nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒07‒16
25 papers chosen by
Steve Ross
University of Connecticut

  1. The Effect of Teachers' Unions on Student Achievement: Evidence from Wisconsin's Act 10 By Eric J. Baron
  2. Working from Home and the Willingness to Accept a Longer Commute By de Vos, Duco; Meijers, Evert J.; van Ham, Maarten
  3. Sub-national fiscal autonomy, infrastructure investment and regional disparities By Paul Van Rompuy
  4. Are Immigrant and Minority Homeownership Rates Gaining Ground in the US? By Chakrabarty, Durba; Osei, Michael J.; Winters, John V.; Zhao, Danyang
  5. Exploring the Influence of Colonial Railways on Java's Economic Geography By Brata, Aloysius Gunadi
  6. Housing and the tax system: how large are the distortions in the euro area? By Fatica, Serena; Prammer, Doris
  7. Measures, Drivers and Effects of Green Employment: Evidence from US Local Labor Markets, 2006-2014 By Francesco Vona; Giovanni Marin; Davide Consoli
  8. The Value of a Healthy Home: Lead Paint Remediation and Housing Values By Billings, Stephen B.; Schnepel, Kevin T.
  9. "Transition of Spatial Distribution of Human Capital in Japan" By Yasuhiro Sato; Masaaki Toma
  10. Towards an East German Wage Curve - NUTS Boundaries, Labour Market Regions and Unemployment Spillovers By Reinhold Kosfeld; Christian Dreger
  11. The Difficult School-To-Work Transition of High School Dropouts: Evidence from a Field Experiment By Cahuc, Pierre; Carcillo, Stéphane; Minea, Andreea
  12. The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results - Working Paper 455 By Michael Clemens; Jennifer Hunt
  13. Technology Network Innovation and Distribution By Jingong Huang
  14. Is Uber a substitute or complement for public transit? By Jonathan D. Hall; Craig Palsson; Joseph Price
  15. Credit market competition and the gender gap: evidence from local labor markets By Popov, Alexander; Zaharia, Sonia
  16. Does Migrating with Children Influence Migrants’ Occupation Choice and Income? By Xing, Chunbing; Wei, Yinheng
  17. Ethnic Capital and Intergenerational Transmission of Educational Attainment By Postepska, Agnieszka
  18. Do tourists tip more than local consumers? Evidence of taxi rides in New York City By Amir B. Ferreira Neto; Adam Nowak; Amanda Ross
  19. Tragedy of the Commons and Evolutionary Games in Social Networks: The Economics of Social Punishment By Jorge Marco; Renan Goetz
  20. Warm-Glow Giving in Networks with Multiple Public Goods By Lionel Richefort
  21. Urban Development, Excessive Entry of Firms and Wage Inequality in Developing Countries By Beladi, Hamid; Chao, Chi-Chur; Ee, Mong Shan; Hollas, Daniel
  22. The Case for Housing Finance Reform : a speech at the American Enterprise Institute, Washington, D.C., July 6, 2017. By Powell, Jerome H.
  23. How to develop corporate real estate? A decision support tool for CREM By Dörr, Anne; Pfnür, Andreas
  24. A Spatial Analysis of Innovation in Europe By Tonnerre, Antoine
  25. Can public policies change risk preferences? The effect of property titling on risk aversion By Fernando M. Aragon; Oswaldo Molinaz; Ingo W. Outes-Leon

  1. By: Eric J. Baron (Department of Economics, Florida State University)
    Abstract: In this study, I estimate the causal impact of a weakening of teachers' unions on student achievement. I do so by exploiting a quasi-experiment that took place in Wisconsin following the passage of Act 10, a measure that significantly limited the bargaining power of teachers' unions in the state. Specifically, I exploit plausibly exogenous variation in the length of pre-Act 10 collective bargaining agreements among school districts that led to differences in the timing of exposure to Act 10. I find that test scores on the state's standardized exam decreased by approximately 30% of a standard deviation in initially low-performing schools, but find no evidence that the law impacted students in initially high-performing schools. Lastly, I show that the reduction in test scores was at least partially driven by a combination of teacher retirements and a decrease in the quality of the teaching workforce.
