do labor market policies have displacement effects evidence from a clustered randomized experiment this article reports the results from a randomized experiment designed to evaluate the direct and indirect displacement impacts of job placement assistance on the labor market outcomes of young educated job seekers in france we use a two step design in the first step the proportions of job seekers to be assigned to treatment 0 25 50 75 or 100 were randomly drawn for each of the 235 labor markets e g cities participating in the experiment then in each labor market eligible job seekers were randomly assigned to the treatment following this proportion after eight months eligible unemployed youths who were assigned to the program were significantly more likely to have found a stable job than those who were not but these gains are transitory and they appear to have come partly at the expense of eligible workers who did not benefit from the program particularly in labor markets where they compete mainly with other educated workers and in weak labor markets overall the program seems to have had very little net benefits

lessons from the u s unemployment insurance experiments recent social experiments have evaluated two reforms of the unemployment insurance ui system reemployment bonuses and job search programs the bonus experiments show that economic incentives affect the length of ui receipt and provide weak evidence that an earlier return to work does not decrease earnings the experiments do not show the favorability of a permanent bonus program as they ignore its effect on the number of the claimants the job search experiments test several more promising reforms nearly all of the combinations of services and increased enforcement reduce ui receipt and have favorable cost benefit analyses earnings often increase though the estimates are imprecise

estimating the effects of a time limited earnings subsidy for welfare leavers in the self sufficiency project ssp welfare demonstration members of a randomly assigned treatment group could receive a subsidy for full time work the subsidy was available for 3 years but only to people who began working full time within 12 months of random assignment a simple optimizing model suggests that the eligibility rules created an establishment incentive to find a job and leave welfare within a year of random assignment and an entitlement incentive to choose work over welfare once eligibility was established building on this insight we develop an econometric model of welfare participation that allows us to separate the two effects and estimate the impact of the earnings subsidy on welfare entry and exit rates among those who achieved eligibility the combination of the two incentives explains the time profile of the experimental impacts which peaked 15 months after random assignment and faded relatively quickly our findings suggest that about half of the peak impact of ssp was attributable to the establishment incentive despite the extra work effort generated by ssp the program had no lasting impact on wages and little or no long run effect on welfare participation

the economic consequences of regulatory taking risk on land value and development activity abstract in this paper the real options approach to land valuation is extended by i showing how land value may be adversely effected when localities threaten a regulatory taking with less than full compensation ii quantifying the resulting probability of development which may increase in an attempt to thwart the taking of development rights and iii measuring the value of lost income on an ex ante basis when an interim taking occurs we find that the economic impact of such regulation can be substantial which has implications for measuring just compensation claims as well as for general land use regulatory policy and related legal theory

insights on the effect of land use choice the perpetual option on the best of two underlying assets abstract we consider the effect of land use choice on speculative land value and on development timing as reflected in the optimal hurdle ratio which triggers immediate development we find that land use choice i e multiple use zoning may add over 40 to land value under typical economic circumstances the conditions for optimal development of the land become markedly more difficult to achieve higher hurdle ratio required when the two land uses have similar values indeed a rational indecision result obtains in theory development will never occur when the two land use choices have equal value

the taking of land when should compensation be paid the analysis focuses on the question of whether the payment of compensation for land taken by eminent domain is efficient when the taking decision is independent of land use zero compensation is efficient but full compensation is not when the project decision is no longer independent of land use and can be affected by investor decisions neither compensation rule is generally efficient because of the moral hazard problem with risk averse consumers and risk neutral firms the previous conclusions remain essentially unchanged however when the project decision rule involves a budgetary fiscal illusion additional compensation may be necessary to correct the incentives facing the project decision maker

competing interests and the political market for smart growth policy the broad intent of smart growth is to reduce development in environmentally sensitive areas by limiting the outward expansion of development and redirecting private investment to urban areas local decisions that shape and constrain land uses can pit narrow economic interests against broader based environmental organisations and impact decisions on smart growth based on the political market framework this study specifically examines the influence of pro growth and smart growth interest groups on smart growth policies adopted by local governments in the state of massachusetts usa the results suggest both real estate interests and environmental groups influence local policy decisions and depending on the policy the characteristics of local political institutions mediate these influences

