nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒09‒17
53 papers chosen by
Steve Ross
University of Connecticut

  1. Out-of-town Home Buyers and City Welfare By Favilukis, Jack; van Nieuwerburgh, Stijn
  2. Accessibility, absorptive capacity and innovation in European urban areas By Clément Gorin
  3. Decomposing the Impact of Immigration on House Prices By Rosa Sanchis-Guarner
  4. Can Learning Explain Boom-Bust Cycles in Asset Prices? An Application to the US Housing Boom By Colin Caines
  5. The Financial Crisis and Diverging House Prices: Evidence from the Copenhagen Metropolitan Area By Ismir Mulalic; Holger Rasmussen; Jan Rouwendal; Hans Henrik Woltmann
  6. Spatiotemporal Short-term Traffic Forecasting using the Network Weight Matrix and Systematic Detrending By Alireza Ermagun; David Levinson
  7. Three risks for the German residential property market By Voigtländer, Michael
  8. Using Temporal Detrending to Observe the Spatial Correlation of Traffic By Alireza Ermagun; Snigdhansu Chatterjee; David Levinson
  9. The value of air quality in Chinese cities: Evidence from labor and property market outcomes By Xuan Huang; Bruno Lanz
  10. Quantifying the effect of labor market size on learning externalities By Peters, Jan Cornelius
  11. High-Dosage Tutoring and Reading Achievement: Evidence from New York City By Roland G. Fryer, Jr; Meghan Howard Noveck
  12. European R&D networks: A snapshot from the 7th EU Framework Programme By Sara Amoroso; Alex Coad; Nicola Grassano
  13. Tarnishing the Golden and Empire States: Land-Use Restrictions and the U.S. Economic Slowdown By Kyle F. Herkenhoff; Lee E. Ohanian; Edward C. Prescott
  14. City Logistics and Pooling Solutions: Obvious, Environmental friendly, Good acceptability, Winner- winner Strategies: Why Think more about it ? By Laurent Guihéry
  15. Traffic Flow Variation and Network Structure By Alireza Ermagun; David Levinson
  16. R&D Policy and Technological Trajectories of Regions: Evidence from the EU Framework Programmes By Wolf-Hendrik Uhlbach; Pierre-Alexandre Balland; Thomas Scherngell
  17. Unexpected versus expected network disruption: Effects on travel behavior By Adam Danczyk; Xuan Di; Henry Liu; David Levinson
  18. The impact of non-cognitive skills and risk preferences on rural-to-urban migration: Evidence from Ukraine By S. H. Ayhan; K. Gatskova; H. Lehmann
  19. Uncertainty in the housing market: Evidence from the US states By Maria Christidou; Stilianos Fountas
  20. Do Teaching Practices Impact Socio-Emotional Skills? By Vaclav Korbel; Michal Paulus
  21. Measuring highway efficiency : A DEA approach and the Malquist index By Sarmento, Joaquim Miranda; Renneboog, Luc; Verga-Matos, Pedro
  22. Safety in Numbers and Safety in Congestion for Bicyclists and Motorists at Urban Intersections By Kristin Carlson; Alireza Ermagun; Brendan Murphy; Andrew Owen; David Levinson
  23. Do Speed Cameras Save Lives? By Cheng Keat Tang
  24. How do teachers teach?: Insights from teachers and students By OECD
  25. Accessibility Oriented Development By Robbin Debbosere; Ahmed El-Geneidy; David Levinson
  26. Incentives to local public service provision: an evaluation of Italy’s Obiettivi di Servizio By Guglielmo Barone; Guido de Blasio; Alessio D'Ignazio; Andrea Salvati
  27. Economic importance of air transport and airport activities in Belgium – Report 2015 By Saskia Vennix
  28. Heterogeneous Growth and Regional (Di)Convergence in Bolivia: A Distribution Dynamics Approach By Mendez-Guerra, Carlos
  29. Clustering Space-Time Series: A Flexible STAR Approach By E. Otranto; M. Mucciardi
  30. An innovative tool for territorial shared diagnosis on poverty and social inclusion: a support for cooperation? By Sonia Adam-Ledunois; Romuald Mansuy; Sébastien Damart
  31. Does Branch Network Size Influence Positively the Management Performance of Japanese Regional Banks? By Kondo, Kazumine
  32. Taken by Storm: Hurricanes, Migrant Networks, and U.S. Immigration By Parag Mahajan; Dean Yang
  33. Family Transfers With Retirement-Aged Adults in the United States: Kin Availability, Wealth Differentials, Geographic Proximity, Gender, and Racial Disparities By Ashton M. Verdery; Jonathan Daw; Colin Campbell; Rachel Margolis
  34. Measuring Productivity Dispersion: Lessons From Counting One-Hundred Million Ballots By Ethan Ilzetzki; Saverio Simonelli
  35. The Regional Input-Output Model: An Application to the Mexican Automotive Sector By Torre Cepeda Leonardo E.; Alvarado Jorge; Quiroga Miroslava
  36. Optimal Congestion Pricing with Diverging Long-run and Short-run Scheduling Preferences By Erik (E.T.) Verhoef
  37. The optimal choice of internal decision-making structures in a network industry By Tsuyoshi Toshimitsu
  38. The Impact of a Rise in the Real Estate Transfer Taxes on the French Housing Market By Guillaume Bérard; Alain Trannoy
  39. Niger NECS Impact Evaluation Report By Emilie Bagby; Kristine Bos; Anca Dumitrescu; Nicholas Ingwersen; Matt Sloan
  40. Does rental housing market stabilize the economy? A micro and macro perspective. By Michal Rubaszek; Margarita Rubio
  41. Knowledge Diffusion and Trade across Countries and Sectors By Nan Li; Jie Cai; Ana Maria Santacreu
  42. Smart Specialisation at work: Analysis of the calls launched under ERDF Operational Programmes By Carlo Gianelle; Fabrizio Guzzo; Krzysztof Mieszkowski
  43. The Hardships of Long Distance Relationships: Knowledge Transmission and the Ease of Communication within Multinational Firms By Dany Bahar
  44. Economic importance of the Belgian ports: Flemish maritime ports, Liège port complex and the port of Brussels - Report 2015 By Claude Mathys
  45. Effectiveness of macroprudential policies under borrower heterogeneity By Punzi, Maria Teresa; Rabitsch, Katrin
  46. Does Urbanization Reduce Rural Poverty? Evidence from Vietnam By Adel Ben Youssef; Mohamed El Hedi Arouri; Cuong Nguyen-Viet
  47. Justice, Exclusion, and Equity: An Analysis of 48 U.S. Metropolitan Areas By Chelsey Palmateer; David Levinson
  48. High School Choices and the Gender Gap in STEM By David Card; A. Abigail Payne
  49. Competition and Academic Performance: Evidence from a Classroom Experiment By Kelly Bedard; Stefanie Fischer
  50. Why APRC is misleading and how it should be reformed By Berlinger, Edina
  51. Typologies of sport clusters based on socio-economic proximity By Anna Gerke; Yan Dalla Pria
  52. Inclusive local development: A strategy for Heraklion, Greece By Benner, Maximilian; Buzin, Johannes; Hoffmann, Jakob; Taifour, Ahmad Azzam
  53. Education Policies and Migration across European Countries By Ainhoa Aparicio Fenoll; Zoe Kuehn

  1. By: Favilukis, Jack; van Nieuwerburgh, Stijn
    Abstract: The major cities of the world have attracted a flurry of out-of-town (OOT) home buyers. Such capital inflows affect housing affordability, the spatial distribution of residents, construction, labor income, wealth, and ultimately welfare. We develop a spatial equilibrium model of a city with substantial heterogeneity among residents. We calibrate the model to the New York and Vancouver metro areas. The observed increase in OOT purchases is associated with 1.1% (5.0%) higher house prices and a 0.1% (0.34%) welfare loss in New York (Vancouver). Taxing OOT buyers can turn welfare losses into gains when tax revenues finance a local public good.