    Keywords: Public Sector Unions, Collective Bargaining, Student Achievement, Economics of Education
    JEL: I20 I28 J45 J50
    Date: 2017–07
  2. By: de Vos, Duco (Delft University of Technology); Meijers, Evert J. (Delft University of Technology); van Ham, Maarten (Delft University of Technology)
    Abstract: It is generally found that workers are more inclined to accept a job that is located farther away from home if they have the ability to work from home one day a week or more (telecommuting). Such findings inform us about the effectiveness of telecommuting policies that try to alleviate congestion and transport related emissions, but they also stress that the geography of labour markets is changing due to information technology. We argue that estimates of the effect of working from home on commuting time are biased downward because most studies ignore preference based sorting (self-selection): workers who dislike commuting, and hence have shorter commutes, might also be more likely to work from home. In this paper we investigate to what extent working from home affects the willingness to accept a longer commute and we control for preference based sorting. We use 7 waves of data from the Dutch Labour Supply Panel and show that on average telecommuters have a 50 percent higher marginal cost of one-way commuting time, compared to non-telecommuters. We estimate the effect of telecommuting on commuting time using a fixed-effects approach and we show that preference based sorting biases cross-sectional results 27-28 percent downwards. Working from home allows people to accept 5.7 percent longer commuting times on average, and every additional 8 hours of working from home are associated with 3 percent longer commuting times.
    Keywords: telecommuting, commuting time, job search, job mobility, labour market area
    JEL: J32 R11 R41
    Date: 2017–07
  3. By: Paul Van Rompuy
    Abstract: This paper focusses on the relationship between subnational fiscal autonomy, transport infrastructure investment and regional disparities in 30 OECD countries over the period 1995-2011. Subnational fiscal autonomy is approximated by the revenue share of autonomous taxes. A fixed effects panel estimation reveals that SNG tax autonomy significantly contributes to regional convergence although its impact is small when compared to the effect of transport infrastructure investment. Subnational expenditure on education and economic affairs does not impact spatial disparities.
    Date: 2017
  4. By: Chakrabarty, Durba (Oklahoma State University); Osei, Michael J. (Oklahoma State University); Winters, John V. (Oklahoma State University); Zhao, Danyang (Oklahoma State University)
    Abstract: This paper investigates post-2000 trends in homeownership rates in the US by immigrant status, race, and ethnicity. Homeownership rates for most groups examined rose during the housing boom of the early and mid-2000s but fell during and after the housing bust. By 2015 homeownership rates had fallen below year 2000 levels for most groups but not all. In particular, some Asian immigrant groups experienced sizable gains in overall homeownership rates and in regression-adjusted differences relative to white non-Hispanic natives. Some other immigrant and minority groups also made gains relative to white non- Hispanic natives. We document and discuss these trends.
    Keywords: housing, homeownership, immigrants, minorities
    JEL: R21 J15
    Date: 2017–06
  5. By: Brata, Aloysius Gunadi
    Abstract: This study explores the impact on Java’s economic geography of railways built by the Dutch colonial government. Pre-1940 Dutch railway construction affords an historical experiment on the spatial distribution of economic activities across urban Java both before and after 1940. Using city data for over 100 years, the study finds that the railways had a short-term impact on the distribution of population, but that in the long run colonial railway investment lost its advantages. Until 1930, the railways substituted for the Great Mail Road. Between 1930 and 2010, however, the Great Mail Road regained an earlier importance in shaping urban Javanese patterns. The study also draws important lessons for recent Indonesian infrastructure development in Indonesia, notably in regard to the railway system itself.
