Understanding Indonesia’s gated communities and their relationship with inequality

Abstract

Income inequality continues to increase worldwide and is highly visible in cities. This rising income inequality, along with the growing upper-middle class, has accelerated the development of gated communities (GC) as a desired housing for the ‘successful’ groups and a manifestation of how the city reproduces inequality. We analyze GC development in Jakarta and Yogyakarta, Indonesia, and offer a typology for this housing option in that country where income inequality has been growing and is now a serious government concern. Although the early 2000s saw isolated GC in only a few cities, now they are developing vigorously. This article contributes twofold. First, it provides evidence on the emergence and features of GC. Second, it shows a relationship between income inequality, social differences and GC development for upper-middle class residents in Indonesia. We argue that there is a mutually reinforcing relationship between inequality and GC: increasing income inequality leads to higher number of GC and this material artefact entrenches ‘emplaced inequality’.     

Agglomeration of knowledge intensive business services and urban productivity

While there is considerable empirical evidence on the productivity‐enhancing effects of manufacturing agglomeration, the impacts of knowledge intensive business services (KIBS) agglomeration have rarely been examined. We propose a mechanism‐based framework to study the precise channels through which KIBS agglomeration contributes to urban productivity. By estimating a model of urban productivity that incorporates agglomeration of manufacturing, KIBS and non‐KIBS using city‐level data from China, we find that KIBS agglomeration is an important source of aggregate urban productivity. The importance of KIBS agglomeration in city productivity growth is systematically related to a city's level of economic development.     

On the measurement of regional inequality: does spatial dimension of income inequality matter?

The paper concerns selected theoretical and empirical aspects of the decomposition of income inequality by spatially defined subgroups. Special consideration is given to the implications for measurement and comparison of regional inequality. The decomposition by the Theil coefficient is applied at global and European levels including estimates of historical development. Additionally, the empirical evidence on the decomposition of inequality in a number of countries is reviewed, regional inequality for 46 countries is estimated, and a simple method of cross-country classification according to relative importance of spatial dimension of inequality is provided.     

Can community design build trust? A comparative study of design factors in Boise,Idaho neighborhoods

Finding ways to increase trust may be one mechanism to overcome the alleged negative consequences of urban sprawl for neighborhoods. This study explores two relationships with community design and trust. First, is one benefit of some of the underlying concepts of New Urbanism design that they build trust? Second, can these design concepts overcome one undesirable feature of cities: the deleterious effect of income inequality on trust? This study uses survey data collected from 34 city of Boise neighborhoods and 2000 US census data aggregated to the neighborhood level to examine the effects of street design, sidewalks and open space on building trust and moderating the effect of income inequality on trust. The study finds that cul-de-sac designed streets, sidewalks and parks or open space increase trust. There is no evidence that design features actually moderate the effects of income inequality on trust. The findings suggest that local governments can influence the quality of life for residents in their communities through neighborhood design even if municipalities cannot use design to moderate the effects of income equality on trust.     

Has the increase in world-wide openness to trade worsened global income inequality?

This article contributes to our understanding of the relationship between globalization and world income inequality by analyzing the trend in global inequality for the period 1960–1989. Using Penn World Tables data and time-series econometric techniques, it analyzes how the increase in worldwide openness to trade has been related to global income inequality during this period. When differential population growth rates among the countries are taken into account, the results indicate that (i) global income inequality exhibited a downward trend between 1960 and 1989, and (ii) while there is a positive relationship between inequality and openness, the relationship is not statistically significant. Received: 22 December 2000 / Accepted: 29 May 2001     

The role of ‘race’ in the likelihood of city participation in the United States public and section 8 existing housing programmes

Research on US housing and politics provides evidence for persistent racial discrimination, dual housing markets (one for whites and one for blacks in particular) and racial segregation. Research also shows the relationship between government subsidised low‐income housing programmes and continued segregation. This work focuses on an additional aspect of racial discrimination in housing: local officials, capitulating to the housing industry, consider the possible effect government subsidised housing will have on racially segmented markets before entering some programmes. This paper explores the relationship between the size of the black population, as one indicator of the racial composition of a city, and the likelihood of city participation in public housing and Section 8 Existing housing. The quantitative analyses of US cities shows a negative relationship between the size of the black population and the likelihood of city participation in Section 8 Existing housing, a programme that provides participants the possibility of crossing segmented market boundaries. The results also suggest that the relationship between race and public housing is different than that between race and Section 8 Existing housing. Public housing does not necessarily provide participants the opportunity to cross boundaries. Rather it concentrates people, giving local officials more control over the location of poor racial minorities. Finally, the paper argues that the negative relationship between the size of the black population and the likelihood of city participation constitutes yet another form of racial discrimination in housing.     

