nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2023‒05‒22
fifty-nine papers chosen by
Steve Ross
University of Connecticut

  1. The Push of Big City Prices and the Pull of Small Town Amenities By Heidi Artigue; Jeffrey Brinkman; Svyatoslav Karnasevych
  2. Freeway Revolts! The Quality of Life Effects of Highways By Jeffrey Brinkman; Jeffrey Lin
  3. Land-use regulation and housing supply elasticity: evidence from France By Guillaume Chapelle; J.B. Eyméoud; C. Wolf
  4. Covid and Cities, Thus Far By Gilles Duranton; Jessie Handbury
  5. Has COVID Reversed Gentrification in Major U.S. Cities? An Empirical Examination of Residential Mobility in Gentrifying Neighborhoods During the COVID-19 Crisis By Lei Ding; Jackelyn Hwang
  6. Secondary housing supply By Mense, Andreas
  7. Derisking Real Estate in China’s Hybrid Economy By Wei Xiong
  8. Should You Meet the Parents? The Impact of Information on Non-test Score Attributes on School Choice By Facchetti, Elisa; Neri, Lorenzo; Ovidi, Marco
  9. Who Are Leaving Metropolitan Areas in the Post-COVID-19 Era:An Analysis of Urban Residents' Migration Decisions in Japan By PENG, Xue; DAI, Erbiao
  10. House Prices and Rents in the 21st Century By Lara Loewenstein; Paul S. Willen
  11. Owner-Occupancy Fraud and Mortgage Performance By Ronel Elul; Aaron Payne; Sebastian Tilson
  12. Impact techniques of modelling next-gen infrastructure investment projects to redress regional disparities using multi-regional input-output model By Darlington Agbonifi
  13. Ring road investment, cordon tolling, and urban spatial structure: Formulation and a case study By Zhi-Chun Li; Li Cheng; André de Palma
  14. Do residents living in transit-oriented development station catchment areas travel more sustainably? The impacts of life events By Shen, Tonggaochuan; Cheng, Long; Yang, Yongjiang; Deng, Jialin; Jin, Tanhua; Cao, Mengqiu
  15. Eviction and Poverty in American Cities By Robert Collinson; John Eric Humphries; Nicholas Mader; Davin Reed; Daniel Tannenbaum; Winnie van Dijk
  16. The Labor Market Effects of Place-Based Policies: Evidence from England’s Neighbourhood Renewal Fund By Robert Calvert Jump; Adam Scavette
  17. Web-scraping housing prices in real-time: The Covid-19 crisis in the UK By Jean-Charles Bricongne; Baptiste Meunier; Sylvain Pouget
  18. Consumer Bankruptcy, Mortgage Default and Labor Supply By Wenli Li; Costas Meghir; Florian Oswald
  19. A Statistical Learning Approach to Land Valuation: Optimizing the Use of External Information By David Albouy; Minchul Shin
  20. The dynamics of redistribution, inequality and growth across China’s regions By Yang, Xiaoliang; Barros, Lucy; Matthews, Kent; Meenagh, David
  21. Ethnic differences in reading and mathematical test performance in primary schools in England By Bessudnov, Alexey
  22. The Effects of Differential Exposure to COVID-19 on Educational Outcomes in Guatemala By Andres Ham; Emmanuel Vazquez; Monica Yanez-Pagans
  23. The Creation and Diffusion of Knowledge: Evidence from the Jet Age By Stefan Pauly; Fernando Stipanicic
  24. The Decline of Routine Tasks, Education Investments, and Intergenerational Mobility By Patrick Bennett; Kai Liu; Kjell G. Salvanes
  25. Do opportunity zones create opportunities? The impact of opportunity zones on real estate prices By James Alm; Trey Dronyk-Trosper; Sean Larkin
  26. Refugee Benefit Cuts By Dustmann, Christian; Landerso, Rasmus; Andersen, Lars Højsgaard
  27. First generation elite the role of school networks By Sarah Cattan; Kjell G. Salvanes; Emma Tominey
  28. Institutional pluralism and pro-poor land registration: lessons on interim property rights from urban Tanzania By Manara, Martina; Pani, Erica
  29. "The influence of independent local parties on spending: Evidence from Dutch municipalities". By Marianna Sebo; Raymond Gradus; Tjerk Budding
  30. Social inequities in neighborhood health amenities over time in the Wasatch Front Region of Utah: Historical inequities, population selection, or differential investment? By Curtis, David Stuart
  31. Do Renewables Create Local Jobs? By Natalia Fabra; Eduardo Gutiérrez; Aitor Lacuesta; Roberto Ramos
  32. Enhanced multilayer perceptron with feature selection and grid search for travel mode choice prediction By Li Tang; Chuanli Tang; Qi Fu
  33. Housing Wealth and Consumption: The Role of Heterogeneous Credit Constraints By S. Boragan Aruoba; Ronel Elul; Sebnem Kalemli Ozcan
  34. Business Group Spillovers By S. Lakshmi Naaraayanan; Daniel Wolfenzon
  35. The Collateral Channel and Bank Credit By Arun Gupta; Horacio Sapriza; Vladimir Yankov
  36. The impact of public support for innovation on SME performance and efficiency By Raphaël CHIAPPINI; Sophie POMET
  37. Towards regenerative regional development in responsible value chains: An agentic response to recent crises By Markus Grillitsch; Bjørn T. Asheim
  38. How 'one-size-fits-all' public works contract does it better? An assessment of infrastructure provision in Italy By Massimo Finocchiaro Castroa; Calogero Guccio; Ilde Rizzo
  39. Provider Spill-Overs in Opioid Prescription Leniency and Patient – Labor Market Outcomes By Peter Rønø Thingholm
  40. Federal-Local Partnerships on Immigration Law Enforcement: Are the Policies Effective in Reducing Violent Victimization? By Eric P. Baumer; Min Xie
  41. The Usual Suspects: Offender Origin, Media Reporting and Natives' Attitudes Towards Immigration By Sekou Keita; Thomas Renault; Jérôme Valette
  42. Municipal Waste Policies and Spillover Effects By Alessandro Bucciol; Roberta Muri; Francesca Rossi
  43. Network Effects on Information Acquisition by DeGroot Updaters By Miguel Risco
  44. The Longevity Benefits of Homeownership By Breen, Casey
  45. The Air Quality Effects of Uber By Kim, Yeong Jae; Sarmiento, Luis
  46. The Effect of the Out of Africa Migration on Cultural Diversity By Wainstock, Daniel Crisóstomo; Galor, Oded; Klemp, Marc
  47. The literature on the impact of natural disasters on remittances has provided mixed evidence so far, with identification remaining a key challenge. This paper studies the insurance role of remittances by investigating their dynamic response in the aftermath of a disaster. We use a novel and rich panel dataset of monthly remittance flows from Italy to 81 developing countries for the period 2005 to 2015. We find that monthly remittance flows on average increase by 2% due to natural disasters in migrants’ home countries. The response gets significant a few months after the event and tends to disappear within a year from the disaster occurrence. The intensity and timing of remittances’ responsiveness are heterogeneous according to the nature of the disaster, the receiving country’s characteristics, and migrants’ socio-economic conditions in the host country. By Giulia Bettin; Amadou Jallow; Alberto Zazzaro
  48. Revisiting Metropolitan Governance: Improving the Delivery of Urban Services through Inter-LGU Cooperation By Ballesteros, Marife M.; Lorenzo, Pauline Joy M.; Ramos, Tatum P.; Ancheta, Jenica A.; Mercado, Elmer S.; Rodil-Ocampo, Amillah
  49. When Crime Tears Communities Apart: Social Capital and Organised Crime By Francesca Maria Calamunci; Federico Fabio Frattini
  50. Foreclosure Kids: Examining the Early Adult Credit Usage of Adolescents Affected by Foreclosure By Alaina Barca; Larry Santucci; Leigh-Ann Schultz
  51. How Much Do Consumers Value Fuel Cost Savings? Evidence from the Passenger Vehicle Leasing Market By Ankney, Kevin; Leard, Benjamin
  52. Whether to decentralize and how to decentralize? The optimal fiscal federalism in an endogenous growth model By Chen, Xiaodong; Mi, Haoming; Zhou, Peng
  53. The dynamic approach of modelling regional recovery investment policies using environmentally-extended SAM Matrix By Darlington Agbonifi
  54. The Racial Wealth Gap, Financial Aid, and College Access By Phillip B. Levine; Dubravka Ritter
  55. Matching Geographies and Job Skills in the Energy Transition By Raimi, Daniel; Greenspon, Jacob
  56. Federal Unemployment Reinsurance amid Local Labor-Market Policy By Marek Ignaszak; Philip Jung; Keith Kuester
  57. Pandemics and economic turmoil in the shortrun: the role of fiscal space By Joao Jalles
  58. The Effect of Local Economic Shocks on Local and National Elections By Juan Herreño; Matias Morales; Mathieu Pedemonte
  59. Jurisdiction size and perceived corruption By Abel François; Nicolas Lagios; Pierre-Guillaume Méon

  1. By: Heidi Artigue; Jeffrey Brinkman; Svyatoslav Karnasevych
    Abstract: As house prices continue to rise in large, supply-constrained cities, what are the implications for other places that have room to grow? Recent literature suggests that amenities that improve quality of life are becoming increasingly important in location decisions. In this paper, we explore how location amenities have differentially driven population and price dynamics in small towns versus big cities, with a focus on the role of housing supply. We provide theory and evidence that demand for high-amenity locations has increased in recent decades. High-amenity counties in large metropolitan areas have experienced relatively higher price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. This divergence in population dynamics between big cities and small towns was driven by domestic migration, with high-amenity small towns and rural areas experiencing significant domestic in-migration.
