nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2022‒10‒03
39 papers chosen by
Steve Ross
University of Connecticut

  1. The external effects of public housing developments on informal housing: The case of Medellín, Colombia By Posada, Hector M.; García-Suaza, Andrés; Londoño, David
  2. The Effect of Working from Home on the Agglomeration Economies of Cities: Evidence from Advertised Wages By Liu, Sitian; Su, Yichen
  3. Place-Based Productivity and Costs in Science By Jonathan Gruber; Simon Johnson; Enrico Moretti
  4. The Housing Wealth Effect: a comparative study of Italy and the Netherlands By Francesco Caloia; Mauro Mastrogiacomo
  5. Splitting up or dancing together? Local institutional structure and the performance of urban areas By Marco Di Cataldo; Licia Ferranna; Margherita Gerolimetto; Stefano Magrini
  6. Scared Straight? Threat and Assimilation of Refugees in Germany By Philipp Jaschke; Sulin Sardoschau; Marco Tabellini
  7. House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data By Denis Gorea; Oleksiy Kryvtsov; Marianna Kudlyak
  8. Till debt do us part: strategic divorces and a test of moral hazard By Yeorim Kim; Mauro Mastrogiacomo; Stefan Hochguertel; Hans Bloemen
  9. Flows of Overseas Funds in the Real Estate Market By Yoshihiko Hogen; Yoshiyasu Koide
  10. Propagation and Amplification of Local Productivity Spillovers By Xavier Giroud; Simone Lenzu; Quinn Maingi; Holger Mueller
  11. Politically connected cities: Italy 1951-1991 By Guglielmo Barone; Guido de Blasio; Elena Gentili
  12. Inland cities, maritime gateways and international trade By César Ducruet; David Guerrero
  13. Pre-Crisis Determinants of Tourism Resilience By Marcus Roller
  14. Internal Migration in the United States: Rates, Selection, and Destination Choice, 1850-1940 By Ariell Zimran
  15. Retrospective User Survey for a Rural Electric Vehicle Carsharing Pilot in California’s Central Valley By Harold, Brian MBA; Rodier, Caroline PhD; Zhang, Yunwan MS
  16. Anti-Corruption Campaign and the Resurgence of the SOEs in China:Evidence from the Real Estate Sector By Hanming Fang; Jing Wu; Rongjie Zhang; Li-An Zhou
  17. A nation-wide experiment: fuel tax cuts and almost free public transport for three months in Germany -- Report 3 Second wave results By Allister Loder; Fabienne Cantner; Andrea Cadavid; Markus B. Siewert; Stefan Wurster; Sebastian Goerg; Klaus Bogenberger
  18. Updating the Induced Travel Calculator By Volker, Jamey M. B.; Handy, Susan L.
  19. Housing Wealth and Online Consumer Behavior:Evidence from Xiong'an New Area in China By Hanming Fang; Long Wang; Yang Yang
  20. Leveraging the power of location information and technologies to improve Public Services at Local Level By BUONGIORNO SOTTORIVA Claudio; NASI Greta; BARKER Louisa; CASIANO FLORES Cesar; CHANTILLON Maxim; CLAPS Massimiliano; CROMPVOETS Joep; FRANCZAK Dagmara; STEVENS Richard; VANCAUWENBERGHE Glenn; VANDENBROUCKE Danny
  21. The Impact of Diversity on Perceptions of Income Distribution and Preferences for Redistribution By Juliana Londoño-Vélez
  22. Refugee Migration and the Labor Market: Lessons from 40 Years of Post-arrival Policies in Denmark By Arendt, Jacob Nielsen; Dustmann, Christian; Ku, Hyejin
  23. From Plantations to Prisons: The Race Gap in Incarceration After the Abolition of Slavery in the U.S. By Melissa Rubio-Ramos
  24. Rethinking regional economic resilience: Preconditions and processes shaping transformative resilience By Michaela Trippl; Sebastian Fastenrath; Arne Isaksen
  25. "Drive and Wave": The Response to LAPD Police Reforms After Rampart By Prendergast, Canice
  26. Banking on Snow: Bank Capital, Risk, and Employment By Simon Baumgartner; Alex Stomper; Thomas Schober; Rudolf Winter-Ebmer
  27. The Value of Forecast Improvements: Evidence from Advisory Lead Times and Vehicle Crashes By Anand, Vaibhav
  28. Incubation and Acceleration in Kazakhstan: Foreign Ideas, Local Practices in an Emerging Technology Landscape By Dauletzhan Baimukhanov; Onajomo Akemu; Atanu Rakshit
  29. Impact of migration flows on the economic activity and labor market of Russia as a whole and regionally By Mariia Kudaeva; Ivan Redozubov
  30. Strengthening the STEM Pipeline Through Summer Programmes for Underrepresented Minority Students By Sarah Cohodes; Helen Ho; Silvia Robles
  31. Labour market and inflation relationship indicator By Evgeny Postnikov; Dmitry Orlov
  32. Effects of Extending Paid Parental Leave on Children’s Socio-Emotional Skills and Well-Being in Adolescence By Mikkel Aagaard Houmark; Cecilie Marie Løchte Jørgensen; Ida Lykke Kristiansen; Miriam Gensowski
  33. Couples, Careers, and Spatial Mobility By Lea Nassal; Marie Paul
  34. Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership By Horioka, Charles Yuji; Ventura, Luigi
  36. Immigration and Support for Redistribution: Lessons from Europe By Cavaillé, Charlotte; Van Der Straeten, Karine
  37. Mind the Gap: City-Level Inflation Synchronization By Mr. Serhan Cevik
  38. COVID-19 and Entrepreneurship Entry and Exit: Opportunity Amidst Adversity By Otrachshenko, Vladimir; Popova, Olga; Nikolova, Milena; Tyurina, Elena
  39. The impact of Covid-19 on the european short-term rental market By Elisa Guglielminetti; Michele Loberto; Alessandro Mistretta

  1. By: Posada, Hector M.; García-Suaza, Andrés; Londoño, David
    Abstract: Provision of new subsidized housing projects has proven to be an effective alternative to reduce the high level of quantitative housing deficit in developing countries. However less is known about how these housing projects affect the quality of the surrounding habitat, especially when projects are located in areas with high levels of precarious housing. Using highly granular public information from Medellin, Colombia, we estimate the causal effect of new social housing projects (VIS) on housing quality indicators in the neighborhood. To estimate this causal effect, we use the geological quality of the land as an instrumental variable for a measure of exposition to new social housing projects. Our results show that new VIS projects lead to a reduction of informal housing, poverty, and crime in the neighborhood.
