nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒05‒21
48 papers chosen by
Steve Ross
University of Connecticut

  1. Social Networks and Housing Markets By Bailey, Michael; Cao, Ruiqing; Kuchler, Theresa; Ströbel, Johannes
  2. Circuity in Urban Transit Networks By Jie Huang; David Levinson
  3. Negative equity in the Sixth Federal Reserve District By Raymond, Elora
  4. Patterns and determinants of inventors’ mobility across European urban areas By Clément Gorin
  5. Jobs in the city : explaining urban spatial structure in Kampala By Goswami,Arti Grover; Lall,Somik V.
  6. Subways and Urban Growth: Evidence from Earth By Marco Gonzalez-Navarro; Matthew A. Turner
  7. Non-durable Consumption and Housing Net Worth in the Great Recession: Evidence from Easily Accessible Data By Kaplan, Greg; Mitman, Kurt; Violante, Giovanni L.
  8. Endogenous UK Housing Cycles and the Risk Premium: Understanding the Next Housing Crisis By Geoffrey Meen; Alexander Mihailov; Yehui Wang
  9. Housing Policies in Hong Kong, China and the People’s Republic of China By Jing Li, Victor
  10. Urbanization and Economic Growth in Punjab (India): An Empirical Analysis By Mahey, Kavita; Tripathi, Sabyasachi
  11. Foreclosure Delay and the U.S. Labor Market By Herkenhoff, Kyle F.; Ohanian, Lee E.
  12. Do Housing Values Respond to Underground Storage Tank Releases? Evidence from High-Profile Cases across the United States By Dennis Guignet; Robin R. Jenkins; Matthew Ranson; Patrick J. Walsh
  13. Why does birthplace matter so much? sorting, learning and geography By Clément Bosquet; Henry G. Overman
  14. Building the city: sunk capital, sequencing and institutional frictions By J. Vernon Henderson; Tanner Regan; Anthony J. Venables
  15. Related Variety, Unrelated Variety, and Regional Growth: The Role of Absorptive Capacity and Entrepreneurship By Michael Fritsch; Sandra Kublina
  16. Social and economic impact analysis of Vadinar refinery of Essar oil: The Case of a mega refinery By Sumana Chaudhuri; Shovan Ray
  17. On the convergence in female participation rates By Abe, Yukiko
  18. Social Promotion in Primary School: Immediate and Cumulated Effects on Attainment By Margaret Leighton; Priscila Souza; Stéphane Straub
  19. Direct-selling farming and urban externalities: what impact on products quality and market size? By Anne Fournier,
  20. Socio-psychological determinants of mode choice habits By Bouscasse, H.; Bonnel, P.
  21. “Relatedness, external linkages and innovation” By Ernest Miguélez; Rosina Moreno
  22. Education curriculum and student achievement : theory and evidence By Su, Xuejuan; Andrietti, Vincenzo
  23. Age, Time, Vintage, and Price Indexes: Measuring the Depreciation Pattern of Houses By Iqbal Syed; Jan de Haan
  24. Does Economic Policy Uncertainty Forecast Real Housing Returns in a Panel of OECD Countries? A Bayesian Approach By Christina Christou; Rangan Gupta; Christis Hassapis
  25. Beyond urban form: How Masahisa Fujita shapes us By Berliant, Marcus; Mori, Tomoya
  26. State Aid to Local Governments: How Hawaii’s State Government Shares Transient Accommodation Tax Revenues With Its Local Governments By James Mak
  27. Internet searches and transactions on the housing market By Sander van Veldhuizen; Benedikt Vogt; Bart Voogt
  28. Labor Market Rigidities and Production Efficiency in Public Schools By Dongwoo Kim; Cory Koedel; Shawn Ni; Michael Podgursky
  29. The Educational and Behavioral Impacts of the Ewing Marion Kauffman Charter School By Matthew Johnson; Cleo Jacobs Johnson; Scott Richman; Alicia Demers; Claudia Gentile; Eric Lindquist
  30. The Cost of Decentralization: Linguistic Polarization and the Provision of Education By Cinnirella, Francesco; Schueler, Ruth M.
