Diverse societal beliefs and redistributive policies, but equal welfare: The trade-off effect of information

Large empirical evidence shows that the difference in the political support for redistribution appears to reflect a difference in the social perceptions regarding the determinants of individual wealth and the underlying sources of income inequality. This paper presents a model of beliefs and redistribution which explains this evidence through multiple politico-economic equilibria. Differently from the recent literature which obtains multiple equilibria by modeling agents characterized by psychological biases, my model is based on standard assumptions. Multiple equilibria originate from multiple optimal levels of information for the society. Multiple optimal levels of information exist because increasing the informativeness of an economy produces a trade-off between a decrease in adverse selection and an increase in moral hazard. The framework allows to analyze various comparative statics in order to answer to policy questions

Spatial Segregation, Redistribution and Welfare: a theoretical model

This paper develops a theoretical model focusing on the effect that different neighborhood compositions can have on the formation of individual beliefs about economic opportunities. Specifically we highlight two effects that spatial segregation may have: (1) it can efficiently separate the individual effort choices of highly and low productive individuals, (2) it may imply that the median voter imposes a level of redistribution that is inefficient from the aggregate point of view. The trade-off implies that segregated and non-segregated cities may present very similar levels of aggregate welfare. We employ this framework to discuss how the structure of cities can play a role in the determination of US-type and Europe-type politico-economic equilibria and the implications for planning policies

The Evolving Intersection of Planning and the Commercial Real Estate Market

This chapter considers the intersection between planning and commercial real estate in the UK, and how it has evolved, adapted and responded to globalisation and consequent regulatory and industry changes after the global financial crisis. We consider the implications of the broader changes that have taken place in London, in particular the influence of dynamic capital flows and ‘financialisation’. The rapidly changing investment and development context in London over the last decade has wide-ranging implications for planning practice, which seeks to balance sustainable social and economic real estate impacts, and successfully ‘add value’. The chapter reflects on how global drivers of change in the planning and real estate markets find expression in London, drawing on interviews with professionals in commercial real estate and planning

Estimation of bubble dynamics in the Chinese real estate market: a state space model

This paper analyses the existence of a bubble in the Chinese real estate market and examines its driving factors with a state-space model. The model considers macroeconomic and real estate time series variables as inputs and employs a Kalman filter to obtain an estimated fundamental price using demand and supply for Chinese real estate. We then measure the deviation between actual and estimated fundamental real estate prices to test for the existence of a bubble. We find evidence for the existence of a bubble especially post 2010, when the deviation ratio is found to be significantly higher with a peak of 80% in 2012. Our estimation of overvaluation is generally much higher than in other studies

Bridging the design / finance divide: adding ‘design strings’ to the finance of urban development

Professional, policy and conceptual divides continue to throw up barriers to a shared understanding between the domains of urban design and development finance. Drawing on cross-Europe analysis, this paper explores the relationship between mechanisms of finance and tools of urban design governance, asking how they can work together to enhance urban quality. Practices were conceptualized and compared and those that combined tools were identified and evaluated. The results fed into an evolving typology of urban design governance and helped to establish clear principles for the effective combination of finance and design: adding ‘design strings’ to the finance of urban development

Who benefits from reducing the cost of formality? quantile regression discontinuity analysis

This chapter studies the effect of increasing formality via tax reduction and simplification schemes on micro-firm performance. We develop a simple theoretical model that yields two intuitive results. First, low- and high-ability entrepreneurs are unlikely to be affected by a tax reduction and therefore, the reduction has an impact only on a segment of the microfirm population. Second, the benefits to such reduction, as measured by profits and revenues, are increasing in the entrepreneur's ability. Then, we estimate the effect of formality on the entire conditional distribution (quantiles) of revenues using the 1996 Brazilian SIMPLES program and a rich survey of formal and informal micro-firms. The econometric approach compares eligible and non-eligible firms, born before and after SIMPLES in a local interval about the introduction of SIMPLES. We develop an estimator that combines both quantile regression and the regression discontinuity design. The econometric results corroborate the positive effect of formality on micro-firms' performance and produce a clear characterization of who benefits from these programs. © 2012 by Emerald Group Publishing Limited

Street appeal: The value of street improvements

The planning for and design of streets around the world have been undergoing a radical change via a move from a network efficiency model to a movement and place-based one. This is a fundamental change, and it is important to understand both the benefits and drawbacks that result. This research represents an attempt to capture and understand these impacts and to address the question, what is the ‘value’, in the widest sense of the word, of place-based improvements in street design. The key features of the approach adopted here were, the use of pairwise comparisons of five improved and five unimproved streets across London, a holistic analytical framework to represent the complexity of urban streets, and the use of diverse qualitative and quantitative data to understand the diverse forms of value that might accrue from interventions. As well as important methodological innovations and insights, the research revealed that in relation to street improvements in the sorts of mixed local high street locations investigated, investments in the quality of the street environment return substantial value to the everyday users of streets, and to the occupiers of space (to business) and investors in surrounding property in multiple ways

Brain differences between persistent and remitted attention deficit hyperactivity disorder

Previous resting state studies examining the brain basis of attention deficit hyperactivity disorder have not distinguished between patients who persist versus those who remit from the diagnosis as adults. To characterize the neurobiological differences and similarities of persistence and remittance, we performed resting state functional magnetic resonance imaging in individuals who had been longitudinally and uniformly characterized as having or not having attention deficit hyperactivity disorder in childhood and again in adulthood (16 years after baseline assessment). Intrinsic functional brain organization was measured in patients who had a persistent diagnosis in childhood and adulthood (n = 13), in patients who met diagnosis in childhood but not in adulthood (n = 22), and in control participants who never had attention deficit hyperactivity disorder (n = 17). A positive functional correlation between posterior cingulate and medial prefrontal cortices, major components of the default-mode network, was reduced only in patients whose diagnosis persisted into adulthood. A negative functional correlation between medial and dorsolateral prefrontal cortices was reduced in both persistent and remitted patients. The neurobiological dissociation between the persistence and remittance of attention deficit hyperactivity disorder may provide a framework for the relation between the clinical diagnosis, which indicates the need for treatment, and additional deficits that are common, such as executive dysfunctions.McGovern Institute for Brain Research at MIT (Poitras Center for Affective Disorders Research)Massachusetts General Hospital (Paediatric Psychopharmacology Council Fund

Who benefits from reducing the cost of formality? Quantile regression discontinuity analysis

This chapter studies the effect of increasing formality via tax reduction and simplification schemes on micro-firm performance. We develop a simple theoretical model that yields two intuitive results. First, low- and high-ability entrepreneurs are unlikely to be affected by a tax reduction and therefore, the reduction has an impact only on a segment of the microfirm population. Second, the benefits to such reduction, as measured by profits and revenues, are increasing in the entrepreneur's ability. Then, we estimate the effect of formality on the entire conditional distribution (quantiles) of revenues using the 1996 Brazilian SIMPLES program and a rich survey of formal and informal micro-firms. The econometric approach compares eligible and non-eligible firms, born before and after SIMPLES in a local interval about the introduction of SIMPLES. We develop an estimator that combines both quantile regression and the regression discontinuity design. The econometric results corroborate the positive effect of formality on micro-firms' performance and produce a clear characterization of who benefits from these programs