RIS3). The rationale behind the concept of smart specialisation is that, in a context of global competition for talent and resources, most regions can only acquire a real competitive edge by finding niches or by mainstreaming new technologies into traditional industries and exploiting their ‘smart’ regional potential. Although the most promising way for a region to promote its knowledge-based growth is to diversify into technologies, products and services that are closely related to existing dominant technologies and the regional skills base, the European Commission puts special emphasis on a set of technologies labelled as 'Key Enabling Technologies' (KETs). Despite the great emphasis on KETs, there is only very limited evidence on the capability of EU regions to specialise in these fields and there are no studies directly investigating the actual impact of these technologies on regional innovation and economic growth. This report aims at filling these gaps by: i) looking at the relationship between KETs and 'Fast Growing Technologies' (FGTs); ii) providing empirical evidence on the EU regional specialisation in KETs and FGTs; iii) relating technological specialisation to regional innovation and economic growth. In particular, the report aims at answering these questions: 1) Which technologies have emerged as the fastest growing ones in the recent decades? 2) Is there a relationship between fast growing technologies and KETs? 3) Which regions are specialised in FGTs and KETs? 4) Are there convergence and polarization phenomena observable in the evolution of EU regions’ innovative activities in fast growing technologies and KETs? 5) Do EU regions specialized in fastest growing technological fields and key enabling technologies exhibit higher innovation and economic performances? The main results of the report can be summarised as follows. First, only a small share of KETs are also fast growing technologies, although the degree of overlapping between KETs and FGTs varies substantially across different KETs fields. Second, while KETs are concentrated in Central Europe, FGTs prevail in Scandinavian countries and the UK. Third, while there is evidence of some regional convergence in KETs and, to a less extent, in FGTs, spatial correlation increases over time, showing that diffusion often occurs across contiguous regions. Finally, the results of the estimations of the effects of FGTs and KETs on innovation (patents) and economic (GDP per capita) growth show that only specialisation in KETs directly affects economic growth, while specialisation in FGTs has an impact on growth only indirectly, that is through its impact on regions’ innovation performances. Overall, these results confirm the pervasive and enabling role of KETs pointing to the importance for European regions to target these technologies as part of their RIS3 strategies.
    Keywords: region, gorwht, innovation
    Date: 2015–11
  11. By: Nakamura,Shohei
    Abstract: This paper estimates slum residents'willingness to pay for formalized land tenure in Pune, India. In so doing, it offers evidence that the legal assurance of slum residents'occupancy of their lands could benefit them. Previous studies have discussed legal and non-legal factors that substantially influence the tenure security of residents in informal settlements. However, it remains unclear to what extent, and how, the assignment of legal property rights through the formalization of land tenure improves the tenure security of residents in informal settlements and living conditions, even in the presence of other legal and non-legal factors that also contribute to their tenure security. To address the question, this study focuses on the city of Pune, India, where government agencies have formalized slums by legally ensuring the occupancy of the residents under"slum declaration."Applying a hedonic price model to an original household survey, this paper investigates how slum residents evaluate formalized land tenure. A spatial econometrics method is also applied to account for spatially autocorrelated unobserved errors. The spatial hedonic analysis finds that the premium of slum declaration is worth 19 percent of the average housing rent in slums. The associated marginal willingness to pay is equivalent to 6 percent of the average household expenditure, although it is heterogeneous depending on a household's caste and other legal conditions. This finding suggests that the assurance of occupancy rights is a vital component of land-tenure formalization policy even if it does not directly provide full property rights.
    Keywords: Housing&Human Habitats,Public Sector Management and Reform,Urban Poverty,Urban Housing,Regional Governance
    Date: 2015–12–30
  12. By: de Vuijst, Elise (Delft University of Technology); van Ham, Maarten (Delft University of Technology); Kleinhans, Reinout (Delft University of Technology)
    Abstract: It is well-known that socioeconomic outcomes and (dis)advantage over the life course can be transmitted from parent to child. It is increasingly suggested that these intergenerational effects also have a spatial dimension, although empirical research into this topic remains scarce. Previous research from Sweden and the United States shows that children who grow up in disadvantaged neighbourhoods experience long-term exposure to such neighbourhoods in their adult lives. This study contributes to the literature by examining to what extent educational attainment can break the link between parental neighbourhood disadvantage and the neighbourhood experiences of children as adults up to 12 years after leaving the parental home. We use longitudinal register data from the Netherlands to study a complete cohort of parental home leavers, covering 119,167 individuals who were followed from 1999 to 2012. Using sequence analyses as a visualisation method, and multilevel logit models, we demonstrate that children who lived in deprived neighbourhoods with their parents are more likely to live in similar neighbourhoods later in life than children who grew up in more affluent neighbourhoods. We find that intergenerational neighbourhood patterns of disadvantage can be discontinued when individuals attain higher education over time. Discontinuation is however less prevalent among individuals from ethnic minority groups.
