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on Urban and Real Estate Economics |
| By: | Ying Hui Chiang |
| Abstract: | The skyrocketing price has led housing to be unaffordable that young citizens are compelled to choose to rent over purchasing houses. The concentration of job opportunities in cities further enhances the demands for rental housing that in turns drives the rental level upwards. The elevated rent incentivizes young citizens to live in illegal rooftop extensions or partitioned small units in an inferior and hazardous environment. The problems of unaffordable housing have attracted attention from media and the government. In response, the government has augmented the supply of social housing and enacted Rental Housing Market Development and Regulation Act. However, there is a controversy over social housing being rent too high and furniture equipped inside unfit.Previous studies have examined the housing rent or residential rental markets. In comparison with the home sales market, however, the rental sector warrants more attention. Based on the state-maintained registration of real estate transactions and rental, and other rental housing listings websites operated by the private sector, this study intends to address three questions: determinants of Taipei's metropolitan housing rental, the spatial distribution of minority tenants and affordability of rental housing. As a whole, this study aims to clarify the housing demands of various tenant groups and problems associated with their living environment. The research findings are hoped to improve the housing policies and alleviate the housing difficulties encountered by the minority groups in the housing sectors. |
| Keywords: | Affordable Rent; Minority Tenants; Rental Housing Market; Residential Rental Price Model |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_150&r=all |
| By: | Michael Funke (Hamburg University Department of Economics and CESifo Munich); Danilo Leiva-Leon (Banco de España); Andrew Tsang (Hamburg University Department of Economics) |
| Abstract: | The recent increase in China’s house prices at the national level masks tremendous variation at the city level – a feature largely overlooked in the macroprudential literature. This paper measures the evolving heterogeneity in China’s house price dynamics across 70 major cities and assesses its relationship with housing market characteristics. We gauge the heterogeneity of house price dynamics using a novel regime-switching modelling approach to estimate the time-varying patterns of China’s city-level housing price synchronization. The estimates indicate an increasing synchronization leading up to 2015, and a decoupling pattern thereafter, which is associated to the heterogeneous strength of regional macroprudential policies. After sorting city-level housing prices into four clusters sharing similar cyclical features, we document high synchronization within clusters, but low synchronization among them. The empirical evidence suggests that differentials in the growth of population, income, and air quality are relevant explanatory factors of housing price synchronization among cities. |
| Keywords: | house prices, Markov-Switching models, synchronization, China |
| JEL: | E31 E32 C32 R11 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1930&r=all |
| By: | Andrew Bacher-Hicks; Stephen B. Billings; David J. Deming |
| Abstract: | Schools face important policy tradeoffs in monitoring and managing student behavior. Strict discipline policies may stigmatize suspended students and expose them to the criminal justice system at a young age. On the other hand, strict discipline acts as a deterrent and limits harmful spillovers of misbehavior onto other students. This paper estimates the net impact of school discipline on student achievement, educational attainment and adult criminal activity. Using exogenous variation in school assignment caused by a large and sudden boundary change and a supplementary design based on principal switches, we show that schools with higher suspension rates have substantial negative long-run impacts. Students assigned to a school that has a one standard deviation higher suspension rate are 15 to 20 percent more likely to be arrested and incarcerated as adults. We also find negative impacts on educational attainment. The negative impacts of attending a high suspension school are largest for males and minorities. |
| JEL: | I24 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26257&r=all |
| By: | Mustapha Bangura; Chyi Lin Lee |
| Abstract: | Little studies have been done on the determinants of housing affordability at a disaggregated level despite the existence of socio-economic and demographic disparities across metropolitan cities such as Greater Sydney. This study therefore gauges the determinants of housing affordability in different regions of Greater Sydney using data at Local Government Area (LGA) over 1991-2016 with a System Generalised Method of Moments (GMM). The study has identified the differential geography of housing affordability determinants among regions (i.e. low and high income regions). Although house price and average income are key drivers of housing affordability across all regions, the differences in the magnitudes of these determinants between regions have also been documented. Specifically, low income regions (i.e. western, inner-west and southern regions) are more sensitive to income and house price change than high income regions (i.e. eastern and northern regions). In addition, low income regions are more sensitive to other determinants compared with high income regions. The empirical results show that housing supply is a significant driver of affordability in the relatively low income regions such as western, inner-west and southern regions of the city but insignificant in the high income eastern and northern regions. Similarly, resident population and median rent are also statistically significant drivers of affordability in the relatively low income regions but insignificant in high income regions. The implications of the study have also been discussed. |
| Keywords: | Greater Sydney; Housing Affordability; housing affordability determinants; regional; Submarket |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_162&r=all |
| By: | Carlos Garriga (Federal Reserve Bank of St. Louis); Aaron Hedlund (University of Missouri); Yang Tang (Nanyang Technological University); ping wang (Washington University in St.Louis) |
| Abstract: | This paper explores the contribution of the structural transformation and urbanization process in the housing market in China. City migration flows combined with an inelastic land supply, due to entry restrictions, has raised house prices. This issue is examined using a multi-sector dynamic general-equilibrium model with migration and housing market. Our quantitative findings suggest that this process accounts for about 80 percent of urban housing prices. This mechanism remains valid in an extension calibrated to the two largest cities where housing booms have been particularly noticeable. Overall, supply factors and productivity account for most of the housing price growth. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1511&r=all |
| By: | Linchuan Yang; Kwong Wing Chau; Zhu Yuan |
| Abstract: | Previous research suggests that access to public services, generally, has a positive impact on housing prices. However, most, if not all, studies are silent on whether the effect varies across different housing submarkets. For example, wealthy households are likely to own cars and thus have high transportation mobility. Thus, they may not value access to public services in the same way as low-income households do. We use 22,586 second-hand housing data in Xiamen, China to test the differential impact of access to public services on housing prices in the high- and low-end submarkets. Low- and high-end housing submarkets are defined according to price. Results from estimating the hedonic pricing and spatial econometric models confirm several findings: (1) the benefits of access to most public services are capitalized in housing prices; (2) access to transit, commercial facility, education, and sports/cultural center has significantly positive impacts on house prices in the low-end housing submarket. Yet, this finding is less applicable to the high-end counterpart; (3) the effect of access to public services on housing prices varies across the two submarkets: typically, access to public services has lower positive impact for high-end properties than for the low-end ones; and (4) interestingly, access to shopping center has a larger positive impact on housing prices in the high-end housing submarket than in the low-end counterpart. Practical implications of our findings are also discussed. |
| Keywords: | access to public services; capitalization effect; Market Segmentation; Property price; spatial econometric model |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_12&r=all |
| By: | Bismark Aha |
| Abstract: | Housing issues have become increasingly important throughout the developed world and have attracted much interest amongst economists, policymakers and the general public, following the catastrophic impacts of the 2007/08 global financial crisis. Globally, housing finance has undergone substantial changes, in terms of structure, composition and regulation, and witnessed considerable expansion within the last three decades. While studies abound seeming to explain national and regional house price movements, the dynamics of the housing market are still not widely understood. Though the importance of finance in the housing industry is generally well appreciated, very little attention has been paid to the drivers of housing finance and their impact on house prices. The determinants of mortgage credit growth and how these interact with macroeconomic, fiscal and regulatory policy variables to shape house prices are still not well understood. This study seeks to make an invaluable contribution to this understanding. by analysing house price dynamics in the UK from 1967 to 2017 and examining the role of mortgage credit in the performance of the housing market. The key drivers underlying housing finance expansion over the last 50 years are also investigated, paying particular attention to the impact of macroeconomic, fiscal and regulatory policy variables. |
| Keywords: | House Prices; Housing Finance; mortgage market; residential property market |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_315&r=all |
| By: | Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Felipe Schwartzman |
| Abstract: | In the U.S., cognitive non-routine (CNR) occupations associated with higher wages are disproportionately represented in larger cities. To study the allocation of workers across cities, we propose and quantify a spatial equilibrium model with multiple industries that employ CNR and alternative (non-CNR) occupations. Productivity is city-industry-occupation specific and partly determined by externalities across local workers. We estimate that the productivity of CNR workers in a city depends significantly on both its share of CNR workers and total employment. Together with heterogeneous preferences for locations, these externalities imply equilibrium allocations that are not efficient. An optimal policy that benefits workers equally across occupations incentivizes the formation of cognitive hubs, leading to larger fractions of CNR workers in some of today's largest cities. At the same time, these cities become smaller to mitigate congestion effects while cities that are initially small increase in size. Large and small cities end up expanding industries in which they already concentrate, while medium-size cities tend to diversify across industries. The optimal allocation thus features transfers to non-CNR workers who move from large to small cities consistent with the implied change in the industrial composition landscape. Finally, we show that the optimal policy reinforces equilibrium trends observed since 1980. However, these trends were in part driven by low growth in real-estate productivity in CNR-abundant cities that reduced welfare. |
| JEL: | E23 E24 H23 H71 J61 R13 R23 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26267&r=all |
| By: | Lena Fahrner; Theresa Kotulla; Elisabeth Beusker |
| Abstract: | Cooperative housing systems vary depending on different aspects for example in which urban context they are formed, which country specific legislation they observe and which purpose they suit. In general, a housing cooperative is a coalition of people, who wants to be shareholders of real estate projects. On one hand, being member of such a legal corporation is a kind of home ownership. The cooperative corporation owns the land and the buildings. On the other hand, members pay a monthly amount to cover the running expenses of all real estates of the cooperative. Summarizing, they live in the cooperative and they run the cooperative. Today, members of housing cooperatives have different motivations to become part of a cooperation. The affordability of the dwelling is just one of the advantages. Urban structures and residential markets change constantly. Furthermore, the expectations of the population regarding their housing conditions change. These are some of the reasons why the motivations to become member of a housing cooperative vary widely. Within this paper different cooperative housing systems in Sweden, Germany and the USA are analyzed and compared. Thereby, the focus is on the motivations of the members. The aim of this research is to illustrate the different motives of people to become part of a housing cooperative in the selected countries. Sweden, |
| Keywords: | Motivations to become a member of a housing cooperative: Comparison of the national characteristics of Sweden, Germany and the USA |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_118&r=all |
| By: | Cath Jackson; Allison Orr; Joanna Stewart; James White |
| Abstract: | The retail sector is fundamental to many local, regional and national economies and social structures, yet is experiencing a prolonged period of change and uncertainty. Rapid and significant changing consumer behaviour, retailer rationalisation and financial pressures, and increasing concerns over anti-social behaviour and the accessibility and security of traditionally public places are significant economic and social drivers of change. Policy-makers, in response to such challenges, have sought to respond by seeking to enable the re-creation of more resilient and adaptable centres within the UK’s retailing hierarchy, recognising and supporting their role as multi-functional places. Here, we begin a new research project that seeks to explore resilience in the retail sector using the five case study cities of Edinburgh, Glasgow, Hull, Liverpool and Nottingham. The first step is mapping previously disparate strands of secondary data to begin to reveal links between ownership, use, the allocation of space for diverse service provision, leisure and social interaction and the adaptive capacity of the built environment. These data have not been brought together previously and, to do so, represents a very significant challenge and a significant opportunity for the advancement of knowledge. The consequent analysis of urban change will reveal areas not previously explored or, therefore, understood. |