    Keywords: Public housing; Informal housing; Neighborhoods; Developing country
    JEL: R23 R31 R58
    Date: 2022–09
  2. By: Liu, Sitian; Su, Yichen
    Abstract: We analyze the effect of working from home on the agglomeration economies of large cities and the aggregate productivity implications of such an effect. Using advertised wages from job ads, we show that occupations with the highest work-from-home adoption during the COVID-19 pandemic saw a strong decrease in the urban wage premium. The decline in the urban wage premium is accompanied by an exodus of employment (based on firms' locations) from large cities to small cities. In contrast, occupations with low or moderate levels of work-from-home adoption saw much smaller overall reduction in the urban wage premium. The empirical evidence in our paper points to weakened agglomeration economies in large cities among professions with the highest prevalence of working from home. A decomposition exercise reveals that a sizable portion of the decline in the urban wage premium is driven by the decline in the urban wage premium of relationship-building skills, suggesting that the decreased agglomeration effect in large cities is at least partially a result of reduced occurrence of interactive activities.
    Keywords: Agglomeration; Productivity; Spillover; Urban Wage Premium; Working from Home; Remote; Virtual; WFH; Wages; Job Posting; COVID-19; Pandemic
    JEL: J24 J31 R12 R23
    Date: 2022–09–01
  3. By: Jonathan Gruber; Simon Johnson; Enrico Moretti
    Abstract: Cities with a larger concentration of scientists have been shown to be more productive places for additional scientists to do Research and Development. At the same time, these urban areas tend to be associated with higher costs of doing research, in terms of both wages and land. While the literature on the benefits of agglomeration economies is extensive, it offers no direct evidence of how productivity gains from agglomeration compare with higher costs of production. This paper aims to shed light on the balance between local productivity and local costs in science. Using a novel dataset, we estimate place-based costs of carrying out R&D in each US metro area and assess how these place-based costs vary with the density of scientists in each area. We then compare these costs with estimates of the corresponding productivity benefits of more scientist density from Moretti (2021). Adding more scientists to a city increases both productivity and production costs, but the rise in productivity is larger than the rise in production costs. In particular, each 10% rise in the stock of scientists is associated with a 0.11% rise in costs and a 0.67% rise in productivity. This implies that firms moving from cities with a small agglomeration of scientists to cities with a large agglomeration of scientists experience productivity gains that are 6 times larger than the increase in production costs. This finding is consistent with the increased concentration of R&D activity observed over the past 30 years. However, while the productivity estimate has only modest non-linearities, the cost estimates suggest much larger non-linearities as the concentration of scientists increases. For the most concentrated R&D cities, the difference between productivity gains and cost increases is close to zero.
    JEL: H0 J0 R0
    Date: 2022–09
  4. By: Francesco Caloia; Mauro Mastrogiacomo
    Abstract: This paper tests whether disregarding home-improvements biases the housing wealth effect, the marginal propensity to consume out of housing wealth. The housing wealth effect is decomposed in its endogenous and exogenous component by filtering out previously stated expectations of house prices and accounting for endogenous home improvements. Results of the empirical analysis show that the size of the bias is zero, due to the zero correlation between home-investments and changes in house values. Our results are consistent with a lifecycle model with exogenous home improvements. The use of a comparative empirical approach excludes that these are only internally valid.
    Keywords: Housing wealth effect; Expectations; maintenance; renovations; home improvements
    JEL: G51
    Date: 2021–05
  5. By: Marco Di Cataldo (Department of Economics, University Of Venice CÃ Foscari; Department of Geography and Environment, London School of Economics); Licia Ferranna (Department of Economics, University Of Venice CÃ Foscari); Margherita Gerolimetto (Department of Economics, University Of Venice CÃ Foscari); Stefano Magrini (Department of Economics, University Of Venice CÃ Foscari)
    Abstract: This paper analyses institutional changes in local governance structures as determinants of wage premia and innovation capacity of urban areas. By combining individual and metropolitan area data for the US, we study the role of institutional fragmentation related to the number of local governments operating in an area, and institutional coordination, stemming from the creation of authorities fostering the collaboration of local governments. Our findings suggest that more fragmented institutional landmarks do not benefit the wage competitiveness and innovativeness of urban areas. If anything, they harm them. Conversely, stronger coordination among local governments boosts the productivity of functional regions by increasing their wage premia and improving their capacity to innovate. Coordination agreements between different counties or municipalities are especially relevant in the case of urban areas modifying their functional borders over time. These findings provide key insights into the economic effects of reforming the governance structure of metropolitan areas.