    Keywords: housing supply; amenities; population dynamics; domestic migration
    JEL: R11 R31 R23
    Date: 2022–12–21
  2. By: Jeffrey Brinkman; Jeffrey Lin
    Abstract: Why do freeways affect spatial structure? We identify and quantify the local disamenity effects of freeways. Freeways cause slower growth in central neighborhoods (where local disamenities exceed regional accessibility benefits) compared with outlying neighborhoods (where access benefits exceed disamenities). A quantitative model calibrated to Chicago attributes one-third of the effect of freeways on central-city decline to reduced quality of life. Barrier effects are a major factor in the disamenity value of a freeway. Local disamenities from freeways, as opposed to their regional accessibility benefits, had large effects on the spatial structure of cities, suburbanization, and welfare.
    Keywords: amenities; central cities; commuting costs; highways; suburbanization; quality of life
    JEL: N72 N92 O18 Q51 R14 R23 R41 R42
    Date: 2022–08–24
  3. By: Guillaume Chapelle; J.B. Eyméoud; C. Wolf (Université de Cergy-Pontoise, THEMA)
    Abstract: This study gathered original data on French metropolitan statistical areas to estimate and decompose their inverse housing supply elasticity, describing how housing prices react to demand shocks. Our findings confirm that French cities are highly inelastic, with an estimated average supply elasticity of 0.5. Furthermore, leveraging a nationwide regulation protecting historical monuments as an instrument, we found that land-use regulations controlled by local authorities appear to be mainly responsible for this low supply elasticity.
    Keywords: housing supply, land use regulation, real estate, urban growth.
    JEL: R31 R52 R21
    Date: 2023
  4. By: Gilles Duranton; Jessie Handbury
    Abstract: A key reason for the existence of cities are the externalities created when people cluster together in close proximity. During Covid, such interactions came with health risks and people found other ways to interact. We document how cities changed during Covid and consider how the persistence of new ways of interacting, particularly remote work, will shape the development of cities in the future. We first summarize evidence showing how residential and commercial prices and activity adjusted at different distances from dense city centers during and since the pandemic. We use a textbook monocentric city model to demonstrate that two adjustments associated with remote work—reduced commuting times and increased housing demand—generate the patterns observed in the data. We then consider how these effects might be magnified by changes in urban amenities and agglomeration forces, and what such forces might mean for the future of cities.
    JEL: R12 R21 R31
    Date: 2023–04
  5. By: Lei Ding; Jackelyn Hwang
    Abstract: This paper examines whether neighborhoods that had been gentrifying lost their appeal during the pandemic because of COVID-induced health risks and increased work-from-home arrangements. By following the mobility pattern of residents in gentrifying neighborhoods in 39 major U.S. cities, we note a larger increase of 1.2 percentage points in the outmigration rate from gentrifying neighborhoods by the end of 2021, relative to nongentrifying ones, with out-of-city moves accounting for over 71 percent of the increased flight. The share of out-of-city moves into gentrifying neighborhoods also decreased significantly during the pandemic. Residents with high credit scores, younger residents, and probable homeowners were more likely to leave gentrifying neighborhoods and their respective cities. Gentrifying neighborhoods closer to city centers, with higher density or higher housing costs, or in cities that are more vulnerable to the pandemic were hit harder by COVID-induced adjustments. The results are consistent with the contention that the pandemic has slowed the pace of gentrification in many major U.S. cities. This slowed gentrification has important policy implications for local government public finance, as well as the long-term future of cities.
    Keywords: Gentrification; Mobility; COVID-19; Work-from-home; Spatial Dynamics
    JEL: R11 I18 H11 H2
    Date: 2022–08–17
  6. By: Mense, Andreas
    Abstract: I estimate the impact of new housing supply on the local rent distribution, exploiting delays in housing completions caused by weather shocks during the construction phase. Increasing the flow of new supply by 1% lowers average rents by 0.2%, and increases disproportionately the number of second-hand units offered for rent. The supply shock affects the entire rent distribution. Employing a quantitative model, I explain this pattern by secondary supply: New supply triggers a cascade of moves that frees up units in all segments of the local market. The impact on rents is similarly strong in locations experiencing growing housing demand.
    Keywords: housing supply; rental housing; rent distribution; secondary markets; market integration
    JEL: D10 D40 R21 R31
    Date: 2023–04–01
  7. By: Wei Xiong
    Abstract: This article examines the risks faced by China's real estate sector within its distinct hybrid economy, which combines market mechanisms with comprehensive state planning and government intervention. The real estate sector holds particular importance as land sale revenues are a crucial source of funding for local governments, enabling them to finance infrastructure projects and stimulate economic growth. Banks are highly exposed to debt secured by real estate properties, not only involving real estate firms and households but also extending to local governments and affiliated companies. The hybrid structure gives the government a strong commitment and the ability to delay a real estate crisis. However, China’s real estate risk is ultimately tied to the country’s overall economic growth and remains susceptible to policy-related risks.
    JEL: O18 O2 R0
    Date: 2023–04
  8. By: Facchetti, Elisa (Institute for Fiscal Studies, London); Neri, Lorenzo (University of St. Andrews); Ovidi, Marco (Catholic University Milan)
    Abstract: Understanding parental response to non-test score attributes is crucial to design effective school choice systems. We study an intervention providing parents with hard-to-find information on the school environment while holding information on school performance constant. The provision of this information decreases the outflow to private institutions by 17% and increases enrollment at local state schools, particularly among high-income and high-performing students. This intervention encourages parents to expand their state-school search without affecting their taste for academic performance, generating increased competition for schools with desirable attributes. These findings imply that simple, low-cost interventions may improve state schools' finances and composition.
    Keywords: school choice, non-test score school attributes, information intervention
    JEL: I24 I28 H75
    Date: 2023–04
  9. By: PENG, Xue; DAI, Erbiao
    Abstract: Japan's central and local governments have implemented various measures to encourage internal migration from metropolitan areas to local areas to address issues related to population decrease and unbalanced regional development. However, despite a significant decrease in net migration flow from Japan's local areas to main metropolitan areas over the past 50 years, the net outflow from metropolitan to local areas has remained negative. This suggests that Japan's population migration spatial pattern is more difficult to change than that of developed countries in Europe and America. On the other hand, the three-year-long COVID-19 pandemic has brought significant changes to people's work, consumption, learning, and daily life. Will such changes affect Japanese residents' residential location choices and migration patterns? This paper uses data from "The Fifth Survey on Residents' Life Consciousness and Behavior Changes under the Influence of COVID-19" and a multinomial logit model to conduct empirical analysis. Our findings suggest that individuals who are more likely to leave metropolitan areas are those with relatively low job opportunity costs in metropolitan areas and high employment probabilities in local areas, young adults who have entered the labor market within the past ten years, individuals who have been retired for a few years, and those who prioritize their well-being. In contrast, household-related factors such as marital status, having underage children, and the work status of residents' spouse did not significantly affect their decision to move. These results provide new evidence to support major migration theories. Based on our analysis, policy recommendations are also discussed.