| Keywords: | adaptive capacity; Land Use; Mapping; property ownership; Retail |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_211&r=all |
| By: | Sophia Gilbukh (Baruch College, CUNY); Paul Goldsmith-Pinkham (Federal Reserve Bank of New York) |
| Abstract: | The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent to help them transact a house. However, low barriers to entry and fixed commission rates result in a market where inexperienced intermediaries have a large market share, especially following house price booms. Using rich micro-level data on 10.4 million listings, we show that seller agents’ experience is an important determinant of client outcomes, particularly during real estate busts. Houses listed for sale by inexperienced agents spend more time on the market and have a lower probability of selling. We then study the aggregate implications of the agents’ experience distribution on real estate market liquidity by building a theoretical entry and exit model of real estate agents with aggregate shocks. Several policies that raise the barriers to entry for agents are considered: 1) increased entry costs; 2) lower commission rates; and 3) more informed clients. Across each counterfactual, increasing barriers to entry shift the distribution of agents across experience to the right, improves liquidity, and reduces the amplitude of liquidity cycles in the housing market. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:932&r=all |
| By: | Alexis Pourcelot |
| Abstract: | The purpose of this paper is to understand the housing rents formation and their dynamics over almost half century (1970-2013) by sector (private/public) and location (Paris region, big, medium and small urban areas). We underline the role played by physical and locational characteristics in the formation of rents. Dynamics and cycles in rents over the period are tackled using macro-economic factors as well as market variables and housing policy. Likewise, we are able to show the impact of specific housing policies such as APL on rents. This stratified approach, will give a relevant overview of the French market for international investors. Likewise, valuation of asset prices is relevant and useful for practitioners (appraisers, brokers, developers, investors, fund managers, analysts and market researchers) but also policy-makers. In order to conduct this analysis we will use the French Housing Survey from the French Statistical and Economic Study Institute (INSEE). This survey describes the French housing stock as well as the household tenure choice and their housing consumption. Physical characteristics and dwelling quality such as size, sanitary convenience, heating, location, environment and security are topics addressed by the survey. The physical and contractual variables used in the empirical strategy got a high power of explanation of our stratified model. Regarding time variation, we expect a positive change of rents over the period 1970-2013. Nevertheless, when we focus on the real rent variation, we find that variation is spatially heterogeneous across urban areas. We also find several cycles in the rental market with a strong decrease in real rent in all urban areas over the period 1970-1984. Likewise, we highlight the inflationary effect of APL (housing subsidy) on rents. |
| Keywords: | Boom anfd bust cycles; Hedonic Model; Housing rents |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_306&r=all |
| By: | Yang Chen; Linchuan Yang |
| Abstract: | Urban rail transit (URT) plays a major role in mitigating numerous contemporary problems (e.g., traffic congestion and greenhouse gas emissions). A multitude of Chinese cities has released URT development plans. However, construction and operation of URT would cause heavy debt burdens for local government. Value capture schemes can be used to finance URT development and its first step is understanding the relationship between URT and property prices. Though numerous studies in the West have focused on this topic, limited studies have been conducted in urban China. Moreover, most studies are silent on 1) whether or not transfer stations provide larger premiums than non-transfer stations, and 2) whether or not URT accessibility benefits are more perceptible in peripheral areas than in central areas. In light of this, based on 722 residential complexes samples in Shenzhen, China, a set of hedonic pricing models is developed to examine the impacts of URT accessibility on property values. The findings are as followings: (1) URT accessibility offers positive externalities; (2) An inverted-U relationship exists between URT accessibility and property prices; (3) Transfer stations provide larger accessibility benefits than non-transfer stations; (4) the URT accessibility benefits are more notable in peripheral areas than in central areas. Though the first two findings are in line with most of the relevant studies, the last two findings have seldom been identified in existing studies, which represent the potential contributions of this work. Practical implications of our findings, such as diversified or location-specific value capture schemes are further discussed. |
| Keywords: | Hedonic Pricing Model; Property price; Sub-market effect; Transfer station; Urban rail transit accessibility |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_89&r=all |
| By: | Song-hee Baek; Myounggu Kang |
| Abstract: | In recent years, real estate prices in Seoul have risen sharply and this phenomenon has not been adequately explained by existing theories. This study will examine the effect of people's sentiment on real estate prices. The variables of real estate price are based on the National Apartment Sale Price Index and the Seoul Apartment Sale Price Index of Korea Appraisal Board. And the variable of sentimental value is based on the real estate market sentiment index of the Ministry of Land, Transport and Maritime Affairs. Other economic and social variables include interest rates and stock price indexes, and their effects on long and short term to apartment price index. The cointegration test is used to examine long-term effects and the vector error correction model is used to see the short-term effects. Empirical results show that consumer sentiment affects the whole country and Seoul in the long run. In addition, it affects Seoul only in the short term. Moreover, sentimental variables are affected by Seoul apartment price index in the short term. In other words, the sentiment affects property prices in short and long term, and the relationship between sentimental variables and Seoul apartment price index is self - reinforcing. This implies a possibility of a bubble in the increasing price of the Seoul real estate market. |
| Keywords: | Cointegration; Consumers Sentiment; Housing Price; Vector Error Correction Model(VECM) |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_274&r=all |
| By: | Chien-Wen Peng; I-Chun Tsai |
| Abstract: | A change of housing price has great impact on households’ housing equity and further moving decision. Some previous studies reveal that whether owning a home is an important factor of residential mobility, and a declining housing price may cause mobility lock-in effect and higher unemployment (Henely1998; Hsieh et al. 2003; Zabel 2012; Blozea and Skak 2016). However, some other studies find that the influences of housing price on residential mobility and unemployment are not significant as expected (Engelhardt 2003; Coulson and Grieco 2013; Vallentta 2013) or the influences are only significant in a smaller regional level but not significant in a national level (Modestino and Dennet 2013). This study reexamines their relationship by using panel cointegration method and the city level panel data during 1994 and 2017 in Taiwan. The empirical results reveal that housing price are cointegrated with migration and unemployment, and the influences of housing price on migration and unemployment are significantly positive and negative respectively in the long run. However, the influences of housing price on migration and unemployment are not as significant as expected in the short run. We used quantile regression to further examine their short run relationships. It shows that the influence of housing price on migration and unemployment might be asymmetric. |
| Keywords: | Housing Price; lock-in effect; residential mobility; unemployment rate |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_136&r=all |
| By: | Daniel Greenwald (MIT); Adam Guren (Boston University) |
| Abstract: | o what extent did an expansion and contraction of credit drive the housing boom and bust? The existing literature lacks consensus, with findings ranging from credit having no effect to credit driving the entire house price cycle. We show that the key difference behind these disparate results is how rental markets are modeled: assuming perfect segmentation between rental and owner-occupied housing leads to large effects of credit on house prices, while assuming frictionless rental markets makes credit irrelevant for house prices. We develop a model with frictional rental markets that nests both extremes and allows us to consider intermediate cases. We argue that the relative elasticity of the price-to-rent ratio and homeownership with respect to an identified credit shock is a sufficient statistic to measure these frictions, estimate this moment, and use it to calibrate our model. Our result imply that rental markets are highly frictional and close to segmented, consistent with large effects of credit on house prices. Experiments using the structural model imply that credit conditions explain 47% - 57% of the rise in price-rent ratios over the boom. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1334&r=all |
| By: | Lida Aminian |
| Abstract: | The prominent aim of most housing studies is to examine residential situations in order to understand housing demands and future consequences on the surrounding urban environment. Most research on housing satisfaction has been performed in socio-behavioral sciences and has looked at housing satisfaction as an essential explanatory input to study migration patterns, affordable housing and residential mobility. Nevertheless, in few studies, housing satisfaction has been assessed to understand residents’ subjective well being. This little emphasis on housing in terms of quality of life measurement highlights the gap in this research stream and the need for more detailed studies on this interdisciplinary field.This paper has aimed to enhance the understanding of the housing satisfaction concept and how this major life domain is affected by socio-demographic characteristics of individuals as well as the characteristics of one’s house. Moreover, the role of housing satisfaction on quality of life is investigated. Using the data that is collected among the residents of the city of Eindhoven in the Netherlands, this study applied path analysis method to capture the links between various variables and their impacts on overall housing satisfaction. The findings highlight the major impact of satisfaction with ownership, housing type and dwelling design on overall house satisfaction . Moreover, satisfaction with housing shows a significant and direct influence on the overall quality of life subjectively experienced by residents. |
| Keywords: | Dwelling; Housing satisfaction; Life domains; Measurement; Quality Of Life (QOL) |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_376&r=all |
| By: | Yuewen Gu; Ping Lyu |
| Abstract: | Research objectives:Based on the analysis framework of behavioral economics, this paper explores the regional differences of migrant workers' housing.Research methods:theoretical analysis, spatial error model (SEM).Research contents:(1) At the micro intergenerational level, analyse housing between the new generation and the old generation of migrant workers by the influence of the regional differentiation.(2) At the macroeconomic level, the influences of different channels such as economic development, industrial structure and urban absorption on the housing of migrant workers are studied and discussed.(3) Taking urban and rural development as the condition, analyze the impact of regional differences on the housing of migrant workers;(4) Discuss the degree of regional differences of migrant workers housing in different periods, such as the short term and the long term.Research conclusion:In view of the intergenerational differences of migrant workers, we should improve the urban housing conditions of the new generation of migrant workers respectively, and give full play to the wealth effect of rural housing of the old generation of migrant workers. And according to the different regional characteristics, sub - city policy. |
| Keywords: | behavioral economics; Housing for migrant workers; Regional differences; Spatial error model |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_82&r=all |
| By: | Elena Ionascu; Marilena Mironiuc; ; Maria Carmen Huian |
| Abstract: | The stability of the housing market is crucial for sustainable development, and the monitoring and assessing housing price dynamics has become a standard practice in macro-financial supervision. In accordance with the EU approach to sustainable development, the paper aims to explore the relationship between housing prices as an informative indicator of the market and sustainability dimensions in the EU countries. Through an econometrical approach, the social and environmental implications on the housing market are investigated in relation to economic development as the most important factor for supporting sustainable practices. Variables that describe housing conditions, living environments and housing affordability are used as social measures, and energy consumption, renewable energy consumption and gas emissions as indicators of the environment. The low perception of the households about the sustainable effects on the housing prices is outlined. Housing fundamentals, such as disposable income, credit conditions and housing supply (construction costs and building permits) remain the most important factors that determine the household decisions. Based on the research result, policy implications are formulated in relation to the current conditions for sustainable development. |
| Keywords: | Environment; Housing Prices; policy implications; Social; sustainability |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_345&r=all |
| By: | Bellés Obrero, Cristina (University of Mannheim); Lombardi, María (Universidad Torcuato Di Tella) |
