nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒02‒12
43 papers chosen by
Steve Ross
University of Connecticut

  1. Bank-Specific Shocks and House Price Growth in the U.S. By Franziska Bremus; Thomas Krause; Felix Noth
  2. What account for the differences in rent-price ratio and turnover rate? A search-and-matching approach By Daisy J. HUANG; Charles Ka Yui LEUNG; Chung-Yi TSE
  3. A Spatial Econometric Analysis of Land Use Efficiency in Large and Small Municipalities By Gianni Guastella; Stefano Pareglio; Paolo Sckokai
  4. The Effect of Performance-Based Incentives on Educational Achievement: Evidence from a Randomized Experiment By Steven Levitt; John List; Sally Sadoff
  5. Industrial clusters: The case for Special Economic Zones in Africa By Carol Newman; John Page
  6. A criterion to compare mechanisms when solutions are not unique, with applications to constrained school choice By DECERF, Benoit; VAN DER LINDEN, Martin
  7. An online experiment on cooperation and groupishness across urban districts By Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
  8. It is not what you know but who you know: Heterogenous peer effects in education By Ana María Díaz- Ignacio Penagos; Ignacio Penagos
  9. Plague and long-term development: the lasting effects of the 1629-30 epidemic on the Italian cities By Guido Alfani; Marco Percoco
  10. So close yet so unequal: Reconsidering spatial inequality in U.S. cities. By Francesco Andreoli; Eugenio Peluso
  11. What Makes Cities More Productive?: gglomeration economies and the role of urban governance: Evidence from 5 OECD Countries By Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke
  12. Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes After Plant Closures By Jahn, Elke J.; Neugart, Michael
  13. The impact of mining on spatial inequality: Recent evidence from Africa By Tony Addison; Amadou Boly; Anthony Mveyange
  14. The baraccati of Rome: internal migration, housing, and poverty in fascist Italy (1924-1933) By Stefano Chianese
  15. Knowledge Composition, Jacobs Externalities and Innovation Performance in European Regions By Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe
  16. A Proposed Sustainable Transportation and Urban Mobility Design By Neyestani, Behnam
  17. Credit Scores, Social Capital, and Stock Market Participation By Jesse Bricker; Geng Li
  18. The Spatial Efficiency Multiplier and Random Effects in Spatial Stochastic Frontier Models By Glass, Anthony J.; Kenjegalieva, Karligash; Sickles, Robin C.; Weyman-Jones, Thomas
  19. Beggar-Thy-Neighbour Tax Cuts: Mobility after a Local Income and Wealth Tax Reform in Switzerland By Martinez, Isabel Z.
  20. Public policies in dangerous places: the Unified Educational Centers (CEU) in the city of São Paulo By Rômullo Carvalho; Marcos Ki Hyung Lee
  21. The cyclical position of housing prices – a VECM approach for Hungary By Tamás Berki; Tibor Szendrei
  22. House prices and capital inflows in Spain during the boom: evidence from a cointegrated VAR and a Structural Bayesian VAR By Juan Carlos Cuestas
  23. The inter-temporal dimension to knowledge spillovers: any non-environmental reason to support clean innovation? By Christos Karydas
  24. The Wage Effects of Regional Brain Gain and Brain Drain Revisited By Möller, Joachim; Eppelsheimer, Johann
  25. The Impact of Employment on Housing Prices: Detailed Evidence from FDI in Ireland By Kerri Agnew; Ronan Lyons
  26. The Economic Effects of Public Financing: Evidence from Municipal Bond Ratings Recalibration By Adelino, Manuel; Cunha, Igor; Ferreira, Miguel
  27. Gendered internal migration patterns in Senegal By Isabelle Chort; Philippe De Vreyer; Thomas Zuber
  28. Vocational Schooling versus Apprenticeship Training. Evidence from Vacancy Data By Parey, Matthias
  29. Transaction-Based and Appraisal-Based Capitalization Rate Determinants By Alain Chaney; Martin Hoesli
  30. Measuring the value of housing services in household surveys: an application of machine learning approach By Embaye, Weldensie T.; Zereyesus, Yacob A.
  32. Spatial Pricing in Ride-Sharing Networks By Bimpikis, Kostas; Candogan, Ozan; Saban, Daniela
  33. Does formative feedback help or hinder students? An empirical investigation By Carlos Cortinhas
  34. Long-Range Growth: Economic Development in the Global Network of Air Links By Campante, Filipe R.; Yanagizawa-Drott, David
  35. Top Lights - Bright Spots and their Contribution to Economic Development By Krause, Melanie; Bluhm, Richard
  36. Measuring sovereign risk spillovers and assessing the role of transmission channels: a spatial econometrics approach By DEBARSY, Nicolas; DOSSOUGOIN, Cyrille; ERTUR, Cem; GNABO, Jean-Yves
  37. Edukacja jako dobro publiczne - próba kwantyfikacji By Polcyn, Jan
  38. Decentralization in Heterogeneous Regions: A Biased Technological Change Approach By Feder, Christophe; Kataishi, Rodrigo Ezequiel
  39. Methods for Accounting for Co-Teaching in Value-Added Models (Journal Article) By Heinrich Hock; Eric Isenberg
  40. The Production Function for Housing: Evidence from France By Pierre-Philippe Combes; Gilles Duranton; Laurent Gobillon
  41. Development of pre-school education in Chelyabinsk region: modern tendencies and problems By Korotina, Natalya; Nechaeva, Svetlana
  42. Ukraine's Regional Economic Growth and Analysis of Regional Disparities By Svitlana Maksymenko
  43. The Effect of Lock-Ups on the Suggested Real Estate Portfolio Weight By Martin Hoesli; Eva Liljeblom; Anders Löflund

  1. By: Franziska Bremus; Thomas Krause; Felix Noth
    Abstract: This paper investigates the link between mortgage supply shocks at the banklevel and regional house price growth in the U.S. using micro-level data on mortgage markets from the Home Mortgage Disclosure Act for the 1990-2014 period. Our results suggest that bank-specific mortgage supply shocks indeed affect house price growth at the regional level. The larger the idiosyncratic shocks to newly issued mortgages, the stronger is house price growth. We show that the positive link between idiosyncratic mortgage shocks and regional house price growth is very robust and economically meaningful, however not very persistent since it fades out after two years.
