nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒08‒06
29 papers chosen by
Steve Ross
University of Connecticut

  1. Financing Central Cities: The Economics Underlying Fiscal Strategy Options With Special Reference to Syracuse City and the Consensus Report By Michael Wasylenko
  2. Innovation and location in German knowledge intensive business service firms By Brunow, Stephan; Hammer, Andrea; Mc Cann, Philip
  3. Regulating Household Leverage By Stephanie Johnson; John Mondragon; Anthony DeFusco
  4. A model about the impact of ability grouping on student achievement By Kiss, David
  5. The Effect of Housing Assistance on Student Achievement: Evidence from Wisconsin By Deven Carlson; Robert Haveman; Sohyun Kang; Hannah Miller; Alex Schmidt; Barbara Wolfe
  6. Additional Career Assistance and Educational Outcomes for Students in Lower Track Secondary Schools By Fitzenberger, Bernd; Licklederer, Stefanie
  7. Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923 By Tetsuji Okazaki; Toshihiro Okubo; Eric Strobl
  8. Distorted Quality Signals in School Markets By Felipe González; José Ignacio Cuesta; Cristián Larroulet
  9. The Effect of Economic Uncertainty on the Housing Market Cycle By Goodness C. Aye; Matthew W. Clance; Rangan Gupta
  10. Can Immigration Cause Local Industrialization? Evidence from Germany’s Post-War Population Transfer By Michael Peters
  11. Expenditure Cascades, Low Interest Rates or Property Booms? Determinants of Household Debt in OECD Countries By Stockhammer, Engelbert; Wildauer, Rafael
  12. Networks, Frictions, and Price Dispersion By Pablo Schenone; Gregory Veramendi; Javier Donna
  13. Adults Behaving Badly: The Effects of Own and Peer Parents’ Incarceration on Adolescent Criminal Activities By Jason Fletcher
  14. The Scarring Effects of Youth Joblessness in Sri Lanka By Kuchibhotla, Murali; Orazem, Peter F.; Ravi, Sanjana
  15. The Geography of Civic Crowdfunding: Implications for Social Inequality and Donor-Project Dynamics By Daniel A. Brent; Katie Lorah
  16. Analysis of the job creation process in metropolitan areas: A spatial perspective By Marc Brunetto; Nadine Levratto
  17. Social Interactions, Mechanisms, and Equilibrium: Evidence from a Model of Study Time and Academic Achievement By Tim Conley; Nirav Mehta; Ralph Stinebrickner; Todd Stinebrickner
  18. The Nexus between Visitor Arrivals and Residential Property Rents in Hong Kong By Chong, Terence Tai Leung; Yiu, Alex Wing-Ho
  19. The Housing Crisis and the Rise in Student Loans By John Mondragon; Janice Eberly; Gene Amromin
  20. Historical urban growth in Europe (1300–1800) By Rafael, González-Val
  21. Crime and the Minimum Wage By Christine Braun
  22. Charges for Water and Access: What Explains the Differences in West Virginia Municipalities? By Elham Erfanian; Alan R. Collins
  23. Discrete Choice Models for Commuting Interactions By Jan J. Rouwendal; Or Levkovich; Ismir Mulalic
  24. Tailoring Instruction to Improve Mathematics Skills in Preschools: A Randomized Evaluation By Francisco Gallego; Emma Näslund-Hadley; Mariana Alfonso
  25. Modeling the relation between income and commuting distance By Giulia Carra; Ismir Mulalic; Mogens Fosgerau; Marc Barthelemy
  26. Migrants and cities research report on recruitment, employment, and working conditions of domestic workers in China By Minghui, Liu.