    Keywords: local governance, US MSAs, fragmentation, coordination, wage premium, innovation
    JEL: H70 R12 R23 J3
    Date: 2022
  6. By: Philipp Jaschke; Sulin Sardoschau; Marco Tabellini
    Abstract: This paper studies the effects of threat on convergence to local culture and economic assimilation of refugees, exploiting plausibly exogenous variation in their allocation across German regions between 2013 and 2016. We combine novel survey data on cultural preferences and economic outcomes of refugees with corresponding information on locals, and construct a threat index that integrates contemporaneous and historical variables. On average, refugees assimilate both culturally and economically. However, while refugees assigned to more hostile regions converge to local culture more quickly, they do not exhibit faster economic assimilation. Our evidence suggests that refugees exert more assimilation effort in response to local threat, but do not integrate faster because of higher discrimination in more hostile regions.
    JEL: F22 J15 Z10
    Date: 2022–08
  7. By: Denis Gorea; Oleksiy Kryvtsov; Marianna Kudlyak
    Abstract: Existing literature documents that house prices respond to monetary policy surprises with a significant delay, taking years to reach their peak response. We present new evidence of a much faster response. We exploit information contained in listings for the residential properties for sale in the United States between 2001 and 2019 from the CoreLogic Multiple Listing Service Dataset. Using high-frequency measures of monetary policy shocks, we document that a one standard-deviation contractionary monetary policy surprise lowers housing list prices by 0.2–0.3 percent within two weeks—a magnitude on par with the effect on stock prices. House prices respond stronger to the surprises to future rates as compared to the surprise changes in the federal funds rate. Sale prices are mostly pre-determined by list prices and do not independently respond to monetary policy surprises.
    Keywords: house prices; monetary policy; monetary policy transmission; house sales
    JEL: E52 R21 R31
    Date: 2022–08–05
  8. By: Yeorim Kim; Mauro Mastrogiacomo; Stefan Hochguertel; Hans Bloemen
    Abstract: We test whether households that face prospective home equity losses during a house price downturn use divorce to shed debt. We study the Dutch context, where qualifying homeowners can buy into a mortgage guarantee scheme that insures the lender against borrower default and transfers the risk to the public. Divorce is one of the major events that obliges the guarantor to repay outstanding residual debt after (foreclosure) sale. We argue in this paper that divorce is endogenous to holding underwater mortgages, and hence constitutes a choice that can be used for strategic use of the insurance. Using administrative data, we find a significant, 44% increase in the probability to divorce for households with an underwater mortgage. This effect is causal to being insured. The identification relies on a regression discontinuity design, that exploits the fact that the insurance is only available for properties with values below a legislated qualification threshold. The house price crisis (2008-2013) provides an unexpected shock to house values, leaving about 40% of owners with an underwater mortgage. Their home equity averages to about €-50.000. Couples with similar characteristics just above the qualification threshold experienced significantly less often a divorce than couples just below the threshold. We interpret this behavioral response as moral hazard, also because the induced divorcees reunite at a higher rate than other divorcees.
    Keywords: moral hazard, mortgage insurance, divorce
    JEL: D10 G21 G52 J12
    Date: 2022–08
  9. By: Yoshihiko Hogen (Bank of Japan); Yoshiyasu Koide (Bank of Japan)
    Abstract: The global real estate fund market is expanding against the backdrop of inflows from investment funds. Japan's real estate fund market has also experienced inflows from foreign investment funds, which now hold a share equivalent to almost 20 percent of the total market value of J-REITs. These investment funds have actively invested via cross-border transactions and may adjust their fund flows in response to manifestations of global risk factors such as those reflected in adjustments in global financial markets. This review first gauges cross-border investment flows of these investment funds to real estate funds using fund-level data, where funds are sorted depending on their location of the registration and investment destination. It then investigates how changes in the economic and financial environment affects investment flows and the real estate prices in each region. The results show that real estate funds in many regions experience a decline in inflows from investment funds and price drops of the local real estate funds as a result of deterioration in global financial conditions or rises in the U.S. interest rate, with the effects particularly pronounced in Japan. These results also indicate that when considering developments in the commercial real estate (CRE) market in Japan, it is essential to look into changes not only in domestic factors but also in global financial conditions, which may have an important impact on investment funds' portfolio allocation decisions.
    Date: 2022–09–05
  10. By: Xavier Giroud; Simone Lenzu; Quinn Maingi; Holger Mueller
    Abstract: This paper shows that local productivity spillovers can propagate throughout the economy through the plant-level networks of multi-region firms. Using confidential Census plant-level data, we find that large manufacturing plant openings not only raise the productivity of local plants but also of distant plants hundreds of miles away, which belong to multi-region firms that are exposed to the local productivity spillover through one of their plants. To quantify the significance of plant-level networks for the propagation and amplification of local productivity shocks, we develop and estimate a quantitative spatial model in which plants of multi-region firms are linked through shared knowledge. Counterfactual exercises show that while knowledge sharing through plant-level networks amplifies the aggregate effects of local productivity shocks, it can widen economic disparities between workers and regions in the economy.
