nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2018‒02‒12
35 papers chosen by
Steve Ross
University of Connecticut

  1. Metropolitan city finances in Asia and the Pacific region: issues, problems and reform options By Roy Bahl
  2. Frictional Labor Mobility By Benoît Schmutz; Modibo Sidibé
  3. Alonso and the Scaling of Urban Profiles By Justin Delloye; R\'emi Lemoy; Geoffrey Caruso
  4. It’s time to learn: understanding the differences in returns to instruction time By Barrios Fernandez, Andrés; Bovini, Giulia
  5. Highways, market access and spatial sorting By Fretz, Stephan; Parchet, Raphaël; Robert-Nicoud, Frédéric
  6. Evolution of Regional Innovation with Spatial Knowledge Spillovers: Convergence or Divergence? By Junwen Qiu; Wenjian Liu; Ning Ning
  7. The Effects of Macro-prudential Policies on House Prices Using Real Transaction Data: Evidence from Korea (in Korean) By Hosung Jung; Jieun Lee
  8. Creative and science-oriented employees and firm-level innovation By Stephan Brunow; Antonia Birkeneder; Andrés Rodríguez-Pose
  9. Shift- Share Instruments and the Impact of Immigration By David Jaeger; Joakim Ruist; Jan Stuhler
  10. Are Inclusionary Housing Programs Color-blind? The Case of Montgomery County MPDU Program By Adji Fatou Diagne; Haydar Kurban; Benoît Schmutz
  11. Poor Little Children: The Socioeconomic Gap in Parental Responses to School Disadvantage By Berniell, Inés; Estrada, Ricardo
  12. The Felbertauern landslide of 2013: impact on transport networks, effects on regional economy and policy decisions By Clemens Pfurtscheller; Elisabetta Genovese
  13. Cities, Towns, and Poverty: Migration Equilibrium and Income Distribution in a Todaro-type Model with Multiple Destinations By Luc Christiaensen; Joachim De Weerdt; Ravi Kanbur
  14. Welfare Effects of Housing Transaction Taxes By Terviö, Marko; Määttänen, Niku
  15. Who becomes an inventor in America? The importance of exposure to innovation By Bell, Alex; Chetty, Raj; Jaravel, Xavier; Petkova, Neviana; Van Reenen, John
  16. Roadways, Input Sourcing, and Patterns of Specialisation By Esteban Jaimovich
  17. Secondary towns, agricultural prices, and intensification: Evidence from Ethiopia By Joachim Vandercasteelen; Seneshaw Tamru; Bart Minten; Johan Swinnen
  18. Ethnic Enclaves and Immigrant Self-employment: A Neighborhood Analysis of Enclave Size and Quality By Andersson, Martin; Larsson, Johan P.; Öner, Özge
  19. Science teachers’ satisfaction: Evidence from the PISA 2015 teacher survey By Tarek Mostafa; Judit Pál
  20. The Rise and Fall of Consumption in the '00s. A Tangled Tale. By Demyanyk, Yuliya; Hryshko, Dmytro; Luengo-Prado, Maria; S�rensen, Bent E
  21. The impact of public employment: evidence from Bonn By Becker, Sascha O.; Heblich, Stephan; Sturm, Daniel
  22. Colonial legacies: shaping African cities By Baruah, Neeraj G.; Henderson, J. Vernon; Peng, Cong
  23. Assessing ex ante the wider effects of high-speed rail service in cities? The lessons drawn from a service innovation-based analysis By Marie Delaplace
  24. The Myopic Stable Set for Social Environments (RM/17/002-revised) By Demuynck, Thomas; Herings, P. Jean-Jacques; Saulle, Riccardo; Seel, Christian
  25. Fiscal pressure of migration & horizontal fiscal inequality: Evidence from Indian experience By Pinaki Chakraborty; Shatakshi Garg
  26. Revisiting supply and demand indexes in real estate By Dorinth van Dijk; David Geltner; Alex van de Minne
  27. A simple, deterministic, and efficient knowledge-driven heuristic for the vehicle routing problem By ARNOLD, Florian; SÖRENSEN, Kenneth
