|
on Urban and Real Estate Economics |
| By: | Richard H. Rijnks (Univesity of Groningen); Stephen Sheppard (Williams College) |
| Abstract: | Recent research indicates that the subjective evaluation of well-being increases when conditions of housing are improved. This suggests that subjective well-being might serve as a useful proxy for characteristics of a home or neighbourhood that are relevant to an occupant, but unobserved by the analyst. In this paper, we assess this idea through analysis of residential property valuation, using a sample of 95,413 respondents matched to house sales for 2000 to 2012 in the North of the Netherlands. Using a spatial econometric approach, we find a significant and positive association between individual and regional subjective well-being and house prices. This suggests that house buyers are willing to pay more for, or that house sellers require greater compensation to sell and move from, properties and areas in which the resident experiences greater happiness. Our study provides the first estimates of the importance of these effects. |
| Keywords: | Subjective well-being, house price, hedonic model |
| JEL: | D91 R2 R3 |
| Date: | 2020–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2020-09&r=all |
| By: | Gregorio S. Caetano; Hugh Macartney |
| Abstract: | We develop a novel strategy to identify the relative importance of school and neighborhood factors in determining school segregation. Using detailed student enrollment and residential location data, our research design compares differences in student composition between adjacent Census blocks served by different schools to analogous differences between those schools. Our findings indicate that neighborhood factors explain around 62% of racial segregation and 44% of economic segregation across all schools, playing an even more pronounced role in urban areas, where school segregation has been especially acute. These findings suggest that the involvement of urban planners is essential when attempting to confront inequality of opportunity through education. |
| JEL: | I21 J15 R23 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27688&r=all |
| By: | Knut Are Aastveit (Norges Bank and BI Norwegian Business School); Bruno Albuquerque (European Central Bank and Ghent University); André Anundsen (Housing Lab, Oslo Metropolitan University) |
| Abstract: | Recent developments in US house prices mirror those of the 1996-2006 boom, but the recovery in construction activity has been weak. Using data for 254 US metropolitan areas, we show hat housing supply elasticities have fallen markedly in recent years. Housing supply elasticities have declined more in areas where land-use regulation has tightened the most, and in areas that experienced the sharpest housing busts. A lowering of the housing supply elasticity implies a strengthened price responsiveness to demand shocks, whereas quantity reacts less. Consistent with this, we find that an expansionary monetary policy shock has a considerably stronger effect on house prices during the recent recovery than during the previous housing boom. At the same time, building permits respond less. |
| Keywords: | House prices, Heterogeneity, Housing supply elasticities, Monetary policy |
| JEL: | C23 E32 E52 R31 |
| Date: | 2019–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2019_08&r=all |
| By: | Kenneth S. Rogoff; Yuanchen Yang |
| Abstract: | China’s real estate has been a key engine of its sustained economic expansion. This paper argues, however, that even before the Covid-19 shock, a decades-long housing boom had given rise to severe price misalignments and regional supply-demand mismatches, making an adjustment both necessary and inevitable. We make use of newly available and updated data sources to analyze supply-demand conditions in the fast-moving Chinese economy. The imbalances are then compared to benchmarks from other economies. We conclude that the sector is quite vulnerable to a sustained aggregate growth shock, such as Covid-19 might pose. In our baseline calibration, using input-output tables and taking account of the very large footprint of housing construction and real-estate related sectors, the adjustment to a decline in housing activity can easily trim a cumulative 5-10 percent from the level of output (over a period of years). |
| JEL: | F39 G01 R3 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27697&r=all |
| By: | Comi, Simona (University of Milan Bicocca); Origo, Federica (University of Bergamo); Pagani, Laura (University of Milan Bicocca); Tonello, Marco (Catholic University Milan) |
| Abstract: | This paper examines the effect of a high school student's relative position in the class achievement distribution on school violence. We identify this effect by exploiting idiosyncratic differences in the distribution of earlier academic achievement across classes. Such differences generate quasi-random variation in rank for students with the same initial achievement. We consider distinct types of school violence, namely, verbal, relational and physical violence. We find that rank has a negative effect on both the probability and frequency of perpetrating school violence for all the specific types of violence considered. The effect size is economically significant, especially in the case of physical violence. We find that rank is less or not effective in reducing physical violence for low-background students, migrants, in lower-quality schools and in high-crime areas, consistent with the lower perceived opportunity costs associated with misbehavior for disadvantaged students in low quality schools and located in violent local contexts. |
| Keywords: | school rank, school violence |
| JEL: | I21 I24 K40 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13554&r=all |
| By: | Federica Cappelli (Roma Tre University); Gianni Guastella (Università Cattolica del Sacro Cuore and Fondazione Eni Enrico Mattei); Stefano Pareglio (Università Cattolica del Sacro Cuore and Fondazione Eni Enrico Mattei) |
| Abstract: | This article examines the relationship between institutional fragmentation and the spatial extent of cities in Europe’s Functional Urban Areas. European Union planning regulations vary across member states, but in most cases, local authorities determine land use within the more general regulatory frameworks set by national or subnational authorities. More decentralised and fragmented settings may favour urban sprawl, allowing developers to avoid land-use restrictions in one municipality by moving to adjacent ones and providing incentives for municipalities to adopt less strict land-conversion regulations to attract households and workers. The empirical results fully support this hypothesis and unveil significant differences between small and large cities, the effect of governance fragmentation being a substantial factor in the latter case. |
| Keywords: | Urban Sprawl, Institutional Fragmentation, Threshold Regression |
| JEL: | R52 R58 C24 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2020.08&r=all |
| By: | Jeffrey T. Denning; Richard Murphy; Felix Weinhardt |
| Abstract: | This paper considers an unavoidable feature of the school environment, class rank. What are the long run effects of a student’s ordinal rank in elementary school? Using administrative data from all public school students in Texas, we show that students with a higher third grade academic rank, conditional on achievement and classroom fixed effects, have higher subsequent test scores, are more likely to take AP classes, to graduate from high school, enroll in college, graduate from college, and ultimately have higher earnings 19 years later. The paper concludes by exploring the tradeoff between higher quality schools and higher rank in the presence of these rank-based peer effects. |
| JEL: | I20 I23 I28 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27468&r=all |
| By: | Cho, Seung Jin (Iowa State University); Lee, Jun Yeong (Iowa State University); Winters, John V. (Iowa State University) |
| Abstract: | We examine effects of the COVID-19 pandemic on employment losses across metropolitan area status and population size. Non-metropolitan and metropolitan areas of all sizes experienced significant employment losses, but the impacts are much larger in large metropolitan areas. Employment losses manifest as increased unemployment, labor force withdrawal, and temporary absence from work. We examine the role of individual and local area characteristics in explaining differing employment losses across metropolitan status and size. The local COVID-19 infection rate is a major driver of differences across MSA size. Industry mix and employment density also matter. The pandemic significantly altered urban economic activity. |