    Date: 2022–08
  11. By: Guglielmo Barone; Guido de Blasio; Elena Gentili
    Abstract: The paper estimates the political connection premium for Italian cities tracked during the second half of the 1900s, when the role of the state in the economy was very widespread. It leverages the peculiar features of the gridlocked political landscape in place between the end of World War II and the fall of the Berlin wall, during which most influential politicians remained in charge for a very long time. We focus on population, a well-celebrated proxy of local development in the long run, and compare connected cities - small areas surrounding birthplaces of both prime ministers and leaders of the parties in power - with unconnected municipalities that show, thanks to a propensity score matching procedure, very similar baseline characteristics, including lagged outcome. Our results indicate that politically connected cities gained a population premium of 7.4% between 1951 and 1991. When the connection ends, the difference in growth rate fades away. We also document that birthplaces of powerful politicians benefit from infrastructure investments, other ordinary and special-purpose public expenditures, and the location of plants by state-owned enterprises. The political connection favors industrialization, and raises employment and wages, but crowds out private entrepreneurship. The paper also illustrates that local communities repay the benefits gained through voting. Finally, it turns out that agglomeration economies in treated municipalities were not higher, thus suggesting that, if anything, place-based interventions linked to political connections have not been output-enhancing from a nationwide point of view.
    JEL: H50 R11 R12
    Date: 2022–09
  12. By: César Ducruet (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); David Guerrero (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel)
    Abstract: This research focuses on the relationships between inland cities and port gateways. A quantitative analysis of 64 inland capital cities situated in coastal countries is proposed based on indicators that relate to ports, transport, trade and urban factors. The identified trends suggest that there is a trade-off between remoteness and openness to trade which leads us to postulate the existence of three typologies of inland cities: major logistics hubs, constrained metropolises and underdeveloped corridors. We conduct a more quantitative review of y intermodalism and port choice issues with reference to via a selection of six case studies. The observed spatial configurations have implications for logistics and governance.
    Date: 2022
  13. By: Marcus Roller
    Abstract: In this study, I provide a location choice model incorporating five pre-crisis determinants for tourists' destination choice to study the impact of these determinants on the resilience of tourism. The determinants are the kind of destination (rural vs. urban), the pre-crisis origin country specific attractiveness of the destination, the infrastructure size, the density, and the local culture. I estimate the effect of these determinants on the recovery of hotel overnight stays during the COVID-19 pandemic in Switzerland. I find that urban areas had an up to 75% percent lower recovery level. Half of this difference is due to their pre-crisis specific attractiveness for international tourists. This implies that a miss-match between long-run local touristic capital and domestic demand preferences prevents destinations from substituting the missing international tourists with domestic tourists. While infrastructure size affects the resilience ambiguously, density weakens the resilience in cities. Culture does not play a role if there are no local COVID-19 policies.
    Keywords: Tourism, COVID-19, resilience, structure, estimation
    JEL: Z3 R12 H12
    Date: 2022–08
  14. By: Ariell Zimran
    Abstract: I study the internal migration of native-born white men in the United States using linked census data covering all possible 10- and 20-year periods 1850--1940. Inter-county migration rates were stable over time. Selection into migration on the basis of occupational status was also largely stable and was neutral or slightly negative. But the orientation of internal migration changed, declining in distance, becoming more directed towards the west, and increasingly driving urbanization. These patterns changed in the 1930s as migration became less common and less urban oriented. These results provide a clearer understanding of historic US internal migration than previously possible.
    JEL: J61 N31 N32 O15
    Date: 2022–08
  15. By: Harold, Brian MBA; Rodier, Caroline PhD; Zhang, Yunwan MS
    Abstract: Rural areas in California present unique transportation challenges associated with long travel distances, infrequent transit service, the cost of car ownership, and limited access to app-based rideshare services that are common to more populated urban centers. Researchers at the University of California, Davis, partnered with the eight San Joaquin Valley Metropolitan Planning Organizations to identify and support the development of innovative regional mobility pilot concepts, including an electric vehicle carsharing service known as Míocar. Míocar launched in August 2019 with roundtrip EV carsharing hubs in affordable housing complexes in the southern San Joaquin Valley. This study summarizes the data collected through a telephone survey with current Míocar users from January 2022 through March 2022. The survey asks users to reflect on their use of the service since they enrolled, and it builds upon past data collection efforts for this program by gathering detailed information on member characteristics, transportation needs and capabilities, and Míocar’s role as a transportation option for the users’ households. The results provide qualitative insights into members’ mobility challenges and considerations and the service’s impacts on user travel. Comparisons to existing carsharing programs suggest that Míocar is achieving similar impacts as other programs in some areas, such as reducing personal vehicle use, ownership, and associated greenhouse gas emissions. However, respondents emphasize its role in improving mobility within the rural region. The evaluation provides information for researchers to enhance future evaluations of rural carsharing, and findings may inform member recruitment, training, program design, and other efforts conducted by rural carsharing operators.
