|
on Urban and Real Estate Economics |
| By: | Ding Ding; Xiaoyu Huang; Tao Jin; W. Raphael Lam |
| Abstract: | China’s real estate market rebounded sharply after a temporary slowdown in 2014-2015. This paper uses city-level data to estimate the range of house price overvaluation across city-tiers and assesses the main risks of a sharp housing market slowdown. If house prices rise further beyond “fundamental” levels and the bubble expands to smaller cities, it would increase the likelihood and costs of a sharp correction, which would weaken growth, undermine financial stability, reduce local government spending room, and spur capital outflows. Empirical analysis suggests that the increasing intensity of macroprudential policies tailored to local conditions is appropriate. The government should expand its toolkit to include additional macroprudential measures and push forward reforms to address the fundamental imbalances in the residential housing market. |
| Keywords: | Asia and Pacific;Macroprudential Policy;Central banks and their policies;China real estate market, housing bubbles, Monetary Policy (Targets, Instruments, and Effects), Housing Supply and Markets, Bayesian Analysis, Time-Series Models |
| Date: | 2017–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/248&r=ure |
| By: | Fedorets, Alexandra; Stops, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lottmann, Franziska |
| Abstract: | "Job mobility equilibrates disparities on local labor markets and influences the efficiency of the job matching process. In this paper, we describe a job matching model that allows for simultaneous regional and occupational mobility, predicting corresponding spillover effects on the number of matches. We estimate these spillover effects based on novel administrative German data on the number of matches, unemployed, and vacancies of local labor markets, which we define as distinct occupations in distinct regions. We specify a matching function for these local labor markets with regional spillovers, occupational spillovers, as well as combined regional and occupational spillovers of unemployed and vacancies. To construct these spillover terms, we use information on the proximity between regions and on similarities between occupations in terms of qualification requirements and tasks. We find that regional spillover effects for both vacancies and the unemployed are positive, occupational spillover effects for vacancies are positive and occupational spillover effects for the unemployed are negative. The combined regional and occupational spillover effects for both vacancies and the unemployed are positive. We conclude that neglecting regional, occupational, and combined spillovers leads to biased estimates of job matching efficiency in local labor markets." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | C21 C23 J44 J64 |
| Date: | 2017–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201735&r=ure |
| By: | Funke, Michael; Leiva-Leon, Danilo; Tsang, Andrew |
| Abstract: | The recent increase in China’s house prices at the national level masks tremendous variation at the city level – a feature largely overlooked in the macroprudential literature. This paper considers the evolving heterogeneity in China’s house price dynamics across 70 cities and assess the main deter-minants. We gauge the heterogeneity of house price dynamics using a novel regime-switching modelling approach to estimate the time-varying patterns of China’s city-level housing price synchronization. After sorting city-level housing prices into four clusters sharing similar cyclical features, we see that each group shows increasing synchronization in the years leading up to 2015, and a decoupling pattern thereafter. We document high synchronization within each of the clusters of cities, but low synchronization among them. The empirical evidence suggests that differentials in the growth of households, income, investment and even differences in air quality explain housing price synchronization among cities. |
| JEL: | E31 E32 C32 |
| Date: | 2017–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2017_021&r=ure |
| By: | Knut Are Aastveit (Norges Bank (Central Bank of Norway)); André K. Anundsen (Norges Bank (Central Bank of Norway)) |
| Abstract: | The responsiveness of house prices to monetary policy shocks depends both on the nature of the shock – expansionary versus contractionary – and on city-specific housing supply elasticities. We test and find supporting evidence for the hypothesis that expansionary monetary policy shocks have a larger impact on house prices when supply elasticities are low on 263 US metropolitan areas. We also test whether contractionary shocks are orthogonal to supply elasticities, as implied by downward rigidity of housing supply, and find supporting evidence. A final theoretical conjecture is that contractionary shocks should have a greater impact on house prices than expansionary shocks, as long as supply is not perfectly inelastic. For areas with high housing supply elasticity, our results are in line with this conjecture. However, for areas with an inelastic housing supply, we find that expansionary shocks have a greater impact on house prices than contractionary shocks. We provide evidence that this is related to a momentum effect that is more pronounced when house prices are increasing than when they are falling. |
| Keywords: | House prices, Heterogeneity, Monetary policy, Non-linearity, Supply elasticities |
| JEL: | E32 E43 E52 R21 R31 |