  28. GMM Gradient Tests for Spatial Dynamic Panel Data Models By Taspinar, Suleyman; Dogan, Osman; Bera, Anil K.
  29. Location matters: daylight saving time and electricity use By Shaffer, Blake
  30. Weather and crime in South Africa By Bruederle, Anna; Peters, Jörg; Roberts, Gareth
  31. Home Equity Extraction and the Boom-Bust Cycle in Consumption and Residential Investment By Xiaoqing Zhou
  32. Productivity Gains from Agglomeration and Migration in the People's Republic of China between 2002 and 2013 By Pierre-Philippe Combes; Sylvie Démurger; Shi Li
  33. Modal choice between rail and road transportation : evidence from Tanzania By Iimi,Atsushi; Humphreys,Richard Martin; Mchomvu,Yonas Eliesikia
  34. Finding the Sweet Spot in the City: a Monopolistic Competition Approach By Bespalova, Elizaveta; Moskalenko, Alim; Safin, Alexander; Sorokin, Constantine; Yagolkovsky, Andrey
  35. Innovation, Productivity Dispersion, and Productivity Growth By Lucia Foster; Cheryl Grim; John Haltiwanger; Zoltan Wolf

  1. By: Roy Bahl (Former Regents Professor and Founding Dean of the Center for State and Local Finance at Georgia State University, United States)
    Abstract: Asia and the Pacific is witnessing the world’s fastest urbanization in history. In the period 2000-2025, 1.1 billion people are projected to migrate into Asian cities and the region is now home to more than half of the megacities worldwide. Providing quality jobs, housing, urban infrastructure and public services for these new urban migrants and supporting sustainable development of the region’s large metropolitan areas would be a significant fiscal challenge for many governments. The current approach of revenue mobilization for cities and municipal fiscal reform efforts are unlikely to meet the substantial financing needs. Instead, there is a need for a metropolitan public financing strategy that is integrated into national urban development plans and matches national development objectives. The governance arrangements in metropolitan areas would be critical for such strategies to succeed. Compared to fragmented governance structures, the area-wide metropolitan governance model, which allows for effective coordination of service provision and revenue mobilization in the broad metropolitan areas, offer the most promising prospects. When the jurisdiction boundary is large enough, public service delivery can have better coverage and be more efficient, more revenue productive tax bases would become available, debt repayment capacity can be enhanced, and fiscal disparities can be reduced. While these changes may come at a cost of diminished local government control in some countries, reforms towards area-wide metropolitan governments would be a step in the right direction. Financing Asia-Pacific’s big cities also requires a broad mix of revenue tools for metropolitan governments, including property and land taxes, transport or fuel taxes, user charges, and broad-based local business, sales and consumption taxes, or surcharges on national taxes. In many cases, the availability and efficiency of these revenue tools depend on the extent of local fiscal autonomy. Accordingly, the intergovernmental transfer schemes should be rationalized in such context. Three central elements for a successful metropolitan public finance strategy can be highlighted. First, there is no universal solution, and policy choices should be aligned with local policy objectives. Second, where local fiscal autonomy is deemed important, local governments should be provided with adequate space for revenue mobilization. However, at the same time, they should be constrained from accessing intergovernmental transfer and special subsidy regimes. Third, higher level governments might consider establishing a commission to study the feasibility of a special regime for metropolitan area finances.
    Keywords: Taxation, local government revenue, local government budget
    JEL: H20 H71 H72
  2. By: Benoît Schmutz (Ecole Polytechnique; CREST); Modibo Sidibé (Duke University; CREST)
    Abstract: We build a dynamic model of migrationwhere, in addition to usual mobility costs,workers face spatial frictions that decrease their ability to compete for distant job opportunities. We estimate the model on a matched employer-employee panel dataset describing labor market transitions within and between the 100 largest French cities. Our identification strategy is based on the premise that frictions affect the frequency of job transitions, while mobility costs impact the distribution of acceptedwages. We find that: (i) controlling for spatial frictions reduces mobility cost estimates by one order of magnitude; (ii) the urban wage premium is driven by better opportunities for local job-to-job transitions in larger cities; (iii) migration dramatically reduces lifetime inequalities due to initial location; (iv) labor mobility policies based on relocation subsidies are inefficient, unlike switching from nationwide to local minimum wages.
    Keywords: mobility costs; spatial frictions;migration; local labor markets
    JEL: J61 J64 R12 R23
    Date: 2017–12–11
  3. By: Justin Delloye; R\'emi Lemoy; Geoffrey Caruso
    Abstract: The scaling of urban characteristics with total population has become an important research field since one needs to better understand the challenges of urban densification. Yet urban scaling research is largely disconnected from intra-urban structure. In contrast, the monocentric model of Alonso provides a residential choice-based theory to urban density profiles. However, it is silent about how these profiles scale with population, thus preventing empirical scaling studies to anchor in a strong micro-economic theory. This paper bridges this gap by introducing power laws for land, income and transport cost in the Alonso model. From this augmented model, we derive the conditions at which the equilibrium urban structure matches recent empirical findings about the scaling of urban land and population density profiles in European cities. We find that the Alonso model is theoretically compatible with the observed scaling of population density profiles and satisfactorily represents European cities. This compatibility however challenges current empirical understanding of wage and transport cost elasticities with population, and requires a scaling of the housing land profile that is different from the observed. Our results call for revisiting theories about land development and housing processes as well as the empirics of agglomeration benefits and transport costs.