    Keywords: House Prices, Idiosyncratic Shocks, Granularity, Credit Supply
    JEL: E44 G21 R20
    Date: 2017
  2. By: Daisy J. HUANG; Charles Ka Yui LEUNG; Chung-Yi TSE
    Abstract: We build an on-the-house-search model and show analytically that the rent-to-price ratio (or rental yield) and turnover rate, which are frequently used metrics for the housing market, are jointly determined in equilibrium. We therefore adopt a simultaneous equation approach on matched sale-rental pairs in our empirical investigation, as a housing unit cannot be owner-occupied and renter-occupied at the same time. Our empirical results confirm a higher turnover rate is associated with a lower rent-to-price ratio, as predicted by the model. Furthermore, our results suggest a form of “dichotomy” in the empirical determinants of rental yield and turnover at the real-estate-development (RED) level: the demographic structure, and past return performance affect its turnover rate, while popularity, human capital environment, mortgage burden, and long run rent growth determine the rental yield. No evidence of “thick market effect” is found. The robustness of our results are established through a series of tests. In addition to these findings, our tractable search-theoretic model, a ranking of more than 130 RED in Hong Kong based on the popularity index we construct, and the estimated brand-premium for different major real estate developers may also carry independent research and practical interests.
    Date: 2017–02
  3. By: Gianni Guastella (Università Cattolica and Fondazione Eni Enrico Mattei); Stefano Pareglio (Università Cattolica and Fondazione Eni Enrico Mattei); Paolo Sckokai (Università Cattolica)
    Abstract: We estimate the relationship between urban spatial expansion and its socio-economic determinants in Lombardy, the most urbanised region of Italy (and one of the most urbanized of the European Union), at the municipality level. Test results suggest that this relationship varies significantly among municipalities of different size and findings support the hypothesis that larger ones are more efficient in managing land take. In particular, we find that the marginal land consumption per new household is inversely related to the size of the municipality and we link this evidence to the fact that, since more space is often available, small municipalities pay less institutional attention to the issue of land take and consequently internalise less the environmental externalities. This evidence calls for a reflection on the role of planning policies and the effectiveness of undifferentiated measures to contain land take, especially in the case of Italy, where the municipalities, more than 99% of which have less than 50,000 inhabitants, decide on land use transformations.
    Keywords: Land Take, City Size, Threshold Regression, Spatial Econometrics
    JEL: O18 Q15 R14
    Date: 2017–01
  4. By: Steven Levitt; John List; Sally Sadoff
    Abstract: We test the effect of performance-based incentives on educational achievement in a low-performing school district using a randomized field experiment. High school freshmen were provided monthly financial incentives for meeting an achievement standard based on multiple measures of performance including attendance, behavior, grades and standardized test scores. Within the design, we compare the effectiveness of varying the recipient of the reward (students or parents) and the incentive structure (fixed rate or lottery). While the overall effects of the incentives are modest, the program has a large and significant impact among students on the threshold of meeting the achievement standard. These students continue to outperform their control group peers a year after the financial incentives end. However, the program effects fade in longer term follow up, highlighting the importance of longer term tracking of incentive programs.
    Date: 2016
  5. By: Carol Newman; John Page
    Abstract: Firms tend to cluster in close geographic proximity to each other to benefit from reduced transport costs, shared inputs, and productivity spillovers due to learning and technology transfers. Evidence from low-income countries suggests that such agglomeration economies may be substantial in endogenously formed clusters. This raises the question of whether spatial industrial policies can be designed to facilitate clustering. In this paper, we consider the case for creating Special Economic Zones (SEZs) in Africa. We document at the country level the state of current SEZ programmes and the policy measures in place for their promotion. We give an overview of the evidence on their success and provide a set of policy recommendations to improve SEZs performance.
    Keywords: agglomeration, Special Economic Zones, spatial industrial policy, Africa
    Date: 2017
  6. By: DECERF, Benoit (Universit e de Namur); VAN DER LINDEN, Martin (Vanderbilt University)
    Abstract: We introduce a new criterion to compare the properties of mechanisms when the solution concept used induces multiple solutions. Our criterion generalizes previous approaches in the literature. We use our criterion to compare the stability of constrained versions of the Boston (BOS) and deferred acceptance (DA) school choice mechanisms in which students can only rank a subset of the schools they could potentially access. When students play a Nash equilibrium, we show that there is a stability cost to increasing the number of schools students can rank in DA. On the other hand, when students only play undominated strategies, increasing the number of schools students can rank increases stability. We find sim- ilar results for BOS. We also compare BOS and DA. Whatever the number of schools students can rank, we find that BOS is more stable than DA in Nash equilibrium, but less stable in undominated strategies.
    Keywords: Multiple solutions, School choice, Stability, Boston mecha- nism, Deferred acceptance mechanism, Nash equilibrium, Undominated strategy
    JEL: C78 D47 D82 I
    Date: 2016–10–04
  7. By: Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
    Abstract: We present experimental evidence that illuminates the trade-off between efficiency considerations and social identity concerns in an inter-city multilevel public goods game. In total, 616 inhabitants of Heidelberg and Mannheim take part in an online experiment in which they can allocate an initial endowment between a private account, an excludable (local) public good, and a non-excludable (regional) public good. We vary the efficiency of the two public goods and find that participants substitute contributions away from the local to the regional public good if the latter is more efficient. To investigate the role of social identity considerations we compare a condition in which the group composition in unknown to a decision in which participants are informed that they share the local public good with three other participants from their own neighborhood. We do not find that a salient common social affiliation affects participants’ behavior per se. If the common local affiliation is revealed through a label, only citizens perceiving a strong local identification adjust their contribution behavior and contribute more to the excludable local public good. Revealing the local affiliation becomes even more effective in a priming condition when participants are remembered of their common local affiliation before they indicate their contribution decision.