    Keywords: affordable housing; Dynamic spatial equilibrium; foreign investors; Gentrification; House Prices; property taxes
    JEL: G11 G12 H41 H70 J61 R10 R20 R30 R40 R51
    Date: 2017–09
  2. By: Clément Gorin (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Empirical studies on the geography of innovation have established that skilled workers' mobility and collaboration networks shape the diffusion of knowledge across firms and regions. At the same time, the literature on absorptive capacity insisted on the importance of local research capabilities to take advantage of knowledge developed elsewhere. This paper investigates both phenomena in an integrated framework by assuming that mobility and networks provide access to knowledge, but the proportion of accessible knowledge effectively used for innovation depends on absorptive capacity. Such complementaries in regional research efforts are effectively captured using a spatial Durbin model in which the conne ctivity structure stems from mobility and collaboration patterns. Results suggest the relative importance of these two channels in the diffusion of knowledge, and suggests that human capital increases absorptive capacity. These findings have implications for the geography of innovation. While greater accessibility encourages convergence, the notion of absorptive capacity implies a self-reinforcing effect leading to divergence. Abstract Empirical studies on the geography of innovation have established that skilled workers' mo
    Keywords: Innovation, Mobility, Network, Absorptive capacity, Spatial Durbin model, Urban areas
    Date: 2017
  3. By: Rosa Sanchis-Guarner (Imperial College Business School)
    Abstract: An inflow of immigrants into a region impacts house prices in three ways. For a fixed level of local population, housing demand rises due to the increase in foreign-born population. In addition, immigrants can influence native location decisions and induce additional shifts in demand. Finally, changes in housing supply conditions can in turn affect prices. Existing reduced form estimates of the effect of immigration on house prices capture the sum of all these effects. In this paper I propose a methodology to identify the different channels driving the total effect. I show that, conditional on supply, total changes in housing demand can be decomposed into the sum of direct immigrant demand and indirect demand changes from relocated population. The size and sign of the indirect demand effect depends on the impact of immigration on native mobility. I use Spanish data during the period 2001-2012 to estimate the different elements of the decomposition, applying an instrumental variables strategy to obtain consistent coefficients. The results show that overlooking the impact of immigration on native location induces a sizeable difference between the total and the immigrant demand effects, affecting the interpretation of the estimates.
    Keywords: Immigration, Housing, Spain, Instrumental Variables
    JEL: J61 R12 R21
    Date: 2017–09
  4. By: Colin Caines (Federal Reserve Board)
    Abstract: Explaining asset price booms poses a difficult question for researchers in macroeconomics: how can large and persistent price growth be explained in the absence large and persistent variation in fundamentals? This paper argues that boom-bust behavior in asset prices can be explained by a model in which boundedly-rational agents learn the process for prices. The key feature of the model is that learning operates in both the demand for assets and the supply of credit. Interactions between agents on either side of the market create complementarities in their respective beliefs, providing an additional source of propagation. In contrast, the paper shows why learning involving only one side on the market, which has been the focus of most of the literature, cannot plausibly explain persistent and large price booms. Quantitatively, the model explains recent experiences in US housing markets. A single unanticipated mortgage rate drop generates 20 quarters of price growth whilst capturing the full appreciation in US house prices in the early 2000s. The model is able to generate endogenous liberalizations in household lending conditions during price booms, consistent with US data, and replicates key volatilities of housing market variables at business cycle frequencies.
    Date: 2017
  5. By: Ismir Mulalic (Technical University of Denmark); Holger Rasmussen (Institute for Urban Economic Research, Denmark); Jan Rouwendal (University of Amsterdam; Tinbergen Institute, The Netherlands); Hans Henrik Woltmann (Institute for Urban Economic Research, Denmark)
    Abstract: This paper investigates the development of house prices in Copenhagen in the period 1994-2013, while paying special attention to the heterogeneous impact of the boom and bust periods along the dimensions of housing type (single vs multifamily housing), geography and quality. To allow for price developments that can differ by quality, we use a recently developed generalization of the conventional Muth model that assumes a constant unit price across the quality spectrum. It allows us to separately consider the development of house prices and quality in Copenhagen neighbourhoods. Moreover, we investigate the validity of the common assumption of a constant unit price and reject it decisively. We use detailed housing transaction data for the greater Copenhagen area. We show that the housing boom of the 2000’s and the bust that followed hit the lowest quality segments significantly harder than the high quality segments of the housing market.
    Keywords: housing price; housing quality; housing price index
    JEL: D40 L85 R21 R31
    Date: 2017–09–11
  6. By: Alireza Ermagun; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: This study examines the dependency between traffic links using a three-dimensional data detrending algorithm to build a network weight matrix in a real-world example. The network weight matrix reveals how links are spatially dependent in a complex network and detects the competi- tive and complementary nature of traffic links. We model the traffic flow of 140 traffic links in a sub-network of the Minneapolis - St. Paul highway system for both rush hour and non-rush hour time intervals, and validate the extracted network weight matrix. The results of the modeling indi- cate: (1) the spatial weight matrix is unstable over time-of-day, while the network weight matrix is robust in all cases and (2) the performance of the network weight matrix in non-rush hour traffic regimes is significantly better than rush hour traffic regimes. The results of the validation show the network weight matrix outperforms the traditional way of capturing spatial dependency between traffic links. Averaging over all traffic links and time, this superiority is about 13.2% in rush hour and 15.3% in non-rush hour, when only the 1st -order neighboring links are embedded in modeling. Aside from the superiority in forecasting, a remarkable capability of the network weight matrix is its stability and robustness over time, which is not observed in spatial weight matrix. In addition, this study proposes a naïve two-step algorithm to search and identify the best look-back time win- dow for upstream links. We indicate the best look-back time window depends on the travel time between two study detectors, and it varies by time-of-day and traffic link.
    Keywords: Traffic Forecasting; Spatial correlation; Competitive links; Traffic Flow; Weight matrix
    JEL: R41 R48 C21 C31 C33
    Date: 2017
  7. By: Voigtländer, Michael
    Abstract: With prices surging in major cities since 2010, the debate about a potential speculative bubble in the German housing market has been gaining momentum. Overall, however, the German housing market is sound. Neither an excess of construction, nor an excess of mortgage lending have been observed, and thus the risk of a sudden burst in housing prices seems low. In the major cities in particular, there is a discrepancy between supply and demand. Combined with low mortgage rates, strong price increases are plausible. Nevertheless, this study also points to risks in the market. Specifically, investors should take into account the 3 following risks: 1. In rural regions, there is an excess of supply of single-family homes. Since demographic forecasts for the larger part of these regions are dismal, a price correction seems more likely. 2. In some big cities, completions in micro apartments have been enormously high. Moreover, most new micro apartments are let at high rental rates, overburdening most students who are meant to be the typical users. As the population aged between 18 and 25 is set to shrink over the coming years, there are grounds for a market correction, 3. Multipliers indicate optimistic expectations with regards to future rent increases, specifically in Hamburg and Munich. Although rental increases can be justified by a growing population, there is a risk of a tightening in rental regulation, preventing investors from putting rental increases in practice. The German housing market appeared to be a haven for investors in recent years. The combination of high demand (migration), a robust economy and ultra-low mortgage rates offered the chance for high capital growth. Fortunately, the German market is less prone to overheating than other markets, but risks are emerging nonetheless. However, since demand continues to outpace supply in various sub-segments of the housing market, investment opportunities are still present.
    JEL: D53 R21 R31
    Date: 2017
  8. By: Alireza Ermagun; Snigdhansu Chatterjee; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This empirical study sheds light on the spatial correlation of traffic links under different traffic regimes. We mimic the behavior of real traffic by pinpointing the spatial correlation between 140 freeway traffic links in a major sub-network of the Minneapolis—St. Paul freeway system with a grid-like network topology. This topology enables us to juxtapose the positive and negative correlation between links, which has been overlooked in short-term traffic forecasting models. To accurately and reliably measure the correlation between traffic links, we develop an algorithm that eliminates temporal trends in three dimensions: (1) hourly dimension, (2) weekly dimension, and (3) system dimension for each link. The spatial correlation of traffic links exhibits a stronger negative correlation in rush hours, when congestion affects route choice. Although this correlation occurs mostly in parallel links, it is also observed upstream, where travelers receive information and are able to switch to substitute paths. Irrespective of the time-of-day and day-of-week, a strong positive correlation is witnessed between upstream and downstream links. This correlation is stronger in uncongested regimes, as traffic flow passes through consecutive links more quickly and there is no congestion effect to shift or stall traffic. The extracted spatial correlation structure can augment the accuracy of short-term traffic forecasting models.
