nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒04‒02
forty-six papers chosen by
Steve Ross
University of Connecticut

  1. Credit conditions, macroprudential policy and house prices By Robert Kelly, Fergal McCann, Conor O'Toole
  2. How Predictable? Rent Growth and Returns in Sydney and Melbourne Housing Markets By Glenn Otto; Nigel Stapledon
  3. Teacher Quality, Test Scores and Non-Cognitive Skills: Evidence from Primary School Teachers in the UK By Sarah Flèche
  4. Regional Growth Differences in China for 1995-2013: An Empirical Integrative Analysis of their Sources By Hongbo Wang; Dan Rickman
  5. Public transport: one mode or several? By Lorenzo Varela , Juan Manuel; Börjesson, Maria; Daly, Andrew
  6. Cities and Spatial Interactions in West Africa By Rafael Prieto Curiel; Philipp Heinrigs; Inhoi Heo
  7. International Migration and Regional Housing Markets: Evidence from France By Hippolyte D'Albis; Dramane Coulibaly; Ekrame Boubtane
  8. Regional Tourism Dynamics in Japan: An Exploratory Spatial Analysis By João Romão; Hiramisu Saito
  9. Does ethnic segregation matter for spatial inequality? A cross-country analysis By Ezcurra, Roberto; Rodríguez-Pose, Andrés
  10. Gauging two sides of regional economic resilience in Western Germany. Why resitance and recovery should not be lumped together By Franziska Pudelko; Christian Hundt
  11. The Effect of Fibre Broadband on Student Learning By Arthur Grimes; Wilbur Townsend
  12. Peer Effects in Employment Status: Evidence from Housing Lotteries for Forced Evacuees in Fukushima By Kondo, Ayako; Shoji, Masahiro
  13. The role of the housing market in workers’ resilience to job displacement after firm bankruptcy By J. Meekes; W.H.J. Hassink
  14. Do Childhood Experiences of Parental Separation Lead to Homelessness? By Julie Moschion; Jan van Ours
  15. “Computing Functional Urban Areas Using a Hierarchical Travel Time Approach: An Applied Case in Ecuador” By Moisés Obaco A; Vicente Royuela; Xavier Vítores
  16. State Strategies for Coordinating Medicaid and Housing Services By Rebecca Kleinman; Matthew Kehn; Allison Wishon Siegwarth; Jonathan Brown
  17. Evidence That Calls-Based and Mobility Networks Are Isomorphic By Michele Coscia; Ricardo Hausmann
  18. R&D cooperation within Italian technological districts: A microeconometric analysis By Otello Ardovino; Maria Rosaria Carillo; Luca Pennacchio
  19. Culture in local and regional development: A Mediterranean perspective on the culture/economy nexus By Benner, Maximilian
  20. A framework for separating individual treatment effects from spillover, interaction, and general equilibrium effects By Huber, Martin; Steinmayr, Andreas
  21. Targeting the Wrong Teachers? Linking Measurement with Theory to Evaluate Teacher Incentive Schemes By Nirav Mehta
  22. Growth Policy, Agglomeration and (the Lack of) Competition By Wyatt J. Brooks; Joseph Kaboski; Yao Amber Li
  23. Social Status and Peer-Punishment: Findings from Two Road Traffic Field Experiments By Ben Jann; Elisabeth Coutts
  24. College Admission and High School Integration By Fernanda Estevan; Thomas Gall; Patrick Legros; Andrew Newman
  25. Rethinking Detroit By Owens, Raymond E.; Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel G.
  26. Spatial Nexus in Crime and Unemployment in Times of Crisis By Lastauskas, Povilas; Tatsi, Eirini
  27. Identifying Productivity Spillovers Using the Structure of Production Networks By Bazzi, Samuel; Chari, Amalavoyal V.; Nataraj, Shanthi; Rothenberg, Alexander D.
  28. Value Subtraction in Public Sector Production: Accounting vs Economic Cost of Primary Schooling in India By Lant Pritchett; Yamini Aiyar
  29. Group inequality and regional development: Evidence from Pakistan: Evidence from Pakistan By Hadia Majid; Rashid Memon
  30. Six Dimensions of Concentration in Economics: Scientometric Evidence from a Large-Scale Data Set By Glötzl, Florentin; Aigner, Ernest
  31. Agglomeration economies in Vietnam : a firm-level analysis By Gokan, Toshitaka; Kuroiwa, Ikuo; Nakajima, Kentaro
  32. Elastic Labor Supply and Agglomeration By Takanori Ago; Tadashi Morita; Takatoshi Tabuchi; Kazuhiro Yamamoto
  33. Publicly announced speed limit enforcement and its impact on road safety: Evidence from the German Blitzmarathons By Molitor, Ramona
