nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2023‒06‒12
fifty-six papers chosen by
Steve Ross
University of Connecticut

  1. Evaluating the Impact of Housing Construction on Single-Family Housing Values in Stockholm: A Difference-in-Difference Analysis By Wilhelmsson, Mats
  2. First-Time Buyers Did Not Drive Strong House Price Appreciation in 2021 By Donghoon Lee; Joseph Tracy
  3. An urban overhead? Crime, agglomeration, and amenity By Stuart Donovan; Thomas de Graaff; Henri L.F. de Groot; Aaron Schiff
  4. House Price Growth and Inflation During COVID-19 By Aditya Aladangady; Elliot Anenberg; Daniel I. García
  6. The Great Pandemic Mortgage Refinance Boom By Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
  7. Secondary Housing Supply By Mense, Andreas
  8. Could Spain be less different? Exploring the effects of macroprudential policy on the house price cycle By Adrian Carro
  9. The Impact of Limiting Applicant Information on Rental Housing Discrimination By Marina Mileo Gorzig; Deborah Rho
  10. Evaluating congestion pricing schemes using agent-based passenger and freight microsimulation By Peiyu Jing; Ravi Seshadri; Takanori Sakai; Ali Shamshiripour; Andre Romano Alho; Antonios Lentzakis; Moshe E. Ben-Akiva
  11. Language and student learning: Evidence from an ethnographic study in Mozambique By Feliciano Chimbutane; Ritva Reinikka
  12. Key determinants of new residential real estate prices in Prague By David Mazáček; Jiří Panoš
  13. The Many Forms of Decentralization and Citizen Trust in Government By Michael A. Nelson
  14. Is Your Apartment Breaking because Your Landlord Is Broke? By Lee Seltzer
  15. Female Neighbors, Test Scores, and Careers By Sofoklis Goulas; Rigissa Megalokonomou; Yi Zhang
  16. Is Income Inequality Converging at the Regional Level? Evidence from LIS Data By Philipp Erfurth
  17. Wealth of Two Nations: The U.S. Racial Wealth Gap, 1860-2020 By Ellora Derenoncourt; Chi Hyun Kim; Moritz Kuhn; Moritz Schularick
  18. Do Second Chances Pay Off? Evidence from a Natural Experiment with Low-Achieving Students By Aspasia Bizopoulou; Rigissa Megalokonomou; Stefania Simion
  19. Inequality in exposure to air pollution in France: bringing pollutant cocktails into the picture By Camille Salesse
  20. Cultural Transmission and Political Attitudes: Explaining Differences between Natives and Immigrants in Western Europe By Jérôme Gonnot; Federica lo Polito
  21. A Mediation Analysis of the Relationship Between Land Use Regulation Stringency and Employment Dynamics By Uche Oluku; Shaoming Cheng
  22. Household, Bank, and Insurer Exposure to Miami Hurricanes: a flow-of-risk analysis By Benjamin Dennis
  23. The Creation and Diffusion of Knowledge: Evidence from the Jet Age By Stefan Pauly; Fernando Stipanicic
  24. Peer effects in deposit markets By Cramer, Kim Fe; Koont, Naz
  25. Spatial Structural Change By Fabian Eckert; Michael Peters
  26. How Good Am I? Effects and Mechanisms Behind Salient Rank By Rigissa Megalokonomou; Yi Zhang
  27. Younger Borrowers Are Struggling with Credit Card and Auto Loan Payments By Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
  28. Management and Performance in the Public Sector: Evidence from German Municipalities By Florian Englmaier; Gerd Muehlheusser; Andreas Roider; Niklas Wallmeier
  29. Market Size and Trade in Medical Services By Jonathan Dingel; Joshua D. Gottlieb; Maya Lozinski; Pauline Mourot
  30. The Evolution of Labor Market Disparities between Hispanic and non-Hispanic Men: 1970-2019 By Kospentaris, Ioannis; Stratton, Leslie S.
  31. Evaluating the Principle of Relatedness: Estimation, Drivers and Implications for Policy By Frank Neffke; Yang Li
  32. Assessing the Economic Costs of Road Traffic-Related Air Pollution in La Reunion By R. Le Frioux; A. de Palma; N. Blond
  33. Mortgage Securitization Dynamics in the Aftermath of Natural Disasters: A Reply By Amine Ouazad; Matthew E. Kahn
  34. Did the policy response to the energy crisis cause crime? Evidence from England By Fetzer, Thiemo
  35. Parental and Student Time Use around the Academic Year By Benjamin Cowan; Todd R. Jones; Jeffrey Swigert
  36. Home Price Expectations and Spending: Evidence from a Field Experiment By Felix Chopra; Christopher Roth; Johannes Wohlfart
  37. Seizing the window of opportunity? The Swedish public innovation system’s support to private business in the early Covid-19 pandemic By Fridholm, Tobias
  38. Parental and Student Time Use around the Academic Year By Cowan, Benjamin; Jones, Todd R.; Swigert, Jeffrey
  39. Immigrant entrepreneurship in Europe: a comparative empirical approach By Rinaldi, Riccardo; Arrighetti, Alessandro; Lasagni, Andrea; Canello, Jacopo
  41. Wage variations and commuting distance By El-Mehdi Aboulkacem; Clément Nedoncelle
  42. Bank Branch Access: Evidence from Geolocation Data By Jung Sakong; Alexander Zentefis
  43. Re-examining Regional Income Convergence: A Distributional Approach By Kevin Rinz; John Voorheis
  44. How can educators prevent the development of mathematics anxiety? By Kotecha, Meena
  45. Contagion in Debt and Collateral Markets By Jin-Wook Chang; Grace Chuan
  46. Young Voters and Budget Deficits By Ole Henning Nyhus; Bjarne Strøm
  47. Building Resilient Education Systems: Evidence from Large-Scale Randomized Trials in Five Countries By Noam Angrist; Micheal Ainomugisha; Sai Pramod Bathena; Peter Bergman; Colin Crossley; Claire Cullen; Thato Letsomo; Moitshepi Matsheng; Rene Marlon Panti; Shwetlena Sabarwal; Tim Sullivan
  48. Pedestrian mobility in Mobility as a Service (MaaS): sustainable value potential and policy implications in the Paris region case By Laura Mariana Reyes Madrigal; Isabelle Nicolaï; Jakob Puchinger
  49. Learning, Diversity and Adaptation in Changing Environments: The Role of Weak Links By Daron Acemoglu; Asuman Ozdaglar; Sarath Pattathil
  50. Local infrastructure, resilience capacity and poverty in rural Southeast Asia By Tim Hartwig; Trung Thanh Nguyen
  51. Moving Out of a Flood Zone? That May Be Risky! By Kristian S. Blickle; Katherine Engelman; Theo Linnemann; João A. C. Santos
  52. Transitions into and out of Car Ownership among Low-Income Households in the United States By Klein, Nicholas J.; Basu, Rounaq; Smart, Michael J.