stochastic goal programming a mean variance approach abstract we propose a stochastic goal programming gp model leading to a structure of mean variance minimisation the solution to the stochastic problem is obtained from a linkage between the standard expected utility theory and a strictly linear weighted gp model under uncertainty the approach essentially consists in specifying the expected utility equation corresponding to every goal arrow s absolute risk aversion coefficients play their role in the calculation process once the model is defined and justified an illustrative example is developed

what works a meta analysis of recent active labor market program evaluations we summarize the estimates from over 200 recent studies of active labor market programs we classify the estimates by type of program and participant group and distinguish between three different post program time horizons using regression models for the estimated program effect for studies that model the probability of employment and for the sign and significance of the estimated effect for all the studies in our sample we conclude that 1 average impacts are close to zero in the short run but become more positive 2 3 years after completion of the program 2 the time profile of impacts varies by type of program with larger average gains for programs that emphasize human capital accumulation 3 there is systematic heterogeneity across participant groups with larger impacts for females and participants who enter from long term unemployment 4 active labor market programs are more likely to show positive impacts in a recession

an evaluation of the swedish system of active labour market programmes in the 1990s we investigate the presence of short and long term effects from joining a swedish labor market program vis a vis more intense job search in open unemployment overall the impact of the program system is found to have been mixed joining a program has increased employment rates among participants a result robust to a misclassification problem in the data on the other hand it has also allowed participants to remain significantly longer on unemployment benefits and more generally in the unemployment system this being particularly the case for those entitled individuals entering a program around the time of their unemployment benefits exhaustion

building codes and land values in high hazard areas vacant land prices on florida s barrier islands are examined under four coastal building regulatory regimes a hedonic pricing model features 1 745 vacant residential land sales from five barrier islands in lee county between 1980 and 1993 we find that land values decrease in response to the county s participation in the national flood insurance program the establishment of a coastal building zone and following the reestablishment of the coastal construction control line the findings suggest that benefits of safety from increased building standards are outweighed by the additional costs of compliance brought about by the code changes

regulation and corporate investment policy in a previous paper it was shown that the traditional rule that the allowed return on the equity of a regulated firm should be set equal to its cost of equity capital was conceptually deficient 2 this deficiency arises because the cost of equity capital of a regulated firm depends upon its risk which depends in turn upon the regulatory policy that will be followed in the future including the allowed rate of return it was argued therefore that this traditional rule should be replaced by the requirement that the regulatory policy be consistent a consistent regulatory policy achieves what the traditional rule only attempts it ensures that at the time of a regulatory hearing the market value of the firm equity is equal to the equity financed portion of the rate base to devise a consistent regulatory policy it is necessary to have a valuation model which takes explicit account of regulatory policy such a model was developed in the above mentioned paper in this paper we generalize the earlier valuation model so that the investment policy of the regulated firm is determined by the value maximizing decisions of the management instead of being taken as exogenous to the extent that investment policy is discretionary its endogeneity must be taken into account in devising a consistent regulatory policy and this is made possible by the generalized model in reality it seems unclear to what extent the investment policies of regulated firms are predetermined by the requirement that they meet demand and to what extent they are discretionary since the model presented here easily accommodates constraints on the investment policy it is the more appropriate model so long as there exists any element of discretionary investment behaviour and permits a more adequate approach to the determination of consistent regulatory policies with discretionary investment policy an important consequence of any particular consistent regulatory policy is the investment policy it induces in section 4 we show how the value maximizing investment policy is affected by the choice of regulatory policy on the other hand regulated firms are wont to argue that their investments are in the main predetermined by demand and must be undertaken regardless of their profitability this putative lack of discretion it is maintained means that the appropriate allowed rate of return is higher than would otherwise be the case in section 4 also we evaluate the strength of this consideration by comparing the allowed rate of return under consistent regulatory policies when investment policy is and is not discretionary section 5 shows briefly how the analysis can be extended to account for the effect of debt in the capital structure

