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on Urban and Real Estate Economics |
| By: | Eduardo A. Haddad; Ana Maria Bonomia Barufi |
| Abstract: | The spatial mismatch between residential locations and jobs can be particularly relevant for low-skilled individuals. In this paper, we first explore such phenomenon from the perspective of the distance of the residence to the geographic concentration of jobs, and locational disadvantages of the urban form itself. Such unequal conditions in the labor market present a great challenge for the spatial sustainability of the multiple equilibria achieved simultaneously at the labor and the housing markets. We estimate the main aspects that influence wage differentials among individuals, focusing on the role of accessibility on labor market outcomes. We suggest the inclusion of geographical characteristics as instruments to deal with endogeneity problems that arise in the estimation of urban price models. Our strategy is based on the inclusion of a specific geographic/historic variable as instrument, namely the river shore access to the first school built by the Jesuits in São Paulo, the city’s founding location. Geography acted as a determinant of the location of the transportation infrastructure in the region, so that the road and rail networks in the city present a strong spatial correlation with pre-urban “waterways”. Nowadays, the vast majority of rivers and creeks are covered with asphalt and cement, and economic agents are practically unaware of their existence. |
| Keywords: | Accessibility; inequality; urban labor market; São Paulo Metropolitan Region |
| JEL: | R14 C26 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon40&r=ure |
| By: | Caterina Calsamiglia; Francisco Martinez-Mora; Antonio Miralles |
| Abstract: | We study the extent to which the widely used Boston Mecha- nism (BM) fosters ability and socioeconomic segregation across public schools. Our model encompasses an endogenous component of school quality -determined by the peer group- and an exogenous one, so that there is at least one bad school ex-ante. Even with no residential priorities, BM generates ability sorting between a priori equally good public schools: an elitist public school emerges. A richer model with some preference for closer schools and flexible residential choice does not eliminate this effect. It rather worsens the peer quality of the nonelitist good school. The existence of private schools makes the best public school more elitist, while the bad school loses peer quality. Their presence may also engender socioeconomic segregation. The main alternative assignment mechanism, Deferred Acceptance, is resilient to such sorting effects. |
| Keywords: | school choice, Mechanism Design, peer effects, local public goods. |
| JEL: | I21 H4 D78 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:949&r=ure |
| By: | Hans R.A. Koster (Vrije Universiteit Amsterdam, the Netherlands); Jos van Ommeren (Vrije Universiteit Amsterdam, the Netherlands) |
| Abstract: | We study the economic effects of place-based policies in the housing market taking into account search frictions. Theory indicates that beneficial policies increase house prices, but temporarily reduce sales times of owner-occupied properties. We investigate both effects for a place-based programme that improved public housing in 83 impoverished neighbourhoods throughout the Netherlands. We combine a first-difference approach with a fuzzy regression-discontinuity design to address the fundamental issue that these neighbourhoods are endogenously treated. Place-based policies increase house prices with 3.5 percent and, in line with theory, temporarily reduce sales times with 20 percent. The sales time effect dissipates within 7.5 years. The programme’s welfare benefits to homeowners are sizeable and at least half of the value of investments in public housing. |
| Keywords: | amenities; housing market; search frictions; house price; sales time; place-based policies. |
| JEL: | R30 R33 R38 |
| Date: | 2017–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170008&r=ure |
| By: | Ana Maria Bonomi Barufi; Eduardo A. Haddad, Peter Nijkamp |
| Abstract: | Agglomeration economies appear to have a significant impact on local labour markets. The interaction of workers and firms in dense urban areas may generate productivity advantages that result in higher wages. City size plays an important role in the relative bargaining power of workers and firms in the relevant labour market. When analysing the relationship between local wages and the business cycle – wage flexibility, measured by the wage curve –, this influence appears to be higher in informal sectors in less densely populated areas in Brazil. Therefore, large agglomerations are supposed to provide a higher bargaining power for workers, as they have more job opportunities. In addition, labour market dualism is an essential ingredient in