nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒12‒09
twenty-one papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Urban Growth and Subcenter Formation: A Trolley Ride from the Staples Center to Disneyland and the Rose Bowl By Marcus Berliant; Ping Wang
  2. Gentrification and Neighborhood Housing Cycles: Will America's Future Downtowns be Rich? By Jan K. Brueckner; Stuart S. Rosenthal
  3. Property Tax and Urban Sprawl. Theory and Implications for U.S. Cities By Song, Yan; Zenou, Yves
  4. Regional Disparities in the European Union : Convergence and Agglomeration By Kurt Geppert; Michael Happich; Andreas Stephan
  5. The mechanisms of spatial mismatch By Gobillon, Laurent; Selod, Harris; Zenou, Yves
  6. Putting New Economic Geography to the Test: Free-ness of Trade and Agglomeration in the EU Regions By Steven Brakman; Harry Garretsen; Marc Schramm
  7. Sustainability of Urban Sprawl: Environmental-Economic Indicators for the Analysis of Mobility Impact in Italy By Chiara M. Travisi; Roberto Camagni
  8. Russia's Regions: Income Volatility, Labour Mobility and Fiscal Policy By Kwon, Goohoon; Spilimbergo, Antonio
  9. Optimal Control and Spatial Heterogeneity: Pattern Formation in Economic-Ecological Models By Anastasios Xepapadeas; William Brock
  10. The geographical concentration of unemployment: A male-female comparison in Spain By Olga Alonso-Villar; Coral del Río
  11. Entrepreneurial Founder Effects in the Growth of Regional Clusters: How Early Succes is a Key Determinant By Michael S. Dahl; Christian Ø.R. Pedersen; Bent Dalum
  12. Racial Sorting and Neighborhood Quality By Patrick Bayer; Robert McMillan
  13. Competitive Dynamics of Southern California's Clothing Industry By Allen J. Scott
  14. Why is economic geography not an evolutionary science? Towards an evolutionary economic geography Model By Ron A. Boschma; Koen Frenken
  15. Regional Disparities and Inequality of Opportunity: The Case of Italy By Daniele Checchi; Vitorocco Peragine
  16. Localized Learning Revisited By Anders Malmberg; Peter Maskell
  17. Property Crime and Law Enforcement in Italy. A Regional Panel Analysis 1980-95 By Guido Travaglini
  18. Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster By Bruce Fallick; Charles A. Fleischman; James B. Rebitzer
  19. Geographical Concentration of Rural Poverty in Bangladesh By Suan Pheng Kam; Manik Lal Bose; Tahmina Latif; M A H Chowdhury; S Ghulam Hussain; Mahbub Ahmed; Anwar Iqbal; L Villano; Mahabub Hossain
  20. The Cultural Economy of Paris By Allen J. Scott
  21. Migration Dynamics By Sergio Vergalli; Michele Moretto

  1. By: Marcus Berliant (Washington University in St. Louis); Ping Wang (Washington University in St. Louis & NBER)
    Abstract: There have been long-term trends of urbanization and sustained growth across developed and developing countries over the past two centuries. Not only have more cities formed, but the leading metropolises have grown larger, with a number of peripheral subcenters developing over time. Conventional models of urban growth are limited, in that commuting cost and congestion eventually result in decreasing returns in a monocentric city as population becomes very large. In our paper, we construct an endogenous growth model with dynamic interactions between spatial agglomeration and urban development. In contrast with the conventional endogenous urban growth framework, our paper models explicitly the underlying growth-driven mechanism, namely location- dependent knowledge spillovers. Our contribution allows endogenous development of subcenters to offset diminishing returns from urban congestion, thus permitting sustained city growth.
