nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒02‒13
thirty-one papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Trade Costs versus Urban Costs By Cavailhès, Jean; Gaigné, Carl; Thisse, Jacques-François
  2. Economic Integration and Agglomeration in a Middle Product Economy By Peng, Shin-Kun; Thisse, Jacques-François; Wang, Ping
  3. Cities, Matching and the Productivity Gains of Agglomeration By Andersson, Fredrik; Burgess, Simon; Lane, Julia
  4. The 'Genome' of NEG Models with Vertical Linkages: A Positive and Normative Synthesis By Ottaviano, Gianmarco I P; Robert-Nicoud, Frédéric
  5. Heterogeneous Firms, Agglomeration and Economic Geography: Selection and Sorting By Baldwin, Richard; Okubo, Toshihiro
  6. Destination- versus Origin-based Commodity Taxation and the Location of Industry By Behrens, Kristian; Hamilton, Jonathan; Ottaviano, Gianmarco I P; Thisse, Jacques-François
  7. New Economic Geography By Hans-Friedrich Eckey; Reinhold Kosfeld
  8. Does Staying out of the European Integration Process Shelter the Industrial Base of Small Countries? By Forslid, Rikard
  9. Spatial Determinants of Productivity: Analysis for the Regions of Great Britain By Rice, Patricia; Venables, Anthony J.
  10. Neighbourhoods, Households and Income Dynamics: A Semi-Parametric Investigation of Neighbourhood Effects By Bolster, Anne; Burgess, Simon; Johnston, Ron; Jones, Kelvyn; Propper, Carol; Sarker, Rebecca
  11. The Dynamics of City Formation: Finance and Governance By Henderson, J Vernon; Venables, Anthony J.
  12. Employment Concentration Across US Counties By Desmet, Klaus; Fafchamps, Marcel
  13. Agglomeration and Welfare: The Core-Periphery Model in the Light of Bentham, Kaldor and Rawls By Charlot, Sylvie; Gaigné, Carl; Robert-Nicoud, Frédéric; Thisse, Jacques-François
  14. Equilibrium Search Unemployment With Explicit Spatial Frictions By Wasmer, Etienne; Zenou, Yves
  15. Endogenous Growth and Regional Dynamics in an OLG Model with Land By Lionel, ARTIGE
  16. Thresholds for Employment and Unemployment. A Spatial Analysis of German Regional Labour Markets 1992-2000 By Reinhold Kosfeld; Christian Dreger
  17. Does the ILO Definition Capture All Unemployment? By Andrea Brandolini; Piero Cipollone; Eliana Viviano
  18. Interregional Redistribution and Mobility in Federations: A Positive Approach By Hansen, Nico; Kessler, Anke
  19. Regional Policy, Integration and the Location of Industry in a Multiregion Framework By Forslid, Rikard
  20. The Political Economy of Urban Transport System Choice By Brueckner, Jan; Selod, Harris
  21. Is There Regional Tax Competition? Firm Level Evidence for Belgium By Crabbé, Karen; Janssen, Boudewijn; Vandenbussche, Hylke
  22. Rule-Based and Case-Based Reasoning in Housing Prices By Gabrielle Gayer; Itzhak Gilboa; Offer Lieberman
  23. Community empowerment and scaling-up in urban areas By Garrett, James
  24. The employment impact of business investment incentives in declining areas: an evaluation of the EU “Objective 2 Area” programs. By Daniele Bondonio; Robert T. Greenbaum
  25. The Paradox of Championships: Be Careful What You Wish For, Sports Fans By Victor Matheson; Robert Baade
  26. Entrepreneurship, Regional Development and Job Creation: the Case of Portugal By Rui Baptista; Paulo Madruga; Vitor Escaria
  27. Spatial analysis of sustainable livelihood enterprises of Uganda cotton production By You, Liangzhi; Chamberlin, Jordan
  28. Spatial patterns of crop yields in Latin America and the Caribbean By Wood, Stanley; You, Liangzhi; Zhang, Xiaobo
  29. Assessing the spatial distribution of crop production using a cross-entropy method By You, Liangzhi; Wood, Stanley
  30. Property Tax Limitations and Mobility: The Lock-in Effect of California's Proposition 13 By Nada Wasi; Michelle J. White
  31. Changes in the Appalachian Wage Gap, 1970 to 2000 By Robert Baumann

  1. By: Cavailhès, Jean; Gaigné, Carl; Thisse, Jacques-François