| Abstract: | We study the impact on student achievement of a nationwide teacher pay-for-performance program implemented in Peruvian public secondary schools in 2015. Schools compete in a tournament primarily based on 8th graders' performance in a standardized test, where the principal and teachers of the top 20 percent of schools receive a substantial bonus. We perform a difference-in-differences estimation comparing the internal grades of 8th and 9th graders of the same school, before and after the program. We find a precisely estimated zero effect on student achievement, and we reject impacts greater than 0.017 standard deviations, well below those previously found in the literature. We provide evidence against a series of potential explanations, and argue that this zero effect could be a consequence of teachers' uncertainty about how to improve their students' performance in the standardized test tied to the bonus. |
| Keywords: | education, teachers, incentives, compensation, Peru |
| JEL: | I21 M52 J4 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12600&r=all |
| By: | Kevin Cutsforth; Michael White |
| Abstract: | The global financial crisis caused house prices to fall across the UK and in many other countries. Even before the crisis, as evidenced by the increased age of first owner-occupation, younger age groups found it harder to enter homeownership due increases in the house price to income ratio. This was compounded by the financial crisis that resulted in tighter lending conditions and decreases in the maximum available loan-to-value (LTV) ratio. Whereas LTVs before the crisis could reach 100%, after the crisis the maximum available had fallen to 75%. This made access to homeownership even harder particularly for younger age cohorts who struggled to save for large downpayments.The UK government sought to simulate the housing market, make homeownership achievable, and overcome downpayment constraints via the introduction of the Help-to-Buy scheme in 2013. The scheme enabled borrowers to effectively increase their LTV to 95% reducing the downpayment hurdle. Further, it stimulated new housing development and the proportion of first-time buyers increased.Using panel data from the English Housing Survey from 2008 to 2016, our research seeks to identify the impact of this policy intervention, amongst a range of other factors, on tenure choice and transitions. In addition, it seeks to identify how impacts vary across age groups and regions and therefore provide evidence as to who and where have been impacted most by policy change. |
| Keywords: | Housing Policy; Panel Data; Tenure Choice |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_317&r=all |
| By: | Frans Schilder |
| Abstract: | The Netherlands, like countries throughout Europe, face enormous challenges realizing the goals set in the 2015 Paris agreement. Real estate, and more specifically residential real estate, bears the potential to contribute significantly to realizing climate goals. Towards meeting the Paris agreement goals the Dutch housing market will need to become energy neutral in 2050. Progress in making housing more energy efficient has been slow so far. Possibly as a result of the slow pace of investments in energy efficiency anticipated price decreases following the industrialization of energy solutions are yet to be realized. Housing associations have recently proposed to become the frontrunner in the energy transition on the housing market: economies of scale, a limited number of agents owning roughly 30% of the total housing stock, and fairly deep pockets make good arguments for this ambition. However, this ambition comes at a cost as well: how feasible is kickstarting the energy transition within the sector in charge of housing the lowest income households? What are the necessary conditions to make this kickstart work? And what are broader welfare implications, in terms of (reduced investment potential in) local living conditions, and affordability? Some preliminary findings of a mixed-methods study. |
| Keywords: | Energy transition; Housing Associations; Mixed-methods; Social Housing |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_313&r=all |
| By: | Tatjana Kleineberg (Yale) |
| Abstract: | Neighborhoods in the US differ substantially in the educational and economic opportunities that they offer to children who grow up in them. We develop and estimate a structural spatial equilibrium model of residential and education choice to study the effects of school financing policies on education outcomes, intergenerational mobility, and welfare at the local and aggregate level. Our model generates persistent effects of children's neighborhoods on adult outcomes through local labor market access and local human capital formation. Local school funding is an important component of the latter. Schools are funded through income taxation and local rent taxation. We estimate the model using a range of US Census datasets by fitting model predictions to regional data of the actual US geography. We use the estimated model to study the effects of counterfactual policy interventions, in particular, the equalization of school funding across all students and the use of rent subsidies. We find that general equilibrium responses in local prices and local skill compositions significantly dampen the partial equilibrium effects of the policy, so that effects on education outcomes and intergenerational mobility are positive but only moderate in general equilibrium. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1197&r=all |
| By: | Michael White; Qiulin Ke |
| Abstract: | Economic integration and regional connectedness within countries may imply limited opportunities for investment portfolio diversification. Previous research on UK office markets has identified similarities between regions in relation the sensitivity of rent to demand and supply side factors (Hendershott et al., 2002). Furthermore, Attanasio et al., (2009) note that there may be some form of common causality that links regions therefore leading to significant correlations. However, regions vary in value added and as indicated by Stevenson et al., (2014), the performance of real estate assets is driven by economic fundamentals more so than in the case of capital markets. While international investment may deliver portfolio diversification, the fact that real estate investment is highly concentrated in a small number of key cities whose economies are often underpinned by the financial sector, may result in renewed interest in, and a re-examination of, investment opportunities in regions within a given country.Therefore, in this paper we examine office markets in the six main regional cities in the UK, after London. First, we provide evidence of the extent to which regional real estate markets and economies are correlated. Second, we adopt a generalised vector autoregressive approach to capture return and volatility spillovers. Third, following the research developed by Diebold and Yilmaz (2009) we employ variance decomposition analysis to find the share of each city’s own variance to itself and to other cities. Finally, we whether relationships are stable or time varying and therefore the extent to which diversification benefits may still exist. |
| Keywords: | regional connectedness; Spillover effect; UK office market; Volatility |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_289&r=all |
| By: | Enrico Moretti |
| Abstract: | The high-tech sector is increasingly concentrated in a small number of expensive cities, with the top ten cities in “Computer Science”, “Semiconductors” and “Biology and Chemistry”, accounting for 70%, 79% and 59% of inventors, respectively. Why do inventors tend to locate near other inventors in the same field, despite the higher costs? I use longitudinal data on top inventors based on the universe of US patents 1971 - 2007 to quantify the productivity advantages of Silicon-Valley style clusters and their implications for the overall production of patents in the US. I relate the number of patents produced by an inventor in a year to the size of the local cluster, defined as a city × research field × year. I first study the experience of Rochester NY, whose high-tech cluster declined due to the demise of its main employer, Kodak. Due to the growth of digital photography, Kodak employment collapsed after 1996, resulting in a 49.2% decline in the size of the Rochester high-tech cluster. I test whether the change in cluster size affected the productivity of inventors outside Kodak and the photography sector. I find that between 1996 and 2007 the productivity of non-Kodak inventors in Rochester declined by 20.6% relative to inventors in other cities, conditional on inventor fixed effects. In the second part of the paper, I turn to estimates based on all the data in the sample. I find that when an inventor moves to a larger cluster she experiences significant increases in the number of patents produced and the number of citations received. Conditional on inventor, firm, and city × year effects, the elasticity of number of patents produced with respect to cluster size is 0.0662 (0.0138). The productivity increase follows the move and there is no evidence of pre-trends. IV estimates based on the geographical structure of firms with laboratories in multiple cities are statistically similar to OLS estimates. In the final part of the paper, I use the estimated elasticity of productivity with respect to cluster size to quantify the aggregate effects of geographical agglomeration on the overall production of patents in the US. I find macroeconomic benefits of clustering for the US as a whole. In a counterfactual scenario where the quality of U.S. inventors is held constant but their geographical location is changed so that all cities have the same number of inventors in each field, inventor productivity would increase in small clusters and decline in large clusters. On net, the overall number of patents produced in the US in a year would be 11.07% smaller. |
| JEL: | J01 R11 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26270&r=all |
| By: | Nicole Lux |
| Abstract: | The current papers examines the sensitivity of loan characteristics on mortgage default probability for UK commercial mortgages. Commercial real estate (CRE) mortgages are major asset holdings for commercial banks, life insurance companies and thrift institutions. The slumping market for real estate threatened to drag down regional banks and other smaller financial institutions in the 08/09 financial crisis and led to the collapse of some financial institutions. Despite the prominence of CRE mortgages, modeling and analysing credit risk of CRE mortgages has been lagging behind those of non-CRE commercial loans. Modelling the probability of default for commercial real estate mortgages is more complicated than that for non-commercial real estate loans. Many distressed loans passed traditional underwriting standards suggesting that, in addition to LTV and DSCR ratios, other characteristics should be taken into consideration such as the inclusion property characteristics. The accuracy of default prediction is tested comparing two traditional statistical methods a) logistic regression (logit) and b) multiple discriminant analysis (MDA) using a unique dataset of defaulted commercial loan portfolios from 60 financial institutions lending in the UK between 2005 – 2017. Overall, both models show that the inclusion of property characteristics such as geography and asset type have been significant factors in determining default probability and improve model accuracy, while LTV shows no clear significance. |
| Keywords: | commercial mortgage risk; Credit risk modelling; linear discriminant analysis; Logistic Regression; Probability of default (PD) |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_86&r=all |
| By: | Muhammad Zaim Razak; Damian Damianov |
| Abstract: | Despite their short history of existence, Japanese REITs (J-REITs) play an increasingly important role as a vehicle for property investment. In this paper we examine the long-run relationship and short-run dynamics between REITs, direct real estate assets, and the stock market in Japan. Using a vector error correction model, we explore whether J-REITs behave like direct real estate assets or like common stocks. Our study is based on general and sector specific appraisal-based monthly real estate indices covering the retail, office, residential and hotel sectors. Cointegration as well as exclusion, and weak exogeneity tests indicate that in the long run J-REITs are good substitutes for direct real estate assets but not for stocks. That is, they are a liquid alternative to unsecuritised real estate which offers diversification benefits to long-horizon investment in the Japanese stock market. These findings are robust and hold across all real estate sectors. Analysis of forecast error variance decompositions and impulse responses shows that shocks to the J-REITs market have a substantial impact on the direct real estate market and the stock market. In contrast, shocks these two markets contribute substantially less of the forecast error variance of J-REITs. Further, Granger causality tests reveal a unidirectional causal relationship from J-REITs to the other asset classes providing evidence that information aggregation and price discovery occurs predominantly in the J-REITs market. |
| Keywords: | Cointegration; Price Discovery; Real Estate Investment; Sector-level REITs; Substitutability |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_119&r=all |
| By: | Michel Serafinelli (University of Essex); Guido Tabellini (Bocconi University) |
| Abstract: | Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. Our main variable of interest is the number of famous creatives (scaled to local population) born in a city during a century, but we also look at famous immigrants (based on location of death). We first document several stylized facts: famous births and immigrants are spatially concentrated and clustered across disciplines, creative clusters are persistent but less than population, and spatial mobility has remained stable over the centuries. Next, we show that the emergence of city institutions protecting economic and political freedoms and promoting local autonomy facilitates the attraction and production of creative talent. |
| Keywords: | innovation, agglomeration, political institutions, immigration, gravity |
| JEL: | R10 O10 J61 J24 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1909&r=all |
| By: | Tayo Odunsi |
