|
on Urban and Real Estate Economics |
| By: | Ehrlich, Maximilian V.; Hilber, Christian A. L.; Schöni, Olivier |
| Abstract: | This article explores the role of institutional settings in determining spatial variation in urban sprawl across Europe. We first synthesize the emerging literature that links land use policies and local fiscal incentives to urban sprawl. Next, we compile a panel dataset on various measures of urban sprawl for European countries using high-resolution satellite images. We document substantial variation in urban sprawl across countries. This variation remains roughly stable over the period of our analysis (1990-2012). Urban sprawl is particularly pronounced in emerging Central and Eastern Europe but is comparatively low in Northern European countries. Urban sprawl – especially outside functional urban areas – is strongly negatively associated with real house price growth, suggesting a trade-off between urban containment and housing affordability. Our main novel empirical findings are that decentralization and local political fragmentation are significantly positively associated with urban sprawl. Decentralized countries have a 25 to 30 percent higher sprawl index than centralized ones. This finding is consistent with the proposition that in decentralized countries fiscal incentives at local level may provide strong incentives to permit residential development at the outskirts of existing developments |
| Keywords: | Decentralization; Housing supply; Supply constraints; Land use regulation; Urban sprawl; Europe |
| JEL: | H2 H3 H4 H7 R3 R4 R5 |
| Date: | 2018–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:86364&r=all |
| By: | Dokko, Jane K.; Keys, Benjamin J.; Relihan, Lindsay |
| Abstract: | At their peak in 2005, roughly 60 percent of all purchase mortgage loans originated in the United States contained at least one non-traditional feature. These features, which allowed borrowers easier access to credit through teaser interest rates, interest-only or negative amortization periods, and extended payment terms, have been the subject of much regulatory and popular criticism. In this paper, we construct a novel county-level dataset to analyze the relationship between rising house prices and non-traditional features of mortgage contracts. We apply a break-point methodology and find that in housing markets with breaks in the mid-2000s, a strong rise in the use of non-traditional mortgages preceded the start of the housing boom. Furthermore, their rise was coupled with declining denial rates and a shift from FHA to subprime mortgages. Our findings support the view that a change in mortgage contract availability and a shift toward subprime borrowers helped to fuel the rise of house prices during the last decade. |
| Keywords: | housing policy; mortgage loans; subprime mortgage |
| JEL: | G22 R21 R22 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101017&r=all |
| By: | Favilukis, Jack; Mabille, Pierre; van Nieuwerburgh, Stijn |
| Abstract: | Housing affordability is the main policy challenge for many large cities in the world. Zoning changes, rent control, housing vouchers, and tax credits are the main levers employed by policy makers. But how effective are they at combatting the affordability crisis? We build a new framework to evaluate the effect of these policies on the well-being of its citizens. It endogenizes house prices, rents, construction, labor supply, output, income and wealth inequality, as well as the location decisions of households. Its main novel features are risk, risk aversion, and incomplete risk-sharing. We calibrate the model to the New York MSA, incorporating current zoning and affordable housing policies. Housing affordability policies carry substantial insurance value but cause misallocation in labor and housing markets. Housing affordability policies that enhance access to this insurance especially for the neediest households create large net welfare gains. |
| Keywords: | affordable housing; Development; Dynamic spatial equilibrium; Gentrification; House Prices; housing vouchers; Rent Control; Tax credits; Zoning |
| JEL: | G11 G12 H41 H70 J61 R10 R20 R30 R40 R51 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13758&r=all |
| By: | Tanya Suhoy (Bank of Israel); Yotam Sofer (Bank of Israel) |
| Abstract: | We use Social Survey data for 2014–16 and Google Maps data to study the distribution of employees in Israel by their travel modes—and in particular, their dependence on private vehicles. The analysis was conducted from two perspectives: one allows geographical mapping of the localities in Israel by their accessibility to job localities via public transportation (relative to private vehicle), and the second examines, at the individual data level, the impact of the accessibility and of individual characteristics on the choice of travel mode. Mapping Israeli localities by an index of relative accessibility via public transportation to workplaces, calculated in this paper, indicates notable gaps. The more distant home localities are from the metropolises’ core, the less relative accessibility there is. In most localities in the periphery—and particularly in Arab localities—the relative accessibility is low due to the limited supply of public transit. In small Jewish localities in the periphery, accessibility is low, but high socioeconomic levels of these localities may indicate that the low accessibility derives from residents’ preference for private vehicles (given the level of public transportation that can be provided to such localities). In ultra-Orthodox cities and localities, the relative accessibility is high. In many localities with a lower socioeconomic background—particularly in the Arab sector—the relative accessibility is low, while in tandem there are organized shuttle services provided by employers. This mode is efficient in the sense of distance covered in a given time. However, a lack of alternatives creates dependence on such shuttle transportation, which reduces the residents’ employment possibilities and creates among them a dependence on a small number of employers. Analyzing individual effects on the travel mode (using the Discrete Choice Model) given a limited number of alternatives indicates a small (but statistically significant) effect of the trip’s travel time. However, the proximity of bus/train stations and frequency of service markedly increase the probability of choosing those modes of transportation, and reduce the use of private vehicles. In contrast, car maintenance benefits and a company car lead to the choice of private vehicles. The findings also indicate a correlation between a low socioeconomic level (in terms of wages, schooling, and housing density) and a greater tendency to use a bus, and a low attractiveness of the bus mode for upper income deciles. The probability of choosing a bus is markedly lower among private vehicle owners and among workers who are eligible for car maintenance benefits from their employer. Concerning trains, the findings indicate a higher readiness to choose them, when the train is available, both among vehicle owners and among other commuters. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:boi:wpaper:2019.02&r=all |
