nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2017‒10‒22
forty papers chosen by
Steve Ross
University of Connecticut

  1. Do Migrant Students Affect Local Students' Academic Achievements in Urban China? By Wang, Haining; Cheng, Zhiming; Smyth, Russell
  2. Gentrification and the Amenity Value of Crime Reductions: Evidence from Rent Deregulation By David H. Autor; Christopher J. Palmer; Parag A. Pathak
  3. Do Parents Value School Effectiveness? By Atila Abdulkadiroglu; Parag A. Pathak; Jonathan Schellenberg; Christopher R. Walters
  4. Immigration and Rental Prices of Residential Housing: Evidence from the Fall of the Berlin Wall By Kürschner, Kathleen
  5. European R&D networks: A snapshot from the 7th EU Framework Programme By Sara Amoroso; Alex Coad; Nicola Grassano
  6. Urban Transportation and Inter-Jurisdictional Competition By Pinto, Santiago
  7. Luxembourg: reaping the benefits of a diverse society through better integration of immigrants By Álvaro Pina
  8. Storm Surges, Informational Shocks, and the Price of Urban Real Estate:An Application to the Case of Hurricane Sandy By Jason Barr; Jeffrey P. Cohen; Eon Kim
  9. The Impact of Ethnic Communities on Immigrant Entrepreneurship: Evidence from Sweden By Tavassoli, Sam; Trippl, Michaela
  10. Quantifying the effect of labor market size on learning externalities By Peters, Jan Cornelius
  11. Analysis of Housing Equity Withdrawal by its Forms By Declan French; Donal McKillop; Tripti Sharma
  12. Local Secessions, Homophily, and Growth. A Model with some Evidence from the Regions of Abruzzo and Molise (Italy, 1963) By Dalmazzo, Alberto; de Blasio, Guido; Poy, Samuele
  13. Planning Ahead for Better Neighborhoods: Long Run Evidence from Tanzania By Michaels, Guy; Nigmatulina, Dzhamilya; Rauch, Ferdinand; Regan, Tanner; Baruah, Neeraj; Dahlstrand-Rudin, Amanda
  14. Foreign Peer Effects and STEM Major Choice By Massimo Anelli; Kevin Shih; Kevin Williams
  15. Firm-level Human Capital and Innovation: Evidence from China By Xiuli Sun; Haizheng Li; Vivek Ghosal
  16. Relationships between Parental Involvement and Academic Achievement among Elementary and Middle School Students By Midori Otani
  17. The effect of a local allowance on the endogenous formation of jurisdictions By Remy Oddou
  18. Disrupting Education? Experimental Evidence on Technology-Aided Instruction in India By Karthik Muralidharan; Abhijeet Singh; Alejandro J. Ganimian
  19. Determinants of a Foreclosure Discount By Donner, Herman
  20. The Effect of Regional Competition and Company-sponsored Training on the Productivity-Wage Wedge By Hinz, Tina; Mohrenweiser, Jens
  21. What Drives Spatial Clusters of Entrepreneurship in China? Evidence from Economic Census Data By Zheng, Liang; Zhao, Zhong
  22. Ethnic fragmentation and school provision in India By Nishant Chadha; Bharti Nandwani
  23. Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies By Alessandro Gavazza; Mattia Nardotto; Tommaso Valletti
  24. The effects of home energy efficiency upgrades on social housing tenants: evidence from Ireland By Bryan Coyne, Sean Lyons, Daire McCoy
  25. The effect of house prices on the long-term care market: Evidence from England By Bilotkach, Volodymyr; Braakmann, Nils; Gonzalo-Almorox, Eduardo; Wildman, John
  26. Student Evaluation of Teaching (SET), social influence dynamics, and teachers' choices: An evolutionary model By Angelo Antoci; Irene Brunetti; Pierluigi Sacco; Mauro Sodini
  27. Welfarism and segregation in endogenous jurisdiction formation models By Remy Oddou
  28. Housing Policy of Non-Bolshevik Governments During the Russian Civil War By Konstantin A. Kholodilin
  29. Leadership at School and the Formation of Character Skills By Briel, Stephanie; Osikominu, Aderonke
  30. Regional Quality and Impaired Firms: Evidence from Italy By De Martiis, Angela; Fidrmuc, Jarko
  31. Does Fiscal Equalization Lead to Higher Tax Rates? Empirical Evidence from Germany By Krause, Manuela; Büttner, Thiess
  32. Improving productivity in New Zealand's economy By Andrew Barker
  33. Where Are Migrants from? Inter- vs. Intra-Provincial Rural-Urban Migration in China By Su, Yaqin; Tesfazion, Petros; Zhao, Zhong
  34. Urban Resurgence as a Consumer City: A Case Study for Weimar in Eastern Germany By Florian W. Bartholomae; Chang Woon Nam; Alina Schoenberg
  35. In Search of a Spatial Equilibrium in the Developing World By Douglas Gollin; Martina Kirchberger; David Lagakos
  36. The Evidence Base for How We Learn: Supporting Students’ Social, Emotional, and Academic Development By Stephanie M. Jones; Jennifer Kahn
  37. The Price of Inattention: Evidence from the Swedish Housing Market By Repetto, Luca; Solis, Alex
  38. The Emergence of Inter-Municipal Cooperation – A Hazard Model Approach By Ivo Bischoff; Eva Wolfschuetz
  39. Public employment services under decentralization: Evidence from a natural experiment By Weber, Michael
  40. Hosting a Mega-Event: Is it Good or Bad for the Economy? General Equilibrium Models as a Litmus Paper Test By Martina Sartori

  1. By: Wang, Haining; Cheng, Zhiming; Smyth, Russell
    Abstract: We examine the educational spillover effects of migrant students on local students’ academic achievement in public middle schools in urban China. The identification of peer effects relies on idiosyncratic variation in the proportion of migrant students across classes within schools. We find that the proportion of migrant students in each class has a small, and positive, effect on local students’ test scores in Chinese, but has no significant effect on math and English test scores. We also find considerable evidence of heterogeneity in the effects of the proportion of students in the class on local students’ test scores across subsamples. Local students toward the bottom of the achievement distribution, local students enrolled in small classes and local students enrolled in lower-ranked schools benefit most in terms of test scores from having a higher proportion of migrant students in their class. Our findings have important policy implications for the debate in China about the inclusion of migrant students in urban schools, and for the assignment of educational resources across schools.