  53. Racial Unemployment Gaps and the Disparate Impact of the Inflation Tax By Mohammed Ait Lahcen; Garth Baughman; Hugo van Buggenum
  54. Who Benefits from State Corporate Tax Cuts? A Local Labor Market Approach with Heterogeneous Firms: Further Results By Juan Carlos Suárez Serrato; Owen M. Zidar
  55. How Did New York City’s Economy Weather the Pandemic? By Jason Bram
  56. On extensions of partial priorities in school choice By Minoru Kitahara; Yasunori Okumura

  1. By: Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: Our objective is to assess the impact of housing construction on single-family housing values. The impact of cities on climate change is significant, and reducing it requires measures such as promoting public transport and infill development. Cities can also use green spaces to lower temperatures and mitigate heat effects. However, urbanisation and a housing shortage require new construction, which raises many conflicting goals, such as conserving green areas and building near public transport. This project uses the difference-in-difference methodology in Stockholm, Sweden, to examine the price effect of multifamily and single-family housing construction on surrounding single-family houses. The study analyses approximately 480 housing construction projects between 2009 and 2014 and 17, 000 single-family detached house transactions between 2005 and 2018. The results indicate that multifamily construction projects do not affect the value of surrounding single-family homes, while single-family home construction has a negative impact. This result can be explained by the fact that single-family housing projects are located directly adjacent to or in a single-family housing area with negative externalities. In contrast, multifamily housing projects are on the edge of single-family housing areas with positive externalities. A policy implication is that urban planners and policymakers must carefully evaluate construction near or in existing single-family housing areas to mitigate potential negative impacts.
    Keywords: new buildings; capitalisation effects; housing; Sweden; difference-in-difference
    JEL: R10 R31 R58
    Date: 2023–05–10
  2. By: Donghoon Lee; Joseph Tracy
    Abstract: In May 2022, Sam Khater—chief economist for Freddie Mac—argued that a surge in first-time buyers had been an important driver of the housing market the previous year. In contrast, using data from the New York Fed Consumer Credit Panel, we find that the share of home purchases by first-time buyers fell in 2021. This suggests that other factors were important to the rapid increase in house prices in 2021.
    Keywords: first-time home buyers; Home Price Appreciation; pandemic
    JEL: D14 R31 G21
    Date: 2023–05–15
  3. By: Stuart Donovan (Vrije Universiteit Amsterdam); Thomas de Graaff (Vrije Universiteit Amsterdam); Henri L.F. de Groot (Vrije Universiteit Amsterdam); Aaron Schiff (Schiff Consulting)
    Abstract: Using data for 134 locations in New Zealand, we study the effects of crime and agglomeration on urban amenity. We find that crime has significant negative effects on the value of urban amenity, with elasticities of approximately ?0.06 for firms and ?0.09 for workers. To put this effect in context, this implies the value of urban amenity for workers is approximately 2–3 times more sensitive to crime than average temperature. More uniquely, we find that controlling for crime leads to somewhat larger estimates of agglomeration economies. Together, these results suggest that crime detracts significantly from the value of urban amenity and may also act as an urban congestion cost that serves to undermine agglomeration economies.
    Keywords: crime, urban development, agglomeration economies, amenity, New Zealand
    JEL: R21 R31 C11
    Date: 2023–04–28
  4. By: Aditya Aladangady; Elliot Anenberg; Daniel I. García
    Abstract: House prices have risen rapidly during the pandemic, creating $9 trillion in owner occupied housing wealth between the first quarter of 2020 and the first quarter of 2022. Both housing and non-housing inflation also moved up over this time period to its highest level in many decades.
    Date: 2022–11–17
  5. By: Paolo Emilio Mistrulli (Bank of Italy); Md Taslim Uddin (Independent University Bangladesh); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR)
    Abstract: In this paper, we explore empirically whether immigrants, other things being equal, pay more for mortgages than natives and whether the probability that banks approve their loan applications is systematically lower. To this aim, we use two extensive and unique dataset of mortgage contracts and banks' requests for initial information about potential mortgagors drawn from the Italian Credit Register for the period 2011-2016, and survey data from the Survey on Household Income and Wealth conducted by the Bank of Italy for the period 2006-2016. We find that immigrants pay 20-24 basis points more than native Italians on single-name mortgages and 28-40 basis points more on jointly-owned ones. This interest rate gap narrows significantly, but does not disappear, when immigrant borrowers' credit history lengthens or if they borrow from a cooperative bank. Finally we find that immigrants have a 2.7% smaller chance of getting a mortgage compared to natives, which decreases for mortgage applications submitted to cooperative banks. Overall, our findings suggest that the disparity of treatment of immigrants in the Italian mortgage market is mostly due to a greater difficulty of banks in assessing the credit-worthiness of culturally distant borrowers. However, we also detect that cultural distance may fuel persistent disparity between migrants and natives.
    Keywords: Immigrants; discrimination; mortgage lending; interest rates; loan approval
    JEL: G21 J15 J71
    Date: 2023–05
  6. By: Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
    Abstract: Total debt balances grew by $148 billion in the first quarter of 2023, a modest increase after 2022’s record growth. Mortgages, the largest form of household debt, grew by only $121 billion, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. The increase was tempered by a sharp reduction in both purchase and refinance mortgage originations. The pandemic boom in purchase originations was driven by many factors – low mortgage rates, strong household balance sheets, and an increased demand for housing. Homeowners who refinanced in 2020 and 2021 benefitted from historically low interest rates and will be enjoying low financing costs for decades ­to come. These “rate refinance” borrowers have lowered their monthly mortgage payments, improving their cash flow, while other “cash-out” borrowers extracted equity from their real estate assets, making more cash available for consumption. Here, we explore the refi boom of 2020-21–who refinanced, who took out cash, and how much potential consumption support these transactions provided. In this analysis, as well as the Quarterly Report, we use our Consumer Credit Panel (CCP), which is based on anonymized credit reports from Equifax.
    Keywords: mortgage; Consumer Credit Panel; refinance; pandemic
    JEL: D14 G21
    Date: 2023–05–15
  7. By: Mense, Andreas (Institute for Employment Research (IAB), Nuremberg, Germany ; London School of Economics)
    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 percent lowers average rents by 0.2 percent, and increases disproportionately the number of second-hand units offered for rent. The impact of the supply shock is similarly strong in locations experiencing growing housing demand. Moreover, it 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." (Author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Open-Access-Publikation
    JEL: D40 R21 R31 D15
    Date: 2023–05–10
  8. By: Adrian Carro (Banco de España)
    Abstract: Employing an agent-based model of the Spanish housing market, this paper explores the main drivers behind the large amplitude of the Spanish house price cycle —as compared to most other European countries—, as well as the scope for macroprudential policy to reduce this amplitude. First, we exploit the availability of a previous calibration to the UK, which has a less pronounced house price cycle, to show the prominent role played by the distributions of various mortgage risk metrics: loan-to-value, loan-to-income and debt-service-to-income ratios. Second, we use the model to calibrate both a hard loan-to-value limit and a soft loan-to-income limit to smooth the Spanish house price cycle and match the amplitude of the UK equivalent. Finally, we characterise the effects of these calibrated policies over the different phases of the cycle, finding that both instruments reduce credit and price growth during the expansionary phase and also reduce their decline during the contractionary phase. Moreover, both instruments lead to a compositional shift in lending: the loan-to-value policy from first-time buyers to buy-to-let investors and the loan-to-income policy from both first-time buyers and home movers to buy-to-let investors.