    Abstract: We analyse how the interplay between urban costs, wage wedges and trade costs may affect the inter-regional location of firms as well as the intra-urban location, within the central business district or in a secondary employment centre (SEC) of the selected region. In this way we investigate, on the one hand, how trade may affect the internal structure of cities and, on the other hand, how decentralizing the production and consumption of goods to subcentres changes the intensity of trade by allowing large metropolitan areas to maintain their predominance. We show that, despite low commuting costs, SECs may emerge when the urban population is large and communication technologies are efficient, two features that seem to characterise modern economies. Moreover, when trade costs fall from high levels, the economy moves gradually from dispersion to agglomeration, favouring the formation of SECs. In an integrating world, however, the centre of a small monocentric city could be more attractive than subcentres of large polycentric cities. Nevertheless, the core retains its predominance through the relative growth of its main centre, which occurs at the expense of its subcentres.
    Keywords: city structure; commuting costs; polycentric city; relocation; trade costs
    JEL: F12 F22 R12 R14
    Date: 2004–08
  2. By: Peng, Shin-Kun; Thisse, Jacques-François; Wang, Ping
    Abstract: The Paper examines the interactions between economic integration and population agglomeration in a middle product economy displaying neoclassical growth. There are two vertically-integrated economies. Each consists of a large number of final good competitive firms operating plants in both regions, and a large number of intermediate goods monopolistically competitive firms operating each in only one region. While immobile workers are employed with intermediate goods to produce the final good, mobile workers are used to design the line of differentiated intermediate good inputs. Capital is immobile and the final good is non-traded, whereas the intermediate goods are traded. We find that employment agglomeration and output growth need not be positively related. Furthermore, trade is not necessarily beneficial to regional growth, whereas trade between the two regions need not be associated with a widened skilled-unskilled wage gap.
    Keywords: agglomeration; economic integration; growth; intermediate goods trade
    JEL: D90 F15 O41 R13
    Date: 2004–08
  3. By: Andersson, Fredrik; Burgess, Simon; Lane, Julia
    Abstract: The striking geographical concentration of economic activities suggests that there are substantial benefits to agglomeration. The nature of those benefits remains unclear, however. In this Paper we take advantage of a new dataset to quantify the role of one of the main contenders: the matching of workers and jobs. Using individual level data for two large US states we show that thicker urban labour markets are associated with more assortative matching between workers and firms. Another critical condition is required for this to generate higher productivity: complementarity of worker and firm quality in the production function. Using establishment level productivity regressions, we show that such complementarity is found in our data. Putting together the production and matching relationships, we show that production complementarity and assortative matching is an important source of the urban productivity premium.
    Keywords: agglomeration; matching; urban productivity
    JEL: J24 R12 R23
    Date: 2004–09
  4. By: Ottaviano, Gianmarco I P; Robert-Nicoud, Frédéric
    Abstract: This Paper takes a broader look at how vertical linkages can trigger the spatial agglomeration of economic activity in a ‘new economic geography’ (NEG) set-up. First, it formally establishes the key positive features of a wide class of vertical-linkage models without resorting to numerical simulations. Second, it proposes an analytically solvable model of this class. Third, it addresses the important though neglected issue of whether in such models market forces yield too much or too little agglomeration. It shows that, in terms of positive implications, vertical-linkage models are identical to migration models once considered in their ‘natural’ state space. Important differences arise, however, in terms of normative implications in the absence of interregional transfers: in migration models agglomeration is necessarily bad for people stuck in lagging regions; in the vertical-linkage models it can be good for everybody as it delivers richer product variety.
