|
on Urban and Real Estate Economics |
| By: | Kristian Blickle; ; ; |
| Abstract: | I study the e?ects of an increase in the supply of local mortgage credit on local house prices and employment by exploiting a natural experiment from Switzerland. Losses in U.S. security holdings triggered a migration of dissatis?ed retail customers from a large, universal bank (UBS) to homogenous local mortgage lenders in mid-2008. Mortgage lenders close to UBS branches experience larger in?ows of deposits, unrelated to their investment opportunities. Using variation in the geographic distance between UBS branches and local mortgage lenders as an instrument for deposit growth, I ?nd that banks with an exogenous positive funding shock invest in strict accordance with their specialization (i.e. local mortgage lending). Consequently, house prices in neighborhoods around a?ected banks rise over 50% more than around una?ected banks. I also ?nd an increase in the number of employees at small ?rms, reliant on real estate collateral, in these neighborhoods. My results show that local mortgage oriented banks a?ect house prices through the supply of credit and that bank specialization thereby plays an important role in the allocation of capital across sectors. |
| Keywords: | credit supply, liquidity shock, house prices, local banking, employment |
| JEL: | G20 G21 R30 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2018:11&r=ure |
| By: | Sommervoll, Dag Einar (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Sommervoll, Åvald (Department of Informatics) |
| Abstract: | House prices vary with location. At the same time the border between two neighboring housing markets tends to be fuzzy. When we seek to explain or predict house prices we need to correct for spatial price variation. A much used way is to include neighborhood dummy variables. In general, it is not clear how to choose a spatial subdivision in the vast space of all possible spatial aggregations. We take a biologically inspired approach, where different spatial aggregations mutate and recombine according to their explanatory power in a standard hedonic housing market model. We find that the genetic algorithm consistently finds aggregations that outperform conventional aggregation both in and out of sample. A comparison of best aggregations of different runs of the genetic algorithm shows that even though they converge to a similar high explanatory power, they tend to be genetically and economically different. Differences tend to be largely confined to areas with few housing market transactions. |
| Keywords: | House price prediction; Machine learning; Genetic algorithm; Spatial aggregation |
| JEL: | C45 R21 R31 |
| Date: | 2018–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsclt:2018_004&r=ure |
| By: | Anna Maria Mayda; Giovanni Peri; Walter Steingress |
| Abstract: | In this paper, we estimate the effect on housing prices of the expansion of the Vancouver SkyTrain rapid transit network during the period 2001–11. We extend the canonical residential sorting equilibrium framework to include commuting time in the household utility function. We estimate household preferences in the sorting model using confidential micro data and geographic information systems (GIS) data on the SkyTrain network. Using these preference estimates and observed data for 2001, we simulate the equilibrium effects of expanding the SkyTrain. In our counterfactual analysis, the SkyTrain expansion increases housing prices not only in neighborhoods where the expansion occurred, but also in those with access to pre-existing segments of the network. We show how these network housing price effects depend on household commuting patterns, and discuss the implications of our results for targeted taxation policies designed to capture the housing price appreciation stemming from a public transit investment. |
| Keywords: | International topics, Labour markets |
| JEL: | F22 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:18-19&r=ure |
| By: | Ashani Amarasinghe; Roland Hodler; Paul A. Raschky; Yves Zenou |
| Abstract: | The aggregate economic impact of any developmental project depends on its effects within the chosen administrative region as well as its economic spillovers into other regions. However, little is known about how these spillovers propagate through geographic, ethnic and road networks. In this paper, we analyze both theoretically and empirically the role of these networks in the spatial diffusion of local economic shocks. We develop a network model that shows how a district’s level of prosperity is related to its position in the network. The network model’s first-order conditions are used to derive an econometric model of spatial spillovers that we estimate using a panel of 5,944 districts from 53 African countries over the period 1997-2013. To identify the causal effect of spatial diffusion, we exploit cross-sectional variation in the location of mineral mines and exogenous time variation in world mineral prices. Our results show that road and ethnic connectivity are particularly important factors for diffusing economic spillovers over longer distances. We then use the estimated parameters from the econometric model to calculate the key player centralities, which determine which districts are key in propagating local economic shocks across Africa. We further show how counterfactual exercises based on these estimates and the underlying network structure can inform us about the potential gains from policies that increase economic activity in specific districts or improve road connectivity between districts. |
| Keywords: | economic development, networks, spatial spillovers, key player centrality, natural resources, transportation, Africa |
| JEL: | O13 O55 R12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7001&r=ure |
| By: | Thierry Mayer (Département d'économie); Corentin Trevien |
| Abstract: | We use the natural experiment provided by the opening and progressive extension of the Regional Express Rail (RER) between 1970 and 2000 in the Paris metropolitan region, and in particular the departure from the original plans due to budget constraints and technical considerations, to identify the causal impact of urban rail transport on firm location, employment and population growth. We apply a difference-in-differences method to a particular subsample, selected to minimize the endogeneity that is routinely found in the evaluation of the effects of transport infrastructure. We find that the RER opening caused a 8.8% rise in employment in the municipalities connected to the network between 1975 and 1990. While we find no effect on overall population growth, our results suggest that the arrival of the RER may have increased competition for land, since high-skilled households were more likely to locate in the vicinity of a RER station. |
| Keywords: | Location; Urban form; Transport infrastructure; Subway |
| JEL: | D04 H43 R42 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/6d427am2i18m5a5elpijpm1e8l&r=ure |
| By: | Alessia De Stefani |
| Abstract: | Using the Michigan Survey of Consumers, I show that American households have heterogeneous expectations about the future of house prices, which largely depend upon the history of past house price realizations in the local area of residence. House price expectations are also systematically biased and inefficient, and as such inconsistent with even weak forms of the rational expectations hypothesis. In particular, house price forecasts display an extrapolative component: expectations are over-optimistic in good times and over-pessimistic in bad ones. This systematic bias matters because consumers make financial decisions on the basis of their house price beliefs. Exploiting an exogenous shift in housing sentiment I show that when individuals expect the value of their properties to rise, they borrow against the anticipated increase in home equity. One standard deviation increase in house price expectations changes the average leverage ratios on long-term fixed-rates mortgages by 6% of a standard deviation. The magnitude of this effect doubles when considering only home equity mortgages. |
| Keywords: | house price, mortgage |
| JEL: | D14 D84 G02 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:282&r=ure |
| By: | Ingrid Gould Ellen (New York University); Stephen L. Ross (University of Connecticut) |
| Abstract: | This paper provides the introduction to the special issue on Race and the City in the Journal of Housing Economics in 2018. The paper surveys relevant topics on racial and ethnic discrimination and residential segregation, and provides a more detailed discussion of the specific papers in the special issue. The paper primarily focuses on the literatures on discrimination in housing, on-line markets and policing. In terms of racial segregation, the paper discusses work related to the pattern of residential segregation and the causes and consequences of segregation. |
| Keywords: | race, ethnicity, discrimination, segregation, urban |
| JEL: | J15 R20 R30 R50 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-022&r=ure |
| By: | Clément Bosquet (Spatial Economic Research Center); Pierre-Philippe Combes (Département d'économie) |