| Keywords: | COVID-19, pandemic, employment, agglomeration, urbanization, cities, density |
| JEL: | J2 R2 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13468&r=all |
| By: | Carr, Constance (University of Luxembourg) |
| Abstract: | With stunning green landscapes, exemplary public transport, and picturesque walkable cities, Switzerland often occupies the public imaginary of a place that has tackled sustainable development. This research, however, looks under the hood and finds that this development path supports not only modes of capital accumulation, but also certain less sustainable patterns of development and governance. This paper examines this apparent paradox by looking at the role of sustainable development as a master-signifier in Swiss urban development processes. Empirical observations were made in the Glatt Valley of Switzerland, where governing officials of small municipalities are confronted with coordinating urban development under growth pressure within cantonal and federal policy frameworks that claim sustainable development. It can be seen that sustainable development is an empty master-signifier that policy makers engage to justify the quilting of a certain hegemonic discourses of power that reflect in further uneven urban development. By reproducing business as usual market-led urban growth, fragmentation is maintained as are social spatial disparities are entrenched. |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:jvbue&r=all |
| By: | Peydró, José-Luis; Rodriguez-Tous, Francesc; Tripathy, Jagdish; Uluc, Arzu |
| Abstract: | Macroprudential regulators worldwide have introduced regulations to limit household leverage in light of existing evidence which suggests that high leverage is associated with household distress during crisis. We analyse the distributional effects of such a macroprudential policy on mortgage and house price cycles. For identification, we exploit the universe of UK mortgages and a 15%-limit imposed in 2014 on lenders — not households — for high loan-to-income ratio (LTI) mortgages. Despite some regulatory arbitrage (eg increases in LTV and average loan size), more-constrained lenders issue fewer high-LTI mortgages. Partial substitution by less-constrained lenders leads to overall credit contraction to low-income borrowers in local-areas more exposed to constrained-lenders, lowering house price growth. Following the Brexit referendum (which led to house-price correction), the 2014-policy strongly implies — via lower pre-correction debt — better house prices and mortgage defaults during an episode of house price correction. |
| Keywords: | macrorpudential policy,mortgages,credit cycles,inequality,house prices |
| JEL: | E5 G01 G21 G28 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:223303&r=all |
| By: | Ahasan, Rakibul (Texas A&M University); Mudasser, Mehedi |
| Abstract: | The information regarding travel behavior of the citizen and understanding why they are making any particular choice in their trip making is gaining vital importance in shaping the traffic management system in any city efficient and competent. Travel behavior pattern of the citizens could have both negative and positive influences on the sustainability issue of any transport system. This paper focuses on the steps of the transport demand model with two types of information- demographic information and travel data. Information regarding trip generation, the pattern of trip variation with housing types, modal choices for various purposes along with changes in income variation of citizens in Khulna City were explored using statistical tools and` techniques, and trip distribution modeling was done to find out the factors affecting the trip making behavior. The findings showed that there is present a salubrious relationship between the income level of the people and their mode preferences. However, the total number of trips has influenced mostly by the income of the households where housing condition has a negative impact on the trips produced. Vehicle ownership and family size do not have that much effect on the number of trips generated. So, the consideration of both positive and negative influential variables on the travel pattern can help to outline a sustainable future transportation plan of Khulna City. |
| Date: | 2018–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:tc3fm&r=all |
| By: | Xu, Yuanwei; Wang, Feicheng |
| Abstract: | China has experienced a rapid boom in real estate prices in the last few decades, leading toa substantial increase in living costs and heavy financial burdens on households. Usingan instrumental variable approach, this paper exploits spatial and temporal variation inhousing price appreciation linked to individual-level health data in China from 2000 to 2011.We find robust evidence that increases in housing prices significantly raise the probability ofresidents having chronic diseases. This negative health impact is more pronounced amongindividuals from low-income families, households that purchased rather than inheritedor was allocated the home, and those who migrated from rural to urban areas. We alsofind evidence that marriage market competition exacerbates these negative health effects,particularly for males and parents with young adult sons. Further empirical results suggestthat housing price appreciation induces negative health consequences through increasedwork intensity, higher mental stress, and reduced sleep time. This paper provides a novelexplanation to the increased prevalence of chronic diseases in China. |
| Keywords: | Housing Prices,Chronic Diseases,Health,Marriage Competition,China |
| JEL: | I10 I12 R21 R31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:403&r=all |
| By: | Andre Nickow; Philip Oreopoulos; Vincent Quan |
| Abstract: | Tutoring—defined here as one-on-one or small-group instructional programming by teachers, paraprofessionals, volunteers, or parents—is one of the most versatile and potentially transformative educational tools in use today. Within the past decade, dozens of preK-12 tutoring experiments have been conducted, varying widely in their approach, context, and cost. Our study represents the first systematic review and meta-analysis of these and earlier studies. We develop a framework for considering different types of programs to not only examine overall effects, but also explore how these effects vary by program characteristics and intervention context. We find that tutoring programs yield consistent and substantial positive impacts on learning outcomes, with an overall pooled effect size estimate of 0.37 SD. Effects are stronger, on average, for teacher and paraprofessional tutoring programs than for nonprofessional and parent tutoring. Effects also tend to be strongest among the earlier grades. While overall effects for reading and math interventions are similar, reading tutoring tends to yield higher effect sizes in earlier grades, while math tutoring tends to yield higher effect sizes in later grades. Tutoring programs conducted during school tend to have larger impacts than those conducted after school. |
| JEL: | I2 J24 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27476&r=all |
| By: | Piza,Caio; Zwager,Astrid Maria Theresia; Ruzzante,Matteo; Santos Dantas,Rafael; Loureiro,Andre |
| Abstract: | What is the impact of greater teacher autonomy on student learning? This paper provides experimental evidence from a program in Brazil. The program supported teachers, through a combination of technical assistance and a small grant, to autonomously develop and implement an innovative project aimed at engaging their students. The findings show that the program improved student learning by 0.15 standard deviation and grade passing by 13 percent in sixth grade, a critical year of transition from primary to lower-secondary education. The paper explores two mechanisms: teacher turnover and student socio-emotional skills. Teacher turnover is reduced by 20.7 percent, and the impacts on student outcomes are concentrated in the schools with the largest reductions. The findings also indicate positive impacts on conscientiousness and extroversion among the students. The results suggest that increasing the autonomy of public servants can improve service delivery, even in a low-capacity context. |