    Keywords: intergenerational inequality, neighbourhood effects, deprived neighbourhoods, neighbourhood histories, educational attainment, longitudinal data, sequence analysis, the Netherlands
    JEL: I30 J60 P46 R23
    Date: 2015–12
  13. By: Chen, Zhao (Asian Development Bank Institute); Lu, Ming (Asian Development Bank Institute)
    Abstract: The People’s Republic of China (PRC) is experiencing a trend toward population concentration in its large coastal cities. However, at the same time, there is also a distortion of city size toward small cities in the country. That is to say, the urban population in the PRC should further concentrate in large cities rather than be more equally spread out. Cross-country analysis indicates that the population size of the primary city in the PRC is smaller than its predicted value. This paper suggests that the PRC government should adjust its policies on future urbanization for fewer restrictions on the further growth of megacities.
    Keywords: urbanization; megacities; population concentration
    JEL: O18 P25 R12
    Date: 2015–12–28
  14. By: Antonio A. Bellofatto; Martín Besfamille
    Abstract: This paper studies the optimal degree of fiscal decentralization in a federation. In our environment, regional governments are characterized by two dimensions of state capacity; namely, administrative and fiscal. These gauge the ability to deliver public goods and to raise tax revenues, respectively. Two regimes are compared: partial and full decentralization. Under partial decentralization, regional governments have no tax powers and rely on central bailouts to refinance incomplete projects. Under full decentralization, regional governments refinance incomplete projects through capital taxes, in a context of tax competition. We provide a normative comparison between partial and full decentralization and show how the optimal degree of fiscal decentralization hinges on the relative magnitudes of each type of capacity. Specifically, for sufficiently low levels of fiscal capacity bailing out regional governments is optimal, regardless of the level of administrative ability. However, a combination of low levels of administrative capacity and high levels of fiscal capacity calls for fully decentralizing tax powers.
    JEL: D82 H77
    Date: 2015
  15. By: Drange, Nina (Statistics Norway); Havnes, Tarjei (Dept. of Economics, University of Oslo); Sandsør, Astrid M. J. (Dept. of Economics, University of Oslo)
    Abstract: Theory and evidence point towards particularly positive effects of high-quality child care for disadvantaged children. At the same time, disadvantaged families often sort out of existing programs. To counter differences in learning outcomes between children from different socioeconomic backgrounds, governments are pushing for universal child care. However, it is unclear how effective programs with universal participation may be at addressing the needs of disadvantaged children. We provide evidence on the long-run effect on schooling of mandating kindergarten at age 5–6. Our identifying variation comes from a reform that lowered school starting-age from 7 to 6 in Norway in 1997. The new program was designed as a low intensity kindergarten program, similar to voluntary child care programs available before mandating. Our precise DD estimates reveal hardly any effect, both overall, across subsamples, and over the grading distribution. A battery of specification checks support our empirical strategy.
    Keywords: kindergarten; early childhood intervention; distributional effects; difference-in- differences; child care; child development
    JEL: H40 I28 J13
    Date: 2015–08–31
  16. By: Gianmarco Daniele (University of Barcelona & IEB & Vrije Universiteit Brussel (VUB)); Benny Geys (Norwegian Business School BI)
    Abstract: Since 1991, the Italian national government can dissolve municipal councils when infiltration by organized crime is suspected (Law 164/1991). We exploit variation over time and space in the application of this law to study voters’ responses to politicians’ publicly exposed ties to criminal organizations. Using a difference-in-differences approach, we find that public exposure of ties to organized crime significantly depresses turnout in local elections, and negatively impacts the electoral performance of incumbents and purely local political parties. The breach in the local political principal-agent relationship also translates into citizens’ reduced willingness to contribute to the financing of local public goods.