    Keywords: leaving metropolitan areas, migration decision, Japan, the post-Covid-19 era, leaving metropolitan areas, migration decision, Japan, the post-Covid-19 era
    Date: 2023–03
  10. By: Lara Loewenstein; Paul S. Willen
    Abstract: We study the joint evolution of prices and rents of residential property. After constructing rent and price indices for renter- and owner-occupied properties, we decompose the change in the price of occupant-owned property into (1) changes in rent, (2) changes in the relative prices of investor- and occupant-owned properties, and (3) changes in the price-rent ratio. Via a simple model, we link our decomposition to different sources of variation in house prices. We argue that while the 2000s boom was plausibly driven by exuberant expectations, the boom of the 2020s more likely resulted from a preference shock.
    Keywords: housing bubbles; credit shocks; rent-price ratio; house price overvaluation
    JEL: R30 R31 E30 E32 H31
    Date: 2023–02–01
  11. By: Ronel Elul; Aaron Payne; Sebastian Tilson
    Abstract: We identify occupancy fraud — borrowers who misrepresent their occupancy status as owner-occupants rather than investors — in residential mortgage originations. Unlike previous work, we show that fraud was prevalent in originations not just during the housing bubble, but also persists through more recent times. We also demonstrate that fraud is broad-based and appears in government-sponsored enterprise and bank portfolio loans, not just in private securitization; these fraudulent borrowers make up one-third of the effective investor population. Occupancy fraud allows riskier borrowers to obtain credit at lower interest rates. These fraudulent borrowers perform substantially worse than similar declared investors, defaulting at a 75 percent higher rate. Their defaults are also likelier to be “strategic, ” suggesting that they pose a risk in the face of declining house prices.
    Keywords: mortgage default; consumer credit; household finance; misreporting; fraud
    JEL: D12 R3
    Date: 2023–01–31
  12. By: Darlington Agbonifi (Department of Economics (University of Verona))
    Abstract: This paper estimates the socio-economic impact of infrastructure recovery investments and resilience plan related to the Institutional Development Contract (CIS) for the city of Taranto on different categories of households, labor markets (skilled and unskilled), and private enterprises in Italy. It does so by implementing a multi-regional input-output (MRIO) model with inter-regional trade at the level of Apulia region, to estimate the intra-regional impact, and, at the national level, to estimate the inter-regional and inter-sectoral supply chain linkages and spillover effects through trade. The intra-regional effects are almost two times the inter-regional effects. Almost 51% of the inter-regional impact on value-added accrues to northern regions, 22% at the centre, while about 27% is captured by the regions in southern Italy. This evidence clearly shows a good degree of connection of the Apulia local economy with the macro region of northern Italy, while it is quite weak with the macro south in Italy. The considerable share of inter-regional spillover effects in terms of value-added, which is transferred outside the southern macro-region, over 73% reflects the persisting regional disparities in Italy, where the productive northern-regions mostly benefit from the national development policies made in the most marginal areas in southern Italy.
    Keywords: multiregional input-output (MRIO) model, local-NGEU investment projects, interregional trade flows, regional disparities, Taranto, Apulia, Italy
    JEL: C67 D57 F14 Q58 R13
    Date: 2023–04
  13. By: Zhi-Chun Li; Li Cheng; André de Palma (Université de Cergy-Pontoise, THEMA)
    Abstract: Ring roads, as candidate cordon locations, provide an advantageous condition for implementing cordon tolling schemes. This paper presents a methodology for investigating the ring road investment and cordon tolling problems in a congested ring-radial city. A two-dimensional urban system equilibrium for a ring-radial city is first formulated, in which interactions among stakeholders, including the authorities, property developers, households and commuters, are explicitly considered. Two social welfare maximization models for optimizing the ring road investment and cordon tolling schemes, a short-sighted and a far-sighted one, are then proposed. In the short-sighted model, the ring road investment decision is first made, and then the cordon tolling scheme is optimized based on the determined ring road locations as candidate cordons. However, in the far-sighted model, a simultaneous decision of the ring road investment and cordon tolling is made. The proposed models explicitly incorporate the estimation of the intra-area travel. The case study applied to the city network of Chengdu China shows that ring road investment and cordon tolling can reshape the urban spatial structure as a result of the tug-of-war between the dispersion effects due to ring road investment and the concentration effects due to cordon tolling. There is a large difference in the optimal solutions of the far-sighted model and the short-sighted model (e.g., optimal number of cordons). The former is closer to the social optimum than the latter. The optimal multi-cordon tolling scheme outperforms the optimal single-cordon tolling scheme in terms of the social welfare. However, the gap between them is trivial. Ignoring the household residential relocation behavior in the models leads to underestimates of total cordon toll revenue and social welfare gains.
    Keywords: Ring-radial city; ring road investment; cordon tolling; urban spatial structure; urban system equilibrium; social welfare.
    JEL: R13 R14 R41 R42
    Date: 2023
  14. By: Shen, Tonggaochuan; Cheng, Long; Yang, Yongjiang; Deng, Jialin; Jin, Tanhua; Cao, Mengqiu
    Abstract: Transit-oriented development (TOD) is an urban designed model aimed at attracting more sustainable travellers. However, not all TOD projects succeed in maintaining a high rate of sustainable travel behaviour. To examine the impacts of TOD on residents' travel behaviour, this paper applies binary logistic regression to analyse survey data for 1, 298 residents living in the TOD areas in Hangzhou collected in 2020. The results show that socioeconomic characteristics, built environment factors, and travel attitudes play important roles in influencing their travel mode choices. Furthermore, the number of children in households and higher levels of car ownership significantly influence residents' sustainable travel behaviours. However, it appears that only a limited number of factors can convince car users to shift to sustainable modes of travel, such as their workplace being accessible by metro and attitudes towards changes in accessibility. This research study contributes to the existing literature in terms of enhancing the understanding of travel mode choice behaviours, particularly with regard to people who live near public transport infrastructure, as well as formulating evidence-based TOD policies to achieve more sustainable transport systems.
    JEL: J1
    Date: 2023–04–04
  15. By: Robert Collinson; John Eric Humphries; Nicholas Mader; Davin Reed; Daniel Tannenbaum; Winnie van Dijk
    Abstract: More than two million U.S. households have an eviction case filed against them each year. Policymakers at the federal, state, and local levels are increasingly pursuing policies to reduce the number of evictions, citing harm to tenants and high public expenditures related to home lessness. We study the consequences of eviction for tenants, using newly linked administrative data from Cook County (which includes Chicago) and New York City. We document that prior to housing court, tenants experience declines in earnings and employment and increases in financial distress and hospital visits. These pre trends are more pronounced for tenants who are evicted, which poses a challenge for disentangling correlation and causation. To address this problem, we use an instrumental variables approach based on cases randomly assigned to judges of varying leniency. We find that an eviction order increases homelessness, and reduces earnings, durable consumption, and access to credit. Effects on housing and labor market outcomes are driven by impacts for female and Black tenants
    JEL: I30 J01 R38
    Date: 2022–12–22
  16. By: Robert Calvert Jump; Adam Scavette
    Abstract: Neighborhood renewal programs are a type of place-based policy that aim to revive underperforming localities. The literature on place-based policies has found mixed results regarding their effects on local labor market outcomes, but there are relatively few studies of policies that aim to improve local labor supply. In this paper, we examine the labor market effects of the Neighbourhood Renewal Fund, which targeted eighty-eight of the most deprived areas in England during the early 2000s as part of the Labour Government's National Strategy for Neighbourhood Renewal. The fund disbursed almost £3 billion for spending on community safety, education, health care and worklessness, with supply-side interventions making up the bulk of the program's spending on worklessness. Using a difference-in-differences approach, we find statistically significant impacts on local employment and out-of-work benefit claimants. Our results suggest that policy interventions to improve local labor supply can be a successful strategy for neighborhood renewal.