| Abstract: | Are agglomeration and peer effects at stake in academic research? To tackle this question, we study how departments’ characteristics affect the quantity and quality of academics’ publications in economics in France, controlling for individual time-varying characteristics and individual fixed effects. Department characteristics have an explanatory power at least equal to a quarter of that of individual characteristics and possibly as high as theirs. The quantity and quality of an academic’s publications in a field increase with the presence of other academics specialised in that field and with the share of the department’s publications output in that field. In contrast, department size, proximity to other large departments, homogeneity in terms of publication performance, presence of colleagues with connections abroad, and composition in terms of positions and age matter for some publication measures but only if not controlling for individual fixed effects. |
| Keywords: | Research productivity; Local externalities; Skill sorting; Peer effects; Knowledge spillovers; Co-author networks; Economics of science |
| JEL: | R23 J24 I23 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4jn6cjcel9913942jpruv3pju6&r=ure |
| By: | Gilles Duranton; Anthony J. Venables |
| Abstract: | Many development policies, such as placement of infrastructure or local economic development schemes, are “place-based.” Such policies are generally intended to stimulate private sector investment and economic growth in the treated place, and as such they are difficult to appraise and evaluate. This paper sets out a framework for analyzing the effects of such policies and assessing their social value. It then reviews the literature on place-based policies in the contexts of transport improvements, economic corridors, special economic zones, lagging regions, and urban policies. |
| JEL: | O10 O18 R10 R11 R13 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24562&r=ure |
| By: | Martin, Hal (Federal Reserve Bank of Cleveland) |
| Abstract: | This paper simulates changes to neighborhood home prices resulting from reforms to tax preferences in the recently passed Tax Cuts and Jobs Act (TCJA). The simulation uses federal tax data summarized at a fine geography to impute homeowner rents at the zip code level across six income classes. Employing a user cost framework, I model rents as a function of prices under the old tax law and under the TCJA. While the average price impact of the TCJA is found to be −5.7 percent, local effects range from 0 to −23 percent across zip codes. Variation across income class is also large. Simulations by income class suggest that the most severe declines in price occur for upper middle-income households ($100,000–$200,000). The paper also simulates partial versions of the TCJA that omit different features of the law that affect housing preference. I find that the higher standard deductions in the new law are the largest driver of price declines. |
| Keywords: | mortgage interest deduction; housing subsidy; income tax; |
| JEL: | H24 H31 R21 |
| Date: | 2018–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1806&r=ure |
| By: | Qiulin Ke; Karen Sieracki; Michael White |
| Abstract: | The central London office market has received much attention in the literature. Regarded as a highly liquid and relatively transparent direct commercial real estate market, research has examined, for example, the cyclical nature of the market, market adjustment, the division of the market into submarkets, and the importance of international investment. However, relatively little research has examined spatial patterns of rents and prices. Partly this may reflect limited data for heterogeneous real estate assets. This paper uses transactions data on offices over a long time period and focuses on the main central London office submarkets. Different models are estimated to attempt to capture space and time varying influences on the property market. The results highlight the importance and significance of neighbouring and contiguous influences in real estate pricing. Considering a number of central locations, we find price and distance to be inversely related even across markets which have a high level of accessibility. |
| Keywords: | London; Offices; Spatial |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_273&r=ure |
| By: | Radoslaw Trojanek; Michal Gluszak |
| Abstract: | In the paper, we analyzed both spatial and time effects of subway availability on apartment prices in Warsaw, the only city in Poland with rapid urban transit system. We have used the data set contained in 6971 geo-coded apartment transactions for the years 2010 to 2015 in Warsaw. In this research, the hedonic method was used in OLS, QTL, SAR and SEM models. We found strong evidence that the new subway line (M2) influenced apartment prices even before it was completed. It confirms our hypothesis, and is in line with previous research in other countries. We observed a steady price premium adjustment process related to new subway line. The impact of the new subway line M2 on apartment prices gradually and significantly increased with time. An increase in distance to the subway station was reflected in a decrease in housing prices (from -1.7%per km in 2010 to -2.4%per km in 2015). We have not found similar effect for the old subway line M1. In case of the latter, the marginal effects did not change significantly in time. |
| Keywords: | Hedonic methods; Housing Market; property prices; subway |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_209&r=ure |
| By: | Shoag, Daniel (Harvard University); Tuttle, Cody (University of Maryland); Veuger, Stan (American Enterprise Institute) |
| Abstract: | Local governments rely heavily on sales tax revenue. We use national bankruptcies of big-box retail chains to study sudden plausibly exogenous revenue shortfalls. Treated localities respond by reducing spending on law enforcement and administrative services. We further study how cities with different degrees of autonomy vary in their response. Cities in home rule states react more swiftly by raising taxes or issuing bonds. A regression discontinuity analysis of cities in Illinois emphasizes that this effect of local autonomy is causal. Home rule cities do not abuse their discretion: their bond ratings are more likely to be strong. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp17-037&r=ure |
| By: | Alfred Larm Teye; Daniel Felix Ahelegbey |
| Abstract: | Following the 2007-08 Global Financial Crisis, there has been a growing research interest on the spatial interrelationships between house prices in many countries. This paper examines the spatio-temporal relationship between house prices in the twelve provinces of the Netherlands using a recently proposed econometric modelling technique called the Bayesian Graphical Vector Autoregression (BG-VAR). This network approach is suitable for analysing the complex spatial interactions between house prices. It enables a data-driven identification of the most dominant provinces where temporal house price shocks may largely diffuse through the housing market. Using temporal house price volatilities for owner-occupied dwellings from 1995Q1 to 2016Q1, the results show evidence of temporal dependence and house price diffusion patterns in distinct sub-periods from different provincial housing sub-markets in the Netherlands. In particular, the results indicate that Noord-Holland was most predominant from 1995Q1 to 2005Q2, while Drenthe became most central in the period 2005Q3–2016Q1 |
| Keywords: | Graphical models; House price diffusion; Spatial dependence; Spillover effect; The Netherlands |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_337&r=ure |
| By: | Yunqing Xu |
| Abstract: | In 2016 China’s house prices achieved record growth in some cities and negative growth in others. This paper studies both induced and imposed institutional changes in China’s housing market that give rise to the formation of the national housing investment market (NHIM), using Suzhou, a rapidly emerging industrial city neighbouring Shanghai, as a case study. It argues that NHIM, an induced institutional change, offers opportunities to the private sector and local governments for profits and revenues by generating housing price inflation. On the other hand, the state has been reluctant to hamper NHIM and only imposes rules to restrict their activities when it sees the need. The Suzhou case illustrates that NHIM has been effective in supporting surplus building activities and is powerful enough to cause hyper house price inflation in cities it sees potential. The paper concludes that housing policies in countries with NHIM or without barriers to foreign investment need to take account of the impact of external purchasing power to avoid the excessive house price inflation generated by inward housing investment. |
| Keywords: | Housing investment, housing price inflation, housing policy, institutional changes, Suzhou Case Study |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_263&r=ure |
| By: | John MacFarlane |
| Abstract: | It is increasingly the case that Public Housing Authorities are required to account for the financial performance and condition of their property portfolio on a regular basis. This is certainly the case in Australia where property and housing are largely the responsibility of State Governments rather than the Federal Government. In terms of asset values and performance, these are required annually, in market terms – not a nominal replacement value based on costs. How should such portfolio valuation and assessment tasks be undertaken to be able to make portfolio estimates to a given level of accuracy at a minimal cost? These issues will be discussed in relation to two New South Wales (NSW) State Government housing portfolios: Land and Housing Corporationwhich manages a portfolio of 150,000 public housing properties; and Teacher Housing Authoritywhich manages a portfolio of 1,500 properties to provide accommodation for school teachers in mainly remote areas of NSW. In both cases, mass appraisal methods are used but most critical is the choice of the benchmark properties on which the mass appraisal models are based. |
