|
on Urban and Real Estate Economics |
| By: | Aris Christodoulou (European Commission - JRC); Panayotis Christidis (European Commission - JRC) |
| Abstract: | Congestion is a major issue for cities and often a determining factor of connectivity within urban areas and intra-city interactions. It is a repercussion of the massive adoption of cars as the main transport mode and an externality related to the nature of cities as it represents the negative aspect of agglomeration, the major driving force of growth in cites. We analyse the causes and impacts of congestion in order to be able to identify viable solutions against it. For this purpose, traffic needs to be studied at fine spatial and temporal resolution levels. We measure congestion at the level of Functional Urban Area considering the full transport network in order to estimate travel times between a large set of origins-destinations as determined by a high resolution population grid (size: 500mx500m). The impact of congestion is measured with the help of the relevant TomTom indicators that provide very detailed information on the variation of speed during the day at road link level. Road traffic also affects accessibility. We measure accessibility using different operationalisations, with and without congestion, for all the populated grid cells in the functional urban areas of Brussels, Seville and Krakow. By analysing urban areas at such a fine spatial level we manage to capture the impacts of congestion in detail. This study is the first step towards the assessment and comparison of traffic in all European cities. |
| Keywords: | accessibility, congestion, fine-resolution analysis, European cities, Functional Urban Area, traffic |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc118448&r=all |
| By: | Viral V. Acharya; Katharina Bergant; Matteo Crosignani; Tim Eisert; Fergal McCann |
| Abstract: | We analyze how regulatory constraints on household leverage—in the form of loan-to-income and loan-to-value limits—a?ect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is reallocated from low-to high-income borrowers and from urban to rural counties. This reallocation weakens the feedback loop between credit and house prices and slows down house price growth in “hot” housing markets. Consistent with constrained lenders adjusting their portfolio choice, more-a?ected banks drive this reallocation and substitute their risk-taking into holdings of securities and corporate credit. |
| Keywords: | Financial crises;Macroprudential policies and financial stability;Bank credit;Central banks;Economic conditions;Macroprudential Regulation,Household Leverage,Residential Mortgage Credit,House Prices,WP,mortgage credit,reallocation,borrower,LTV,central bank of Ireland |
| Date: | 2020–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:20/58&r=all |
| By: | Francesco Quatraro; Alessandra Scandura |
| Abstract: | This paper investigates the relationship between the involvement of academic inventors in local innovation dynamics and the patterns of regional technological diversification. Based on the combination of the evolutionary economic approach and the theories on regional innovation capabilities, and on the distinctive features of academic inventors, we hypothesise that knowledge spillovers accruing from the participation of university scientists to local patenting activity influence the extent of regional technological diversification. In addition, we posit that the involvement of academic inventors mitigates the path dependency engendered by the constraining role of the existing capabilities. The empirical results highlight the key role of academic institutions for the development of regional technological trajectories while contributing to the academic and policy debate on regional diversification strategies. |
| Keywords: | regional diversification, relatedness, academic inventors |
| JEL: | O33 R11 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:603&r=all |
| By: | Renaud Marti (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles, Naturalia-Environnement, Ingénierie en écologie); Zhichao Li (Ministry of Education Key Laboratory for Earth System Modeling, Department of Earth System Science, Tsinghua University); Thibault Catry (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Emmanuel Roux (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, ICICT/Fiocruz - Institute of Communication and Scientific and Technological Information on Health [Rio de Janeiro, Brasil] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Morgan Mangeas (ENTROPIE [Nouvelle-Calédonie] - Ecologie marine tropicale des océans Pacifique et Indien - IRD [Nouvelle-Calédonie] - Institut de Recherche pour le Développement); Pascal Handschumacher (SESSTIM - U1252 INSERM - Aix Marseille Univ - UMR 259 IRD - Sciences Economiques et Sociales de la Santé & Traitement de l'Information Médicale - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université - INSERM - Institut National de la Santé et de la Recherche Médicale, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Jean Gaudart (SESSTIM - U1252 INSERM - Aix Marseille Univ - UMR 259 IRD - Sciences Economiques et Sociales de la Santé & Traitement de l'Information Médicale - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université - INSERM - Institut National de la Santé et de la Recherche Médicale, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, AMU - Aix Marseille Université); Annelise Tran (UMR TETIS - Territoires, Environnement, Télédétection et Information Spatiale - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Cirad-ES - Département Environnements et Sociétés - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement); Laurent Demagistri (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles); Jean-François Faure (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles); José Joaquín Carvajal (Laboratório de Doenças Parasitárias - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, ILMD - Instituto Leônidas e Maria Deane - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Bruna Drumond (ICICT/Fiocruz - Institute of Communication and Scientific and Technological Information on Health [Rio de Janeiro, Brasil] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, ENSP - Escola Nacional de Saude Publica Sergio Arouca [Rio de Janeiro] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Lei Xu (Ministry of Education Key Laboratory for Earth System Modeling, Department of Earth System Science, Tsinghua University); Vincent Herbreteau (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles); Helen Gurgel (Department of Geography - UnB - Universidade de Brasilia [Brasília], LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Nadine Dessay (UMR 228 Espace-Dev, Espace pour le développement - IRD - Institut de Recherche pour le Développement - UPVD - Université de Perpignan Via Domitia - AU - Avignon Université - UR - Université de La Réunion - UM - Université de Montpellier - UG - Université de Guyane - UA - Université des Antilles, LMI Sentinela - IRD - Institut de Recherche pour le Développement - UnB - Universidade de Brasilia [Brasília] - FIOCRUZ - Fundação Oswaldo Cruz - RIIP - Réseau International des Instituts Pasteur); Peng Gong (Ministry of Education Key Laboratory for Earth System Modeling, Department of Earth System Science, Tsinghua University, Center for Healthy Cities - Tsinghua University [Beijing]) |
| Abstract: | To date, there is no effective treatment to cure dengue fever, a mosquito-borne disease which has a major impact on human populations in tropical and subtropical regions. Although the characteristics of dengue infection are well known, factors associated with landscape are highly scale dependent in time and space, and therefore difficult to monitor. We propose here a mapping review based on 78 articles that study the relationships between landscape factors and urban dengue cases considering household, neighborhood and administrative levels. Landscape factors were retrieved from survey questionnaires, Geographic Information Systems (GIS), and remote sensing (RS) techniques. We structured these into groups composed of land cover, land use, and housing type and characteristics, as well as subgroups referring to construction material, urban typology, and infrastructure level. We mapped the co-occurrence networks associated with these Remote Sens. 2020, 12, 932 2 of 82 factors, and analyzed their relevance according to a three-valued interpretation (positive, negative, non significant). From a methodological perspective, coupling RS and GIS techniques with field surveys including entomological observations should be systematically considered, as none digital land use or land cover variables appears to be an univocal determinant of dengue occurrences. Remote sensing urban mapping is however of interest to provide a geographical frame to distribute human population and movement in relation to their activities in the city, and as spatialized input variables for epidemiological and entomological models. |
| Keywords: | Dengue,remote sensing,interdisciplinary,environment,Urban landscape |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02682042&r=all |
| By: | Kutscher, Macarena (University of Maryland); Nath, Shanjukta (University of Maryland); Urzua, Sergio (University of Maryland) |
| Abstract: | This paper investigates whether centralized admissions systems can alter school segregation. We take advantage of the largest school-admission reform implemented to date: Chile's SAS, which in 2016 replaced the country's decentralized system with a Deferred Acceptance algorithm. We exploit its incremental implementation and employ a Difference-in-Difference design. Using rich administrative student-level records, we find the effect of SAS critically depends on pre-existing levels of residential segregation and local school supply. For instance, districts with prominent provision of private education experience an uptick in school segregation due to SAS. Migration of high-SES students to private schools emerges as a key driver. |
| Keywords: | education, inequality, segregation |
| JEL: | I20 I24 I28 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13305&r=all |
| By: | Clark, Andrew E.; Díaz Serrano, Lluís |
