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on Urban and Real Estate Economics |
| By: | Takayama, Yuki; Kuwahara, Masao |
| Abstract: | This study examines the effects of location-dependent parking fees and time-varying congestion tolls on the behavior of heterogeneous commuters and their commuting costs. To this end, we develop a model of trip timing and parking location choices by heterogeneous commuters and characterize its equilibrium. By comparing the equilibrium with and without pricing policies, we obtain the following results: (1) without pricing policies, interactions among heterogeneous commuters yield an inefficient distribution of trip timing and parking locations; (2) imposing a parking fee and expanding parking capacity may concentrate the temporal distribution of traffic demand, thereby exacerbating traffic congestion and total commuting cost; (3) the social optimum is achieved by combining a parking fee with a congestion toll; and (4) the revenue obtained from pricing of parking and roads exactly equals the costs for optimal parking and bottleneck capacity; that is, the self-financing principle holds in the model. |
| Keywords: | scheduling preference; parking competition; bottleneck congestion; parking fee |
| JEL: | D62 H23 R41 R48 |
| Date: | 2016–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68938&r=ure |
| By: | Christian A. L. Hilber; Teemu Lyytikainen |
| Abstract: | We estimate the effect of the UK Stamp Duty Land Tax (SDLT) – a transfer tax on the purchase price of property or land – on different types of household mobility using micro data. Exploiting a discontinuity in the tax schedule, we isolate the impact of the tax from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate jumps from 1 to 3 percent. We find that a higher SDLT has a strong negative impact on housing-related and short distance moves but does not adversely affect job-induced or long distance mobility. our results suggest that transfer taxes may mainly distort housing rather than labor markets. |
| Keywords: | transfer taxes; stamp duty; transaction costs; homeownership; household mobility |
| JEL: | D23 H21 H27 J61 R21 R31 R38 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65022&r=ure |
| By: | Spader, Jonathan (Harvard University); Schuetz, Jenny (Board of Governors of the Federal Reserve System (U.S.)); Cortes, Alvaro (Abt Associates) |
| Abstract: | The relationship between neighborhood physical environment and social disorder, particularly crime, is of critical interest to urban economists and sociologists, as well as local governments. Over the past 50 years, various policy interventions to improve physical conditions in distressed neighborhoods have also been heralded for their potential to reduce crime. Urban renewal programs in the mid-20th century and public housing redevelopment in the 1990s both subscribed to the idea that signs of physical disorder invite social disorder. More recently, the federal Neighborhood Stabilization Program (NSP) provided funding for local policymakers to rehabilitate or demolish foreclosed and vacant properties, in order to mitigate negative spillovers--including crime--on surrounding neighborhoods. In this paper, we investigate the impact of NSP investments on localized crime patterns in Cleveland, Chicago and Denver. Results suggest that demolition activity in Cleveland decreased burglary and theft, but do not find measurable impacts of property rehabilitation investments--although the precision of these estimates are limited by the number of rehabilitation activities. |
| Keywords: | Crime; broken windows; foreclosures; neighborhood revitalization |
| JEL: | H40 H70 R10 R50 |
| Date: | 2015–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2015-88&r=ure |
| By: | Sander van Veldhuizen; Benedikt Vogt; Bart Voogt |
| Abstract: | We investigate the impact of negative home equity on household mobility. We investigate the impact of negative home equity on household mobility. We employ a unique administrative data set, which contains annual mobility and a large set of homeownercharacteristics of more than two million Dutch households. We exploit the regional variation of the substantial and unanticipated housing market bust starting in 2008 until 2012 to identify the effect of negative home equity on mobility. We find that households falling into negative equity due to unanticipated declining house prices are 18 percent less likely to move compared to households maintaining positive home equity. |
| JEL: | D10 D14 H31 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:323&r=ure |
| By: | Chan, Sewin (New York University); Haughwout, Andrew F. (Federal Reserve Bank of New York); Hayashi, Andrew (University of Virginia); Van der Klaauw, Wilbert (Federal Reserve Bank of New York) |
| Abstract: | The mortgage default decision is part of a complex household credit management problem. We examine how factors affecting mortgage default spill over to other credit markets. As home equity turns negative, homeowners default on mortgages and HELOCs at higher rates, whereas they prioritize repaying credit cards and auto loans. Larger unused credit card limits intensify the preservation of credit cards over housing debt. Although mortgage non-recourse statutes increase default on all types of housing debt, they reduce credit card defaults. Foreclosure delays increase default rates for both housing and non-housing debts. Our analysis highlights the interconnectedness of debt repayment decisions. |
| Keywords: | mortgage default; state foreclosure laws; consumer finance |
| JEL: | D12 D14 G1 K10 |
| Date: | 2015–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:732&r=ure |
| By: | Saleem Bahaj (Bank of England; Centre for Macroeconomics (CFM)); Angus Foulis (Bank of England; Centre for Macroeconomics (CFM)); Gabor Pinter (Bank of England; Centre for Macroeconomics (CFM)) |
| Abstract: | We present evidence on a new macroeconomic channel which we call the residential collateral channel. Through this channel, an increase in real estate prices expands firm activity by enabling company directors to utilise their residential property as a source of funds for their business. This channel is a key determinant of investment and job creation, with a £1 increase in directors’ residential collateral estimated to increase investment by £0.07 and total wage costs by £0.10. To show this, we use a unique combination of UK datasets including firm-level accounting data matched with transaction-level house price data and loan-level residential mortgage data. The aggregate value of residential collateral held by company directors suggests that this channel has important macroeconomic effects. We complement this with further evidence on the corporate collateral channel whereby an increase in real estate prices directly expands firm activity by enabling businesses to borrow more against their corporate real estate. A simple general equilibrium model with collateral constrained firms is used to quantify the aggregate effects of both channels. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1607&r=ure |
| By: | Börjesson, Maria (CTS); Fung, Chau Man (Katholieke Universiteit Leuven); Proost , Stef (Katholieke Universiteit Leuven) |
| Abstract: | Many public transport services are heavily subsidized. One of the main justifications of this is the expected beneficial effect on road congestion. Stockholm introduced congestion pricing in 2006 and the effects on car and public transport demand were carefully monitored. This change in prices provides unique estimates on price- and cross-price elasticities. This paper uses these data to model the optimal pricing, frequency, bus size and number of bus lanes for a corridor in the presence of congestion pricing of cars. Results show that the subsidies for peak bus trips are indeed too high. However, the major welfare benefits of the reform are due to a decrease in frequencies during the off-peak period and the use of larger buses. |
| Keywords: | Public transport; Bus fares; Bus lanes; Bus frequency; Subsidies; Congestion pricing |
| JEL: | D61 H54 R41 R48 |
| Date: | 2016–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_019&r=ure |
| By: | Rickman, Dan S.; Wang, Hongbo |
| Abstract: | In this paper, we apply a spatial equilibrium growth model (Glaeser and Tobio, 2008) to examine relative housing price growth across the provinces and municipalities of mainland China for 1999-2013. The spatial equilibrium growth model is built upon the traditional static Rosen-Roback spatial equilibrium model. A distinguishing feature is the addition of a regionally-varying elasticity of housing supply. A primary finding is the significant geographical differences in housing price growth and the importance of differences in regional housing supply in explaining the differences in housing price growth. Regions in the East had the most inelastic housing supply, while northern regions had the most elastic housing supply. |