| Keywords: | asset valuation; housing portfolio; Mass Appraisal; Quality Assurance |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_86&r=ure |
| By: | Avraamova, Elena (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Klyachko, Tatiana (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Loginov, Dmitriy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Semionova, Elena (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Tokareva, Galina (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Yakovlev, Ivan (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | The paper presents the results of the fifth wave of the monitoring study of the effectiveness of general education conducted by the Center for the Economics of Continuing Education of the IAER RANEPA. Participants of the sociological survey in 2017 were 41 school principals, 2107 representatives of households, 2038 teachers of general education organizations located in urban settlements and rural areas of the Chelyabinsk region, the Altai and Stavropol regions, and also in St. Petersburg. The positions of teachers on a wide range of issues related to the problems of general education are considered: the personnel situation in schools, the quality of teaching, the requirements of families for the organization of the educational process, and the satisfaction of teachers with professional activities. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:041818&r=ure |
| By: | Scott E. Carrell (University of California, Davis); Mark Hoekstra (Texas A&M University); Elira Kuka (Southern Methodist University) |
| Abstract: | A large and growing literature has documented the importance of peer effects in education. However, there is relatively little evidence on the long-run educational and labor market consequences of childhood peers. We examine this question by linking administrative data on elementary school students to subsequent test scores, college attendance and completion, and earnings. To distinguish the effect of peers from confounding factors, we exploit the population variation in the proportion of children from families linked to domestic violence, who have been shown to disrupt contemporaneous behavior and learning. Results show that exposure to a disruptive peer in classes of 25 during elementary school reduces earnings at age 24 to 28 by 3 percent. We estimate that differential exposure to children linked to domestic violence explains 5 percent of the rich-poor earnings gap in our data, and that each year of exposure to a disruptive peer reduces the present discounted value of classmates’ future earnings by $80,000 |
| Keywords: | Peer Effects, Domestic Violence |
| JEL: | I20 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1804&r=ure |
| By: | Zeno Adams; Kristian Blickle; ; |
| Abstract: | We make use of the universe of immigrants who arrived in Switzerland between 1992 and 2013, granular community level house price and wage data as well as detailed information on the Swiss population to study the effects of immigration on the location choice of incumbent households. Immigration influences a household’s location choice through three distinct channels: house price changes, labor market competition, and households’ sentiment regarding immigration. We find evidence of all three channels. However, we show that the channel to which a household responds most strongly depends on the type of immigration and the characteristics of the household. Our research provides valuable insights into some of the effects of large scale immigration. |
| Keywords: | Immigration, house prices, wages, employment, gentrification,displacement |
| JEL: | D14 D9 J61 R21 R23 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2018:09&r=ure |
| By: | Xiaofang Dong; Siqi Zheng; Matthew E. Kahn |
| Abstract: | High skilled workers gain from face to face interactions. If the skilled can move at higher speeds, then knowledge diffusion and idea spillovers are likely to reach greater distances. This paper uses the construction of China’s high speed rail (HSR) network as a natural experiment to test this claim. HSR connects major cities, that feature the nation’s best universities, to secondary cities. Since bullet trains reduce cross-city commute times, they reduce the cost of face-to-face interactions between skilled workers who work in different cities. Using a data base listing research paper publication and citations, we document a complementarity effect between knowledge production and the transportation network. Co-authors’ productivity rises and more new co-author pairs emerge when secondary cities are connected by bullet train to China’s major cities. |
| JEL: | O15 O31 R4 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24539&r=ure |
| By: | Roland Füss; Oliver Lerbs |
| Abstract: | This paper investigates whether and how strongly the share of households owning their homes in a community affects residential property taxation by local governments. Homeowners bear the full property tax burden irrespective of local market conditions, and the tax is more salient to them. "Home owner communities" may hence oppose high property taxes in local elections in order to protect their housing wealth. Using granular spatial data from a complete housing inventory in the 2011 German Census and war-related housing damages as a source of exogenous variation in local homeownership, we provide empirical evidence confirming that otherwise identical jurisdictions choose significantly lower property tax multipliers when the share of homeowners in their population is higher. This result appears to be independent of local housing market conditions, which suggests tax salience as the key mechanism for this effect. We find strong positive spatial dependence in tax multipliers, indicative of property tax mimicking by local governments. |
| Keywords: | Homeownership; Political economy; property taxation; Spatial interactions |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_149&r=ure |
| By: | João-Manuel Carvalho |
| Abstract: | Urban design influences the value of private properties when it does not simply generate new ones. Furthermore present urban planning, which is the most common institutional framework for urban design, requires financially balanced urban plans or even beyond it in search for public funds to interventions outside the plan area. This enhances the role of real estate in urbanism as it is the value added to real estate that allows for the funding of public features within urban planning.Two relevant issues derive from this approach – urban planners have to give a new and awkward place to real estate knowledge within their teams and the value added by the urban plan has to be calculated.The current Portuguese planning law requires municipal plans to evidence their economic feasibility without public disbursements and to provide an algorithm to allocate costs and benefits among initial property owners. This is however done without either the least mention to the role of real estate or to a purposeful concept of value added by the plan. The latter issues are the subject of the presentation with illustrations from the Portuguese urban planning framework. |
| Keywords: | Real Estate Development; Urban Design; Urban Planning; Urbanism; value added |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_29&r=ure |
| By: | Rita Yi Man Li; Beiqi Tang |
| Abstract: | Many of the previous research shows that ups and downs of real estate prices are affected by the foreigners' investments. Some countries such as Australia have implement relevant measures to lower the incentives of foreigners to invest in their housing sector. The objective of this paper is to examine the major determinants of FDI inflow in real estate sector in five countries, i.e. Korea, Japan, Australia, Canada and the UK via Artificial neural networks. It shall investigate the relationship between foreign direct investment inflow in real estate sector, residential property price index, gross domestic product per capita, global house price index growth rate, global housing price index, effective exchange rate, housing price to income index and natural disaster. The results show that there are different determinants in different countries. While global housing price index plays the most important role in foreign direct investment inflow in Korea, Japan and UK, Gross domestic product and house price to income ratio is the most important factor in Canada and Australia respectively. |
| Keywords: | Artificial Neural Network; Foreign Direct Investment Inflow |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_349&r=ure |
| By: | Wenli Li (Federal Reserve Bank of Philadelphia); Florian Oswald (Département d'économie) |
| Abstract: | The state of Nevada passed legislation in 2009 that abolished deficiency judgments for purchase mortgage loans made after October 1, 2009, and collateralized by primary single-family homes. In this paper, we study how this change in the law affected equilibrium mortgage lending. Using unique mortgage loan-level application data and a difference-in-differences approach that exploits the qualification criterion, we find that the law change led to a decline in equilibrium loan sizes of about 1 to 2 percent. There exists some evidence that mortgage approval rates also decreased for the affected loan applications. These results suggest that making the deficiency judgment law more default friendly in Nevada generated material cost on borrowers at the time of mortgage origination. |
| Keywords: | Deficiency judgment; Default; Foreclosure; Approval; Interest rate; Nevada |
| JEL: | G21 K11 R20 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/6ka8i7k76r83u9an5s6phimuh3&r=ure |