    Keywords: migrant student,peer effects,academic achievement,China
    JEL: I21
    Date: 2017
  2. By: David H. Autor; Christopher J. Palmer; Parag A. Pathak
    Abstract: Gentrification involves large-scale neighborhood change whereby new residents and improved amenities increase property values. In this paper, we study whether and how much public safety improvements are capitalized by the housing market after an exogenous shock to the gentrification process. We use variation induced by the sudden end of rent control in Cambridge, Massachusetts in 1995 to examine within-Cambridge variation in reported crime across neighborhoods with different rent-control levels, abstracting from the prevailing city-wide decline in criminal activity. Using detailed location-specific incident-level criminal activity data assembled from Cambridge Police Department archives for the years 1992 through 2005, we find robust evidence that rent decontrol caused overall crime to fall by 16 percent—approximately 1,200 reported crimes annually—with the majority of the effect accruing through reduced property crime. By applying external estimates of criminal victimization’s economic costs, we calculate that the crime reduction due to rent deregulation generated approximately $10 million (in 2008 dollars) of annual direct benefit to potential victims. Capitalizing this benefit into property values, this crime reduction accounts for 15 percent of the contemporaneous growth in the Cambridge residential property values that is attributable to rent decontrol. Our findings establish that reductions in crime are an important part of gentrification and generate substantial economic value. They also show that standard cost-of-crime estimates are within the bounds imposed by the aggregate price appreciation due to rent decontrol.
    JEL: D61 R21 R23 R28
    Date: 2017–10
  3. By: Atila Abdulkadiroglu; Parag A. Pathak; Jonathan Schellenberg; Christopher R. Walters
    Abstract: School choice may lead to improvements in school productivity if parents' choices reward effective schools and punish ineffective ones. This mechanism requires parents to choose schools based on causal effectiveness rather than peer characteristics. We study relationships among parent preferences, peer quality, and causal effects on outcomes for applicants to New York City's centralized high school assignment mechanism. We use applicants' rank-ordered choice lists to measure preferences and to construct selection-corrected estimates of treatment effects on test scores and high school graduation. We also estimate impacts on college attendance and college quality. Parents prefer schools that enroll high-achieving peers, and these schools generate larger improvements in short- and long-run student outcomes. We find no relationship between preferences and school effectiveness after controlling for peer quality.
    JEL: I21 I24 J24
    Date: 2017–10
  4. By: Kürschner, Kathleen
    Abstract: This paper exploits the natural experiment provided by the unexpected disintegration of socialist East Germany to study the impact that immigration has on residential housing rents in recipient regions. Using a spatial correlation approach, annual district-level migration data and rental price indicators, we find strong evidence for a positive and sizeable effect of immigration on housing rents. An exploration of exogenous origin-region push factors yields IV estimates of even larger magnitude.
    JEL: J61 R21 R23 R31
    Date: 2017
  5. 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
  6. By: Pinto, Santiago (Federal Reserve Bank of Richmond)
    Abstract: It is well-known that competition for factors of production, including competition for residents, affects the public services provided in the communities. This paper considers the determination of local investment in urban transport systems. Many specialists question the effectiveness of the current U.S. top-to-bottom transportation institutional arrangement in which the federal government plays a dominant role and recommend a shift toward a decentralized organization. We examine how such a shift would affect the levels of transport investment. Specifically, we consider a model of two cities, and assume, as in Brueckner and Selod (2006), that transport systems are characterized by different time and money costs. We compare the outcomes reached when the transport system is decided by a central authority (a state or federal government) to the one decided by each jurisdiction in a decentralized way. In the latter case, city or local transportation authorities choose the system that maximizes residents’ welfare, taking as given the decisions made elsewhere, essentially competing for residents (or workers). Our analysis shows that even though a shift toward a decentralized arrangement of the transportation system would generally lead to overinvestment (relative to the centralized case), the extent of this bias depends on the specific factors that drive transport authorities in deciding the transportation system, on the landownership structure, and on the financing arrangements in place. The paper also shows that, in a more general setup, when the two cities differ in their productivity levels, the more productive city will tend to overinvest in transportation systems that connect the two cities, and the less productive city will tend to underinvest in those systems.