  34. Two Tales of Two U.S. States: Regional Fiscal Austerity and Economic Performance By Dan S. Rickman; Hongbo Wang
  35. Novelty, Knowledge Spillovers and Innovation: Evidence from Nobel Laureates By Ham, John C.; Weinberg, Bruce A.
  36. Sectoral Composition of Consumption Expenditure: A Regional Analysis By W. Addessi; M. Pulina
  37. Estimating Regional Matching Efficiency in the Indian Labor Market: State-Level Panel Data for 1999-2013 By Lee , Woong
  38. Depreciation: a Dangerous Affair By Cozzi, Guido
  39. The Impact of Standardised Testing on Later High Stakes Test Outcomes By Joseph Regan-Stansfield
  40. Peer Effects on Children’s Expressive Vocabulary Development Using Conceptual Scoring in Linguistically Diverse Preschools By Sally Atkins-Burnett; Yange Xue; Nikki Aikens
  41. A New Measure of Inter-Industry Distance and Its Application to the U.S. Regional Growth By Yoon, Yeo Joon; Whang, Unjung
  42. Migrants and the Making of America: The Short and Long Run Effects of Immigration during the Age of Mass Migration By Nunn, Nathan; Qian, Nancy; Sequeira, Sandra
  43. The Workforce of Pioneer Plants By Ricardo Hausmann; Franke Neffke
  44. Disentangling Age and Cohorts Effects on Home-Ownership and Housing Wealth in Turkey By Evren Ceritoglu
  45. Does early child care attendance influence children's cognitive and non-cognitive skill development? By Kuehnle, Daniel; Oberfichtner, Michael
  46. Kinetic models for topological nearest-neighbor interactions By Blanchet, Adrien; Degond, Pierre

  1. By: Robert Kelly, Fergal McCann, Conor O'Toole
    Abstract: We provide a micro-empirical link between the large literature on credit and house prices and the burgeoning literature on macroprudential policy. Using loan-level data on Irish mortgages originated between 2003 and 2010, we construct a measure of credit availability which varies at the borrower level as a function of income, wealth, age, interest rates and prevailing market conditions around Loan to Value ratios (LTV), Loan to Income ratios (LTI) and monthly Debt Service Ratios (DSR). We deploy a property-level house price model which shows that a ten per cent increase in credit available leads to an 1.5 per cent increase in the value of property purchased. Coefficients from this model are then used to fit values under scenarios of macroprudential restrictions on LTV, LTI and DSR on credit availability and house prices in Ireland for 2003 and 2006. Our results suggest that macroprudential limits would have had substantial impacts on house prices, and that both the level at which they are set and the timing of their introduction is a crucial determinant of their impact on housing values. JEL Classification: E58, G28, G21, R31
    Keywords: Mortgages, credit availability, macroprudential policy, house prices
    Date: 2017–02
  2. By: Glenn Otto (School of Economics, UNSW Business School, UNSW); Nigel Stapledon (School of Economics, UNSW Business School, UNSW)
    Abstract: We construct rent-price ratios for houses and units in 82 local government areas in the Sydney and Melbourne markets for the period 1985/86-2015. Using this annual data we employ long-horizon regression techniques and find that rent-price ratios (i.e. rental yields) have predictive content for both future real housing returns and future growth rates of real rents. However rents and returns have greater predictability in Sydney than in Melbourne. Using a variance decomposition for the rent-price ratio implied by the present-value model, we find that variation in rental yields of units in Sydney is almost fully accounted for by expected changes in future rent growth and returns. There appears to be no role for rational bubbles in influencing the prices of Sydney units. In contrast – on average – lesser portions of the variance in rental yields on houses in Sydney (two thirds) and Melbourne (one third) and units in Melbourne (60 percent) is explained by expected future returns and rents. Evidently there is scope for (stochastic) rational bubbles to have affected these markets. Our results point to an important difference between the behaviour of residential housing markets and stock markets. In the stock market, current changes in dividend-price ratios do not appear to reflect important variations in future dividend growth. Our results for Sydney and Melbourne suggest that current changes in rent-price ratios do signal future changes in rent growth.
    Keywords: Symmetry; Rent-price ratio; Housing returns; Rent growth; Long horizon regression
    JEL: C22 G17 R31
    Date: 2017–01
  3. By: Sarah Flèche
    Abstract: Schooling can produce both cognitive and non-cognitive skills, both of which are important determinants of adult outcomes. Using very rich data from a UK birth cohort study, I estimate teacher value added (VA) models for both pupils' test scores and non-cognitive skills. I show that teachers are equally important in the determination of pupils' test scores and non-cognitive skills. This finding extends the economics literature on teacher effects, which has primarily focused on pupils' test scores and may fail to capture teachers' overall effects. In addition, the large estimates reveal an interesting trade-off: teacher VA on pupils' test scores are weak predictors of teacher VA on non-cognitive skills, which suggests that teachers recourse to different techniques to improve pupils' cognitive and non-cognitive skills. Finally, I find that teachers' effects on pupils' non-cognitive skills have long-run impacts on adult outcomes such as higher education attendance, employment and earnings, conditional on their effects on test scores. This result indicates that long-run outcomes are improved by a combination of teachers increasing pupils' test scores and non-cognitive skills and has large policy implications.
    Keywords: teacher quality, test scores, non-cognitive skills, long-run impacts, teaching practices, ALSPAC
    JEL: I21 J00
    Date: 2017–03
  4. By: Hongbo Wang (Oklahoma State University); Dan Rickman (Oklahoma State University)
    Abstract: An integrative analysis of several regional economic outcome variables in China for the period of 1995-2013 reveal the major sources of regional growth differences in China. Patterns of growth in population, per capita income, gross regional product, housing prices and changes in unemployment rates are identified using principal components analysis. Regression analysis of principal component scores is applied to identify geographic patterns in the sources of the growth. The analysis suggests that shifts in labor supply largely were responsible for the regional growth differences over the period, though shifts in labor demand were nearly equally as important. The results have implications for evaluating the success of regional development policies such as the Western Development Strategy.
    Keywords: China, Regional growth, Western Development Strategy
    JEL: R11 R12 R23 R58
    Date: 2017–03
  5. By: Lorenzo Varela , Juan Manuel (KTH); Börjesson, Maria (KTH); Daly, Andrew (ITS, Leeds / RAND Europe)
    Abstract: This paper develops a methodology for testing and implementing differences in preferences for a set of public transport modes, relating to observed and unobserved attributes, in state-of-practice large-scale travel demand models. Results of a case study for commuters in the Stockholm public transport system suggest that there are preference differences among public transport modes, and that they are captured by unobserved attributes. Surprisingly, we found no evidence for differences proportional to the in-vehicle time, suggesting that characteristics of in-vehicle time in different public transport modes, such as comfort, are valued equally by the travellers. We also found that the value of time is higher for auxiliary modes than for the main mode, and that the unobserved preference for metro is highest and the preference for light rail lowest.