  27. For Whom the Bell Tolls: Road Safety Effects of Tolls on Uncongested SCUT Highways in Portugal By Alfredo Marvão Pereira; Rui Marvão Pereira; João Pereira dos Santos
  28. Natural hazard information and migration across cities:Evidence from the anticipated Nankai Trough earthquake By Michio NAOI; Keiichi SATO; Yozo TANAKA; Hiroaki MATSUURA; Shingo NAGAMATSU
  29. Demand-driven Propagation: Evidence from the Great Recession By Ha Nguyen

  1. By: Michael Wasylenko (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244)
    Abstract: A consortium of Syracuse City and Onondaga County governments along with a number of local area non-profit organizations have recently organized a commission on Local Government Modernization for the Syracuse area. The Report makes three major recommendation to strengthen the local public sector in the Syracuse region: seek opportunities to share public services across local jurisdictions to reduce costs, adopt the Minneapolis region model for sharing revenues from new commercial and industrial development across localities, and work toward merging Syracuse City government with Onondaga County government. At the same time, current non-city residents would not have responsibility for the city or school district’s legacy debts or post-employment benefit obligations. The working paper reviews the urban economics and local public finance literature in the context of fiscal viability of central cities. Central cities form the heart of knowledge-based economies and those benefits redound to the entire region in the form of higher property values and incomes. In addition, suburban enclaves have developed in part through discriminatory policies and practices at the federal and local levels and they have weakened the fiscal viabilities of central cities. It also reviews the relevant local public finance literature on city annexation and government mergers, optimally sized jurisdictions, non-profit entities’ payments in lieu of taxes in cities, efficient local government taxes, and related topics. Based on the review, the economic development of a region depends on the economic and fiscal sustainability of its central city. Suburban resident benefit in tangible ways from the economic activities in their respective cities and suburban areas could reasonably devote a portion of their tax base to enhance the resources available to the city to service the city’s legacy debts and other obligations. The working paper concludes with fiscal implications for Syracuse City and its metropolitan area.
    Keywords: Financing Central Cities
    JEL: H73 H77 R23
    Date: 2017–07
  2. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hammer, Andrea; Mc Cann, Philip
    Abstract: "Knowledge Intensive Business Services (KIBS) are widely perceived as being important drivers of technological progress and innovation. KIBS are generally understood as depending, driving and thriving on knowledge exchanges and therefore, geographical proximity to markets, customers and suppliers would be expected to be a critical factor in their performance. This paper investigates how the innovation performance and processes of KIBS firms are related to their distance from the nearest city and also to the size of the nearest city. For this purpose we make use of detailed firm level data and consider Germany as a research field. While most current evidence on this topic emerges from Canada, we complements and add to this existing literature on the geography of KIBS by examining these issues in the German spatial setting which largely conforms to a textbook type of spatial urban hierarchy. Our probit results indeed find that there are very strong distance decay and city size effects, and these also vary according to the innovation type." (Author's abstract, IAB-Doku) ((en))
    Keywords: Innovation, unternehmensbezogene Dienstleistungen, Wissensarbeit, regionale Faktoren, Stadt-Umland-Beziehungen
    JEL: D22 L84 O31 R12
    Date: 2017–07–24
  3. By: Stephanie Johnson (Northwestern University); John Mondragon (Northwestern University); Anthony DeFusco (Northwestern University)
    Abstract: Despite the growing interest in policies that seek to constrain household leverage, there is only limited empirical evidence on how such policies affect the markets they intend to regulate. In this paper, we estimate how a central U.S. policy intended to reduce household leverage in the mortgage market—the Ability-to-Repay/Qualiï¬ ed Mortgage rule—affects the price, quantity, and anticipated performance of credit. Using a difference-in-differences strategy that exploits a policy-induced discontinuity in the legal liability associated with originating certain high-leverage mortgages, we estimate that the Ability-to-Repay/Qualiï¬ ed Mortgage rule led lenders to charge an additional 10-15 basis points per year to originate such loans. For the average affected borrower in our sample, this premium works out to roughly $1,700– 2,600 in additional interest over the typical life of a loan, or as much as $13,000–20,000 if held to maturity. By measuring the amount of bunching and missing mass near the discontinuity separating high- and low-leverage loans, we also estimate that the policy eliminated 2 percent of the affected segment of the market completely and led to a reduction in leverage for another 2.7 percent of loans. These estimates imply that when current exemptions expire and the policy is extended to the entire mortgage market, it will reduce the total volume of purchase mortgage originations by roughly $12 billion per year. Our estimates also suggest that these restrictions on leverage would have only modestly reduced the aggregate default rate during the housing crisis.