    Keywords: Political accountability, voter turnout, elections, mafia, tax compliance
    JEL: K42 H89 O17
    Date: 2015
  17. By: Mendolia, Silvia (University of Wollongong); Tosh, Alex; Yerokhin, Oleg (University of Wollongong)
    Abstract: This paper investigates the relationship between neighbourhood ethnic and linguistic heterogeneity and the formation of an individual's local and general trust. A wide literature across economics and sociology has recognised the importance of trust in facilitating economic growth and development and it is therefore important to investigate elements of social organisation that encourage or inhibit the development of trust. We use fixed effects and instrumental variable regression and control for a wide set of individual and local area characteristics to identify the effect of heterogeneity on trust formation. Our results show that increasing neighbourhood ethnic and linguistic fractionalisation is associated with a decrease in local trust of about 12% of a standard deviation in the model with fixed effects, while we do not find any significant relationship between neighbourhood heterogeneity and general trust.
    Keywords: trust, social capital, ethnic fractionalization, ethnic heterogeneity, HILDA
    JEL: J15 Z10
    Date: 2015–12
  18. By: Michela Martinoia; Tomaso Pompili
    Abstract: Empirical analyses highlight local structural features (territorial capital) as constraints on regional growth and interregional convergence processes, but scant attention is devoted to traditional localised resources and specifically the natural and cultural heritage. However, no heritage provides value by itself: only the application of know-how embodied in human capital achieves this. Specifically, natural and cultural heritage becomes economically relevant through human capital acting through tourist, recreational and cultural activities. Also because of its service exporting nature, tourism is believed to contribute to economic growth and job creation similarly to manufacturing; nevertheless, theoretical and empirical literature concerned manufacturing and rarely studied tourism or extended results to it. Besides, tourism is the market activity most favouring policentricity in Europe: apparently, tourism brings territorial cohesion and equity, although its most dynamic component (culture, events) favours metropolitan locations. However, heritage valorisation responding to tourist service demand may have adverse effects on development (congestion) and significant impacts on environmental quality and on resource consumption (heritage dissipation); these partly offsets strictly economic benefits and over time they weaken the destination’s pull, hence its value and its population’s welfare. Our goal is to explore the role of territorial capital, and specifically of intangibles such as the natural and cultural capital, in regional growth processes and in local response processes to exogenous crises. To this end we aim at achieving the following objectives: i) developing the theoretical framework of territorial capital, highlighting the role of immobile resources in local economic growth and in its spatial differentials, and the role of human capital in resource valorisation; ii) building a national database of territorial capital in Italian provinces, containing synthetic endowment indicators for natural and cultural heritage, human capital, and structure and distribution of the tourism and leisure industries. Our methodology includes the application of multivariate, and later on econometric, analyses, with the relevant state-of-the-art techniques. We use already available European and national databases, making recourse to ad hoc integrations if and when needed. The study area is Italy; the optimal tier is NUTS3, i.e. provinces, in Italy. The time reference is the period from the early 1990s to the latest available year, to ensure a structural long-term approach.
    Date: 2015–12
  19. By: Hector Nuñez (Division of Economics, CIDE); Dusan Paredes (Division of Economics, Universidad Católica del Norte); Rafael Garduño Rivera (Division of Economics, CIDE)
    Abstract: Since Roback (1982)’s seminal work, the literature has evaluated the role of the amenities to equilibrate the regional differentials of nominal wages and prices. While these studies generally find evidence for traditional amenities and disamenities in developed countries, it still exists a scarce exploration on how those characteristics assessed, like violence, affect the equilibrium in less developed countries. In this paper, we explore violence as amenity or disamenity for the case of Mexico as a particular and unique natural experiment. We use the hedonic wage and rent theory proposed by Roback using data from the Mexican Household Income and Expenditure Survey, along with other information at municipal and state level. For our particular hypothesis, we find evidence to support that inhabitants in traditional drug trafficking states could consider drug-related crime as an amenity.
    Keywords: Hedonic Valuation, Wages, Rents, Amenities, Crime, Mexico.
