nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒05‒14
fifty-two papers chosen by
Steve Ross
University of Connecticut

  1. Stirring Up a Hornets' Nest: Geographic Distribution of Crime By Sebastian Galiani; Ivan Lopez Cruz; Gustavo Torrens
  2. Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development By Rebecca Diamond; Timothy McQuade
  3. Modelling and Forecasting Mortgage Delinquency and Foreclosure in the UK By Aron, Janine; Muellbauer, John
  4. Housing and Tax-Deferred Retirement Accounts By Anson T. Y. Ho; Jie Zhou
  5. Quality of government and social capital as drivers of regional diversification in Europe By Nicola Cortinovis; Jing Xiao; Ron Boschma; Frank van Oort
  6. Non-durable Consumption and Housing Net Worth in the Great Recession: Evidence from Easily Accessible Data By Greg Kaplan; Kurt Mitman; Giovanni L. Violante
  7. What Do Test Scores Miss? The Importance of Teacher Effects on Non-Test Score Outcomes By C. Kirabo Jackson
  8. The Contribution of Fiscal Decentralization to Regional Inequality: Empirical Results for South African Municipalities By Hammed Amusa and Ramos Mabugu
  9. Achievement Effects from New Peers: Who Matters to Whom? By Duncan McVicar; Julie Moschion; Chris Ryan
  10. Place-based Policies, Firm Productivity and Displacement Effects: Evidence from Shenzhen, China By Hans Koster; Fang Fang Cheng; Michiel Gerritse; Frank van Oort
  11. The Effect of Single-Sex Education on Academic Outcomes and Crime: Fresh Evidence from Low-Performing Schools in Trinidad and Tobago By C. Kirabo Jackson
  12. Social infrastructure and productivity of manufacturing firms: Evidence from Pakistan By Ahmed, Riaz
  13. Spatial divergence of primary education development in Bangladesh through the lens of Education Development Index (EDI) By Raihan, Selim; Ahmed, Mansur
  14. School Entry, Compulsory Schooling, and Human Capital Accumulation: Evidence from Michigan By Hemelt, Steven W.; Rosen, Rachel B.
  15. Enabled to Work: The Impact of Government Housing on Slum Dwellers in South Africa By Simon Franklin
  16. Ewing Marion Kauffman School Evaluation Impact Report Year 3 By Matthew Johnson; Eric Lundquist; Alicia Demers; Cleo Jacobs Johnson; Claudia Gentile
  17. Boosting Job Creation in Kalmar, Sweden By Lars Niklasson; Jonathan Barr; Michela Meghnagi
  18. Economic Gains for U.S. States from Educational Reform By Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
  19. Relative Age, Class Assignment and Academic Performance: Evidence from Brazilian Primary Schools By Martin Foureaux Koppensteiner
  20. The (displacement) effects of spatially targeted enterprise initiatives: evidence from UK LEGI By Elias Einiö; Henry G. Overman
  21. Education Curriculum and Student Achievement: Theory and Evidence By Andrietti, Vincenzo; Su, Xejuan
  22. Weak and Strong Cross-Sectional Dependence: a Panel Data Analysis of International Technology Diffusion By Antonio Musolesi; Cem Ertur
  23. EU Structural Funds and Regional Income Convergence - A Sobering Experience By Breidenbach, Philipp; Mitze, Timo; Schmidt, Christoph M
  24. Communities of Local Optima as Funnels in Fitness Landscapes By Sebastian Herrmann; Gabriela Ochoa; Franz Rothlauf
  25. Case Studies of Schools Receiving School Improvement Grants: Final Report By Kerstin Carlson Le Floch Jennifer O'Day; Beatrice Birman; Steven Hurlburt; Michelle Nayfack; Clare Halloran; Andrea Boyle; Seth Brown; Diana Mercado-Garcia; Rose Goff; Linda Rosenberg; Lara Hulsey
  26. Feeding Africa's cities: The case of the Supply Chain of Teff to Addis Ababa By Minten, Bart J.; Legesse, Ermias; Beyene, Seneshaw; Werako, Tadesse
  27. External Devaluations; Are Small States Different? By Sebastian Acevedo Mejia; Aliona Cebotari; Kevin Greenidge; Geoffrey N. Keim
  28. Labour, lodging and linkages: migrant women's experience in South Africa By Laura Phillips; Deborah James
  29. Take What You Can: Property Rights, Contestability and Conflict By Thiemo Fetzer; Samuel Marden
  30. Migration and Innovation Diffusion : An Eclectic Survey By Francesco LISSONI
  31. Measuring the Impacts of the Superfund Sites in Jefferson County, Kentucky by using a Spatial Hedonic By Kim, GwanSeon; Schieffer, Jack; Mark, Tyler
  32. Adolescents at Risk: Psychosomatic health complaints, low life satisfaction, excessive sugar consumption and their relationship with cumulative risks By Zlata Bruckauf; Tania Gaspar; Sophie D. Walsh; UNICEF Innocenti Research Centre
  33. Places and spaces in the weightless economy By Huiwen Gong
  34. Seven-Year Impacts of Burkina Faso's BRIGHT Program By Harounan Kazianga; Leigh Linden; Cara Orfield; Ali Protik; Matt Sloan
  35. Integrating Computer Assisted Learning into a Regular Curriculum: Evidence from a Randomized Experiment in Rural Schools in Shaanxi By Mo, Di; Zhang, Linxiu; Luo, Renfu; Qu, Qinghe; Huang, Weiming; Wang, Jiafu; Qiao, Yajie; Boswell, Matthew; Rozelle, Scott
  36. Should Monetary Policy Lean Against Housing Market Booms? By Sami Alpanda; Alexander Ueberfeldt
  37. "Teaching to Teach" Literacy By Stephen Machin; Sandra McNally; Martina Viarengo
  38. Approaches to Making Federal Highway Spending More Productive By Congressional Budget Office
  39. Is the Grass Really Greener across the State Line? A Regional Analysis of State Branding Programs By Neill, Clinton L.; Holcomb, Rodney B.; Lusk, Jayson
  40. The Regional Distribution of Public Employment:Theory and Evidence By Sebastian G. Kessing; Chiara Strozzi
  41. Price Convergence Patterns across U.S. States By Christina Christou; Juncal Cunado; Rangan Gupta
  42. Network Structure and Industrial Clustering Dynamics in the Aerospace Industry By Ekaterina Turkina; Ari Van Assche; Raja Kali
  43. Local Power, Local Pollution? An Analysis from the Philippines By Elvira M. Orbetta
  44. Labour turnover, employment density and employer provided training: Evidence from Vienna By Francisca Bremberger; Rudolf Hochholzer; Petr Huber
  45. Networks in the Diaspora By Gil S. Epstein; Odelia Heizler (Cohen)
  46. Culture, Diffusion, and Economic Development By Ani Harutyunyan; Ömer Özak
  47. Voters' Information, Corruption, and the Efficiency of Local Public Services By Graziano Abrate; Federico Boffa; Fabrizio Erbetta; Davide Vannoni
  48. No escape? The co-ordination problem in heritage conservation By Nancy Holman; Gabriel M. Ahlfeldt
  49. Family Size, Sibling Rivalry and Migration: Evidence from Mexico By Massimiliano Bratti; Simona Fiore; Mariapia Mendola
  50. Stochastic and path dependence effects in the diffusion of ideas By Andrea Mantovi
  51. Explaining “peak car” with economic variables By Bastian, Anne; Börjesson, Maria; Eliasson, Jonas
  52. State and federal fuel taxes: The road ahead for U.S. infrastructure funding By Dumortier, Jerome; Zhang, Fengxiu; Marron, John

