nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2019‒02‒18
43 papers chosen by
Steve Ross
University of Connecticut

  1. 2019/01 Merging city and suburban governments: A public choice perspective on the Norwegian local government reform By Fitjar, Rune Dahl
  2. How does subway and ground transit proximity affect rental prices? By Konstantin A. Kholodilin; Mariia A. Maksimova
  3. Unequal Migration and Urbanisation Gains in China By Pierre-Philippe Combes; Sylvie Démurger; Shi Li; Jianguo Wang
  5. The Housing Wealth Effect: Quasi-Experimental Evidence By Kessel, Dany; Tyrefors, Björn; Vestman, Roine
  6. From Immigrants to Americans: Race and Assimilation during the Great Migration By Vasiliki Fouka; Soumyajit Mazumder; Marco Tabellini
  7. Recovering social networks from panel data: identification, simulations and an application By Áureo de Paula; Imran Rasul; Pedro CL Souza
  8. On Regional Borrowing, Default, and Migration By Gordon, Grey; Guerron-Quintana, Pablo
  9. Development Charges in Ontario:Is Growth Paying for Growth? By Adam Found
  10. Peers, parents and attitudes about school By Jonathan Norris
  11. The economic effects of big events: evidence from the Great Jubilee 2000 in Rome By Raffaello Bronzini; Sauro Mocetti; Matteo Mongardini
  12. Comparing Pollution Where You Live and Play: A Hedonic Analysis of Enterococcus in the Long Island Sound By Megan Kung; Dennis Guignet; Patrick Walsh
  13. Migration Constraints and Disparate Responses to Changing Job Opportunities By Burns, Kalee; Hotchkiss, Julie L.
  14. Expenditure cascades, low interest Rates, credit deregulation or property booms? Determinants of household Dbt in OECD countries By Wildauer, Rafael; Stockhammer, Engelbert
  15. Teacher Career Paths, Teacher Quality, and Persistence in the Classroom: Are Public Schools Keeping Their Best? By Dan Goldhaber; Betheny Gross; Daniel Player
  16. Bargaing power in apartment sales in Corsica:A latent class approach By Steven B. Caudill; Claudio Detotto; Dominique Prunetti
  17. Broadband Internet and Social Capital By Andrea Geraci; Mattia Nardotto; Tommaso Reggiani; Fabio Sabatini
  18. Do Low-Income Students Have Equal Access to the Highest-Performing Teachers? By Steven Glazerman; Jeffrey Max
  20. Higher Education Supply, Neighbourhood Effects and Economic Welfare By Elena Cottini; Paolo Ghinetti; Simone Moriconi
  21. The Economic Benefits of Latino Immigration: How the Migrant Hispanic Population’s Demographic Characteristics Contribute to US Growth By Jacob Funk Kirkegaard; Gonzalo Huertas
  22. Funding Special Education by Capitation: Evidence from State Finance Reforms By Elizabeth Dhuey; Stephen Lipscomb
  23. Tax Policy and Local Labor Market Behavior By Daniel G. Garrett; Eric C. Ohrn; Juan Carlos Suárez Serrato
  24. The added value of more accurate predictions for school rankings By Fritz Schiltz; Paolo Sestito; Tommaso Agasisti; Kristof De Witte
  25. Charter School Authorizers and Student Achievement (Working Paper) By Ron Zimmer; Brian Gill; Kaitlin Obenauf
  26. Marginal costs for railway level crossings in Sweden By Jonsson, Lina; Björklund, Gunilla; Isacsson, Gunnar
  27. Community matters: heterogenous impacts of a sanitation intervention By Laura Abramovsky; Britta Augsburg; Melanie Lührmann; Francisco Oteiza; Juan Pablo Rud
  28. Priority Roads: The Political Economy of Africa's Interior-to-Coast Roads By Roberto Bonfatti; Yuan Gu; Steven Poelhekke
  29. CAFE in the City – A Spatial Analysis of Fuel Economy Standards By Waldemar Marz; Frank Goetzke
  30. Interaction, stereotypes and performance. Evidence from South Africa By Lucia Corno; Eliana La Ferrara; Justine Burns
  31. How Migration Policies Moderate the Diffusion of Terrorism By Tobias Böhmelt; Tobias Böhmelt; Vincenzo Bove
  32. “Technological cooperation and R&D outsourcing at the rm level: The role of the regional context” By Damián Tojeiro-Rivero; Rosina Moreno
  33. Spatial Linkages, Global Shocks, and Local Labor Markets: Theory and Evidence By Rodrigo Adão; Costas Arkolakis; Federico Espósito
  34. Passing Muster: Evaluating Teacher Evaluation Systems By Steven Glazerman; Dan Goldhaber; Susanna Loeb; Stephen Raudenbush; Douglas O. Staiger; Grover J. Whitehurst; Michelle Croft
  35. Combination Classes and Educational Achievement (Journal Article) By Jaime L. Thomas
  36. Fixed-effect regressions on network data By Koen Jochmans; Martin Weidner
  37. Contagious Defaults in Inter-bank Networks By Mohammad Ali Elminejad
  38. Housing Rent Dynamics and Rent Regulation in St. Petersburg (1880-1917) By Konstantin A. Kholodilin; Leonid E. Limonov; Sofie R. Waltl
  39. Migration and co-residence choices: Evidence from Mexico By Simone Bertoli; Elie Murard
  40. Racial Variation in Vocational Rehabilitation Outcomes: A Structural Equation Modeling Approach By Frank H. Martin
  41. Communal fees and election cycles: Evidence from German municipalities By Manuela Krause
  42. Local territorial reform and regional spending efficiency By António Afonso; Ana Venâncio
  43. Tie to community as a proxy of competency to fill the gap between intended and actual pro-environmental behavior in urban settings By Yoshinori Nakagawa; Koichiro Mori; Takeshi Nishimura; Kengo Hayashi

  1. By: Fitjar, Rune Dahl (University of Stavanger)
    Abstract: The administrative boundaries of the central city almost universally cover a smaller area than its functional boundaries. As mobility patterns go mainly into the central city, local governments in central cities supply public goods beyond their own residents. They should want to extend their boundaries in order to internalize more of these externalities, while suburban municipalities should oppose this. This implication is clear from a theoretical perspective, but can rarely be tested given that local government reform is infrequent and typically top-down. However, the 2014-2017 Norwegian municipal reform offers a rare opportunity for empirical evidence to test this proposition. The paper examines the merger decisions made by municipalities in all city regions in Norway. The analysis provides support for the proposition that central cities want to internalize more of the externalities from their public goods production, while suburban municipalities oppose this: First, central cities tend to have higher property tax rates and to provide more public goods compared to suburban municipalities. Second, central cities were much more interested in merging than suburban municipalities: while the central cities wanted to merge with a total of 75 suburban municipalities, only 15 of the latter were positive to merging with the central city.
