nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒12‒20
nineteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Estimation of Spatial Weights Matrix in a Spatial Error Model, with an Application to Diffusion in Housing Demand By Arnab Bhattacharjee; Chris Jensen-Butler
  2. Concentration, agglomeration and the size of plants. By Miren Lafourcade; Giordano Mion
  3. Spatial Correlation Robust Inference with Errors in Location or Distance By Timothy Conley; Francesca Molinari
  4. Perfect Competition, Spatial Competition, and Tax Incidence in the Retail Gasoline Market By James Alm; Edward Sennoga; Mark Skidmore
  5. Firm Fragmentation and Urban Patterns By Esteban Rossi-Hansberg; Pierre-Daniel_Sarte; Raymond Owens III
  6. The Impact of the Institutions on Regional Unemployment Disparities By Floro Ernesto Caroleo – Gianluigi Coppola
  7. Myths and Realities of American Political Geography By Edward L. Glaeser; Bryce A. Ward
  8. Income Taxes, Property Values and Migration By Amihai Glazer; Vesa Kanniainen; Panu Poutvaara
  9. Tolerance, aesthetics, amenities or jobs? Dutch city attraction to the creative class By Gerard Marlet; Clemens van Woerkens
  10. Policy-induced Internal Migration: An Empirical Investigation of the Canadian Case By Kathleen M. Day; Stanley L. Winer
  11. Interagency Task Force for the Economic Development of the Central San Joaquin Valley By Various Authors
  12. Assessing and Explaining the Relative Efficiency of Local Government: Evidence for Portuguese Municipalities By António Afonso; Sónia Fernandes
  13. Social Capital, Public Spending and the Quality of Economic Development. The Case of Italy By Fabio Sabatini
  14. Does Social Capital Improve Labour Productivity in Small and Medium Enterprises? By Fabio Sabatini
  15. Evaluation of the Family Self-Sufficiency Program By Robert C. Ficke; Andrea Piesse
  16. Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia By Mark Skidmore; Mehmet Serkan Tosun
  17. Population Geography Perspectives on the Central Asian Republics By Gentile, Michael
  18. The Geographic Distribution of Disaster Damages across the United States By Jeff Olson; Mark Skidmore
  19. Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties By Mark Skidmore; Mehmet Serkan Tosun

  1. By: Arnab Bhattacharjee; Chris Jensen-Butler
    Abstract: This paper proposes a methodology for estimation of spatial weights matrices which are consistent with a given or estimated pattern of spatial autocovariance. This approach is potentially useful for applications in urban, environmental, development, growth and other areas of economics where there is uncertainty regarding the nature or spatial (or cross-sectional) interaction between regions (or economic agents). The proposed methodology is applied to housing markets in England and Wales and several new hypotheses are advanced about the social and economic forces that determine spatial diffusion in housing demand.
    Keywords: Spatial econometrics; Spatial autocorrelation; Spatial weights matrix, Spatial error model; Housing demand
    JEL: C14 C15 C30 C31 R21 R31
    Date: 2005–12
  2. By: Miren Lafourcade; Giordano Mion
    Abstract: This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data we find, as in Kim (1995) and Holmes and Stevens (2002, 2004), that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities, and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities.
    Date: 2005
  3. By: Timothy Conley (Institute for Fiscal Studies and University of Chicago); Francesca Molinari
    Abstract: This paper presents results from a Monte Carlo study concerning inference with spatially dependent data. It investigates the impact of location/distance measurement errors upon the accuracy of parametric and nonparametric estimators of asymptotic variances.
    Date: 2005–08
  4. By: James Alm (Andrew Young School of Policy Studies, Georgia State University); Edward Sennoga (Andrew Young School of Policy Studies, Georgia State University); Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater)
    Abstract: In this paper we use monthly gasoline price data for all fifty U.S. states over the period 1984 to 1999 to examine the incidence of state gasoline excise taxes. Standard economic theory predicts full shifting of the excise tax to consumers when the supply of gasoline is perfectly elastic, and our empirical results are largely consistent with this prediction. In general, we find full shifting of gasoline taxes to the final consumer, with changes in gasoline taxes fully reflected in the tax-inclusive gasoline price almost instantly, a result consistent with a retail gasoline market in which firms are perfectly competitive and produce at constant cost. In addition, although we find that gasoline retail prices demonstrate asymmetric responses to changes in gasoline wholesale prices, we find only limited evidence of such behavior for retail prices with respect to gasoline excise taxes. Importantly, we also present a novel application of a spatial price discrimination model to examine tax incidence in markets that are not perfectly competitive. In this alternative framework, the incidence of excise taxes depends upon the competitiveness of retail gasoline markets, which depends in turn on spatial aspects of the market. Consistent with this alternative theoretical framework, our empirical estimates demonstrate that gasoline markets in urban states exhibit full shifting, but those in rural states demonstrate somewhat less than full shifting.