    Keywords: colonial railways, history, economic geography, Java
    JEL: N75 N95 R12
    Date: 2017–07–07
  6. By: Fatica, Serena; Prammer, Doris
    Abstract: This paper presents new evidence on the impact of the preferential treatment of owner-occupied housing in Europe. We find that tax benefits to homeowners reduce the user cost of housing capital by almost 40 percent compared to the efficient level under neutral taxation. On average, the tax subsidy translates into an excess consumption of housing services equivalent to 7.8 percent of the value of owner-occupied housing, or about 30 percent of financial asset holdings in household portfolios. The bulk of the subsidies stems from under-taxation of the return to home equity, while the average contribution of the tax rebate for mortgage interest payments is driven down by relatively low loan-to-value ratios in the data. However, at the margin, the tax–induced incentive to use mortgage debt to finance the purchase of the main residence is sizable. JEL Classification: H24, H31, D14
    Keywords: owner-occupied housing, taxation, user cost
    Date: 2017–07
  7. By: Francesco Vona (Observatoire Francais des Conjonctures Economiques (OFCE), France; Universite Cote d'Azur, SKEMA, CNRS, GREDEG, France.); Giovanni Marin (Department of Economics, Society and Politics, University of Urbino `Carlo Bo', Italy.); Davide Consoli (ZINGENIO[CSIC-UPV], Valencia, Spain.)
    Abstract: This paper explores the nature and the key empirical regularities of green employment in US local labor markets between 2006 and 2014. The main methodological novelty consists of a new measure of green employment based on the task content of occupations. Descriptive analysis reveals that: 1. the share of green employment is between 2 and 3 percent, with a strongly pro-cyclical trend; 2. the green wage premium is 4 percent; 3. green jobs are more geographically concentrated than similar non-green jobs; and 4. the top green areas are mostly high-tech. As regards to the drivers, direct changes in environmental regulation are a secondary force in explaining the 8-years growth of green jobs compared to the local amount of green subsidies within the American Recovery and Reinvestment Act (ARRA), the endowment of green knowledge and the resilience to the great recession. Assessing the impact of moving to greener activities, we find that one additional green job is associated with 4.2 (2.2 in the crisis period) new local jobs in non-tradable activities, and that this effect can be mostly ascribed to the green ARRA package.
    Keywords: Green employment; local labor markets; task-based approach; local multipliers; green American Recovery and Reinvestment Act; environmental policies
    JEL: J23 O33 Q52 R23
    Date: 2017–07
  8. By: Billings, Stephen B. (University of Colorado, Boulder); Schnepel, Kevin T. (University of Sydney)
    Abstract: The presence of lead paint significantly impairs cognitive and behavioral development, yet little is known about the value to households of avoiding this residence-specific environmental health risk. In this paper, we estimate the benefits of lead-paint remediation on housing prices. Using data on all homes that applied to a HUD-funded program in Charlotte, North Carolina, we adopt a difference-in-differences estimator that compares values among remediated properties with those for which an inspection does not identify a lead paint hazard. Results indicate large returns for public and private investment in remediation with each $1 spent on lead remediation generating $2.60 in benefits as well as a reduction in residential turnover.
    Keywords: lead paint exposure, lead hazard remediation, value of environmental health risk, urban environmental health
    JEL: Q51 Q52 Q58 R21 R23 R31 I18
    Date: 2017–07
  9. By: Yasuhiro Sato (Faculty of Economics, The University of Tokyo); Masaaki Toma ( Graduate School of Economics, Osaka University)
    Abstract: We examine the transition of the spatial distribution of human capital by using data on Japanese prefectures. We find substantive concentration of university enrollments in Tokyo and its neighboring prefectures. After graduation, slight dispersal occurs but the movements are limited to neighboring prefectures. Moreover, we examine the relationship between human capital distributions of different cohorts, and find that the concentration of university graduates of a particular age group attracts university graduates of adjacent age groups. However, such an effect becomes insignificant and sometimes opposite as the age differences grow.