| Keywords: | Educational Sciences,Educational Institutions&Facilities,Effective Schools and Teachers,Secondary Education,Gender and Development |
| Date: | 2020–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9371&r=all |
| By: | Han, Bing; Han, Lu; Zhou, Zhengyi |
| Abstract: | Using a unique survey data of Chinese households, we study the impact of house price growth and house price risk on entrepreneurship. House price risk, measured as the sensitivity of house price growth to local GDP growth, negatively impacts the entrepreneurship of homeowners relative to renters. This finding is concentrated only among sophisticated households and is consistent with the portfolio effect when housing and occupational choices are integral parts of the household portfolio. Moreover, a high past house price growth reduces the entrepreneurship of homeowners relative to renters. This holds for both sophisticated and unsophisticated households. We propose a new economic channel based on extrapolative belief and provide further supportive evidence. |
| Keywords: | Entrepreneurship; Housing market; Extrapolative belief |
| JEL: | D10 G11 L26 R21 R31 |
| Date: | 2020–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102597&r=all |
| By: | Andrew Bacher-Hicks; Joshua Goodman; Christine Mulhern |
| Abstract: | We use high frequency internet search data to study in real time how US households sought out online learning resources as schools closed due to the Covid-19 pandemic. By April 2020, nationwide search intensity for both school- and parent-centered online learning resources had roughly doubled relative to baseline. Areas of the country with higher income, better internet access and fewer rural schools saw substantially larger increases in search intensity. The pandemic will likely widen achievement gaps along these dimensions given schools' and parents' differing engagement with online resources to compensate for lost school-based learning time. Accounting for such differences and promoting more equitable access to online learning could improve the effectiveness of education policy responses to the pandemic. The public availability of internet search data allows our analyses to be updated when schools reopen and to be replicated in other countries. |
| JEL: | I20 I24 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27555&r=all |
| By: | Neil Bhutta; Andreas Fuster; Aurel Hizmo |
| Abstract: | We document wide dispersion in the mortgage rates that households pay on identical loans, and show that borrowers' financial sophistication is an important determinant of the rates obtained. We estimate a gap between the 10th and 90th percentile mortgage rate that borrowers with the same characteristics obtain for identical loans, in the same market, on the same day, of 54 basis points|equivalent to about $6,500 in upfront costs (points) for the average loan. Time-invariant lender attributes explain little of this rate dispersion, and considerable dispersion remains even within loan officer. Comparing the rates borrowers obtain to the real-time distribution of rates that lenders could offer for the same loan and borrower type, we find that borrowers who are likely to be the least financially savvy tend to substantially overpay relative to the rates available in the market. In the time series, the average overpayment decreases when overall market interest rates rise, suggesting that a rising level of borrowing costs encourages more search and negotiation. Furthermore, new survey data provide direct evidence that financial knowledge and shopping both affect the mortgage rates borrowers get, and that shopping activity increases with the level of market rates. |
| Keywords: | Financial literacy; Household finance; Interest rates; Mortgages; Price dispersion; Search; Shopping |
| JEL: | E43 G21 |
| Date: | 2020–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-62&r=all |
| By: | Boeing, Geoff (Northeastern University) |
| Abstract: | This paper was presented as the 8th annual Transactions in GIS plenary address at the American Association of Geographers annual meeting in Washington, DC. The spatial sciences have recently seen growing calls for more accessible software and tools that better embody geographic science and theory. Urban spatial network science offers one clear opportunity: from multiple perspectives, tools to model and analyze nonplanar urban spatial networks have traditionally been inaccessible, atheoretical, or otherwise limiting. This paper reflects on this state of the field. Then it discusses the motivation, experience, and outcomes of developing OSMnx, a tool intended to help address this. Next it reviews this tool's use in the recent multidisciplinary spatial network science literature to highlight upstream and downstream benefits of open‐source software development. Tool-building is an essential but poorly incentivized component of academic geography and social science more broadly. To conduct better science, we need to build better tools. The paper concludes with paths forward, emphasizing open-source software and reusable computational data science beyond mere reproducibility and replicability. |
| Date: | 2020–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:d267g&r=all |
| By: | Sébastien P. Kraenzlin; Christoph Meyer; Thomas Nellen |
| Abstract: | This paper analyzes card payments to the retail sector in Switzerland during the COVID-19 crisis. We provide evidence on aggregate effects and regional shifts. Pronounced shifts - which persisted post-lockdown - can be observed from urban to suburban and rural areas and among cantons. Data allow us to identify directly two sources of shifts: "tourists and business travelers," and "e-commerce." We indirectly identify additional sources: infection risk, lockdown measures, working from home, shopping tourism, and cash substitution. The COVID-19 crisis seems to have reinforced pre-existing trends that may have faster than anticipated effects on the economy. Our analysis underscores the usefulness of real-time card payment data to inform policy makers. |
| Keywords: | COVID-19, lockdown, card payment data, regional sale shifts |
| JEL: | E21 E42 E65 R10 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:snb:snbwpa:2020-15&r=all |
| By: | International Monetary Fund |
| Abstract: | A technical assistance (TA) mission was conducted during July 9–13, 2018 to assist the General Statistics Office of Vietnam (GSO) with the development of a residential property price index (RPPI). This was the first mission conducted to Vietnam under the auspices of the multi-annual STA Data for Decisions (D4D) trust fund. The main objective of TA provided to Vietnam under the D4D will be to assist the GSO to develop an RPPI. The GSO recently launched two initiatives to collect potential source data for the RPPI since taxation data are unreliable in respect of reported transaction prices, and the State Bank of Vietnam (SBV) does not collect loan level mortgage data. |
| Keywords: | Technical assistance missions;Price indexes;Housing prices;Statistics;Technical Assistance Reports;Consumer price indexes;Asset bubbles;Real estate prices;Producer price indexes;Economic sectors;GSO,data source,source data,SBV,property list |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2019/005&r=all |
| By: | Rajashri Chakrabarti; Andrew F. Haughwout; Donghoon Lee; William Nober; Joelle Scally; Wilbert Van der Klaauw |
| Abstract: | In yesterday's post, we studied the expected debt relief from the CARES Act on mortgagors and student debt borrowers. We now turn our attention to the 63 percent of American borrowers who do not have a mortgage or student loan. These borrowers will not directly benefit from the loan forbearance provisions of the CARES Act, although they may be able to receive some types of leniency that many lenders have voluntarily provided. We ask who these borrowers are, by age, geography, race and income, and how does their financial health compare with other borrowers. |
| Keywords: | COVID-19; CARES Act; forbearance; student loan; mortgage; deliquency; credit score |
| JEL: | D14 I14 |
| Date: | 2020–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:88602&r=all |
| By: | Gazze, Ludovica (University of Warwick) |