| Keywords: | Housing supply; China; Spatial equilibrium |
| JEL: | R11 R31 |
| Date: | 2016–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69157&r=ure |
| By: | Luisa Gagliardi; Teresa Schlüter |
| Abstract: | This paper investigates the relation between amenities and skills by looking at the sorting behavior of skilled individuals across neighbourhoods within British cities. Using a detailed micro dataset on housing transactions we recover a composite measure of local amenities that captures the level of attractiveness of each neighbourhood. By combining the amenity measure with data on British individuals we analyse how the cost associated with the consumption of amenities is distributed across education groups and across neighborhoods within cities defined as integrated labour markets. Results show that, holding constant the availability of job opportunities, high skilled individuals exhibit a moderate preference bias towards amenity consumption as they tend to sort into more attractive neighborhoods than lower skilled individuals with the same income. |
| Keywords: | neighbourhood characteristics; sorting amenities; skills; local labour markets; hedonic pricing |
| JEL: | J24 R22 R23 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65017&r=ure |
| By: | Enström Öst, Cecilia (Institute for Housing and Urban Research (IBF), Uppsala University and the Expert Group on Public Economics (ESO), Ministry of Finance); Wilhelmsson, Mats (Centre for Banking and Finance) |
| Abstract: | Earlier research has found that housing and childbearing are linked, difficulties accessing housing possibly delaying childbearing and negatively effecting education opportunities. To increase housing accessibility, some municipalities have earmarked apartments for young adults. These “youth dwellings” are criticized for being small and not necessarily facilitating family formation and fertility, better suiting students’ needs. We analyze the childbearing and education patterns of young adults entering youth housing in 1996. We follow them for 14 years to examine the causal effect of youth housing on childbearing and higher education using a propensity score matching technique. Results indicates that gaining access to small, low-rent inner-city rental apartments earmarked for young adults promote higher education but negatively affect childbearing, unless the rest of the housing market permits these renters to advance their housing careers. |
| Keywords: | Housing market; Youth housing; Childbearing; Higher education |
| JEL: | I24 J13 R21 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthrec:2015_003&r=ure |
| By: | Ferrante, Francesco (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | Two key channels that allowed the 2007-2009 mortgage crisis to severely impact the real economy were: a housing net worth channel, as defined by Mian and Sufi (2014), which affected the wealth of leveraged households; and a bank net worth channel, which reduced the ability of financial intermediaries to provide credit. To capture these features of the Great Recession, I develop a DSGE model with balance-sheet constrained banks financing both risky mortgages and productive capital. Mortgages are provided to agents facing idiosyncratic housing depreciation risk, implying an endogenous default decision and a link between their borrowing capacity and house prices. The interaction among the housing net worth channel, the bank net worth channel and endogenous foreclosures generates novel amplification mechanisms. I analyze the quantitative implications of these new channels by considering two different shocks linked to the supply of mortgage credit: an increase in the variance of housing risk and a deterioration in the collateral value of mortgages for bank funding. Both shocks are able to produce co-movements in house prices, business investment, consumption and output. Finally, I study two types of policy interventions that are able to reduce the severity of a mortgage crisis: debt relief for borrowing households and central bank credit intermediation. |
| Keywords: | Bank runs; deposit insurance; large depositors |
| JEL: | E32 E44 E58 G21 |
| Date: | 2015–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2015-110&r=ure |
| By: | AKAMATSU Takashi; MORI Tomoya; TAKAYAMA Yuki |
| Abstract: | Agglomeration externalities have been recognized as major sources of lumpy spatial distributions of industries and population. While the abstraction of interregional space has been a common exercise, the recent increasing availability of disaggregated geographical data and more sophisticated computational techniques have promoted counterfactual analyses based on many-region models of agglomeration externalities with explicit interregional space (e.g., Redding and Sturm, 2008; Allen and Arkolakis, 2014). A caveat is that incorporating interregional space to a many-region model with agglomeration externalities by itself does not warrant the formation of polycentric agglomerations in stable equilibria—a crucial property in order to replicate the observed geography of agglomerations. We elaborate this point by comparing a pair of new economic geography models: Forslid and Ottaviano (2003) and Helpman (1998). In a two-region economy, these models exhibit both "agglomeration" (i.e., a relative concentration of mobile agents in one of the regions) and "dispersion" (i.e., a uniform distribution of mobile agents across the two regions). But, if the location space were more disaggregated, only the former admits polycentric agglomerations in stable equilibria, while in the latter, only a monocentric agglomeration can occur if any. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:16009&r=ure |
| By: | Jing Chen (Regional Research Institute, West Virginia University); Randall Jackson (Regional Research Institute, West Virginia University) |
| Abstract: | The concept of “economic clusters” is usually referred to as geographical concentrations of firms in the same or related industries. Illustrative examples of economic clusters are medical devices clusters in Massachusetts and high-tech clusters in Silicon Valley, California. Such phenomenon have attracted interests from geographers, regional economists, urban planners and regional scientists a long time ago, yet in recent decades it has become extremely popular among policy-makers for regional development. Thus, an annotated bibliography on the state of the art of economic cluster research will be useful for current academicians and practitioners and will help them gain a deep and comprehensive understanding towards current economic clusters research |
| Keywords: | economic clusters, agglomerations, typologies |
| JEL: | R11 R12 O18 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2015rd04&r=ure |
| By: | Richard Arnott (Department of Economics, University of California Riverside); Huiling Zhang (University of California, Riverside) |
| Abstract: | This paper estimates the aggregate value of land in the Greater Los Angeles Region in 2000 using the land parcel database of the Southern California Association of Governments (SCAG), which combines land registry and property tax assessment data from the constituent counties. To our knowledge, the paper is the first to estimate aggregate land value from a parcel database. Aggregate land value is of interest in several contexts: macroeconomic modeling of land and property markets, taxation of land and property, and regional and national accounting. Land parcel databases hold great promise for application in urban and regional policy analysis. Unfortunately, the assessment component of the SCAG database has severe problems with missing and erroneous data. One contribution of the paper is to alert researchers to these problems, which are likely present in other land parcel databases, and to advise them not to trust results reported for any land parcel database unless accompanied by documentation of how these problems were dealt with. We establish a lower bound on the ratio of aggregate land value to regional income of 1.114, which is higher than previous estimates, and argue that the true ratio is likely considerably higher. |
| Keywords: | land value |
| JEL: | R10 R14 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:201506&r=ure |