    Keywords: new economic geography; vertical linkages; welfare analysis
    JEL: F12 F15 F21 R12
    Date: 2004–09
  5. By: Baldwin, Richard; Okubo, Toshihiro
    Abstract: A Melitz-style model of monopolistic competition with heterogeneous firms is integrated into a simple NEG model to show that the standard assumption of identical firms is neither necessary nor innocuous. We show that re-locating to the big region is most attractive for the most productivity firms; this implies interesting results for empirical work and policy analysis. A ‘selection effect’ means standard empirical measures overestimate agglomeration economies. A ‘sorting effect’ means that a regional policy induces the highest productivity firms to move to the core while the lowest productivity firms to move to the periphery. We also show that heterogeneity dampens the home market effect.
    Keywords: economic geography; estimation of agglomeration economies; heterogeneous firms; home market effect
    JEL: H32 P16
    Date: 2004–09
  6. By: Behrens, Kristian; Hamilton, Jonathan; Ottaviano, Gianmarco I P; Thisse, Jacques-François
    Abstract: This Paper studies the positive aspects of destination vs. origin principles of commodity taxation as well as tax harmonization, with an emphasis on the international implications of these measures when firms are mobile. We investigate the tax incidence of these two principles on price levels and uncover how taxes and trade costs interact. While under the destination principle an increase in the tax rate of a country always causes some firms to relocate to the other, this effect may get reversed under the origin principle when economic integration is deep enough, so that a tax increase leads to an inflow of capital.
    Keywords: commodity tax; destination principle; home market effect; origin principle; tax harmonization
    JEL: F12 H22 H87 R12
    Date: 2004–10
  7. By: Hans-Friedrich Eckey (Author-Workplace-Name: Department of Economics, University of Kassel); Reinhold Kosfeld (Author-Workplace-Name: Department of Economics, University of Kassel)
    Abstract: The standard model of New Economic Geography (NEG) presents a synthesis of polarization and neo-classical theories. Within a monopolistic competition framework it aims to explain processes of concentration and deconcentration of manufacturing in a two-sector economy. In this paper the effects of several assumptions of spatial agglomeration processes are addressed. In particular, we investigate the effects of transport costs for agricultural goods, spatial spillovers, the presence of non-tradable services and limited mobility of the labour force. It becomes clear that the tendency towards deconcentration of manufacturing is more marked - the higher the transport costs for agricultural goods, - the stronger the positive spillovers across the regions, - the more income spent on services, - the more limited the mobility of the labour force.
    Keywords: Neue Ökonomische Geographie, Transportkosten, nicht handelbare Dienstleistungen, Spillovers
    JEL: R10 R12
    Date: 2004–11
  8. By: Forslid, Rikard
    Abstract: This Paper compares the effect of economic integration on industry location for a small country that goes ahead with an integration process, such as the European, and a country that stays out. Theoretical results, derived from a three-region new economic geography model, are compared to stylized facts on European manufacturing production. These are consistent with a scenario where further integration strengthens the industrial base of small countries that go ahead with integration.
    Keywords: agglomeration; economic integration; multiregion-model
    JEL: F12 F15 F21 R12
    Date: 2004–07
  9. By: Rice, Patricia; Venables, Anthony J.
    Abstract: This Paper uses NUTS3 sub-regional data for Great Britain to analyse the determinants of spatial variations in income and productivity. We decompose the spatial variation of earnings into a productivity effect and an occupational composition effect. For the former (but not the latter) we find a robust relationship with proximity to economic mass, suggesting that doubling the population of working age proximate to an area is associated with a 3.5% increase in productivity in the area. We measure proximity by travel time, and show that effects decline steeply with time, ceasing to be important beyond approximately 80 minutes.