| By: | Efthymios Pavlidis; Ivan Paya; Alex Skouralis |
| Abstract: | This is the first paper to examine the role of the real estate sector and housing unaffordability in the determination of systemic risk. We measure the systemic risk of the UK by employing the CoVaR method developed by Adrian and Brunnermeier (2011, 2016), and we explore both its cross-sectional and time series behaviour. Regarding the former, we show that when the real estate sector is under distress the tail risk of the entire financial system increases significantly. With respect to the latter, the findings of our dynamic model suggest that sustainable house prices positively contribute to the stability of the financial sector; whilst house price exuberance and rapid increases in housing unaffordability amplify systemic risk. Finally, we examine the conjecture that the banking sector comprises a transmission channel from the housing market to the systemic risk of the financial system. Our empirical results are in line with this argument and highlight the key role of housing unaffordability. |
| Keywords: | affordability, real estate sector, systemic risk |
| JEL: | C21 C23 E44 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:266072868&r=all |
| By: | Tamim Bayoumi; Jelle Barkema |
| Abstract: | Using bilateral data on migration across US metro areas, we find strong evidence that increasing house price and income inequality has reduced long distance migration, the type most linked to jobs. For those migrating uphill, from a less to a more prosperous location, lower mobility is driven by increasing house price inequlity, as the disincentives from higher house prices dominate the incentives from higher earnings. By contrast, increasing income inequality drives the fall in downhill migration as the disincentives from lower earnings dominate the incentives from lower house prices. The model underlines the plight of those trapped in decaying metro areas—those “left behind”. |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/122&r=all |
| By: | Rico Krueger; Taha H. Rashidi; Vinayak V. Dixit |
| Abstract: | This paper seeks to advance the understanding of the potential impacts of autonomous vehicles (AVs) on travel behaviour and land use by investigating stated preferences for combinations of residential locations and travel options for the commute in the context of autonomous automobile travel. Our analysis draws from a stated preference survey, which was completed by 512 commuters from the Sydney metropolitan area in Australia, and provides insights into travel time valuations and demand elasticities in a long-term decision-making context. By and large, the findings of our empirical study suggest that the impact of AVs on travel behaviour and residential location preferences may be relatively modest. We estimate that the mean value of travel time savings (VOT) for commuting by AV is 24.0 AUD/h, while the mean VOTs for commuting by conventional car and public transit are 25.3 AUD/h and 19.0 AUD/h, respectively. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1905.11486&r=all |
| By: | Figari, Francesco; Hollan, Katarina; Matsaganis, Manos; Zolyomi, Eszter |
| Abstract: | This paper aims to explore how housing allowances and mortgage interest tax relief have evolved in recent years, against the background of falling disposable incomes and rising housing costs. The analysis focuses on seven EU countries (Greece, Italy, Austria, Hungary, the Netherlands, Sweden and the UK), covering a range of housing market developments and housing policy responses. The first part of the paper provides an overview of housing market trends over the period following the financial crisis and examines recent changes in housing policies in the countries concerned. The next part discusses the main features of two specific housing policy instruments, housing allowance and mortgage interest tax relief, also exploring recent changes there and the motives behind these. The last part estimates the distributional impact of housing allowances and mortgage tax relief in 2016 as compared with 2007 using the European tax-benefit model EUROMOD. The paper concludes with a discussion of the results and of the policy implications. |
| Date: | 2019–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em12-19&r=all |
| By: | Maria Chiara Cavalleri; Boris Cournède; Volker Ziemann |
| Abstract: | Housing markets are large and highly volatile: they can thus create large macroeconomic risks. The current paper provides a bird’s eye view of where the housing markets of major OECD economies currently stand. It then uses the results of recently developed models to provide indications of where macroeconomic risks exist. Finally, the paper draws on recent empirical analyses to suggest how economic policies can enhance economic resilience by reducing housing-related risks through macroprudential measures and housing market reforms (such as changes in rent regulation, taxation and land use policies). |
| Keywords: | Housing, land use policy, macroprudential, policy, rent regulation, resilience, taxation |
| JEL: | E37 E5 R31 |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1555-en&r=all |
| By: | Heidi Jane Smith (Economics Department, Universidad Iberoamericana) |
| Abstract: | This paper examines the relationship between fiscal autonomy and a municipalities' commitment to and the impact upon economic development activities. This article evaluates quantitatively, using a panel dataset from 1989-2014, the relationship of fiscal capacity to a city?s economic development. It tests the hypothesis that if a municipality is more fiscally autonomous in collecting their own revenue and also discretion in making their own decisions, then the city will be more likely to have successful economic development. Fiscal autonomy is measured as total own-source revenue (TOSR) collection and discretion is measured as how local governments decide to enter into the municipal bond market. The empirical model also tests for convergence between municipal growth. Overall municipalities that grow collect more own source revenue, spend a bit more on salaries, often have more debt, but this does not imply they are making efficient debt policy decisions. Finally, through the years, municipal growth shows an absolute (unconditional) beta convergence in decrease in the difference of growth between the poor and rich municipalities. |