| By: | Mills, James (Amherst Holdings, LLC); Molloy, Raven S. (Board of Governors of the Federal Reserve System (U.S.)); Zarutskie, Rebecca (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | In 2012, several large firms began purchasing single-family homes with the stated intention of creating large portfolios of rental property. We present the first systematic evidence on how this new investor activity differs from that of other investors in the housing market. Many aspects of buy-to-rent investor behavior are consistent with holding property for rent rather than reselling quickly. Additionally, the large size of these investors imparts a few important advantages. In the short run, this investment activity appears to have supported house prices in the areas where it is concentrated. The longer-run impacts remain to be seen. |
| Keywords: | Institutional investors; buy-to-rent; ownership structure; real estate investors; rental housing; securitization; single-family rental |
| Date: | 2015–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2015-84&r=ure |
| By: | Neil Lee |
| Abstract: | The 'Northern Powerhouse' is the UK government's latest attempt to reduce regional disparities. By bringing together the cluster of cities in the North of England, the aim is to create an agglomeration with the scale to counterbalance London. To achieve this, policymakers have focused on four areas - transport, devolution, science and innovation, and culture. This paper summarises and critically reviews the Northern Powerhouse. While sympathetic to the basic idea, it argues that the Northern Powerhouse has become an increasingly fuzzy concept. It can be understood both as an economic development strategy, to help guide policymakers, and a political brand, giving focus to disparate and often pre-existing policies. As a strategy, it has meant some new resources and powers for the North and represents a partial return of interventionist approaches to local economic development. But it is geographically fuzzy, with funding insufficient to achieve its vague but ambitious aims. Instead, the Northern Powerhouse has become a political brand - used to brand policy interventions in a scattergun fashion, including some which pre-date the term or would have happened anyway. The result is a fuzzy policy agenda which is increasingly disconnected from the initial theoretical concept. |
| Keywords: | agglomeration, rebalancing, Northern Powerhouse, north-south divide |
| JEL: | R1 R12 R58 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercpp:014&r=ure |
| By: | Dreger, Christian (DIW Berlin); Kosfeld, Reinhold (University of Kassel); Zhang, Yanqun (Chinese Academy of Social Sciences) |
| Abstract: | Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. In addition to a broad set of economic determinants, such as per capita income and consumption, consumer prices, unemployment and industrial structures, spatial effects are taken into account. They might arise for different reasons, including competition of local policymakers. The results show that the impact of economic variables declines, once spatial spillovers are considered. Although the minimum wage regulation pursues the relevance of economic factors in the determination of the appropriate levels, the actual development is largely driven by regional dependencies. As minimum wage standards set by local officials do not fully reflect the regional economic development, further reforms should be on the agenda. |
| Keywords: | Chinese transformation, minimum wages, spatial effects, spatial Durbin model |
| JEL: | J30 R23 C23 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9716&r=ure |
| By: | Lapatinas, Athanasios; Garas, Antonios |
| Abstract: | We develop a location analysis spatial model of firms’ competition in multi-characteristics space, where consumers’ opinions about the firms’ products are distributed on multilayered networks. Firms do not compete on price but only on location upon the products’ multi-characteristics space, and they aim to attract the maximum number of consumers. Boundedly rational consumers have distinct ideal points/tastes over the possible available firm locations but, crucially, they are affected by the opinions of their neighbors. Our central argument is that the consolidation of a dense underlying consumers’ opinion network is the key for the firm to enlarge its market-share. Proposing a dynamic agent-based analysis on firms’ location choice we characterize multi-dimensional product differentiation competition as adaptive learning by firms’ managers and we argue that such a complex systems approach advances the analysis in alternative ways, beyond game-theoretic calculations. |
| Keywords: | location choice, networks, multi-characteristics space, networks; consumer behavior; decision heuristics; agent-based model; |
| JEL: | C63 C65 D72 L14 R39 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68959&r=ure |
| By: | Alan Mace; Nancy Holman; Antoine Paccoud; Jayaraj Sundaresan |
| Abstract: | Achieving higher density development has become, as part of sustainable development, a core principle of the contemporary planning professional. The appeal of density is its simplicity, it is an independent measurable element to which various separate claims can be and are attached; it achieves greater public transport use, makes it possible to live nearer to work, supports mixed uses providing a more lively street-scene and so on. As the academic literature has shown the reality is much more complex as achieving a positive outcome through adjustments to density may lead to negative outcomes elsewhere; it can allow more people to live near public transport nodes but can be detrimental in terms of housing affordability for example. Given this tension between the simplicity of the claims and the complexity of application we are interested in how planners seek to balance the multiple advantages and disadvantages of density; to what extent do they approach density as a simple variable or as a complex act of balancing. We address this question by looking at four higher density developments in London. |
| Keywords: | density; compact city; London; planning governance |
| JEL: | Q15 L91 L96 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:56768&r=ure |
| By: | Hoffmann, Mathias; Stewen, Iryna |
| Abstract: | We explore empirically how capital inflows into the US and financial deregulation within the United States interacted in driving the run-up (and subsequent decline) in US housing prices over the period 1990-2010. To obtain an ex ante measure of financial liberalization, we focus on the history of interstate-banking deregulation during the 1980s, i.e. prior to the large net capital inflows into the US from China and other emerging economies. Our results suggest a long shadow of deregulation: in states that opened their banking markets to out-of-state banks earlier, house prices were more sensitive to capital inflows. We provide evidence that global imbalances were a major positive funding shock for US wide banks: different from local banks, these banks held a geographically diversified portfolio of mortgages which allowed them to tap the global demand for safe assets by issuing private-label safe assets backed by the country-wide US housing market. This, in turn, allowed them to expand mortgage lending and lower interest rates, driving up housing prices. |
| Keywords: | HOUSE PRICES, SAVINGS GLUT, GLOBAL IMBALANCES, CREDIT CONSTRAINTS, STATE BANKING DEREGULATION |
| JEL: | G10 G21 G28 F20 F32 F40 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:27&r=ure |
| By: | Rey, Sergio |
| Abstract: | In the study of income inequality dynamics, the concept of exchange mobility plays a central role. Applications of classical rank correlation statistics have been used to assess the degree to which individual economies swap positions in the income distribution over time. These classic measures ignore the underlying geographical pattern of these rank changes. Rey (2004) introduced a spatial concordance statistic as an extension of Kendall’s rank correlation statistic, a commonly employed measure of exchange mobility. This article suggests local forms of the global spatial concordance statistic: Local Indicators of Mobility Association (LIMA). The LIMA statistics allow for the decomposition of the global measure into the contributions associated with individual locations. They do so by considering the degree of concordance (stability) or discordance (exchange mobility) reflected within an economy’s local spatial context. Different forms of the LIMAs derive from alternative expressions of the neighborhood and neighbor set. Additionally, the additive decomposition of the LIMAs permits the development of a meso-level analytic to examine whether the overall space-time concordance is driven by either interregional or intraregional concordance. The measures are illustrated in a case study that examines regional income dynamics in Mexico. |
| Keywords: | space-time, concordance, inequality |
| JEL: | R12 R15 |