| Abstract: | The Nigerian real estate market has grown over the years. From contributing about 3.37% to GDP in 2010, it contributed 6.79% to GDP in 2017 (as per the data from the Nigeria Bureau of Statistics). It has also improved in transparency parameters; from being ranked 96th in the JLL Global Real Estate Transparency Index (2012) it was ranked 69th in the 2018 rankings. However, there is very little formally and consistently reported real estate data, with no accessible property databank and there is no reliable benchmarks such as house price index in the country. This lack of data and state of opacity has hindered extensive and empirical analysis of the local market. For the residential real estate sector, a reliable House Price Index is crucial in information flow across various stakeholders in the market and setting expectations based on fundamental aspects of the market, thereby reducing measurement error issues in empirical estimations.In this PhD work, I am undertaking three strands of research. First, we would develop a house price index based on transaction data using established methods (such as hedonic and repeat sales frameworks). Second, we would examine the dynamics of ownership and renting market using user cost of capital framework. Third, we would undertake a detailed analysis of the informal market structure and recommend policy framework for bringing efficiency in the housing market.Standard economic theoretical frameworks (related to revealed preference, symmetric information, market transmission channels) will be brought in and research hypotheses will be tested using appropriate empirical methods (e.g. regression-based analysis) and property transaction as well as economic indicator data. |
| Keywords: | housing; Index; Ownership; Renting |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_331&r=all |
| By: | Arthur Acolin |
| Abstract: | This article analyses how differences in outcomes between owner and renter households vary across countries based on institutional features such as rental lease lengths. A substantial literature is devoted to identifying benefits associated with owning relative to renting (including in terms of civic participation, income, children educational outcomes, health) and the mechanisms driving these differences. The higher level of residential stability associated with homeownership has been identified as a potential driver. This paper uses microdata from the European Union Statistics on Income and Living Conditions (EU-SILC) for 24 countries to explore whether differences in outcomes between owners are renters vary across countries and whether they are systematically smaller when the differences in length of residence across tenure is smaller. Given the wide differences in tenure mix and length of residence across European countries, the EU-SILC data provides the opportunity to identify to what extent outcomes such as income, workforce participation, life satisfaction and social engagement are more similar across tenure types when length of residence is more similar. The results indicate that the direction of the relationship between tenure and the selected outcomes tend to be similar across countries although stronger in some than other with owners generally obtaining more desirable outcomes. When looking at the relationship between differences in length of tenure for owners and renters and outcomes, findings suggest that owners have outcomes more similar to renters in countries in which the difference is smaller. These results point to the potential benefits of policies that would increase residential stability for renters. |
| Keywords: | European Union; Homeownership benefits; Length of residence; Tenure |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_65&r=all |
| By: | Adrian Toschka |
| Abstract: | Purpose: High rents cause displacement and segregation in German cities, which is why self-used residential property in cities is politically promoted. However, the affordability of homeownership is also declining in cities, which is why, groups of private individuals form private joint building ventures to buy urban vacant land to develop and build multi-family houses for later owner -occupancy. Therefore, it was investigated if private joint construction projects really represent an alternative to buying property from a conventional developer for small and middle-income households.Design/methodology/approach: First, a cluster analysis is performed to identify disparities within the collected financing data of the members of joint building ventures. Second, the typical members of joint building ventures are characterized and compared with data from the Socio-Economic Panel (SOEP) using a regression analysis. The evaluation of the data also determines whether the construction costs of joint building projects are relatively low, and whether this makes self-used residential property affordable for households with low and middle income. Findings: The cluster analysis enabled typical groups of people involved in joint building ventures. In conjunction with the subsequent regression analysis, it has been revealed that members of joint construction projetcs are highly homogeneous in terms of formal literacy. However, the comparison with a reference group revealed that the decision for a collective construction project does not depend on the level of net household income. As the projects are partly carried out by non-professional groups, different stakeholders have developed various preconditions through increased professionalization in order to minimize the uncertainty of the construction projects. |
| Keywords: | Affordable Housing; Collective Building; Homeownership |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_305&r=all |
| By: | Charles Olivier Amédée-Manesme; Francois Des Rosiers; Isaora Dialahy; Fluet Claude |
| Abstract: | A large number of researches have evaluated price linkages in spatially separated markets. In this work, we analyse whether and to what extent the three major Canadian housing markets– Montreal, Toronto and Vancouver–are integrated and if this relation is time-varying. The integration of markets can have important implications for price discovery, housing demand mobility and more importantly for regulations. The question of housing market integration is particularly questioning in Canada. Indeed, some local markets in particular Vancouver and Toronto have recently experienced a strong growth attributed namely to wealthy foreign investors. Local authorities have tried to circumvent this problem by imposing a special foreign- buyer tax in order to favor local buyers. We analyse how these taxes may have shifted investors’ focus to other markets. Our results confirm the presence of thresholds and indicates strong support for market integration and demand shifting. In particular, we exhibit how adjustment to shocks may take months to be completed. We also show that there is a strong contribution from other markets to the volatility of real estate prices in each Canadian city. |
| Keywords: | housing; Integration; real estate |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_250&r=all |
| By: | George A. Matysiak (Krakow University of Economics); Krzysztof Olszewski (Narodowy Bank Polski, Warsaw School of Economics) |
| Abstract: | We employ two methodologies in order to identify groupings of cities and to analyse the factors which drive convergence in residential prices across Polish prime markets over the period 2007-2018. The Phillips and Sul (2007) methodology is first used to identify convergence in primary residential prices in the major Polish cities. The results indicate that residential prices do not converge to a single common trend. However, we find the existence of three distinct sub-groups of cities (‘clubs’), where residential prices converge to each club’s steady-state path. Using an ordered logit model, we investigate supply and demand factors determining club membership, the model allocating 13 out of the 15 cities as belonging to the clubs identified by the Phillips and Sul procedure. |
| Keywords: | Polish residential prices, Phillips and Sul, panel convergence, clubs, relative transition, ordered logit model |
| JEL: | C2 C3 C25 R1 R2 R3 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:316&r=all |
| By: | Leonel Muinelo-Gallo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Adrián Rodríguez Miranda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | The purpose of this work is to reflect on the relationship between subnational finance and the capabilities for regional economic development in Uruguay. It presents rigorous evidence of recent work on the relationships between fiscal decentralization, intergovernmental transfers and regional disparities in Uruguay. This is analyzed together with new available information on the evolution of subnational finances and a critical analysis of the productive policies developed in the country. It seeks to contribute to the current debate on the relationships between territorial development, decentralization and the role of public policy to reduce regional disparities. In this regard, it is concluded that these challenges require a better financing scheme for local development, with greater management capacity for decision-making at the local level. For this, as a prerequisite, it is urgent to improve the technical and management capacities of subnational governments. |
| Keywords: | descentralization, regional development, local development, bubnational finance, subnational governments, productive policies, Uruguay |
| JEL: | H70 H77 R11 R51 R58 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-15-19&r=all |
| By: | Anne Ardila Brenoe; Ulf Zölitz |
| Abstract: | This paper investigates how high school gender composition affects students’ participation in STEM at college. Using Danish administrative data, we exploit idiosyncratic within-school variation in gender composition. We find that having a larger proportion of female peers reduces women’s probability of enrolling in and graduating from STEM programs. Men’s STEM participation increases with more female peers present. In the long run, women exposed to more female peers are less likely to work in STEM occupations, earn less, and have more children. Our findings show that the school peer environment has lasting effects on occupational sorting, the gender wage gap, and fertility. |
| Keywords: | gender, peer effects, STEM studies |
| JEL: | I21 J16 J31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7829&r=all |
| By: | Angela Black; Steven Devaney; Patric Hendershott; Bryan MacGregor |
| Abstract: | A considerable body of research exists on how office rents, vacancy rates and new supply adjust in response to shocks to occupier demand. Research has settled upon an Error Correction Model (ECM) approach for modelling the dynamics. More recent studies have used panel data (such as Hendershott, Jennen and MacGregor, 2013; Adams and Füss, 2012), but there has been little investigation of either the temporal or the cross sectional variation in the adjustment parameters and why these might vary. Furthermore, the econometric complications from using lagged dependent variables in such models have still to be addressed. We use panel data and dynamic panel estimation techniques for 58 US MSA office markets in this paper and we analyse differences in the parameters found for different locations and time periods, including demand and supply coefficients, implied natural vacancy rates and speeds of adjustment to shocks in fundamental variables. Cross-sectional variations are analysed using variables that depict the characteristics of different locations in terms of their economic activity, urban form and real estate markets. |
| Keywords: | Dynamic panel models; Error correction modelling; Office market dynamics; US metropolitan areas |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_173&r=all |
| By: | Alla Koblyakova; Michael White |
| Abstract: | The global financial crisis after 2007, and the subsequent housing and mortgage market stagnation, significantly deteriorated households’ ability to buy a house. Responding to declining homeownership rates, the government introduced a range of initiatives to offset the negative impact of relatively high first time deposit requirements, and the associated overall mortgage costs, also providing a stimulus to the house-building market by assisting households to obtain a mortgage when purchasing a new-build house. The Help to Buy Scheme was designed to help first time buyers and households in need to enter homeownership, also aiming to stabilise house prices by stimulating supply of new homes. However, the strict and inflexible planning system in England may have significantly reduced responsiveness of housing supply to raising demand for housing debt. Such politically infeasible consequences may have led to destabilisation of house prices and a regionally unequal distribution of HTB benefits. Further, there is a possibility that the main beneficiaries may refer to lenders, since lending rates within the scheme may apply additional risk premiums, leading to additional profit margins. This article addresses these questions by employing a system of the four structural equations, exploring reverse causality and simultaneous relationships between the share of the HTB Equity Scheme, Supply of New Built houses, House Prices and spreads between average mortgage rates and base interest rates. The period of study covers 2013-2018, capturing the start and subsequent developments of the HTB Scheme in England. Empirical estimations employ two stage least squares and IV estimation techniques. |
| Keywords: | Deposit requirements; Homeownership; House Prices; Housing Supply; Mortgage Finance |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_269&r=all |
| By: | Alain Coen; Benoit Carmichael; Alain Coen |
| Abstract: | This article studies the role of real estate as a potential risk factor in the financial sector returns over the period running from February 1990 to December 2015 for a sample of 14 countries. We develop and test parsimonious Intertemporal Capital Asset Pricing Models (ICAPM) including a systematic risk and a real estate risk factor. We suggest two factors to capture the real estate risk measures in two complementary dimensions. The EPRA index is used to valuate the domestic real estate risk. Besides, to illustrate the role played by the US real estate as a potential contagion risk factor, we develop a US real estate risk premium. Used separately or combined in a three-factor model, both risk factors report the presence of a real estate risk factor. Our results show that the real estate risk in its both dimensions is priced in the financial sector. If the domestic real estate risk factor is valued, the US real estate factor seems to be often prevalent. It raises the question of a potential contagion effect. |
| Keywords: | Asset Pricing; Financial sector; GMM; Multifactor Models; Real Estate Risk |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_76&r=all |
| By: | Van Wolleghem, Pierre Georges; De Angelis, Marina; Scicchitano, Sergio |
| Abstract: | Whilst migration has become a structural feature of most European countries, the integration of foreigners in the labour market continues to raise concerns. Evidence across countries shows that migrants are more often over-educated than natives. Over the last years, scholarship has intended to capture the effect of informal networks on migrants’ over-education. Interestingly, no study has looked into the Italian case, yet a country for which the effect of networks on education-occupation mismatch is well documented. This article has two objectives: it assesses the extent to which over-education affects migrants and it evaluates the role informal networks play in producing it. We find that foreigners are more over-educated than natives but that the role of networks is consistent across the two groups. Empirical evidence is drawn from the application of quantitative and counter-factual methods to PLUS 2018 – Participation, Labour, Unemployment Survey. |