the evaluation of the wage curve in developing economies. However, a dual labour market analysis should be conducted at the appropriate regional level (labour market areas), making it possible to find a relevant impact of city size on the relative bargaining power of workers and firms. Our study aims to shed new theoretical and empirical light on the importance of the wage curve, taking into account various specificities of developing economies. The applied modelling study in Brazil shows that wage flexibility is higher in less dense local labour markets and in the informal sector in relation to the formal sector. Furthermore, it is essential to control for unobserved local characteristics in order to obtain the ‘true’ elasticity of wages to local unemployment rates, and spatial effects should be accounted for when the unit of analysis is rather small. In this sense, a significant part of the difference between the formal and the informal sectors originates from spatial effects. |
| Keywords: | wage curve; informal sector; bargaining power; agglomeration; rural-urban dichotomy. |
| JEL: | R12 J31 J46 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon39&r=ure |
| By: | Gautier, Pieter A. (VU University Amsterdam, Tinbergen Institute); van Vuuren, Aico (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | In Amsterdam, houses located on private land and houses with various land-lease contracts coexist. In this paper, we investigate the impact of future land-lease payments on the house price. We look at the impact on house prices of: (i) the number of years that the land lease has been paid in advance and (ii) the amount that must be paid up front. Houses on privately owned land are on average 10% more expensive. Houses with a land-lease contract that has been paid in advance are 0.41% more expensive for each year that no land lease has to be paid. We find a large and negative impact of the land-lease rent that needs to be paid on the house price. |
| Keywords: | House prices; Land lease |
| JEL: | R30 R38 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0686&r=ure |
| By: | Rothenberg, Alexander D.; Bazzi, Samuel; Nataraj, Shanthi; Chari, Amalavoyal V. |
| Abstract: | Beyond the role of economic forces, many theories of economic geography emphasize the way politics can shape the spacial configuration of economic activity. We investigate the impact of changes in political regimes on industrial concentration using 30 years of data on Indonesian manufacturers. These data span both the reign of Suharto, one of the strongest central governments in Southeast Asia, and its collapse and the subsequent decentralization of power. Using the canonical measure of Ellison and Glaeser, we show that in the mid 1980s, Indonesia's firms exhibited a similar degree of agglomeration as seen in the United States. Spatial concentration then declined until the 1998 Asian Financial Crisis, and has since begun to rise during the decentralization period. We also measure concentration using the continuous measure developed by Duranton and Overman (2005), and find that the agglomeration exhibited by Indonesian firms is also broadly similar to that documented by Duranton and Overman (2005 ) for the United Kingdom, although localization drops off more gradually in Indonesia than in the United Kingdom. Using this continuous measure of agglomeration, we identify 32 manufacturing clusters in Indonesia, and investigate the correlates of concentration. We find that the most robust drivers of agglomeration have been natural resources and supply chain linkages, especially with respect to explaining long-term changes in spatial concentration. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:1180&r=ure |
| By: | Eckley, Peter (Bank of England); Benetton, Matteo (LSE); Latsi, Georgia (Independent); Garbarino, Nicola (Bank of England); Kirwin, Liam (Bank of England) |
| Abstract: | Since Basel II was introduced in 2008, two approaches to calculating bank capital requirements have co-existed: lenders’ internal models, and a less risk-sensitive standardised approach. Using a unique dataset covering 7 million UK mortgages for 2005–15, and novel identification, we provide empirical evidence that the differences between these approaches cause lenders to specialise. This leads to systemic concentration of high-risk mortgages in lenders with less sophisticated risk management. Our results have broad implications for the design of the international bank capital framework. |
| Keywords: | Capital regulation; banking; mortgages; specialisation; risk-taking; Basel II |
| JEL: | G01 G21 G28 |
| Date: | 2017–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0639&r=ure |
| By: | Eduardo Bandrés (UNIVERSITY OF ZARAGOZA AND FUNCAS); María Dolores Gadea-Rivas (UNIVERSITY OF ZARAGOZA); Ana Gómez-Loscos (Banco de España) |
