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on Urban and Real Estate Economics |
| By: | Murtaza Haider, Amar Anwar, and Cynthia Holmes (Ryerson University and Cape Breton University) |
| Abstract: | The City of Toronto implemented a land transfer tax on real estate transactions in February 2008. We explore the impact of the tax on housing sales in the City of Toronto and the rest of the Greater Toronto Area (GTA). Previous research has shown that housing sales declined in Toronto once the City imposed the land transfer tax. This study, however, concludes that the negative impact of the tax on housing sales was statistically insignificant. Our approach differs from earlier studies in three ways. First, we highlight other influences on housing sales, in particular, the impact of the Great Recession, which overlapped with the imposition of the land transfer tax in Toronto, and the tightening of mortgage regulations in Canada that prevented lenders from issuing subprime mortgages. Second, we analyze the sale of both freehold and condominium properties in the GTA; previous research restricted analysis to freehold properties. Third, we take a regional perspective by contrasting any decline in housing sales in Toronto against an increase in sales in the suburban municipalities. |
| Keywords: | land transfer tax, housing sales, housing market, consumer behavior, Toronto, Greater Toronto Area |
| JEL: | H76 H31 R31 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:mfg:wpaper:28&r=ure |
| By: | Clement Bellet |
| Abstract: | Despite a major upscaling of suburban houses over the last decades, house satisfaction has remained steady in the United States. I show that upward comparison in size can explain this paradox, as top housing size mirrored the U-shaped pattern of top income inequality. Combining data from the American Housing Survey from 1984 to 2009 with an original dataset of three millions suburban houses built between 1920 and 2009, I find that suburban owners who experienced a relative downscaling of their home due to the building of bigger units in their suburb record lower satisfaction and house values. These homeowners are more likely to upscale and subscribe to new loans. Results are robust to household fixed effects and concentrated in counties with lower segregation, suggesting a causal link between inequality and mortgage debt. In the absence of keeping up with the Joneses, I estimate the mortgage debt to income ratio would have been 25 percentage points lower at the eve of the 2008 financial crisis. |
| Keywords: | inequality, social preferences, subjective well-being, housing, household debt |
| JEL: | D01 D03 I30 R20 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1462&r=ure |
| By: | Lévêque, Christophe; Saleh, Mohamed |
| Abstract: | We investigate the impact of state industrialization on residential segregation between Muslims and non-Muslims in nineteenth-century Cairo using individual-level census samples from 1848 and1868. We measure local segregation by a simple inter-group isolation index, where Muslims' (non-Muslims') isolation is measured by the share of Muslim (non-Muslim) households in the local environment of each location. We find that relative to locations that did not witness changes in industrialization, the opening of Cairo railway station in 1856 differentially increased Muslims' isolation from non-Muslims (conversely, decreased non-Muslims' isolation) in its proximity and that the closures of textiles firms in 1848-1868 differentially decreased it. The results are arguably driven by a labor market mechanism, whereby state rms crowded in unskilled jobs that attracted greater net inows of rural immigrants and unskilled workers who were predominantly Muslims. |
| Keywords: | local segregation; industrialization; Middle East; railways; slums |
| JEL: | N35 R23 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:31397&r=ure |
| By: | John Haisken-DeNew (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and Institute for the Study of Labor (IZA)); Syed Hasan (Crawford School of Public Policy, The Australian National University); Nikhil Jha (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Mathias Sinning (Crawford School of Public Policy, The Australian National University; RWI; and Institute for the Study of Labor (IZA)) |
| Abstract: | The Australian Government launched the My School website in 2010 to provide standardised information about the quality of schools to the Australian public. This paper combines data from this website with home sales data for the state of Victoria to estimate the effect of the publication of school quality information on property prices. We use a difference-indifference approach to estimate the causal effect of the release of information about high-quality and low-quality schools relative to medium-quality schools in the neighbourhood and find that the release of information about high-quality schools increases property prices by 3.6 percent, whereas the release of information about low-quality schools has no significant effect. The findings indicate that many buyers are unaware of the relevance of school quality information and that real estate agents pursue a strategy of disclosing information about high-quality schools to increase the sales price. Results from a survey of Victorian real estate agents provide evidence in favor of this strategy. |
| Keywords: | School quality, housing markets, information asymmetry, public policy evaluation, difference-in-difference estimation |
| JEL: | D82 D84 I24 R31 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2017n03&r=ure |
| By: | Gianni La Cava (Reserve Bank of Australia) |
| Abstract: | Piketty (2014) documents how the share of aggregate income going to capital in the United States has risen in the post-war era. Rognlie (2015) has since shown that this is largely due to the housing sector. I explore the determinants of the secular rise in the share of housing capital income (or 'rental income') in the US economy. I first decompose the aggregate national accounts by geographic region and also by type of housing. I then exploit variation across US states in factors that could explain housing capital income, such as interest rates, housing prices and income growth. I show that the long-run increase in the aggregate share of housing capital income is mainly due to higher imputed rental income going to owner-occupiers. I also find evidence that the rise in the share of housing capital income over recent decades reflects a combination of: 1) lower real interest rates; 2) lower consumer price inflation; and 3) constraints on the supply of new housing in some large US cities. In effect, I argue that the fall in nominal interest rates over the 1980s and 1990s raised the demand for housing and pushed up housing prices and rents (relative to non-housing prices) in supply-constrained areas. I estimate that the long-term decline in interest rates can explain more than half the increase in the share of nominal income spent on housing since the early 1980s. |