    Keywords: Core-Periphery Urban Structure, Agglomerative Production Activity, Endogenous Formation of Cities
    JEL: C78 D51 R12
    Date: 2005–11–23
  2. By: Jan K. Brueckner; Stuart S. Rosenthal
    Abstract: This paper identifies a new factor, the age of the housing stock, that affects where high- and low-income neighborhoods are located in U.S. cities. High-income households, driven by a high demand for housing services, will tend to locate in areas of the city where the housing stock is relatively young. Because cities develop and redevelop from the center outward over time, the location of these neighborhoods varies over the city’s history. The model predicts a suburban location for the rich in an initial period, when young dwellings are found only in the suburbs, while predicting eventual gentrification once central redevelopment creates a young downtown housing stock. Empirical work indicates that if the influence of spatial variation in dwelling ages were eliminated, longstanding central city/suburban disparities in neighborhood economic status would be reduced by up to 50 percent. Model estimates further predict that between 2000 and 2020, central-city/suburban differences in economic status will widen somewhat in smaller cities but narrow sharply in the largest American cities as they become more gentrified.
    JEL: R00 R14
    Date: 2005
  3. By: Song, Yan; Zenou, Yves
    Abstract: This article attempts a formal analysis of the connection between property tax and urban sprawl in U.S. cities. We develop a theoretical model that includes households (who are also landlords) and land developers in a regional land market. We then test the model empirically based on a national sample of urbanized areas. The results we obtained from both theoretical and empirical analyses indicate that increasing property tax rates reduces the size of urbanized areas.
    Keywords: fully-closed city; instrumental variables; property tax; urban economics; urban sprawl
    JEL: H3 H71 R14
    Date: 2005–11
  4. By: Kurt Geppert; Michael Happich; Andreas Stephan
  5. By: Gobillon, Laurent; Selod, Harris; Zenou, Yves
    Abstract: The Spatial Mismatch Hypothesis (SMH) argues that low-skilled minorities residing in U.S. inner cities experience poor labour-market outcomes because they are disconnected from suburban job opportunities. This assumption gave rise to an abundant empirical literature, which confirmed this hypothesis. Surprisingly, however, it is only recently that theoretical models have emerged, which probably explains why the mechanisms of spatial mismatch have long remained unclear and not properly tested. In this survey, we present relevant facts, review the theoretical models of spatial mismatch, confront their predictions with available empirical results, and indicate which mechanisms deserve further empirical tests.
    Keywords: discrimination; ghettos; segregation; urban unemployment
    JEL: J15 J41 R14
    Date: 2005–11
  6. By: Steven Brakman; Harry Garretsen; Marc Schramm
    Abstract: Based on a new economic geography (NEG) model by Puga (1999), we use the equilibrium wage equation to estimate two key structural model parameters for the NUTS II EU regions. These estimations enable us to come up with an empirically grounded free-ness of trade parameter. In line with NEG theory, the estimation results show that a spatial wage structure exists for the EU regions. By going back to the theoretical model we then analyze the implications of the free-ness of trade parameter for the degree of agglomeration. Our main findings suggest that agglomeration forces still have only a limited spatial reach in the EU. Agglomeration forces appear to be rather localized. At the same time, confronting our empirical results with the underlying new economic geography model also brings out the limitations of empirical research in new economic geography.
    JEL: F12 J31 R12
    Date: 2005
  7. By: Chiara M. Travisi (DIG, Politecnico di Milano); Roberto Camagni (DIG, Politecnico di Milano)
    Abstract: Sound empirical and quantitative analysis on the relationship between different patterns of urban expansion and environmental or social costs of mobility are still very rare in Europe and the few studies available provide only a qualitative discussion on this. Recently, Camagni et al. (2002) have performed an empirical analysis on the metropolitan area of Milan, aimed at establishing whether different patterns of urban expansion generate different levels of land consumption and heterogeneous impacts of urban mobility. Results confirm the expectation that higher environmental impact of mobility is associated with more extensive and sprawling urban development, more recent urbanisation processes and residential specialisation. The present paper enlarges further the empirical analysis to seven Italian metropolitan areas (namely, Bari, Florence, Naples, Padua, Perugia, Potenza and Turin) to corroborate previous results for the Italian context. The novelty of the present paper is threefold. Firstly, we are interested in exploring the changes occurred to the intensity of the mobility impact across a ten-year period, from 1981 to 1991, corresponding to the Italian economic boom years. Secondly, using an econometric analysis in cross-section, we consider several metropolitan areas at once, being therefore able to explore whether there are significant differences in the way the model explains variations in the mobility impact across various Italian urban areas. Finally, we propose a conceptual interpretation of the causal chain in the explanation of the mobility impact intensity and we test it using Causal Path Analysis.