| Abstract: | Large contractionary shocks such as the Great Recession or the sovereign debt crisis in Europe have rekindled interest in analyzing the overall patterns of business cycles. We study these patterns for Europe both at the national and the regional level. We first examine business cycles’ comovements and then, using Finite Mixture Markov Models, we obtain a dating of the different business cycles and identify clusters among them. We also propose an index to analyze within-country homogeneity. Our main findings are the following: (i) we find evidence of just one cluster amongst the European countries while, at the regional level, there is more heterogeneity and we identify five different groups of European regions; (ii) the groups are characterized as follows: the first contains most of the Greek regions; groups two and three include, in most cases, regions from Germany (plus a couple of regions from southern European countries in group two and some regions of the core countries in group three); group four is populated mainly by regions belonging to northern European countries; and group five is the largest and is composed of the rest of European regions; (iii) we notice that the degree of homogeneity of regional business cycles within countries is quite different; (iv) we also observe that spatial correlation increased during the convergence process towards the introduction of the euro and has taken a big leap with the Great Recession, both at country and regional level. In fact, comovements among regions have mainly increased during the last decade. These results have important implications for policymakers in the design of convergence policies at the European level and also in the design of fiscal policies to reduce regional disparities at the country level. |
| Keywords: | business cycles, clusters, regions, finite mixtures Markov models |
| JEL: | C32 E32 R11 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:1702&r=ure |
| By: | Beestermöller, Matthias |
| Abstract: | This paper investigates the effect of the largest rail strikes in German history in 2014-2015 on long-distance buses – a newly liberalized market. Using a novel dataset of detailed bus ticket sales and rail cancellations, I find that the primary channel that drives ticket sales during the strike is whether the absolute bus travel time was sufficiently short. In a difference-indifferences framework, I exploit this variation to identify any demand persistence. Although the common trend assumption does not seem to be completely tenable in the given context, my results point to a persistent effect on the ticket sales for inter-city buses on the affected routes. |
| Keywords: | Transportation; Long-Run Demand Effects; Intermodal Substitution; Strike |
| JEL: | L92 R41 C81 |
| Date: | 2017–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:31768&r=ure |
| By: | Korthals, Roxanne (General Economics 2 (Macro)) |
| Abstract: | The aim of this paper is to estimate the causal effects of an accelerated curriculum, in which students progress through the course material faster, on cognitive and non-cognitive outcomes. I employ two methods: First, I make use of the cohorts before and after the introduction of the possibility to accelerate and of classes which are and which are not considered for acceleration using a Difference-in-Differences (DiD) strategy. However, it seems reasonable that the best students benefit from this policy, while it is less clear that the less able students would benefit. Therefore I also employ a second method in which I only look at the effects for the marginal student. For this, I use school grades to employ a fuzzy Regression Discontinuity Design (fRDD). Using both methods, I find that after one year the students who accelerated scored significantly higher on certain sub scores of the mathematics tests. I find no definitive results on non-cognitive skills: Using the DiD, I find that this positive cognitive effect is countered by lower scores on the teacher rated scores on perseverance, concentration, and conversation skills. For the marginal student, I find almost no effects on non-cognitive skills. |
| Keywords: | curriculum, instruction hours, student performance, non-cognitive skills |
| JEL: | I20 I21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2017003&r=ure |
| By: | Pekkala Kerr, Sari; Kerr, William R. |
| Abstract: | We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to native-founded companies. Our work quantities immigrant contributions to new firm creation in a wide variety of fields and using multiple definitions. While significant research effort has gone into understanding the economic impact of immigration into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine several restricted-access U.S. Census Bureau data sets to create a unique longitudinal data platform that covers 1992-2008 and many states. We describe differences in the types of businesses initially formed by immigrants and their medium-term growth patterns. We also consider the relationship of these outcomes to the immigrants’ age at arrival to the United States. |
