nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒09‒03
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Commuting, Externalities, and the Geographical Sizes of Metropolitan Areas By Eckhardt Bode
  2. Gentrification and Neighborhood Housing Cycles: Will America’s Future Downtowns Be Rich? By Jan K. Brueckner; Stuart S. Rosenthal
  3. Why Butterflies Don’t Leave. Locational behaviour of entrepreneurial firms By Erik Stam
  4. Spatial Hedonics and the Willingness to Pay for Residential Amenities By Kenneth A. Small; Seiji Steimetz
  5. Location in a Vertically Differentiated Industry By E. Bacchiega; A. Minniti
  6. New Revelations about Unemployment Persistence in Spain By Luis Alberiko Gil-Alana; Pedro Garcia-del-Barrio
  7. Natural Advantage, Location and Trade Patterns in Increasing Returns to Scale Industries By G.A. Minerva
  8. A Tale of Two Stadiums: Comparing the Economic Impact of Chicago’s Wrigley Field and U.S. Cellular Field By Victor Matheson; Robert Baade; Mimi Nikolova
  9. Outward FDI and Local Employment Growth in Italy By S. Federico; G.A. Minerva
  10. Macroeconometric modelling for evaluationg the policy impact on growth in dualistic countries: the case of Southern Italian Regions By Stefania P. S. Rossi; Guido Pellegrini; Ornella Tarola

  1. By: Eckhardt Bode
    Abstract: The paper proposes an econometric approach for quantifying jointly the geographical scope of commuting as well as the various forms of agglomeration economies originating from metropolitan centers. Adopting an urban economics perspective, and using land prices to measure their aggregate effects, the approach estimates the geographical reach of commuting and urban externalities from a hierarchical system of gradient functions. The results for West German NUTS3 regions indicate that metropolitan areas may be larger than suggested by MSA classifications based on commuting only. Metropolitan subcenters are found to enlarge metropolitan areas significantly.
    Keywords: urban economics, commuting, agglomeration economies, land price gradient, urban fringe, Germany
    JEL: C21 C52 R14
    Date: 2006–08
  2. By: Jan K. Brueckner (Department of Economics, University of California-Irvine); Stuart S. Rosenthal (Departament of Economics, Syracuse University)
    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.
    Date: 2005–09
  3. By: Erik Stam
    Abstract: Entrepreneurship is an important process in regional economic development. Especially the continued growth of a minority of new firms is of major significance to the commercialization of new ideas and employment growth. These growing new firms are transforming on a structural basis, like caterpillars turning into butterflies. However, like butterflies they are at risk to leave their region of origin for better places. This paper analyses how and why the spatial organization of firms develops subsequent to their start-up. A new conceptual framework and an empirical study of the life course of entrepreneurial firms are used to construct a theory on their locational behavior that explains that behavior as the outcome of a process of initiatives taken by entrepreneurs, enabled and constrained by resources, capabilities and relations with stakeholders within and outside of the firm. This study shows that entrepreneurs decide whether or not to move their firm outside of their region of origin for different reasons in distinct phases of the firm life course. Being embedded in social networks, for example, is an important constraint on locational behavior during the early life course of a firm, but over time this becomes less important and other mechanisms like sunk costs increasingly determine the locational behavior of fast-growing firms. The development of the spatial organization is also of major importance: when a multilocational spatial organization has been realized, it is much easier to move the headquarters to another region. The spatial organization of entrepreneurial firms co-evolves with the accumulation of their capabilities. A developmental approach incorporating evolutionary mechanisms and recognizing human agency provides new insights into the age-old study of firm location.
