Estimating dynamic local interactions models

This paper presents empirical methods for studying a class of local interactions models in which agents’ transitions are affected by their neighbors’ states. We consider an application to urban unemployment and social networks in job search using publicly available cross-section and retrospective data. Most links in our model are local, but some span an entire metropolitan area. Our methods are designed to accommodate the presence of strong cross-sectional dependence arising from these few cross-metro-area links. We also present simple methods to compare data and model spell distributions and to illustrate the model's dynamic properties.     

Ethnic Variation in Commuting Propensity and Unemployment Spells: Some U.K. Evidence

This paper uses 1987–88 U.K. survey data from the unemployment inflow to investigate the ability of ethnic variation in commuting willingness to account for longer non-white unemployment spells. The study is motivated by the possibility that ethnic minorities are at greater risk of spatial mismatch unemployment because they are more geographically restrictive in their job-seeking activities. Our findings support this hypothesis and indicate that lower commuting willingness explains about 20% of the differential between the average unemployment spells of ethnic minorities and whites.     

Social Capital Across European Countries: Individual and Aggregate Determinants of Group Membership

Social capital refers to norms and networks of reciprocity, trust, and cooperation that facilitate coordinated action for a mutual benefit. Theoretical and empirical studies have documented the positive contribution of social capital in social welfare and development. This study empirically explores the determinants of social capital, in the form of group membership, across European countries. Data is derived from the European Community Household Panel, which covers a large sample of individuals from a set of European countries. Binary logistic regression models are applied to regress an index of individuals' group membership on a set of individual characteristics (income, education, gender, age, marital status, employment), as well as aggregate characteristics of countries (GDP per capita, income inequality, social trust, trust in public institutions, corruption, unemployment, and violation of political and civil rights). Results provide evidence of the impact of both individual and aggregate factors on group membership. These factors constitute a possible means to rebuilding patterns of social capital, especially in Southern European countries, where special‐interest groups and patron‐client relations prevail over generalized norms and networks of reciprocity, trust, and cooperation that promote wider social welfare and development objectives.     

Social networks and labor market transitions

We study the influence of social networks on labor market transitions. We develop the first model where social ties and job status coevolve through time. Our key assumption is that the probability of formation of a new tie is greater between two employed individuals than between an employed and an unemployed individual. We show that this assumption generally generates negative duration dependence of exit rates from unemployment. Our model has a number of novel testable implications. For instance, we show that a higher connectivity among unemployed individuals reduces duration dependence and that exit rates depend positively on the duration of the last job held by the unemployed worker.     

The geographic distribution of unemployment rates in the U.S.: A spatial-time series analysis

This paper presents estimates of the time series and spatial pattern of unemployment rate fluctuations in the U.S. over the period 1977.I–1983.IV. Spatial and time series autocorrelations over a regular lattice are estimated using both simultaneous (SAR) and conditional (CAR) autoregressive models of spatial series. The empirical results indicate that a temporary unemployment rate shock has a significant effect on unemployment rates in adjacent areas contemporaneously, but virtually no impact on neighboring unemployment rates after six quarters. A permanent change in an area's unemployment rate has a strong and persistent impact on unemployment rates in labor markets within 250 miles of the initial shock.     

The politics of ethnic integration in Singapore: Malay ‘regrouping’ as an ideological construct