| Date: | 2019–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:smx:wpaper:2019002&r=all |
| By: | Utpal Bhattacharya (Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Daisy Huang (Nanjing Audit University); Kasper Meisner Nielsen (Institute for Emerging Market Studies, Hong Kong University of Science and Technology) |
| Abstract: | Exploiting the unique institutional setting of Hong Kongâs real estate market, we uncover a curious ripple effect of haunted houses on the prices of nearby houses. Prices drop on average 20% for units that become haunted, 5% for units on the same floor, 3% for units in the same block, and 1% for units in the same estate. Our study makes two contributions. First, our results provide an estimate of a large negative spillover on asset prices caused by an idiosyncratic shock to the perceived quality of an asset. Second, since we observe that this ripple effect exists even if the haunted house is not sold, we can isolate the quality channel from the price pressure channel. We find that the quality channel contributes significantly to spillovers in asset prices. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201963&r=all |
| By: | Nikolaos Antonakakis (Webster Vienna Private University); Ioannis Chatziantoniou (Portsmouth Business School); David Gabauer (Webster Vienna Private University, Johannes Kepler University) |
| Abstract: | In this study we employ a TVP-VAR model in order to investigate dynamic connectedness of housing prices and sales volume across four US regional housing markets; namely, Midwest, Northeast, South, as well as, West, for the period between January 1990 and March 2019. Furthermore, utilising an insightful decomposition of the results, we provide a thorough investigation of the underlying dynamics. Overall, results indicate that during turbulent economic periods, it is sales volume shocks that drive developments in the US housing market, rather than shocks in housing prices. In addition, we find that the South is rather a persistent net transmitter of both prices and volume housing market shocks, while the Northeast, a net receiver. On the whole, all four markets assume both roles over time. Results are important for policy makers and regulators aiming to alleviate the negative ramifications of an overheated housing market. In addition, given that over time, the four markets behave differently in connection with their short run shock-transmission capacity, results are also suggestive that there is potential for economic (i.e., rather than strictly geographical) portfolio diversification. |
| Keywords: | US regional housing markets, Housing prices, Transaction volume, TVP-VAR, Dynamic connectedness, Dynamic connectedness decomposition |
| JEL: | C32 G10 G20 |
| Date: | 2019–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2019-06&r=all |
| By: | Batabyal, Amitrajeet; Kourtit, Karima; Nijkamp, Peter |
| Abstract: | We study the impact that the provision of a local public good (LPG) by two cities has on their ability to attract and retain members of the creative class. This creative class consists of two types of members known as engineers and artists. Engineers are wealthier than artists and they also value the LPG more. We first focus on each city in isolation. We compute the marginal value and the marginal cost of the LPG and then determine the provision of this LPG when the provision is determined by uniform contributions and majority voting. Next, we allow the creative class members to migrate between the two cities and analyze whether engineers or artists migrate, the equilibrium distribution of the creative class, and the efficiency of the LPG provision. Finally, we consider the situation in each city just before migration and study how much of the LPG is provided when proportional contributions and majority voting determine this provision. A related question we address is whether engineers or artists now have an incentive to migrate and, if yes, we identify who would like to migrate and to which city. |
| Keywords: | Artist, Creative Class, Engineer, Local Public Good, Majority Voting |
| JEL: | H40 R11 |
| Date: | 2019–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94119&r=all |
| By: | Cattaneo, Andrea; Robinson, Sherman |
| Abstract: | This paper sheds new light on internal migration processes by estimating migration flows for 31 countries, focusing on step migration and on return migration back to rural areas from urban areas. The approach is to estimate the shares of the population (by gender) that move or stay in rural and urban areas over three periods (childhood and two forward periods). Using data from Demographic and Health Surveys (DHS), the estimation was done with an information-theoretic procedure using maximum-entropy econometrics to estimate migration frequencies by population groups. Sizeable urban to rural migration flows are found, with rural returnees often contributing substantially to urban-to-rural flows. This phenomenon is more pronounced in countries in relatively early phases of development, and among male migrants. The analysis also confirms anecdotal evidence that migrants move in several steps and that internal migration patterns vary considerably according to gender; however, in countries that are further along the path of structural transformation, and particularly urbanization, the magnitude of migration flows appears to be similar across genders. |
| Keywords: | Labor and Human Capital, Community/Rural/Urban Development |
| Date: | 2019–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:faoaes:288948&r=all |
| By: | Ivandic, Ria; Kirchmaier, Tom; Machin, Stephen |
| Abstract: | Empirical connections between local anti-Muslim hate crimes and international jihadi terror attacks are studied. Based upon rich administrative data from Greater Manchester Police, event studies of ten terror attacks reveal an immediate big spike up in Islamophobic hate crimes and incidents when an attack occurs. In subsequent days, hate crime is amplified by real-time media. It subsequently attenuates, but hate crime incidence cumulates to higher levels than prior to the series of attacks. The overall conclusion is that, even when they reside in places far away from where jihadi terror attacks take place, local Muslim populations face a media magnified likelihood of hate crime victimization following international terror attacks. This matters for community cohesion in places affected by discriminatory hate crime and, from both a policy and research perspective, means that the process of media magnification of hate crime needs to be better understood. |