| Date: | 2017–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2017_25&r=ure |
| By: | Olegs Krasnopjorovs (Bank of Latvia) |
| Abstract: | This paper aims at identifying the school characteristics consistently associated with better performance of pupils on state exams. First, we find that exam scores are positively related to school size (the number of pupils in the respective school) and teacher salaries, but negatively – with teacher age. Meanwhile, quantitative inputs like the number of teachers and computers per pupil are not robust determinants of education performance. Second, we show that pupils in urban and rural schools would perform similarly if characteristics of these schools were the same. The Oaxaca–Ransom decomposition fully explains the urban-rural exam score gap by a greater number of pupils and higher teacher salaries in urban schools as well as by different pupil structure; in turn, pupils' ethnic origin plays in favour of rural schools. Finally, Stochastic Frontier Analysis models show that school size is a robust efficiency determinant, while school location in the Riga region or in another big city is not. The bottom line is that structural reforms involving school mergers and a rise in teacher salaries might bring non-negligible dividends in terms of education quality. |
| Keywords: | education performance, school size, rural schools, Oaxaca–Ransom decomposition, Stochastic Frontier Analysis |
| JEL: | I21 C1 |
| Date: | 2017–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:201703&r=ure |
| By: | Robert J. Shiller (Cowles Foundation, Yale University); Rafal M. Wojakowski (Surrey Business School, University of Surrey); M. Shahid Ebrahim (Durham University Business School); Mark B. Shackleton (Lancaster University Management School) |
| Abstract: | This paper studies the Continuous Workout Mortgage (CWM), a two in one product: a fixed rate home loan coupled with negative equity insurance, to advocate its viability in mitigating financial fragility. In order to tackle the many issues that CWMs embrace, we perform a range of tasks. We optimally price CWMs and take a systemic market-based approach, stipulating that mortgage values and payments should be linked to housing prices and adjusted downward to prevent negative equity. We illustrate that amortizing CWMs can be the efficient home financing choice for many households. We price CWMs as American option style, defaulting debt in conjunction with prepayment within a continuous time, analytic framework. We introduce random prepayments via the intensity approach of Jarrow and Turnbull (1995). We also model the optimal embedded option to default whose exercise is motivated by decreasing random house prices. We adapt the Barone-Adesi and Whaley (1987) (BAW) approach to work within amortizing mortgage context. We derive new closed-form and new analytical approximation methodologies which apply both for pricing CWMs, as well as for pricing the standard US 30-year Fixed Rate Mortgage (FRM). |
| Keywords: | Negative equity, House price index indexation, Repayment mortgage, Insurance, Embedded option to default, Prepayment intensity |
| JEL: | C63 D11 D14 D92 G13 G21 R31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:3016&r=ure |
| By: | Stefan Speckesser; Sophie Hedges |
| Abstract: | This paper investigates whether the educational choices that young people make after the completion of their GCSEs (at age 16) are influenced by their peers. More specifically, it takes advantage of the variation in peer groups that arises when students move from primary to secondary school in order to isolate the impact of secondary school peers on the choice of educational trajectory. These trajectories are broadly classified as academic, vocational, a combination of the two, or no education at all. In order to overcome the common problems associated with the identification of peer effects, the ability of the primary school peers of secondary school peers, who are not going to the same secondary school, is used as an instrument for secondary school peer group quality. These ‘peers of peers’ did not go to the same primary or secondary school as the individual of interest and so cannot have had any direct impact on them. Our results show that higher ability peers reduce the likelihood that an individual will choose a vocational course at age 16 after controlling for the individual’s own ability. We also find a very strong effect of household income on education choices, showing that the more deprived a student’s background is, the more likely they are to opt for a vocational trajectory over an academic one. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:483&r=ure |
| By: | Langer, Sebastian; Korzhenevych, Artem |
| Abstract: | This paper aims to quantify the municipal tax revenue effects of built-up area increases. The assumed existence of these effects is one of the key reasons for ongoing land consumption on the side of the municipalities. Some previous case studies however suggested that these effects might be not large enough especially in rural municipalities and would thus make land development not profitable. We estimate the effect of built-up industrial and commercial (BIC) area change on the business tax revenues in cross-sectional instrumental variable (IV) estimations. Based on detailed data for Bavaria, we find a significant and positive tax revenue effect of an increase in municipal BIC area. There exist strong differences in the size of this effect between urban and rural municipalities. The largest effects are generated by the BIC area in the large cities and become substantially smaller when these are dropped from the sample. Based on these findings, we reflect on the tradable planning permits (TPP) scheme recently discussed in the land use literature in the context of policies aiming to limit land consumption. Furthermore, we relate our estimates to the average municipal costs for land development and execute a number of robustness checks. |