    JEL: D5 H4 J3 Q2 R1 R2
    Date: 2015–12
  20. By: Hanushek, Eric A. (Stanford University); Ruhose, Jens (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: There is limited existing evidence justifying the economic case for state education policy. Using newly-developed measures of the human capital of each state that allow for internal migration and foreign immigration, we estimate growth regressions that incorporate worker skills. We find that educational achievement strongly predicts economic growth across U.S. states over the past four decades. Based on projections from our growth models, we show the enormous scope for state economic development through improving the quality of schools. While we consider the impact for each state of a range of educational reforms, an improvement that moves each state to the best-performing state would in the aggregate yield a present value of long-run economic gains of over four times current GDP.
    Keywords: economic growth, human capital, cognitive skills, schooling, U.S. states
    JEL: I21 J24 O47
    Date: 2015–12
  21. By: Rafael González-Val (Universidad de Zaragoza & IEB); Miriam Marcén (Universidad de Zaragoza)
    Abstract: In this paper, we examine whether the business cycle plays a role in marriage and divorce. We use data on Spain, since the differences between recession and expansion periods across regions are quite pronounced in that country. We find that the unemployment rate is negatively associated with the marriage rate, pointing to a pro-cyclical evolution of marriage; however the response of the divorce rate to the business cycle is mixed. Results show the existence of different patterns, depending on geography: divorce rates in coastal regions are pro-cyclical, while in inland regions divorces react to unemployment in a counter-cyclical way. Other factors, such as changes in divorce law and duration of the marriage also have a significant effect on divorce rates.
    Keywords: Divorce, marriage, unemployment, business cycle, geography
    JEL: J12
    Date: 2015
  22. By: Reis, Hugo (Banco de Portugal)
    Abstract: The paper develops and estimates a dynamic structural model that allows for the interrelations between girls' schooling and mothers' labor market participation decision, in a rural area of Pakistan where drop-out rates are considerably high. The model incorporates home production, which is critical for understanding the behavior of mothers when deciding girls' schooling. Results suggest that monetary incentives are a good mechanism to increase girls' school enrollment, but not the most cost effective. The impact of the conditional cash transfer program on secondary school enrollment rate was only one third of the impact of the school building program. Regarding welfare, the difference between schemes is smaller. Results also highlight the effectiveness of the role of conditionality.
    Keywords: girls' schooling, home production, development economics, structural model, discrete choice dynamic programming models
    JEL: I25 I28
    Date: 2015–12
  23. By: Trippl , Michaela (CIRCLE, Lund University); Grillitsch , Markus (CIRCLE, Lund University); Isaksen , Arne (Department of Working Life and Innovation, University of Agder, Norway)
    Abstract: The role of exogenous sources of new path development has been underplayed in the literature on regional industrial change so far. The aim of this paper is to explore in a conceptual way under which conditions and in what ways non-local knowledge can lead to new path development in different regional innovation systems (RIS). We distinguish between organizationally thick and diversified, thick and specialized and thin RIS and argue that these types vary markedly in their needs for exogenous sources as well as in their capacities to attract and absorb knowledge generated elsewhere. Organisationally thick and diversified RIS have a lower need for exogenous sources but they exhibit strong capacities to attract and absorb non-local knowledge. In contrast, organisationally thick and specialised RIS and organisationally thin RIS have a higher need for exogenous sources but show a lower capacity to attract and absorb knowledge from elsewhere. However, a closer look reveals that these RIS types can increase their attractiveness for non-local knowledge and may benefit from its inflow if they strengthen their absorption capacity. We conclude that new regional industrial path development is less endogenous in nature than commonly thought, and that the attraction and absorption of non-local knowledge should be more included in conceptualisations of new path development.
    Keywords: new path development; regional industrial change; non-local knowledge; regional innovation systems; degree of organizational thickness; specialization; diversity
    JEL: O10 O19 O30 R10
    Date: 2015–12–21
  24. By: Paramita Sinha; Maureen L. Cropper
    Abstract: We value climate amenities by estimating a discrete location choice model for U.S. households. The utility of each Metropolitan Statistical Area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head’s birthplace. We use the estimated trade-off between wages, housing costs and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs due to heterogeneous tastes for winter and summer temperature. Preferences for winter and summer temperature are negatively correlated: households that prefer milder winters, on average, prefer cooler summers and households that prefer colder winters prefer warmer summers. Households in the Midwest region, on average, have lower marginal willingness to pay to increase winter and reduce summer temperatures than households in the Pacific and South Atlantic census divisions. We use our results to value changes in winter and summer temperature for the period 2020 to 2050 under the B1 (climate-friendly) and A2 (more extreme) climate scenarios. On average, households are willing to pay 1% of income to avoid the B1 scenario and 2.4% of income to avoid the A2 scenario.