  1. By: Sebastian Galiani; Ivan Lopez Cruz; Gustavo Torrens
    Abstract: This paper develops a model of the geographic distribution of crime in an urban area. Agents select their occupation, residence, consumption, and housing. The paper is the first to formally study how the location of crime, the residence of workers, and housing prices are affected by the spatial allocation of police protection. It examines two opposite strategies of police deployment: concentrated protection (the police only protect one area of the city) and dispersed protection (the police are evenly deployed across the city). In equilibrium, under concentrated protection, only rich agents are willing to pay the high housing prices in protected areas, while poor agents reside in high-crime areas. The city becomes segregated. Under dispersed protection, all areas of the city have the same income per capita and crime levels, and an integrated city emerges. Comparing these equilibria, crime is more likely to be higher under dispersed protection than concentrated protection when inequality is high, dispersing the police force significantly reduces its effectiveness, and the proportion of income that criminals extract from rich (poor) agents is high (low). Concentrated protection may induce higher aggregate welfare than dispersed protection, particularly when inequality is high. Unequal societies face a diffcult dilemma in that concentrated protection maximizes aggregate welfare but exacerbates social disparities. Fortunately, there is a set of taxes and subsidies that can be employed to offset the disadvantages to agents left unprotected. Finally, this paper incorporates private security and shows that dispersed public protection does not necessarily lead to an integrated city equilibrium. Rich agents may use private security to endogenously isolate themselves in closed residential areas.
    JEL: K42 R12
    Date: 2016–04
  2. By: Rebecca Diamond; Timothy McQuade
    Abstract: We nonparametrically estimate spillovers of properties financed by the Low Income Housing Tax Credit (LIHTC) onto neighborhood residents by developing a new difference-in-differences style estimator. LIHTC development revitalizes low-income neighborhoods, increasing house prices 6.5%, lowering crime rates, and attracting racially and income diverse populations. LIHTC development in higher income areas causes house price declines of 2.5% and attracts lower income households. Linking these price effects to a hedonic model of preferences, LIHTC developments in low-income areas cause aggregate welfare benefits of $116 million. Affordable housing development acts like a place-based policy and can revitalize low-income communities.
    JEL: H23 R13 R38
    Date: 2016–04
  3. By: Aron, Janine; Muellbauer, John
    Abstract: In the absence of micro-data in the public domain, new aggregate models for the UK's mortgage repossessions and arrears are estimated using quarterly data over 1983-2014, motivated by a conceptual double trigger frame framework for foreclosures and payment delinquencies. An innovation to improve on the flawed but widespread use of loan-to-value measures, is to estimate difficult-to-observe variations in loan quality and access to refinancing, and shifts in lenders' forbearance policy, by common latent variables in a system of equations for arrears and repossessions. We introduce, for the first time in the literature, a theory-justified estimate of the proportion of mortgages in negative equity as a key driver of aggregate repossessions and arrears. This is based on an average debt-equity ratio, corrected for regional deviations, and uses a functional form for the distribution of the debt-equity ratio checked on Irish micro-data from the Bank of Ireland, and Bank of England snapshots of negative equity. We systematically address serious measurement bias in the 'months-in-arrears' measures, neglected in previous UK studies. Highly significant effects on aggregate rates of repossessions and arrears are found for the aggregate debt-service ratio, the proportion of mortgages in negative equity and the unemployment rate. Economic forecast scenarios to 2020 highlight risks faced by the UK and its mortgage lenders, illustrating the usefulness of the approach for bank stress-testing. For macroeconomics, our model traces an important part of the financial accelerator: the feedback from the housing market to bad loans and hence banks' ability to extend credit.
    Keywords: credit risk stress testing; foreclosures; latent variables model; mortgage arrears; mortgage payment delinquencies; mortgage repossessions
    JEL: C51 C53 E27 G17 G21 G28 R21 R28
    Date: 2016–04
  4. By: Anson T. Y. Ho; Jie Zhou
    Abstract: Assets in tax-deferred retirement accounts (TDA) and housing are two major components of household portfolios. In this paper, we develop a life-cycle model to examine the interaction between households’ use of TDA and their housing decisions. The model generates life-cycle patterns of home ownership and the composition of net worth that are broadly consistent with the data from the Survey of Consumer Finances. We find that TDA promotes home ownership, as households take advantage of the preferential tax treatments for both TDA and home ownership. They substitute TDA assets for home equity by accumulating wealth in TDA and making smaller down payments (taking out bigger mortgages); consequently, they become homeowners earlier in their lives. On the other hand, housing-related policies, such as a minimum down payment requirement and mortgage interest deductibility, affect households’ housing decisions more than their use of TDA.
    Keywords: Economic models, Housing
    JEL: C61 D14 D91 E21 H24 R21
    Date: 2016
  5. By: Nicola Cortinovis; Jing Xiao; Ron Boschma; Frank van Oort
    Abstract: Industrial diversification is considered crucial for economies to prosper. Recent studies have shown that regional economies tend to diversify into sectors that are related to those already present in the region. However, no study yet has investigated the impact of regional institutions. The objective of the paper is to bring together the literatures on related diversification and institutions by analyzing how formal and informal institutions influence regional diversification. Analyzing 118 European regions in the period 2004 and 2012, we find evidence that institutions matter for regions to diversify into new industries. Bridging social capital is a key driver of regional diversification, in addition to relatedness, in contrast to quality of government in regions. Bonding social capital has a negative impact in regions with a low quality of government. This suggests that regional institutions relevant for structural change in regions are predominantly informal in character rather than formal, and bridging rather than bonding.