Which factors determine water saving behaviour? evidence from spanish households

In this paper we propose to answer the following questions: What does the adoption of water saving measures by Spanish households depend on? Which factors have the most influence on water saving behaviour? To this end we have conducted an empirical study in which a binary model (probit/logit) with interaction effects between city size, educational level and climatic area, along with other quantitative and qualitative variables, is estimated using household level data. The results of this estimation, together with the evaluation of probability changes that occur when any of the qualitative factors change, suggest that the level of income, the size of the city where the dwelling is, the educational level of the reference person and the climatic location of the city are factors that influence the attitude towards saving water.     

City size distributions and spatial economic change

"The concept of the city size distribution is criticized for its lack of consideration of the effects of interurban interdependencies on the growth of cities. Theoretical justifications for the rank-size relationship have the same shortcomings, and an empirical study reveals that there is little correlation between deviations from rank-size distributions and national economic and social characteristics. Thus arguments suggesting a close correspondence between city size distributions and the level of development of a country, irrespective of intranational variations in city location and socioeconomic characteristics, seem to have little foundation." (summary in FRE, ITA, JPN, )     

The spatial and temporal dynamics of US regional income inequality, 1950–1989

The inverted-U hypothesis which so influenced research on regional income inequality is obsolete and does not predict or explain the recent rise in regional inequality. We argue that the regional dynamics literature on polarization, polarization reversal and spatial restructuring offers more powerful explanations to changes in regional income inequality. In addition to the conventional approach of measuring systemic inequality, the empirical analysis in this paper emphasizes inequality variations, which put into focus the interplay between regional dynamics and regional income inequality. The findings highlight the impact of sectoral shifts and global spatial restructuring on the US regional economy, where new cores of growth and renewed growth are emerging.     

Entrepreneurship and spatial externalities: Theory and measurement

The paper presents an empirical analysis on the role played by urbanisation and localisation economies on factor productivity of firms. A vast literature exists on this issue, conceptually presenting reasons supporting either industry size or city size as sources of external advantages. In general, the empirical analyses are based on the estimates of aggregate city or industry production functions; the limited hypotheses characterising these studies have suggested to test another methodology, based on the estimate of a production function at the firm level, and calculate how factor productivity changes according to different degrees of urbanisation and localisation economies. The methodology is applied to firms chosen in the high-tech sector, which demonstrates a high spatial concentration in particular areas of the Metropolitan Area of Milan. The result is that factor productivity is influenced by both urbanisation and localisation economies, but the latter show an increasing positive effect on factor productivity. Moreover, the size of firms plays an important role in defining the impact of urbanisation and localisation economies on firms' outcome.     

Impacts of national development and decentralization policies on regional income disparity in Korea

This paper analyzed the effects of national development and decentralization policies on the regional income disparity in Korea. It also attempted to test whether there was a structural change in the causal relationship between income inequality and its determinant factors. This study found that the degree of variation in regional incomes was positively correlated with the spatial distribution of decentralization instruments such as educational services, employment, infrastructure facilities, and information network variables. The effects of some decentralization policies on regional income inequality were fully realized within a period of three years. Finally, the impacts of the spatial decentralization of public goods on regional inequality fluctuated until the early 1980s but were stabilized as industrial restructuring and spatial reorganization progressed during the 1990s. Received: December 2001/Accepted: June 2002     

Spatial disparities in the European Union: an analysis of regional polarization

This paper examines the degree of polarization in the European Union regional per capita income distribution between 1977 and 1999 from several complementary perspectives. Specifically, we have combined a non-parametric analysis with the information provided by various polarization measures proposed by the literature on personal income distribution. The results reveal that the European regions tend to cluster into different per capita income classes during the study period. Nevertheless, the level of intra-distribution mobility is relatively low, especially in regions at the upper and lower ends of the distribution. In any event, regional polarization has decreased over time, as a consequence of various factors sometimes working in opposite directions. Additionally, the empirical evidence provided reveals that the geographical location of the various regions and the differences in their productivity levels, play a major role in explaining the polarization patterns observed in the European Union.     

Agglomeration, productivity, and spatial spillovers across Chinese cities

This paper investigates the causal relationship between, and the determinants of, urban labor productivity and industrial agglomeration across Chinese cities. We extend the Ciccone and Hall (Am Econ Rev 86(1):54–70, 1996) production density model by distinguishing between the size of the industrial sector and the density of the urban economy in order to examine the effects of industry agglomeration and congestion on urban productivity. We also account for the endogeneity of industrial agglomeration and propose a simultaneous equation model to estimate the determinants of urban productivity and agglomeration. A spatial econometric analysis across 617 Chinese cities in year 2005 shows that the spatial concentration of industrial production is an important cause of higher productivity in large industrial cities and cities in neighboring regions, where higher productivity resulting from concentrated industrial production then leads to further agglomeration in these cities. Controlling for the size of the industrial sector, employment density has a negative effect on urban productivity. We conclude by briefly discussing potential policy implications of the empirical findings.     