    Keywords: Choice behaviour; Generalised travel cost; Unobserved preferences; Rail factor; Demand forecast
    JEL: R40
    Date: 2017–03–23
  6. By: Rafael Prieto Curiel (University College London); Philipp Heinrigs (Sahel and West Africa Club); Inhoi Heo (Sahel and West Africa Club)
    Abstract: Over the past 60 years, urbanisation and cities have fundamentally transformed the social, economic and political geography of West Africa. The number of people living in cities increased from 5 million in 1950 to 133 million in 2010. During the same period, the number of towns and cities with more than 10 000 inhabitants grew from 159 to close to 2 000. A large majority of these agglomerations are secondary cities and small towns that act as hubs and catalysts for local and regional production and supply chains, as well as for the transfer of goods, people and information, linking the local and regional economies to the global economy. The intensity of the spatial interactions of cities has strongly increased with population growth, urbanisation and higher urban density. This paper, part of ongoing work within the Sahel and West Africa Club Secretariat to integrate urbanisation and city growth into analyses of major trends in the region, lays the foundation for the development of a systematic method to capture and describe these spatial interactions. It does so by examining four variables: city size, market potential, urbanisation level and local dominance. These variables, in turn, help to define seven different city groups that can be used to classify West African agglomerations. The initial results of this work reveal the diversity and distinctive behaviours of cities in the region, providing a new perspective on urbanisation dynamics and the influence of spatial variables on urban growth rates, the emergence of new agglomerations and the clustering of cities.
    Keywords: mega cities, metropolitan areas, secondary towns, urbanisation
    JEL: C31 C38 J11 R12 R58
    Date: 2017–03–31
  7. By: Hippolyte D'Albis (PSE - Paris School of Economics); Dramane Coulibaly (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Ekrame Boubtane (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CERDI - Centre d'études et de recherches sur le developpement international - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article examines the causal relations between non-European immigration and the characteristics of the housing market in host regions. We constructed a unique database from administrative records and used it to assess annual migration flows into France’s 22 administrative regions from 1990 to 2013. We then estimated various panel VAR models, taking into account GDP per capita and the unemployment rate as the main regional economic indicators. We find that immigration has no significant effect on property prices, but that higher property prices significantly reduce immigration rates. We also find no significant relationship between immigration and social housing supply.
    Keywords: immigration, property prices, social housing, panel VAR
    Date: 2017–02–16
  8. By: João Romão (CEFAGE, Portugal); Hiramisu Saito (Graduate School of Economics and Business Administration, Hokkaido University)
    Abstract: Assuming tourism as a place oriented activity, where tourism flows often cross regional borders, local and global indicators of spatial autocorrelation can be useful tools to identify and explain different patterns of regional tourism dynamics and their determinants. These techniques recently became widely used in applied economic studies, as a result of their useful insights to understand spatial phenomena and benefiting from the existence of georeferenced data and adequate software tools. This tendency is also observed in the tourism sector in the last few years, although the application of these methodologies is still scarce in tourism studies. In this work, these methodologies are applied to the case of the Japanese Prefectures, leading to the identification of different patterns of spatial heterogeneity and agglomeration processes related to regional tourism dynamics in Japan, with a view on policy and managerial recommendations. The results clearly reveal the existence of such spatial effects, reflecting the importance of central areas of Japan in terms of tourism performance. It was also possible to observe that regions where tourism plays a more prominent role in terms of its importance within regional employment do not present a relatively high performance in terms of economic growth.
    Date: 2016
  9. By: Ezcurra, Roberto; Rodríguez-Pose, Andrés
    Abstract: The paper examines the link between ethnic segregation and spatial inequality in 71 countries with different levels of economic development. The results reveal that ethnic segregation is associated with significantly higher levels of spatial inequality. This finding is not affected by the inclusion of various covariates that may influence both spatial inequality and the geographical distribution of ethnic groups, and is confirmed by a number of robustness tests. The results also suggest that political decentralization and the quality of government could act as transmission channels linking ethnic segregation and spatial inequality.
    Keywords: ethnic segregration; spatial inequality
    JEL: J15 O11 O18 R11
    Date: 2017–03
  10. By: Franziska Pudelko (Department of Geography, Philipps University Marburg); Christian Hundt (Department of Geography, Ruhr University Bochum)
    Abstract: The paper empirically investigates the economic resilience of Western German regions in the wake of the Great Recession of 2008/2009. In particular, the focus is laid on the influence of regional agglomeration economies (arising from specialization, related and unrelated variety) and the explicit sudivision of short-term resilience into resistance and recovery. The necessity to distinguish between different factors and phases is well documented by means of the OLS regression results as all three types of agglomeration economies reveal varying, if not opposing directions of influences across the resistance and recovery phase. A pregnant example refers to regional specialization. Not only does it show a negative impact on resistance while exerting a positive influence during the recovery phase, but it is also mediated by the regional share in manufacturing workforce. This workforce reveals opposing phase-specific facts itself. hence, ignoring the two-component structure of short-term resilience entails the risk of imprecise, if not false conclusions on the driving mechanisms stabilizing and/or destabilizing regional economies in times of crisis.
    Keywords: regional economic resilience, resistance, recovery, agglomeration economies, industry structure
    JEL: R11 R12 E32
    Date: 2017–03
  11. By: Arthur Grimes (Motu Economic and Public Policy Research); Wilbur Townsend (Motu Economic and Public Policy Research)
    Abstract: We estimate the impact of ultra-fast broadband on schools’ academic performance using a difference-in-difference study of a new fibre broadband network. We show that fibre broadband increases primary schools’ passing rates in standardised assessments by roughly one percentage point. Estimates are robust to alternative specifications, such as controlling for time-varying covariates. We find no evidence that gender, ethnic minorities or students enrolled in remote schools benefit disproportionately. However, we find some evidence of a larger benefit within schools that have a greater proportion of students from lower socio-economic backgrounds
    Keywords: Fibre broadband, UFB, Education, Difference in difference
    JEL: H43 H54 I28
    Date: 2017–04
  12. By: Kondo, Ayako; Shoji, Masahiro
    Abstract: Does a high peer employment rate increase individual employment probability? We exploit the random assignment of temporary housing to evacuees from the Fukushima Daiichi nuclear power plant accident to identify the effect of neighbors’ employment rates on an individual’s probability of finding a job post-evacuation. Using unique survey data, we find that a one standard deviation increase in the initial employment rate of an individual’s peers makes the hazard of restarting work 1.41 times larger during the six months after move-in. We also show suggestive evidence for social norm to work as an underlying mechanism for the observed peer effect.