| Abstract: | Several states require owners to mitigate lead hazards in old houses with children present. I estimate the mandates’ effects on housing markets. My empirical strategy exploits differences by state, year, and housing vintage. The mandates decrease the prices of old houses by 7.1 percent, acting as a large tax on owners. Moreover, families with children become 11.3 percent less likely to live in old houses. Increases in rents for family-friendly houses suggest that the mandates have important distributional consequences. These findings are relevant for evaluating similar mandates such as healthy homes standards. |
| Keywords: | Mandates ; Health Hazards ; Housing Quality JEL codes: I18 ; Q52 ; R21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1302&r=all |
| By: | Blimpo, Moussa P.; Pugatch, Todd |
| Abstract: | We assess, via an experiment across 207 secondary schools, how a comprehensive teacher training program affects the delivery of a major entrepreneurship curriculum reform in Rwanda. The reform introduced interactive pedagogy and a focus on business skills in the country’s required upper secondary entrepreneurship course. In addition to the government’s standard training, a random sample of schools received intensive training organized by an NGO for two years. The training consisted of (i) six training sessions during school breaks, ii) exchange visits each term where teachers provided feedback to their peers, and (iii) outreach and support from NGO staff at least twice per year. The program increased teachers’ use of active instruction, consistent with the reform’s features. These effects on pedagogy did not translate into improvements in student academic outcomes or skills. Treated students increased their participation in businesses by 5 percentage points, or 17% of the control mean, with a commensurate decrease in wage employment, and no effect on overall income. These results suggest substitution between entrepreneurship and employment among students in treated schools. |
| Keywords: | entrepreneurship education,teacher training,secondary school,pedagogy,randomized control trials,Rwanda |
| JEL: | I25 I26 I28 J24 O12 O15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:642&r=all |
| By: | Odermatt, Reto (University of Basel); Stutzer, Alois (University of Basel) |
| Abstract: | The belief that home ownership makes people happy is probably one of the most widespread intuitive theories of happiness. However, whether it is accurate is an open question. Based on individual panel data, we explore whether home buyers systematically overestimate the life satisfaction associated with living in their privately owned property. To identify potential prediction errors, we compare people's forecasts of their life satisfaction in five years' time with their current realizations. We find that, while moving into a purchased dwelling is associated with higher life satisfaction, people systematically overestimate the long-term satisfaction gain. The misprediction therein is driven by people who follow extrinsically-oriented life goals, highlighting biased beliefs regarding own preferences as a relevant mechanism in the prediction errors. |
| Keywords: | beliefs, home ownership, housing tenure, life goals, life satisfaction, projection bias, subjective well-being, intuitive theories of happiness, utility prediction |
| JEL: | D12 D83 D90 I31 R20 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13510&r=all |
| By: | N. Meltem Daysal; Michael F. Lovenheim; Nikolaj Siersbæk; David N. Wasser |
| Abstract: | We estimate the effect of housing price changes on fertility and early-life child health in Denmark. Using rich population register data among women aged 20-44 who own a home, we find that for each 100,000 DKK increase in home prices (equivalent to $12,000), the likelihood of giving birth increases by 0.27 percentage points or 2.32%. These estimates are similar to findings from the US per dollar of home price change, which is surprising given the strong pro-natalist policies and generous government programs in Denmark. We also present the first estimates of the effect of home prices on infant health. Our findings indicate that housing price increases lead to better child health at birth in terms of low birth weight and prematurity, however most of these effects reflect changes in the composition of births. There is no evidence of an effect on health during the first five years of life. These findings are consistent with a lack of credit constraints among homeowner families and with both children and child health being normal goods that are similarly-valued in the US and Denmark. |
| JEL: | I12 J13 R21 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27469&r=all |
| By: | Buck,Lindsey; Fiala,Nathan V.; Prakash,Nishith; Sabarwal,Shwetlena; Saraswat,Deepak; Shrestha,Deepika |
| Abstract: | Early childhood is a crucial period for the cognitive, social, emotional, physical, and language development of children. Of the 200 million children who do not reach their developmental potential worldwide, 66 percent live in South Asia. This paper explores gaps in knowledge among educators in Eastern Nepal about the importance of early childhood. The results of a survey headteachers and teachers show that teachers often do not place enough weight on the importance of behaviors that contribute to the growth and development of children in early childhood. There are also large gaps in teachers'understanding and practice of classroom accommodations for children with disabilities. The paper illustrates that educators, who play a large role in children's lives during early years, may be uninformed about the importance of early childhood development. The paper provides policy recommendations that can help policymakers target areas that lack understanding and improve early childhood development education and understanding among educators. |
| Date: | 2020–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9381&r=all |
| By: | Tian, Yuan (Carnegie Mellon University); Caballero, Maria Esther (Carnegie Mellon University); Kovak, Brian K. (Carnegie Mellon University) |
| Abstract: | We document the transmission of social distancing practices from the United States to Mexico along migrant networks during the early 2020 Covid-19 pandemic. Using data on pre-existing migrant connections between Mexican and U.S. locations and mobile-phone tracking data revealing social distancing behavior, we find larger declines in mobility in Mexican regions whose emigrants live in U.S. locations with stronger social distancing practices. We rule out confounding pre-trends and use a variety of controls and an instrumental variables strategy based on U.S. stay-at-home orders to rule out the potential influence of disease transmission and migrant sorting between similar locations. Given this evidence, we conclude that our findings represent the effect of information transmission between Mexican migrants living in the U.S. and residents of their home locations in Mexico. Our results demonstrate the importance of personal connections when policymakers seek to change fundamental social behaviors. |
| Keywords: | social learning, migration, Mexico-U.S., network, COVID-19 |
| JEL: | J61 F22 I12 D83 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13574&r=all |
| By: | Abhimanyu Gupta |
| Abstract: | Newton-step approximations to pseudo maximum likelihood estimates of spatial autoregressive models with a large number of parameters are examined, commencing from initial instrumental variables or least squares estimates. These have the same asymptotic efficiency properties as maximum likelihood under Gaussianity but are of closed form. Hence they are computationally simple and free from compactness assumptions, thereby avoiding two notorious pitfalls of implicitly defined estimates of large spatial autoregressions. For an initial least squares estimate, the Newton step can also lead to weaker regularity conditions for a central limit theorem than those extant in the literature. A simulation study demonstrates excellent finite sample gains from Newton iterations, especially in large multiparameter models for which grid search is costly. A small empirical illustration shows improvements in estimation precision with real data. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2008.12395&r=all |
| By: | Giovanni Facchini; Brian G. Knight; Cecilia Testa |