    Keywords: Social and Behavioral Sciences, Electric vehicles, carsharing evaluation, social equity, environmental justice, rural areas, rural transportation, pilot studies, low income groups
    Date: 2022–09–01
  16. By: Hanming Fang (University of Pennsylvania and the NBER); Jing Wu (Tsinghua University); Rongjie Zhang (Tsinghua University); Li-An Zhou (Peking University)
    Abstract: We advance a novel hypothesis that China’s recent anti-corruption campaign may have contributed to the resurgence of the state-owned enterprises (SOEs) in China as an unintended consequence. Weexplore the nexus between the anti-corruption campaign and the SOE resurgence by presenting supporting evidence from the Chinese real estate sector, which is notorious for pervasive rentseeking and corruption. We use a unique data set of land parcel transactions merged with firm-level registration information and a difference-in-differences empirical design to show that, relative to the industrial land parcels which serve as the control, the fraction of residential land parcels purchased by SOEs increased significantly relative to that purchased by private developers after the anticorruption campaign. This finding is robust to a set of alternative specifications. We interpret the findings through the lens of a model where we show, since selling land to private developers carries the stereotype that the city official may have received bribes, even the “clean” local officials will become more willing to award land to SOEs despite the presence of more efficient competing private developers. We find evidence consistent with the model predictions.
    Keywords: Anti-Corruption Campaign; Land Market; State-Owned Enterprises; State Capitalism
    JEL: D73 R31
    Date: 2022–08–05
  17. By: Allister Loder; Fabienne Cantner; Andrea Cadavid; Markus B. Siewert; Stefan Wurster; Sebastian Goerg; Klaus Bogenberger
    Abstract: In spring 2022, the German federal government agreed on a set of measures that aimed at reducing households' financial burden resulting from a recent price increase, especially in energy and mobility. These measures included among others, a nation-wide public transport ticket for 9\ EUR per month and a fuel tax cut that reduced fuel prices by more than 15\,\%. In transportation research this is an almost unprecedented behavioral experiment. It allows to study not only behavioral responses in mode choice and induced demand but also to assess the effectiveness of transport policy instruments. We observe this natural experiment with a three-wave survey and an app-based travel diary on a sample of hundreds of participants as well as an analysis of traffic counts. In this third report, we provide first findings from the second survey, conducted during the experiment.
    Date: 2022–08
  18. By: Volker, Jamey M. B.; Handy, Susan L.
    Abstract: The National Center for Sustainable Transportation’s (NCST’s) Induced Travel Calculator (Calculator) has generated substantial interest among policymakers and practitioners as a method for estimating induced vehicle miles traveled (VMT). With Calculator use increasing, the Institute of Transportation Studies at University of California, Davis (ITS-Davis) initiated a project to update the Calculator and improve its functionality based on recent data and empirical research. Efforts included adding three more years of baseline VMT and lane mile data to the Calculator (2017, 2018, and 2019), adding ranges to the Calculator’s induced VMT estimates (+/-20%), and providing an updated review of the induced travel literature. The team also investigated and determined that there is not enough empirical evidence to justify using different elasticities based on initial congestion levels, urban versus rural setting, or lane type (for general-purpose lanes, high-occupancy-vehicle lanes, and high-occupancy toll lanes). Going forward, this report suggests avenues for future induced travel research, including meta-analyses of induced travel studies to estimate pooled effect sizes, more research on the impact of existing traffic congestion and other contextual factors on induced travel effect size, and further studies on induced travel from managed lanes. It will also be important to continue monitoring other induced travel calculators for consistency with NCST’s Calculator. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Induced travel, VMT, travel demand, road construction, traffic, traffic forecasting, calculators, environmental review
    Date: 2022–09–01
  19. By: Hanming Fang (University of Pennsylvania and the NBER); Long Wang (Fudan University); Yang Yang (The Chinese University of Hong Kong)
    Abstract: We provide new evidence on the causal effects of housing wealth on consumer behavior.To overcome the empirical challenge of non-random housing wealth changes, we exploit the unexpected announcement of China's newest national-level new area - Xiong'an New Area - on April 1, 2017 as an exogenous shock to housing prices. We use a proprietary dataset of individual-level online consumption from the largest e-commerce company in China to measure various aspects of consumer behavior, such as consumption patterns, purchase hesitation, tolerance to unsatisfied products, and shirking (proxied by making online purchases during work hours). We explore the underlying mechanisms through which the housing shock a effects consumer behavior; in particular, we attempt to disentangle the realizable and unrealizable housing wealth effects.
    Keywords: Housing price, wealth effects, consumer behavior, online consumption
    JEL: D1 R3 L81
    Date: 2022–09–07
    Abstract: This work focuses on the public value generated from location-enabled public services by investigating a set of ten case studies from across the European Union. Our research suggests that (i) the local agenda might refer to the urgency and relevancy of an issue and particular local characteristics that need to be adequately addressed; (ii) past choices and digitalisation efforts are a decisive positive factor whenever they encompass past decisions of service digitalisation and technological capability strengthening; (iii) the assignment of clear responsibilities for innovation and a clear innovation strategy are fostering location-enabled public service adoption. Furthermore, we found that organisations adopting and implementing location-based data and technology produce short-term related outputs that are usually efficiency-driven and produce operational value. Social and political value, on the other hand, are more difficult to measure and difficult to translate into operative measures. Future research should focus on measuring impacts and ways to increase citizens involvement.
    Keywords: public value, public services, location, data, technology, innovation
    Date: 2022–08
  21. By: Juliana Londoño-Vélez
    Abstract: Does diversity affect people’s perceptions of income distribution and their preferences for redistribution? I leverage variation from a Colombian financial aid reform boosting the share of low-income students at an elite university. Combining college records and original survey data, I study how diversity affects high-income students’ social networks, perceptions, and preferences by exploiting treatment variation across cohorts and majors using difference-in-differences. Exposure to low-income peers caused high-income students to diversify their social networks, have more accurate perceptions of the income distribution, and support progressive redistribution. My preferred interpretation is that diversity raised students’ concerns about (the lack of) equal opportunity.