    Date: 2017–04
  10. By: Reinhold Kosfeld; Christian Dreger
    Abstract: The relevance of spatial effects in the wage curve can be rationalized by the model of monopsonistic competition in regional labour markets. However, distortions in extracting the regional unemployment effects arise in standard regional (i.e. NUTS) classifications as they fail to adequately capture spatial processes. In addition, the nonstationarity of wages and unemployment is often ignored. Both issues are particularly important in high unemployment regimes like East Germany where a wage curve is difficult to establish. In this paper, labour market regions defined by economic criteria are used to examine the existence of an East German wage curve. Due to the nonstationarity of spatial data, a global panel cointegration approach is adopted. By specifying a spatial error correction model (SpECM), equilibrium adjustments are investigated in time and space. The analysis gives evidence on a locally but not a spatially cointegrated wage curve for East Germany.
    Keywords: Wage curve, labour market regions, global cointegration, spatial error-correction model
    JEL: J30 J60 C33 R15
    Date: 2017
  11. By: Cahuc, Pierre (Ecole Polytechnique, Paris); Carcillo, Stéphane (OECD); Minea, Andreea (Sciences Po, Paris)
    Abstract: This paper investigates the effects of the labor market experience of high school dropouts four years after leaving school by sending fictitious résumés to real job postings in France. Compared to those who have stayed unemployed since leaving school, the callback rate is not raised for those with employment experience, whether it is subsidized or non-subsidized, in the market or non-market sector, if there is no training accompanied by skill certification. In particular, we find no stigma effect associated with subsidized or non-market sector work experience. Moreover, training accompanied by skill certification improves youth prospects only when the local unemployment rate is sufficiently low, which occurs in one fifth of the commuting zones only.
    Keywords: youth, unemployment, training
    JEL: J08 J60
    Date: 2017–06
  12. By: Michael Clemens (Center for Global Development); Jennifer Hunt
    Abstract: An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. We show that conflicting findings on the effects of the Mariel Boatlift can be explained by a sudden change in the race composition of the Current Population Survey extracts in 1980, specific to Miami but unrelated to the Boatlift. We also show that conflicting findings on the labor market effects of other important refugee waves can be produced by spurious correlation between the instrument and the endogenous variable introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school.
    JEL: J61 O15 R23
    Date: 2017–05–22
  13. By: Jingong Huang (University of Melbourne)
    Abstract: Motivated by empirical evidence from the U.S. patent citation data on the dynamics of firms' patent portfolio development, I build a model of innovation incorporating a technology network structure. The model features firms operating in multiple technology sectors and internalising the spillovers of their own knowledge accumulation to produce patents. Two new insights emerge: The technology network is an important determinant of the patent distribution in different sectors. The growth of patents in each sector is proportional to the Eigenvector Centrality of the technology network. The model is estimated using Simulated Method of Moments and it is capable of reproducing the patent distribution observed in the data.
    Date: 2017
  14. By: Jonathan D. Hall; Craig Palsson; Joseph Price
    Abstract: How Uber affects public transit ridership is a relevant policy question facing cities worldwide. Theoretically, Uber's effect on transit is ambiguous: while Uber is an alternative mode of travel, it can also increase the reach and flexibility of transit's fixed-route, fixed-schedule service. We use a difference-in-differences design to measure the effect of Uber on public transit ridership. The design exploits variation across U.S. metropolitan areas in both the intensity of Uber penetration (as measured using data from Google Trends) and the timing of Uber entry. We find that Uber is a complement for the average transit agency. This average effect masks considerable heterogeneity, with Uber being more of a complement in larger cities and for smaller transit agencies. Comparing the effect across modes, we find that Uber's impact on bus ridership follows the same pattern as for total ridership, though for rail ridership, it is a complement for larger agencies.