    Keywords: transportation; transport investment;
    Date: 2017–10–12
  7. By: Álvaro Pina (OECD)
    Abstract: Luxembourg’s large foreign-born population is a pillar of the country’s prosperity: they have brought skills and knowledge to many sectors of the economy. They also tend to successfully find jobs, with a higher employment rate than natives. However, not all immigrants have done well. The minority from non-EU origin (about 10% of the country’s population) suffers from high unemployment, large gender gaps in activity and below-average incomes. Refugees are particularly vulnerable. Other integration shortcomings go beyond disadvantaged minorities. Pervasive labour market segmentation is well illustrated by the marked under-representation of the foreign-born in public sector jobs. Political participation of immigrants at local level is modest. At school, their children are often put at a disadvantage by an education system which tends to perpetuate socio-economic inequality. The diversity of Luxembourg’s society contributed by immigrants should be seen as an asset for economic growth and well-being. Initiatives such as the diversity charter can help private and public organisations to reap the benefit of diversity through the inclusion of outsiders and the strengthening of social cohesion. Learning the languages of Luxembourg, developing social capital and having foreign qualifications validated are key preconditions for successful integration. Education requires both general equity-enhancing reforms, starting at early childhood, and targeted support to disadvantaged students, including upgraded vocational studies. Furthermore, job matching and social cohesion would benefit from greater immigrant participation in public sector employment and civic life. Avoiding that asylum seekers undergo protracted inactivity is also a concern. This Working Paper relates to the 2017 OECD Economic Survey of Luxembourg ( y-luxembourg.htm).
    Keywords: asylum seekers, early childhood education and care, equity in education, labour market segmentation, public employment, school tracking
    JEL: H52 I24 I28 J15 J45 J48 J61
    Date: 2017–10–11
  8. By: Jason Barr; Jeffrey P. Cohen; Eon Kim
    Abstract: The impacts of a major hurricane on commercial and residential real estate can be devastating. Recent events in Houston (with Hurricane Harvey), Florida (with Hurricane Irma), and New York City (with Hurricane Sandy) are examples of how flooding damage can unexpectedly extend beyond the FEMA flood zones. Such surprises or shocks can provide property owners—including those that are not flooded—with new information about future flood risks, based on the difference of the property distance from the flood zone and the distance to the actual locations of flooding. We apply a new estimation strategy to quantify the effects of these shocks on property values, using information on repeat property sales to estimate a separate shock effect for each dry property. We demonstrate our approach with an application to non-flooded properties in New York City for Hurricane Sandy. We find that, in general, houses, apartments and commercial properties show the most price volatility within the older, denser urban core, mostly in those neighborhoods that appear to be gentrifying.
    Keywords: Hurricane Sandy, Storm Surges, New York City, Locally Weighted Regressions, Real Estate Prices
    JEL: R3 C14
    Date: 2017–09
  9. By: Tavassoli, Sam (RMIT University); Trippl, Michaela (University of Vienna)
    Abstract: This paper seeks to provide novel insights into the effects of ethnic communities on immigrants’ entrepreneurial activities. We investigate to what extent the decision of an employed immigrant to become an entrepreneur is associated with his or her embeddedness in ethnic networks in the host region. We capture such embeddedness through various mechanisms. Using longitudinal registered-data from Sweden and employing a Logit model, we find that merely being located in an ethnic community does not have an influence on immigrant entrepreneurship; rather what matters is being located in ethnic communities that have a high share of entrepreneurs themselves.
    Keywords: Immigrants; entrepreneurship; ethnic communities; embeddedness; social capital
    JEL: D83 J61 M13
    Date: 2017–10–12
  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." (Author's abstract, IAB-Doku) ((en))
    Date: 2017–10–09
  11. By: Declan French; Donal McKillop; Tripti Sharma
    Abstract: Using the household level data from the UK Wealth and Asset Survey for years 2006-2014, we explore a household’s decision to use one particular method of withdrawing home equity from a range of options available to them. These options include financial products such as remortgage contracts and equity release schemes (reverse mortgage and home reversion schemes) and informal mediums carried out by individual households themselves, for example downsizing of homeownership. The results show that homeowners prefer using formal channels of equity withdrawal. This tendency persists when controlling for household characteristics such as age profile, marital status and demographics and levels of housing wealth, income, savings and unsecured and secured debts. Our findings support the argument that while the decision to withdraw home equity conforms to consumption smoothing motives, the choice of an equity withdrawal medium goes beyond those motives and depends on the circumstances facing individual households.
