Tiebout choice and residential segregation by race in US metropolitan areas, 1980–2000

This article examines the link between local government fragmentation, or “Tiebout choice,” and segregation between black and white residents. As suggested by Tiebout [Tiebout, C., 1956. A pure theory of local public expenditures. Journal of Political Economy 64, 416–424.], fragmented local governance structures may encourage households to vote with their feet and sort into communities based on their willingness to pay for local public services. This outcome has been well documented. The nuance explored here is that, if the demand for local public services varies by race or if households have preferences for neighbors with specific racial characteristics, local government fragmentation may foster an increase in residential segregation by race across neighborhoods and jurisdictions. Results from metropolitan-level regressions suggest that increased Tiebout choice is associated with increases in black–white residential segregation within US metropolitan areas. Comparable results are obtained from household-level estimates, where the black racial composition of a household's census tract of residence is regressed on household-level controls and racially stratified measures of Tiebout choice. Results from both approaches suggest that a 10% increase in Tiebout choice would increase neighborhood segregation by no more than 1%, while segregation across jurisdictions would increase by between 4% and 7%.     

Residential mobility with job location uncertainty

This paper investigates the relationship between job changes and residential mobility. A job change may be prompted by reasons unrelated to factors associated with housing consumption. However, a job change may lead to an adjustment to housing consumption, i.e., residential relocation. Previous studies find that job relocations are positively associated with residential mobility. This paper departs from previous studies by looking at the effects of an uncertain future job location on residential mobility and mobility expectation. It is conjectured that with the existence of costs of residential mobility, a household head's likelihood for changing jobs in the future dampens the household's propensity to move, but encourages the formation of mobility expectation. These conjectures are examined empirically using data from the Panel Study of Income Dynamics and they are confirmed.     

Housing capital-gains taxation and homeowner mobility: Evidence from the Taxpayer Relief Act of 1997

We provide new evidence on the impact of housing capital-gains taxation on homeowner behavior by examining residential mobility before and after the Taxpayer Relief Act of 1997 (TRA97), which generated the most sweeping reform of capital-gains taxation in the last two decades. In addition to lowering marginal tax rates on long-term capital gains for all assets, TRA97 also eliminated any differential treatment of housing gains above and below age 55, allowing all homeowners to qualify for capital-gains exclusions. Utilizing data drawn from the Current Population Survey (CPS) on either side of the law change (1996 and 1998) on homeowners just above (56–58 year olds) and below (52–54 year olds) the age-55 threshold and a reduced-form, difference-in-difference empirical approach, our estimates suggest that the repeal of the differential capital-gains tax treatment by age embodied in TRA97 had an economically important and statistically significant impact on the residential mobility of under-55 homeowners. Across a variety of specifications, the repeal raised the mobility rate by around 1–1.4 percentage points, which, for a mean mobility rate of 4 percentage points, represented an increase in the mobility rate of homeowners in their early 50s by 22–31%. Furthermore, the bulk of this effect was concentrated among highly mobile homeowners who a priori were more likely to have wanted to trade down (e.g., divorced, empty nesters), those facing higher capital gains tax rates, and those living in states that had experienced higher rates of nominal appreciation.     

Optimal property taxation in the presence of interregional capital mobility

A single region's optimal property tax policy is examined in a model with interregional capital mobility. In this model, property taxation is used to finance local public expenditures. Different tax rates may be imposed on property used to produce goods which are traded between regions and property used to produce nontraded goods (e.g., residential property). The key determinants of the difference between the optimal tax rates are identified, and it is argued that there exists a bias towards relatively low tax rates on property used to produce traded goods. The role of labor mobility is also investigated.     

An extension of the monocentric urban spatial equilibrium model to a multicenter setting: The case of the two-center city

Firms in a monocentric city conforming in substance to the “new urban economics” produce an export commodity under agglomeration economies and employ homogeneous labor and capital. Workers reside about the CBD in decreasing densities with distance. A developer establishes a second export production center within the city's residential area. Conditions for economic viability and growth of the subcenter are examined, and its impacts on short-run and long-run city location patterns are discussed. A limiting condition on subcenter employment size is provided.     