    Keywords: public transportation; difference-in-differences
    JEL: R40 H42
    Date: 2017–07–04
  15. By: Popov, Alexander; Zaharia, Sonia
    Abstract: We exploit the exogenous variation in regional credit market contestability brought on by banking deregulation in the United States to study the narrowing of the gender gap in local labor markets. We find that deregulation reduced the gender gap in labor force participation, as the subsequent increase in the demand for labor induced non-working women to enter the labor force. Deregulation also reduced wage inequality as women became more likely to work in the private sector, to enter high-paid "male" jobs, and to acquire higher education. Tests of contiguous MSAs sharing a state border corroborate a genuine deregulation effect. JEL Classification: G28, J16, J22
    Keywords: bank deregulation, gender gap, labor force participation, wage inequality
    Date: 2017–07
  16. By: Xing, Chunbing (Asian Development Bank Institute); Wei, Yinheng (Asian Development Bank Institute)
    Abstract: We study the impact of migrant children on their parents’ occupation choice and wage income using a dataset from a household survey conducted in 2011. We find that the heads of migrant households with school-age children earn significantly less than those who left them at their place of hukou registration. This result holds when we control for personal characteristics, migration duration, origin location, and family structure. Households migrating with school-age children have a higher probability of doing so within the prefecture/province of their hukou registration and are less likely to target coastal regions. After controlling for migration scope and destination location, the presence of children does not influence wages of migrant household heads. We also find that the presence of children below the age of six has no impact on the income of migrant household heads. Our results suggest that the hukou system still impedes labor mobility.
    Keywords: migrants; migration; occupation choice; education; hukou system
    JEL: I28 J12 J13 J18
    Date: 2017–01–26
  17. By: Postepska, Agnieszka (Georgetown University)
    Abstract: This paper studies the role of ethnicity in the intergenerational transmission of educational attainment. Relying on heteroskedasticity to identify parameters in the presence of endogenous regressors, I revisit Borjas ethnic capital hypothesis. I find evidence that the OLS estimates of the effect of ethnic capital on intergenerational transmission of education are biased upwards due to the transfer of unobserved ability. I find that while the role of parental capital has declined over time, ethnic capital has a relatively constant effect on intergenerational transmission of educational attainment. I also find that only women benefit from the quality of the ethnic environment and that the intergenerational transfer of ethnic capital is most prevalent in communities with strong ties measured with endogamy rates.
    Keywords: ethnic capital, human capital formation, intergenerational transmission
    JEL: J15 J62 D1 Z1
    Date: 2017–06
  18. By: Amir B. Ferreira Neto (West Virginia University, Department of Economics); Adam Nowak (West Virginia University, Department of Economics); Amanda Ross (University of Alabama, Department of Economics, Finance, and Legal Studies)
    Abstract: We revisit the mechanisms that drive tipping behavior by comparing tourists and locals in New York City. It is unlikely a tourist will tip as a way of enforcing repeated interactions since they are not from the area, while a local may tip as an enforcement mechanism. However, if people tip because of social norms, we should see both tourists and locals tipping similar amounts. We compare locals and tourists who are theatergoers to control for education and income, as these factors are likely to affect tipping behavior. Using data from the New York City and Limousine Commission on yellow taxis, we identify tourists as those trips leaving from or going to a hotel and theatergoers as trips where the drop off or pick up is near Broadway within 30 minutes of the beginning or end of a show. Our results suggest that tourists and theatergoers tip more than locals and non-theatergoers, and tourists who are theatergoers tip even more, between 0.51% and 0.67% more. These results are robust across specifications and suggest that social norms are likely driving tipping behavior.
    Keywords: tipping behavior, social norms
    Date: 2017–07
  19. By: Jorge Marco (University of Girona); Renan Goetz (University of Girona)
    Abstract: This study revisits the problem of the tragedy of the commons. Extracting agents participate in an evolutionary game in a complex social network and are subject to social pressure if they do not comply with the social norms. Social pressure depends on the dynamics of the resource, the network and the population of compliers. We analyze the influence the network structure has on the agents’ behavior and determine the economic value of the intangible good - social pressure. For a socially optimal management of the resource, an initially high share of compliers is necessary but is not sufficient. The analysis shows the extent to which the remaining level of the resource, the share of compliers and the size, density and local cohesiveness of the network contribute to overcoming the tragedy of the commons. The study suggests that the origin of the problem – shortsighted behavior - is also the starting point for a solution in the form of a one-time payment. A numerical analysis of a social network comprising 7500 agents and a realistic topological structure is performed using empirical data from the western La Mancha aquifer in Spain.
