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on Urban and Real Estate Economics |
| By: | Verdugo, Gregory (Université Paris 1 Panthéon-Sorbonne); Toma, Sorana (CREST (ENSAE)) |
| Abstract: | Recent decades have seen a rapid increase in the share of non-European immigrants in public housing in Europe, which has led to concern regarding the rise of "ghettos" in large cities. Using French census data over three decades, we examine how this increase in public housing participation has affected segregation. While segregation levels have increased moderately on average, the number of immigrant enclaves has grown. The growth of enclaves is being driven by the large increase in non-European immigrants in the census tracts where the largest housing projects are located, both in the housing projects and the surrounding non-public dwellings. As a result, contemporary differences in segregation levels across metropolitan areas are being shaped by the concentration of public housing within cities, in particular the share of non-European immigrants in large housing projects constructed before the 1980s. Nevertheless, the overall effect of public housing on segregation has been ambiguous. While large projects have increased segregation, the inflows of non-European immigrants into small projects have brought many immigrants into census tracts where they have previously been rare and, thus, diminished segregation levels. |
| Keywords: | immigration, social housing, public housing, segregation, Europe, France |
| JEL: | J15 R31 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11527&r=ure |
| By: | David Prentice (Infrastructure Victoria); Melek Cigdem-Bayram (RMIT) |
| Abstract: | In this paper we take the first steps to providing parameters capturing the wider impacts of crime when performing cost benefit analysis of investments in justice infrastructure. Specifically, we provide the first set of estimates of the wider impacts of crime for metropolitan Melbourne and regional Victoria. We estimate the effects of two different types of crime on households applying a hedonic regression model to a three year dataset of house prices and characteristics, distances to local amenities and crime rates. We find while an increase in the per capita rate of crime against persons reduces property prices in regional Victoria, it has no such effect in Melbourne. And we find no significant relationship between crimes against property and property prices in either Melbourne or regional Victoria. This implies that when investing in justice infrastructure to deliver services in regional Victoria that are expected to reduce crime against persons, the impact on the broader community (as captured through effects on property prices) should be taken into account in a cost-benefit analysis. Creation Date: 2018-05-17 |
| Keywords: | Crime, House Prices, Hedonic Regression, Cost-Benefit Analysis, Australia, Victoria |
| JEL: | C21 D61 D62 R00 |
| URL: | http://d.repec.org/n?u=RePEc:inv:tpaper:201802&r=ure |
| By: | Alexander M. Danzer; Carsten Feuerbaum; Marc Piopiunik; Ludger Wößmann |
| Abstract: | Does a high regional concentration of immigrants of the same ethnicity affect immigrant children’s acquisition of host-country language skills and educational attainment? We exploit the exogenous placement of guest workers from five ethnicities across German regions during the 1960s and 1970s in a model with region and ethnicity fixed effects. Our results indicate that exposure to a higher own-ethnic concentration impairs immigrant children’s host-country language proficiency and increases school dropout. A key mediating factor for this effect is parents’ lower speaking proficiency in the host-country language, whereas inter-ethnic contacts with natives and economic conditions do not play a role. |
| Keywords: | immigrant children, ethnic concentration, language, education, guest workers |
| JEL: | J15 I20 R23 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7097&r=ure |
| By: | Isabelle CHORT; Bénédicte APOUEY |
| Abstract: | This study examines how house prices in fluence cognitive functioning for individuals aged 50+ in Europe. Using data from the Survey of Health, Ageing and Retirement (SHARE) between 2004 and 2015, we compute the median house price for each region-year, using individual self-reported house values. Cognitive scores capture either fl uid intelligence (numeracy, memory) or a mix of fl uid and crystallized intelligences (verbal fluency). Compared with the previous literature, we allow housing market fl uctuations to have different effects during episodes of price increases and decreases, and we study owners with a mortgage, owners without a mortgage, and tenants separately. Findings indicate that house price booms do not systematically improve cognitive health outcomes: for outright owners and tenants, a rise in prices correlates with a decrease in fluid intelligence. For outright owners, this result is partly explained by increased alcohol consumption, and is also related to stronger feelings of guilt and irritability, consistent with aversion to advantageous inequality. Findings also show asymmetry in the effects of price booms and busts: indeed, for mortgaged owners, both price increase and decrease episodes have a positive impact on cognitive outcomes. We argue that during the crisis the beneficial impact of price busts may have been driven by the decline in interest rates, which reduced the debt burden of households with a variable rate mortgage. |
| Keywords: | House prices, Wealth, Cognitive functioning, Health, Older Europeans, Europe, SHARE |
| JEL: | D12 I1 I3 J14 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2017-2018_7&r=ure |
| By: | Pablo Fajgelbaum; Cecile Gaubert |