    Keywords: regional diversification, social capital, quality of government, institutions
    JEL: R11 O14
    Date: 2016–05
  6. By: Greg Kaplan; Kurt Mitman; Giovanni L. Violante
    Abstract: In an influential paper, Mian, Rao and Sufi (2013) exploit geographic variation in housing supply elasticities to measure the effect of changes in the housing share of net worth on total household expenditures during the Great Recession. Their widely-cited estimates are based on proprietary house price data, and use new vehicle registrations as the main proxy for total spending. We revisit their study using different, publicly available data on house prices, and an easily-accessible proxy for expenditures in non-durable goods. We re-affirm their findings in our data, and refine their analysis in several dimensions: (i) we separate the roles of falling house prices and initial leverage; (ii) we distinguish the effects on real consumption versus nominal expenditures; and (iii) we infer the implied elasticity of total non-durable expenditures in goods and services to housing net worth.
    JEL: E21 E32
    Date: 2016–05
  7. By: C. Kirabo Jackson
    Abstract: This paper extends the traditional test-score value-added model of teacher quality to allow for the possibility that teachers affect a variety of student outcomes through their effects on both students’ cognitive and noncognitive skill. Results show that teachers have effects on skills not measured by test-scores, but reflected in absences, suspensions, course grades, and on-time grade progression. Teacher effects on these non-test-score outcomes in 9th grade predict effects on high-school completion and predictors of college-going—above and beyond their effects on test scores. Relative to using only test-score measures of teacher quality, including both test-score and non-test-score measures more than doubles the predictable variability of teacher effects on these longer-run outcomes.
    JEL: I21 J00
    Date: 2016–05
  8. By: Hammed Amusa and Ramos Mabugu
    Abstract: Over the past two decades, many African countries have carried out reforms aimed at decentralizing the political, administrative and fiscal structures of the public sector. The need to transform the structure of governance is informed by the view that decentralization increases the overall efficiency and responsiveness of the public sector in providing services, an outcome that enhances economic development and contributes to a reduction in regional disparities. Using panel data for South Africa’s 234 municipalities over the period 2003–2012, we test whether the decentralization of some fiscal powers to municipalities acts as a commitment tool that motivates local authorities to implement policies that reduce inter–regional inequality. The results of the empirical analysis provide evidence of a statistically significant relationship between fiscal decentralization and inequality in the context of South Africa’s local government sphere, with the specific nature of the relationship contingent on how fiscal decentralization is measured. In the case of revenue based measures of fiscal decentralization, the results support the hypothesis that the commitment device of fiscal decentralization provides incentives that decrease inter–municipal inequality. On the other hand, expenditure based fiscal decentralization contribute to increased inter–municipal disparities.
    Keywords: Decentralization, inequality, Intergovernmental fiscal relations
    JEL: H73 H77 O18 R11 R12
    Date: 2016
  9. By: Duncan McVicar (Queen's Management School, Queen's University Belfast); Julie Moschion (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; EconomiX, University of Nanterre); Chris Ryan (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper presents estimates of achievement-related peer effects on school pupils’ literacy using data from national test scores, across multiple literacy or language-related measures and student cohorts, for the population of public secondary school pupils in Years 7 and 9 (aged 12/13 and 14/15 years) in the Australian state of Victoria. Identification is achieved via individual fixed effects and by distinguishing between secondary school peers who attended the same primary school as the individual and those who did not. Estimates of peer effects are based on the new peers, whose primary school achievement could not have been affected by the individual. The results provide evidence for the existence of achievement-related peer effects, with small but positive and statistically significant effects from having higherachieving peers on average and from having a higher proportion of very high achieving peers (in the top 10% of the prior achievement distribution). We do not find a penalty from having ‘bad’ peers (from the bottom 10% of the prior achievement distribution). Further, it is low achievement individuals who benefit most from having high achievement peers. Classification-I21, I24, J24
    Keywords: Peer effects, school achievement, education, tracking
    Date: 2016–04
  10. By: Hans Koster (VU University Amsterdam, the Netherlands, and London School of Economics, United Kingdom); Fang Fang Cheng (Utrecht University, the Netherlands); Michiel Gerritse (University of Groningen, the Netherlands); Frank van Oort (Erasmus School of Economics, Erasmus University Rotterdam, and Utrecht University, the Netherlands)
    Abstract: We analyse the economic impacts of place-based policies that aim to enhance economic development by stimulating growth and productivity of firms in designated areas. We use unique panel data from China with information on manufacturing firms’ production factors, productivity and location, and we exploit temporal and spatial variation in place-based interventions due to the opening of science parks in the metropolitan area of Shenzhen. The identification strategy enables us to address the issues that (i) science parks are located in favourable locations and that (ii) high-productivity firms sort themselves in science parks. We find that productivity is approximately 15-25 per cent higher due to the policies. The results also show that local wages have increased in science parks. Weaker evidence suggests that displacement effects are sizeable.
    Keywords: place-based policies; transitional economies; science parks; productivity
    JEL: H2 R3 R5
    Date: 2016–04–01
  11. By: C. Kirabo Jackson
    Abstract: In 2010, the Ministry of Education in Trinidad and Tobago converted 20 low-performing pilot secondary schools from coed to single-sex. I exploit these conversions to identify the causal effect of single-sex schooling holding other school inputs (such as teacher quality and leadership quality) constant. After also accounting for student selection, both boys and girls in single-sex cohorts at pilot schools score 0.14σ higher in the academic subjects on national exams. There is no robust effect on non-academic subjects. Additionally, treated students are more likely to earn the secondary-school leaving credential, and the all-boys cohorts have fewer arrests. Survey evidence reveals that these single-sex effects reflect both direct gender peer effects due to interactions between classmates, and also indirect effects generated through changes in teacher behavior. Importantly, these benefits are achieved at zero financial cost.
    JEL: H0 I20 J00
    Date: 2016–05
  12. By: Ahmed, Riaz
    Abstract: Does investment in social infrastructure affect the productivity of manufacturing firms in developing countries? To test this question, I empirically investigate the impact of social infrastructure indicators at district level on firm productivity using firm level data from Pakistan. I split my sample into rural and urban regions to capture the effect of regional disparities in investment in social goods while controlling for a potential selection bias from firms' decision to locate in regions with better infrastructure equipment. My findings reveal that indicators of health and education are positively and significantly related to firm level productivity in manufacturing industries in Pakistan. However, these results hold for urban districts only. For rural regions, both health and education show a negative impact on firm productivity.