    Keywords: Tragedy of the Commons, Cooperation, Evolutionary Game, Social Network, Social Punishment
    JEL: C71 D85 Q25
    Date: 2017–07
  20. By: Lionel Richefort (Université de Nantes, LEMNA)
    Abstract: This paper explores a voluntary contribution game in the presence of warm-glow effects. There are many public goods and each public good benefits a different group of players. The structure of the game induces a bipartite network structure, where players are listed on one side and the public good groups they form are listed on the other side. The main result of the paper shows the existence and uniqueness of a Nash equilibrium. The unique Nash equilibrium is also shown to be locally asymptotically stable. Then the paper provides some comparative statics analysis regarding pure redistribution, taxation and subsidies. It appears that small redistributions of wealth may sometimes be neutral, but generally, the effects of redistributive policies depend on how public good groups are related in the contribution network structure.
    Keywords: Multiple Public Goods, Warm-glow Effects, Bipartite Contribution Structure, Nash Equilibrium, Comparative Statics
    JEL: C72 D64 H40
    Date: 2017–07
  21. By: Beladi, Hamid (Asian Development Bank Institute); Chao, Chi-Chur (Asian Development Bank Institute); Ee, Mong Shan (Asian Development Bank Institute); Hollas, Daniel (Asian Development Bank Institute)
    Abstract: We examine the short- and long-term effects of urbanization, via favorable urban development policies, on income distribution and social welfare for a developing country. The urban manufacturing sector is characterized by imperfect competition and free entry. Urbanization shifts rural workers to the highly productive urban sector, while causing production in urban firms to expand because of scale economies. However, urbanization may worsen wage inequality between skilled and unskilled labor in the short term. In the long term, urbanization can attract new firms to the urban sector, and favorable urban development policies may result in excessive entry of firms, which can amplify wage inequality in the economy. This entry-amplifying effect is confirmed empirically, especially for low- and lower-middle-income countries. If the entry effect is not considered, the impact of urbanization on wage inequality could be understated by 18% for low- and lower-middle-income countries.
    Keywords: urbanisation; firm entry; wage inequality; developing economies
    JEL: J31 R23 R58
    Date: 2017–01–31
  22. By: Powell, Jerome H. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2017–07–10
  23. By: Dörr, Anne; Pfnür, Andreas
    Date: 2017–06–30
  24. By: Tonnerre, Antoine
    Abstract: The purpose of this paper is two-fold. Firstly, it surveys different works related to the analysis of Innovation and the way it spreads locally. We will see that theoretical predictions and empirical facts are rather contradictory. This will lead us, secondly, to shedding light towards the concentration of innovative activities in the European Union, at a more precise level of analysis: the NUTS2 nomenclature. We contradict the usually accepted empirical fact that innovative activities tend to be less and less concentrated, thus supporting the theory of knowledge spillovers, which is probably due to the important changes the European Union went through in terms of trade structure. This claim relies on a rather simple but well-founded analysis. Patent applications to the European Patent Office will be used as a proxy for the level of Innovation. These patent applications have a geographical component that will be exploited to determine whether spatial autocorrelation of innovative activities is present. After showing the importance of considering spatial autocorrelation in an analysis of Innovation, we will propose an empirical methodology to assess how it spreads. Regarding this, no results are presented, as it goes beyond the scope of the paper.
    Keywords: Innovation, knowledge spillovers, spatial concentration, spatial autocorrelation, empirics, patents, European Union, NUTS2.
    JEL: O31 R12
    Date: 2017–07–10
  25. By: Fernando M. Aragon (Simon Fraser University); Oswaldo Molinaz (Universidad del Pacifico); Ingo W. Outes-Leon (Oxford University)
    Abstract: Evidence suggests that major events, like war or natural disasters, affect risk preferences. This paper shows that similar effects can also be caused by public policies. Using the case of a large titling program in Peru, we find that this policy reduced risk aversion. The effects are sizeable and seem to be driven by the reduction in background risk associated with improved security of tenure. Our results highlight the potential of public policies to affect human behavior not only by shaping the economic environment, but also by changing individual preferences.
    Date: 2017–06

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