    JEL: Q5 Q51
    Date: 2015–12
  25. By: Abbas Valadkhani; Andrew C Worthington; Russell Smyth
    Keywords: House, apartment, price, seasonality, Australia
    JEL: C24 R31 G14
    Date: 2015–12
  26. By: Nagayasu, Jun
    Abstract: This paper analyzes empirically interaction between the inflation rates across regions using consumption data on services and the geographical location of regions in Japan. The service sector has been expanding rapidly in terms of its contribution to the total economic activity in advanced countries, and further demographic changes have accelerated its speed in Japan over recent decades. After providing a theoretical relationship between regional inflation and consumption of non-tradable goods, we find evidence that different consumption patterns of services across regions explain heterogeneity in regional inflation in Japan.
    Keywords: Regional inflation; non-tradable goods; services; demographic changes; spatial models
    JEL: E3 F3 R1
    Date: 2015–12–01
  27. By: Borcan, Oana (University of Gothenburg); Lindahl, Mikael (University of Gothenburg); Mitrut, Andreea (University of Gothenburg)
    Abstract: We investigate the distributional consequences of a corruption-fighting initiative in Romania targeting the endemic fraud in a high-stakes high school exit exam, which introduced CCTV monitoring of the exam and credible punishment threats for teachers and students. We find that the campaign was effective in reducing corruption and, in particular, that monitoring increased the effectiveness of the punishment threats. Estimating the heterogeneous impact for students of different poverty status we show that curbing corruption led to a worrisome score gap increase between poor and non-poor students. Consequently, the poor students have reduced chances to enter an elite university.
    Keywords: corruption, high-stakes exam, bribes, monitoring and punishment
    JEL: I21 I24 K42
    Date: 2015–12
  28. By: Federico Crescenzi; Gianni Betti; Francesca Gagliardi
    Abstract: The Europe 2020 Strategy has formulated key policy objectives or so-called “headline targets” which the EU as a whole and Member States are individually committed to achieving by 2020. One of the five headline targets is directly related to key quality aspects of life, namely social inclusion; within these targets, the EU-SILC headline indicators at-risk-of-poverty or social exclusion and its components will be included in the budgeting of structural funds, one of the main instruments through which policy targets are attained. For this purpose, DG Regional Policy of the European Commission is aiming to use sub-national/regional level data (NUTS 2). Starting from this, the focus of the present paper is on the “regional dimension” of well-being. In fact, we compare two small area techniques, namely the cumulation and the spatial EBLUP (SEBLUP), on the basis of EU-SILC data from Austria and Spain
    Keywords: small area estimation; poverty; inequality; SILC
    JEL: C21 I32 C23
    Date: 2015–12
  29. By: Cloyne, James; Ferreira, Clodomiro; Surico, Paolo
    Abstract: In response to an interest rate change, mortgagors in the U.K. and U.S. adjust their spending significantly (especially on durable goods) but outright home-owners do not. While the dollar change in mortgage payments is nearly three times larger in the U.K. than in the U.S., these magnitudes are much smaller than the overall change in expenditure. In contrast, the income change is sizable and similar across both household groups and countries. Consistent with the predictions of a simple heterogeneous agents model with credit- constrained households and multi-period fixed-rate debt contracts, our evidence suggests that the general equilibrium effect of monetary policy on income isquantitatively more important than the direct effect on cashflows.
    JEL: E21 E32 E52
    Date: 2015–12
  30. By: Alessandro Barattieri; Ingo Borchert; Aaditya Mattoo
    Abstract: This paper explores the role of policy and economic structure in determining interna- tional mergers and acquisitions (M&A) in services sectors. The analysis is based on bilateral sectoral M&A ow data and detailed information on policy barriers from a new database. Restrictive investment policies are found to reduce the probability of M&A inows, controlling for bilateral frictions such as geography. This negative effect, however, is mitigated in countries with relatively large shares of manufacturing and (to a lesser extent) services in GDP. The same result holds for the number of M&A deals concluded. Findings are robust to accounting for the potential endogeneity of policy restrictiveness. The evidence suggests that the impact of policy is state-dependent and related to the composition of GDP in the target economy.