    Date: 2018–01
  4. By: Barrios Fernandez, Andrés; Bovini, Giulia
    Abstract: As hours per day are inherently a limited resource, increasing daily instruction time reduces the amount of time pupils can dedicate to other activities outside school. We study how the effect of longer school days on achievement varies across students and schools. We exploit a large-scale reform of school schedules that substantially increased daily instruction time in Chilean primary schools. We show that the average effect of one additional year of exposure to the longer school day on reading and on mathematics test scores at the end of grade 4 masks substantial heterogeneity. Students from disadvantaged backgrounds benefit more from longer schedules, indicating that returns to time spent at school are larger the scarcer the learning opportunities available at home. Added instruction time yields higher gains in charter than in public schools, suggesting that more autonomy on administrative and pedagogical decisions may increase the effectiveness of other school inputs
    Keywords: instruction time; education reform; heterogeneous effects; charter schools
    JEL: I20 I28
    Date: 2017–12–01
  5. By: Fretz, Stephan; Parchet, Raphaël; Robert-Nicoud, Frédéric
    Abstract: We design a spatial model featuring workers embodied with heterogeneous skills. In equilibrium, locations with improved market access become relatively more attractive to the high-skilled, high-income earners. We then empirically analyze the effects of the construction of the Swiss highway network between 1960 and 2010 on the distribution of income at the local level, as well as on employment and commuting by education level. We find that the advent of a new highway access within 10km led to a long-term 19%-increase of the share of high-income taxpayers and a 6%-decrease of the share of low-income taxpayers. Results are similar for employment data decomposed by education level, as well as for in- and outcommuters. Highways also contributed to job and residential urban sprawl
    Keywords: transportation; highway; market access; income sorting
    JEL: D31 H54 O18 R11 R23
    Date: 2017–11–01
  6. By: Junwen Qiu; Wenjian Liu; Ning Ning
    Abstract: Based on endogenous economic growth models and the panel data of 31 regions in China, this paper explores the following four questions: Do spatial knowledge spillovers among regions exist? Do spatial knowledge spillovers promote regional innovative activities? What is the radiation range of spatial knowledge spillovers? Do external knowledge spillovers affect the evolution of regional innovations in the long run? The results show that spatial knowledge spillovers exist, and though the range of knowledge spillover is within 1000 kilometers in China, it pushes up regional innovative activities. Moreover, since developing regions benefit more from external knowledge spillovers than developed regions, it leads to the convergence of regional knowledge growth rate.
    Date: 2018–01
  7. By: Hosung Jung (Economic Research Institute, The Bank of Korea); Jieun Lee (Economic Research Institute, The Bank of Korea)
    Abstract: We investigate the effects of macro-prudential policies on house prices using event study approaches and dynamic panel models. We construct a unique dataset with house price index based on real transactions and newly estimated loan-to-value (LTV) and debt-to-income (DTI) limits for a monthly panel of 98 districts across Seoul, the Gyeonggi Province and six metropolitan cities covering the period from March 2006 to June 2015. We show that DTI limits appear to be more effective in stabilizing house prices than LTV limits. Both tightening and loosening DTI and only loosening LTV limits are effective. Overall, the results indicate that macro-prudential policies could be a useful tool in curbing excessive household debts and the subsequent house price bubbles. This is the first study to estimate LTV and DTI limits at the district level and analyze the effects of macro-prudential policies on house prices. Our study would provide important lessons for the policy authorities that are implementing LTV and DTI regulations with an aim to cope with a surge in house prices and credit extension.
    Keywords: Macro-prudential policies, Household debt, House prices, LTV, DTI
    JEL: E30 E44 E58 G28
    Date: 2016–07–15
  8. By: Stephan Brunow; Antonia Birkeneder; Andrés Rodríguez-Pose
    Abstract: This paper examines the link between innovation and the endowments of creative and science-oriented STEM - Science, Technology, Engineering and Mathematics ? workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.
    Keywords: Innovation, Creative workers, STEM workers, Smart Cities, Spillover, Germany
    JEL: D22 J82 R12 J21 J24 R23
    Date: 2018–02
  9. By: David Jaeger (CUNY Graduate Center); Joakim Ruist (University of Gothenburg); Jan Stuhler (Universidad Carlos III de Madrid)
    Abstract: A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants’ location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants’ pastgeographic distribution. We present evidence that estimates based on this “shift-share†instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a “multiple instrumentation†procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.