| Keywords: | Network,Over-education,Migrants,labour market |
| JEL: | F22 J61 Z13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:398&r=all |
| By: | William Diamond (Wharton School, University of Pennsylvan); Tim Landvoigt (University of Pennsylvania) |
| Abstract: | We develop a model in which mortgage leverage available to households depends on the risk bearing capacity of financial intermediaries. Our model features a novel transmission mechanism from Wall Street to Main Street, as borrower households choose lower leverage and consumption when intermediaries are distressed. The model has financially constrained young and unconstrained middle-aged households in overlapping generations. Young households choose higher leverage and riskier mortgages than the middle-aged, and their consumption is particularly sensitive to credit supply. Relative to a standard model with exogenous credit constraints, the macroeconomic importance of intermediary net worth is magnified through its effects on household leverage, house prices, and consumption demand. The model quantitatively demonstrates how recessions with housing crises differ from those driven only by productivity, and how a growing demand for safe assets replicates many features of the 2000s credit boom and increases the severity of future financial crises. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:162&r=all |
| By: | Rene Chalom (Federal Reserve Bank of New York); Benjamin Pugsley (University of Notre Dame); Fatih Karahan (Federal Reserve Bank of New York); Kurt Mitman (Stockholm University) |
| Abstract: | Recipients of unemployment insurance benefits may allocate payouts towards consumption, savings, or servicing outstanding debt. This paper examines the effects that unemployment benefits have on mortgage, automobile loan, and credit card debt delinquency, exploiting the variation across states in the magnitude of unemployment benefit extensions that were provided in response to the Great Recession. We find that additional unemployment benefits reduced mortgage debt delinquency in locations that avoided large home price declines in the aftermath of the recession. Accordingly, we conclude that the stimulus effects of unemployment insurance may be muted to the extent that benefit payments are used to satisfy housing debt obligations. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:438&r=all |
| By: | Robbie Lin; Chyi Lin Lee; Graeme Newell |
| Abstract: | Residential Real Estate Investment Trusts in Japan (residential J-REITs) have become an increasingly significant listed property sector recently. The purpose of this paper is to assess the effectiveness of residential J-REITs in a mixed-asset portfolio context in Japan by assessing the significance, risk-adjusted performance and portfolio diversification benefits of residential J-REITs over July 2006-August 2018. The findings showed that residential J-REITs generally delivered superior risk-adjusted returns compared with the other sub-sector J-REITs, stocks and bonds in Japan over July 2006-August 2018, with desirable portfolio diversification benefits in the full mixed-asset portfolio context. Importantly, residential J-REITs are observed as strongly contributing to the mixed-asset portfolio context in Japan across the portfolio risk spectrum, particularly in a post-GFC context. This indicates that residential J-REITs are effective and liquid residential property investment exposure in Japan. This also confirms the effectiveness of institutionalised residential J-REITs. Given the solid residential property market fundamentals in Japan, an increased level of the institutionalisation of residential J-REITs can be expected. |
| Keywords: | Australia; Interest Rate Sensitivity; Japan; Sector-specific REITs; Singapore |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_122&r=all |
| By: | Blesse, Sebastian; Diegmann, André |
| Abstract: | Does the administrative organization of police affect crime? In answering this question, we focus on the reorganization of local police agencies. Specifically, we study the effects police force reallocation via station closures has on local crime. We do this by exploiting a quasiexperiment where a reform substantially reduced the number of police stations. Combining a matching strategy with an event-study design, we find no effects on total theft. Police station closures, however, open up tempting opportunities for criminals in car theft and burglary in residential properties. We can rule out that our effects arise from incapacitation, crime displacement, or changes in employment of local police forces. Our results suggest that criminals are less deterred after police station closures and use the opportunity to steal more costly goods. |
| Keywords: | Crime,Policing,Crime Deterrence,Police Station Closures |
| JEL: | K42 R53 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:svrwwp:072019&r=all |
| By: | Alain Coen; Raphael Languillon; Arnaud Simon; Saadallah Zaiter |
| Abstract: | The aim of this paper is to investigate if financialization and metropolization are two converging dynamics. We aim to verify if the most financialized European public property companies are also the main actors in the metropolization process through their portfolio arbitrages. We find that, between 2002 and 2016, the financialized European public property companies (F-companies) and the non-financialized European public property companies (NF-companies) exhibit a tendency to disinvest the non-urban spaces, to reinvest in the Hinterlands for the NF-companies, to reinvest in the Core for the F-companies, at least in relative terms. We also find that, in relative terms, the F-companies reallocated their portfolio toward the Large metropoles, in particular in Germany, France and Switzerland while the non-financialized REITs shifted their portfolio toward the others segments (exclusively toward the Metropoles segment for Sweden). Belgium is exception, with a reversed evolution. In order to analyze the differences in the behavior of F-companies and NF-companies, we introduce a new score transparency index. Our results suggest that F-companies are more transparent than NF-companies. They are larger in size, less dominated by insiders, are followed by more analysts and they have greater institutional ownership. The results of a logistic regression also show that F-companies have higher liquidity than NF-companies. |
| Keywords: | European public real estate companies; financialization; Metropolization; Transparency |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_101&r=all |
| By: | Justyna Brzezicka; Radoslaw Wisniewski |
| Abstract: | A review of the literature clearly indicates that the real estate market has a local character because real property is permanently attached to the land in a given location. This approach predominates in the research relating to real estate as an immobile object of market transactions. However, real estate markets can and should also be analyzed from the perspective of market participants (market actors), namely, in a subjective approach. The activity of market participants is expressed by their mobility in a spatial and geographic sense (horizontal dimension) as well as their pursuit of goals, needs and opportunities for development (vertical dimension). This observation leads to the conclusion that the popular definition of locality accounts only for objective locality and is not sufficiently exhaustive. The concept of translocality on the real estate market has been proposed to combine subjective locality with the activity and creativity of market participants. This report will analyze translocality on the real estate market in a process approach. The aim of the study is to identify the key components of translocal processes and the variables that describe these processes in relation to the real estate market. The research hypothesis states that market participants are the creators and carriers of translocal processes and drivers of market change. The processes and variables associated with the real estate market will be analyzed individually and in data aggregates. The research methodology for analyzing translocality on the real estate market is being presently developed.This research and conference expenses are funded by a grant from the Polish National Science Center, Miniatura 2 COMPETITION, No. DEC-2018/02/X/HS4/02241. |
| Keywords: | globality; glocality; locality; translocal processes; translocality |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_56&r=all |
| By: | Martin Hoesli; Elias Oikarinen |
| Abstract: | The aim of this study is to add to the knowledge on the question of whether listed real estate returns reflect direct real estate returns or general stock market returns. Relative to the extant literature on the topic, we make several contributions in addition to using more recent data: (1) we use data for six countries (U.K., France, Germany, and the Netherlands for Europe, and the U.S and Australia for the rest of the world); (2) we estimate both country-specific and panel models to increase the reliability and generalizability of the analysis; (3) we estimate structural vector autoregressive and structural vector error-correction models to be able to better and more reliably interpret the various shocks in the model; and (4) we analyze the influence of the planned investment horizon on the correlation structures between listed real estate, direct real estate, and equity in the six markets. In addition to the listed and direct real estate and stock market indices, we incorporate in the analysis a number of fundamental variables that are expected to influence and have been found to affect real estate and stock returns significantly and that can be utilized to identify the structural (i.e., more reliably identifiable) economic shocks. We also control for the leverage of listed investments. |
| Keywords: | Listed Real Estate; Portfolio Diversification; REIT; Structural VAR; Structural VECM |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_68&r=all |
| By: | Sviatlana Engerstam |
| Abstract: | Sweden is one of the countries where residential prices have been growing since late 1990s. On average, residential prices were growing by 6.5% p.a. between 1995 and 2017 with a few exceptions after the financial crisis of 2008 and during debt crisis in Europe in 2011. In the late 2017 and following 2018 residential prices were stagnating. Can these fluctuations in prices be explained by fundamental factors of supply and demand?The aim of this paper is to investigate the effects of macroeconomic factors such as population, disposable income, dwelling stock and interest rate on residential price dynamics. Estimation is done by applying panel data methodology on regional data for major Swedish cities for the period of 1995-2018. Results suggest that the long run dynamics of residential prices in Sweden has autoregressive character, and to certain extent might be explained by changes in fundamental factors such as population, disposable income per capita, dwelling stock and mortgage interest rate. Even though non-fundamental factors like, for example, rental regulations, valuation and banking policies have received attention in the research literature, the impact of these factors is not well described. Therefore, this paper also provides a deeper insight into different institutional factors that might create fluctuations in prices on residential markets. |
| Keywords: | banking policies; Housing Markets; Price determinants; rent regulations; Valuation |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_371&r=all |
| By: | David Downs; Bing Zhu |
| Abstract: | This paper examines the impact of underlying property market liquidity on the liquidity of publicly traded REIT shares. Our analysis measures firm-level exposure to local, direct real estate market liquidity using the property allocation of each REIT. The findings show that property market liquidity can causally influence the liquidity of real estate securities. This is especially true during the crisis period, which confirms with the notion that illiquidity is transmitted from direct to indirect property markets. The results also reveal that the liquidity of a firm’s assets can affect the liquidity of financial claims on the assets. The corporate investment decision, including the selection of a geographic market, can affect stock liquidity. Furthermore, we find that the sensitivity to underlying asset liquidity changes with the firm’s credit constraint and investment opportunities. Small REITs, REITs with a lower cash interest coverage ratio, and REITs with a higher book-to-market ratio might choose to invest in more liquid property markets to improve their stock liquidity. Finally, we find that underlying asset liquidity is associated with REIT values. |
| Keywords: | Geographic asset location; Liquidity; real estate returns |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_239&r=all |
| By: | Liu, Jing (University of Texas at Austin); Lee, Monica (Stanford University); Gershenson, Seth (American University) |
| Abstract: | We provide novel evidence on the causal impact of student absences in middle and high school on state test scores, course grades, and educational attainment using a rich administrative dataset that includes the date and class period of each absence. Our identification strategy addresses potential endogeneity due to time-varying student-level shocks by exploiting the fact that in a given year, there exists within-student, between-class variation in absences. We also leverage information on the timing of absences to show that absences that occur after the annual window for state standardized testing do not appear to affect test scores, which provides a further check of our identification strategy. We find that absences in middle and high school harm contemporaneous student achievement and longer-term educational attainment: On average, missing 10 math classes reduces math test scores by 7% of a standard deviation, math course grades by 19% of a standard deviation, the probability of on-time graduation by 8%, and the probability of college enrollment by 7%. Similar results hold for absences in English Language Arts classes. These results suggest that absences in middle school and high school are just as harmful, if not more so, than absences in elementary school. Moreover, the timing of absences during the school year matters, as both the occurrence and the impact of absences are dynamic phenomena. |
| Keywords: | student absences, achievement gaps, education production function |
| JEL: | I2 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12613&r=all |
| By: | Abukar Warsame; Sviatlana Engerstam |
