access to markets and rural poverty evidence from household consumption in china abstract this paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural china the econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets we use straight line distances to coastline and navigable river along with the topography of the intervening counties as sources of exogeneous variations we also use identification through heteroskedasticity which does not rely on standard exclusion restrictions the results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption the domestic market effect is significantly larger in magnitude and there is complementarity between the access to domestic and international markets

the demand for post compulsory education in the uk and the effects of educational maintenance allowances in this paper the author develops a model of investment in postcompulsory schoolin g based on human capital theory the model is estimated using data on a sample of sixteen and seventeen year olds derived from the family expenditure survey the results reveal significant differences in the factors influencing enrollment in postcompulsory education between m ales and females mot notably household income is an important deter minant of educational participation for females but not for their ma le counterparts on the basis of these results the author assesses t he effects of the introduction of educational maintenance allowances on participation rates in the united kingdom

human capital formation and local economic performance bradley s and taylor j 1996 human capital formation and local economic performance reg studies 30 1 14 this paper is concerned with the interaction between the vocational education and training system vet and local economic performance in britain after briefly discussing the shortcomings of britain s vet system the paper examines the way in which the education and training system and the local economy interact in particular it is argued that the outputs from the local education and training system determine and are determined by the locality s stock of high skill workers these high skill workers in turn help to determine the competitiveness and hence the economic performance of the local economy this has feedback effects on the stock of high skill workers through its effect on the occupational mix of in migrants some empirical tests of the model are provided based on data relating to 107 local education authority areas in england bradley s et taylor j 1996 la formation du capi

the future price of houses mortgage market conditions and the returns to homeownership the purpose of this paper is to provide a simple framework in which to analyze the impact of a perfectly anticipated increase in the future selling price of houses on current house purchase decisions in the presence of capital market imperfections since implicitly it is the after tax selling price of houses that is considered this analysis is equivalent to one of a decrease in the capital gains tax on houses at retirement in this paper assumptions about homeownership mortgage markets and liquidity constraints are added to a life cycle model of asset accumulation taking the date of house purchase as exogenous it is shown that the impact of an exogenous increase in the expected future price of houses depends on current mortgage market conditions the future price of houses relative to the current price and the ratio of liquid assets to future labor income as well as preferences also a simple model of a market for houses is presented to analyze the impact of an increase in the expected future price of houses on the current market clearing price the mortgage market and the redistribution of the housing stock to consumers according to their wealth and liquidity characteristics in the life cycle model as exposited by franco modigliani and robert brumberg an increase in consumption in one period requires a decrease in consumption in another period when owner occupied housing is added to the model the tradeoff between consumption in different periods becomes more complex purchasing a larger house entails an increase in the consumption of housing services and an increase in assets held in the form of a house but a decrease in either nonhousing consumption or the holdings of an alternative asset or both the response of the consumer to price or income changes is also limited by financial market constraints capital market imperfections have been introduced into the life cycle model by a number of authors see for example lester thurow thayer watkins thomas russell clark wiseman and christopher pissarides and several authors have explicitly considered the impact of capital market imperfections on the house purchase decision see william dolde and james tobin william poole donald lessard and modigliani and dolde most similar to this study although developed independently roland artle and p varaiya s paper includes the theoretical incorporation of the house purchase decision into a life cycle model they consider the problem of choosing the date of house purchase while treating the level of consumption of housing services as exogenous in the life cycle model in this paper the consumer chooses the size of house to purchase at an exogenous date to use the life cycle model in the framework of a market of houses it is assumed that the stock of houses and the prices of all other goods including the rate of return on the alternative asset are fixed all consumers are identical except perhaps for initial wealth as noted by irving fisher p 325 in a world of perfect foresight and perfect markets the rates of return on all assets are equated in equilibrium if markets are perfect with the stock of houses and other prices fixed the present price of houses will rise by an amount equal to the present value of an exogenous increase in a future price of houses when mortgage market imperfections are introduced this relationship no longer holds and a future price increase may result in a redistribution of the current stock assistant professor of economics university of michigan this paper is an extension of a chapter of my doctoral thesis at the university of wisconsin madison the helpful comments of donald d hester charles a wilson hal varian and george borts are gratefully acknowledged

are chinese cities too small this paper models and estimates net urban agglomeration economies for cities economic models of cities postulate an inverted u shape of real income per worker against city employment where the inverted u shifts with industrial composition across the urban hierarchy of cities this relationship has never been estimated in part because of data requirements china has the necessary data and context we find that urban agglomeration benefits are high real incomes per worker rise sharply with increases in city size from a low level they level out nearer the peak and then decline very slowly past the peak we find that a large fraction of cities in china are undersized due to nationally imposed strong migration restrictions resulting in large income losses