    Keywords: agent-based modelling, housing market, macroprudential policy, borrower-based measures, buy-to-let sector
    JEL: D1 D31 E58 G51 R21 R31
    Date: 2022–09
  9. By: Marina Mileo Gorzig; Deborah Rho
    Abstract: Policies that reduce information on applicants (e.g., limiting criminal history) have mixed results in the labor market. However, little is known about their impact in the housing market. We submitted fictitious email inquiries to publicly advertised rentals using names manipulated on perceived race and ethnicity before and after a policy that restricted the use of background checks, eviction history, income minimums, and credit history in rental housing applications in Minneapolis. After the policy was implemented, discrimination against African American and Somali American men increased. Triple difference analysis shows that discrimination increased in Minneapolis relative to St. Paul after the policy.
    Keywords: Discrimination; Race/Ethnicity; Housing; Immigration
    JEL: J15 J68 R31
    Date: 2022–09–21
  10. By: Peiyu Jing; Ravi Seshadri; Takanori Sakai; Ali Shamshiripour; Andre Romano Alho; Antonios Lentzakis; Moshe E. Ben-Akiva
    Abstract: The distributional impacts of congestion pricing have been widely studied in the literature and the evidence on this is mixed. Some studies find that pricing is regressive whereas others suggest that it can be progressive or neutral depending on the specific spatial characteristics of the urban region, existing activity and travel patterns, and the design of the pricing scheme. Moreover, the welfare and distributional impacts of pricing have largely been studied in the context of passenger travel whereas freight has received relatively less attention. In this paper, we examine the impacts of several third-best congestion pricing schemes on both passenger transport and freight in an integrated manner using a large-scale microsimulator (SimMobility) that explicitly simulates the behavioral decisions of the entire population of individuals and business establishments, dynamic multimodal network performance, and their interactions. Through simulations of a prototypical North American city, we find that a distance-based pricing scheme yields the largest welfare gains, although the gains are a modest fraction of toll revenues (around 30\%). In the absence of revenue recycling or redistribution, distance-based and cordon-based schemes are found to be particularly regressive. On average, lower income individuals lose as a result of the scheme, whereas higher income individuals gain. A similar trend is observed in the context of shippers -- small establishments having lower shipment values lose on average whereas larger establishments with higher shipment values gain. We perform a detailed spatial analysis of distributional outcomes, and examine the impacts on network performance, activity generation, mode and departure time choices, and logistics operations.
    Date: 2023–05
  11. By: Feliciano Chimbutane; Ritva Reinikka
    Abstract: This ethnographic study explores the implementation of bilingual education in Mozambique: how it is understood, adapted, and resisted by school directors, teachers, and local officials. Bilingual education uses local languages in early grades before a gradual shift into Portuguese, which most Mozambican children do not speak when entering school. Our study confirms that students participate actively and understand content better in bilingual classes. Regardless of education policy, school directors decide whether or not to form bilingual classes.
    Keywords: Education, Education policy, Implementation, Ethnography, Mozambique
    Date: 2023
  12. By: David Mazáček; Jiří Panoš
    Abstract: The real estate residential market plays a crucial role in the economy and personal savings of a significant portion of the population. In recent years, the pricing of new apartments in Prague and other major European cities has experienced rapid growth, but also a sharp decline during the global financial crisis of 2008. The purpose of this paper is to describe the relationship between the selling price per square meter of new residential developments in Prague and the macroeconomic determinants, as well as real estate sector variables. The econometric model developed for this study is based on quarterly observations from 2005 to 2021 and utilizes statistical learning techniques of lasso regularization combined with Bayesian model averaging (BMA). The primary objective is to employ the model to identify the main determinants and provide insights into the price dynamics of new residential units. The outcomes of the model suggest that the set of variables selected in this paper provides a good explanation of the developments in real estate prices.
    Keywords: Real Estate, Pricing, Macroeconomic variables, ADL (autoregressive distributed lag) lasso regularization, BMA (Bayesian model averaging)
    Date: 2022–06–05
  13. By: Michael A. Nelson (Department of Economics, University of Akron, Akron, OH, USA)
    Abstract: This paper contributes to the literature on the nexus between decentralization and citizen trust in government through the use of a comprehensive set of decentralization measures that have been recently developed. Using measures of autonomy at both the regional and local (municipal) levels of government, and responses from five recent waves of the World Values Survey on citizen trust/confidence in their national government, the civil service, and the police, several interesting insights emerged from the analysis. First, giving regional governments a voice in policy making for the country as a whole promotes trust in government at the national level and in the civil service. Second, deconcentrationÑcentral government offices at the regional level as opposed to autonomous regional governmentsÑappears to be an effective strategy to generate greater confidence in government activities. Third, affording regional and local governments complete autonomy in the delivery of government services without at least some oversight by higher levels of government is not found to be trust promoting. Finally, giving local governments authority to levy at least one major tax is associated with greater government trust, a finding that is consistent with others who have found tax decentralization to be linked with better outcomes in the public sector. Overall, the analysis suggests that the caution researchers sometimes give when using one-dimensional measures of the authority/autonomy measures of subnational governments such a fiscal decentralization is warranted.
    Date: 2023–05
  14. By: Lee Seltzer
    Abstract: Thirty-one percent of housing units in the United States are rental units, and rental housing is unique because unlike in the case of homeownership, renters rely on the property owner for maintenance spending. From the property owner’s perspective, building maintenance is an important investment necessary to keep the asset in good condition. However, like all investments, it is only possible to maintain a building with sufficient financial resources. In a recent staff report, I examine the relationship between a building’s financing constraints and its maintenance. I find that financially constrained buildings, colloquially “broke, ” tend to be less well maintained.
    Keywords: Corporate Finance; Commercial Real Estate; housing code violations
    JEL: G3
    Date: 2023–03–10
  15. By: Sofoklis Goulas (Hoover Institution, Stanford University); Rigissa Megalokonomou (Department of Economics, Monash University); Yi Zhang (School of Economics, University of Queensland)
    Abstract: How much does your neighbor impact your test scores and career? In this paper, we examine how an observable characteristic of same-age neighbors—their gender—affects a variety of high school and university outcomes. We exploit randomness in the gender composition of local cohorts at birth from one year to the next. Using new administrative data for the universe of students in consecutive cohorts in Greece, we find that a higher share of female neighbors improves both male and female students’ high school and university outcomes. We also find that female students are more likely to enroll in STEM degrees and target more lucrative occupations when they are exposed to a higher share of female neighbors. We collect rich qualitative geographic data on communal spaces (e.g., churches, libraries, parks, Scouts and sports fields) to understand whether access to spaces of social interaction drives neighbor effects. We find that communal facilities amplify neighbor effects among females.
    Keywords: neighbor gender peer effects, cohort-to-cohort random variat, birth gender composition, geodata, STEM university degrees
    JEL: J16
    Date: 2023–05
  16. By: Philipp Erfurth
    Abstract: This study provides new insights into regional income inequality convergence across and within countries, building on the increased availability of Luxem- bourg Income Study (LIS) data. It finds evidence of regional income inequal- ity convergence across countries, but finds heterogenous trends within coun- tries. The study also explores the impact of state systems on regional income inequality convergence, providing evidence that the state system (federal, unitary or hybrid) matters for income inequality convergence, with unitary states being associated with regional income inequality convergence.