    Keywords: Municipal reform; city regional governance; Norway; interjurisdictional spillovers; city-suburb amalga
    JEL: H71 H73 H77 R51
    Date: 2019–01–22
  2. By: Konstantin A. Kholodilin (National Research University Higher School of Economics); Mariia A. Maksimova (National Research University Higher School of Economics)
    Abstract: This study focuses on the ground transportation system and its impact on the rents in 30 of Russia’s largest cities. It also compares the effect with subway transit networks. The data set includes rent information from an all-Russia online advertisement website Avito and various measures of proximity to the public transit network stops (including subways for cities with them). The analysis is conducted using linear hedonic models. The results show that the ground transportation proximity is important for housing rent formation in both cities with and without subways, although the effect for subway stations is greater in comparison. Nevertheless, the benefits of a denser ground transportation system are high and stable, whereas the distance to the closest bus stop and the number within the walking distance are important solely for cities with a subway system and without it, respectively.
    Keywords: housing rent; public transit; subway; hedonic analysis; largest Russian cities.
    JEL: C43 O18 R38
    Date: 2019
  3. By: Pierre-Philippe Combes (Univ Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France; Sciences Po, Department of Economics, 28, Rue des Saints-Pères, 75007 Paris, France. Research fellow at CEPR); Sylvie Démurger (Univ Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France. Research fellow at IZA); Shi Li (Business School, Beijing Normal University, China. Research fellow at IZA); Jianguo Wang (Beijing Information Science and Technology University, China)
    Abstract: We assess the role of internal migration and urbanisation in China on the nominal earnings of three groups of workers (rural migrants, low-skilled natives, and high-skilled natives). We estimate the impact of many city and city-industry characteristics that shape agglomeration economies, as well as migrant and human capital externalities and substitution effects. We also account for spatial sorting and reverse causality. Location matters for individual earnings, but urban gains are unequally distributed. High-skilled natives enjoy large gains from agglomeration and migrants at the city level. Both conclusions also hold, to a lesser extent, for low-skilled natives, who are only marginally negatively affected by migrants within their industry. By contrast, rural migrants slightly lose from migrants within their industry while otherwise gaining from migration and agglomeration, although less than natives. The different returns from migration and urbanisation are responsible for a large share of wage disparities in China.
    Keywords: urban development, agglomeration economies, wage disparities, migrants, human capital externalities, China
    JEL: O18 R12 R23 J31 O53
    Date: 2019
  4. By: Laura Helena Kivi
    Abstract: This study investigates the spatial dependence of unemployment and employment rates in Europe relying on Eurostat NUTS2 level data for 306 European regions. Spatial dependence is explored using spatial error, spatial lag and a spatial autoregressive model with spatial autoregressive disturbances. The findings show that regional labour markets in Europe cluster in space – regions with high (low) (un)employment rate are surrounded by regions with high (low) (un)employment rate. The study provides evidence that significant spillovers across regional labour markets exist. The (un)employment rate in one region is directly affected by (un)employment rate changes in other regions, but also by unobserved shocks in other regions. It was found that the spatial effects are not determined by differences in the share of the population of youth, differences in industrial structure or difference in human capital. The results of the study confirm the importance of close coordination between regions while developing labour market and regional policy measures.
    Keywords: regional labour markets, spatial econometrics, spatial dependence, clustering, Europe
    Date: 2019
  5. By: Kessel, Dany (Södertörn University and Research Institute of Industrial Economics (IFN)); Tyrefors, Björn (Research Institute of Industrial Economics (IFN)); Vestman, Roine (Stockholm University and Swedish House of Finance)
    Abstract: We exploit a quasi-experiment to provide new evidence on the magnitude of the housing wealth effect. We estimate an immediate shock of approximately - 15% to house prices close to one of Stockholm's airports after its operations were unexpectedly continued as a result of political bargaining. This source of price variation is ideal to identify housing wealth effects since it is local and unrelated to variation in macroeconomic conditions. Using a household data set with granular geographic information on location of primary residence, we find an elasticity of 0.45 among purchasers of new cars. Converting our estimate to an aggregate MPC on cars, it is however only 0.13 cents per dollar. The MPC is entirely concentrated to homeowners with a combined loan-to-value ratio between 0.6 and 0.8 which, on the one hand, confirms the key role of household balance sheets but on the other hand refutes a monotone relationship between response and household leverage.