    Keywords: Equity release schemes; Reverse mortgage; Refinancing; Downsizing; Housing; Homeownership; Retirement; Wealth de-accumulation
    JEL: D14 E21 G21 J14 R21
    Date: 2017–10
  12. By: Dalmazzo, Alberto; de Blasio, Guido; Poy, Samuele
    Abstract: This paper analyses the case of a local secession, i.e. the birth of a new local jurisdiction by separation from an existing one. We present a stylized model in which society is composed of heterogeneous groups and individuals have an homophily bias. The model predicts that: i) separations, such as the split of a territory into distinct administrative units, occur when the costs of mixed communities are sufficiently large; ii) the smaller community drives the decision to secede; iii) welfare gains from the split are associated with positive population growth; iv) higher payoffs under separations, however, might be related to taste for sameness only, with no (or even negative) effect on economic growth. Then, we bring the model to the data by exploiting the secession of the Italian region of Molise from Abruzzo, a unique event in Italian history, which took place in 1963. Historical records document that the split was the result of pressures from Molise, the smaller community. Our evidence suggests that the split was associated with population inflows in both areas. Finally, the main empirical findings, derived by using a synthetic control approach, show that the split caused significant benefits, in both regions, in terms of per-capita GDP growth.
    Keywords: local jurisdictions,secessions,regional growth
    JEL: H77 H10 R11 R12
    Date: 2017
  13. By: Michaels, Guy (London School of Economics); Nigmatulina, Dzhamilya (London School of Economics); Rauch, Ferdinand (University of Oxford); Regan, Tanner (London School of Economics); Baruah, Neeraj (London School of Economics); Dahlstrand-Rudin, Amanda (London School of Economics)
    Abstract: What are the long run consequences of planning and providing basic infrastructure in neighborhoods, where people build their own homes? We study "Sites and Services" projects implemented in seven Tanzanian cities during the 1970s and 1980s, half of which provided infrastructure in previously unpopulated areas (de novo neighborhoods), while the other half upgraded squatter settlements. Using satellite images and surveys from the 2010s, we find that de novo neighborhoods developed better housing than adjacent residential areas (control areas) that were also initially unpopulated. Specifically, de novo neighborhood are more orderly and their buildings have larger footprint areas and are more likely to have multiple stories, as well as connections to electricity and water, basic sanitation and access to roads. And though de novo neighborhoods generally attracted better educated residents than control areas, the educational difference is too small to account for the large difference in residential quality that we find. While we have no natural counterfactual for the upgrading areas, descriptive evidence suggests that they are if anything worse than the control areas.
    Keywords: urban economics, economic development, slums, Africa
    JEL: R31 O18 R14
    Date: 2017–09
  14. By: Massimo Anelli; Kevin Shih; Kevin Williams
    Abstract: Since the 1980s the United States has faced growing disinterest and high attrition from STEM majors. Over the same period, foreign-born enrollment in U.S. higher education has increased steadily. This paper examines whether foreign-born peers affect the likelihood American college students graduate with a STEM major. Using administrative student records from a large public university in California, we exploit idiosyncratic variation in the share of foreign peers across introductory math courses taught by the same professor over time. Results indicate that a 1 standard deviation increase in foreign peers reduces the likelihood native-born students graduate with STEM majors by 3 percentage points–equivalent to 3.7 native students displaced for 9 additional foreign students in an average course. STEM displacement is offset by an increased likelihood of choosing Social Science majors. However, the earnings prospects of displaced students are minimally affected as they appear to be choosing Social Science majors with equally high earning power. We demonstrate that comparative advantage and linguistic dissonance may operate as underlying mechanisms.
    Keywords: immigration, peer effects, higher education, college major, STEM
    JEL: I21 I23 I28 J21 J24
    Date: 2017
  15. By: Xiuli Sun; Haizheng Li; Vivek Ghosal
    Abstract: Understanding the factors that may produce a sustained rate of innovation is important for promoting economic development and growth. In this paper, we examine the role of human capital in firms’ innovation by using a large sample of manufacturing firms from China. We use two firm-level datasets from China: one from metropolitan cities, and one from provincial small and medium sized cities. Patent applications are used as the measure of innovation. Human capital indicators used include skilled human capital (number of highly educated workers), general manager’s education and tenure, and management team’s education and age. We find that skilled human capital has a significant positive effect on firms’ innovation, while the management team’s age has a significant negative effect on innovation. The General Manager’s tenure plays a significant positive role in firm innovation in metropolitan cities, while it is the General Manager’s education that has a positive and significant effect on firms’ innovation in small and middle cities. We also find that the effect of R&D on patents is insignificant for firms in large cities, but it is positive and significant in the smaller and medium sized cities. We conclude by noting some policy issues for promoting innovation in developing economies.