    Date: 2017
  4. By: Kiss, David
    Abstract: This paper presents a small theoretical model to compare school systems that segregate students by ability ("tracking") with comprehensive ones, which allow for mixing of differently skilled students into same classes. The outcomes of interest are the achievement levels of weaker and better students, and the average achievement of all students. In the model, the instructional pace is tailored to the skill distribution of a class, and higher-achieving peers are an additional source of learning. The results show that differences in both the share of high-achievers and degree of interaction between student types can explain the mixed (quasi-)experimental evidence on the effect of de-tracking on student achievement. As changes in peer quality affect good and weak students' achievement in very different ways, the term "peer effect" should be used with caution.
    Keywords: tracking vs. mixing; decomposition of ability peer effects
    JEL: I24 J24 H52 I2
    Date: 2017–07
  5. By: Deven Carlson (Department of Political Science, University of Oklahoma); Robert Haveman (La Follette School of Public Affairs, University of Wisconsin–Madison; Department of Economics, University of Wisconsin–Madison; and Melbourne Institute: Applied Economic and Social Research, The University of Melbourne); Sohyun Kang (Department of Educational Policy Studies, University of Wisconsin–Madison); Hannah Miller (Abt Associates); Alex Schmidt (Department of Sociology, University of Wisconsin–Madison); Barbara Wolfe (Department of Population Health Sciences, University of Wisconsin–Madison; and Melbourne Institute: Applied Economic and Social Research, The University of Melbourne)
    Abstract: Drawing on a unique data set that links information on all Wisconsin households receiving means-tested benefits with the educational performance of all Wisconsin public school students in these households, we estimate the effect of a family’s initial receipt of housing assistance on students’ subsequent achievement outcomes. We estimate these effects using two different comparison groups. Our first comparison group consists of children living in households that receive housing assistance starting three years after our treatment group—we use observations from students’ pre-receipt years as the basis for the comparison. Our second comparison group consists of low-income students whose families never received housing assistance, but did receive other forms of means-tested benefits, such as SNAP, TANF, or Medicaid. The results of our analyses suggest small positive effects of housing benefit receipt on student achievement. We discuss the implications for research and policy.
    Keywords: Housing vouchers, public housing, student achievement, administrative data
    JEL: H53 O18
    Date: 2017–07
  6. By: Fitzenberger, Bernd (Humboldt University Berlin and ZEW Mannheim); Licklederer, Stefanie (University of Freiburg)
    Abstract: Based on local policy variation, this paper estimates the causal effect of additional career assistance on educational outcomes for students in Lower Track Secondary Schools in Germany. We find mostly insignificant effects of the treatment on average outcomes, which mask quite heterogeneous effects. For those students, who are taking extra coursework to continue education, the grade point average is unaffected and the likelihood of completing a Middle Track Secondary School degree falls. In contrast, educational outcomes improve for students who do not take extra coursework. Hence, the treatment causes a reversal of educational plans after graduation.
    Keywords: lower track secondary schools; career guidance; educational upgrading;
    JEL: I20 J24
    Date: 2017–07–27
  7. By: Tetsuji Okazaki (Graduate School of Economics, University of Tokyo); Toshihiro Okubo (Faculty of Economics, Keio University); Eric Strobl (ECOLE POLYTECHNIQUE)
    Abstract: The Great Kanto Earthquake occurred on September 1st, 1923 and inflicted serious damage on Yokohama City as well as Tokyo City. For example, about 90% of the factories in Yokohama City were burnt down. However, these manufacturing industries appear to have recovered from the damage swiftly. This paper investigates the existence of creative destruction due to the Great Kanto Earthquake. Using firm-level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction in Yokohama city. Larger firms tend to increase their capital more in seriously damaged areas.
    Keywords: natural disaster, Great Kanto Earthquake, creative destruction
    JEL: N95 Q54 R11
    Date: 2017–06–26
  8. By: Felipe González; José Ignacio Cuesta; Cristián Larroulet
    Abstract: Information plays a key role in markets with consumer choice. In education, data on school quality is often gathered through standardized testing. However, the use of these tests has been controversial because of behavioral responses that could distort performance measures. We study the Chilean educational market and document that low-performing students are underrepresented in test days, generating distortions in school quality information. These distorted quality signals affect parents’ school choice and induce misallocation of public programs. These results indicate that undesirable responses to test-based accountability systems may impose significant costs on educational markets.