    Keywords: statistics, spatial weight matrix, traffic forecasting, network weight matrix Publication status: Published in PLoS One. 12(5): e0176853.
    JEL: R41 R48 C21 C31 C33
    Date: 2017
  9. By: Xuan Huang; Bruno Lanz
    Abstract: Using a dual-market sorting model of workers' location decisions, this paper studies the capitalization of air pollution in wages and property prices across Chinese cities. To account for endogeneity of air pollution in the determination of wages and property prices, we exploit quasi-experimental variations in air quality induced by a policy subsidizing coal-based winter heating in northern China, and document a discontinuity in average air quality for cities located north and south of the policy boundary. Using data for all 288 Chinese cities in 2011, we estimate an equilibrium relationship between wages and house prices for the entire system of Chinese cities, and specify a regression discontinuity design to quantify how variation in air quality induced by the policy affects this relationship locally. Our preferred estimates of the elasticity of wages and house prices with respect to PM10 concentration are 0.53 and -0.71 respectively. At the average of our sample, the willingness to pay for a marginal reduction in PM10 concentration is CNY 261.28 (about USD 40.50), with a significant share reflected in labor market outcomes.
    Keywords: Hedonic model; Air pollution; Labor market; House prices; Local public goods; Regression discontinuity
    JEL: H41 J31 R31 Q53
    Date: 2017–09
  10. By: Peters, Jan Cornelius
    Abstract: We show for Germany that labor productivity as reflected in wage is, ceteris paribus, higher for workers who previously acquired work experience in rather urban labor markets with a large local workforce than in rather rural labor markets which are small in terms of regional employment. Our empirical analysis provides new evidence on the magnitude of these dynamic agglomeration gains by estimating the elasticity of wages with regard to the (cumulated) size of the local labor markets in which workers acquired experience. It shows that this elasticity increases with the level of individual experience to more than 0.06 implying that today's wage of a worker with 20 years of experience or more would be about four to five percent higher if the worker would have gained all his or her experience in local labor markets double the size of the labor markets in which he or she actually was working in the past. These identified dynamic agglomeration gains are supposed to be related to learning externalities. The analysis uses information on individual employment biographies and regional employment from 1975 onwards. The wage information refers to more than 300,000 entry wages of new employment relationships in Germany in the period 2005 to 2011. The depreciation of human capital is taken into account and that high-skilled workers presumably are the ones other workers learn the most from.
    Keywords: Dynamic agglomeration economies,Human capital externalities,Learning,Regional disparities,Dynamische Agglomerationsvorteile,Humankapitalexternalitäten,Lernen,Regionale Disparitäten
    JEL: R10 R23 J31
    Date: 2017
  11. By: Roland G. Fryer, Jr; Meghan Howard Noveck
    Abstract: This study examines the impact on student achievement of high-dosage reading tutoring for middle school students in New York City Public Schools, using a school-level randomized field experiment. Across three years, schools offered at least 130 hours of 4-on-1 tutoring based on a guided reading model, which consisted of 1-on-1 read alouds, independent reading, vocabulary review, and group discussion. We show that, at the mean, tutoring has a positive and significant effect on school attendance, a positive, but insignificant, effect on English Language Arts (ELA) state test scores and no effect on math state test scores. There is important heterogeneity by race. For black students, our treatment increased attendance by 2.0 percentage points (control mean 92.4 percent) and ELA scores by 0.09 standard deviations per year – two times larger than the effect of the Promise Academy Middle School in the Harlem Children’s Zone and KIPP Charter Middle Schools on reading achievement. For Hispanic students, the treatment effect is 0.8 percentage points on attendance (control mean 92.0 percent) and 0.01 standard deviations per year on ELA scores. We argue that the difference between the effectiveness of tutoring for black and Hispanic students is best explained by the average tutor characteristics at the schools they attend.
    JEL: I20 J0
    Date: 2017–09
  12. By: Sara Amoroso (European Commission - JRC); Alex Coad (CENTRUM Católica Graduate Business School, Pontificia Universidad Católica del Perú, Lima, Perú); Nicola Grassano (European Commission – JRC)
    Abstract: Recent empirical studies have investigated the territorial impact of Europe’s research policies, in particular the contribution of the European Framework Programmes to the integration of a European Research Area. This paper deepens the analysis on the integration and participation of peripheral regions, by focusing on the differences in intensity and determinants of inter-regional collaborations across three groups of collaborations. We consider collaborations among more developed regions, between more and less developed regions, and among less developed regions. Building on the recent spatial interaction literature, this paper investigates the effects of physical, institutional, social and technological proximity on the intensity of inter-regional research collaboration across heterogeneous European regions. We find that the impact of disparities in human capital and technological proximity on regional R&D cooperation is relevant and differs across subgroups of collaborations. Moreover, despite the efforts of integrating marginal actors, peripheral regions have lower rates of collaborations.
    Keywords: European Research Area, spatial interaction modelling, R&D collaboration, regional integration
    JEL: O38 L14 F15 R15
    Date: 2017–07
  13. By: Kyle F. Herkenhoff; Lee E. Ohanian; Edward C. Prescott
    Abstract: This paper studies the impact of state-level land-use restrictions on U.S. economic activity, focusing on how these restrictions have depressed macroeconomic activity since 2000. We use a variety of state-level data sources, together with a general equilibrium spatial model of the United States to systematically construct a panel dataset of state-level land-use restrictions between 1950 and 2014. We show that these restrictions have generally tightened over time, particularly in California and New York. We use the model to analyze how these restrictions affect economic activity and the allocation of workers and capital across states. Counterfactual experiments show that deregulating existing urban land from 2014 regulation levels back to 1980 levels would have increased US GDP and productivity roughly to their current trend levels. California, New York, and the Mid-Atlantic region expand the most in these counterfactuals, drawing population out of the South and the Rustbelt. General equilibrium effects, particularly the reallocation of capital across states, accounts for much of these gains.
    JEL: E24 E3 E6 R11 R12
    Date: 2017–09
  14. By: Laurent Guihéry (MRTE - Laboratoire de géographie Mobilités, Réseaux, Territoires, Environnements - Université de Cergy Pontoise)
    Abstract: City logistics projects and research on pooling logistics activities, especially in urban area, are nowadays on the agenda of land use planners and transport economist researchers. There is a general agreement on the relevancy, success and implementation of these strategies: acceptability of urban population is good, as (diesel motorized) trucks entering cities are considered as damaging the environment and generating strong nuisances on the neighbourhood. Local politicians and public policy designers have integrated these projects in new urban plans and future city modelling. Setting up an organization between shippers, transport companies, logisticians, supported by local authorities, needs a clear and rigorous analysis. Do we have to take into account the long term impact on innovation and possible distortion of competition and cartelization?
    Keywords: city-logistics, urban studies, spatial competition
    Date: 2016–11
  15. By: Alireza Ermagun; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: This study defines and detects competitive and complementary links in a complex network and constructs theories illustrating how the variation of traffic flow is interconnected with network structure. To test the hypotheses, we extract a grid-like sub-network containing 140 traffic links from the Minneapolis - St. Paul highway system. We reveal a real-world traffic network comprises both competitive and complementary links, and there is a negative network dependency between a competitive link pair and a positive network dependency between a complementary link pair. We validate a robust linear relationship between standard deviation of flow in a link and its number of competitive links, its link correlation with competitive links, and its network dependency with both competitive and complementary links. The results indicate the number of competitive links in a traffic network is negatively correlated with the variation of traffic flow in congested regimes as drivers are able to take alternative paths. The results also signify that the more the traffic flow of a link is correlated to the traffic flow of its competitive links, the more the flow variation is in the link. Considering the network dependency, however, it is corroborated that the more the network dependency between a link and its competitive links, the more the flow variation in the link. This is also true for complementary links.