    Keywords: Cross-border M&A, services trade policy, trade frictions
    JEL: F13 F21 L80
    Date: 2015
  31. By: Fredriksen, Lars (Aarhus university); Wennberg, Karl (Institute for Analytical Sociology (IAS) & Department of Management and Engineering Linköping University, Sweden and Ratio Institute); Balachandran, Chanchal (Linköping unievrsity)
    Abstract: Knowledge-based theories of entrepreneurship infer transfer of knowledge from the effect of labor mobility on entrepreneurial entry. Yet, simple selection or situational mechanisms that do not imply knowledge transfer may influence entrepreneurial entry in similar ways. We argue that the extent to which such alternative mechanisms operate, labor mobility predicts entry but not subsequent performance for entrepreneurs. Analyses of matched employee-employer data from Sweden suggest that high rates of geographical and industry mobility increase individuals’ likelihood of entrepreneurial entry but have no effects on their entrepreneurial performance, indicating that the relationship between labor mobility and entrepreneurial entry not necessarily implies knowledge transfer.
    Keywords: Entrepreneurship; Mobility; Knowledge
    JEL: J61 M13 O18
    Date: 2015–12–23
  32. By: Feld, Lars P.; Fritz, Benedikt
    Abstract: This paper investigates the political economy of after merger effects of the large scale municipal amalgamations in the German state of Baden-Württemberg in the early 1970s. By exploiting the huge variance in the amalgamation process in terms of number of participating municipalities, municipality size or amalgamation strategy we identify considerable common pool effects. Amalgamations can create a common pool, as the former independent municipalities have now access to more resources. Common pool exploitation is stronger the more municipalities participate and when municipalities amalgamate by annexation. Additionally, voter involvement is lower in amalgamated municipalities.
    Keywords: Municipal Amalgamation,Public Debt,Common Pool,Difference in Difference
    JEL: D78 H11 H72
    Date: 2015
  33. By: Sambracos, Evangelos; Ramfou, Irene
    Abstract: It is common practice in Benefit - Cost analysis to consider freight transport time savings (FTTS) as a benefit for both transport producing and consuming companies. While transportation projects and policies resulting in FTTS are expected to have a positive effect on carriers’ performance reducing time related transport costs and improving service, this is not always the case for the demand side of the transport market. Using System Dynamics in order to model the internal supply chain of a transport using company and simulate several scenarios, we argue that FTTS do not necessarily translate to benefit for shippers, but their effect depends strongly on the structure of the company’s decision making process.
    Keywords: Freight transport time, benefit – cost analysis, Systems Dynamics
    JEL: P23 P27 R42
    Date: 2015–11
  34. By: Alicia Adsera (Woodrow Wilson School of International and Public Affairs, Princeton University); Ana Ferrer (Department of Economics, University of Waterloo)
    Abstract: This paper contributes to the analysis of the integration of immigrants in the Canadian labour market by focusing in two relatively new dimensions. We combine the large samples of the restricted version of the Canadian Census (1991-2006) with both a new measure of linguistic proximity of the immigrant’s mother tongue to that of the destination country, and with information of the occupational skills embodied in the jobs immigrants hold. This allows us to assess the role that language plays in the labour market performance of immigrants and to better study their career progression relative to the native born. Weekly wage differences between immigrants and the native born are driven mostly by penalties associated with immigrants’ lower returns to social skills, but not to analytical or manual skills. Linguistic proximity affects the types of jobs immigrant hold. The influence of linguistic proximity on the skill content of jobs immigrants hold over time and the associated wages also varies by the educational level of the migrant. Low linguistic proximity between origin and destination language imposes larger wage penalties to the university-educated, and more significantly affects the status of the jobs they hold.
    JEL: J15 J24 J31 J61 F22
    Date: 2015–12
  35. By: Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
    Abstract: We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis suggests that the internet has displaced other media with greater news content (i.e., radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, local government expenditures (and taxes) are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings corroborate the idea that voters' information plays a key role in determining electoral participation, government policies and government size.
