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Local taxation and tax base mobility: Evidence from France
Publication date: Available online 13 February 2019Source: Regional Science and Urban EconomicsAuthor(s): Tidiane Ly, Sonia PatyAbstractThis paper investigates the impact of tax base mobility on local taxation. First, we develop a theoretical model in order to examine the connection between local business property taxation and tax base mobility within a metropolitan area. We find that, in the presence of a budget compensation, decreasing capital intensity in business property tax base, composed of capital and land, increases the business property tax rates and decreases the tax rates on residents. We test this result using...
Source: Regional Science and Urban Economics - February 14, 2019 Category: Science Source Type: research

Surname-based ethnicity and ethnic segregation in the early twentieth century U.S.
Publication date: Available online 13 February 2019Source: Regional Science and Urban EconomicsAuthor(s): Dafeng XuAbstractIn this paper, I discuss a new measure of ethnicity in historical U.S. census data, and apply it in segregation studies. In the early twentieth century U.S., three major sending countries of Central and Eastern European immigrants—namely, Germany, Poland, and Russia—had high degrees of ethnic and cultural diversity. The population in all three countries comprised largely of a mixture of German, Polish, Russian, and Jewish ethnic groups. Consequently, there might be significant heterogeneity in ethn...
Source: Regional Science and Urban Economics - February 13, 2019 Category: Science Source Type: research

Do commuting subsidies increase commuting distances? Evidence from a Regression Kink Design
Publication date: Available online 13 February 2019Source: Regional Science and Urban EconomicsAuthor(s): Jörg PaetzoldAbstractI exploit a kink in the benefit scheme of a large commuter tax break to study the effect of subsidizing commuting costs on the commuting distance of employees. My results show a significant change in slope in the relationship between income and commuting distance exactly at the income level where the commuting subsidy becomes more generous. I test the robustness of this finding by using variation in the location of the benefit kink over time. My results indicate that commuting subsidies can indeed...
Source: Regional Science and Urban Economics - February 13, 2019 Category: Science Source Type: research

Distributive politics inside the city? The political economy of Spain's Plan E
Publication date: Available online 11 February 2019Source: Regional Science and Urban EconomicsAuthor(s): Felipe Carozzi, Luca RepettoAbstractWe study distributive politics inside cities by analysing how local governments allocate investment projects to voters across neighbourhoods. In particular, we ask whether politicians use investment to target their own supporters. To this aim, we use detailed geo-located investment data from Plan E, a large fiscal stimulus program carried out in Spain in 2009–2011. Our main empirical strategy is based on a close-elections regression-discontinuity design. In contrast to previous stu...
Source: Regional Science and Urban Economics - February 12, 2019 Category: Science Source Type: research

Environmental policy competition and heterogeneous capital endowments
Publication date: Available online 7 February 2019Source: Regional Science and Urban EconomicsAuthor(s): Yu-Bong LaiAbstractIn a model with monopolistic competition, international trade, and mobile capital, this paper aims to investigate the relationship between two countries with different capital endowments in terms of environmental regulations. The conventional result is that the capital-abundant country will charge a higher tax rate than the capital-scarce country. This present paper, however, finds that the opposite result may occur. Another feature of this paper is that governments strategically use the distribution ...
Source: Regional Science and Urban Economics - February 7, 2019 Category: Science Source Type: research

The income elasticity of housing demand in New South Wales, Australia
Publication date: Available online 21 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Xiangling LiuAbstractThis paper studies the theoretical relationship between house prices and income by using the user cost equilibrium condition. Empirically, the long-run and short-run dynamics of this relationship are studied by using data for 144 Local government areas (LGA) over 25 years from 1991 to 2015 in the state of New South Wales, Australia. The income elasticity of house prices for the state is estimated to be 1.07 by multi-factor panel data models and the cointegration analysis. The income elasticities acr...
Source: Regional Science and Urban Economics - January 21, 2019 Category: Science Source Type: research

Editorial Board
Publication date: January 2019Source: Regional Science and Urban Economics, Volume 74Author(s): (Source: Regional Science and Urban Economics)
Source: Regional Science and Urban Economics - January 15, 2019 Category: Science Source Type: research

Higher taxes on less elastic goods? Evidence from German municipalities
Publication date: Available online 14 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Sebastian Blesse, Philipp Doerrenberg, Anna RauchAbstractGerman municipalities have substantial autonomy in setting taxes on two distinct tax bases: business profits and property values. We use this setting and a two-step approach to explore whether implemented tax policy is consistent with the seminal inverse-elasticity rule. First, we estimate the tax elasticity of the two tax bases using event-study and generalized differences-in-differences methods based on the universe of municipalities in 1995–2010. Second, we c...
Source: Regional Science and Urban Economics - January 15, 2019 Category: Science Source Type: research