| Abstract: | This paper investigates the relationship between the franchise and law enforcement practices using evidence from the Voting Rights Act (VRA) of 1965. We find that, following the VRA, black arrest rates fell in counties that were both covered by the legislation and had a large number of newly enfranchised black voters. We uncover no corresponding patterns for white arrest rates. The reduction in black arrest rates is driven by less serious offenses, for which police might have more enforcement discretion. Importantly, our results are driven by arrests carried out by sheriffs - who are always elected. While there are no corresponding changes for municipal police chiefs in aggregate, we do find similar patterns in covered counties with elected rather than appointed chiefs. We also show that our findings cannot be rationalized by alternative explanations, such as differences in collective bargaining, changes in the underlying propensity to commit crimes, responses to changes in policing practices, and changes in the suppression of civil right protests. Taken together, these results document that voting rights, when combined with elected, rather than appointed, chief law enforcement officers, can lead to improved treatment of minority groups by police. |
| JEL: | D7 J15 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27463&r=all |
| By: | KICHKO Sergey, (HSE University); LIANG Wen-Jung, (National Dong Hwa University); MAI Chao-Cheng, (Academia Sinica and Tamkang University); THISSE Jacques-François, (CORE, UCLouvain; HSE University and CEPR) |
| Abstract: | Science parks play a growing role in knowledge-based economies by accommodating high-tech firms and providing an environment that fosters location-dependent knowledge spillovers and promote R&D investments by firms. Yet, not much is known about the economic conditions under which such entities may form in equilibrium without government interventions. This paper develops a spatial equilibrium model with a competitive final sector and a monopolistically competitive intermediate sector, which allows us to determine necessary and sufficient conditions for a science park to emerge as an equilibrium outcome. We show that strongly localized knowledge spillovers, skilled labor abundance, and low commuting costs are key drivers for a science park to form. Not only is the productivity of the final sector higher when intermediate firms cluster, but a science park hosts more intermediate firms, more researchers and more production workers, and yields greater worker welfare, compared to a counterfactual flat city. With continual improvements in infrastructure and communication technology that lowers coordination costs, science parks will eventually be fragmented. |
| Keywords: | science park, knowledge spillovers, intermadiate firm clustering, land use, worker commuting, R&D |
| JEL: | D51 L22 O33 R13 |
| Date: | 2020–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2020015&r=all |
| By: | Coker Eric (College of Public Health and Health Professions, University of Florida); Cavalli Laura (Fondazione Eni Enrico Mattei); Fabrizi Enrico (Department of Economics and Social Sciences, Università Cattolica del Sacro Cuore); Guastella Gianni (Fondazione Eni Enrico Mattei and Department of Mathematics and Physics, Università Cattolica del Sacro Cuore); Lippo Enrico (Fondazione Eni Enrico Mattei); Parisi Maria Laura (Department of Economics and Management, Università degli studi di Brescia); Pontarollo Nicola (Department of Economics and Management, Università degli studi di Brescia); Rizzati Massimiliano (Fondazione Eni Enrico Mattei); Varacca Alessandro (Department of Agricultural Economics, Università Cattolica del Sacro Cuore); Vergalli Sergio (Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli studi di Brescia) |
| Abstract: | Long-term exposure to ambient air pollutant concentrations is known to cause chronic lung inflammation, a condition that may promote increased severity of COVID-19 syndrome caused by the novel coronavirus (SARS-CoV-2). In this paper, we empirically investigate the ecologic association between long-term concentrations of area-level fine particulate matter (PM2.5) and excess deaths in the first quarter of 2020 in municipalities of Northern Italy. The study accounts for potentially spatial confounding factors related to urbanization that may have influenced the spreading of SARS-CoV-2 and related COVID-19 mortality. Our epidemiological analysis uses geographical information (e.g., municipalities) and negative binomial regression to assess whether both ambient PM2.5 concentration and excess mortality have a similar spatial distribution. Our analysis suggests a positive association of ambient PM2.5 concentration on excess mortality in Northern Italy related to the COVID-19 epidemic. Our estimates suggest that a one-unit increase in PM2.5 concentration (μg/m3) is associated with a 9% (95% confidence interval: 6% - 12%) increase in COVID-19 related mortality. |
| Keywords: | COVID-19, Mortality, Pollution, Italy, Municipalities |
| JEL: | Q53 I18 J11 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2020.06&r=all |
| By: | Miaari, Sami H. (Tel Aviv University); Lee, Ines (University of Cambridge) |
| Abstract: | This paper examines the impact of mobility restrictions on educational performance in the West Bank over 2000–2006 during the Israeli-Palestinian conflict. This conflict is characterized by a system of mobility restrictions enforced through physical barriers such as checkpoints. Using novel data on the location of barriers, we find that exposure to one or more checkpoints reduces the probability of passing the final high school exam by 1–3 percentage points and the overall score by 0.04–0.07 standard deviations. We find evidence of three mechanisms at play: school resources deteriorate, students' psychological wellbeing worsens, and students lose time due to delays at checkpoints. |
| Keywords: | education, academic achievement, test score, conflict, fatalities, mobility, closures |
| JEL: | D74 I25 J61 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13563&r=all |
| By: | Stefan Schiman |
| Abstract: | Labor supply shocks can have substantial effects on the Beveridge Curve. Structural VARs with sign restrictions show that the shocks associated with the free movement of workers from Eastern Europe have temporarily increased unemployment in Austria, a major destination country, by 25 percent and job vacancies by 40 percent. The 2 percent increase in total employment was accompanied by a temporary decline in the employment of domestic workers. The greatest impact is seen in regions bordering on the home countries of the migrant workers. Beyond these findings the paper addresses empirical regularities of labor supply shocks that are at odds with theoretical predictions. |
| Keywords: | labour supply shocks, Beveridge curve, job-related migration, sign restrictions, structural VAR KP_Berichte_Analysen |
| Date: | 2020–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2020:i:606&r=all |
| By: | Yuen Tsang (Tarleton State University,) |
| Abstract: | As more “green†cities are emerging in the 21st century, human recognition of urban buildings can be obstructed by increasing amount of vegetation in urban areas. While the architectural designs of urban buildings are more complicated than before, architects often seek the maximum exposure of the design to public. If vegetation obstructs significant portions of an innovative design of a building, the visual value and attractiveness of the building can diminish greatly. People may not able to retain much visual and spatial memories about a building or even a city because their views are obstructed. This paper begins with a thorough review of current and past literature about the relationship between buildings, street trees, and visibility in urban environments. The purpose of this research is to identify factors that influence visual recognizability of buildings in an urban environment. First, a method called green ratio is proposed to quantify the amount of greenery that people can see on the ground. The result can be beneficial to urban planners, architects, city planners, urban geographers, and city tourism board for better integrating vegetation and buildings in a cityscape. The goal of understanding people’s visual recognition of urban objects is to raise inhabitant’s satisfaction, capture their attention, and make strong impressions towards the city. |
| Keywords: | urban geography, environmental planning, environmental perception, human-environment geography, urban planning, urban design, urban morphology, and demographics |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:smo:spaper:024yt&r=all |
