nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2016‒07‒02
43 papers chosen by
Steve Ross
University of Connecticut

  1. Waking up from the American dream: on the experience of young Americans during the housing boom of the 2000s By Laeven, Luc; Popov, Alexander
  2. Default, Mortgage Standards and Housing Liquidity By Allen Head; Hongfei Sun; Chenggang Zhou
  3. Should Value-Added Models Control for Student Absences? By Gershenson, Seth
  4. Validation of reference forecasts for passenger traffic By Andersson, Matts; Brundell-Freij, Karin; Eliasson, Jonas
  5. Next train to the polycentric city: The effect of railroads on subcenter formation By Miquel-Àngel Garcia-López; Camille Hémet; Elisabet Viladecans-Marsal
  6. The Relationship between Second Liens, First Mortgage Outcomes, and Borrower Credit: 1996-2010 By Andrew V. Leventis
  7. House prices in Italy, 1927-2012 By Luigi Cannari; Giovanni D’Alessio; Giovanni Vecchi
  8. Teacher Quality and Learning Outcomes in Kindergarten By M. Caridad Araujo; Pedro Carneiro; Yyannú Cruz-Aguayo; Norbert Schady
  9. Curse of Anonymity or Tyranny of Distance? The Impacts of Job-Search Support in Urban Ethiopia By Girum Abebe; Stefano Caria; Marcel Fafchamps; Paolo Falco; Simon Franklin; Simon Quinn
  10. The long-run impact of human capital on innovation and economic development in the regions of Europe. By Claude Diebolt; Ralph Hippe
  11. Understanding Gasoline Price Dispersion By Demet Yilmazkuday; Hakan Yilmazkuday
  12. Introducing Railway Time in the Balkans: Economic effects of railway construction in Southeast Europe and beyond since the early 19th century until present days By Eduard Alvarez; Mario Holzner; Stefan Jestl; Jordi Marti-Henneberg
  13. Is it the way they use it? Teachers, ICT and student achievement By Simona, Comi; Marco, Gui; Federica, Origo; Laura, Pagani; Gianluca, Argentin;
  14. Tracing the Evolution of Agglomeration Economies: Spain, 1860-1991 By Francisco J. Beltrán Tapia; Alfonso Díez-Minguela; Julio Martinez-Galarraga
  15. Impact of Infrastructure Investment on Tax: Estimating Spillover Effects of the Kyushu High-Speed Rail Line in Japan on Regional Tax Revenue By Yoshino, Naoyuki; Abidhadjaev, Umid
  16. The Value of Private Schools: Evidence from Pakistan By Pedro Carneiro; Jishnu Das; Hugo Reis
  17. Predication in a Generalized Spatial Panel Data Model with Serial Correlation By Badi Baltagi; Long Liu
  18. Production Networks, Geography and Firm Performance By Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
  19. Household Borrowing Constraints and Residential Investment Dynamics By Hashmat U. Khan; Jean-François Rouillard
  20. Industry Clusters and Regional Economic Development in the Midwest By Amugeh, Naomi; Van der Sluis, Evert
  21. Housing and Macroeconomics By Monika Piazzesi; Martin Schneider
  22. Cognitive Ability and Games of School Choice By Christian, Basteck; Marco, Mantovani
  23. Yes, social housing in Australia desperately needs financial innovation! By Augustine Conteh; Benjamin Liu; Eduardo Roca
  24. Long-term energy demand forecasting in Romania : an end-use demand By Malla,Sunil; Timilsina,Govinda R.
  25. Neighborhood Effects, Peer Classification, and the Decision of Women to Work By Mota, Nuno; Patacchini, Eleonora; Rosenthal, Stuart S.
  26. Homophily and transitivity in dynamic network formation By Bryan S. Graham
  27. Strategic interactions in corporate tax between Chinese local governments By Chen, Yang; Regis, Paulo José
  28. Are disadvantaged students given equal opportunities to learn mathematics? By OECD
  29. Job placement agencies in an agent-based model of the local labor market with the long-term unemployed and on-the-job flows By Wozniak, Marcin
  30. For whom does the phone (not) ring? Discrimination in the rental housing market in Delhi, India By Saugato Datta; Vikram Pathania
  31. Price formation on a housing market and spatial income segregation By Marco Pangallo; Jean Pierre Nadal; Annick Vignes
  32. Market Signals: Evidence on the Determinants and Consequences of School Choice from a Citywide Lottery By Steven Glazerman; Dallas Dotter
  33. Gendered Entrepreneurship Networks By Markussen, Simen; Røed, Knut
  34. On-the-job search and city structure By van Vuuren, Aico
  35. Individual trust: does quality of public services matter? By Silvia Camussi; Anna Laura Mancini
  36. On the border effect in the Regional Comprehensive Economic Partnership (RCEP) By Daniel Rais
  37. The value of water sensitive landscaping styles in residential property market By Polyakov, Maksym; Zhang, Fan; White, Ben; Pandit, Ram
  38. Because of you I did not give up - How peers affect perseverance By Gerhards, Leonie; Gravert, Christina
  39. Leisure and Housing Consumption after Retirement: New Evidence on the Life-Cycle Hypothesis By Sven Schreiber; Miriam Beblo
  40. The long-run impact of human capital on innovation and economic development in the regions of Europe By Claude Diebolt; Ralph Hippe
  41. Disappointment looms around the corner: Visibility and local businesses' market power By Jeanne DALL'ORSO; Romain GAURIOT; Lionel PAGE
  42. What are the benefits from early childhood education? By OECD
  43. Inter-regional Population Migration in Russia Revisited: Analysis on Origin-to-Destination Matrix, 1990-2013 By Kumo, Kazuhiro

  1. By: Laeven, Luc; Popov, Alexander
    Abstract: We exploit regional variations in house price fluctuations in the United States during the early to mid-2000s to study the impact of the housing boom on young Americans' choices related to home ownership, household formation, and fertility. We also introduce a novel instrument for changes in house prices based on the predetermined industrial structure of the local economy. We find that in MSAs which experienced large increases in house prices between 2001 and 2006, the youngest households were substantially less likely to purchase residential property, to be married, and to have a child, both in 2006 and in 2011. JEL Classification: E32, G21, J10, R21