    Keywords: clustering; productivity; regional disparities
    JEL: O40 R10
    Date: 2004–08
  10. By: Bolster, Anne; Burgess, Simon; Johnston, Ron; Jones, Kelvyn; Propper, Carol; Sarker, Rebecca
    Abstract: Using a unique dataset, we present evidence on income trajectories of people living in micro neighbourhoods. We place bounds on the influence of neighbourhood making as few parametric assumptions as possible. The Paper offers a number of advances. We exploit a dataset that is large, representative, longitudinal with very local neighbourhoods. We analyse income growth over one, five- and ten-year windows. We analyse the whole distribution of income growth and track large gainers and losers as well as average outcomes. We consider the appropriate definition of neighbourhood. We find little evidence of a negative relationship between neighbourhood and subsequent income growth.
    Keywords: income dynamics; neighbourhood effects; small scale neighbourhoods
    JEL: D31 I30
    Date: 2004–09
  11. By: Henderson, J Vernon; Venables, Anthony J.
    Abstract: This Paper examines city formation in a country whose urban population is growing steadily over time, with new cities required to accommodate this growth. In contrast to most of the literature there is immobility of housing and urban infrastructure, and investment in these assets is taken on the basis of forward-looking behaviour. In the presence of these fixed assets cities form sequentially, without the population swings in existing cities that arise in current models. Equilibrium city size, absent government, may be larger or smaller than is efficient, depending on how urban externalities vary with population. Efficient formation of cities involves local government borrowing to finance development. The institutions governing land markets, leases, local taxation, and local borrowing and debt affect the efficiency of outcomes. The Paper explores the effects of different fiscal constraints, and shows that borrowing constraints lead cities to be larger than is efficient.
    Keywords: city governance; city size; urban developers; urbanization
    JEL: H70 O18 R10 R50
    Date: 2004–09
  12. By: Desmet, Klaus; Fafchamps, Marcel
    Abstract: This Paper examines the spatial distribution of jobs across US counties and investigates whether sectoral employment is becoming more or less concentrated. The existing literature has found deconcentration (convergence) of employment across urban areas. Cities only cover a small part of the US though. Using county data, our results indicate that deconcentration is limited to the upper tail of the distribution. The overall picture is one of increasing concentration (divergence). While this seemingly contradicts the well-documented deconcentration in manufacturing, we show that these aggregate employment dynamics are driven by services. Non-service sectors – such as manufacturing and farming – are indeed becoming more equally spread across space, but services are becoming increasingly concentrated.
    Keywords: economic geography; ergodic distribution; spatial distribution of employment; US counties
    JEL: R11 R12
    Date: 2004–10
  13. By: Charlot, Sylvie; Gaigné, Carl; Robert-Nicoud, Frédéric; Thisse, Jacques-François
    Abstract: The objective of this Paper is to apply different welfare approaches to the canonical model developed by Krugman, with the aim of comparing the only two possible market outcomes, i.e. agglomeration and dispersion. More precisely, we use the potential Pareto improvement criteria, as well as the utilitarian and Rawlsian welfare functions. No clear answer emerges for the following two reasons: (i) in general, there is indetermination when compensation schemes are used and (ii) the best outcome heavily depends on societal values regarding inequalities across individuals. However, simulations undertaken for plausible values of the main parameters suggest that there might be excessive agglomeration.
    Keywords: agglomeration; compensation mechanism; economic geography; welfare
    JEL: F12 R13
    Date: 2004–10
  14. By: Wasmer, Etienne; Zenou, Yves
    Abstract: Assuming that job search efficiency decreases with distance to jobs, workers’ location in a city depends on spatial elements such as commuting costs and land prices and on labour elements such as wages and the matching technology. In the absence of moving costs, we show that there exists a unique equilibrium in which employed and unemployed workers are perfectly segregated but move at each employment transition. We investigate the interactions between the land and the labour market equilibrium and show under which condition they are interdependent. When relocation costs become positive, a new zone appears in which both the employed and the unemployed co-exist and are not mobile. We demonstrate that the size of this area goes continuously to zero when moving costs vanish. Finally, we endogenize search effort, show that it negatively depends on distance to jobs and that long and short-term unemployed workers coexist and locate in different areas of the city.