    JEL: D31 D63 I22 I24
    Date: 2022–08
  22. By: Arendt, Jacob Nielsen (Rockwool Foundation Research Unit); Dustmann, Christian (University College London); Ku, Hyejin (University College London)
    Abstract: Denmark has accepted refugees from a large variety of countries and for more than four decades. Denmark has also frequently changed policies and regulations concerning integration programs, transfer payments, and conditions for permanent residency. Such policy variation in conjunction with excellent administrative data provides an ideal laboratory to evaluate the effects of different immigration and integration policies on the outcomes of refugee immigrants. In this article, we first describe the Danish experience with refugee immigration over the past four decades. We then review different post-arrival refugee policies and summarize studies that evaluate their effects on the labor market performance of refugees. Lastly, we discuss and contrast these findings in the context of international studies of similar policies and draw conclusions for policy.
    Keywords: refugee integration, immigration policies, labor supply, employment, language
    JEL: J22 J24 J61
    Date: 2022–08
  23. By: Melissa Rubio-Ramos (University of Cologne)
    Abstract: This paper documents the emergence of a race gap in incarceration after the abolition of slavery in the U.S. Counties that relied more on slave labor incarcerated more African Americans, with no comparable effects for whites. An increase of slave reliance by 10% increases black incarceration rates by 1.8-per-1,000. This effect is associated with an increased use of prison labor. Consistent with this, I show that arrests increase before cotton harvesting and incarceration declines after exogenous shocks that decrease the demand for labor. I find no evidence for supply-side mechanisms, according to which former slaves commit more crimes.
    Keywords: Slavery, US, Incarceration
    JEL: J15 J47 K31 N31 N91 N92
    Date: 2022–08
  24. By: Michaela Trippl (University of Vienna); Sebastian Fastenrath (University of Vienna); Arne Isaksen (University of Agder)
    Abstract: The unpredictable impacts of slow-burn processes such as climate change and sudden shocks such as the current COVID-19 crisis have led to a renewed interest into regional economic resilience. Much of the literature focuses attention on how regional economies and industries could bounce back, that is, how they could return to their pre-shock conditions. Other scholars have proposed to construe resilience as bouncing forward to capture the mechanisms and processes that underpin positive adaptation and structural change in response to a crisis. In this article, we argue that both conceptualisations fail to consider shocks and crises as a window of opportunity for regional economies to transform to a radically different and more desirable trajectory. This paper brings a new perspective into play, that is, transformative resilience which places shifts towards more sustainable pathways centre stage. This understanding of regional economic resilience acknowledges that a crisis may bring about permanent structural change and it considers to what extent these transformations are to the benefit of society and the environment. This article seeks to identify in a conceptual way what factors and dynamics are vital for enhancing the transformative resilience of regions. To this end, we link recent insights from the debate on regional economic resilience to challenge-oriented regional innovation systems and elaborate on the role of pre-shock conditions and various core processes in building up regional transformative resilience.
    Keywords: transformative regional resilience, environmental and societal challenges, challenge-oriented regional innovation systems; green path development
    Date: 2022
  25. By: Prendergast, Canice
    Abstract: We study LAPD police reforms after the Rampart scandal, when formal oversight rose discretely in 1998, and then fell in late 2002. We offer a simple model to interpret how police behavior is affected by changed accountability to the public. We show how officers responded by a practice they labeled "drive and wave". The arrest-to-crime rate fell 40% after accountability to the public rose, then rebounded to its original level when accountability fell. For the "victimless" crimes of narcotics and prostitution, arrests fall almost 50% and then rebound. No such effects arise for the Los Angeles Sheriff Department, even for those stations surrounded by areas policed by the LAPD. We also see no effects on arrests made by other agencies within the LAPD's jurisdiction. This impact was greatest in predominantly Hispanic neighborhoods, and felt least in White communities. Other behavioral responses - use of force and street stops - tell a similar story. We argue that much of the response may be attributable to an imbalance between oversight done by suspects compared to that done by the victims of crime. We also document an impact on homicides.
    Date: 2021
  26. By: Simon Baumgartner (Humboldt University Berlin, Germany); Alex Stomper; Thomas Schober; Rudolf Winter-Ebmer
    Abstract: How does small-firm employment respond to exogenous labor productivity risk? We find that this depends on the capitalization of firms’ local banks. The evidence comes from firms offering (quasi-) fixed employment to workers whose productivity depends on the weather. Weather risk reduces this employment, and the effect is stronger in regions where the regional banks have less equity capital. Bank capitalization also proxies for the extent to which the regional banks’ borrowers can obtain liquidity when the regions are hit by weather shocks. We argue that, as liquidity providers, well-capitalized banks support economic adaptation to climate change.
    Date: 2022–08
  27. By: Anand, Vaibhav
    Abstract: Scientific and technological advances are resulting in improved forecasts of risk, but do better forecasts result in better risk management? I investigate to what extent the improvements in lead time of winter weather advisories affect the frequency of motor vehicle crashes. I construct a data set of winter weather advisories, weather monitor readings, and vehicle crashes at the county-date level in 11 states in the US during 2006-2018. Using within county variation in lead time, I show that receiving winter advisories earlier reduces crash risk significantly. I also examine two potential mechanisms that might lead to these effects. First, using the mobile phone location data from SafeGraph, I show that longer lead times result in fewer visits by people to places outside their homes. Second, using snow plow truck location data, I show that road crews perform a greater level of winter maintenance activities when advisories arrive with longer lead time. Overall, this study provides evidence that improvements in forecast lead times result in meaningful economic benefits to society, and these benefits come from both the individual and institutional response to longer lead times.