examining the role of economic opportunity and amenities in explaining population redistribution abstract this paper develops a model of migration integrating equilibrium and disequilibrium components in which individuals and firms form rational expectations about future opportunities levels of migration are derived as functions of variations in factors influencing migrant labor demand economic opportunity and migrant labor supply residential amenities the model is used to estimate the extent to which migration in the united states over the period 1950 1980 is determined by these two classes of exogenous factors

optimal urban population size national vs local economic efficiency this paper explores whether the population size of the seoul metropolitan area sma in korea is efficient in terms of the national economy to undertake this analysis a recursively dynamic interregional computable general equilibrium icge model with a population module is developed in this model the explicit costs and benefits of population growth are estimated by using the industrial value added and consumer price inflation functions for each region the counter factual analysis shows that national population decentralisation away from the sma is desirable for korea s economic growth korea s gdp is estimated to be maximised when the sma s national population share is at 39 per cent in the short term and 35 per cent in the long term however the sma government is likely to have incentive to maintain its population at around 40 per cent of the national population where per capita income at the regional not national level is maximised

is economic growth improving urbanisation a cross regional study of china this study applies a bootstrap panel granger causality test to determine the relationship between urbanisation and economic growth for china we find that the patterns of interaction between urbanisation and economic growth vary across different regions the empirical results show that in urbanisation of the northern coastal region and most of the inland region granger causes economic growth whereas economic growth does not have a significant effect on urbanisation except in the southern coastal region and the inland region one fourth of china s provinces primarily in the southern coastal region do not show a granger causality relationship between urbanisation and economic growth this finding indicates that urbanisation has promoted economic growth by expanding demand and that economic growth s effect on urbanisation is restricted by administrative intervention rather than market mechanisms thus the findings for three fourths of the provinces in china conform to the urbanised economy theory these

urban hierarchies and city growth in the balkans this paper uses empirical evidence from the balkan peninsula during the 1981 2001 period in order to study the dynamic patterns of a conflict affected city size distribution by examining the time variations of the pareto exponent on the one hand and by exploring cities relative growth patterns and intradistribution mobility on the other the paper shows that city growth dynamics follow a hybrid pattern where city size filters the effects of external shocks city size dynamics thus seem more complex than that predicted by random growth or endogenous growth theories in the balkan peninsula during the 1981 2001 period medium sized city demographics have resisted external shocks due to conflicts redrawing of national frontiers and institutional upheaval better than large conglomerations however this does not lead to convergence towards a steady city size

how does energy consumption affect china s urbanization new evidence from dynamic threshold panel models abstract energy consumption may play different roles at different stages of urbanization and economic growth given china s rapid economic development and urbanization process this study tries to explore the possible nonlinear relationship between energy consumption and urbanization in china against the background of promoting new type urbanization the level of china s urbanization is evaluated comprehensively using the entropy method a newly developed dynamic threshold panel model is employed to examine the nexus of energy consumption and comprehensive urbanization with full consideration of heterogeneous characteristics the panel data vector autoregression or pvar model is also used to estimate the direct effects of various energy consumption patterns on the urbanization the empirical results indicate that the nexus of energy consumption and urbanization is indeed nonlinear and that energy consumption is conducive to promote china s urbanization at the current stage of development however the positive effect decreases when there is an increase in energy consumption intensity and energy consumption scale whereas the effect increases with the promotion of energy consumption structure

choice at sixteen the proportion of sixteen year olds in britain who stay on at school is low by oecd standards this paper examines the probability of completing education at the minimum legal age using micro data on individuals parameter estimates of a reduced form logit model of the leaving probability are obtained for both boys and girls the rich data set used allows the separate effects of family school and ability to be assessed family background in the form of class and parental education is shown to have a large effect even when ability and school type are controlled for copyright 1989 by the london school of economics and political science

retail agglomeration and competition externalities evidence from openings and closings of multiline department stores in the u s from the perspective of an existing retailer the optimal size of a cluster of retail activity represents a trade off between the marginal increases in consumer attraction from another store agains

searching for the parallel growth of cities in china based on the parallel growth implications of the four urban growth theories endogenous growth theory random growth theory hybrid growth theory and locational fundamentals theory this paper use

the costs of agglomeration house and land prices in french cities we develop a new methodology to estimate the elasticity of urban costs with respect to city population using french house and land price data after handling a number of estimation concerns we find that the elasticity of urban costs increases with city population with an estimate of about 0 03 for an urban area with 100 000 inhabitants to 0 08 for an urban area of the size of paris our approach also yields a number of intermediate outputs of independent interest such as the share of housing in expenditure the elasticity of unit house and land prices with respect to city population and within city distance gradients for house and land prices

migration externalities in chinese cities we analyse the impact of internal migration in china on natives labour market outcomes we find evidence of a large positive correlation of the city share of migrants with natives wages using different sets of control variables and instruments suggests that the effect is causal the large total migrant impact 10 when one moves from the first to the third quartile of the migrant variable distribution arises from gains due to complementarity with natives in the production function 6 4 and from gains due to agglomeration economies 3 3 finally we find some evidence of a stronger effect for skilled natives than for unskilled as expected from theory overall our findings support large nominal wage gains that can be expected from further migration and urbanisation in china