  31. Housing Policy in the Republic of Korea By Kim, Kyung-Hwan; Park, Miseon
  32. Benefits of dense labour markets: Evidence from transitions to employment in Germany By Hamann, Silke; Niebuhr, Annekatrin; Peters, Jan Cornelius
  33. Current Status of the Local Income Tax in New York City By Tatsuhiko Tani
  34. Family Networks and Distributive Politics By Fafchamps, Marcel
  35. Local Labour Market Effects of Unemployment on Crime Induced by Trade Shocks By Deiana, Claudio
  36. Resilience in the European Union: the effect of the 2008 crisis on the ability of regions in Europe to develop new industrial specializations By Jing Xiao; Ron Boschma; Martin Andersson
  37. Location and Productivity of Knowledge- and Information-intensive Business Services By MORIKAWA Masayuki
  38. Digital Tools for Capturing User?s Needs on Urban Open Spaces: Drawing Lessons from Cyberparks project By Smaniotto Costa, Carlos; Bahillo Martínez, Alfonso; Álvarez, Fernando J.; ?uklje Erjavec, Ina; Menezes, Marluci; Montserrat Pallares-Barbera
  39. The global spatial distribution of economic activity: nature, history and the role of trade By J. Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
  40. Ready to learn: the role of childcare attendance on children's school outcomes in Italy By Gloria Di Caprera
  41. Bloom and Bust: Toxic Algae’s Impact on Nearby Property Values By Wolf, David; Klaiber, H. Allen
  42. The implications of labor market network for business cycles By Marcelo Arbex; Sydney Caetano; Dennis O'Dea
  43. Do Subnational Fiscal Rules Foster Fiscal Discipline? New Empirical Evidence from Europe By Ananya Kotia; Victor Duarte Lledo
  44. Approaches to Making Federal Highway Spending More Productive By Congressional Budget Office
  45. Regional Transport Infrastructure: Mapping Projects to Bridge South Asia and Southeast Asia By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  46. Take what you can: property rights, contestability and conflict By Thiemo Fetzer; Samuel Marden
  47. The Influence of Oil and Gas on Local Sales and Use Tax Receipts: Evidence from Oklahoma Panel Data By Johnston, Dylan; Whitacre, Brian
  48. More than an Urban Legend: The long-term socioeconomic effects of unplanned fertility shocks By Fetzer, Thiemo; Pardo, Oliver; Shanghavi, Amar

  1. By: Bailey, Michael; Cao, Ruiqing; Kuchler, Theresa; Ströbel, Johannes
    Abstract: We document that the recent house price experiences within an individual's social network affect her perceptions of the attractiveness of property investments, and through this channel have large effects on her housing market activity. Our data combine anonymized social network information from Facebook with housing transaction data and a survey. We first show that in the survey, individuals whose geographically-distant friends experienced larger recent house price increases consider local property a more attractive investment, with bigger effects for individuals who regularly discuss such investments with their friends. Based on these findings, we introduce a new methodology to document large effects of housing market expectations on individual housing investment decisions and aggregate housing market outcomes. Our approach exploits plausibly-exogenous variation in the recent house price experiences of individuals' geographically-distant friends as shifters of those individuals' local housing market expectations. Individuals whose friends experienced a 5 percentage points larger house price increase over the previous 24 months (i) are 3.1 percentage points more likely to transition from renting to owning over a two-year period, (ii) buy a 1.7 percent larger house, (iii) pay 3.3 percent more for a given house, and (iv) make a 7% larger downpayment. Similarly, when homeowners' friends experience less positive house price changes, these homeowners are more likely to become renters, and more likely to sell their property at a lower price. We also find that when individuals observe a higher dispersion of house price experiences across their friends, this has a negative effect on their housing investments. Finally, we show that these individual-level responses aggregate up to affect county-level house prices and trading volume. Our findings suggest that the house price experiences of geographically-distant friends might provide a valid instrument for local house price growth.
    Keywords: disagreement; Expectation Formation; House Price Dynamics; Social Networks
    JEL: D12 D14 D84 G12 R21
    Date: 2016–05
  2. By: Jie Huang; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper investigates the circuity of transit networks and examines auto mode share as a function of circuity and accessibility to better understand the performance of urban transit systems. We first survey transit circuity in the Minneapolis–St. Paul, Minnesota, region in detail, comparing auto and transit trips. This paper finds that circuity can help to explain mode choices of commuters. We then investigate thirty-five additional metropolitan areas in the United States. The results from these areas show that transit circuity exponentially declines as travel time increases. Moreover, we find that the circuity of transit networks is higher than that of road networks, illustrating how transit systems choose to expand their spatial coverage at the expense of directness and efficiency in public transportation networks. This paper performs a regression analysis that suggests the circuity of transportation networks can estimate transit accessibility, which helps to explain mode share.
    Keywords: Circuity, Accessibility, Transit networks, Network efficiency, Mode share, Public transportation
    JEL: R14 R41 R42
    Date: 2015
  3. By: Raymond, Elora (Federal Reserve Bank of Atlanta)
    Abstract: Using Zillow's zip code level Negative Equity Report for the second quarter of 2014 and 2015, I map, describe, and analyze the characteristics of neighborhoods that have persistent negative equity in the Sixth Federal Reserve District, comprised of Alabama, Florida, and Georgia, and parts of Louisiana, Mississippi, and Tennessee. Persistent negative equity, when a house is worth less than outstanding mortgage debt, is high in the Sixth District and concentrated in urban areas. In a series of regressions, I evaluate the correlation of income, commute times, unemployment, housing stock quality, vacancy rates, mortgage market factors, and racial/ethnic composition on rates of negative equity. I also provide within-state and within-metropolitan estimates to understand the differences between the highest negative equity and moderate negative equity areas. I find that even after controlling for the housing market crash, the places with persistent high negative equity are in predominantly black zip codes with longer commute times, higher unemployment rates, and high rental vacancy rates. Economic indicators, housing stock quality, and measures of the local severity of the subprime and foreclosure crises are significant predictors of overall negative equity, but their inclusion as controls does not eliminate the strong association between racial composition and persistent negative equity. This research does not identify the causes of this pattern, but suggests that the housing market recovery is uneven and proceeding in a way that could widen the racial gap in housing wealth. Future research could investigate further the impact of transportation access, maintenance of vacant rental housing in hard-hit areas, and unemployment in areas with persistent negative equity.
    Keywords: negative equity; race; mortgages; Southeast
    JEL: R31
    Date: 2016–03–01
  4. By: Clément Gorin (Université de Lyon, Lyon F- 69007, France; CNRS, GATE L-SE, Ecully, F- 69130, France; Université J. Monnet, Saint-Etienne, F- 42000, France)
    Abstract: Highly skilled professionals are regarded as one of the main driver for the economic development of cities through their effect on innovative capabilities. Skilled individuals are mobile in space and tend to cluster within a limited number of urban areas, therefore a crucial question is what factors shape this flows and influence the divergent levels of economic development across urban areas. Building on these considerations, this paper takes advantage of a large-scale dataset to shed light on the patterns and determinants of inventors’ mobility across European urban areas. First, a descriptive analysis is carried out to document the dynamics of inventors’ mobility and their spatial dimension. Second, a gravity model is used to analyse how job opportunities and socio-professional networks influence the flows of inventors between urban areas. From a methodological perspective, this paper uses a spatial filtering variant of the Poisson gravity model, which accommodate the nature of the data, while controlling for multilateral resistance and spatial autocorrelation in mobility flows. The descriptive analysis suggest that inventors’ mobility occurs primarily between relatively large and collocated urban areas, partly because of the high level of circular and intra-firm mobility. The econometric analysis shows that employment opportunities, social networks, as well as various forms of proximity are important determinants of inventors’ mobility.
