nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒04‒03
twelve papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Income Inequality and Growth: a Panel Study of Swedish Counties 1960-2000 By Nahum, Ruth-Aïda
  2. Higher Education, Localization and Innovation: Evidence from a Natural Experiment By Andersson, Roland; John M. Quigley, John M.; Wilhelmsson, Mats
  3. Urban Health Status in Ahmedabad city: GIS based study of Baherampura, Kubernagar, and Vasna wards By Ramani K V; Mehandiratta Sweta; Patel Amit; Joshi Diptesh; Patel Nina
  4. Accès à l'emploi, ségrégation résidentielle et chômage : le cas de l'Ile-de-France By Laurent Gobillon; Harris Selod
  5. Financing Cities By Robert Inman
  6. Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States? By Sukkoo Kim
  7. Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000) By Jesse Rothstein
  8. Competition Among Schools: A Reply to Rothstein (2004) By Caroline M. Hoxby
  9. Business Improvement Districts - An Approach for Retail-Area Revitalization in American Downtowns By Michael Rüscher
  10. Political Devolution without Fiscal Devolution By Andrew Hughes Hallett
  11. Convergence across Spanish Provinces:Cross-section and Pairwise Evidence By Don J Webber; Paul White; Asier Minondo; David O Allen
  12. Convergence towards a Steady State Distribution By Don J Webber; Paul White

  1. By: Nahum, Ruth-Aïda (Institute for Futures Studies)
    Abstract: This paper explores the relationship between income inequality and growth using panel data on Swedish counties from 1960-2000. Compared to standard methods of estimating this relationship yearly regional level data are used, and inequality is allowed to be endogenous. We find a significant positive impact of inequality on growth, but the magnitude of the effect decreases with the length of the growth period studied. When allowing income inequality to be endogenous, using a panel 2SLS IV estimation, we find positive effect of inequality on 1 to 5-year growth rates, when significant, whereas the effect on 10-year growth rates are not clear cut.
    Keywords: Income inequality; regional economic growth; panel data
    JEL: D31 O15 O40
    Date: 2005–03
  2. By: Andersson, Roland (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); John M. Quigley, John M. (University of CaliforniaBerkeley, CA, USA); Wilhelmsson, Mats (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: During the past fifteen years, government policy has decentralized post-secondary education in Sweden. We investigate the economic effects of this decentralization policy on the level of innovation and its spatial distribution in the Swedish economy. We rely upon micro data on patent activity over time, which records the home address of each patent awardee during the past eight years. These measures of innovation, together with data documenting the decentralization of university-based researchers and students, permit us to estimate the effects of exogenous changes in educational policy upon the extent and locus of innovative activity. We find important and significant effects of this policy upon the locus of knowledge production, suggesting that the decentralization has affected regional development through local innovation and increased creativity. We also find some evidence that this policy has affected the aggregate output of “knowledge industries.”
    Keywords: Higher Education; Localization; Innovation; Natural Experiment
    JEL: N34 O31 R11
    Date: 2005–03–18
  3. By: Ramani K V; Mehandiratta Sweta; Patel Amit; Joshi Diptesh; Patel Nina
    Abstract: Urbanization is an important demographic shift worldwide. Today, nearly half the world population is urban. In the 1991-2001 decade, Indian population grew by 2 %, urban India by 3 %, mega cities at 4 %, and slum population by 5 % (2-3-4-5 syndrome). Slum growth in future is expected to surpass the capacities of civic authorities to respond to health and infrastructure needs of this population group. Managing urban health, thus assumes critical importance to achieve better health outcomes in the country. Historically, Government of India’s focus has been on development of rural health system. However, since the 9th Five year Plan, Government has started giving priority to urban health as well, but hardly any progress has been achieved in this area. In this working paper, we discuss our initiatives in a pilot study of urban health management in Ahmedabad city, the seventh largest mega city in India with a population of 3.5 million consisting of 1.5 million people living in slums and slum-like conditions. Our objective is to understand the nature, magnitude, and complexity of issues in the management of urban health. Towards this, our pilot study focuses on three wards, in three different parts (zones) of Ahmedabad. Our GIS based analysis provides some very interesting insights into the status of health in the selected wards. Our next task is to understand private health care in Ahmedabad, analyze existing public private partnerships in the city, and thereby build a Model Urban Health Centre with Public private Participation.