| Abstract: | We study optimal spatial policies in quantitative trade and geography frameworks with spillovers and sorting of heterogeneous workers. We characterize the spatial transfers that must hold in efficient allocations, as well as labor subsidies that would implement them. Assuming homogeneous workers and constant-elasticity spillovers, a constant labor tax over space restores efficiency regardless of micro heterogeneity in fundamentals. Place-specific subsidies are needed to attain optimal sorting if there are spillovers across different types of workers. We show how to quantify optimal spatial transfers, and apply the framework to data across U.S. cities using existing estimates of the spillover elasticities. The results suggest that the U.S. economy features too much spatial sorting by skill and wage inequality in larger cities relative to efficient allocations. |
| JEL: | F12 H21 H71 R13 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24632&r=ure |
| By: | Antoine Habersetzer, Rikard Eriksson, Heike Mayer |
| Abstract: | The aim of this paper is to assess the importance of industry experience and home advantage of entrepreneurs for the competitiveness of new firms in the periphery. We assume that spinoffs founded by local entrepreneurs are generally the most competitive form of entry, and show the highest comparative advantage in peripheral regions. We use matched employer-employee data for Sweden to test the effect of industry experience and home advantage on firm survival (logistic regressions), and job growth of surviving firms (OLS regression) during the period 2004-2012. Our results suggest that industry experience is more important than home advantage for firm survival, but that firms in core areas do benefit from home advantage. Regarding job growth, home advantage seems to be more important than industry experience but with varying significance over the regional hierarchy. After controlling for survival, the positive effect on job growth of being locally embedded seems to be confined to peripheral entrepreneurs. |
| Keywords: | Entrepreneurship, spinoffs, home advantage, periphery |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:rdv:wpaper:credresearchpaper14&r=ure |
| By: | Yu Chen (University of Graz, Austria); Shaobin Shi (Shandong University, China); Yugang Tang (Shandong University, China) |
| Abstract: | This paper fills the gap in exploring the demand side of Hukou (household registration) granting in China. We estimate the market evaluation of the urban Hukou. According to the provision of “Acquiring Hukou by Purchasing Houses” in Jinan City's Hukou policy, this paper takes houses slightly higher than the minimum required area as the treatment group, and houses slightly lower than the minimum required area as the control group to perform regression discontinuity design. The empirical results indicate that residents’ willingness to pay for urban Hukou in Jinan City was approximately between 90,000 and 126,000 Yuan (RMB) in 2017. Our finding is robust to parameter, non-parametric estimates, and different model specifications. We also perform other falsification tests by assuming false policy introduction date and placebo tests based on rents other than housing price data. Our analysis also provides insight for the reform of Chinese Hukou system and public good provision. |
| Keywords: | Acquiring Hukou by Purchasing Houses, Household Registration System, Regression Discontinuity Design |
| JEL: | P23 H75 R38 J61 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2018-14&r=ure |
| By: | Martin, Carolin; Westerhoff, Frank |
| Abstract: | Since the instability of housing markets may be quite harmful for the real economy, we explore whether public housing construction programs may tame housing market fluctuations. As a workhorse, we use a behavioral stock-flow housing market model in which the complex interplay between speculative and real forces triggers realistic housing market dynamics. Simulations reveal that plausible and well-intended policy measures may turn out to be a mixed blessing. While public housing construction programs may reduce house prices, they seem to be incapable of bringing house prices much closer towards their fundamental values. In addition, these programs tend to drive out private housing constructions. |
| Keywords: | housing markets,boom-bust dynamics,extrapolative and regressive expectations,heterogeneous agent model,policy experiments,public housing construction programs |
| JEL: | D84 R21 R31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:135&r=ure |
| By: | Dean F. Amel; Elliot Anenberg; Rebecca Jorgensen |
| Abstract: | In this note, we first discuss why markets for mortgage originations are likely to be national in scope. We then show that even if mortgage markets were local, they would be unconcentrated. Finally, we test for an empirical relationship between the local concentration of mortgage lending and changes in mortgage rates and find essentially no correlation of concentration and rates. |
| Date: | 2018–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2018-06-15&r=ure |
| By: | Engelbert Stockhammer; Rafael Wildauer (Kingston University) |