    Keywords: incidence, spatial competition, asymmetric response
    JEL: H22
    Date: 2005–10
  5. By: Esteban Rossi-Hansberg; Pierre-Daniel_Sarte; Raymond Owens III
    Abstract: We document several empirical regularities regarding the evolution of urban structure in the largest U.S. metropolitan areas over the period 1980-1990. These regularities relate to changes in resident population, employment, occupations, as well as the number and size of establishments in different sections of the metropolitan area. We then propose a theory of urban structure that emphasizes the location and internal structure decisions of firms. In particular, firms can decide to locate their headquarters and operation plants in different regions of the city. Given that cities experienced positive population growth throughout the 1980s, we show that firm fragmentation produces the diverse set of facts documented in the paper.
    JEL: R12 R14
    Date: 2005–12
  6. By: Floro Ernesto Caroleo – Gianluigi Coppola (CELPE-DISES, Università degli Studi di Salerno)
    Abstract: The main aim of this paper is to study European regional disparities in unemployment, considering regional productive structures and some regional institutional variables. It is widely known that one most important stylized facts concerning the EU consists in regional disparities among regions. Such differences relate to both income per capita and the labour market, the latter generally measured in terms of unemployment rates. In a recent paper (Amendola, Caroleo Coppola, 2004) we have analyzed the economic structure of the EU’s regions using proxies for the productive structure and the labour market. In this paper we estimate a panel data model where the dependent variable is the regional unemployment rate and the independent variables relate to the productive structure and some regional institutional aspects. The results confirm that institutional variables, such as the centralization of wage bargaining, the decentralization of public expenditure and the level of bureaucracy, have important impactson unemployment rates.
    Keywords: Unemployment, Regional Disparities, Institutions, Multivariate Analysis, Panel data
    JEL: R23 C23 H70
    Date: 2005–10
  7. By: Edward L. Glaeser; Bryce A. Ward
    Abstract: The division of America into red states and blue states misleadingly suggests that states are split into two camps, but along most dimensions, like political orientation, states are on a continuum. By historical standards, the number of swing states is not particularly low, and America's cultural divisions are not increasing. But despite the flaws of the red state/blue state framework, it does contain two profound truths. First, the heterogeneity of beliefs and attitudes across the United States is enormous and has always been so. Second, political divisions are becoming increasingly religious and cultural. The rise of religious politics is not without precedent, but rather returns us to the pre-New Deal norm. Religious political divisions are so common because religious groups provide politicians the opportunity to send targeted messages that excite their base.
    JEL: H7
    Date: 2005–12
  8. By: Amihai Glazer (University of California, Irvine); Vesa Kanniainen (University of Helsinki); Panu Poutvaara (University of Helsinki and IZA Bonn)
    Abstract: We consider taxation by a utilitarian government in the presence of heterogeneous locations within a country. We show that a utilitarian government never equalizes after-tax incomes, even when it can impose group-specific lump-sum taxes. If migration is impossible, a utilitarian government may even transfer income from the poor to the rich, reducing the rents earned by absentee landlords. The redistributive tax on the rich may be higher or lower when the rich can migrate than when they cannot.
    Keywords: taxes, land rents, property values, migration, redistribution
    JEL: H21 H7 R21 R23
    Date: 2005–12
  9. By: Gerard Marlet; Clemens van Woerkens
    Abstract: Richard Florida stated that it is not (only) job opportunities or urban amenities which attract creative high-educated people to cities but, rather, tolerance and aesthetics. We have tested this hypothesis in a cross section of Dutch cities. Our conclusion is that the tolerance/creative class nexus empirically fails to materialize for the Netherlands. However, the aesthetic assets of cities do provide a strong explanation for both share and growth of the creative class in Dutch cities. Beside that, job opportunities and urban amenities are still the most important factors influencing the choice for a place of residence.
    Keywords: urban economics, human capital, creative class, tolerance, urban amenities, city aesthetics
    Date: 2005–12
  10. By: Kathleen M. Day; Stanley L. Winer
    Abstract: We investigate the influence of public policy on interprovincial migration in Canada using new aggregated migration data for 1974-1996, the longest period studied so far. We consider the consequences of regional variation in a variety of policies, and also investigate the effects of certain extraordinary events in Quebec and in the Atlantic provinces. The results indicate that while the changing bias in the unemployment insurance system may have induced some people to move to the relatively high unemployment Atlantic region, the resulting flows are likely too small to have altered regional unemployment rates. In contrast, political events in Quebec in the 1970's and the closing of the cod fishery in 1992 appear to be associated with large changes in migration patterns.
