Factors Affecting Regional Productivity and Innovation in Israel: Some Empirical Evidence
D., Felsenstein. 2015. “Factors Affecting Regional Productivity and Innovation in Israel: Some Empirical Evidence”. Regional Studies 49 (9):1457-1469. Publisher's VersionAbstract

The role of human capital and physical capital in determining regional productivity and innovation is examined. Two specific mechanisms through which knowledge becomes an inherently regional asset are investigated: the generation of local externalities (a stock mechanism) and human capital accumulation and mobility (a flow mechanism). Empirically, this connection is investigated using recent advances in spatial panel data analysis applied to regions in Israel. Panel co-integration is used to entangle issues of spurious relationships. Results show that human capital stock has large and relatively consistent effects on both regional earnings and regional innovation levels. Human capital mobility is inversely related to innovation. This is interpreted as reflecting the ‘conduit’ role of the region in the innovation process. Regional capital-to-labour ratios are also inversely related to innovation, implying that physical capital substitutes rather than complements human capital.

Immigration to the European Union from its Neighborhoods: Testing Welfare-Chasing and Related Hypotheses by Spatial Gravity
M., Beenstock, Felsenstein D., and Rubin Z. 2015. “Immigration to the European Union from its Neighborhoods: Testing Welfare-Chasing and Related Hypotheses by Spatial Gravity”. International Journal of Manpower 36 (4):491-517. Publisher's VersionAbstract

Purpose – The purpose of this paper is to examine the determinants of immigration from European Neighborhood (EN) and new member states to the EU core countries over the period 2000- 2010. Apart from income differentials, unemployment rates and other standard variables hypothesized to determine immigration, the paper focusses attention on welfare-chasing as well as measures to enforce immigration policy. Using a variant of the gravity model, the paper investigates whether tests of these hypotheses are robust with respect to spatial misspecification.
Design/methodology/approach – The determinants of migration from the European Neighborhood and new member states to the EU core countries is estimated using a spatial variant of the gravity model. The methodology is used for both multilateral and spatial flows. Gravity model estimations are presented for immigration into the EU core destinations using standard, non-spatial econometrics, as well as spatial econometrics for single and double-spatial dynamics
Findings – Immigration to EU core countries varies directly with the change in social spending per head in the destination. This result stands out in all the models, both OLS and spatial. Immigrants are attracted by economic inequality as measured by the Gini coefficient. However, in this case it is the level that matters rather than its change. No evidence is found that the threat of apprehension at the destination deters migrants from the European Neighborhood and other countries. 
Research limitations/implications – The authors assume multilateralism is spatial. This means that everything else given, destinations are closer substitutes the nearer they are, and that immigration shocks are likely to be more correlated among origins the closer they are. This implicit assumption is restrictive because multilateralism is just spatial.
Social implications – While immigration to EU core countries varies directly with the change in (not level of ) social spending per head. If a given country becomes more benevolent it attracts more immigration. The results suggest that if during 2000-2010 social spending per capita grew by 1 percent, the immigration rate increased by between 1 and 2 percentage points relative to the number of foreign-born in 2000. This is a large demographic effect.
Originality/value – Uniquely, this paper does not assume immigration flows are independent and stresses their spatial and multilateral nature. A series of new non-spatial and spatial (single and double-spatial lag) models are used to empirically test hypotheses about the determinants of immigration to the EU core countries.

Simulating and Communicating Outcomes in Disaster Management Situations
M., Lichter, AY Grinberger, and D Felsenstein. 2015. “Simulating and Communicating Outcomes in Disaster Management Situations”. International Journal of Geographic Information 41827-1847. Publisher's VersionAbstract

An important, but overlooked component of disaster managment is raising the awareness and preparedness of potential stakeholders. We show how recent advances in agent-based modeling and geo-information analytics can be combined to this effect. Using a dynamic simulation model, we estimate the long run outcomes of two very different urban disasters with severe consequences: an earthquake and a missile attack. These differ in terms of duration, intensity, permanence, and focal points. These hypothetical shocks are simulated for the downtown area of Jerusalem. Outcomes are compared in terms of their potential for disaster mitigation. The spatial and temporal dynamics of the simulation yield rich outputs. Web-based mapping is used to visualize these results and communicate risk to policy makers, planners, and the informed public. The components and design of this application are described. Implications for participatory disaster management and planning are discussed.

Spatial Spillover in Housing Construction
M., Beenstock, and Felsenstein D. 2015. “Spatial Spillover in Housing Construction”. Journal of Housing Economics 28:42-58. Publisher's VersionAbstract

A model is proposed in which building contractors have regional preferences so that housing construction in different regions are imperfect substitutes. The model hypothesizes spatial and national spillovers in construction. Although the government does not engage directly in housing construction, it influences regional housing markets by auctioning land to contractors. Contractors are hypothesized to use housing-under-construction as a buffer between starts and completions. Spatial panel data for Israel are used to test the model and investigate the determinants of regional housing construction. Because the spatial panel data are nonstationary, we use spatial panel cointegration methods to estimate the model. The estimated model is used to calculate impulse responses which propagate over time and across space.