skill transferability migration and development evidence from population resettlement in indonesia we use a natural experiment in indonesia to provide causal evidence on the role of location specific human capital and skill transferability in shaping the spatial distribution of productivity from 1979 1988 the transmigration program relocated two million migrants from rural java and bali to new rural settlements in the outer islands villages assigned migrants from regions with more similar agroclimatic endowments exhibit higher rice productivity and nighttime light intensity one to two decades later we find some evidence of migrants adaptation to agroclimatic change overall our results suggest that regional productivity differences may overstate the potential gains from migration

how migration restrictions limit agglomeration and productivity in china china strongly restricts rural urban migration resulting in a well acknowledged surplus of labor in agriculture but migration is also restricted within sectors this paper argues that these intra sector restrictions lead to insufficient agglomeration of economic activity in both the rural industrial and urban sectors with resulting first order losses in gdp for urban areas the paper estimates a city productivity relationship based on city gdp numbers the effects of access educational attainment fdi and public infrastructure on productivity are estimated given these worker productivity is shown to be an inverted u shape function of city employment with the peak point shifting out as industrial composition moves from manufacturing to services as predicted by urban theory as far as we know this is the first paper to actually estimate the relationship between output per worker and city scale for any country the majority of chinese cities are shown to be potentially undersized below the lower bound on the 95 confidence interval about the size where their output per worker peaks the paper calculates the large gains from increased agglomeration in both the rural industrial and urban sectors

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

investments in education too much or not enough abstract this paper shows that both the external effects and overeducation approach use the same empirical wage equation to test empirical implications it proves that at least one of the approaches is invalid or needs other methods to test its implications

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

the impact of polycentric development on regional gap of energy efficiency a chinese provincial perspective abstract a reasonable distribution of urban systems is essential for optimizing spatial energy allocation and the quality of economic growth for china this study discusses the impact of the polycentric development on the regional gap of energy efficiency rgee i e difference in energy efficiency levels among cities in the same region in the chinese provincial context by employing a novel method using nighttime lighting data from defense meteorological satellite program s operational linescan system dmsp ols to measure the spatial structure of provinces and stochastic frontier approach sfa to evaluate the total factor energy efficiency our results firstly show that the polycentric development has a narrowing effect on the rgee second they show that the more government intervention can narrow the rgee of a province but being more open having more foreign direct investment fdi and using more coal can widen the rgee of that province meanwhile the level of regional urbanization is shown to have no influence on rgee third they show that the polycentric development has a negative effect on the energy efficiency of large cities but a positive effect on that of small and medium size cities which accordingly narrows the rgee the conclusions of this study not only reveal insights for policies that aim to reduce the rgee but also provide an empirical basis for future urban development strategies in the chinese provincial context

the failure of training in britain analysis and prescription in the last decade education and training et reform has become a major issue in many of the world s industrial powers one theme which runs throughout these reform initiatives is the need to adapt et systems to the changing economic environment these changes include the increasing integration of world markets the shift in mass manufacturing towards newly developed nations and the rapid development of new technologies most notably information technologies education and training are seen to play a crucial role in restoring or maintaining international competitiveness both on the macro level by easing the transition of the workforce into new industries and at the micro level where firms producing high quality specialized goods and services require a well qualified workforce capable of rapid adjustment in the work process and continual product innovation this paper will highlight the need for policy makers and academics to take account of the two way nature of the relationship between et and the economy

labor market outcomes and reforms in china over the past few decades of economic reform china s labor markets have been transformed to an increasingly market driven system china has two segregated economies the rural and urban understanding the shifting nature of this divide is probably the key to understanding the most important labor market reform issues of the last decades and the decades ahead from 1949 the chinese economy allowed virtually no labor mobility between the rural and urban sectors rural urban segregation was enforced by a household registration system called hukou individuals born in rural areas receive agriculture hukou while those born in cities are designated as nonagricultural hukou in the countryside employment and income were linked to the commune based production system collectively owned communes provided very basic coverage for health education and pensions in cities state assigned life time employment centrally determined wages and a cradle to grave social welfare system were implemented in the late 1970s china s economic reforms began but the timing and pattern of the changes were quite different across rural and urban labor markets this paper focuses on employment and wages in the urban labor markets the interaction between the urban and rural labor markets through migration and future labor market challenges despite the remarkable changes that have occurred inherited institutional impediments still play an important role in the allocation of labor the hukou system remains in place and 72 percent of china s population is still identified as rural hukou holders china must continue to ease its restrictions on rural urban migration and must adopt policies to close the widening rural urban gap in education or it risks suffering both a shortage of workers in the growing urban areas and a deepening urban rural economic divide