    Keywords: House prices; housing wealth; consumption; house price elasticity; marginal propensity to consume; collateral effect
    JEL: D12 E21 E32 E44 E60
    Date: 2018–12–01
  6. By: Vasiliki Fouka (Stanford University); Soumyajit Mazumder (Harvard University); Marco Tabellini (Harvard Business School)
    Abstract: How does the appearance of a new out-group affect the economic, social and cultural integration of previous outsiders? We study this question in the context of the first Great Migration (1915-1930), when 1.5 million African Americans moved from the US South to urban centers in the North, where 30 million Europeans had arrived since 1850. We test the hypothesis that black inflows led to the establishment of a binary black-white racial classification, and facilitated the incorporation of - previously racially ambiguous - European immigrants into the white majority. We exploit variation induced by the interaction between 1900 settlements of southern-born blacks in northern cities and state-level outmigration from the US South after 1910. Black arrivals increased both the effort exerted by immigrants to assimilate and their eventual Americanization. These average effects mask substantial heterogeneity: while initially less integrated groups (i.e. Southern and Eastern Europeans) exerted more assimilation effort, assimilation success was larger for those that were culturally closer to native whites (i.e. Western and Northern Europeans). These patterns are consistent with a framework in which changing perceptions of out-group distance among native whites lower the barriers to the assimilation of white immigrants.
    Keywords: Immigration, assimilation, Great Migration, race, group identity.
    JEL: J11 J15 N32
    Date: 2019–02–04
  7. By: Áureo de Paula (Institute for Fiscal Studies and University College London); Imran Rasul (Institute for Fiscal Studies and University College London and IFS); Pedro CL Souza (Institute for Fiscal Studies)
    Abstract: It is almost self-evident that social interactions can determine economic behavior and outcomes. Yet, information on social ties does not exist in most publicly available and widely used datasets. We present results on the identification of social networks from observational panel data that contains no information on social ties between agents. In the context of a canonical social interactions model, we provide sufficient conditions under which the social interactions matrix, endogenous and exogenous social effect parameters are all globally identified. While this result is relevant across different estimation strategies, we then describe how high-dimensional estimation techniques can be used to estimate the model based on the Adaptive Elastic Net GMM method. We showcase the method and its robustness in Monte Carlo simulations using stylized and real world network structures. Finally, we employ the method to study tax competition across US states. We find the identified network structure of tax competition differs markedly from the common assumption of competition between geographically neighboring states. We analyze the identified social interactions matrix to provide novel insights into the long-standing debate on the relative roles of factor mobility and yardstick competition in driving tax setting behavior across states. Most broadly, our results show how the analysis of social interactions can be extended to economic realms where no network data exists.
    Date: 2018–10–08
  8. By: Gordon, Grey (Federal Reserve Bank of Richmond); Guerron-Quintana, Pablo (Boston College)
    Abstract: Migration plays a key role in city finances with every new entrant reducing debt per person and every exit increasing it. We study the interactions between regional borrowing, migration, and default from empirical, theoretical, and quantitative perspectives. Empirically, we document that in-migration rates are positively correlated with deficits, that many cities appear to be at or near state-imposed borrowing limits, and that defaults can occur after booms or busts in productivity and population. Theoretically, we show that migration creates an externality that results in over-borrowing, and our quantitative model is able to rationalize many features of the data because of it. Counterfactuals reveal (1) Detroit should have deleveraged in the financial crisis to avoid default; (2) a return to the high-interest rate environment prevailing in the 1990s has only small long-run effects on city finances; and (3) anticipated bailouts double default rates.
    Keywords: migration; cities
    JEL: E21 F22 F34 R23 R51
    Date: 2019–02–12
  9. By: Adam Found (University of Toronto)
    Abstract: Ontario’s Development Charges Act (DCA) provides the legal framework within which municipalities recover growth-related capital costs from the new development giving rise to such costs. While the purpose of the DCA is to ensure that growth pays for itself, the way the DCA is designed prevents it from achieving its obvious goal. Because of its overly prescriptive and complex provisions, and because it forces municipalities to charge existing ratepayers for some of the costs of growth, the DCA undermines municipal efficiency, equity, and accountability. One barrier to legislative reform of the DCA is the absence in the literature of a rigorous economic rationale for funding growth-related capital works with development charges. This paper develops such a rationale by comparing development charges to alternative methods of cost recovery for growth-related capital works. A review of the shortcomings of the DCA leads to a recommendation that the DCA be replaced by a new development charges section in the Municipal Act and City of Toronto Act that would enhance municipal efficiency, equity, and accountability, and ensure growth really does pay its own way
    Keywords: development charges, growth, property taxes, user fees, municipal finance
    JEL: H21 H54 R11
    Date: 2019–01
  10. By: Jonathan Norris (Department of Economics, University of Strathclyde)
    Abstract: Educational attitudes are an important component of adolescent development linked to long-term educational success and as a component of noncognitive skills. This study focuses on peer and parent roles in shaping adolescent attitude development. First, I explore the relationship between an adolescent and their friends' attitudes and whether this influence is heterogeneous. Second, I ask whether parents can moderate the friend effect. I find that adolescents with poor attitudes and whose friends have particularly poor attitudes are especially at risk of developing low educational attitudes and that working with parents can serve as a channel to decrease the risk.