| Abstract: | This paper provides one of the first tests of adaptation to a full set of residential transitions. We use long-run SOEP panel data and consider the impact of all housing transitions, whether or not they involve a change in housing tenure or geographical movement, on both life satisfaction and housing satisfaction. Controlling for individual characteristics and housing quality, some residential transitions affect life satisfaction only little, while all transitions have a significant effect on housing satisfaction. This latter is particularly large for renters who become homeowners and move geographically, and for renters who move without changing tenure status. Regarding housing satisfaction, we find very little evidence of adaptation even after five years. Losing homeowner status is the only transition that reduces housing satisfaction, and here the effect seems to become even more negative over time. Keywords: Housing, Adaptation, well-being, SOEP. JEL Classification Codes: D19, R21. |
| Keywords: | Habitatge, 332 - Economia regional i territorial. Economia del sòl i de la vivenda, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/376033&r=all |
| By: | Cailin Slattery (Columbia Business School); Owen Zidar (Princeton University and NBER) |
| Abstract: | This essay describes and evaluates state and local business tax incentives in the United States. In 2014, states spent between $5 and $216 per capita on incentives for firms in the form of firm-specific subsidies and general tax credits, which mostly target investment, job creation, and research and development. Collectively, these incentives amounted to nearly 40% of state corporate tax revenues for the typical state, but some states' incentive spending exceeded their corporate tax revenues. States with higher per capita incentives tend to have higher state corporate tax rates. Recipients of firm-specific incentives are usually large establishments in manufacturing, technology, and high-skilled service industries, and the average discretionary subsidy is $178M for 1,500 promised jobs. Firms tend to accept subsidy deals from places that are richer, larger, and more urban than the average county, and poor places provide larger incentives and spend more per job. Comparing "winning" and runner-up locations for each deal in a bigger and more recent sample than in prior work, we find that average employment within the 3-digit industry of the deal increases by roughly 1,500 jobs. While we find some evidence of direct employment gains from attracting a firm, we do not find strong evidence that firm-specific tax incentives increase broader economic growth at the state and local level. Although these incentives are often intended to attract and retain high-spillover firms, the evidence on spillovers and productivity effects of incentives appears mixed. As subsidy-giving has become more prevalent, subsidies are no longer as closely tied to firm investment. If subsidy deals do not lead to high spillovers, justifying these incentives requires substantial equity gains, which are also unclear empirically. |
| JEL: | H20 H25 H71 R11 R30 R50 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:261&r=all |
| By: | Davis, Donald R; Dingel, Jonathan; Miscio, Antonio |
| Abstract: | In developed economies, agglomeration is skill-biased: larger cities are skill-abundant and exhibit higher skilled wage premia. This paper characterizes the spatial distributions of skills in Brazil, China, and India. To facilitate comparisons with developed-economy findings, we construct metropolitan areas for each of these economies by aggregating finer geographic units on the basis of contiguous areas of light in nighttime satellite images. Our results validate this procedure. These lights-based metropolitan areas mirror commuting-based definitions in the United States and Brazil. In China and India, which lack commuting-based definitions, lights-based metropolitan populations follow a power law, while administrative units do not. Examining variation in relative quantities and prices of skill across these metropolitan areas, we conclude that agglomeration is also skill-biased in Brazil, China, and India. |
| Keywords: | cities; Metropolitan areas; satellite images; skill-biased agglomeration; Zipf's law |
| JEL: | C8 O1 O18 R1 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14434&r=all |
| By: | Paolo Veneri (OECD Centre for Entrepreneurship, Paris, France); Andre Comandon (University of California, Los Angeles (UCLA), United States); Miquel-Àngel Garcia-López (Universitat Autònoma de Barcelona, Institut d’Economia de Barcelona, Spain); Michiel N. Daams (University of Groningen, Department of Economic Geography, Groningen, Netherlands) |
| Abstract: | This paper provides a comparative assessment of income segregation within cities in 12 countries. We use spatial entropy indexes based on small-scale gridded income data and consistent definition of city boundaries to ensure international comparability of our segregation measures. Results show considerable variation in the levels of income segregation across cities, even within countries, reflecting the diversity of cities within urban systems. Larger, more affluent, productive, and more unequal cities tend to be more segregated. Urban form, demographic, and economic factors explain additional variation in segregation levels through the influence of high-income households, who tend to be the most segregated. The positive association between productivity and segregation is mitigated in polycentric cities. |
| Keywords: | segregation, income, functional urban areas, international urban comparison, spatial inequalities |
| JEL: | D63 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2004&r=all |
| By: | Susan Athey; Raj Chetty; Guido Imbens |
| Abstract: | There has been an increase in interest in experimental evaluations to estimate causal effects, partly because their internal validity tends to be high. At the same time, as part of the big data revolution, large, detailed, and representative, administrative data sets have become more widely available. However, the credibility of estimates of causal effects based on such data sets alone can be low. In this paper, we develop statistical methods for systematically combining experimental and observational data to obtain credible estimates of the causal effect of a binary treatment on a primary outcome that we only observe in the observational sample. Both the observational and experimental samples contain data about a treatment, observable individual characteristics, and a secondary (often short term) outcome. To estimate the effect of a treatment on the primary outcome while addressing the potential confounding in the observational sample, we propose a method that makes use of estimates of the relationship between the treatment and the secondary outcome from the experimental sample. If assignment to the treatment in the observational sample were unconfounded, we would expect the treatment effects on the secondary outcome in the two samples to be similar. We interpret differences in the estimated causal effects on the secondary outcome between the two samples as evidence of unobserved confounders in the observational sample, and develop control function methods for using those differences to adjust the estimates of the treatment effects on the primary outcome. We illustrate these ideas by combining data on class size and third grade test scores from the Project STAR experiment with observational data on class size and both third and eighth grade test scores from the New York school system. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.09676&r=all |
| By: | Dhaval M. Dave; Andrew I. Friedson; Kyutaro Matsuzawa; Joseph J. Sabia; Samuel Safford |
| Abstract: | Sparked by the killing of George Floyd in police custody, the 2020 Black Lives Matter protests have brought a new wave of attention to the issue of inequality within criminal justice. However, many public health officials have warned that mass protests could lead to a reduction in social distancing behavior, spurring a resurgence of COVID-19. This study uses newly collected data on protests in 315 of the largest U.S. cities to estimate the impacts of mass protests on social distancing and COVID-19 case growth. Event-study analyses provide strong evidence that net stay-at-home behavior increased following protest onset, consistent with the hypothesis that non-protesters’ behavior was substantially affected by urban protests. This effect was not fully explained by the imposition of city curfews. Estimated effects were generally larger for persistent protests and those accompanied by media reports of violence. Furthermore, we find no evidence that urban protests reignited COVID-19 case growth during the more than three weeks following protest onset. We conclude that predictions of broad negative public health consequences of Black Lives Matter protests were far too narrowly conceived. |
| JEL: | H75 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27408&r=all |
| By: | Rincón-Zapatero, Juan Pablo; Jerez Garcia-Vaquero, Maria Belen; Diaz Rodriguez, Antonia |
| Abstract: | We embed a competitive search model of the real estate market into a heterogeneous agentsetting where hoeholds face credit constraints and idiosyncratic turnover shocks. Householdscan accumulate a risk-free asset to build a down payment and to smooth non-housing consumption.There is an inelastic supply of identical homes. The model is "block recursive". Inequilibrium wealthier home buyers sort into submarkets with higher prices and shorter buyingtimes. We identify a novel amplification mechanism, arising from sorting, by which demandshocks can substantially affect housing prices. In particular, lowering down payment requirementsinduces entry of new buyers in the market and higher asset accumulation by currentsearchers, as these agents target more expensive (less congested) submarkets. This affects thedistribution of prices and trading probabilities, and thereby the wealth distribution. Our quantitativeresults suggest that the effects on the long-run level and dispersion of housing pricescan be significant. |
| Keywords: | Sorting; Wealth Inequality; Inelastic Housing Supply; Price Dispersion; Competitive Search; Credit Constraints; Housing Prices |