| Abstract: | The past decades have witnessed a strong increase in household debt and high growth of private consumption expenditures in many countries. This paper empirically investigates four explanations: First, the expenditure cascades hypothesis argues that an increase in inequality induced lower income groups to copy the spending behaviour of richer peer groups and thereby drove them into debt (‘keeping up with the Joneses’). Second, the housing boom hypothesis argues that increasing property prices encourage household spending and household borrowing due to wealth effects, eased credit constraints and the prospect of future capital gains. Third, the low interest hypothesis argues that low interest rates encouraged households to take on more debt. Fourth, the financial deregulation hypothesis argues that deregulation of the financial sector boosted credit supply. The paper tests these hypotheses by estimating the determinants of household borrowing using a panel of 11 OECD countries (1980-2011). Results indicate that real estate prices and low interest rates were the most important drivers of household debt. In contrast the data does not support the expenditure cascades hypothesis as a general explanation of debt accumulation across OECD countries. Our results are consistent with the financial deregulation hypothesis, but its explanatory power for the 1995-2007 period is low. |
| Keywords: | household debt, income distribution, property prices |
| JEL: | D31 E12 E51 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:1710&r=ure |
| By: | Christie Smith (Reserve Bank of New Zealand); Christoph Thoenissen (Department of Economics, University of Sheffield) |
| Abstract: | Shocks to net migration matter for the business cycles. Using an estimated dynamic stochastic general equilibrium (DSGE) model of a small open economy and a structural vector autoregression, we find that migration shocks account for a considerable proportion of the variability of per capita GDP. Migration shocks matter for the capital investment and consumption components of per capita GDP, but they are not the most important driver. Migration shocks are also important for residential investment and real house prices, but other shocks play a larger role in driving housing market volatility. In the DSGE model, the level of human capital possessed by migrants relative to that of locals materially affects the business cycle impact of migration. The impact of migration shocks is larger when migrants have substantially different levels of human capital relative to locals. When the average migrant has higher levels of human capital than locals, as seems to be common in most OECD economies, a migration shock has an expansionary effect on per capita GDP and its components. |
| Keywords: | Migration, macroeconomics, business cycle fluctuations |
| JEL: | E44 E61 F42 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2018006&r=ure |
| By: | Sergei Soares (Center for Global Development) |
| Abstract: | Owner-occupied housing and public infrastructure services are a relevant part of the income distribution whose impacts have not yet been adequately studied, at least not from the distributive point of view. This paper suggests a way to find the market value for these services using hedonic prices. While far from new, this methodology is nevertheless useful in assigning values to these services. The paper uses Brazilian data from 1995, 2005, and 2015 to impute rental values for owner occupied housing and the associated infrastructure services. The results are that imputation of housing services considerably reduces inequality and that public infrastructure services have become more progressive as their expansion brings these services to increasingly poorer households. |
| Keywords: | Public infrastructure services, hedonic prices, imputed rent, concentration coefficients, income distribution |
| JEL: | H41 D31 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:69&r=ure |
| By: | Richard Hornbeck; Enrico Moretti |
| Abstract: | We estimate the local and aggregate effects of total factor productivity growth on US workers' earnings, housing costs, and purchasing power. Drawing on four alternative instrumental variables, we consistently find that when a city experiences productivity gains in manufacturing, there are substantial local increases in employment and average earnings. For renters, increased earnings are largely offset by increased cost of living; for homeowners, the benefits are substantial. Strikingly, local productivity growth reduces local inequality, as it raises earnings of local less-skilled workers more than the earnings of local more-skilled workers. This is due, in part, to lower geographic mobility of less-skilled workers. However, local productivity growth also has important general equilibrium effects through worker mobility. We estimate that 38% of the overall increase in workers' purchasing power occurs outside cities directly affected by local TFP growth. The indirect effects on worker earnings are substantially greater for more-skilled workers, due to greater geographic mobility of more-skilled workers, which increases inequality in other cities. Neglecting these general equilibrium effects would both understate the overall magnitude of benefits from productivity growth and misstate their distributional consequences. Overall, US workers benefit substantially from productivity growth. Summing direct and indirect effects, we find that TFP growth from 1980 to 1990 increased purchasing power for the average US worker by 0.5-0.6% per year from 1980 to 2000. These gains do not depend on a worker's education; rather, the benefits from productivity growth mainly depend on where workers live. |
| JEL: | E24 J0 R0 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24661&r=ure |
| By: | Marcus Roller, Daniel Steinberg |
| Abstract: | Whether early school stratification is conducive or detrimental to scholastic performance has been subject to controversial debates in educational policy and science across many countries. We exploit a unique exogenous variation in Lower Saxony, Germany, where performance based tracking was preponed from grade 7 to grade 5 in 2004, i.e. with the completion of primary school. In particular, we measure the long-run effects of this reform on PISA achievement test scores based on a difference-in-differences setup. In order to disentangle average from distributional achievement effects, we complementarily rely on a changes-in-changes framework. Our results indicate that preponed school tracking increased test scores at the upper tail of the skill distribution and lowered test scores at the lower tail of the skill distribution, compensating each other on average. |