    Keywords: Traffic flow variations; Reliability; Competitive links; Weight matrix; Network structure
    JEL: R41 R48 C21 C31 C33 L14
    Date: 2017
  16. By: Wolf-Hendrik Uhlbach; Pierre-Alexandre Balland; Thomas Scherngell
    Abstract: It is widely acknowledged that new technological specializations of regions are to a large extent driven by the recombination of existing knowledge and capabilities. Since this process is path-dependant and self-reinforcing, it can easily lead to technological lock-ins. A key issue is therefore to evaluate whether public policy can impact technological trajectories of regions and how it can be more effective. To address this issue, we analyze quantitatively and systematically the relation between R&D subsidies and new technological specializations of European regions from 1999 to 2010. R&D subsidies are identified by using the EU Framework Pro- grammes (FP) from the EUPRO database, and matched with patent documents from the OECD-REGPAT database. Using a fixed-effects linear probability model, our results indicate that FP participations have a positive but relatively small effect on the development of new specializations of regions, and that it can compensate for a lack of local related capabilities. We also find evidence that R&D subsidies have the highest impact if the level of relatedness with the new technology is neither too low (policy can not build a cathedral in the desert) nor too high (if all the capabilities are already present there is no need for policy).
    Keywords: Regional Diversification, Technological Change, R&D subsidies, EU Framework Programmes
    JEL: O31 O33 O38 O52
    Date: 2017–09
  17. By: Adam Danczyk; Xuan Di; Henry Liu; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: This paper discusses the observed evolution of traffic in the Minneapolis-St Paul (Twin Cities) region road network following the unexpected collapse of the I-35W Bridge over the Mississippi River. The observations presented within this paper reveal that traffic dynamics are potentially different when a prolonged and unexpected network disruption occurs rather than a preplanned closure. Following the disruption from the I-35W Bridge's unexpected collapse, we witnessed a unique trend: an avoidance phenomenon after the disruption. More specifically, drivers are observed to drastically avoid areas near the disruption site, but gradually return after a period of time following the collapse. This trend is not observed in preplanned closures studied to date. To model avoidance, it is proposed that the tragedy generated a perceived travel cost that discouraged commuters from using these sections. These perceived costs are estimated for the Twin Cities network and found to be best described as an exponential decay cost curve with respect to time. After reinstituting this calibrated cost curve into a mesoscopic simulator, the simulated traffic into the discouraged areas are found to be within acceptable limits of the observed traffic on a week-by-week basis. The proposed model is applicable to both practitioners and researchers in many traffic-related fields by providing an understanding of how traffic dynamics will evolve after a long-term, unexpected network disruption.
    Keywords: Unexpected network disruption; Avoidance phenomenon; Perceived cost evolution; Traffic dynamic, I-35W Bridge collapse
    JEL: R41 R48 C21 C23 D81 D83 D84
    Date: 2017
  18. By: S. H. Ayhan; K. Gatskova; H. Lehmann
    Abstract: This paper provides evidence on the impacts of non-cognitive skills and attitudes towards risk on the decision to migrate from rural to urban areas. Our analysis is based on a unique four-wave panel of Ukrainian Longitudinal Monitoring Survey for the period between 2003 and 2012. Adopting the Five Factor Model of personality structure, and using it in the evaluation of non-cognitive skills, our results suggest that such personality traits as openness to new experience and the willingness to take risks increase the probability of migration. On the other hand, the non-cognitive skills conscientiousness and extraversion are found to be negatively associated with the propensity to migrate. The effects are statistically and quantitatively significant, and mainly driven by movements from rural areas into cities. Our results are robust to several sensitivity checks, including tests for reverse causality.
    JEL: J61 D03 D81 R23
    Date: 2017–09
  19. By: Maria Christidou (Department of Economics, University of Macedonia); Stilianos Fountas (Department of Economics, University of Macedonia)
    Abstract: Housing is distinct from other financial assets, since it is a durable consumer good for households. Due to the irreversible nature of housing investment, uncertainty should be an important determinant of housing investment. From a theoretical point of view, though, this impact is ambiguous. This paper extends previous empirical work by employing the techniques of bivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH) models in a group of fortyeight US states. In particular, we use data on housing permits as a proxy for housing investment and the house price index for the forty-eight contiguous US states and estimate bivariate GARCH models (BEKK) for each state, in order to obtain proxies of housing investment and house price uncertainty. Moreover, we use the Economic Policy Uncertainty index as an alternative measure of uncertainty. This setup allows us to test for the impact of uncertainty on housing investment growth and house price inflation and examine whether the effects differ across the different states. In general, we find that in most states uncertainty tends to increase housing investment growth and to decrease house price inflation. The cross-state differences in results may be due to variation in the degree of speculation in housing markets.
    Keywords: housing; house prices; investment; uncertainty; GARCH.
    JEL: L11 L13 L41 L42
    Date: 2017–08
  20. By: Vaclav Korbel; Michal Paulus
    Abstract: Recent studies emphasize the importance of socio-emotional skills for the success in school as well as for later economic outcomes. However, little is known about how everyday classroom practices impact development of these skills. Using data from the Czech Republic, we show that modern practices such as working in small groups improve these skills. Intrinsic motivation and self-confidence are particularly positively affected. Moreover, modern practices have no adverse effects on test scores. On the other hand, standard practices such as lecturing or requiring memorizing have no impact on socio-emotional skills and test scores. Our results highlight that test score measures do not capture all skills developed in schools and suggest that changing slightly the composition of teaching practices can have a substantial positive impact on socio-emotional skills.
    Keywords: teaching practices; socio-emotional skills; between-subject variation;
    JEL: I21 C23
    Date: 2017–06
  21. By: Sarmento, Joaquim Miranda; Renneboog, Luc (Tilburg University, School of Economics and Management); Verga-Matos, Pedro
    Abstract: A growing concern exists regarding the efficiency of public resources spent in transport infrastructures. In this paper, we measure the efficiency of seven highway projects in Portugal over the past decade by means of a data envelopment analysis and the Malmquist productivity and efficiency indices. We distinguish between technical and technological efficiency and find that most highways face a reduction over time in both types of efficiency. This reduction is mainly due to an increase in operating and maintenance costs, follow-up investments, and a decline in traffic. Some highways only experience a reduction in technological efficiency after a decrease in traffic. They compensate with cost controls and stable investments. While controlling for scale efficiencies, we find a lack of pure technical efficiency in highways that are not subject to a competitive environment, which produces a lack of incentives for better management. Not only does evidence exist of poor management due to a lack of competition, but the increased use of outsourcing also increases inefficiencies. The introduction of tolls and the outburst of the economic crisis in Portugal have substantially reduced traffic that further contributes to inefficiency. The local context, such as highways in low-income areas and rural regions with a lower traffic density, also affects highway performance.
    Date: 2017
  22. By: Kristin Carlson; Alireza Ermagun; Brendan Murphy; Andrew Owen; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: This study assesses the estimated crashes per bicyclist and per vehicle as a function of bicyclist and vehicle traffic, and tests whether greater traffic reduces the per-car crash rate. We present a framework for comprehensive bicyclist risk assessment modeling, using estimated bicyclist flow per intersection, observed vehicle flow, and crash records. Using a two-part model of crashes, we reveal that both the annual average daily traffic and daily bicyclist traffic have a diminishing return to scale in crashes. This accentuates the positive role of safety in numbers. Increasing the number of vehicles and cyclists decelerates not only the probability of crashes, but the number of crashes as well. Measuring the elasticity of the variables, it is found that a 1% increase in the annual average daily motor vehicle traffic increases the probability of crashes by 0.14% and the number of crashes by 0.80%. However, a 1% increase in the average daily bicyclist traffic increases the probability of crashes by 0.09% and the number of crashes by 0.50%. The saturation point of the safety in numbers for bicyclists is notably less than for motor vehicles. Extracting the vertex point of the parabola functions examines that the number of crashes starts decreasing when daily vehicle and bicyclist traffic per intersection exceed 29,568 and 1,532, respectively.
    Keywords: Safety; Bicyclist crashes; Returns to scale; Road intersection
    JEL: R41 R48
    Date: 2017
  23. By: Cheng Keat Tang
    Abstract: I evaluate whether speed enforcement cameras reduce the number and severity of traffic accidents by penalizing drivers for exceeding speed limits. Relying on micro data on accidents and speed cameras across Great Britain, I find that installing these devices significantly enhance road safety. Putting another 1,000 cameras reduce around 1130 collisions, 330 serious injuries, and save 190 lives annually, generating net benefits of around £21 million. However, these effects are highly localised around the camera and dissipate over distance, and there is suggestive evidence of more collisions away from the camera, illustrating the possible limitations associated with fixed speed cameras.