    Keywords: Skill development, attitudes, peer effects, friendship networks
    JEL: C31 I21 Z13
    Date: 2019–01
  11. By: Raffaello Bronzini (Banca d'Italia); Sauro Mocetti (Banca d'Italia); Matteo Mongardini (Banca d'Italia)
    Abstract: This paper assesses the short- and long-term economic impact of the Great Jubilee 2000 on the city of Rome’s economy; this is an important Catholic event that occurs every 25 years. By applying the synthetic control approach, we find that the value added per capita increases slightly in the short term while in the long term it is not significantly different from what it would have been if Rome had not hosted the Jubilee. However, we do find a significant effect on the employment rate. Consistently with these findings, we document a shift of the local economy towards less productive sectors, such as construction and services requiring a lower skill content, and an overall productivity loss for/in Rome with respect to the counterfactual scenario. The investment in infrastructure, facilities and urban requalification did not significantly affect tourism or house prices in the long run, with exception of peripheral residential areas which experienced an appreciation.
    Keywords: mega events, synthetic control method, urban economic growth, house prices
    JEL: R00 R11 R12 R58
    Date: 2019–02
  12. By: Megan Kung; Dennis Guignet; Patrick Walsh
    Abstract: Hedonic property value studies of water quality conventionally focus on quality levels measured nearest a home. This study examines whether quality at the nearest access point, i.e., a beach, matters more to local residents. We conduct a hedonic analysis focusing on water quality in the Long Island Sound, where an aging infrastructure and heavy precipitation lead to frequent sewage overflows. The analysis focuses on bacteria contamination and beach closures. Results suggest that decreases in water quality measured at the nearest beach yield a larger negative effect and impact homes at a much farther spatial extent than previously suggested in the literature. Key Words: beach; enterococcus; hedonic; Long Island Sound; property value; water quality
    JEL: Q24 Q51 Q53
    Date: 2019
  13. By: Burns, Kalee (Georgia State University); Hotchkiss, Julie L. (Federal Reserve Bank of Atlanta)
    Abstract: Using the Current Population Survey between 1996 and 2018, this paper investigates the role constraints to migration might play in explaining racial/ethnic disparities in the labor market. The Delta Index of dissimilarity is used to illustrate a greater distributional mismatch between race/education specific workers and jobs among minorities relative to white non-Hispanics. Regression analysis then shows that this mismatch is consistent with minorities being less responsive to changes in the distribution of job opportunities. However, minorities are more responsive when the growing job opportunities are located in areas with greater same-racial/ethnic representation, suggesting that social constraints might play a role in the observed distributional mismatch. The analysis focuses on 25–54 year old men.
    Keywords: racial labor market disparities; migration costs; Delta Index; social costs; place-based; people-based; mismatch
    JEL: J15 J18 J61
    Date: 2019–02–11
  14. By: Wildauer, Rafael; Stockhammer, Engelbert
    Abstract: The past decades have witnessed a strong increase in household debt and fast 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, the prospects of future capital gains and changes in mental accounts. Third, the low interest hypothesis argues that low interest rates encouraged households to take on more debt. Fourth, the credit market deregulation hypothesis argues that deregulation boosted credit supply. The paper tests these hypotheses by estimating the determinants of household borrowing using a panel of 13 OECD countries (1980-2011). Results indicate that real estate prices were the most important drivers of household debt which we interpret as the result of speculative dynamics in real estate markets. In contrast we do not find a significant impact of shifts in the income distribution on household sector indebtedness. Our results are consistent with the credit deregulation and low interest rate hypotheses, but their explanatory power for the 1995-2007 period is low.
    Keywords: household debt; income distribution; property prices
    JEL: H63
    Date: 2018–09–13
  15. By: Dan Goldhaber; Betheny Gross; Daniel Player
    Abstract: This paper examines the mobility of early-career teachers of varying quality—measured using value-added methods—and focuses on the variation in these effects across the effectiveness distribution. On average, more effective teachers remain in the profession and stay in their initial schools.
    Keywords: Teacher Career Paths , Teacher Quality , Public Schools , Education
    JEL: I
  16. By: Steven B. Caudill (Florida Atlantic University, Department of Economics); Claudio Detotto (Laboratoire Lieux, Identités, eSpaces et Activités (LISA)); Dominique Prunetti (Laboratoire Lieux, Identités, eSpaces et Activités (LISA))
    Abstract: This paper adds to the literature by extending the bargaining model of Harding, Rosenthal, and Sirmans (2003) to a latent class framework. We examine data on apartment sales in Corsica over the period 2006to 2016. Our results indicate that the Corsican housing market has two distinct segments and that bargaining power of buyers and sellers is not the same in these two segments.In particular,we find that the French mainlanders have morebargaining power when sellingin one market segment but they experience adecrease in bargaining power when buying in the other segment. Corsican buyers exhibit significant bargaining power in both sub-markets but local sellers exhibit significant bargaining power in just one segmentof the market.Auxiliary regressions indicate that the apartments associated with the first segment are more spacious, less likely to be new, more likely to have a garden, and typically have longer travel times to any of the local amenities like doctors, pharmacies and the downtown area. From this we conclude that apartments in one segment are more likely to be rural and at a greater distance from the coastcompared to the other segment.
    Keywords: Latent class, hedonic regression, bargaining power
    JEL: R31 R3 C24
    Date: 2019–01
  17. By: Andrea Geraci (European Commission JRC); Mattia Nardotto (KU Leuven); Tommaso Reggiani (Masaryk University); Fabio Sabatini (Sapienza University of Rome)
    Abstract: We study how the diffusion of broadband Internet affects social capital using two data sets from the UK. Our empirical strategy exploits the fact that broadband access has long depended on customersâ position in the voice telecommunication infrastructure that was designed in the 1930s. The actual speed of an Internet connection, in fact, rapidly decays with the distance of the dwelling from the specific node of the network serving its area. Merging unique information about the topology of the voice network with geocoded longitudinal data about individual social capital, we show that access to broadband Internet caused a significant decline in forms of offline interaction and civic engagement. Overall, our results suggest that broadband penetration substantially crowded out several aspects of social capital.