    Keywords: job matching; local labour markets; relocation costs; search effort
    JEL: E24 J41 R14
    Date: 2004–11
  15. By: Lionel, ARTIGE (Universitat Autonoma de Barcelona (Spain))
    Abstract: This paper examines the existence condition of a balanced growth path in an overlapping generations model in which production uses three inputs, physical capital, human capital and land, with increasing returns to scale. Human capital is the engine of economic growth. It is shown that, unlike standard economic geography models, increasing returns verifying balanced growth always lead to regional convergence. Physical capital mobility turns out to be an overwhelming convergence force.
    Keywords: Endogenous growth; human capital; land; overlapping generations; regional dynamics
    JEL: E13 O41 R11
    Date: 2004–10–14
  16. By: Reinhold Kosfeld (Author-Workplace-Name: Department of Economics, University of Kassel); Christian Dreger (Author-Workplace-Name: Institute for Economic Research Halle (IWH))
    Abstract: Changes in production, employment and unemployment are closely related over the course of the business cycle. However, as exemplified by the laws of Verdoorn (1949, 1993) and Okun (1962, 1970), thresholds seem to be present in the relationship. Due to capacity reserves of the firms, output growth must exceed certain levels for the creation of new jobs or a fall in the unemployment rate. In order to get efficient estimates of these bounds, we take a wide range of information into account. In particular, thresholds for employment and unemployment are determined on the grounds of 180 German regional labour markets. To capture cross section dependencies, a spatial SUR model is built up utilizing the eigenfunction decomposition approach suggested by Griffith (1996, 2000). The results indicate, that minimum output growth sufficient for a rise in employment is below the level which is needed for a simultaneous drop in the unemployment rate. Especially, the thresholds turn out to be about 1.2 and 2.2 percent, respectively. The ordering is related both to demographic changes and institutional settings on the labour market, such as the working of the unemployment benefit system. If spatial effects are not controlled for, the thresholds seem to be overrated.
    Keywords: Threshold employment and unemployment, regional labour markets, spatial filtering techniques, spatial SUR analysis
    JEL: C21 C23 E24 E32
    Date: 2004–01
  17. By: Andrea Brandolini (Bank of Italy, Economic Research Department); Piero Cipollone (Bank of Italy, Economic Research Department); Eliana Viviano (Bank of Italy, Research Department, Milan Branch)
    Abstract: The labour market status of many non-working persons is at the boundary between unemployment and inactivity. Like the unemployed, they seek and are available for work; unlike them, their last search action was not recent enough to meet the ILO definition of unemployment. In this paper we examine by non-parametric tests how the transition probabilities of these out-of-the-labour-force job seekers differ from those of the unemployed as well as the other non-participants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information only available in the Italian Labour Force Survey to derive a measure of search intensity which we use to break down the out-of-the-labour-force job seekers. On the basis of their transition probabilities, the most active are indistinguishable from the unemployed.
    Keywords: unemployment, ILO classifications, transition probabilities
    JEL: J64 J22 R23
    Date: 2004–12
  18. By: Hansen, Nico; Kessler, Anke
    Abstract: The Paper studies the effects and the determinants of interregional redistribution in a model of residential and political choice. We find that paradoxical consequences of interjurisdictional transfers can arise if people are mobile: while self-sufficient regions are necessarily identical with respect to policies and average incomes in our model, interregional redistribution always leads to the divergence of regional policies and per capita incomes. Thus, interregional redistribution prevents interregional equality. As we show, however, it at the same time allows for more interpersonal equality among the inhabitants of each region. For this reason, the voting population may in a decision over the fiscal constitution deliberately implement such a transfer scheme to foster regional divergence.