| Date: | 2016–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69480&r=ure |
| By: | Jonas Egerer; Jens Weibezahn; Hauke Hermann |
| Abstract: | We discuss the implications of two price zones, i.e. one northern and southern bidding area, on the German electricity market. In the northern zone, continuous capacity additions with low variable costs cause large regional supply surpluses in the market dispatch while conventional capacity decreases in the southern zone. As the spatial imbalance of supply and load is increasing, the current single bidding area results more often in technically infeasible market results requiring curative congestion management. Additional bidding zones would enable better market integration of scarce transmission capacities in a system exposed to structural regional imbalances. Using a line sharp electricity sector model, this paper analyzes the system implications and the distributional effects of two bidding zones in the German electricity system in 2012 and 2015, respectively. Results show a decrease in cross-zonal re-dispatch levels, in particular in 2015. However, overall network congestion and re-dispatch levels increase in 2015 and also remain high for both bidding zones. Results are very sensitive to additional line investments illustrating the challenge to define stable price zones in a dynamic setting. With two bidding areas, prices in the model results increase in the southern zone and decrease in the northern zone. The average price deviation grows from 0.4 EUR/MWh in 2012 to 1.7 EUR/MWh in 2015 with absolute values being significantly higher in hours with price differences. Stakeholders within zones are exposed to the price deviations to a different extent. Distributional effects are surprisingly small compared to the wholesale price or different network charges. |
| Keywords: | German electricity market, congestion management, bidding zone configuration, distributional effects. |
| JEL: | L94 Q41 Q48 L51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1451&r=ure |
| By: | Chih-Sheng Hsieh (The Chinese University of Hong Kong, Hong Kong, PR China); Hans van Kippersluis (Erasmus University Rotterdam, the Netherlands) |
| Abstract: | Social interactions are generally thought to play an important role in smoking initiation among adolescents. In this paper we exploit detailed friendship nominations in the US Add Health data, and extend the Spatial Autoregressive Model (SAR) model to deal with (i) endogenous peer selection, and (ii) unobserved contextual effects, in order to identify the endogenous peer effect. We show that peer effects in the uptake of smoking are predominantly affecting individuals who are emotionally unstable. That is, individuals with "weaker" personalities are more vulnerable to peer pressure. This finding not only helps understanding heterogeneity in peer effects, but additionally provides a promising mechanism through which personality affects later life health and socioeconomic outcomes. |
| Keywords: | Smoking, Peer effects, Personality, SAR model, Bayesian MCMC |
| JEL: | C11 C21 I12 |
| Date: | 2015–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20150093&r=ure |
| By: | Calista Cheung; Dmitry Granovsky |
| Abstract: | Housing starts and building permits data are commonly used as leading indicators of economic activity. In British Columbia, all new homes must be registered with the Homeowner Protection Office, a branch of BC Housing, before the issuance of building permits and the start of construction. Data on new housing registrations (NHR) could thus potentially be used as an even earlier leading indicator of economic activity. This study assesses whether NHR data have significant predictive power for economic activity in British Columbia. The authors find that quarterly increases in new registrations for single detached homes have statistically significant predictive content for growth in real GDP over the next one to three quarters, and provide stronger signals compared to housing starts and building permits over this forecast horizon. These signals remain significant for growth in real GDP over the next two quarters even in the presence of other leading indicators in the equations. However, forecasts using quarterly NHR data with other leading indicators are not able to outperform simple benchmark forecasts in an out-of-sample forecasting exercise. Nonetheless, adding the NHR variable to an AR(1) equation does produce forecasts that are superior to a simple AR(1) and that at one quarter ahead also outperform an AR(1) augmented with building permits. |
| Keywords: | Business fluctuations and cycles, Housing, Regional economic developments |
| JEL: | C13 C53 E32 E37 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:16-3&r=ure |
| By: | Sandhya Garg (Indira Gandhi Institute of Development Research) |
| Abstract: | India, a quasi federal structure specifies the provisions of federal transfers to subnational governments to cushion their inadequate expenditure capacity. Observing this provision of federal transfers and large disparities in real per capita expenditure, the present study explores evidence of convergence in total real per capita expenditure and its three categories: education, health and development expenditure across Indian states. Results show that there exists conditional convergence in all expenditure categories. Federal transfers are helping to equalize the level of per capita expenditure across sub national governments. It is important to note that, not all types of federal transfers have equal impact on expenditure growth due to their varying distribution criteria. Formula transfers, devolved based on a composite formula, seem to be expenditure augmenting more than discretionary components of the federal transfers. The former category also ensures faster convergence as compared to the latter. Literature on strategic interaction among different jurisdiction indicates that public expenditure in one jurisdiction is not independent of public expenditure of neighbouring jurisdictions. Using the spatial econometrics approach, this study analyses such spillover effect in public expenditure. Econometric estimates suggest significant spatial spillovers which extend beyond the borders of state and effect expenditure growth in other states. Results are robust to various model specifications. |
| Keywords: | India, public expenditure, convergence, federal transfers, spatial econometrics, political economy |
| JEL: | C23 H72 H77 R12 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2015-028&r=ure |
| By: | McCoy, Daire; Lyons, Sean; Morgenroth, Edgar; Palcic, Donal; Allen, Leonie |
| Abstract: | Extensive previous work on factors affecting regional development has considered the impact of aggregate measures of infrastructure like the public capital stock or individual infrastructures such as motorways. More recently the impact of ICT infrastructure, and in particular broadband, has received attention. This paper analyses the impact on new business establishments of broadband infrastructure, motorways, airports and railways and a range of other local characteristics such as availability of human capital and access to third level educational facilities. The sample period spans the introduction and recent history of broadband in Ireland, and during this period 86% of the current motorway network was constructed. Human capital, measured as the percentage of the population with a third level qualification and proximity to a third level institution prove to be important determinants of new firm establishments. Availability of broadband infrastructure is significant, but its effects may be mediated by availability of sufficient local human capital. Transport infrastructure access is significant for some sectors. For all sectoral groupings examined, firm establishments seem to favour a more diverse local sectoral mix rather than a concentrated one. |
| Keywords: | New business establishments; ICT; Infrastructure; Count panel regression model |
| JEL: | D22 R11 R3 |
| Date: | 2016–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69074&r=ure |
| By: | Paul Cheshire; Christian A. L. Hilber; Hans R. A. Koster |