    Keywords: accidents, injuries, fatalities, speed camera, speeding
    JEL: H23 I18 R41
    Date: 2017–09
  24. By: OECD
    Abstract: Almost all mathematics teachers across participating countries use clear and structured teaching practices, according to both teachers and students. A vast majority of teachers also use student-oriented practices and enhanced learning activities in their classroom. Cross-country differences are weak regarding the use of structuring practices, but moderate regarding the use of student-oriented practices and enhanced learning activities. Overall, mathematics teachers tend to report, more often than students, that they use a given teaching practice. The gap between teacher and student reports about the use of a given teaching practice varies across countries. Overall, the highest degree of convergence is observed for structuring practices, and the smallest is observed for student-oriented practices.
    Date: 2017–09–18
  25. By: Robbin Debbosere; Ahmed El-Geneidy; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: Municipal governments worldwide have been pursuing transit-oriented development (TOD) strategies in order to increase transit ridership, curb traffic congestion, and rejuvenate urban neighborhoods. In many cities, however, development of planned sites around transit stations has been close to non-existent, due to, among other reasons, a lack of coordination between transit investments and land use at the regional scale. Further, access to transit differs from access to destination that people care about. Reframing transit-oriented development as accessibility-oriented development (AOD) can aid the process of creating functional connections between neighborhoods and the rest of the region, and maximize benefits from transport investments. AOD is a strategy that balances accessibility to employment and the labor force in order to foster an environment conducive to development. AOD areas are thus defined as having higher than average accessibility to employment opportunities and/or the labor force; such accessibility levels are expected to increase the quality of life of residents living in these areas by reducing their commute time and encouraging faster economic development. To quantify the benefits of AOD, accessibility to employment and the labor force are calculated in the Greater Toronto and Hamilton Area, Canada in 2001 and 2011. Cross-sectional and temporal regressions are then performed to predict average commute times and development occurring in AOD areas and across the region. Results show that AOD neighborhoods with high accessibility to jobs and low accessibility to the labor force have the lowest commute times in the region, while the relationship also holds for changes in average commute time between the studied time periods. In addition, both accessibility to jobs and accessibility to the labor force are associated with changes in development, as areas with high accessibility to jobs and the labor force attract more development. In order to realize the full benefits of planned transit investments, planning professionals and policy makers alike should therefore leverage accessibility as a tool to direct development in their cities, and concentrate on developing neighbourhoods with an AOD approach in mind.
    Keywords: Transit oriented development, accessibility, travel behavior, land use
    JEL: R12 R14 R41 R52 R53
    Date: 2017
  26. By: Guglielmo Barone (Bank of Italy); Guido de Blasio (Bank of Italy); Alessio D'Ignazio (Bank of Italy); Andrea Salvati (Rice University, Houston, Texas)
    Abstract: Set up by the Italian central government and implemented in the areas of the country that are lagging behind, Obiettivi di Servizio is an innovative scheme designed to encourage local authorities to reach given targets for public service provision in the areas of education, childcare and elderly care, waste management, and water supply. The paper makes an econometric evaluation of the scheme’s effectiveness. Our findings suggest that the program was only partially successful, with considerable differences across regions and targets. An important driver of effectiveness was local institutional quality, while some features of the scheme – such as the common targets and the distribution of the pledges – might have impacted negatively on local performance. We also find signs of displacement effects: local authorities involved in the program might have concentrated on the targets to the detriment of other local public services.
    Keywords: public service provision, incentives
    JEL: C21 H75 H76
    Date: 2017–09
  27. By: Saskia Vennix (Microeconomic Information Department, NBB)
    Abstract: This study assesses the economic importance of air transport and airport activities in Belgium in terms of value added, employment and investment over the 2013-2015 period 1 . The sector considered embraces not only the activities directly connected with air transport, but also all those that take place on site at the six Belgian airports (Antwerp, Brussels,Charleroi, Kortrijk, Liège and Ostend). The study reviews the direct and indirect effects of the sector on the basis of microeconomic data (mainly obtained from the Central Balance Sheet Office) and mesoeconomic data (from the National Accounts Institute). It also includes a social balance sheet analysis and an indication of credit risk using statistical models from the NBB’s In-house Credit Assessment System (ICAS). In 2015, air transport and airport activities generated € 6 billion in direct and indirect value added (i.e. 1.5 % of Belgian GDP) and employed around 62 500 people in full-time equivalents (FTEs)either directly or indirectly (1.5 % of domestic employment including the self-employed). Brussels and Liège Airport remain the country’s biggest airports, respectively in terms of passenger and cargo traffic. In the aftermath of the terrorist attacks in March 2016, the regional airports received part of Brussels’ passenger traffic. All in all, Brussels recovered fairly quickly, especially freight traffic, but also passenger traffic resumed gradually to tie in with growth again since November 2016. Brussels and Liège are the fastest growing airports during the 2013-2015 period, respectively in terms of value added and employment. At Ostend Airport, these economic variables slumped in line with the evolution of freight traffic volumes. Antwerp’s growth rates went into the red as well, mainly under the influence of the difficulties faced by VLM Airlines. At Charleroi and Liège, the trend of value added is downward, while that is not the case for employment. The smallest changes are recorded in Kortrijk.
    Keywords: air transport, airport activities, sector analysis, indirect effects, employment, value added, investment.
    JEL: C67 D40 J21 L93 R15 R34 R41
    Date: 2017–07
  28. By: Mendez-Guerra, Carlos
    Abstract: Bolivia has experienced high economic growth rates in the last decade and a half. This fast growth, however, varies largely across its administrative regions. Considering this heterogeneous-growth context, this article documents the evolution of income disparities and convergence patterns of the Bolivian regions over the 1988-2014 period. In particular, using a distribution dynamics approach, this article evaluates both the long-run equilibrium and the transition dynamics of the cross-sectional distribution of regional GDP per capita. The main results show a clear pattern of regional divergence for the period 1988-2000. In contrast, the 2000-2014 period points to a much more complex pattern of (di)convergence: the long-run equilibrium distribution is characterized by both a process of convergence arising from the top and a process of divergence near its bottom tail. Overall, the evolution of the external shape of the distribution and the intra-distribution dynamics suggest that the process of regional growth in Bolivia may be characterized by at least two convergence clubs. Moreover, these clubs are identifiable in periods of both low and high national growth.
    Keywords: regional growth, convergence, distribution dynamics, Bolivia
    JEL: O40 O47 R11
    Date: 2017–08–30
  29. By: E. Otranto; M. Mucciardi
    Abstract: The STAR model is widely used to represent the dynamics of a certain variable recorded at several locations at the same time. Its advantages are often discussed in terms of parsimony with respect to space-time VAR structures because it considers a single coefficient for each time and spatial lag. This hypothesis can be very strong; we add a certain degree of flexibility to the STAR model, providing the possibility for coefficients to vary in groups of locations. The new class of models is compared to the classical STAR and the space-time VAR by simulations and an application.
    Keywords: clustering;forecasting;space–time models;spatial weight matrix
    Date: 2017
  30. By: Sonia Adam-Ledunois (NIMEC - Normandie Innovation Marché Entreprise Consommation - UNICAEN - Université Caen Normandie - ULH - Université Le Havre Normandie - Université de Rouen); Romuald Mansuy (Autres - AUTRE); Sébastien Damart (DRM - MLAB - DRM - MLAB - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Stakeholders involved in social housing and social integration are numerous (governmental services, non-profit organizations, volunteers, local authorities, etc.). These multiple actors, with heterogeneous resources (coming partly from the government, partly from other institutions) have different areas of intervention, which does not always make actions effective, the ultimate goal being obviously to increase social utility or societal utility created. In order to both increase knowledge about housing and social integration, and improve coordination between stakeholders, the French government designed and made ​​available to local actors a methodology for a shared territorial diagnosis, so-called "360° diagnosis". In this communication, we present two case studies corresponding to the deployment of this tool in two regions. We propose a critical analysis of the implementation of this tool, by focusing on its uses and effects, this next to its philosophy and its initial intentions.