| JEL: | R30 R21 E21 D83 D31 |
| Date: | 2020–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:30623&r=all |
| By: | Rebecca Diamond; Adam Guren; Rose Tan |
| Abstract: | How costly is foreclosure? Estimates of the social cost of foreclosure typically focus on financial costs. Using random judge assignment instrumental variable (IV) and propensity score matching (PSM) approaches in Cook County, Illinois, we find evidence of significant non-pecuniary costs of foreclosure, particularly for foreclosed-upon homeowners. For all homeowners (IV and PSM), foreclosure causes housing instability, reduced homeownership, and financial distress. For marginal homeowners (IV) but not average homeowners (PSM), foreclosure also causes moves to worse neighborhoods and elevated divorce. We show that the difference between IV and PSM is due to treatment effect heterogeneity: marginal homeowners have more to lose than average homeowners. We find similar financial costs for landlords, although the non-financial effects we find for owners are absent. We find few negative effects for renters whose landlord forecloses. The contrast between our results for owners, renters, and landlords implies that the financial costs come from the financial loss while the non-financial costs for owners are due to a combination of eviction and financial loss rather than either individually. Our estimates imply that foreclosure is far more costly than current estimates imply, particularly for marginal cases that are most responsive to foreclosure mitigation policies, and that the costs are disproportionately borne by owners who lose their home. |
| JEL: | R21 R51 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27358&r=all |
| By: | Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco |
| Abstract: | How does the appearance of a new immigrant group affect the integration of earlier generations of migrants? We study this question in the context of the first Great Migration (1915-1930), when 1.5 million African Americans moved from the US South to northern urban centers, where 30 million Europeans had arrived since 1850. We exploit plausibly exogenous variation induced by the interaction between 1900 settlements of southern-born blacks in northern cities and state-level out-migration from the US South after 1910. Black arrivals increased both the effort exerted by immigrants to assimilate and their eventual Americanization. These average effects mask substantial heterogeneity: while initially less integrated groups (i.e. Southern and Eastern Europeans) exerted more assimilation effort, assimilation success was larger for those culturally closer to native whites (i.e. Western and Northern Europeans). We show that these patterns cannot be entirely explained by economic forces. Our findings are instead more consistent with a framework in which changing perceptions of outgroup distance among the majority group lower the barriers to the assimilation of less distant minorities. |
| Keywords: | Assimilation; Great Migration; group identity; Immigration; race |
| JEL: | J11 J15 N32 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14396&r=all |
| By: | Caeyers, Bet; Fafchamps, Marcel |
| Abstract: | We examine a largely unexplored source of downward bias in peer effect estimation, namely, exclusion bias. We derive formulas for the magnitude of the bias in tests of random peer assignment, and for the combined reflection and exclusion bias in peer effect estimation. We show how to consistently test random peer assignment and how to estimate and conduct consistent inference on peer effects without instruments. The method corrects for the presence of reflection and exclusion bias but imposes restrictions on correlated effects. It allows the joint estimation of endogenous and exogenous peer effects in situations where instruments are not available and cannot be constructed from the network matrix. We estimate endogenous and exogenous peer effects in two datasets where instrumental approaches fail because peer assignment is to mutually exclusive groups of identical size. We find significant evidence of positive peer effects in one, negative peer effects in the other. In both cases, ignoring exclusion bias would have led to incorrect inference. We also demonstrate how the same approach applies to autoregressive models. |
| Keywords: | Autoregressive Models; Exclusion bias; Linear-in-means; peer effects; Random peer assignment; Reflection bias; Social interactions |
| JEL: | C32 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14386&r=all |
| By: | Richard Bluhm; Axel Dreher; Andreas Fuchs; Bradley C. Parks; Austin M. Strange; Michael J. Tierney |
| Abstract: | This paper studies the causal effect of transport infrastructure on the spatial concentration of economic activity. Leveraging a new global dataset of geo-located Chinese government-financed projects over the period from 2000 to 2014 together with measures of spatial inequality based on remotely-sensed data, we analyse the effects of transport projects on the spatial distribution of economic activity within and between regions in a large number of developing countries. We find that Chinese-financed transportation projects reduce spatial concentration within but not between regions. In line with land use theory, we document a range of results which are consistent with a relocation of activity from city centers to their immediate periphery. Transport projects decentralize activity particularly strongly in regions that are more urbanized, located closer to the coast, and less developed. . |
| Keywords: | transport costs, infrastructure, development finance, foreign aid, spatial concentration China |
| JEL: | F15 F35 R11 R12 P33 O18 O19 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8344&r=all |
| By: | Gibson Mudiriza; Lawrence Edwards |
| Abstract: | Despite the ending of apartheid, regional wage disparities remain prevalent in South Africa with the former homelands characterised by persistently low wages and incomes. In this paper, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities are an outcome of economic forces such as access to markets. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for the NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find a wage deficit in homeland areas even after controlling for NEG and other region-specific characteristics. Average wages of workers in homeland areas were 11.8% lower than predicted in 1996, with this gap rising to 13.3% in 2011. This gap remains using alternative estimation approaches and the inclusion of controls for infrastructure, removal of incentives under the deconcentration policies and local amenities. |
| Keywords: | : Economic geography; Labour market, Wage differentials, Regional economic activity, Economic Development |
| JEL: | F12 F16 J31 R11 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:816&r=all |
| 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: | 2019–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101171&r=all |
| By: | Richard Fabling (Independent Researcher); David C. Maré (Motu Economic and Public Policy Research) |
| Abstract: | We use administrative and survey data in the Integrated Data Infrastructure (IDI) to allocate workers to job locations (plants), which enables the production of over a decade of commute distance population statistics for New Zealand employees. We find that average commute distance (meshblock centroid-to-centroid) fell from 2005 to 2009 before rising again through to 2018 (the final analysis year), with most regions displaying this general temporal pattern. Census 2013 place of residence and work is used to test our methodology against the alternative of using pre-existing plant allocations from the Linked Employer-Employee Data (LEED) production system. For a consistent set of individuals, our estimate of the commute distance distribution closely matches the corresponding distribution in Census. In contrast, LEED-based estimates tend to significantly overestimate commute distances, including radically overestimating the likelihood of inter-island commuting. Our more plausible results are primarily due to re-engineering the job allocation process, as opposed to exploiting better administrative data, though we make marginal improvements to residential address identification through a new prioritisation method, allowing us to use a broader set of residential address sources than available in LEED. |
| Keywords: | commuting patterns; linked employer-employee data (LEED); Integrated Data Infrastructure (IDI); administrative data |
| JEL: | R40 R41 M21 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:20_05&r=all |
| By: | Rodríguez-Pose, Andrés; Zhang, Min |
| Abstract: | Does the variation in the quality of local government institutions affect the capacity of firms to innovate? This paper uses a unique dataset that combines the specific features of 2,700 firms with the institutional and socioeconomic characteristics of the 25 cities in China where they operate, in order to assess the extent to which institutional quality -- measured across four dimensions: rule of law, government effectiveness, corruption, and regulatory quality -- affects both the innovation probability and intensity of firms. The results of the econometric analysis show that poor institutional quality in urban China is an important barrier for firm-level innovation. In particular, a deficient rule of law, high corruption, and a weak regulatory quality strongly undermine firm-level innovation. The role of these factors is far more limited in the case of innovation intensity. Better institutions also reduce the amount of time firms spend dealing with government regulations in order to facilitate innovation. The results also indicate that the cost of weak institutions for innovation is higher for private than for state-owned firms, at least in the early stages of innovation. In general, differences in institutional quality generate local urban ecosystems that impinge on the propensity of firms to innovate. |
| Keywords: | China; cities; firms; Government quality; Innovation; institutions |
| JEL: | H1 O3 O31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14399&r=all |