    Date: 2017
  13. By: J. Meekes; W.H.J. Hassink
    Abstract: This paper examines the importance of the housing market for workers who have become displaced. We used Dutch administrative data, which were analysed with a quasi-experimental empirical design. The estimates indicate that displaced workers experience an increase in commute and decrease in moving home, employment and wage. Furthermore, these patterns change across time – the evidence suggests that workers who have longer unemployment duration prefer lower gains in commute to higher losses in wage. Finally, the worker-specific housing state has a substantial effect on the costs of job displacement, which is comparable to the effects of various demographic and job characteristics.
    Keywords: Housing, Unemployment, Wages, Commuting, Mobility, Worker Characteristics
    Date: 2016–10
  14. By: Julie Moschion (University of Melbourne, Australia); Jan van Ours (Erasmus University Rotterdam, The Netherlands)
    Abstract: This paper investigates the effect of parental separation on homelessness. Previous studies are limited in their ability to isolate this effect and can only provide descriptive evidence that parental separations relate to reductions in housing quality and stability. Using a unique dataset of disadvantaged Australians who provide retrospective information on parental separation and homelessness, we estimate bivariate duration models to examine transitions into homelessness resulting from parental separation. Controlling for observed as well as unobserved family and individual characteristics and exploiting the timing of events we investigate whether a causal relationship exists. Our results indicate that parental separation significantly increases the likelihood of experiencing homelessness in subsequent years for boys and girls if the separation occurred before the respondent was 12 years old. Parental separation occurring from the age of 12 only increases boys’ likelihood of becoming homeless, but not girls’.
    Keywords: Parental separation; Homelessness; Australia
    JEL: D12 J12
    Date: 2017–03–27
  15. By: Moisés Obaco A (AQR-IREA, University of Barcelona); Vicente Royuela (AQR-IREA, University of Barcelona); Xavier Vítores (Independent Statistical Researcher)
    Abstract: Identifying integrated urban areas is an important issue for urban analysis and policy evaluation. In this paper, we extend the OECD’s methodology to identify Functional Urban Areas to countries where there is not commuting data. We do so substituting such socioeconomic flows by available information on road structure, which allow us to work with accessibility based on travel time. The main advantage of our procedure is its applicability to most countries in the world, as it only uses GIS data. In this paper we apply the procedure two border countries: Colombia, which has a recent census with commuting data, to calibrate our approach, and Ecuador, where there is not commuting census. We perform several sensitivity analysis and robustness checks to Ecuador with alternative sources of socioeconomic flows.
    Keywords: Functional Urban Areas. GIS data. Ecuador. Colombia. Travel time. JEL classification: R12, R14, R52.
    Date: 2017–03
  16. By: Rebecca Kleinman; Matthew Kehn; Allison Wishon Siegwarth; Jonathan Brown
    Abstract: This article reports findings from case studies of 4 states (Illinois, Louisiana, Massachusetts, and Tennessee) that used different approaches to coordinate Medicaid services with temporary or permanent housing supports for individuals with psychiatric disabilities.
    Keywords: Medicaid, Housing services, Illinois, Louisiana, Massachusetts, Tennessee
    JEL: I
  17. By: Michele Coscia (Center for International Development at Harvard University); Ricardo Hausmann (Center for International Development at Harvard University)
    Abstract: Social relations involve both face-to-face interaction as well as telecommunications. We can observe the geography of phone calls and of the mobility of cell phones in space. These two phenomena can be described as networks of connections between different points in space. We use a dataset that includes billions of phone calls made in Colombia during a six-month period. We draw the two networks and find that the call-based network resembles a higher order aggregation of the mobility network and that both are isomorphic except for a higher spatial decay coefficient of the mobility network relative to the call-based network: when we discount distance effects on the call connections with the same decay observed for mobility connections, the two networks are virtually indistinguishable.
    Date: 2015–12
  18. By: Otello Ardovino; Maria Rosaria Carillo; Luca Pennacchio (-)
    Abstract: The purpose of this paper is to investigate the determinants of inter-firm R&D collaborations in a particular type of innovation network, the technological districts created in Italy under a specific public policy to foster innovation and economic development at the local level. Using an original database containing information on the collaborative research projects activated by the districts, we find that the structural characteristics of the individual districts play an important role upon firms’ collaboration choices: the probability of cooperating is higher in districts in which universities have a major weight and in districts with governance more oriented towards market logic. As regards the governance, the estimates also reveal a strong moderating effect on other important determinants of R&D cooperation, such as geographical proximity and absorptive capacity.
    Keywords: : R&D cooperation, innovation networks, firm behaviour, dyadic regession model
    JEL: L14 O31 O32
    Date: 2016–09–05
  19. By: Benner, Maximilian
    Abstract: This policy paper discusses the direct and indirect role of culture as a driver of local and regional development. It identifies the interactions between local framework conditions, culture, creative industries, culturally relevant products and local development, and discusses the systemic role of culture in translating local framework conditions such as diversity, creativity and experimentation into local or regional development impacts such as economic growth and employment. Case studies from two Mediterranean countries, Cyprus and Israel, illustrate the link between culture and local development. In the final part of the paper, conclusions for local and regional policy are drawn and key recommendations are presented with a particular focus on Mediterranean countries.