Research on ethnic residential patterns is overwhelmingly empiricist in focus. The discursive context surrounding the socio‐spatial phenomenon needs to be acknowledged since it can have concrete impacts on the practice of urban social planning as well as the spatial behaviour of individuals and groups. Using Henri Lefebvre's insights into the production of social space, this article looks at how a dominant representation of space is constructed, with its implications for ‘lived’ spaces and the spatial practices which circumscribe them. The case of Singapore is examined, where the government has appropriated the discourse surrounding ‘ethnic regrouping’ in an attempt to legitimize the unpopular policy of ethnic quotas in public housing. Alleging that ‘ethnic regrouping’ had been taking place during the 1980s, this was portrayed as undesirable and contrary to the ideal of integration. The imposition of ethnic quotas was thus justified as necessary and appropriate. Systematic analysis using the index of dissimilarity, however, problematizes this representation of space. The rhetoric surrounding ethnic regrouping is revealed to be a means of social discipline whereby the government imposes a particular representation of space and seeks to manipulate the social landscape via technocratic means. Les recherches sur les modèles résidentiels ethniques débordent d'empirisme. Or, le contexte discursif du phénomène socio‐spatial doit être reconnu puisque celui‐ci peut avoir des incidences tangibles sur l'exercice de l'urbanisme social, ainsi que sur le comportement des individus et groupes dans l'espace. A partir des idées d'Henri Lefebvre sur la production de l'espace social, l'article analyse comment s'élabore une représentation dominante de l'espace, avec ses implications sur les espaces ‘vécus'et les pratiques spatiales qui les délimitent. Dans le cas de Singapour, le gouvernement s'est approprié le discours autour du ‘regroupement ethnique’ dans le but de légitimer la politique impopulaire des quotas ethniques dans les logements publics. Sous le prétexte que le ‘regroupement ethnique’ s'était déroulé dans les années 1980, il a été présenté comme indésirable et contraire à l'idéal d'intégration. Les quotas ethniques ont donc été justifiés comme nécessaires et pertinents. Cependant, une analyse systématique utilisant l'indice de dissemblance remet en cause cette représentation de l'espace. La rhétorique entourant le regroupement ethnique apparaît comme un outil de discipline sociale grâce auquel le gouvernement impose une représentation particulière de l'espace, cherchant à manipuler le paysage social par des moyens technocratiques.     

SPATIAL LIMITED DEPENDENT VARIABLE MODELS: A REVIEW FOCUSED ON SPECIFICATION,ESTIMATION, AND HEALTH ECONOMICS APPLICATIONS

Modeling individual choices is one of the main aim in microeconometrics. Discrete choice models have been widely used to describe economic agents' utility functions and most of them play a paramount role in applied health economics. On the other hand, spatial econometrics collects a series of econometric tools, which are particularly useful when we deal with spatially distributed data sets. Accounting for spatial dependence can avoid inconsistency problems of the commonly used statistical estimators. However, the complex structure of spatial dependence in most of the nonlinear models still precludes a large diffusion of these spatial techniques. The purpose of this paper is then twofold. The former is to review the main methodological problems and their different solutions in spatial nonlinear modeling. The latter is to review their applications to health issues, especially those appeared in the last few years, by highlighting the main reasons why spatial discrete neighboring effects should be considered and suggesting possible future lines of development in this emerging field. Particular attention has been paid to cross‐sectional spatial discrete choice modeling. However, discussions on the main methodological advancements in other spatial limited dependent variable models and spatial panel data models are also included.     

Spatial versus social mismatch

The aim of this paper is to provide a new mechanism based on social interactions, explaining why distance to jobs can have a negative impact on workers’ labor-market outcomes, especially ethnic minorities. Building on Granovetter’s idea that weak ties are superior to strong ties for providing support in getting a job, we develop a model in which workers who live far away from jobs choose to have less connections to weak ties. Because of the lack of good public transportation in the US, it is costly (both in terms of time and money) to commute to business centers to meet other types of people who can provide other source of information about jobs. If distant minority workers mainly rely on their strong ties, who are more likely to be unemployed, there is then little chance for them of escaping unemployment. It is therefore the separation in both the social and physical space that prevents ethnic minorities from finding a job.     

Fractional Integration and the Dynamics of UK Unemployment*

This article is concerned with estimating the dynamic behaviour of UK unemployment using fractional integration methods. The question it considers is whether an unemployment model using a relatively small set of determinants of unemployment is consistent with the persistence which estimates an integrated model yield, or the much long‐lasting estimates obtained from fractional integration. Our empirical tests favour the latter version. The results show that when accounting for UK unemployment in terms of lagged values of the real oil price and the real interest rate, unemployment appears fractionally integrated. This finding means that although unemployment is mean reverting, once it is shocked it may take a very long time to recover, and our estimates of the response times are considerably in excess of those previously reported in the literature.     

Endogenous censoring in the mixed proportional hazard model with an application to optimal unemployment insurance

We examine the sensitivity of estimates of the MPH model with respect to assumptions on the censoring mechanism in the context of an economic model of optimal unemployment insurance. We assume a parametric model for the duration of interest and leave the distribution of censoring unrestricted, allowing it to be correlated with observed and unobserved characteristics. We provide a practical characterization of the identified set with moment inequalities and suggest methods for estimating this set. We apply this approach to estimate the elasticity of unemployment exit rate with respect to unemployment benefit. Finally, we investigate welfare consequences of our estimates.     