    JEL: C36 J15 J21 J61
    Date: 2018–02
  10. By: Adji Fatou Diagne (Howard University); Haydar Kurban (Howard University); Benoît Schmutz (Ecole Polytechnique; CREST)
    Abstract: Relying on exhaustive administrative data spanned over four decades, this paper studies the treatment of African American applicants by the Moderately Priced Dwelling Unit (MPDU) program in Montgomery County, MD. We show that this program was equally accessible to African-American applicants, except between 1995 and 2000, when African Americans’ conditional probability of purchasing a home through the program was lowered by 10% compared to that of other applicants, maybe as a temporary response to the sudden surge in African American applicants that occurred at that time. Turning to the outcome of the allocation process, we show that even if the spatial allocation of beneficiaries does reflect preference-based sorting patterns observed on the private housing market at the neighborhood level, the program seems to induce some scattering of different ethnic groups at the most local level. When comparing beneficiaries living in the same housing development, but at different addresses, we find that African American beneficiaries have 15% fewer African-American neighbors.
    Keywords: Housing Market Discrimination; Housing Policy; Spatial Sorting; Propensity Score Matching
    JEL: R31 R38 J15
    Date: 2017–11–18
  11. By: Berniell, Inés; Estrada, Ricardo
    Abstract: In this paper, we study how parents react to a widely-used school policy that puts some children at a learning disadvantage. Specifically, we first document that, in line with findings in other countries, younger children in Spain perform significantly worse at school than their older peers and – key to causal interpretation – that for children born in winter this effect is not due to birth seasonality. Furthermore, the age of school entry effect is significantly greater among children from disadvantaged families. To understand why, we analyze detailed data on parental investment and find that college-educated parents increase their time investment and choose schools with better inputs when their children are the youngest at school entry, while non-college-educated parents do not.
    Keywords: Educación, Economía, Equidad e inclusión social, Investigación socioeconómica, Pobreza, Políticas públicas, Familia,
    Date: 2017
  12. By: Clemens Pfurtscheller (Regional Firebrigade Association of Vorarlberg, Natural hazards prevention and disaster management); Elisabetta Genovese (IRCrES-CNR, Italy)
    Abstract: The Felbertauern landslide of May 2013 caused the total destruction of approximately 100 meters of road including an avalanche gallery, generating traffic disruption and several direct and indirect impacts on the regional economy. The Felbertauern Road, an important traffic artery for the whole NUTS-3 region East-Tyrol (Austria), was totally blocked for several weeks. Shortly after the event, regional decision makers sought to estimate the regional-economic impacts of the road blockage, in order to determine whether reopening the road or building an alternative route would be more economically feasible. This economic analysis was carried out using scattered information two weeks after the incident. The analysis is based on a three-month interruption scenario, though the road blockage was finally two months. Due to the fact that, shortly after the event, no up-to-date data on regional-economics at helpful scales was available, we calculated impacts on tourism by analysing overnight stays, additional transportation costs and time losses for the local companies. Using these numbers, a cost-benefit-analysis was then carried out for a projected bypass, a mid-term 1.5 kilometre long route as an alternative to the destroyed road. Finally, the impacts on the local companies were severe, due to additional transportation costs of approx. € 760,000 to 1.4 million. The impacts on regional tourism were calculated at € 7.7 to 8.6 million. This study demonstrates the strong impact of traffic disruption on a regional economy and describes the importance of cost-benefit analysis for policy making in order to get rapid decisions and to prevent large economic losses.
    Date: 2018–02
  13. By: Luc Christiaensen; Joachim De Weerdt; Ravi Kanbur
    Abstract: Should public investment be targeted to big cities or to small towns, if the objective is to minimize national poverty? To answer this policy question we extend the basic Todaro-type model of rural-urban migration to the case of migration from rural areas to two potential destinations, secondary town and big city. We first derive conditions under which a poverty gradient from rural to town to city will exist as an equilibrium phenomenon. We then address the policy question and show how the answer depends on the migration response, where the poverty line lies relative to incomes in the three locations, and at times also the poverty index itself. In particular, we develop sufficient statistics for the policy decisions based on these income parameters and illustrate the empirical remit of the model with long running panel data from Kagera, Tanzania. Further, we show that the structure of the sufficient statistics is maintained in the case where the model is generalized to introduce heterogeneous workers and jobs. Overall, the findings confirm that, given migration responses, national poverty outcomes are not immune to whether urban employment generation takes place in the towns or the city.
