nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒09‒23
thirteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Was There A British House Price Bubble? Evidence from a Regional Panel By Gavin Cameron; John Muellbauer; Anthony Murphy
  2. Labour Market Flexibility and Regional Unemployment Rate Dynamics: Spain 1980-1995 By Roberto Bande; Marika Karanassou
  3. Housing Market Dynamics and Regional Migration in Britain By Anthony Murphy; John Muellbauer; Gavin Cameron
  4. An Assessment of the Regional Innovation Policy by the European Union based on Bibliometrical Analysis By Claudia Werker
  5. The Micro-level Dynamics of Regional Productivity Growth: The Source of Divergence in Finland Revised By Petri Böckerman; Mika Maliranta
  6. Village inequality in Western China: Implications for Development Strategy in Lagging Regions By Xing, Li; Fan, Shenggen; Luo, Xiaopeng; Zhang, Xiaobo
  7. Transportation Conditions and Access to Services in a Context of Urban Sprawl and Deregulation. The Case of Dar es Salaam By Lourdes Diaz Olvera; Didier Plat; Pascal Pochet
  8. Rich States, Poor States: Convergence and Polarisation in India By Sanghamitra Bandyopadhyay
  9. Capital gains taxation and house price fluctuations By Fuest, Clemens; Huber, Bernd; Nielsen, Søren Bo
  10. Pay Inequality in Cuba: the Special Period and After By James K. Galbraith; Laura Spagnolo; Daniel Munevar
  11. Public & Private Spillovers, Location and the Productivity of Pharmaceutical Research By Jeffrey L. Furman; Magaret K. Kyle; Iain M. Cockburn; Rebecca Henderson
  12. The Effects of Accessibility to University Education on Enrollment Decisions, Geographical Mobility, and Social Recruitment By Eliasson, Kent

  1. By: Gavin Cameron; John Muellbauer; Anthony Murphy
    Abstract: This paper investigates the bubbles hypothesis with a dynamic panel data model of British regional house prices between 1972 and 2003. The model consists of a system of inverted housing demand equations, incorporating spatial interactions and lags and relevant spatial parameter heterogeneity. The results are data consistent, with plausible long-run solutions and include a full range of explanatory variables. Novel features of the model include transaction cost effects influencing the speed of adjustment, and interaction effects between an index of credit availability and real and nominal interest rates. No evidence for a recent bubble is found.
    Keywords: House Prices, Bubble, Spatial Economics
    JEL: C51 E39
    Date: 2006
  2. By: Roberto Bande (Universtity of Santiago and IDEGA); Marika Karanassou (Queen Mary, University of London and IZA)
    Abstract: This paper aims to shed light in the dynamics of Spanish regional unemployment rates and determine the driving forces of their disparities. The Spanish economy has one of the highest unemployment rates in the EU and is characterised by severe regional disparities. We apply the chain reaction theory of unemployment according to which the evolution of unemployment is driven by the interplay of lagged adjustment processes and the spillover effects within the labour market system. Our model includes nationwide as well as region-specific variables, and takes into account the limited labour and firm mobility in Spain. We show that the degree of labour market flexibility differs between high and low unemployment regions, and find that investment has a major influence on the unemployment trajectory. In addition, we find that in bad times high unemployment regions are hit more severely than low unemployment regions, while in good times high unemployment regions do not benefit as much as low unemployment regions.
    Keywords: Regional disparities, Unemployment, Spillover effects, Labour market lagged adjustment processes
    JEL: R23 J64
    Date: 2006–09
  3. By: Anthony Murphy; John Muellbauer; Gavin Cameron
    Abstract: Economic conditions exert a strong influence on regional migration. On the one hand, strong labour market conditions, as exemplified by low unemployment rates and high earnings, draw migrants into regions. On the other hand, strong housing market conditions can prevent movement since expensive housing can deter migrants and commuting may often be an alternative. This can be thought of as giving rise to a migration equilibrium, where high house prices choke off migration caused by strong labour market conditions. Expected capital gains in housing and expected earnings growth however, can offset high levels of house prices, effects ignored in previous literature. Migration can also be influenced more directly by the availability of housing relative to population without this being mediated through prices. This paper presents evidence from a 28 year panel on net and gross migration for the regions of Britain that is broadly in accord with these expectations.