    Keywords: ICT, broadband infrastructure, networks, Internet, social capital, civic capital
    JEL: C91 D9 D91 Z1
    Date: 2018–12
  18. By: Steven Glazerman; Jeffrey Max
    Abstract: Most research on equal educational opportunity has focused on inputs like teacher experience and degrees. This brief estimated teachers’ value added (contribution to student achievement growth) and measured access to highest-performing teachers in high- and low-poverty schools.
    Keywords: Teacher Performance, Low-Income Students , Teacher Quality , Education
    JEL: I
  19. By: Akan Kadyrbekov (National Research University Higher School of Economics); Dmitry Veselov (National Research University Higher School of Economics)
    Abstract: The paper explores the e ect of migration of Russian settlers on the intra-regional development in Kazakhstan. We use the 1897 census dataset of the Russian Empire and modern economic data to provide links between Russian settlements in Kazakhstan in 1897 and the current level of economic development. Exploiting exogenous geographic and geopolitical sources of variation across twenty-six districts (uyezd) we provide the empirical evidence of positive impact of the migration of Russians in XVIII-XIX centuries on the current level of development. The paper discusses several channels of such in uence: human capital formation channel and the Soviet Union industrialization policy.
    Keywords: Intra-regional development · migration ows · historical development
    JEL: N13 N33 O1 O15
    Date: 2019
  20. By: Elena Cottini; Paolo Ghinetti; Simone Moriconi
    Abstract: This paper uses an own built dataset on the history of universities in Italy during 1861-2010 to estimate neighbourhood effects in the local supply of higher education, and incorporate them in a welfare analysis. We implement an instrumental variables approach that exploits initial conditions in the pre-unitarian Italian states, interacted with post-unification university reforms. We provide robust evidence of local displacement between higher education supply in neighbouring provinces. These effects are mostly concentrated within the same field of study, the same region, and a spatial reach of 90 Km. We show that accounting for these displacement forces is important to evaluate the local economic returns related to higher education supply. On average, this explains more than 4% of local value added per capita. Economic returns are very localised, and larger in provinces that host university hubs.
    Keywords: neighbourhood effects, higher education supply, historical data, initial conditions, economic welfare
    JEL: I23 I28 N00 R10
    Date: 2019
  21. By: Jacob Funk Kirkegaard (Peterson Institute for International Economics); Gonzalo Huertas (Peterson Institute for International Economics)
    Abstract: The Hispanic community in the United States has contributed significantly to US economic growth in recent decades and will continue to do so over the next 10 to 20 years, adding more to US growth than some past immigrant communities at similar stages of integration and time following their arrival on American shores. This contribution derives partially from demographic vitality: the fact that Hispanics are the youngest and largest minority group in America and are on a path toward becoming an increasingly large share of the US labor force. Higher fertility rates, net immigration, and growing labor force participation rates will reinforce this trend. This paper presents evidence showing that Hispanic educational attainments are now rapidly converging to the US average. The Hispanic community now exhibits significantly higher levels of opportunity-driven entrepreneurship than does the rest of the US population. These factors position the Hispanic community to increase its contribution to the US economy in coming decades, with significant positive effects on the overall economic growth rate. The data underlying this analysis are available at
    Keywords: geographic labor mobility, immigrant workers, demographic trends, macroeconomic effects, forecasts, international migration
    JEL: J61 J11 F22
    Date: 2019–02
  22. By: Elizabeth Dhuey; Stephen Lipscomb
    Abstract: This study examined responses to state capitation policies for special education finance between 1991 to 1992 and 2003 to 2004. Capitation refers to distributing funds based on the entire student enrollment.
    Keywords: Special Education , State Finance Reforms , Disability Rates , High School Students
    JEL: I
  23. By: Daniel G. Garrett; Eric C. Ohrn; Juan Carlos Suárez Serrato
    Abstract: Since 2002, the US government has encouraged business investment using accelerated depreciation policies that significantly reduce investment costs. We provide the first in-depth analysis of this stimulus on employment and earnings. Our local labor markets approach exploits cross-industry differences in policy generosity interacted with county-level variation in industry concentration. Places that experience larger decreases in investment costs see a level increase in employment that implies a $53,000 cost-per-job. We find no positive effects on average earnings. In contrast, we document a persistent growth in capital. These results imply a capital-labor substitution elasticity that grows over time and can exceed unity.
    JEL: E62 H25 H32 J23 J38
    Date: 2019–02
  24. By: Fritz Schiltz (University of Leuven); Paolo Sestito (Bank of Italy); Tommaso Agasisti (Politecnico di Milano); Kristof De Witte (University of Leuven, University of Maastricht)
    Abstract: School rankings based on value-added (VA) estimates are subject to prediction errors, since VA is defined as the difference between predicted and actual performance. We introduce a more flexible random forest (RF), rooted in the machine learning literature, to minimize prediction errors and to improve school rankings. Monte Carlo simulations demonstrate the advantages of this approach. Applying the proposed method to data on Italian middle schools indicates that school rankings are sensitive to prediction errors, even when extensive controls are added. RF estimates provide a low-cost way to increase the accuracy of predictions, resulting in more informative rankings, and better policies.
