nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2020‒04‒13
forty-one papers chosen by
Steve Ross
University of Connecticut

  1. What Do We Learn From Cross-Regional Empirical Estimates in Macroeconomics? By Adam Guren; Alisdair McKay; Emi Nakamura; Jón Steinsson
  2. Education for All? A Nationwide Audit Study of School Choice By Bergman, Peter; McFarlin, Isaac
  3. Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment By Bergman, Peter; Chan, Eric; Kapor, Adam
  4. Transportation Improvement and Hollowing-out of Urban Commercial Center: Do They Harm Consumer Welfare? By Kishi, Akio; Kono, Tatsuhito
  5. Key Players in Economic Development By Amarasinghe, Ashani; Hodler, Roland; Raschky, Paul A.; Zenou, Yves
  6. Calling from the outside: The role of networks in residential mobility By Konstantin Büchel; Maximilian V. Ehrlich; Diego Puga; Elisabet Viladecans-Marsal
  7. Industrial Agglomeration and Proliferation of Startup Firms in the Kyushu Region (Japanese) By HAMAGUCHI Nobuaki; OKANO Hideyuki; OSAJIMA Shuzo
  8. Hipsters vs. Geeks? Creative workers, STEM and innovation in US cities By Andrés Rodríguez-Pose; Neil Lee
  9. Monetary policy and regional inequality By Hauptmeier, Sebastian; Holm-Hadulla, Fédéric; Nikalexi, Katerina
  10. The Economic Impact of Migrants from Hurricane Maria By Peri, Giovanni; Rury, Derek; Wiltshire, Justin C.
  11. Workplace Choice, Commuting Costs, and Wage Taxation in Urban and Adjacent Rural Regions By Batabyal, Amitrajeet; Nijkamp, Peter
  12. Distance in Bank Lending: The Role of Social Networks By Oliver Rehbein; Simon Rother
  13. House prices and tourism development in Cyprus: A contemporary perspective By Andrew A. Alola; Simplice A. Asongu; Uju V. Alola
  14. Institutions and the fortunes of territories By Andrés Rodríguez-Pose
  15. Parents' Responses to Teacher Qualifications By Chang, Simon; Cobb-Clark, Deborah A.; Salamanca, Nicolás
  16. Regional Convergence in Russia: Estimating a Neoclassical Growth Model By Lehmann, Hartmut; Oshchepkov, Aleksey; Silvagni, Maria Giulia
  17. Migration Costs and Observational Returns to Migration in the Developing World By David Lagakos; Samuel Marshall; Ahmed Mushfiq Mobarak; Corey Vernot; Michael E. Waugh
  18. Income Segregation and Social Housing in France By Kévin Beaubrun-Diant; Tristan-Pierre Maury
  19. Determinants of inter-regional financial inclusion heterogeneities in the Philippines By Burguillos, Je-Al; Cassimon, Danny
  20. Trade Shocks and Growth: The Impact of the Quartz Crisis in Switzerland By Twinam, Tate
  21. The Ecological Impact of Place-Based Economic Policies By Garg, Teevrat; Shenoy, Ajay
  22. Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity By Janke, Katharina; Lee, Kevin; Propper, Carol; Shields, Kalvinder; Shields, Michael A.
  24. Ancient Origins of the Global Variation in Economic Preferences By Becker, Anke; Enke, Benjamin; Falk, Armin
  25. Japanese Inter-prefectural Input-Output Table: Construction Method and Main Results for 2005 (Japanese) By ARAI Sonoe
  26. Effects of Recent Minimum Wage Policies in California and Nationwide: Initial Results from a Pre-specified Analysis Plan By Neumark, David; Yen, Maysen
  27. Potential and pitfalls of big transport data for spatial interaction models of urban mobility By Oshan, Taylor M.
  28. The Impact of Regional Bank Consolidation on Regional Economies: Evidence from Data on the Location of Bank Branches at the Municipal Level (Japanese) By HARIMAYA Kozo; OZAKI Yasufumi
  29. A revised application of 3Ts´ Florida in peri-urban areas By Cattivelli, Valentina; Stawinoga, Agnieszka
  30. Disparities in Regional Productivity, Capital Accumulation, and Efficiency across Indonesia: A Convergence Clubs Approach By Mendez-Guerra, Carlos; Kataoka, Mitsuhiko
  31. Migration-prone and migration-averse places. Path dependence in long-term migration to the US By Andrés Rodríguez-Pose; Viola von Berlepsch
  32. Proximity, Innovation and Networks: A Concise Review and Some Next Steps By Pierre-Alexandre Balland; Ron Boschma; Koen Frenken
  33. The Speed of Innovation Diffusion in Social Networks* By Itai Arieli; Yakov Babichenko; Ron Peretz; H. Peyton Young
  34. The Speed of Innovation Diffusion By Itai Arieli; Yakov Babichenko; Ron Peretz; H. Peyton Young
  35. Rational Inattention and Migration Decisions By Bertoli, Simone; Fernández-Huertas Moraga, Jesús; Guichard, Lucas
  36. "Stabilizing State and Local Budgets through the Pandemic and Beyond" By Alexander Williams
  37. How home equity can be used to fight a recession. A U.S. case study By De Koning, Kees
  38. The Effect of Immigration on Business Dynamics and Employment By Orrenius, Pia M.; Zavodny, Madeline; Abraham, Alexander
  39. What drives university-industry collaboration: Research excellence or firm collaboration strategy? By Kwadwo Atta-Owusu; Rune Dahl Fitjar; Andrés Rodríguez-Pose
  40. Spatial externality and indeterminacy By Emmanuelle Augeraud-Véron; Arnaud Ducrot
  41. Terrorism, Political Opinions, and Election Outcomes: Evidence from Europe By Peri, Giovanni; Rees, Daniel I.; Smith, Brock

  1. By: Adam Guren; Alisdair McKay; Emi Nakamura; Jón Steinsson
    Abstract: Recent empirical work uses variation across cities or regions to identify the effects of economic shocks of interest to macroeconomists. The interpretation of such estimates is complicated by the fact that they reflect both partial equilibrium and local general equilibrium effects of the shocks. We propose an approach for recovering estimates of partial equilibrium effects from these cross-regional empirical estimates. The basic idea is to divide the cross-regional estimate by an estimate of the local fiscal multiplier, which measures the strength of local general equilibrium amplification. We apply this approach to recent estimates of housing wealth effects based on city-level variation, and derive conditions under which the adjustment is exact. We then evaluate its accuracy in a richer general equilibrium model of consumption and housing. The paper also reconciles the positive cross-sectional correlation between house price growth and construction with the notion that cities with larger price volatility have lower housing supply elasticities using a model in which housing supply elasticities are more dispersed in the long run than in the short run.