| JEL: | F22 J15 J44 J61 L26 M13 O31 O32 O33 |
| Date: | 2016–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2016_033&r=ure |
| By: | Balmera, Roberto E.; Ünverb, Mehmet Bilal |
| Abstract: | Alternative telecommunications operators have continuously invested in their own infrastructure in recent years. After more than a decade since liberalization, competitive conditions have substantially changed, especially in urban areas. European regulatory authorities have acknowledged this development by starting regional deregulation. Additionally, different forms of cooperative investments in next generation broadband have appeared on the market. This article reviews the theoretical and empirical literature on geographic regulation as well as practical cases. Based on this review it is suggested that regulators consider geographically segmented access prices to set optimal incentives for the investment in next generation broadband infrastructure. |
| Keywords: | next generation access,co-investment,geographic regulation |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse16:148656&r=ure |
| By: | Na, Kyoung-Youn; Yoon, Chang-Ho |
| Abstract: | This paper estimates the non-linear impact of ICT network on motorway contribution to total factor productivity. Using dynamic panel data of OECD member countries, the paper finds that there exists a critical mass of broadband penetration rate which has the property that if this threshold level is reached, there will be an accelerating network effects of motorway extension. |
| Keywords: | ICT convergence,productivity growth,complementarity,infrastructure development |
| JEL: | O47 O38 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse16:148692&r=ure |
| By: | Richard Guy Cox (Department of Economics, Arizona State University); Darren Grant (Department of Economics and International Business, Sam Houston State University) |
| Abstract: | This paper documents a large educational gradient in traffic fatality rates and investigates its source. Compared to individuals with a college education, those with at most a high school diploma are more than four times as likely to die in a traffic accident, a gradient exceeding that for all-cause mortality. More educated individuals’ health behaviors, such as drinking or seat belt use, support this gradient. A panel analysis of data from the Fatality Analysis Reporting System indicates that this gradient is, to a small degree, causal, particularly for males, who cause most traffic accidents. |
| Keywords: | human capital; traffic safety |
| JEL: | I12 I26 R41 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:shs:wpaper:1701&r=ure |
| By: | Diana Lúcia Gonzaga da Silva; Carlos Roberto Azzoni |
| Abstract: | The objective of this paper is to assess the contribution of unobservable firm and individual heterogeneity for the location effects on wages and for the variation of wages in Brazil. In the first stage we estimate the effects of location through a wage equation, controlling for observable worker characteristics and unobserved heterogeneity of workers and firms. In a second stage, the estimated location effects are regressed on the fixed effects of firms and workers. We use micro data panel for the period 1995-2008 (RAIS-Migra). We estimate the model proposed by Abowd et al. (1999) for the wage decomposition, to deal with multiple fixed effects in large databases matching workers and firms. One contribution of this paper is to deal with more controls than usual in this type of analysis. As for the literature on the Brazilian case, the simultaneous control for firm and worker effects is also an important contribution. The findings show that firm and worker effects account for a substantial variation of wages across individuals (93%) and for the variation in location effects across metropolitan areas (95%). In the first and second stages individual characteristics are more important than firm effect to explain wage differentials (individuals 91%, firms 80%) and location effects (92%, 41%). Controlling for all these effects, the “pure” agglomeration effects would amount to only 5%. Therefore, both effects account for substantial shares of the variation of real wages and location effects on wages in Brazil. |
| Keywords: | wage determination; sorting; firm effects; location effects; individual effects |
| JEL: | J24 J31 R23 C23 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon41&r=ure |
| By: | Servaas van der Berg (Department of Economics, University of Stellenbosch); Chris van Wyk (Department of Economics, University of Stellenbosch); Ronelle Burger (Department of Economics, University of Stellenbosch); Janeli Kotzé (Department of Economics, University of Stellenbosch); Marlies Piek (Department of Economics, University of Stellenbosch); Kate Rich (Department of Economics, University of Stellenbosch) |