    Keywords: Firm Productivity,Social Infrastructure,Health and Education,Pakistan
    JEL: D24 H51 H52 I15 I25
    Date: 2016
  13. By: Raihan, Selim; Ahmed, Mansur
    Abstract: This paper addresses the issue of spatial divergence in educational performances in primary education sector through the construction of education development index (EDI). The paper uses principal component analysis to generate weights for indicators used in the construction of multidimensional general EDI. The paper finds that upazilas are, in general, performing poorly in terms of school access, school infrastructure, and school outcome. While upazilas from metropolitan areas perform very well and remain at the high range of each EDIs; upazilas from the ‘haor’ region, the Chittagong Hill Tracts (CHT), the coastal region and the regions along the Jamuna River perform poorly and remain at the very bottom range of each EDIs.
    Keywords: Education Development Index (EDI), principal component analysis, spatial divergence
    JEL: I21 I24 I25
    Date: 2016
  14. By: Hemelt, Steven W. (University of North Carolina, Chapel Hill); Rosen, Rachel B.
    Abstract: Extant research on school entry and compulsory schooling laws finds that these policies increase the high school graduation rate of relatively younger students, but weaken their academic performance in early grades. In this paper, we explore the evolution of postsecondary impacts of the interaction of school entry and compulsory schooling laws in Michigan. We employ a regression-discontinuity (RD) design using longitudinal administrative data to examine effects on high school performance, college enrollment, choice, and persistence. On average, we find that children eligible to start school at a relatively younger age are more likely to complete high school, but underperform while enrolled, compared to their counterparts eligible to start school at a relatively older age. In turn, these students are 2 percentage points more likely to first attend a two-year college, and enroll in fewer postsecondary semesters, relative to their older counterparts. We explore heterogeneity in these effects across subgroups of students defined by gender and poverty status. For example, we illustrate that the increase in the high school graduation rate of relatively younger students attributable to the combination of school entry and compulsory schooling laws is driven entirely by impacts on economically disadvantaged students.
    Keywords: school entry, compulsory schooling, postsecondary enrollment
    JEL: I20 I21 I28
    Date: 2016–04
  15. By: Simon Franklin
    Abstract: This paper looks at the link between housing conditions and household income and labour market participation in South Africa. I use four waves of panel data from 2002-2009 on households that were originally living in informal dwellings. I find that those households that received free government housing later experienced large increases in their incomes. This effect is driven by increased employment rates among female members of these households, rather than other sources of income. I take advantage of a natural experiment created by a policy of allocating housing to households that lived in close proximity to new housing developments. Using rich spatial data on the roll out of government housing projects, I generate geographic instruments to predict selection into receiving housing. I then use housing projects that were planned and approved but never actually built to allay concerns about non-random placement of housing projects. The fixed effects results are robust to the use of these instruments and placebo tests. I present suggestive evidence that formal housing alleviates the demands of work at home for women, which leads to increases in labour supply to wage paying jobs.
    Keywords: housing, labour supply, time allocation, home production
    JEL: P14 J22 O18 D13
    Date: 2016–05
  16. By: Matthew Johnson; Eric Lundquist; Alicia Demers; Cleo Jacobs Johnson; Claudia Gentile
    Abstract: The Kauffman School is a charter school in Kansas City, Missouri that opened in 2011 to serve middle and high school students from the city’s most economically disadvantaged neighborhoods. This report evaluates the effectiveness of the school at improving student achievement, attendance, and suspension outcomes during its first three years of operation.
    Keywords: Charter School Evaluation
    JEL: I
    Date: 2016–03–02
  17. By: Lars Niklasson; Jonathan Barr; Michela Meghnagi
    Abstract: Unemployment and quality job creation remain pressing concerns for many localities and regions across the OECD. Municipalities, districts, provinces and regions have it within their power to speed up change and seize new economic opportunities. With the right strategies and implementation plans, the fortunes of local businesses, jobs and people can be significantly changed for the better. This report examines workforce and skills development issues Kalmar county, Sweden. It highlights the unique employment challenges faced by the community and policy actions that have been taken to attract investment and human capital into the region. The report outlines a set of recommendations to improve policies and programmes that support job creation, employment, and productivity.
    Date: 2016–05–12
  18. By: Eric A. Hanushek; Jens Ruhose; Ludger Woessmann
    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 of long-run economic gains of over four times current GDP.
    Date: 2016–04
  19. By: Martin Foureaux Koppensteiner
    Abstract: Students in Brazil are typically assigned to classes based on the age ranking in their cohort. I exploit this rule to estimate the effects on maths achievement of being in class with older peers for students in fifth grade. I find that being assigned to the older class leads to a drop in Math scores of about 0.4 of a standard deviation for students at the cut-off. I provide evidence that heterogeneity in age is an important factor behind this effect. Information on teaching practices and student behaviour sheds light on how class heterogeneity harms learning.
    Keywords: Primary education, group effects, group heterogeneity, regression discontinuity, Brazil.
    JEL: I20 I21
    Date: 2016–05
  20. By: Elias Einiö; Henry G. Overman
    Abstract: We investigate the impacts of a significant area-based intervention (LEGI) that aimed to increase employment and entrepreneurial activity in 30 disadvantaged areas across England. We examine the spatial pattern of effects at a fine spatial scale using panel data for small geographic units and a regression discontinuity design that exploits the programme eligibility rule. The results indicate considerable local displacement effects. Employment increases in treated areas close to the treatment area boundary at the cost of significant employment losses in untreated localities just across the boundary. These differences vanish quickly when moving away from the boundary and do not persist after the programme is abolished. These findings support the view that area-based interventions may have considerable negative displacement effects on untreated parts of the economy. This displacement can substantially reduce (or in this case eliminate) any net benefits.
    Keywords: place-based policy; programme evaluation; displacement; employment; industrial policy
    JEL: H25 J20 O40 R11
    Date: 2016–02
  21. By: Andrietti, Vincenzo; Su, Xejuan
    Abstract: This paper proposes a theory of education curriculum and analyzes its distributional impact on student learning outcomes. Different curricula represent horizontal differentiation in the education technology, thus a curriculum change has distributional effects across students. We test the model using the quasi-natural experiment of the G8 reform in Germany. We find evidence of heterogeneous reform effects consistent with our theory. While the reform improves student test scores on average, such benefits are more pronounced for well-prepared students. In contrast, less-prepared students do not benefit from the reform.