    JEL: C90 D70 H41
    Date: 2016
  8. By: Ana María Díaz- Ignacio Penagos; Ignacio Penagos
    Abstract: This paper explores the presence of peer effects in education. We investigate whether and how education attainment depends on the educational attainment of peers. We consider the role of different types of relationships among peers on education outcomes using a detailed network structure among first-year economics students. We find that there are strong peer effects in education, but peers tend to be influential only if they interact frequently. This result suggest that the mechanism behind is that students teach their peers specific knowledge rather than general knowledge that they possess. We also find that peers can have a positive influence if they belong to the highest tercile of the distribution of the university entrance exam. While the influence can be negative if peers belong to the lowest decile of the distribution. This evidence suggest that the bad apple model and the shining light model can coexist.
    Keywords: Peer effects, social network formation, academic achievement, homophily
    JEL: D85 I21 I23 I26 J24
    Date: 2016–11–16
  9. By: Guido Alfani (PAM, Università Bocconi (Italy) Dondena Centre and IGIER); Marco Percoco (PAM, Università Bocconi (Italy) Dondena Centre)
    Abstract: The paper aims to analyze the effects of plague on the long-term development of Italian cities, with particular attention to the 1629-30 epidemic. By using a new dataset on plague mortality rates in 49 cities covering the period 1575-1700 ca., an economic geography model verifying the existence of multiple equilibria is estimated. It is found that cities severely affected by the 1629-30 plague were permanently displaced to a lower growth path. It is also found that plague caused a long-lasting damage to the size of Italian urban populations and to urbanization rates. These findings support the hypothesis that seventeenth-century plagues played a fundamental role in triggering the process of relative decline of the Italian economies.
    Keywords: Plague, Italian cities, Urban development, Urban demography, Multiple equilibria, Early modern period, Mortality crises, Urbanization, Italy
    JEL: N30 N33 N93 D31
    Date: 2016–11
  10. By: Francesco Andreoli; Eugenio Peluso (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: Spatial income inequality in cities is assessed by looking at the distribution of income across individuals and their neighbors. Two new Gini-type spatial inequality indices are introduced: the first index measures the average degree of income inequality within individual neighborhoods; the second index measures the inequality of average incomes among individual neighborhoods. Connections with geostatistics are investigated and the asymptotic distributions of these indices are derived. A rich income database from the U.S. census is used to establish new stylized facts about the patterns of spatial inequality in the 50 largest American cities during the last 35 years. Four different types of city are identified, according to the level of inequality between and within individual neighborhoods. Inequality within the neighborhood is shown to be associated with lifelong economic and health expectations of urban residents.
    Keywords: Neighborhood inequality, Gini, individual neighborhood, variogram, geostatistics, census, ACS, causal neighborhood e ects, life expectancy, divided city, mixed city.
    JEL: C34 D31 H24 P25
    Date: 2017–02
  11. By: Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke
    Abstract: This paper estimates agglomeration benefits across five OECD countries, and represents the first empirical analysis that combines evidence on agglomeration benefits and the productivity impact of metropolitan governance structures, while taking into account the potential sorting of individuals across cities. The comparability of results in a multi-country setting is supported through the use of a new internationally-harmonised definition of cities based on economic linkages rather than administrative boundaries. In line with the literature, the analysis confirms that city productivity increases with city size but finds that cities with fragmented governance structures tend to have lower levels of productivity. This effect is mitigated by the existence of a metropolitan governance body. Comment rendre les villes plus productives? : Economies d’agglomération et rôle de la gouvernance urbaine: une étude sur 5 pays de l’OCDE Cet article teste l’existence d’économies d'agglomération dans cinq pays de l’OCDE. Ce papier est la première analyse empirique prouvant l’existence d’économies d’agglomération et l’impact des différentes structures de gouvernance sur la productivité, tout en neutralisant l’effet d’appariement sélectif des individus entre les différentes villes (différentes villes attirent des individus au profil différent). L’utilisation d’une nouvelle définition harmonisée des aires urbaines fondée sur les liens économiques plutôt que sur les frontières administratives garantit la comparabilité des résultats entre les pays. A l’instar de la littérature sur le sujet, cette analyse confirme que la productivité dans les agglomérations urbaines augmente avec la population (taille de l’agglomération), mais conclut que la « fragmentation » de leur gouvernance induit des niveaux de productivité plus faibles. Cet effet négatif d’une gouvernance fragmentée semble atténué par l’existence d’une entité de coopération métropolitaine (par exemple, une communauté d’agglomération).
    Keywords: agglomeration economics, cities, governance, productivity
    JEL: H73 R12 R23 R50
    Date: 2017–02–08
  12. By: Jahn, Elke J. (University of Bayreuth); Neugart, Michael (Darmstadt University of Technology)
    Abstract: Social networks may affect workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether the employment status of neighbors influences the employment probability of a worker who lost his job due to a plant closure and the channels through which this occurs. Our findings suggest that a ten percentage point higher neighborhood employment rate increases the probability of having a job six months after displacement by 0.9 percentage points. The neighborhood effect seems to be driven not by social norms but by information transmission at the neighborhood level, and additionally by networks of former co-workers who also lost their jobs due to plant closure.