| By: | Victor Couture; Jonathan I. Dingel; Allison E. Green; Jessie Handbury; Kevin R. Williams |
| Abstract: | Tracking human activity in real time and at fine spatial scale is particularly valuable during episodes such as the COVID-19 pandemic. In this paper, we discuss the suitability of smartphone data for quantifying movement and social contact. We show that these data cover broad sections of the US population and exhibit movement patterns similar to conventional survey data. We develop and make publicly available a location exposure index that summarizes county-to-county movements and a device exposure index that quantifies social contact within venues. We use these indices to document how pandemic-induced reductions in activity vary across people and places. |
| JEL: | C8 R1 R23 R4 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27560&r=all |
| By: | Filmer,Deon P.; Molina,Ezequiel; Wane,Waly |
| Abstract: | Four different classroom observation instruments -- from the Service Delivery Indicators, the Stallings Observation System, the Classroom Assessment Scoring System, and the Teach classroom observation instrument -- were implemented in about 100 schools across four regions of Tanzania. The research design is such that various combinations of tools were administered to various combinations of teachers, so these data can be used to explore the commonalities and differences in the behaviors and practices captured by each tool, the internal properties of the tools (for example, how stable they are across enumerators, or how various indicators relate to one another), and how variables collected by the various tools compare to each other. Analysis shows that inter-rater reliability can be low, especially for some of the subjective ratings; principal components analysis suggests that lower-level constructs do not map neatly to predetermined higher-level ones and suggest that the data have only few dimensions. Measures collected during teacher observations are associated with student test scores, but patterns differ for teachers with lower versus higher subject content knowledge. |
| Date: | 2020–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9365&r=all |
| By: | Katerina Lisenkova |
| Abstract: | This paper explores the characteristics of a range of stylised devolved fiscal systems which have been applied, or proposed, as a means of funding the devolved Scottish Government. The central aim is to identify those fiscal mechanisms that most effectively incentivise the pursuit of growth promoting policies by the regional government. This implies identifying the extent to which different fiscal arrangements reinforce effective local growth policies by resulting in increased devolved budgets. Simulations using an inter-temporal, computable general equilibrium model for Scotland, fail to rank uniquely a range of devolved fiscal systems on this criterion over a range of demand- and supply-side policy interventions. Moreover, rather counter-intuitively, tax-sharing regimes do not necessarily improve growth incentives relative to more basic block grants. |
| Keywords: | regional fiscal autonomy; regional fiscal systems; applied general equilibrium. |
| JEL: | D58 R13 R15 H24 H71 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:2009&r=all |
| By: | Bryan S. Graham; Geert Ridder; Petra M. Thiemann; Gema Zamarro |
| Abstract: | We study the effects of counterfactual teacher-to-classroom assignments on average student achievement in elementary and middle schools in the US. We use the Measures of Effective Teaching (MET) experiment to semiparametrically identify the average reallocation effects (AREs) of such assignments. Our findings suggest that changes in within-district teacher assignments could have appreciable effects on student achievement. Unlike policies which require hiring additional teachers (e.g., class-size reduction measures), or those aimed at changing the stock of teachers (e.g., VAM-guided teacher tenure policies), alternative teacher-to-classroom assignments are resource neutral; they raise student achievement through a more efficient deployment of existing teachers. |
| JEL: | C14 C36 I21 I24 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27543&r=all |
| By: | Koen Jochmans |
| Abstract: | We introduce an approach to deal with self-selection of peers in the linear-in-means model. Contrary to the existing proposals we do not require to specify a model for how the selection of peers comes about. Rather, we exploit two restrictions that are inherent to many such specifications to construct intuitive instrumental variables. These restrictions are that link decisions that involve a given individual are not all independent of one another, but that they are independent of the link behavior between other pairs of individuals. A two-stage least-squares estimator of the linear-in-means model is then readily obtained. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2008.07886&r=all |
| By: | Matias Berthelon Author-Name: Diana Kruger Author-Name: Catalina Lauer Author-Name: Luca Tiberti Author-Name: Carlos Zamora |
| Abstract: | Ample empirical evidence has shown that access to childcare for preschool children increases mothers’ labor-force participation and employment. By estimating the causal effect of a school schedule reform in Chile, we investigated whether increased childcare for primary school children improved the quality of the jobs that mothers found. Combining plausibly exogenous temporal and spatial variations in school schedules with a panel of mothers’ employment between 2002 and 2015, we estimated a fixed-effects model that controlled for unobserved heterogeneity. We found a positive effect of access to full-day schools on several measures of the quality of mothers’ jobs, which were correlated to working full-time. We also found small, positive effects on the quality of fathers’ jobs. Our evidence suggests that the mechanism driving the effect was the effect of the reform’s implicit subsidy to the cost of childcare on the opportunity cost of mothers’ time. We also found that less-educated mothers benefited most from the reform. Childcare can increase household welfare by improving parents’ jobs and, thus, can play a role in reducing inequality. |
| Keywords: | Employment quality, job quality, women’s labor-force participation, women’s labor supply, full-day schooling, childcare, education reform, Chile |
| JEL: | H41 H52 I25 I28 J13 J16 J18 J22 O15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2020-07&r=all |
| By: | Jose Canals-Cerda (Federal Reserve Bank of Philadelphia) |
| Abstract: | The integration of the generalized structural equation modeling (GSEM) framework to widely used statistical packages like Stata offers significant opportunities for credit risk management. GSEM techniques bring to bear a modular and all-inclusive approach to statistical model building. We illustrate the “game changing” potential of the GSEM framework with an application to credit risk stress testing and loss forecasting for a representative portfolio of mortgages originated over the past 20 years. Specifically, we analyze a representative dataset of USA mortgage loans originated over the past 20 years that includes detailed loan-level information on monthly loan performance and other relevant loan and borrower characteristics. Our analysis and discussion illustrates how GSEM techniques can significantly impact every aspect of a model-driven risk management framework, from model development, documentation, and validation to model production, as well as to other, perhaps less obvious, aspects of model building like model risk management, enhanced team collaboration, minimization of proliferation of disparate datasets within projects, and the promotion of a holistic and collaborative approach to model building. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:boc:scon20:6&r=all |
| By: | Karadja, Mounir (Department of Economics); Prawitz, Erik (Research Institute of Industrial Economics) |