    JEL: I20 L15
    Date: 2017
  9. By: Goodness C. Aye (Department of Economics, University of Pretoria, Pretoria, South Africa); Matthew W. Clance (Department of Economics, University of Pretoria, Pretoria, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: This paper examines the spill over effect of economic uncertainty on the duration probability of housing market booms, busts and normal times among 12 OECD countries. Quarterly data from 1985 to 2012 were used. Based on a discrete-time duration (hazard) model, we find that the probability of exiting housing market busts increases with higher economic uncertainty in a statistically significant fashion. Uncertainty, however, is not found to influence the likelihood of leaving booms and normal times. Our results tend to suggest that housing serves as possible hedge against uncertainty.
    Keywords: Housing Market Cycles, Uncertainty, Hazard Model
    JEL: C41 E32 E51 E52 R31
    Date: 2017–08
  10. By: Michael Peters (Yale University)
    Abstract: Can increases in the size of the local population spur economic development? This paper uses a particular historical episode to study this question empirically. After the Second World War, between 1945 and 1948, about 12m Ethnic Germans were expelled from regions in Middle and Eastern Europe and transferred to Western Germany. At the time, this inflow amounted to almost 20% of the Western German population. Importantly, there are vast cross-sectional differences in the extent to which refugees were allocated to individual counties and various features of the allocation mechanism make it possible to construct exogenous variation in these local supply shocks. I study the effect of such shocks on Germany's regional economic development between 1950 and 1970. I find that refugee-inflows are positively correlated with local income per capita and manufacturing employment. These patterns are consistent with theories of agglomeration and endogenous technological change but harder to reconcile in a neoclassical framework.
    Date: 2017
  11. By: Stockhammer, Engelbert (Kingston University London); Wildauer, Rafael (Kingston University London)
    Abstract: The past decades have witnessed a strong increase in household debt and high growth of private consumption expenditures in many countries. This paper empirically investigates four explanations: First, the expenditure cascades hypothesis argues that an increase in inequality induced lower income groups to copy the spending behaviour of richer peer groups and thereby drove them into debt (‘keeping up with the Joneses’). Second, the housing boom hypothesis argues that increasing property prices encourage household spending and household borrowing due to wealth effects, eased credit constraints and the prospect of future capital gains. Third, the low interest hypothesis argues that low interest rates encouraged households to take on more debt. Fourth, the financial deregulation hypothesis argues that deregulation of the financial sector boosted credit supply. The paper tests these hypotheses by estimating the determinants of household borrowing using a panel of 11 OECD countries (1980-2011). Results indicate that real estate prices and low interest rates were the most important drivers of household debt. In contrast the data does not support the expenditure cascades hypothesis as a general explanation of debt accumulation across OECD countries. Our results are consistent with the financial deregulation hypothesis, but its explanatory power for the 1995-2007 period is low.
    Keywords: household debt; income distribution; property prices
    JEL: D31 E12 E51
    Date: 2017–08–01
  12. By: Pablo Schenone (Arizona State University); Gregory Veramendi (Arizona State University); Javier Donna
    Abstract: This paper studies price dispersion in buyer-seller markets using networks to model frictions, where buyers are linked with a subset of sellers and sellers are linked with a subset of buyers. Our approach allows for indirect competition, where a buyer who is not directly linked with a seller affects the price obtained by that seller. Indirect competition generates the central finding of our paper: price dispersion depends on both the number of links in the network and the structure of the network (how links are distributed). Networks with very few links can have no price dispersion, while networks with many links can still support significant price dispersion. We develop a decomposition of the network that characterizes which links are redundant (i.e. have no effect on prices). We show that a particular network structure (Hamiltonian Cycle) with only two links per node has no price dispersion. We then use a theorem from Frieze (1985) to show that this network structure arises asymptotically with probability one in a randomly drawn network, even as the probability of an individual link goes to zero. We also show the finite sample properties of this relationship and find that even small sparse networks can have very little price dispersion. In an application to eBay, we show that our model reproduces the price dispersion seen in the data quite well, and that 35-45 percent of the price dispersion at eBay can be explained by the network structure alone.