    Keywords: social networks, job search, neighborhood, employment, wages, plant closures
    JEL: J63 J64 R23
    Date: 2017–01
  13. By: Tony Addison; Amadou Boly; Anthony Mveyange
    Abstract: This paper investigates the relationship between mining and spatial inequality in Africa during 2001–12. The identification strategy is based on a unilateral causation between mining and district inequality. The findings show that when minerals are aggregated, mining increases district inequality. But an analysis of individual minerals shows that mining affects district inequality both positively and negatively, suggesting that mineral wealth can be both a curse and a blessing. Further analysis suggests that these results largely depend on whether mining is active or closed, the scale of mining operations, the value of minerals extracted, and the nature of mining activities—important dimensions for shaping mining policies aimed at bolstering socio-economic development in Africa.
    Keywords: mineral resources, mining, spatial inequality, Africa
    Date: 2017
  14. By: Stefano Chianese (University of Rome Tor Vergata)
    Abstract: Newly discovered archival material is used to document the standard of living of slum dwellers in fascist Rome. As part of the regime's effort to suppress growing shanty towns in the capital, the Governorate of Rome conducted a census in 1933, gathering information on the identity and living conditions of their inhabitants, the "baraccati". The paper analyzes the mostly migrant families of the shanty towns, identifying their social and demographic characteristics.
    Keywords: Housing,internal migration,poverty,slum dwellers,fascism
    JEL: N01 R23
    Date: 2017–02–03
  15. By: Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe (University of Turin)
    Abstract: This paper analyses the role of the composition of the regional stock of knowledge in explaining innovation performance. The paper provides three main contributions. First, it investigates the relevance of Jacobs knowledge externalities in characterizing the technological capabilities at the regional level. Second, it applies the Hidalgo-Hausmann (HH) methodology to analyze knowledge composition by looking at patent data of 214 regions, located in 27 state members of the European Union (EU) during the years 1994- 2008. Third, it econometrically assesses the role of knowledge base composition in a knowledge generation function. The results of the empirical analysis confirm that the characterization of regional knowledge base through the HH indicators provides interesting information to understanding its composition and to qualify it as a provider of the Jacobs knowledge externalities that account for the dynamics of regional innovative performance.
    Date: 2016–07
  16. By: Neyestani, Behnam
    Abstract: The Urban Mobility Design is city's comprehensive resource on street design guidelines, policies, and processes. It aggregates a broad range of resources from nationally recognized engineering and design guidelines. It supplements rather than replaces existing engineering and environmental standards, requirements, or guidelines, such as the Manual on Traffic Control Devices and Policy on Geometric Design of Highways and Streets. In a city with as many varied and complex conditions as Metro Manila, designs should be tailored to the particular needs and opportunities created by the local context, uses, and dimensions of streets. The purpose of this study is to find the problems of transportation and mobility, and likewise propose the appropriate solutions based on principles of sustainability in city's transportation.
    Keywords: Sustainable Transportation, Urban Mobility Design, Sustainability, Sustainable Mobility.
    JEL: Q01 Q56
    Date: 2015–08–01
  17. By: Jesse Bricker; Geng Li
    Abstract: While a rapidly growing body of research underscores the influence of social capital on financial decisions and economic developments, objective data-based measurements of social capital are lacking. We introduce average credit scores as an indicator of a community's social capital and present evidence that this measure is consistent with, but richer and more robust than, those used in the existing literature, such as electoral participation, blood donations, and survey-based measures. Merging unique proprietary credit score data with two nationwide representative household surveys, we show that households residing in communities with higher social capital are more likely to invest in stocks, even after controlling for a rich set of socioeconomic, preferential, neighborhood, and demographic characteristics. Notably, such a relationship is robustly observed only when social capital is measured using community average credit scores. Consistent with the notion that social capital and trust promote stock investment, we find the following: first, the association between average credit score and stock ownership is more pronounced among the lower educated; second, social capital levels of the county where one grew up appear to have a lasting influence on future stock investment; and third, investors who did not own stocks before have a greater chance of entering the stock market a few years after they relocate to higher-score communities.
    Keywords: Credit scores ; Social Capital ; Stock market participation ; Trust
    JEL: D14 G10 O16
    Date: 2017–02
  18. By: Glass, Anthony J. (Loughborough University); Kenjegalieva, Karligash (Loughborough University); Sickles, Robin C. (Rice University and Loughborough University); Weyman-Jones, Thomas (Loughborough University)
    Abstract: We extend the emerging literature on spatial frontier models in three respects. Firstly, we account for latent heterogeneity by developing a maximum likelihood random effects spatial autoregressive (SAR) stochastic frontier model. Secondly, to analyze the finite sample properties of a spatial stochastic frontier model we develop a Monte Carlo experimental methodology which we then apply. Thirdly, we introduce the concept of the spatial efficiency multiplier and show that the efficiency benchmark for a productive unit from the structural form of a spatial stochastic frontier model differs from the efficiency benchmark from the reduced form of the model.
    JEL: C23 C51 D24 Q10
    Date: 2016–11
  19. By: Martinez, Isabel Z.
    Abstract: Tax competition raises the question to which extent taxpayers respond to differences in income tax rates by migrating to low-tax areas. This paper analyzes a large, two-step tax reform in the canton of Obwalden in central Switzerland in 2006 and 2008. The canton first introduced a regressive income tax scheme with the explicit purpose of attracting affluent taxpayers, followed by a change to a flat rate tax, thereby lowering taxes for all taxpayers. Using individual tax data from the cantonal tax administration, I apply a 2SLS approach to estimate how responsive migration was to the tax reduction. I estimate an elasticity of the stock of rich taxpayers in the canton with respect to the average net-of-tax rate of 2.4 in the first two years after the reform, increasing to 3.5 over the five post-reform years. The corresponding elsticities of the inflow of rich taxpayers are even larger. These estimates are larger than what the few studies on tax induced mobility elasticity have found so far. I can further rule out that these results are due to an exogenous positive income shock to top incomes. DiD estimations comparing the share of rich taxpayers and net income per taxpayer in Obwalden to two neighboring cantons confirm that the reform was successful in increasing the canton's tax base. The large elasticities can be explained by two aspects. First, by the sizable pool of intentionally treated and the prevailing residence-based taxation, as opposed to source-based taxation. Through relocating to Obwalden, any Swiss and European citizen could take advantage of this tax scheme. Second, by the initially low share of rich taxpayers in Obwalden and the small size of the canton.