| By: | Joan Crespo (Department of Economics, Universitat Jaume I, Castellón, Spain); Jesús Peiró-Palomino (INTECO & Department of Applied Economics II, University of Valencia, Spain); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | This paper analyzes the impact of the university system performance on labor productivity growth for Spanish regions during the period 2009–2016. Using a frontier approach, we decompose changes in university performance into efficiency changes (approximations to the frontier) and changes due to technical progress (shifts of the frontier). Our results show a positive link between university performance and the productivity growth of their home regions. We also find that this impact is driven by shifts in the frontier rather than by approximation to the frontier. This effect is robust across stages of the economic cycle (crisis and recovery), as well as across different estimation methods, and when including spatial spillovers, although it is only significant for provinces with productivity levels above the median. This suggests that the inefficiency of the Spanish university system can be one of the factors slowing down the convergence path of Spanish provinces. |
| Keywords: | university performance, productivity, provinces |
| JEL: | C61 J24 R11 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2020/20&r=all |
| By: | Alfonso Echazarra |
| Abstract: | The benefits of co-operative behaviours have been broadly documented in various social contexts, including neighbourhoods, hospitals, companies and in education. In education, when students, teachers, parents and the school principal know and trust each other, work together, and share information, ideas and goals, students – particularly disadvantaged students – can benefit. However, co-operation and teamwork come with potential drawbacks too. Tasks might not be divided fairly and efficiently; team members sometimes work on tasks for which they are unsuited or that they dislike; some group members may freeride on their teammates’ efforts; and co-ordinating tasks may be too complex and time-consuming. Evidence also suggests that competition can improve academic performance and speed in learning, if only because competition can be thrilling and enjoyable. |
| Date: | 2020–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduddd:107-en&r=all |
| By: | Díaz Serrano, Lluís |
| Abstract: | A straightforward way of keeping children in school is increasing the duration of compulsory education. Evidence of the impact of this type of policy in Western countries is abundant. However, its effectiveness has been rarely tested in low-income countries. Using panel data of low-income and lower-middle-income countries covering the period 1996-2017, this paper analyzes the impact of lengthening the duration of compulsory education on the transition of children from primary to secondary education. The empirical results show that in those countries where this policy is implemented, there is a significant increase in the share of children transiting from primary to secondary education but only in those countries where the reform implies that the duration of compulsory education becomes longer than the duration of primary education. JEL Classification: I21, I25, I28. Keywords: compulsory education, educational achievement, educational transitions, low-income countries, panel data, education policy |
| Keywords: | Escolaritat obligatòria, Política educativa, 371 - Organització i gestió de l'educació i de l'ensenyament, |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/376037&r=all |
| By: | Bertocchi, Graziella; Dimico, Arcangelo |
| Abstract: | Discussion on the disproportionate impact of COVID-19 on African Americans has been at center stage since the outbreak of the epidemic in the United States. To present day, however, lack of race-disaggregated individual data has prevented a rigorous assessment of the extent of this phenomenon and the reasons why blacks may be particularly vulnerable to the disease. Using individual and georeferenced death data collected daily by the Cook County Medical Examiner, we provide first evidence that race does affect COVID-19 outcomes. The data confirm that in Cook County blacks are overrepresented in terms of COVID-19 related deaths since-as of June 16, 2020-they constitute 35 percent of the dead, so that they are dying at a rate 1.3 times higher that their population share. Furthermore, by combining the spatial distribution of mortality with the 1930s redlining maps for the Chicago area, we obtain a block group level panel dataset of weekly deaths over the period January 1, 2020-June 16, 2020, over which we establish that, after the outbreak of the epidemic, historically lower-graded neighborhoods display a sharper increase in mortality, driven by blacks, while no pre-treatment differences are detected. Thus, we uncover a persistence influence of the racial segregation induced by the discriminatory lending practices of the 1930s, by way of a diminished resilience of the black population to the shock represented by the COVID-19 outbreak. A heterogeneity analysis reveals that the main channels of transmission are socioeconomic status and household composition, whose influence is magnified in combination with a higher black share. |
| Keywords: | COVID-19,deaths,blacks,redlining,vulnerability,Cook County,Chicago |
| JEL: | I14 J15 N32 N92 R38 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:qucehw:202006&r=all |
| By: | Caitlin S. Gorback; Benjamin J. Keys |
| Abstract: | Interconnected capital markets allow mobile global capital to flow into immobile local assets. This paper examines how foreign demand affects U.S. housing markets, and uses this demand shock to estimate local price elasticities of supply. Other countries introduced foreign-buyer taxes meant to deter Chinese housing investment beginning in 2011. We first show house prices grew 8 percentage points more in U.S. zipcodes with high foreign-born Chinese populations after 2011, subsequently reversing with the onset of the U.S.–China trade war. Second, we use international tax policy changes as a U.S. housing demand shock and estimate local house price and quantity elasticities with respect to international capital. We find that a 1% increase in instrumented foreign capital raises house prices at the zip code level by 0.27%, and housing supply by 0.004%. Finally, we use the two elasticities to construct new local house price elasticities of supply for the largest 100 CBSAs. These supply elasticities average 0.1 and vary between 0.02 and 0.7, suggesting that local housing markets are inelastic in the short run and exhibit substantial spatial heterogeneity. |
| JEL: | R21 R31 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27370&r=all |
| By: | Tien Manh Vu (Asian Growth Research Institute); Hiroyuki Yamada (Faculty of Economics, Keio University) |
| Abstract: | We investigated the impact of individuals who passed the Vietnamese imperial examinations (1075-1919) on the present-day quantity and quality of education in their home districts. We layered the 2009 Population and Housing Census and the 2009 National Entrance Exams to University (NEEU) test scores on the geographical distribution of imperial test takers' home districts. We constructed a novel instrumental variable representing the average distance between the examinees' home districts and the corresponding imperial examination venues. We found a persistent legacy in the average years of schooling, literacy rate, school attendance rate, NEEU test scores, and primary school dropout rate. |
| Keywords: | Education, Human Capital, Imperial Examination, Historical Legacy, Vietnam |
| JEL: | I25 N35 O15 |
| Date: | 2020–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2020-012&r=all |
| By: | Shinya Fukui (Graduate School of Economics, Kobe University / Senior Researcher, Osaka Prefectural Government, Japan) |
| Abstract: | We observe dense agglomerations of Knowledge-Intensive Business Services (KIBS) in large cities such as Tokyo and Osaka. Such urban features of KIBS stem from the fact that the main customers for KIBS are corporate headquarters (HQs), and KIBS’s main input is highly skilled labor. We adhere to the model proposed by Redding and Venables (2004) and present a monopolistic competition model. Our results indicate that improving access to the agglomeration of HQs and KIBS and knowledge agglomeration will strengthen market access and supply access and that KIBS firms will be even more inclined to establish locations in those municipalities. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:2008&r=all |
| By: | Albane Demblans (European Commission - JRC); Cristiano Cagnin (European Commission - JRC); Javier Gomez (European Commission - JRC) |
| Abstract: | Since 2016, the International Urban Cooperation Programme has been a vehicle for cooperation between the European Union and Latin America on the topic of innovation for local and regional development. In this endeavour, the Smart Specialisation approach originally deployed in the EU, and its potential to foster localised, innovation-driven sustainable territorial development, have been a great source of inspiration. Building on the 20 regional pairings between regions from the EU and Latin America (Mexico, Brazil, Colombia, Argentina, Chile and Peru), this Science for Policy Report analyses the outcomes and the lessons generated by transcontinental cooperation and examines the potential to enshrine the EU touch on Smart Specialisation in the innovation landscape of Latin America. |
| Keywords: | European Union, Latin America, innovation, local and regional development, Smart Specialisation |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc120873&r=all |
| By: | David Bounie (IP Paris - Institut Polytechnique de Paris, ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech); Youssouf Camara; John Galbraith |
| Abstract: | This paper investigates interregional retail trade linkages, and changes in the gravity effects between cities and regions arising from online commerce, as opposed to traditional point-of-sale commerce. We build original interregional retail trade measures from nearly 20 billion domestic consumer online and in-store transactions made through bank cards, in France 2018-19. We are able to study the mobility of individual bank card holders throughout France, their on-site purchases, and also the locations from which their online purchases were made. We find evidence that online consumer expenditure tends to be more heavily concentrated in the already-large regional economies. This result suggests that the increasing movement toward online purchasing may tend to increase the concentration of overall economic activity, and may have important implications for regional economic development. |