    JEL: E20 R21
    Date: 2020–03
  2. By: Bergman, Peter (Columbia University); McFarlin, Isaac (University of Florida)
    Abstract: School choice may allow schools to impede access to students perceived as costlier to educate. To test this, we sent emails from fictitious parents to 6,452 charter schools and traditional public schools subject to school choice in 29 states and Washington, D.C. The fictitious parent asked whether any student is eligible to apply to the school and how to apply. Each email signaled a randomly assigned attribute of the child. We find that schools are less likely to respond to inquiries from students with poor behavior, low achievement, or a significant special need. Lower response rates to students with this special need are driven by charter schools. Otherwise, these results hold for traditional public schools, high value-added schools, including high-value added, urban charter schools.
    Keywords: school choice, discrimination, audit study, experiment
    JEL: I20 I21 I24 I28
    Date: 2020–02
  3. By: Bergman, Peter (Columbia University); Chan, Eric (Columbia University); Kapor, Adam (Princeton University)
    Abstract: This paper shows that imperfect information about school quality causes low-income families to live in neighborhoods with lower-performing, more segregated schools. We randomized the addition of school quality information onto a nationwide website of housing listings for families with housing vouchers. We find that this information causes families to choose neighborhoods with schools that have 1.5 percentage point higher proficiency rate on state exams. We use data from the experiment to estimate a dynamic model of families' search for housing on and off the website, as well as their location decisions. The model incorporates imperfect information about school quality and characterizes the bias that would arise from estimating neighborhood preferences ignoring this information problem. Having data from both the treatment and control groups allows us to estimate families' prior beliefs about school quality and each group's apparent valuation of school quality. Families tend to underestimate school quality conditional on neighborhood characteristics. If we had ignored imperfect information, we would have estimated that the control group valued school quality relative to their commute downtown by less than half that of the treatment group.
    Keywords: housing, education, information, experiment, choice
    JEL: I24
    Date: 2020–02
  4. By: Kishi, Akio; Kono, Tatsuhito
    Abstract: Concentration or dispersion of retail stores is the result of market interactions. If it involves market failures, then the spatial location equilibrium of retail stores is not optimal in terms of social welfare. We investigate two important market failures involving retail store location: “monopolistic competition among retail stores” and “shopping externality caused by multipurpose shopping”. Retail store locations in market equilibrium and those in a social optimum are derived. Next, we show that the degree of hollowing-out of urban centers is not always excessive from the perspective of the social optimum. It is believed that hollowing-out of urban commercial centers harms social welfare. But on the contrary, if the accessibility of suburban areas from residential areas is lower than that of the urban center, we confirm that hollowing-out of urban commercial centers is desirable. In this case, promotion of retail stores’ location in urban center, such as subsidies to locate in the city center or restrictions on location in suburbs, decreases social welfare. Instead, promotion of stores’ location in the suburbs is preferred.
    Keywords: monopolistic competition, hollowing-out, suburbanization, shopping externality
    JEL: L11 L13 R12 R32
    Date: 2020–03–24
  5. By: Amarasinghe, Ashani (Monash University); Hodler, Roland (University of St. Gallen); Raschky, Paul A. (Monash University); Zenou, Yves (Monash University)
    Abstract: This paper analyzes the role of networks in the spatial diffusion of local economic shocks in Africa. We show that road and ethnic connectivity are particularly important factors for diffusing economic spillovers over longer distances. We then determine the key players, i.e., which districts are key in propagating local economic shocks across Africa. Using these results, we conduct counterfactual policy exercises to evaluate the potential gains from policies that increase economic activity in specific districts or improve road connectivity between districts.
    Keywords: transportation, natural resources, key player centrality, spatial spillovers, networks, Africa
    JEL: O13 O55 R12
    Date: 2020–03
  6. By: Konstantin Büchel (University of Bern); Maximilian V. Ehrlich (University of Bern); Diego Puga (CEMFI, Centro de Estudios Monetarios y Financieros); Elisabet Viladecans-Marsal (Universitat de Barcelona)
    Abstract: Using anonymised cellphone data, we study the role of social networks in residential mobility decisions. Individuals with few local contacts are more likely to change residence. Movers strongly prefer places with more of their contacts closeby. Contacts matter because proximity to them is itself valuable and increases the enjoyment of attractive locations. They also provide hard-to-find local information and reduce frictions, especially in home-search. Local contacts who left recently or are more central are particularly influential. As people age, proximity to family gains importance relative to friends.
    Keywords: Social networks, residential mobility.