| Keywords: | Islamophobic hate crime; jihadi terror attacks; media |
| JEL: | K42 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13743&r=all |
| By: | Olivier Walther; Denis Retaille |
| Abstract: | This chapter examines the geographical meaning of the Sahel, its fluid boundaries, and its spatial dynamics. Unlike other approaches that define the Sahel as a bioclimatic zone or as an ungoverned area, it shows that the Sahel is primarily a space of circulation in which uncertainty has historically been overcome by mobility. The first part of the paper discusses how pre-colonial empires relied on a network of markets and cities that facilitated trade and social relationships across the region and beyond. The second part explores changing regional mobility patterns precipitated by colonial powers and the new approach they developed to control networks and flows. The third part discusses the contradiction between the mobile strategies adopted by local herders, farmers and traders in the Sahel and the territorial development initiatives of modern states and international donors. Particular attention is paid in the last section to how the Sahel was progressively redefined through a security lens. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.02223&r=all |
| By: | Roland Hodler (Department of Economics, University of St.Gallen; CEPR, London; CESifo, Munich); Michele Valsecchi (New Economic School); Alberto Vesperoni (Department of Economics, Alpen-Adria University Klagenfurt) |
| Abstract: | The effects of ethnic geography, i.e., the distribution of ethnic groups across space, on economic, political and social outcomes are not well understood. We develop a novel index of ethnic segregation that takes both ethnic and spatial distances between individuals into account. Importantly, we can decompose this index into indices of spatial dispersion, generalized ethnic fractionalization, and the alignment of spatial and ethnic distances. We use ethnographic maps, spatially disaggregated population data, and language trees to compute these four indices for around 160 countries. We apply these indices to study the relation between ethnic geography and current economic, political and social outcomes. We document that country level quality of government, income and trust increase with the alignment component of segregation, i.e., with the ratio between the country's actual segregation and the segregation it would have if ethnic groups were represented in each location with population shares identical to their country-level population share. Hence, all else equal, countries where ethnically diverse individuals live farther apart tend to perform better. |
| Keywords: | Ethnic diversity; ethnic geography; segregation; fractionalization; quality of government; economic development |
| JEL: | C43 D63 O10 Z13 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0253&r=all |
| By: | Alan S Duncan (Bankwest Curtin Economics Centre (BCEC), Curtin University); Amity James (School of Economics, Finance and Property, Curtin Business School); Steven Rowley (School of Economics, Finance and Property, Curtin Business School) |
| Abstract: | This report by the Bankwest Curtin Economics Centre focuses on housing affordability, one of the most important economic and social issues facing Western Australia, and indeed the country. This twelfth report in BCEC’s Focus on WA series builds on the Centre’s earlier reports into Housing Affordability, and includes new analysis of the latest trends in housing affordability since the release of the first housing affordability report in 2014. The report benefits from new suburb-level transactions data both for housing sales and rents, provided by the Real Estate Institute of Western Australia, as well as from numerous secondary data sources provided by the Australian Bureau of Statistics. And the report includes important new findings from the fourth Bankwest Curtin Economics Centre Housing Affordability Survey. The latest BCEC survey draws on responses collected during April 2019 from 3,600 households in WA, New South Wales and Queensland. This gives us a unique opportunity to benchmark WA’s housing affordability position relative to the situation faced by other states. |
| Keywords: | Western Australia, WA economy, housing pathways, housing affordability, income and wealth, financial disadvantage, housing stress |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ozl:bcecrs:fwa12&r=all |
| By: | Carlos Caceres |
| Abstract: | This paper analyzes the existence of “wealth effects” derived from net equity (in the form of housing, financial assets, and total net worth) on consumption. The study uses longitudinal household-level data?from the Panel Study of Income Dynamics (PSID) ?covering about 7,000-9,000 households in the U.S., with the estimations carried over the period 1999-2017. Overall, wealth effects are found to be relatively large and significant for housing wealth, but less so for other types of wealth, including stocks. Furthermore, the analysis shows how these estimated marginal propensities to consume (MPC) from wealth are closely linked to household characteristics, including income and demographic factors. Finally, underlying structural changes in household characteristics point to potentially lower aggregate MPCs from wealth going forward. |
| Date: | 2019–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/115&r=all |
| By: | ITO Hirotake; KASAI Keiko; NAKAMURO Makiko |
| Abstract: | This paper examines the causal effect of computer-aided instruction (CAI) on children's cognitive and non-cognitive skills. Closely working with the Cambodian government, we ran clustered-randomized controlled trials at five elementary schools near Phnom Penn for three months. Students were randomly assigned into 20 treatment classes which were allowed to use an app based on CAI instead of regular math classes during the intervention, or 20 control classes. Our empirical results drawn from these experiments suggest that average treatment effect on cognitive skills measured using several types of math achievement tests and IQ tests is positive and statistically significant. The effect is significantly large, especially as compared with prior literature examined in developing countries: the estimated coefficients on student achievements are 0.56-0.67 standard deviations and IQ scores 0.70 standard deviations even after controlling for demographic factors. Furthermore, it is found that that CAI-based app can increase the students' subjective expectation of being able to attend tertiary education in the future. However, there is no significant effect on non-cognitive skills, such as motivation. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19040&r=all |