Tide Gauge Location and the Measurement of Global Sea Level Rise
M., Beenstock, Felsenstein D., and Reingewertz Y. 2015. “Tide Gauge Location and the Measurement of Global Sea Level Rise”. Environmental and Ecological Statistics 22 (1):179-206. Publisher's VersionAbstract

The location of tide gauges is not random. If their locations are positively (negatively) correlated with sea level rise (SLR), estimates of global SLR will be biased upwards (downwards). Using individual tide gauges obtained from the Permanent Service for Mean Sea Level during 1807–2010, we show that tide gauge locations in 2000 were independent of SLR as measured by satellite altimetry. Therefore these tide gauges constitute a quasi-random sample, and inferences about global SLR obtained from them are unbiased. Using recently developed methods for nonstationary time series, we find that sea levels rose in 7 % of tide gauge locations and fell in 4 %. The global mean increase is 0.39–1.03 mm/year. However, the mean increase for locations where sea levels are rising is 3.55–4.42 mm/year. These findings are much lower than estimates of global sea level (2.2 mm/year) reported in the literature and adopted by IPCC (2014), and which make widespread use of imputed data for locations which do not have tide gauges. We show that although tide gauge locations in 2000 are uncorrelated with SLR, the global diffusion of tide gauges during the 20th century was negatively correlated with SLR. This phenomenon induces positive imputation bias in estimates of global mean sea levels because tide gauges installed in the 19th century happened to be in locations where sea levels happened to be rising.

Visa waivers, multilateral resistance and international tourism: some evidence from Israel
M., Beenstock, Felsenstein D., and Rubin Z. 2015. “Visa waivers, multilateral resistance and international tourism: some evidence from Israel”. Letters in Spatial and Resource Sciences 8 (3):357-371. Publisher's VersionAbstract

This paper tests the visa-led tourism hypothesis which contends that easing of visa restrictions increases international tourism. Israel acts as a natural laboratory in this case with clear before and after junctures in visa restrictions. We use panel data on tourism to Israel from 60 countries during 1994–2012. In contrast to previous work we take account of nonstationarity in the data and test for the effect of multilateral resistance on tourism. Partial waivers of visa restrictions are estimated to increase tourism by 48 % and complete waivers increase tourism by 118 %. Other results include the adverse effect of Israel’s security situation on tourism, the beneficial effect of real devaluation on tourism, and the fact that the elasticity of tourism to Israel with respect to tourism to all destinations is very small.

Simulating Land Use Change in Coastal Areas (Special Issue)
Felsenstein, Daniel, and Michal Lichter. 2014.“Simulating Land Use Change in Coastal Areas (Special Issue)”. in Ocean and Coastal Management, vol. 101. Publisher's Version
Land Use-Land Cover Dynamics at the Metropolitan Fringe
D., Felsenstein, Lichter M., Ashbel E., and Grinberger Y. 2014.“Land Use-Land Cover Dynamics at the Metropolitan Fringe”. Pp. 143-166 in Czamanski D., Benenson I and Malkinson D (eds), Modeling of Land Use and Ecological Dynamics. Heidelberg: Springer. Publisher's VersionAbstract

Diverse pressures for change operate at the outer metropolitan fringe. This paper examines the spatial and temporal dynamics of change in this area. We set up a simple model that incorporates spatial and temporal dynamics of functional (land use) and structural (land cover) interactions. We posit that land use (development) changes the ecosystem functions at the edge of urban areas expressed in change in land cover. Additionally, the characteristics of land cover (forest, agriculture, bare soil, neighboring cover etc.) mutually influence the land use. We estimate a model where land values and land use are jointly determined while land use and land cover interact recursively. We use historical data, probability estimation and land use simulation to generate panel data of future patterns of land value, land use and land cover at the outer edge of the Tel Aviv metropolitan area for the period 1995–2023. The modeling system combines panel 2SLS (2-stage least squares) estimation to investigate land value-land use interactions. Land use-land cover dynamics are estimated using panel MNL (multi-nomial logit) estimation. Results of simple simulations of the probability of land cover change are presented. When coupled with an appropriate biodiversity model, this system could potentially be extended to forecasting other aspects of the environmental stress of metropolitan expansion, for example impacts on vegetation or ecological dynamics.