    Keywords: fiscal federalism; interregional transfers; migration; redistribution
    JEL: H71 H73
    Date: 2004–08
  19. By: Forslid, Rikard
    Abstract: This Paper analyses the interaction of economic integration and some typical regional policies in a new economic geography model with three regions of different size. The policies analysed are when the government controls the location of industry through location permits, infrastructure investments, and subsidies to the establishment of industry. It is shown how regional policy can easily be misdirected. The existing literature almost entirely focuses on two-region cases. This Paper instead analytically analyses a three-region case with asymmetric regions. The introduction of a third region gives several new insights. In particular the locational consequences for the region of intermediate size can generally not be inferred from a two-region case.
    Keywords: agglomeration; multiregion-model; new economic geography; regional policy
    JEL: F12 F15 F21 R12
    Date: 2004–09
  20. By: Brueckner, Jan; Selod, Harris
    Abstract: This Paper analyses the political economy of transport-system choice, with the goal of gaining an understanding of the forces involved in this important urban public policy decision. Transport systems pose a continuous trade-off between time and money cost, so that a city can choose a fast system with a high money cost per mile or a slower, cheaper system. The Paper compares the socially optimal transport system to the one chosen under the voting process, focusing on both homogeneous and heterogeneous cities, while considering different landownership arrangements. The analysis identifies a bias toward over-investment in transport quality in heterogeneous cities.
    Keywords: income heterogeneity; multiple transport systems; over-investment in transport quality
    JEL: H41 R42
    Date: 2004–10
  21. By: Crabbé, Karen; Janssen, Boudewijn; Vandenbussche, Hylke
    Abstract: This is the first Paper that looks at regional tax competition within one single country. In many countries in Europe, regions within a country differ substantially in their economic development and attractiveness to firms. Belgium is a typical example of a country where the economic situation of its three regions is very different. Our findings are indicative of regional tax competition, with a lower Effective Tax Rate (ETR) in the peripheral region of Wallonia than in Flanders. In addition to location variables, our empirical model explaining firm level heterogeneity in ETRs includes firm characteristics, sector membership and variables capturing statutory tax breaks.
    Keywords: Belgian firms; company accounts; effective tax rates
    JEL: C50 F36 H25
    Date: 2004–10
  22. By: Gabrielle Gayer (Tel Aviv University); Itzhak Gilboa (School of Economics, Tel Aviv University); Offer Lieberman (Technion-Israel Institute of Technology)
    Abstract: People reason about real-estate prices both in terms of general rules and in terms of analogies to similar cases. We propose to empirically test which mode of reasoning fits the data better. To this end, we develop the statistical techniques required for the estimation of the case-based model. It is hypothesized that case-based reasoning will have relatively more explanatory power in databases of rental apartments, whereas rule-based reasoning will have a relative advantage in sales data. We motivate this hypothesis on theoretical grounds, and find empirical support for it by comparing the two statistical techniques (rule-based and case-based) on two databases (rentals and sales).
    Keywords: Housing, similarity, regression, case-based reasoning, rule-based reasoning
    JEL: C1 C8 D8 R1
    Date: 2004–11
  23. By: Garrett, James
    Abstract: "CARE began PROSPECT (Program of Support for Poverty Elimination and Community Transformation) in 1998. PROSPECT aims to reduce poverty in peri-urban areas of Lusaka. It employs a community-based approach to carry out three types of activities: social empowerment (institution building at the local level), personal empowerment (microfinance), and infrastructure improvement (mostly water supply schemes). PROSPECT has attempted to carry out these activities largely through its support of area-based organizations (ABOs) that now form part of city government. The zone development committees (ZDCs) and residents' development committees (RDCs) are the basic components of the ABO structure. These are community-level representations of municipal government; they are the community's mechanisms for expressing its voice and driving development. PROSPECT is itself an extension of an earlier project, PUSH II (Peri-Urban Self-Help Project). PUSH II and PROSPECT are fundamentally about developing community-based and community-driven development (CDD) mechanisms and strengthening community capacities to identify and respond to community needs. The paper examines the scaling-up experience of PUSH II and PROSPECT, looking especially at the mechanisms of CDD, the ABOs." Authors' Abstract
    Keywords: CARE ,Poverty alleviation ,Community organizations ,Urban poor ,Peri-urban areas ,
    Date: 2004
  24. By: Daniele Bondonio; Robert T. Greenbaum
    Abstract: Beginning in 1989, the European Union started targeting its Structural Funds business incentives geographically to industrial areas that have been facing above average unemployment and industrial job loss. Although billions of euros have been invested in these Objective 2 areas, very little is known about the effectiveness of these public expenditures. This paper develops an estimation strategy utilizing parametric difference in difference specifications to estimate the impact of business incentives offered in the Objective 2 areas of central and northern Italy between 1995 and 1998. The paper finds the incentives to be most effective in the areas that faced the least pre-intervention employment loss.