    Keywords: Décision support , social innovation : management tool , public management
    Date: 2016–09–05
  31. By: Kondo, Kazumine
    Abstract: This paper investigates whether branch network expansions by Japanese regional banks influence their management performances positively at a time when management environments surrounding regional financial institutions have become increasingly severe due to the population decreases and shrinkage of regional economies. Specifically, the effects of numbers of regional bank branches on their credit businesses and profits are empirically examined. The results indicated that regional banks with more branches can increase their loans and bills discounted as well as their small and mid-sized enterprises (SME) loans and bills discounted. Thus, establishing more branches is effective in increasing the total sum of loans and bills discounted by each bank because regional banks with many branches can make contact with more customers. On the other hand, return on assets (ROA) and return on equity (ROE) of regional banks with more branches were found to be lower. Therefore, regarding the cost performance of regional banks, establishing too many branches and maintaining branch networks that are too large can have negative effects on regional banks.
    Keywords: region-based relationship banking policy, regional bank, branch, loans and bills discounted, profit ratio
    JEL: G2 G21
    Date: 2017–09–08
  32. By: Parag Mahajan; Dean Yang
    Abstract: How readily do potential migrants respond to increased returns to migration? Even if origin areas become less attractive vis-à-vis migration destinations, fixed costs can prevent increased migration. We examine migration responses to hurricanes, which reduce the attractiveness of origin locations. Restricted-access U.S. Census data allows precise migration measures and analysis of more migrant-origin countries. Hurricanes increase U.S. immigration, with the effect increasing in the size of prior migrant stocks. Large migrant networks reduce fixed costs by facilitating legal immigration from hurricane-affected source countries. Hurricane-induced immigration can be fully accounted for by new legal permanent residents (“green card” holders).
    Keywords: Immigration, migrant networks, returns to migration, natural disasters, hurricanes
    JEL: F22 O15 Q54
    Date: 2017–01
  33. By: Ashton M. Verdery; Jonathan Daw; Colin Campbell; Rachel Margolis
    Abstract: This paper examines transfers of time and money between retirees and their children. It uses data from the Panel Study of Income Dynamics to test whether numbers of children, parent-child wealth differentials, geographic proximity, and gender contribute to racial and ethnic differences in transfers of time and money between retirement-aged adults and their children. Critical components of the analysis include measuring kin availability, the spatial and social embeddedness of family networks, supply as well as demand for transfers, and gender. Key limitations are that we exclude those who have no living family members with whom they could transfer, and we do not examine the role of non-familial transfers.
    Date: 2017–08
  34. By: Ethan Ilzetzki (London School of Economics, Centre for Macroeconomics, and CEPR); Saverio Simonelli (University of Naples "Federico II" and CSEF)
    Abstract: We measure output per worker in nearly 8,000 municipalities in the Italian electoral process using ballot counting times in the 2013 general election and two referenda in 2016. We document large productivity dispersion across provinces in this very uniform and low-skill task that involves nearly no technology and requires limited physical capital. Using a development accounting framework, this measure explains up to half of the firm-level productivity dispersion across Italian provinces and more than half the north-south productivity gap in Italy. We explore potential drivers of our measure of labor efficiency and we find that its association with measures of work ethic and trust are particularly robust.
    Keywords: Labor productivity, development accounting, work ethic, cultural economics.
    JEL: O47 E24 J24 Z10
    Date: 2017–09–02
  35. By: Torre Cepeda Leonardo E.; Alvarado Jorge; Quiroga Miroslava
    Abstract: We use the national Input-Output Matrix 2012 of INEGI and Flegg's approach to estimate four Regional Input-Output Matrices (RIOM) applying Banco de Mexico's regionalization. The RIOM are employed to evaluate the effects on gross output, value added and employment at the regional level resulting from two shocks: (a) the construction of a hypothetical automotive plant worth 1,000 million dollars; and (b) the production of 200,000 vehicles per year in that plant. The exercise reveals that: (i) the construction and the operation of the plant at full capacity have differentiated effects across regions and sectors on the studied variables, in both absolute and relative terms; (ii) the spillover effects resulting of both shocks within each region are concentrated in a limited number of sectors; and (iii) the north central region resulted to be the one receiving the largest relative benefits from both shocks.
    Keywords: Input-Output Model;Regional Analysis;Multiplier Effects;Automotive Sector
    JEL: R11 R12 R15
    Date: 2017–07
  36. By: Erik (E.T.) Verhoef (VU Amsterdam; Tinbergen Institute, The Netherlands)
    Abstract: Recent empirical work has suggested that there is an important distinction between short-run versus long-run scheduling behaviour of commuters, reflected in differences in values of time and schedule delays, as well as in preferred arrival moments, for the short-run versus the long-run problem. Peer et al. (2015) for example find that the average value of time when consumers form their routines in the long-run problem may exceed by a factor 6 the short-run value that governs departure time choice given these routines. For values of schedule delay, in contrast, the short-run value exceeds the long-run value, by a factor 2. And, when forming routines, consumers in fact choose a most preferred arrival time that may deviate from the value they would choose in absence of congestion because a change in routines may mean that shorter delays will be encountered. This paper investigates whether this distinction between short-run and long-run scheduling decisions affect optimal pricing of a congestible facility. Using a stochastic dynamic model of flow congestion for describing short-run equilibria and integrating it with a dynamic model of routine formation, it is found that consistent application of short-run first-best optimal congestion pricing does not optimally decentralize the optimal formation of routines in the long-run problem. A separate instrument, next to road pricing, is therefore needed to optimize routine formation.
    Keywords: Congestion pricing; dynamic congestion; scheduling
    JEL: R41 R48 D62
    Date: 2017–09–05
  37. By: Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University)
    Abstract: Focusing on the role of compatibility between products, we consider the choice of internal decision-making structures—i.e., centralization and decentralization—and its effect on welfare in a network industry where there are horizontally differentiated products associated with network externalities. We demonstrate that if the degree of a network externality is sufficiently large, it is socially optimal to choose decentralization. Furthermore, in the case of consumer ex post expectations, it is optimal for the firm’s owners to choose centralization. However, it is socially preferable given a particular condition.
    Keywords: internal decision-making; centralization; decentralization; network externality; compatibility; multiproduct monopoly
    JEL: D43 D62 L14 L15 L41
    Date: 2017–09
  38. By: Guillaume Bérard (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille); Alain Trannoy (EHESS - Ecole des Hautes Etudes en Sciences Sociales, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille)
    Abstract: This paper estimates the effects of an increase in the real estate transfer taxes (RETT) rate from 3.80% to 4.50%, following an optional reform implemented in March 2014 by French départements. Not all the départements implemented the RETT increase, which is the starting point for a natural experiment: using a difference-in-differences design, we estimate two main effects. (1) An anticipation effect a month before the implementation of the reform in order to avoid the RETT increase (timing response). The total tax base increased by 28% just the month before. (2) The classic depressing effect of a tax on the equilibrium quantity (extensive margin response) is estimated to be 7% on average from March 2014 to October 2015. All in all, the average net effect corresponds to a drop of the transactions of 4.6% over a period of ten months following the implementation date. Furthermore, we estimate that the elasticity of the tax revenue to the tax increase is about 0.65, meaning that départements’ tax revenues are still on the increasing side of the Laffer curve.
    Keywords: local government,real estate market,transfer taxes,natural experiment,anticipation
    Date: 2017–09
  39. By: Emilie Bagby; Kristine Bos; Anca Dumitrescu; Nicholas Ingwersen; Matt Sloan
    Abstract: This report documents the main findings from a rigorous evaluation of the NECS and IMAGINE projects in Niger. The projects included the construction of girl-friendly primary schools, local language reading instruction, and a set of complementary interventions to increase access to quality education.