| Abstract: | The level of rents and property values play a major role in defining different types of urban structures. A central business district (CBD) is often associated with high rents and high property values and subsequently tall buildings are constructed in order to offset high land prices. The expansion of co-working space market seems to have impact on the traditional office markets that were mostly located in CBDs. An increase of co-working spaces and their locations might lead to less concentration of traditional office spaces in central locations and thus transformation of urban structures is expected. Most of the studies in the co-working spaces focus on productivity of users and flexibility of the shared working space but not on the long term consequence of dynamic impact of co-working spaces on the existing urban structure. The aim of this paper is to explore the transformation of urban structures triggered by the spread of co-working space in the Stockholm region. This study is mainly descriptive based on the data of recent development of co-working spaces and their locations. We will also complement our analysis with a case study and interviews of major actors in the office markets. We expect the rents and property values of existing locations will be affected by the concentration of co-working spaces in new urban areas. Subsequently, more segmented office markets with lower density can be expected to emerge in the long run. |
| Keywords: | Central business district; co-working; Office Markets; Urban Structure |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_221&r=all |
| By: | John Macfarlane |
| Abstract: | Public Housing Authorities are required to account for the financial performance and condition of their property portfolio on a regular basis. In Australia, where property and housing are largely the responsibility of State Governments rather than the Federal Government, public housing represents a significant proportion of a State’s asset base. As such, regular (annual), accurate and reliable portfolio values are required. Under international accounting and valuation standards, market values – not nominal replacement values based on costs – are required; even though most properties in the portfolio are not immediately marketable. Values (Land, Building and Rental) of individual properties, and groups of properties, are also required to effectively manage the portfolio.In New South Wales (NSW), the State Government housing portfolio (of 150,000+ dwellings) is managed by the Land and Housing Corporation (LAHC). The value of this portfolio is approaching $A 50b ($US 36b).How should such portfolio valuation and assessment tasks be undertaken to be able to make portfolio estimates to a given level of accuracy at a minimal cost; while also maximising the quality of valuation information at the individual property level?As this is an annual exercise, how can the rolling cycle of valuations be constructed to ensure quality improvement over time?These questions and related issues will be examined in the paper. |
| Keywords: | asset valuation; Mass Appraisal; Public Housing Portfolio; Quality Assurance |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_128&r=all |
| By: | Theis Theisen; Jonas Dahl |
| Abstract: | In typical vacation regions, people from other parts of the country, or from other countries, may often want to buy properties for the use as vacation homes. This may easily drive up property prices. Moreover, if houses built for permanent residence are converted into vacation homes, these houses will be in use only a few weeks of the year. Many of those who have their permanent residence in areas where houses are being bought for vacation use may want to keep house prices low, and houses used for permanent residence. Since 1974 Norwegian municipalities have had the option to introduce residence requirements. Such requirements implying that a house which initially is approved for the use as a permanent dwelling cannot legally be used only as a vacation home. Hence, the person buying such a house must sign a contract that the house will be used for permanent residence. Residence requirements have been a heavily discussed topic all the time since they were introduced, but little research on how such requirements work have been carried out. In the present paper we focus on how residence requirements impact house prices. We first discuss this issue within a theoretical model, and subsequently carry out an empirical investigation. The empirical analysis is based on data on house transactions over a 7-year period from four municipalities on the South-Eastern coast of Norway. The results show that house prices along the coast increased significantly when residence requirements are abolished, but that there was no impact on house prices far from the coast. |
| Keywords: | House Prices; Residence requirements; Vacation homes |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_187&r=all |
| By: | Juan de Lucio (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Raúl Mínguez (Universidad Nebrija. Calle de Santa Cruz de Marcenado, 27, 28015, Madrid (Spain).); Asier Minondo (Deusto Business School, University of Deusto, Camino de Mundaiz 50, 20012 Donostia - San Sebastián (Spain). Research aliate of Instituto Complutense de Estudios Internacionales.); Francisco Requena (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | This paper helps to understand how firms learn from their peers when enter new markets. The results point the existence of information spillovers steaming from close companies: in the same region, sector or export markets'. In fact, exporters learn from very close firms; sectoral peers in their region. There seem to be also a competition effect that hinder spillovers; this comes from companies that without providing new information share the forieng demand. Knowledge externalities seem to be stronger in incoming companies what increase the relevance of these effects for export extensive margin growth. |
| Keywords: | Exports, firm-level data, local spillovers, region, sector. |
| JEL: | F1 F2 R12 F14 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1908&r=all |
| By: | Hertrich, Markus |
| Abstract: | From 2014 until present, housing prices in Germany have been rising faster than consumer prices in all quarters except one, raising concerns about an excessive over-heating of the housing market. To assess the vulnerability of the German housing market to a future realignment of prices or even a housing bust, this paper develops a housing price misalignment indicator that is composed of seven indicators, which are commonly associated with the fundamental value of residential property. An empirical application to the most recent data suggests that the German housing market exhibits an overvaluation of approximately 11%, where interest rate risk and a relatively advanced stage of the housing cycle are identified as the main factors fueling these imbalances, while a rather solid debt-servicing capacity mitigates these imbalances since end-2009. |
| Keywords: | composite indicator,fundamental value,housing market,imbalances,loose monetary policy,price misalignment |
| JEL: | C43 C51 E32 E37 E43 G12 R21 R28 R31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:312019&r=all |
| By: | Sergei Guriev (Département d'économie); Biagio Speciale (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Michele Tuccio (Université Paris-Dauphine) |
| Abstract: | We study wage adjustment during the recent crisis in Italy using a unique dataset on immigrant workers that includes those employed in formal and informal sector. We find that before the crisis immigrants’ wages in the formal and informal sectors moved in parallel (with a 15% premium in the formal labor market). During the crisis, however, formal wages did not adjust down while wages in the unregulated informal labor market fell so that by 2013 the gap had grown to 32%. The difference was particularly salient for workers in occupations where the minimum wage is likely to be binding, and in “simple” occupations where there is high substitutability between immigrant and native workers. Calibrating a simple partial equilibrium model of spillovers between formal and informal markets, we find that less than 10% of workers who lost a formal job during the crisis move to the informal sector. We also find that if the formal sector wages were fully flexible, the decline in formal employment would be in the range of 1.5–4.5%—much lower than 16% decline that we observe in the data. |
| JEL: | E24 E26 J31 J61 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/73bviabv8o80nrgh0mm5h3163q&r=all |
| By: | Ping Lyu; Miao Yu |
| Abstract: | The purpose of this study is to measure, analyze and compare the housing stress faced by the youth in purchasing and renting houses, and try to identify the housing problems existing in the youth groups so that we can explore the causes and propose effective solutions. Factor analysis method was used to construct and calculate the housing stress index (HSI), and chart statistics method was used to analyze the characteristics of youth’s housing stress. The results showed that the youth’s housing stress on purchasing houses is generally lower than that on leasing houses. The most obvious housing pressure of youth on purchasing houses is the housing area pressure, and the most obvious housing pressure of youth on renting houses is the social emotional pressure. In addition, the youth’s housing stress on purchasing houses is higher than that of other age groups, and the youth’s housing stress on leasing houses is lower than that of other age groups. Last, the youth’s housing stress frequently increases with their age both on purchasing and leasing houses. The study concluded that the youth’s housing problems should be solved mainly by the owned housing and common property housing, Supplemental by the rental housing in conditional cities. The housing problems of different types of youth’s group can be solved by means of physical security, monetary security, financial and credit support, so that youth’s housing can realize stable transition from difficulty to ease and from lease to purchase. |
| Keywords: | Housing Stress; purchasing houses; renting houses; youth group |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_125&r=all |
| By: | Winters, John V. (Iowa State University); Cai, Zhengyu (Southwestern University of Finance and Economics); Maguire, Karen (Oklahoma State University); Sengupta, Shruti (Oklahoma State University) |
| Abstract: | Fracking innovations revolutionized the United States oil and gas industry and facilitated a boom in energy production in states with oil and gas resources. This paper examines effects of oil and gas booms within a state on individual employment and earnings. To account for endogenous migration decisions, we instrument for oil and gas production in workers' state of residence via the predicted percent of oil and gas employment in their state of birth. We find statistically significant and economically meaningful positive effects. The bulk of the effects accrue to workers employed outside the oil and gas industry indicating sizable spillovers. |
| Keywords: | resource boom, regional economic development, employment, wages, income |
| JEL: | J20 J30 Q40 R10 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12619&r=all |
| By: | Boarnet, Marlon G.; Burinskiy, Evgeny; Bostic, Raphael; Rodnyansky, Seva; Prohofsky, Allen |
| Abstract: | This project brief summarizes findings from a project aimed at addressing the question of "Is new rail transit associated with displacement of low-income residents in near-rail neighborhoods?" To address this question, the researchers used annual data on household locations and incomes from 1994 to 2012 to examine neighborhood income distributions and the pattern of residential moves by income in Los Angeles rail transit neighborhoods. The Los Angeles metropolitan area presents an ideal study area for analyzing transit-oriented development (TOD) and potential displacement. Since 1990, the Los Angeles Metropolitan Transit Authority (Metro) has opened 93 new rail-transit stations. An additional 17 are under construction. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Demographics, Households, Land use, Land values, Persons by socioeconomic levels, Rail transit, Rail transit stations, Real estate development, Socioeconomic development |
| Date: | 2019–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt2hv4h0r8&r=all |
| By: | Rincón-Zapatero, Juan Pablo; Jerez, Belén; Díaz, Antonia |
| Abstract: | In this paper we embed a directed search model of the real estate market into a heterogeneous agents setting to study the effect of credit on housing prices. Households can either rent or own their home and face idiosyncratic turnover shocks which make them want to change residence. They can accumulate financial assets to put a down payment on a home and to smooth consumption. Search and matching frictions generate frictional dispersion in housing prices and financial assets in equilibrium. Our model is “block recursive” and highly tractable. We calibrate it to reproduce selected statistics for the US. We extend the Endogenous Grid Method with non-convexities to our environment to compute it. In our framework the distribution of wealth, housing prices, and trading probabilities (e.g. liquidity of housing assets) are crucially affected by credit conditions. Our mechanism greatly amplifies the effect of changes in financial conditions on housing prices. |
| Keywords: | Endogenous Grid Method; Block-Recursivity; Price Dispersion; Housing Prices; Directed Search; Incomplete Markets; Wealth Inequality |
| JEL: | R30 R21 E21 D83 D31 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:28874&r=all |
| By: | Saroj Bhattarai (University of Texas at Austin); Choongryul Yang (University of Texas at Austin); Felipe Schwartzman (Federal Reserve Bank Richmond) |
| Abstract: | We show that the housing wealth collapse of 2006-09 had a persistent impact on employment across US counties. In particular, localities that had a larger loss in housing net-worth during that period had more depressed employment as late as 2016, without a commensurate population response. Using IV's and controls to identify the causal impact of the wealth shock amplify those results, leading to an estimate that a 10 percent change in housing net-worth between 2006 and 2009 causes a 4.5 percent decline in local employment by 2016, as compared to a 2006 baseline. We do not find long-term causal impact of the shock on wages. Sectoral results indicate, however, that the results are unlikely to be purely a result of persistently low demand, since, contrary to the short-run effects, the effect over the longer horizon is less concentrated in the non-tradables sectors and is instead more prominent in the high-skilled services sector. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:671&r=all |
| By: | Alain Coen; Aurelie Desfleurs; Saadallah Zaiter |