    Keywords: culture; creative industries; local development; regional development; Mediterranean countries; Cyprus; Israel
    JEL: O31 O34 O35 O38 O43 R58
    Date: 2017–03–21
  20. By: Huber, Martin; Steinmayr, Andreas
    Abstract: This paper suggests a causal framework for disentangling individual level treatment effects and interference effects, i.e., general equilibrium, spillover, or interaction effects related to treatment distribution. Thus, the framework allows for a relaxation of the Stable Unit Treatment Value Assumption (SUTVA), which assumes away any form of treatment-dependent interference between study participants. Instead, we permit interference effects within aggregate units, for example, regions or local labor markets, but need to rule out interference effects between these aggregate units. Borrowing notation from the causal mediation literature, we define a range of policy-relevant effects and formally discuss identification based on randomization, selection on observables, and difference-in-differences. We also present an application to a policy intervention extending unemployment benefit durations in selected regions of Austria that arguably affected ineligibles in treated regions through general equilibrium effects in local labor markets.
    Keywords: treatment effect; general equilibrium effects; spillover effects; interaction effects; interference effects; inverse probability; weighting; propensity score; mediation analysis; difference-in-differences
    JEL: C21 C31
    Date: 2017–03–23
  21. By: Nirav Mehta (University of Western Ontario)
    Abstract: Measurement is crucial to the implementation of output-based incentive schemes. This paper uses models to study the performance of teacher quality estimators that enter teacher incentive schemes. I model an administrator tasked with (i) categorizing teachers with respect to a cutoff, (ii) retaining teachers in a hidden type environment, and (iii) compensating teachers in a hidden action environment. The preferred estimator would be the same in each model and depends on the relationship between teacher quality and class size. I use data from Los Angeles to show that simple fixed effects would almost always outperform more popular empirical Bayes.
    Keywords: Teacher Incentive Pay; Teacher Quality
    Date: 2017
  22. By: Wyatt J. Brooks (University of Notre Dame); Joseph Kaboski (University of Notre Dame); Yao Amber Li (Hong Kong University of Science and Technology)
    Abstract: Industrial clusters are promoted by policy and generally viewed as good for growth and development, but both clusters and policies may also enable non- competitive behavior. This paper studies the presence of non-competitive pricing in geographic industrial clusters. We develop, validate, and apply a novel test for collusive behavior. We derive the test from the solution to a partial cartel of perfectly colluding firms in an industry. Outside of a cartel, a firm’s markup depends on its market share, but in the cartel, markups across firms converge and depend instead on the total market share of the cartel. Empirically, we validate the test using plants with common owners, and then test for collusion using data from Chinese manufacturing firms (1999-2009). We find strong evidence for non-competitive pricing within a subset of industrial clusters, and we find the level of non-competitive pricing is about four times higher in Chinese special economic zones than outside those zones.
    JEL: L11 O10 O25 R11
    Date: 2017–03
  23. By: Ben Jann; Elisabeth Coutts
    Abstract: In a seminal experiment, Doob and Gross (1968) examined the influence of social status on peer-punishment of norm violations in traffic. They observed an inverse relationship between the economic status indicated by a car that was blocking an intersection and the punishment meted out to the driver of that car, with "punishment" taking the form of a honk of the car horn. In a more recent experiment, Diekmann et al. (1996) noted the status and reactions of the cars blocked by a single mid-status car. Blocked drivers at the wheel of a higher-status car were found to punish more aggressively than drivers of a lower-status car. Our study employs a combined design to separate the effects of driver and blocker status. In two field experiments, we varied the status of the norm-violating car and recorded the status of the blocked driver's (i.e. the experimental subject's) car. Our results provide evidence that social distance facilitates peer-punishment. Punishment was expressed less readily when the blocked and blocking cars indicated a similar social status.
    Keywords: social status, peer-punishment, horn honking, field experiment, road traffic
    JEL: C93
    Date: 2017–03–24
  24. By: Fernanda Estevan (University of Sao Paulo); Thomas Gall; Patrick Legros; Andrew Newman (Boston University)
    Abstract: We investigate whether a policy that bases college admission on relative performance can modify the degree of racial or ethnic segregation in high schools by inducing students to relocate to schools with weaker competition. Theoretically, such school arbitrage will neutralize the admissions policy at the college level. It will result in partial desegregation of the high schools if flows are sufficiently unbiased. These predictions are supported by empirical evidence on the effects of the Texas Top Ten Percent Law, indicating that a policy intended to support diversity at the college level actually helped achieve it in the high schools.
    Keywords: matching, Affirmative Action, education, college admission, high school desegregation, Texas Top Ten Percent
    JEL: C78 I23 D45 J78
    Date: 2017–03
  25. By: Owens, Raymond E. (Federal Reserve Bank of Richmond); Rossi-Hansberg, Esteban (Princeton University); Sarte, Pierre-Daniel G. (Federal Reserve Bank of Richmond)
    Abstract: We study the urban structure of the city of Detroit. Following several decades of decline, the city's current urban structure is clearly not optimal for its size, with a business district immediately surrounded by a ring of largely vacant neighborhoods. We propose a model with residential externalities that features multiple equilibria at the neighborhood level. In particular, developing a residential area requires the coordination of developers and residents, without which it may remain vacant even if its fundamentals are sound. We embed this mechanism in a quantitative spatial economics model and use it to rationalize current city allocations. We then use the model to evaluate existing strategic visions to revitalize Detroit, and to design alternative plans that rely on 'development guarantees' to yield better outcomes. The widespread effects of these policies underscore the importance of using a general equilibrium framework to evaluate policy proposals.