| Keywords: | Analysis of Education; Education and Inequality; Tracking; Government Policy |
| JEL: | I21 I24 I28 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:rdv:wpaper:credresearchpaper19&r=ure |
| By: | Langer, Sebastian |
| Abstract: | This paper analyzes municipal expenditures in the light of horizontal fiscal interactions. I investigate total expenditures and a set of non-earmarked expenditure subcategories in the largest German federal state, North Rhine-Westphalia (NRW). The empirical analysis is based on a Spatial Durbin Model in a panel for the years 2009-2015. Using a two-regime spatial matrix, I also examine the impact of agglomeration on the intensity of public expenditure interactions, thus testing the hypothesis that an agglomerated region can decrease the amount of public goods without losing mobile factors to the periphery. The findings indicate that significant municipal expenditure interaction effects do exist. The reaction functions also vary for different expenditure subcategories. Unlike spillover effects and fiscal competition, yardstick competition is an insignificant source of potential interactions. Expenditure interaction is fiercer if there is less agglomeration in a municipality. Urbanized and populous municipalities appear to benefit from agglomeration economies, a fact that enables them to spend less. Robustness checks confirm the findings. |
| Keywords: | Local Government Expenditure,Spatial Regression Analysis,Expenditure Interaction |
| JEL: | C31 F12 F15 J31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tudcep:0318&r=ure |
| By: | Bold, Tessa; Filmer, Deon; Molina, Ezequiel; Svensson, Jakob |
| Abstract: | In many low income countries, teachers do not master the subject they are teaching and children learn little from attending school. Using unique data from nationally representative surveys from seven Sub-Saharan African countries, we propose a methodology to assess the effect of teacher knowledge on student learning when panel data on students are not available. We show that data on test scores of the current and the previous year's teachers allows us to estimate a lower bound on the cumulative effect of teacher knowledge on student achievement. With further restrictions on the cumulative student achievement function we can also estimate bounds on both the contemporaneous effect of teacher content knowledge and the extent of fade out of the teachers' impact in earlier grades. We use these structural estimates to answer two questions. To what extent can shortfalls in teachers' content knowledge account for the large learning gap observed across countries? How much learning is lost because of misallocation? |
| Keywords: | education production function; Human Capital |
| JEL: | I21 I25 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12956&r=ure |
| By: | Delphine Guex, Olivier Crevoisier |
| Abstract: | In terms of regional development, let’s call the period up to 2008 the industrial age. Until then, the development of regions depended on their integration into globalization through production, and their positioning in the spatial division of labor: this illustrates the concept of competitiveness. Now, globalization also plays a role in terms of consumption. This dimension is discussed in the literature, for example by Markusen (Markusen, 2007, Markusen & Schrock, 2009) and the proponents of the so-called residential and presential economic trends in France (Davezies, 2009, Davezies & Talandier, 2016): this illustrates the concept of attractiveness. This research greatly improves the understanding of the current development processes of the regions insofar as it considers both consumption and productive flows. Nevertheless, the question of understanding the dynamics of development based on competitiveness and attractiveness still arises. This article proposes an analytical framework based on the idea put forward in Camagni’s (2005) conceptualization of the region as a meeting place for different supplies and demands. We propose a typology of income flows and regional and urban activities that considers local and extra-local demands, as well as local supply, firstly as a productive agglomeration and secondly as both a place of consumption and a living environment. The concept of an "innovative milieu" (e.g. clusters, industrial districts, etc.) allowed the industrial context to take into consideration local capacity for renewing competitiveness; we suggest that the "local postindustrial milieu" development model should encompass the capacity of a city or a region to manage tensions and to exploit the synergies between the various types of activities and people in the region which result from the integration of the region into various forms of globalization. |
| Keywords: | territorial development, export base theory, residential economy, milieu, demand-based development |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:rdv:wpaper:credresearchpaper15&r=ure |
| By: | Lars Vandrei |
| Abstract: | We analyze the extent to which sales prices for residential housing react to rent-price regulation. To this end, we exploit changes in apartment prices across the regulation treatment threshold. We examine a quasi-natural design in the German federal state of Brandenburg using transaction price data provided by the committee of evaluation experts. Brandenburg introduced both a capping limit for existing rental contracts as well as a price ceiling for new contracts for municipalities with tight housing markets in 2014. Whether or not a municipality falls under this classification is based upon a municipality’s housing market characteristics, which are translated into a specific score. This allows us to employ a regression discontinuity design with a sharp cutoff point. We compare sales prices in municipalities that are located marginally above the assignment threshold with the prices in those slightly below. Our results suggest that the regulations reduced sales prices for affected apartments by 20–30 %. |