    Keywords: Secondary Towns versus Big Cities, Poverty Reduction, Poverty Gradient, Todaro Model, Migration Equilibrium, Equilibrium Income Distribution
    Date: 2017
  14. By: Terviö, Marko; Määttänen, Niku
    Abstract: We evaluate the welfare cost of ad valorem housing transaction taxes, focusing on distortions in the suboptimal matching of houses and households as the channel of welfare effects. We present a one-sided assignment model with transaction costs and imperfectly transferable utility where households are heterogeneous by incomes, houses are heterogeneous by quality, and housing is a normal good. We calibrate the model with data from the Helsinki metropolitan region to assess the welfare impact of a counterfactual tax reform, where the transaction tax is replaced by a revenue equivalent ad valorem property tax. The aggregate welfare gain would be 13% of the tax revenue at the current 2% tax rate. The share of ex post losers from the reform is increasing in the tax rate even though the aggregate welfare cost of transaction taxation increases rapidly with the tax rate, with the Laffer curve peaking at about 10%.
    Keywords: transaction tax; stamp duty; housing market; assignment models
    JEL: D31 R21
    Date: 2017–12
  15. By: Bell, Alex; Chetty, Raj; Jaravel, Xavier; Petkova, Neviana; Van Reenen, John
    Abstract: We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among highimpact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by cutting tax rates. In particular, there are many “lost Einsteins” - individuals who would have had highly impactful inventions had they been exposed to innovation
    Keywords: inventor; America; innovation
    JEL: N0 R14 J01
    Date: 2017–12–01
  16. By: Esteban Jaimovich (University of Surrey)
    Abstract: We propose a model where the internal transport network facilitates the sourcing of intermediate goods from di¤erent locations. E¢ cient internal transportation promotes thus the growth of industries that rely on a large variety of inputs. The model shows that heterogeneities in internal transport infrastructures can become a key factor in shaping comparative advantage and specialisation. Moreover, when su¢ ciently pronounced, such heterogeneities may even overshadow more traditional sources of specialisation based on factor productivities. Evidence based on industry-level trade data grants support to the main prediction of the model: countries with denser road networks export relatively more in industries that exhibit wider input bases. We show that this correlation is robust to several possible confounding e¤ects proposed by the literature, such as the impact of institutions on specialisation in complex goods. Furthermore, we show that a similar correlation also arises when the density of the local transport network is measured by the density of their internal waterways, rather than by roadway density.
    JEL: F11 O18 R12
    Date: 2018–01
  17. By: Joachim Vandercasteelen; Seneshaw Tamru; Bart Minten; Johan Swinnen
    Abstract: Urbanization is happening fast in the developing world and especially so in sub-Saharan Africa where growth rates of cities are among the highest in the world. While cities and, in particular, secondary towns, where most of the urban population in sub-Saharan Africa resides, affect agricultural practices in their rural hinterlands, this relationship is not well understood. To fill this gap, we develop a conceptual model to analyze how farmers’ proximity to cities of different sizes affects agricultural prices and intensification of farming. We then test these predictions using large-scale survey data from producers of teff, a major staple crop in Ethiopia, relying on unique data on transport costs and road networks and implementing an array of econometric models. We find that agricultural price behavior and intensification is determined by proximity to a city and the type of city. While proximity to cities has a strong positive effect on agricultural output prices and on uptake of modern inputs and yields on farms, the effects on prices and intensification measures are lower for farmers in the rural hinterlands of secondary towns compared to primate cities.
    Keywords: urbanization, cities, secondary towns, Ethiopia, sub-Saharan Africa, agricultural prices, intensification
    Date: 2017
  18. By: Andersson, Martin (Blekinge Institute of Technology); Larsson, Johan P. (Swedish Entrepreneurship Forum); Öner, Özge (Research Institute of Industrial Economics (IFN))
    Abstract: We explore the effects of neighborhood-level ethnic enclaves on the propensity of immigrants to use business ownership as a vehicle to transcend from labor market outsiders to insiders. We exploit an exogenously partitioned grid of geocoded 1–by–1 km squares to approximate neighborhoods, and match it with Swedish full-population data from 2011–2012 to study immigrants from the Middle East. We demonstrate a robust tendency for people to leave non-employment for self-employment if many members of the neighborhood ethnic diaspora are business owners, while we observe weak effects emanating from business ownership in other groups. Net of these effects, the overall scale of the enclave, measured by local concentration of co-ethnic peers, negatively influences the propensity to become self-employed. The results are consistent with the argument that it is not the scale, but the quality of local ethnic enclaves that influence labor market outcomes for immigrants.