    Keywords: Education, Niger, primary school, school infrastructure, reading
    JEL: F Z
  40. By: Michal Rubaszek; Margarita Rubio
    Abstract: The size of the rental housing market in most countries around the globe is low. In this article we claim that this may be detrimental for macroeconomic stability. Toward this aim we, determine the reasons behind rental market underdevelopment by conducting an original survey among a representative group of 1005 Poles, a country that is characterized by high homeownership ratio. We find that households' preferences are strongly influenced by economic and psychological factors. Next, we propose a DSGE model in which households satisfy housing needs both by owning and renting. We use it to show that reforms enhancing the rental housing market contribute to macroeconomic stability. This micro-macro approach allows us to dig into the causes of rental market underdevelopment and design appropriate policy recommendations.
    Keywords: Rental housing market; survey data; DSGE model
    Date: 2017
  41. By: Nan Li (International Monetary Fund); Jie Cai (Shanghai University of Finance and Economics); Ana Maria Santacreu (St. Louis Fed)
    Abstract: Countries and sectors interact through knowledge spillovers and international trade flows. These interactions drive differences in income per capita and innovation not only across countries, but also across sectors within a country. We develop and quantify a model of innovation, knowledge diffusion and trade that can explain these differences. Using data on intersectoral patent citations, R&D expenditures and international trade flows, we calibrate the model and perform several counterfactual exercises. Decreases in trade costs or increases in the speed of diffusion reallocate resources across countries and sectors, generating a distributional effect on aggregate innovation and growth.
    Date: 2017
  42. By: Carlo Gianelle (European Commission - JRC); Fabrizio Guzzo (European Commission - JRC); Krzysztof Mieszkowski (European Commission - JRC)
    Abstract: The goal of this paper is to assess how and to what extent resources under Thematic Objective 1 (TO1) of national and regional Operational Programmes for the European Regional Development Fund (ERDF) were allocated to operations falling within the innovation and research priorities set in the respective national and regional smart specialisation strategies (S3) during the first phase of the 2014-2020 programming period. The analysis is based on information drawn from calls for proposals launched under 46 Operational Programmes in Italy, Poland, Portugal, Czech Republic, Hungary, Lithuania and Slovenia and published by 31 December 2016. In particular, the study assesses the coherence of calls with S3 priorities; it also looks at the concentration of resources on priorities by calculating the share of ERDF-TO1 funding made available to S3-related projects through calls. Moreover, the analysis explores the range of S3 priorities tackled by individual calls for projects, identifies the policy instruments utilised and the types of beneficiaries targeted by those instruments. The examination reveals that the S3 approach is being translated into practice from a formal point of view. In most of the examined calls, S3 alignment is a binding eligibility condition for funding. Nearly the total amount of the ERDF-TO1 resources made available through calls supports project proposals falling exclusively within S3 priority areas. This could be interpreted as positive evidence of improved prioritisation and more strategic spending patterns, yet results should be taken with caution given the relatively short time-span of the analysis.
    Keywords: regional innovation policy, smart specialisation, prioritisation, EU Cohesion policy
    JEL: O25 O30 R12 R58
    Date: 2017–08
  43. By: Dany Bahar (Center for International Development at Harvard University)
    Abstract: Using a unique dataset on worldwide multinational corporations with precise location of headquarters and affiliates, I present evidence suggesting that when firms expand internationally, they tend to locate foreign subsidiaries geographically closer to the headquarters the more knowledge intensive the affiliates’ economic activities are. This tradeoff, however, weakens when controlling for the ease of communication between the headquarters and its foreign subsidiary, such as being in the same time zone. All the evidence points that the intra-firm transmission of knowledge plays an important role in the mechanisms of the proximity-concentration hypothesis.
    Keywords: multinational firms, multinational corporations, knowledge, location, proximity concentration hypothesis, FDI
    JEL: F23 L22 L25
    Date: 2017–09
  44. By: Claude Mathys (NBB, Microeconomic Information department)
    Abstract: This paper is an annual publication issued by the Microeconomic Analysis service of the National Bank of Belgium. The Flemish maritime ports (Antwerp, Ghent, Ostend, Zeebrugge), the Autonomous Port of Liège and the port of Brussels play a major role in their respective regional economies and in the Belgian economy, not only in terms of industrial activity but also as intermodal centers facilitating the commodity flow. This update paper1 provides an extensive overview of the economic importance and development of the Flemish maritime ports, the Liège port complex and the port of Brussels for the period 2010 - 2015, with an emphasis on 2015. Focusing on the three major variables of value added, employment and investment, the report also provides some information based on the social balance sheet and an overview of the financial situation in these ports as a whole. These observations are linked to a more general context, along with a few cargo statistics. Annual accounts data from the Central Balance Sheet Office were used for the calculation of direct effects, the study of financial ratios and the analysis of the social balance sheet. The indirect effects of the activities concerned were estimated in terms of value added and employment, on the basis of data from the National Accounts Institute. As a result of the underlying calculation method the changes of indirect employment and indirect value added can differ from one another. The developments concerning economic activity in the six ports in 2014 - 2015 are summarized in the table on the next page. In 2015 the growth of maritime traffic in the Flemish maritime ports was due to developments in the port of Antwerp and the port of Ghent. Direct value added increased in all Flemish maritime ports in 2015. However, direct employment is continuing to decline. Investment was down everywhere except in the port of Zeebrugge. Cargo traffic in the Liège port complex declined in 2015, whereas it slightly slowed down in the port of Brussels. At the same time, direct value added in Liège shrank while it rose sharply in the port of Brussels. By contrast, direct employment was down in both ports. This report provides a comprehensive account of these issues, giving details for each economic sector, although the comments are confined to the main changes that occurred in 2015.
    Keywords: Flemish maritime ports, Liège port complex and the port of Brussels – Report 2015
    JEL: C67 H57 J21 L22 L91 L92 R15 R34 R41
    Date: 2017–06
  45. By: Punzi, Maria Teresa; Rabitsch, Katrin
    Abstract: We study the impact of macroprudential policies using a novel model which takes into account households´ ability to borrow under different loan-to-value ratios which are tied to their collateral values. Such model generates a larger amplification in real and financial variables, compared to standard models that assume homogeneity in the leveraging and deleveraging process. Conditional on this model, we consider the implications of macroprudential policies that aim to lean against an excessive credit cycle. In particular, we allow macroprudential authorities to tighten excessive lending to higher leveraged households, whose riskiness had been evaluated too optimistically. We find thata policy that targets only the group of households that most strongly deleveraged after an adverse idiosyncratic housing investment risk shock, is welfare-improving at social and individual levels, relative to a macroprudential policy which targets all households in the economy.
    Keywords: Endogenous Loan-to-Value ratio, Heterogeneity, Macroprudential Policy
    Date: 2017–09
  46. By: Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Mohamed El Hedi Arouri (CRGM - Centre de Recherche Clermontois en Gestion et Management - Université d'Auvergne - Clermont-Ferrand I); Cuong Nguyen-Viet (Chercheur Indépendant)
    Abstract: This paper contributes to the urbanization-poverty nexus by assessing the effect of urbanization on income, expenditure, and poverty in rural households in Vietnam, using data from household surveys. We find that the urbanization process stimulates the transition from farm to non-farm activities in rural areas. More specifically, urbanization tends to reduce farm income and increase wages and non-farm income in rural households. This suggests that total income and consumption expenditure of rural households are more likely to increase with urbanization. Finally, we find also that urbanization helps to decrease the expenditure poverty rate of rural households, albeit by a small magnitude.
    Keywords: rural poverty,urbanization, household surveys, Vietnam, R11, I30,, Asia
    Date: 2016–09–27
  47. By: Chelsey Palmateer; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: Injustice in transportation services experienced by disadvantaged demographic groups account for much of these groups’ social exclusion. Unfortunately, there is little agreement in the field about what theoretical foundation should be the basis of measures of the justice of transportation services, limiting the ability of transportation professionals to remedy the issues. Accordingly, there is a need for an improved measure of the justice of the distribution of transportation services, which relates to the effectiveness of transportation services for all members of disadvantaged groups rather than for only segregated members of these disadvantaged groups. To this end potential measures of distributive justice, based on the accessibility to jobs provided by various modes, are evaluated in 48 of the top 50 largest metropolitan areas in the United States. The purpose of the study is to inform recommendations for appropriate use of each measure.