    Keywords: Urban health, management, Public-private partnership
    Date: 2005–03–29
  4. By: Laurent Gobillon; Harris Selod
    Abstract: Cet article regroupe une synthèse théorique de la littérature économique, des faits stylisés, et une étude empirique portant sur les déterminants locaux du chômage urbain en Ile-de-France. La synthèse montre que la déconnexion physique aux opportunités d’emploi et la ségrégation résidentielle peuvent conduire à une augmentation du chômage. La déconnexion aux emplois peut être à l’origine d’une prospection d’emploi coûteuse et inefficace. La ségrégation résidentielle peut quant à elle diminuer l’employabilité des individus, détériorer la qualité des réseaux sociaux intervenant dans l’obtention d’un emploi, et permettre la discrimination territoriale par les employeurs. Les faits stylisés montrent l’ampleur des phénomènes de ségrégation et de déconnexion domicile-emploi en l’ Ile-de-France. L’étude micro-économétrique suggère que la ségrégation a un effet négatif sur le retour à l'emploi des chômeurs.
    Keywords: spatial mismatch, ségrégation résidentielle, réseaux sociaux, chômage urbain
    JEL: J64 R14
    Date: 2005–03
  5. By: Robert Inman
    Abstract: The macro-economic and micro-economic evidences makes a persuasive case for cities as important centers for productive efficiency, innnovation, and economic growth. For cities to achieve their full economic potential, however, complementary public services are required. This paper reviews the arguments and the evidence for the efficient financing and governance of city public services. Against the criterion of efficiency, city services should be limited to those services valued by city residents; financing should assign residential taxes to residential services and business land taxes and fees to business services; and city governance should foster competition and choice.
    JEL: H11 H7 R38 R51
    Date: 2005–03
  6. By: Sukkoo Kim
    Abstract: Industrialization and urbanization are seen as interdependent processes of modern economic development. However, the exact nature of their causal relationship is still open to considerable debate. This paper uses firm-level data from the manuscripts of the decennial censuses between 1850 and 1880 to examine whether the adoption of the steam engine as the primary power source by manufacturers during industrialization contributed to urbanization. While the data indicate that steam-powered firms were more likely to locate in urban areas than water-powered firms, the adoption of the steam engine did not contribute substantially to urbanization.
    JEL: N60 N90 R38
    Date: 2005–03
  7. By: Jesse Rothstein
    Abstract: In an influential paper, Hoxby (2000) studies the relationship between the degree of so-called "Tiebout choice" among local school districts within a metropolitan area and average test scores. She argues that choice is endogenous to school quality, and instruments with the number of larger and smaller streams. She finds a large positive effect of choice on test scores, which she interprets as evidence that school choice induces greater school productivity. This paper revisits Hoxby's analysis. I document several important errors in Hoxby's data and code. I also demonstrate that the estimated choice effect is extremely sensitive to the way that "larger streams" are coded. When Hoxby's hand count of larger streams is replaced with any of several alternative, easily replicable measures, there is no significant difference between IV and OLS, each of which indicates a choice effect near zero. There is thus little evidence that schools respond to Tiebout competition by raising productivity. <p> <a href=""> A data appendix for this paper is available online</a>
    JEL: H7 I2 R5
    Date: 2005–03
  8. By: Caroline M. Hoxby
    Abstract: Rothstein has produced two comments, Rothstein (2003) and Rothstein (2004), on Hoxby "Does Competition Among Public Schools Benefit Students and Taxpayers," American Economic Review, 2000. In this paper, I discuss every claim of any importance in the comments. I show that every claim is wrong. I also discuss a number of Rothstein's innuendos--that is, claims that are made by implication rather than with the support of explicit arguments or evidence. I show that, when held up against the evidence, each innuendo proves to be false. One of the major points of Rothstein (2003) is that lagged school districts are a valid instrumental variable for today's school districts. This is not credible. Another major claim of Rothstein (2003) is that it is better to use highly