    JEL: H71 H24 H31
    Date: 2016
  20. By: Rômullo Carvalho; Marcos Ki Hyung Lee
    Abstract: Since 2003, São Paulo municipal government has started a public policy construction of “Centros Educacionais Unificados (CEUs)”, a complex with schools, sport, leisure and cultural facilities, in the most socially peripherical areas of the city. To the best of our knowledge, this paper is the first to investigate some effects related to the introduction of CEUs in these regions. Through a methodology of Differences-in-Differences with Propensity Score Matching and exploiting a criminal data from Public Security Secretariat, our results suggest that the areas affected by the program had - on average - from 6 to 9 homicides less, in comparison with areas that have not received CEU. This analysis, although preliminary, supports the idea that CEUs had a positive impact on welfare of its surrounding communities in different dimensions
    Keywords: public policy; crime; education; development economics
    JEL: D04 D61 I28 I38
    Date: 2016–12–20
  21. By: Tamás Berki (Magyar Nemzeti Bank (Central Bank of Hungary)); Tibor Szendrei (Magyar Nemzeti Bank (Central Bank of Hungary))
    Abstract: This paper aims to estimate a long-term equilibrium price level for the Hungarian housing market by identifying key underlying macroeconomic factors. For this, in line with the empirical literature, a vector error correction model is employed. The housing market price level is mapped by the newly established MNB housing price index. The results establish one stable cointegrating relationship between the housing prices and its longterm driving factors: average new housing loans, disposable income and housing stock. Credit channel plays a decisive role in determining equilibrium level of housing prices. Housing prices exhibit overshooting to various shocks potentially due to the protracted supply side adjustment. Due to the short sample size the estimated price gap might be underestimated in magnitude; nevertheless the fairly slow price adjustment coefficient ensures a persistent gap. Therefore, the sign of the estimated price gap is informative for policy makers from a macroprudential perspective.
    Keywords: housing prices, VECM, error correction, housing loans, cyclical position
    JEL: E44 R21 R31
    Date: 2017
  22. By: Juan Carlos Cuestas (Economics and Research Department Eesti Pank (Bank of Estonia) || Department of Finance and Economics Tallinn University of Technology)
    Abstract: House prices in Spain escalated rapidly in the run up of the financial crisis. In addition, capital inflows may have influenced the amount of credit available for private use, and in particular for the purchase of real estate. The aim of this paper is to analyse the relationship between foreign capital flows and house prices in Spain. Based on a cointegrated VAR and a structural Bayesian VAR, it is found that both capital inflows and house price shocks have influenced each other in the run up of the Great Moderation.
    Keywords: house prices; capital inflows; leveraging; CVAR; structural Bayesian VAR
    JEL: C22 F15
    Date: 2016–11
  23. By: Christos Karydas (ETH Zurich, Switzerland)
    Abstract: How should governments best allocate their budget to support private research activities? The consensus in the literature is that sector-specific R&D support policies should be increasing in the degree of compatibility of sectoral innovation with the practices of the wider economy. Using a multi-sector endogenous growth model with in-house R&D and knowledge spillovers, it is shown, that accounting for the time it takes for an innovation to diffuse modifies this widely-accepted result. Wide applicability of green innovations alone does not justify higher research subsidies.
    Keywords: Climate Policy, Industrial Policy, Innovation Spillovers, Technology Diffusion, Endogenous Growth
    JEL: O31 O33 Q54 Q55 Q58 H23
    Date: 2017–01
  24. By: Möller, Joachim; Eppelsheimer, Johann
    Abstract: Since the study by Moretti (2004) for the US, it is widely accepted that the spatial distribution of human capital plays an increasing role for regional labor market outcomes. Like in the pioneer approach we assume that workers' productivity at the firm level depend on the regional share of the high skilled. We extent the theoretical framework, however, by decomposing the change in the regional share of high-skilled workers into brain drain, brain gain as well as into labor market entry and exit effects. This allows us to investigate hypotheses about the extent and nature of knowledge spillovers in more detail. For the empirical part we analyze a large administrative panel data set. Including a series of controls as well as fixed effects for the worker, occupation, industry, region and year we find a significant negative relationship between brain drain and the regional wage level of low- and high skilled workers and a positive one for brain gain. These results are robust across different specifications and hold for Germany as a whole and West Germany alone. If estimated separately, we find much weaker and partly statistically not significant knowledge spillovers for East German regions. In general, brain drain and brain gain effects are of similar order of magnitude, whereas the effect of labor market exits of high-skilled workers exceeds that of labor market entries in absolute value. Using instrumental variable methods we show that the basic results are not driven by endogeneity bias.