| By: | Marina Bassi (World Bank); Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ana Reynoso (Department of Economics, University of Michigan) |
| Abstract: | Improving school quality with limited resources is a key issue of policy. It has been suggested that instructing teachers to follow specific practices together with tight monitoring of their activities may help improve outcomes in under-performing schools that usually serve poor populations. This paper uses an RCT to estimate the e?ectiveness of guided instruction methods as implemented in under-performing schools in Chile. The intervention improved performance substantially and by equal amounts for boys and girls. However, the effect is mainly accounted for by children from relatively higher income backgrounds and not for the most deprived. Based on the CLASS instrument we document that quality of teacher-student interactions is positively correlated with the performance of low income students; however, the intervention did not affect these interactions. Guided instruction can improve outcomes, but it is a challenge to reach the most deprived children. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2181&r=all |
| By: | Alexandra Bykova (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Exploring the determinants of credit risk has gained importance in the aftermath of the global financial crisis, which caused a sharp increase in non-performing loans (NPLs) in Central, East and Southeast Europe. In this note we first analyse the post-crisis trends in NPLs comparing five Southeast European countries with their peers in Central and Eastern Europe. Second, we estimate the effect of key macroeconomic drivers on NPL development in the region. We distinguish between total household loans, non-secured consumer loans, housing loans and loans to non-financial corporations, and investigate separately their corresponding determinants. On average across the five Southeast European countries examined (Bosnia and Herzegovina, Croatia, Montenegro, Serbia, and Slovenia), after the crisis asset quality of corporate loans deteriorated more strongly than that of household loans. We find that GDP growth has a negative and statistically significant impact on NPLs for all types of loans. However, the impact on corporate loan quality is much greater than for households, and in particular for consumer loans (housing loans’ NPLs show a stronger negative relationship with GDP growth). We therefore conclude that the consumer loan quality is less susceptible to the business cycle than either corporate or housing lending. One possible explanation for this is that the amounts involved are smaller, and can often be serviced in times of difficulty by friends or relatives. This probably included relatives living abroad, given that outward migration from the Western Balkans is so high, and remittances inflows so large. We find that various other macroeconomic indicators have an impact on asset quality. Rises in consumer and producer price inflation are associated with higher NPL ratios for all types of loans, but changes in real interest rates affect corporates more than households. This may be because corporates have a greater share of floating rate loans. Interestingly, higher unemployment also appears to affect corporate asset quality more strongly than that of households this may again be related to the possibility of friends or relatives helping out with loan repayments for smaller consumer loans. Finally, we also find that periods of elevated loan growth are followed eventually by higher NPL levels. |
| Keywords: | Southeast Europe, non-performing loans, credit cycle, financial crisis, unsecured household loans |
| JEL: | G01 G21 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:32&r=all |
| By: | Jonathan Eberle (Department of Economic Geography and Location Research, Philipps University Marburg); Philipp Boeing (ZEW - Leibniz Centre for European Economic Research, Mannheim and Peking University, China Center for Economic Research (CCER), Beijing) |
| Abstract: | We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening. |
| Keywords: | China, R&D subsidies, regional economic growth, panel VAR, impulse response functions |
| JEL: | C33 R11 R58 O38 O47 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2019-03&r=all |
| By: | Randall Akee; Maggie R. Jones |
| Abstract: | Using a novel panel data set of recent immigrants to the U.S., we identify return migration rates and earnings trajectories of two immigrant groups: those with foreign graduate degrees and those with a U.S. graduate degree. We focus on immigrants (of both genders) to the U.S. who arrive in the same entry cohort and from the same country of birth over the period 2005-2015. In Census-IRS administrative data, we ?nd that downward earnings trajectories are predictive of return migration for immigrants with degrees acquired abroad. Meanwhile, immigrants with U.S.-acquired graduate degrees experience mainly upward earnings mobility. |
| Keywords: | Post-Secondary Education, Immigration, Human Capital, Wage Growth, Panel Data. |
| JEL: | J31 F22 J61 J15 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:19-17&r=all |
| By: | Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo (University of Turin) |
| Abstract: | By discussing the relation between the traditional Marshallian/Jacobian approach and Klepper’s concept of spinoffs and their role, this paper tries to explain the early genesis and later evolution of the Italian automotive industry, based on the for mation of the Torino’s car cluster from the late nineteenth century. Historical analysis and econometric models are integrated to identify key factors that enabled the creation and success of the automotive industry in Turin. Specifically, we investigate agglomeration economies, the role of spinoffs and institutional factors such as the level and importance of local education. Based on original archival research, we built a new database of all Italian automobile companies. Replication of Klepper’s (2007) and Boschma and Wenting’s (2007) models shows no particular influence of the Turin cluster and no early entry advantages. Our model, which integrates and extends previous contributions, confirms the existence of a spinoffs effect, and in particular the positive effect of inherited technical skills embedded in pilots. We find support also, for positive agglomeration effects at the regional level and inter industry externalities from aeronautics, a metropolitan cluster effect and the significance of metropolitan education. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201909&r=all |