    Keywords: Education curriculum,Horizontal differentiation,Distributional effects,Difference-in-differences,Conditional quantile regression,Unconditional quantile regressionI
    JEL: I21 I28 D04
    Date: 2016–04–01
  22. By: Antonio Musolesi; Cem Ertur
    Abstract: This paper provides an econometric examination of technological knowledge spillovers among countries by focusing on the issue of error cross-sectional dependence, particularly on the dif- ferent ways – weak and strong – that this dependence may affect model specification and estimation. A preliminary analysis based on estimation of the exponent of cross-sectional de- pendence provides a clear result in favor of strong cross-sectional dependence. This result has relevant implications in terms of econometric modeling and suggests that a factor structure is preferable to a spatial error model. The common correlated effects approach is then used be- cause it remains valid in a variety of situations that are likely to occur, such as the presence of both forms of dependence or the existence of nonstationary factors. According to the estimation results, richer countries benefit more from domestic R&D and geographic spillovers than poorer countries, while smaller countries benefit more from spillovers originating from trade. The re- sults also suggest that when the problem of (possibly many) correlated unobserved factors is addressed, the quantity of education no longer has a significant effect. Finally, a comparison of the results with those obtained from a spatial model provides interesting insights into the bias that may arise when we allow only for weak dependence, despite the presence of strong dependence in the data.
    Keywords: cross-sectional dependence; large panels; factor models; spatial models; heterogeneous slopes; unit root; total factor productivity; research and development; human capital
    JEL: C23 C5 F0 O3
    Date: 2016–05–09
  23. By: Breidenbach, Philipp; Mitze, Timo; Schmidt, Christoph M
    Abstract: The European Structural and Investment Funds (ESIF) are the prime instrument of EU regional policy. European policy makers place considerable hope into their growth stimulating funding measures to overcome current economic stagnation. Consequently, there is a strong need for credible evidence regarding the programs' effectiveness. Based on an empirical identification strategy linked to modern growth theory, we find that the disbursement of EU structural funds is negatively correlated with regional growth. Incorporating spatial dynamics and decomposing this correlation into a direct and a spatially-indirect component, it is particularly the latter which determines this "sobering" finding. Regarding the economics behind these results, the obtained negative spatial effect may reflect the role played by policy-induced spatial competition among neighboring regions. It could also highlight the backwardness in technological endowment and economic structures of highly funded regions. In any case, EU structural funding does not seem to contribute effectively to foster income convergence across regions.
    Keywords: EU Regional Policy; Spatial Spillovers; Panel Data
    JEL: C21 R12 R58
    Date: 2016–04
  24. By: Sebastian Herrmann (Johannes Gutenberg University Mainz); Gabriela Ochoa (University of Stirling); Franz Rothlauf (Johannes Gutenberg University Mainz)
    Abstract: We conduct an analysis of local optima networks extracted from ?tness landscapes of the Kauffman NK model under iterated local search. Applying the Markov Cluster Algorithm for community detection to the local optima networks, we ?nd that the landscapes consist of multiple clusters. This result complements recent ?ndings in the literature that landscapes often decompose into multiple funnels, which increases their difficulty for iterated local search. Our results suggest that the number of clusters as well as the size of the cluster in which the global optimum is located are correlated to the search difficulty of landscapes. We conclude that clusters found by community detection in local optima networks offer a new way to characterize the multi-funnel structure of ?tness landscapes.
    Keywords: Fitness landscape analysis; search difficulty; local optima networks; NK-landscapes.
    Date: 2016
  25. By: Kerstin Carlson Le Floch Jennifer O'Day; Beatrice Birman; Steven Hurlburt; Michelle Nayfack; Clare Halloran; Andrea Boyle; Seth Brown; Diana Mercado-Garcia; Rose Goff; Linda Rosenberg; Lara Hulsey
    Abstract: The Study of School Turnaround (SST) examines the change process in a diverse, purposive sample of schools receiving federal School Improvement Grants (SIG) from 2010–11 to 2012–13.
    Keywords: Building Human Capital in SIG Schools, Change and Sustainability, Study of School Turnaround Codebook, 2010–13, Technical Approach to Qualitative Analyses, Details of Teacher Survey Analyses, Leading Indicators of School-Level Capacity
    JEL: I
  26. By: Minten, Bart J.; Legesse, Ermias; Beyene, Seneshaw; Werako, Tadesse
    Abstract: Urbanization is quickly increasing in Africa, raising important questions on how food value chains to cities function and what the implications of urban growth are for the local food trade and farm sector. We study the rural–urban value chain of teff in Ethiopia, by value its most important staple value chain. Relying on unique large-scale surveys at different levels in this value chain, we find— in contrast to conventional wisdom—that value chains are relatively short and that average farmers obtain a high share, of about 80 percent, of the final consumer price in the major terminal market, Addis Ababa. We further find that producer prices decline in line with transportation costs the further farmers live from the city, that seasonal price movements are rather small, and that average stock release by farmers is smooth over the year.
    Keywords: agricultural transformation, teff, value chains, Ethiopia, Consumer/Household Economics, Crop Production/Industries, Food Consumption/Nutrition/Food Safety,
    Date: 2015
  27. By: Sebastian Acevedo Mejia; Aliona Cebotari; Kevin Greenidge; Geoffrey N. Keim
    Abstract: The paper investigates whether the macroeconomic effects of external devaluations have systematically different effects in small states, which are typically more open and less diversified than larger peers. Through several analytical approaches -- DSGE model, event study, and regression analysis -- it finds that the effects of devaluation on growth and external balances are not significantly different between small and large states, with both groups equally likely to experience expansionary or contractionary outcomes. However, the transmission channels are different: devaluations in small states are more likely to affect demand through expenditure compression, rather than expenditure-switching channels. In particular, consumption tends to fall more sharply in small states due to adverse income effects, thereby reducing import demand. Policy conclusions point to the importance of social safety nets, complementary wage and antiinflation policies, investment-boosting reforms, and attention to potential adverse balance sheet effects to ensure positive outcomes.