    JEL: R23 L14
    Date: 2019–03
  7. By: HAMAGUCHI Nobuaki; OKANO Hideyuki; OSAJIMA Shuzo
    Abstract: In recent years, we have noticed a proliferation of startup firms being established in Kyushu, especially in Fukuoka City. We analyze two propositions: (1) The determinants of the startup company location are the initial costs and the expected profitability; (2) The magnitude of the initial costs and the expected profitability are influenced by regional variables. In the estimation results using nationwide municipality-level data, the size of industrial agglomeration and the degree of turnover of the local population through migration improve profitability, while competitive markets, better access to finance, and the diversity of industry structure at the local level reduce the initial costs. In the case of Kyushu data, only the competitive market environment has the effect of suppressing the initial cost of startups. In Kyushu, which is located a long distance from the central markets in Kansai or Kanto, implementing policies that minimize initial costs rather than policies that increase profitability will promote startups.
    Date: 2020–01
  8. By: Andrés Rodríguez-Pose; Neil Lee
    Abstract: Innovation in cities is increasingly regarded as an outcome of two potential inputs: scientific activity and creativity. Recent research using firm level data has suggested that actually it might be the combination of these two inputs, rather than the mere presence of workers representing each group, which matters. Yet there is little evidence on whether this relationship holds using city level data in the case of the United States (US). This paper investigates this gap in our knowledge by examining how the combination of STEM (geeks) and creative workers (hipsters) in a panel of 290 US Metropolitan Statistical Areas during the period between 2005 and 2015 relates to city level innovation. The results indicate that, although the presence of STEM workers is a more important driver of innovation than that of creative ones, the most innovative cities are characterised by a combination of the two. Hence, current policies which tend to focus mainly on either STEM or creativity may be better targeted at ensuring interactions between the two.
    Keywords: creativity, creative class, STEM, innovation, cities, United States
    JEL: O18 O32 O33 R12
    Date: 2020–04
  9. By: Hauptmeier, Sebastian; Holm-Hadulla, Fédéric; Nikalexi, Katerina
    Abstract: We study the impact of monetary policy on regional inequality using granular data on economic activity at the city- and county-level in Europe. We document pronounced heterogeneity in the regional patterns of monetary policy transmission. The output response to monetary policy shocks is stronger and more persistent in poorer regions, with the difference becoming particularly pronounced in the extreme tails of the distribution. Regions in the lower parts of the distribution exhibit hysteresis, consisting of long-lived adjustments in employment and labor productivity in response to the shocks. As a consequence, policy tightening aggravates regional inequality and policy easing mitigates it. JEL Classification: C32, E32, E52
    Keywords: local projections, monetary policy, quantile regressions, regional heterogeneity
    Date: 2020–03
  10. By: Peri, Giovanni (University of California, Davis); Rury, Derek (University of California, Davis); Wiltshire, Justin C. (University of California, Davis)
    Abstract: Using a synthetic control estimation strategy we examine the economic impact of a large inflow of people from Puerto Rico into Orlando in the aftermath of Hurricane Maria, which devastated Puerto Rico in September 2017. We find that aggregate employment in Orlando increased as a result of the inflow, as did employment in the construction and retail sectors. We also find positive overall employment effects on non-Hispanic and less-educated workers, as well as positive effects on compensation for those same subgroups in the retail sector. In the construction sector – which absorbed the preponderance of this migrant labor supply shock – we find that earnings for non-Hispanic and less-educated (workers likely to be natives) decreased by a modest amount. These results together suggest that, while migrant inflows may have small negative impacts on the earnings of likely-native workers in sectors directly exposed to the labor supply shock, employment and earnings of likely-native workers in other sectors are positively impacted, possibly by increased local demand.
    Keywords: migration, natural disasters, local economies
    JEL: F22 J15 J21 J61
    Date: 2020–03
  11. By: Batabyal, Amitrajeet; Nijkamp, Peter
    Abstract: We analyze the impact of wage taxation on the workplace choices of and the commuting costs borne by individuals in an aggregate economy consisting of an urban and an adjacent rural region. This economy is inhabited by a continuum of individuals who are uniformly distributed with a total mass of one. These individuals choose whether to work in the urban or in the rural region. The wage is higher (lower) in the urban (rural) region. Our analysis leads to three findings. First, assuming that individuals work in the region in which their after-tax wage net of commuting costs is the highest, we compute the equilibrium number of workers in each region. Second, supposing that the rural region’s median voter works in the urban region, we determine the Nash equilibrium in taxes and ask whether either of the two regions ought to tax or to subsidize the wage. Finally, assuming that the rural region’s median voter works in the rural region, we solve for the Nash equilibrium in taxes and show that optimality calls for the urban and the rural governments to subsidize the two wages.
    Keywords: Commuting Cost, Rural Region, Urban Region, Wage Taxation, Workplace Choice
    JEL: H30 R12 R49
    Date: 2019–08–26
  12. By: Oliver Rehbein; Simon Rother
    Abstract: This paper provides empirical evidence that banks leverage social connections as an information channel. Using county-to-county friendship-link data from Facebook, we find that strong social ties increase loan volumes, especially if screening incentives are large. This effect is distinct from physical and cultural distances. Physical distance becomes significantly less relevant when accounting for social connections. Moreover, sufficiently strong social ties prevent cultural differences from constituting a lending barrier. The effect of social connectedness is more supply-side driven for small banks but demand-side driven for large banks. To bolster identification, we exploit highway connections, historical travel costs, and the quasi-random staggered introduction of Facebook as instruments. Our results reveal the important role of social connectedness as an information channel, speak to the nature of borrowing constraints, and point toward implications for bank-lending strategies and anti-trust policies.