| Keywords: | Consumption expenditure,Consumer mobility,Gravity model,Inter-regional trade,E-commerce |
| Date: | 2020–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02864695&r=all |
| By: | Maiko Koga (School of Economics, Senshu University); Kohei Matsumura (Bank of Japan) |
| Abstract: | We study the MPC heterogeneity of households in Japan both theoretically and empirically. We build a heterogeneous-agent overlapping-generations general equilibrium model with an illiquid and indivisible housing asset. We show that mortgage debtor exhibits high MPC and households about to upgrade their house exhibit low MPC. Using Japanese household survey data, we empirically support our theoretical predictions. |
| Keywords: | Consumption; Heterogeneity; Housing choices; Liquidity constraints; Marginal propensity to consume |
| JEL: | E21 E50 R21 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojwps:wp20e03&r=all |
| By: | Banerjee, Abhijit; Sequeira, Sandra |
| Abstract: | Youth unemployment remains high throughout the developing world, at times coexisting with unmet demand for labor and high job turnover. This paper examines one possible explanation: young job seekers who live far from the city centres where jobs are located, over-estimate their employment prospects and underestimate actual commuting costs. Increasing access and exposure to the wider labor market leads job seekers to adjust beliefs and accept jobs closer to home. These ï¬ ndings underscore the importance of supply-side information frictions and how they can lead to spatial and occupational mistargeting in the job search. |
| Keywords: | Biased Beliefs; job search; unemployment |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14414&r=all |
| By: | Katerina Ciampi Stancova (European Commission - JRC) |
| Abstract: | Smart specialisation (S3) is a place-based agenda for regional economic transformation. To that end, smart specialisation emphasises the importance of strategic thinking, good (multi-level) governance, existence of public institutions that are able to orchestrate fruitful discussion about the region’s future development trajectories as well as develop appropriate policy instruments and interventions, and finally engaged stakeholders that are willing to take an active lead in local development. In order to achieve these objectives, public institutions are required to learn constantly – explore, integrate and exploit knowledge acquired by individuals. The proposition of this study is to discuss if and how smart specialisation fosters policy learning and to provide some evidence on implementation of smart specialisation and associated policy learning opportunities in Visegrad Group countries. |
| Keywords: | smart specialisation, policy learning, knowledge networks, innovation policy, Visegrad Group countries |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc120702&r=all |
| By: | Asim,Salman; Riaz,Amina |
| Abstract: | This paper presents the results of a field experiment in rural Sindh, Pakistan, where half of the school-age children (ages 6-10 years) are out of school. The study tests simple and low-intensity approaches to strengthen engagement of communities with schools: face-to-face dialogue at externally facilitated community meetings, and ongoing, anonymous dialogue via text messages. The interventions increased communities'interest in education as measured through an improvement in the number of functioning schools and, in the case of the text message treatment, substantial gains in retention of students in grades 2, 3, and 4. On the supply side, the schools significantly increased staffing and the share of one-teacher schools was reduced; however, teacher absenteeism increased, and there was no substantial impact on basic school infrastructure. Elections and capacity building for school committees were implemented in a cross-over experimental design. The intervention undermined the participation of communities in meetings and reduced impacts on all indicators except new admissions and availability of toilets in schools. No evidence is found of impact on measured test scores for any intervention. |
| Date: | 2020–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9280&r=all |
| By: | Schenkenhofer, Julian |
| Abstract: | Substantial efforts have contributed to overcome the scarcity of hidden champions research. Nevertheless, literature has missed to compile a comprehensive review. Drawing on the insights of 94 publications, four strands of literature could be distinguished to unravel the essence of hidden champions. Research on hidden champions studies their 1) internationalization strategies, 2) R&D and innovation strategies, the 3) worldwide and regional geographic distribution of hidden champions and finally 4) other research that could not be assigned to one of the first three strands. A hand-collected sample of 1372 German hidden champions exemplifies the key insights from the reviewed research articles. Discussing the findings of the different literature strands aims at drawing a conclusion on their main results and analytical pitfalls to eventually unfold and motivate future research avenues. |
| Keywords: | Literature Review,Hidden Champions,Niche Strategy |
| JEL: | D4 L1 L22 O32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:auguow:0620&r=all |
| By: | Hardik A. Marfatia (Department of Economics, Northeastern Illinois University, 5500 N St Louis Ave, BBH 344G, Chicago, IL 60625, USA); Christophe Andre (Economics Department, Organisation for Economic Co-operation and Development (OECD), 75775 Paris, Cedex 16, France); Rangan Gupta |
| Abstract: | Sentiment indicators have long been closely monitored by economic forecasters, notably to predict short-term moves in consumption and investment. Recently, housing sentiment indices have been developed to forecast housing market developments. Sentiment indices partly reflect economic determinants, but also more subjective factors, thereby adding information, particularly in periods of uncertainty, when economic relations are less stable than usual. While many studies have investigated the relevance of sentiment indicators for forecasting, few have looked at the factors which shape sentiment. In this paper, we investigate the role of different types of uncertainty in predicting housing sentiment, controlling for a wide set of economic and financial factors. We use a dynamic model averaging/selection (DMA/DMS) approach to assess the relevance of uncertainty and other factors in forecasting housing sentiment at different points in time. We find that housing sentiment forecast errors from models incorporating uncertainty measures are up to 40% lower at a two-year horizon, compared with models ignoring uncertainty. We also show, by examining DMS posterior inclusion probabilities, that uncertainty has become more relevant since the 2008 global financial crisis, especially at longer forecast horizons. |
| Keywords: | Housing sentiments, Uncertainty, DMA, DMS |
| JEL: | C53 E44 R31 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202061&r=all |
| By: | Christelis, Dimitris; Georgarakos, Dimitris; Jappelli, Tullio; Pistaferri, Luigi; Van Rooij, Maarten |
| Abstract: | We measure wealth effects on consumption using a novel research design: responses to direct survey questions asking how much a household would change consumption in response to unexpected (positive and negative) shocks to own home value. The average wealth effect is in the 2-5% range, in line with econometric estimates that associate changes in housing wealth with consumption realizations. However, our analysis uncovers significant heterogeneity. Extensive margin responses are limited: more than 90% of the sample reports no consumption adjustment to wealth shocks. On the other hand, conditioning on adjusting, intensive margin responses are substantial. Finally, the consumption response to positive wealth shocks is greater than the response to negative shocks. |
| Keywords: | Heterogeneity; Housing; Wealth effect |
| JEL: | D12 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14453&r=all |
| By: | Bertocchi, Graziella (University of Modena and Reggio Emilia); Dimico, Arcangelo (Queen's University Belfast) |
| Abstract: | We empirically assess the effect of historical slavery on the African American family structure. Our hypothesis is that female single headship among blacks is more likely to emerge in association not with slavery per se, but with slavery in sugar plantations, since the extreme demographic and social conditions prevailing in the latter have persistently affected family formation patterns. By exploiting the exogenous variation in sugar suitability, we establish the following. In 1850, sugar suitability is indeed associated with extreme demographic outcomes within the slave population. Over the period 1880-1940, higher sugar suitability determines a higher likelihood of single female headship. The effect is driven by blacks and starts fading in 1920 in connection with the Great Migration. OLS estimates are complemented with a matching estimator and a fuzzy RDD. Over a linked sample between 1880 and 1930, we identify an even stronger intergenerational legacy of sugar planting for migrants. By 1990, the effect of sugar is replaced by that of slavery and the black share, consistent with the spread of its influence through migration and intermarriage, and black incarceration emerges as a powerful mediator. By matching slaves' ethnic origins with ethnographic data we rule out any influence of African cultural traditions. |
| Keywords: | black family, slavery, sugar, migration, culture |
| JEL: | J12 J47 N30 O13 Z10 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13312&r=all |
| By: | Amarasinghe, Ashani; Raschky, Paul A.; Zenou, Yves; Zhou, Junjie |