| Keywords: | tax revenues,municipal taxes,land consumption,instrumental variable regression |
| JEL: | H21 H25 H70 H71 R14 R52 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:1817&r=ure |
| By: | Fazili, Sameera (Federal Reserve Bank of Atlanta) |
| Abstract: | The two sectors of community development and health have long worked in the same neighborhoods, but they have not always worked together. This is starting to change, due in part to a growing recognition among health experts of the social, economic, and environmental factors that drive health outcomes. These social determinants of health have become the basis for new collaborations between community development and health professionals. This paper introduces professionals in both sectors to this emerging area of practice through a series of case studies of innovators in the southeastern United States. Case studies look at ways to bring housing and health professionals together, opportunities to leverage community development finance tools, and efforts to use Pay for Success to improve Medicaid spending. This discussion paper reviews early lessons on how to build a successful health and community development partnership, including an examination of the incentives for community developers, health professionals, state and local governments, and philanthropy to participate in these collaborations. |
| Keywords: | social determinants of health; affordable housing; health and housing; community development financial institutions; Medicaid |
| JEL: | I11 I14 L31 P46 R51 Z18 |
| Date: | 2017–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedacd:2017-03&r=ure |
| By: | Nicola Cortinovis (Erasmus University Rotterdam); Frank van Oort (ESE EUR, IHS EUR, Utrecht University) |
| Abstract: | Productivity across European regions is related to three types of networks that mediate R&D-related knowledge spillovers: trade, co-patenting and geographical proximity. Both our panel and instrumental variable estimations for European regions suggest that network relations are crucial sources of R&D spillovers, but with potentially different features. While co-patenting relations appear to affect local productivity directly, regions that link up to innovative leader regions via imports gain in productivity only when they have relatively high levels of human capital and absorptive capacity. From a policy perspective, this may frustrate recent European policy initiatives, such as Smart Specialization, that are designed to benefit all regions in Europe. |
| Keywords: | productivity; economic networks; regions; Europe; trade; knowledge |
| JEL: | R11 R12 O33 O47 |
| Date: | 2017–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170118&r=ure |
| By: | Konstanting Lucks (Institute for Fiscal Studies); Melanie Lührmann (Institute for Fiscal Studies and Royal Holloway, University of London); Joachim K. Winter (Institute for Fiscal Studies and Ludwig-Maximilians-Universität München) |
| Abstract: | We study the effects of peers on risky decision making among adolescents in the age range of 13 to 15 years. In a field experiment, we randomly allocated school classes to two social interaction treatments. Students were allowed to discuss their choices with a natural peer – either a friend or a randomly selected classmate – before individually making choices in an incentivised lottery task. In the control group, adolescents made choices without being able to discuss them with a peer. In addition, we collected information on existing peer networks. This novel design allows us to separate two channels of peer influence, assortative matching on preferences and the effect of social interaction on choices. We find that friends and classmates are matched on socio-demographic characteristics but not on risk preferences. In contrast, social interaction strongly increases the similarity of teenagers’ risky choices. A large fraction of peers align their choices perfectly. |
| Keywords: | peer effects; assortative matching; social interaction; risk and loss aversion |
| Date: | 2017–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:17/16&r=ure |
| By: | Nina Biljanovska; Francesco Grigoli; Martina Hengge |
| Abstract: | High levels of economic policy uncertainty in various parts of the world revamped the de- bate about its impact on economic activity. With increasingly stronger economic, fi nancial, and political ties among countries, economic agents have more reasons to be vigilant of for- eign economic policy. Employing heterogeneous panel structural vector autoregressions, this paper tests for spillovers from economic policy uncertainty on other countries' economic ac- tivity. Furthermore, using local projections, the paper zooms in on shocks originating in the United States, Europe, and China. Our results suggest that economic policy uncertainty re- duces growth in real output, private consumption, and private investment, and that spillovers from abroad account for about two-thirds of the negative effect. Moreover, uncertainty in the United States, Europe, and China reduces economic activity in the rest of the world, with the effects being mostly felt in Europe and the Western Hemisphere. |