    Keywords: bank lending, social networks, information frictions, culture, distance
    JEL: D82 D83 G21 O16 L14 Z13
    Date: 2020–03
  13. By: Andrew A. Alola (Istanbul Gelisim University, Turkey); Simplice A. Asongu (Yaoundé, Cameroon); Uju V. Alola (Istanbul Gelisim University, Turkey)
    Abstract: This study investigates the nexus between tourism development and house prices in the Republic of Cyprus over the period spanning from 2005Q1 to 2016Q4. Tourism indicators vis-Ã -vis tourism arrivals along with other explanatory variables (domestic credit, land area per person, and the consumer price index) are employed in a multivariate Autoregressive Distributed Lag (ARDL)-bound test model. The empirical results indicate a significant evidence of cointegration. Indicatively, an observed adjustment of about 44% from short-run to long-run implies that the model is not relatively slow to adjust to disequilibrium. Importantly, a percent increase in tourism arrivals is observed to cause a rise in house price by about 37%. Expectedly, it is statistically observed that as the land area per person decreases, it is accompanied by a hike in house price. Also, the impacts of domestic credit offered to private enterprises and the consumer price index are different from the results in previous studies. As a policy guide, the government of Cyprus and stakeholders in the tourism and housing sectors should outline a strategy that will ensure the social welfare of people such that housing availability is not hampered by tourism activities.
    Keywords: house prices; tourism; domestic credit; cointegration; ARDL; Republic of Cyprus
    JEL: C22 O50 R31
    Date: 2019–01
  14. By: Andrés Rodríguez-Pose
    Abstract: Regions and cities face unceasing pressures to adapt in response to processes of globalisation, changes in industrial production, and new patterns of migration and trade. At the same time, the dominant development policies are proving less than capable of providing answers to these challenges. Strategies based on a mix of physical and human capital and technology have not succeeded in dealing with growing territorial inequality and its treacherous economic, social and political consequences. There is thus an urgent need to understand why territorial divergence occurs and why there is what seems to be a growing decline in the returns of public intervention targeting economic development. In search for answers, scholars have turned to the examination of institutions. But despite progress in our grasp of how institutions affect development, crucial knowledge gaps remain. This paper reviews recent progress in our understanding of the role of institutions for development, unveils the most important gaps, and proposes a series of avenues to improve how a better understanding of how institutions shape regional and urban development can lead to more efficient development policies.
    Keywords: institutions, government quality, public policies, regions, cities
    JEL: E02 O43 R11 R50
    Date: 2020–03
  15. By: Chang, Simon (University of Western Australia); Cobb-Clark, Deborah A. (University of Sydney); Salamanca, Nicolás (Melbourne Institute of Applied Economic and Social Research)
    Abstract: We identify the causal effect of teacher qualifications on parents' investments in their children. Exploiting a unique, high-stakes educational setting in which teachers are randomly assigned to classes, we show that parents react to more qualified teachers by increasing their financial investments in their children. The key mechanism is an increase in parents' belief that academic achievement is driven by student effort—for which financial investment is instrumental. However, higher teacher qualifications do not improve student test scores. This is likely due to a negative effect of teacher qualifications on students' belief in the importance of effort for academic achievement. Our findings uncover various family-wide behavioral reactions to teacher qualifications and highlight the intricacies in educational production within households.
    Keywords: teacher quality, student achievement, parental investment, beliefs, school effort
    JEL: D10 I21 I24
    Date: 2020–03
  16. By: Lehmann, Hartmut (University of Bologna); Oshchepkov, Aleksey (NRU HSE, Moscow); Silvagni, Maria Giulia (University of Bologna)
    Abstract: In this paper, we study convergence in per capita gross regional products across Russian regions in the period from 1996 to 2017. To this purpose, we estimate growth equations, which are directly derived from a neoclassical growth model, augmented with human capital and migration. To our knowledge, this is the first paper that explicitly applies a neoclassical model to analyze the regional convergence process in the Russian case. We also take into account possible spatial effects and do a series of other robustness checks. Our main estimates establish a convergence rate of around 2% per year. While we fail to find any role of human capital for regional economic growth, we find that interregional migration and interdependencies of the growth experience of Russian regions contribute to economic convergence between them.
    Keywords: migration, regional economics, economic growth, convergence, Russia
    JEL: O47 R11 P2
    Date: 2020–03
  17. By: David Lagakos; Samuel Marshall; Ahmed Mushfiq Mobarak; Corey Vernot; Michael E. Waugh
    Abstract: Recent studies find that observational returns to rural-urban migration are near zero in three developing countries. We revisit this result using panel tracking surveys from six countries, finding higher returns on average. We then interpret these returns in a multi-region Roy model with heterogeneity in migration costs. In the model, the observational return to migration confounds the urban premium and the individual benefits of migrants, and is not directly informative about the welfare gain from lowering migration costs. Patterns of regional heterogeneity in returns, and a comparison of experimental to observational returns, are consistent with the model’s predictions.
    JEL: O11 O18 R23
    Date: 2020–03
  18. By: Kévin Beaubrun-Diant (LEDa - Laboratoire d'Economie de Dauphine - Université Paris Dauphine-PSL); Tristan-Pierre Maury (EDHEC - EDHEC Business School - Edhec)
    Abstract: This article provides a geographical analysis of the contribution of social housing to income segregation in France from 1999 to 2015 at very detailed spatial scale. During this period, a law required some French municipalities (with more than 3500 inhabitants in large conurbations) to build more social housing to reduce segregation. Surprisingly, it appears that while home tenure (social vs private housing) segregation has been decreasing, income segregation has been rising. With segregation decomposition techniques, we provide evidence that this is a side-e¤ect of the legal framework: decreasing income segregation in the geographical scope of the law but a ‡ight e¤ect of middle and upper class households out of it.
    Date: 2020–03–31
  19. By: Burguillos, Je-Al; Cassimon, Danny
    Abstract: This study explores the key factors that affected the deepening of financial inclusion across the 17 regions of the Philippines from 2013-2017. Using the regional multidimensional financial inclusion index (FII) developed by the BSP, the study finds out that significant heterogeneities exist among regions, and that they persist over time, suggesting most importantly that the least financially inclusive regions do not show significant progress. Moreover, using different panel estimation techniques, we try to determine the possible factors that affect this inter-regional financial inclusion heterogeneities. Overall, we show that regional GDP per capita, population, a proxy for the availability of physical infrastructure, and the degree of mobile penetration are among the robust factors explaining the financial inclusion variations across regions.