| By: | Langer, Sebastian; Korzhenevych, Artem |
| Abstract: | We investigate how lump-sum equalization transfers affect expenditures and taxes in the municipalities of the largest German state North Rhine-Westphalia. In general, those general-purpose transfers cannot be treated as exogenous variables. Thus, for the identification of causal effects, two exogenous adjustments in the transfer allocation formula are used as instrumental variables. Findings suggest the existence of the "flypaper effect" - municipalities use transfers to increase expenditures but do not reduce tax rates. Extra money from transfers is mainly used to finance social expenditures and public facilities. A set of robustness checks, including a spatial dependence model, confirm the results. |
| Keywords: | flypaper effect,local government expenditure,transfers,local taxation,Flypaper Effekt,Regionalregierung,Transfers,regionale Steuern |
| JEL: | H21 H70 H71 H72 H77 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0118&r=ure |
| By: | Andreu Arenas, Clément Malgouyres |
| Abstract: | We study how economic conditions at the time of choosing post-compulsory education affect intergenerational mobility. Exploiting local variation in birthplace unemployment rate at age 16 across 23 cohorts in France, we find that cohorts deciding on post-compulsory education in bad economic times are more educationally intergenerationally mobile – their level of educational attainment is less related to having a white-collar father. These cohorts are also more occupationally intergenerationally mobile; and a large fraction of this effect is explained by business cycle-induced differences in educational attainment. Results are robust to accounting for differential spatial mobility between birth and age 16 by parental occupation. Finally, we provide additional evidence that high local unemployment at age 16 increases the relative school enrollment rate of children of blue collar workers the year after – at age 17. |
| Keywords: | Intergenerational mobility, business cycle, human capital, occupational choice |
| JEL: | J24 I21 E24 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:679&r=ure |
| By: | Andrea Ascani; Pierre-Alexandre Balland |
| Abstract: | Countries and regions all over the world compete to attract Foreign Direct Investment (FDI) as a way to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI on local economies, little is known about (1) the impact on innovation of neighbouring regions and the type of FDI that generates the strongest learning effects. To fill this gap, this article investigates the relationship between FDI and the innovation capacity of Italian provinces (NUTS3). In order to capture the heterogeneity of FDI in terms of knowledge inputs, we apply the Pavitt categorisation of manufacturing sectors to inward FDI within Italian provinces, thus accounting for the nature and sources of knowledge in different sectors where foreign multinationals are active. Our results suggest that only some specific typologies of inward FDI, such as that in "Science based" sectors and to a lesser extent in "Specialised supplier" activities, benefit local economies. Nevertheless, other types of inward FDI can produce possible negative outcomes in terms of local innovation. We detect only weak evidence on the spatial implications of inward FDI. |
| Keywords: | foreign direct investment, spillovers, Pavitt taxonomy, FDI heterogeneity |
| JEL: | O3 F23 R11 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1820&r=ure |
| By: | Alla Koblyakova |
| Abstract: | The main contribution of this paper is the empirical evidence of the regional variations in mortgage interest rates within the UK’s mortgage market. Variations in mortgage rates may reflect regional imbalances in the supply and demand for mortgage funds, also incorporating economic considerations of credit risk, pricing policies and various degrees of competition. This study differs from the existing literature in its provision of the previously unexplored findings. This is achieved by estimating a model incorporating three simultaneous equations, applying Understanding Society Survey data for the new mortgages originated in 2001-2014. Applying unique algorithm for calculation of contractual mortgage rates, modelling aims to determine whether mortgage rates vary by region, and urban versus rural location. With a competitive market and elastic supply of credit funds, regional variation in mortgage pricing should not exist. However, this paper finds that mortgage rates tend to be cheaper in England and Northern Ireland, also suggesting more expensive mortgage rates for the rural locations. These are important findings, as an awareness of the possibility of regionally asymmetric response to income shocks and monetary policy decisions may assist in optimising policy considerations. |
| Keywords: | urbanisation%2C housing affordability%2C tenure choice. |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_127&r=ure |
| By: | Jesse Rothstein |
| Abstract: | Chetty et al. (2014b) show that children from low-income families achieve higher adult incomes, relative to those from higher income families, in some commuting zones (CZs) than in others. I investigate whether children’s educational outcomes help to explain the between-CZ differences. I find little evidence that the quality of schools is a key mechanism driving variation in intergenerational mobility. While CZs with stronger intergenerational income transmission have somewhat stronger transmission of parental income to children’s educational attainment and achievement, on average, neither can explain a large share of the between-CZ variation. Marriage patterns explain two-fifths of the variation in income transmission, human capital accumulation and returns to human capital each explain only one-ninth, and the remainder of the variation (about one-third) reflects differences in earnings between children from high- and low-income families that are not mediated by human capital. This points to job networks and the structure of local labor and marriage markets, rather than the education system, as likely factors influencing intergenerational economic mobility. |
| JEL: | I24 I3 J12 J24 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24537&r=ure |
| By: | Nawrot, Katarzyna A. (Poznan University of Economics and Business); Juma, Calestous (Harvard University); Donald, James (Harvard University) |
| Abstract: | The unprecedented population growth in Africa and its projections followed by a high rate of urbanization are resulting in a growing number of huge urban agglomerations – cities and megacities. That phenomenon creates opportunities for the continent, but it also raises concerns about low levels of development and diminished quality of life among the majority of urban residents. African cities are characterized by overcrowding, poor infrastructure, and limited connectivity to the international economic system. They are essentially underperforming as potential centres of creativity and innovation. This paper argues that despite these challenges, Africa’s emerging megacities can unleash their potential as drivers of economic transformation if they can be viewed and managed less as static administrative regions and more as dynamic innovation ecosystems rather than a collection of discrete geographical enclosures that encroach on each other and neighbouring regions without adequate urban planning. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp17-031&r=ure |
| By: | Crescenzi, Riccardo; Gagliardi, Luisa; Orrù, Enrico |
| Abstract: | The paper looks at the geographical mobility of graduate students and their skill matching in the labour market. The paper assesses the impact of a learning mobility grant scheme funded by the European Social Fund in Sardinia (ex-Objective 1 region in the Italian Mezzogiorno). The scheme aims to foster regional human capital and increase the employability of local graduates by covering the cost of post-graduate studies in other regions or countries. The econometric analysis is based on a unique dataset that combines administrative data on beneficiaries with information from a dedicated survey. The results suggest that learning mobility grants can reinforce skill matching only if the problem of self-selection of the beneficiaries is properly addressed. |
| Keywords: | mobility; skills; labour markets; regions; European Union |
| JEL: | J24 J61 R23 R58 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87608&r=ure |
| By: | Megan Kung; Dennis Guignet; Patrick Walsh |
| Abstract: | Hedonic property value methods typically examine the effect of water quality on home prices by focusing on waters nearest a home. While this captures any aesthetic values households may hold for water quality improvements, it may not fully reflect recreational values, particularly for nearby residents that do not live on the waterfront. This study is the first to compare the conventional approach of examining how property prices vary with the quality of waters closest to a home, versus water quality levels at the closest point of access for recreation (i.e., the beach). Using spatial econometric models, we conduct a hedonic analysis of residences within five kilometers of the Long Island Sound. Due to an aging infrastructure, high levels of precipitation often lead to sewage overflows, resulting in high counts of enterococcus – a bacterial indicator of fecal pollution. We also estimate the effect of subsequent beach closures, which we posit as an alternative and more salient signal of local water quality to residents. In line with previous literature, we find that enterococcus levels at waters nearest a home negatively affect home prices within 1 kilometer. However, this effect becomes insignificant when controlling for levels at the nearest beach. In contrast, enterococcus at the closest beach yields a negative 0.03% to 0.02% elasticity that extends 2.5 km. Controlling for beach closures suggests negative effects as far as 3.5 km from beaches. Our findings demonstrate that the impact of water quality on home prices may extend further than previously suggested by the literature, at least at large iconic waterbodies like the Sound. |