    Keywords: migration, regional disparity, public policy, unemployment insurance, conditional logit, taxation data
    JEL: H00 H70 J41 J65 R23 R58
    Date: 2005
  11. By: Various Authors
    Abstract: The San Joaquin Valley (the Valley) is a region with unique and serious social, economic, and environmental challenges that merit special attention by the federal government. In February 2002, President Bush implemented Executive Order 13173, which created the Federal Interagency Task Force for the Economic Development of the Central San Joaquin Valley as the primary vehicle for leading change. The Task Force comprises 19 federal agencies that seek to leverage each other’s strengths and resources, as well as work in partnership with local and state governments, the private sector, universities, Congressional representatives, and other local organizations. During the past year, the Task Force has made great progress toward achieving the goals of the executive order. The Task Force has chosen to focus on three priority economic development initiatives, which include measurable goals and outcomes. The Regional Jobs Initiative focuses on alleviating chronic double-digit unemployment through a comprehensive private-public effort aimed at creating new jobs in the Valley. The Clean Air/Clean Energy Initiative focuses on alleviating the region’s poor air quality, a major obstacle to the region’s economic development, by a series of innovative efforts to clean the environment in ways that create new jobs. The Financial Education Initiative seeks to create more opportunities for homeownership, small business development, and personal savings through increased banking relationships and access to financial services by Valley residents.
    JEL: R50
    Date: 2004–06
  12. By: António Afonso; Sónia Fernandes
    Abstract: In this paper we measure the relative efficiency of Portuguese local municipalities in a non-parametric framework approach using Data Envelopment Analysis. As an output measure we compute a composite local government output indicator of municipal performance. This allows assessing the extent of municipal spending that seems to be “wasted” relative to the “best-practice” frontier. Our results suggest that most municipalities could achieve, on average, the same level of output using fewer resources, improving performance without necessarily increasing municipal spending. Inefficiency scores are afterwards explained by means of a Tobit analysis with a set of relevant explanatory variables playing the role of non-discretionary inputs..
    Keywords: local government; expenditure efficiency; technical efficiency; DEA; Tobit models.
    JEL: C14 C34 H72 R50
  13. By: Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics)
    Abstract: This paper carries out an empirical assessment of the relationship between social capital and the quality of economic development in Italy. The analysis draws on a dataset collected by the author including about two hundred variables representing different aspects of economic development and four “structural” dimensions of social capital. The quality of development is measured through human development and indicators of the state of health of urban ecosystems, public services, gender equality, and labour markets, while social capital is measured through synthetic indicators representing strong family ties, weak informal ties, voluntary organizations, and political participation. The quality of development exhibits a strong positive correlation with bridging weak ties and a negative correlation with strong family ties. Particularly, the analysis shows a strong correlation between informal ties and an indicator of “social well-being” (synthesizing gender equality, public services and labour markets) and between voluntary organizations and the state of health of urban ecosystems. Active political participation proves to be irrelevant in terms of development and well-being. Finally, the role of public spending for education, health care, welfare work, and the environment protection is analysed, revealing a scarce correlation both with social capital and development indicators.
    Keywords: Social capital, Social networks, Public spending, Economic development, Human development, Principal component analysis
    JEL: O15 O18 R11
    Date: 2005–12–11
  14. By: Fabio Sabatini (University of Rome La Sapienza, Department of Public Economics)
    Abstract: This paper carries out an empirical assessment of the relationship between social capital and labour productivity in small and medium enterprises in Italy. By means of structural equations models, the analysis investigates the effect of different aspects of the multifaceted concept of social capital. While the bonding social capital of strong family ties seems to be irrelevant, the bridging social capital of weak ties connecting friends and acquaintances is proved to exert a significant and positive influence both on labour productivity and on human development.
    Keywords: Labour productivity, Small and medium enterprises, Industrial organization, Social capital, Social networks, Structural equations models
    JEL: J24 R11 O15 O18
    Date: 2005–12–16
  15. By: Robert C. Ficke; Andrea Piesse
    Abstract: To break the cycle of reliance of government assistance, HUD’s legislation includes a requirement that most public housing authorities (PHAs) offering the Housing Choice Voucher program develop action plans promoting family self-sufficiency (FSS) for client families. Avenues to family self-sufficiency include individual case management, education, employment, childcare and transportation, and a substantial delayed monetary incentive for families that achieve increases in earnings. PHAs’ FSS plans rely on community partnerships through which these opportunities and services are made available to public housing and Housing Choice Voucher families. Then, in a contractual arrangement of up to five years, an individual family and the PHA jointly target goals, utilizing the support services arranged by the PHA that they believe will enable the family to attain economic self-sufficiency. This study presents a descriptive profile of FSS program participants and FSS programs in terms of size across the country. Using site visits and 1996–2000 HUD administrative data, the study also reports FSS program outcomes and compares them with what changes occurred in similar non-FSS program participants during the same period.