    Keywords: financial inclusion, financial development, inter-regional disparities, the Philippines
    JEL: I30 G18 O53 R11
    Date: 2020–04
  20. By: Twinam, Tate
    Abstract: Agglomeration economies and clustering effects are a key driver of urban growth. They can also be a source of vulnerability when cities and regions specialize in export-intensive industries. Foreign competition, exchange rate movements, macroeconomic volatility, and technological change are all potential threats to exporters, and shocks to these industries can have long-run impacts on population size and growth. In this paper, I study an unusual confluence of all four of these trade shocks: The quartz crisis in Switzerland, which devastated the globally-dominant Swiss watch industry in the 1970s. I document the geographic agglomeration pattern of the industry and the impact of the crisis on exports, employment, and wages. Using a differences-in-differences strategy, I show that this series of trade shocks led to a large and rapid loss of population in affected areas, and a long-run change in growth patterns. I explore the mechanisms behind this population change, including the role of manufacturing employment and immigration. I discuss the implications of these results for theories of urban growth, and contrast them with recent work on the China shock in Europe and the United States.
    Date: 2020–03–12
  21. By: Garg, Teevrat (University of California, San Diego); Shenoy, Ajay (University of California, Santa Cruz)
    Abstract: Does economic development have an unavoidable ecological cost? We examine the ecological impacts of one of India's signature place-based economic policies involving massive tax benefits for new industrial and infrastructure development following the creation of the new state of Uttarakhand. The policy, which had an explicit pro-environment mandate, resulted in no meaningful change in local forest cover. Our results suggest that even in settings with low levels of enforcement, place-based economic policies with pro-environment mandates can achieve sizeable economic expansion without major ecological costs.
    Keywords: place-based economic policies, agglomeration, deforestation
    JEL: Q53 O40 Q56 H54
    Date: 2020–03
  22. By: Janke, Katharina (Lancaster University); Lee, Kevin (University of Nottingham); Propper, Carol (Imperial College London); Shields, Kalvinder (University of Melbourne); Shields, Michael A. (Monash University)
    Abstract: We estimate a model that allows for dynamic and interdependent responses of morbidity in different local areas to economic conditions at the local and national level, with statistical selection of optimal local area. We apply this approach to quarterly British data on chronic health conditions for those of working age over the period 2002-2016. We find strong and robust counter-cyclical relationships for overall chronic health, and for five broad types of health conditions. Chronic health conditions therefore increase in poor economic times. There is considerable spatial heterogeneity across local areas, with the counter-cyclical relationship being strongest in poorer local areas with more traditional industrial structures. We find that feedback effects are quantitatively important across local areas, and dynamic effects that differ by health condition. Consequently, the standard panel data model commonly used in the literature considerably under-estimates the extent of the countercyclical relationship in our context.
    Keywords: macroeconomic conditions, health, morbidity, dynamics, heterogeneity, aggregation
    JEL: J10 J21 C33 E32
    Date: 2020–03
  23. By: Yuliia Puzanova; M. Hakan Eratalay
    Abstract: This paper analyses the effect of real estate news sentiment on the stock returns of Swedbank and SEB Bank, which are leading banks in Sweden and the Baltic region. For this purpose, we have selected sentiments from news about real estate in the markets of these banks in Sweden, Estonia, Latvia, and Lithuania between 4 January 2016 and 19 February 2019. Estimation results showed that sentiments about the housing market affect stock returns for the banks, and showed the presence of the asymmetric effects of positive and negative news. We also found that there is a difference in the stock returns of these banks in terms of when and to what extent they react to news coming from the Baltic States and Sweden. Moreover, we found that the number of negative news affects the stock returns of the banks more than the strength of the news. We also apply several GARCH specifications to show that negative and positive news explain the asymmetric effects in the volatility processes to some extent. The asymmetric effects in the volatilities are captured much better by the GJR-GARCH and NA-GARCH models, implying that these effects are generated by idiosyncratic shocks rather than the sentiments in the news.
    Keywords: sentiment analysis, real estate market, Sweden , Baltics, Latvia, Lithuania, Estonia
    Date: 2020
  24. By: Becker, Anke (University of Bonn); Enke, Benjamin (University of Bonn); Falk, Armin (briq, University of Bonn)
    Abstract: Variation in economic preferences is systematically related to both individual and aggregate economic outcomes, yet little is known about the origins of the worldwide preference variation. This paper uses globally representative data on risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust to uncover that contemporary preference heterogeneity has its roots in the structure of the temporally distant migration patterns of our very early ancestors: In dyadic regressions, differences in preferences between populations are significantly increasing in the length of time elapsed since the ancestors of the respective groups broke apart from each other. To document this pattern, we link genetic and linguistic distance measures to population-level preference differences (i) in a wide range of cross-country regressions, (ii) in within-country analyses across groups of migrants, and (iii) in analyses that leverage variation across linguistic groups. While temporal distance drives differences in all preferences, the patterns are strongest for risk aversion and prosocial traits.