    Keywords: Ethnic enclave; Segregation; Immigrant entrepreneurship; Self-employment; Labor market sorting; Integration
    JEL: J15 L26 P25
    Date: 2017–12–22
  19. By: Tarek Mostafa (OECD); Judit Pál (OECD)
    Abstract: In 2015, for the first time in its history, PISA (the Programme for International Student Assessment) asked teachers to describe the various aspects of their working environment and teaching practices. This paper examines how teacher, student and school characteristics are related to science teachers’ satisfaction in 19 PISA-participating countries and economies. The findings show that the most satisfied science teachers tend to be those who are initially motivated to become teachers. The results also highlight the positive relationship between science teachers’ satisfaction and teacher collaboration, good disciplinary climate in science classes, availability of school resources, and the opportunity to participate in professional-development activities.
    Date: 2018–02–07
  20. By: Demyanyk, Yuliya; Hryshko, Dmytro; Luengo-Prado, Maria; S�rensen, Bent E
    Abstract: U.S. consumption has gone through steep ups and downs since 2000. We quantify the statistical impact of income, unemployment, house prices, credit scores, debt, financial assets, expectations, foreclosures, and inequality on county-level consumption growth for four subperiods: the "dot-com recession'' (2001--2003), the "subprime boom'' (2004--2006), the Great Recession (2007--2009), and the "tepid recovery'' (2010--2012). Consumption growth cannot be explained by a few factors; rather, it depends on a large number of variables whose explanatory power varies by subperiod. Growth of income, growth of housing wealth, and fluctuations in unemployment are the most important determinants of consumption, significantly so in all subperiods, while fluctuations in financial assets and expectations are important only during some subperiods. Lagged variables, such as the share of subprime borrowers, are significant but less important.
    JEL: E21
    Date: 2017–12
  21. By: Becker, Sascha O.; Heblich, Stephan; Sturm, Daniel
    Abstract: This paper evaluates the impact of public employment on private sector activity using the relocation of the German federal government from Berlin to Bonn in the wake of the Second World War as a source of exogenous variation. To guide our empirical analysis, we develop a simple economic geography model in which public sector employment in a city can crowd out private employment through higher wages and house prices, but also generates potential productivity and amenity spillovers. We find that relative to a control group of cities, Bonn experiences a substantial increase in public employment. However, this results in only modest increases in private sector employment with each additional public sector job destroying around 0.2 jobs in industries and creating just over one additional job in other parts of the private sector. We show how this finding can be explained by our model and provide several pieces of evidence for the mechanisms emphasised by the model
    Keywords: economic geography; public employment; place-based policies; German division
    JEL: F15 J45 N44 R12
    Date: 2018–01–01
  22. By: Baruah, Neeraj G.; Henderson, J. Vernon; Peng, Cong
    Abstract: Differential institutions imposed during colonial rule continue to affect the spatial structure and urban interactions in African cities. Based on a sample of 318 cities across 28 countries using satellite data on built cover over time, Anglophone origin cities sprawl compared to Francophone ones. Anglophone cities have less intense land use and more irregular layout in the older colonial portions of cities, and more leapfrog development at the extensive margin. Results are impervious to a border experiment, many robustness tests, measures of sprawl, and sub-samples. Why would colonial origins matter? The British operated under indirect rule and a dual mandate within cities, allowing colonial and native sections to develop without an overall plan and coordination. In contrast, integrated city planning and land allocation mechanisms were a feature of French colonial rule, which was inclined to direct rule. The results also have public policy relevance. From the Demographic and Health Survey, similar households, which are located in areas of the city with more leapfrog development, have poorer connections to piped water, electricity, and landlines, presumably because of higher costs of providing infrastructure with urban sprawl.
    Keywords: colonialism; persistence; Africa; sprawl; urban form; urban planning; leapfrog
    JEL: H7 N97 O1 R5
    Date: 2017–11–01
  23. By: Marie Delaplace (LAB'URBA - LAB'URBA - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: In January 2016, 35,000 km of high-speed lines were planned worldwide for completion by 2050. Governments have sometimes to choose between different projects. If cost-benefit analysis is the most widely used tool to evaluate the effects of different projects, it seems to be inappropriate for evaluating the wider effects. Using service innovation theories, this paper shows that these wider effects in cities are difficult to evaluate ex ante because they are coproduced in space and time.
    Date: 2017
  24. By: Demuynck, Thomas (universite libre de bruxelles); Herings, P. Jean-Jacques (General Economics 1 (Micro)); Saulle, Riccardo (General Economics 1 (Micro)); Seel, Christian (General Economics 1 (Micro))
    Abstract: We introduce a new solution concept for models of coalition formation, called the myopic stable set (MSS). The MSS is defined for a general class of social environments and allows for an infinite state space. An MSS exists and, under minor continuity assumptions, it is also unique. The MSS generalizes and unifies various results from more specific applications. It coincides with the coalition structure core in coalition function form games when this set is non-empty; with the set of stable matchings in the Gale-Shapley matching model; with the set of Pareto optimal allocations in the Shapley-Scarf housing matching model; with the set of pairwise stable networks and closed cycles in models of network formation; with the set of pure strategy Nash equilibria in pseudo-potential games and finite supermodular games; and with the set of mixed strategy Nash equilibria in several classes of two-player games.