| Abstract: | We develop a network model of conflict in which players are involved in different battles. A negative shock in one locality affects the conflict in this locality but may also increase battles in path-connected localities depending on the location of the battle in the network and the strength of each locality involved in each battle. We then empirically test this model by analyzing the effect of local natural disasters on battles in Africa. We construct a novel panel-dataset that combines geo-referenced information about battle events and natural disasters at the monthly level for 5,944 districts in 53 African countries over the period from 1989 to 2015. At this fine temporal and spatial resolution, natural disasters are formidable exogenous shocks that affect the costs and benefits of fighting in a locality. We find that natural disasters decrease battle incidence in the affected locality and that this effect persists over time and space. This mitigating effect appears to be more pronounced in more developed localities. As highlighted by the model, these results can be explained by the fact that natural disasters divert fighting activity to surrounding localities, particularly those that are connected via geographic and road networks. |
| Keywords: | Africa; battle; Natural Disasters; Spillovers |
| JEL: | D85 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14300&r=all |
| By: | Judith M. Delaney; Paul J. Devereux |
| Abstract: | Using unique data on preference rankings for all high school students who apply for college in Ireland, we investigate whether, conditional on absolute achievement, within school-cohort rank in English and math affects choice of college major. We find that higher rank in math increases the likelihood of choosing STEM and decreases the likelihood of choosing Arts and Social Sciences. Similarly, a higher rank in English leads to an increase in the probability of choosing Arts and Social Sciences and decreases the probability of choosing STEM. The rank effects are substantial, being about one third as large as the effects of absolute performance in math and English. We identify subject choice in school as an important mediator – students who rank high in math are more likely to choose STEM subjects in school and this can partly explain their subsequent higher likelihood of choosing STEM for college. We also find that English and math rank have significant explanatory power for the gender gap in the choice of STEM as a college major--they can explain about 36% as much as absolute performance in English and math. Overall, the tendency for girls to be higher ranked in English and lower ranked in math within school-cohorts can explain about 6% of the STEM gender gap in mixed-sex schools and about 16% of the difference in the STEM gender gap between mixed-sex schools and same-sex schools. Notably, these effects occur even though within-school rank plays no role whatsoever in college admissions decisions. |
| Keywords: | High school rank; STEM; College major choice; Gender gap; Comparative advantage |
| JEL: | I20 J16 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201931&r=all |
| By: | Gomes, Joseph Flavian |
| Abstract: | This paper shows that children of mothers who are ethnically more distant from their neighbours have worse health outcomes. I combine individual-level micro data from DHS surveys for 14 sub-Saharan African countries with a novel high-resolution dataset on the spatial distribution of ethnic groups at the 1 km x 1 km level. I measure ethnic distance using linguistic distance and construct the spatial distribution of ethnic groups using an iterative proportional fitting algorithm. Using a time-varying ethnicity fixed effects framework to curb unobserved heterogeneity across ethnic groups, I show that children whose mothers are linguistically more distant from their neighbours face higher mortality rates and are shorter in stature. The pernicious effects of linguistic distance are more pronounced in areas where malaria is endemic. I argue that higher linguistic distance impedes the transmission of information. Consistent with this interpretation, mothers who are linguistically more distant from their neighbours are less likely to receive health-related information. Linguistic distances driven by splits that occurred thousands of years ago are more relevant than more recent splits. |
| Keywords: | African development; child mortality; Ethnic distance; ethnic diversity; ethnic networks |
| JEL: | I14 O10 O15 Z10 Z13 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14332&r=all |
| By: | Arribas-Bel, Daniel; Garcia-Lopez, Miquel-Angel; Viladecans-Marsal, Elisabet |
| Abstract: | This paper proposes a novel methodology for delineating urban areas based on a machine learning algorithm that groups build-ings within portions of space of suffi cient density. To do so, we use the precise geolocation of all 12 million buildings in Spain. We exploit building heights to create a new dimension for urban areas, namely, the vertical land, which provides a more accurate measure of their size. To better understand their internal structure and to illustrate an additional use for our algorithm, we also identify employment centers within the delineated urban areas. We test the robustness of our method and compare our urban areas to other delineations obtained using administrative borders and commuting-based patterns. We show that: 1) our urban areas are more similar to the commuting-based delineations than the administrative boundaries but that they are more precisely measured; 2) when analyzing the urban areas' size distribution, Zipf's law appears to hold for their population, surface and vertical land; and 3) the impact of transportation improvements on the size of the urban areas is not underestimated. |
| Keywords: | Buildings; City size; Machine Learning; Transportation; urban areas |
| JEL: | R12 R14 R2 R40 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14450&r=all |
| By: | S. Chakravarty; M. Lundberg; P. Nikolov; J. Zenker |
| Abstract: | Lack of skills is arguably one of the most important determinants of high levels of unemployment and poverty. In response, policymakers often initiate vocational training programs in effort to enhance skill formation among the youth. Using a regression-discontinuity design, we examine a large youth training intervention in Nepal. We find, twelve months after the start of the training program, that the intervention generated an increase in non-farm employment of 10 percentage points (ITT estimates) and up to 31 percentage points for program compliers (LATE estimates). We also detect sizeable gains in monthly earnings. Women who start self-employment activities inside their homes largely drive these impacts. We argue that low baseline educational levels and non-farm employment levels and Nepal's social and cultural norms towards women drive our large program impacts. Our results suggest that the program enables otherwise underemployed women to earn an income while staying at home - close to household errands and in line with the socio-cultural norms that prevent them from taking up employment outside the house. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.13036&r=all |
| By: | Karolis Bielskis (Bank of Lithuania, Vilnius University); Andrius Ciginas (Vilnius University) |
| Abstract: | This paper reports new data on the household balance sheet and the consumption situation in Lithuania. It uses a unique Household Finance and Consumption Survey (HFCS) dataset, which collects detailed information about different asset classes and outlines the composition of the household balance sheet in Lithuania. At 93.2%, the homeownership rate in Lithuania is the highest in Europe. Real assets correspond to the highest share of households’ wealth and generate a median net wealth of 46 000 €. Lithuanian households participate poorly in financial assets, with only deposits and individual insurance/pensions generating more significant aggregate values. Household participation in debt markets is also limited in Lithuania, with only 11.7% of households having some mortgage-based liabilities. Lithuanian households spend a significant share of their income on food and utilities. This share is among the highest in Europe. A large number of Lithuanian households can be characterized as "hand-to-mouth" households, as they own a significant amount of wealth in illiquid real estate and very little wealth in liquid financial assets. |
| Keywords: | household balance sheet, net wealth, household survey, HFCS |
| JEL: | D1 D3 |
| Date: | 2020–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:lie:dpaper:19&r=all |
| By: | Sijmons, David; Bakens, Jessie (RS: GSBE other - not theme-related research, ROA / Dynamics of the labour market) |
| Abstract: | Heterogeneity in economic structures between different countries or regions has been examined by economists for a long time. Much of the literature has focused on explaining (and quantifying) interregional differences in production and income. However, little attention is focused on explaining and quantifying differences in occupational and educational compositions of the workforce across regions. This is the gap this paper tries to fill by analyzing regional occupational and educational structures in the Netherlands. |
| Date: | 2020–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umarot:2020004&r=all |
| By: | Robert Aue; Thilo Klein; Josue Ortega |
| Abstract: | We study the welfare effects of school district consolidation, i.e. the integration of disjoint school districts into a centralised clearinghouse. We show theoretically that, in the worst-case scenario, district consolidation may unambiguously reduce students' welfare, even if the student-optimal stable matching is consistently chosen. However, on average all students experience expected welfare gains from district consolidation, particularly those who belong to smaller and over-demanded districts. Using data from the Hungarian secondary school assignment mechanism, we compute the actual welfare gains from district consolidation in Budapest and compare these to our theoretical predictions. We empirically document substantial welfare gains from district consolidation for students, equivalent to attending a school five kilometres closer to the students' home addresses. As an important building block of our empirical strategy, we describe a method to consistently estimate students' preferences over schools and vice versa that does not fully assume that students report their preferences truthfully in the student-proposing deferred acceptance algorithm. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.13209&r=all |