    Keywords: Urban and regional economic development; impact evaluation; employment policy; Structural Funds
    JEL: O18 R5 R12 C23
    Date: 2004–09
  25. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College)
    Abstract: This paper examines issues related to the economic impact of sports championships on the local economy of host cities. While boosters frequently claim a large positive effect of such championships, a closer examination leads to the conclusion that the impact is likely much smaller than touted and may even be negative.
    Keywords: impact analysis, sports, mega-event, championship
    JEL: L83 R53
    Date: 2005–02
  26. By: Rui Baptista; Paulo Madruga; Vitor Escaria
    Abstract: This paper investigates whether a high level of new business formation in a region stimulates employment in that region. The study looks at the lag structure of these effects, using a data set covering a fairly large time span (1982-2002). The indirect supply-side effects of new firm births, whether due to greater competition, efficiency or innovation, seem to be at least as important as the direct effects associated with employment creation by the new entrants. However, such supply-side effects only occur after a time lag of about eight years, leading to a pattern of lagged effects that is somewhat u-shaped. This finding suggests that new entrants bring about improvements to overall regional competitiveness, but that such improvements only become significant after some time.
  27. By: You, Liangzhi; Chamberlin, Jordan
    Abstract: "Because the conditions for agricultural development vary considerably across space, we need to develop methods that allow us to take such variability into account when evaluating development strategies for particular crops or farming systems. This paper addresses spatially varying characteristics in an evaluation of the potential economic benefits of three cotton development strategies for Uganda: area expansion, productivity improvement, and domestic consumption increase. We begin with a historical review of cotton production in Uganda. We then described the major challenges and opportunities for Ugandan cotton production, including farm-level production constraints. Household-level production data from the 2000 Uganda National Household Survey (UNHS) are used to estimate the current spatial distribution of cotton production (called the cotton production area, or CPA), based on the association of household cotton production with ranges in mapped variables (altitude, length of growing period, and population density), district cotton production statistics and expert knowledge of local production patterns. Cotton development domains (CDDs) are then defined by agroclimatic suitability, market/ginnery access, and inclusion in the CPA. We use the UNHS data to evaluate the importance of cotton as a livelihood enterprise and its role in rural livelihood strategies. Key ecosystems and protected areas are considered in conjunction with the CDDs in defining feasible areas for expansion of production. Finally, the Dynamic Research Evaluation for Management (DREAM) model is used to estimate benefits that accrue from the three development strategies considered." Authors' Abstract
    Keywords: DREAM ,Spatial analysis (Statistics) ,
    Date: 2004
  28. By: Wood, Stanley; You, Liangzhi; Zhang, Xiaobo
    Abstract: From a theoretical perspective crop yields should tend to converge over time and space as: growth in yield potential exhibits diminishing returns; an increasing share of farmers shift to using high yielding varieties (HYVs); barriers to the free flow of knowledge and information are removed; and significant investments continue to be made in supporting institutions whose mandates include facilitating and accelerating the cross-border flow of improved agricultural technologies. Using a new, sub-national crop yield database for Latin America and the Caribbean (LAC) we examine whether convergence is indeed occurring, and discover it is not. On the contrary, there is evidence of divergence. We test three hypotheses that might help account for this finding: that technology generation has been biased towards production in more-favored production systems leaving behind persistent pockets of production in more marginal lands; that rainfall patterns have changed in ways that exacerbate yield divergence, and that technology spillover across borders remains more problematic than within-country spillover. We find evidence to support all three of these hypotheses. Further work is needed to assess the relative importance of these sources of yield divergence both across and within LAC. As anticipated, rainfall variability is poorly linked to the variability of irrigated crop yields, but more strongly linked to variability in rainfed crops. The results suggest while some countries and regions within countries forge ahead with crop yield improvements there are many areas, often in smaller countries, where the livelihoods of many farmers - and likely a disproportionate share of LAC's rural poor - continue to be constrained by low-productivity agriculture. There remains significant work ahead for national governments and for publicly-funded regional and international agricultural technology institutions to remedy this situation.