| Keywords: | Private consumption;Private investment;Europe;China;United States;Economic policy uncertainty, spillover, General, International Policy Coordination and Transmission |
| Date: | 2017–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/240&r=ure |
| By: | José Garcia Montalvo; Josep M. Raya |
| Abstract: | The introduction of limits or regulatory penalties on high LTV ratios for residential mortgages is one of the most frequently used tools of macroprudential policy. The available evidence seems to indicate that this instrument can reduce the feedback loop between credit and house prices. In this paper, we show that these constraints on LTV ratios, used by Spanish banking regulators before the onset of the housing crisis of 2008, did not prevent that feedback loop. In the Spanish case, the fact that appraisal companies were mostly owned by banks led to a situation in which the LTV limits were used to generate appraisal values adjusted to the needs of the clients, rather than trying to appropriately represent the value of the property. This tendency towards over-appraisals produced important externalities in terms of a higher than otherwise demand for housing, and intensification of the feedback loop between credit and house prices. |
| JEL: | E52 E58 Y G28 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1592&r=ure |
| By: | Giuseppe Calignano; Rune Dahl Fitjar; Dieter Franz Kogler |
| Abstract: | Cluster policy is often ineffective in peripheral regions with weak institutions and significant barriers to knowledge production and exchange. Nonetheless, many peripheral regions have pursued such policies in recent years, an example being technology districts in Southern Italy. This paper examines one such district, the aerospace district in Apulia, where policy has focused on indirect support for networking through coordination. This has led to a substantial increase in knowledge exchange within the district, but also to a heavy dependence on the cluster organization itself as the key actor in the knowledge exchange network. |
| Keywords: | Clusters, Technology districts, Policy evaluation, Innovation networks, Knowledge exchange, Social network analysis |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1730&r=ure |
| By: | Puhani, Patrick A. |
| Abstract: | With girls having overtaken boys in many education indicators, the “feminization” of elementary school teaching is causing debates about disadvantages for male students. Using administrative panel data on the universe of students, teachers and schools for a German state, I exploit within school and within teacher variation to determine teacher characteristics’ effects on students’ tracking outcomes. Germany tracks students at age 10 into more or less academic school types. I find hardly any effects of teacher’s gender, age, pay level, qualifications, or working hours on boys’ or girls’ school track recommendations or school choice. Even when following students into middle school, no effects of elementary-school teacher gender on school type change or grade repetition can be detected. |
| Keywords: | Education, gender, identification, fixed effects, teacher quality |
| JEL: | I21 J45 J71 J78 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2017:20&r=ure |
| By: | Abel,Simon Martin; Burger,Rulof Petrus; Carranza,Eliana; Piraino,Patrizio |
| Abstract: | The paper tests the effects of plan-making on job search and employment. In a field experiment with unemployed youths, participants who complete a detailed job search plan increase the number of job applications submitted (by 15 percent) but not the time spent searching, consistent with intention-behavior gaps observed at baseline. Job seekers in the plan-making group diversify their search strategy and use more formal search channels. This greater search efficiency and effectiveness translate into more job offers (30 percent) and employment (26 percent). Weekly reminders and peer-support sub-treatments do not improve the impacts of plan-making, suggesting that limited attention and accountability are unlikely mechanisms. |
| Keywords: | Rural Labor Markets |
| Date: | 2017–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8181&r=ure |
| By: | Argaw, Bethlehem A.; Puhani, Patrick A. |
| Abstract: | We use administrative panel data on about a quarter of a million students in the German state of Hesse to estimate the causal effect of class size on school tracking outcomes after elementary school. Our identification strategy relies on the quasi-random assignment of students to different class sizes based on maximum class size rules. In Germany, students are tracked into more or less academic middle school types at about age ten based, to a large extent, on academic achievement in elementary school. We mostly find no or small effects of class size in elementary school on receiving a recommendation or on the actual choice to attend the more academic middle school type. For male students, we find that an increase in class size by 10 students would reduce their chance of attending the higher school track - which more than 40 percent of students attend - by 3 percentage points. |
| Keywords: | class size,panel,administrative data,education production |
| JEL: | I21 I28 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:155&r=ure |
| By: | Argaw, Bethlehem A.; Puhani, Patrick A. |