| Keywords: | Housing rent controls, sales prices |
| JEL: | D04 R31 R52 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_262&r=ure |
| By: | Peter Schaeffer (Resource Economics and Management, West Virginia University); Randall Jackson (Regional Research Institute, West Virginia University); Eric Bowen (Bureau of Business and Economic Research, West Virgina University) |
| Abstract: | At the present time, U.S. regional economic development policies tend to be focused on sectors, infrastructure, human capital, innovation capability, or to be problem oriented, and only a few programs can be described as being place-based. In this paper, we are looking at major federal regional development programs to deduce their combined implicit place-based goals and objectives. Because the U.S. seems to be relatively unique among OECD countries in its scant use of place-based policies, we compare the United States to, in particular, Canada to gain further insights into the reasons for and potential effects of such policy differences. |
| Keywords: | regional development, national policy, implicit goals |
| JEL: | O2 R0 L52 |
| Date: | 2018–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2018wp06&r=ure |
| By: | David Prentice (Infrastructure Victoria); Rosanna Scutella (RMIT) |
| Abstract: | In this paper we take the first steps to providing parameters for use in the cost benefit analysis of investments in social housing by estimating its effects on outcomes for individual residents. This is done by applying statistical matching methods to the Journeys Home dataset to provide new estimates of the impacts of social housing on employment, education, health, incarceration and homelessness. We find placing an individual, vulnerable to becoming homeless, in social housing means they are less likely, compared with other similar individuals not in social housing, to become homeless. Hence, social housing is providing an important `safety net’ for people vulnerable to homelessness. We also find that in the short run individuals in social housing have similar outcomes in terms of employment, education, physical and mental health, and incarceration to similarly disadvantaged individuals not in social housing. These results are potentially due to strict targeting of individuals into relatively limited available spots in social housing and the averaging across cohort specific effects. The long run impacts, for some cohorts, may differ but analysing this requires longer datasets. Creation Date: 2018-05-16 |
| Keywords: | Social Housing, Matching Methods, Homelessness, Employment, Education, Health, Incarceration |
| JEL: | C21 D61 I38 H42 H54 |
| URL: | http://d.repec.org/n?u=RePEc:inv:tpaper:201801&r=ure |
| By: | Fuster, Andreas; Plosser, Matthew; Schnabl, Philipp; Vickery, James |
| Abstract: | Technology-based (``FinTech'') lenders increased their market share of U.S. mortgage lending from 2% to 8% from 2010 to 2016. Using market-wide, loan-level data on U.S. mortgage applications and originations, we show that FinTech lenders process mortgage applications about 20% faster than other lenders, even when controlling for detailed loan, borrower, and geographic observables. Faster processing does not come at the cost of higher defaults. FinTech lenders adjust supply more elastically than other lenders in response to exogenous mortgage demand shocks, thereby alleviating capacity constraints associated with traditional mortgage lending. In areas with more FinTech lending, borrowers refinance more, especially when it is in their interest to do so. We find no evidence that FinTech lenders target marginal borrowers. Our results suggest that technological innovation has improved the efficiency of financial intermediation in the U.S. mortgage market. |
| Keywords: | Financial Intermediation; Fintech; Mortgages |
| JEL: | G21 G23 L51 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12961&r=ure |
| By: | Lobyrev, Vitaly; Tikhomirov, Andrey; Tsukarev, Taras; Vinokurov, Evgeny |
| Abstract: | The report presents an analysis of the impact that international freight traffic barriers have on logistics, transit potential, and development of transport corridors traversing EAEU member states. Restrictions discussed in this report include infrastructural (transport and logistical infrastructure), border/customs-related, and administrative/legal barriers. The authors also provide the recommendations regarding removal of barriers that hamper international freight traffic along the China-EAEU-EU axis. |
| Keywords: | Transport corridors, Belt and Road Initiative, transport infrastructure, non-tariff barriers, freight traffic, EAEU, China, EU |
| JEL: | F15 R41 R42 |
| Date: | 2018–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86705&r=ure |
| By: | Yashar Blouri, Maximilian von Ehrlich |
| Abstract: | We quantify general equilibrium effects of place-based policies in a multi-region framework with population mobility, trade and agglomeration economies. Using detailed data on EU transfers, we infer the local effects of different transfer types on productivity, income and transportation cost. Based on these estimates and the general equilibrium model we derive the spatial distribution of economic activity and the resulting aggregate welfare effects if (i) no transfers were paid and taxes set to zero, (ii) transfers were distributed uniformly, (iii) transfers were welfare-optimally distributed. Characterizing the optimal distributions, we reveal complementarities between transfer types and between transfers and local endowments. |