    Keywords: Regional Migration, House Prices, Expected Capital Gains, Contiguity, Great Britain, Regional Panel
    JEL: C33 J19 R3
    Date: 2006
  4. By: Claudia Werker
    Abstract: The Lisbon strategy for growth and jobs seeks to use knowledge and innovation in the context of the European Research Area (ERA). To build the ERA the European Union (EU) implements – amongst others - regional innovation policy. Ample scientific publications have investigated how innovation drives regional dynamics. Therefore, we assess the goals of European regional innovation policy in the light of the scientific findings, which we collected and condensed by bibliometrical analysis. The general goals of the Lisbon strategy to at the same time stimulate growth and achieve cohesion of economic activities across the EU is not in line with the finding that positive cumulative and self-reinforcing processes go hand in hand with the agglomeration of economic activities. However, the goals of the specific innovation policies for the regional level are mainly in line with the scientific findings.
    Keywords: Region, innovation policy, European Union, bibliometrical analysis Length 28 pages
    JEL: O31 O33 O38 R11
    Date: 2006–09
  5. By: Petri Böckerman; Mika Maliranta
    Keywords: productivity, efficiency, micro-level restructuring, convergence
    JEL: O12 R23
    Date: 2006–09–14
  6. By: Xing, Li; Fan, Shenggen; Luo, Xiaopeng; Zhang, Xiaobo
    Abstract: "Increased regional inequality has been a major concern in many emerging economies like China, India, Vietnam and Thailand. However, even a large inequality is observed within the lagging regions. The objective of this paper is to look into what are the sources of within region inequality using the community surveys and a census type of households in Western China. This snapshot view of inequality within and between rural villages in western China is based on a census-type household survey in three administrative villages and a sampling survey of 286 natural villages in the poor province of Guizhou in 2004. In contrast to coastal regions, nonfarm income is distributed unevenly in this inland western region. This accounts for the largest share of overall income inequality. But agriculture is still the rural people's major source of livelihood in this particular location. On the expenditure side, health care is one of the most important sources of inequality. Because rural income is strongly related to human capital, the uneven access to health care will translate into a larger income gap in the long run. The analysis based on the natural village survey indicates that income varies widely across villages. Access to infrastructure and markets, education, and political participation explain most of this variation. These findings have important implications on the future development strategy in promoting lagging regions development and poverty reduction. While the overall economic development will be the main instrument to bring the majority poor out of poverty, a targeted approach has become increasingly crucial in helping the poor villages and households. It is critical to understand why these villages and households can not participate in the growth process and how development programs and various transfer programs help them to overcome the constraints they face." Authors' Abstract
    Keywords: Rural development, Poverty reduction, Inequality, Public investment, China, Asia, Household surveys, Agriculture, Income Rural areas,
    Date: 2006
  7. By: Lourdes Diaz Olvera (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Didier Plat (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Pascal Pochet (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Major deficiencies in urbanisation and transportation systems are reinforcing patterns of social and urban segregation in Dar es Salaam, Tanzania's largest city. Analysis of the 1993 Human Resources Development Survey shows that there are numerous obstacles to the daily travel of the city's inhabitants, notably the poor. These barriers weigh heavily on schedules, complicate access to services ever further, limit the use of urban space, and place considerable pressure on household budgets. Consequently, the poorest individuals tend to retreat into their neighbourhood where the low-quality urban facilities are unable to assist in the development of human and social capital and economic opportunities, the alleviation of poverty or the prevention of social exclusion.
    Keywords: Accessibility ; Unplanned urbanization ; Social exclusion ; Poverty ; Walking trip ; Public transport ; Africa
    Date: 2006–09–15
  8. By: Sanghamitra Bandyopadhyay
    Abstract: The distribution dynamics of incomes across Indian states are examined using the entire income distribution rather than using standard regression approaches. The period 1965 to 1997 exhibits twin-peaked dynamics: there are two income convergence clubs at 50% and 125% of the national average income. Disparities across the states declined over the sixties and then increased. The observed polarisation is explained by the disparate distribution of infrastructure, in particular, that of education, irrigation and literacy in the formation of the lower convergence club. Parametric analysis establishes irrigation, education, roads, industrial power consumption and bank deposits as infrastructure components explaining cross-state variation in growth.
    Keywords: Convergence Clubs, Distribution Dynamics, Education, Infrastructure, Panel Data, India
    JEL: C23 E62 O23
    Date: 2006
  9. By: Fuest, Clemens (Department of Economics, Copenhagen Business School); Huber, Bernd (Department of Economics, Copenhagen Business School); Nielsen, Søren Bo (Department of Economics, Copenhagen Business School)
    Abstract: Recent years have seen large swings in house prices in many countries. Motivated by housing price variations, proposals for taxing capital gains on housing have repeatedly been put forth. The idea seems to be that such taxes would curb the redistribution occurring between those owning houses and those trying to get into the market for owner-occupied housing. Our paper shows that at least in simple settings, a tax on real capital gains on housing will only lead to even bigger price swings and will not be able to redistribute between people appearing on either side of the housing market.