    Keywords: value-added, school rankings, machine learning, Monte Carlo
    JEL: I21 C50
    Date: 2019–02
  25. By: Ron Zimmer; Brian Gill; Kaitlin Obenauf
    Abstract: This paper examines the charter school authorizing process using student-level data from Ohio, a state with a range of public and private authorizers.
    Keywords: Charter Schools , Student Achievement , Authorizers , Education
    JEL: I
  26. By: Jonsson, Lina (WSP); Björklund, Gunilla (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Isacsson, Gunnar (Trafikverket)
    Abstract: The purpose of the present study is to estimate accident risks and marginal costs for railway level crossings in Sweden. The marginal effect of train traffic on the accident risk is used to derive the marginal cost per train passage that is due to level crossing accidents. The estimations are based on Swedish data from 2000 to 2012 on level crossing accidents, train volume, and crossing characteristics. In this study we estimate the accidents risk for both motorized road traffic and vulnerable road users. As a proxy for road traffic flow we use three categories of road type, and to capture the influences of pedestrians and bicyclists we use information about the number of persons living nearby the level crossing. The results show that both protection device, road type, traffic volume of the trains, and number of persons living nearby the level crossing have significant influences on the accident probability. The marginal cost per train passage regarding motor vehicle accidents is estimated at SEK 1.51 on average in 2012. The corresponding number for accidents with vulnerable road users excluding suicides is SEK 0.79 or including suicides SEK 5.02. The cost per train passage varies substantially depending on type of protection device, road type, the traffic volume of the trains, and number of persons living nearby the crossing.
    Keywords: Railway; Marginal cost; Accident probability: Level crossings
    JEL: D62 H23 R41
    Date: 2019–02–13
  27. By: Laura Abramovsky (Institute for Fiscal Studies and Institute for Fiscal Studies); Britta Augsburg (Institute for Fiscal Studies and Institute for Fiscal Studies); Melanie Lührmann (Institute for Fiscal Studies and Royal Holloway, University of London); Francisco Oteiza (Institute for Fiscal Studies and EDePo @ Institute for Fiscal Studies); Juan Pablo Rud (Institute for Fiscal Studies and Royal Holloway)
    Abstract: We study the effectiveness of a community-level information and mobilization intervention to reduce open defecation (OD) and increase sanitation investments in Nigeria. The results of a cluster-randomized control trial in 246 communities, conducted between 2014 and 2018, suggest that average impacts are exiguous. However, these results hide important community heterogeneity, as the intervention has strong and lasting effects on OD habits in poorer communities. This result is robust across several measures of community socio-economic characteristics, and is not driven by baseline differences in toilet coverage. In poor communities, OD rates decreased by 9pp from a baseline level of 75%, while we find no effect in richer communities. The reduction in OD is achieved mainly through increased toilet ownership (+8pp from a baseline level of 24%). In terms of channels, the intervention appears to have raised the social status attached to toilet ownership among the poorer treated communities, and not in rich communities. Finally, we use data from our study and five other trials of similar interventions and show that estimated impacts on OD are stronger in poorer contexts, rationalizing the wide range of estimates in the literature and providing plausible external validity.
    Keywords: External validity, Heterogeneous Treatment Effects, Sanitation, Information, Cluster- Randomized Control Trial.
    Date: 2018–11–06
  28. By: Roberto Bonfatti; Yuan Gu; Steven Poelhekke
    Abstract: Africa’s interior-to-coast roads are well suited to export natural resources, but not to support regional trade. Are they the optimal response to geography and comparative advantage, or the result of suboptimal political distortions? We investigate the political determinants of road paving in West Africa across the 1965-2012 period. Controlling for geography and the endogeneity of democratization, we show that autocracies tend to connect natural resource deposits to ports, while the networks expanded in a less interior-to-coast way in periods of democracy. This result suggests that Africa’s interior-to-coast roads are at least in part the result of suboptimal political distortions.
    Keywords: political economy, democracy, infrastructure, natural resources, development
    JEL: P16 P26 D72 H54 O18 Q32
    Date: 2019
  29. By: Waldemar Marz; Frank Goetzke
    Abstract: Climate policy instruments in the transportation sector like fuel economy standards (CAFE) and fuel taxes not only affect households’ vehicle choice, but also the urban form in the long run. We introduce household level vehicle choice into the urban economic monocentric city model and run long-term climate policy scenarios to analyze the welfare effects of this urban adjustment in reaching emission goals. This goes beyond more short-term empirical analyses of the rebound effect in driving. We find that stricter CAFE standards lead to an urban expansion and considerable additional welfare costs for certain emission goals, unaccounted for in the previous literature on welfare costs of CAFE. These welfare costs can be reduced roughly by one half through the combination of CAFE with an urban growth boundary. Fuel taxes, in turn, lead to an urban contraction and additional welfare gains. We analyze the sensitivity of the results to changes in model parameters.
    Keywords: Fuel economy standards, fuel tax, monocentric city, rebound effect
    JEL: H23 L90 Q48 R40
    Date: 2019
  30. By: Lucia Corno (Institute for Fiscal Studies and Queen Mary, University of London); Eliana La Ferrara (Institute for Fiscal Studies and Bocconi University); Justine Burns (Institute for Fiscal Studies)
    Abstract: We exploit a policy designed to randomly allocate roommates in a large South African university to investigate whether inter-racial interaction affects stereotypes, attitudes and performance. Using Implicit Association Tests, we find that living with a roommate of a different race reduces white students? negative stereotypes towards blacks and increases inter-racial friendships. Interaction also affects academic outcomes: blacks in mixed rooms improve their GPA, pass more exams and have lower dropout rates. This positive effect is not driven by the ability of the roommate and is stronger the lower the roommate?s prejudice, suggesting a complementarity between stereotype reduction and performance gains.