    JEL: J24 J31 O15
    Date: 2016
  25. By: Kerri Agnew (Department of Economics, Trinity College Dublin); Ronan Lyons (Department of Economics, Trinity College Dublin)
    Abstract: Access to employment is one of the most valuable amenities offered by cities. In urban economics, this is the principal driver of the bid-rent gradient and is a key determinant of housing prices and land values. However, little is known about the causal effect of employment on housing prices, due to the problem of identification. This study presents the first causal estimates of employment changes on housing prices, both sales and rental. It does this by using a purpose-built spatially granular dataset of 1.4 million housing prices and FDI employment, covering Ireland 2007-2013. Identification rests on a combination of rich spatio-temporal variation due to the abundance of FDI in Ireland, a rich set of location controls and an inelastic housing supply in the period covered. The main results show that 1-2 years after 1,000 extra jobs have been created, monthly rents in nearby properties will be between 0.5% and 1% higher. The effect on prices is at least 2% but less consistent across specifications. On average, net job creation in export-oriented FDI firms 2009-2013 added roughly Û48 million to the stock of wealth of owner occupied real estate and Û8 million to the stock of wealth of the rental sector. We also estimate that the aggregate effect of the stock of FDI jobs in 2013 on Irish housing prices is Û440 million, or just over 1%.
    Keywords: Housing Prices, Employment, Foreign Direct Investment, Ireland, Hedonic Regression
    JEL: R10 R21 F23
    Date: 2017–02
  26. By: Adelino, Manuel; Cunha, Igor; Ferreira, Miguel
    Abstract: We show that municipalities' financial constraints can have a significant impact on local employment and growth. We identify these effects by exploiting exogenous upgrades in U.S. municipal bond ratings caused by Moody's recalibration of its ratings scale in 2010. We find that local governments increase expenditures because their debt capacity expands following a rating upgrade. These expenditures have an estimated local income multiplier of 1.9 and a cost per job of $20,000 per year. Our findings suggest that debt-financed increases in government spending can improve economic conditions during recessions.
    Keywords: Credit ratings; Government Employment; Income; Local Economy; Municipal Bonds; Private Employment; Public Finance
    JEL: E24 G24 G28 H74
    Date: 2017–01
  27. By: Isabelle Chort (LEDa, UMR DIAL-Paris-Dauphine); Philippe De Vreyer (Université Paris-Dauphine, PSL Research University,IRD, LEDa, DIAL); Thomas Zuber (Columbia University. Department of Middle Eastern, South Asian and African Studies/History, New York)
    Abstract: Using individual panel data from Senegal collected in 2006-07 and 2010-12, this study explores internal migration patterns of men and women. The data used contain the GPS coordinates of individuals' location, allowing us to calculate precise migration distances and map individual mobilities.Women are found to be more likely to migrate than men. However, they move less far and are more likely to migrate to rural areas, especially when originating from rural areas. Education is found to increase the likelihood of migration to urban destinations, especially for women. An analysis of the motives for migrating con rms the existence of gendered migration patterns, as female mobility is mostly linked to marriage while labor mobility is frequently observed for men.
    Keywords: Internal migration ; gender; rural-urban migration; Senegal.
    JEL: R23 O15 O18 J16
    Date: 2017–01
  28. By: Parey, Matthias
    Abstract: How to best prepare non-college bound youth for the labor market? Different approaches compete in this field, including firm-based apprenticeships, full-time vocational schooling, and on-the-job learning. Little is known about how effective these methods are, and comparisons of means are uninformative due to the selection of individuals into different streams. In this paper, we exploit the idea that variation in apprenticeship availability affects the opportunities individuals have when they grow up. We present a small open economy model in which price shocks affect the local number of apprentices, without a differential effect on factor rewards; this motivates an instrumental variable strategy to compare labor market outcomes between labor types, which is implemented exploiting differences in training availability. We document how variation in vacancies for apprenticeships affects educational choice. We show that at the margin, individuals substitute between apprenticeship training and full-time school-based vocational training. We exploit this variation to study how this formation period affects later labor market outcomes at ages 23 to 26. Our results show that firm-based apprenticeship training leads to substantially lower unemployment rates; investigating this pattern over time, the evidence indicates that former apprentices have a transitory advantage which fades out over time. We do not find significant differences in wages. This suggests that these alternatives confer similar overall levels of productivity, and that apprenticeship training improves the early labor market attachment relative to vocational schooling. We investigate the responsiveness to negative shocks in an experiment based on firm closures. Our results are found to be robust in a number of specification checks, and we investigate the validity of our functional form in a semiparametric analysis.
    JEL: I21 I28 J24
    Date: 2016
  29. By: Alain Chaney (Universitiy of Geneva); Martin Hoesli (University of Geneva, University of Aberdeen - Business School, and Swiss Finance Institute)
    Abstract: This paper provides a contribution to the discussion on appraised values vs. transaction prices by comparing the driving factors of appraisal-based capitalization rates with those of transaction-based capitalization rates. Using a rich database of real estate transactions in Switzerland for the period 1985–2010, we identify several property-specific variables that have not been used in prior research and that increase the explained portion of the cap rate variance by as much as 10 percentage points. Results show that compared to investors, appraisers overweight factors that they can easily observe when they appraise a property, at the cost of variables related to growth expectations and the opportunity cost of capital. This has two implications. First, it helps to explain the appraisal-smoothing phenomenon, as the easily observable factors hardly change over time, while the latter variables do change frequently and significantly. Second, investors put less emphasis on factors that are diversifiable, which suggests that they have a portfolio perspective, whereas the focus of appraisers is more on the individual property level.