| Abstract: | The aim of this study is to analyze and compare the abnormal earnings announcement returns of «concentrated» and «diversified» U.S. REITs from 2000 to 2017. Using a unique property-level dataset, we analyze the impact of geographic concentration on the relative performances of real estate investments trusts (REITs). More precisely, we focus on financial analysts’ forecast accuracy, market-level uncertainty, REIT-level uncertainty and synchronicity. First, we document the coverage, the accuracy and the bias of financial analysts’ earnings forecasts on «concentrated» and «diversified» REITs. Our results report that the level of accuracy and the level of optimism are statistically different for these two categories. Second, we observe that abnormal stock returns, abnormal trading volume and abnormal volatility may be related to the level of geographic concentration and synchronicity. Our results shed a new light on the potential link between the level of geographic concentration, or home bias at home, and the level of information on stock markets. |
| Keywords: | Financial analystsâ forecasts; Geographic Concentration; REITs; Synchronicity; Uncertainty |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_216&r=all |
| By: | Thomas Weston; Stanimira Milcheva |
| Abstract: | Transaction-level data will be utilised to explore the level and structure of long-run discount rates applicable to the residential leasehold property market. While techniques such as panel and hedonic regression have traditionally been applied to housing data, issues such as nonlinearity, multicollinearity and heteroscedasticity, present challenges to the ability of traditional regression-based methodologies to make long-term, accurate forecasts. Therefore, this work will compare these traditional regression techniques with two machine learning techniques – a long short-term memory (LSTM) model, and a gradient episodic memory (GEM) model – that are anticipated to overcome these issues endemic to housing data, and provide more accurate and precise forecasts. LSTM models overcome some of the problems with regression models, namely, nonlinearity, and the level of memory over time. Where regression models lack a categorical memory component, LSTM models provide the ability to learn features from the data, as opposed to directly applying a pre-conceived, prior structure. This results in LSTM models being able to better deal with inter-temporal, yet rarely occurring events. GEM models build on the strengths of LSTM, and allow task-based learning, which enables more precise modelling of the behaviour and recurrence of rarely-occurring events within leasehold transaction data. |
| Keywords: | Discount-rate; Forecasting; housing; Leasehold; Machine Learning |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_71&r=all |
| By: | John Gibson (University of Waikato); Susan Olivia (University of Waikato); Geua Boe-Gibson (University of Waikato) |
| Abstract: | Night lights, as detected by satellites, are increasingly used by economists, especially to proxy for economic activity in poor countries. Widely used data from the Defense Meteorological Satellite Program (DMSP) have several flaws; blurring, top-coding, lack of calibration, and variation in sensor amplification that impairs comparability over time and space. These flaws are not present in newer data from the Visible Infrared Imaging Radiometer Suite (VIIRS) that is widely used in other disciplines. Economists have been slow to switch to these better VIIRS data, perhaps because flaws in DMSP are rarely emphasized. We show the relationship between night lights and Indonesian GDP at the second sub-national level for 497 spatial units. The DMSP data are not a suitable proxy for GDP outside of cities. Within the urban sector, the lights-GDP relationship is twice as noisy using DMSP as using VIIRS. Spatial inequality is considerably understated by the DMSP data. A Pareto adjustment to correct for top-coding in DMSP data has a modest effect but still understates spatial inequality and misses much of the intra-city heterogeneity in the brightness of lights for Jakarta. |
| Keywords: | density; DMSP; inequality; night lights; VIIRS; Indonesia |
| JEL: | O15 R12 |
| Date: | 2019–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:19/11&r=all |
| By: | Sae Woon Park |
| Abstract: | This study analyzes the impact of living floor on the price of an apartment using 3,249 price data sample of apartments traded in Sejong city in 2017. In addition to a traditional regression analysis, we employ a spatial lag model, and a spatio-temporal model to consider the prices of neighboring apartments. Among these, spatio-temporal model turned out to be the fittest since its log likelihood was the biggest with having the smallest AIC and SC value. In regard to living floor which is our main concern, we made a dummy variable per 3- floor- unit with having 1-3 floor unit as our reference variable, and the highest dummy being 28-30 floor unit dummy. We controlled such variables as size, total floor, age, squared age, the number of households, parking lot capacity, stair type apartment dummy, distance from government complex, distance from Daejon city hall, BTR dummy, brand name dummy, and time fixed effect dummy which can also affect the price. As results, we found that except for the number of households variable and time fixed effect variables, most variables were significant with 1% level. Especially, living floor dummy of our interest showed that except for 19-21 floor dummy, the higher the floor, the higher the price. This result is different from literature where living floor raises the price up to a certain point of floor, but after the point the price rather declines. This may be because the residents in Sejong city are comparatively young, on average, and they may favor high living floors which can provide good environmental benefits. Besides, the coefficient of relative living floor (living floor/total floor) was bigger than that of living floor, which shows that apartment purchasers value relative height of living floor more than just the height of living floor. |
| Keywords: | Korean Housing Market; Living Floor; Spatial Lag Model; Spatio-temporal Model |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_160&r=all |
| By: | Philip Gleason; Helen Ladd |
| Abstract: | Over the past 30 years, the charter school movement has become a significant factor in U.S. public education. |
| Keywords: | charter schools, public interest, education |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:b4c98019ae4e4289827d92a3a9723300&r=all |
| By: | Jaehwan Kim; Gongcheol Jeong; JunSik Choi |
| Abstract: | The present study applied the analytical framework for the relationship between land development projects and land value and their effect on land value, which was discussed in previous studies, to an urban regeneration project, and analyzed their relationship with land value. The scope and subject of this study’s analysis included land value change for two years in Changwon before, during, and after the first generation urban regeneration project. The results showed that while the average cumulative rate of change for 4 dongs within the 1 km affected area was 15.3%, that of 6 dongs within the 5 km affected area it was 25.8%, which was quite high. Hence, as part of the Ministry of Land, Infrastructure, and Transport’s regulatory efforts to curb a steep land value rise in the areas adjacent to urban regeneration projects, it is necessary to approach the steep rise by closely examining a land value change trend in 5 km from the project area, instead of simply regulating the immediately adjacent areas. |
| Keywords: | Affected Area; Land Value Change; Neighboring Area; Rate of Change; Urban Regeneration Project |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_294&r=all |
| By: | Jeongseob Kim; Gi-Hyoug Cho |
| Abstract: | Co-living or shared housing has become popular as an emerging housing option for young adults in many countries. Co-living allows residents to save rent by sharing common spaces such as a kitchen and living room in their home. In addition, co-living could provide a new opportunity for social relationship with housemates. Personal privacy is not fully ensured in shared housing so that social conflicts can occur among residents. However, co-living could improve the health of residents through social interactions with housemates. In this regard, this study examines whether co-living can improve physical and mental health of residents. This study explores the relationship between co-living and the health of residents based on the survey with a sample of 830 young adults in Seoul, South Korea. We compared the mental and physical health of house-shares with those of residents in general housing. There is no difference in the physical health between house-sharers and general people, but the mental health of house-sharers, specifically for the depression, is better than that of general people. The results imply that co-living could have the potential to improve the mental health of residents by providing the social relationship with housemates. The findings of this study could be a basis for developing an effective housing policy and planning for young adults. |
| Keywords: | co-living; mental health; physical health; shared housing; Young Adults |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_135&r=all |
| By: | Giuseppe Attanasi (Université Côte d'Azur, CNRS, GREDEG, France); Ylenia Curci (RECITS - FEMTO, UTBM, Belfort, France); Patrick Llerena (BETA, University of Strasbourg, France); Adriana Carolina Pinate (Department of Neuroscience Imaging, CeSI-MeT, University of G. d'Annunzio, Chieti-Pescara, Italy); Maria del Pino Ramos-Sosa (Departamento de Economía, Universidad Loyola Andalucía, Campus Palmas Altas, Seville, Spain); Giulia Urso (Social Sciences, Gran Sasso Science Institute, L'Aquila, Italy) |
| Abstract: | This article presents a mixed-methods research in the eld of creativity. By making use of experiments and a questionnaire, it analyses how creativity is aected by three factors: i) motivation, ii) individuals' attitudes towards risk and ambiguity and iii) social context. Each one of these factors has been extensively investigated in the theoretical and empirical literature getting to results still open to discussion. In particular, this research focuses on two aspects. First, we try to shed some light on the controversial ndings linking risk taking and creativity that exist in the economic and psychology literature. To do so, we test the hypotheses that self perception of creative abilities may play a role in establishing a riskcreativity positive correlation. Second, being the three factors strongly inuenced by culture, the study investigates whether the impacts on creativity may dier in diverse geographical locations. Following Attanasi et al. (2019), we exploit data from experiments performed in main cities of one eastern and one western country: Ho Chi Minh city (Vietnam) and Strasbourg (France). The information to build the risk and ambiguity factor derive from risk and ambiguity elicitation via lotteries. To account for motivation, dierent organizational scenarios are set in experimental treatments (nancial incentives vs non nancial incentives to collaborate). Finally, information on social context and self perception of creative abilities are collected through a self administrated questionnaire. In our analysis, we nd that risk aversion, social habits and leisure activities have a positive eect on the creative performance of the French participants, while for Vietnamese the intrinsic motivation and the perception of their own creative capacities are positive correlated with creative scores. Our results suggest that in a country like France, social context has a strong inuence on individual creativity, while for Vietnam individual features play a role in creativity, suggesting that the socio-cultural context has dierent impacts on creativity. |
| Keywords: | experiments, risk, ambiguity, self-perceived creativity, motivation, geographical location, social context |
| JEL: | I23 O31 O32 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2019-21&r=all |
| By: | John Duca |
| Abstract: | Collapses in commercial real estate (CRE) prices sharply reduced construction outlays and—via their accompanying loan losses—induced bank credit crunches, thereby playing a large role in the U.S. recessions of 1990 and 2007-09 and the sluggish recoveries from them. We develop a system of equations for commercial office valuations, rents, and construction that empirically incorporates some of the features of the DiPasquale and Wheaton (1992) four-quadrant model of CRE markets. Using quarterly data spanning a half century, we estimate how changes in taxes, interest rates, tax depreciation, credit conditions, and capital requirements have affected office valuations (capitalization rates), which, in turn, induce changes in rents and construction—the latter of which is analyzed using a Tobin’s q approach. Using data covering several decades is needed because CRE activity tends to experience long cycles. Our results indicate that while current high valuations of CRE are in line with a low real interest rate environment, office prices and valuations are vulnerable to mean-reversion in long-term interest rates. Nevertheless, the impact of valuation swings on office construction in recent years has been muted by less pronounced changes in existing property prices relative to replacement costs, implying that prices are more vulnerable than is the level of construction. |
| Keywords: | commercial real estate; Construction; Tobin's q |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_184&r=all |
| By: | Moritz Starzer; Wolfgang Feilmayr; Wolfgang Brunauer |
| Abstract: | The aim of this paper is to study the processes and factors that influence the average land price of municipalities in Austria using statistical models. For this purpose, we use a dataset of 1667 Austrian municipalities. The location is clearly one of the most important factors influencing land prices. Therefore, land price data are spatial data. When modelling spatial data, spatial effects must be taken into account. In the case of land price data this is primarily the effect of spatial dependence. Spatial dependence therefore must be incorporated in the model specification. Model specifications coming from the field of spatial econometrics, especially spatial autoregressive models, and methods from the field of geostatistics, especially kriging methods, are able to account for spatial dependence.By comparing these spatial model specifications with classical non-spatial model specifications, one can clearly show that the model-fit can significantly be increased by spatial model specifications. This shows that the process that generates the land price is a spatial process. |
| Keywords: | Geostatistics; land price; SAR models |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_23&r=all |
| By: | Georgia Warren-Myers; Katrina Raynor; Matthew Palm |