| Keywords: | beach, enterococcus, hedonic, Long Island Sound, property value, water quality |
| JEL: | Q24 Q51 Q53 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201708&r=ure |
| By: | Elif Alkay; Craig Watkins |
| Abstract: | There have been extensive rearrangement of the Turkish planning system in terms of both institutional restructuring and reform of planning laws between 2000-2014. Planning reforms have emerged a recentralized planning system that remarkably differs from the period of 1985-200, which adopted decentralization of planning authorities. New regulations basically provide the basis for government institutions to be more influential in urban development processes, and strengthen the power of the role of some municipalities in planning whilst defenestrating others. In this paper, the prospective impacts of the new planning system on housing development are discussed. The discussion of the new planning system from the housing development perspective is based on documentary analysis and semi-structured interviews. The interviewee sample includes two main groups: the first group involves planning authorities and the second group involves market actors in housing development sector. This system-wide discussion aims to reflect policy-makers, governmental decision-makers and market actors’ perspectives on the housing development views on the new planning system beyond and the opportunities and/or conflicts that arise. |
| Keywords: | Housing; Market; planning regime; planning regulation; Policy |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_268&r=ure |
| By: | Izryadnova, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Gaidar Institute for Economic Policy) |
| Abstract: | Structural properties of the Russian economy determine the relevance of the study of the features of economic development and the possibilities of increasing the efficiency of using the potential of the regions to achieve sustainable growth. High inertia of the processes of spatial development led to a change in the ratings of the subjects of the Federation on competitiveness and investment attractiveness in the domestic market and increased the limitations of infrastructure, management and labor factors. The analysis of the development dynamics of the Federation subjects in the context of changing general economic conditions and regional development programs makes it possible to explain the territorial features, to assess the risks and benefits of the regions from decisions in the field of investment and social policy. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:041816&r=ure |
| By: | Fitjar, Rune Dahl; Rodríguez-Pose, Andrés |
| Abstract: | It has often been argued that “there is something in the air” which makes firms in high-density environments—such as cities or clusters—more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be “much less in the air” than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or “being there.” |
| Keywords: | innovation; tacit knowledge; agglomeration; externalities; spillovers; Norway |
| JEL: | N0 J50 |
| Date: | 2017–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:84287&r=ure |
| By: | Noemí NAVARRO; H. Dan TRAN |
| Abstract: | We study how the presence of transitive cycles in the interbank network affects the extent of financial contagion. In a regular network setting, where the same pattern of links repeats for each node, we allow an external shock to propagate losses through the system of linkages (interbank network). The extent of contagion (contagiousness) of the network is measured by the limit of the losses when the initial shock is diffused into an infinitely large network. This measure indicates how a network may or may not facilitate shock diffusion in spite of other external factors.\r\nOur analysis provides two main results. First, contagiousness decreases as the length of the minimal transitive cycle increases, keeping the degree of connectivity (density) constant. Secondly, as density increases the extent of contagion can decrease or increase, because the addition of new links might decrease the length of the minimal transitive cycle. Our results provide new insights to better understand systemic risk and could be used to build complementary indicators for financial regulation. |
| Keywords: | Financial contagion, networks, shock diffusion, transitive cycles, degree. |
| JEL: | G33 D85 C69 C02 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-10&r=ure |
| By: | Tripathi, Sabyasachi |
| Abstract: | We assess the impact of economic reforms on urbanization in India for the period of 1991 to 2016. It is found that economic reform variables (except import of goods and services as % of GDP) have a positive effect on urbanization. The vector error correction model shows that economic reforms have influenced only on total urban population with a very slower rate with the speed of adjustment of 0.003. The short run effect is also negligible. Granger causality test shows that there is no causal relationship between them. Therefore, we conclude that economic reforms do not promote urbanization in India. Economic reforms for urbanization are required though promotion of small and medium cities, human capital, cultural mobility and formulating proper plans for new green cities. |
| Keywords: | Economic reforms, urbanization, Time series modeling, India. |
| JEL: | C50 O18 R10 |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86591&r=ure |
| By: | Takaki Sato; Yasumasa Matsuda |
| Abstract: | This study proposes spatiotemporal extensions of time series autoregressive conditional heteroskedasticity (ARCH) models. We call spatiotemporally extended ARCH models as spatiotemporal ARCH (ST-ARCH) models. ST-ARCH models specify conditional variances given simultaneous observations and past observations, which constitutes a good contrast with time series ARCH models that specify conditional variances given past own observations. We have proposed two types of ST-ARCH models based on cross-sectional correlations between error terms. A spatial weight matrix based on Fama-French 3 factor models are used to quantify the closeness between stock prices. We estimate the parameters in ST-ARCH models by a two-step procedure of the quasi maximum likelihood estimation method. We demonstrate the empirical properties of the models by simulation studies and real data analysis of stock price data in the Japanese market. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:toh:dssraa:82&r=ure |
| By: | Benjamin A. Austin; Edward L. Glaeser; Lawrence H. Summers |
| Abstract: | The economic convergence of American regions has greatly slowed, and rates of long-term non-employment have even been diverging. Simultaneously, the rate of non-employment for working age men has nearly tripled over the last 50 years, generating a terrible social problem that is disproportionately centered in the eastern parts of the American heartland. Should more permanent economic divisions across space lead American economists to rethink their traditional skepticism about place-based policies? We document that increases in labor demand appear to have greater impacts on employment in areas where not working has been historically high, suggesting that subsidizing employment in such places could particularly reduce the not working rate. Pro-employment policies, such as a ramped up Earned Income Tax Credit, that are targeted towards regions with more elastic employment responses, however financed, could plausibly reduce suffering and materially improve economic performance. |
| JEL: | J01 J21 J38 R12 R23 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24548&r=ure |
| By: | Seyedehsahar Shafieiosgouei (Payamme Noir University, Iran); Nava Nourdad (University of Tabriz, Iran); Robab Hassantofighi (Azad University of Tabriz); Seyyedreza Shafieioskouei (Azad University of Iran) |
| Abstract: | The technological advances of the 21st century have impacted all spheres of life, including education. The world of books and pens is being replaced by computers at young ages. The present study aimed at investigating the effect of technology on Iranian elementary school students’ learning and interest in school attendance. The participants were 47 sixth grade students selected from two schools with and without technological support. The results of the study revealed a higher level of interest in school attendance in the group provided with technology. Consequently this study may have beneficial pedagogical implications for learners, teachers, and curriculum developers. |
| Keywords: | E-Learning school, interest in school attendance, technology |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:smo:tpaper:012&r=ure |
| By: | Jason Anastasopoulos; George J. Borjas; Gavin G. Cook; Michael Lachanski |