(Under)Mining local residential property values: A semiparametric spatial quantile autoregression

Rock mining operations, including limestone and gravel production, have considerable adverse effects on residential quality of life due to elevated noise and dust levels resulting from dynamite blasting and increased truck traffic. This paper provides the first estimates of the effects of rock mining—an environmental disamenity—on local residential property values. We focus on the relationship between a house's price and its distance from a nearby rock mine. Our analysis studies Delaware County, Ohio, which, given its unique features, provides a natural environment for the valuation of property‐value‐suppressing effects of rock mines on nearby houses. We improve upon the conventional approach to evaluating adverse effects of environmental disamenities based on hedonic house price functions. Specifically, in the pursuit of robust estimates, we develop a novel (semiparametric) partially linear spatial quantile autoregressive model which accommodates unspecified nonlinearities, distributional heterogeneity, as well as spatial dependence in the data. We derive the consistency and normality limit results for our estimator as well as propose a consistent model specification test. We find statistically and economically significant property‐value‐suppressing effects of being located near an operational rock mine which gradually decline to insignificant near‐zero values at roughly a 10‐mile distance. Our estimates suggest that, all else equal, a house located a mile closer to a rock mine is priced, on average, at about 2.3–5.1% discount, with more expensive properties being subject to larger markdowns.     

Endogenous Social Comparisons and the Internal Organization of Firms

Should workers of a firm be organizationally integrated to realize benefits from benchmarking? Or should they be separated to preclude horizontal social comparisons? This paper highlights a trade‐off that arises if social comparisons in firms are endogenous. We analyze a principal multi‐agent model in which the principal trades off the reduction of agents' risk exposures by use of relative performance evaluation and the thereby induced social comparisons for which agents must be compensated. Contrary to standard theoretical predictions, relative performance evaluation is optimal only if the performance measures are sufficiently correlated relative to the agents' regard for others. Copyright © 2011 John Wiley & Sons, Ltd.     

Unemployed Chinese workers: the survivors,the worried young and the discouraged old

The forces of globalization and the wave of economic reform in the People's Republic of China have led to government policies to downsize state-owned enterprises and support a competitive labour market. Chinese workers who have been laid off ( xiagang ) are leaving the 'iron rice-bowl' security of the socialist state. Unemployment produces personal challenges for laid-off workers and human resource policy challenges for the government. For workers, xiagang and unemployment status mean they must cope with the unfamiliar challenges of job search and the threat of economic hardship. But how unemployment influences workers' lives is strikingly diverse in its impacts. Distinctly different patterns emerge for workers depending on: 1) their position in the social structure and stage of life, 2) their available skills and coping resources, and 3) their experience of economic and psychological distress. The present study reports survey responses of a sample of 2,412 laid-off Chinese workers in seven cities in China and identifies three distinct sub-groups of unemployed workers: 1) 'Survivors': more confident and better educated workers, 2) 'The Worried Young': distressed younger workers with few coping resources, and 3) 'The Discouraged Old': older workers with less education looking towards retirement. Each of these groups of workers views their circumstances and life prospects in quite different ways. Our results are examined in the context of the literature on social change and the life course. Our findings also suggest different human resource policies for each of these groups of workers.     

Opportunity, Subculture and the Economic Performance of Urban Ethnic Groups

A bstract . An attempt is made to account for age-specific differences in economic performance among 14 ethnic groups living in the nation's nine largest metropolitan areas, by regression analysis of 1950 U.S. Census data. A large proportion of the variance in occupational structure, income, unemployment, and labor force status is accounted for by variations in urban opportunities, relative group size and the members' educational attainment. With the specified economic factors held constant, ethnic factors—nationality and nativity—are associated with residual differences in economic performance. These residual ethnic influences as well as ethnic differences in marital, educational, and labor force status suggest that differences in ethnic subculture have important economic consequences.     

The geography of suppliers and retailers

In the last decades, supply chains have increasingly transcended national boundaries developing into global supply chains. Along with the many opportunities arising from international sourcing and the extended commercial presence over the world, the management of a globally dispersed supply chain is highly complex. A key issue to consider when dealing with the global supply chain design is the location of facilities, not only with respect to firms' owned facilities but also the supply and distribution side as factors that affect supply chain complexity and operational performance. This paper sets out a methodological framework to characterize the geographical configuration of a firm's suppliers and retailer networks. Quantitative indexes of network spatial concentration and relative proximity measures based on a nonparametric kernel density estimator are developed to identify both intra- and inter-firm patterns between the supply and point of sales' distributions. The method is first described by means of a series of theoretical-illustrative examples and exemplified by analyzing the geographical dispersion of four practical cases from the fashion-textile industry (i.e., Adidas, Benetton, C&A, and Puma). Subsequently, managerial implications and potential use of the metrics are discussed, showing how the proposed approach can support researchers and practitioners to improve supply chain location decisions and logistic integration, and evaluate changes in either the purchasing or distribution strategy.     