| By: | Hari Sharma (University of Waikato); John Gibson (University of Waikato) |
| Abstract: | A growing literature studies microeconomic effects of war on human capital formation and labour market activity. A common research design is to relate spatially aggregated data on conflict rates at the first or second sub-national level to more spatially disaggregated survey data on outcomes of interest. Several studies focus on Nepal’s civil war, that ran for a decade from 1996, and use conflict-related deaths in Nepal’s 75 districts (the second sub-national level). Variation in the conflict-related death rate within Nepal’s districts is more than three times higher than the variation between districts. Consequently, using district-level conflict data creates a measurement error on the right-hand side of regression models, making the conflict seem more widespread, and biases econometric estimates of conflict impacts. Prior studies also ignore spatial spillovers, where local conflict may affect outcomes not only locally but also in surrounding areas. To deal with these biases, we use measures of conflict intensity for Nepal’s 3982 localities in a spatial Durbin model of the change in emigration rates between the 2001 and 2011. We distinguish emigration to India, which is informal and long-standing, from emigration to other countries that is a recent development for Nepal and requires formal recruitment and visa processes. Higher local conflict intensity is associated with slower local growth in the emigration rate between 2001 and 2011. It is mainly indirect impacts, based on the spatial lags, which matter and it is emigration to destinations other than India that was deterred by the conflict. The estimated impacts would be substantially distorted if conflict intensity was measured at the more aggregated, district-level, as in the existing literature. |
| Keywords: | aggregation; conflict; emigration; spatial Durbin model; Nepal Length: 27 pages |
| JEL: | C21 D74 F22 O15 |
| Date: | 2019–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:19/06&r=all |
| By: | Juan Carlos Cuestas (Department of Economics, Universitat Jaume I, Castellón, Spain); Merike Kukk (Department of Economics and Finance, Tallinn University of Technology, Estonia) |
| Abstract: | This paper aims to investigate the relationship between housing prices and their fundamental determinants using the example of Spain and considering the possibility of structural breaks in the relationship. We find that the cointegrating coefficient estimates are quite unstable and need to be estimated for different subperiods. Specifically we find that the standard fundamentals explain the behaviour of equilibrium house prices well during the boom-bust period. However, only corporate profit or capital income seems to explain the evolution in recent years. |
| Keywords: | house prices, capital income, wage income, DOLS, structural breaks, crisis |
| JEL: | E21 E51 R20 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2019/04&r=all |
| By: | L. (Lisa B.) Ryan; Andrew J. Kelly; Ivan Petrov; Yulu Guo; Sarah La Monaca |
| Abstract: | Building on COM/ENV/EPOC/CTPA/CFA/RD(2018)1, this document presents a social cost-benefit analysis of reforms in the motor vehicle taxes in Ireland since 2008. |
| Keywords: | Social cost-benefit analysis; Reforms in motor vehicle taxes; Ireland |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:oapubs:10197/9906&r=all |
| By: | Tim Pawlowski; Carina Steckenleiter; Tim Wallrafen; Michael Lechner |
| Abstract: | By merging administrative data on public finances of all municipalities in Germany with individual data from the German Socio-Economic Panel, we explore whether local public expenditures on sports facilities influences individual labor market outcomes. Our identification strategy follows a selection-on-observables approach and exploits the panel structure of the data covering 12 years between 2001 and 2012. The results of our matching estimations suggest that both women and men living in municipalities with high expenditure levels benefit, exhibiting approximately 7 percent of additional household net income on average. However, this income effect is fully captured by earning gains for men rather than women living in the household. Additional analysis suggests, that these gender differences, which can also be observed in terms of working time, hourly wage and employment status, appear plausible since women in the age cohort under consideration are less likely than men to engage in sports in general and in any of the publicly funded sports facilities in particular. Moreover, improved well-being and health are possible mechanisms that determine how the positive labor market effects for men may unfold. |
| Keywords: | Labor market effects, public expenditures, sports, health, well-being |
| JEL: | H72 H75 J31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1040&r=all |
| By: | Daryna Grechyna (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | This paper estimates political polarization in English counties during 1991–2007, based on the aggregated individual data from the British Household Panel Survey and using three variants of the political polarization measure. It analyzes the socioeconomic determinants of political polarization, using the indicators computed from the same survey. The results suggest that the statistical properties of three different polarization measures are similar, though there is some variation in the levels of polarization related to different policy statements. Greater income inequality, greater average age of county residents, greater share of employed full time, and lower share of natives are associated with greater political polarization in English counties. These findings shed some light on the microeconomic foundations of political polarization. |
| Keywords: | political polarization; income inequality; social inequality; survey data. |
| JEL: | D31 D63 D72 O15 |
| Date: | 2019–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:19/07&r=all |
| By: | Wang, Yusiyu (Tilburg University, School of Economics and Management) |
| Abstract: | The three essays collected in this PhD thesis examine how regulatory, political, and social environments shape capital markets. The first essay studies how regulation affects the behavior of financial analysts. The second essay studies how a political event affects investors’ political beliefs and firm disclosures. The third essay studies how spatial differences in the audit office location can explain variations in the going-concern opinions of auditors. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:809d31ac-b5a7-4e6c-b2eb-94746a914d6e&r=all |