    Keywords: Place-Based Policies; Urban Economics; Labor Supply; Employment
    JEL: J21 J22 J48 R10 R58
    Date: 2022–03–23
  17. By: Jean-Charles Bricongne (Centre de recherche de la Banque de France - Banque de France, LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Baptiste Meunier (Centre de recherche de la Banque Centrale européenne - Banque Centrale Européenne, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Sylvain Pouget (Grenoble INP ENSIMAG - École nationale supérieure d'informatique et de mathématiques appliquées - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)
    Abstract: While official statistics provide lagged and aggregate information on the housing market, extensive information is available publicly on real-estate websites. By web-scraping them for the UK on a daily basis, this paper extracts a large database from which we build timely and highly granular indicators. One originality of the dataset is to focus on the supply side of the housing market, allowing to compute innovative indicators reflecting the sellers' perspective such as the number of new listings posted or how prices fluctuate over time for existing listings. Matching listing prices in our dataset with transacted prices from the notarial database, using machine learning, also measures the negotiation margin of buyers. During the Covid-19 crisis, these indicators demonstrate the freezing of the market and the "wait-and-see" behaviour of sellers. They also show that listing prices after the lockdown experienced a continued decline in London but increased in other regions.
    Keywords: Housing, Real time, Big data, Web-scraping, High frequency, United Kingdom
    Date: 2023–03
  18. By: Wenli Li; Costas Meghir; Florian Oswald
    Abstract: We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic institutional framework in the U.S. as implied by Chapter 7 and Chapter 13. The model is estimated using micro data on credit reports and mortgages combined with data from the American Community Survey. We use the model to understand the relative importance of the two chapters (7 and 13) for each of our two education groups that differ in both preferences and wage profiles. We also provide an evaluation of the BAPCPA reform. Our paper demonstrates importance of distributional effects of Bankruptcy policy.
    Keywords: Lifecycle; Bankruptcy; Housing; Mortgage Default; Labor Supply; Consumption; Education; Insurance; Moral hazard.
    JEL: G33 K35 J22 J31 D14 D18 D52 D53 E21
    Date: 2022–08–30
  19. By: David Albouy; Minchul Shin
    Abstract: We develop a statistical learning model to estimate the value of vacant land for any parcel, regardless of improvements. Rooted in economic theory, the model optimizes how to combine common improved property sales with rare, but more informative, vacant land sales. It estimates how land values change with geography and other features and determines how much information either vacant or improved sales provide to nearby areas through spatial correlation. For most census tracts, incorporating improved sales often doubles the certainty of land value estimates.
    Keywords: land values; hierarchical modeling; spatial data; Bayesian estimation
    JEL: C11 C43 R1 R3
    Date: 2022–11–14
  20. By: Yang, Xiaoliang; Barros, Lucy (Swansea University); Matthews, Kent (Cardiff Business School); Meenagh, David (Cardiff Business School)
    Abstract: China’s fast growth has been accompanied by rising regional inequality, triggering debate over a policy trade-off between aggregate growth and equity. We set out a three-region model of China in which local government behavior affects local TFP dynamics, and regional inequality itself generates more regional productivity divergence. These dynamics can also be affected by central government transfers to regions. Two kinds of fiscal transfers are investigated: equalization transfers and the tax rebate. We estimate and test the model by indirect inference, and explore transfer policy reforms. The results suggest that transfer policies pursued since 1994 have prevented a 15% rise in regional inequality, though at an 8% cost to aggregate GDP.
    Keywords: Regional inequality, China, Fiscal decentralization, Redistribution, Local Government, Growth
    JEL: E60 H30 H70 O40
    Date: 2023–05
  21. By: Bessudnov, Alexey
    Abstract: This study investigates ethnic differences in Key Stage 2 (KS2) reading and mathematical test scores among primary school pupils in state schools in England in 2007 and 2018. The aim is to assess the performance across ethnic categories and examine its evolution over the course of the study period. The analysis uses data from the National Pupil Database combining ethnicity information from school censuses with KS2 attainment data. KS2 reading and mathematical tests are taken by Year 6 pupils aged 10 to 11. Mean test scores are compared across ethnic categories, while the method of relative distribution is employed to evaluate performance in each ethnic category relative to the White British across the entire distribution of test scores. Between 2007 and 2018, the reading and maths test scores of British Bangladeshi, Black African, and Pakistani pupils improved relative to the White British group. In 2018, British Bangladeshi and Black African pupils performed at a similar or slightly higher level compared to their White British peers. The advantage in test scores in the two higher performing categories, British Indian and Chinese, further increased. Attainment in the other White category remained similar to the White British group. The test scores for the Black Caribbean and Mixed White and Black Caribbean categories tended to be concentrated in the lower part of the distribution. In 2018, the proportion of mixed and non-White pupils remained largely constant throughout the reading test score distribution, while in maths, a higher proportion of mixed and non- White pupils were found among high achievers compared to other parts of the distribution. The paper proposes potential explanations for these differences, which are related to the volume and characteristics of immigration to England.
    Date: 2023–04–20
  22. By: Andres Ham (School of Government- Universidad de los Andes); Emmanuel Vazquez (CEDLAS-IIE-FCE-UNLP); Monica Yanez-Pagans (Education Global Practice. The World Bank)
    Abstract: This paper studies the effects of differential exposure to COVID-19 on educational outcomes in Guatemala. The government adopted a warning index (ranging from 0 to 10) to classify municipalities by infection rates in 2020, which was then used by the Ministry of Education in 2021 to establish a “stoplight” system for in-person instruction. Using administrative panel data for all students in Guatemala, the study employs a difference-in-differences strategy that leverages municipal differences over time in the warning index to estimate the effects of the pandemic on dropout, promotion, and school switching. The results show that municipalities with a higher warning index had significantly larger dropout, lower promotion rates, and a greater share of students switching from private to public schools. These effects were more pronounced during the first year of the pandemic. The findings show differential effects by the level of instruction, with greater losses for younger children in initial and primary education. The results are robust to specification choice, multiple hypothesis adjustments, and placebo experiments, suggesting that the pandemic has had heterogeneous consequences.
    JEL: H12 I21 I24 I25 I28
    Date: 2023–05
  23. By: Stefan Pauly (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Fernando Stipanicic (UC Berkeley - University of California [Berkeley] - UC - University of California)
    Abstract: Click here for the latest version This paper provides new causal evidence of the impact of air travel time on the creation and diffusion of knowledge. We exploit the beginning of the Jet Age as a quasi-natural experiment. We digitize airlines' historical flight schedules and construct a novel data set of the flight network in the United States. Between 1951 and 1966, travel time between locations more than 2, 000 km apart decreased on average by 41%. The reduction in travel time explains 33% of the increase in knowledge diffusion as measured by patent citations. The increase in knowledge diffusion further caused an increase in the creation of new knowledge. The results provide evidence that jet airplanes led to innovation convergence across locations and contributed to the shift in innovation activity towards the South and the West of the United States.
    Date: 2022–10–21
  24. By: Patrick Bennett; Kai Liu; Kjell G. Salvanes
    Abstract: How does a large structural change to the labor market affect education investments made at young ages? Exploiting differential exposure to the national decline in routine-task intensity across local labor markets, we show that the secular decline in routine tasks causes major shifts in education investments of high school students, where they invest less in vocational-trades education and increasingly invest in college education. Our results highlight that labor demand changes impact inequality in the next generation. Low-ability and low-SES students are most responsive to task-biased demand changes and, as a result, intergenerational mobility in college education increases.