    Keywords: Urban mobility, Sprawl, Environmental sustainability, Collective costs
    JEL: Q56 R14 R41
    Date: 2005–09
  8. By: Kwon, Goohoon; Spilimbergo, Antonio
    Abstract: Russia's regions are heavily exposed to regional income shocks because of an uneven distribution of natural resources and a Soviet legacy of heavily skewed regional specialization. Also, Russia has a limited mobility of labour and lacks fiscal instruments to deal with regional shocks. We assess how these features influence the magnitude and persistence of regional income shocks, through a panel vector auto-regression, drawing on extensive and unique regional data covering the last decade. We find that labour mobility associated with regional shocks is far lower than in the US yet higher than in the EU-15, and that regional expenditures tend to expand in booms and contract in recessions. We discuss institutional factors behind these outcomes and policy implications.
    Keywords: fiscal policy; labour mobility; panel VAR; Russia
    JEL: C33 E62 H77 J61 P52
    Date: 2005–10
  9. By: Anastasios Xepapadeas (University of Crete); William Brock (University of Wisconsin)
    Abstract: This paper extends Turing analysis to standard recursive optimal control frameworks in economics and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics under optimal control over space creates (or destroys) spatial heterogeneity. We show how our approach reduces the analysis to a tractable extension of linearization methods applied to the spatial analog of the well known costate/state dynamics. We explicitly show the existence of a non-empty Turing space of diffusive instability by developing a linear-quadratic approximation of the original non-linear problem. We apply our method to a bioeconomic problem, but the method has more general economic applications where spatial considerations and pattern formation are important. We believe that the extension of Turing analysis and the theory associated with the dispersion relationship to recursive infinite horizon optimal control settings is new.
    Keywords: Spatial analysis, Pattern formation, Turing mechanism, Turing space, Pontryagin’s principle, Bioeconomics
    JEL: Q2 C6
    Date: 2005–07
  10. By: Olga Alonso-Villar (Universidade de Vigo); Coral del Río (Universidade de Vigo)
    Abstract: This paper aims at complementing the approach presented by Johnston et al. (2003) with tools from the literature on economic geography and income distribution in order to perform a thorough analysis of the spatial concentration of unemployment. Apart from using such empirical procedures in the field of labour economy, the paper shows the complementarities that both approaches have when trying to look into distributive issues from a spatial perspective. For that purpose, the paper analyses the spatial distribution of unemployment in Spain, with a thorough analysis of the differences between male and female patterns.
    Keywords: unemployment; spatial concentration; municipalities.
    Date: 2005–11
  11. By: Michael S. Dahl; Christian Ø.R. Pedersen; Bent Dalum
    Abstract: How can the growth of regional clusters be explained? This paper studies in great detail the growth of the wireless communication cluster in Northern Denmark. Unlike the dominant theories, we argue that initial success of the first firms are the main driving force behind the generation of new firms that eventually lead to the formation of clusters. The success of the first firms tend to generate spinoffs, which becomes successful themselves due to the background of the founders.
    Keywords: Agglomeration; Clusters; Spin-offs; Knowledge Diffusion
    JEL: R10 O13 J60 L63
    Date: 2005
  12. By: Patrick Bayer; Robert McMillan
    Abstract: In cities throughout the United States, blacks tend to live in significantly poorer and lower-amenity neighborhoods than whites. An obvious first-order explanation for this is that an individual’’s race is strongly correlated with socioeconomic status (SES), and poorer households can only afford lower quality neighborhoods. This paper conjectures that another explanation may be as important. The limited supply of high-SES black neighborhoods in most U.S. metropolitan areas means that neighborhood race and neighborhood quality are explicitly bundled together. In the presence of any form of segregating preferences, this bundling raises the implicit price of neighborhood amenities for blacks relative to whites, prompting our conjecture -- that racial differences in the consumption of neighborhood amenities are significantly exacerbated by sorting on the basis of race, given the small numbers of blacks and especially high-SES blacks in many cities. To provide evidence on this conjecture, we estimate an equilibrium sorting model with detailed restricted Census microdata and use it to carry out informative counterfactual simulations. Results from these indicate that racial sorting explains a substantial portion of the gap between whites and blacks in the consumption of a wide range of neighborhood amenities -- in fact, as much as underlying socioeconomic differences across race. We also show that the adverse effects of racial sorting for blacks are fundamentally related to the small proportion of blacks in the U.S. metropolitan population. These results emphasize the significant role of racial sorting in the inter-generational persistence of racial differences in education, income, and wealth.