| Keywords: | interest rates; housing prices; housing supply; imputed rent; inequality |
| JEL: | D33 D63 E01 E21 E43 R31 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2016-04&r=ure |
| By: | Sandrine Mesplé-Somps (IRD, UMR DIAL, PSL, Université Paris-Dauphine); Laure Pasquier-Doumer (IRD, UMR DIAL, PSL, Université Paris-Dauphine); Charlotte Guénard (UMR Développement and Sociétés, Université Paris 1-IEDES, IRD) |
| Abstract: | Impact studies of urban upgrading projects are few and far between. This article presents the case of an integrated urban development project in a Djibouti slum. It uses two difference-in-differences estimation techniques, one to compare the project zone with a control zone and the other to compare individuals and households within the project zone based on the extent to which the project has connected them. We find that the project has had a not-inconsiderable impact on tenure regularisation, but no impact on housing or property values. In employment, the project has had no impact on the labour supply, but has nonetheless prompted the emergence of self-employed activities. Lastly, near the new roads, poorer households are crowded out by much better-off households. |
| Keywords: | slums, urban project, impact analysis, employment, housing, Djibouti. |
| JEL: | R23 J68 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201609&r=ure |
| By: | Harry Kitchen and Enid Slack (University of Toronto) |
| Abstract: | Canadian cities have long called for access to more tax revenues. This paper argues that additional taxes are appropriate for major cities, describes the advantages and disadvantages of potential new taxes, and estimates the revenue from a city income tax, a city sales tax, and a city fuel tax for eight Canadian cities – Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montréal, and Halifax. The authors find that the property tax is a good tax, but cities would benefit from a mix of taxes. In particular, user fees are an important source of revenue and can alter economic behaviour. Taxes on income, sales, vehicle registration, fuel, and hotel stays are also an effective way to diversify local taxes. Of the available options, a personal income tax and a municipal sales tax are likely to generate the largest revenues. Although setting up their own tax systems would grant cities the greatest fiscal autonomy, doing so would be costly. It would be more cost-effective for cities to piggyback new taxes onto provincial taxes, with the province collecting the revenue and remitting it to cities. To promote local accountability, however, it is essential that local governments set their own tax rates. In this way, taxes levied would be linked to services consumed. |
| Keywords: | municipal finance, local taxes, fiscal autonomy |
| JEL: | H71 H77 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:mfg:wpaper:27&r=ure |
| By: | Silvo, Aino |
| Abstract: | I study the link between house prices, lending standards, and aggregate over-investment in housing. I develop a model of the housing market where the credit market is affected by asymmetric information. Selection is towards less creditworthy borrowers. Asymmetric information coupled with deadweight costs of default can create endogenous boom-bust cycles in house prices. I show that lending standards are loose and the incentives for less-than-creditworthy borrowers to apply for a loan are particularly strong, first, when future house values are expected to be high, which leads to high leverage of borrowers; and second, when safe interest rates are low, which implies low costs of borrowing. However, there are strong nonlinearities in the relationship between borrowing incentives and economic fundamentals. The results shed light on incentive mechanisms that can help explain the developments in the U.S. housing market in the early 2000s. They also imply that loose monetary policy can have a direct impact on the stability of the housing market through the cost of borrowing and the opportunity cost of housing investment. |
| JEL: | E21 E32 E44 G14 G21 |
| Date: | 2017–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2017_004&r=ure |
| By: | Sofie R. Waltl (University of Graz) |
| Abstract: | Gross rental yields are an important ingredient when measuring the cost of owning a property which is used by investors and policy makers to assess housing markets. This paper develops a methodology to construct quality-adjusted, quantile-specific gross rental yields to analyse an entire housing market and therefore combines an adapted propensity score matching strategy with hedonic quantile regression techniques. The methodology is applied on a detailed data set of house transactions and asking rents in Sydney between 2004 and 2014 and finds strong temporal variation as well as decreasing rental yields over the distribution as expected from theoretical considerations. |
| Keywords: | Rental yield; Price-to-rent ratios; Hedonic models; Quantile regression; Matching; Housing markets |
| JEL: | R31 C14 C21 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2016-09&r=ure |
| By: | Ioannis Branikas; Harrison Hong; Jiangmin Xu |
| Abstract: | Households hold nondiversified stock portfolios of firms headquartered near their city of residence. Explanations assign a causal role for proximity, either in generating an informational advantage or a familiarity bias. Empirical analyses assume households locate randomly, even though they optimally select a city. This selection is important since latent location factors might be correlated with latent demand for local stocks. Building on location choice models from urban economics, we develop a Heckman (1977)-style model to account for the effect of location choices on portfolio choices. Adjusting for selection significantly reduces local bias and the performance of local stock picks. |
| JEL: | G02 G11 R2 R22 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23040&r=ure |
| By: | Rokhaya Dieye; Bernard Fortin |
| Abstract: | This paper explores gender peer effects heterogeneity in adolescent Body Mass Index (BMI). We propose a utility-based non-cooperative social network model with effort technology. We allow the gender composition to influence peer effects. We analyze the possibility of recovering the fundamentals of our structural model from the best-response functions. We provide identification conditions of these functions generalizing those of the homogeneous version of the model. Extending Liu and Lee [2010], we consider 2SLS and GMM strategies to estimate our model using Add Health data. We provide tests of homophily in the formation of network and reject them after controlling for network (school) fixed effects. The joint (endogenous plus contextual) gender homogeneous model is rejected. However, we do not reject that the endogenous effects are the same.This suggests that the source of gender peer effects heterogeneity is the contextual effects. We find that peers’ age, parents’ education, health status, and race are relevant for the latter effects and are gender-dependent. |