    Keywords: credit constraints, fertility, home ownership, house prices, household formation
    Date: 2016–05
  2. By: Allen Head (Queen's University); Hongfei Sun (Queen's University); Chenggang Zhou (University of Waterloo)
    Abstract: The effects of households' indebtedness on their house-selling decisions are studied in a dynamic equilibrium model with search in the housing market and defaultable long-term mortgages. In equilibrium, both sellers' asking prices and time-to-sell increase with the relative size of their outstanding mortgages. In turn, the liquidity of the housing market associated with time-to-sell determines the mortgage standards of competitive lenders, measured by the maximum loan-to-value (LTV) ratio offered at origination. Calibrated to the U.S. economy, the model generates, as observed, positive correlations over time between house prices and LTV's at origination and across sellers among asking prices, time-to-sell, and LTV's outstanding.
    Keywords: Housing, Mortgages, Foreclosures, Directed Search, Liquidity, Block Recursive Equilibrium
    JEL: E30 G21 R10 R31
    Date: 2016–06
  3. By: Gershenson, Seth (American University)
    Abstract: Whether or not value-added models should control for contemporaneous student absences is theoretically ambiguous, as such absences are only partly outside of teachers' control. Teachers often feel strongly that value-added models should account for student attendance, and many districts' value-added models condition on lagged student absences as a result. Using matched teacher-student administrative data from a state-wide longitudinal data system, this note investigates the practical importance of this modeling decision for value-added measures of teacher effectiveness (VAMs). This is done by comparing VAM-based rankings of teacher effectiveness generated by value-added models that either control for current absences, control for lagged absences, or exclude student absences altogether. Regardless of how between-school differences are accounted for, VAM-based rankings of teacher effectiveness are insensitive to how, and whether, student absences enter the value-added model's conditioning set. Spearman Rank Correlations are always larger than 0.99 for both math and reading VAMs, suggesting that whether or not value-added models control for annual student absences is a relatively unimportant modeling decision, at least in the context of self-contained primary school classroom teachers. These results are consistent with recent research suggesting that simply conditioning on lagged achievement yields approximately unbiased VAMs. Moreover, these findings suggest that controlling for student absences in teacher evaluation systems' value-added models is a relatively inexpensive way to increase teacher buy-in.
    Keywords: teacher effectiveness, value added models, student absences, teacher evaluation
    JEL: I2
    Date: 2016–05
  4. By: Andersson, Matts (WSP); Brundell-Freij, Karin (WSP); Eliasson, Jonas (KTH)
    Abstract: We have compared Swedish national forecasts for passenger traffic produced from 1975 to 2009 with the actual outcomes, and we found substantial differences between forecasts of passenger kilometers by mode and actual outcomes. In forecasts produced since the early 1990s, road and air traffic growth rates have generally been overpredicted, aggregate railway growth has been fairly accurate, commercial long-distance railway growth has been overpredicted, and the growth of subsidized intra-regional railway travel has been underpredicted following vast unanticipated supply increases. Focusing on car traffic forecasts, we show that a very large share of forecast errors can be explained by input variables turning out to be different than what was assumed in the forecasts. Even the original forecasts are much closer to actual outcomes than simple trendlines would have been, and once the input assumptions are corrected, the forecasts vastly outperform simple trendlines. The potential problems of using cross-sectional models for forecasting intertemporal changes thus seem to be limited. This tentative conclusion is also supported by the finding that elasticities from the cross-sectional models are consistent with those from a time-series model.
    Keywords: Demand modeling; Forecast; Transport; Accuracy; Validation
    JEL: R41 R42
    Date: 2016–06–07
  5. By: Miquel-Àngel Garcia-López (Universitat Autònoma de Barcelona & Barcelona Institute of Economics (IEB)); Camille Hémet (UEcole Normale Supérieure (PSE) & Barcelona Institute of Economics (IEB)); Elisabet Viladecans-Marsal (Universitat de Barcelona & Barcelona Institute of Economics (IEB))
    Abstract: Recent evidence reveals that transportation’s improvements within metropolitan areas have a clear effect on population and job decentralization processes. Yet, very little has been said on how these improvements affect the spatial organization of the economic activity in the suburbs. This paper analyses the effects of transportation’s changes on employment subcenters formation. Using data from metropolitan Paris between 1968 and 2010, we first show that rail network improvements cause the expected job decentralization by attracting jobs to suburban municipalities. Our main contribution is to show that the new rail transit clearly affects the spatial organization of employment through the number and size of the employment subcenters: not only does the presence of a rail station increase the probability of a suburban municipality of belonging to a subcenter by 5 to 10 %, but a 10 % increase in municipality proximity to a suburban station is found to increase its chance to be part of a subcenter by 3 to 5 %.