    Keywords: location, location behavior, spatial organization, theory of the firm, entrepreneurial firms, entrepreneurship, firm growth, regional economic development
    JEL: D21 L14 L22 M13 R11 R30
    Date: 2006–08
  4. By: Kenneth A. Small (Department of Economics, University of California-Irvine); Seiji Steimetz (Department of Economics, California State University-Long Beach)
    Abstract: Housing rents and prices may be influenced not only by the characteristics of the house in question, but by those of nearby houses. Recent work has shown how this effect can be included in a hedonic housing-price equation by using a spatial autoregression model that includes “spatial lags” (prices of nearby properties) in the specification. But if there is a change that influences all prices simultaneously, such as a uniform pollution reduction, what role do spatial lags play in measuring the welfare effects arising from this change? One suggestion in the literature is that the full marginal value of an improvement in air quality is given by the reduced form equation of the autoregressive model, effectively applying a “spatial multiplier” to the directly-measured implicit price of air pollution. We show that this suggestion is correct only if the spatial price interdependence arises from technological spillovers, such that my utility depends on actions my neighbor takes as a result of that neighbor’s property value (e.g. better maintenance). In this case simply estimating a model without spatial lags may also provide a reasonably accurate welfare measure. On the other hand, the spatial inter-dependence could be from pecuniary spillovers, e.g. when real-estate agents use prices of nearby houses to estimate the true equilibrium price of a house being sold. In that case, correct benefit estimation requires the use of spatial lags to separate these pecuniary effects from the implicit prices of pollution. And because those implicit prices alone carry all the required information for benefit estimates, applying a spatial multiplier to them would overestimate benefits.
    Keywords: Spatial autocorrelation; spatial lag; welfare; willingness to pay; hedonic price function
    Date: 2006–06
  5. By: E. Bacchiega; A. Minniti
    Date: 2005
  6. By: Luis Alberiko Gil-Alana (Universidad de Navarra); Pedro Garcia-del-Barrio (Universitat Internacional de Catalunya)
    Abstract: This paper aims to re-examine the persistence of unemployment in Spain. For this purpose, we use time series and cross-section analysis. From a time series viewpoint we disaggregate unemployment by regions, and use unit root tests, AR coefficients and fractional differencing parameters as indicators of persistence. For the cross-section approach, we first estimate mean regressions of regional unemployment rates. Then, using a panel of 114 periods and 50 provinces, we estimate pooled, fixed and random effects models. Finally, following some recent developments, we implement several panel data unit root tests. Previous studies had already shown the strong persistence of Spanish unemployment. Our disaggregated analysis extends that finding to reveal that the persistence is greater in the most industrialised regions. The results also suggest that a structural break took place in 1994, implying a decline in the unemployment persistence since then.
    JEL: J64
  7. By: G.A. Minerva
    Date: 2006
  8. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College); Mimi Nikolova (Department of Economics and Business, Lake Forest College)
    Abstract: Supporters of sports stadium construction often defend taxpayer subsidies for stadiums by suggesting that sports infrastructure can serve as an anchor for local economic redevelopment. Have such promises of economic rejuvenation been realized? The City of Chicago provides an interesting case study on how a new stadium, U. S. Cellular Field, has been integrated into its southside neighborhood in a way that may well have limited local economic activity. This economic outcome stands in stark contrast to Wrigley Field in northern Chicago which continues to experience a synergistic commercial relationship with its neighborhood.
    Keywords: sports, sports, stadiums, development, baseball, Chicago, economic impact
    JEL: L83 O18 R53
    Date: 2006–08
  9. By: S. Federico; G.A. Minerva
    Date: 2006
  10. By: Stefania P. S. Rossi; Guido Pellegrini; Ornella Tarola
    Abstract: Can policies accelerate the convergence path of dualistic economic growth in a single country, offsetting market failures and making growth transmission channels more efficient? A structural dynamic econometric model, has been set up in order to account for these changes. Three are the main sources of growth playing a role in this context: the “neighbourhood” effect, the interaction between the economic environment and the agents' expectations, and the policy impact on economic take-off. The evidence shows that policies strongly boost economicgrowth of a local area and narrow the gap between the regions of a dual economy.
    JEL: C50 C52
    Date: 2006–07

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