邻里资本视角下的城市住区空间变革

对当下城市住区邻里社会资本的缺失现状和背景成因进行了探讨,揭示出当前住区空间变异与邻里社会网络退化的相互消极影响,在此基础上提出必须重新审视城市住区发展的价值取向,并结合住区空间营造提出变革策略.     

Neighbourhood Spatial Order,the Local Economy and Firm Mobility in Urban Areas of the Netherlands

Urban residential neighbourhoods in the Netherlands increasingly function as incubation zones for small‐scale businesses. Despite this development, little is known about whether and how the local production environment in these neighbourhoods shapes firm mobility behaviour. This article studies how two aspects of the local production environment — the built neighbourhood environment and zoning regulations — affect firm mobility of small‐scale businesses in urban residential neighbourhoods. To achieve this aim, we contrast two sets of urban neighbourhoods, pre‐ and post‐second world war neighbourhoods with a comparable low socio‐economic profile, but with distinct built environments and zoning regulations. We combine quantitative and qualitative methods to analyse available trade register data from the Dutch regional Chambers of Commerce, study neighbourhood zoning regulations, and conduct focus‐group and individual interviews with neighbourhood experts and entrepreneurs. The local built environment and its regulations appear to have a small but significant effect on the firm mobility behaviour of entrepreneurs in the neighbourhoods studied. Relocation intentions are higher among entrepreneurs in post‐war than in pre‐war neighbourhoods, which may (in part) be attributed to less favourable local institutional settings for businesses, but actual firm mobility does not differ between these neighbourhoods.     

A model of residential change and neighborhood tipping

This paper applies the theory of probabilistic consumer demand to an analysis of residential change at the urban neighborhood scale. By developing the profit maximizing pricing behavior of housing suppliers, it is shown that neighborhood transitions from high income to low income and from white to black can be explained on purely economic grounds without involving prejudicial preferences. The analytical model explains two types of transition. In the first, a neighborhood's social mix changes gradually in response to gradual exogenous changes. In the second, a neighborhood “tips” suddenly in response to similar exogenous changes. The two transitions can occur depending on the characteristics of the demand functions for the two competing groups.     

Residential choice and the local public sector: An alternative test of the “Tiebout Hypothesis”

This paper provides an empirical test of the hypothesis, commonly referred to as the “Tiebout Hypothesis,” that locally provided public services and the level of local taxes influences residential choice decisions of households. This hypothesis has previously been tested by looking at the capitalization of fiscal factors into housing prices. This study analyzes the determinants of residential choice by looking at household moving data. The results provide support for the Tiebout hypothesis, even in cases when no capitalization is expected. Support was developed for the hypothesis that at any point of time significant fiscal disequilibrium exists for residents of some communities, resulting in a reduction of the efficiency properties of the Tiebout mechanism.     

Property taxation and local public spending: the renter effect

The point of departure for this study is the pervasive finding that, other things equal, local jurisdictions tend to spend more on local services the larger the fraction of renters among their residents. This paper seeks to determine the approximate magnitude of this “renter effect” by posing the question “How much smaller would local public budgets be if all residents were home-owners?” Making use of two quite different approaches, the paper finds a typical renter effect on local public expenditure on the order of ten percent. This finding suggests that we might do well to reform the administration of the property tax so that changes in property tax liabilities on rental dwellings are directly and visibly transformed into changes of monthly rental payments.     

Housing equity,residential mobility and commuting

Highly productive economies require a flexible labor force with workers that move in accordance with the changing demand for goods and services. In times with falling housing prices, the mobility of home owning workers may be hampered by a lock-in effect of low or even negative housing equity. This paper explores the effect of housing equity on both the residential mobility and the commuting pattern of homeowners. We merge administrative registers for the Danish population and properties and get highly reliable micro data for our analysis. We find that low and negative housing equity substantially reduces residential mobility among homeowners. The negative effect of locked-in low equity families on labor market mobility may be mitigated by commuting. However, our results show that family heads in low or negative equity homes are not found to commute more than households with higher housing equity, but also that a considerable fraction of home owning family heads commute. The analysis of the joint decision of homeowners to commute or move shows that the option of moving, as an alternative to not moving and not commuting, is chosen by five to six percent of homeowners with low housing equity, while the option of not moving but commuting is chosen by 60%.     