    Keywords: urban spatial structure, decentralization, subcenters, polycentric city, transportation
    JEL: R11 R12 R14 R4 O2
    Date: 2016
  6. By: Andrew V. Leventis (Federal Housing Finance Agency)
    Abstract: To help inform the ongoing policy debate concerning the risks associated with second mortgages, the paper rigorously evaluates the effect of second liens on the performance of first mortgages. Using a dataset that combines credit bureau information with mortgage performance data, the statistical analysis separately quantifies the extent to which piggyback and subsequent second liens impacted loan default and prepayment likelihoods for first liens. In a simple direct comparison of first-lien outcomes, piggyback second liens are shown to have substantially increased mortgage default rates, while decreasing mortgage prepayment likelihoods. The results differ significantly, however, when the relative comparison group is altered and the analysis looks for a “residual” relationship (i.e., the control variables are changed in the statistical analysis). When first-lien outcomes are compared for borrowers with identical at-origination total equity and debt servicing obligations, the residual outcome differences tend to be minimal. Where material differences do exist, piggyback second liens tended to be associated with marginally worse outcomes for loans originated during the housing boom and slightly better outcomes for later years. With respect to subsequent second liens, models that evaluate the direct relationship between second liens and first-lien outcomes find a pronounced time trend. In the late 1990s and early 2000s, the origination of a second lien generally signaled better subsequent performance for the associated first mortgage, most likely because only the most creditworthy borrowers were able to get such loans. By the mid-2000s, the overall signal associated with subsequent second liens became negative—i.e., the underlying first mortgages performed materially worse than others. An abrupt switch at the inception of the housing bust is then evident, however, as second-lien-burdened first mortgages then performed better again. Models that control for total net equity and borrower debt obligations, i.e., seek the residual relationship between outcomes and second liens, show a consistent positive relationship between outcomes and subsequent second liens, but also reveal an interesting evolution over time. The paper concludes with a comparison of time trends for various nonmortgage credit statistics—including nonmortgage loan balances, revolving credit utilization rates, and credit scores—for borrowers with and without second liens.
    Date: 2014–09
  7. By: Luigi Cannari (Bank of Italy); Giovanni D’Alessio (Bank of Italy); Giovanni Vecchi (University of Rome “Tor Vergata”)
    Abstract: In this paper we evaluate the trend in house prices and residential land prices from 1927 to 2012. In this period real house prices increased more than threefold, while they quintupled in big cities. The increase was much greater than that of the real construction costs, which doubled. More than two-thirds of the increase in house prices that occurred between 1950 and 2012 was attributable to the increase in residential land prices. The increase in the wealth-to-GDP ratio observed in Italy since the middle of the last century was largely due to the rise in real house prices; although increasing house prices can make buying a home more difficult for non-homeowners, our results mitigate the concerns about the distributive tensions that may arise from the growth in the wealth-to-GDP ratio.
    Keywords: house prices, land prices, wealth, households.
    JEL: N01 R31
    Date: 2016–06
  8. By: M. Caridad Araujo (Institute for Fiscal Studies); Pedro Carneiro (Institute for Fiscal Studies and University College London); Yyannú Cruz-Aguayo (Institute for Fiscal Studies); Norbert Schady (Institute for Fiscal Studies)
    Abstract: We assigned two cohorts of kindergarten students, totaling more than 24,000 children, to teachers within schools with a rule that is as-good-as-random. We collected data on children at the beginning of the school year, and applied 12 tests of math, language and executive function (EF) at the end of the year. All teachers were filmed teaching for a full day, and the videos were coded using a wellknown classroom observation tool, the Classroom Assessment Scoring System (or CLASS). We find substantial classroom effects: A one-standard deviation increase in classroom quality results in 0.11, 0.11, and 0.07 standard deviation higher test scores in language, math, and EF, respectively. Teacher behaviors, as measured by the CLASS, are associated with higher test scores. Parents recognize better teachers, but do not change their behaviors appreciably to take account of differences in teacher quality.
    Keywords: Teacher quality, learning, test scores
    JEL: I24 I25
    Date: 2016–03–03
  9. By: Girum Abebe; Stefano Caria; Marcel Fafchamps; Paolo Falco; Simon Franklin; Simon Quinn
    Abstract: We conduct a randomised evaluation of two job-search support programmes for urban youth in Ethiopia. One group of treated respondents receives a subsidy to cover the transport costs of job search. Another group participates in a job application workshop where their skills are certified and they are given orientation on how to make effective job applications. The two interventions are designed to lower spatial and informational barriers to employment. We find that both treatments significantly improve the quality of jobs that young jobseekers obtain. Impacts are concentrated among women and the least educated. Using rich high-frequency data from a phone survey, we are able to explore the mechanisms underlying the results; we show that while the transport subsidy increases both the intensity and the efficacy of job search, the job application workshop mainly operates through an increase in search efficacy. Both interventions mitigate the adverse effects of spatial constraints on employment outcomes, and the job application workshop alleviates informational asymmetries by helping workers to signal their ability.