    Date: 2004
  29. By: You, Liangzhi; Wood, Stanley
    Abstract: While agricultural production statistics are reported on a geopolitical – often national - basis we often need to know the status of production or productivity within specific sub-regions, watersheds, or agro-ecological zones. Such re-aggregations are typically made using expert judgments or simple area-weighting rules. We describe a new, entropy-based approach to making spatially disaggregated assessments of the distribution of crop production. Using this approach tabular crop production statistics are blended judiciously with an array of other secondary data to assess the production of specific crops within individual ‘pixels' – typically 25 to 100 square kilometers in size. The information utilized includes crop production statistics, farming system characteristics, satellite-derived land cover data, biophysical crop suitability assessments, and population density. An application is presented in which Brazilian state level production statistics are used to generate pixel level crop production data for eight crops. To validate the spatial allocation we aggregated the pixel estimates to obtain synthetic estimates of municipio level production in Brazil, and compared those estimates with actual municipio statistics. The approach produced extremely promising results. We then examined the robustness of these results compared to short-cut approaches to spatializing crop production statistics and showed that, while computationally intensive, the cross-entropy method does provide more reliable estimates of crop production patterns.
    Keywords: Entropy ,Cross entropy ,Remote sensing ,Spatial allocation ,Crop distribution ,
    Date: 2004
  30. By: Nada Wasi; Michelle J. White
    Abstract: Proposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2% per year until the next sale. In this paper, we examine how Prop 13 has affected the average tenure length of owners and renters in California versus in other states. We find that from 1970 to 2000, the average tenure length of owners and renters in California increased by 1.04 years and .79 years, respectively, relative to the comparison states. We also find substantial variation in the response to Prop 13, with African-American households responding more than households of other races and migrants responding more than native-born households. Among owner-occupiers, the response to Prop 13 increases sharply as the size of the subsidy rises. Homeowners living in inland California cities such as Bakersfield receive Prop 13 subsidies averaging only $110/year and their average tenure length increased by only .11 years in 2000, but owners living in coastal California cities receive Prop 13 subsidies averaging in the thousands of dollars and their average tenure length increased by 2 to 3 years.
    JEL: H2 R2 H7 K2
    Date: 2005–02
  31. By: Robert Baumann
    Abstract: Since at least 1960, Appalachians have lower wages, employment rates, and educational attainment than residents elsewhere in the country. Despite educational gains and large federal outlays since 1965, the wage gap has only slightly decreased. Using a sample of full-time workers from the Integrated Public Use Microdata Series Census project, I identify factors affecting the wage gap between 1970 and 2000. I find several national trends unfavorable to Appalachians after 1980: increasing returns to both observable and unobservable skill, rising income inequality, and the decline of manufacturing, which offset faster Appalachian education growth. There is also a growing gap in education returns between Appalachia and elsewhere in the country since 1980.
    Keywords: Appalachia, wage decomposition, poverty, skill differential
    JEL: J10 R10 J31
    Date: 2005–02

This nep-geo issue is ©2005 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.