THE ROLE OF MUNICIPAL‐LEVEL FACTORS IN NEIGHBORHOOD ECONOMIC CHANGE

Despite extensive studies on neighborhood change, the role of municipal‐level factors in neighborhood economic change has been underexplored. This article reviews diverse social science literature and makes theoretical connections between city size and homogeneity of city population and municipal performance, which is accordingly associated with neighborhood economic health. Building on the insights from the literature, this study hypothesizes that neighborhoods stay economically healthier in smaller cities and more homogeneous cities. This study presents a multilevel analysis of neighborhood economic change in 35 U.S. metropolitan areas between 1990 and 2000 and finds empirical evidence to support the proposed hypothesis.     

Does EU regional policy promote local TFP growth? Evidence from the Italian Mezzogiorno

Total factor productivity (TFP) explains the bulk of the differences in income level across territories. A major policy issue refers to the ability of place-based policy to promote TFP growth in backward areas. We investigate the effect of the European Regional Development Fund (ERDF) on local TFP growth in Southern Italy between 2007 and 2015. By using different empirical models (least absolute shrinkage and selection operator (LASSO) cross-section, panel fixed-effect regressions and a spatial regression discontinuity design), we show that, on average, local TFP seems to be rather unresponsive to EU programmes. Some suggestive evidence of a positive effect is found for ERDF infrastructure investments and for the areas characterized by higher institutional quality and population density.     

An exploration of relationships between urbanization and per capita income: United States and countries of the world

The relationship between urbanization and level of income has been the subject of considerable theoretical debate and empirical study for many years. However, little recent work has been done to determine whether or not previous findings still hold, and there has been even less multi-country analysis to explore the degree of generality. Analysis of data for metropolitan areas in the United States from 1970 to 1990 indicates per capita income increases directly with population size. For states of the United States and 113 countries for 1960 and 1980 a strong positive relationship exists and holds temporally between level of per capita Gross Domestic Product and percent of the population that is urban.     

On urban sprawl: Closed city,open city or does it even matter?

The empirical urban sprawl literature uses the closed city urban model in which population and income are exogenous. This paper considers the open city model with endogenous population and income as an alternative. The tests for single-county urbanized areas over 1970–2010 support the open over closed city models. While point estimates differ for open city instrumental variable (IV) models when compared with closed city OLS counterparts, the open city models offer broad empirical support for the underlying neoclassical urban land use theory. In that regard, support for the theory found in the existing empirical literature using closed city models is not likely to diminish when using empirically preferred open city models.     

Housing costs,poverty and inequality in Australia

Housing costs have long been recognised as a factor contributing to poverty, and poverty researchers have estimated poverty using income before and after deducting housing costs. This paper examines the treatment of housing in the literatures on poverty and housing and applies the before and after housing costs approach to examine the extent of both poverty and income inequality in Australia and how they have changed since the early 2000s, focusing on the role of housing costs in the periods before and after the global financial crisis (GFC). Account has been taken of changes in the income measure used by the Australian Bureau of Statistics in its household income surveys as these have been shown to have a marked impact on empirical estimates. The findings indicate that taking account of housing costs leads to greater increases in both poverty and inequality between 2003–2004 and 2007–2008 and to smaller reductions in both since the GFC in 2007–2008.     

Agglomeration economies in classical music

This study investigates agglomeration effects for classical music production in a wide range of cities for a global sample of composers born between 1750 and 1899. Theory suggests a trade‐off between agglomeration economies (peer effects) and diseconomies (peer crowding). I test this hypothesis using historical data on composers and employ a unique instrumental variable – a measure of birth centrality, calculated as the average distance between a composer's birthplace and the birthplace of his peers. I find a strong causal impact of peer group size on the number of important compositions written in a given year. Consistent with theory, the productivity gain eventually decreases and is characterized by an inverted U‐shaped relationship. These results are robust to a large series of tests, including checks for quality of peers, city characteristics, various measures of composers' productivity, and across different estimations in which also time‐varying birth centrality measures are used as instrumental variables.     

Economic growth and regional income inequality in Brazil

This paper analyses the evolution of regional inequality in Brazil in the period 1939–1995. Based on a data set organized by the author, indicators of per capita income dispersion among states and regions are presented and their evolution over time is analyzed. The correlation between the regional initial level of per capita income and its growth is considered, testing for Beta convergence. The speed of convergence is calculated in two different forms, the neoclassical model and the coefficient of variation, the later allowing for the analysis of oscillations in inequality over time and its relationship to national economic growth rates. The Kuznetz hypothesis, relating regional income inequality and level of development, is tested. The results indicate the presence of signs of regional income convergence in Brazil, but with important oscillations in the evolution of inequality over time as well as across regions within the country. The association of regional inequality with national income growth produced interesting results, indicating a promising line for future research. Received: April 1996/Accepted: February 2000