    JEL: O12 O18 J22 J61 J64 M53
    Date: 2016
  10. By: Claude Diebolt; Ralph Hippe
    Abstract: Human capital is supposed to be an important factor for innovation and economic development. However, the long-run impact of human capital on current innovation and economic development is still a black box, in particular at the regional level. Therefore, this paper makes the link between the past and the present. Using a large new dataset on regional human capital and other factors in the 19th and 20th century, we find that past regional human capital is a key factor explaining current regional disparities in innovation and economic development.
    Keywords: Human Capital, Economic Development, Innovation, Regions, Europe.
    JEL: I25 N90 O18 R11
    Date: 2016
  11. By: Demet Yilmazkuday (Department of Economics, Florida International University); Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: This paper models and estimates the gasoline price dispersion across time and space by using a unique data set at the gas-station level within the U.S.. Nationwide effects (measured by time Â…fixed effects or crude oil prices) explain up to about 51% of the gasoline price dispersion across stations. RefiÂ…nery-specific costs, which have been ignored in the literature due to using local data sets within the U.S., contribute up to another 33% to the price dispersion. While state taxes explain about 12% of the price dispersion, spatial factors such as local agglomeration externalities, land prices, distribution costs of gasoline explain up to about 4%. The contribution of brand-specifiÂ…c factors is relatively minor.
    Keywords: Gasoline Prices, Gas-Station Level Analysis, Nighttime Lights, Land Prices, the United States
    JEL: L11 L81 R32 R41
    Date: 2016–06
  12. By: Eduard Alvarez; Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Jordi Marti-Henneberg
    Abstract: Abstract In this paper we analyse the economic effects of railway infrastructure at the national level for European countries as well as at the local level for Southeast European cities based on a novel railway database capturing decades of the 19th century up to the early 21th century. A panel fixed effects regression analysis at the country level indicates a positive economic impact emanating from railway infrastructure, whereby the effect appears to be even stronger for less developed Southeast European countries. In addition, a linear spatially augmented multilevel model at the city level sheds light on the positive effects resulting from railway infrastructure on urban development. Its positive spillover effects occur within countries as well as across borders.
    Keywords: Railway, infrastructure, Balkans, Southeast Europe, backwardness, urban development, economic development, railway accessibility, infrastructural spillovers, multilevel model, historical analysis
    JEL: L92 N13 N14 N73 N74 N93 N94 O18 O47 R11 R41
    Date: 2016–05
  13. By: Simona, Comi; Marco, Gui; Federica, Origo; Laura, Pagani; Gianluca, Argentin;
    Abstract: We provide evidence on whether ICT-related teaching practices affect student achievement. We use a unique student-teacher dataset containing variables on very specific uses of computer and ICT by teachers matched with data on national standardized tests for 10th grade students. Our identification strategy relies on a within-student between-subject estimator and on a rich set of teacher’s controls. We find that computer-based teaching methods increase student performance if they help the teacher to obtain material to prepare lectures, if they channel the transmission of teaching material, if they increase students’ awareness in ICT use and if they enhance communication. Instead, we find a negative impact of practices requiring an active role of the students in classes using ICT. Our findings suggest that the effectiveness of ICT at school depends on the actual practice that teachers make of it and on their ability to integrate ICT into the teaching process.
    Keywords: Teaching practices, Student performance, ICT, Between-subject variation
    JEL: I21
    Date: 2016–06–10
  14. By: Francisco J. Beltrán Tapia; Alfonso Díez-Minguela; Julio Martinez-Galarraga
    Abstract: This article attempts to quantify how the effect of agglomeration economies on population growth has evolved over time. Using district population in Spain between 1860 and 1991, recorded approximately every decade, this article examines whether initial population affects subsequent population growth. Our results show that, while the relationship between these two variables hardly existed during the second half of the 19th century, this link increased significantly between 1910 and 1970, although this trend was abruptly interrupted by the Civil War and the autarkic period that followed. The intensity of this relationship debilitated in the 1970s, a process that continued during the 1980s as rural out-migration diminished and de-industrialisation hit traditional manufacturing sectors. Our findings also stress that agglomeration economies were stronger in medium-size districts, especially from 1960 onwards, thus suggesting that congestion costs began to mitigate the benefits arising from agglomeration economies in the largest locations.
    Keywords: Agglomeration economies, regional growth, Spain
    JEL: N93 N94 O18 R11 R12
    Date: 2016–06–03
  15. By: Yoshino, Naoyuki (Asian Development Bank Institute); Abidhadjaev, Umid (Asian Development Bank Institute)
    Abstract: This paper analyzes the impact of infrastructure investment on tax revenues and on the regional economy by studying the effect of the Kyushu high-speed rail line (shinkansen train) in Japan. The effects of the Kyushu high-speed rail line on the economy has often been debated. We estimated its impact in the Kyushu region by using the difference-in-difference method, and compared the tax revenues of regions along the railway line with other regions that were not affected by it. Our findings show a positive impact on the region’s tax revenue following the connection of the Kyushu rapid train with large cities such as Hiroshima and Osaka. Tax revenue in the region significantly increased during the construction in 1991–2003, and dropped after the start of operations in 2004–2010. The rapid train’s impact on the neighboring prefectures of Kyushu is positive. The difference-in-difference coefficient methods reveal that corporate tax revenue was lower than personal income tax revenue during construction. However, the difference in corporate tax revenues rose after connectivity with large cities was completed. The railway’s connectivity to large cities has a significant economic impact not only in the case of Japan but also in other cases such as Uzbekistan.