    Date: 2017
  13. By: Jason Fletcher (University of Wisconsin–Madison)
    Abstract: A maturing literature across the social sciences suggests important impacts of the intergenerational transmission of crime as well as peer effects that determine youth criminal activities. This paper explores these channels by examining gender-specific effects of maternal and paternal incarceration from both own-parents and classmate-parents. This paper also adds to the literature by exploiting across-cohort, within school exposure to peer parent incarceration to enhance causal inference. While the intergenerational correlations of criminal activities are similar by gender (father-son/mother-son), the results suggest that peer parent incarceration transmits effects largely along gender lines, which is suggestive of specific learning mechanisms. Peer maternal incarceration increases adolescent female criminal activities and reduces male crime and the reverse is true for peer paternal incarceration. These effects are strongest for youth reports of selling drugs and engaging in physical violence. In contrast, the effects of peer parental incarceration on other outcomes, such as GPA, do not vary by gender.
    Keywords: crime, social spillovers, intergenerational transmission, gender
    JEL: J24 Z13
    Date: 2017–07
  14. By: Kuchibhotla, Murali; Orazem, Peter F.; Ravi, Sanjana
    Abstract: Retrospective data on labor market spells for successive cohorts of school leavers in Sri Lanka are used to examine whether early spells of joblessness lead to subsequent difficulty in finding or keeping a job. A matching method based on the Joffee and Rosenbaum (1999) balancing score approach is used to generate pairs of school leavers that have similar expected levels of joblessness but that differ in realized levels of joblessness. Assuming that youth are not able to perfectly control whether they are employed or not employed, we argue that marginal differences in joblessness between otherwise observationally equivalent youth can be viewed similarly to a regression discontinuity in experienced joblessness. We find evidence of scarring in that spending the first year after leaving school without a job or training increases subsequent time spent jobless by between 11 to 16%.
    Date: 2017–07–31
  15. By: Daniel A. Brent; Katie Lorah
    Abstract: Civic crowdfunding combines the power of private crowdfunding with grassroots organization to directly fund local public projects. This article analyzes fine scale geographic data on 18,000 donations to roughly 800 campaigns from a leading civic crowdfunding platform to examine the implications of civic crowdfunding for inequality and the link between donors and projects. The neighborhood characteristics of projects, including median household income, do not impact the ability to raise capital, which addresses a common concern that civic crowdfunding will exacerbate inequality in neighborhood amenities. The average distance of a donor to a project is over 300 miles and the median distance is 8 miles, indicating that while projects elicit donations from outside their community local donations are very important. Donors' income does not influence whether donors contribute to projects in low income or high income neighborhoods. The findings serve as a guide to future research on civic crowdfunding and inform how the expansion of this new funding mechanism can integrate into local government policy.
    Date: 2017–09
  16. By: Marc Brunetto; Nadine Levratto
    Abstract: This paper seeks to challenge the view that metropolitan areas are characterized by a general positive trend in the job creation process. It rests upon an empirical analysis of the 13 French metropolitan areas over the 2004-2010 period. The estimations of employment growth run using spatial econometrics modeling techniques show that spatial spillover effects intervene in the growth process of the areas under review and that density matters in determining the employment growth rate. We have been unable to identify a unique model of metropolitan dynamics. Indeed, each metropolitan area is characterized by a specific combination of explanatory variables which, finally, attests of the variety of the metropolitan frameworks.
    Keywords: Metropolitan areas; agglomeration effects; spatial econometrics; spillover effects.
    JEL: R11 R12 R50
    Date: 2017
  17. By: Tim Conley (University of Western Ontario); Nirav Mehta (University of Western Ontario); Ralph Stinebrickner (Berea College); Todd Stinebrickner (University of Western Ontario)
    Abstract: We develop and estimate a model of study time choices of students on a social network. The model is designed to exploit unique data collected in the Berea Panel Study. Study time data allow us to quantify an intuitive mechanism for academic social interactions: own study time may depend on friend study time. Social network data allow study time choices and resulting academic achievement to be embedded in an estimable equilibrium framework. New data on study propensities allow us to directly address potential sorting into friendships based on typically unobserved determinants of study time. We develop a speci?cation test that exploits the equilibrium nature of social interactions and use it to show that our study propensity measures substantially address endogeneity concerns. We ?nd friend study time strongly a?ects own study time, and, therefore, student achievement. We examine how network structure interacts with student characteristics to affect academic achievement. Sorting on friend characteristics appears important in explaining variation across students in study time and achievement, and determines the aggregate achievement level.