empirical entry games with complementarities an application to the shopping center industry abstract the author proposes a strategic model of entry that allows for positive and negative spillovers among firms the model is applied to a novel data set containing information about the store configurations of all u s regional shopping centers and is used to quantify the magnitude of interstore spillovers the author addresses the estimation difficulties that arise due to the presence of multiple equilibria by formulating the entry game as a mathematical problem with equilibrium constraints mpec although this study constitutes the first attempt to use this direct optimization approach to address a specific empirical problem the method can be used in a wide range of structural estimation problems the empirical results support the agglomeration and clustering theories that predict that firms may have incentives to colocate despite potential business stealing effects the author shows that the firms negative and positive strategic effects help predict both how many firms can operate profitably i

an equilibrium model of city size abstract this paper develops an equilibrium model of city size in which population distribution real prices and real wages are determined two possible modifications are considered one involving externalities the partial equilibrium changes resulting from these modifications are derived and seen to be quite different from the general equilibrium changes finally the paper suggests that site specific factors of production must be introduced into any consistent model of city size

hard and soft networks for urban competitiveness the concept of competitiveness has grown significantly and it is now common for cities regions and nations to assess improve and publicise their competitive standing vis a vis other places yet it remains rather unclear just what competitiveness is when applied to places which have objectives distinct from those of private sector organisations for whom share price and profitability serve as common metrics the blurring of the responsibilities of the public and private sectors also complicates matters with the former making increasing use of the terminology and priorities of business this paper takes the view that both public and private sectors and their interactions are sustained by networks to be effective these networks must operate at the global national regional and local scales gathering knowledge via social interaction that is through soft networks to a growing degree competitive networking also demands technological capability whether in high tech sectors smokestack industries

does history matter only when it matters little the case of city industry location when will an industry subject to agglomeration economies move from an old high cost site to a new low cost site it is argued that history in the form of sunk costs resulting from the operation of many firms at a site creates a first mover disadvantage that can prevent relocation it is demonstrated that developers of industrial parks can partly overcome this inertia through discriminatory pricing of land over time and empirical evidence is provided that they actually engage in such behavior it is also shown that other aspects of developer land sale strategy can be a source of information on the nature of interfirm externalities

understanding china s urban pollution dynamics china s ongoing urban economic growth has sharply increased the population s per capita income lowered the count of people living below the poverty line and caused major environmental problems we survey the growing literature investigating the causes and consequences of china s urban pollution challenges we begin by studying how urban population and industrial growth impacts local pollution levels and greenhouse gas production as the urban population grows richer its demand for private transportation and electricity sharply increases such privately beneficial activity exacerbates urban pollution externalities facing these severe environmental challenges china s urbanites increasingly demand quality of life progress we survey the emerging literature investigating the demand for environmental progress in china progress in mitigating externalities hinges on whether the powerful central and local governments choose to address these issues we analyze the political economy of whether government officials have strong incentives to tackle lingering urban externalities we conclude by discussing future research opportunities at the intersection of environmental and urban economics jel o18 p25 p28 q53 r23 r41 r58

on the distributional aspects of urban growth abstract although many theories of urban growth have broad implications regarding the dynamics of wage inequality little empirical work has explored the issue this paper studies the relationship between the growth of three measures of economic activity population employment and per capita income and a variety of wage dispersion measures across a sample of us metropolitan areas between 1970 and 1990 overall the results indicate a negative association between the two cities experiencing more rapid growth also tend to witness smaller increases or larger decreases in their inequality such findings offer some support to theories stressing growth mechanisms which equalize productivity across workers

human capital graduate migration and innovation in british regions with the aid of a geographical information system our paper constructs a three stage least squares simultaneous equation model to investigate the interrelationships between the interregional flows of human capital and the innovation dynamism of a region in order to do this we model the interregional migration behaviour of high quality british university graduates from university into first employment and we relate these human capital flows to both the labour market characteristics and the knowledge characteristics of the employment regions this is done for all industries and separately for just high technology industries our results indicate that for england and wales there is a two way causality between the interregional human capital employment migration flows of recent university graduates and the innovation performance of regions however the results for great britain as a whole depend on whether london is included and scotland is excluded we find little or no support for the argument that the presence of local universities or small firms promotes regional innovation

unequal migration and urbanisation gains in china abstract we assess the role of internal migration and urbanisation in china on the nominal earnings of three groups of workers rural migrants low skilled natives and high skilled natives we estimate the impact of many city and city industry characteristics that shape agglomeration economies as well as migrant and human capital externalities and substitution effects we also account for spatial sorting and reverse causality location matters for individual earnings but urban gains are unequally distributed high skilled natives enjoy large gains from agglomeration and migrants at the city level both conclusions also hold to a lesser extent for low skilled natives who are only marginally negatively affected by migrants within their industry by contrast rural migrants slightly lose from migrants within their industry while otherwise gaining from migration and agglomeration although less than natives the different returns from migration and urbanisation are responsible for a large share of wage disparities in china