| Abstract: | We use administrative panel data on about a quarter of a million students in the German state of Hesse to estimate the causal effect of class size on school tracking outcomes after elementary school. Our identification strategy relies on the quasi-random assignment of students to different class sizes based on maximum class size rules. In Germany, students are tracked into more or less academic middle school types at about age ten based, to a large extent, on academic achievement in elementary school. We mostly find no or small effects of class size in elementary school on receiving a recommendation or on the actual choice to attend the more academic middle school type. For male students, we find that an increase in class size by 10 students would reduce their chance of attending the higher school track - which more than 40 percent of students attend - by 3 percentage points. |
| Keywords: | Class size, panel, administrative data, education production |
| JEL: | I21 I28 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2017:21&r=ure |
| By: | Mense, Andreas; Michelsen, Claus; Cholodilin, Konstantin A. |
| Abstract: | This paper empirically analyzes the effects of a second generation rent control. We make use of an uncommon policy intervention in the German housing market and translate the generated variation into a difference-and-differences setup, augmented with elements of a discontinuity design, to identify the causal impact of rent controls. We exploit the spatial and temporal differences in the regulation, finding significant effects on de facto regulated and unregulated rents and house prices. Our results suggest that the regulation benefits low/medium income households. Further, we provide evidence that rent regulations alter land values and depress maintenance activities. Overall, these results fit the predictions of a standard comparative-static representation of a second-generation rent control, which sheds a more favorable light on housing market interventions. |
| Keywords: | housing policy,rent control,rental housing,Germany |
| JEL: | D2 D4 R31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:242017&r=ure |
| By: | Montmartin, B.; Herrera, M.; Massard, N. |
| Abstract: | Using a unique database containing information on the amount of R&D tax credits and regional, national and European subsidies received by firms in French NUTS3 regions over the period 2001-2011, we provide new evidence on the efficiency of R&D policies taking into account spatial dependency across regions. By estimating a spatial Durbin model with regimes and fixed effects, we show that in a context of yardstick competition between regions, national subsidies are the only instrument that displays total leverage effect. For other instruments internal and external effects balance each other resulting in insignificant total effects. Structural breaks corresponding to tax credit reforms are also revealed. |
| Keywords: | ADDITIONALITY;FRENCH POLICY MIX;R&D INVESTMENT;SPATIAL PANEL;STRUCTURAL BREAK |
| JEL: | H25 O31 O38 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2017-06&r=ure |
| By: | Bergantino, Angela Stefania; Madio, Leonardo |
| Abstract: | We study the demand and the willingness-to-pay for a new High-Speed (HSR) line on the Bari-Rome route, and its indirect effect on the connected Brindisi-Rome line, when competing with other existing transport modes. We carry out a discrete choice experiment over a significant number of respondents. We find that reductions in access and egress (A/E) time are more valued than in-vehicle travel time if HSR is available (faster services) while, when only traditional services are available, the opposite is true. This confirms that fragmented journeys, for faster connections, yield greater disutility and this would be the greater competitive advantage of HSR services. We also explore the heterogeneity among respondents, by studying the relationship between in-vehicle, and A/E travel time considering different population segments, i.e. different income levels, travel habits (frequent or occasional), and travel purposes, in order to profile potential users. We also study the patterns of the inter-modal substitutability. We find that increasing the travel distance by 120 km (to Brindisi) still guarantees large substitution between HSR and air transport mode. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sit:wpaper:17_6&r=ure |
| By: | Irina Stanga; Razvan Vlahu; Jakob de Haan |
| Abstract: | Using a newly constructed database for 26 countries over 2000-2014, we analyze cross-country and within-country differences in mortgage arrears. We find that macro-prudential policies (notably regulatory LTV ratios) are significantly negatively associated with the share of mortgage arrears in total residential debt. Our results suggest that better institutions are also associated with lower delinquency rates, both directly and by enhancing the impact of macro-prudential policies and the right to recourse. Moreover, we find that the effect of macro-prudential policies is conditioned by several mortgage market characteristics, like the maturity of loans, interest rate fixity, and tax deductibility of interest payments. |
| Keywords: | mortgage arrears; macro-prudential regulation; institutions; mortgage market |
| JEL: | C25 D14 E32 G15 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:580&r=ure |