| Abstract: | How does immigration affect labor market opportunities in a receiving country? This paper contributes to the voluminous literature by reporting findings from a new (but very old) data set. Beginning in 1951, the Conference Board constructed a monthly job vacancy index by counting the number of help-wanted ads published in local newspapers in 51 metropolitan areas. We use the Help-Wanted Index (HWI) to document how immigration changes the number of job vacancies in the affected labor markets. Our analysis begins by revisiting the Mariel episode. The data reveal a marked decrease in Miami’s HWI relative to many alternative control groups in the first 4 or 5 years after Mariel, followed by recovery afterwards. We find a similar initial decline in the number of job vacancies after two other supply shocks that hit Miami over the past few decades: the initial wave of Cuban refugees in the early 1960s, as well as the 1995 refugees who were initially detoured to Guantanamo Bay. We also look beyond Miami and estimate the generic spatial correlations that dominate the literature, correlating changes in the HWI with immigration across metropolitan areas. These correlations consistently indicate that more immigration is associated with fewer job vacancies. The trends in the HWI seem to most strongly reflect changing labor market conditions for low-skill workers (in terms of both wages and employment), and a companion textual analysis of help-wanted ads in Miami before and after the Mariel supply shock suggests a slight decline in the relative number of low-skill job vacancies. |
| JEL: | J6 J61 J63 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24580&r=ure |
| By: | Albert Junjian Cao; Yunqing Xu |
| Abstract: | Affordability of housing in Shanghai has deteriorated as house prices in rose 46.1%in 2015 and 2016. This paper examines housing policy changes in Shanghai since purchase restrictions were imposed to stop housing investment by non-local residents and affordable and social housing provision provided in quantity since 2010. It employs an analytical framework of imposed and induced institutional changes to examine the practices in the housing market that seek to compromise government controls and the responses from the Shanghai Municipal Government to achieve housing market stability. The paper also reviews the provision of affordable and social housing in Shanghai to improve housing conditions of low-income households and provide help to low-middle income households to step on the housing ladder. It concludes that the government lacks a long-term strategy to stabilise house prices and needs to improve management of its expanding affordable and social housing stock to reduce abuse by some beneficiaries. |
| Keywords: | affordable and social housing; Housing Policy; Housing Prices; institutional changes; Shanghai |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_343&r=ure |
| By: | Kevin Muldoon-Smith; Paul Greenhalgh |
| Abstract: | Commercial real estate vacancy is a key indicator of property market efficiency, economic performance and urban resilience. However, there has been little conceptual reflection into the abstract notion of vacancy beyond binary distinctions of natural and structural vacancy. Although useful simplifying meta-concepts, neither accounts for the internal complexity and imperfection that permeates real commercial property markets. Consequently, the objective of this article is to outline a conceptual framework that describes vacancy across the commercial real estate building life-cycle – from initial construction to final demolition and redevelopment. The originality of the research rests in its utility as the first known holistic examination of commercial real estate vacancy beyond that of an abstract economic factor, while its value is explicit in the conceptual typology which can be used by researchers interested in market imperfections and consequent interventions. |
| Keywords: | Building life-cycle; Commerical real estate; Natural vacancy; Resilience; Structural vacancy |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_341&r=ure |
| By: | Nikulin, Alexander (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | The relevance of the problem is due to the fact that in recent decades the rural areas of all regions of the world are facing the complication of the global socioeconomic context of their sustainable development (and even survival) in connection with the formation of the international food and agro-industrial markets that dictate their demands to the agriculture of all countries. The growing and increasing tendencies of globalization give rise to similar consequences in rural areas, regardless of specific regional and country conditions (the dominance of agroholdings, the disappearance of villages, the formation of urban agglomerations with rural suburbanizational suburbs, etc.), but the globalization and state pressure is opposed by another tendency - glocalization, or preservation by local communities of their own social and economic specifics, primarily through tools of informal economy. The latter can act simultaneously in two ways: as a tool for confronatation of local rural communities with models of social and economic development ("weak arms" by J. Scott) imposed by the "above" (state, market or international business); and, conversely, as an instrument for maximally painless and successful integration of local rural communities into the new social and economic context of modern life. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:041807&r=ure |
| By: | Baltagi, Badi H.; Fingleton, Bernard; Pirotte, Alain |
| Abstract: | This paper focuses on the estimation and predictive performance of several estimators for the time-space dynamic panel data model with Spatial Moving Average Random Effects (SMA-RE) structure of the disturbances. A dynamic spatial Generalized Moments (GM) estimator is proposed which combines the approaches proposed by Baltagi, Fingleton and Pirotte (2014) and Fingleton (2008). The main idea is to mix non-spatial and spatial instruments to obtain consistent estimates of the parameters. Then, a forecasting approach is proposed and a linear predictor is derived. Using Monte Carlo simulations, we compare the short-run and long-run effects and evaluate the predictive efficiencies of optimal and various suboptimal predictors using the Root Mean Square Error (RMSE) criterion. Last, our approach is illustrated by an application in geographical economics which studies the employment levels across 255 NUTS regions of the EU over the period 2001-2012, with the last two years reserved for prediction. |
| Keywords: | Panel data; Spatial lag; Error components; Time-space; Dynamic;OLS; Within; GM; Spatial autocorrelation; Direct and indirect effects; Moving average; Prediction; Simulations, Rook contiguity, Interregional trade. |
| JEL: | C23 |
| Date: | 2018–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86371&r=ure |
| By: | Reis, Ricardo |
| JEL: | J1 |
| Date: | 2017–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:67042&r=ure |
| By: | Eilers, Lea; Paloyo, Alfredo R.; Vance, Colin |
| Abstract: | This paper deals with the question of whether migrants in Germany pay a rent premium for apartments of comparable quality and neighborhood characteristics. We use a twostep selection-correction model augmented by a control function to account for nonrandom neighborhood choice. The estimation sample is a uniquely assembled panel comprising the German Socio-Economic Panel (SOEP), information on household and apartment characteristics, as well as georeferenced data describing neighborhood quality. We find no evidence that having a migrant background is directly associated with higher rent. Migrants may nevertheless face higher rents by settling in neighborhoods populated by a high share of foreigners, which we find has a positive and statistically significant relationship with the rent. |
| Keywords: | migrants,discrimination,housing market |
| JEL: | R23 J15 R21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:736&r=ure |
| By: | Claudio Giannotti; Gianluca Mattarocci; Xenia Scimone |
| Abstract: | Loss given default (LGD) for residential real estate loans is affected by real estate market trends due to the impact on the value of debtors’ main collateral. Banks specialised in real estate lending are expected to be better at selecting lending opportunities, properly evaluating real estate collaterals, and managing the recovery process. The recovery process is expected to differ for specialised lenders but there is no consensus about their differences from other market players.The paper examines LGD for a representative sample of European banks to underline the key differences related to real estate specialisation. Results show that real estate banks, on average, perform a better recovery process. Moreover, real estate banks not fully specialised in real estate can better manage the real estate market cycle effect, reducing the pro-cyclicality of LGD. |
| Keywords: | Lending; Loss Given Default; Real estate banks; Real Estate Market |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_130&r=ure |
| By: | Brhanu , Desta (Mekelle University); Holden , Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences) |
| Abstract: | We investigate the extent of variation in output sharing in land rental contracts and alternative hypotheses to explain this variation. Close to half of the rental contracts in our study in northern Ethiopia have output shares that deviate from the dominant 50-50 equal sharing. Variation in land quality, the relative bargaining power of landlords and tenants, production risks and shocks are hypothesized to influence output shares. Matched data of landlords and tenants are used. The importance of endogenous matching of landlords and tenants is investigated by assessing how endogenous tenant characteristics are correlated with landlord characteristics. We find evidence of negative assortative matching for key resource characteristics. A control function approach is used to control for endogenous matching in the output share models. The results reveal that production risks as well as relative bargaining power affect output shares in the reverse tenancy setting with tenants being relatively wealthier and influential than landlords. |