| Keywords: | Obesity, Social Networks, Gender, Heterogeneity, Peer Effects, Identification, Add Health. |
| JEL: | L12 C31 Z13 D85 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:crrecr:1702&r=ure |
| By: | Juan Saavedra; Emma Näslund-Hadley; Mariana Alfonso |
| Abstract: | An outstanding challenge in education is improving learning among low-achieving students. We present results from the first randomized experiment of an inquiry-based remedial science-education program for low-performing elementary students in the setting of a developing country. At 48 low-income public elementary schools in Lima, Peru and surrounding areas, third-grade students scoring in the bottom half of their science classes were selected at random to receive up to 16 remedial sessions of 90 minutes each during the school year. Control-group compliance with assignment (no extra tutoring) was close to perfect. Treatment-group compliance was roughly 40 percent, or five to six remedial sessions—a 4 to 5 percent increase in total science instruction time over the school year. Despite the low-intensity treatment, students assigned to the remedial sessions scored 0.12 standard deviations higher on a science endline test. But all improvements were concentrated among boys, for whom gains were 0.22 standard deviations. Remedial education does not produce within-student spillovers to math, or spillovers on other students. |
| JEL: | I21 I25 O15 O54 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23050&r=ure |
| By: | Vincent Boucher; Marion Goussé |
| Abstract: | We present a flexible model of wage dynamics where information about job openings is transmitted through social networks. The model is based on Calvò-Armengol & Jackson (2004, 2007) and extends their results outside the stationary distribution, and under observed and unobserved heterogeneity. We present an empirical application using the British Household Panel Survey by exploiting direct information about individual's social networks. We find that having more employed friends leads to more job offers but to lower wages due to higher mismatch. We also find that non-relative friends are more helpful than relatives, and that women benefit relatively more from their male friends. |
| Keywords: | Labour Market, Peer Referrals, Social Networks |
| JEL: | C33 J31 J46 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:crrecr:1608&r=ure |
| By: | Oren Ziv |
| Abstract: | Geography models have introduced and estimated a set of competing explanations for the persistent relationships between firm and location characteristics, but cannot identify these forces. I introduce a solution method for models in arbitrary geographies that generates reduced-form predictions and tests to identify forces acting through geographic linkages. This theoretical approach creates a new strategy for spatial empirics. Using the correct observables, the model shows that geographic forces can be taken into account without being directly estimated; establishment and employment density emerge as sufficient statistics for all geographic forces. I present two applications. First, the model can be used to evaluate whether geographic linkages matter and when simplified models suffice: the mono-centric model is a good fit for business services firms but cannot capture the geography of manufactures. Second, the model generates reduced-form tests that distinguish between spillovers and firm sorting and finds evidence of sorting. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:17-10&r=ure |
| By: | Cem Oyvat (University of Greenwich, International Business and Economics Department); Mwangi wa Githinji (University of Massachusetts - Amherst, Economics Department) |
| Abstract: | This paper examines the impact of agrarian structures on the migration behavior and destination of rural household heads and individuals in Kenya. To explore the complexity of migration we extend the standard Harris-Todaro framework to account for land inequality and size. In addition, we disaggregate urban destination into different types of urban centers and also consider rural-to-rural migration. Using logistic regressions, we show that Kenyan household heads born in districts with higher land inequality, smaller per capita land and lower per capita rural income are more likely to migrate. Hence, poverty and inequality in Kenyan rural districts are transmitted to other areas over time. Our estimates also show that, for peasants whose incomes are squeezed by larger land inequality, migration from villages to suburban Nairobi, smaller cities, and villages in different districts could be a preferable strategy to migrating to Metro Nairobi. The impact of land inequality is more significant for male migration than female migration. Moreover, the level of education, age, marital status, gender, religion and distance to Nairobi play a role in the migration behavior of rural dwellers. Classification-JEL: O15, Q15, O12, O55 |
| Keywords: | migration, distribution, agrarian structures |
| Date: | 2017–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2017-02&r=ure |
| By: | Leung, Charles Ka Yui; Tse, Chung-Yi |
| Abstract: | We add arbitraging middlemen -- investors who attempt to profit from buying low and selling high -- to a canonical housing market search model. Flipping tends to take place in sluggish and tight, but not in moderate, markets. To follow is the possibility of multiple equilibria. In one equilibrium, most, if not all, transactions are intermediated, resulting in rapid turnover, a high vacancy rate, and high housing prices. In another equilibrium, few houses are bought and sold by middlemen. Turnover is slow, few houses are vacant, and prices are moderate. Moreover, flippers can enter and exit en masse in response to the smallest interest rate shock. The housing market can then be intrinsically unstable even when all flippers are akin to the arbitraging middlemen in classical finance theory. In speeding up turnover, the flipping that takes place in a sluggish and illiquid market tends to be socially beneficial. The flipping that takes place in a tight and liquid market can be wasteful as the efficiency gain from any faster turnover is unlikely to be large enough to offset the loss from more houses being left vacant in the hands of flippers. Based on our calibrated model, which matches several stylized facts of the U.S. housing market, we show that the housing price response to interest rate change is very non-linear, suggesting cautions to policy attempt to “stabilize” the housing market through monetary policy. |