    Keywords: Weather forecast, risk mitigation, auto crash
    JEL: D80 D81 H41 Q50 Q54 Q55 Q58 R00 R41
    Date: 2022–09–01
  28. By: Dauletzhan Baimukhanov; Onajomo Akemu; Atanu Rakshit
    Date: 2022
  29. By: Mariia Kudaeva (Bank of Russia, Russian Federation); Ivan Redozubov (Bank of Russia, Russian Federation)
    Abstract: This study presents an empirical assessment of the migration effects on macroeconomic indicators in Russia as a whole and separately for groups of regions that "attract" and "give" migrants. Using a structural vector autoregression model with the short-term constraints, it was found that a sharp increase in the flow of migrants to the country and to the "attracting" regions has a significant positive effect on the economic activity. At the same time, the outflow of migrants from the "giving" regions leads to a slight increase in wages. The impact of migration for unemployment has not been identified. Thus, we have determined that migration flows of population are reflected in the indicators of economic activity and labor market of the country. In accordance with the transmission mechanism, changes in the output and wage are seen in the dynamics of inflation. The got results will help to understand the impact of migration and whether it should be taken into account in the monetary policy decisions.
    Keywords: migration, economic activity, labor market, structural vector autoregression models.
    JEL: E24 E32 J11
    Date: 2021–12
  30. By: Sarah Cohodes; Helen Ho; Silvia Robles
    Abstract: The under-representation of ethnic minorities in the STEM workforce in the US is preceded by disparities in who attains a college degree in STEM.
    Keywords: STEM, ethnic minorities, college degree
  31. By: Evgeny Postnikov (Bank of Russia, Russian Federation); Dmitry Orlov (Bank of Russia, Russian Federation)
    Abstract: The labour market is closely connected to inflation processes, and is therefore a key factor to consider in monetary policy decisions. Russian regions differ substantially in terms of employment, wages, migration flows and the age structure of their population. Therefore, the effects of regional changes in the labour market on prices may be different. Since the Central bank’s inflation targeting policy is pursued nationwide, it is important for a regulator to factor in regional heterogeneity when assessing the impact of changes in the labour market on inflation growth. This paper brings forward a composite indicator of the contribution of labour market changes to inflation increase – the Labour Market Indicator (LMI). To capture regional heterogeneity in terms of market labour indicators, regions are grouped into four clusters with different social, demographic and economic characteristics. We make the case that the impact of unemployment on inflation can be described as slight or moderate in Russia. The calculated quarterly LMI values are overall consistent with the actual effect of the labour market on inflation processes over the entire time horizon under study, which suggests that the estimates are reliable. The important benefit of the LMI is that it is possible to interpret and allows to assess the future impact of labour market on inflation one quarter ahead of available statistical data – which helps make better informed monetary policy decisions.
    Keywords: impact of the labour market on inflation, regional heterogeneity, clustering, principal component analysis, unemployment, wages, regression analysis.
    JEL: C32 C38 E24 E31
    Date: 2022–09
  32. By: Mikkel Aagaard Houmark (Department of Economics and Business Economics and TrygFonden’s Centre for Child Research, Aarhus University); Cecilie Marie Løchte Jørgensen (Department of Economics and Business Economics, Aarhus University); Ida Lykke Kristiansen (Department of Economics and CEBI, University of Copenhagen); Miriam Gensowski (Rockwool Foundation Research Unit, and IZA, Bonn)
    Abstract: We study how children’s socio-emotional skills and well-being in adolescence are affected by an increase in the duration of parental care during infancy. Exploiting a Danish reform that extended paid parental leave in 2002 and effectively delayed children’s entry into formal out-of-home care, we show that longer leave increases adolescent well-being, conscientiousness and emotional stability, and reduces school absenteeism. The effects are strongest for children of mothers who would have taken short leave in absence of the reform. This highlights how time spent with a parent is particularly productive during very early childhood.
    Keywords: Parental Leave, Early Childhood, Skill Formation, Parental Investments, Socio-Emotional Skills, Personality, Well-Being, Adolescence
    JEL: J13 J18 J24 I31
    Date: 2022–09–11
  33. By: Lea Nassal (Lea Nassal); Marie Paul (Marie Paul)
    Abstract: We investigate the effects of long-distance moves of married couples on both spouses’ earnings, employment and job characteristics based on a new administrative dataset from Germany. Employing difference-in-difference propensity score matching and accounting for spouses’ pre-move employment biographies, we show that men’s earnings increase significantly after the move, whereas women suffer large losses in the first years. Men’s earnings increases are mainly driven by increasing wages and switches to slightly larger and better paying firms. Investigating effect heterogeneity with respect to pre-move relative earnings or for whose job opportunity couples move, confirms strong gender asymmetries in gains to moving.
    Keywords: Long-distance moves, labour market careers, gender gap
    JEL: J61 J16 R23
    Date: 2022–09
  34. By: Horioka, Charles Yuji; Ventura, Luigi
    Abstract: In this paper, we use micro data on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. To summarize our main findings, we find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6% over a 3-year period). These findings strongly suggest that the Wealth Decumulation (or Retirement Saving) Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.