    Keywords: human capital, education, innovation, patents, R&D, economic development, Asia, China
    JEL: J24 I25 D21 D22 L13 O32 O33
    Date: 2017
  16. By: Midori Otani (Ph.D., Osaka School of International Public Policy (OSIPP))
    Abstract: This study investigates how parental involvement is associated with academic achievement by comparing the associations of parental involvement across three criteria: elementary and middle school (school level), male and female (gender), and math and science (subject). Also, it examines whether students' attitudes towards the subjects and academic aspiration mediate the relationship. A nationally representative sample of elementary and middle school children in Japan (1,884 female students and 140 schools and 1,894 male students and 139 schools in fourth grade, and 1,812 female students and 133 schools and 1,789 male students and 131 schools in eighth grade) from Trends International Mathematics and Science Study (TIMSS) 2011 was used for the analysis. Results show that parental involvement is associated with students’ educational outcome. Students’ attitude and aspiration mediate the associations between parental involvement and academic achievement. The associations between parental involvement and academic achievement vary according to the school level, gender, and the subjects. Especially, different association between monitoring types of involvement and achievement is found between elementary and middle school.
    Keywords: Weather Parental Involvement, TIMSS, Elementary school, Middle school, Mathematics, Science, Japan
    JEL: I21
    Date: 2017–10
  17. By: Remy Oddou
    Abstract: This paper analyses the effect of allowances, whose amount depends on jurisdictions, on the segregative properties of endogenous formation of jurisdictions. Households choosing to live at the same place form a jurisdiction whose aim is to produce a local public good and to implement a redistribution policy, by granting every household an allowance whose amount is determined by the jurisdiction. In every jurisdiction, the production of the local public services and the allowance are financed with a local tax based upon the households’ wealth. Local wealth tax rates and the level of the allowance are exogenously determined in every jurisdiction. Households are free to leave their jurisdiction for another jurisdiction that would provide them with their highest utility. We find that the existence of an allowance mitigates the segregative properties of endogenous jurisdiction formation, as the condition identified by Gravel and Thoron to ensure the segregation of any stable jurisdiction structure remains necessary, but is no longer sufficient.
    Keywords: Jurisdictions; Segregation; Allowance
    JEL: C78 D02 H73 R13
    Date: 2017
  18. By: Karthik Muralidharan; Abhijeet Singh; Alejandro J. Ganimian
    Abstract: We present experimental evidence on the impact of a technology-aided after-school instruction program on learning outcomes in middle school grades in urban India, using a lottery that provided students with a voucher to cover program costs. A key feature of the program was its ability to individually customize educational content to match the level and rate of progress of each student. We find that lottery winners had large increases in test scores of 0.36ó in math and 0.22ó in Hindi over just a 4.5-month period. IV estimates suggest that attending the program for 90 days would increase math and Hindi test scores by 0.59ó and 0.36ó respectively. We find similar absolute test score gains for all students, but the relative gain was much greater for academically-weaker students because their rate of learning in the control group was close to zero. We show that the program was able to effectively cater to the very wide variation in student learning levels within a single grade by precisely targeting instruction to the level of student preparation. The program was highly cost-effective, both in terms of productivity per dollar and unit of time. Our results suggest that well-designed technology-aided instruction programs can sharply improve productivity in delivering education.
    Keywords: computer-aided learning, productivity in education, personalized learning, teaching at the right level, post-primary education, middle school, secondary school
    JEL: C93 I21 J24 O15
    Date: 2017
  19. By: Donner, Herman (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Using a dataset with individual appraisals of foreclosed apartments sold through auction in Stockholm, Sweden, the issue of selection bias and a potential overestimation of a foreclosure related discount on price is addressed. A mean discount of 7.9% with a corresponding median value of 9.5% is shown. A hedonic model is also applied. It is found that about half of the impact on price caused by a forced sale is attributable to the search process on the real estate market. These results contrasts from earlier research having explained a negative impact on price to seller motivational factors. These results provide insight towards the dynamics of a negative impact on price caused by a forced sale, and has the potential to allow stakeholders to model a potential discount in greater detail for individual foreclosed properties, and contribute to management of credit risk.
    Keywords: Foreclosure; Hedonic Models
    JEL: D80 D82 R30 R31
    Date: 2017–10–12
  20. By: Hinz, Tina; Mohrenweiser, Jens
    Abstract: The new training literature argues that imperfect labour market competition drives a wedge between productivity and wage increases in skills. We apply recent advancements in the estimation of production and wage functions to show a compressed wage structure in Germany. We also use regional and industry variation in labour market competitiveness and show that there is a premium on productivity and wages,but the productivity-wage wedge does not diminish in labour markets that are more competitive.
    JEL: J24 M53 R23
    Date: 2017
  21. By: Zheng, Liang; Zhao, Zhong
    Abstract: Since Chinese government initiated economic reform in the late 1970s, entrepreneurship and private sectors have emerged gradually and played an increasingly important role in promoting economic growth. However, entrepreneurship is distributed unevenly in China. Using micro data from 2008 economic census and 2005 population census, this paper explains spatial clusters of entrepreneurship for both manufacturing and services. For both sectors, entrepreneurship (measured by new private firms) tends to emerge in places with more relevant upstream and downstream firms. Moreover, Chinitz's (1961) theories are also supported for manufacturing: small upstream and downstream firms seem to be more important for manufacturing entrepreneurship. For both sectors, entrepreneurship is positively related to city size, the share of young adults and the elderly population, and foreign direct investment. More migrants are also found to promote service entrepreneurship. Our paper is the first to consider both manufacturing and service entrepreneurship in China and should be of interest to both local and national policymakers who plan to encourage entrepreneurship.