Indecent proposals: Estimating the impact of regional state aid through EU guideline compliance
Publication date: Available online 9 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Sander Ramboer, Jo ReynaertsAbstractThis paper estimates the causal effects of Flanders' main industrial policy programme, aiming to support economic development in lagging municipalities. The identification strategy exploits a State Aid reform which required Member States to propose a designation methodology and a selection of eligible municipalities in accordance with the new guidelines. While the proposed designation indicators allow us to account for selection on observables, further compliance with State Aid guideli...
Source: Regional Science and Urban Economics - January 10, 2019 Category: Science Source Type: research

Simulating the impact of transport infrastructure investment on wages: A dynamic spatial panel model approach
Publication date: Available online 9 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Bernard Fingleton, Nikodem SzumiloAbstractThis paper estimates the impact of a multi-billion pound investment in Britain's rail transport infrastructure, in the form of high-speed rail links, on wage levels across each of 347 districts of England and Wales. The impacts are based on a dynamic spatial panel model adaptation of standard urban economics based on employment density and commuting patterns. This allows estimation of these global impacts operating via improved commuting times. We demonstrate that while estimates...
Source: Regional Science and Urban Economics - January 10, 2019 Category: Science Source Type: research

The inversion of the spatial lag operator in binary choice models: Fast computation and a closed formula approximation
Publication date: Available online 10 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Luís Silveira Santos, Isabel ProençaAbstractThis paper presents a new method to approximate the inverse of the spatial lag operator, used in the estimation of spatial lag models for binary dependent variables. The related matrix operations are approximated as well. Closed formulas for the elements of the approximated matrices are deduced. A GMM estimator is also presented. This estimator is a variant of Klier and McMillen's iterative GMM estimator. The approximated matrices are used in the gradients of the new iterati...
Source: Regional Science and Urban Economics - January 10, 2019 Category: Science Source Type: research

Spatial crowding-out and crowding-in effects of government spending on the private sector in Japan
Publication date: Available online 10 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Yoshito Funashima, Yoshihiro OhtsukaAbstractMotivated by cross-jurisdictional private activities, this study proposes a fiscal spillover channel to investigate the spatial crowding-out and crowding-in effects of government spending on the private sector in Japan. We demonstrate that there are spatial autocorrelations in private economic variables, intensifying the crowding-out effects of government consumption. On the contrary, when such spatial spillovers are controlled for, the crowding-out effects of public investmen...
Source: Regional Science and Urban Economics - January 10, 2019 Category: Science Source Type: research

Mortgage default decisions in the presence of non-normal, spatially dependent disturbances
Publication date: Available online 4 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Raffaella Calabrese, Meagan McCollum, R. Kelley PaceAbstractWe develop a flexible binary choice model for mortgage default decisions that incorporates neighborhood effects in the disturbances. The main advantage of the model lies in its performance in providing improved estimates of the probability of default for risky mortgage loans. In addition, it can be applied to portfolios with a high number of loans. Assuming mortgage decisions with spatially dependent disturbances, the proposed approach uses the generalized extre...
Source: Regional Science and Urban Economics - January 5, 2019 Category: Science Source Type: research

Interaction matrix selection in spatial autoregressive models with an application to growth theory
Publication date: Available online 4 January 2019Source: Regional Science and Urban EconomicsAuthor(s): Nicolas Debarsy, Cem ErturAbstractThe interaction matrix, or spatial weight matrix, is the fundamental tool to model cross-sectional interdependence between observations in spatial autoregressive models. However, it is most of the time not derived from theory, as it should be ideally, but chosen on an ad hoc basis. In this paper, we propose a modified version of the J test to formally select the interaction matrix. Our methodology is based on the application of the robust against unknown heteroskedasticity GMM estimation...
Source: Regional Science and Urban Economics - January 5, 2019 Category: Science Source Type: research

Local responses to labor demand shocks: A Re-assessment of the case of Italy
Publication date: Available online 24 December 2018Source: Regional Science and Urban EconomicsAuthor(s): Emanuele Ciani, Francesco David, Guido de BlasioAbstractThe paper studies how local economies react to labor demand shocks. It focuses on the case of Italy, a country with lasting labor-market disparities in the context of rigid local wages and limited housing supply elasticity. Results document that allowing greater flexibility in local prices is a first-order option to reduce labor-market heterogeneity, while place-based policy seems to be a less viable alternative. (Source: Regional Science and Urban Economics)
Source: Regional Science and Urban Economics - December 24, 2018 Category: Science Source Type: research