    Keywords: media; voting
    JEL: D72
    Date: 2015–12
  36. By: Guiso, Luigi; Pistaferri, Luigi; Schivardi, Fabiano
    Abstract: We document that individuals who grew up in areas with high density of firms are more likely, as adults, to become entrepreneurs, controlling for the density of firms in their current location. Conditional on becoming entrepreneurs, the same individuals are also more likely to be successful entrepreneurs, as measured by business income or firm productivity. Strikingly, firm density at entrepreneur’s young age is more important than current firm density for business performance. These results are not driven by better access to external finance or intergenerational occupation choices. They are instead consistent with entrepreneurial capabilities being at least partly learnable through social contacts. In keeping with this interpretation, we find that entrepreneurs who at the age of 18 lived in areas with a higher firm density tend to adopt better managerial practices (enhancing productivity) later in life.
    Keywords: entrepreneurship; learning; spillovers
    JEL: J24 M13 R11
    Date: 2015–12
  37. By: Bruno Cardinale Lagomarsino (Department of Economics, Universidad de San Andres); Matías Gutman (Department of Economics, Universidad de San Andres); Lucía Freira (Department of Economics, Universidad de San Andres & UTDT); María Laura Lanzalot (Department of Economics, Universidad de San Andres); Maximiliano Lauletta (Department of Economics, Universidad de San Andres); Leandro Malchik (Department of Economics, Universidad de San Andres); Felipe Montaño Campos (Department of Economics, Universidad de San Andres); Bianca Pacini (Department of Economics, Universidad de San Andres); Martín Rossi (Department of Economics, Universidad de San Andres); Christian Valencia (Department of Economics, Universidad de San Andres)
    Abstract: We provide experimental evidence on the effect of peer pressure on activities with externalities. Specifically, we study the effect of being exposed to an observer in a public restroom on hand-washing behavior. Our estimates show that being exposed to an observer increases the probability of hand-washing in 13 percentage points. We also observe urinal flushing behavior, with similar results. We find empirical support that peer pressure may provide an additional way of solving the social suboptimality arising from externalities.
    Keywords: peer pressure, externalities
    Date: 2015–12
  38. By: Daniel Miles-Touya (RGEA, Universidad de Vigo); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: In this empirical paper we attempt to measure the separate influence on civic engagement of educational attainment and cultural transmission of civic attitudes. Unlike most of the previous empirical works on this issue, we are able to observe both individuals' educational attainment and the transmission of civic attitudes. We observe that civic returns to education are overstated when the transmission of civic attitudes is ignored. Moreover, the transmission of civic attitudes significantly enhances civic involvement and reinforces civic returns to education (the interactions are significant).
    Keywords: returns to education, cultural transmission
    JEL: I20 H80
    Date: 2015–10
  39. By: João Salazar LEITE (Department of Institutional Relations, Studies and Prospectives, CASES-Cooperativa António Sérgio para a Economia Social, Lisboa, Portugal)
    Abstract: Job creation by cooperatives and other social economy organizations requires an open spirit towards new forms of co-operatives, the doctrine call hybrids. In Portugal, public interest cooperatives is since 1984 a hybrid form made possible by the constitutional statement that a cooperative sector joins the public and private ownership of the means of production sectors. The public interest cooperative model needs to be adapted following the publication of the Social Economy Framework Law of May 8, 2013. The participation of municipal authorities in the building process of cooperative and other social economy organizations is fundamental to the sustainable development of the territories and populations fixation. I propose that social economy houses, real poles of job and income creation, could be developed under municipal supervision, therefore contributing to a real implementation of a tightly woven cooperative and social sector.
    Keywords: municipalities, cooperatives, social economy, law, public interest, Portugal
    JEL: P13
    Date: 2015
  40. By: Takauchi, Kazuhiro
    Abstract: This study examines the effects of higher transport efficiency on cost-reducing R&D investment and welfare in a two-way duopoly trade model with an imperfectly competitive transport sector. We show that, corresponding to the degree of the R&D spillover, higher transport efficiency can affect investment in a U-shaped fashion. We also show that higher transport efficiency can reduce total output and consumer surplus. By comparing the two cases of firm-specific carriers and duopoly carriers, we demonstrate that total output in the case of duopoly carriers is lower than that in the case of firm-specific carriers if the spillover is sufficiently large. Higher transport efficiency and competition in the transport sector may harm consumers.
    Keywords: Transport efficiency; Imperfectly competitive transport sector; Cost-reducing R&D; R&D spillover
    JEL: F12 L13
    Date: 2015–12–21

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