| By: | Guizzardi, Andrea; Stacchini, Annalisa; Costa, Michele |
| Abstract: | This study investigates visitors’ perceived value in little known small areas, at the early stage of tourism development, participating in a European regional development project, for improving the local tourism supply and marketing initiatives, with limited investments. We suggest to employ an Ordinal Structural Equation Model with Pairwise Likelihood estimator to deal with non-normal and missing data. We detect which destinations’ aspects convey the greatest value to tourists, identify market segmentation variables, test the relations of perceived value with satisfaction, intention to recommend and destination image. Results are relevant for policymakers and destination managers, even more in the post-COVID-19 tourism recovery. |
| Keywords: | Perceived value; Ordinal SEM; Tourism development planning; Segmentation variables; Small areas; Destination marketing. |
| JEL: | O29 R1 Y8 |
| Date: | 2020–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101245&r=all |
| By: | Duque, Valentina; Gilraine, Michael |
| Abstract: | This paper examines the effect of air pollution from power production on students’ cognitive outcomes. To do so, we leverage variation in power production over time, wind patterns, and plant closures. We find that each one million megawatt hours of coal-fired power production decreases student performance in schools within ten kilometers by 0.02 SD and 0.01 SD in math and English, respectively. We find no such relationship for gas-fired plants. Extrapolating our results nationwide indicates that the decline in coal use in the United States from 2007 through 2018 increased student performance by 0.003 SD and reduced the black-white test score gap by 0.002 SD. |
| Keywords: | Air Pollution; Coal Power; Education; Health. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2020-07&r=all |
| By: | Arkadiusz Górski; Kamila Urbańska; Agnieszka Parkitna |
| Abstract: | While looking for investment opportunities, investors analyse whether a potential investment will bring satisfactory returns, the level of which depends on many risk factors. That is why it is necessary to analyse the potential risks in the process of investment management. The investors need to possess knowledge of such risks, their influence on the investment, and the methods of avoiding risk. Given the scale of investments into residential property, the focus has been on the risk factors determining the return on investment, which is crucial for a large number of small investors. The identification of different kinds of risks associated with residential premises is crucial for the management of such investments and translates directly into the level of return on the investment. The increase of the investments into residential property is caused by a number of small investors who are looking for an alternative method of investing. Their funds do not bring a satisfactory level of returns while in bank deposits. Those investors recognize the opportunity which arises from renting flats. The temptation of high returns compensates the level of risk. |
| Keywords: | Risks; Investments; Reeal estate investment management; Investment Properties |
| JEL: | D81 G11 G32 L85 |
| Date: | 2020–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ahh:wpaper:worms2015&r=all |
| By: | Bosquet, Clément; Combes, Pierre-Philippe; Henry, Emeric; Mayer, Thierry |
| Abstract: | Using an instrument based on a national contest in France determining researchers' location, we fi nd evidence of peereffects in academia, when focusing on precise groups of senders (producing the spillovers) and receivers (benefi ting from the spillovers),defi ned based on fi eld of specialisation, gender and age. These peereffects are shown to exist even outside formal co-authorship relationships. Furthermore, the match between the characteristics of senders and receivers plays a critical role. In particular, men benefi t a lot from peer effects provided by men, while all other types of gender combinations produce spillovers twice as small. |
| Keywords: | economics of science; gender publication gap; peer e�ects; Research productivity |
| JEL: | I23 J16 J24 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14376&r=all |
| By: | Ahmed Elsayed (IZA); Olivier Marie (Erasmus University Rotterdam) |
| Abstract: | Exploiting a unique policy reform in Egypt that reduced the number of years of compulsory schooling, we show how it unexpectedly increased education attainment as more students chose to complete the next school stage. This impact is almost entirely driven by girls from more disadvantaged households. Treated women later experienced important positive improvements in labor market opportunity and marriage quality, as measured by bride price received and household bargaining power. We attribute the increased investment in daughters’ human capital to changes in the behavior of credit-constrained families facing reduced school costs combined with strongly non-linear returns to female education. |
| Keywords: | School Costs, Education Investment, Gender Bias, Female Labor Market, Marriage, Bride Price, Egypt |
| JEL: | I21 I25 J24 O55 |
| Date: | 2020–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200037&r=all |
| By: | Esteban M. Aucejo; Jacob F. French; Maria Paola Ugalde Araya; Basit Zafar |
| Abstract: | In order to understand the impact of the COVID-19 pandemic on higher education, we surveyed approximately 1,500 students at one of the largest public institutions in the United States using an instrument designed to recover the causal impact of the pandemic on students' current and expected outcomes. Results show large negative effects across many dimensions. Due to COVID-19: 13% of students have delayed graduation, 40% lost a job, internship, or a job offer, and 29% expect to earn less at age 35. Moreover, these effects have been highly heterogeneous. One quarter of students increased their study time by more than 4 hours per week due to COVID-19, while another quarter decreased their study time by more than 5 hours per week. This heterogeneity often followed existing socioeconomic divides; lower-income students are 55% more likely to have delayed graduation due to COVID-19 than their higher-income peers. Finally, we show that the economic and health related shocks induced by COVID-19 vary systematically by socioeconomic factors and constitute key mediators in explaining the large (and heterogeneous) effects of the pandemic. |
| JEL: | I2 I23 I24 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27392&r=all |
| By: | Payne, Jason Leslie (Australian National University); Morgan, Anthony |
| Abstract: | At the time of writing, there was 3.4 million confirmed cases of COVID-19 and more than 300,000 deaths worldwide. Not since the Spanish Flu in 1918 has the world experienced such a widespread pandemic and this has motivated many countries across globe to take unprecedented actions in an effort to curb the spread and impact of the SARS-CoV-2 virus. Among these government and regulatory interventions includes stringent domestic and international travel restrictions as well as a raft of stay-at-home and social distancing regulations. The scale of these containment measures has left criminologists wondering what impact this will have on crime in both the short- and long-term. In this study, we examine officially recorded property crime rates for March, 2020, as reported for the state of Queensland, Australia. We use ARIMA modeling techniques to compute six-month-ahead forecasts of property damage, shop theft, other theft, burglary, fraud, and motor vehicle theft rates and then compare these forecasts (and their 95% confidence intervals) with the observed data for March 2020. We conclude that the observed rates of reported property offending across Queensland were significantly lower than expected for shop theft, other theft and credit-card fraud but statistically unchanged for property damage, burglary, and motor-vehicle theft. |
| Date: | 2020–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:de9nc&r=all |
| By: | Andrew B. Martinez (Office of Macroeconomic Analysis, US Department of the Treasury) |
| Abstract: | I analyze damages from hurricane strikes on the United States since 1955. Using machine learning methods to select the most important drivers for damages, I show that large errors in a hurricane’s predicted landfall location result in higher damages. This relationship holds across a wide range of model specifications and when controlling for ex-ante uncertainty and potential endogeneity. Using a counterfactual exercise I find that the cumulative reduction in damages from forecast improvements since 1970 is about $82 billion, which exceeds the U.S. government’s spending on the forecasts and private willingness to pay for them. |
| Keywords: | Adaptation, Model Selection, Natural Disasters, Uncertainty |
| JEL: | C51 C52 Q51 Q54 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:gwc:wpaper:2020-003&r=all |
| By: | Azevedo,Joao Pedro Wagner De; Hasan,Amer; Goldemberg,Diana; Iqbal,Syedah Aroob; Geven,Koen Martijn |