    Keywords: stereotype reduction, performance gains
    Date: 2019–01–30
  31. By: Tobias Böhmelt; Tobias Böhmelt (University of Eessex); Vincenzo Bove (University of Warwick)
    Abstract: There is an ongoing debate among practitioners and scholars about the security consequences of transnational migration. Yet, existing work has not yet fully taken into account the policy instruments states have at their disposal to mitigate these, and we lack reliable evidence for the effectiveness of such measures. The following research addresses both shortcomings as we analyze whether and to what extent national migration policies affect the diffusion of terrorism via population movements. Spatial analyses report robust support for a moderating influence of states’ policies: while larger migration populations can be a vehicle for the diffusion of terrorism from one state to another, this only applies to target countries with extremely open controls and lax regulations. This research sheds new light on the security implications of population movements, and it crucially adds to our understanding of governments’ instruments for addressing migration challenges as well as their effectiveness.
    Keywords: Terrorism, Diffusion, Immigration; National Migration Policies
    Date: 2018–02
  32. By: Damián Tojeiro-Rivero (AQR-IREA, University of Barcelona); Rosina Moreno (AQR-IREA, University of Barcelona)
    Abstract: Much has been said about the role that technological networking activities play on the innovative performance of rms, but little is known about the relevance of the context where the rm is locate shaping the eciency of such networking activities. In this article we hypothesize that the transformation of rms' networking activities into innovation may vary depending on the regional environment in which the rm is located. For Spanish manufactures in the period 2000-12 and through the use of a multilevel framework, we obtain that after controlling for the rm's characteristics, the regional context has not only a direct eect on rms' innovation performance, but it also conditions the returns to rms' networking activities, although dierently in the case of cooperation and outsourcing. Cooperating in innovation activities is more benecial for those rms located in a knowledge intensive region, whereas R&D outsourcing seems to be more protable for rms in regions with a low knowledge pool.
    Keywords: Technological cooperation, R&D Outsourcing, Local Knowledge Spillovers; Multilevel; Panel data; Spanish Firms, Manufactures JEL classification: D21, D22, O31, R10, R15
    Date: 2019–01
  33. By: Rodrigo Adão (The University of Chicago Booth School of Business); Costas Arkolakis (Cowles Foundation, Yale University); Federico Espósito (Dept. of Economics, Tufts University)
    Abstract: How do shocks to economic fundamentals in the world economy affect local labor markets? In a framework with a flexible structure of spatial linkages, we characterize the model-consistent shock exposure of a local market as the exogenous shift in its production revenues and consumption costs. In general equilibrium, labor outcomes in any market respond directly to the market’s own shock exposure, and indirectly to other markets shocks exposures. We show how spatial linkages control the size and the heterogeneity of these indirect effects. We then develop a new estimation methodology - the Model-implied Optimal IV (MOIV) - that exploits quasi-experimental variation in economic shocks to estimate spatial linkages and evaluate their counterfactual implications. Applying our methodology to US Commuting Zones, we find that difference-in-difference designs based on model-consistent measures of local shock exposure approximate well the differential effect of international trade shocks across CZs, but miss around half of the aggregate effect, partly due to the offsetting action of indirect effects.
    Keywords: Economic Impacts of Globalization, Regional Economics Measurement, International Trade, Economic Geography, General Equilibrium, Structural Estimation
    Date: 2019–02
  34. By: Steven Glazerman; Dan Goldhaber; Susanna Loeb; Stephen Raudenbush; Douglas O. Staiger; Grover J. Whitehurst; Michelle Croft
    Abstract: This report addresses the comparison of teacher evaluation systems and proposes ways to achieve a uniform standard for dispensing funds to districts to recognize exceptional teachers without imposing a uniform evaluation system on those districts.
    Keywords: Teacher Evaluation Systems , Teacher Quality , Education
    JEL: I
  35. By: Jaime L. Thomas
    Abstract: This article examines the relationship between combination class membership in 1st grade and 1st-grade test scores, finding that 1st graders are not harmed by being in a combination class or by their schools offering combination classes.
    Keywords: Costs Educational Economics Educational Finance Human Capital; imput output analysis
    JEL: I
  36. By: Koen Jochmans (Institute for Fiscal Studies and Sciences Po); Martin Weidner (Institute for Fiscal Studies and cemmap and UCL)
    Abstract: This paper considers inference on fixed effects in a linear regression model estimated from network data. An important special case of our setup is the two-way regression model. This is a workhorse technique in the analysis of matched data sets, such as employer-employee or student-teacher panel data. We formalize how the structure of the network affects the accuracy with which the fixed effects can be estimated. This allows us to derive sufficient conditions on the network for consistent estimation and asymptotically-valid inference to be possible. Estimation of moments is also considered. We allow for general networks and our setup covers both the dense and sparse case. We provide numerical results for the estimation of teacher value-added models and regressions with occupational dummies.
    Keywords: connectivity, fixed effects, graph, Laplacian, limited mobility, teacher value-added, two-way regression model
    Date: 2018–07–16
  37. By: Mohammad Ali Elminejad (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)
    Abstract: This paper investigates systemic risk and contagion processes in the inter-bank network using network science methods. The inter-bank network consisting 10 banks, similar to the real world inter-bank networks, is studied to understand the contagion process in the network regarding changes in the network structure, as well as changes in the characteristics of components. Simulations support the claim that heterogeneous networks are more resilient to contagious shocks, while systemic shocks are more problematic in homogeneous networks. The study also shows that more interconnections among banks could accelerate or block contagion proces depending on the structure of the network and seniority of debts in the inter-bank network as well.