    Keywords: risk preferences, time preferences, social preferences, origins of preferences
    JEL: D01 D03
    Date: 2020–03
  25. By: ARAI Sonoe
    Abstract: In order to analyze determinants of regional income disparities we must focus on the economic interdependence between regions as well as technological spillovers and factor endowment in the regions. For instance, we want to know what changes have occurred in the division of work among Japanese regions in recent years and whether they have increased or decreased regional income disparities. When we want to study these interdependences and their changes, the need for inter-regional input-output (IO) table is evident. This paper explains the construction of inter-prefectural IO table for 2005 and main results. In Japan, each prefecture regularly releases prefectural-level IO tables. However, prefectural IO tables is not necessarily constructed on consistent industrial classification and activity definitions. Therefore, the first step is to harmonize these differences in classifications and definitions. The most important harmonization undertaken is the treatment of activities of headquarters for companies that operate trans-regionally with offices in deferent prefectures. After harmonizing prefectural IO table, an inter-prefectural IO table is constructed by estimating intermediate sectoral inputs from different prefectures.
    Date: 2020–02
  26. By: Neumark, David (University of California, Irvine); Yen, Maysen (University of California, Irvine)
    Abstract: Many U.S. cities have recently increased their minimum wages, especially in California. We report results from carrying out analyses of the impacts of these city minimum wages, as specified in a pre-analysis plan (PAP) that was registered on Open Science Framework prior to the release of data covering two years of minimum wage increases. In this working paper, we report results updating the data through 2018; our final paper will add another year of evidence on minimum wages. For employment effects, in our analysis of California cities we find a hint of negative employment effects, but the estimates are neither robust nor statistically strong. The analysis of local minimum wages nationally also provides some evidence of disemployment effects, although it is not statistically significant. For distributional effects, our city-specific analyses do not provide clear evidence one way or the other, except for evidence of increases in the shares poor or low-income in Santa Clara. In our panel data analyses of all California or national local minimum wages, there is evidence pointing to declines in the shares poor or low-income, although at least for California the data indicate that the shares poor or low-income were declining before local minimum wages took effect (or were increased). More definitive results await our next update.
    Keywords: minimum wage, employment, poverty, low-income
    JEL: J23 J38
    Date: 2020–03
  27. By: Oshan, Taylor M.
    Abstract: Massive amounts of data that characterize how people meet their economic needs, interact within social communities, and utilize shared resources are being produced by cities. Harnessing these ever-increasing data streams is crucial for understanding urban dynamics. Within the context of transportation modeling it still remains largely unknown whether or not these new data sources provide the opportunity to better understand spatial processes. Therefore, in this paper, the usefulness of a recently available big transport dataset - the New York City (NYC) taxi trip data - is evaluated within a spatial interaction modeling framework. This is done by first comparing parameter estimates from a model using the taxi data to parameter estimates from a model using a traditional commuting dataset. In addition, the high temporal resolution of the taxi data provide an exciting means to explore potential dynamics in movement behavior. It is demonstrated how parameter estimates can be obtained for temporal subsets of data and compared over time to investigate mobility dynamics. The results of this work indicate that a pitfall of big transport data is that it is less useful for modeling distinct phenomena; however, there is a strong potential for modeling high frequency temporal dynamics of diverse urban activities.
    Date: 2020–03–09
  28. By: HARIMAYA Kozo; OZAKI Yasufumi
    Abstract: In Japan, the consolidation among regional banks has been increasing, reflecting the deterioration of the business conditions under the negative interest rate policy. The government also said that legislation will be submitted to the Diet in 2020 that will exempt regional banks from the anti-monopoly law for 10 years to facilitate consolidation. Therefore, the current wave of consolidation will be accelerated in the near future. This study investigates the impact of regional bank consolidation on regional economies, using data on the location of bank branches at the municipal level. We consider the differences in two types of consolidation; mergers and the establishment of a bank holding company. We examine whether the changes in economic conditions of municipalities where the branches of consolidated regional banks existed differ from the other municipalities, using the difference-in-differences (DID) method. The major results of this study are summarized as follows: First, political variables have no significant impact on the regional economic indicators in the case of mergers. Second, in the case of bank holding companies, political variables have a significant impact on taxable income, local government tax revenues, and so on. Third, consistent results are obtained when excluding urban areas. These contrasting results between mergers and the establishment of a bank holding company indicate the potential benefits of the bank holding company structure, which can provide flexibility in structuring strategic transactions with existing entities.
    Date: 2019–12
  29. By: Cattivelli, Valentina; Stawinoga, Agnieszka
    Abstract: This article analyzes the determinants and the distribution of Creative Class in peri-urban areas. Starting from Florida´s hypothesis on localization patterns (the famous 3Ts), the article uses unique measures to define tolerance and urban climate, to add innovative determinants and extend the analysis to peri-urban territory in Northern Italy. These measures are tested applying a principal component analysis and spatial regression models. The results partially confirm Florida. Creative class presence is strongly associated with socio-economic determinants, such us public expenditure, presence of creative and no-creative firms, volunteering; less than cultural amenities and technology. Tolerance has more controversial effects.
    Keywords: Creative class, creative capital, Peri-urban municipalities, civil unions
    JEL: R00 R1 R11 R12
    Date: 2019–10
  30. By: Mendez-Guerra, Carlos; Kataoka, Mitsuhiko
    Abstract: This paper studies the evolution of regional disparities in labor productivity, capital accumulation, and efficiency across Indonesian provinces over the 1990-2010 period. Through the lens of a non-linear dynamic factor model, we first test the hypothesis that all provinces would eventually converge to a common steady-state path. We reject this hypothesis and find that the provincial dynamics of labor productivity are characterized by two convergence clubs. We next evaluate the dynamics of the proximate determinants of labor productivity and find some mixed results. On the one hand, physical and human capital accumulation are characterized by four and two convergence clubs, respectively. On the other hand, efficiency is characterized by a unique convergence club. The paper concludes suggesting that based on the provincial composition of each club and the common low level of efficiency across Indonesia, considerable improvements in both capital accumulation and efficiency are still needed to reduce regional disparities and accelerate productivity growth.