| Keywords: | Search and matching, housing market, liquidity, flippers and speculators, financing and bargaining advantage. |
| JEL: | D83 G12 R30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76443&r=ure |
| By: | Sambit Bhattacharyya (Department of Economics, University of Sussex); Louis Conradie (Department of Economics, University of Sussex); Rabah Arezki (Research Department, IMF) |
| Abstract: | If the central government is a revenue maximizing Leviathan then resource discovery and democratization should have a discernible impact on the degree of fiscal decentralization. We systematically explore this effect by exploiting exogenous variation in giant oil and mineral discoveries and permanent democratization. Using a global dataset of 77 countries over the period 1970 to 2012 we find that resource discovery has very little effect on revenue decentralization but induces expenditure centralization. Oil discovery appears to be the main driver of centralization and not minerals. Resource discovery leads to centralization in locations which have not experienced permanent democratization. Tax and intergovernmental transfers respond most to resource discovery shocks and democratization whereas own source revenue, property tax, educational expenditure, and health expenditure do not seem to be affected. Higher resource rent leads to more centralization and the effect is moderated by democratization. |
| Keywords: | Resource discovery; Resource rent; Democratization; Fiscal decentralization |
| JEL: | H41 H70 O11 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:08916&r=ure |
| By: | Thiemo Fetzer (Department of Economics, University of Warwick); Samuel Marden (Department of Economics, University of Sussex) |
| Abstract: | Weak property rights are strongly associated with underdevelopment, low state capacity and civil conflict. In economic models of conflict, outbreaks of violence require two things: the prize must be both valuable and contestable. This paper exploits spatial and temporal variation in contestability of land title to explore the relation between (in)secure property rights and conflict in the Brazilian Amazon. Our estimates suggest that, at the local level, assignment of secure property rights eliminates substantively all land related conflict, even without changes in enforcement. Changes in land use are also consistent with reductions in land related conflict. |
| Keywords: | property rights, land titling, conflict, deforestation |
| JEL: | O12 Q15 D74 Q23 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:09216&r=ure |
| By: | Timothy Grieder (Department of Economics, Carleton University); Hashmat Khan (Department of Economics, Carleton University) |
| Abstract: | Chaney, Sraer and Thesmar (2012) find that over the 1993–2007 period, a $1 increase in collateral (the value of real estate a firm actually owns) leads the representative US public corporation to raise its investment by $0.06. We first demonstrate that data Winsorization induces a strong bias in favour of finding this result. There is no relationship ($0.00 per $1) between the value of real estate a firm owns and its investment in the unaltered data. We also show that the identification approach based on local variations in real estate prices does not provide evidence on the collateral channel. |
| Keywords: | Collateral, Real Estate Prices, Corporate Investment, Winsorization, Aggregate Shocks |
| JEL: | D22 G31 R30 |
| Date: | 2017–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:17-03&r=ure |
| By: | Harounan Kazianga; Leigh Linden; Cara Orfield; Matt Sloan; Ali Protik |
| Abstract: | We evaluate the long term effect of a "girl-friendly" primary school program in Burkina Faso, using a regression discontinuity design. The intervention consisted in upgrading existing three-classroom schools to six-classroom schools in order to accommodate more grades. After 6 years, the program increased enrollment by 15.4 percentage points and increased test scores by 0.29 standard deviations. Students in treatment schools progress farther through the grades, compared to students in non-selected schools. These upgraded schools are effective at getting children into school, at getting children start school on time and at keeping children in school longer. Overall, we find that the schools are able to sustain large impacts observed about 3 years earlier, with enrollment declining slightly from 18.5 to 14.9 for the cohorts of children who were exposed to both the first and second phases of the intervention. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:okl:wpaper:1609&r=ure |
| By: | Mizuki Kawabata (Faculty of Economics, Keio University); Yukiko Abe (Graduate School of Economics and Business Administration, Hokkaido University) |
| Abstract: | We examine intra-metropolitan patterns of geographic disparities in female participation in the labor market and their associations with commuting time in the Tokyo metropolitan area. Our analysis based on the Global Moran's I and Getis-Ord Gi* statistics reveals that the spatial patterns of labor force participation and regular employment rates differ markedly by marital status and the presence of children. Compared with unmarried women and married women without children, married women with children exhibit more significant spatial clustering of high and low values of labor force participation and regular employment rates, and these rates are negatively correlated with male commuting time. The non-spatial and spatial regression results show that for married women with children, longer commuting time is significantly associated with lower participation and regular employment rates, while for unmarried women and married women without children, the associations are mostly insignificant. These results are robust to different model specifications and spatial weights. Our findings suggest that policies alleviating commuting constraints help women with children in dual-earner couples more actively participate in the labor market. |
| Keywords: | female labor force participation, spatial patterns, geographic information systems (GIS), spatial statistics, Tokyo metropolitan area |
| JEL: | J21 R12 C30 |
| Date: | 2016–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2016-024&r=ure |
| By: | Partridge, Mark; Feng, Bo; Rembert, Mark |