    Date: 2022–06
  17. By: Ellora Derenoncourt; Chi Hyun Kim; Moritz Kuhn; Moritz Schularick
    Abstract: The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this paper, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the last 150 years, with convergence stalling after 1950. Since the 1980s, the wealth gap has widened again as capital gains have predominantly benefited white households, and income convergence has stopped.
    Keywords: Wealth accumulation; Wealth inequality; Savings and asset prices; Racial wealth gap
    JEL: J15 N11 N12
    Date: 2022–06–10
  18. By: Aspasia Bizopoulou (VATT Institute for Economic Research, Arkadiankatu); Rigissa Megalokonomou (Monash University, Business School, Department of Economics); Stefania Simion (School of Economics, University of Bristol)
    Abstract: In several countries, students who fail end-of-high-school high-stakes exams are faced with the choice of retaking or forgoing postsecondary education. We explore exogenous variation generated by a policy that imposed a performance threshold for admission into post secondary education in Greece to estimate the effect of retaking exams on academic performance and various measures of the quality of received offers. Using a fuzzy regression discontinuity design and novel administrative data, we find that low-achieving students who retake national exams improve their performance by around 0.6 of a standard deviation, and obtain higher quality postsecondary offers.
    Keywords: postsecondary education, admission, low-achieving students, exogenous policy, fuzzy regression
    JEL: I21
    Date: 2023–05
  19. By: Camille Salesse (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)
    Abstract: I estimate the relationship between income, the number of days of exposure to the four main air pollutants and the proportion of "cocktail days" with French municipal data over the period 2012-2018. I find contrasting results between rural and urban areas. The most affluent urban municipalities have on average a lower number of pollution days compared to the poorest urban municipalities. In urban areas, the pollution days are composed of an equal proportion of cocktail days between the poorest and the most affluent municipalities. On the other hand, in the rural areas the better-off municipalities have on average a higher number of days of pollution, composed of more toxic mixtures, compared to the poorer municipalities. I also show that the pollution levels and the difference in the number of pollution days between the better-off and poorer municipalities are higher in urban areas.
    Keywords: air pollution, cocktail, inequality, environmental justice
    Date: 2022–12–02
  20. By: Jérôme Gonnot; Federica lo Polito
    Abstract: This paper uses data on individual political opinions from the European Social Survey to study the role of horizontal cultural transmission on immigrants' political assimilation in Western Europe. We analyze five key political issues: redistribution, gay rights, EU integration, immigration policy and trust in political institutions. Controlling for individual socio-economic characteristics, we document that immigrants show identical support for redistribution as natives, display more conservative attitudes towards gay rights and more liberal views on the other three issues. These differences widen with the cultural and religious distance between immigrants' background and Western European norms, and decrease with the number of years since migration. Among immigrants that have spent at least 10 years in their host country, attitudes towards migration policy catch up with those of natives and the migrant-to-native gap on political trust is reduced by 80\%. In contrast, differences on EU integration and gay rights remain stable while immigrants' views on redistribution becomes relatively more conservative. These attitude-specific patterns are also salient when studying political preferences at the regional and sub-regional level. Our results strongly point towards the transmission of cultural values from natives to immigrants on matters of immigration policy and political trust, whereas attitudes towards redistribution seem immune to cultural influences at destination.
    Keywords: Immigration;Assimilation;Political Attitudes;Cultural Transmission
    JEL: D72 J15 P16 R23 Z1
    Date: 2023–05
  21. By: Uche Oluku; Shaoming Cheng
    Abstract: The paper examines the effects of stringent land use regulations, measured using the Wharton Residential Land Use Regulatory Index (WRLURI), on employment growth during the period 2010-2020 in the Retail, Professional, and Information sectors across 878 local jurisdictions in the United States. All the local jurisdictions exist in both (2006 and 2018) waves of the WRLURI surveys and hence constitute a unique panel data. We apply a mediation analytical framework to decompose the direct and indirect effects of land use regulation stringency on sectoral employment growth and specialization. Our analysis suggests a fully mediated pattern in the relationship between excessive land use regulations and employment growth, with housing cost burden as the mediator. Specifically, a one standard deviation increase in the WRLURI index is associated with an approximate increase of 0.8 percentage point in the proportion of cost burdened renters. Relatedly, higher prevalence of cost-burdened renters has moderate adverse effects on employment growth in two sectors. A one percentage point increase in the proportion of cost burdened renters is associated with 0.04 and 0.017 percentage point decreases in the Professional and Information sectors, respectively.
    Date: 2023–05
  22. By: Benjamin Dennis
    Abstract: We analyze possible future financial losses in the event of hurricane damage to Miami residential real estate, where the hurricane's destructiveness reflects climate-change. We focus on three scenarios: (i) a business-as-usual scenario, (ii) a Hurricane-Ian-spillovers scenario, and (iii) a cautious-markets scenario. We quantify bank exposures and loss rates, where exposures are proportional to the size of real estate markets and loss rates depend on post-hurricane devaluations and insurance coverage. This quantitative methodology could complement modeling of local economy impacts, stress on public finances, asset market losses, and other financial developments that will also affect banks.
    Keywords: Climate-related risk; Financial stability; Flow of risk; Real estate loans
    JEL: Q54 R31 G20
    Date: 2023–02–13
  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: Cramer, Kim Fe; Koont, Naz
    Abstract: We provide first empirical evidence that consumer peer effects matter for banks' deposit demand. Using a novel measure that depicts for each county how exposed peers are to a specific bank in a given year, we tightly identify the causal effect of peer exposure on deposit demand through a fixed effects identification strategy. We address key empirical challenges such as time-invariant homophily. We find that a one percent increase in a bank's peer exposure leads to a 0.05 percent increase in deposit market share. This effect has become stronger over time with the rise of the internet and social media, which facilitate cross-county communication. Peer exposure is especially relevant for smaller banks and customers that have access to the internet.
    Keywords: deposit demand; peer effects; banking
    JEL: G21
    Date: 2021–09–25
  25. By: Fabian Eckert; Michael Peters
    Abstract: Between 1880 and 1920, the US agricultural employment share fell from 50% to 25%. However, despite aggregate demand shifting away from their sector of specialization, rural labor markets saw faster wage growth and industrialization than non-agricultural parts of the US. We propose a spatial model of the structural transformation to analyze the link between aggregate structural change and local economic development. The calibrated model shows that rural areas adapted to the decline of the agricultural sector by adopting technologies already in use in urban locations. Without such catchup growth, economic development would have been urban-biased and spatial inequality would have increased.