    Date: 2023
  25. By: James Alm (Tulane University); Trey Dronyk-Trosper (Tulane University); Sean Larkin (U.S. Census Bureau)
    Abstract: The Tax Cuts and Jobs Act of 2017 allowed governors of the fifty states to designate low-income areas as “Qualified Opportunity Zones” (QOZs). This designation entitled investors in these QOZs to significant tax incentives, with the goal of creating economic opportunities in these areas. In this paper we estimate the impact of QOZ designation on several dimensions of economic development – residential and business real estate prices – using data from Florida for the period 2016-2020 and controlling for endogenous QOZ designation in several estimation approaches. All estimation results indicate little consistent and robust evidence that QOZ designation had a positive impact on sales prices for single family homes, commercial lots, or vacant lots.
    Keywords: opportunity zones, tax incentives, place-based development policies, regression discontinuity estimation
    JEL: H24 I38 O23 R38
    Date: 2023–04
  26. By: Dustmann, Christian (University College London); Landerso, Rasmus (Rockwool Foundation Research Unit); Andersen, Lars Højsgaard (Rockwool Foundation Research Unit)
    Abstract: This paper analyzes the effects of Denmark's Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform's immediate effects, but also its longerterm consequences, and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform's effects on immediate and longer-term employment.
    Keywords: labor market outcomes, welfare state, social assistance, labor demand, migration
    JEL: E64 I30 J60
    Date: 2023–04
  27. By: Sarah Cattan (Institute for Fiscal Studies); Kjell G. Salvanes (Institute for Fiscal Studies); Emma Tominey (Institute for Fiscal Studies)
    Date: 2023–05–05
  28. By: Manara, Martina; Pani, Erica
    Abstract: While interim property rights are thought to achieve incremental improvements of tenure security and rights for the urban poor, there is surprisingly little research into the provision of starter documents in sub-Saharan Africa. Namely, how effective are interim property rights in responding to local demands for tenure security and rights in the long run and vis-à-vis other de facto and de jure tenure options? Drawing on an institutional analytic approach and mixed-method research, we study the Residential Licence programme of Tanzania, which offers short-term leases to around 220, 000 plots in Dar es Salaam. This interim property right has undergone substantial institutional drift, with decreasing uptake rates, low renewal rates and poor updating of records. Today, landholders value other de facto and de jure proofs of ownership over and above the Residential Licence, which is now less perceived as pro-poor and fit-for-purpose. These results illustrate that interim property rights need maintenance and recalibration, or they will ‘come adrift’ amidst other institutional layers. Reflecting on the effects of institutional layering in property rights, this paper contributes to literatures on incremental land reform and demand for land titles, and it provides important policy recommendations relevant to urban Tanzania and wider contexts.
    Keywords: Dar es Salaam Tanzania; incremental policy; institutional layering and Drift; interim property rights; land registration; land tenure security; legal pluralism; International Growth Centre TZA-19071; Richard Oram Fund (through Regional and Urban Planning Studies at the LSE; Postdoctoral Fellowship ( ES/W005719/1
    JEL: J50 Q15
    Date: 2023–06–01
  29. By: Marianna Sebo (Department of Econometrics, Statistics and Applied Economics. John Keynes 1-11. 08034 Barcelona, Spain.); Raymond Gradus (School of Economics and Business and Tinbergen Institute, Vrije Universiteit Amsterdam.); Tjerk Budding (School of Economics and Business and Tinbergen Institute, Vrije Universiteit Amsterdam.)
    Abstract: Do independent local parties make different decisions on municipal finances compared to their national counterparts? In this paper, we empirically analyze whether independent local parties affect public finances in Dutch municipalities. Using a matching strategy, we compare municipalities that are similar in their observable characteristics except for the presence of an independent local party majority in the municipal council. We provide evidence that shows that municipalities with independent local majorities indeed differ in terms of local spending, specifically they spend more on categories of Local Public Administration, Public Health and Environment and Culture and Recreation which are arguably more local-oriented. We extend our analysis by looking at the local effects of local independent majorities. Using a regression kink design, we find consistent results if we look at the changes that take place once the majority share of the seats in the municipal council has been reached by independent local parties.
    Keywords: Local government, Spending categories, Local parties, Empirical research, Matching methods, Regression kink design. JEL classification: D72, H41, H72, H83.
    Date: 2023–05
  30. By: Curtis, David Stuart (University of Utah)
    Abstract: Socially disadvantaged groups generally are more likely to reside in areas with less desirable conditions. We examined longitudinal relationships between neighborhood resident characteristics and amenities from 1990 to 2010 in a four-county urban area of Utah, U.S. Four temporal patterns of social inequities are described using mixed-effects models: historical inequities in amenities; differential selection into amenity-rich tracts; differential investment in amenities; and simultaneous twenty-year change. Results indicate historical differences by nSES, with lower status tracts having fewer green/natural amenities and higher air pollution in 1990 but also greater walkability and more food stores. Differences widened over time as nSES disproportionately increased in tracts with more green/natural amenities, less air pollution, and lower walkability in 1990, consistent with differential selection. Tract percentage non-Hispanic White did not predict historical differences, but tracts that were less walkable and had fewer healthy food stores per capita in 1990 experienced larger subsequent increases in racial/ethnic diversity. Tracts with higher percentage non-Hispanic White in 1990 had larger decreases in air pollution but also declining green/natural amenities relative to more diverse tracts. This study shows how social inequities in neighborhood amenities change over time, providing strong evidence of historical socioeconomic differences that increased due to differential selection.
    Date: 2023–04–12
  31. By: Natalia Fabra (UNIVERSIDAD CARLOS III); Eduardo Gutiérrez (Banco de España); Aitor Lacuesta (Banco de España); Roberto Ramos (Banco de España)
    Abstract: We investigate whether investments in renewable energy – solar and wind plants – create jobs in the municipality where they are located. Using 13 years of monthly data, we exploit the variation in the timing and size of investment projects across more than 3, 200 municipalities in Spain, a country with substantial investments in this area. We use a new estimator for staggered differences-in-differences analysis that extends the local projections approach with clean controls (Dube et al., 2022). We find strong heterogeneity in the magnitude and pattern of the impacts of solar and wind investments. On average, solar investments increase employment by local firms, but the effects on the unemployment of local residents are weak. The effects of wind investments on local employment and unemployment are mostly non-significant. These findings have important implications for public policy.
    Keywords: renewable energy, employment, unemployment, NIMBY, spatial effects
    JEL: L94 C33 O25 R23
    Date: 2023–01
  32. By: Li Tang; Chuanli Tang; Qi Fu
    Abstract: Accurate and reliable prediction of individual travel mode choices is crucial for developing multi-mode urban transportation systems, conducting transportation planning and formulating traffic demand management strategies. Traditional discrete choice models have dominated the modelling methods for decades yet suffer from strict model assumptions and low prediction accuracy. In recent years, machine learning (ML) models, such as neural networks and boosting models, are widely used by researchers for travel mode choice prediction and have yielded promising results. However, despite the superior prediction performance, a large body of ML methods, especially the branch of neural network models, is also limited by overfitting and tedious model structure determination process. To bridge this gap, this study proposes an enhanced multilayer perceptron (MLP; a neural network) with two hidden layers for travel mode choice prediction; this MLP is enhanced by XGBoost (a boosting method) for feature selection and a grid search method for optimal hidden neurone determination of each hidden layer. The proposed method was trained and tested on a real resident travel diary dataset collected in Chengdu, China.
    Date: 2023–04
  33. By: S. Boragan Aruoba; Ronel Elul; Sebnem Kalemli Ozcan
    Abstract: We quantify the role of heterogeneity in households’ financial constraints in explaining the large decline in consumption between 2006 and 2009. Using household-level data, we show that in addition to a direct effect of changes in house prices, there are sizable indirect effects from general equilibrium feedback and bank health. About 60% of the aggregate response of consumption to changes in house prices is explained by ex-ante and ex-post financial constraints, where only a specific set of households face binding ex-post financial constraints as a result of declining house prices. We find a negligible wealth effect once we account for the role of heterogonous financial constraints
    Keywords: financial crisis; mortgage; individual-level data; general equilibrium; bank health; credit supply
    JEL: O16 E32
    Date: 2022–09–28
  34. By: S. Lakshmi Naaraayanan; Daniel Wolfenzon
    Abstract: We compare the investment of standalone firms across regions after a positive shock to the investment opportunities generated by a large-scale highway development project. We show that the standalones’ investment sensitivity is lower in regions with a higher density of business groups in the local area. We investigate mechanisms driving our results and find support for a financing mechanism whereby banks allocate capital preferentially to group-affiliated firms in responding to the increase in credit demand. Overall, our study documents that business groups have spillover effects on standalone firms.