| Keywords: | Land rental contracts; sharecropping; output shares; endogenous matching; control function approach |
| JEL: | Q15 |
| Date: | 2018–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsclt:2018_002&r=ure |
| By: | Bonev, Petyo; Glachant, Matthieu; Söderberg, Magnus |
| Abstract: | This is the first study that uses a natural experiment to test the Regulatory Threat Hypothesis. We use a unique novel dataset on unregulated Swedish local district heating monopolists and a new measure of threat - customer complaints. Our results support the Regulatory Threat Hypothesis: firms reduce prices when they feel threatened by price regulation. We also find evidence that (otherwise unrelated) monopolists homogenize locally prices to reduce complaints and thus to reduce threat of regulation. This mechanism is related to Yardstick competition and to behavioral theories of fair pricing. |
| Keywords: | Regulatory Threat, Monopoly, Price Setting, Spatial Interaction, Natural Experiment |
| JEL: | L11 L12 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2018:05&r=ure |
| By: | Ieva Augutyte-Kvedaraviciene |
| Abstract: | Real estate investments become more and more popular form of investing in Lithuania. Prime reasons for this are relatively cheap financing, growing income of residents and growing economy in general. Investments into residential real estate represent the most popular type of real estate investment among individual investors. When buying a residential unit with the purpose of value appreciation and income generation, individual investors often overlook major value drivers for real estate investments in a long run. Overconfidence, normalcy bias, expectation bias, bandwagon effect and other cognitive biases in decision making may lead to overvaluation of particular investment, general growth of demand and, finally, prices of real estate. The paper discusses major value drivers of residential real estate and major risks when investing into residential property, with special attention to low financial literacy of market participants, major cognitive decision making biases and limited knowledge how real estate market operates in general. |
| Keywords: | decision making biases; Investments; Residential Real Estate; Risk; value drivers |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_22&r=ure |
| By: | Elena Grinza; Stephan Kampelmann; François Rycx |
| Abstract: | Measuring the economic impact of coworkers from different countries of origin sparked intense scrutiny in labor economics, albeit with an uncomfortable methodological limitation. Most attempts involved metrics that eliminate most of the economically relevant distances among different countries of origin. The typical examples of such metrics are diversity indicators that divide the firm’s workforce into blacks and whites, foreigners and natives, non-Europeans and Europeans, etc. We propose an entirely novel approach. It is based on the conversion of the qualitative information on individuals’ countries of origin into an aggregate firm-level diversity indicator, built on the United Nations Development Programme’s Human Development Index (HDI), a standard harmonized measure of cross-country variations that is available for virtually all the countries in the world. By resorting to rich matched employer-employee panel data for Belgium, we use this new aggregate measure to estimate state-of-the-art firm-level wage equations, which control for a wide range of observable and time-invariant unobservable factors, including variations in labor productivity between firms and within firms over time. Our results suggest that the majority of firms do not discriminate against foreigners. Yet, we find that firms with high diversity largely discriminate against them. The wage discrimination in high-diversity firms could be alleviated through a stronger presence of collective bargaining and/or efforts to de-cluster foreigners from low-HDI countries in these firms. |
| Keywords: | diversity; workers’ origin; wages; discrimination; matched employer-employee panel data |
| JEL: | J15 J16 J24 J31 J70 |
| Date: | 2018–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/270859&r=ure |
| By: | Enrique Moral-Benito (Banco de España) |
| Abstract: | The Spanish growth experience over the 1995-2007 period was characterized by the remarkable surge in employment and investment as well as the dismal evolution of productivity. These macroeconomic fluctuations were coupled with an unprecedented credit boom fueled by a housing bubble. This article reviews a line of research that investigates the connection between these developments using micro-level data on Spanish firms and banks. The evidence suggests that the abundant availability of credit, partially induced by the real estate bubble, and its propagation through the Spanish production network explain a sizable part of the massive accumulation of labor and capital. Also, the deterioration in the allocation of resources across firms is the main responsible of the fall in aggregate productivity. The allocation of credit across firms and municipalities, the softening of banks lending standards, and the low productivity of Spanish firms can partly explain this deterioration. |
| Keywords: | Spain, firm level data, TFP, misallocation, input-output linkages |
| JEL: | D24 O11 O47 E44 G21 L25 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:1805&r=ure |
| By: | Bernd Kolkmann; Ingrid Janssen |
| Abstract: | Studies have shown that certain tenants are frequently excluded from the housing market given landlords’ measurement of financial eligibility using opaque risk management approaches. What is arguably needed is a scientific model that would allow landlords to build their decision on the dependent variable they are most interested in; that is, customer profit. This would follow in the footsteps of other industries that commonly use customer profitability analysis, such as hotels, financial services, and the private health care sector. Using the case study of the German housing market, this study will construct such a model that landlords can use to evaluate tenant profitability. Using a methodology based on customer profitability analysis, the research will deconstruct the key variables that make tenants financially profitable in the eyes of a residential landlord, and demonstrate their interaction. This paper argues why and how a profitability approach adds value for the landlord and explains the model based on an extensive literature review. |
| Keywords: | Customer profitability analysis; Housing; Tenant profitability; Tenant risk |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_49&r=ure |
| By: | Charles Ka Yui LEUNG; Joe Cho Yiu NG |
| Abstract: | This paper aims to achieve two objectives. First, we demonstrate that with respect to business cycle frequency (Burns and Mitchell, 1946), there was a general decrease in the association between macroeconomic variables (MV) and housing market variables (HMV) following the global financial crisis (GFC). However, there are macro-finance variables that exhibited a strong association with the HMV following the GFC. For the medium-term business cycle frequency (Comin and Gertler, 2006), we find that while some correlations exhibit the same change as the business cycle counterparts, others do not. These “new stylized facts” suggest that a reconsideration and refinement of existing “macro-housing” theories would be appropriate. We also provide a review of the recent literature, which may enhance our understanding of the evolving macro-housing-finance linkage. |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1030&r=ure |
| By: | Ulrik Hvidman; Hans Henrik Sievertsen |
| Abstract: | High-stakes exams provide students with incentives to perform well. This paper uses a reform-induced recoding of grades from completed exams, which caused variation in high school students’ grade point average (GPA), to identify students’ behavioral responses to changes in high-stakes grades. The results show that students who were downgraded by the recoding performed better on subsequent assessments and worked less for pay during high school. Students with downgraded grades were also somewhat more likely to enroll in college. As the recoding did not convey information on academic performance, these results emphasize that changes in incentives are important in understanding students’ responses to high-stakes grades. There is no evidence that the recoding algorithm predicts outcomes for nonaffected cohorts. |
| Keywords: | Student behavior, high-stakes tests, human capital. |
| Date: | 2018–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:18/698&r=ure |
| By: | Sviatlana Engerstam |
| Abstract: | Abolishment of rent control in residential market is seen as one of the solution to Swedish housing shortage. Politicians believe that it will provide higher incentives for investors and property companies to construct more rental housing and to stabilize property prices in the long-run.The aim of the study is to find out if the abolishment of rent control in housing market leads to more residential investments and more stable returns on it in the long run.The method is a comparative analysis of returns on residential investments in two case countries - with and without rent control - Sweden and Finland. Data covers the time period of 2000-2015 and include total, capital and income return on residential investments from Property databank in Sweden and Finland. The study considers the effects of abolishment of rental regulations on residential market with control for changes in fundamental variables like GDP, income, population growth, dwelling stock and interest rate.The results of the study demonstrate that abolishment of rent control leads to more stable total returns on residential investments in the long run. It also leads to higher level of income return and less fluctuation in capital return in the long run. |