    Keywords: Appraisal-Based Capitalization Rates, Transaction-Based Capitalization Rates, Real Estate Risk, Appraisal Smoothing, Valuation
    JEL: G11 G12 R33
  30. By: Embaye, Weldensie T.; Zereyesus, Yacob A.
    Keywords: Community/Rural/Urban Development, International Development,
    Date: 2017
  31. By: Antonio Di Majo; Elina De Simone
    Abstract: Abstract. This paper looks at the role of tax decentralization in the Italian history of Public Finance from the beginning of the Italian Unification to the years before the set-up of Regional governments. The role of the benefit principles in the local tax assignments is discussed. The analysis also includes some updated data on local public expenditures and taxes from 1861 to 1970
    Keywords: Local taxes, Fiscal decentralization, Italy, XIX-XX centuries
    JEL: N93 N94 H70
    Date: 2017–02
  32. By: Bimpikis, Kostas (Stanford University); Candogan, Ozan (Chicago University); Saban, Daniela (Stanford University)
    Abstract: We explore spatial price discrimination in the context of a ride-sharing platform that serves a network of locations. Riders at different locations are heterogeneous in terms of their destination preferences, as captured by the demand pattern of the underlying network. Drivers decide whether, when, and where to provide service so as to maximize their expected earnings given the platform's pricing policy. Our findings highlight the impact of the demand pattern of the underlying network on the platform's optimal profits and aggregate consumer surplus. In particular, we establish that both profits and consumer surplus are maximized when the demand pattern is "balanced" across the network's locations. In addition, we show that profits and consumer surplus are monotonic with the balancedness of the demand pattern (as formalized by the pattern's structural properties). Furthermore, we explore the widely adopted compensation scheme that allocates a constant fraction of the fare to drivers and identify a class of networks for which it can implement the optimal equilibrium outcome. However, we also showcase that generally this scheme leads to significantly lower profits for the platform than the optimal pricing policy especially in the presence of heterogeneity among the demand patterns in different locations. Together, these results illustrate the value of accounting for the demand pattern across a network's locations when designing the platform's pricing policy, and complement the existing focus on the benefits of dynamic (surge) pricing to deal with demand fluctuations over time.
    Date: 2016–11
  33. By: Carlos Cortinhas (Department of Economics, University of Exeter)
    Abstract: The link between formative assessment and student performance is not entirely clear in the existing literature with some previous studies showing contradicting results. Although the debate is very old (since mid-1800s), previous research is almost exclusively based on elementary and secondary school students. This paper attempts to add to the existing literature by focusing on data from a large scale experiment (a class of 578 UK first year undergraduate students enrolled on Introduction to Statistics) to determine whether online, formative (non-compulsory) homework helps or hinders students. The results suggest that completing formative assessment tasks contributes to higher grades but only for good students. The result is robust to a variety of specifications and after controlling for a large number of student characteristics (including nationality, gender, ethnicity, whether a student has completed a Maths or Economics A-Level in Secondary School, amongst others) and the level of student ability/effort. This study shows, therefore, that formative homework might contribute to amplifying inequalities amongst students and that other strategies are needed to close the gap between the top and bottom performing students.
    Keywords: homework, online learning, formative assessment.
    JEL: C21 I21 I24
    Date: 2017
  34. By: Campante, Filipe R. (Harvard University); Yanagizawa-Drott, David (University of Zurich)
    Abstract: We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles. We show that these air links have a positive effect on local economic activity, as captured by satellite-measured night lights. To shed light on how air links shape economic outcomes, we first present evidence of positive externalities in the global network of air links: connections induce further connections. We then find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses, but also gives rise to increased spatial inequality locally, and potentially globally.
    JEL: F15 F21 F23 F63 O11 O18 O19
    Date: 2016–09
  35. By: Krause, Melanie; Bluhm, Richard
    Abstract: Satellite data on nighttime luminosity is an increasingly popular proxy for economic activity in developing countries. However, their use for analyzing inequality and convergence on a global scale is severely limited by top-coding of the NOAA satellite images, which fail to accurately capture the brightness of large and densely populated cities, as well as by comparability problems between satellites. As a result, they severely underestimate differences between urban and rural regions, and developed and developing countries. We propose a new and easy-to-use procedure to correct for top-coding in nighttime lights, which borrows from the top incomes literature. We show that just as top incomes, top lights are Pareto distributed. We then derive simple formulas for the top-coding adjusted spatial Gini coeffcient and top-coding adjusted average light intensity. Using data for Germany we show that by correcting for top-coding of the top 2% of lights, we can account for up to 40% of the difference between saturated and unsaturated satellites. We also analyze corrections for between and within satellite measurement errors. Finally, we present three economic applications to determine where the influence of top-coding is most severe. We show that top-coding and satellite calibration aspects estimates of the income elasticity of light, regional inequalities and urban-rural differences.
    JEL: O10 D30 O18
    Date: 2016
  36. By: DEBARSY, Nicolas; DOSSOUGOIN, Cyrille (Université catholique de Louvain, CORE, Belgium); ERTUR, Cem; GNABO, Jean-Yves
    Abstract: We contribute to the literature on international risk spillovers by developing a unified framework based on spatial econometrics that enables to address the following questions: (i) what are the channels of transmission for sovereign risk across countries and/or regions, (ii) what are the most dominant ones, and (iii) which countries are the most at risk for their environment and those suffering the most of international exposure. Our analysis based on 41 advanced and emerging economies from 2008Q1 to 2012Q4 shows that the informational channel is the most relevant to explain the transmission of bond yield spreads across countries. Our results challenge previous findings from the literature that consider transmission channels in separate models while we propose to feature multiple sources of transmission altogether in a single model. Eventually, our stress-testing analysis reveals important insights on countries prone either to international spillovers, international exposure or both at regional and worldwide level.