    JEL: G31 G32
    Date: 2023–04
  35. By: Arun Gupta; Horacio Sapriza; Vladimir Yankov
    Abstract: Our paper studies the role of the collateral channel for bank credit using confidential bank-firm-loan data. We estimate that for a 1 percent increase in collateral values, firms pledging real estate collateral experience a 12 basis point higher growth in bank lending with higher sensitivities for more credit constrained firms. Higher real estate values boost firm capital expenditures and lead to lower unemployment and higher employment growth and business creation. Our estimates imply that as much as 37 percent of employment growth over the period from 2013 to 2019 can be attributed to the relaxation of borrowing constraints.
    Keywords: Collateral channel; firm borrowing constraints; bank credit allocation; corporate investment; macro-finance; transmission mechanisms
    JEL: E44 G21
    Date: 2022–04–25
  36. By: Raphaël CHIAPPINI; Sophie POMET
    Abstract: This article examines the impact of two types of financial support for innovation granted by French public institutions to French SMEs on a set of firm performance measures. Using an original database that provides information on repayable advances and subsidies obtained by 5, 448 French SMEs over the period 2010-2016, we evaluate the effectiveness of such financial support using a quasi-experimental design. Our findings indicate that both repayable advances and subsidies significantly improve targeted SMEs’ turnover, level of intangible assets and total employment at one year and three years after support is granted. The impact on firm-level TFP is only positive and significant after three years, while being negative in the very short run. Our results also provide evidence that the combination of both instruments for a given innovation project within a year does not entail significantly higher effects. A heterogeneous analysis reveals that the impact of financial support instruments for innovation is significantly higher for young, micro and small firms. Furthermore, our analysis shows that innovation support benefits more to firms located in the Paris region than in other regions and this tends to exacerbate regional inequalities. Finally, our findings indicate that the transformation of Oséo into Bpifrance in December 2012 has led to an increase in the effectiveness of the innovation policy.
    Keywords: Innovation policy, firm performance, policy evaluation, Mahalanobis distance matching, difference-in-difference.
    JEL: O33 O38 C14 C21
    Date: 2023
  37. By: Markus Grillitsch; Bjørn T. Asheim
    Abstract: In this paper, we empirically and theoretically present regenerative regional development in responsible value chains as an alternative to the prevailing traditional, neoliberal economic rationale of globalization. We develop the argument on the back of a longitudinal in-depth case study on actors’ engagement in the recurring crises in the maritime industry in Sunnmøre/Norway. The alternative perspective is an agentic response from the business community in the wake of recent crises. It builds on advanced manufacturing capabilities, automation, and precision technologies, which promise local economic regeneration while reducing the reliance on low-cost labor, substantially cuts emissions through reduced long-haul transport, use of green energy, and more energy-efficient production processes. To succeed, however, it calls for policies that promote the building of local capabilities and penalize practices causing environmental and social harm in global value chains, making it possible to move towards responsible and shorter value chains.
    Keywords: Regional resilience, sustainability transformation, human agency, global value chains, automation and industry 4.0, innovation, industrial and innovation policy
    JEL: R10 R11 R50 R58 O30
    Date: 2023–04
  38. By: Massimo Finocchiaro Castroa; Calogero Guccio; Ilde Rizzo
    Abstract: Public infrastructure procurement is crucial as a prerequisite for public and private investments and for economic and social capital growth. However, low performance in execution severely hinders infrastructure provision and benefits delivery. One of the most sensitive phases in public infrastructure procurement is the design because of the strategic relationship that it potentially creates between procurers and contractors in the execution stage, affecting the costs and the duration of the contract. In this paper, using recent developments in non-parametric frontiers and propensity score matching, we evaluate the performance in the execution of public works in Italy. The analysis provides robust evidence of significant improvement of performance where procurers opt for a design and build contracts, which lead to lower transaction costs, allowing contractors to better accommodate the project in the execution. Our findings bear considerable policy implications.
    Date: 2023–04
  39. By: Peter Rønø Thingholm (Department of Economics and Business Economics, Aarhus University)
    Abstract: While it is widely recognized that treatment choices of health care providers vary across similar patients, reasons for this remain poorly understood. This paper estimates the spatial evolution of opioid prescription leniency of health care providers. Using exits and entries of primary care providers into local markets I document spillover effect in opioid prescription leniency across primary care practices. My results imply that an increase in opioid leniency of 1 standard deviation of a random provider peer increases the leniency of the focal provider by 7% of a standard deviation. Finally, I apply the network model to estimate how increased opioid use is harmful to patients’ labor market outcomes.
    Keywords: Labor market, Opioids, Provider Practice Style
    JEL: I11 I12
    Date: 2023–05–09
  40. By: Eric P. Baumer; Min Xie
    Abstract: Our understanding of how immigration enforcement impacts crime has been informed by data from the police crime statistics. This study complements existing research by using longitudinal multilevel data from the National Crime Victimization Survey (NCVS) for 2005-2014 to simultaneously assess the impact of the three predominant immigration policies that have been implemented in local communities. The results indicate that the activation of Secure Communities and 287(g) task force agreements significantly increased violent victimization risk among Latinos, whereas they showed no evident impact on victimization risk among non-Latino Whites and Blacks. The activation of 287(g) jail enforcement agreements and anti-detainer policies had no significant impact on violent victimization risk during the period.Contrary to their stated purpose of enhancing public safety, our results show that the Secure Communities program and 287(g) task force agreements did not reduce crime, but instead eroded security in American communities by increasing the likelihood that Latinos experienced violent victimization. These results support the Federal government’s ending of 287(g) task force agreements and its more recent move to end the Secure Communities program. Additionally, the results of our study add to the evidence challenging claims that anti-detainer policies pose a threat to violence risk.
    Keywords: immigration policy, secure communities, 287(g), anti-detainer, crime, victimization
    Date: 2023–04
  41. By: Sekou Keita (IAB - Institute for Employment Research); Thomas Renault (UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Jérôme Valette (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)
    Abstract: This paper analyses whether the systematic disclosure of criminals' origins in the press affects natives' attitudes towards immigration. It takes advantage of the unilateral change in reporting policy announced by the German newspaper Sächsische Zeitung in July, 2016. Combining individual-level panel data from the German Socio-Economic Panel from 2014 to 2018 with 402, 819 crime-related articles in German newspapers and those newspapers' market shares, we find that systematically mentioning the origins of criminals increases the relative salience of natives' criminality and reduces natives' concerns about immigration, breaking the implicit link between immigration and crime.
    Keywords: Immigration, Crime, Media Bias
    Date: 2022–10
  42. By: Alessandro Bucciol (Department of Economics (University of Verona)); Roberta Muri (University of Bologna); Francesca Rossi (Department of Economics (University of Verona))
    Abstract: Using a unique dataset combining administrative data from the municipalities of the Veneto region of Italy for the years 2010-2019, we develop a spatial econometric model to study the effect of two policies (Door-to-Door collection and Pay-As-You-Throw tariff) on waste sorting and waste accumulation. We are especially interested in the spatial spillover effect of the policies. Both policies are successful and with similar impact on the outcome variables. Interestingly, we also find evidence of a spatial spillover effect. The effect is mostly negative and limits the effectiveness of the policies (especially PAYT). Our results highlight the importance of coordinating decisions on the implementation of waste management policies.