Bouncing Back or Bouncing Forward? Simulating Urban Resilience,
A.Y., Grinberger, and Felsenstein D. 2014. “Bouncing Back or Bouncing Forward? Simulating Urban Resilience,”. Urban Design and Planning 167 (3):115-124. Publisher's VersionAbstract

While the direct physical effects of an urban catastrophe are relatively straightforward to assess, indirect and long-term impact on the urban system is more circumspect. A large-scale shock such as an earthquake derails the complex urban system from its equilibrium path onto an unknown trajectory. Consequently, assessing the effect of policy intervention that aims to mitigate this shock and increase urban resilience is fraught with complexity. This paper presents the implementation of dynamic agent-based simulation to test long-run effects of a hypothetical earthquake in Jerusalem, Israel. It focuses on investigating the effectiveness of policy choices aimed at restoring the urban equilibrium. Cities are found to have a self-organising market-based mechanism that strives to attain a new equilibrium. They therefore may not always bounce back – they may also bounce forward. Decision-makers, engineers, emergency and urban planners need to be cognizant of this tendency when designing policy interventions. Otherwise, well-intentioned efforts may inhibit urban rejuvenation and delay the onset of city recovery.

Coastal Communities under Threat: Comparing Property and Social Exposure
Lichter, M, and D Felsenstein. 2014. “Coastal Communities under Threat: Comparing Property and Social Exposure”. Geography Research Forum 34:40-58. Publisher's VersionAbstract
We examine the threat to coastal communities from sea level rise and extreme flooding. A distinction is drawn between the exposure of the physical property base of a community and its social composition. We investigate whether any correspondence exists between these two dimensions of vulnerability and whether it holds for both small and large communities. Flood scenarios along the Israeli coast are defined and we  look at the resultant property and exposure patterns in communities at different flooding increments. Results are presented for three select inundation increments. Using comparative and graphic methods, we analyze exposure rankings for different communities and property and social exposure at the intra-urban level. We use break point analysis to trace the evolution of community exposure at different flooding increments. We conclude with some cautionary policy implications with respect to opportunities for change in highly exposed communities in the wake of extreme flooding.
Coastal Congestion: Simulating Port Expansion and Land Use Change under Zero-Sum Conditions
D., Felsenstein, Lichter M., and Ashbel E. 2014. “Coastal Congestion: Simulating Port Expansion and Land Use Change under Zero-Sum Conditions”. Ocean and Coastal Management 101:89-101. Publisher's VersionAbstract

This paper examines the displacement effects associated with new land use development in a congested coastal area. A land use micro-simulation model (UrbanSim) and statistical estimation are used to identify the expected future land use impacts arising from the proposed expansion of the Port of Haifa. Maximum and minimum development scenarios are simulated and compared to baseline (business-as-usual) conditions. Simulation outputs refer to future population, employment, residential and non-residential construction for the city of Haifa and its metropolitan area untill the year 2038. A key finding relates to the spatial substitution effects of additional non-residential floor space on residential development throughout the Haifa region. This highlights the zero sum effects of land use change under conditions of congestion. The challenge of efficiently using limited land use resources and balancing development across many competing uses and stakeholders, is stressed.

Land Use Change and the Management of Coastal Areas: Prospect and Retrospect
Felsenstein, D, and M Lichter. 2014. “Land Use Change and the Management of Coastal Areas: Prospect and Retrospect”. Ocean and Coastal Management 101:123-125. Publisher's VersionAbstract

The main features of the contributions to this special issue on Simulating Land Use Change in Coastal Areas, are synthesized. Three key themes for coastal zone research and management are identified. These relate to the need for (1) making new analytic techniques relevant to coastal zone management, (2) communicating results to the public without inhibiting civic participation through technological over-kill and (3) designing public policy cognizant of the special conditions under which land use change operates in coastal areas.

Social and Economic Vulnerability of Coastal Communities to Sea Level Rise and Extreme Flooding
D., Felsenstein, and Lichter M. 2014. “Social and Economic Vulnerability of Coastal Communities to Sea Level Rise and Extreme Flooding”. Natural Hazards 71 (1):463-491. Publisher's VersionAbstract

This paper assesses the socioeconomic consequences of extreme coastal flooding events. Wealth and income impacts associated with different social groups in coastal communities in Israel are estimated. A range of coastal flood hazard zones based on different scenarios are identified. These are superimposed on a composite social vulnerability index to highlight the spatial variation in the socioeconomic structure of those areas exposed to flooding. Economic vulnerability is captured by the exposure of wealth and income. For the former, we correlate the distribution of housing stock at risk with the socioeconomic characteristics of threatened populations. We also estimate the value of residential assets exposed under the different scenarios. For the latter, we calculate the observed change in income distribution of the population under threat of inundation. We interpret the change in income distribution as an indicator of recovery potential.