intranational risk sharing and its determinants abstract we develop a model of risk sharing in which agents can pool their consumption risks in both national and local markets and then smooth the remaining consumption fluctuations with credit markets estimating the model with a unique dataset on chinese cities we find that the participation rate in risk sharing is low but upon entering the market agents tend to pool risk in the national market rather than the local market the welfare gain from reaching the perfect consumption risk sharing at the national market could be as large as 4 of the perpetual deterministic consumption flow however conditional on the estimated degree of risk sharing participation the welfare gain from pooling all income risks at the national market is only 0 1 empirical analysis on the determinants of city risk sharing reveals that the degree of risk sharing depends on initial economic development and share of gdp contributed by tertiary industry

business environment economic agglomeration and job creation around the world based on a comprehensive worldwide firm survey this paper looks at how the business environment and economic agglomeration affect job creation holding constant conventional determinants of firm growth such as firm ownership size and age the analysis finds that economic agglomeration is most important especially modern telecommunications access to export markets concentration of economic activity in large cities and capacity agglomeration the concentration of large firms in a city although the business environment affects job growth less than agglomeration does some elements of the business environment matter such as labor flexibility unionization and local skill levels there is strong heterogeneity in job creation across firm size and age

economic transition dynamic externalities and city industry growth in china using data on two digit manufacturing industries for prefecture level cities during the period of 2000 05 this study found a significant non linear relationship between dynamic externalities and city industry growth industrial specialisation and local competition may help city industry growth but may harm growth when they exceed a certain level diversity helps industry growth but only when it reaches a certain level liberalised globalised and locally protected industries are more likely to benefit from dynamic externalities industries located in cities with greater authorities are also found to grow faster the empirical findings indicate that economic transition has created conditions to allow a larger role of dynamic externalities in stimulating city industry growth

the optimal distribution of population across cities abstract we develop an urban model that incorporates 1 heterogeneous sites 2 fiscal and urban externalities and 3 an endogenous number of cities i e the extensive margin of urban development within and across city decreasing returns to scale cause agents to perceive their city as being too large in the socially optimal allocation as a consequence in equilibrium the largest cities on the most amenable sites are undersized whereas the smaller cities on less amenable sites are oversized we propose a test for optimal city size with heterogeneous sites extending the henry george theorem

globalization and the skilled city abstract the location of economic activity both across and within countries has undergone dramatic shifts over the last five decades three key trends stand out first cross country inequality has declined as many developing countries have grown rapidly second economic geography within countries has instead grown more unequal in both the developed and the developing world third within country spatial disparities have grown mainly because of the disproportionate success of skilled cities in this paper i develop a model that jointly explains these patterns as a consequence of deepening international economic integration my model explains the faster population and output growth of skilled cities as well as their tendency to increase their initial skill advantage consistent with the evidence my theory predicts a non monotonic path of urban growth in developed countries the model predicts a future shift in worldwide urban hierarchies as some developing world cities overtake unskilled cities in industrialized countries along global supply chains

what is different about urbanization in rich and poor countries cities in brazil china india and the united states abstract are the well known facts about urbanization in the united states also true for the developing world we compare american metropolitan areas with analogous geographic units in brazil china and india both gibrat s law and zipf s law seem to hold as well in brazil as in the u s but china and india look quite different in brazil and china the implications of the spatial equilibrium hypothesis the central organizing idea of urban economics are not rejected the india data however repeatedly rejects tests inspired by the spatial equilibrium assumption one hypothesis is that spatial equilibrium only emerges with economic development as markets replace social relationships and as human capital spreads more widely in all four countries there is strong evidence of agglomeration economies and human capital externalities the correlation between density and earnings is stronger in both china and india than in the u s strongest in china in india the gap between urban and rural wages is huge but the correlation between city size and earnings is more modest the cross sectional relationship between area level skills and both earnings and area level growth are also stronger in the developing world than in the u s the forces that drive urban success seem similar in the rich and poor world even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop

an evaluation of yts the youth training scheme yts is much the most significant public policy intervention in the uk training market since the 1964 industrial training act ita this paper presents an economic evaluation of yts we begin in part ii by outlining the history and mechanics of the scheme part iii describes the market failure or failures which yts addresses and part iv assesses how successful it has been in tackling these problems finally part v considers the scheme s future what further changes are needed to improve its effectiveness

urbanization and urban systems in the people s republic of china research findings and policy recommendations this paper provides a literature review on urbanization in the people s republic of china prc research findings indicate that the prc s urbanization is incomplete its level of urbanization lags behind its industrialization and development status and while there are too many small cities the large cities are not large enough this is mainly because of the institutional constraints exerted by the hukou and land systems on labor mobility which have led to segregation efficiency loss distortion in the urban system and adverse impacts on equity as discussed in this study major policy recommendations are offered for removing the distortions and steering the prc s urbanization onto an efficient and equitable path