    Keywords: Structural change; Industrial structure; Economic geography; Growth
    Date: 2022–09–22
  26. By: Rigissa Megalokonomou (Monash University, Department of Economics, Australia, and University of Queensland, School of Economics); Yi Zhang (School of Economics, University of Queensland)
    Abstract: How can individuals respond to their ordinal ranking when they are not aware of it? We present evidence on the effects and mechanisms of achievement rank effects in middle schools when ranks are to a large extent salient to students and their parents. For identification, we rely on the random assignment of students (and teachers) to classrooms in China. That is, students with the same baseline test scores end up having different achievement ranks in their assigned classroom. We find positive and large effects of being assigned a higher rank on subsequent performance. The estimated effects of ranks are larger when ranks are more salient, for male students and for students whose parents have lower education. We show that students with higher ranks spend more hours on autonomic studying. What drives these effects is still an open question, especially when ranks are salient to both students and their parents. Using rich survey data, we show that these academic gains are not only mediated through (1) students’ higher self-perception and higher subject learning confidence, but also through (2) better parental understanding of their child’s ranks, stricter parental requirements for their child’s study, and higher parental expectations regarding their child’s educational attainment and career prospects. We show that these two channels make similar contributions to explaining salient rank effects, and when combined they explain 46.80% of the increase in test scores. We find no impact on teachers’ investment or attention to students as a result of rank effects.
    Keywords: achievement rank, salience, random classroom assignment, mechanisms, survey data
    JEL: I21 J24
    Date: 2023–05
  27. By: Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
    Abstract: Total debt balances grew by $394 billion in the fourth quarter of 2022, the largest nominal quarterly increase in twenty years, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Mortgage balances, the largest form of household debt, drove the increase with a gain of $254 billion, while credit card balances saw a $61 billion increase—the largest observed in the history of our data, which goes back to 1999.
    Keywords: consumer credit panel; delinquency
    JEL: D14
    Date: 2023–02–16
  28. By: Florian Englmaier (LMU Munich); Gerd Muehlheusser (University of Hamburg); Andreas Roider (University of Regensburg); Niklas Wallmeier (University of Hamburg)
    Abstract: We study management practices and performance in a representative sample of German municipalities, which provide the bulk of direct administrative services for citizens and firms in Germany. Surveyed municipalities differ substantially in their use of structured management practices, and this heterogeneity is also pronounced within all federal states, regional types, and population size brackets. Moreover, we document a systematic positive relationship between the degree of structured management and a diverse set of performance measures capturing municipalities' attractiveness for citizens and firms. Topic modelling (LDA) of survey responses suggests that the predominant management style is to use relatively little structured management.
    Keywords: management practices; public sector organizations; local government; municipal performance; state capacity; World Management Survey (WMS);
    JEL: D20 D73 H11 H73 R50
    Date: 2023–05–14
  29. By: Jonathan Dingel; Joshua D. Gottlieb; Maya Lozinski; Pauline Mourot
    Abstract: We measure the importance of increasing returns to scale and trade in medical services. Using Medicare claims data, we document that “imported” medical care—services produced by a medical provider in a different region—constitute about one-fifth of US healthcare consumption. Larger regions specialize in producing less common procedures, which are traded more. These patterns reflect economies of scale: larger regions produce higher-quality services because they serve more patients. Because of increasing returns and trade costs, policies to improve access to care face a proximity-concentration tradeoff. Production subsidies and travel subsidies can impose contrasting spillovers on neighboring regions.
    Keywords: Market-size effects; Trade in services; Medicare claims data; Healthcare access
    JEL: F14 I11 F12 R12
    Date: 2023–04–04
  30. By: Kospentaris, Ioannis; Stratton, Leslie S.
    Abstract: We describe how ethnic disparities in the labor market between prime aged Hispanic and non-Hispanic white men have evolved over the last 50 years. Using data from the March CPS, the Census, and the ACS, we examine several employment and earning outcomes. Hispanics have experienced sizable gains to employment: from a negative 2% prior to 1990 to a positive 4% after 2010 compared to non-Hispanics. In terms of earnings, Hispanics face a substantial negative disparity between 20% and 30% with some improvement after 2000. Most of the employment gain is driven by those with less than a high school degree, while the earnings disparity increases with education. Comparing Hispanic immigrants with natives reveals much of the employment and earnings gains are attributable to Hispanic immigrants, particularly immigrants not fluent in English.
    Keywords: Hispanics, disparities, earnings, employment, education, immigration
    JEL: J15 J21 J31 J71
    Date: 2023
  31. By: Frank Neffke (Center for International Development at Harvard University); Yang Li
    Abstract: A growing body of research documents that the size and growth of an industry in a place depends on how much related activity is found there. This fact is commonly referred to as the "principle of relatedness." However, there is no consensus on why we observe the principle of relatedness, how best to determine which industries are related or how this empirical regularity can help inform local industrial policy. We perform a structured search over tens of thousands of specifications to identify robust – in terms of out-of-sample predictions – ways to determine how well industries fit the local economies of US cities. To do so, we use data that allow us to derive relatedness from observing which industries co-occur in the portfolios of establishments, firms, cities and countries. Different portfolios yield different relatedness matrices, each of which help predict the size and growth of local industries. However, our specification search not only identifes ways to improve the performance of such predictions, but also reveals new facts about the principle of relatedness and important trade-offs between predictive performance and interpretability of relatedness patterns. We use these insights to deepen our theoretical understanding of what underlies path-dependent development in cities and expand existing policy frameworks that rely on inter-industry relatedness analysis.
    Keywords: Economic Complexity, Structural Transformation, Cities
    Date: 2023–03
  32. By: R. Le Frioux; A. de Palma; N. Blond (Université de Cergy-Pontoise, THEMA)
    Abstract: This research builds an integrated chain of models to compute the economic costs of population exposure to air pollution from roads. The framework uses data with a high geographical resolution (1 km x 1 km), a mobility module to simulate population movements, and a Gaussian dispersion model-based exposure model to evaluate population air pollution exposure and the related costs. This paper investigates the impact of two policies on La Réunion, a French island.: replacing old vehicles with electric ones and allowing flexible departure times for commuting trips.
    Keywords: dynamic traffic simulation, air pollution, road traffic pollution, population exposure costs, integrated chain of models, electric vehicles.
    JEL: I18 L91 L92 P25 R41 Q5
    Date: 2023
  33. By: Amine Ouazad; Matthew E. Kahn
    Abstract: Climate change poses new risks for real estate assets. Given that the majority of home buyers use a loan to pay for their homes and the majority of these loans are purchased by the Government Sponsored Enterprises (GSEs), it is important to understand how rising natural disaster risk affects the mortgage finance market. The climate securitization hypothesis (CSH) posits that, in the aftermath of natural disasters, lenders strategically react to the GSEs conforming loan securitization rules that create incentives that foster both moral hazard and adverse selection effects. The climate risks bundled into GSE mortgage-backed securities emerge because of the complex securitization chain that creates weak monitoring and screening incentives. We survey the recent theoretical literature and empirical literature exploring screening incentive effects. Using regression discontinuity methods, we test key hypotheses presented in the securitization literature with a focus on securitization dynamics immediately after major hurricanes. Our evidence supports the CSH. We address the data construction issues posed by LaCour-Little et. al. and show that their concerns do not affect our main results. Under the current rules of the game, climate risks exacerbates the established lemons problem commonly found in loan securitization markets.