    Keywords: Social Networks; Peer Effects; Homophily; Time-use
    Date: 2017
  18. By: Chong, Terence Tai Leung; Yiu, Alex Wing-Ho
    Abstract: Cost of living in Hong Kong is among the highest in the world. This paper investigates the effect of tourist arrivals on the residential property market in Hong Kong. It is demonstrated that the soaring number of tourists from mainland China is pushing up property rents in Hong Kong. The substantial accommodation need generated by the increasing number of students from China is another contributing factor.
    Keywords: Residential property rent; Retail property rent; Instrumental variable
    JEL: R2 R21 R23
    Date: 2017–07–01
  19. By: John Mondragon (Northwestern University); Janice Eberly (Northwestern University); Gene Amromin (Federal Reserve Bank of Chicago)
    Abstract: The flow of new student loans increased by 50% between 2007 and 2010, and the amount borrowed per student also rose by about a third. This shift occurred during the Financial Crisis, while credit markets were disrupted, and home prices fell by about a third nationwide. In this paper, we explore whether these two phenomena are linked, and in particular, whether the decline in home equity caused households to shift the responsibility for education financing to students in the form of loans. Student loans were one of the few forms of credit that remained accessible throughout the crisis. We estimate that for every dollar of home equity lost, households increase student loan debt by forty to sixty cents. This substitution appears to be driven primarily by households with low levels of liquid assets. We extend our analysis using credit bureau data to trace longer-run effects of this leverage on students. Our results show that constrained households generally continued to enroll in college, but switched to student loan financing. Our quantitative estimates suggest that the 30% average decline in house prices resulted in $1300 in additional student borrowing on average, per student, though the estimated effects are larger for liquidity-constrained and less-educated households. This channel explains 38% of the change in student loan debt within our sample.
    Date: 2017
  20. By: Rafael, González-Val
    Abstract: This paper analyses the evolution of the European urban system from a long-term perspective (from 1300 to 1800). Using the method recently proposed by Clauset, Shalizi, and Newman (2009), a Pareto-type city size distribution (power law) is rejected from 1300 to 1600. A power law is a plausible model for the city size distribution only in 1700 and 1800, although the log-normal distribution is another plausible alternative model that we cannot reject. Moreover, the random growth of cities is rejected using parametric and non-parametric methods. The results reveal a clear pattern of convergent growth in all the periods.
    Keywords: city size distribution, power law, Pareto distribution, Zipf’s law, Gibrat’s law
    JEL: C12 C14 R11 R12
    Date: 2017–07–28
  21. By: Christine Braun (University of California Santa Barbara)
    Abstract: How does the minimum wage affect crime rates? Empirical research suggests that increasing a worker's wage can deter him from committing crimes. On the other hand, if that worker becomes displaced as a result of the minimum wage, he may be more likely to commit a crime. In this paper, I describe a frictional world in which a worker's criminal actions are linked to his labor market outcomes. I calibrate the model to match the aggregate crime rate and the labor market faced by 16-24 year olds in 1998. Using the calibrated model, I show that the relationship between the aggregate crime rate and the minimum wage is non-monotonic. I test for this non-monotonicity using county level crime data and state level minimum wage changes from 1980 to 2012. The results from the empirical analysis as well as the model suggest that any increase in the federal minimum wage may increase the crime rate as the current wage floor is close the the crime minimizing value.
    Date: 2017
  22. By: Elham Erfanian (Regional Research Institute, West Virginia University); Alan R. Collins (Davis College Division of Resource Management, West Virginia University)
    Abstract: Applying linear and log-log functional forms plus spatial econometric analyses to a dataset of 125 municipal water utilities, we investigate the determinants of charges for water use and minimum monthly access to water across West Virginia municipalities in 2014. Water charges models are consistent with the theory of water cost determination as water source, debt, and economies of size plus scale influence what household consumers pay for water. Based on model results, groundwater use by utilities lowers water charges and is estimated to save household customers in West Virginia over $3.6 million annually. West Virginia households typically pay far below the OECD standard of 3 to 5% of household income for municipal water, which may explain why socioeconomic factors do not influence minimum charges for access.