    Keywords: Foreign exchange;Small states;external devaluation, devaluations, exchange rate, devaluation, currency, consumption, Studies of Particular Policy Episodes, Economic Growth of Open Economies, All Countries,
    Date: 2015–11–23
  28. By: Laura Phillips; Deborah James
    Abstract: This historiographical overview examines the literature on women migrants in South Africa, arguing that it is important to consider domestic struggles and their impact on women’s urban experiences within and beyond the workplace in order to understand the unfolding of the migrant labour system in the 20th and 21st centuries. Looking at writing on pre-1994 migrancy, it highlights women’s experiences in the workplace, in the residential spaces they occupy, and in their associational life. We also draw out some of the major trends in the post-1994 period, focusing in particular on scholarship that considers HIV/AIDS. Migrant women, we argue, are neither simply home-based nor town-linked; rather their experiences and struggles provide the means to accommodate both while also transforming these polarities.
    Keywords: gender; historiography; migrancy; women; housing; apartheid; associational life; informal work; domestic work; factory work; HIV/AIDS
    JEL: R14 J01
    Date: 2014–11–06
  29. By: Thiemo Fetzer; Samuel Marden
    Abstract: Weak property rights are strongly associated with underdevelopment, low state capacity and civil conflict. In economic models of conflict, outbreaks of violence require two things: the prize must be both valuable and contestable. This paper exploits spatial and temporal variation in contestability of land title to explore the relation between (in)secure property rights and conflict in the Brazilian Amazon. Our estimates suggest that, at the local level, assignment of secure property rights eliminates substantively all land related conflict, even without changes in enforcement. Changes in land use are also consistent with reductions in land related conflict.
    Keywords: property rights, land titling, conflict, deforestation
    JEL: O12 Q15 D74 Q23
    Date: 2016–04
  30. By: Francesco LISSONI
    Abstract: In the new era of mass migration, with highly skilled individuals playing a key role, the role of migration in innovation diffusion is a topical issue. The paper organizes several strands of literature, from the history of religious minorities to the spatial analysis of knowledge flows. Three main themes emerge: the distinction between mobility and migration, the directions of flows, and their contents. Migration supports diffusion from origin to host countries, but also in the opposite direction, as well as within and across destinations. Distinguishing between information access and knowledge exchanges remain a major item of the research agenda.
    Keywords: migration ; innovation ; diffusion
    JEL: O33 F22 J61
    Date: 2016
  31. By: Kim, GwanSeon; Schieffer, Jack; Mark, Tyler
    Keywords: Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2016
  32. By: Zlata Bruckauf; Tania Gaspar; Sophie D. Walsh; UNICEF Innocenti Research Centre
    Abstract: Adolescence is a time of transitions when experimentation, risk taking and active peer interactions can be viewed as a part of the development process. Yet, for some groups of young people with reported poor psychosomatic health, low life satisfaction or unhealthy eating habits these experiences may be different. Empirical evidence is limited for recognising the overlapping and cumulative risks of adolescents’ health disadvantage and multiple externalized risk behaviours and outcomes (smoking, drinking, binge drinking, regular fighting, injuries and bullying). Drawing on the most recent 2013/2014 data of the Health Behaviour of School Children (HBSC) study, this paper examines the risks of individual and cumulative risks (three or more types) associated with being in the bottom group of psychosomatic health complaints, life satisfaction and unhealthy eating (excessive sugar consumption) across 29 countries.
    Keywords: adolescent health; health education; socio-economic status;
    Date: 2016
  33. By: Huiwen Gong (Kiel University, Germany)
    Abstract: Proposition of the 'end of geography' based on globalization and digitalization has been havily criticized by different geographers in the last decades. This paper mainly focus on the digitalization side of debate because of the more obvious and contradictory relationships between geography and digital production/consumption. Based on a systemic reflection on the literature in new media industry in general, and video game industry in particular, this paper bridges two different strings of research in the weightless economy. By referring to previous respondents' opinions as well as extracting new ideas from other empirical studies, this paper organizes its arguments in a comprehensive way and supports these arguments with abundant empirical evidence found in different case studies. It contributes to economic geographers' side of debate on the role of geography in today's weihgtless economy
    Keywords: the weightless economy, the end of geography, new media, video game industry
    JEL: A14 D20
    Date: 2016–04–14
  34. By: Harounan Kazianga; Leigh Linden; Cara Orfield; Ali Protik; Matt Sloan
    Abstract: Less than half of the girls living in Burkina Faso in 2004 attended primary school. In the same year, only a quarter of all girls were enrolled in the last grade of primary school.
    Keywords: BRIGHT, CIPRE, evaluation, impact, school, “girl-friendly†, enrollment, achievement, education
    JEL: F Z
    Date: 2016–02–25
  35. By: Mo, Di; Zhang, Linxiu; Luo, Renfu; Qu, Qinghe; Huang, Weiming; Wang, Jiafu; Qiao, Yajie; Boswell, Matthew; Rozelle, Scott
    Abstract: Recent attention has been placed on whether computer assisted learning (CAL) can effectively improve learning outcomes. However, the empirical evidence of its impact is mixed. Previous studies suggest that the lack of an impact in developed countries may be attributable to substitution of effort/time away from productive, in-school activities. However, there is little empirical evidence on how effective an in-school program may be in developing countries. In order to explore the impact of an in-school CAL program, we conducted a clustered randomized experiment involving over 4000 third and fifth grade students in 72 rural schools in China. Our results indicate that the in-school CAL program has significantly improved the overall math scores by 0.16 standard deviations. Both the third graders and the fifth graders benefited from the program.
    Keywords: Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession,
    Date: 2015
  36. By: Sami Alpanda; Alexander Ueberfeldt
    Abstract: Should monetary policy lean against housing market booms? We approach this question using a small-scale, regime-switching New Keynesian model, where housing market crashes arrive with a logit probability that depends on the level of household debt. This crisis regime is characterized by an elevated risk premium on mortgage lending rates, and, occasionally, a binding zero lower bound on the policy rate, imposing large costs on the economy. Using our set-up, we examine the optimal level of monetary leaning, introduced as a Taylor rule response coefficient on the household debt gap. We find that the costs of leaning in regular times outweigh the benefits of a lower crisis probability. Although the decline in the crisis probability reduces volatility in the economy, this is achieved by lowering the average level of debt, which severely hurts borrowers and leads to a decline in overall welfare.
