Testing the Temporal Stability of Accessibility Value in Residential Hedonic Prices

Purpose – This paper bridges the gap between, on the one hand, supply-driven (urban form and transportation networks) and demand-driven (action-based) accessibility to urban amenities and, on the other hand, house price dynamics as captured through panel hedonic modelling. It aims at assessing temporal changes in the valuation of accessibility, while ordering households’ priorities among access to labour market, schools and shopping outlets. Design/methodology/approach – Several indexes are built using a methodology developed by Thériault et al. (2005, published in Journal of Property Investment and Finance). They integrate car-based travel time on the road network (using GIS), distribution of opportunities (activity places) within the city, and willingness of persons to travel in order to reach specific types of activity places (mobility behaviour). While some measure centrality (potential attractiveness considering travel time, population and opportunities) others consist of action-based indexes using fuzzy logic and capture the willingness to travel in order to reach actual specific activity places (work places, schools, shopping centres, groceries). They summarise suitable opportunities available from each neighbourhood. Rescaled indices (worst - to 100 - best) are inserted simultaneously into a multiplicative hedonic model of single-family houses sold in Quebec City during years 1986, 1991 and 1996 (10,269 transactions). Manipulations of accessibility indexes are developed for ordering their relative impact on sale prices and isolate effects of each index on the variation of sale price, thus providing proxies of households’ priorities. Moreover, a panel-like modelling approach is used to control for changes in the valuation of each property-specific, taxation or accessibility attribute during the study period. Findings – This original approach proves efficient in isolating the cross-effects of urban centrality from accessibility to several types of amenities, while controlling for multicollinearity and heteroscedasticity. Results are in line with expectations. While only a few property-specific attributes experience a change in their marginal contribution to house value during the study period, all accessibility indexes do. Every single accessibility index has a much stronger effect on house values than centrality (which is still marginally significant). When buying their home, households put more emphasis on access to schools than they put on access to the labour market, which in turn, prevail over accessibility to either shopping centres or, finally, groceries. The ordering is rather stable but the actual valuation of a specific amenity may change over time. Practical implications – Better understanding the effect of accessibility to amenities on house values provides guidelines for choosing among a set of new neighbourhoods to develop in order to generate optimal fiscal effects for municipalities. It could also provide guidelines for decision making when improving transportation networks or locating new activity centres.

Regional Effects of Taxes in Canada: An Applied General Equilibrium Approach

This paper reports on an applied general equilibrium regional model for Canada which is used to investigate the regional effects of taxes. Earlier, literature on regional tax effects is reviewed and the main features of the model are briefly described. Existing literature on regional tax effects is largely non-quantitative, and does not discuss several important regional features of taxes, such as taxes which are predominantly on products or industries located in particular regions. Results suggest that regional effects of taxes can be significant, and in the Canadian case at least, do not tend to counterbalance one another. In general, richer regions tend to lose and poorer regions gain from federal taxes, but other regional characteristics such as manufacturing/non-manufacturing, or resource/non-resource can be important.

Corporate tax harmonization in the EU

This paper explores the economic consequences of proposed EU reforms for a common consolidated corporate tax base. The reforms replace separate accounting with formula apportionment as a way to allocate corporate tax bases across countries. To assess the economic implications, we use a numerical CGE model for Europe. It encompasses several decision margins of firms,such as marginal investment, FDI decisions, and multinational profit shifting. The simulations suggest that consolidation does not yield substantial welfare gains for Europe. The variation of effects across countries is large and depends on the choice of the apportionment formula. Consolidation with formula apportionment does not weaken incentives for tax competition. Tax competition instead offers a rationale for rate harmonisation, in addition to base harmonisation.