the stochastic city abstract this paper analyzes a simple model of an urban area with growth and uncertainty household income rents and prices for land follow stochastic processes even though investors are risk neutral uncertainty affects both land rents and land prices in equilibrium because the conversion of land from agricultural to urban use is irreversible growth on the other hand affects urban and agricultural land prices but not the level of rents we show that uncertainty i delays the conversion of land from agricultural to urban use ii imparts an option value to agricultural land iii causes land at the boundary to sell for more than its opportunity cost in other uses and iv reduces equilibrium city size

takings compensation and equal treatment for owners of developed and undeveloped property this article constructs an economic model of government takings in which some property owners develop their land earlier than others because it is efficient for the government to take undeveloped land before developed land uncompensated takings will give landowners an incentive to develop their property early in order to reduce the risk of government appropriation this overdevelopment incentive can be countered and efficiency thereby restored if landowners are appropriately compensated when their property is taken or if equal treatment is afforded to owners of developed and undeveloped land however when the government responds to political pressure a judicial compensation requirement will often lead to less government land use regulation than is efficient in contrast a judicial equal treatment requirement can elicit efficient development and regulatory decisions

the credibility of a threat to nationalize abstract this paper empirically estimates the credibility of the african national congress s recent threat to nationalize south african mineral assets while south africa s financial press argued that the threat was negatively affecting mineral investment and asset values mining industry executives were confident that the threat was not credible using financial market data i estimate the annual probability of nationalization to have been relatively low at 1 4 although specific to the south african political environment this result can serve as a benchmark when including political risk in applied models of land and natural resource valuation investment timing and resource extraction

debt and development abstract this paper examines incentive and valuation effects of debt financing on land investment when land is debt financed the landowner holds both a development option on the land and a default option on the debt because development typically devalues the default option investment may be delayed past the point at which efficient investment would otherwise proceed the incentive to underinvest is shown to be more pronounced as debt level increases i e as the debt becomes riskier this agency problem provides an explanation as to why land is generally difficult to debt finance and may also explain why debt levels are relatively low for land intensive real estate firms novel comparative statics show that debt value may increase for a given increase in asset volatility as well as for a given increase in interest rate renegotiation and restrictive contract provisions are considered as mechanisms to promote efficient investment policy in the presence of debt financing

the equilibrium valuation of risky discrete cash flows in continuous time this paper values a contingent claim to discrete stochastic cash flows generated by a poisson arrival process with a randomly varying intensity parameter in the most general case both the size and the arrival intensity of cash flows may correlate wih state variables in a continuous time economy assuming the conditions of an intertemporal capital aset pricing model solutions for the value of the contingent claim can be found using various techniques the paper suggests immediate applications to the valuation of insurance contracts the decision to build a firm with unknown future investment opportunities and the pricing of mortgage backed securities

active labor market policy evaluations a meta analysis this article presents a meta analysis of recent microeconometric evaluations of active labour market policies we categorise 199 programme impacts from 97 studies conducted between 1995 and 2007 job search assistance programmes yield relatively favourable programme impacts whereas public sector employment programmes are less effective training programmes are associated with positive medium term impacts although in the short term they often appear ineffective we also find that the outcome variable used to measure programme impact matters but neither the publication status of a study nor the use of a randomised design is related to the sign or significance of the programme estimate

the effectiveness of public sponsored training revisited the importance of data and methodological choices this article revisits the effectiveness of public sponsored training programs for germany accounting for dynamic selection into heterogeneous programs we carefully assess to what extent various aspects of our empirical strategy such as conditioning flexibly on employment and benefit histories the availability of rich data handling of later program participations and further methodological choices affect our estimates our results imply pronounced negative lock in effects in the short run and positive medium run effects on employment and earnings when job seekers enroll after having been unemployed for some time we find that data and specification issues can have a large effect

the fundamentals of land prices and urban growth abstract in a very simple model in which capital is durable and landowners have perfect foresight the price of urban land has four additive components the value of agricultural land rent the cost of conversion the value of accessibility and the value of expected future rent increases a growth premium in rapidly growing cities the growth premium may easily account for half of the average price of land and may create a large gap between the price of land at the boundary minus conversion cost and the value of agricultural land rent

evidence on the specification of price in the study of domestic water demand the development of lakefront property in northern wisconsin has prompted in several towns minimum frontage zoning stricter than the state standard such zoning generates an economic loss by constraining development development effect and an economic