| By: | Tuan Anh Nguyen (University of Economics and Business, Vietnam National University, Hanoi, Vietnam and VietinBank Capital, VietinBank); Tuyen Quang Tran (University of Economics and Business, Vietnam National University, Hanoi); Huong Van Vu (Department of Economics, Academy of Finance, Hanoi, Vietnam); Dat Quoc Luu (University of Economics and Business, Vietnam National University, Hanoi, Vietnam) |
| Abstract: | Using a novel dataset involving 450 respondents living in affordable apartments in urban Hanoi, this study examines the level of housing satisfaction and its correlates. We find that housing satisfaction is positively associated with household income but negatively related to education. Interestingly, the study finds that residents borrowing from banks to buy home are less satisfied with their home than their non-borrowing counterparts. We also find that respondents’ positive evaluation of their apartments, such as the design, construction quality and price of apartments, are strongly linked with housing satisfaction. In addition, the location of and environmental quality surrounding the housing area were found to be major factors affecting housing satisfaction. |
| Keywords: | affordable apartment, housing satisfaction, social apartment, cheap commercial apartment. |
| JEL: | D4 D6 D11 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:0317&r=ure |
| By: | Wouter (W.) Zant (VU Amsterdam, The Netherlands; Tinbergen Institute, The Netherlands) |
| Abstract: | We estimate to what extent bridges in Mozambique lead to transport cost reductions and attribute these reductions to key determinants, in particular road distance, road quality and crossing borders. For identification we exploit the introduction of a road bridge over the Zambezi river, in August 2009 between Caia and Chimuara, with the simultaneously completed rehabilitation of the railway bridge between Vila de Sena and Mutarara, which jointly create variation in optimal trading itineraries between markets. Estimations, based on monthly maize prices in 24 markets, for up to five years before and after the (re)introduction of the bridges, are conditioned on spatial price equilibrium with market integration. Bridges explain a reduction of transport costs, averaged over itineraries, from 17% to 42% (ATT). Results are shown to be robust for the non-random bridge placement and various other threats. Reduction in transport costs for particular itineraries is occasionally even larger, and is, generally, mainly due to road distance and modestly to road quality. |
| Keywords: | agricultural markets; transport costs; bridges; Mozambique; sub-Sahara Africa |
| JEL: | D23 D61 O13 O18 Q13 R41 |
| Date: | 2017–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170117&r=ure |
| By: | Anna Gloria Billé (Free University of Bozen-Bolzano, Faculty of Economics and Management); Samantha Leorato (University of Rome Tor Vergata, Department of Economics and Finance) |
| Abstract: | In this paper we propose a Partial-MLE for a general spatial nonlinear probit model, i.e. SARAR(1,1)-probit, defined through a SARAR(1,1) latent linear model. This model encompasses the SAE(1)-probit model, considered by Wang et al. (2013), and the more interesting SAR(1)-probit model. We perform a complete asymptotic analysis, and account for the possible finite sum approximation of the covariance matrix (Quasi-MLE) to speed the computation. Moreover, we address the issue of the choice of the groups (couples, in our case) by proposing an algorithm based on a minimum KL-divergence problem. Finally, we provide appropriate definitions of marginal effects for this setting. Finite sample properties of the estimator are studied through a simulation exercise and a real data application. In our simulations, we also consider both sparse and dense matrices for the specification of the true spatial models, and cases of model misspecifications due to different assumed weighting matrices. |
| Keywords: | spatial autoregressive-regressive probit model, nonlinear modeling, SARAR, partial maximum likelihood, quasi maximum likelihood, marginal effects |
| JEL: | C13 C31 C35 C51 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps44&r=ure |
| By: | Sylvain Dejean (CEREGE - Centre de Recherche en sciences de Gestion - EA 1722 - La Rochelle - ULR - Université de La Rochelle) |
| Abstract: | Does the distance still matters in a context where digital technologies promised to eliminate distance-related costs? In crowdfunding platforms, the founder of a project and the backers mainly exchange tacit information (trustworthiness and seriousness of the founder, feasibility of a project), challenging the ability of the Internet to abolish the cost of distance. We investigate how the existence of social ties between two geographical areas, by lowering the asymmetry of information, can shape the flow of funding in a given country. We take advantage of a unique database provided by the French leader of reward-based Crowdfunding. With a dataset containing 12887 projects and 452 850 contributions representing a value of 19 million euros over the period 2012/2015, we estimate, for each pair of the 94 French regions, the number and the amount of bilateral funding as well as their determinants in a gravity-like equation model. To account for the existence of social ties between French regions we exploit information of the French national Census of 2013 about regional migration. Our mains results are first that the elasticity of distance is still important (around 0.5) in the context of reward-based crowdfunding platforms. We then show that taking into account the existence of social ties between regions strongly reduces and even annihilates (under some specifications) the impact of distance. This result suggests that if digital technology could have reduced the geographical distance, only social proximity seems able to decrease the information-related costs. |