    Keywords: infrastructure; railway; tax revenue; tax income; public investment; regional economy; economic development; development planning; urban development; macroeconomic analysis; Japan; Kyushu; prefecture
    JEL: H54 O11 O23 R11
    Date: 2016–06–01
  16. By: Pedro Carneiro (Institute for Fiscal Studies and University College London); Jishnu Das (Institute for Fiscal Studies); Hugo Reis (Institute for Fiscal Studies)
    Abstract: Using unique data from Pakistan we estimate a model of demand for diff erentiated products in 112 rural education markets with signi ficant choice among public and private schools. Our model accounts for the endogeneity of school fees and the characteristics of students attending the school. As expected, central determinants of school choice are the distance to school, school fees, and the characteristics of peers. Families are willing to pay on average between 75% and 115% of the average annual private school fee for a 500 meter reduction in distance. In contrast, price elasticities are low: -0.5 for girls and -0.2 for boys. Both distance and price elasticities are consistent with other estimates in the literature, but at odds with a belief among policy makers that school fees deter enrollment and participation in private schooling. Using the estimates from the demand model we show that the existence of a low fee private school market is of great value for households in our sample, reaching about 25% to 100% of monthly per capita income for those choosing private schools. A voucher policy that reduces the fees of private schools to $0 (from an average annual fee of $13) increases private school enrollment by 7.5 percentage points for girls and 4.2 percentage points for boys. Our demand estimates and policy simulations, which account for key challenges specifi c to the schooling market, help situate ongoing debate around private schools within a larger framework of consumer choice and welfare.
    Keywords: Education, School Choice, Pakistan, Characteristics Model
    JEL: I20 I21
    Date: 2016–05–13
  17. By: Badi Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Long Liu (College of Business, University of Texas at San Antonio, UTSA Circle, Texa 78249)
    Abstract: This paper considers the generalized spatial panel data model with serial correlation proposed by Lee and Yu (2012) which encompasses a lot of the spatial panel data models considered in the literature, and derives the best linear unbiased predictor (BLUP) for that model. This in turn provides valuable BLUP for several spatial panel models as special cases.
    Keywords: Prediction; Panel Data; Fixed Effects; Random Effects; Serial Correlation; Spatial Error Correlation
    JEL: C33
    Date: 2016–02
  18. By: Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
    Abstract: This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.
    Keywords: production networks, trade, productivity, infrastructure
    JEL: F14 D22 D85 L10 L14 R12
    Date: 2016–06
  19. By: Hashmat U. Khan (Department of Economics, Carleton University); Jean-François Rouillard (Universite de Sherbrooke)
    Abstract: Why does residential investment lead output in the US and Canada but it is coincident in other industrialized countries? In this paper we explore the role of home-equity loans used to boost consumption as a channel that affects residential investment. Towards this end, we consider a multi-agent real business cycle model augmented with household borrowing constraints that re flect home-equity loans or refinancing constraints. The main contribution of our paper is to highlight that the severity of these borrowing constraints in the economy can generate both stylized facts of residential investment dynamics. In US and Canada, a greater proportion of households rely on home-equity loans relative to other industrialized countries. This difference matters for the distinct residential investment dynamics observed across countries.
    Keywords: Home-Equity Loans, Borrowing Constraints, Residential Investment, Business Cycles
    JEL: E22 E32 R21 R31
    Date: 2016–05–30
  20. By: Amugeh, Naomi; Van der Sluis, Evert
    Abstract: Industry clusters (ICs) are a popular strategy followed by state and local governments to achieve regional and local economic growth and development. We investigate the presence of ICs in Metropolitan Statistical Areas (MSAs) in the Midwest between 2000 and 2010, and the degree to which the ICs have contributed to economic growth. Results indicate that the manufacturing, retail trade, health care and social assistance, finance and insurance, wholesale trade and construction industries were the six most common industries with concentrations across the MSAs in the Midwest. Also, only few industries (manufacturing, construction, utilities and wholesale trade) consistently showed statistically significant connections with the economic growth variables considered, even though most industries considered correlate positively with the economic development indicators. Changes in control variables such as population density, unemployment rate and education have greater impacts on economic development than do the cluster variables. Our study supports the hypothesis that while the presence of an industry cluster contributes to economic development, changes in other variables, such as a reduction in unemployment rate, have relatively greater impacts. Thus, the IC approach may not necessarily be among the most preferred strategy to boost economic development in the Midwest.
    Keywords: Industry clusters, regional economies, economic growth, Metropolitan Statistical Areas, Midwest, Community/Rural/Urban Development, R10,
    Date: 2016–06–07
  21. By: Monika Piazzesi; Martin Schneider
    Abstract: This paper surveys the literature on housing in macroeconomics. We first collect facts on house prices and quantities in both the time series and the cross section of households and housing markets. We then present a theoretical model of frictional housing markets with heterogeneous agents that nests or provides background for many studies. Finally, we describe quantitative results obtained during the last 15 years on household behavior, business cycle dynamics and asset pricing, as well as boom bust episodes.