| Abstract: | In a comment to Karadja & Prawitz (2019), henceforth KP, Per Pettersson-Lidbom (2020), henceforth P-L, argues that the main results in KP are severely biased. He argues that KP's results are biased due to non-classical measurement error in emigration and due to confounders related to the instrument. In this response, we show that P-L's reasoning regarding measurement error bias contradicts the results from his proposed test. More generally, P-L's results cannot exclude alternative and arguably more likely explanations. We present two straightforward tests that both indicate that measurement error does not bias KP's results. Second, we argue that KP controls for confounders in a standard way given the identication strategy. Including fixed effects at the level of the exogenous cross-sectional variation, as P-L does, severely limits the available identifying variation and decreases precision. Nevertheless, we document that KP's results are robust to non-linear frost shock controls, including fixed effects for groups of similar frost shocks. In addition, we show that our results are robust to altering regional fixed effects or dropping them altogether, in contrast to what is suggested by P-L. |
| Keywords: | emigration; labor unions; political institutions; instrumental variables; measurement error |
| JEL: | D72 J61 P16 |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2020_005&r=all |
| By: | Paul Kilgarriff; Martin Charlton |
| Abstract: | This paper examines the spatial distribution of income in Ireland. Median gross household disposable income data from the CSO, available at the Electoral Division (ED) level, is used to explore the spatial variability in income. Geary's C highlights the spatial dependence of income, highlighting that the distribution of income is not random across space and is influenced by location. Given the presence of spatial autocorrelation, utilising a global OLS regression will lead to biased results. Geographically Weighted Regression (GWR) is used to examine the spatial heterogeneity of income and the impact of local demographic drivers on income. GWR results show the demographic drivers have varying levels of influence on income across locations. Lone parent has a stronger negative impact in the Cork commuter belt than it does in the Dublin commuter belt. The relationship between household income and the demographic context of the area is a complicated one. This paper attempts to examine these relationships acknowledging the impact of space. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2008.11720&r=all |
| By: | Brandily, Paul (Paris School of Economics); Brébion, Clément (Paris School of Economics); Briole, Simon (Paris School of Economics); Khoury, Laura (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | While COVID-19 was responsible for more than 600,000 deaths worldwide as of July 24, 2020, very little is known about the socio-economic heterogeneity of its impact on mortality. In this paper, we combine several administrative data sources to estimate the relationship between mortality due to COVID-19 and poverty at a very local level (i.e. the municipality level) in France, one of the most severely hit countries in the world. We find strong evidence of an income gradient in the impact of the pandemic on mortality rates, which is twice as large in municipalities below the 25th percentile of the national income distribution than in municipalities above this threshold. We then show that both poor housing conditions and higher occupational exposure play a key role in this heterogeneity: taken together, these mechanisms account for up to 77% of the difference observed between rich and poor municipalities. |
| Keywords: | COVID-19; poverty; inequality; mortality; labor market; housing conditions |
| JEL: | I14 I18 R00 |
| Date: | 2020–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2020_015&r=all |
| By: | Facundo Albornoz (University of Nottingham); Jake Bradley (University of Nottingham); Silvia Sonderegger (University of Nottingham) |
| Abstract: | We document a sharp increase in hate crime in the aftermath of the Brexit referendum. We show that this rise was more pronounced in more pro-remain areas. These facts are consistent with a model in which individual behavior is dictated by a desire to conform to imperfectly observable social norms in addition to following individual preferences. Arguably, the referendum was a source of new information about society’s overall preferences over immigration in a context where other determinants of attitudes remained constant. We exploit this feature of the referendum for identiï¬ cation. We build a quantitative model to examine whether the observed trends can be replicated with a sensible parameterization of the model. Our estimation of the conformity parameter allows us to quantify the role of shared narratives, national identity and stereotypes in shaping aggregate behavior. |
| Keywords: | Hate crime, Brexit, attitudes towards immigrants, social norms, value of information |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2020-12&r=all |
| By: | Philipp Ager; James J. Feigenbaum; Casper Worm Hansen; Hui Ren Tan |
| Abstract: | Fears of immigrants as a threat to public health have a long and sordid history. At the turn of the 20th century, when millions of immigrants crowded into dense American cities, contemporaries blamed the high urban mortality penalty on the newest arrivals. Nativist sentiments eventually led to the implementation of restrictive quota acts in the 1920s, substantially curtailing immigration. We capture the "missing immigrants" induced by the quotas to estimate the effect of immigration on mortality. We find that cities with more missing immigrants experienced sharp declines in deaths from infectious diseases from the mid-1920s until the late 1930s. The blame for these negative mortality effects lies not with the immigrants, but on the living conditions they endured. We show that mortality declines were largest in cities where immigrants resided in the most crowded and squalid conditions and where public health resources were stretched the thinnest. Though immigrants did die from infectious diseases at higher rates than the US-born, the mortality decline we find is primarily driven by crowding not changes in population composition or contagion, as we show mortality improvements for both US- and foreign-born populations in more quota-affected cities. |
| JEL: | I14 J15 N32 N92 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27480&r=all |
| By: | John Y. Campbell; Nuno Clara; João F. Cocco |
| Abstract: | We study mortgage design features aimed at stabilizing the macroeconomy. We model overlapping generations of mortgage borrowers and an infinitely lived risk-averse representative mortgage lender. Mortgages are priced using an equilibrium pricing kernel derived from the lender's endogenous consumption. We consider an adjustable-rate mortgage (ARM) with an option that during recessions allows borrowers to pay only interest on their loan and extend its maturity. We find that this maturity extension option stabilizes consumption growth over the business cycle, shifts defaults to expansions, and is welfare enhancing. The cyclical properties of the maturity extension ARM are attractive to a risk-averse lender so the mortgage can be provided at a relatively low cost. |
| JEL: | E32 E52 G21 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27676&r=all |
| By: | Chen, Jiaqian (IMF); Finocchiaro, Daria (Research Department, Central Bank of Sweden); Lindé, Jesper (IMF and CEPR); Walentin, Karl (Research Department, Central Bank of Sweden) |
| Abstract: | We examine the effects of various borrower-based macroprudential tools in a New Keynesian environment where both real and nominal interest rates are low. Our model features long-term debt, housing transaction costs and a zero lower bound constraint on policy rates. We find that the long-term costs, in terms of forgone consumption, of all the macroprudential tools we consider are moderate. Even so, the short-term costs differ dramatically between alternative tools. Specifically, a loan-to-value tightening is more than twice as contractionary compared to a loan-to-income tightening when debt is high and monetary policy cannot accommodate. |
| Keywords: | Household debt; Zero lower bound; New Keynesian model; Collateral and borrowing constraints; Mortgage interest deductibility; Housing prices |
| JEL: | E52 E58 |
| Date: | 2020–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0389&r=all |
| By: | Leonardo Gambacorta; Yiping Huang; Zhenhua Li; Han Qiu; Shu Chen |