    Date: 2023–05
  34. By: Fetzer, Thiemo (University of Warwick, CAGE, NIESR and CEPR)
    Abstract: The invasion of Ukraine has led to an unprecedented increase in energy prices in much of Western Europe with policy makers actively intervening in energy markets to cushion the shock. The UK’s policy response stands out: the energy price guarantee (EPG) was entirely untargeted and is, in real terms, much less generous to those living in properties with low energy efficiency. Using granular data and following a documented research approach this paper documents that areas more exposed to the energy price shock saw a notable increase in burglaries and anti-social behaviour: the energy price shock is responsible for a 6 to 10 percent increase in burglaries and a 9 to 24 percent increase in police reported anti-social behaviour between October 2022 to March 2023 inclusive. A quantification of policy alternatives suggests that a more targeted energy support package and/or a more energy efficient housing stock could have resulted in a drastically less pronounced uptick in crime.
    Keywords: crime, welfare, instability, climate crisis, cost-of-living JEL Classification: Q40, Q48, K42
    Date: 2023
  35. By: Benjamin Cowan; Todd R. Jones; Jeffrey Swigert
    Abstract: We demonstrate how mothers, fathers, and 15–17-year-old students alter their schedules around the K-12 academic year. Using regression discontinuity (RDD) methods, combined with dates on school year start and end dates by locality, we document several notable results. First, mothers are substantially more affected by the school year than are fathers. When school is in session, mothers sleep less, spend more time caring for family members and driving them around, and spend less time on eating, free time and exercise. Fathers see changes that are generally similar in sign but smaller in magnitude compared to mothers. 15–17-year-olds naturally reduce time spent in educational pursuits when school is out (a decrease of about 5.5 hours per day on weekdays), and most of that time is substituted toward free time (an additional 2+ hours per day) and sleep (1+ hours per day). Our results provide a holistic picture of how families build their days around the K-12 school calendar and have implications for policies targeted toward women’s and teenage children’s health and well-being.
    Keywords: parent time use, student time use, regression discontinuity
    JEL: I20
    Date: 2023
  36. By: Felix Chopra (University of Copenhagen, CEBI); Christopher Roth (University of Cologne, ECONtribute, MPI for Collective Goods Bonn, briq); Johannes Wohlfart (University of Copenhagen, CEBI)
    Abstract: How do households adjust their spending behavior in response to changes in home price expectations? We conduct a field experiment with a sample of Americans that links survey data on home price expectations to actual spending behavior as measured in a rich home-scanner dataset. In the experiment we exogenously vary households’ home price expectations by providing them with different expert forecasts. Homeowners do not adjust their spending in response to exogenously higher home price expectations, consistent with wealth effects and higher expected housing costs offsetting each other. However, renters reduce their spending in response to an increase in home price expectations. We provide evidence that the effects on renters operate through an increase in expected rental costs and higher expected costs of a future home that many renters intend to buy. Our evidence has implications for the role of asset price expectations in business cycle dynamics and consumption inequality.
    Keywords: Consumption, Expectations, Home prices, Homeowner, Information, Renter
    Date: 2023–05
  37. By: Fridholm, Tobias (Jönköping International Business School)
    Abstract: This paper investigates the Swedish public innovation system’s response to the Covid-19 pandemic during 2020 in terms of initiatives targeting private business. It is based on a review of the websites of 181 major national and regional organisations in the Swedish public innovation system. A total of 208 initiatives were observed. The study shows that almost all national agencies and regional councils responded, but among more specialised organisations the response was scattered. The responses were on general rather swift, and most of them concerned short-term crisis management. Initiatives to build long-term strength, e.g. re-skilling or platforms for potentially more radical renewal, were much fewer and often thematically unspecified. There is a moderately strong correlation between region size and response, but also regional differences on other dimensions, for example, regions strong in innovation involved expertise in specialised innovation support organisations to a much higher extent than other. Almost all university response came from ‘young’ universities. The largest and most research-intensive universities are almost absent in the material. Policy implications focus on the need to strengthen the innovation system’s capacity to be agile and initiate support initiatives with long-term perspectives in times of crisis.
    Keywords: industrial and innovation policy; public innovation support; regional innovation policy; regional resilience; sustainability transitions
    JEL: O31 O32 O38 R58
    Date: 2023–05–15
  38. By: Cowan, Benjamin (Washington State University); Jones, Todd R. (Mississippi State University); Swigert, Jeffrey (Southern Utah University)
    Abstract: We demonstrate how mothers, fathers, and 15–17-year-old students alter their schedules around the K-12 academic year. Using regression discontinuity (RDD) methods, combined with dates on school year start and end dates by locality, we document several notable results. First, mothers are substantially more affected by the school year than are fathers. When school is in session, mothers sleep less, spend more time caring for family members and driving them around, and spend less time on eating, free time and exercise. Fathers see changes that are generally similar in sign but smaller in magnitude compared to mothers. 15–17-year-olds naturally reduce time spent in educational pursuits when school is out (a decrease of about 5.5 hours per day on weekdays), and most of that time is substituted toward free time (an additional 2+ hours per day) and sleep (1+ hours per day). Our results provide a holistic picture of how families build their days around the K-12 school calendar and have implications for policies targeted toward women's and teenage children's health and well-being.
    Keywords: parent time use, student time use, regression discontinuity
    JEL: I2 I1 J2 D1
    Date: 2023–04
  39. By: Rinaldi, Riccardo; Arrighetti, Alessandro; Lasagni, Andrea; Canello, Jacopo
    Abstract: The aim of this paper is to use a multi-country approach to assess the role played by individual characteristics and local labor market conditions in influencing migrants’ self-employment decisions. The empirical investigation exploits data from the EU Labor Force Survey for the 2005-2016 period and focuses on two countries (Italy and the UK) characterized by significantly different labor market dynamics. Our findings suggest that the impact of individual characteristics is similar across countries, whereas the role of the local economic environment changes significantly, resulting in different migrant entrepreneurship patterns. These findings appear to be consistent with the most recent strand of literature, suggesting that while individual characteristics of self-employed migrants are similar across countries, national and regional differences play a key role in determining migrants’ entrepreneurial propensity.
    Keywords: migrant, entrepreneurship, regional economics
    Date: 2023
  40. By: Polina Popova (National Research University Higher School of Economics); Maria Semenova (National Research University Higher School of Economics); Vladimir Sokolov (National Research University Higher School of Economics)
    Abstract: The COVID-19 pandemic caused a significant change in the consumption, savings, and employment patterns of individuals. This study investigates the reaction of individual bank depositors to the spread of COVID-19 from the perspective of the outflow of retail deposits and the shift in their maturity structure across Russian regions which were differently hit by the pandemic. Exploiting the cross-regional variation in COVID-19 cases in Russia from April 2020 to September 2021, we document higher deposit outflows and a shift to short-term deposits in banks that were operating in the regions with higher rates of COVID-19 relative to banks from the regions that were less affected by the pandemic. We demonstrate that these effects are driven by increased unemployment, the lack of state-financed beds in hospitals, and the lack of financial literacy. Stricter isolation measures and underdeveloped bank branch networks smoothed the withdrawals of banks deposits caused by increased number of new COVID-19 cases. The maturity shifts are additionally driven by lower regional income and increased household health expenditures. Our results do not support the alternative hypothesis that those changes were forced by market discipline mechanisms.