| Abstract: | This study analysed grade 6 and grade 9 mathematics data from the Annual National Assessment by comparing school performance in public and independent schools in three geographical regions: Western Cape, Gauteng and South Africa as a whole. The aim was to see whether low-fee independent schools outperform public schools i) for schools which have similar school fees and ii) for schools which have similar resources, which is the sum of school fees and government subsidies. Our analysis indicates that independent primary schools, in all three geographical regions, are able to use resources more efficiently and are thus able to translate resources into better performance. However, when comparing schools in similar school fee brackets, the findings are mixed and vary by geographical area: sending a child to an independent primary school in Gauteng is worthwhile, whereas it is not worthwhile in the Western Cape. |
| Keywords: | Public And Independent Schools, Low Fee Schools |
| JEL: | I21 I24 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers276&r=ure |
| By: | Sutirtha Bagchi (Department of Economics, Villanova School of Business, Villanova University) |
| Abstract: | This article examines the institution of taxicab medallions in two of the largest cities of the U.S.: New York and Chicago and changes in the prices of these medallions during the period 2009-2016 (for New York City) and 2007-2016 (for Chicago). It finds a drop of roughly 50% in the prices of these medallions in New York City and roughly 80% in Chicago from their peak in 2013/2014 to the present day. This drop is likely due to the rise of Transportation Network Companies (TNCs) such as Uber and Lyft although there have been other developments in this industry and this article chronicles some of these developments. |
| Keywords: | Taxicab medallions; Transportation Network Company; Uber; Lyft |
| JEL: | L43 L51 G14 M13 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:vil:papers:33&r=ure |
| By: | David Marques†Ibanez |
| Abstract: | Banks are usually better informed on the loans they originate than other financial intermediaries. As a result, securitized loans might be of lower credit quality than otherwise similar nonsecuritized loans. We assess the effect of securitization activity on loans’ relative credit quality employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that, at issuance, banks do not seem to select and securitize loans of lower credit quality. Following securitization, however, the credit quality of borrowers whose loans are securitized deteriorates by more than those in the control group. We find tentative evidence suggesting that poorer performance by securitized loans might be linked to banks’ reduced monitoring incentives. |
| Keywords: | Banks;Europe;Corporate sector;Loans;Credit;Securities;Borrowing;Collateral management;Econometric models;Securitization; syndicated loans; credit risk |
| Date: | 2016–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:16/221&r=ure |
| By: | Llanto, Gilberto M. |
| Abstract: | Everyone has an opinion on how to solve the terrible traffic plaguing Manila every hour of every day. Many people blamed the behemoth cargo trucks plying the roads everyday, inconveniencing thousands of commuters and car drivers by taking up too much space. People across the metropolis rejoiced when the City of Manila declared a truck ban, effectively preventing cargo trucks from crowding the roads. Commuters and passengers collectively felt relieved to have saved a few minutes in their daily journey from home to work. Ultimately, the price of those precious minutes added up to major economic losses reaching billions of pesos. Who could have imagined that things could go wrong? |
| Keywords: | Philippines, infrastructure, truck ban, port congestion, ports, logistics industry: Manila, economic loss |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2016-52&r=ure |
| By: | Iftekhar Hasan (Fordham University and Bank of Finland); Krzysztof Jackowicz (Kozminski University); Oskar Kowalewksi (IESEG School of Management (LEM-CNRS-UMR 9221)); Lukasz Kozlowski (Kozminski University) |
| Abstract: | The study analyses the economic consequences of changes in the local bank presence. Using a unique dataset of banks, firms, and counties in Poland over the period 2009-2014, we show that changes in local banking that increase the role of the relationship banking model are associated with improvements in local labour markets and easier access of SMEs to bank debt. Moreover, radical changes in the ownership structure of large commercial banks result in a more rapid new firm creation. Finally, we document that young companies’ performance is more sensitive to the instability of local banking markets. |
| Keywords: | local economic activity, SMEs, entrepreneurship, local banks |
| JEL: | G21 G32 R11 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ies:wpaper:f201701&r=ure |