    Keywords: Social environments, group formation, stability, Nash equilibrium
    JEL: C70 C71
    Date: 2018–02–01
  25. By: Pinaki Chakraborty; Shatakshi Garg
    Abstract: This paper examines the patterns and trends in inter-state migration across Indian states and observes that migration is affected by demographic profile as well as the fiscal profile of states. Econometric estimation suggests that level of vertical federal transfers and its horizontal distribution has an impact on out-migration. To correct for the extant horizontal fiscal inequality across Indian states, the paper suggests a relatively more progressive transfer system and a developmental fiscal policy stance at the state level to reduce pressure of out-migration to prosperous regions of the country.
    Date: 2018
  26. By: Dorinth van Dijk; David Geltner; Alex van de Minne
    Abstract: In this paper we disentangle reservation prices of buyers and sellers for commercial real estate at the city level. To do so, we further develop and extend the Fisher et al. (2003, 2007) methodology to a repeat sales indexing framework. This has the advantage that it takes care of all unobserved heterogeneity, which is an important consideration in commercial real estate. Furthermore, it allows for the construction of supply and demand indexes without the need for many property characteristics or assessed values. A key innovation in our methodology, which also enables granular index production, is our use of a Bayesian, structural time series model for index estimation. By introducing these new methodological developments, we are able to estimate reliable, robust supply and demand indexes for all major metropolitan areas in the US. Here we focus on two very different urban markets: New York and Phoenix. Consistent with the notion of pro-cyclical liquidity, we find that buyers' reservation prices move much more extremely and earlier than sellers' reservation prices. Our results show that the demand indexes in both New York and Phoenix went down a full year earlier than the supply indexes during the crisis.
    Keywords: Liquidity; Price index; Commercial real estate
    JEL: R30 C11 C41
    Date: 2018–01
  27. By: ARNOLD, Florian; SÖRENSEN, Kenneth
    Abstract: In this paper we develop a heuristic for the capacitated vehicle routing problem that revolves around three complementary local search operators, embedded in a guided local search framework. The efficiency of the operators is guaranteed by using knowledge, obtained through data mining, on the attributes of undesirable edges. In spite of its straightforward design and the fact that it is completely deterministic, the heuristic is competitive with the best heuristics in the literature in terms of accuracy and speed. Moreover, it can be readily extended to solve a wide range of vehicle routing problems, which we demonstrate by applying it to the multi-depot vehicle routing problem.
    Keywords: Vehicle routing problems, Heuristics, Metaheuristics
    Date: 2017–12
  28. By: Taspinar, Suleyman; Dogan, Osman; Bera, Anil K.
    Abstract: In this study, we formulate the adjusted gradient tests when the alternative model used to construct tests deviates from the true data generating process for a spatial dynamic panel data model (SDPD). Following Bera et. al. (2010), we introduce these adjusted gradient tests along with the standard ones within a GMM framework. These tests can be used to detect the presence of (i) the contemporaneous spatial lag terms, (ii) the time lag term, and (iii) the spatial time lag terms in an higher order SDPD model. These adjusted tests have two advantages: (i) their null asymptotic distribution is a central chi-squared distribution irrespective of the mis-specified alternative model, and (ii) their test statistics are computationally simple and require only the ordinary least-squares (OLS) estimates from a non-spatial two-way panel data model. We investigate the finite sample size and power properties of these tests through Monte Carlo studies. Our results indicates that the adjusted gradient tests have good finite sample properties.
    Keywords: Spatial Dynamic Panel Data Model, SDPD, GMM, Robust LM Tests, GMM Gradient Tests, Inference
    JEL: C13 C21 C31
    Date: 2017
  29. By: Shaffer, Blake
    Abstract: The primary rationale for daylight saving time (DST) has long been energy savings. Whether it achieves this goal, however, remains a subject of debate. Recent studies, examining only one location at a time, have shown DST to increase, decrease or leave overall energy use unchanged. Rather than concluding the effect is ambiguous, this paper is the first to test for heterogeneous regional effects based on differences in (natural) sun times and (societal) waking hours. Using a rich hourly data set and quasi -experimental methods applied across Canadian provinces, this paper rationalizes the differing results, finding region-specific effects consistent with differences in sun times and waking hours. DST increases electricity use in regions with late sunrises and early waking hours.