    Keywords: banks, retail deposits, COVID-19, Russian regions
    JEL: Z
    Date: 2023
  41. By: El-Mehdi Aboulkacem (AME-SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - Université Gustave Eiffel); Clément Nedoncelle (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We estimate the causal impact of wage variations on commuting distance of workers. We test whether higher wages across years lead workers to live further away from their working place. We use employer–employee data for the French Ile-de-France region (surrounding Paris), from 2003 to 2008, and we deal with the endogenous relation between income and commuting using an instrumental variable strategy. We estimate that increases in wages coming from exogenous exposure to trade activities lead workers to increase their commuting distance and to settle closer to the city of Paris historical center. Our results cast novel insights upon the causal mechanisms from wage to spatial allocation of workers.
    Abstract: Nous estimons l'impact causal des variations de salaire sur la distance de navettage des travailleurs. Nous testons si des salaires plus élevés au fil des ans conduisent les travailleurs à vivre plus loin de leur lieu de travail. Nous utilisons les données employeurs-salariés de la région Ile-de-France (autour de Paris), de 2003 à 2008, et nous traitons la relation endogène entre revenus et déplacements en utilisant une stratégie IV. Nous estimons que les hausses de salaires résultant d'une exposition exogène aux activités commerciales conduisent les travailleurs à augmenter leur distance de trajet et à s'installer plus près du centre historique de Paris. Nos résultats apportent de nouvelles perspectives sur les mécanismes causaux du salaire à la répartition spatiale des travailleurs.
    Keywords: Communiting, Distance
    Date: 2022–06–28
  42. By: Jung Sakong; Alexander Zentefis
    Abstract: Low-income and Black households are less likely to visit bank branches than high-income and White households, despite the former two groups appearing to rely more on branches as means of bank participation. We assess whether unequal branch access can explain that disparity. We propose a measure of bank branch access based on a gravity model of consumer trips to bank branches, estimated using mobile device geolocation data. Residents have better branch access if branches are closer or have superior qualities that attract more visitors. Because the geolocation data is distorted to protect user privacy, we estimate the gravity model with a new econometric method that adapts the Method of Simulated Moments to handle high-dimensional fixed effects. We find no evidence that low-income communities lack access to bank branches and instead find that lower demand for bank branch products or services explains their lower branch use. But in Black communities, worse access explains their entire drop-off in branch use. For residents of these areas, weaker access is not from having lower quality branches, but from branches being located farther away from them. The results highlight parts of the country that would benefit the most from policies that expand access to banking.
    Keywords: Inequality; location economics; spatial analysis; Banking
    JEL: D14 G21 J15 R20
    Date: 2023–04–11
  43. By: Kevin Rinz; John Voorheis
    Abstract: We re-examine recent trends in regional income convergence, considering the full distribution of income rather than focusing on the mean. Measuring similarity by comparing each percentile of state distributions to the corresponding percentile of the national distribution, we find that state incomes have become less similar (i.e. they have diverged) within the top 20 percent of the income distribution since 1969. The top percentile alone accounts for more than half of aggregate divergence across states over this period by our measure, and the top five percentiles combine to account for 93 percent. Divergence in top incomes across states appears to be driven largely by changes in top incomes among White people, while top incomes among Black people have experienced relatively little divergence.
    Keywords: Wages; Regional convergence; Distribution; Income; Race
    JEL: J30 R10
    Date: 2023–03–09
  44. By: Kotecha, Meena
    Abstract: Mathematics Anxiety may sound like a trivial issue once school exams are over, but, argues Meena Mehta Kotecha, it has far-reaching consequences for both individuals and society. Her research explores its impact and identifies ways educators can help reduce unfavourable narratives about mathematics.
    JEL: C1
    Date: 2023–03–23
  45. By: Jin-Wook Chang; Grace Chuan
    Abstract: This paper investigates contagion in financial networks through both debt and collateral markets. We find that the role of collateral is mitigating counterparty exposures and reducing contagion but has a phase transition property. Contagion can change dramatically depending on the amount of collateral relative to the debt exposures. When there is an abundance of collateral (leverage is low), then collateral can fully cover debt exposures, and the network structure does not matter. When there is an adequate amount of collateral (leverage is moderate), then collateral can mitigate counterparty contagion, and having more links in the network reduces contagion, as interlinkages act as a diversifying mechanism. When collateral is not enough (leverage is high) and agents in the network are too interconnected, then the collateral price can plummet to zero and the whole network can collapse. Therefore, we show the importance of the interaction between the level of collateral and interconnectedness across agents. The model also provides the minimum collateral-to-debt ratio (haircut) to attain a robust macroprudential state for a given network structure and aggregate state.
    Keywords: Collateral; Financial network; Fire sale; Systemic risk
    JEL: D49 D53 G01 G21 G33
    Date: 2023–04–11
  46. By: Ole Henning Nyhus; Bjarne Strøm
    Abstract: This paper exploits a novel trial in Norwegian local elections in 2011 to provide empirical evidence on fiscal performance from lowering the minimum voting age from 18 to 16. Using a difference in differences research strategy, we find that this voting age change reduced the net operating surplus by around 600NOK (€60) per capita. This finding is consistent with micro evidence that young individuals have higher discount rates and are more likely to take risk than older ones, although other evidence is needed to confirm that interpretation. Further heterogeneity analysis demonstrates that increased deficits (reduced net operating surplus) due to the extension of the youth voting franchise mainly appear in governments with low party fragmentation and a large share of socialist politicians in the local council.
    Keywords: local public finance, fiscal performance, minimum voting age
    JEL: C23 D72 H72
    Date: 2023
  47. By: Noam Angrist; Micheal Ainomugisha; Sai Pramod Bathena; Peter Bergman; Colin Crossley; Claire Cullen; Thato Letsomo; Moitshepi Matsheng; Rene Marlon Panti; Shwetlena Sabarwal; Tim Sullivan
    Abstract: Education systems need to withstand frequent shocks, including conflict, disease, natural disasters, and climate events, all of which routinely close schools. During these emergencies, alternative models are needed to deliver education. However, rigorous evaluation of effective educational approaches in these settings is challenging and rare, especially across multiple countries. We present results from large-scale randomized trials evaluating the provision of education in emergency settings across five countries: India, Kenya, Nepal, Philippines, and Uganda. We test multiple scalable models of remote instruction for primary school children during COVID-19, which disrupted education for over 1 billion schoolchildren worldwide. Despite heterogeneous contexts, results show that the effectiveness of phone call tutorials can scale across contexts. We find consistently large and robust effect sizes on learning, with average effects of 0.30-0.35 standard deviations. These effects are highly cost-effective, delivering up to four years of high-quality instruction per $100 spent, ranking in the top percentile of education programs and policies. In a subset of trials, we randomized whether the intervention was provided by NGO instructors or government teachers. Results show similar effects, indicating scalability within government systems. These results reveal it is possible to strengthen the resilience of education systems, enabling education provision amidst disruptions, and to deliver cost-effective learning gains across contexts and with governments.
    JEL: I20 I24 O15
    Date: 2023–05
  48. By: Laura Mariana Reyes Madrigal (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay, IRT SystemX); Isabelle Nicolaï (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Jakob Puchinger (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie, LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay)
    Abstract: Pedestrian mobility remains neglected in MaaS solutions, yet it has the potential to become a tool for promoting public policies and more sustainable lifestyles away from excessive private car use. This research identifies the potential for sustainable value creation and the transversal implications for policymakers and other MaaS stakeholders of overlooking walking in innovations like MaaS. To do so, we explore how walking is currently integrated into four MaaS solutions in the Paris region. Our main findings show heterogeneity in the hierarchy given to walking in the user interfaces and the determinant roles of governance and policy in supporting the prioritization of pedestrian mobility in MaaS.