    Keywords: Distributive Justice; Equity; Accessibility; Transportation
    JEL: R12 R14 R41 R48 R52 R53 Q56 D63
    Date: 2017
  48. By: David Card; A. Abigail Payne
    Abstract: Women who graduate from university are less likely than men to specialize in science, technology, engineering, or math (STEM). We use detailed administrative data for a recent cohort of high school students in Ontario, Canada, combined with data from the province's university admission system to analyze the dynamic process leading to this gap. We show that entry to STEM programs is mediated through an index of STEM readiness based on end-of-high-school courses in math and science. Most of the gender gap in STEM entry can be traced to differences in the rate of STEM readiness; less than a fifth is due to differences in the choice of major conditional on readiness. We then use high school course data to decompose the gap in STEM readiness among university entrants into two channels: one reflecting the gender gap in the fraction of high school students with the necessary prerequisites to enter STEM, and a second arising from differences in the fractions of females and males who enter university. The gender gap in the fraction of students with STEM prerequisites is small. The main factor is the lower university entry rate by men – a difference that is due to the lower fraction of non-science oriented males who complete enough advanced level courses to qualify for university entry. We conclude that differences in course-taking patterns and preferences for STEM conditional on readiness contribute to male-female differences in the rate of entering STEM, but that the main source of the gap is the lower overall rate of university attendance by men.
    JEL: I20 J16
    Date: 2017–09
  49. By: Kelly Bedard (University of California, Santa Barbara and IZA); Stefanie Fischer (Department of Economics, California Polytechnic State University)
    Abstract: We examine the effect of relative evaluation on academic performance by implementing a classroom-level field experiment in which students are incentivized individually or in a tournament to take a microeconomics quiz. We focus on two aspects of competitive environments that may be particularly salient in academics: tournament size and one's perceived position in the ability distribution. At least in our setting, we find no evidence that effort responses to competition are sensitive to tournament size. However, in contrast to previous studies that examine effort responses to exogenously assigned competition, we find a large negative competition effect for students who believe they are relatively low in the ability distribution and no competition effect for those who believe they are relatively high ability. Using additional treatments, we further show that the divergence between our results and past results is driven by task type and not by differences in selection into participation between lab and field environments.
    Date: 2017
  50. By: Berlinger, Edina
    Abstract: The annual percentage rate of charge (APRC) designed to reflect all costs of borrowing is a widely used measure to compare different credit products. It disregards completely, however, risks of possible future changes in interest and exchange rates. As an unintended consequence of the general advice to minimize APRC, many borrowers take adjustable-rate mortgages with extremely short interest rate period or foreign currency denominated loans and run into an excessive risk without really being aware of it. To avoid this, we propose a new, risk-adjusted APRC incorporating also the potential costs of risk hedging. This new measure eliminates most of the virtual advantages of riskier structures and reduces the danger of excessive risk taking. As an illustration, we present the latest Hungarian home loan trends but lessons are universal.
    Keywords: mortgage lending, annual percentage rate of charge, adjustable-rate loans, foreign currency denominated loans
    JEL: G18 G21 G28
    Date: 2017–09–10
  51. By: Anna Gerke (Audencia Recherche - Audencia Business School); Yan Dalla Pria (CeRSM - Centre de Recherche sur le Sport et le Mouvement - UPN - Université Paris Nanterre)
    Abstract: Cluster theory is a well‐established field of research (Greve, 2009; Martin & Sunley, 2003; Porter, 1998, 2008) and has been an enduring element in national economic policies around the globe (Benner, 2012; Ketels, 2015). Also the sport sector has seen political and economic initiatives for cluster development on national and international level (EU4SportsClusters, 2015; EuroSIMA, 2015; Sporaltec, 2016). Shilbury (2000), pioneer in this topic, emphasises that in Australia sport clusters are potentially a new form of the sport delivery system in response to environmental changes, e.g., reduced state subsidies for sport. Until today sport clusters have been viewed as one conceptual category. However, this paper suggests a dual typology of sport clusters depending on the level of heterogeneity of cluster members and the type of interorganizational linkages. This study compares two clusters from the sailing industry to two clusters from the surfing industry. The use of a multiple case study with pairs of similar case studies permits theory development through literal and theoretical replication. Similar results amongst similar cases strengthen theory through literal replication. Differing results across different pairs of cases deepen theory (Miles, Huberman, & Saldaña, 2014; Yin, 2009). This qualitative research uses interviews (n=117) and observations (n=17) as the primary data sources, and organizational information (n=47) and archival data (n=27) as secondary data sources. The results reveal two diametrically opposed models for clusters in the sport industry in terms of socio‐economic proximity (i.e., social proximity affecting economic proximity and vice versa (Gerke, Desbordes, & Dickson, 2015)). These two models represent the fundamental logic of community and society (Dalla Pria & Vicente, 2006; Storper, 2005). The logic of a society like cluster is founded in the paradigm of proximity because of complementarity. The two sailing clusters rely on the logic of society because the boat‐building projects are complex and require a variety of specialised skills that are supplied by small‐and medium‐sized cluster members. The creation of a formal cluster governing body accompanies an existing collective logic between much diversified and specialised local actors. The logic of a community like cluster is founded in the paradigm of cognitive proximity. The two surfing clusters rely on the logic of community because cluster members have similar business models, competencies, and value creation processes. There are few buyer‐ supplier relationships and firms tend to be direct competitors, thus interorganisational linkages tend to be competitive in nature.
    Keywords: sport cluster, interorganisational linkages, socio-economic proximity
    Date: 2016–11–23
  52. By: Benner, Maximilian; Buzin, Johannes; Hoffmann, Jakob; Taifour, Ahmad Azzam
    Abstract: Identifying opportunities to facilitate economic growth is a major challenge in local and regional development. Particularly for local or regional economies confronted with deep structural economic problems, unlocking growth differentials by targeting untapped potentials for employment and entrepreneurship can provide an opportunity to renew themselves. Therefore, it is logical that the “missing entrepreneurs” from among economically underrepresented or disadvantaged groups such as women, senior citizens, people with special needs, or youth as well as immigrants have recently gained attention by scholars and policymakers in local and regional development. Still, there is not yet a clear and comprehensive understanding on how to consider the needs of economically underrepresented or disadvantaged groups, both as entrepreneurs or as employees, in local and regional development strategy design. While women and youth entrepreneurship have been subject to an academic and policy debate for some time, the discourse on how to include other economically underrepresented or disadvantaged groups in local or regional economies is far less advanced. The present study reviews the state of literature on inclusive local development and, based on a preliminary analysis of the local economy, proposes a strategy for inclusive local development in Heraklion, Greece. As a locality suffering under the structural economic crisis that has afflicted Greece for almost a decade, a strategy for how to include economically underrepresented or disadvantaged groups in the local economy is both a social necessity and a way to unlock untapped potentials for economic growth.
    Keywords: local development; regional development; inclusiveness; women entrepreneurship; senior entrepreneurship; youth entrepreneurship; immigrant entrepreneurship; special-needs entrepreneurship; missing entrepreneurs; Heraklion; Crete; Greece
    JEL: L26 L31 L83 O13 O14 R11 R58
    Date: 2017–09–12
  53. By: Ainhoa Aparicio Fenoll; Zoe Kuehn
    Abstract: Two leading explanations as to why migration across European countries remains relatively limited are: (i) language barriers and (ii) lower educational attainment in Europe compared to the US. Both aspects are malleable via education policies which thus have the potential to affect migration. This paper tests whether and how (i) increasing the length of compulsory schooling and (ii) introducing foreign languages into compulsory school curricula, influence migration of ffected cohorts across European countries. We construct a novel data base that includes information on such education reforms for thirty-one countries spanning four decades. Combining this data with information on recent migration flows by cohorts, we find that an additional year of compulsory education reduces the number of migrants from affected cohorts by almost 14%. Increasing the length of compulsory schooling shifts educational attainment for a significant fraction of the population from low towards medium levels. Our findings are thus in line with the fact that in the majority of European countries medium educated individuals display lower emigration rates compared to low educated individuals. Introducing a foreign language into compulsory school curricula on the other hand, almost doubles the number of migrants from affected cohorts who move to the country where the language is spoken, and it increases the overall number of migrants from these cohorts by 23%.
    Keywords: migration, compulsory schooling, foreign language proficiency, education
    Date: 2016

This nep-ure issue is ©2017 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.