| Abstract: | Policy makers agree that vacant houses are undesirable. Moreover the existence of empty houses is used as an argument for allocating less land for new construction. So higher vacancy rates tend to trigger tighter restrictions on the supply of land. Such tighter restrictions lead to higher prices and, because of the incentives this creates for occupying housing, to lower housing vacancies (‘opportunity cost effect’). There is, however, a second effect ignored by planners: more restrictive planning policies impede the matching process in housing markets so leading to higher vacancies (‘mismatch effect’). Which of these two forces dominates is an empirical question. This is our focus here. Addressing potential reverse causation and other endogeneity concerns, we use a unique panel data set on land use regulation for 350 Local Authorities in England from 1981 to 2011. Our results show that tighter local planning constraints increase local housing vacancy rates, suggesting that the mismatch effect dominates. A one standard deviation increase in local regulatory restrictiveness causes the average local vacancy rate to increase by about 0.9 percentage points (23 percent). The results are economically meaningful and show that pointing to the existence of vacant houses as a reason for being more restrictive in allocating land for housing is counterproductive. |
| Keywords: | residential vacancy rates; housing supply constraints; land use regulation |
| JEL: | R13 R38 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65014&r=ure |
| By: | Brian Bell; Rui Costa; Stephen Machin |
| Abstract: | Do compulsory schooling laws reduce crime? Previous evidence for the U.S. from the 1960s and 1970s suggests they do, primarily working through their effect on educational attainment to generate a causal impact on crime. In this paper, we consider whether more recent experience replicates this. There are two key findings. First, there is a strong and consistent negative effect on crime from stricter compulsory schooling laws. Second, there is a weaker and sometimes non-existent link between such laws and educational attainment. As a result, credible causal estimates of the education-crime relationship cannot in general be identified for the more recent period, though they can for some groups with lower education levels (in particular, for blacks). |
| Keywords: | crime; education; compulsory schooling laws |
| JEL: | I2 K42 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64968&r=ure |
| By: | Kara, Alper (Loughborough University); Marques-Ibanez, David (Board of Governors of the Federal Reserve System (U.S.)); Ongena, Steven (University of Zürich) |
| Abstract: | Banks are usually better informed on the loans they originate than outside investors. As a result, securitized loans might be of lower credit quality than — otherwise similar — non-securitized loans. We assess the effect of securitization activity on credit quality employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that, at issuance, banks do not select and securitize loans of lower credit quality. Following securitization, however, the credit quality of borrowers whose loans are securitized deteriorates by more than those in the control group. We find tentative evidence suggesting that poorer performance by securitized loans might be linked to banks’ reduced monitoring incentives. |
| Keywords: | Securitization; syndicated loans; credit risk; |
| Date: | 2015–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1148&r=ure |
| By: | L. Cocco; F. Cerina; M. Marchesi; K. Mannaro; F. Pigliaru |
| Abstract: | A network on an island only serves the territory in which it is located, while on a mainland region the same network would also serve other regions. This paper quantitatively assesses this effect through a model which simulates the construction of a railway network in Italy. The negative effect of land discontinuity on the development of an insular railway network is found to be quite strong - while the railway lines located in the island of Sardinia are the least profitable under the factual scenario, their relative profitability is significantly boosted in every counterfactual scenario where land discontinuity is artificially removed. |
| Keywords: | Simulation Modeling, Railway networks, Insularity, Graph Theory |
| JEL: | R41 C63 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201522&r=ure |
| By: | Lant Pritchett and Yamini Aiyar |
| Abstract: | We combine newly created data on per student government expenditure on children in government elementary schools across India, data on per student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas. The combination of these three sources allows us to compare both the “accounting cost” difference of public and private schools and also the “economic cost”—what it would take public schools, at their existing efficacy in producing learning, to achieve the learning results of the private sector. We estimate that the “accounting cost” per student in a government school in the median state in 2011/12 was Rs. 14,615 while the median child in private school cost Rs. 5,961. Hence in the typical Indian state, educating a student in government school costs more than twice as much than in private school, a gap of Rs. 7,906. Just these accounting cost gaps aggregated state by state suggests an annual excess of public over private cost of children enrolled in government schools of Rs. 50,000 crores (one crore=10 million) or .6 percent of GDP. But even that staggering estimate does not account for the observed learning differentials between public and private. We produce a measure of inefficiency that combines both the excess accounting cost and a money metric estimate of the cost of the inefficacy of lower learning achievement. This measure is the cost at which government schools would be predicted to reach the learning levels of the private sector. Combining the calculations of accounting cost differentials plus the cost of reaching the higher levels of learning observed in the private sector state by state (as both accounting cost differences and learning differences vary widely across states) implies that the excess cost of achieving the existing private learning levels at public sector costs is Rs. 232,000 crores (2.78% of GDP, or nearly US$50 billion). It might seem counterintuitive that the total loss to inefficiency is larger than the actual budget, but that is because the actual budget produces such low levels of learning at such high cost that when the loss from both higher expenditures and lower outputs are measured it exceeds expenditures. |
| Keywords: | education, primary schooling, India |
| JEL: | I21 I25 I28 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:391&r=ure |
| By: | Psycharis, Yannis; Rodriguez-Pose, Andres; Tselios, Vassilis |
| Abstract: | This paper discusses how electoral politics shapes the regional allocation of public investment expenditures per capita in Greece. Using regional public investment data for 10 political periods (1975-2009), combined with electoral data by constituency, a model is proposed which captures the influence of politics on the regional distribution of public investment expenditures. The results of the analysis point to a strong relationship between electoral results and regional public investment spending. Greek governing parties have tended to reward those constituencies returning them to office. Moreover, an increase in both the absolute and relative electoral returns of the governing party in a region has traditionally been followed by greater public investment per capita in that region. Regions where the governing party (whether Liberal or Socialist) has held a monopoly of seats have been the greatest beneficiaries of this type of pork-barrel politics. |
| Keywords: | elections; Greece; political geography; pork-barrel politics; public investment |
| JEL: | H50 H77 R12 R58 Z18 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10422&r=ure |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); Nico Frederick Katzke (bDepartment of Economics, Stellenbosch University, South Africa) |
| Abstract: | In this paper we set out to date-stamp periods of US housing price explosivity for the period 1830 – 2013. We make use of several robust techniques that allow us to identify such periods by determining when prices start to exhibit explosivity with respect to its past behaviour and when it recedes to long term stable prices. The first technique used is the Generalized sup ADF (GSADF) test procedure developed by Phillips, Shi, and Yu (2013), which allows the recursive identification of multiple periods of price explosivity. The second approach makes use of Robinson (1994)’s test statistic, comparing the null of a unit root process against the alternative of specified orders of fractional integration. Our analysis date-stamps several periods of US house price explosivity, allowing us to contextualize its historic relevance. |
| Keywords: | GSADF, Bubble, Structural Breaks, Random Walk, Explosivity |
| JEL: | C22 G15 G14 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:emu:wpaper:15-03.pdf&r=ure |
| By: | Basten, Christhoph; Koch, Cathérine |