    Keywords: New Firm Formation,Entrepreneurship,Marshallian Effect,Chinitz Effect,China
    JEL: L26 L60 L80 R10 R12
    Date: 2017
  22. By: Nishant Chadha; Bharti Nandwani
    Abstract: In this paper, we study the impact of ethnic fragmentation on the provision of private and public schools, separately. The distinction is made because the two types of schools have different objective functions, a factor which can influence the relationship between ethnic fragmentation and public goods provision. We find that ethnic fragmentation has a negative impact on the provision of schools overall, but this effect manifests differently for the two types of schools considered. To explain our findings we show that ethnic fragmentation lowers collective action, and because of the different objectives of provision of private and public schools, lack of collective action results in a differential impact. While private schools are shown to be lower in number, public schools are of lower quality in fragmented districts.
    Date: 2017
  23. By: Alessandro Gavazza; Mattia Nardotto; Tommaso Valletti
    Abstract: We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis suggests that the internet has displaced other media with greater news content (i.e., radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence that local government expenditures and taxes are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings are consistent with the idea that voters' information plays a key role in determining electoral participation, government policies and government size.
    Keywords: Internet, newspaper, media, elections, policy
    JEL: D72 C50 L86
    Date: 2017
  24. By: Bryan Coyne, Sean Lyons, Daire McCoy
    Abstract: This research examines the impact of a home energy efficiency upgrade programme on social housing tenants. Employing a quasi-experimental approach we examine a range of objectively measured and self- reported outcomes, including metered gas consumption, for a control and upgrade group, before and after the upgrade. We draw our sample from a large home energy efficiency programme in Ireland, The SEAI Better Energy Communities Scheme, which provides funding for whole communities to upgrade the efficiency of their dwellings. Dwellings are selected for upgrade based on need, allowing us to control for observable dwelling characteristics correlated with selection into the trial. The upgrades undertaken are extensive relative to the average home energy improvement, with many dwellings receiving a number of measures. Households report improvements across a range of outcomes associated with heating-related deprivation and comfort in the home. Panel regression models examine the elasticity of gas demand with respect to the thermal efficiency of the dwellings. Overall, we find that use of natural gas falls much less than 1:1 for each increment to thermal efficiency of the home. For the average household in this study, about half of a marginal increase in thermal efficiency is reflected in reduced gas demand. This result highlights issues with standard engineering models which are commonly used to assess the energy efficiency of dwellings and points to a behavioural response from households, potentially taking back some of the savings as increased internal temperatures.
    Date: 2017–09
  25. By: Bilotkach, Volodymyr; Braakmann, Nils; Gonzalo-Almorox, Eduardo; Wildman, John
    Abstract: High house prices are often considered to be beneficial for the elderly due to the accumulation of wealth. However, as land is an input in the provision of public services, the elderly might be harmed by them, for example, due to a shortage of local care homes. Alternatively, care home providers might be attracted by asset-rich potential clients, which could lead to a positive effect of house prices on the provision of care. Applying an instrumental variables approach on English data, we show that higher house prices lead to fewer care homes, fewer entries into the market as well as fewer available beds.
    Keywords: Care homes, house prices, long-term care, England
    JEL: I11 R31
    Date: 2017–10–16
  26. By: Angelo Antoci; Irene Brunetti; Pierluigi Sacco; Mauro Sodini
    Abstract: The issue of student evaluation of teachers (SET) has been explored by a large literature across many decades. However, the role of social influence factors in determining teachers' responses to a given incentive and evaluation framework has been left basically unexplored. This paper makes a first attempt in this vein by considering an evolutionary game-theoretic context where teachers face a two-stage process where their rating depends on both students' evaluation of their course and on retrospective students' evaluation of their teaching output in view of students' performance in a related follow-up course. We find that both high effort (difficult course offered) and low effort (easy course effort) outcomes may emerge, and that may either lead to a socially optimal outcome for teachers or not, according to cases. Moreover, there may be a potential conflict between the optimal outcome for students and for teachers. We also consider possible ways to generalize our model in future research.
    Keywords: Student evaluation of teachers (SET); teacher effort; teacher motivation; social selection; strategic interaction between teachers.
    JEL: I21 C73 D79
    Date: 2017–01–01
  27. By: Remy Oddou
    Abstract: This paper analyses how welfarism affects the segregative properties of endogenous jurisdiction formation, in a model where local jurisdictions produce a local public good and distribute an allowance to their households, both financed by a proportional tax based on the households' wealth. A jurisdiction is composed of all the households that live in the same place. Local wealth tax rates and the level of the allowance are determined to maximize a social welfare function. Households can "vote with their feet", which means that they can choose to move to the jurisdiction that offers the package "tax rate - amount of public good - allowance" that provides the highest utility level. The main result of this article is the proof that the maximin criterium is more segregative than the utilitarian one.