| Abstract: | School closures due to COVID-19 have left more than a billion students out of school. This paper presents the results of simulations considering three, five and seven months of school closure and different levels of mitigation effectiveness resulting in optimistic, intermediate and pessimistic global scenarios. Using data on 157 countries, the analysis finds that the global level of schooling and learning will fall. COVID-19 could result in a loss of between 0.3 and 0.9 years of schooling adjusted for quality, bringing down the effective years of basic schooling that students achieve during their lifetime from 7.9 years to between 7.0 and 7.6 years. Close to 7 million students from primary up to secondary education could drop out due to the income shock of the pandemic alone. Students from the current cohort could, on average, face a reduction of $355, $872, or $1,408 in yearly earnings. In present value terms, this amounts to between $6,472 and $25,680 dollars in lost earnings over a typical student's lifetime. Exclusion and inequality will likely be exacerbated if already marginalized and vulnerable groups, like girls, ethnic minorities, and persons with disabilities, are more adversely affected by the school closures. Globally, a school shutdown of 5 months could generate learning losses that have a present value of $10 trillion. By this measure, the world could stand to lose as much as 16 percent of the investments that governments make in the basic education of this cohort of students. The world could thus face a substantial setback in achieving the goal of halving the percentage of learning poor and be unable to meet the goal by 2030 unless drastic remedial action is taken. |
| Date: | 2020–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9284&r=all |
| By: | Tenev, Nicholas H (Office of the Comptroller of the Currency) |
| Abstract: | How much of the wage gap between black workers and others in the US owes to differences in jobs found through social connections? Panel data from the NLSY79 are used to estimate a job search model in which individual human capital is distinguished from social capital by comparing the wages and frequency of jobs found directly with those of jobs found through friends. Jobs found through friends tend to pay more, but this premium is lower for black workers; the difference can account for 10% of the racial wage gap. |
| Date: | 2020–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:vm82w&r=all |
| By: | Jean-Victor Alipour; Harald Fadinger; Jan Schymik |
| Abstract: | This paper studies the relation between work and public health during the COVID-19 pandemic in Germany. Combining administrative data on SARS-CoV-2 infections and short-time work registrations, firm- and worker-level surveys and cell phone tracking data on mobility patterns, we find that working from home (WFH) is very effective in economic and public health terms. WFH effectively shields workers from short-term work, firms from COVID-19 distress and substantially reduces infection risks. Counties whose occupation structure allows for a larger fraction of work to be done from home experienced (i) much fewer short-time work registrations and (ii) less SARSCoV-2 cases. Health benefits of WFH appeared mostly in the early stage of the pandemic and became smaller once tight confinement rules were implemented. Before confinement, mobility levels were lower in counties with more WFH jobs and counties experienced a convergence in traffic levels once confinement was in place. |
| Keywords: | COVID-19, SARS-CoV-2, working from home, labor supply shock, infections, mitigation, BIBB-BAuA |
| JEL: | J22 H12 I18 J68 R12 R23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_329&r=all |
| By: | Kenneth A. Couch; Robert W. Fairlie; Huanan Xu |
| Abstract: | COVID-19 abruptly impacted the labor market with the unemployment rate jumping to 14.7 percent less than two months after state governments began adopting social distancing measures. Unemployment of this magnitude has not been seen since the Great Depression. This paper provides the first study of how the pandemic impacted minority unemployment using CPS microdata through April 2020. African-Americans experienced an increase in unemployment to 16.6 percent, less than anticipated based on previous recessions. In contrast, Latinx, with an unemployment rate of 18.2 percent, were disproportionately hard hit by COVID-19. Adjusting for concerns of the BLS regarding misclassification of unemployment, we create an upper-bound measure of the national unemployment rate of 26.5 percent, which is higher than the peak observed in the Great Depression. The April 2020 upper-bound unemployment rates are an alarming 31.8 percent for blacks and 31.4 percent for Latinx. Difference-in-difference estimates suggest that blacks were, at most, only slightly disproportionately impacted by COVID-19. Non-linear decomposition estimates indicate that a slightly favorable industry distribution partly protected them being hit harder by COVID-19. The most impacted group are Latinx. Difference-in-difference estimates unequivocally indicate that Latinx were disproportionately impacted by COVID-19. An unfavorable occupational distribution and lower skills contributed to why Latinx experienced much higher unemployment rates than whites. These findings of early impacts of COVID-19 on unemployment raise important concerns about long-term economic effects for minorities. |
| Keywords: | unemployment, inequality, labor, race, minorities, COVID-19, coronavirus, shelter-in-place, social distancing |
| JEL: | J60 J70 J15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8327&r=all |
| By: | Randal K. Quarles |
| Date: | 2020–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgsq:88227&r=all |
| By: | David Benson; Serafin J. Grundl; Richard Windle |
| Abstract: | This note documents differences and similarities between rural and urban retail banking clients using data from the Board's Survey of Consumer Finances (SCF). Understanding geographic differences in local demand conditions for banking is important for designing effective public policy. |
| Date: | 2020–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2020-06-12-2&r=all |
| By: | Anushree Sinha; Astha Sen; Rajesh Kumar Jaiswal (National Council of Applied Economic Research) |
| Abstract: | In comparison to the rest of India, Rajasthan continues to suffer from disturbingly low female literacy rate, poor enrolment and retention rates of girls in schools mostly the in rural areas, but also in the small urban towns. This research informs the design of a cash transfer policy intended to improve enrolment levels of 13-15-year-old girls in secondary schools in Dhaulpur, a district of Rajasthan. Secondly, it statistically identifies non-monetary factors contributing towards parents’ decision of enrolling their daughters in secondary education, in the presence of a large enough cash grant. Furthermore, the study statistically investigates attributes that influence the size of the cash grant chosen by parents for enroling their daughters in secondary school. Caste, level of education acquired by parent/s and concerns regarding the safety of girls’ determine the choice of a cash grant. |
| Keywords: | Cash Transfers, Secondary Education, School Enrolments, Rural, Rajasthan, Direct Costs Girl Education, Education Costs, Opportunity Cost, and Policy-Making |
| JEL: | C81 I38 I22 O15 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nca:ncaerw:117&r=all |
| By: | Gabriel Rissola (European Commission - JRC); Jurgen Haberleithner |
| Abstract: | This case-study comparative analysis focuses on five different Place-based Innovation Ecosystems in four countries of the European Union (namely Espoo in Finland, Barcelona in Spain, Gothenburg in Sweden and Ljubljana in Slovenia) and one in the United States of America (Boston) and seeks to generate scientific evidence for the future development of the European Union policies related to innovation in the context of regional and urban innovation ecosystems. All five selected and presented Place-based Innovation Ecosystems have been individually synthesised, analysed and compared based on common dimensions of analysis. These results allowed - as a first theoretical approximation to a specific typology - to define five different models of Place-based Innovation Ecosystems, with the potential to serve as an indicative reference for the development of other EU (and non-EU) cases. In conclusion, this study evidences a high complexity of innovation ecosystems with different levels of implementation of the Quadruple Helix Model and different kind of interrelations with Smart Specialisation Strategies and their inherent Entrepreneurial Discovery Processes. Orchestrators and main key-players play an essential role in the governance of the innovation ecosystems, performing a leadership role concerning local, regional, national and international innovation-related policy agendas. This leadership, talent attraction and retaining, the presence of research and innovation infrastructure, complementary system stakeholders and internationalisation were detected as core elements for successful local and regional innovation ecosystems. |
| Keywords: | Place-based, Territorial, Innovation Ecosystems, Smart Specialisation, Quadruple Helix, Espoo, Barcelona, Gothenburg, Ljubljana, Boston |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc120695&r=all |
| By: | Alpalhão, Henrique; Lopes, Marta; Pereira Santos, João; Tavares, José |
| Abstract: | We investigate the causal relationship between local government expenditure and private firm performance, using the quantity and naming of civil parishes within each municipality as an instrumental variable. Religious denominations are taken as a proxy for strong local identity, which likely increases competition for resources between neighboring parishes. We explore a dataset on the universe of private firms, local government expenditure categories and socio-economic indicators for all mainland Portuguese municipalities, in a period encompassing both normal and crisis times. The number of parishes per municipality, as exogenously set by the central government, and the number of parishes that display religious denominations are both used as instruments that explain local government spending, indirectly impacting firm performance. We find that both display considerable power in determining total primary and current spending, which then positively impacts private firms' sales and value added. Using religious denominations is found to yield a particularly potent instrument, confirming and expanding the baseline results. In a field that mostly relies on natural experiments for instrumental variable frameworks, our proposed instruments are both easily obtainable and powerful. |
| Keywords: | firm performance; fragmentation; instrumental variables; Local fiscal multiplier; local governments; Local identity; religion |
| JEL: | D72 E62 H72 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14448&r=all |