| Abstract: | Manmade climate change (CC) has catastrophic consequences. The United States has already experienced wholesale population realignment due to climate as households have relocated to the Sunbelt and West. The irony is that people are moving towards the heat and major storms associated with CC. As CC intensifies, with high rates of internal U.S. factor mobility, firms and households will likely again relocate to areas with higher utility and profits, reducing CC costs. Yet current research typically focuses on CC costs in a given location without considering this realignment. We propose several avenues to overcome such shortcomings in U.S. CC modelling. |
| Keywords: | Climate change, migration, prediction, spatial equilibrium |
| JEL: | Q54 R0 R11 R23 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76419&r=ure |
| By: | Bernd Frick (Paderborn University); Anica Rose (Paderborn University) |
| Abstract: | Using a large sub-sample of expeditions from the “Himalayan Database”, we analyze the impact of a climbing team’s cultural value diversity on various performance outcomes. Irrespective of an already large (and still growing) body of theoretical and empirical research on the diversity-performance link, the study of the multifaceted concept “culture” under rather extreme conditions has hitherto been largely ignored. We extend the literature by focusing on the effects of the cultural value diversity of a commercial climbing team on expedition outcomes. We test our hypotheses using data from 1,168 expeditions that took place between 1990 and 2014 involving mostly “amateur” climbers from all over the world. We find that the probability of team success is positively influenced by a culturally more heterogeneous team composition. Individual-level analyses further reveal that an increase in a team member’s cultural distance increases the probability of individual success, but also the probability of experiencing an injury or death. This result shows that the higher collective performance in culturally diverse teams is driven by the isolation of single team members. |
| Keywords: | team diversity; team performance; cultural value diversity |
| JEL: | M14 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:24&r=ure |
| By: | Tamai, Yoshihiro; Shimizu, Chihiro; Nishimura, Kiyohiko G. |
| Abstract: | This paper investigates the effect of aging population on property (land) prices. A theory of very long run portfolio choice is developed for a transition economy from young and growing to rapidly aging population and applied to estimate property price inflation in Japanese municipal markets. The results are stunning. The simulation results in which income factors are assumed to be fixed at the 2005-2010 growth level suggest that the average residential property price (land price) in the Japanese municipalities may decrease as much as 19 percent from the present to 2020, 24 percent to 2030, and 32 percent to 2040. |
| Keywords: | Aging, Asset Prices, Long Run Portfolio Choice, Constant Monetary Quantity (CMQ), Inflation Target (IT), Price Stability |
| JEL: | G11 G12 J11 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:65&r=ure |
| By: | Marjan Petreski; Nikica Mojsoska-Blazevski; Marcelo Bérgolo |
| Abstract: | The aim of this study is to assess how the duration of the unemployment spell of Macedonian youth affects later employment (the employment ‘scarring’ effect) and wage outcomes (the wage ‘scarring’ effect). For this purpose, we first devise a model in which the unemployment spell is determined by individual and household characteristics, and work attitudes and preferences. A discrete-time duration method is used to estimate this model. Then, we rely on standard employment and Mincer earnings functions. We repeatedly impute missing wages to address the selection of observables, and use the regional unemployment rate when the individual finished school as an instrument to mitigate the selection of unobservable. The School to Work Transition Survey 2012 is used. Results robustly suggest a presence of an employment scar as those young persons who stayed unemployed over a longer period of time were found to have lower chances of finding a job afterwards. On the other hand, the study does not provide evidence for the existence of a wage scar. |
| Keywords: | employment scarring, wage scarring, extremely high unemployment, Macedonia |
| JEL: | E24 J24 J64 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2016-23&r=ure |
| By: | Fuster, Andreas (Federal Reserve Bank of New York); Lo, Stephanie (Harvard University); Willen, Paul S. (Federal Reserve Bank of Boston, NBER) |
| Abstract: | The U.S. mortgage market links homeowners with savers all over the world. In this paper, we ask how much of the flow of money from savers to borrowers goes to the intermediaries that facilitate these transactions. Based on a new methodology and a new administrative data set, we find that the price of intermediation, measured as a fraction of the loan amount at origination, is large— 142 basis points on average over the 2008-14 period. At daily frequencies, intermediaries pass on price changes in the secondary market to borrowers in the primary market almost completely. At monthly frequencies, the price of intermediation fluctuates significantly and is highly sensitive to volume, likely reflecting capacity constraints: a one standard deviation increase in applications for new mortgages leads to a 30-35 basis point increase in the price of intermediation. Additionally, over 2008-14, the price of intermediation increased about 30 basis points per year, potentially reflecting higher mortgage servicing costs and an increased legal and regulatory burden. Taken together, the sensitivity to volume and the positive trend led to an implicit total cost to borrowers of about $140 billion over this period. Finally, increases in application volume associated with “quantitative easing” (QE) led to substantial increases in the price of intermediation, which attenuated the benefits of QE to borrowers. |
| Keywords: | mortgage finance; financial intermediation; monetary policy transmission |
| JEL: | E44 E52 G21 L11 |
| Date: | 2017–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:805&r=ure |
| By: | Gianni Betti; Ruzhdie Bici; Laura Neri; Thomas Pave Sohnesen; Ledia Thomo |
| Abstract: | This paper presents the results of the latest poverty mapping update using the most recent LSMS survey of 2012 and the most recent Census 2011. This poverty map still builds on the methodology outlined in Elbers et al. (2003), but also innovates by including a number of new methodological developments, the most important described by Elbers and Van der Weide (2014). The results presented here can be a powerful tool for policymakers, as they allow better understanding and addressing spatial inequalities in welfare across Albania; this is particularly needed since in the last decade the internal movements led to large-scale urbanization in some areas and drastic depopulation in others. While internal movements are multifaceted, it is apparent that the large majority of internal migration flows is in the direction of Tirana. |