    JEL: E0 E44 G11 G12 R2 R3
    Date: 2016–06
  22. By: Christian, Basteck; Marco, Mantovani
    Abstract: We take school admission mechanisms to the lab to test whether the manipulable Boston mechanism disadvantages students of lower cognitive ability and whether this leads to ability segregation across schools. Results show this is the case: lower ability participants receive a lower average payoff and are over-represented at the worst school. Under the strategy-proof Deferred Acceptance mechanism, payoff differences between high and low ability participants are reduced, and distributions by ability across schools are harmonized. Hence, we find support for the argument that a move to strategy-proof mechanisms would “level the playing field†. However, we document a trade-off between equality and efficiency in the choice of school admission mechanisms since average payoffs are larger under Boston than under Deferred Acceptance.
    Keywords: laboratory experiment, school choice, strategy-proofness, cognitive ability, mechanism design
    JEL: C78 C91 D82 I24
    Date: 2016–06–21
  23. By: Augustine Conteh; Benjamin Liu; Eduardo Roca
    Keywords: Social housing, Financial innovation, Financing, Private sector
    JEL: G11 G18
    Date: 2016–05
  24. By: Malla,Sunil; Timilsina,Govinda R.
    Abstract: This study develops an end-use energy demand analysis model for Romania to project energy demand by sector and end-use for 2015-50. The study finds that Romania's energy demand in 2050 would be 34 percent higher than the level in 2013. The industry sector would be the largest final energy-consuming sector, surpassing the residential sector from 2025 onward. The services sector would exhibit the fastest growth of energy consumption in line with the expected structural change from manufacturing to services. Although population in the country is projected to drop by 7 percent in 2050 from the 2013 level, electricity demand would increase by 46 percent over the same period, because of increased household income and the expanded service sector, which is relatively electricity intensive. Still, per capita electricity consumption in Romania will be about half the European Union 28 average. At the end-use level, thermal processes in the industry sector, space heating in the residential and services sectors, and road transportation in the transport sector would be dominant throughout the study period. The study also shows that improvement of energy efficiency in the heating system would be the main channel to cut energy demand in the country.
    Keywords: Energy Demand,Climate Change Economics,Energy Production and Transportation,Energy and Environment,Transport Economics Policy&Planning
    Date: 2016–06–07
  25. By: Mota, Nuno (Fannie Mae); Patacchini, Eleonora (Cornell University); Rosenthal, Stuart S. (Syracuse University)
    Abstract: We examine the influence of neighborhood peer effects on the decision of women to work using panel data that follows clusters of adjacent homes between 1985-1993. Modeling assumptions imply rank order restrictions that enable us to classify individuals into peer groups while identifying peer effects and underlying mechanisms. For women, peer effects influence labor supply in part because women appear to emulate the work behavior of nearby women with similar age children. For men, peer effects are mostly absent, consistent with inelastic work decisions. Geographically concentrated panel data are crucial for these estimates. Our approach could also be applied to other instances in which neighborhood peer effects are important.
    Keywords: neighborhood peer effects, female labor supply
    JEL: R2 J2
    Date: 2016–06
  26. By: Bryan S. Graham (Institute for Fiscal Studies and University of California, Berkeley)
    Abstract: In social and economic networks linked agents often share additional links in common. There are two competing explanations for this phenomenon. First, agents may have a structural taste for transitive links – the returns to linking may be higher if two agents share links in common. Second, agents may assortatively match on unobserved attributes, a process called homophily. I study parameter identifiability in a simple model of dynamic network formation with both effects. Agents form, maintain, and sever links over time in order to maximize utility. The return to linking may be higher if agents share friends in common. A pair-specific utility component allows for arbitrary homophily on time-invariant agent attributes. I derive conditions under which it is possible to detect the presence of a taste for transitivity in the presence of assortative matching on unobservables. I leave the joint distribution of the initial network and the pair-specific utility component, a very high dimensional object, unrestricted. The analysis is of the 'fixed effects' type. The identification result is constructive, suggesting an analog estimator, whose single large network properties I characterize.
    Keywords: Strategic Network Formation, Homophily, Transitivity, Triads, Assortative Matching, Initial Conditions Problem, Panel Data, Fixed Effects
    JEL: C31 C33 C35
    Date: 2016–04–15
  27. By: Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); Regis, Paulo José (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: Within the time framework of this study (1998–2012), the institutional settings of intergovernmental relations may constrain any strategic behavior of local governments since provincial tax rates are set by the central government. However, attracting business is an important measure of public officials’ performance. Government officials have created alternative channels for tax competition. Our findings are consistent with this view that competition in corporate tax is relevant between provinces. As expected, the positive coefficient on the neighbor’s tax variable indicates provinces respond by changing around 0.73% of GDP to changes in neighboring jurisdictions of 1%.
    Keywords: Strategic interaction, average effective corporate tax, panel data, spatial regression model
    JEL: C23 H25 H77 R12
    Date: 2013–04–01
  28. By: OECD
    Abstract: Some 65% of socio-economically advantaged students reported that they know well or have often heard of the concept of quadratic function, on average across OECD countries; but only 43% of disadvantaged students so reported. On average across OECD countries, the 20% of students who are most exposed to pure mathematics tasks (equations) score, on the PISA mathematics test, the equivalent of almost two school years ahead of the 20% of students who are least exposed. Exposure to simple applied mathematics tasks is much less strongly associated with better performance. About 19% of the performance difference between socio-economically advantaged and disadvantaged students can be attributed to differences in familiarity with mathematics. In Austria and Korea, more than 30% of the performance gap between these two groups of students is related to differences in familiarity with mathematics. In other words, there are clear indications that disadvantaged students systematically receive mathematics instruction of lower quality than advantaged students.