    Keywords: Inventors’ mobility, urban areas, job opportunities, socio-professional network, Poisson gravity model, spatial filtering
    JEL: J61 O18 O31 O33
    Date: 2016
  5. By: Goswami,Arti Grover; Lall,Somik V.
    Abstract: This paper examines the spatial organization of jobs in Kampala, the capital city of Uganda, and applies the Lucas and Rossi-Hansberg (2002) model to explain the observed patterns in terms of the agglomeration forces and the commuting costs of workers. The paper suggests that: (i) Economic activities are concentrated in the downtown -- beyond which employment is spatially dispersed. (ii) Geographically weighted regressions identify five potential subcenters in 2011; however, none of these contribute significantly to employment. When explaining the variation in employment density across localities in Kampala, the research highlights that (i) density falls by 23.5 percent per kilometer increase in distance from the nearest potential subcenter; (ii) an increase in local production externalities of 10 percent increases density by 3.7 percent; and (iii) production externalities in Kampala's potential subcenters are extremely weak to have any significant impact even on nearby tracts.
    Keywords: Urban Housing and Land Settlements,Urban Slums Upgrading,Labor Policies,Health Systems Development&Reform,Transport Economics Policy&Planning
    Date: 2016–04–27
  6. By: Marco Gonzalez-Navarro; Matthew A. Turner
    Abstract: We investigate the relationship between the extent of a city's subway network, its population and its spatial configuration. To accomplish this investigation, for the 632 largest cities in the world, we construct panel data describing the extent of each of the 138 subway systems in these cities, their population, and measures of centralization calculated from lights at night data. These data indicate that large cities are more likely to have subways, but that subways have an economically insignificant effect on urban population growth. Consistent with economic theory and with other studies of the effects of transportation improvements on cities, our data also indicate that subways cause cities to be more decentralized. For a subset of subway cities we also observe panel data describing subway and bus ridership. We find that a 10% increase in subway extent causes about a 6% increase in subway ridership and has no effect on bus ridership. Consistent with the available literature describing the effect of roads on cities, our results are consistent with subways having a larger effect on the configuration of cities than on their sizes, and with subways having a larger effect on discretionary than commute travel.
    Keywords: subways, public transit, urban growth, urban decentralization
    JEL: L91 R4 R11 R14
    Date: 2016–04
  7. By: Kaplan, Greg; Mitman, Kurt; Violante, Giovanni L.
    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.
    Keywords: Consumption; great recession; House Prices; Non-durable expenditures
    JEL: E21 E32 R21
    Date: 2016–05
  8. By: Geoffrey Meen (Department of Economics, University of Reading); Alexander Mihailov (Department of Economics, University of Reading); Yehui Wang (Department of Economics, University of Reading)
    Abstract: Despite the lessons of the post-2007 housing crisis, it would be dangerous to suggest that there will be no similar future events. Here we define a ‘crisis’ as a period of sustained worsening in affordability followed by a collapse in house prices, both of which were features of the 1996-2009 period. Extending the standard life-cycle housing approach to a three-asset model which incorporates interactions with financial markets and uncertainty, it can be shown that endogenous housing cycles can explain volatility. Three parameters drive the system – the income and price elasticities of housing demand and the degree of risk aversion. Furthermore, a key feature of UK housing policy over the last ten years or more has been an attempt to increase housing supply in order to stabilise affordability. The model demonstrates that stabilisation is impossible for any plausible level of construction, if affordability is measured by the ratio of house prices to incomes. Nevertheless, the market has built-in stabilisers; this is demonstrated through the use of stochastic simulations, which illustrate the dynamics of house prices implied by our expected utility model. The model derives explicitly a housing risk premium as a key determinant of the user cost and, hence, house prices and affordability, a factor commonly ignored in many housing models. Moreover, we find that exogenous, persistent ‘ups and downs’ similar to the Great Moderation – Global Financial Crisis period complement the endogenous propagation mechanism of our model.
    Keywords: house prices, life-cycle housing model, affordability, housing risk premium, endogenous housing cycles
    JEL: E32 E37 G11 R21 R31 R38
    Date: 2016–04–15
  9. By: Jing Li, Victor (Asian Development Bank Institute)
    Abstract: This paper analyzes the housing markets and housing policies in Hong Kong, China and the People’s Republic of China (PRC). Both markets face housing affordability problems due to limited land supply, for which the solutions vary considerably. Hong Kong, China has adopted a railway and property development model, which involves close collaboration between the government and property developers in compact urban areas, while leaving most greenbelts and surrounding islands underdeveloped. Although the PRC has pledged to maintain a minimum level of basic farmland to feed its large population, this target has often been compromised due to local governments’ fiscal constraints and growth concerns.
    Keywords: PRC housing market; Hong Kong; China; housing affordability; housing subsidies
    JEL: H11 H72 P25 P26 R21 R28 R31 R38 R52
    Date: 2016–04–21
  10. By: Mahey, Kavita; Tripathi, Sabyasachi
    Abstract: In recent decades, urbanization in Punjab is occurring rapidly by reducing the share of agricultural activity and increasing rural to urban migration. In this perspective, the present paper using Census data describes the recent past trends and patterns of Punjab’s urbanization from 1961 to 2011. It investigates the relevant determinants of urbanization in Punjab. Finally, it measures the impact of urbanization on urban economic growth in Punjab. The empirical results show that the growth rate of urban population is higher than that of the total population in Punjab. Urban agglomerations and urban areas of in Punjab also are increasing rapidly. Most importantly, it has been seen that urban population in Punjab is concentrated in an around Class I cities than other class of cities/towns. The OLS regression results show that road distance to sub division (or nearest city population of 1 lakh and more) has a negative effect on urbanization in Punjab measured by size of city population. On the other hand, city-wise total road length has a positive impact on urbanization in Punjab. In addition to that, city-wise total number of schools, colleges and electricity connections has a positive impact on urbanization in Punjab measured by city population density. The paper also finds the positive link between urbanization measured by size of district urban population and urban economic growth measured by district domestic product in Punjab. Finally, the paper suggests several policy options for planned urbanization in Punjab for not only to improve economic growth in Punjab but also in India as well.