    Keywords: Jurisdiction, Segregation, Welfare
    JEL: C78
    Date: 2017
  28. By: Konstantin A. Kholodilin (National Research University Higher School of Economics)
    Abstract: This paper analyzes the governmental regulation of the rental housing market in the states that arose on the ruins of the Russian Empire during the Russian Civil war in 19181922. It examines and compares three major tools of the housing policy of those times: rent control, protection of tenants from eviction, and housing rationing. It shows evolution and continuity of the housing legislation of the non-Bolshevik governments and its relationship with the housing policies of Bolsheviks.
    Keywords: Russia; Russian Civil war; non-bolshevik governments; rental housing; housing policy.
    JEL: N44 O18 R38
    Date: 2017
  29. By: Briel, Stephanie; Osikominu, Aderonke
    Abstract: We analyze whether engagement as class representative affects the character skill formation in adolescents. To estimate the c.p. effect we combine a stratified propensity score matching approach with a flexible regression adjustment exploiting data form the GSOEP. We use different tests to check the plausibility and quality of our estimation strategy. Our findings are in line with the hypothesis that leadership experience during school time positively affects the development of character skills.
    JEL: I21 J13 J24
    Date: 2017
  30. By: De Martiis, Angela; Fidrmuc, Jarko
    Abstract: We analyze how regional quality affects firm’s efficiency by identifying the impaired firms receiving financial assistance as those paying an implicit interest rate lower than the prime rate. Then, we decompose them into: real impaired firms unable to repay their loans, and those not repaying their debts even if financially they could. The regions with a high share of loans and crime exhibit a higher concentration of distressed firms, and crime increases the performance of existing companies.
    JEL: O43 E51 G33
    Date: 2017
  31. By: Krause, Manuela; Büttner, Thiess
    Abstract: This paper explores the role of fiscal equalization as a driver of states’ tax policy in Germany. We argue that fiscal redistribution of tax revenues provides an incentive for states to increase their tax rates. The analysis exploits differences in the degree of fiscal redistribution among the states over time. The results show a significant effect on tax policy: with full equalization of revenues from the real estate transfer tax the tax rate is about one percentage point higher than without.
    JEL: H20 H26 R38
    Date: 2017
  32. By: Andrew Barker
    Abstract: New Zealand ranks highly on most indicators of well-being, but incomes are below the OECD average due to low labour productivity. Low labour productivity is only partly explained by the industry composition of the NZ economy and is primarily a consequence of sustained low multi-factor productivity growth within industries, as well as weak investment. Economic geography is an important factor in New Zealand’s poor productivity performance, as the small size and remoteness of the economy diminish its access to global markets, the scale and efficiency of domestic businesses, the level of competition, and the ability to benefit from innovation at the global frontier. Policy and institutions are generally supportive of productivity growth, but there are a number of areas where there is scope for reforms that would help offset the country’s geographical disadvantages and improve the welfare of New Zealanders over the coming decades. This includes promoting international connections, removing barriers to fixed capital investment (including taxation), accessing benefits from agglomeration by improving urban planning and infrastructure provision, enhancing competition and increasing investment in innovation and intangibles. This Working Paper relates to the 2017 OECD Economic Survey of New Zealand ( y-new-zealand.htm).
    Keywords: competition, economic geography, foreign investment, housing, innovation, investment
    JEL: E22 F21 O24 O38 O43 O47 R31
    Date: 2017–10–11
  33. By: Su, Yaqin (Hunan University); Tesfazion, Petros (Central College); Zhao, Zhong (Renmin University of China)
    Abstract: Using a representative sample of rural migrants in cities, this paper investigates where the migrants in urban China come from, paying close attention to intra-provincial vs. inter-provincial migrants, and examining the differences in their personal attributes. We find that migrants who have come within the province differ significantly from those who have come from outside of the province. Using a nested logit model, we find that overall, higher wage differentials, larger population size, higher GDP per capita, and faster employment growth rate are the attributes of a city that attract migrants from both within and outside province. In addition, moving beyond one's home province has a strong deterrent effect on migration, analogous to the "border effect" identified in international migration studies. We also explore the role of culture, institutional barrier, and dialect in explaining such a pronounced "border effect".
    Keywords: rural-urban migration, inter- vs. intra-provincial migration, border effect, China
    JEL: J62 O15
    Date: 2017–09
  34. By: Florian W. Bartholomae; Chang Woon Nam; Alina Schoenberg
    Abstract: Weimar achieved urban recovery as a ‘consumer city’ with sub-brandings like a population magnet with a high living-quality, a cultural city with touristic attractions, and a university city. Its intensive cultural promotion policies combined with urban regeneration programs have contributed to the recent demographic and economic growth. This study demonstrates this success and investigates its sectoral weaknesses compared to other German cities. Weimar needs an optimal mixture of consumption- and production-oriented development strategies to rectify the current structural imbalances and better control those negative impacts caused by a rapidly ageing population. Besides ample presence and intact connectivity of high-tech industries and producer services within a city which enhance R&D, innovation and productivity, Weimar should more seriously consider, when design-ing future development policy, that both urban growth approaches are interrelated: agglomeration generates higher income for the creative class, whereas high urban amenities attract young creative entrepreneurs selecting locations for start-ups.