| By: | Jean-Charles BRICONGNE; Alessandro TURRINI; Peter PONTUCH |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:leo:wpaper:2675&r=all |
| By: | KUTSUZAWA Ryuji |
| Abstract: | This paper makes an attempt to construct a property price index using the transaction price data for apartments in Tokyo. Property price indices are used to indicate economic vitality in urban areas in many cases; therefore, they are shown in US and European countries. In Japan, property price indices are constructed using the hedonic method, but it is criticized that the indices tend to be higher than the indices of land or detached houses due to omitted variable bias. The repeated sales method where only properties with multiple sales are analyzed creates the problems of sample selection bias and the problem of demonstrating the time-dependent effects of property attributes and neighborhood environment. I adopted the two-step Heckman correction to solve the problem of sample selection bias and analyzed the time-dependent influence of the environment and attributes on the apartment prices in order to create the property indices using the repeated sale prices, which are similar to the price indices of land for detached houses. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:19027&r=all |
| By: | Dessouky, Maged; Fu, Lunce; Hu, Shichun |
| Abstract: | Railway has always been an effective mode to transport both people and goods. Freight trains are about four times more fuel efficient than trucks and passenger trains and are popular because of their blend of efficiency, speed and low emissions. Increasing rail network capacity, however, can be difficult and expensive. Finding more efficient ways to utilize existing rail network capacity can mitigate the impacts of growing freight demand. New communication technologies, such as Positive Train Control (PTC), have the potential to improve efficiency and minimize delays in freight and passenger railway operations. PTC enables trains to communicate and share critical information such as speed and location with each other in real time. This research brief highlights findings from the project, "Integrated Management of Truck and Rail Systems in Los Angeles," which simulated the complex, busy freight and passenger rail corridor between downtown Los Angeles and Pomona to evaluate the effectiveness of proposed new scheduling and dispatching algorithms using PTC. View the NCST Project Webpage |
| Keywords: | Engineering, Delays, Freight trains, Freight transportation, Headways, Passenger trains, Positive train control, Railroad tracks, Switches (Railroads) |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt4c43d0gt&r=all |
| By: | Jessica F. Harding; Maia C. Connors; Allison Friedman Krauss; Nikki Aikens; Lizabeth Malone; Louisa Tarullo |
| Abstract: | Early care and education (ECE) teachers shape children's daily experiences in many ways. Specifically, teachers’ well†being, attitudes about child development, and teaching practices are central influences on children's learning. |
| Keywords: | Professional development , Early care and education , Early childhood teacher , Curriculum supports , Mentoring , Coaching , Developmentally appropriate attitudes , Math activities , Literacy activities , Depression , Job satisfaction , Well†being , Teaching practices , Head Start |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:982ddf29bc854d0b9f103d88d5160a25&r=all |
| By: | : Andrew Minster; Danielle Kavanagh-Smith; Lara-Zuzan Golesorkhi (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | This paper recognizes additional complicating factors, like social policy and employers' power to shape job prospects, to more accurately characterize the relationship between the labor market and migration. The authors discuss the need to improve the status of unions, create state-funded jobs guarantees, and reform retirement policy to support all workers in the face of growing employer influence. |
| Keywords: | immigration, job markets, undocumented, compensation, immigration economics, labor |
| JEL: | J6 J3 J5 J7 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2018-01&r=all |
| By: | Hanming Fang (Department of Economics, University of Pennsylvania); Linke Hou (Shandong University); Mingxing Liu (Peking University); Lixin Colin Xu (World Bank); Pengfei Zhang (Peking University) |
| Abstract: | We develop a theoretical model of how factional affiliation and local accountability can shape the policy choices of local officials who are concerned about political survivals, and subsequently affect the long-term local development. We provide empirical evidence in support of the theoretical predictions using county-level variations in development performance in Fujian Province in China. When the Communist armies took over Fujian Province from the Nationalist control circa 1949, communist cadres from two different army factions were assigned as county leaders. For decades the Fujian Provincial Standing Committee of the Communist Party was dominated by members from one particular faction, which we refer to as the strong faction. Counties also differed in terms of whether a local guerrilla presence had existed prior to the Communist takeover. We argue that county leaders from the strong faction were less likely to pursue policies friendly to local development because their political survival more heavily relied on their loyalty to the provincial leader than on the grassroots support from local residents. By contrast, the political survival of county leaders from the weak faction largely depended on local grassroots support, which they could best secure if they focused on local development. In addition, a guerrilla presence in a county further improved development performance either by intensifying the local accountability of the county leader, or by better facilitating the provision of local public goods beneficial to development. We find consistent and robust evidence supporting these assumptions. Being affiliated with weak factions and having local accountability are both associated with sizable long-term benefits that are evident in terms of a county’s growth and level of private-sector development, its citizens’ education levels, and their survival rates during the Great Chinese Famine. We also find that being affiliated with the strong faction and adopting pro-local policies are associated with higher likelihood of a local leader’s political survival. |