| Keywords: | economic geography; place-based policies; structural estimation; subsidies; public investments; European structural funds |
| JEL: | R10 R50 F10 F20 H20 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:rdv:wpaper:credresearchpaper18&r=ure |
| By: | Calsamiglia, Caterina; Fu, Chao; Güell, Maia |
| Abstract: | We model household choice of schools under the Boston mechanism (BM) and develop a new method, applicable to a broad class of mechanisms, to fully solve the choice problem even if it is infeasible via the traditional method. We estimate the joint distribution of household preferences and sophistication types using administrative data from Barcelona. Counterfactual policy analyses show that a change from BM to the Deferred Acceptance mechanism would decrease average welfare by 1,020 euros, while a change to the top trading cycles mechanism would increase average welfare by 460 euros. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12958&r=ure |
| By: | Daniel Levy; Avichai Snir |
| Abstract: | We use novel and unique data to study the effect of price changes in the market for luxury and middle class homes. We find that luxury home sales respond less to price changes than the middle-class home sales; in the market for luxury homes, past prices affect current prices; luxury home prices persist; and prices of luxury homes are stickier than prices of middle-class homes. Recent macroeconomic models predict that housing markets can have counter-cyclical effect, if home prices are flexible. Our findings imply that home prices, especially luxury home prices, may not be flexible enough to generate such effect. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1802&r=ure |
| By: | Batabyal, Amitrajeet |
| Abstract: | We analyze spatial spillovers in an aggregate economy consisting of a leading and a lagging region where the spillovers stem from the provision of a local public good. Specifically, if the leading region provides the public good then the lagging region obtains some spillover benefits and vice versa. We first solve for the Nash equilibrium levels of the local public goods in the two regions when public investment decisions are simultaneous; next, we determine the equilibrium welfare levels in each region. Second, on the assumption that the public investment decisions are centralized, we compute the levels of the local public goods that maximize aggregate welfare. Finally, we describe an interregional transfer scheme that leads each region to choose non-cooperatively in a Nash equilibrium the same public investment levels as those that arise when aggregate welfare is maximized. |
| Keywords: | Lagging Region, Leading Region, Local Public Good, Spatial Spillover |
| JEL: | O18 R11 |
| Date: | 2018–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87128&r=ure |
| By: | Samuel Bazzi; Matthew Gudgeon |
| Abstract: | This paper argues that redrawing subnational political boundaries can transform ethnic divisions. We use a natural policy experiment in Indonesia to show how the effects of ethnic diversity on conflict depend on the political units within which groups are organized. Redistricting along group lines can reduce conflict, but these gains are undone or even reversed when the new borders introduce greater polarization. These adverse effects of polarization are further amplified around majoritarian elections, consistent with strong incentives to capture new local governments in settings with ethnic favoritism. Overall, our findings illustrate the promise and pitfalls of redistricting in diverse countries. |
| JEL: | D72 D74 H41 H77 O12 Q34 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24625&r=ure |
| By: | Johanna Lacoe; Matthew P. Steinberg |
| Abstract: | Employing a difference-in-differences approach, we find that Philadelphia's reform resulted in a modest decline in suspensions for nonviolent infractions in the year of reform; however, total suspensions remained unchanged while serious incidents of student misconduct increased. |
| Keywords: | School Discipline, student outcomes, zero tolerance |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d86d3527373c40d085dded38b6a22e91&r=ure |
| By: | Roed, Marianne (Institute for Social Research, Oslo); Schone, Pal (Institute for Social Research, Oslo); Umblijs, Janis (Institute for Social Research, Oslo) |
| Abstract: | In this paper we analyse the impact of labour market conditions at immigration on school performance for the immigrants' children. First, we establish the direct effect of initial labour market conditions on later labour market performance for the father. Along with several other studies in this field we find that later labour market performance of the father (measured by labour earnings and accumulated work experience) depend significantly initial labour market conditions. Second, we find evidence that this initial effect feeds into the children's school performance. Concretely, for the sons, we find a positive impact of initial favourable labour market conditions of the father on the grade point average in lower secondary school. Daughters' school performance seems to be unrelated to the same initial labour market conditions. |
| Keywords: | educational outcomes, immigration, local labour market conditions |
| JEL: | I20 J18 J61 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11526&r=ure |
| By: | Alberto Martín; Enrique Moral-Benito; Tom Schmitz |