    Keywords: Mobility as a service MaaS Walking Pedestrian mobility Sustainable mobility Inclusion Active mobility Sustainable value Public policies Governance, Mobility as a service, MaaS, Walking, Pedestrian mobility, Sustainable mobility, Inclusion, Active mobility, Sustainable value, Public policies, Governance
    Date: 2023–04–28
  49. By: Daron Acemoglu; Asuman Ozdaglar; Sarath Pattathil
    Abstract: Adaptation to dynamic conditions requires a certain degree of diversity. If all agents take the best current action, learning that the underlying state has changed and behavior should adapt will be slower. Diversity is harder to maintain when there is fast communication between agents, because they tend to find out and pursue the best action rapidly. We explore these issues using a model of (Bayesian) learning over a social network. Agents learn rapidly from and may also have incentives to coordinate with others to whom they are connected via strong links. We show, however, that when the underlying environment changes sufficiently rapidly, any network consisting of just strong links will do only a little better than random choice in the long run. In contrast, networks combining strong and weak links, whereby the latter type of links transmit information only slowly, can achieve much higher long-run average payoffs. The best social networks are those that combine a large fraction of agents into a strongly-connected component, while still maintaining a sufficient number of smaller communities that make diverse choices and communicate with this component via weak links.
    JEL: D83 D85
    Date: 2023–05
  50. By: Tim Hartwig; Trung Thanh Nguyen
    Abstract: We examine the association between infrastructure and a household’s resilience capacity against shocks and the impacts of a household’s resilience capacity on household consumption and poverty. We use panel data (collected in 2010, 2013, and 2016) from 1, 698 households in Thailand and 1, 701 households in Vietnam and employ an instrumental variable approach. We find that transportation and information and communication technology infrastructure help improve households’ absorptive capacity in coping with shocks. Furthermore, this capacity can prevent households from reducing consumption and falling into poverty. Thus, rural development policies should attend to transportation and information and communication technology infrastructure.
    Keywords: Infrastructure, Resilience capacity, Poverty, Instrumental variable, Thailand, Vietnam
    JEL: D01 O12 Q12
    Date: 2022–12
  51. By: Kristian S. Blickle; Katherine Engelman; Theo Linnemann; João A. C. Santos
    Abstract: An often-overlooked aspect of flood-plain mapping is the fact that these maps designate stark boundaries, with households falling either inside or outside of areas designated as “flood zones.” Households inside flood zones must insure themselves against the possibility of disasters. However, costly insurance may have pushed lower-income households out of areas officially designated a flood risk and into physically adjacent areas. While not designated an official flood risk, Federal Emergency Management Agency (FEMA) and disaster data shows that these areas are still at considerable risk of flooding. In this post, we examine whether flood maps may have inadvertently clustered those households financially less able to bear the consequences of a disaster into areas that may still pose a significant flood risk.
    Keywords: insurance; floods; flood risk; climate; climate change; flood maps; neighborhood composition
    JEL: D14 G2 R31
    Date: 2023–04–20
  52. By: Klein, Nicholas J. (Conrell University); Basu, Rounaq; Smart, Michael J.
    Abstract: We examine transitions into and out of car ownership among low-income households. We use a novel online survey of U.S. residents to investigate why households lose access to a car, how long they are without a car, why they regain a car, and how these transitions affect their quality of life. We find that car ownership transitions are primarily motivated by economic security and insecurity. The median length of a car-less episode is 1.7 years, while black and Hispanic respondents experienced longer car-less episodes. Despite their precarious grasp on car ownership, respondents felt that owning a car was worth it.
    Date: 2023–05–03
  53. By: Mohammed Ait Lahcen; Garth Baughman; Hugo van Buggenum
    Abstract: We study the nonlinearities present in a standard monetary labor search model modified to have two groups of workers facing exogenous differences in the job finding and separation rates. We use our setting to study the racial unemployment gap between Black and white workers in the United States. A calibrated version of the model is able to replicate the difference between the two groups both in the level and volatility of unemployment. We show that the racial unemployment gap rises during downturns, and that its reaction to shocks is state-dependent. In particular, following a negative productivity shock, when aggregate unemployment is above average the gap increases by 0.6pp more than when aggregate unemployment is below average. In terms of policy, we study the implications of different inflation regimes on the racial unemployment gap. Higher trend inflation increases both the level of the racial unemployment gap and the magnitude of its response to shocks.
    Keywords: Unemployment; Discrimination; Racial inequality; Monetary policy; Inflation
    JEL: E31 E32 E52 J64
    Date: 2023–04–11
  54. By: Juan Carlos Suárez Serrato; Owen M. Zidar
    Abstract: This paper estimates the incidence of state corporate taxes using new data and methods for estimating the effects on profits. We extend Suarez Serrato and Zidar (2016) by developing two new identification approaches that use the effects of business taxes on the labor demand of incumbent firms and local productivity to identify profit effects. We estimate these reduced-form effects using data from Census, show how reduced-form moments identify incidence and parameters, and provide incidence estimates using a variety of reduced-form approaches as well as a structural model. Across these approaches, we find that owners bear a substantial portion of incidence. Our central estimate is that firm owners bear half of the incidence, while workers and landowners bear 35-40 percent and 10-15 percent, respectively.
    JEL: H22 H25 H32 H71 J23 R30 R58
    Date: 2023–05
  55. By: Jason Bram
    Abstract: When COVID-19 first struck the U.S. in early 2020, New York City was the epicenter of the pandemic. By early April, there was an unthinkable scale of suffering, with massive hospitalizations and roughly 800 fatalities per day, accounting for nearly half of the nationwide total. The rapid spread was facilitated by the city’s extraordinarily high population density and widespread use of mass transit. What followed was a quick and massive shutdown of restaurants, retail stores, personal services, offices, and more. And the shutdowns, of course, led to widespread job losses. Between February and May, one out of five jobs in the city vanished; in the restaurant industry, 70 percent of jobs were lost. Although the pandemic didn’t go away, the city’s economy has recovered steadily, aside from a brief but sharp setback in late 2020. By early 2023, New York had finally reversed just about all of the total job loss. In this post, we look at the contours of the city’s recovery as a possible guide to where we go from here.
    Keywords: New York City; post-pandemic; pandemic
    JEL: R10
    Date: 2023–04–13
  56. By: Minoru Kitahara; Yasunori Okumura
    Abstract: We consider a school choice matching model where the priorities for schools are represented by binary relations that may not be weak order. We focus on the (total order) extensions of the binary relations. We introduce a class of algorithms to derive one of the extensions of a binary relation and characterize them by using the class. We show that if the binary relations are the partial orders, then for each stable matching for the profile of the binary relations, there is an extension for which it is also stable. Moreover, if there are multiple stable matchings for the profile of the binary relations that are ranked by Pareto dominance, there is an extension for which all of those matchings are stable. We provide several applications of these results.
    Date: 2023–04

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