    Keywords: sovereign risk; transmission channels; spatial dynamic panel data; spillover analysis
    JEL: C33 C51 F34 F42
    Date: 2016–12–31
  37. By: Polcyn, Jan
    Abstract: The analysis involved the construction of synthetic measures of quantity and quality of public goods in education and synthetic measures of economic and social development. The synthetic measures were built using the Hellwig method. Taxonomic analyses were performed with respect to the quantity, quality and effectiveness of public goods at the local level in Poland. An attempt was made to determine the education production function in the Polish context. Analysis techniques also included multivariate analysis of variance, regression models for quality and effectiveness of education and multilevel analysis of regression.Drawing conclusions based on the methodology adopted in this study is certainly burdened with error due to the considerable level of aggregation of measures used for illustrating the existing dependencies. However, it should be noted that the analysis covered all local government units (poviats) responsible for upper-secondary school education in Poland. In the Polish political system, the units fulfil the state’s function related to the provision of public goods in education. The efforts undertaken by researchers worldwide to find the ways to improve the quality and effectiveness of educational processes have focused on modelling the education production function. The attempts made in this study to implement the education production function in the Polish context have confirmed the results of global research in this field. However, models constructed on the basis of literature data were characterised by low explanatory power, which prompted the author to search for new methods that use the findings of research on education production function in order to identify the factors shaping the quality of public goods in education and effectiveness of education. Econometric analyses have pointed to the inefficiency of the teacher remuneration system. The expenditure on teacher remuneration was negatively correlated with the measure of quality. The negative impact of teacher remuneration on the synthetic measure of quality may be indicative of the incorrect explanatory properties of the analysed econometric models.
    Keywords: public goods, economics of education, educational funcion production
    JEL: A2 P36 P46
    Date: 2017
  38. By: Feder, Christophe; Kataishi, Rodrigo Ezequiel (University of Turin)
    Abstract: Regional heterogeneity plays a determinant role in both the decentralization and the biased technological change literature. Merging these perspectives, this paper offers a novel approach on how productivity of firms can be affected by public policies within centralized and decentralized political systems. The contribution of this paper is to develop a theoretical model that introduces the biased technological change concept instead of the traditional Total Factor Productivity (TFP) to evaluate policy outcomes. By doing so, we find that public policies may not always have the expected effect in terms of effciency. In our model, productivity and effciency will depend on the level of regional heterogeneity, the inter-regional spillovers and the relative amount of regional endowments. In particular, our point argues that if there is regional heterogeneity but no inter-regional spillovers a centralized policy can be effcient and that if regions are homogeneous in the presence of inter-regional spillovers, a decentralized strategy can be effcient too. Last, we find that there are cases that may reach no effcient outcomes, regardless the political system.
    Date: 2017–01
  39. By: Heinrich Hock; Eric Isenberg
    Abstract: We examine methods of estimating teacher value added when students are co-taught. Two methods that presume that co-teachers share joint responsibility for shared students—the Teacher Team Method and Full Roster Method—produce similar estimates, but the Full Roster Method is more easily implemented.
    Keywords: Growth models, Teacher evaluation, Teacher–student links
    JEL: I
  40. By: Pierre-Philippe Combes (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris, GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - Université de Lyon - ENS Lyon - École normale supérieure - Lyon); Gilles Duranton (Wharton School, University of Pennsylvania - University of Pennsylvania [Philadelphia]); Laurent Gobillon (PSE - Paris School of Economics)
    Abstract: We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on the firstorder condition for profit maximisation with respect to nonland inputs by competitive house builders. For parcels of a given size, we compute housing by summing across the marginal products of nonland inputs. Differences in nonland inputs are caused by differences in land prices that reflect differences in the demand for housing across locations. We implement our methodology on newlybuilt singlefamily homes in France. We find that the production function for housing is reasonably well, though not perfectly, approximated by a CobbDouglas function and close to constant returns. After correcting for differences in user costs between land and nonland inputs and taking care of some estimation concerns, we estimate an elasticity of housing production with respect to nonland inputs of about 0.80.
    Keywords: production function,housing
    Date: 2016
  41. By: Korotina, Natalya (Russian Presidential Academy of National Economy and Public Administration, Chelyabinsk branch); Nechaeva, Svetlana (Russian Presidential Academy of National Economy and Public Administration, Chelyabinsk branch)
    Abstract: The article analyzes material and technical resources, financial and staffing support of the system of pre-school education in Chelyabinsk region, shows up the problems and defines tendencies of its development.
    Keywords: pre-school education, availability of educational establishments, Chelyabinsk region
    JEL: I0 R0
    Date: 2015–12
  42. By: Svitlana Maksymenko
    Abstract: Is here evidence that economic growth reduces poverty in Ukraine's regions which lag in industrial and agricultural development? To answer this question and analyze medium-range growth prospects, we build an econometric model consisting of four blocks - industry, agriculture, construction, and services - for all administrative regions of Ukraine. After adjusting a baseline 2015-2017 forecast for a structural break caused by a fall in production and applying exponential smoothing technique, we identify the top and bottom regional performers in different sectors of the economy. From the policy analysis perspective, we find that the rise in industrial production does not likely affect the level of poverty in the bottom regions. We also find that it is the agricultural growth that could potentially reduce poverty there. The paper discusses some alternative scenarios and development goals for a reduction in entrenched rural poverty in Ukraine.
    Date: 2016–01
  43. By: Martin Hoesli (University of Geneva, University of Aberdeen, and Swiss Finance Institute); Eva Liljeblom (Swedish School of Economics and Business Administration); Anders Löflund (Hanken School of Economics)
    Abstract: We test relative illiquidity, exemplified through a temporary lock-up, as a partial explanation for the gap between theoretical and empirical weights for real estate in a multi-asset portfolio. Since asset correlations are known to increase in bear markets, reducing their diversification benefits, the ex ante knowledge of a lock-up in an asset class offering diversification benefits in bull markets (Hung et al., 2008) may reduce the optimal weight an investor wishes to put in it ex ante. Using the dynamic multiperiod portfolio policies by Brandt and Santa-Clara (2006), and introducing a lock-up in line with de Roon et al. (2009), we study the effects of a partial lock-up on the weight for REITs in a U.S. stock and bond portfolio. We find support for our prediction, in the form of lower weights for the illiquid asset once a lock-up is introduced.
    Keywords: asset allocation, illiquidity, lock-up, multi-period portfolio policy, REITs
    JEL: G11 G23 R33

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