    Date: 2016–06–20
  29. By: Wozniak, Marcin
    Abstract: In this paper, an agent-based search model of the labor market with heterogeneous agents and an on-the-job search is developed, i.e. the long-term unemployed and other job seekers compete for vacancies which differ in skills demands and in the sector of the economy. Job placement agencies help both types of unemployed persons find the proper vacant job by improving their search effectiveness and by sharing leveraged job advertisements. The agents' interactions take place in an artificial world drawn from labor market search theory. Six global model parameters were calibrated with the Latin hypercube sampling technique for one of the largest urban areas in Poland. To investigate the impact of parameters on model output, two global sensitivity analysis methods were used, i.e. Morris screening and Sobol indices. The results show that both programs considerably influence unemployment and long-term unemployment ratios as well as the level of wages, duration of unemployment, skills demand and worker turnover. Moreover, strong cross-effects were detected: programs aimed at one group of job seekers affect other job seekers and the whole economy. This impact is sometimes positive and sometimes it is negative.
    Keywords: agent-based search model,skills heterogeneity,on-the-job search,ALMP evaluation,sensitivity analysis
    JEL: C63 C69 J48 J63 J64
    Date: 2016
  30. By: Saugato Datta; Vikram Pathania
    Abstract: Using an audit experiment carried out on of India.s largest real estate websites, we document striking variations between landlords. treatment of upper-caste Hindus, Other Backward Castes, Scheduled Castes, and Muslims. We find strong evidence of discrimination against Muslim applicants, both in terms of probability of being contacted and the number of contacts, relative to upper-caste Hindu (UC) applicants, in the rental housing market in Delhi and its largest suburbs.While the probability that a landlord responds to an upper-caste applicant is 0.35, this is only 0.22 for a Muslim applicant. We also find suggestive evidence that when landlords respond to both UC and Muslim applicants, they call back the UC applicant sooner. Muslim applicants are especially disadvantaged when applying to rent one-bedroom houses; there is an additional 20 percentage points reduction in the probability of a callback. In contrast, we find no clear evidence that landlords are less likely to respond to Scheduled Castes and Other Backward Classes. However, our estimates may understate the true differentials in callback ratios as a result of our failure to perfectly link all callbacks to a listing.
    Keywords: Caste, Discrimination in housing, Equality and inequality, Religion
    Date: 2016
  31. By: Marco Pangallo; Jean Pierre Nadal; Annick Vignes
    Abstract: The price formation in Non-Walrasian markets is notoriously an open problem. Here we focus on urban housing markets, where the mismatch between supply and demand has important consequences in terms of social welfare. We propose a simple Agent-Based Model (ABM) that explicitly reproduces the market mechanism and which is specifically suited to study issues related to spatial income segregation. We first find the analytical solution of the ABM in some specific cases, shedding light on the structure of the model and on the effect of the parameters. We then simulate the fully-fledged ABM and find that: (i) the market mechanism easily implies income segregation; (ii) an increase of the demand in one part of the city can potentially increase the prices all over the city (in qualitative agreement with the data); (iii) subsidies are more efficient than taxes in mitigating income segregation. These non-trivial results provide an example of the kind of insights that can be gained if one considers bounded rationality, heterogeneity and the potential lack of (Walrasian) equilibrium, as it would have been much less natural to address these issues under more standard assumptions.
    Date: 2016–06
  32. By: Steven Glazerman; Dallas Dotter
    Abstract: In this paper, we estimate school-choice preferences revealed by the rank-ordered lists submitted by more than 22,000 applicants to a citywide lottery for more than 100 traditional and charter public schools in Washington, DC.
    Keywords: school choice, segregation, lottery, education, district of Columbia, market signals
    JEL: I
  33. By: Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: In virtually all industrialized countries, women are underrepresented in entrepreneurship, and the gender gap exhibits a remarkable persistence. We examine one particular source of persistence, namely the prevalence of gendered networks and associated peer effects. We study how early career entrepreneurship is affected by existing entrepreneurship among neighbors, family members, and recent schoolmates. Based on an instrumental variables strategy, we identify strong peer effects. While men are more influenced by other men, women are more influenced by other women. We estimate that differences between male and female peer groups explain approximately half of the gender gap in early career entrepreneurship.
    Keywords: early career entrepreneurship, peer effects, gender gap, instrumental variables
    JEL: L26 M13 J16
    Date: 2016–06
  34. By: van Vuuren, Aico (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper investigates an equilibrium search model in which search frictions are increas- ing with the distance to a city’s central business district, allowing for on-the-job search and endogenous wage formation and land allocation. The findings suggest that the decentralized market results in a more segregated outcome than may be socially desirable. The externality comes from the misguided incentives for the low-paid workers, who have a high preference for central locations in order to climb up the job ladder. Policies reducing the rental costs of unemployed workers for locations close to the central business district may potentially increase welfare.