| Abstract: | Rapid increases in housing costs, stagnant wage growth and limited government funding have created a housing affordability crisis in many cities, in particular in capital cities in Australia. Unlike elsewhere in the world where affordable housing contributions are secured through inclusionary zoning or other planning processes, the Australian context is largely devoid of any mandatory requirements for affordable housing provision in new development. Recent changes to legislation in Victoria have enabled planners to negotiate with developers to secure voluntary affordable housing contributions by offering alternative incentives. However, the lack of financial literacy and understanding of development feasibility and the effects of affordable housing provision on development viability and profit is likely to limit the success of this change. This paper reports on the conceptual framework and development of an Affordable Housing Negotiation Calculator to assist in educating local and state government representatives, community housing providers and developers about affordable housing provision and its effects on development feasibility. It is hoped this tool will enable those decision-makers to better negotiate positive outcomes for an increase in affordable housing while communicating the factors that impact on development feasibility. |
| Keywords: | Affordable Housing; Development feasibility; Education; Negotiations; Valuation |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_158&r=all |
| By: | Victor Dorofeenko; Gabriel Lee; Kevin Salyer; Johannes Strobel |
| Abstract: | This paper demonstrates that risk (uncertainty) along with the monetary (interest rates) shocks to thehousing production sector that is subject to nominal frictions in prices and wages are a quantitativelyimportant impulse mechanism for the business and housing cycles. Our model framework is that ofthe housing supply/banking/monetary sector model as developed in Dorofeenko, Lee, Salyer and Strobel(2016) with the model of housing demand with sticky pricing (Calvo) presented in Iacoviello and Neri(2010). We provide empirical evidence that large housing price and residential investment boom and bustcycles over the last few years are driven largely by economic fundamentals and financial constraints. Wefind the impact of risk and monetary shocks are the main impulse in explaining the aggregate and sectoralfluctuations. Moreover, in the presence of nominal frictions in prices and wages, the Loan to Value ratiothat affects the household borrowing constraint plays a critical role for real aggregate variables. Thiscomparison carries over to housing market variables such as the price of housing, the risk premium onloans, and the bankruptcy rate of housing producers. |
| Keywords: | credit constraint; hetrogenous households; Monetary Policy; residential investment; uncertainty and demand shocks |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_214&r=all |
| By: | Agostino Valier; Ezio Micelli |
| Abstract: | This research reviews the existing literature on the use of digital innovation in real estate valuation, focusing on three aspects.First, it analyses the factors that make the use of digital innovation increasingly relevant in the real estate sector and, more specifically, in the evaluation phase of assets. The need for innovation in the real estate market is highlighted, as the demand from investors for fast, reliable and objective appraisals.The second part reports the literature on digital innovations applied to valuation models, distinguishing between forecasting models for future market trends and assets-specific automated valuation models. This section focuses on the impact that new models have on the currently used approaches for value assessment.Third, the use of digital-based valuation models is investigated by analysing the context conditions. The review analyses the literature that correlates the reliability of the new models and the conditions of the real estate market in which they are used, especially in terms of information efficiency. Finally, the conclusions summarise the limits and potential of digital innovation in the field of valuation. Future directions are then identified. |
| Keywords: | Automated Valuation Models; Big data; Digital innovation; Forecasting analysis; proptech |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_320&r=all |
| By: | Igor Livshits (Federal Reserve Bank of Philadelphia); Youngmin Park (Bank of Canada) |
| Abstract: | Loose financial regulation encourages some banks to adopt a risky strategy of specializing in residential mortgages. In the event of an adverse aggregate housing shock, these banks fail. When banks do not fully internalize the losses from such failure (due to limited liability or deposit insurance), they offer mortgages at less than actuarially fair interest rates. This opens a door to home-ownership for some young low net-worth individuals. In turn, the additional demand from these new home-buyers drives up house prices. All of this leads to non-trivial distribution of gains and losses from lax regulation amongst the households. Renters and individuals with large non-housing wealth suffer from the fragility of the banking system induced by the lax regulation. On the other hand, some young middle-income households are able to get a mortgage and buy a house, thus benefiting from the lax regulation. Furthermore, the current (old) homeowners benefit from the increase in the price of their houses. If the latter two groups constitute a majority of the population, then regulatory failure can be an outcome of a democratic political process. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:1465&r=all |
| By: | Giambra, Samuele (Brown University); McKenzie, David (World Bank) |
| Abstract: | There is a widespread policy view that a lack of job opportunities at home is a key reason for migration, accompanied by suggestions of the need to spend more on creating these opportunities so as to reduce migration. Self-employment is widespread in poor countries, and faced with a lack of existing jobs, providing more opportunities for people to start businesses is a key policy option. But empirical evidence to support this idea is slight, and economic theory offers several reasons why the self-employed may in fact be more likely to migrate. We put together panel surveys from eight countries to descriptively examine the relationship between migration and self-employment, finding that the self-employed are indeed less likely to migrate than either wage workers or the unemployed. We then analyze seven randomized experiments that increased self-employment, and find their causal impacts on migration are negative on average, but often small in magnitude. |
| Keywords: | internal migration, international migration, self-employment, migrant selection, randomized experiment |
| JEL: | F22 J61 O15 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12624&r=all |
| By: | Adrien Montalbo (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The impact of education on growth or individual earnings has been vastly studied in economics. However, much remains to know about this association before the mid-20th century. In this article, I investigate the effect of primary schooling on the economic devel- opment of French municipalities during the 19th century and up to World War I. Before the Guizot Law of 1833, no national legislation on primary schooling existed in France. Therefore, I evaluate if the municipalities with higher educational achievements before this law grew more than their counterparts during the following years. To do so, I exploit first the fact that the Guizot Law forced municipalities over 500 inhabitants to open and fund a primary school for boys. I implement a regression discontinuity around this cut-off on municipalities with no primary school in 1833. Second, I instrument educational achieve- ment, namely enrolment rates and schooling years, by the proximity of municipalities to printing presses established before 1500. Each method returns a positive impact of edu- cation on development. Education quality also mattered in this perspective. A matching estimation on municipalities with a school in 1833 indicates a positive impact of better teaching conditions provided by public grants on the subsequent growth of municipalities. Primary schooling is therefore an important factor which favoured the development of French municipalities during the century of industrialisation and modernisation. |
| Keywords: | Primary instruction,Economic development,Nineteenth-century France |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02286126&r=all |
| By: | Christophe Providence (CREGED - Centre de Recherche en Gestion et Economie du Développement - Université Quisqueya, MEMIAD - Management, économie, modélisation, informatique et aide à la décision - UA - Université des Antilles) |
| Abstract: | The measurement of the financial issues of local public administrations has never been addressed in the scientific literature on Haiti, either from the point of view of accountability or the evaluation of local public actions. However, the provision of local public goods and services depends on the financial situation of these local public administrations. In this paper, the financial measurement model will be based on nine indicators, three for financial sustainability, three for financial flexibility and three for financial vulnerability. The results demonstrated not only the difficulties faced by municipalities in the West Department in financing their supply of local goods and services to taxpayers, but also the profound disparities in the evolution of their financial health over the period 2015–2018. |
| Keywords: | public administration,Local Financing,financial situation,local development,Local finance,public service provision,local authority,community participation,proximity,provision of public good,local budgets |
| Date: | 2019–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02189614&r=all |
| By: | Massimo Guidolin; Manuela Pedio |
| Abstract: | This paper has a twofold objective. First, we contribute to the stream of literature that investigates whether traditional asset pricing factors show any predictive power for the cross-section of Real Estate Investment Trust (REIT) returns. In particular, we investigate the existence of a premium associated to the Value, Size, Momentum, Investment, and Profitability factors over the period 1993-2018. We find support for all the pricing factors but for the Profitability one. Second, we investigate whether a set of smart beta strategies, based on the combination of the identified factors, may outperform similar allocation techniques that do not exploit factors. We find that all the proposed factor-based strategies display a higher risk-adjusted out-of-sample performance than a simple buy-and-hold investment in the real estate market (proxied by the FTSE NAREIT All REITs Index). In addition, we find that when factor-based strategies are implemented, REIT-only portfolios display risk-adjusted performances comparable to those of diversified portfolios that include equity, bond, and commodities. |
| Keywords: | REITs, real estate factors, factor investing, smart beta strategies |
| JEL: | G11 G12 R30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp19117&r=all |
| By: | Tony ShunTe Yuo; Yu-An Yang |
| Abstract: | Sharing economy is so popular nowadays, it is regarded as a new way to generate evolutionary or even revolutionary business models. Owing to the rapid development of verifying, measuring and storing technologies, such as ICT, IoT, GPS, clouds, 5G and block chains, sharing economies have shown its potential in almost all fields: bikes, cars, rooms, logistics, energies, even finance and investments. Explicitly, these technologies seemed to be the solutions of resource indivisibility and free-rider effects, therefore sharing become applicable. Nevertheless, this research believes that sharing is not merely the problem of identifying and delineated the rights and obligations between sharing users. In other words, not all resources are suitable for sharing, especially the stakeholders of the subjects were multiple parties. This research focuses on the concerns of Airbnb-liked room-sharing platforms, collecting opinions from users, providers and the managerial authorities. The results show that sharing is indeed not all about benefits, but comes with all sorts of concerns, ranging from planning issues, devaluing the property value, privacy concerns, to personal safety worries. Another matter is the slow legislation process cannot cope with the rapidly evolving operational patterns in sharing economies. The managerial authorities even could not identify the essence of the problem in sharing to determine the legality of the business. This research suggests that regulating these sharing goods should go back to the fundamental characteristics and not all traditional or old fashion system should be contempt. |
| Keywords: | Free rider effect; Neighborhood externalities; Sharing Economy; Smart City; Tragedy of the Commons |
| JEL: | R3 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2019_113&r=all |
| By: | Daniel P. Gross |
| Abstract: | Collusion is widely condemned for its negative effects on consumer welfare and market efficiency. In this paper, I show that collusion may also in some cases facilitate the creation of unexpected new sources of value. I bring this possibility into focus through the lens of a historical episode from the 19th century, when colluding railroads in the U.S. South converted 13,000 miles of railroad track to standard gauge over the course of two days in 1886, integrating the South into the national transportation network. Route-level freight traffic data reveal that the gauge change caused a large shift in market share from steamships to railroads, but did not affect total shipments or prices on these routes. Guided by these results, I develop a model of compatibility choice in a collusive market and argue that collusion may have enabled the gauge change to take place as it did, while also tempering the effects on prices and total shipments. |
| JEL: | F14 F15 L15 L41 L92 N71 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26261&r=all |
| By: | SIGUE, Moussa; SIRPE, Gnanderman |
| Abstract: | This paper assesses the non-linear effects of road infrastructure investment on the structural competitiveness of Burkina Faso's economy. After retaining the period from 1980 to 2015, the quadratic and spline estimation revealed a non-linearity between the structural economy competitiveness and investment in road infrastructure. Indeed, the quadratic estimate identified non lineary U-shaped inverted with an optimal threshold of 10.11%. With regard to the spline estimation, it also highlighted this nonlinearity and gave an optimal interval of [5%;15%]. The economic policy implication that emerges from these results is that in order to benefit from optimal structural competitiveness, the investment’s share in road infrastructure in the total investment budget must be between5% and 15%. |
| Keywords: | Structural competitiveness; Investment in road infrastructure; Non-linearity; Burkina Faso |
| JEL: | F43 H54 R42 |
| Date: | 2019–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:96142&r=all |