| Keywords: | Property returns; Rent Control; Residential markets |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_260&r=ure |
| By: | Martijn Dröes; Philip Koppels; Boris Ziermans |
| Abstract: | Using a unique transactions dataset, this paper examines the determinants of lease incentives in the Amsterdam office market. The study focusses on the type of landlord involved (institutional/privately owned) and whether the tenant or landlord used an advisor to help them with the transaction. The results show that an institutional landlord, ceteris paribus, offers 11 percentage points more incentives than a private owner. In addition, a landlord who uses the services of an advisor pays 16 percentage points less incentives. An advisor at the side of the tenant increases incentives by 7 percentage points. If both parties use an advisor lease incentives are not statistically different from using no advisors at all. The results in this paper highlight the crucial role of market information, information asymmetry, and bargaining in the market for commercial real estate. |
| Keywords: | Advisor; Commercial Real Estate; Information Asymmetry; Lease incentives; Office Market |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_250&r=ure |
| By: | El Moctar LAGHLAL; |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2587&r=ure |
| By: | Ernst Fehr; Tony Williams |
| Abstract: | Throughout human history, informal sanctions by peers were ubiquitous and played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of experimental evidence suggests that informal peer sanctions cause large collateral damage and efficiency costs. This raises the question whether peer sanctioning systems exist that avoid these costs and whether other, more centralized, punishment systems are superior and will be preferred by the people. Here, we show that welfare-enhancing peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. The exogenous removal of the norm consensus opportunity reduces the efficiency of peer punishment and renders centralized sanctioning by an elected judge the dominant institution. However, if given the choice, subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of peer sanctioning with a norm consensus opportunity or an equally efficient institution with centralized punishment by an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects’ cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision. |
| Keywords: | cooperation, punishment ,endogenous institutions, public goods |
| JEL: | D02 D03 D72 H41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7003&r=ure |
| By: | Jane Choi; Scott Richman; Sarah Dolfin |
| Abstract: | The widespread adoption of more rigorous state guidelines for student learning, such as the Common Core State Standards (CCSS), has led to tremendous interest in how best to prepare and develop teachers to foster the skills that students need to meet the new standards and succeed in college and careers. |
| Keywords: | EL education, English language arts, teacher practices, professional learning |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:1edca1d13a1f48d0b480f495a1de5f96&r=ure |
| By: | Michal Gluszak; Iwona Forys; Jan Konowalczuk |
| Abstract: | The externalities resulting from airport operation has been a subject of empirical investigation in economic literature, at least since 1960s. Most of the research focused on negative relation between airport noise and property values. The results were summarized in meta-analysis of 23 previous studies based on North American data by Nelson (2004) – suggesting significant noise discount, but also country level differences.The study extends the scope of analysis, covering airports outside United States and Canada (mainly in Europe). Additionally, in the paper we discuss the joint effect of airport noise and land use restrictions enforced in selected areas around the airport on property values. We argue that the nature of land use controls related to airport operation can significantly affect the relation between noise and property values, and should be controlled for in order to get unbiased results in hedonic models. |
| Keywords: | airport noise; land use controls; meta-analysis; Property Values |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_244&r=ure |
| By: | Charles-Olivier Amédée-Manesme; Michel Baroni; Fabrice Barthélémy |
| Abstract: | This paper aims to describe the deformation of the factorial model that explains real estate returns over time. If economic and financial factors may be used to estimate a repeat sales factorial index, their impact on the model may change from one period to another.This research based on the methodology of the factorial index elaborated in Baroni M, Barthélémy F. and Mokrane M, JRER, 2007, addresses this issue and highlights the changing impact of the interest rates. It also tries to identify specific events that provoked these changes.To reach this objective, the index for the period 1982-2001 is considered as a basis, and then the weights of the factors are estimated by rolling periods with a one-month step until 2015. In this way time series of each factor weights are built and then analysed.The BIEN database, provided by the Chambre des Notaires of Paris, which includes repeat sales transactions for residential properties in Paris and close surroundings over the 1982-2015 period is used to perform this study. |
| Keywords: | Factorial Model; Real Estate indexes; Repeat Sales indexes |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_167&r=ure |
| By: | Rita Yi Man Li; Kung Chun Wah; Beiqi Tang |
| Abstract: | Property price is a major concern for many Hong Kong People. In the recent years, we saw a phenomenon, the continuous raising of RMB and also the Housing price in Hong Kong. In this paper, we want to examine whether there are positive correlation between the raising property price and the appreciation of RMB. Based some literatures about geographical factor to affect property value, we would determine to use the Northern District as our observation. After almost 2600 transactions from 2009 to 2014 are estimated, we find that higher exchange rate of RMB against HKD and property value of Shen Zhen will significant cause more expensive property value. Moreover, the GDP in Hong Kong is not correlated with property price in this period. It implies that the upward trend of Hong Kong property market is not caused by national income rising of Hong Kong residents. |
| Keywords: | Housing Price; RMB |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_351&r=ure |
| By: | Fabian Kosse; Thomas Deckers; Pia Pinger; Hannah Schildberg-Hörisch; Armin Falk |
| Abstract: | This study presents descriptive and causal evidence on the role of social environment for the formation of prosociality. In a first step, we show that socioeconomic status (SES) as well as the intensity of mother-child interaction and mothers' prosocial attitudes are systematically related to elementary school children's prosociality. In a second step, we present evidence on a randomlyassigned variation of the social environment, providing children with a mentor for the duration of one year. Our data include a two-year follow-up and reveal a significant and persistent increase in prosociality in the treatment relative to the control group. Moreover, enriching the social environment bears the potential to close the observed gap in prosociality between low and high SES children. A mediation analysis of the observed treatment effect suggests that prosociality develops in response to stimuli in the form of prosocial role models and intense social interactions. |
| Keywords: | Formation of preferences, prosociality, social preferences, trust, social inequality |
| JEL: | D64 C90 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_013_2018&r=ure |
| By: | Mark Andrew; James Culley |
| Abstract: | In the UK there exist transactions involving residential properties, particularly apartments, where there is a clear distinction between the user rights of the dwelling and the ownership of the land in which the dwelling stands on. The majority of current hedonic analyses of dwelling prices focus on the impacts of its physical and locational characteristics. A few of these studies control for this distinction crudely by broadly categorising dwellings into freeholds and leaseholds. However, the length of an unexpired lease may have substantially varying impacts on dwelling prices, and consequently adopting such a crude indicator could lead to misleading predictions of value and biased estimates of value attributable to certain physical and locational characteristics. Our hedonic investigation examines the role played by the length of unexpired leases on prices of dwellings in Prime Central London. Empirical propositions tested include the effect of having a pure leasehold and a share of the freehold on dwelling prices, as well as the threshold and non-linear effects of the length of an unexpired lease. Our main conclusion is that it is important to control for lease expiry. |
| Keywords: | discounting; Hedonic; lease expiry; Leasehold; London |
| JEL: | R3 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2017_123&r=ure |