D., Felsenstein, and Hazam S. 2012.“Intra-Urban Mobility and Changing Density Functions in Tel Aviv,1995-2006”. Pp. 29-44 in Frenkel A, McCann P and Nijkamp P (eds), Societies in Motion: Regional Development, Industrial Innovation and Spatial Mobility. Cheltenham UK: Edward Elgar.
Airport Relocation and Expansion and the Estimation of Derived Tourist Demand; The Case of Eilat, Israel
Y., Ergas, and Felsenstein D. 2012. “Airport Relocation and Expansion and the Estimation of Derived Tourist Demand; The Case of Eilat, Israel”. Journal of Air Transport Management 24:54-61. Publisher's VersionAbstract

This paper looks at capacity expansion relating to an airport and the derived tourist demand that this facilitates. The context is the airport relocation planned for the tourist destination of Eilat, Israel. The paper addresses three issues. First, using a multi-regional input output model for Israel, we estimate the magnitude of the static inter-sectoral impacts associated with airport construction and operation and their impact on the regional and national economy. Second, we focus on the lag effects in this process as increased tourism demand does not elicit an immediate response on the supply side in terms of new hotel investment. Third, on the demand side, we estimate additional tourism expenditure in non-hotel activities over the period that the market adjusts and beyond.

Assessing the Costs of Sea Level Rise and Extreme Flooding at the Local Level; A GIS-Based Approach
M., Lichter, and Felsenstein D. 2012. “Assessing the Costs of Sea Level Rise and Extreme Flooding at the Local Level; A GIS-Based Approach”. Ocean and Coastal Management 59:47-62. Publisher's VersionAbstract

This paper presents a systematic framework for assessing the costs of sea-level rise (SLR) and extreme flooding at the local level. The method is generic and transferable. It is built on coupling readily available GIS capabilities with quantitative estimates of the effects of natural hazards. This allows for the ex ante monetization of the main costs related to different scenarios of permanent inundation and periodic flooding. This approach can be used by coastal zone planners to generate vital information on land use, capital stock and population at risk for jurisdictions of different sizes. The simple mechanics of the method are presented with respect to two examples: one relates to the two largest coastal cities in Israel (Tel Aviv and Haifa) and the other to the Northern Coastal Strip region containing a variety of small towns and rural communities. The paper concludes with implications for coastal zone planning praxis.

The Flexible Accelerator Model and the ‘Regionalization’ of Capital Stock Estimates
S., Alexiadis, and Felsenstein D. 2012. “The Flexible Accelerator Model and the ‘Regionalization’ of Capital Stock Estimates”. Regional Science Inquiry 4 (1):39-45. Publisher's VersionAbstract

This paper suggests a model of obtaining estimates of capital stock based on the theory of ‘flexible accelerator’. However, this represents a rather ‘indirect’ method independently for each year and each region. Clearly this is an unrealistic condition, especially for regional economies characterized by mutual spatial dependence. To add an extra injection of realism, we illustrate how a national model of capital stock (the stock –flow model) can effectively be ‘regionalized’

Nonparametric Estimation of the Spatial Connectivity Matrix using Spatial Panel Data
M., Beeenstock, and Felsenstein D. 2012. “Nonparametric Estimation of the Spatial Connectivity Matrix using Spatial Panel Data”. Geographical Analysis 44 (4):386-387. Publisher's VersionAbstract

We use moments from the covariance matrix for spatial panel data to estimate the parameters of the spatial autoregression model, including the spatial connectivity matrix W. In the unrestricted spatial autoregression model, the parameters are underidentified by one when W is symmetric. We show that a special case exists in which W is asymmetric and its parameters are exactly identified. If the panel data are stationary and ergodic, spatially and temporally, the estimates of W and the spatial autoregression coefficients are consistent. Spatial panel data for house prices in Israel are used to illustrate this methodology.

Testing for Units Roots and Cointegration in Spatial Cross Section Data
M., Beeenstock, Feldman D., and Felsenstein D. 2012. “Testing for Units Roots and Cointegration in Spatial Cross Section Data”. Spatial Economic Analysis 7 (2):203-222. Publisher's VersionAbstract

Spatial impulses are derived for SAR models containing a spatial unit root. Analytical solutions are obtained for lateral space where the number of spatial units tends to infinity. Numerical solutions are obtained for finite regular lattices where edge-effects are shown to influence spatial impulses, and for irregular lattices. Monte Carlo simulation methods are used to compute critical values for spatial unit root tests in SAR models estimated from spatial cross-section data for regular and irregular lattices. We also compute critical SAC values for spatial cointegration tests for cross-section data that happen to be spatially nonstationary. We show that parameter estimates in spatially cointegrated models are ‘superconsistent’.

Human Capital and Labor Mobility in Regional Innovation and Growth
D., Felsenstein. 2011.“Human Capital and Labor Mobility in Regional Innovation and Growth”. Pp. 119-131 in Cooke P, Asheim B, Martin R, Todtling F, Boschma R ansd Schwartz D (eds) Handbook on Regional Innovation and Growth. Cheltenham UK: Edward Elgar. Publisher's Version