    Keywords: Aged, bequests, bequest intentions, bequest motives, dissaving, elderly, Europe, household saving, inheritances, intergenerational transfers, life cycle model or hypothesis, precautionary saving, retired elderly, Retirement Saving Puzzle, saving, SHARE, wealth accumulation, wealth decumulation, Wealth Decumulation Puzzle, D14, D15, D64, E21, H55, J14
    Date: 2022–09
  35. By: Giovanni Busetta (Department of Economics - Universita' di Messina)
    Abstract: Economic theory splits discrimination into statistical and tastebased. While the logic underlying the first one consists of using information on a group of individuals as proxy of a specific worker. In the case of taste-based, the discrimination against a group of individuals, is connected to a personal preference of the employer rather than any lack of information. This second kind of discrimination is incompatible with the maximization of entrepreneur's profits. To assess the difference between the two, we constructed a specific index of ethnic discrimination, capable to separate the two kinds of discrimination using native, first- and second- generation immigrants (Busetta et al., 2018; Busetta et al., 2020). The aim of this paper is to apply this Index, previously used only in the Italian context, to several European countries, using the dataset "Condition and Social Integration of Foreign Citizens, SCIF 2011-2012", to compare the levels of statistical and taste-based discrimination in different societies.
    Keywords: Labor market discrimination, First- and second-generation immigrants, Statistical and taste-based discrimination.
    JEL: C43 J15 J23 J64 J71
    Date: 2022–09
  36. By: Cavaillé, Charlotte; Van Der Straeten, Karine
    Abstract: Research shows that opposition to policies that redistribute across racial divides has affected the development of the American welfare state. Are similar dynamics at play in Western Europe? For many scholars, the answer is yes. In contrast, we argue that researchers’ understanding of the political economy of redistribution in diversifying European countries is too incomplete to reach a conclusion on this issue. First, existing evidence is inconsistent with the assumption —ubiquitous in this line of research— of a universal distaste for sharing resources with people who are culturally, ethnically and racially different. Second, important historical and institutional differences between the U.S. and Europe preclude any straightforward transposition of the American experience to the European case. We discuss what we see as the most promising lines of inquiry going forward.
    Keywords: Immigration; parochial altruism; redistribution; welfare state; Europe; United State
    Date: 2022–09–14
  37. By: Mr. Serhan Cevik
    Abstract: The post-pandemic rise in consumer prices across the world has renewed interest in inflation dynamics after decades of global disinflation. This paper provides a spatial investigation of inflation synchronicity at the city level in Lithuania using disaggregated monthly data during the period 2000–2021. The empirical analysis provides strong evidence that (i) the co-movement of city-level inflation rates—estimated using the instantaneous quasi-correlation approach—is significantly weaker than the extent of synchronization suggested by the simple correlation analysis; (ii) there is substantial heterogeneity in the instantaneous quasi-correlation of inflation subcomponents between city pairs; and (iii) there are significant changes in the degree of city-level synchronization over time, reflecting important economic developments in history such as the global financial crisis, the adoption of euro, and the COVID-19 pandemic.
    Keywords: Inflation synchronization; subnational; transition economies; Lithuania
    Date: 2022–09–02
  38. By: Otrachshenko, Vladimir (Justus Liebig University, Giessen); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)); Nikolova, Milena (University of Groningen); Tyurina, Elena
    Abstract: We theoretically and empirically examine how acquiring new skills and increased financial worries influenced entrepreneurship entry and exit intentions during the pandemic. To that end, we analyze primary survey data we collected in the aftermath of the COVID-19's first wave in Russia, which has had one of the highest COVID-19 infection rates globally. Our results show that acquiring new skills during the pandemic helps maintain an existing business and encourages start-ups in sectors other than information technology (IT). For IT start-ups, having previous experience matters more than new skills. While the pandemic-driven financial worries are associated with business closure intentions, they also inspire new business start-ups, highlighting the creative destruction power of the pandemic. Furthermore, preferences for formal employment and remote work also matter for entrepreneurial intentions. Our findings enhance the understanding of entrepreneurship formation and closure in a time of adversity and suggest that implementing entrepreneurship training and upskilling policies during the pandemic can be an important policy tool for innovative small business development.
    Keywords: business entry, information technology (IT), business closure, COVID-19, entrepreneurship intentions, self-employment, Russia
    JEL: E24 J24 L26 P20
    Date: 2022–08
  39. By: Elisa Guglielminetti (Bank of Italy); Michele Loberto (Bank of Italy); Alessandro Mistretta (Bank of Italy)
    Abstract: The spread of Covid-19 and the related containment measures practically halted tourism flows, which in many countries generate a significant share of GDP. By exploiting Airbnb data covering the main tourist destinations in Europe, we investigate the impact of the pandemic on the market for short-term rentals up to early 2021. We find that the epidemic dramatically reduced both the supply of apartments available for rent and customers’ demand, up to 9 months ahead. Accommodation more exposed to foreign tourism was the hardest hit and owners reacted by cutting prices with results that were mainly driven by government-mandated restrictions. All in all, our findings point to a relevant but uneven impact of Covid-19 on the accommodation sector.
    Keywords: Covid-19, Airbnb, tourism, travel activities, lockdown
    JEL: L83 L85 R20 R30 Z30
    Date: 2022–07

This nep-ure issue is ©2022 by Steve Ross. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.