    Keywords: water charges, social equity, utilities, spatial econometrics
    JEL: H40 Q25 D24
    Date: 2017–07–31
  23. By: Jan J. Rouwendal (Vrije Universiteit Amsterdam; Tinbergen Institute, The Netherlands); Or Levkovich (Vrije Universiteit Amsterdam); Ismir Mulalic (DTU, KRAKS)
    Abstract: An emerging quantitative spatial economics literature models commuting interactions by a gravity equation that is mathematically equivalent to a multinomial logit model. This model is widely viewed as restrictive because of the independence of irrelevant alternatives (IIA) property that links substitution behavior in response to changes in the attractiveness of choice alternatives to choice probabilities in a mechanistic way. This is relevant for counterfactual analysis. In this paper we examine the appropriateness of the commuting model from a theoretical as well as an empirical point of view. We show that conventional specification tests of the multinomial logit model are of limited use when alternative specific constants are used, as is common in the recent literature, and offer no information with respect to the validity of IIA. In particular, we show that maximum likelihood estimation of relevant nested logit model is impossible because the crucial parameters are not identified. We discuss cross-nested and mixed logit as alternatives. We argue that a comparison between predicted and actual changes in commuting flows in response to a change in the attractiveness of choice alternatives provides a more informative test for the validity of the multinomial logit model for commuting interaction and report the results of such a test – as well as others – for data referring to Copenhagen.
    Keywords: quantitative spatial economics; multinomial logit; mixed logit; independence of irrelevant alternatives
    JEL: R1 R2 R4
    Date: 2017–07–31
  24. By: Francisco Gallego; Emma Näslund-Hadley; Mariana Alfonso
    Abstract: Previous research suggests that tailoring instruction to each student needs can produce significant learning gains. However, few programs have successfully implemented this approach in practice. In this paper, we present the results of a randomized evaluation of a program that uses an individualized scaffolding approach during regular school hours to teach the basic elements of numbers and shapes to preschoolers using a sample of 107 preschool centers and almost 3,000 children in Peru. The program improves Math outcomes among all children (by 0.10 standard deviations) and has stronger impacts for students in the lower quintiles of the distribution of outcomes and for students with teachers with university degrees. The effect in the areas that were implemented in a more intense way persists even one year after the program ended. Interestingly, we find no evidence of effects that are different across gender, language-spoken at home, and proxies for SES, contrasting with results from previous research that suggest that effects of Math programs are biased along gender and socioeconomic lines.
    JEL: I21 I28 O15
    Date: 2017
  25. By: Giulia Carra (IPHT - Institut de Physique Théorique - UMR CNRS 3681 - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Ismir Mulalic (DTU - Technical University of Denmark [Lyngby]); Mogens Fosgerau (DTU - Technical University of Denmark [Lyngby]); Marc Barthelemy (CAMS - Centre d'analyse et de mathématique sociale - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, IPHT - Institut de Physique Théorique - UMR CNRS 3681 - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We discuss the distribution of commuting distances and its relation to income. Using data from Denmark, the UK, and the US, we show that the commuting distance is (i) broadly distributed with a slow decaying tail that can be fitted by a power law with exponent $\gamma \approx 3$ and (ii) an average growing slowly as a power law with an exponent less than one that depends on the country considered. The classical theory for job search is based on the idea that workers evaluate the wage of potential jobs as they arrive sequentially through time, and extending this model with space, we obtain predictions that are strongly contradicted by our empirical findings. We propose an alternative model that is based on the idea that workers evaluate potential jobs based on a quality aspect and that workers search for jobs sequentially across space. We also assume that the density of potential jobs depends on the skills of the worker and decreases with the wage. The predicted distribution of commuting distances decays as $1/r^{3}$ and is independent of the distribution of the quality of jobs. We find our alternative model to be in agreement with our data. This type of approach opens new perspectives for the modeling of mobility.