    Keywords: Search; city structure; urban economics
    JEL: J00 J64 R14
    Date: 2016–06
  35. By: Silvia Camussi (Bank of Italy); Anna Laura Mancini (Bank of Italy)
    Abstract: This paper contributes to the literature on the determinants of social capital by investigating how the quality of local services influences individual’s generalized trust and trust in local government. Using data from the Italian National Statistic Office survey “Aspetti della vita quotidiana”, after building a measure for local services’ quality, we study its effect on individual’s social capital using linear regressions techniques. Our results suggest that good local public services affect positively individual’s social capital, the effect being stronger for trust in local institutions. To deal with possible endogeneity issues, the robustness of our results is tested using two-step GMM estimation, while the procedure proposed by Altonji et al. (2005) is used to study the sensitivity to omitted variables. Finally, the paper extends the analysis to further social capital measures (family ties, network social capital and trust in central government) and to alternative quality measures. We also test the existence of age related differences in the influence of public services’ quality on individual trust measures.
    Keywords: trust, quality of public services, IV estimation
    JEL: C26 Z10 H70
    Date: 2016–06
  36. By: Daniel Rais
    Abstract: SECO Working Paper 9/2014
    Date: 2014–08–28
  37. By: Polyakov, Maksym; Zhang, Fan; White, Ben; Pandit, Ram
    Keywords: Environmental Economics and Policy, Land Economics/Use,
    Date: 2016–02
  38. By: Gerhards, Leonie (Department of Economics, University of Hamburg); Gravert, Christina (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Various empirical papers have shown that peers affect productivity and behavior in the workplace. However, the mechanisms through which peers influence each other are still largely unknown. In this laboratory experiment we study a situation in which individuals might look at their peers' behavior to motivate themselves to endure in a task that requires perseverance. We test the impact of unidirectional peer effects under individual monetary incentives, controlling for ability and tactics. We find that peers significantly increase their observers' perseverance, while knowing about being observed does not significantly affect behavior. In a second experiment we investigate the motives to self-select into the role of an observing or an observant subject and what kind of peers individuals deliberately choose. Our findings provide first insights on the perception of peer situations by individuals and new empirical evidence on how peer groups emerge.
    Keywords: grit; perseverance; laboratory experiment; peer effects; real effort
    JEL: C91 D03 J24 M50
    Date: 2016–06
  39. By: Sven Schreiber; Miriam Beblo
    Abstract: We revisit the alleged retirement consumption puzzle. According to the life-cycle theory, foreseeable income reductions such as those around retirement should not affect consumption. However, we first recall that given higher leisure endowments after retirement, the theory does predict a fall of total market consumption expenditures. In order not to mistake this predicted drop for a puzzle we focus on housing consumption which can be plausibly regarded as complementary to leisure, and we control for the leisure change in our empirical specifications, using micro data for Germany (SOEP), where housing expenditures are observable as rents for the majority (60%), as well as dwelling relocations. We still find significant negative impacts of the retirement status on housing consumption, which is hard to reconcile with the life-cycle theory. For retirees we also find significant effects of the income reduction at retirement on housing. However, the effects are small in quantitative terms, given the lock-in nature of past housing decisions.
    Keywords: consumption smoothing, retirement-consumption puzzle, SOEP
    JEL: D91 E21
    Date: 2016
  40. By: Claude Diebolt (BETA, University of Strasbourg Strasbourg, France); Ralph Hippe (London School of Economics and Political Science, Grantham Research Institute on Climate Change and the Environment)
    Date: 2016
  41. By: Jeanne DALL'ORSO; Romain GAURIOT; Lionel PAGE
    Abstract: We investigate how restaurants can use high visibility locations to charge higher prices or offer lower quality to customers who are imperfectly informed and face search costs. We use a large dataset of user reviews in 10 large cities in North America and Europe. We find that prime locations in terms of visibility such as touristic locations or street intersections are associated with substantial lower customer satisfaction. This result can be explained by economic models of search. Restaurants with greater visibility face a larger number of uninformed customers and have therefore less need to rely on quality or low price to attract customers.
    Keywords: Search, location, spatial analysis
    JEL: D40 D82 D83
    Date: 2016–06–07
  42. By: OECD
    Abstract: Early childhood education and care programmes (ECEC) have become more accessible in recent years, with high enrolment rates in both early childhood educational development and preprimary education. The educational results of students at the age of 15 may be partially explained by attendance at pre-primary education, which sharply decreases the likelihood of low performance in the Programme for International Student Assessment (PISA). Pre-primary education can play a strong role in promoting equality at an early age, particularly by targeting disadvantaged groups such as first- and second-generation immigrants. Assuring and monitoring the quality of programmes is key to guaranteeing that early childhood education and care has a positive impact on both equity and performance in education.
    Date: 2016–06–16
  43. By: Kumo, Kazuhiro
    Abstract: This paper examines regional economic conditions and their effects on interregional population redistribution patterns in Russia. After reviewing striking changes in population flows before and after the collapse of the former Soviet Union, an application of the gravity model on population migration in Russia is presented using a newly obtained interregional in- and out-migration flow matrix from 1990 to 2013, which were supplied by Rosstat (formerly Goskomstat). The analysis conducted comparison of factors affecting migration patterns between those in the Soviet era and in modern Russia, focusing on geographical factors, namely, the attractiveness of resource-mining regions. The analysis clearly showed major changes in the effect of governmental investment in determining migration flow before and after the collapse of the Soviet Union.
    Date: 2016–05

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