| Abstract: | We examine how the CCB affects mortgage pricing after Switzerland was first to activate this macroprudential tool of Basel III. Observing multiple offers per request, we obtain three core findings. First, the CCB changes the composition of mortgage supply, as capital-constrained and mortgage-specialized banks raise prices relatively more. Second, risk-weighting schemes do not amplify the CCB effect. Third, CCB-subjected banks and CCB-exempt insurers both raise mortgage rates. To conclude, changes in the supply composition hint at the CCB’s success in shifting mortgages from less to more resilient banks, but stricter capital requirements do not discourage banks from risky mortgage lending. |
| Keywords: | macroprudential policy, capital requirement, mortgage pricing |
| JEL: | G21 E51 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:26&r=ure |
| By: | Carl Bonander; Niklas Jakobsson; Federico Podestà; Mikael Svenson |
| Abstract: | Are research universities important for regional growth and development? We study the impact on the regional economy of granting research university status to two former university colleges in two different regions in Sweden. We analyze the development in the treated regions compared to a set of control regions that are created using the synthetic control method. We find small or no effects on the regional economy. Our findings cast doubt on the effectiveness of research universities in fostering regional growth and development. We contribute to the existing research by using a more credible identification strategy in assessing the effects of universities on the regional economy compared to what has usually been used in previous studies. |
| Keywords: | Higher education, Local economy, Regional development, Research, University |
| JEL: | H52 H75 O18 R11 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2016-03&r=ure |
| By: | Berggren, Björn (Department of Real Estate and Construction Management, Royal Institute of Technology); Fili, Andreas (Department of Real Estate and Construction Management, Royal Institute of Technology); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology) |
| Abstract: | Entrepreneurs are at the core of economic development in that they start new businesses or make existing firms grow. To fulfill this important role, entrepreneurs need access to finance. Owing to information asymmetry and the relatively high risk associated with business start-ups, many financiers shy away from engaging in relationships with firms during the early stages of their development. Based on the existing body of knowledge on the financing of entrepreneurship, we know that insider finance is of paramount importance in the early stages of firms’ development. We expand this knowledge base by analyzing the influence of house prices on business start-ups across municipalities in Sweden. In our analysis, we include data from all municipalities in Sweden. Our data on house prices and control variables are collected in period one, and our data on the frequency of start-ups are collected in period two. We find that rising house prices in a municipality lead to a higher frequency of start-ups. In our regression analysis, we find that a 1% increase in house prices leads to a 0.14% increase in start-ups. Our findings are in line with the limited international research that has been previously conducted, and for this reason, they could be seen as a vital addition to the existing body of knowledge within the area of entrepreneurship and regional development. |
| Keywords: | Business start-ups; entrepreneurship; financing; house prices; mortgages |
| JEL: | M13 R11 R31 |
| Date: | 2015–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthrec:2015_008&r=ure |
| By: | Balmer, Roberto E. |
| Abstract: | Alternative telecommunications operators have continuously invested in their own infrastructure in recent years. After more than a decade since liberalization, competitive conditions have substantially changed, especially in urban areas. European regulatory authorities have acknowledged this development by starting regional deregulation. Additionally, different forms of cooperative investments in next generation broadband have appeared on the market. This article reviews the theoretical and empirical literature on geographic regulation as well as practical cases. Based on this review it is suggested that regulators consider geographically segmented access prices to set optimal incentives for the investment in next generation broadband infrastructure. |
| Keywords: | next generation access,co-investment,geographic regulation |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse15:127125&r=ure |
| By: | Bruno Gabriel Witzel de Souza (Georg-August-Universität Göttingen) |
| Abstract: | This paper studies the impact of German-speaking immigrants on the path dependence of human capital accumulation in the State São Paulo, Brazil. Using a new dataset based on Almanacs from 1873 and 1888, we are able to test if (i) the cultural component, (ii) immigrants' on-the-job-skills, and (iii) their ethnic schools influenced the historical accumulation of human capital. No robust evidence was found for the first two explanations. On the other hand, for the 1910s, German schools had strong positive impacts on enrollment, not only for private, but also for state schools, a result which suggests the occurrence of spillover and contagion effects. Such impact tends, however, to dissipate over time and it does not survive for current educational performance. In addition, the paper shows that the pathdependence of education is conditional on the type of school: while there is a positive persistence in enrollment in private schools over the 20th century, enrollment in state schools depends negatively on its historical levels, reflecting convergence toward 100% enrollment rates in primary schooling. Furthermore, current stocks of human capital, measured by illiteracy and years of education, are shown to be strongly impacted by completion and enrollment in state schools back in the 1910s. |
| Date: | 2016–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:234&r=ure |
| By: | Yongzheng Liu (Renmin University of China) |
| Abstract: | This paper explores how government preferences a ect the choices of capital tax rates in the presence of tax competition. We develop a model in which governments, di erentiating in their preferences for economic development and regional equality, compete for mobile capital over corporation taxes. The key prediction of the model, borne out in data from OECD countries over the years 1990-2007, is that countries emphasizing more on economic development tend to choose lower level of corporate income tax rates than the counterparts that stressing more on regional equality. Our result contributes to the tax competition literature by advancing a new element, heterogeneous government preferences, as another potential source of asymmetric tax policy responses that is widely observed across countries. |
| Keywords: | Tax competition; heterogeneous government preferences; asymmetric tax rates |
| Date: | 2014–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper1428&r=ure |
| By: | Gabrielle Wills (Department of Economics, University of Stellenbosch) |
| Abstract: | A rising number of school leadership changes have been occurring in South African schools as a large proportion of incumbent principals near retirement age. While this presents opportunities to replace weaker school principals with better performing ones, these changes may also destabilise school environments and impede on learning. This paper explores how these principal change events affect school performance in the context of South Africa using a unique administrative dataset constructed by linking payroll data on the population of public school principals to national data on schools and matriculation examination outcomes. Exploiting the panel structure of the data, a school fixed effects strategy suggests that principal changes are indeed detrimental to school performance especially when leadership changes are due to principals exiting the public education system. These results are robust to using an alternative estimation strategy proposed by Heckman, Ichimura and Todd (1997) which combines propensity score matching with a difference-in-difference estimation strategy. The paper also considers two mechanisms through which school leadership changes may impact on school performance, namely through rising promotion rates and teacher turnover. |
| Keywords: | Principals, school leadership, principal turnover, teacher turnover, school performance |
| JEL: | J63 I29 J45 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers256&r=ure |
| By: | Papa Ousmane Cissé (Centre d'Economie de la Sorbonne et Université Gaston Berger - LERSTAD); Abdou Kâ Diongue (Université Gaston Berger - LERSTAD); Dominique Guegan (Centre d'Economie de la Sorbonne) |