| Keywords: | Local Accountability; Factional Politics; Political Survival; Development Performance; Famine |
| JEL: | O1 O43 H70 D72 |
| Date: | 2019–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:19-009&r=all |
| By: | Hjalmarsson, Randi (Department of Economics, School of Business, Economics and Law, Göteborg University); Mitrut, Andreea (Department of Economics, School of Business, Economics and Law, Göteborg University); Pop-Eleches, Cristian (SIPA, Columbia University, USA) |
| Abstract: | The 1966 abolition and 1989 legalization of abortion in Romania immediately doubled and decreased by about a third the number of births per month, respectively. To isolate the link between abortion access and crime while abstracting from cohort and general equilibrium effects, we compare birth month cohorts on either side of the abortion regime. For both the abolition and legalization of abortion, we find large and significant effects on the level of crime and risky-behavior related hospitalization, but an insignificant effect on crime and hospitalization rates (i.e. when normalizing by the size of the birth month cohort). In other words, the Romanian abortion reforms did affect crime, but all of the effect appears to be driven by cohort size effects rather than selection or unwantedness effects. |
| Keywords: | Abortion; crime; Risky behavior |
| JEL: | I18 J13 J18 K42 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0769&r=all |
| By: | Fumitoshi Mizutani (Graduate School of Business Administration, Kobe University) |
| Abstract: | The purpose of this short paper is to summarize the state of rail transportation in Japan and to recount recent developments. Points of focus here are organization and types of competition in the rail industry in Japan, the evolution of passenger and freight rail transportation, yardstick regulation as a competition tool, and recent vertical separation in Japan. Several distinguishing factors of the Japanese rail industry are discussed. First, passenger rail transportation is still vital in Japan, but the freight rail business is weaker than in other major industrial countries. The second notable feature of the rail industry in Japan is the extraordinary number of rail operators, the vast majority of which are privately owned passenger railways. Third, most railways are vertically integrated, and entry into and exit from the market are not free but are regulated. Fourth, there are eight types of competition, among which is yardstick competition, an indirect form that is applied to separate markets and has existed in Japan since the 1970s. Fifth, as for the evolution of passenger and freight rail transportation, two developments—the Ekinaka business for passenger rail and the Eco-Rail-Mark certificate system for freight—are underway in the rail industry. Sixth, yardstick regulation is effective to some degree, but it is unknown how long the effect will continue. Last, while vertical integration is the norm in Japan, there are cases of vertical separation in some urban area operations. Recently, however, new types of vertical separation have been emerging, mostly for financial reasons. As competition in Japan’s rail industry has been very limited up to now, Japanese policy makers would be wise to seek lessons from the European experience. |
| Keywords: | Rail industry in Japan, vertical integration, yardstick regulation, Ekinaka business, Eco-Rail-Mark certificate system, privately owned railways |
| JEL: | L16 L25 L33 L43 L51 L92 R41 R48 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:kbb:dpaper:2019-03&r=all |
| By: | Boberg-Fazlic, Nina; Sharp, Paul |
| Abstract: | Despite the growing literature on the impact of immigration, little is known about the role existing migrant settlements can play for knowledge transmission. We present a case which can illustrate this important mechanism and hypothesize that nineteenth century Danish-American communities helped spread knowledge on modern dairying to rural America. From around 1880, Denmark developed rapidly and by 1890 it was a world-leading dairy producer. Using a difference-in-differences strategy, and data taken from the US census and Danish emigration archives, we find that counties with more Danes in 1880 subsequently both specialized in dairying and used more modern practices. |
| Keywords: | dairying; Immigration; Knowledge Spillovers; technology |
| JEL: | F22 J61 N11 N31 N51 O33 Q16 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13757&r=all |
| By: | Alexander, Diane (Federal Reserve Bank of Chicago); Schwandt, Hannes |
| Abstract: | Car exhaust is a major source of air pollution, but little is known about its impacts on population health. We exploit the dispersion of emissions-cheating diesel cars across the United States from 2008–2015 as a natural experiment to measure the health impact of car pollution—each cheating diesel car secretly polluted up to 150 times as much as gasoline cars. Using the universe of vehicle registrations, we demonstrate that a 10 percent cheating-induced increase in car exhaust increases fine particulate matter by 2 percent and rates of low birth weight and acute asthma attacks among children by 1.9 and 8.0 percent, respectively. These health impacts occur at all pollution levels and across the entire socioeconomic spectrum. |
| Keywords: | car pollution, health, emissions-cheating |
| JEL: | I10 I14 K32 J13 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12427&r=all |
| By: | : Bridget Fisher; Flávia Leite (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | Tax increment financing (TIF) has exploded in popularity on the municipal finance landscape as cities compete for scarce public resources to fund economic development. Previous studies evaluate TIF’s efficacy and ability to spark economic growth. This research expands the evaluation of TIF by questioning the widespread understanding of TIF as a “self-financing” tool through an analysis of its risks and costs to taxpayers. We present a case study of the Hudson Yards redevelopment project in New York City, the country’s largest TIF-type project. Our analysis reveals a project that, rather than being “self-financing,” cost the city $2.2 billion, largely due to tax breaks to incentivize development and standard development risks and costs. We conclude that positioning TIF and its variants as “self-financing” is incomplete and that analyzing costs and risks associated with TIF and TIF-variant projects is necessary to provide a robust cost-benefit analysis to those municipalities considering its implementation. |
| Keywords: | TIF, Hudson Yards, Municipal Fiscal Health, Costs and risks |
| JEL: | H30 E21 H2 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2018-02&r=all |