    Keywords: Urbanization, Urban Economic Growth, Punjab, India
    JEL: O18 R11 R12
    Date: 2016–05–16
  11. By: Herkenhoff, Kyle F. (University of Minnesota); Ohanian, Lee E. (Federal Reserve Bank of Minneapolis)
    Abstract: The time required to complete a home foreclosure rose substantially during the Great Recession, due both to lender bottlenecks in processing foreclosures and to government policies intended to slow the foreclosure process. This paper shows that foreclosure delay had the unintentional benefit of giving unemployed homeowners additional time to search for high-paying jobs. {{p}} Our economic model analyzes foreclosure delay as equivalent to extending additional credit to unemployed homeowners that is paid back if the homeowners find jobs and fulfill their delinquent mortgage obligations before foreclosure is completed. Model simulations estimate that foreclosure delay during the recession improved the quality of new employment matches, raised national income by about 0.3 percent and increased homeownership by about 800,000 units.
    Date: 2016–05–03
  12. By: Dennis Guignet; Robin R. Jenkins; Matthew Ranson; Patrick J. Walsh
    Abstract: Underground storage tanks (USTs) containing petroleum and hazardous substances are ubiquitous. Accidental releases of these substances can present risks to local residents and the environment. The purpose of this paper is to develop monetized estimates of the benefits of preventing and cleaning up UST releases, as reflected in house values. We focus on 17 of the most high-profile UST releases in the United States with release discovery and other milestone events occurring at different points between 1985 and 2013. These data are the broadest analyzed for property value impacts of UST releases, as previous hedonic studies of USTs focused only on a single county, city, or subset of counties within a state. We employ a two-step methodology in which (i) site specific hedonic regressions are estimated using a difference-in-differences approach, and then (ii) an internal meta-analysis of the resulting estimates is conducted. The spatial and temporal variation among the 17 sites improves our identification of the treatment effects by reducing local idiosyncratic biases; thus providing greater confidence to a causal interpretation of the estimated average price effects. The results suggest significant heterogeneity in the price effects across sites, but on average reveal a 3% to 6% depreciation upon the discovery of a high profile release, and a similar appreciation after cleanup. These average effects diminish with distance, extending out to 2 or 3km from the site.
    Keywords: groundwater, hedonic, meta-analysis, property value, underground storage tanks, UST, vapor intrusion
    JEL: Q24 Q51 Q53
    Date: 2016–03
  13. By: Clément Bosquet; Henry G. Overman
    Abstract: We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city size. We consider a number of mechanisms through which this birthplace effect could arise. Our results suggest that inter-generational transmission (sorting) and the effect of birthplace on current location (geography) both play a role in explaining the effect of birthplace. We find no role for human capital formation at least in terms of educational outcomes (learning). Our results highlight the importance of intergenerational sorting in helping explain the persistence of spatial disparities.
    Keywords: place of birth; spatial sorting; lifetime mobility
    JEL: J61 J62
    Date: 2016–01
  14. By: J. Vernon Henderson; Tanner Regan; Anthony J. Venables
    Abstract: This paper models a growing city, and focuses on investment decisions and consequent patterns of land use and urban density. We distinguish between formal and informal sector construction. The former can be built tall (at a cost), but structures once built are durable and cannot be modified. Investments are based on expectations about future growth of the city. In contrast, informal structures are malleable and do not involve sunk costs. As the city grows areas will initially be developed informally, and then formally; formal areas are redeveloped periodically. This process can be hindered by land right issues which raise the costs of converting informal to formal sector development. The size and shape of the city are sensitive to the expected returns to durable investments and to the costs of converting informal to formal sector usage. We take the model to data on the built environment for Nairobi, to study urban growth and change between 2004 and 2015 in a context where population is growing at about 4% a year. We study the evolution of building footprints and heights, development at the fringe, infilling, and redevelopment of the formal sector.
    Keywords: city; urban; urban growth; slum development; urban structure; urban form; housing investment; capital durability
    JEL: R14 J01
    Date: 2016–04
  15. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sandra Kublina (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: This paper investigates the effect of related and unrelated variety on regional growth in West Germany. In particular, we analyze the role of regional absorptive capacity and new business formation for these effects. We find that West German regions benefit from both types of varieties. The positive effect of unrelated variety on growth is more pronounced in regions with higher levels of absorptive capacity in terms of R&D activities and with higher levels of new business formation. Such moderating effects cannot be found for related variety.
    Keywords: Related variety, unrelated variety, knowledge spillovers, regional absorptive capacity, entrepreneurship, regional growth
    JEL: R11 R12 D62
    Date: 2016–05–10
  16. By: Sumana Chaudhuri (Durgadevi Saraf Institute of Management Studies); Shovan Ray (Indira Gandhi Institute of Development Research)
    Abstract: The paper is a case study of Vadinar refinery in Gujarat. It examines the costs and benefits associated with one of the world's mega refinery projects highlighting the welfare impacts on society. The paper briefly examines whether refining at Vadinar by Essar is of net economic benefit to the region, state and the country by constructing a Social Cost Benefit Analysis of the Vadinar Refinery Project. The paper analyses the local-level economic impacts (on-site labor impacts, local revenue and supply chain impacts and induced impacts) and jobs supported by Vadinar refinery construction and ongoing operations. The paper also analyses the regional (state and country) level economic impacts; multiplier effect of income, tax and savings generated as a result of the refinery operations, including other externalities associated with the project. There is abundance of scope to reflect the strategic food and oil security of India from the macroeconomic perspective; the gradual increase in investor and consumer confidence with respect to self-reliance in production and consumption of oil and natural gas resources in the country and the broader social impact of the project, which may be taken up in subsequent research. A sequel to this paper will explore an approach to integrating the methods with a CGE model framework.