| Abstract: | The use of massive amounts of data by large technology firms (big techs) to assess firms’ creditworthiness could reduce the need for collateral in solving asymmetric information problems in credit markets. Using a unique dataset of more than 2 million Chinese firms that received credit from both an important big tech firm (Ant Group) and traditional commercial banks, this paper investigates how different forms of credit correlate with local economic activity, house prices and firm characteristics. We find that big tech credit does not correlate with local business conditions and house prices when controlling for demand factors, but reacts strongly to changes in firm characteristics, such as transaction volumes and network scores used to calculate firm credit ratings. By contrast, both secured and unsecured bank credit react significantly to local house prices, which incorporate useful information on the environment in which clients operate and on their creditworthiness. This evidence implies that a greater use of big tech credit – granted on the basis of machine learning and big data – could reduce the importance of collateral in credit markets and potentially weaken the financial accelerator mechanism. |
| Keywords: | big tech, big data, collateral, banks, asymmetric information, credit markets |
| JEL: | D22 G31 R30 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:881&r=all |
| By: | Marco Due\~nas; Mercedes Campi; Luis Olmos |
| Abstract: | We analyze mobility changes following the implementation of containment measures aimed at mitigating the spread of COVID-19 in Bogot\'a, Colombia. We characterize the mobility network before and during the pandemic and analyze its evolution and changes between January and July 2020. We then link the observed mobility changes to socioeconomic conditions, estimating a gravity model to assess the effect of socioeconomic conditions on mobility flows. We observe an overall reduction in mobility trends, but the overall connectivity between different areas of the city remains after the lockdown, reflecting the mobility network's resilience. We find that the responses to lockdown policies depend on socioeconomic conditions. Before the pandemic, the population with better socioeconomic conditions shows higher mobility flows. Since the lockdown, mobility presents a general decrease, but the population with worse socioeconomic conditions shows lower decreases in mobility flows. We conclude deriving policy implications. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2008.11850&r=all |
| By: | Brian Krauth (Simon Fraser University) |
| Abstract: | Models of social interactions are often estimated under the strong assumption that an individual's choices are a direct function of the average observed characteristics of his or her reference group. This paper interprets social interactions in a less restrictive potential outcomes framework in which interaction with a given peer or peer group is considered a treatment with an unknown treatment effect. In this framework, conventional peer effect regressions can be interpreted as characterizing treatment effect heterogeneity. This framework is then used to clarify identification and interpretation of commonly-used peer effect models and to suggest avenues for improving upon them. |
| Keywords: | peer effect; social interactions; peer effect regressions |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp20-08&r=all |
| By: | Hillel Rapoport; Sulin Sardoschau; Arthur Silve |
| Abstract: | We examine both theoretically and empirically how migration affects cultural change in home and host countries. Our theoretical model integrates various compositional and cultural transmission mechanisms of migration-based cultural change for which it delivers distinctive testable predictions on the sign and direction of convergence. We then use the World Value Survey for the period 1981-2014 to build time-varying measures of cultural similarity for a large number of country pairs and exploit within country-pair variation over time. Our evidence is inconsistent with the view that immigrants are a threat to the host country’s culture. While migrants do act as vectors of cultural diffusion and bring about cultural convergence, this is mostly to disseminate cultural values and norms from host to home countries (i.e., cultural remittances). |
| Keywords: | Migration;Cultural Change;Globalization |
| JEL: | F22 O15 Z10 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2020-10&r=all |
| By: | Schürz, Simon (Department of Economics, University of Gothenburg, Sweden); Alem, Yonas (Environment for Development and Department of Economics, University of Gothenburg, Sweden); Kocher, Martin G. (Department of Economics, University of Vienna, Institute for Advanced Studies, Vienna, Austria, and Department of Economics, University of Gothenburg, Sweden); Carlsson, Fredrik (Department of Economics, University of Gothenburg, Sweden); Lindahl, Mikael (Department of Economics, University of Gothenburg, Sweden) |
| Abstract: | We study distributional (“social”) preferences in adolescent peer networks. Using incentivized choices between allocations for themselves and a passive agent, children are classified into efficiency-loving, inequality-loving, inequality-averse, and spiteful types. We find that pairs of students who report a friendship link are more likely to exhibit the same preference type than other students that attend the same school. The relation between types is almost completely driven by inequality-loving and spiteful types. Further analyses suggest that preference peer networks are mainly formed by selection into the network and, to a smaller degree, by preference transmission. The role of peer networks in explaining distributional preferences goes beyond network composition effects. A low rank in academic performance and a central position within the network relate positively to a higher likelihood of being classified as spiteful. Hence, social hierarchies seem to be correlated with distributional preference types. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihswps:20&r=all |
| By: | Gordon B. Dahl; Dan-Olof Rooth; Anders Stenberg |
| Abstract: | This paper estimates peer effects both from older to younger siblings and from parents to children in academic fields of study. Our setting is secondary school in Sweden, where admissions to oversubscribed fields is determined based on a student's GPA. Using an RD design, we find strong spillovers in field choices that depend on the gender mix of siblings and whether the field is gender conforming. There are also large intergenerational effects from fathers and mothers to sons, except in female-dominated fields, but little effect for daughters. These spillovers have long-term consequences for occupational segregation and wage gaps by gender. |
| JEL: | I21 J24 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27618&r=all |
| By: | Marco Alfano (Department of Economics, University of Strathclyde); Ross McKenzie (Department of Economics, University of Strathclyde); Graeme Roy (Department of Economics, University of Strathclyde) |
| Abstract: | This paper estimates the effect of immigration into an occupation on the wages of natives working in other, better paid occupations. Using Annual Population Survey data from the UK we rank occupations by real hourly wage and _find that increasesin the migrant/native ratio raise average wages of natives working in the next higher paid occupation by around 0.13 percent. We find that these effects operate through migrants' higher educational attainments raising workplace productivity more broadly and supporting specialization in tasks. Our findings have important implications for policy and public discourse. They suggest that debates over the economic impacts of migration often ignore the potential spill-over benefits that a migrant can bring to the outcomes for native workers elsewhere in the wage distribution, particularly in lower wage occupations. |
| Keywords: | immigration, impact, wage distribution |
| JEL: | J21 J31 J61 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:2011&r=all |
| By: | Monica Deza; Johanna Catherine Maclean; Keisha T. Solomon |
| Abstract: | We estimate the effect of local access to office-based mental healthcare on crime. We leverage variation in the number of mental healthcare offices within a county over the period 1999 to 2014 in a two-way fixed-effects model. We find that increases in the number of mental healthcare offices modestly reduce crime. In particular, ten additional offices in a county reduces crime by 1.7 crimes per 10,000 residents. These findings suggest an unintended benefit from expanding the office-based mental healthcare workforce: reductions in crime. |
| JEL: | I1 I11 K42 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27619&r=all |