    JEL: R50
    Date: 2004–04
  16. By: Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater); Mehmet Serkan Tosun (Bureau of Business and Economic Research, College of Business and Economics, West Virginia University)
    Abstract: In this paper we present new evidence of cross-border shopping in response to sales taxation. While several instructive studies provide estimates of the cross-border shopping effect, we utilize a unique opportunity to evaluate the effect of a large discrete change in sales tax policy. Using county level data on food income and sales tax data for West Virginia over the 1982-2000 period we estimate that for every one-percentage point increase in the county relative price ratio due to sales tax change, the per capita food income decreases by about 0.7 percent. Our estimates indicate that food sales fell in West Virginia border counties by about 4 percent as a result of the imposition of the 6 percent sales tax on food in 1989.
    Date: 2005–09
  17. By: Gentile, Michael (Institute for Futures Studies)
    Abstract: Since the fall of the iron curtain, research on population issues in Central Asia, with the exception of migration, has lost ground in the academia, and little is known about the geographical dimensions of population issues in this region beyond the findings of the handful of studies carried out under the auspices of international organisations. Therefore, the purpose of this paper is to outline the main traits of the population geography of the Central Asian Republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. The report investigates the geographical characteristics of the countries’ vital statistics, as well as of other significant demographic indicators, such as the age structure, dependency ratio and infant mortality. Additionally, the report attempts to establish whether particular regional and local demographies show inter-linkages with the specific socio-economic and/or cultural settings that they are embedded in. The report uses the systematic collection and analysis of data from statistical sources as its main method. Most of the statistical materials derive from the national statistical authorities of the USSR and its successor states, although additional and complementary data was collected from the US Bureau of Census’ international database web resource. The use of such data involves substantial methodological and interpretative difficulties, which this report discusses in detail. <p> Applying a three-scale geographical approach on the study of the Central Asian Republics’ population development, this report demonstrates that there are significant variations in the territoriality of these countries’ demographies. The variations are indeed striking, and suggest that the five states will face distinctly spatially differentiated challenges with regard to the volume and type of healthcare that will be required, the nature of the demand for housing, social and cultural services, and the structure of the labour market, just to name a few examples. These challenges should be taken into greater consideration by policy-makers and other stakeholders, along with matters of more immediate concern, such as the poor health infrastructure and sanitary situation, the high rate of poverty, environmental degradation, and the economic and political instability in the southern regions, most recently epitomized by the Ferghana valley-based “tulip” revolution in Kyrgyzstan and the violent riots in the Uzbek city of Andijan.
    Keywords: Population Geography Perspectives; Central Asian Republics
    JEL: J10
    Date: 2005–12–12
  18. By: Jeff Olson (Department of Geography, Ohio State University); Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater)
    Abstract: In this paper we examine the geographic distribution of economic damages caused by natural disasters throughout the United States. Some economists have advocated the use of appropriately priced comprehensive natural disaster insurance as a means of disaster mitigation. The presumption implicit in the comprehensive disaster framework is that natural disasters are not uniformly distributed across the nation. While it clear that disasters occur more frequently and cause more damages in some regions than in others, limitations on the availability of and public access to disaster damage data have constrained researchers in their examination of the actual experiences across the states. Which states have the most damages resulting from natural disaster events? The objective of the paper is to compile information on disaster damages from multiple sources and present the spatial distribution of damages across the country. Some of the results are in line with what one might expect. However, we document some surprising results. The research also demonstrates the paucity of data on disaster damages over time and across space, highlighting the need for a systematic and comprehensive single public source of information on disaster damages for all types of natural hazards.
    Date: 2005–08
  19. By: Mark Skidmore (Department of Economics, University of Wisconsin - Whitewater); Mehmet Serkan Tosun (Bureau of Business and Economic Research, College of Business and Economics, West Virginia University)
    Abstract: In this paper we examine the impact of the lottery sales and the introduction of new lottery games on the retail activity using panel data on lottery sales, the adoption of new lottery games in West Virginia and in neighboring states, and retail income (a proxy for retail sales) for all 55 counties in West Virginia over the 1987-2001 period. Importantly, we are able to utilize changes in neighboring state lottery status to examine the potentially endogenous relationship between lottery sales and retail activity. Our findings generally show that lottery sales are positively associated with retail income, but perhaps surprisingly this positive effect is generated from interior counties and not border counties. We also find that the introduction of video lottery in several West Virginia counties has resulted in a significant increase in retail income.
    Keywords: Lottery, Regional Development
    JEL: R11 H70
    Date: 2005–05

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