    Keywords: Economic models, Financial stability, Housing, Monetary policy framework
    JEL: E44 E52 G01
    Date: 2016
  37. By: Stephen Machin; Sandra McNally; Martina Viarengo
    Abstract: Significant numbers of people have very low levels of literacy in many OECD countries and, because of this, face significant labour market penalties. Despite this, it remains unclear what teaching strategies are most useful for actually rectifying literacy deficiencies. The subject remains hugely controversial amongst educationalists and has seldom been studied by economists. Research evidence from part of Scotland prompted a national change in the policy guidance given to schools in England in the mid-2000s about how children are taught to read. We conceptualise this as a shock to the education production function that affects the technology of teaching. In particular, there was phasing in of intensive support to some schools across Local Authorities: teachers were trained to use a new phonics approach. We use this staggered introduction of intensive support to estimate the effect of the new 'teaching technology' on children's educational attainment. We find there to be effects of the teaching technology ('synthetic phonics') at age 5 and 7. However, by the age of 11, other children have caught up and there are no average effects. There are long-term effects only for those children with a higher initial propensity to struggle with reading.
    Keywords: Literacy, phonics
    JEL: I21 I28
    Date: 2016–04
  38. By: Congressional Budget Office
    Abstract: Federal spending on highways does not correspond very well with how the roads are used. CBO examines three approaches lawmakers could consider to make highway spending more productive.
    JEL: H41 H54 H76 R41 R42 R48
    Date: 2016–02–11
  39. By: Neill, Clinton L.; Holcomb, Rodney B.; Lusk, Jayson
    Keywords: Beggar-thy-neighbor, Milk, demand, Agricultural and Food Policy, Consumer/Household Economics, Marketing,
    Date: 2016
  40. By: Sebastian G. Kessing; Chiara Strozzi
    Keywords: Public employment, redistribution, regional inequality, European regions
    JEL: H11 J45 R12
    Date: 2016–01–25
  41. By: Christina Christou (University of Pireaus, Department of Banking & Financial Management, Greece); Juncal Cunado (University of Navarra, School of Economics, Spain); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This study examines the convergence patterns of prices across 50 U.S. states over the period 1960-2007, by applying the convergence algorithm developed by Phillips and Sul (2007). The empirical findings suggest rejection of full convergence across the 50 U.S. states prices, and the presence of a certain number of convergence clubs. In particular, eleven subgroup convergence clubs emerge, suggesting that great differences in prices indices exist across the U.S. states. The main implications of the paper point out to the low degree of market integration across the U.S. states, to the limitations of using a unique national price deflator to calculate real US state variables, and to the different effects that the national monetary policies directed to stabilize national prices, for example, will have on U.S. state prices.
    Keywords: Price converge, Club convergence, U.S. states
    JEL: C33 E31 R10
    Date: 2016–04
  42. By: Ekaterina Turkina; Ari Van Assche; Raja Kali
    Abstract: We use a new firm level dataset to study the network of formal firm linkages within and across 52 aerospace clusters in North America and Europe over the period 2002-2014. Applying community structure detection techniques, we find that the structure of the overall network has changed over time. We organize sub-networks by linkage type and find two important trends in their evolution. First, new linkages in the vertical buyer-supplier sub-network are generally formed in a hierarchical hub-and-spoke fashion, whereas new links in the horizontal partnership sub-network are generated in a more decentralized and cohesive manner. Second, the geographical scope of new linkages is different, with vertical buyer-supplier and investment linkages moving increasingly trans-local and partnership linkages becoming more localized. Taken together, our findings suggest that the overall network is evolving from a geographically partitioned community structure to a hierarchical community structure that is stratified along value chain stages.
    Keywords: industrial clusters, local and trans-local linkages, community structure detection, small world analysis,
    JEL: L14 L62 F23
    Date: 2016–04–08
  43. By: Elvira M. Orbetta (Resources, Environment and Economics Center for Studies (REECS))
    Keywords: pollution, Philippines
    Date: 2016–04
  44. By: Francisca Bremberger (Vienna University of Economics and Business (WU), Welthandelsplatz 1, 1020 Vienna); Rudolf Hochholzer (Wiener ArbeitnehmerInnen Förderungsfonds, Nordbahnstr. 36, 1020 Wien); Petr Huber (Austrian Institute for Economic Research (WIFO), Arsenal, Objekt 20, 1030 Wien and Faculty of Business and Economics, Mendel University in Brno.)
    Abstract: We analyse the impact of regional and sectoral labour market characteristics as determinants of the supply of employer financed training using a unique data set on employer provided training in Vienna. According to the results labour turnover has a robust negative impact and employment density a slightly less robust but also negative impact on the probability of a firm to provide employer financed training. Policies directed at increasing employer provided training may therefore face substantial challenges in sectors and regions with high labour turnover and employment densities. These challenges are likely to be even larger when it comes to providing employer financed training for less skilled workers.
    Keywords: employer financed training, urban labour markets, density
    JEL: R12 J24
    Date: 2016–05
  45. By: Gil S. Epstein (Bar-Ilan University, IZA, CReAM and Centro Studi Luca d'Agliano); Odelia Heizler (Cohen) (Tel-Aviv_Yaffo Academic College)
    Abstract: In this paper, we examine possible types of network formation among immigrants in the diaspora and between those immigrants and the locals in different countries. We present the model by considering different possible interactions between immigrants and the new society in their host country. Spread of migrants from the same origin in the diaspora may well increase international trade between the different countries, depending on the types of networks formed. We present possible applications of network structure on the country of origin, such as on international trade. We find that when the size of the diaspora is sufficiently large, the natives in the different countries will be willing to bear the linking cost with the immigrants because the possible benefits increase with increasing size of the diaspora.
    Keywords: Immigrants, Networks, Diaspora
    JEL: D85 D74 J61 L14
    Date: 2016–05–09
  46. By: Ani Harutyunyan (LICOS - Centre for Institutions and Economic Performance at KU Leuven); Ömer Özak (Southern Methodist University)
    Abstract: This research explores the effects of culture on technological diffusion and economic development. It shows that culture's direct effects on development and barrier effects to technological diffusion are, in general, observationally equivalent. In particular, using a large set of cultural measures, it establishes empirically that pairwise differences in contemporary development are associated with pairwise cultural differences relative to the technological frontier, only in cases where observational equivalence holds. Additionally, it establishes that differences in cultural traits that are correlated with genetic and linguistic distances are statistically and economically significantly correlated with differences in economic development. These results highlight the difficulty of disentangling the direct and barrier effects of culture, while lending credence to the idea that common ancestry generates persistence and plays a central role in economic development.