government intervention land market and urban development evidence from chinese cities this article investigates how government intervention in land market affects china s urban development using data from prefecture level cities between 2000 and 2010 we find that government intervention enlarges the impact of positive productivity shocks on housing price appreciation through mainly the government control over residential land supply however we find no significant evidence that high government intervention constrains population growth and leads to wage increase such patterns of urban dynamics can be explained by the fact that migrant workers are the driving force behind china s urbanization but they have limited housing demand and are not well compensated jel p52 r12 h11

inflation and housing demand a new perspective abstract the effects of inflation on the housing market are investigated in this study of new house prices in 42 u s metropolitan areas from 1971 to 1978 the results show that estimates of the elasticity of real house prices with respect to the real user cost have been biased sharply downward owing to an errors in variables problem when the error term in estimating expected inflation is recognized explicitly the negative relationship between real house prices and real user cost is found to be very strong this analysis helps to resolve the conflict in the literature between the negative cash flow effects and the positive untaxed capital gains and declining real payment effects resulting from inflation

high inflation and returns on residential real estate evidence from turkey this study examines the hedging behaviour of real estate investment in a high inflationary environment the hypothesis that the real estate investment hedges both expected and unexpected inflation is tested the returns of investment on residential apartments in several neighbourhoods in the capital of turkey are used in the analysis expected inflation is measured by three proxies it is found that in a high inflationary environment real estate investment does not provide hedge against inflation a reverse causality between returns on real estate and changes in expected inflation is not observed however a relationship between real returns and changes in inflationary expectations seem to be different in relatively low and relatively high income neighbourhoods

urban accounting and welfare why do people live in particular cities we can list many reasons but two are undoubtedly relevant agents can enjoy the city or be more productive there a combination of life amenities and productivity levels determines the size of cities but the positive effects of these characteristics are capped by the costs and frictions arising from congestion depending on city governance and the flexibility of markets these costs and frictions can be more or less important these city characteristics are in turn enhanced and amplified by the presence of urban externalities understanding the different forces that determine city sizes is crucial for answering a broad set of questions what is the relative importance of these forces in determining the size distribution of cities how much would we gain or lose if cities had similar amenities technology levels or frictions how much reallocation would this cause more generally what are the welfare implications of the location of agents across cities in this paper we provide a simple way of decomposing the characteristics that lead to the size distribution of cities into three main components efficiency amenities and excessive frictions we use a simple urban theory to calculate these components and to carry out a wide set of counterfactual exercises that provide answers to the questions we asked above the theory consists of a multi city model with monocentric cities that produce a single good workers decide how much to work and where to live efficiency is modeled as tfp amenities as directly affecting preferences

on the regional labour market determinants of female university enrolment in europe casarico a profeta p and pronzato c d on the regional labour market determinants of female university enrolment in europe regional studies this paper empirically investigates how young women s decisions of investing in post secondary education are affected by labour market outcomes of older women living in the same region eu silc data on educational decisions of women who completed secondary schooling are used and indicators of the regional labour market are constructed exploiting regional and time variability it is found that the share of working women with young children of women with managerial positions and the self employed positively affect the probability to enrol significant effects of these variables for men are not found

agglomeration economies in urban manufacturing industries a case of japanese cities abstract the effects of urban agglomeration economies on productivities in two digit manufacturing industries is estimated using the cross section data of japanese cities in 1979 urbanization and localization economies which are major forms of urban agglomeration economies are explicitly separated the estimates of these economies vary considerably among industries light industries receive more productive advantages from urbanization economies than from localization economies but heavy industries experience these economies more from localization economies than from urbanization economies

aggregate metropolitan employment growth and the deconcentration of metropolitan employment abstract in this paper we document that the disparity in employment densities across us metropolitan areas has lessened substantially over the postwar period to account for this deconcentration of metropolitan employment we develop a system of cities model in which an increase in aggregate metropolitan employment causes congestion costs to increase faster for the more dense metro areas a calibrated version of the model reveals that the roughly two and a half fold increase in postwar aggregate metropolitan employment implies by itself more deconcentration than actually observed thus rising aggregate metropolitan employment is a powerful force favoring deconcentration although some benefit of greater employment density appears to have partially offset the effects of rising congestion costs for the more dense metro areas

does inflation affect real behavior the case of housing an important tradition in economics is to assume that demand depends upon relative prices and is homogenous of degree zero for the most part this has been interpreted as meaning inflation changes in the price level leaves demand unchanged recent work by a number of economists has challenged this position for the case of housing demand two arguments have been made that inflation acting in concert with existing institutions alters the quantity of housing demanded and the decision to rent or own a house the first argument states that inflation and the standard fixed payment mortgage combine to reduce the size of the mortgage loan a household can obtain for the purpose of buying a home this works to reduce the quantity of owner occupied housing demanded given the importance of mortgage finance to the demand for owner occupied housing the second argument focuses on the inflation adjusted after tax cost of owner occupied housing it simply states that an increase in the rate of anticipated inflation of the general price level reduces the after tax cost of housing thus increasing the demand for housing and the demand for homeownership there has been little empirical testing of these two arguments the purpose of this paper is to formulate and estimate a model which will give an indication of the quantitative significance of the two arguments a housing demand equation and a tenure choice equation own versus rent are estimated using a sample of about 6000 households from the 1975 annual housing survey 10 the estimates suggest that inflation dampens housing demand and homeownership opportunity for most households even though the inflation adjusted after tax cost of owner occupied housing declines as inflation heats up the paper consists of six sections including the introduction section two examines the ways inflation affects housing choices in more detail the third section contains the specification of the econometric model that forms the basis of the study section four is a discussion of econometric problems and the data used the results of the estimates are discussed in the fifth section the paper concludes with a presentation of the major conclusions and policy implications of the study