Understanding gentrification: an empirical analysis of the determinants of urban housing renovation

The “back-to-the-city” phenomenon presented an unpredicted countercurrent in the prevalent tide of suburbanization, and this process of upper-income resettlement in the inner city has been thoroughly analyzed in the urban economic literature. Housing renovation, a process that always accompanies gentrification and constitutes a significant portion of residential housing investment, has been studied much less. Contrary to the expectation that “location matters,” the existing empirical studies have concluded that most neighborhood amenities and structural attributes are insignificant as determinants of renovation. Using a detailed parcel-level data set that documents all residential renovation activity in Chicago between 1995 and 2000, this paper establishes that the characteristics of a building and its neighborhood do indeed influence the likelihood that it will be renovated.     

Will We Ever Meet Again? The Relationship between Inter-Firm Managerial Migration and the Circulation of Client Ties

A large body of research shows that the migration of managers from one professional service firm to another weakens the old employer’s relationship with its clients, because migrating managers remove their relationship-specific knowledge and expertise – i.e., human and social capital – from their old employers, redeploying it to their new employers. This study extends this research by introducing a bi-directional perspective of social capital in which both firms and managers may exploit these relationship-specific resources. We use theory on social capital to build arguments about how one form of manager mobility, manager migration between two service providers in a single market, can both lead and lag the movement of client ties between those providers, and signaling theory to hypothesize the conditions under which this is likely to occur. Analyses using longitudinal data on New York City advertising agencies generally support our arguments. Our findings contribute to theory and research on manager migration, social capital, and signaling, and raise new questions for how the portability of relationship-specific social capital shapes markets.     

Explaining the democracy deficit in the Arab world

This paper strongly corroborates the widely held claim about the democracy and freedom “deficit” in the Arab world and asks the natural question as to why has the Arab world experienced such a deficit. The estimation results of an extended “modernity” model of democracy (measured by the Polity IV global index) suggest that after controlling for a host of economic, social and historical variables a negative and highly significant Arab dummy effect remains. This suggests, therefore, that the modernization theory does not fully account for the democracy deficit of the Arab world. Controlling for the modernity and other determinants, oil is negatively associated with democracy while the net effect of regional conflicts in the Arab world was negative, suggesting that conflicts in the Arab world promote authoritarianism in contrast with other regions where regional wars have been associated with democratic transitions. Moreover, and very significantly the Arab dummy was no longer significant as a stand alone effect though it remains significant when interacted with regional wars.     

Evaluating shifts in Japan's quality-of-life

This paper presents a Data Envelopment Analysis/Malmquist index (DEA/MI) analysis of the change in quality-of-life (QOL), which is defined as the state of a social system as measured by multiple social-indicators. Applying panel data from Japan's 47 prefectures for the period 1975–2002, we identify significant movement in the country's overall QOL using a “cumulative” frontier shift index. Results suggest that Japan's QOL rose during the so-called “bubble economy years” (second half of the 1980s), and then dropped in the succeeding “lost-decade” (1990s). We also identify those prefectures considered most “responsible” for the shift(s) in QOL. Moreover, the use of both upper- and lower-bound DEAs enabled an evaluation of both “good” and “bad” movements in QOL.     

Entrepreneurship and Social Capital: Examining the Association in Deprived Urban Neighbourhoods

Spatial approaches to examining entrepreneurship have increasingly built on theories of social capital. However, the nature and extent of local social capital in less successful deprived communities remains under researched and inadequately understood. This article examines the association between social capital and entrepreneurship in a deprived urban neighbourhood in the city of Leeds, UK as a means of contributing to an improved theoretical understanding of how space moderates this association. It is found that social capital has a strong association with patterns of entrepreneurship in deprived urban neighbourhoods, with the potential impacts being both positive and negative. The forms of social capital are found to differ from that found in more affluent localities, with a prevalence of bonding social capital as the key facilitator of entrepreneurship, which may help in the early stages of venture development, but which over time may become a constraint. Also, a lack of the bridging social capital associated with entrepreneurial success is found within the locality. From a policy perspective, it is recommended that policymakers responsible for entrepreneurship in deprived urban neighbourhoods should seek to enhance initiatives for developing social capital which incorporate local businesses, residents and local government agencies.     