    Keywords: Comparative economic development, economic growth, culture, barriers to technological diffusion, genetic distances, linguistic distances
    JEL: O10 O11 O20 O33 O40 O47 O57 Z10
    Date: 2016–04
  47. By: Graziano Abrate; Federico Boffa; Fabrizio Erbetta; Davide Vannoni
    Abstract: This paper explores the link between voters information, corruption and efficiency in the context of a career concern model where politically connected local monopolies are in charge of the provision of a local public service. We find that both a corrupt environment and a low level of voters? information on managerial actions induce managers to reduce effort levels, thereby contributing to drive down efficiency. We test our predictions using data on solid waste management services provided by a large sample of Italian municipalities. We estimate a stochastic cost frontier model that provides robust evidence that services provided in more corrupt regions and in regions with low voters? information are substantially less cost efficient. We show that the negative impact of a corrupt environment is weaker for municipalities ruled by left-wing parties, while the positive impact of voters? information is larger if the waste collection service is managed by limited liability companies. We finally quantify potential cost savings associated to operating in a less corrupt environment and in one in which voters are more informed through a simulation on six major Italian cities. The magnitude of the figures suggests that effective anti-corruption measures, and/or carefully designed incentives for citizens to acquire information, can generate sig- nificant economic benefits.
    Keywords: corruption, voters' information, efficiency, solid waste
    JEL: D24 D72 D73 L25 Q53
    Date: 2016
  48. By: Nancy Holman; Gabriel M. Ahlfeldt
    Abstract: Conservation areas (CAs) represent a particularly restrictive type of English planning policy that seeks to ex-ante pin down some notion of what value is and how it should be practiced. Designation implies a significant limitation of owners’ control over the shape and appearance of their property and could be argued to run counter to the current push towards a growth dependent paradigm of planning. The policy, however, also may be viewed as a solution to a coordination problem that exists whereby it is collectively rationale to preserve the character of an area, but individually owners may be tempted to inappropriately alter their property, thus free-riding on nearby properties’ character. In this paper, applying a quantitative analysis of about 8000 CAs and close to 1 million property transactions in England and a qualitative analysis of nine CAs in Greater London, we illustrate that not only does regulation create a framework, which helps to overcome coordination problems in CAs, but that residents held and practiced wider more nuanced views of value(s) that allowed for exchange and value creation all the while permitting more multiple and complex economic practices to exist.
    Keywords: designation; social relation of value; heritage; property value; prisoner’s dilemma.
    JEL: C78 D23 R52
    Date: 2015–01
  49. By: Massimiliano Bratti (Università degli Studi di Milano, IZA and Centro Studi Luca d’Agliano); Simona Fiore (Università degli Studi di Bologna); Mariapia Mendola (Università degli Studi di Milano - Bicocca, IZA and Centro Studi Luca d’Agliano)
    Abstract: This paper examines the effects of family size and demographic structure on offspring’s international migration. We use rich survey data from Mexico to estimate the impact of sibship size, birth order and sibling composition on teenagers’ and Young adults’ migration outcomes. We find little evidence that high fertility drives migration. The positive correlation between sibship size and migration disappears when endogeneity of family size is addressed using biological fertility miscarriages) and infertility shocks. Yet, the chances to migrate are not equally distributed across children within the family. Older siblings, especially firstborn males, are more likely to migrate, while having more sisters than brothers may increase the chances of migration, particularly among girls.
    Keywords: International Migration, Mexico, Family Size, Birth Order, Sibling Composition
    JEL: J13 F22 O15
    Date: 2016–04–13
  50. By: Andrea Mantovi (Department of Economics, University of Parma, Italy; The Rimini Centre for Economic Analysis, Italy)
    Abstract: An impersonal mechanism for the diffusion of (the productivity of) ideas along a quality ladder is represented in terms of a Feynman-Kac path integral and the corresponding linear evolution PDE. The explicit solution of the initial value problem is set forth in terms of elementary functions, and the path dependence effects embodied by such a framework are thoroughly discussed. Potential lines of progress are briefly sketched.
    Date: 2016–05
  51. By: Bastian, Anne (KTH); Börjesson, Maria (KTH); Eliasson, Jonas (KTH)
    Abstract: Many western countries have seen a plateau and subsequent decrease of car travel during the 21st century. What has generated particular interest and debate is the statement that the development cannot be explained by changes in traditional explanatory factors such as GDP and fuel prices. Instead, it has been argued, the observed trends are indications of substantial changes in lifestyles, preferences and attitudes to car travel; what we are experiencing is not just a temporary plateau, but a true “peak car”. However, this study shows that the traditional variables GDP and fuel price are in fact enough to explain the observed trends in car traffic in all the countries included in our study: the United States, France, the United Kingdom, Sweden and (to a large extent) Australia and Germany. We argue that the importance of the fuel price increases in the early 2000’s has been underappreciated in the studies that shaped the later debate. Results also indicate that GDP elasticities tend to decrease with rising GDP, and that fuel price elasticities tend to increase at high price levels and during periods of rapid price increases.
    Keywords: Peak car; Fuel price elasticity; GDP elasticity; Travel demand
    JEL: D61 H54 R41 R42 R48
    Date: 2016–04–19
  52. By: Dumortier, Jerome; Zhang, Fengxiu; Marron, John
    Abstract: Taxes on gasoline and diesel are the primary sources of transportation funding at the state and federal level. Due to inflation and improved fuel efficiency, these taxes are increasingly inadequate to maintain the transportation system. In most states and at the federal level, the real fuel tax rates decrease because they are fixed at a cents-per-gallon amount rather than indexed to inflation. In this paper, we provide a forecast on state and federal tax revenue based on different fuel taxation policies such as indexing to inflation, imposing a sales tax on gasoline and diesel, or using a mileage fee on vehicles. We compare how those taxation policies perform compared to the policies states use currently under different macroeconomic conditions relating to the price of oil, economic growth, and vehicle miles traveled. The baselines projections indicate that between 2015 and 2040, fuel tax revenue will decrease 52.2%-54.9% in states that do not index taxes to inflation and 22.6%-22.9% that do currently index to inflation. Switching to a mileage fee increases revenue between 15.6%-26.9% in 2040 compared to 2015. Indexing fuel taxes to inflation in addition to imposing a states' sales tax increases revenue significantly but suffers from a continuous decline in the long-run due to increased fuel efficiency. Our results indicate that although a mileage fee is politically and technologically difficult to achieve, it avoids a declining tax revenue in the long-run.
    Keywords: gasoline taxes, diesel taxes, VMT fee, simulation, motor fuel tax revenue, Public Economics, Resource /Energy Economics and Policy,
    Date: 2016–04–02

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