    Keywords: Waste, Door-to-Door, Pay-As-You-Throw, Spatial effects
    JEL: Q53 C23
    Date: 2023–04
  43. By: Miguel Risco
    Abstract: In today’s world, social networks have a significant impact on information processes, shaping individuals’ beliefs and influencing their decisions. This paper proposes a model to understand how boundedly rational (DeGroot) individuals behave when seeking information to make decisions in situations where both social communication and private learning take place. The model assumes that information is a local public good, and individuals must decide how much effort to invest in costly information sources to improve their knowledge of the state of the world. Depending on the network structure and agents’ positions, some individuals will invest in private learning, while others will free-ride on the social supply of information. The model shows that multiple equilibria can arise, and uniqueness is controlled by the lowest eigenvalue of a matrix determined by the network. The lowest eigenvalue roughly captures how two-sided a network is. Two-sided networks feature multiple equilibria. Under a utilitarian perspective, agents would be more informed than they are in equilibrium. Social welfare would be improved if influential agents increased their information acquisition levels.
    Keywords: Information Acquisition, Learning, Public Goods, Network Effects, Information Diffusion, Bounded Rationality
    JEL: C72 D61 D83 D85 H41
    Date: 2023–04
  44. By: Breen, Casey
    Abstract: Owning a home has long been touted as a key component of the idealized “American Dream.” Homeownership is associated with greater wealth and better health, but the causal impact of homeownership on health remains unclear. Using linked complete-count census and Social Security mortality records, we document Black-White disparities in homeownership rates and produce the first U.S.-based estimates of the association between homeownership in early adulthood and longevity. We then use a sibling-based identification strategy to estimate the causal effect of homeownership on longevity for cohorts born in the first two decades of the 20th century. Our results indicate homeownership has a significant positive impact on longevity, which we estimate at approximately 0.4 years.
    Date: 2023–04–15
  45. By: Kim, Yeong Jae; Sarmiento, Luis
    Abstract: This study identifies the effect of Uber on the air quality of urban agglomerations in the United States. For this, we infer its causal impact on the Environmental Protection Agency’s air quality index with state-of-the-art difference-in-difference estimators accounting for Uber’s staggered implementation and dynamic treatment effects. Results show that Uber improves air quality. The value of the air quality index and the number of unhealthy air quality episodes decrease after its introduction. We provide evidence that the bulk of the improvement comes from declining ozone levels during the summer. Notably, results hold for a plethora of different specifications, samples, and robustness exercises. To the best of our knowledge, this article is the first to estimate the air quality effects of ride-hailing technologies empirically in the United States. However, further research is required to identify the exact mechanisms through which Uber’s impact on the transportation system affects air quality.
    Date: 2021–11–01
  46. By: Wainstock, Daniel Crisóstomo (Brown University); Galor, Oded (Brown University); Klemp, Marc (University of Copenhagen)
    Abstract: Evidence suggests that the Out of Africa Migration has impacted the degree of intra-population genetic and phenotypic diversity across the globe. This paper provides the first evidence that this migration has shaped cultural diversity. Leveraging a folklore catalogue of 958 oral traditions across the world, we show that ethnic groups further away from East Africa along the migratory routes have lower folkloric diversity. This pattern is consistent with the compression of genetic, phenotypic, and phonemic traits along the Out of Africa migration routes, setting conditions for the emergence and proliferation of differential cultural diversity and economic development across the world.
    Keywords: diversity, culture, Out of Africa migration, folklore
    JEL: O10 Z10
    Date: 2023–04
  47. By: Giulia Bettin (Universitá Politecnica delle Marche and MoFiR.); Amadou Jallow (University of the Gambia.); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Keywords: migrants’ remittances, international migration, natural disasters.
    JEL: F24 F22 Q54
    Date: 2023–05–02
  48. By: Ballesteros, Marife M.; Lorenzo, Pauline Joy M.; Ramos, Tatum P.; Ancheta, Jenica A.; Mercado, Elmer S.; Rodil-Ocampo, Amillah
    Abstract: Interlocal cooperation has long been promoted in the Philippines to address the resource limitations of local government units; however, there is a lack of discussion on how it can efficiently deliver urban services. This study aims to investigate cooperation models in the delivery of critical urban services by evaluating the management structure, financing strategies, sustainability, and issues/challenges of the interlocal arrangement in relation to operationalization. It focuses on answering the following policy questions: (1) what forms of interlocal cooperation have been utilized in the delivery of urban services; (2) how has interlocal cooperation improved the delivery of urban services; and (3) how can interlocal cooperation work better and be sustained given the decentralized nature of local politics. A closer look through findings from desk reviews and interviews is given to solid waste management and healthcare since they have been identified as services wherein cooperation among LGUs is extensively developed. Reforms are then proposed to improve the effectiveness of interlocal cooperation in efficiently delivering urban services. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: interlocal cooperation;Mandanas-Garcia Supreme Court Ruling;metropolitan arrangement;solid waste management;healthcare;local government units;LGU
    Date: 2023
  49. By: Francesca Maria Calamunci (Department of Economics and Law, Sapienza University); Federico Fabio Frattini (Trinity College Dublin and Fondazione Eni Enrico Mattei)
    Abstract: What is the long-term effect of organised crime presence on social capital accumulation? By leveraging novel social capital and organised crime data, this study investigates this question within the Italian landscape. In an instrumental variable (IV) setting, we exploit the forced resettlement law that compelled organised crime members living in the South of Italy to resettle in the Centre-North area. Using a granular measure of tax compliance as a proxy for civic awareness, we find evidence that sustained exposure to mafia presence depresses social capital accumulation. This finding applies to other dimensions of social capital, such as civic engagement and political participation. Results are robust to a series of robustness checks, such as the alternative strategy which combines the migratory movements from the South and the allocation of Marshall Plan funds. The findings appear to be influenced by a tolerance of dishonest conduct, a decrease in institutional trust, and a general disengagement from social activities.
    Keywords: Organised Crime, Social Capital, Forced Resettlement, Expansion
    JEL: A13 J16 K4 N34 O15
    Date: 2023–05
  50. By: Alaina Barca; Larry Santucci; Leigh-Ann Schultz
    Abstract: We investigate the long-term effects of foreclosure-induced relocations on adolescents and their subsequent use of credit. We ask whether individuals who experience a foreclosure-induced move between the ages of 10 and 17 are more likely to exhibit signs of credit scarring later in life. To establish a set of counterfactual outcomes, we implement propensity score matching with exact matching on certain characteristics and regression adjustment of the remaining covariate imbalances. We then compare the credit behavior of individuals who experienced a foreclosure-induced move in adolescence to similar individuals who neither experienced a foreclosure nor moved during adolescence. We find that young adults who experience a foreclosure-induced move tend to spend more time with one or more tradelines in a state of severe delinquency and tend to seek credit at a higher rate, which lowers their credit score trajectory relative to individuals who did not experience a foreclosure or a move in adolescence. This association is most evident within the group of children whose parents had nonprime credit scores one year prior to mortgage origination. Delinquency and low credit scores are also more pronounced in the group of adolescents who were between the ages of 10 and 14 at the time of foreclosure.
    Keywords: foreclosure; credit scores; intergenerational credit; household finance
    JEL: D14 G21 R20
    Date: 2022–08–24
  51. By: Ankney, Kevin; Leard, Benjamin (Resources for the Future)
    Abstract: Vehicle leasing involves a consumer renting a car for an average of three years. Given the typical lease length, we show that estimating valuation of leased vehicle fuel costs is fundamentally different from estimating valuation of purchased vehicle fuel costs. We find that new vehicle lessees and buyers both undervalue lifetime fuel costs. But because leasing periods last about three years, new vehicle lessees fully value lease-specific fuel costs. Our estimates also imply that leasing companies set residual values, defined as the post-lease expected value of the vehicle, with the expectation that used vehicle buyers undervalue post-lease fuel costs.
    Date: 2021–08–25
  52. By: Chen, Xiaodong (Xi'an Jiaotong University, China.); Mi, Haoming (Xi'an Jiaotong University, China.); Zhou, Peng (Cardiff Business School)
    Abstract: We develop an endogenous growth model with public consumption and infrastructure services provided by two-tier governments. Growth performance and welfare implication are compared under the centralized and decentralized fiscal federal systems. In general, there is a trade-off between welfare and growth due to conflicts of interest and asymmetric information between central and local governments. By numerical simulations, we show that the optimal fiscal federalism should impose restrictions on expenditure-GDP ratio, rather than on expenditure-budget ratio or central-local expenditure ratio, because expenditure-GDP ratio can align the incentives of the two-tier governments. Furthermore, it is suggested that decentralized fiscal systems are generally superior to the centralized system because the efficiency loss overweighs the agency cost. The model is then applied to analyzing different growth experiences in the West and China by institutional and cultural differences.