    Keywords: Urban Economics; Regional Economics
    JEL: F0 H0 R0
    Date: 2017–02–02
  26. By: Lastauskas, Povilas (-); Tatsi, Eirini (Swedish Institute for Social Research, Stockholm University)
    Abstract: -
    Keywords: -
    Date: 2017–03–20
  27. By: Bazzi, Samuel; Chari, Amalavoyal V.; Nataraj, Shanthi; Rothenberg, Alexander D.
    Abstract: Despite the importance of agglomeration externalities in theoretical work, evidence for their nature, scale, and scope remains elusive, particularly in developing countries. Identification of productivity spillovers between firms is a challenging task, and estimation typically requires, at a minimum, panel data, which are often not available in developing country contexts. In this paper, we develop a novel identification strategy that uses information on the network structure of producer relationships to provide estimates of the size of productivity spillovers. Our strategy builds on that proposed by Bramoulle et al. (2009) for estimating peer effects, and is one of the first applications of this idea to the estimation of productivity spillovers. We improve upon the network structure identification strategy by using panel data and validate it with exchange-rate induced trade shocks that provide additional identifying variation. We apply this strategy to a long panel dataset of manufacturers in Indonesia to provide new estimates of the scale and size of productivity spillovers. Our results suggest positive productivity spillovers between manufacturers in Indonesia, but estimates of TFP spillovers are considerably smaller than similar estimates based on firm-level data from the U.S. and Europe, and they are only observed in a few industries.
    Date: 2017–02
  28. By: Lant Pritchett (Center for International Development at Harvard University); Yamini Aiyar
    Abstract: We combine newly created data on per student government expenditure on children in government elementary schools across India, data on per student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas. The combination of these three sources allows us to compare both the "accounting cost" difference of public and private schools and also the "economic cost"—what it would take public schools, at their existing efficacy in producing learning, to achieve the learning results of the private sector. We estimate that the "accounting cost" per student in a government school in the median state in 2011/12 was Rs. 14,615 while the median child in private school cost Rs. 5,961. Hence in the typical Indian state, educating a student in government school costs more than twice as much than in private school, a gap of Rs. 7,906. Just these accounting cost gaps aggregated state by state suggests an annual excess of public over private cost of children enrolled in government schools of Rs. 50,000 crores (one crore=10 million) or 0.6 percent of GDP. But even that staggering estimate does not account for the observed learning differentials between public and private. We produce a measure of inefficiency that combines both the excess accounting cost and a money metric estimate of the cost of the inefficacy of lower learning achievement. This measure is the cost at which government schools would be predicted to reach the learning levels of the private sector. Combining the calculations of accounting cost differentials plus the cost of reaching the higher levels of learning observed in the private sector state by state (as both accounting cost differences and learning differences vary widely across states) implies that the excess cost of achieving the existing private learning levels at public sector costs is Rs. 232,000 crores (2.78% of GDP, or nearly US$50 billion). It might seem counterintuitive that the total loss to inefficiency is larger than the actual budget, but that is because the actual budget produces such low levels of learning at such high cost that when the loss from both higher expenditures and lower outputs are measured it exceeds expenditures.
    Date: 2015–06
  29. By: Hadia Majid; Rashid Memon
    Abstract: This study explores the patterns and consequences of ethnic and regional inequalities in Pakistan. Using inter-district variation in inequality, ethnic fractionalization, and access to public goods, we extend the literature on public service provisioning by using finer estimates of between-group inequality along multiple dimensions. We also provide the first estimates of horizontal and vertical inequality at the district level in Pakistan. We find that higher group inequality in land, income, and electoral votes is negatively associated with access to public goods. But higher vertical inequality along the same dimensions is positively associated with public goods provisioning.
    Keywords: horizontal inequality, publicly provided goods
    Date: 2016
  30. By: Glötzl, Florentin; Aigner, Ernest
    Abstract: This paper scientometrically investigates concentration in economics between 1956 and 2016 using a large-scale data set. It is revealed that economics is highly concentrated along six dimensions: articles, journals, regions, institutions, authors, and paradigms. North America accounts for half of all published articles and three quarters of all citations, while the top twenty academic institutions reap a share of 42 percent of all citations. The top 100 authors alone receive a share of 15 percent. Five journals account for 27.7 percent of all citations and only 8 percent of all articles, and 3 percent of all citations may be attributed to heterodox schools of thought. The overall Gini coefficient for the distribution of citations among articles is 0.72. Generally, concentration is found to increase towards the top of the discipline and to be higher and more persistent on the level of citations than on the level of articles. Concentration has increased over the last few decades, with the strongest increases occurring already until the 1970s.
    Keywords: concentration, economics, scientometrics
    Date: 2017–03
  31. By: Gokan, Toshitaka; Kuroiwa, Ikuo; Nakajima, Kentaro
    Abstract: This paper examines the effects of agglomeration economies on firm†level productivity in Vietnam. By using Vietnamese firm†level data and the cluster detection method proposed by Mori and Smith (2013), we estimate the agglomeration economies for firm†level productivity. Specifically, we consider the different effects of agglomeration economies for localization and urbanization, as well as across types of firms; state†owned, private, and foreign†owned firms. Furthermore, we decompose the agglomeration economies into the three sources of the effect; inter†industry transaction relationships, knowledge spillovers, and labor pooling. We find the following results. First, localization economies actually improve firm†level productivity in Vietnam, with firms in the clustered areas having higher productivities. However, the localization economies do not improve the productivity of the state†owned firms. Second, urbanization economies improve productivity only for foreign†owned firms. State†owned and private firms do not benefit from urbanization economies. From the decomposition of agglomeration economies, we find that agglomeration economies formed through transactions work only for private firms. On the other hand, agglomeration economies formed through knowledge spillovers and labor pooling work for foreign†owned firms.
    Keywords: Local economy, Economic conditions, Economic geography, Productivity, Agglomeration Economies, Economic Geography
    JEL: R12
    Date: 2017–03
  32. By: Takanori Ago (ySchool of Commerce, Senshu University); Tadashi Morita (Faculty of Economics, Kindai University); Takatoshi Tabuchi (Faculty of Economics, University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University)
    Abstract: This study analyzes the interplay between the agglomeration of economic activities and interregional diverences in working hours, which are typically longer in large cities, as they are normally more developed than small cities. For this purpose, we develop a two-region model with endogenous labor supply. Although we assume a symmetric distribution of immobile workers, the symmetric equilibrium breaks in the sense that firms may agglomerate when trade costs are intermediate and labor supply is elastic. We also show that the price index is always lower, while labor supply, per capita income, real wages, and welfare are always higher in the more agglomerated region.