    Keywords: Social Cost Benefit Analysis, Economic Impact, Externalities, Oil Refinery
    JEL: B41 D60 D61 D62 H23 H43 L71 O22 Q43
    Date: 2016–04
  17. By: Abe, Yukiko
    Abstract: Large regional differences exist in female participation across regions within Japan. This paper uses two datasets to show that a significant convergence in female participation occurred from 1940 to 2010. Historically, female participation has been low in urban areas and high in non-urban areas. The participation rate steadily and significantly increased in urban areas and, to a lesser extent in non-urban areas, and thus regional differences shrank over time. Microdata from 1982 to 2012 reveal that regional dispersion is large for married women’s regular full-time participation in the traditional sectors (manufacturing for the less educated and teaching for the highly educated). Compositional changes in demographics and educational attainment explain 74 percent of the convergence for those aged 25-39 years, and 40 percent of the convergence for those aged 40-54 years. An increase in non-regular employment accounts for 60 percent of the convergence for the latter group. Convergence in regular full-time participation by married women is only observed in the traditional sectors (manufacturing and teaching) and not in the new sectors (service and retail). Since the compositional change is the major source of convergence for young women's participation, their behavior across regions did not converge.
    Keywords: convergence, region, female participation,
    Date: 2016–04
  18. By: Margaret Leighton (University of St Andrews); Priscila Souza (Climate Policy Initiative/Pontifical Catholic University of Rio de Janeiro); Stéphane Straub (Toulouse School of Economics)
    Abstract: Does social promotion perpetuate shortfalls in student achievement, or can low-achieving students catch up with their peers when they are pushed ahead? Using data from Brazilian primary schools, this paper presents evidence of substantial catch up among socially promoted students. After documenting sorting across schools in response to the policy, in particular away from gated- promotion private schools, we show that social promotion cycles has no significant effect on municipality enrolment figures or on the percentage of students dropping out mid-year. Cohorts of students exposed to episodes of social pro- motion display higher rates of age-appropriate study than their peers who faced the threat of repetition each year: by age eleven, 5.6 fewer students out of 100 have fallen behind in their studies, while 5.1 fewer students out of 100 are two or more years delayed. These gains, which arise mechanically during the period of social promotion, are highly persistent over time – even through educational stages which are typically high-stakes. This evidence suggests that, absent the social promotion policy, retention rates in Brazilian primary schools are inefficiently high: many promoted students successfully pass gateway exams after being pushed ahead, and go on to complete junior primary school on time.
    Keywords: education policy, primary school, grade repetition, grade retention; social promotion; automatic promotion; Brazil
    JEL: I21 I28 I25
    Date: 2016–04–26
  19. By: Anne Fournier,
    Abstract: In this paper, we study how the proximity to cities affects the decision of farmers to enter the direct-selling market in presence of spatial heterogeneity in agricultural yields. We develop a theoretical model which takes into account the externality of urban pollution and market access costs on direct-selling profits. We find that regions hosting an intermediate-size city are more likely to supply a wider range of direct-selling varieties. Additionally, we highlight that spatial heterogeneity in productivity creates distortions in competition between farmers, and can have concomitant undesired effects on both the quality and the range of available varieties.
    Keywords: direct-selling farming, spatial heterogeneity, urban pollution, city sized
    JEL: D43 Q13 Q53 R52
    Date: 2016
  20. By: Bouscasse, H.; Bonnel, P.
    Abstract: This article uses structural equation modeling with latent variables to analyse the influence of socio-psychological variables on mode choice habits. Considering theories from socio-psychological research, we propose to link together environmental concern, motives for car use, public transport perceptions and mode choice habits (public transport and car). Based on a recent survey carried out by the authors in the Rhône-Alpes Region of France, we show that a high environmental concern and positive perceptions of public transport promote public transport habits. The process by which environmental concern influences public transport habits is partially mediated by perceptions of public transport. Conversely, car use habits are reduced for people with a high environmental concern. Results also suggest that car use habits are more marked to the extent that they depend on affective and symbolic motives.
    JEL: R41 C52
    Date: 2016
  21. By: Ernest Miguélez (GREThA, University of Bordeaux & AQR Research Group-IREA. University of Barcelona); Rosina Moreno (AQR Research Group-IREA. University of Barcelona)
    Abstract: This paper has two main objectives. First, it estimates the impact of related and unrelated variety of European regions’ knowledge structure on their patenting activity. Second, it looks at the role of technological relatedness and extra-local knowledge acquisitions for local innovative activity. Specifically, it assesses how external technological relatedness affects regional innovation performance. Results confirm the strong relevance of related variety for regional innovation; whereas the impact of unrelated variety seems relevant only for the generation of breakthrough innovations. The study also shows that external knowledge flows have a higher impact, the higher the similarity between these flows and the extant local knowledge base.