| By: | M. Mucciardi; E. Otranto |
| Abstract: | The Space–Time Autoregressive (STAR) model is one of the most widely used models to represent the dynamics of a certain variable recorded at several locations at the same time, capturing both their temporal and spatial relationships. Its advantages are often discussed in terms of parsimony with respect to space-time VAR structures because it considers a single coefficient for each time and spatial lag for the full time span and the full location set. This hypothesis can be very strong; the presence of groups of locations with similar dynamics makes it more realistic. In this work we add a certain degree of flexibility to the STAR model, providing the possibility for coefficients to vary in groups of locations, proposing a new class of flexible STAR models. Such groups are detected by means of a clustering algorithm. The new class or model is compared to the classical STAR and the space-time VAR by simulation experiments and a practical application. |
| Keywords: | spatial weight matrix,space–time models,forecasting,clustering |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201608&r=ure |
| By: | Atalay, Kadir; Barrett, Garry; Edwards, Rebecca; Yu, Chaoran |
| Abstract: | We analyse the effect of housing wealth on household indebtedness for the period 2002 to 2014 in Australia. Overall we find that approximately one quarter of the growth in household debt during this period can be explained by rising house prices. This rise is mostly driven by the wealth effect associated with rising house prices, and a collateral effect which is present for households that are collateral and liquidity constrained. We uncover a weaker wealth effect for households that have faced negative shocks to income or employment which indicates precautionary behaviour.. |
| Keywords: | Housing Wealth, Household Debt, Credit Constrain |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2016-18&r=ure |
| By: | Wixe, Sofia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, Sweden); Nilsson, Pia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, Swede); Naldi, Lucia (Centre for Family Enterprise and Ownership (CeFEO ), Jönköping International Business School, Sweden); Westlund, Hans (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, & KTH Royal Institute of Technology, Sweden) |
| Abstract: | This paper applies unique survey data on innovation and external interaction of small food producers in Sweden. The overall purpose is to test if firms that are more engaged in external interaction are more innovative. To disentangle innovativeness beyond new goods and services, innovation is measured as new processes, new markets, new suppliers, new ways of organization, and new distributors. Findings point to a positive relationship between firm innovation and external interaction, both in terms of collaboration, external knowledge and support from regional actors. In particular, collaboration regarding transports and sales is shown to enhance most types of innovation. Product and process innovation benefit from external knowledge from extra-regional firms as well as regional support from the largest firm. Findings suggest that current innovation policies can improve their efficiency by increasing their flexibility to enable tailor-made innovation policies at the local level. |
| Keywords: | Innovation; collaboration; food industry; rural regions |
| JEL: | L25 L66 O31 R12 |
| Date: | 2017–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0446&r=ure |
| By: | Tales Rozenfeld; Eduardo A. Haddad |
| Abstract: | This study explores the issue of road infrastructure funding, analyzing the impact of financing a road improvement project through tolls tariff charged from the final users vis-a-vis the financing through an increase in the country’s payroll tax rate. Using a transport model integrated to an interregional computable general equilibrium model this research simulated alternative arrangements for financing investments made at BR-040, Brazilian road granted by the Federal Government and which figured as the case study for this research. The results indicate that the way the investment is financed is relevant to the regionally distributed impacts of the project, being decisive in defining which regions are benefited by the improvement project. Analyzing the country’s aggregated results, the situation that has the greatest impact on the Brazilian's GDP growth is the investment payed by the road users through toll tariff. From a regional perspective, a clear area of influence that benefits from the improvements on the road can be identified and, when the costs for executing such improvements are shared with the whole country through a tax increase, these benefits are accentuated. |
| Keywords: | regional economics; transport policy; general equilibrium |
| JEL: | R13 R42 C68 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon42&r=ure |