    Keywords: elastic labor supply; agglomeration; symmetry break
    JEL: R23 F16
    Date: 2017–03
  33. By: Molitor, Ramona
    Abstract: This paper studies a unique traffic law enforcement campaign in Germany and its impact on road safety. Key features of the campaign are (1) repeated one-day lasting massive speed limit monitoring (so called Blitzmarathons) and (2) a media campaign that informs the public in advance about the timing, extent, and purpose of the speed limit monitoring. Using administrative records on all police reported vehicle crashes in Germany from 2011 to 2014 and generalized difference-indifferences estimations, we find an eight percent reduction in the number of traffic accidents and a nine percent reduction in the number of slightly injured during Blitzmarathon-day compared to regular days. The effect begins to emerge with the onset of the media campaign, one to three days before a Blitzmarathon. However, while the initiators of the Blitzmarathons intended a permanent change in road safety, we do not find that the reduction in traffic accidents persists beyond a Blitzmarathon-day. In terms of mechanisms, we show that a substitution of traffic from motorized vehicles to other modes of transport not targeted by the Blitzmarathons does not drive our results, and we demonstrate that overall driving speed is lower during a Blitzmarathon-day compared to other days. Given the general relevance of traffic law enforcement strategies, our result have important implications for policy makers beyond the German context.
    Keywords: traffic,law enforcement,safety,accidents
    JEL: H76 K42 R41
    Date: 2017
  34. By: Dan S. Rickman (Oklahoma State University); Hongbo Wang (Oklahoma State University)
    Abstract: The recent fiscal austerity experiments undertaken in the states of Kansas and Wisconsin have generated considerable policy interest. Using a variety of identification approaches within a difference-in-differences framework and examining a wide range of economic indicators, this paper assesses whether the experiments have spurred growth in the states as promised by the governors and legislatures which enacted them into law. The overall conclusion from the paper is that the fiscal experiments did not spur growth, and if anything, harmed state economic performance. Among the identification approaches used, the Synthetic Control Method (Abadie and Gardeazabal 2003; Abadie et al., 2010) is demonstrated to provide the most compelling evidence.
    Keywords: Fiscal austerity; State taxes; Synthetic Control Method
    JEL: H71 R12 R23
    Date: 2017–03
  35. By: Ham, John C.; Weinberg, Bruce A.
    Abstract: Using a new identification strategy and unique, rich data on Nobel laureates, we show that being in new or multiple locations, as measures of exposure to novel combinations of ideas, and the number of other local important innovators, all increase the probability that eventual Nobel laureates begin their Nobel prize winning work. Strikingly, and consistent with our identifying assumptions, we find that none of these measures increase the probability of doing Nobel prize winning work. Our results strongly suggest that spillovers affect the generation of ideas, and help us understand the weak spillover effects previously estimated in the economics literature.
    Keywords: Knowledge spillovers,Innovation,Nobel Prize,Duration models
    Date: 2017
  36. By: W. Addessi; M. Pulina
    Abstract: This paper analyses the evolution of the sectoral composition of consumption expenditure in the Italian regions in the period between 1996 and 2013. The purpose is to verify whether such a composition at the regional level converged towards the national average and to identify which factors have mostly contributed to this convergence. Empirical data show that while regional performance converged towards the national average during the first half of the analyzed time span, the opposite occurred during the second half. Simulations suggest that - i) regional price dynamics do not have a large impact on the evolution of regional differences; ii) income effect explains rather well both the phases of the observed dynamics; and iii) consumer preferences have contributed to the increase in the differences among regions particularly since the beginning of the recent economic crisis.
    Keywords: Consumption-expenditure composition,Regional economics,Regional comparison
    Date: 2017
  37. By: Lee , Woong (Korea Institute for International Economic Policy)
    Abstract: We analyze state-level matching efficiency in the Indian labor market using stochastic frontier analysis. The key contribution of this research is the estimation of matching efficiency at the state level because the estimates can be used for a state-level measure of labor market conditions. Next, we explore the relation between estimated matching efficiency and population density (or labor market flexibility). The results show that matching efficiency is heterogeneous across states with considerable variation in accordance with the regional diversity in India. However, we find that there is no relationship between the estimated matching efficiency and the well-known labor market conditions of interest. The correlations are either close to zero or not statistically significant, suggesting that other regional diversity may affect matching efficiency in India.
    Keywords: Matching Function; Matching Efficiency; Indian Labor Market; Stochastic
    Date: 2015–12–30
  38. By: Cozzi, Guido
    Abstract: What if the statutory fiscal depreciation of buildings was higher than their effective economic depreciation? This would imply that markets would value buildings more than their social fundamental value. I prove that this would allow house price bubbles to emerge and open the door to sudden crashes. This paper provides an example of how a misaligned fiscal policy measure could generate potentially destabilizing self-fulfilling prophecies even in an economy with fully rational and forward-looking individuals.
    Keywords: House price bubbles; Fiscal depreciation; Sunspot equilibria.
    JEL: E3 E6 R3
    Date: 2017–02
  39. By: Joseph Regan-Stansfield
    Abstract: Standardised tests are a common, yet contentious, feature of many countries’ schooling systems. In May 2010, over one-quarter of English primary schools boycotted that year’s mandatory age eleven standardised tests (colloquially known as SATs tests). This paper investigates the plausibly causal effect of participation in standardised testing on later end-of-schooling qualification (GCSE) attainment. After controlling for non-random boycott participation, and relying on a selection-on-observables argument, evidence is found of a statistically significant negative effect of boycott participation on various measures of GCSE attainment. Amongst other findings, pupils are estimated to be 0.7 per-cent less likely to achieve five or more GCSEs at grades A* to C due to not sitting their age eleven SATs tests. Thus, evidence is found that individual pupils’ subsequent attainment benefits from their own prior participation in standardised tests.