| Abstract: | What are the effects of a housing bubble on the rest of the economy? We show that if firms and banks face collateral constraints, a housing bubble initially raises credit demand by housing firms while leaving credit supply unaffected. It therefore crowds out credit to non-housing firms. If time passes and the bubble lasts, however, housing firms eventually pay back their higher loans. This leads to an increase in banks’ net worth and thus to an expansion in their supply of credit to all firms: crowding-out gives way to crowding-in. These predictions are confirmed by empirical evidence from the recent Spanish housing bubble. In the early years of the bubble, non-housing firms reduced their credit from banks that were more exposed to the bubble, and firms that were more exposed to these banks had lower credit and output growth. In its last years, these effects were reversed. Keywords: Housing bubble, Credit, Investment, Financial Frictions, Financial Transmission, Spain. JEL Codes: E32, E44, G21. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:625&r=ure |
| By: | David Prentice (Infrastructure Victoria); Melek Cigdem-Bayram (RMIT) |
| Abstract: | In this paper we take first steps in providing parameters capturing some wider impacts of crime on individuals for the cost benefit analysis of investments in justice infrastructure. Statistical matching methods are applied to the HILDA dataset in the first broad economic analysis of how individuals respond to living in an acutely high crime environment and the consequences. Compared with individuals living in a postcode with a moderately high crime rate, the matching analysis shows individuals living in postcodes with acutely high crime rates are more likely to be a victim of a violent crime and spend less on insurance. They are also more likely to have a family member incarcerated even if they are no more likely to be incarcerated themselves. There are no significant differences in household incomes or full-time employment rates though those living in an acutely high crime rate postcode are more likely to be unemployed. Finally, although there are no significant differences in measures of mental health, individuals in acutely high crime rate areas spend less on health. This could be because they are less likely to have a long term health condition but could also reflect underinvesting in health care which may have negative consequences for health in the long term. Creation Date: 2018-05-18 |
| Keywords: | Crime, Matching Methods, Cost-Benefit Analysis, Employment, Education, Health, Insurance, Australia, Victoria |
| JEL: | C21 D61 D62 R00 |
| URL: | http://d.repec.org/n?u=RePEc:inv:tpaper:201803&r=ure |
| By: | Guerrieri, Cinzia; Mendicino, Caterina |
| Abstract: | How sizable is the wealth effect on consumption in euro area countries? To address this question, we use newly available harmonized euro area wealth data and the methodology in Carroll et al. (2011b). We find that the marginal propensity to consume out of total wealth averaged across the largest euro area economies is around 3 cents per euro, with a marginal propensity to consume out of financial wealth significantly larger than of housing wealth. Country-group estimates document no significant differences between the largest economies and the rest of the sample. In contrast, remarkable differences emerge between periphery and core countries. JEL Classification: C22, E21, E32, E44 |
| Keywords: | consumption dynamics, financial assets, households wealth, wealth effects |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20182157&r=ure |
| By: | Joshua Goodman; Michael Hurwitz; Jisung Park; Jonathan Smith |
| Abstract: | We provide the first evidence that cumulative heat exposure inhibits cognitive skill development and that school air conditioning can mitigate this effect. Student fixed effects models using 10 million PSAT-takers show that hotter school days in the year prior to the test reduce learning, with extreme heat being particularly damaging and larger effects for low income and minority students. Weekend and summer heat has little impact and the effect is not explained by pollution or local economic shocks, suggesting heat directly reduces the productivity of learning inputs. New data providing the first measures of school-level air conditioning penetration across the US suggest such infrastructure almost entirely offsets these effects. Without air conditioning, each 1°F increase in school year temperature reduces the amount learned that year by one percent. Our estimates imply that the benefits of school air conditioning likely outweigh the costs in most of the US, particularly given future predicted climate change. |
| JEL: | I20 J24 Q5 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24639&r=ure |
| By: | Joshua Hyman (University of Connecticut) |
| Abstract: | I conduct a statewide experiment in Michigan with nearly 50,000 high-achieving high school seniors. Treated students are mailed a letter encouraging them to consider college and providing them with the web address of a college information website. I find that very high-achieving, poor and minority students are the most likely to navigate to the website. Small changes to letter content have dramatic effects on take-up. For example, highlighting college affordability induces 18 percent more students to the website than highlighting college choice, and 37 percent more than highlighting how to apply to college. Poor students who are mailed the letter experience a 1.4 percentage point increase in the probability that they enroll in college, driven by increases at four-year institutions. Unfortunately, these students tend not to persist through college, leading to an effect only half as large on the probability of enrolling and persisting to the second year of college, and a near zero impact on enrolling and persisting to the third year. These findings highlight the importance of supporting marginal college enrollees through college, and, for researchers, the necessity of examining persistence when evaluating college-going interventions. |