from school to university the demand for post compulsory education in britain the work reported here was done at the centre for labour economics lse and it is a revision of earlier work done at the national bureau of economic research this revision owes much to the comments and suggestions of richard layard and to the technical expertise of george alogoskoufis thanks are also due to the department of education and science for their comments and help with the data and to the manpower services commission the department of employment and the ford foundation for finance

real and nominal interest rates and the demand for housing abstract this paper is an empirical study of the relationship between inflation expectations and the demand for housing the major findings are that housing demand is a function of both expected inflation and the real interest rate but that demand cannot be specified as a function of the nominal rate it is also shown that expected inflation has a larger impact on those households that are likely to be constrained by capital market imperfections

exclusionary policies in urban development under servicing migrant households in brazilian cities localities in developed countries often enact regulations to deter low income households from moving in in developing countries such restrictions lead to the emergence of informal housing sectors to deter low income migrants localities in developing countries withhold public services to the informal housing sector using a large sample of brazilian localities we examine migration and exclusion focusing on the public provision of water to small houses where low income migrants are likely to live withholding water connections reduces the locality growth rate particularly of low education households in terms of service provision during dictatorship in brazil we find evidence of strategic exclusion where localities appear to withhold services to deter in migration we also find evidence of strategic interactions among localities within metro areas in their setting of service levels if one locality provides more services to migrant households other localities respond by withholding service

does wal mart sell inferior goods i feel we are well positioned for an economic downturn our low prices and low cost business model should give us an advantage over other retailers if things get more difficult for consumers wal mart s ceo lee scott kavilanz 2007 i introduction in this paper i test for the aggregate income elasticity of revenues at wal mart and target using panel data for 1997 2006 i find that wal mart s revenues fall during good times whereas target s rise during good times inferring income elasticities of demand from these estimated income elasticities of revenue consumers view purchases at wal mart as inferior goods whereas purchases at target are normal goods a well established cross sectional fact is that wal mart s shoppers have relatively low incomes compared to say target s shoppers 1 in a 2005 survey by the pew research center for the people and the press 53 of respondents reporting annual earnings below 20 000 said they shopped at wal mart regularly compared with 33 of respondents earning more than 50 000 pew research center for the people and the press 2005 the average annual household income among wal mart shoppers is 40 000 45 000 roughly equal to the u s median household income compared with 60 000 for target shoppers mui 2005 confirming this pattern figure 1 plots the frequency of shopping at wal mart and target often sometimes or never based on survey evidence for households with incomes below 40 000 and above 70 000 2 shopping frequencies at wal mart are higher for all income groups because the chain s penetration is higher but the likelihood of shopping at wal mart often falls with income whereas the likelihood of shopping at target often rises with income this cross sectional evidence does not establish that a given household increases its shopping at target and decreases its shopping at wal mart as its income rises if wal mart stores are located in lower income areas for example shopping at wal mart may be a normal activity and still consistent with the cross sectional evidence despite this distinction the claim has been made that wal mart sells inferior goods in the technical sense of the term goods for which demand increases when income falls the goal of this paper is to evaluate the inferiority of wal mart s goods using appropriate data and methods i use aggregate data on personal disposable income as a measure of consumer income and publicly available data on sales per store at both wal mart and target by construction the aggregate elasticity i estimate is a weighted average of individual households elasticities of expenditure and can be interpreted as the average household s income elasticity of expenditure on wal mart s and target s wares this elasticity of expenditure is an upper bound on the elasticity of demand at wal mart if wal mart s prices are not any more elastic with respect to income than other stores prices evidence presented in the appendix in this paper suggests that wal mart s prices are if anything less elastic with respect to income than prices at other stores which implies that the income elasticity of expenditure for wal mart s goods is even more negative than my estimates suggest figure 1 omitted holding relative prices constant two effects of income on store revenues work in opposite directions on the one hand a negative income shock may send some shoppers who normally shop at more upscale retailers to discounters thus increasing revenue at the discount retailers on the other hand people who already shop at discounters curtail their spending as well the aggregate effect depends both on the proportion of households of the two types and on the income elasticity of demand for each group if the income shocks are not uniform across types the relative size of the income shock matters too ideally this question would be addressed using household panel data in which household s time invariant characteristics as well as shoppers choice sets are controlled for and changes in income are matched with changes in purchasing patterns