    Keywords: Daylight saving time; electricity demand; regional effects
    JEL: C54 Q4 Q48
    Date: 2017
  30. By: Bruederle, Anna; Peters, Jörg; Roberts, Gareth
    Abstract: South Africa has one of the highest crime rates in the world, incurring high cost for society. The present paper examines the effect of weather shocks on various types of crime. Using a 12-year panel data set at monthly resolution on the police ward level, we demonstrate a short-term effect of warmer temperatures on violent crime and thereby offer support for the heat-aggression link as suggested by psychological research. Furthermore, we find evidence for a mid-term effect of weather on crime via agricultural income, which is in line with the economic theory of crime. Our findings have direct policy implications for the design of crime prevention strategies, in which weather forecasts could play an important role.
    Keywords: South Africa,weather,crime,income shocks
    JEL: C33 O55 Q54 R11
    Date: 2017
  31. By: Xiaoqing Zhou
    Abstract: The consumption boom-bust cycle in the 2000s coincided with large fluctuations in the volume of home equity borrowing. Contrary to conventional wisdom, I show that homeowners largely borrowed for residential investment and not consumption. I rationalize this empirical finding using a calibrated two-goods, multiple-assets, heterogeneous-agent life-cycle model with borrowing frictions. The model replicates key features of the household-level and aggregate data. The model offers an alternative explanation of the consumption boom-bust cycle. This cycle is caused by large fluctuations in the number of borrowers and hence in total home equity borrowing, even though the fraction of borrowed funds spent on consumption is small.
    Keywords: Credit and credit aggregates, Economic models, Housing
    JEL: D1 E2 E3
    Date: 2018
  32. By: Pierre-Philippe Combes (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique, IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris); Sylvie Démurger (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Shi Li (School of Economics and Business Administration - Beijing Normal University)
    Keywords: agglomeration economies, migration, wage disparities, urban development, cities
    Date: 2017
  33. By: Iimi,Atsushi; Humphreys,Richard Martin; Mchomvu,Yonas Eliesikia
    Abstract: Rail transport generally has the advantage for large-volume long-haul freight operations. The literature generally shows that shipping distance, costs, and reliability are among the most important determinants of people's modal choice among road, rail, air, and coastal shipping transport. However, there is little evidence in Africa, although the region historically possesses significant rail assets. Currently, Africa's rail transport faces intense competition against truck transportation. With firm-level data, this paper examines shippers'modal choice in Tanzania. The traditional multinomial logit and McFadden?s choice models were estimated. The paper shows that rail prices and shipping distance and volume are important determinants of firms'mode choice. The analysis also finds that the firms'modal choice depends on the type of transactions. Rail transport is more often used for international trading purposes. Exporters and importers are key customers for restoring rail freight operations. Rail operating speed does not seem to have an unambiguous effect on firms'modal selection.
    Keywords: Transport Economics Policy&Planning
    Date: 2017–08–29
  34. By: Bespalova, Elizaveta; Moskalenko, Alim; Safin, Alexander; Sorokin, Constantine; Yagolkovsky, Andrey
    Abstract: We propose a general equilibrium model to study the spatial inequality of consumers and firms within a city. Our mechanics rely on Dixit and Stiglitz monopolistic competition framework. The firms and consumers are continuously distributed across a two-dimensional space, there are iceberg-type costs both for goods shipping and workers com- muting (hence firms have variable marginal costs based on their location). Our main interest is in the equilibrium spatial distribution of wealth. We construct a model that is both tractable and general enough to stand the test of real city empirics. We provide some theoretical statements, but mostly the results of numerical simulations with the real Moscow data.
    Keywords: spatial distribution, linear city, circular city, monopolistic competition
    JEL: L12 O18
    Date: 2016–07–18
  35. By: Lucia Foster; Cheryl Grim; John Haltiwanger; Zoltan Wolf
    Abstract: We examine whether underlying industry innovation dynamics are an important driver of the large dispersion in productivity across firms within narrowly defined sectors. Our hypothesis is that periods of rapid innovation are accompanied by high rates of entry, significant experimentation and, in turn, a high degree of productivity dispersion. Following this experimentation phase, successful innovators and adopters grow while unsuccessful innovators contract and exit yielding productivity growth. We examine the dynamic relationship between entry, productivity dispersion, and productivity growth using a new comprehensive firm-level dataset for the U.S. We find a surge of entry within an industry yields an immediate increase in productivity dispersion and a lagged increase in productivity growth. These patterns are more pronounced for the High Tech sector where we expect there to be more innovative activities. These patterns change over time suggesting other forces are at work during the post-2000 slowdown in aggregate productivity.
    Date: 2018–02

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