    JEL: H0 J7 R0 R2
    Date: 2005–12
  13. By: Allen J. Scott (UCLA)
    Abstract: A general outline of the functional and spatial characteristics of the clothing industry in Southern California is sketched out. Two important trends are noted: (a) the increasing design- and knowledge-intensive structure of the industry and (b) the marked increase in offshore subcontracting by local manufacturers that has occurred in recent years. The predicaments and promises of this situation are explored. Will the industry simply continue to lose its employment base in the region? Will it succeed in making the transition to the status of a major world center of fashion? I argue that the Southern California clothing industry is potentially capable of rising to the latter challenge, though it remains strongly over-shadowed by the New York industry in terms of both fashion significance and commercial reach, and it also retains strong elements of its traditional underbelly of sweatshops. I further argue that considerable effort needs to be invested in building social infrastructures to reinforce current positive trends in the industry. Given the right kinds of private and public responses, I submit that Southern California is capable of becoming an international fashion center on a par with New York, Paris, London, or Milan.
    Keywords: Apparel, agglomeration, outsourcing, industrial clusters
    JEL: R
    Date: 2005–11–28
  14. By: Ron A. Boschma; Koen Frenken
    Abstract: The paper explains the commonalities and differences between neoclassical, institutional and evolutionary approaches that have been influential in economic geography during the last couple of decades. For all three approaches, we argue that they are in agreement in some respects and in conflict in other respects. While explaining to what extent and in what ways the Evolutionary Economic Geography approach differs from the New Economic Geography and the Institutional Economic Geography, we can specify the value-added of economic geography as an evolutionary science.
    Keywords: evolutionary economic geography, new economic geography, institutional economic geography
    JEL: A12 B20 B25 R0 R1
    Date: 2005–02
  15. By: Daniele Checchi (University of Milan and IZA Bonn); Vitorocco Peragine (University of Bari)
    Abstract: In this paper we provide a new methodology to measure opportunity inequality and to decompose overall inequality in an "ethically offensive" and an "ethically acceptable" part. Moreover, we provide some empirical applications of these new evaluation tools: in the first exercise, we compare the income distributions of South and North of Italy on the basis of a measure of opportunity inequality. Then, we repeat the exercise using the cognitive abilities in a sample of 15-year old students. In both circumstances we find that the less developed regions in the South are characterized by greater incidence of inequality of opportunity.
    Keywords: equality of opportunity, justice, education
    JEL: D63
    Date: 2005–12
  16. By: Anders Malmberg; Peter Maskell
    Abstract: The concept of localized learning outlines how local conditions and spatial proximity between actors enable the formation of distinctive cognitive repertoires and influence the generation and selection of skills, processes and products within a field of knowledge or activity. The localized learning argument consists of two distinct yet related elements. One has to do with localized capabilities that enhance learning while the other concerns the possible benefits that firms with similar or related activities may accrue by locating in spatial proximity of one another. In this essay, we disentangle these two inherent elements of the concept, review some of the critique that has been raised against it, and sort out some misunderstandings that we think are attached to its present use.
    Date: 2005
  17. By: Guido Travaglini (Università 'La Sapienza' Roma)
    Abstract: In this paper a Cobb-Douglas utility function is introduced and solved for a dynamic equation of property crime supply and its determinants, namely deterrents and income. Thereafter, all variables are empirically tested, by means of a simultaneous equations model, for the sign and magnitude of their mutual relationships in a panel of Italy and its two economically and culturally different areas, the North and the South. The period scrutinized is 1980-95 and the results obtained widely differ among the two. When appropriately modeled and instrumented, in fact, property crime is found to react to police and criminal justice deterrence, and also to incomes, with different parameter magnitudes and significance. The same diversity applies to the parameters related to deterrence, flawed in quite a few cases by scarce law enforcement and productivity, and to those related to local incomes, which still reflect for the South a tendency of crime to substitute for legal activities.