    Keywords: Education Policy, Standardised Testing, Secondary Education
    JEL: I21 I28 J24
    Date: 2017
  40. By: Sally Atkins-Burnett; Yange Xue; Nikki Aikens
    Abstract: This study examined associations between the expressive vocabulary of classroom peers and children’s own vocabulary knowledge using conceptual scoring in a linguistically diverse sample of 4-year-olds who attended universal preschool programs in a metropolitan area.
    Keywords: expressive vocabulary, linguistically diverse preschools
    JEL: I
  41. By: Yoon, Yeo Joon (Korea Institute for International Economic Policy); Whang, Unjung (Korea Institute for International Economic Policy)
    Abstract: We propose a new measure of inter-industry 'distance'. This is constructed a la Antras et al. (2012). While they measure the distance of an industry from its final use - what they call 'downstreamness' of an industry - we measure the distance between a pair of industries. Our proposed index is a measure of input-output linkages between industries that incorporates a 'distance' flavor. Our measure distinguishes the number of vertical production stages that an industry's product goes through until it is finally used by another industry by assigning larger weights to the value of input use with longer production chains. Hence our measure contains more information on the relation between two industries along the vertical production chain. We use this index to construct an aggregate measure of 'industry connectedness' of regions in the U.S. It measures the degree of industrial linkages of a region. We then empirically establish that each region's labor productivity is positively associated with the 'industry connectedness'. The result contributes to the large literature of agglomeration economies that the industrial linkage is one of the main sources of agglomeration economies and productivity growth, as emphasized by Marshall (1920). It also suggests that our index can serve as an alternative measure of the industrial linkages.
    Keywords: Inter-industry Distance; Regional Growth; Input-Output Linkages
    JEL: F43 F63 O11
    Date: 2016–12–30
  42. By: Nunn, Nathan; Qian, Nancy; Sequeira, Sandra
    Abstract: We study the effects of European immigration to the United States during the Age of Mass Migration (1850-1920) on economic prosperity today. We exploit variation in the extent of immigration across counties arising from the interaction of fluctuations in aggregate immigrant flows and the gradual expansion of the railway network across the United States. We find that locations with more historical immigration today have higher incomes, less poverty, less unemployment, higher rates of urbanization, and greater educational attainment. The long-run effects appear to arise from the persistence of sizeable short-run benefits, including greater industrialization, increased agricultural productivity, and more innovation.
    Keywords: economic development; historical persistence; Immigration
    JEL: B52 F22 N72 O10 O40
    Date: 2017–03
  43. By: Ricardo Hausmann (Center for International Development at Harvard University); Franke Neffke (Center for International Development at Harvard University)
    Abstract: Is labor mobility important in technological diffusion? We address this question by asking how plants assemble their workforce if they are industry pioneers in a location. By definition, these plants cannot hire local workers with industry experience. Using German social-security data, we find that such plants recruit workers from related industries from more distant regions and local workers from less-related industries. We also show that pioneers leverage a low-cost advantage in unskilled labor to compete with plants that are located in areas where the industry is more prevalent. Finally, whereas research on German reunification has often focused on the effects of east-west migration, we show that the opposite migration facilitated the industrial diversification of eastern Germany by giving access to experienced workers from western Germany.
    Date: 2016–01
  44. By: Evren Ceritoglu
    Abstract: This paper analyses the role of age and cohort effects on home-ownership and housing wealth in Turkey. We utilize twelve consecutive waves of the Turkish Statistical Institute (TURKSTAT) Household Budget Surveys (HBS) from 2003 to 2014. We construct a pseudo-panel data set following Deaton (1985) using birth-year cohorts in which families are grouped into cohorts with respect to the birth year of their household heads. Empirical analysis shows that young cohorts are less likely to own their homes, but they are more likely to be in housing debt. Moreover, they are willing to invest in second homes as much as old cohorts. We estimate a Heckman two-step selection model to distinguish the contribution of quality growth on house prices, while the selection criterion is home-ownership. We regress weighted average of the natural logarithm of cohort home values on age and cohort dummy variables. We find that cohort effects on home values are significantly larger for young cohorts even after controlling for age effects and quality growth.
    Keywords: Home-ownership, Housing wealth, Cohort effects, Pseudo-panel
    JEL: C23 D12 R21
    Date: 2017
  45. By: Kuehnle, Daniel; Oberfichtner, Michael
    Abstract: While recent studies mostly find that attending child care earlier improves the skills of children from low socio-economic and non-native backgrounds in the short-run, it remains unclear whether such positive effects persist. We identify the short- and medium-run effects of early child care attendance in Germany using a fuzzy discontinuity in child care starting age between December and January. This discontinuity arises as children typically start formal child care in the summer of the calendar year in which they turn three. Combining rich survey and administrative data, we follow one cohort from age five to 15 and examine standardised cognitive test scores, non-cognitive skill measures, and school track choice. We find no evidence that starting child care earlier affects children's outcomes in the shortor medium-run. Our precise estimates rule out large effects for children whose parents have a strong preference for sending them to early child care.
    Keywords: child care,child development,skill formation,cognitive skills,non-cognitive skills,fuzzy regression discontinuity
    JEL: J13 I21 I38
    Date: 2017
  46. By: Blanchet, Adrien; Degond, Pierre
    Abstract: We consider systems of agents interacting through topological interactions. These have been shown to play an important part in animal and human behavior. Precisely, the system consists of a finite number of particles characterized by their positions and velocities. At random times a randomly chosen particle, the follower adopts the velocity of its closest neighbor, the leader. We study the limit of a system size going to infinity and, under the assumption of propagation of chaos, show that the limit kinetic equation is a non-standard spatial diffusion equation for the particle distribution function. We also study the case wherein the particles interact with their K closest neighbors and show that the corresponding kinetic equation is the same. Finally, we prove that these models can be seen as a singular limit of the smooth rank-based model previously studied in [10]. The proofs are based on a combinatorial interpretation of the rank as well as some concentration of measure arguments.
    Keywords: rank-based interaction, spatial diffusion equation, continuity equation, concentration of measure
    Date: 2017–03

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