non-representative achievement data based on students' self-selecting into test-taking than to use nationally representative achievement data. This claim is wrong for multiple reasons. The most important claim of Rothstein (2004) is that the results of Hoxby (2000) are not robust to including private school students in the sample. This is incorrect. While Rothstein appears merely to be adding private school students to the data, he actually substitutes error-prone data for error-free data on all students, generating substantial attenuation bias. He attributes the change in estimates to the addition of the private school students, but I show that the change in estimates is actually due to his using erroneous data for public school students. Another important claim in Rothstein (2004) that the results in Hoxby (2000) are not robust to associating streams with the metropolitan areas through which they flow rather than the metropolitan areas where they have their source. This is false: the results are virtually unchanged when the association is shifted from source to flow. Since 93.5 percent of streams flow only in the metropolitan area where they have their source, it would be surprising if the results did change much. The comments Rothstein (2003) and Rothstein (2004) are without merit. All of the data and code used in Hoxby (2000) are available to other researchers. An easy-to-use CD provides not only extracts and estimation code, but all of the raw data and the code for constructing the dataset.
    JEL: H70 I20
    Date: 2005–03
  9. By: Michael Rüscher
    Date: 2005–03–31
  10. By: Andrew Hughes Hallett (Vanderbilt University and CEPR)
    Abstract: Using a conventional model, this paper examines the conditions under which it is possible to stabilise both the output (inflation) cycle and the budget deficit/surplus of a regional economy in a wider currency union. We find that it is never possible. But we can approximate that result (for example, by limiting budgetary instability when the cycle is smoothed) if the product and labour markets are suitably flexible. Conversely, if fiscal policy is restricted, output and inflation volatility will be extended unless all shocks are supply shocks, compared to the case where there is some fiscal autonomy. Attempts at stabilisation in this situation would lead to an unstable political equilibrium. These results are important because they show what can be expected from fiscal restraints like the Stability Pact or tax harmonisation in the Eurozone; and from fiscal autonomy at the subnational level in older unions. Calibrating the results for the EU and UK respectively, we find that denying autonomy to the regions of the UK might be rather costly in terms of performance. But imposing tax harmonisation at the EU level would not.
    Keywords: Business cycle volatility, budget stability, regional autonomy, market flexibility
    JEL: E32 E63 R13
    Date: 2005–03
  11. By: Don J Webber (School of Economics, University of the West of England); Paul White (Faculty of Computing, Engineering and Mathematical Sciences, University of the West of England); Asier Minondo (Faculty of Economic and Business Administration Sciences, Universidad de Deusto, San Sebastián, Spain); David O Allen (School of Economics, University of the West of England)
    Abstract: Distribution free statistics are employed to investigate biennial income per capita convergence across 52 Spanish provinces over the period 1955-1997. Based upon ideas of concordance and discordance that capture convergence and divergence properties, the paper presents results that suggest convergence is dominant for the full sample over the entire period, swings in this trend between convergence and divergence are present and switching in rank does take place. When provinces are analysed in pairs some show strong evidence of divergence.
    Keywords: Convergence; Steady state; Average UK regional male wages
    JEL: C1 O4
    Date: 2004–04
  12. By: Don J Webber (School of Economics, University of the West of England); Paul White (Faculty of Computing, Engineering and Mathematical Sciences, University of the West of England)
    Abstract: The convergence literature frequently presupposes some unidentified steady state distribution. This paper presents a new method to identify the presence and rate of convergence to a steady state distribution. The method is illustrated with application to UK regional male wages.
    Keywords: Convergence; Steady state; Average UK regional male wages
    JEL: C1 O4
    Date: 2005–01

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