| Keywords: | Poverty Mapping; LSMS; Census; Albania |
| JEL: | I32 C21 R58 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:745&r=ure |
| By: | Ortuño, Ignacio; Gomes, Joseph; Desmet, Klaus |
| Abstract: | This paper theoretically analyzes and empirically investigates the importance of local interaction between individuals of different linguistic groups for the provision of public goods at the national level. Depending on whether local interaction mitigates or reinforces antagonism towards other groups, the micro-founded theory we develop predicts that a country's provision of public goods (i) decreases in its overall linguistic fractionalization, and (ii) either increases or decreases in how much individuals locally learn about other groups. After constructing a 5 km by 5 km geographic dataset on language use for 223 countries, we compute measures of overall fractionalization and local learning, and investigate their relation to public good provision at the country level. While overall fractionalization worsens outcomes, we find a positive causal relation between local learning and public goods. Local mixing therefore mitigates the negative impact of a country's overall linguistic fractionalization. An IV strategy shows that this result is not driven by the possible endogenous spatial distribution of language speakers within countries. |
| Keywords: | Local interaction; Public goods; Diversity |
| JEL: | D82 J15 H5 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:23940&r=ure |
| By: | Ana L Kassouf; Luca Tiberti; Marcos Garcias; Ida Bojicic Ono |
| Abstract: | In this study we analyze the impact of domestic and market child labor on learning using Prova Brazil census data from 2007 and 2011. To do that, we created a large panel dataset with students in 5th and 9th Grades. To measure the impact of children working in the labor market and/or in their households on Portuguese and Mathematics test scores, we estimated fixed effect models. An instrumental variable approach, proposed by Lewbel, was applied to the models to control for the endogeneity of child labor. Possible attrition bias was taken into account through inverse probability weights. Results show that the work performed by children either in the household, or in the labor market was detrimental to their academic performance, with working only in the labor market showing the largest impact for both girls and boys, followed by working both in the market and inside the house, and by working in the house alone. The largest impact was for 5th Grade girls who suffered a reduction of 19% in their Portuguese test scores when they worked only in the labor market. The largest impact for boys was a reduction of 14% in their 5th Grade Portuguese test scores when they worked only in the labor market. |
| Keywords: | YI21, J13, C23, C26, C36 |
| JEL: | I21 J13 C23 C26 C36 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2016-27&r=ure |
| By: | Ashish Arora; Sharon Belenzon; Honggi Lee |
| Abstract: | Spillover of knowledge is considered to be an important cause of agglomeration of inventive activity. Many studies argue that knowledge spillovers are localized based on the observation that patents tend to cite nearby patents disproportionately. Specifically, patent citations are interpreted as mapping the transmission of knowledge from the cited invention to the citing invention. The localization of patent citations is therefore taken as evidence that such knowledge transmission is also localized. Localization of knowledge transmission, however, may not be the only reason for why patent citations are localized. Using a set of citations that are unlikely to be associated with knowledge transmission from the cited to the citing invention, we present evidence that challenges the view that localization of citations is driven by localized knowledge transmission. Though localized knowledge transmission may well exist, it is unlikely to be captured by patent citations |
| JEL: | O32 O34 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23036&r=ure |
| By: | Schoors, Koen; Semenova, Maria; Zubanov, Andrey |
| Abstract: | We analyze whether a depositor’s familiarity with a bank affects depositor behavior during a financial crisis. Familiarity is measured by the presence of regional or local cues in the bank’s name, while depositor behavior is considered in terms of depositor sensitivity to observable bank risk (market discipline exerted by depositors). Using the 2001–2010 bank-level and region-level data for Russia, we show the evidence that depositors use quantity-based discipline on all banks in the sample. The evidence of a price-based discipline mechanism, however, is virtually absent. We find that depositors of familiar banks were less sensitive to bank risk after a financial crisis than depositors at unfamiliar banks. To assure the results are driven by familiarity bias and not implicit support of regional governments to banks with regional cues in their names, we interact the variables with measures of trust in local governments and regional affinity. We find a “flight to familiarity” effect strongly present in regions with strong regional affinity, while the effect is rejected in regions with greater trust in regional and local governments. This suggests that the results are driven by familiarity rather than implicit protection from trusted regional or local governments. |
| JEL: | G21 G01 P2 |
| Date: | 2017–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2017_001&r=ure |
| By: | Massimo Baldini; Vito Peragine; Luca Silvestri |
| Abstract: | We study the effect of quality of government on subjective poverty across European countries and regions, taking advantage of recently released data on the quality of public institutions at the regional level, and of information on household subjective poverty. In the analysis we try to separate the effects of quantity and quality of public services on perceived well-being, controlling for the size of the local government and for the receipt of in-kind services by each household of the sample. Results suggest that good governance significantly reduces the probability of being subjectively poor, both over the whole population and also among households that are poor in terms of monetary income. We then estimate the greater cost that a family has to bear in order to achieve a given level of welfare, if it lives in a region with inefficient public institutions. Our measure of this inefficiency cost is around 6% of disposable income. |
| Keywords: | Quality of government, subjective poverty, minimum income, European regions, poverty line |
| JEL: | I32 H1 H7 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0149&r=ure |
| By: | Wu, Yiyun (Asian Development Bank Institute); Zhu, Xiwei (Asian Development Bank Institute) |