| Keywords: | college access; college persistence; social experiments; behavioral nudges |
| JEL: | I2 H4 J23 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2018-10&r=ure |
| By: | Duran, Nicolas; Elhorst, J. Paul (Groningen University) |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugsom:2018007-eef&r=ure |
| By: | Ikeda, Kiyohiro; Onda, Mikihisa; Takayama, Yuki |
| Abstract: | Racetrack economy is a conventional spatial platform for economic agglomeration in spatial economy models. Studies of this economy up to now have been conducted mostly on $2^k$ cities, for which agglomerations proceed via so-called spatial period doubling bifurcation cascade. This paper aims at the elucidation of agglomeration mechanisms of the racetrack economy in a general setting of an arbitrary number of cities. First, an attention was paid to the existence of invariant solutions that retain their spatial distributions when the transport cost parameter is changed. A complete list of possible invariant solutions, which are inherent for replicator dynamics and are dependent on the number of cities, is presented. Next, group-theoretic bifurcation theory is used to describe bifurcation from the uniform state, thereby presenting an insightful information on spatial agglomerations. Among a plethora of theoretically possible invariant solutions, those which actually become stable for spatial economy models are obtained numerically. Asymptotic agglomeration behavior when the number of cities become very large is studied. |
| Keywords: | Bifurcation; Economic agglomeration; Racetrack economy; Replicator dynamics; Spatial economy model |
| JEL: | R12 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:86923&r=ure |
| By: | Fox, Jonathan; Klüsener, Sebastian; Myrskylä, Mikko |
| Abstract: | Evidence for nation-states suggests that the long-standing negative relationship between fertility and economic development might turn positive at high levels of development. The robustness of the reversal continues to be debated. We add to this discussion from a novel angle by considering whether such a reversal could also occur at the sub-national level within highly developed countries. Our contributions are both theoretical and empirical. We first discuss important trends which might foster the emergence of a positive fertility–development relationship across regions of highly developed countries. These include shifts in family policies, changes in the spatial organisation of the economic sphere, and selective international and internal migration processes. In order to explore whether we observe tendencies towards a reversal, we investigate data covering 20 European countries subdivided in 256 regions between 1990 and 2012. We document a weakening of the negative relationship between fertility and economic development within many countries, and among some countries the emergence of a positive relationship. These findings do not seem to be driven by postponement effects alone. However, there is substantial variation in the fertility and the eco |
| Keywords: | fertility; income; economic development; sub-national regions; regional variations; Europe |
| JEL: | N0 |
| Date: | 2018–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88295&r=ure |
| By: | Alberto Martin; Enrique Moral-Benito; Tom Schmitz |
| Abstract: | What are the effects of a housing bubble on the rest of the economy? We show that if firms and banks face collateral constraints, a housing bubble initially raises credit demand by housing firms while leaving credit supply unaffected. It therefore crowds out credit to non-housing firms. If time passes and the bubble lasts, however, housing firms eventually pay back their higher loans. This leads to an increase in banks’ net worth and thus to an expansion in their supply of credit to all firms: crowding-out gives way to crowding-in. These predictions are confirmed by empirical evidence from the recent Spanish housing bubble. In the early years of the bubble, non-housing firms reduced their credit from banks that were more exposed to the bubble, and firms that were more exposed to these banks had lower credit and output growth. In its last years, these effects were reversed. |
| Keywords: | Housing bubble, credit, investment, financial frictions, financial transmission, Spain |
| JEL: | E32 E44 G21 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1613&r=ure |
| By: | Casey, Katherine (Stanford University) |
| Abstract: | Classic arguments for decentralization, augmented by ideas about how participation empowers the poor, motivate the widely used approach in foreign aid called community-driven development. CDD devolves control over the selection, implementation and financial management of public goods to communities. Until recently, policy enthusiasm has outstripped the evidence. I synthesize findings from randomized controlled trials and find that CDD effectively delivers public goods and modest economic returns at low cost in difficult environments. There is no evidence, however, that CDD transforms local decision-making or empowers the poor in any enduring way. Part of this failure may be because some constraints believed important--like insufficient social capital--appear not to bind. Others, like exclusive local institutions, are a problem, however not one that CDD remedies. These results present a conundrum: how much participation is enough to safeguard the gains of such "extreme" decentralization, while minimizing the opportunity costs imposed on poor people's time? |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:repec:ecl:stabus:3598&r=ure |