    Keywords: urban resurgence consumer city, Weimar, East Germany, post-industrial transformation, population magnet, modern industries and services
    JEL: P25 O14 O38 R11 H76
    Date: 2017
  35. By: Douglas Gollin; Martina Kirchberger; David Lagakos
    Abstract: In most developing countries, there is a large gap in average consumption per capita between urban and rural areas. One appealing interpretation of this gap is that it reflects a spatial equilibrium, in which the higher consumption levels of urban areas are offset by lower non-monetary amenities. In this paper, we draw on new high-resolution evidence to document how non-monetary amenities vary across space within 20 developing countries. We focus on measures of health, public goods, crime and pollution. These vary substantially across locations within countries and can be carefully measured with highly comparable data. We find that in almost all countries, and for almost all measures, the quality of these amenities is non-decreasing in population density. In addition, net internal migration flows are directed toward denser areas in every country. These findings are hard to reconcile with a spatial equilibrium. Instead, they suggest that developing countries are undergoing a reallocation of workers to densely populated areas, consistent with many models of structural change but inconsistent with models that assume a simple static spatial equilibrium.
    JEL: E0 O11 O18
    Date: 2017–10
  36. By: Stephanie M. Jones; Jennifer Kahn
    Abstract: Compelling research demonstrates what parents have always known—the success of young people in school and beyond is inextricably linked to healthy social and emotional development.
    Keywords: Students, Social, Emotional, Academic development
    JEL: I
  37. By: Repetto, Luca (Department of Economics); Solis, Alex (Department of Economics)
    Abstract: Do behavioral biases affect prices in a high-stake market? We study the role of left-digit bias in the purchase of an apartment, one of the most important assets in a household’s portfolio. Left-digit bias is the inability to fully process digits after the first, perceiving prices just below a round number (such as $3.99) as cheaper than their round counterpart ($4). We start by documenting that apartments listed at just-below asking prices are sold at a 3-5% higher final price after an auction. This effect appears not to be driven by i) differences in observable characteristics; ii) differences in real estate agents’behavior; or iii) institutional characteristics of the market. We show that apartments using just-below prices attract more bidders and bids, leading to higher competition and to a higher final price. Our results suggest that inattentive buyers might be losing roughly half a year of disposable income.
    Keywords: Housing market; auctions; inattention; first-digit bias
    JEL: C78 D44 D83 R31
    Date: 2017–09–27
  38. By: Ivo Bischoff (University of Kassel); Eva Wolfschuetz (University of Kassel)
    Abstract: We use a hazard model to identify the factors that drive the emergence of inter-municipal cooperation (IMC). We focus on IMC in tasks of internal administration in West-Germany between 2001 and 2014 – tasks where IMC may generate economies of scale while regional spillovers are negligible. Our results support the homophily-hypothesis and the relevance of political transaction costs. Municipalities situated in clusters of small and shrinking municipalities are more likely to start IMC. At odds with the previous literature, IMC is more likely to emerge among municipalities in fiscally strong clusters. We find no evidence that IMC is more likely in certain phases of the election cycle while state subsidies for IMC are an important driving force behind IMC.
    Keywords: Inter-municipal cooperation, hazard model, Germany, survey
    JEL: H77 D72
    Date: 2017
  39. By: Weber, Michael
    Abstract: We study whether decentralizing public employment services impacts job finding positively, as is suggested by the classic decentralization theorem, or negatively, as is suggested by political economy considerations. Our difference-in-difference estimates for a German reform in 2012 point to negative effects: Decentralization decreased job finding by 10% and increased the use of inefficient job creation programs that likely reduce local but increase federal public expenditures.
    JEL: H11 H75 I38 J48
    Date: 2017
  40. By: Martina Sartori (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Hosting mega-events has long been regarded as an opportunity for economic growth, creating long-lasting benefits and attaining international recognition. Recently, both the scientific community and the public opinion at large have turned much more skeptical about the impact of mega-events. Why is it that some events appear successful and other disasters? Why the perception of impacts has changed over time? To answer these (and other) questions, there is a need to go beyond the simple narratives and “stylized facts”, to undertake some serious scientific investigation, based on verifiable data and testable models. Despite the fact that most recent studies use the same modeling tool, namely some Computable General Equilibrium (CGE) model, results are sometimes contradictory, thereby hindering the trustiness of the economic analysis for policy guidance. In this paper, we show that results are different because assumptions are different and because the range of effects considered is different, even when the same model is employed. Furthermore, some critical hypotheses are not often clearly stated. We advocate some kind of standardization in the process of model building for the economic assessment of mega-events. Only a transparent and replicable model exercise can serve as a “litmus paper”, to ascertain whether hosting a mega-event is good or bad for an economy.
    Keywords: Computable general equilibrium modeling, methodological issues, mega-events economic impact assessment
    JEL: C68
    Date: 2017

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