    Keywords: Models with Panel Data, Illegal Behavior and the Enforcement of Law
    JEL: C33 K42
    Date: 2005–12–01
  18. By: Bruce Fallick (Federal Reserve System); Charles A. Fleischman (Federal Reserve System); James B. Rebitzer (Case Western Reserve University, The Levy Economics Institute, & The National Bureau of Economic Research)
    Abstract: Observers of Silicon Valley’s computer cluster report that employees move rapidly between competing firms, but evidence supporting this claim is scarce. Job-hopping is important in computer clusters because it facilitates the reallocation of talent and resources toward firms with superior innovations. Using new data on labor mobility, we find higher rates of job-hopping for college-educated men in Silicon Valley’s computer industry than in computer clusters located out of the state. Mobility rates in other California computer clusters are similar to Silicon Valley’s, suggesting some role for features of California law that make non-compete agreements unenforceable. Consistent with our model of innovation, mobility rates outside of computer industries are no higher in California than elsewhere.
    Keywords: agglomerations, clusters, non-compete agreements, human capital, innovation, Silicon Valley, modular production.
    JEL: R12 L63 O3 J63
    Date: 2005–12–02
  19. By: Suan Pheng Kam; Manik Lal Bose; Tahmina Latif; M A H Chowdhury; S Ghulam Hussain; Mahbub Ahmed; Anwar Iqbal; L Villano; Mahabub Hossain
    Abstract: This paper was presented at the dialogue on Mapping Poverty for Rural Bangladesh: Implications for Pro-poor Development. The dialogue was organised as part of CPD's ongoing agricultural policy research and advocacy activities with IRRI under the PETRRA project. The study reported geographical concentration of rural poverty in Bangladesh for 425 upazilas in 2000-01. The study measured and mapped incidence of poverty (using Headcount Index), intensity of poverty (using Poverty Gap Index) and severity of poverty (using Squared Poverty Gap Index). It has analyzed factors contributing to the spatial concentration of poverty. It is hoped that the findings of the study would be helpful in identifying target areas and priorities for agricultural R&D interventions and poverty reduction programmes.
    Keywords: Poverty, Rural Poverty, Bangladesh
    JEL: I3
    Date: 2004–07
  20. By: Allen J. Scott (UCLA)
    Abstract: The cultural economy is defined in terms of a set of sectors ranging from certain traditional artisanal industries like clothing or jewelry on the one side, to newer media industries like sound recording or television program production on the other. I provide an overview of the industrial dynamic of French society since the Second World War and I assess its (inimical) effects on segments of the cultural economy. An empirical description of the cultural-products industries of Paris is offered, with special reference to their locational structure and their competitive advantages and disadvantages. The entire institutional and policy environment within which these industries operate is then subject to analysis, and I seek to show how many of them have become locked in to dysfunctional competitive strategies. I conclude by suggesting that despite their current difficulties, the cultural-products industries of Paris remain a potential focus of significant new growth and development.
    Keywords: Cultural products, agglomeration, industrial clusters, creative industries
    JEL: R
    Date: 2005–11–28
  21. By: Sergio Vergalli (University of Brescia); Michele Moretto (University of Brescia)
    Abstract: This paper tries to explain why most migration flows show some observable jumps in their processes, a phenomenon that seems to be sympathetic with the characteristic of irreversibility of migration. We present a real option model where the choice to migrate depends on both the differential wage between the host country and the country of origin, and on the probability of being fully integrated into the host country. The theoretical results show that the optimal migration decision of a single individual consists of waiting before migrating in a (coordinate) mass of individuals. The dimension of the migration flow depends on the behavioural characteristics of the ethnic groups: the more "sociable" they are, the larger the size of the wave and the lower the differential wage required. A second part of the paper is devoted to calibrating the model and simulating some migration flows to Italy in the last decade. The calibration is able to replicate the observable migration jumps in the short term. In particular, the calibrated model is able to conjecture the induced labour demand elasticity level of the host country and the behavioural rationale of the migrants.
    Keywords: Migration, Real Option, Labour Market, Network Effect
    JEL: F22 O15 R23
    Date: 2005–09

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