    Keywords: Variety; Patents; Patent citationsM Relatedness; Knowledge production function. JEL classification: O18; O31; O33; R11
    Date: 2016–04
  22. By: Su, Xuejuan; Andrietti, Vincenzo
    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: Unconditional quantile regression; Conditional quantile regression; Difference-in-differences; Distributional effects; Horizontal differentiation; Education curriculum
    JEL: D04 I28 I21
    Date: 2016–04
  23. By: Iqbal Syed (School of Economics and CAER, UNSW Business School, UNSW); Jan de Haan (Statistics Netherlands and Delft University of Technology, The Netherlands)
    Abstract: Age, time and vintage are key determinants of house prices, yet they cannot be included together linearly or as dichotomous variables in hedonic regressions as construction time + age of house = sale time. We introduce a method where the estimates of the age, time and vintage effects on prices are obtained in a flexible manner, without requiring us to specify a pre-determined functional form for either of these variables. Applying our method to Dutch data, we find that the estimated depreciation pattern over the life of houses does not follow the functional forms typically specified for the age of houses in hedonic regressions.
    Keywords: Age-price profile, capital formation, hedonic regressions, GEKS index
    JEL: C43 E01 E31 R31
    Date: 2016–02
  24. By: Christina Christou (School of Economics and Management, Open University of Cyprus, 2252, Latsia, Cyprus); Rangan Gupta (Department of Economics, University of Pretoria); Christis Hassapis (Department of Economics, University of Cyprus, P.O. Box 20537, CY-1678 Nicosia, Cyprus)
    Abstract: This paper investigates whether the news-based measure of economic policy uncertainty (EPU) could help in forecasting the real housing returns in ten (Canada, France, Germany, Italy, Japan, The Netherlands, South Korea, Spain, United Kingdom, and United States of America) Organization for Economic Co-operation and Development (OECD) countries. We analyze the quarterly out-of-sample period of 2008:Q2-2014:Q4, given an in-sample period of 2003:Q1- 2008:1Q1, using time series and panel data-based vector autoregressive models, with the latter allowing for heterogeneity, and static and dynamic interdependence. It is found that regardless of the forecasting model considered, EPU is useful for forecasting real housing returns. Our results show that, panel data models, especially the Bayesian variants which allow for parameter shrinkage, consistently beat time series autoregressive models suggesting the importance of pooling information when trying to forecast real housing returns.
    Keywords: Real Housing Returns, Economic Policy Uncertainty, OECD Countries, Panel Vector Autoregressions
    JEL: C33 C53 R31
    Date: 2016–04
  25. By: Berliant, Marcus; Mori, Tomoya
    Abstract: Literature from several phases of the career of Masahisa Fujita is surveyed chronologically, with a view toward future contributions in these areas. First we address the economic structure of the interior of a city with mobile consumers, adding production. Next we provide a critical discussion of the New Economic Geography, in particular distinguishing between recent approaches employing two regions and more than two regions, both in theory and in application to data. Finally, we discuss knowledge creation in groups and briefly touch on his current work in artificial intelligence.
    Keywords: New urban economics; New economic geography; Knowledge creation; Knowledge diversity; Robot economist
    JEL: D83 O31 R12 R13 R14
    Date: 2016–04–19
  26. By: James Mak (UHERO, University of Hawaii at Manoa)
    Abstract: Many states in the U.S. give unrestricted financial support to their local governments. The reasons some state governments provide aid and others do not, and why a particular mode of revenue sharing is adopted remain unclear. This paper examines Hawaii’s recent effort at developing a model to allocate the state’s transient accommodation tax revenues between the State and the county governments. The paper documents the process and explains the rationale behind the model.
    Keywords: Intergovernmental revenue sharing, transient accommodation tax, hotel occupancy tax
    JEL: H7
    Date: 2016–05
  27. By: Sander van Veldhuizen; Benedikt Vogt; Bart Voogt
    Abstract: We use Google searches of the word “mortgage†to explain housing transactions in the Netherlands in the period from 2004 until 2015. Our estimates indicate that Google searches of the previous months are significantly positively associated with housing transactions in the current month. This provides evidence that internet search data can provide information about real market behaviour.
    JEL: E2 E27 R2 R3
    Date: 2016–05
  28. By: Dongwoo Kim (Department of Economics, at the University of Missouri, Columbia); Cory Koedel (Department of Economics and Truman School of Public Affairs, at the University of Missouri, Columbia); Shawn Ni (Department of Economics, at the University of Missouri, Columbia); Michael Podgursky (Department of Economics, at the University of Missouri, Columbia)
    Abstract: Economic theory predicts that incomplete licensing reciprocity and mobility penalties built into teacher pension plans create costly labor frictions for schools operating near state boundaries. We empirically test for boundary effects on production efficiency in public schools by comparing achievement across otherwise similar schools that differ by the extent to which a state line divides the local labor market area. We find highly localized but robust negative effects of state boundaries on student achievement. To the best of our knowledge, our study is the first to link labor-market rigidities to a direct measure of output in any sector.
    Keywords: labor mobility, labor frictions, teacher labor market, teacher pensions, teacher licensing
    JEL: H7 I2 J6
    Date: 2016–05
  29. By: Matthew Johnson; Cleo Jacobs Johnson; Scott Richman; Alicia Demers; Claudia Gentile; Eric Lindquist
    Abstract: The Kauffman School is a public charter school that serves students from low-income neighborhoods in Kansas City, Missouri. 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
  30. By: Cinnirella, Francesco; Schueler, Ruth M.
    Abstract: In this paper we argue that different preferences in a decentralized system lead to under provision of public goods. We analyze the provision of public primary education in nineteenth-century Prussia which was characterized by a linguistically polarized society and a decentralized education system. Using unique county-level data on education spending we show that linguistic polarization has a negative impact on local spending. Instrumental variable estimates using distance to the eastern border suggest that the relationship can be causally interpreted. Exploiting a reform of education spending, we show that centralization increases the provision of primary education relatively more in linguistically polarized counties.