The Credibility of Performance Feedback in Tournaments

This paper studies the effect of performance feedback on tournament outcomes, when a possibly dishonest principal may manipulate the agents' expectations to stimulate their effort. Under plausible circumstances, an increase in the principal's propensity to tell the truth (i.e., integrity) induces a mean preserving spread in the distribution of effort and leads to a decrease in expected profits and welfare. More generally, I identify conditions under which a lower integrity can improve the effectiveness of financial incentives in inducing the agents' effort, thus leading to higher expected profits for the principal.     

Asymptotic theory for nonparametric regression with spatial data

Nonparametric regression with spatial, or spatio-temporal, data is considered. The conditional mean of a dependent variable, given explanatory ones, is a nonparametric function, while the conditional covariance reflects spatial correlation. Conditional heteroscedasticity is also allowed, as well as non-identically distributed observations. Instead of mixing conditions, a (possibly non-stationary) linear process is assumed for disturbances, allowing for long range, as well as short-range, dependence, while decay in dependence in explanatory variables is described using a measure based on the departure of the joint density from the product of marginal densities. A basic triangular array setting is employed, with the aim of covering various patterns of spatial observation. Sufficient conditions are established for consistency and asymptotic normality of kernel regression estimates. When the cross-sectional dependence is sufficiently mild, the asymptotic variance in the central limit theorem is the same as when observations are independent; otherwise, the rate of convergence is slower. We discuss the application of our conditions to spatial autoregressive models, and models defined on a regular lattice.     

Segregated Networks in the City

Segregation has been one of the most persistent features of urban life and, accordingly, one of the main subjects of enquiry in urban studies. Stemming from a tradition that can be traced back to the Chicago School in the early twentieth century, social segregation has been seen as the natural consequence of the social division of space. Such naturalized understanding of segregation as ‘territorial segregation' takes space as a surrogate for social distance. We propose a shift in the focus from the static segregation of places—where social distance is assumed rather than fully explained—to how social segregation is reproduced through embodied urban trajectories. We aim to accomplish this by exploring the spatial behaviour of different social groups as networks of movement that constitute opportunities for co‐presence. This alternative view recasts the original idea of segregation as ‘restrictions on interaction' by concentrating on the spatiality of segregation potentially active in the circumstances of social contact and encounters in the city. This approach to segregation as a subtle process that operates ultimately through trajectories of the body is illustrated by an empirical study in a Brazilian city.     

Ethnic minority women: a lost voice in HRM

Strategic themes within HRM imply an organisational commitment towards the full deployment of all employees in order to meet business goals and objectives. The rhetoric of equality within HRM has been challenged but these discussions have typically focused on gender issues, ignoring ethnicity, culture and religion. Individuals' social group cultures and other cultural and religious aspects have been largely absent in HR literature. By examining ethnic minority women's struggles to fit into white Western organisations, this article seeks to provide a discussion on an area where limited research has been conducted. Our emphasis is placed on organisational expectations in relation to ethnic minority women's demonstrated behaviours and appearance, the latter being expressed through dressing, hairstyles and mannerisms. The empirical data show that ethnic minority women are often required to fit into the existing culture if they want to penetrate influential networks or be given opportunities for career development and advancement. Extending the critique of others who argue that organisations must move away from the existing male‐dominant culture rather than expecting women to move towards it, we contend that management must also acknowledge and better understand religious and cultural differences instead of requiring ethnic minority women to fit into a narrow mono‐culture. The article concludes with a discussion of human resource implications for organisations engaged in diversity management.     

Cyclical output,cyclical unemployment,and Okun's coefficient: A new approach

Estimates of Okun's coefficient are obtained using new estimates of cyclical GNP and cyclical unemployment rates for the post-war USA. Empirical estimates of the coefficient are near —0.25, somewhat smaller in magnitude than other recent estimates obtained applying similar econometric techniques to different estimates of cyclical output and unemployment. Tests fail to reject the hypothesis of parameter stability across an hypothesized break between the third and fourth quarters of 1973, suggesting similar relationships between cyclical output and unemployment both before and after the supply shocks of the 1970s.