    Keywords: capital gains tax; housing market; price fluctuations
    JEL: H23 H24 R31
    Date: 2006–09–12
  10. By: James K. Galbraith (The University of Texas Inequality Project, The University of Texas at Austin); Laura Spagnolo (The University of Texas Inequality Project, The University of Texas at Austin); Daniel Munevar (The University of Texas Inequality Project, The University of Texas at Austin)
    Abstract: This paper analyzes the evolution of pay inequality in Cuba from the early 1990s through 2004, during what was known as the “Special Period in Times of Peace” and after. We measure pay inequality across sectors and regions, using the between-groups component of Theil’s T statistic, and we map the changing components of that statistic in order to provide a compact summary of structural change in Cuba. This method helps us to observe the transition of the Cuban economy from one based fundamentally on sugar to one based largely on services, especially tourism, but also others with greater growth potential, such as information technology, pharmaceuticals, and biotechnology. Regionally, we observe that a main dividing line between winners and losers is the presence of tourist attractions: the recent increase of regional pay inequality is associated primarily with changing incomes in the city of Havana and the province of Matanzas.
    Date: 2006
  11. By: Jeffrey L. Furman; Magaret K. Kyle; Iain M. Cockburn; Rebecca Henderson
    Abstract: While there is widespread agreement among economists and management scholars that knowledge spillovers exist and have important economic consequences, researchers know substantially less about the "micro mechanisms" of spillovers -- about the degree to which they are geographically localized, for example, or about the degree to which spillovers from public institutions are qualitatively different from those from privately owned firms (Jaffe, 1986; Krugman, 1991; Jaffe et al., 1993; Porter, 1990). In this paper we make use of the geographic distribution of the research activities of major global pharmaceutical firms to explore the extent to which knowledge spills over from proximate private and public institutions. Our data and empirical approach allow us to make advances on two dimensions. First, by focusing on spillovers in research productivity (as opposed to manufacturing productivity), we build closely on the theoretical literature on spillovers that suggests that knowledge externalities are likely to have the most immediate impact on the production of ideas (Romer, 1986; Aghion & Howitt, 1997). Second, our data allow us to distinguish spillovers from public research from spillovers from private, or competitively funded research, and to more deeply explore the role that institutions and geographic proximity play in driving knowledge spillovers.
    JEL: L23 L65 O3 R3
    Date: 2006–09
  12. By: Eliasson, Kent (National Institute for Working Life)
    Abstract: This paper focuses on how accessibility to higher education affects university enrollment decisions in Sweden. The analysis refers to the autumn semester of 1996 and is based on approximately 835,000 individuals aged 1929. The empirical results show that the probability of enrollment increases with accessibility to university education. The findings also reveal that accessibility adds to the likelihood of enrollment within the region of residence. Both these results are robust with regard to different specifications of accessibility. Moreover the empirical results indicate that the enrollment decisions of individuals with a less privileged background are more sensitive to accessibility to university education than those of individuals from a more advantageous background. The influence of accessibility on enrollment decreases significantly with individual ability, parental education, and parental earnings.
    Keywords: University enrollment; accessibility; geographical mobility; social recruitment
    JEL: A22 I21 R23
    Date: 2006–09–11
  13. By: Gilles Puel (GRESOC - Groupe de REcherches SOCio-économiques - [Université Toulouse le Mirail - Toulouse II])
    Abstract: Cette etude sur la geographie des centres d'appels met en evidence l'interaction spatiale de trois dynamiques issues des grands champs de forces de la mondialisation, de l'atmosphere territoriale et du jeu des echelles territoriales. L'interaction entre les geographies technique, economique, culturelle et de l'environnement institutionnel produit des differenciations spatiales essentielles pour comprendre la geographie des teleservices. L'analyse des effets spatiaux montre qu'un processus dominant de dissemination planetaire contient un processus de metropolisation incluant lui-même une nouvelle dissemination. Cette dissemination metropolitaine laisse à son tour entrevoir une concentration des activites sur quelques sites ou immeubles. Les acteurs, loin de s'affranchir des rugosites de l'espace sont de plus en plus amenes à integrer dans leurs strategies des variables territoriales quantitatives ou cognitives. Il apparaît nettement de cette etude que l'allocation territoriale des ressources humaines demeure la variable explicative, cle de la localisation des centres d'appels.
    Keywords: téléservices, centres d'appels, distance, proximité, métropolisation, dissémination, polarisation, territoire, localisation, interaction
    Date: 2006–09–09

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