A Spatial and Temporal Autoregressive Local Estimation for the Paris Housing Market

This original study examines the potential of a spatiotemporal autoregressive Local (LSTAR) approach in modelling transaction prices for the housing market in inner Paris. We use a data set from the Paris Region notary office (“Chambre des notaires d’Île-de-France”) which consists of approximately 250,000 transactions units between the first quarter of 1990 and the end of 2005. We use the exact X -- Y coordinates and transaction date to spatially and temporally sort each transaction. We first choose to use the spatiotemporal autoregressive (STAR) approach proposed by Pace, Barry, Clapp and Rodriguez (1998). This method incorporates a spatiotemporal filtering process into the conventional hedonic function and attempts to correct for spatial and temporal correlative effects. We find significant estimates of spatial dependence effects. Moreover, using an original methodology, we find evidence of a strong presence of both spatial and temporal heterogeneity in the model. It suggests that spatial and temporal drifts in households socio-economic profiles and local housing market structure effects are certainly major determinants of the price level for the Paris Housing Market.Hedonic Prices; Heterogeneity; Paris Housing Market; STAR Model

Roadmap for Logistics Excellence: Need to Break the Unholy Equilibrium

This white paper attempts to provide a roadmap for India to move towards logistics excellence. Apart from raising issues that are currently relevant, it also draws from the issues that were raised in the previous three logistics summits and continue to be relevant today. As a departure from the earlier summits, it was felt that some of the issues could be presented even prior to the summit, to enable discussions and prioritization during the summit. The paper begins with an assessment of the overall performance of logistics in India, followed by a framework of an “unholy equilibrium” that seeks to explain where we are and why, and then provides actor wise action agenda as the roadmap towards logistics excellence.

Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions

The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.immigration, CGE, skills, wage inequality, brain-drain, regional economies

Environmental Consideration in Tax Policy Design

This paper discusses how environmental considerations will affect tax policy in the decades ahead. It argues that in the future, interactions between tax and environmental policy are likely to go well beyond recent discussion of double dividend issues and internalization of environmental externalities via tax policy will be the goal, which inevitably will involve the particular rather than the general. As a result, notions of neutrality which dominate current thinking on tax design will come under challenge; and in ways which will go well beyond current discussion of special treatment for particular goods and industries on environmental grounds. Special treatment of methods of production, more so than of goods, will be the name of the game. Moreover, the informational requirements of such an approach to tax policy are likely to be large. The paper concludes by pointing out that if environmental quality, as many suppose, is a luxury good with income elasticity of demand greater than one, then high income households will gain disproportionately from internalization of the externalities at issue. This may fuel pressures for more redistribution elsewhere in the tax system than is currently the case.Tax policy design

Vietnam's New Environmental Tax Law: What Will It Cost? Who Will Pay?

We examine the effects of a proposed environmental tax in a small open developing economy, using an applied general equilibrium model linked to a household survey database. The burden of the tax, applied primarily to fossil fuels, is passed forward by non-traded industries and backward by industries selling into the world market. It causes efficiency and competitiveness losses equivalent to those of a real exchange rate appreciation, and since export industries are in general highly labor-intensive, is regressive and thus poverty-increasing. The budget-neutral use of increased tax revenues to raise spending on anti-poverty programs can offset most of the losses of poor households, but does not create new jobs. The extent of overall losses and their distribution is sensitive to some parameters, such as labor supply response, about which little is currently known in a developing-country context.

Changes in social security eligibility and the international mobility of New Zealand citizens in Australia

This paper is concerned with the international mobility of New Zealanders who migrate to Australia. One in ten New Zealand citizens lives in Australia and their settlement and subsequent mobility is important from demographic, socio-economic and policy perspectives in both countries. Using a unique longitudinal dataset on New Zealand citizens arriving for a stay of 12 months or longer between 1 August 1999 and 31 July 2002, we track all subsequent moves of these migrants out of and back into Australia, up to July 2005. This allows us to assess the impact of the removal of labour market-related social security eligibility and some other policy changes affecting New Zealand migrants to Australia, implemented between February and June 2001. United Kingdom migrants to Australia, who were not affected by the policy changes, provide a ‘control group’. Using hazard models, we find that the policy changes increased the probability of remigration from Australia among those who had intended to settle permanently. Competing risk models suggested no difference between the impact of the policy changes on onward or return moves. Settlers arriving after the policy changes spend less time Australia and make more trips away than earlier migrants