| Abstract: | We investigate the trends and determinants of geographic concentration and industrial specialization in the People’s Republic of China (PRC) using interprovincial panel data for the period from 1999 to 2010. It shows that, after 2005, both geographic concentration and industrial specialization began to decrease, resulting in an increased similarity of provincial industrial structure. Industrial policies of provincial governments cause geographic dispersion and inverse specialization. The result is robust when using instrumental variables to deal with possible reverse causality and omitted variable problems. The mechanism behind this is that central government industrial policy, which tends to last for several years, is an important reference document for each provincial planner. This causes the less-developed regions to deviate from their comparative advantages, resulting in a combination of insufficient geographic concentration and inverse specialization in the PRC. |
| Keywords: | geographic concentration; dispersal; industrial policy; specialization; local government; provincial government; economic geography |
| JEL: | L59 L60 R12 |
| Date: | 2017–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0633&r=ure |
| By: | H Peyton Young; Mark Paddrik |
| Abstract: | Abstract This paper analyzes counterparty exposures in the credit default swaps market and examines the impact of severe credit shocks on the demand for variation margin, which are the payments that counterparties make to offset price changes. We employ the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) shocks and estimate their impact on the value of CDS contracts and the variation margin owed. Large and sudden demands for variation margin may exceed a firm's ability to pay, leading some firms to delay or forego payments. These shortfalls can become amplified through the network of exposures. Of particular importance in cleared markets is the potential impact on the central counterparty clearing house. Although a central node according to conventional measures of network centrality, the CCP contributes less to contagion than do several peripheral firms that are large net sellers of CDS protection. During a credit shock these firms can suffer large shortfalls that lead to further shortfalls for their counterparties, amplifying the initial shock. |
| Keywords: | Credit default swaps, stress testing, systemic risk, financial networks |
| JEL: | D85 G01 G17 L14 |
| Date: | 2017–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:821&r=ure |
| By: | Sanni N. Breining; Joseph J. Doyle, Jr.; David N. Figlio; Krzysztof Karbownik; Jeffrey Roth |
| Abstract: | Birth order has been found to have a surprisingly large influence on educational attainment, yet much less is known about the role of birth order on delinquency outcomes such as disciplinary problems in school, juvenile delinquency, and adult crime: outcomes that carry significant negative externalities. This paper uses particularly rich datasets from Denmark and the state of Florida to examine these outcomes and explore potential mechanisms. Despite large differences in environments across the two areas, we find remarkably consistent results: in families with two or more children, second-born boys are on the order of 20 to 40 percent more likely to be disciplined in school and enter the criminal justice system compared to first-born boys even when we compare siblings. The data allow us to examine a range of potential mechanisms, and the evidence rules out differences in health at birth and the quality of schools chosen for children. We do find that parental time investment measured by time out of the labor force is higher for first-borns at ages 2-4, suggesting that the arrival of a second-born child extends early-childhood parental investments for first-borns. |
| JEL: | J01 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23038&r=ure |
| By: | Roesel, Felix |
| Abstract: | In many federal countries, local governments run large deficits, even when fiscal supervision by state authorities is tight. I investigate to which extent party alignment of governments and fiscal supervisors influences budget deficits. The dataset includes 427 German local governments for the period 2000-2004. I exploit a period after a far-reaching institutional reform that entirely re-distributed political powers on both the government level and the fiscal supervisor level. Results do not show that party alignments of governments and supervisors (co-partisanship) drive short-term deficits. Instead, I find that the ideology of partisan governments and supervisors matters: left-wing local governments run higher deficits than their right-wing counterparts; left-wing supervisors tolerate higher deficits than right-wing supervisors. These findings imply that political independence for fiscal supervisors is recommended. |
| Keywords: | Local government,Budget deficits,Fiscal supervision,Partisan cycle |
| JEL: | H62 H74 H77 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0217&r=ure |
| By: | Aldieri, Luigi; Vinci, Concetto Paolo |
| Abstract: | The aim of this paper is to investigate the extent to which knowledge spillovers effects are sensitive to different levels of innovation. We develop a theoretical model in which the core of spillover effect is showed and then we implement the empirical model to test for the results. In particular, we run the quantile regression for panel data estimator (Baker, Powell and Smith, 2016), to correct the bias stemming from the endogenous regressors in a panel data sample. The findings identify a significant heterogeneity of technology spillovers across quantiles: the highest value of spillovers is observed at the lowest quartile of innovation distribution. The results might be interpreted to provide some useful implications for industrial policy strategy |
| Keywords: | Innovation; Spillovers; Quantile regression; Knowledge diffusion |
| JEL: | C21 O32 O33 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76405&r=ure |
| By: | Campaniello, Nadia; Gavrilova, Evelina |
| Abstract: | Research on the gender variation in the crime market, a peculiar labor market for illegal activities, is limited, although the issue is relevant per se and for its policy implications. We document a gender gap in criminal activities, based on property and white collar crimes, using data from the U.S. National Incident Based Reporting System. We show that there is a gender participation gap where around 30 percent of the crimes are committed by females. In order to explain, at least in part, the gender participation gap we investigate whether there are differences in incentives to be involved in criminal activities and in responsiveness to these incentives across gender. In particular we focus on criminal earnings and probability of arrest. We show that on average females earn 18 percent less than males while they face the same likelihood of arrest. We find that females are more responsive to changes in the expected probability of arrest, while males respond more to changes in the expected illegal earnings. The fact that females behave differently than males has implications for the heterogeneity in response to crime control policies. In addition, using a Blinder-Oaxaca type decomposition technique, we find that differences in incentives explain about 12 percent of the gender crime gap, while differences in responsiveness explain about 55 percent of the gap. |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:18833&r=ure |