    Keywords: Centralization; Decentralization; education; Polarization; Prussia; Public Goods
    JEL: H41 H75 I22 N13 N33
    Date: 2016–05
  31. By: Kim, Kyung-Hwan (Asian Development Bank Institute); Park, Miseon (Asian Development Bank Institute)
    Abstract: This paper evaluates housing policy in the Republic of Korea over the past several decades, describes new challenges arising from the changing environment, and draws lessons for other countries. The most important goals of the housing policy have been to alleviate housing shortages and to stabilize housing prices. To achieve these goals, the government has been engaging the private sector while establishing public sector institutions and legal framework, providing developable land, and allocating housing units to intended target groups. Thanks to the sustained and massive provision of new housing since the 1980s, the country’s absolute housing shortage has been resolved, and overall housing conditions have improved substantially. Since the turn of the new millennium, enhancing the housing welfare of low-income households and the underprivileged has been added to housing policy goals. The supply of public rental housing was increased, and a housing benefit was introduced to address the new policy goal, but more work needs to be done. Today, the Republic of Korea also faces new housing challenges regarding the country’s demographic and socioeconomic changes.
    Keywords: Korean housing policy; housing–macroeconomy nexus; rental housing market structural change
    JEL: P25 R21 R28 R31 R38 R52
    Date: 2016–05–12
  32. By: Hamann, Silke; Niebuhr, Annekatrin; Peters, Jan Cornelius
    Abstract: We analyse whether the size of the local labour market allows for better matching between job seekers and vacancies, which is thought to enhance productivity. This analysis is based on a large data set providing detailed micro-level information on new employment relationships in Germany. Our results suggest rather small matching benefits. Doubling employment density increases the productivity of new employment relationships by 1.1% to 1.2%. Moreover, the findings indicate that the benefits accrue only to persons experiencing job-to-job transitions and short-term unemployed. We detect no important impact of agglomeration on transitions from long-term non-employed.
    Keywords: agglomeration economies,matching,urban wage premium,transitions to employment
    JEL: R23 J31
    Date: 2016
  33. By: Tatsuhiko Tani (Office of Research Development and Sponsored Projects, Mita Campus, Keio University)
    Abstract: The orthodox view of local taxation is that local governments should not levy a progressive local income tax. However, a progressive local income tax is a major revenue source of New York City government revenue. Furthermore, in recent years, several Democrats in New York City have raised plan to make the city's income tax more progressive. Why is it considered that a progressive local income tax is a fair tax in New York City? This paper explores the economic and political background of progressive local income taxation in New York City.
    Keywords: Local Income Taxation, Taxes in New York City, Local Income Redistribution, Income Inequality
    JEL: H71 H24
    Date: 2016–03–29
  34. By: Fafchamps, Marcel
    Abstract: We argue that incumbents share rents with central players to build and sustain coalitions. Using an unusually rich dataset, we show that households with high betweenness centrality - a measure of brokerage potential - receive more public services from their local government. This result is robust to the inclusion of controls for program eligibility, family ties with politicians, and other measures of centrality - which are not significant once betweenness is included. We provide further corroboration from indirect evidence from variation in size and electoral competition across municipalities. Finally, we show that in municipalities where politicians provide more goods and services to their relatives they target fewer goods to households with high betweenness centrality. The evidence supports the hypothesis that incumbent municipal politicians offer favorable access to public services to households most able to play a brokerage role in the formation of coalitions of families for electoral support.
    Date: 2016–04
  35. By: Deiana, Claudio
    Abstract: This paper analyses the effect of a long-term change in unemployment on crime in the US local labour markets (1990-2007). During these last two decades, the US economy has experienced severe structural changes caused by international trade shocks, and China has played a crucial role as a major global exporter. The rapid growth of US exposure to China products triggers the increase in US local unemployment rates. This study documents whether this increasing exposure to Chinese competitiveness has indirectly contributed to the change in the propensity to commit crime through the displacement of workers. I exploit the cross-market variation in import exposure stemming from initial differences in industry specialisation to instrument the unemployment rate. The empirical evidence suggests that a one per cent increase in unemployment rate, induced by a change in Chinese import products, leads to almost a one per cent rise in the total crime rate.
    Date: 2016
  36. By: Jing Xiao; Ron Boschma; Martin Andersson
    Abstract: This paper adopts an evolutionary framework to the study of industrial resilience. We present a study on European regions and assess the extent to which the capacity of their economies to develop new industrial specializations is affected by the global economic crisis of 2008. We compare levels of industry entry in European regions in the period 2004-2008 and 2008-2012, i.e. before and after a major economic disturbance. Resilient regions are defined as regions that show high entry levels or even increase their entry levels after the shock. Industrial relatedness and population density exhibit a positive effect on regional resilience, especially on the entry of knowledge-intensive industries after the shock, while related variety per se shows no effect on regions being resilient or not.
    Keywords: regional resilience, evolutionary economic geography, new growth paths, related variety, industrial relatedness
    JEL: B52 O18 R11
    Date: 2016–04
  37. By: MORIKAWA Masayuki
    Abstract: Knowledge-intensive business services (KIBS), which produce skill-intensive services used as intermediate inputs, are becoming important for the economic growth and international competitiveness of advanced countries. This study, using establishment- and company-level micro data, analyzes the productivity of knowledge- and information-intensive services in Japan, including information services, publishers, and design services. We focus on the effect of urban density on the productivity of these services. Our estimations reveal that doubling the employment density of municipalities is associated with around 5% higher labor productivity of service providers, which is larger than that found in the manufacturing industry. However, quantitatively, the economies of density vary for individual services, suggesting that the services to be promoted by small and medium cities differ from those for which large metropolitan cities such as Tokyo and Osaka have strong comparative advantages.