| Abstract: | In this paper, we introduce a new model called Fractionally Integrated Separable Spatial Autoregressive processes with Seasonality and denoted Seasonal FISSAR for two-dimensional spatial data. We focus on the class of separable spatial models whose correlation structure can be expressed as a product of correlations. This new modelling allows taking into account the seasonality patterns observed in spatial data. We investigate the properties of this new model providing stationary conditions, some explicit expressions form of the autocovariance function and the spectral density function. We establish the asymptotic behaviour of the spectral density function near the seasonal frequencies and perform some simulations to illustrate the behaviour of the model |
| Keywords: | seasonality; spatial short memory; seasonal long memory; two-dimensional data; separable process; spatial stationary process; spatial autocovariance |
| JEL: | C02 C21 C51 C52 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:16013&r=ure |
| By: | Fu, Shihe; Liao, Yu; Zhang, Junfu |
| Abstract: | This paper uses the 2011 China Household Finance Survey data to estimate the effect of change in housing value on homeowners’ labor force participation. Using the average housing capital gains of other homes in the same community as an instrument for the housing capital gains of a given household, we find that a 100 thousand yuan increase in housing value leads to a 1.37 percentage point decrease in female homeowners’ probability of participating in the labor force and a 1.49 percentage point increase in their probability of becoming housewives. We find little effect on men’s labor force participation. |
| Keywords: | Housing wealth effect; housing price; labor supply; labor force participation |
| JEL: | J21 J22 R20 R30 |
| Date: | 2015–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69559&r=ure |
| By: | Jens K. Perret (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | Using a basic growth accounting approach it is deduced how far the regional knowledge infrastructure plays any significant role across the regions of the Russian Federation. Aside from aspects of the size of the regional innovation system, like the number of researchers and students, it is discussed in how far the inflow and outflow of knowledge plays a role in determining the economic growth. The study shows thereby that while the Russian growth dynamics are indeed driven by the exploitation of natural resources, foremost of oil and gas, a significant part of Russian growth is due to its innovation system. This shows that innovation oriented growth politics as promoted by former president Dmitry Medvedev do have a solid foundation to be built on. |
| Keywords: | Economic Growth, Russian Federation, Knowledge, Innovations |
| JEL: | O31 P25 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei207&r=ure |
| By: | Rhodes, Andrew; Zhou, Jidong |
| Abstract: | This paper proposes a framework for studying how consumer search frictions affect retail market structure. In our model single-product firms which supply different products can merge to form a multiproduct firm. Consumers wish to buy multiple products and value the one-stop shopping convenience associated with a multiproduct firm. We find that when the search friction is relatively large all firms are multiproduct in equilibrium. However when the search friction is smaller the equilibrium market structure is asymmetric, with single-product and multiproduct firms coexisting. This asymmetric market structure often leads to the weakest price competition, and is the worst for consumers among all possible market structures. Due to the endogeneity of market structure, a reduction in the search friction can increase market prices and decrease consumer welfare. |
| Keywords: | consumer search; conglomerate merger; multiproduct pricing; one-stop shopping; retail market structure |
| JEL: | D11 D43 D83 L13 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69484&r=ure |
| By: | Höckel, Lisa Sofie; Santos Silva, Manuel; Stöhr, Tobias |
| Abstract: | Educational outcomes of children are highly dependent on household and school-level inputs. In poor countries, remittances from migrants can provide additional funds for the education of the left behind. At the same time the absence of migrant parents can affect families' time allocation towards education. Previous work on education inputs often implicitly assumed that preferences for different kinds of education inputs remain unchanged when household members migrate. Using survey data from Moldova, one of the countries with the highest emigration rates in the world, and an instrumental variable approach we find that the strongest migration-related response in private education expenditure are substantially lower informal payments to public school teachers. This fact is at odds with a positive income effect due to migration. We argue that our results are likely to be driven by changing preferences towards educational inputs induced by migration. |
| Keywords: | migration,emigration,education spending,social remittances,corruption,children left behind |
| JEL: | F22 I22 D13 H52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2018&r=ure |
| By: | Stacey, Brian |
| Abstract: | Price discrimination enjoys a long history in the airline industry. Borenstein (1989) discusses price discrimination through frequent flyer programs from 1985 as related to the Piedmont-US Air merger, price discrimination strategies have grown in size and scope since then. From Saturday stay over requirements to varying costs based on time of purchase, the airline industry is uniquely situated to enjoy the fruits of price discrimination. |
| Keywords: | Price Discrimination, Oligopoly |
| JEL: | L13 |
| Date: | 2015–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69168&r=ure |
| By: | Sandro Montresor; Francesco Quatraro |
| Abstract: | The paper investigates the drivers of Smart Specialisation Strategies (S3) with a focus on Key Enabling Technologies (KETs). We re-examine the interpretation of S3 as new regional technological advantages (RTAs) obtained through relatedness, by reconceptualising within it the original focus on General Purpose Technologies (GPTs) and by considering their inter-regional spillovers. Combing regional patent and economic data for a 30-year panel (1980-2010) of 26 European countries, we find that KETs positively impact on new RTAs, pointing to a novel “enabling” role for them. KETs also negatively moderate the RTAs-impact of cognitively proximate pre-existing technologies, suggesting that KETs could make relatedness less binding in pursuing S3. The net-impact of KETs is positive, pointing to a new case for plugging KETs in the S3 policy tool-box. Furthermore, KETs also display cross-regional spillovers in their RTAs-impact, leaving KETs “poor” regions with a possible back-up from closer KETs “rich” ones. |
| Keywords: | Smart Specialization Strategies, Key Enabling Technologies, Relatedness, Revealed Technological Advantages |
| JEL: | R11 R58 O31 O33 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1525&r=ure |
| By: | Pierre Guérin; Danilo Leiva-Leon |
| Abstract: | This paper introduces new weighting schemes for model averaging when one is interested in combining discrete forecasts from competing Markov-switching models. In particular, we extend two existing classes of combination schemes – Bayesian (static) model averaging and dynamic model averaging – so as to explicitly reflect the objective of forecasting a discrete outcome. Both simulation and empirical exercises show that our new combination schemes outperform competing combination schemes in terms of forecasting accuracy. In the empirical application, we estimate and forecast U.S. business cycle turning points with state-level employment data. We find that forecasts obtained with our best combination scheme provide timely updates of the U.S. business cycles. |
| Keywords: | Business fluctuations and cycles, Econometric and statistical methods |
| JEL: | C53 E32 E37 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:15-24&r=ure |
| By: | Fagerberg , Jan (CIRCLE, University of Lund, IKE, University of Aalborg, TIK, University of Oslo); Srholec , Martin (CIRCLE, University of Lund, CERGE-EI, Charles University and Economics Institute of the Czech Academy of Sciences) |