    Keywords: Fiscal Federalism; Decentralization; Economic Growth; Social Welfare
    JEL: E61 E62 H1 H5 O41 R5
    Date: 2023–04
  53. By: Darlington Agbonifi (Department of Economics (University of Verona))
    Abstract: This paper analyzes the socioeconomic and environmental dynamic impacts of an exogenous public-financed increases in infrastructure investments and modernization projects (CIS) of around EUR 1097 billion for the 2021-2026 period on industrial outputs, household employment and income distribution, in the Italian province of Taranto using an environmentally extended Social Accounting Matrix (ESAM) techniques for the year 2015. This method reconciles the analysis of the impact of an investment policy aiming at climate neutrality on a local economy. As well as an in-depth evaluation of the intersectoral production linkages through trade and multiplier analysis, with the cost-benefit (CB) analysis of a large-scale investment project. The evaluation of the dynamic impacts on the local economy produces a benefit/cost ratio of 5.63 that increases to 7.88 when the CB analysis of the project, and therefore the revenues generated during the operational period, are also included. The inclusion of environmental externalities associated with industrial greenhouse gas (GHGs) emissions reduces by about 16% the benefit/cost ratio in the construction period. In the operational period, when we assume that green production technologies are adopted, the reduction of the ratio is more consistent. The distributional impact of the investments on the annual income of households is also acceptably equitable.
    Keywords: Policy Impact Evaluation, Cost Benefit Analysis, Local Economic Development, SAM
    JEL: C67 D57 Q56 Q58 R11
    Date: 2023–04
  54. By: Phillip B. Levine; Dubravka Ritter
    Abstract: We examine how the racial wealth gap interacts with financial aid in American higher education to generate a disparate impact on college access and outcomes. Retirement savings and home equity are excluded from the formula used to estimate the amount a family can afford to pay. All else equal, omitting those assets mechanically increases the financial aid available to families that hold them. White families are more likely to own those assets and in larger amounts. We document this issue and explore its relationship with observed differences in college attendance, types of institutions attended, degrees attained, and education debt using data from the Survey of Consumer Finances (SCF), the National Postsecondary Student Aid Study (NPSAS), and the Panel Study of Income Dynamics (PSID). We show that this treatment of assets provides an implicit subsidy worth thousands of dollars annually to students from families with above-median incomes. White students receive larger subsidies relative to Black students and Hispanic students with similar family incomes, and this gap in subsidies is associated with disadvantages in educational advancement and student loan levels. It may explain 10 percent to 15 percent of white students’ advantage in these outcomes relative to Black students and Hispanic students.
    Keywords: racial wealth gap; racial wealth inequality; consumer finance; household finance; financial aid; FAFSA; college access; student loans; student debt
    JEL: D31 G51 I22 I24 J15
    Date: 2022–09–26
  55. By: Raimi, Daniel (Resources for the Future); Greenspon, Jacob
    Abstract: Driven by technological innovation, public policy, and other factors, the US energy system is facing rapid changes, raising concerns over potential job losses, particularly among fossil fuel workers. Because there will be considerable variation across the United States in the employment impacts of a changing energy landscape, policies must be tailored to local contexts. This analysis develops and implements a tool to help policymakers understand the localized opportunities and challenges that the US energy workforce may face in the years ahead. We first identify the exposure of local labor markets to job displacement in fossil fuel extraction, transportation, processing, and electricity industries. We then develop an empirical framework that assesses the extent to which the skill sets of existing fossil energy workers are a good match for growing job opportunities with similar pay in their local labor markets. We document substantial differences across local labor markets in terms of the demographics of local fossil fuel workforces, the skills they have attained from their current work, and how well these skills align with those in demand locally over the coming decade. We find that, with the exception of technical skills, the skills important to fossil fuel jobs typically are not the same as those necessary for fast-growing occupations with similar levels of pay, many of which require extensive service-oriented and management skills. Our methodology and associated analytical tools can be readily used to provide locally tailored information about skills gaps between the existing fossil energy workforce and in-demand sectors, suggesting areas where workforce development may bear the most fruit.
    Date: 2022–10–25
  56. By: Marek Ignaszak; Philip Jung; Keith Kuester
    Abstract: Consider a union of atomistic member states. Idiosyncratic business-cycle shocks cause persistent differences in unemployment. Private cross-border risk-sharing is limited. A federal unemployment-based reinsurance scheme can provide transfers to member states in recession, which helps stabilize local unemployment. Limits to federal generosity arise because member states control local labor-market policies. Calibrating the economy to a stylized European Monetary Union, we find that moral hazard puts notable constraints on the effectiveness of federal reinsurance. This is so even if payouts are indexed to member state’s usual unemployment rate or if the federal level pays only in severe-enough recessions.
    Keywords: Unemployment reinsurance, fiscal risk sharing, labor-market policy, fiscal federalism, search and matching
    JEL: E32 E24 E62 H77
    Date: 2023–04
  57. By: Joao Jalles (Universidade de Lisboa)
    Abstract: We estimate, by means of the local projection method, the short to medium-term economic impact of previous pandemics in a sample of 170 countries during the 2000-2018 period. We find that the output effect has been significant (reaching over -2 percent after 5 years) and persistent. The impact has varied across income groups, with pandemics affecting more developed countries through a big negative impact on investment. Moreover, we explored the relevance of fiscal space in affecting the negative economic impact of pandemics. To this end, we constructed new aggregate fiscal space variables based on a principal component analysis that combined several indicators. Results suggest that the initial fiscal landscape of countries was a key ingredient in softening the economic impact of past pandemics. We believe that these paper´s findings are useful to inform policy makers what can be expected in the new-normal that is following the recent COVID-19 pandemic particularly in a context of increasingly constrained fiscal space.
    Keywords: aggregate demand; fiscal policy; pandemics; local projection; impulse response functions; fiscal space, nonlinearities
    JEL: H
    Date: 2023
  58. By: Juan Herreño; Matias Morales; Mathieu Pedemonte
    Abstract: We study the reaction of voters to shifts in local economic conditions. Using the departure from the gold standard of US trading partners in 1931 and the US in 1933, we exploit heterogeneity in export destinations, creating local differences in expenditure-switching in US counties by isolating the aggregate effects of the monetary shocks using time fixed effects. We find significant changes in local voting behavior in response to both shocks, one originating abroad, and another domestically. The response to both shocks have similar magnitude. We argue that voters punished and rewarded incumbents regardless of the shocks’ origin, implying strong feedback from economic conditions to electoral outcomes.
    Keywords: US Elections; Gold Standard; Economic Voting
    JEL: D72 N42 E61
    Date: 2023–03–29
  59. By: Abel François; Nicolas Lagios; Pierre-Guillaume Méon
    Abstract: This paper studies the relationship between the size of a jurisdiction and how corrupt its citizens perceive officials to be. The relationship may a priori be driven by four distinct mechanisms: (i) larger communities have more officials, thereby making it more likely at least one official is corrupt; (ii) larger communities have a larger budget, thereby offering more opportunity to be corrupt; (iii) monitoring officials is costlier in larger communities; and (iv) the public is less likely to have contact with officials in larger communities, which raises citizen’s suspicion. Using cross-country analysis, we first establish that corruption is perceived as larger in countries with larger populations. We then test this stylized fact using French survey data on the perception of the municipal government corruption. We again observe that perceived corruption increases with population size. This result holds through a series of robustness checks and many confounding factors. Moreover, our results hold across two distinct periods and for another administrative unit, departments. Finally, we report suggestive evidence that the stylized fact is driven by mechanisms (i) and (ii), but not by (iii) and (iv).
    Keywords: Perceived corruption; Jurisdiction size
    Date: 2023–04–18

This nep-ure issue is ©2023 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.