    Date: 2016–04
  38. By: Smaniotto Costa, Carlos; Bahillo Martínez, Alfonso; Álvarez, Fernando J.; ?uklje Erjavec, Ina; Menezes, Marluci; Montserrat Pallares-Barbera
  39. By: J. Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
    Abstract: We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometres. We first document that nearly half of the variation can be explained by a parsimonious set of physical geography attributes. A full set of country indicators only explains a further 10%. When we divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, we find that the agriculture variables have relatively more explanatory power in countries that developed early and the trade variables have relatively more in countries that developed late, despite the fact that the latter group of countries are far more dependent on agriculture today. We explain this apparent puzzle in a model in which two technological shocks occur, one increasing agricultural productivity and the other decreasing transportation costs, and in which agglomeration economies lead to persistence in urban locations. In countries that developed early, structural transformation due to rising agricultural productivity began at a time when transport costs were still relatively high, so urban agglomerations were localized in agricultural regions. When transport costs fell, these local agglomerations persisted. In late developing countries, transport costs fell well before structural transformation. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. With structural transformation, these initial coastal locations grew, without formation of more cities in the agricultural interior.
    Keywords: agriculture; physical geography; development
    JEL: J1 N0
    Date: 2016–05
  40. By: Gloria Di Caprera (CEIS,University of Rome "Tor Vergata")
    Abstract: This work investigates the casual effect of childcare attendance on children's school achievements. We analyse data about children's school outcomes in mathematics and language focusing on pupils attending second and fifth grade in Italian primary school in conjunction with data providing public childcare coverage at provincial level. Using IV identification strategy, we show that childcare attendance leads to better school outcomes and early investment in education boosts both mathematics and language skills. For both school grades our results highlight a positive and significant effect of childcare attendance on children's school achievements which does not dissipate over time.
    Keywords: Early investment in education, childcare attendance, children's cognitive outcomes
    JEL: J13 I26 H75
    Date: 2016–05–09
  41. By: Wolf, David; Klaiber, H. Allen
    Abstract: Over the past decade harmful algal blooms (HABs) have become a nationwide environmental concern. HABs are likely to increase in frequency and intensity due to rising summer temperatures caused by climate change and higher nutrient enrichment from increased urbanization. Policymakers need information on the economic costs of HABs to design optimal management policies in the face of limited budgets. Using a detailed, multi-lake hedonic analysis across 6 Ohio counties between 2009 and 2015 we show capitalization losses associated with near lake homes between 12% and 17% rising to over 30% for lake adjacent homes. In the case of Grand Lake Saint Marys, we find capitalization losses exceeding $48 million for near lake homes which dwarfs the State of Ohio’s cleanup expenditure of $26 million.
    Keywords: harmful algal bloom, hedonic, blue green algae, cyanobacteria, capitalization, inland lake, Environmental Economics and Policy, Q25, Q51, Q53, Q57,
    Date: 2016
  42. By: Marcelo Arbex (Department of Economics, University of Windsor); Sydney Caetano (Faculdade de Economia, Universidade Federal de Juiz de Fora); Dennis O'Dea (Department of Economics, University of Washington)
    Abstract: This paper modifies the standard labor market search model with social networks. Labor market networks is an important job information transmission channel and the complementarity of network and direct search by the unemployed amplify the economy's short-run response to a technological shock. We show that network search has important quantitative consequences for the business cycle, in particular, for output and unemployment.
    Keywords: Business Cycles; Labor Markets; Social networks; Job search.
    JEL: D85 E24 E32 J64
    Date: 2016–04
  43. By: Ananya Kotia; Victor Duarte Lledo
    Abstract: This paper studies how fiscal rules interact with the intergovernmental fiscal framework to foster fiscal discipline among European subnational governments. We use political variables describing the fiscal attitudes of the central government as instruments to obtain consistent estimates of the impact of subnational fiscal rules on fiscal balances. The results suggest that the discipline-enhancing effect of fiscal rules is weaker when there are large “vertical fiscal imbalances†that is, large differences in revenue and spending assignments across the different levels of government. These findings imply that separate reforms to reduce excessive vertical fiscal imbalances complement a rules-based fiscal framework that is aimed at fostering fiscal discipline.
    Keywords: Fiscal rules;Europe;Fiscal policy;Intergovernmental fiscal relations;Fiscal balance;Econometric models;Fiscal policy, fiscal rules, fiscal discipline, intergovernmental relations, Europe
    Date: 2016–04–07
  44. 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
  45. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB)
    Abstract: This ADB Brief by Peter Morgan, Mike Plummer, and Ganeshan Wignaraja examines the critical role of regional transport infrastructure to connect South Asia and Southeast Asia and maps $63 billion worth of road, rail, and port projects.
    Keywords: transport infrastructure, transport corridors, trade, south asia, southeast asia, production networks, supply chains, regional integration, regional markets, asian highway network, trans-asian railway, transport investment
    Date: 2015–09
  46. 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: J1 N0
    Date: 2016–04
  47. By: Johnston, Dylan; Whitacre, Brian
    Keywords: Energy Economics, Rural Economics, Oil & Natural Gas, Community/Rural/Urban Development, Resource /Energy Economics and Policy,
    Date: 2016
  48. By: Fetzer, Thiemo (University of Warwick); Pardo, Oliver (Universidad Icesi); Shanghavi, Amar (London School of Economics)
    Abstract: This paper exploits a nearly year-long period of power rationing that took place in Colombia in 1992, to shed light on three interrelated questions. First, we show that power shortages can lead to higher fertility, causing mini baby booms. Second, we show that the increase in fertility had not been offset by having fewer children over the following 12 years. Third, we show that the fertility shock caused mothers worse socioeconomic outcomes 12 years later. Taken together, the results suggest that there are significant indirect social costs to poor public infrastructure.
    Keywords: fertility, infrastructure, blackouts, unplanned parenthood. JEL Classification: J13, J16, O18, H41
    Date: 2016

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