Fiscal centralization versus decentralization: Growth and welfare effects of spillovers, Leviathan taxation, and capital mobility

This paper develops an endogenous growth model with spillovers of public goods, Leviathan taxation, and mobile capital to examine the relative merits of centralized and decentralized fiscal systems for economic growth and social welfare. We show that a decentralized system dominates a centralized system in terms of economic growth; however, the difference in social welfare between a decentralized and a centralized system is non-monotonic and displays a hump-shaped relationship with respect to capital mobility. Since higher capital mobility induces stronger tax competition, this finding implies that there is an optimal degree of tax competition; some tax competition is desirable, but fierce tax competition may be harmful. We also show that there is a critical level of spillovers of public goods above which centralization dominates decentralization in terms of social welfare, as in previous studies; however, if spillovers are below this critical level, capital mobility also matters in the welfare comparison between centralized and decentralized systems.     

A Housing Career Perspective on Risk

The main question analyzed in the article is how uncertainty in the asset price of owner-occupied housing capital affects user costs and consequently housing demand. The analysis is performed within the framework of a dynamic model of planned housing careers. Owner-occupied housing has a dual role as both an asset and a consumption good—a consumption good both now and in the future. By holding owner-occupied housing capital, the risk associated with future purchase of housing can be reduced. Taking account of this, it is shown that the risk premium in the user cost is negative for consumers on a sufficient increasing path of future housing consumption. Hence, the demand for owner-occupied housing of a risk-averse consumer can be increasing in asset price volatility. This result is contrary to the “conventional wisdom” in housing economics and can be identified only within an analytical framework that takes account of the dynamic aspects of housing market behavior.     

Social capital and human resource management in international joint ventures in Vietnam: a perspective from a transitional economy

This study highlights the importance of social capital in international joint ventures (IJVs), and examines human resource practices as a factor shaping such social capital. Comprehensive measures of social capital are developed and tested, which extend prior work on ‘bonding’ and ‘bridging’ social capital. We also link social capital with its anticipated antecedents and consequences. The study's findings are based on data collected from 164 IJVs located in Vietnam. IJV performance was predicted by training and by the level of trust and cooperation between foreign and local personnel. Training (including acquisition of management skills, technology, and cross-cultural understanding) also was predictive of the measures of social capital. A key practical implication arising from this study is that the return on investment from training of joint venture personnel can stem not only from the transfer of technical and management skills needed for developing competitive advantage, but also from the positive impact on social capital, which further contributes to venture success. The establishment of written objectives and plans for the venture, as well as the IJV's level of control regarding its own HR functions also was found to be related to some components of social capital. The findings of this study reinforce the call to build on the contributions of local personnel in joint ventures, and in Vietnam in particular.     

Heterogeneity in social values and capital accumulation in a changing world

In a society characterized by a multitude of heterogeneous agents and a large number of possibly immaterial goods, each one having distinct social and personal values, we study the impact of these relative values on intergenerational capital accumulation, as a function of economic and social parameters such as capital mobility, productivity and personal and social values discrepancies. Each agent is modelled by a one-period production function and a two-period intertemporal utility. Agents live, produce and consume over one period, but optimize over two periods, so providing a remaining stock of goods for the next generation. This creates a dynamics in capital accumulation depending on social and individual values. A threshold appears in capital stock accumulation that depends on personal and social values’ volatilities, and below which the initial stock will be depleted. Whereas volatility in social values increases the threshold, impairing capital accumulation, adverse shocks in goods’ values may reverse the dynamics of the accumulation process. Finally, capital mobility specifically favors forerunners, but capital accumulation in one or several sectors may shift social values in their direction, at the expense of other sectors.