| By: | John Kennan |
| Abstract: | In 2004, the European Union admitted 10 new countries, and wages in these countries were generally well below the levels in the existing member countries. Citizens of these newly-admitted countries were subsequently free to take jobs anywhere in the EU, and many did so. In 2015, a large number of refugees from Syria and other broken countries sought to migrate to EU countries (along very dangerous routes), and these refugees were met with fierce resistance, at least in some places. This paper seeks to understand the labor market implications of allowing free migration across borders, with particular reference to the EU. The aim is to quantify the migration flows associated with EU enlargement, and to analyze the extent to which these flows affected equilibrium wages. The main conclusion is that the real wage effects are small, and the gains from open borders are large. |
| JEL: | E25 F22 J61 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23048&r=ure |
| By: | Kosuke Uetake; Nathan Yang |
| Abstract: | We investigate the role of heterogeneous peer effects in encouraging healthy and sustainable lifestyles. Our analysis revolves around one of the largest and most extensive databases about weight loss, which contains well over 10 million observations that track individual participants’ meeting attendance and progress in a large national weight loss program. A few key findings emerge. First, while higher weight loss among average performing peers leads to lower future weight loss for an individual, the effect of the top weight loss performer among peers leads to greater future weight loss for that same individual. Second, the discouraging effects from average peers and encouraging effects from top performing peers are magnified for individuals who struggled with weight loss in the past. Third, the encouraging effect of top performers has a long-run impact on an individual’s weight loss success. Finally, we provide suggestive evidence that the discrepancy between the top and average performer effects is not likely an artifact of salience or informativeness of top performers, but instead, driven by its positive impact on the motivation to accomplish weight loss goals. Given our empirical findings, we discuss managerial implications on meeting design. |
| Keywords: | big data, customer development, customer relationship management, healthy and sustainable living, subscription services, weight management |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cch:wpaper:170001&r=ure |
| By: | Vincent Boucher |
| Abstract: | I present a strategic model of network formation with positive network externalities in which individuals have preferences for being part of a clique. I build on the theory of supermodular games (Topkis, 1979) and focus on the greatest Nash equilibrium of the game. Although the structure of the equilibrium network cannot be expressed analytically, I show that it can easily be simulated. I propose an approximate Bayesian computation (ABC) framework to make inferences about individuals' preferences, and provide an illustration using data on high school friendships. |
| Keywords: | Network Formation, Supermodular Games, Approximate Bayesian Computation |
| JEL: | D85 C11 C15 C72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:crrecr:1604&r=ure |
| By: | John Ermisch; Fiona Steele |
| Abstract: | BACKGROUND It is plausible that people take into account anticipated changes in family size in choosing where to live. But estimation of the impact of anticipated events on current transitions in an event history framework is challenging because expectations must be measured in some way and, like indicators of past childbearing, expected future childbearing may be endogenous with respect to housing decisions. OBJECTIVE The objective of the study is to estimate how expected changes in family size affect residential movement in Great Britain in a way which addresses these challenges. METHODS We use longitudinal data from a mature 18-wave panel survey, the British Household Panel Survey, which incorporates a direct measure of fertility expectations. The statistical methods allow for the potential endogeneity of expectations in our estimation and testing framework. RESULTS We produce evidence consistent with the idea that past childbearing mainly affects residential mobility through expectations of future childbearing, not directly through the number of children in the household. But there is heterogeneity in response. In particular, fertility expectations have a much greater effect on mobility among women who face lower costs of mobility, such as private tenants. CONCLUSIONS Our estimates indicate that expecting to have a(nother) child in the future increases the probability of moving by about 0.036 on average, relative to an average mobility rate of 0.14 per annum in our sample. Contribution: Our contribution is to incorporate anticipation of future events into an empirical model of residential mobility. We also shed light on how childbearing affects mobility. |
| JEL: | C1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68878&r=ure |
| By: | Nemati, Mehdi; Buck, Steven; Soldati, Hilary |
| Abstract: | In this paper, the effects of Dropcountr on water usage were examined using household- level panel data for the City of Folsom, California, from January-2013 to September- 2016. Results suggest that the introduction of the Dropcountr services for the population of households participating in Dropcountr causes an aggregate treatment effect of 7% reduction in water usage with a significant variation in the effect across households dependent on baseline consumption quintile. In response to the Dropcountr services, households in the highest quintile of baseline consumption reduce water usage by an estimated 13%. |
| Keywords: | Automated meters, Non-price conservation, California water, Urban water demand, Consumer/Household Economics, Demand and Price Analysis, Institutional and Behavioral Economics, Resource /Energy Economics and Policy, Q250, D12, |
| Date: | 2017–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252738&r=ure |