| Keywords: | Crowdfunding,economic geography,gravity,social networks |
| Date: | 2017–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01645147&r=ure |
| By: | Tödtling, Franz; Auer, Alexander |
| Abstract: | Innovation is nowadays a highly interdependent process where firms rely on distributed knowledge sources at various spatial scales. It has been argued that innovation interactions are shifting increasingly from local/regional towards global scales and that the region as a space for supporting innovation and competitiveness of firms is losing in importance. We suggest, however, that firms and clusters rely on various kinds of knowledge bases and factors for their development that differ in their geographical mobility and territorial boundedness. Whereas codified knowledge as well as many kinds of goods and services, investment capital, and people have become mobile at a global scale due to improvements of transport- and communication technologies and a lowering of trade barriers, we find other factors that are still territorially bound, such as tacit knowledge that is exchanged in local and social networks, and certain kinds institutions and regulations that are territorially confined. We investigate therefore for different types of industries to what extent and which kind of driving factors for cluster development and innovation have become non-local or footlose, or remain territorially bound to regions or countries. This also has relevance for regional and innovation policies that try to enhance the competitiveness of clusters and regional economies. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus009:5937&r=ure |
| By: | Tamm, Marcus |
| Abstract: | An active participation in work-related training supports career development and reduces the risk of job loss. A pioneering RWI study demonstrates that the duration of schooling and vocational education has a causal impact on how an employee acquires training throughout adulthood. Consequently, public investments in school and college education may have a significant impact on lifelong learning. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwiimp:171353&r=ure |
| By: | Ajay Bhaskarbhatla (Erasmus School of Economics, ERIM); Deepak Hegde (New York University); Thomas (T.L.P.R.) Peeters (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands) |
| Abstract: | Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance. |
| Keywords: | Human Capital; Capabilities; Innovation; Matching; Competitive Advantage |
| JEL: | O30 O31 O32 J24 |
| Date: | 2017–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170115&r=ure |
| By: | Diego A. Vera-Cossio (University of California - San Diego) |
| Abstract: | Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential benef ciaries and favoritism towards local elites. Unlike targeting cash transfers to the poor, the optimal targeting of credit is a more complex problem involving issues of productivity, repayment, and market responses: This paper analyzes this problem using a large-scale lending program, the Thai Million Baht Credit Fund, which decentralizes the allocation of loans to an elected group of community members, and provides three main results. First, exploiting a long and detailed panel, I recover pre-program structural estimates of household total factor productivity and f nd that resources from the program were not allocated to high-productivity, poor households, which is inconsistent with poverty and productive eff ciency as targeting criteria. Second, using socioeconomic networks data, I show that actual targeting is strongly driven by connections to village elites and is related to lower program profitability, which suggests favoritism as a reason for mistargeting. Finally, I exploit quasi-experimental variation in the rollout of the program and uncover evidence that, in general equilibrium, informal credit markets compensate for targeting distortions by redirecting credit towards unconnected households, albeit at higher interest rates than those provided by the program. The results highlight the limitations of community-driven approaches to program delivery and the role of markets in attenuating potential targeting errors. |
| Keywords: | credit, social networks, misallocation, targeting |
| JEL: | D14 G21 O12 O16 O17 L14 Z13 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:201707&r=ure |
| By: | Kühl, Leonie; Szech, Nora |
| Abstract: | Cooperativeness among genetically unrelated humans remains a major puzzle in the social sciences. We explore the causal impact of physical distance on willingness to help. In a field setting, participants decide about supporting local refugees at the dispense of money to themselves. We vary physical distance only, and keep other factors such as cultural distance fixed. The data shows that an increase in local physical distance decreases willingness to donate. A laboratory experiment confirms this finding. We further explore the causal roles of exposure (in the field) and of larger distances (in the lab) with a total of 475 participants. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:110&r=ure |
| By: | Elbert, R.; Friedrich, Christian; Knigge, J. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:90749&r=ure |