    Keywords: Regional productivity, Capital Accumulation, Efficiency, Convergence clubs, Indonesia
    JEL: R10 R11 R58
    Date: 2020–03–28
  31. By: Andrés Rodríguez-Pose; Viola von Berlepsch
    Abstract: Does past migration beget future migration? Do migrants from different backgrounds, origins and ethnicities, and separated by several generations always settle – in a path dependent way – in the same places? Is there a permanent separation between migration-prone and migration-averse areas? This paper examines whether that is the case by looking at the settlement patterns of two very different migration waves to the United States (US), that of Europeans at the end of the 19th and early 20th centuries and that of Latin Americans between the 1960s and the early 21st century. Using Census data aggregated at county level, we track the settlement pattern of migrants and assess the extent to which the first mass migration wave has determined the later settlement pattern of Latin American migrants. The analysis, conducted using ordinary least squares, instrumental variable and panel data estimation techniques, shows that past US migration patterns create a path dependence that has conditioned the geography of future migration waves. Recent Latin American migrants have flocked, once other factors are controlled for, to the same migration prone US counties where their European predecessors settled, in spite of the very different nature of both migration waves and a time gap of three to five generations.
    Keywords: migration, migration waves, long-term, Latin America, Europe, counties, US
    JEL: F22 J15 O15 R23
    Date: 2020–04
  32. By: Pierre-Alexandre Balland; Ron Boschma; Koen Frenken
    Abstract: We review proximity research on collaborative innovation among organizations. We discuss the basic theorical tenets of collaborative innivation and summarize empirical findings on the roles of various forms of proximity. At the aggregative level, we look at studies of inter-organizational relations at the aggregate level of innovation systems. We end with a discussion of next steps in proximity research on collaborative innovation.
    Keywords: proximity, innovation, networks, inter-organizational relations, innovation systems, knowledge base
    JEL: B25 D85 L14 O3 R1
    Date: 2020–03
  33. By: Itai Arieli (Faculty of Industrial Engineering and Management, Technion–Israel Institute of Technology); Yakov Babichenko (Faculty of Industrial Engineering and Management, Technion–Israel Institute of Technology); Ron Peretz (Department of Economics, Bar Ilan University); H. Peyton Young (London School of Economics and Nuffield College, University of Oxford)
    Abstract: New ways of doing things often get started through the actions of a few innovators, then diffuse rapidly as more and more people come into contact with prior adopters in their social network. Much of the literature focuses on the speed of diffusion as a function of the network topology. In practice, however, the topology may not be known with any precision, and it is constantly in flux as links are formed and severed. Here we establish an upper bound on the expected waiting time until a given proportion of the population has adopted that holds independently of the network structure. Kreindler and Young [33, 2014] demonstrated such a bound for regular networks when agents choose between two options: the innovation and the status quo. Our bound holds for directed and undirected networks of arbitrary size and degree distribution, and for multiple competing innovations with different payoffs.
    Date: 2019–08–22
  34. By: Itai Arieli (Faculty of Industrial Engineering and Management, Technion–Israel Institute of Technology); Yakov Babichenko (Faculty of Industrial Engineering and Management, Technion–Israel Institute of Technology); Ron Peretz (Department of Economics, Bar Ilan University); H. Peyton Young (London School of Economics and Nuffield College, University of Oxford)
    Abstract: New ways of doing things often get started through the actions of a few innovators, then diffuse rapidly as more and more people come into contact with prior adopters in their social network. Much of the literature focuses on the speed of diffusion as a function of the network topology. In practice, however, the topology may not be known with any precision, and it is constantly in flux as links are formed and severed. Here we establish an upper bound on the expected waiting time until a given proportion of the population has adopted that holds independently of the network structure. Kreindler and Young [33, 2014] demonstrated such a bound for regular networks when agents choose between two options: the innovation and the status quo. Our bound holds for directed and undirected networks of arbitrary size and degree distribution, and for multiple competing innovations with different payoffs.
    Date: 2018–12–17
  35. By: Bertoli, Simone (CERDI, University of Auvergne); Fernández-Huertas Moraga, Jesús (Universidad Carlos III de Madrid); Guichard, Lucas (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Acquiring information about destinations can be costly for migrants. We model information frictions in the rational inattention framework and obtain a closed-form expression for a migration gravity equation that we bring to the data. The model predicts that ows from countries with a higher cost of information or stronger priors are less responsive to variations in economic conditions at destination, as migrants rationally get less information before deciding where to move. The econometric analysis reveals systematic heterogeneity in the pro-cyclical behavior of migration flows across origins that is consistent with the existence of information frictions.
    Keywords: rational inattention, information, international migration, gravity equation
    JEL: F22 D81 D83
    Date: 2020–03
  36. By: Alexander Williams
    Abstract: The federal government appears to have abandoned the idea of a coordinated public health response to the COVID-19 pandemic, leaving the entirety to state and local governments. Meanwhile, the economic standstill resulting from necessary public health measures will soon cripple state and local budgets. Alexander Williams outlines a proposal for an intragovernmental automatic stabilizer program that would provide a backstop for state and local finances—both during the pandemic and beyond. Without this program, states will be severely constrained in their ability to respond to COVID-19, and balanced budget requirements will force them to cut jobs and raise taxes during the deepest recession in living memory.