| Abstract: | This paper is concerned with the explanation of differences in regional economic performance. The first part of the paper presents an overview of how theoretical and applied work of relevance for the analysis of regional economic performance has evolved to its present stance. This leads to the identification of two central factors for regional economic performance, that is, capability building and specialization. There is ample evidence on the impact of these two factors on economic development at the national level, but lack of relevant data has until recently made it difficult to explore these relationships at the regional level. This paper uses data that has recently become available for European regions to delve further into the relationships between capability building, specialization and economic performance. The analysis shows that regional economic performance and capability building does indeed go hand in hand, while the evidence regarding the impact of specialization is more mixed. Finally, the implications of these findings for regional policy and future research are considered. |
| Keywords: | Capabilities; Specialization; Regions; Related Variety; Smart Specialization |
| JEL: | O30 O38 |
| Date: | 2016–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_002&r=ure |
| By: | WU, JIABIN |
| Abstract: | This paper proposes a cultural evolutionary model in which the assortativity level of matching is endogenously determined. We consider a population consisting of two cultural groups. Each group has a leader who can actively exert effort to enhance social connections among group members. Social connections increase the agents' probabilities of matching with one another among the same group in economic activities and thus increase the assortativity of matching in the population. We find that the endogenous process by which the assortativity level is determined can lead to cultural heterogeneity. While cultural homogeneity is the only prediction when the assortativity level is constant. |
| Keywords: | Cultural evolution, social connections, cultural heterogeneity, assortative matching, evolutionary game theory. |
| JEL: | C73 Z13 |
| Date: | 2016–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69599&r=ure |
| By: | Juan C. Medina (Universidad Autónoma de Ciudad Juárez); Robert R. Reed (Universidad de Alabama); Ejindu S. Ume (Universidad de Ohio) |
| Abstract: | We study the effects of money growth in a neoclassical growth model with wealth effects. As the capital stock is the only component of wealth which contributes to an individual’s utility, the model should be interpreted as a model of housing production and housing wealth since the capital stock affects utility. Consistent with empirical evidence on the relationship between residential investment and GDP across countries, there are significant non-linearities between housing market activity and aggregate income in our framework. |
| Keywords: | Development, housing, monetary policy, inflation. |
| JEL: | E31 E52 E58 |
| Date: | 2015–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cjz:ca41cj:30&r=ure |
| By: | Dimant, Eugen |
| Abstract: | Social interactions and the resulting peer effects loom large in both economic and social contexts. This is particularly true for the spillover of (un)ethical behavior in explaining how behavior and norms spread across individual people, neighborhoods, or even cultures. Although we understand and observe the outcomes of such contagion effects, little is known about the drivers and the underlying mechanisms, especially with respect to the role of social identity with one’s peers and the (un)ethicality of behavior one is exposed to. We use a variant of a give-or-take dictator game to shed light on these aspects in a con-trolled laboratory setting. Our experiment contributes to the existing literature in two ways: first, using a novel approach of inducing social identification with one’s peers in the lab, our design allows us to analyze the spillover-effects of (un)ethical behavior under varied levels of social identification. Second, we study whether contagion of ethical behavior differs from contagion of unethical behavior. Our results suggest that a) unethical behavior is more contagious, and b) social identification with one’s peers and not the (un)ethicality of observed behavior is the main driver of behavioral contagion. Our findings are particularly important from a policy perspective both in order to foster pro-social and mitigate deviant behavior. |
| Keywords: | Conformity, Behavioral Contagion, Peer effects, Social Identity, Unethical Behavior |
| JEL: | D03 D73 D81 |
| Date: | 2015–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68732&r=ure |
| By: | Castillo, Victoria; Figal-Garone, Lucas; Maffioli, Alessandro; Rojo, Sofia; Stucchi, Rodolfo |
| Abstract: | We estimate the effects of knowledge spillovers on firms’ performance and workers’ wages. We use an innovation support program as an exogenous shock to the knowledge of non-participant firms and an employer-employee dataset to track the mobility of workers—and knowledge diffusion—between firms. We find that non-participants that acquired new knowledge by hiring skilled workers exposed to the program increased employment, the average wage they pay, exports, and productivity. Finally, we find that—depending on the level of competition—a wage premium was paid either by participant or non-participant firms to retain or acquire workers. |
| Keywords: | Knowledge spillover, Labor mobility, Innovation, Panel data |
| JEL: | D2 J3 O3 O38 |
| Date: | 2016–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69141&r=ure |
| By: | Guglielmo Barone (Bank of Italy and RCEA); Alessio D’Ignazio (Bank of Italy); Guido de Blasio (Bank of Italy); Paolo Naticchioni (Roma Tre University and IZA) |
| Abstract: | Using Italian municipality-level data on national elections and IV estimation strategy, we find that immigration generates a sizable causal increase in votes for the centre-right coalition, which has a political platform less favorable to immigrants. Additional findings are: (i) the effect is heterogeneous across municipalities with different sizes; (ii) the gain in votes for the centreright coalition corresponds to a loss of votes for the centre and centre-left parties, a decrease in voter turnout, and a rise in protest votes; (iii) the relationship between immigration and electoral gains percolates to mayoral election at the municipality level; (iv) cultural diversity, competition in the labor market and for public services, and political competition are the most relevant channels at work. |
| Keywords: | Immigration, voting, political economy |
| JEL: | D72 P16 J61 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rcr:wpaper:03_15&r=ure |
| By: | Lumengo Bonga-Bonga (Faculty of Economic and Financial Sciences, University of Johannesburg); Jean Luc Erero (South African Revenue Service and Faculty of Economic and Financial Sciences, University of Johannesburg); Rangan Gupta (Department of Economics, University of Pretoria) |
| Abstract: | This paper analyses the economy-wide impact of an increase in property tax in South Africa by disaggregating the real property sector into two subcomponents, namely the property-owning and subletting of fixed property sectors. Use is made of the Computable General Equilibrium model for this end. The results of the simulation show that increasing taxation in the property sector reduces demand for all types of labour in South Africa. Moreover, the results of the simulations show that a tax increase in the property sector reduces economic activity in the country and offsets a possible increase in government revenue. This paper suggests that the South African government should be cautious about resorting to an increase in tax in the property sector to raise its revenue. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201611&r=ure |
| By: | Alexander Fritsche; Katherine Ragan |
| Abstract: | Calculating the labour market indicator (LMI) at the provincial level provides useful insights into Canada’s regional economies and reveals differing trends in the state of underlying labour market conditions across provinces. Conclusions based on the Canadian LMI do not necessarily translate to the provinces. In most cases, the correlations between the provincial LMIs and the underlying labour market variables have the expected sign. Differences among provinces reflect idiosyncratic differences among provincial labour markets. The values of the provincial LMIs are not invariant to the sample period used when constructing them. We find that using a longer sample estimation period improves the properties of some of the provincial LMIs. Recent values for the LMI show that labour markets have deteriorated notably in Alberta, Saskatchewan, and Newfoundland and Labrador. At the same time, the LMIs for British Columbia, Ontario, Quebec and New Brunswick have improved over the course of the past year and the gap between the unemployment rate and the LMI has tended to narrow. |
| Keywords: | Labour markets, Recent economic and financial developments |
| JEL: | E2 E24 E27 J2 J21 J23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:16-2&r=ure |