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

do lower mortgage rates mean higher housing prices much research has shown that mortgage rates exert a negative influence on housing prices this study analyses the long and short run relationships between housing prices and mortgage rates using advanced nonstructural estimation methods as expected a bivariate specification and a four variable housing demand specification both show that these variables have a long run relationship and that there is a rather inelastic response of housing prices to changes in mortgage rates however contrary to previous research the results from granger non causality tests impulse response functions and variance decompositions reveal that there is virtually no short run influence from mortgage rates to housing prices

the erroneous use of china s population and per capita data a structured review and critical test hundreds of studies in economics misinterpret china s subnational population and per capita data the most widely used population counts are of hukou registrations from each province prefecture county or city rather than of the people living in each place and generating local gross domestic product over 220 million people have left their place of registration while almost none had when reforms began creating time varying errors in estimates of per capita income of subnational units we survey empirical articles in blue ribbon journals in development journals and in regional and urban economics journals that use china s subnational data over 80 of articles use these data erroneously most commonly the wrong population or employment counts are used to measure the size of subnational units and per capita data are calculated with the wrong denominator for how variables are interpreted we provide examples of errors from each group of journals and a critical test of one highly cited study specifically we show that if hukou registrations are erroneously used to measure the local population following existing practice conclusions about driving forces for urban area expansion are reversed we give recommendations for more careful use of china s subnational population and per capita data

agglomeration economies and productivity a structural estimation approach using commercial rents we gain more insight into the heterogeneity in firms productivity regarding agglomeration economies given a production function that allows for input factor substitution we identify ratios of firm specific production parameters employing a hedonic price approach we use unique microdata of commercial rents and firm characteristics and employ semiparametric estimation techniques the results show that agglomeration economies capitalize in commercial rents nevertheless expenditure on agglomeration is in general limited for example it is on average only 5 3 of expenditure on office floor space it is much higher in some sectors for retail firms it is about 20 of the expenditure on floor space 2013 the london school of economics and political science

policy scepticism and the impact of scottish higher education institutions heis on their host region accounting for regional budget constraints under devolution hermannsson k lisenkova k mcgregor p g and swales j k policy scepticism and the impact of scottish higher education institutions heis on their host region accounting for regional budget constraints under devolution regional studies a policy scepticism has emerged that challenges the results of conventional regional higher education institution hei impact analyses this paper provides a systematic critique of such scepticism while rejecting its extreme form the limiting effect of the binding public sector expenditure constraints under devolution is noted and it is shown how conventional impact analyses can be augmented to accommodate these constraints while the results suggest that conventional impact studies overestimate the expenditure impacts of heis they also demonstrate that the policy scepticism that treats these expenditure effects as irrelevant neglects some key aspects of heis in particular their export intensity

completing china s move to the market beginning in late 1978 by luck as much as design china arrived at a strategy for market oriented economic reform that combined substantial reform with rapid growth in gdp and exports the sequencing of reform began with the easy to reform sectors agriculture and foreign trade and then took up the more difficult task of reforming the large state owned enterprises with respect to agriculture small scale industry and foreign investment china found ways of introducing meaningful property rights into the increasingly marketized system a partially unreformed financial system and inadequate autonomy of large state enterprises accounts however for the current stop go nature of chinese development

heterogeneity stratification and growth macroeconomic implications of community structure and school finance this paper examines how socioeconomic stratification and alternative systems of education finance affect inequality and growth agents interact through local public goods or externalities school funding neighborhood effects and economywide linkages complementary skills knowledge spillovers sorting families into homogeneous communities often minimizes the costs of existing heterogeneity but mixing reduces heterogeneity faster integration therefore tends to slow down growth in the short run yet raise it in the long run a move to state funding of education presents society with a similar intertemporal trade off local and global complementarities play major roles in determining the efficient social and educational structures copyright 1996 by american economic association

intergenerational transfers and the accumulation of wealth h t ouseholds acquire wealth from two sources they save out of income they have earned and they receive transfers from other people the first method of wealth accumulation goes under the name of life cycle saving in which people save during their working lives and dissave after retirement the second involves either an inter vivos transfer that is a transfer between living people or a bequest a transfer that occurs at the death of the donor while inter vivos transfers and bequests will arise in dynastic models where preferences include a taste for the well being of one s descendents few empirical life cycle models reflect these concerns indeed a sharp debate has arisen over the ability of the simple life cycle model to explain observed wealth accumulation understanding the relative sizes of these sources of wealth accumulation affects a variety of issues for example the effects of government debt social insurance public transfer programs estate taxes and incentives for charitable giving depend to some extent on the magnitude and nature of private saving and transfers of wealth analyses of the inequality of wealth may depend on whether most of wealth is earned or received as transfers appropriate policies for encouraging private saving may look rather different depending on whether most saving is to be consumed later in life or passed along to the next generation finally evidence on transfer patterns relates to more fundamental