    Date: 2020–03
  37. By: De Koning, Kees
    Abstract: The corona virus occurrence has and will dramatically change the economic outlook for many countries in the world, including the one for the U.S. Not until a vaccine is produced and accepted as safe for users, will this threat continue to live on. Currently consumer preferences are rapidly changing, including avoiding local and international travel. Supply chains are and will also be seriously affected as some of the most important exporting countries, (China and South Korea) are bearing the brunt of the virus infections. What has this to do with the subject of this paper: “How home equity can be used to fight a recession”. At first glance little, but as will be explained in the paper actually quite a lot. The likely results of the corona virus in economic terms will be company closures and/or staff reductions, which will be reflected in reduced earnings, both for companies and individual households leading to higher unemployment levels. Obligations on home mortgages will for quite a few households become a very heavy burden. Home mortgage obligations are currently not linked to income fluctuations, neither in the U.S., nor in any other country. Secondly the concept of the “Bank of Mums and Dads” can only apply to households where the Mums and Dads are in a sound financial position themselves. The worldwide low interest rates and the expected reduction in pension payouts as a result of falling stock markets will reduce the scope for such financial assistance for many parents. The proposals, as set out in this paper, directly links income levels with the ability to service mortgage debt. The second and probably even more important element is to extend the concept of the “Bank of Mums and Dads” to a new government entity: “A Mortgage Debt Stability Fund” (MDSF). The aim of the MDSF is to facilitate the temporary withdrawal of home equity as and when macro economic situations require it to do so. An MDSF helps fight recessions. The currently applied system turns such home equity withdrawal into a loan rather than a cash withdrawal from personal bank accounts. The latter involves no charges. The MDSF can have the latter capacity. Federal Reserve funding to the MDSF (another form of QE) can act as the National Bank of Mums
    Keywords: Recession, home mortgages, home equity,corona virus, Mortgage Debt Stability Fund (MDSF)
    JEL: D14 E3 E58 E6
    Date: 2020–03–09
  38. By: Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (University of North Florida); Abraham, Alexander (Federal Reserve Bank of Dallas)
    Abstract: Immigration, like any positive labor supply shock, should increase the return to capital and spur business investment. These changes should have a positive impact on business creation and expansion, particularly in areas that receive large immigrant inflows. Despite this clear prediction, there is sparse empirical evidence on the effect of immigration on business dynamics. One reason may be data unavailability since public-access firm-level data are rare. This study examines the impact of immigration on business dynamics and employment by combining U.S. data on immigrant inflows from the Current Population Survey with data on business formation and survival and job creation and destruction from the National Establishment Time Series (NETS) database for the period 1997 to 2013. The results indicate that immigration increases the business growth rate by boosting business survival and raises employment by reducing job destruction. The effects are largely driven by less-educated immigrants.
    Keywords: immigration, business dynamics, firm entry, firm exit, job creation, job destruction
    JEL: J15 J61 L25
    Date: 2020–02
  39. By: Kwadwo Atta-Owusu; Rune Dahl Fitjar; Andrés Rodríguez-Pose
    Abstract: Research and innovation policy aims to boost research output and university-industry collaboration (UIC) at least in part to allow firms access to leading scientific knowledge. As part of their mission, universities are expected to contribute to innovation in their regions. However, the relationship between research output and UIC is unclear: research-intensive universities can produce frontier research, which is attractive to firms, but may also suffer from a gap between the research produced and the needs of local firms, as well as mission overload. This may hinder local firms’ ability to cooperate with universities altogether or force them to look beyond the region for other suitable universities to interact with. This paper investigates the relationship between the research output of local universities and firms’ participation in UICs across different geographical scales. It uses Community Innovation Survey (CIS) data for Norwegian firms and Scopus data on Norwegian universities’ research output across various disciplines. The results demonstrate that local university research intensity and quality are negatively associated with firm participation in UICs at the local level. Firm characteristics, in particular the firm’s general strategy towards cooperation and its geography, turn out to be much more important than university characteristics in explaining UICs. Notably, firms’ cooperation with other external partners at the same scale is a strong predictor of UICs.
    Keywords: research, universities, firms, university-industry collaboration, Norway
    JEL: O31 O32 O33
    Date: 2020–03
  40. By: Emmanuelle Augeraud-Véron (MIA - Mathématiques, Image et Applications - ULR - Université de La Rochelle); Arnaud Ducrot (LMAH - Laboratoire de Mathématiques Appliquées du Havre - ULH - Université Le Havre Normandie - NU - Normandie Université)
    Abstract: We study conditions for existence and uniqueness of solutions in some space-structured economic models with long-distance interactions between locations. The solution of these models satisfies non local equations, in which the interactions are modeled by convolution terms. Using properties of the spectrum location obtained by studying the characteristic equation, we derive conditions for the existence and uniqueness of the solution. This enables us to characterize the degree of indeterminacy of the system being considered. We apply our methodology to a theoretical one-sector growth model with increasing returns, which takes into account technological interdependencies among countries that are modeled by spatial externalities. When symmetric interaction kernels are considered, we prove that conditions for which indeterminacy occurs are the same as the ones needed when no interactions are taken into account. For Gaussian kernels, we study the impact of the standard deviation parameter on the degree of indeterminacy. We prove that when some asymmetric kernels are considered, indeterminacy can occur with classical assumptions on supply and demand curves. © The authors. Published by EDP Sciences, 2019.
    Keywords: Characteristic equation,Convolution,Economics,Existence and uniqueness,Existence and uniqueness of solution,Indeterminacy,Long distance interactions,Non-local equations,Spatial externalities,Standard deviation
    Date: 2019
  41. By: Peri, Giovanni (University of California, Davis); Rees, Daniel I. (University of Colorado Denver); Smith, Brock (Montana State University)
    Abstract: There is surprisingly little evidence on how terror attacks impact elections. With only a few exceptions, previous studies in this literature have focused on a particular country or attack, limiting their generalizability. Ours is the first comprehensive, multi-country examination of the effects of terror attacks on political opinions and election outcomes. The results provide little evidence that terror attacks are systematically related to Europeans' attitudes towards immigrants and how much trust they have in government. International terror attacks are, however, associated with an increase in the vote share received by nationalistic parties in Europe. These results are relevant to the ongoing debate among academics over the effectiveness of terror attacks.
    Keywords: terrorism, elections, nationalism, terror attack
    JEL: D72 D74
    Date: 2020–03

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