    Date: 2017–06–08
  26. By: Minghui, Liu.
    Abstract: This study on domestic workers in China was conducted under the EU–China Dialogue on Migration and Mobility Support Project, a collaboration between the International Organization for Migration and the International Labour Organization, funded by the European Union. It examines the current situation of domestic workers in China with a focus on the case study of Beijing, including domestic workers’ recruitment, employment, working conditions, social security, accessibility to legal protection, and complaint mechanisms. The study identifies the gaps in the national policies and practices concerning domestic workers in China in light of international standards and good practices. In addition, the study provides relevant policy recommendations to narrow the gaps with regard to international instruments and to promote the legitimate rights of domestic workers in China. The study is not only an illustration of the socioeconomic impact of migration on development – and urbanization in particular. It is an expression of hope that domestic work may transition from the informal to the formal economy and become a fully-fledged urban labour market in its own right in China’s near future.
    Keywords: descriptor 1, descriptor 2, descriptor 3, descriptor 4
    Date: 2017
  27. By: Alfredo Marvão Pereira (Department of Economics, The College of William and Mary, Williamsburg VA 23187); Rui Marvão Pereira (Department of Economics, The College of William and Mary, Williamsburg VA 23187); João Pereira dos Santos (Nova School of Business and Economics, Faculdade de Economia – Universidade Nova de Lisboa)
    Abstract: We present a difference-in-differences analysis of the road safety effects of introducing tolls on SCUT highways in Portugal, a policy motivated purely by financial considerations, as congestion was never an issue. Using negative binomial count models and a comprehensive dataset on all mainland municipalities covering 2008 to 2014, we find that introducing tolls led to an increase in the total numbers of accidents and of road injuries in municipalities where SCUT highways are located. Additionally, we register a change in the composition thereof, with fewer occurrences on highways (including on SCUT highways) and an increase on national and other roads. Finally, we find that most effects pertain to light injuries. No statistically significant effects were identified for fatal or serious injuries. Furthermore, as a result of introducing tolls on SCUT highways, we estimate that around 20% of the toll revenue collected is lost on the costs linked to road accidents. This questions the rationale of introducing such tolls, even on a revenue-raising standpoint.
    Keywords: Road safety, Accident, Injury, Toll, Difference-in-differences, SCUT, Portugal
    JEL: R10 R41
    Date: 2017–07
  28. By: Michio NAOI; Keiichi SATO; Yozo TANAKA; Hiroaki MATSUURA; Shingo NAGAMATSU
    Abstract: The Nankai Trough and its underlying fault are the major source of the future devastating earthquake, the Nankai Trough earthquake. The Central Disaster Management Council, which is a governmental committee for policy planning on disaster management, released the latest report on the predicted damage from the Nankai Trough earthquake in 2012. The new report estimated the maximum possible seismic movements and tsunami height for each municipality, which were updated from the previous ones released in 2003. We examine the causal impact of the municipality-level predicted seismic movements and tsunami heights on the net migration across municipalities. The Difference-in-Differences (DID) estimates suggest that the predicted tsunami height is significantly negatively associated with the municipality’s net migration rate. Further empirical analysis shows that the predicted tsunami height has a prolonged negative impact on the in-migration into the municipality, whereas it has only a short-term positive impact on the out-migration. Our empirical findings suggest that, after the dissemination of tsunami predictions, people tend to choose less risky locations, rather than engaging in other disaster-prevention activities. In addition, we found that the negative impact of tsunami heights on the in-migration is weaker in municipalities where public facilities that can serve as disaster relief or evacuation center are concentrated in the densely inhabited district.
    Keywords: Earthquake, Tsunami, Net migration JEL Classification: Q54, Q58, R23
    Date: 2017–03
  29. By: Ha Nguyen (The World Bank)
    Abstract: This paper presents evidence for the propagation of job losses in the U.S. during the Great Recession. Using county-level tradable job losses (driven by declines in aggregate demand) as an instrument, it shows that retail and restaurant employment fell by 0.34% for every 1% job losses in the rest of the county’s economy. The finding is not driven by the collapse in house price or by credit supply problems. In addition, the spillover is more severe for more income-elastic retail and restaurant industries, which suggest a role for the demand-driven propagation.
    Date: 2017

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