    Keywords: Complex Networks, Systemic Risk, Contagion, Default Risk, Epidemic Modeling
    JEL: G01 G21
    Date: 2018–12
  38. By: Konstantin A. Kholodilin (National Research University Higher School of Economics); Leonid E. Limonov (National Research University Higher School of Economics); Sofie R. Waltl (Luxembourg Institute of Socio-Economic Research)
    Abstract: This article studies the evolution of housing rents in St. Petersburg between 1880 and 1917, covering an eventful period of Russian and world history. We collect and digitize over 5,000 rental advertisements from a local newspaper, which we use together with geo-coded addresses and detailed structural characteristics to construct a quality-adjusted rent price index in continuous time. We provide the first pre-war and pre-Soviet index based on market data for any Russian housing market. In 1915, one of the world’s earliest rent control and tenant protection policies was introduced in response to soaring prices following the outbreak of World War I. We analyze the impact of this policy: before the regulation rents were increasing at a similarly rapid pace to other consumer prices; the policy reversed that trend. We find evidence for official compliance with the policy, document a rise in tenure duration and strongly increased rent affordability for workers after the introduction of the policy. We conclude that the immediate prelude to the October Revolution was indeed characterized by economic turmoil, but rent affordability and rising rents were no longer the dominating problems.
    Keywords: Rental Market; Rent Regulation; Intra-Urban Rent Dynamics; Hedonic Rent Price Index; Economic History; Pre-Soviet Russia; October Revolution.
    JEL: C14 C43 N93 O18
    Date: 2019
  39. By: Simone Bertoli (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Elie Murard (IZA - Institute for the Study of Labor)
    Abstract: The migration literature typically assumes that the migration of a household member is not associated with further variations in co-residence choices. We rely on a Mexican panel survey to provide novel evidence on the correlation between the occurrence of an international migration episode and changes in household composition. Migrant households have a higher probability of receiving a new member within one year around the migration episode. Attrition is significantly higher among migrant households, and we provide evidence that this is partly due to the dissolution of the household of origin of the migrant. The endogeneity of co-residence choices induces an undercount of migration episodes, as shown with data from the 2000 Census. This has implications for the analysis of migrant selection and of the effects on the individuals left behind. Dealing with these analytical challenges requires an approach to data collection that is less dependent on variations in household composition.
    Keywords: International migration,household composition,data collection,remittances
    Date: 2019
  40. By: Frank H. Martin
    Abstract: This study tested a new conceptual model for the relationship between race, personal history characteristics, and quality of employment outcomes for white, black, and Hispanic participants to examine an old question: Are there still racial disparities in vocational rehabilitation employment outcomes?
    Keywords: Race , Multivariate Rehabilitation , Research Design , Employment
    JEL: I J
  41. By: Manuela Krause
    Abstract: The political business cycle theories describe that election-motivated politicians manipulate economic policy-making. Election cycles occur in many fiscal variables, for example tax rates. I examine whether electoral motives influence communal fees in Germany. Fees have to be paid for the use of many public services, for example waste management or sewerage provisions. Fees should be equivalent to the costs of a public service and thus correspond to the benefit principle in public finance. The German municipalities, however, have a leeway to determine fees. I use revenue data for around 7,000 West German municipalities from seven states over the period 1992–2006. The results show that municipalities increase communal fees in election years to a smaller extent than in the middle of the legislative period, while they increase fees more directly after elections. Fees increase in election years by 0.94 euro per capita less and directly after elections by 1.74 euro per capita more than in the middle of the legislative period. The results thus corroborate the predictions of the political business cycle theories.
    Keywords: Electoral cycles, political business cycles, local government, communal fees, public utilities sector
    JEL: D72 H72 A13 R50 H27
    Date: 2019
  42. By: António Afonso; Ana Venâncio
    Abstract: We investigate the effect of a local territorial reform, which reduced the number of parishes, on municipality spending efficiency in the period 2011-2016. We build a composite output indicator and use Data Envelopment Analysis (DEA) to compute efficiency scores, which we then analyze through a second stage regression with socio-demographic, economic factors and the reform. We find efficiency gains for around 10% of municipalities overall. In Alentejo and in Centro, more than 50% of the municipalities improved efficiency. The second stage results show that the reform did not improve local spending efficiency in Mainland Portugal, particularly in the Norte region.
    Keywords: public spending efficiency, local government, data envelopment analysis (DEA), local organizational reform
    JEL: C14 H72 R50
    Date: 2019–02
  43. By: Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Koichiro Mori (Shiga University.); Takeshi Nishimura (Sanyo Gakuen University); Kengo Hayashi (University of Tokyo)
    Abstract: It is essential to encourage worldwide pro-environmental behaviors among an increasingly urban population. Understanding the gap between intended and actual pro-environmental behavior is crucial for developing effective intervention measures. The present study aimed to identify a variable that could serve as a proxy for urban individuals’ overall competence to fill this gap. Data was collected from 366 residents living in highly urbanized Japanese municipalities with a population density of 7088/km2 or higher. It found that community ties, as measured by Theodori’s (2004) community attachment scale, moderated the intention-behavior gap. This was also true when only resource-saving behavior, conventionally regarded as being in the private sphere, was considered when scoring individuals’ pro-environmental behavior, which suggests that this behavior is much more social than previously realized. The practical implications of these findings are also discussed.
    Keywords: pro-environmental behavior, intention-behavior gap, place attachment, community attachment, urban living
    Date: 2019–02

This nep-ure issue is ©2019 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.