nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒11‒25
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Economic centrality, per capita income and human capital – some results at regional level By Nuno Crespo; Maria Paula Fontoura
  2. The empirics of spatial competition: Evidence from European regions By Nestor Duch Brown
  3. Traffic Accessibility and the Effect on Firms and Population in 99 Austrian Regions By Polasek, Wolfgang; Schwarzbauer, Wolfgang
  4. Sustainability of Clusters and Regions at Austria’s Accession Edge By Edward M. Bergman
  5. Regional Spillovers and Spatial Heterogeneity in Matching Workers and Employers in Germany By Reinhold Kosfeld
  6. Trends in the distributions of income and human capital within metropolitan areas: 1980-2000 By Christopher H. Wheeler; Elizabeth A. La Jeunesse
  7. Financing Large Canadian Cities in the 21st Century: The Case of the City of Toronto By Harvey Schwartz
  8. Training and Economic Density: Some Evidence from Italian Provinces By Giorgio Brunello; Maria De Paola
  9. The economic performance of cities: a Markov-switching approach By Michael T. Owyang; Jeremy M. Piger; Howard J. Wall; Christopher H. Wheeler
  10. Airports and Economic Development By Richard K. Green
  11. Institutions v. Geography: Sub-National Evidence from the United States By Alma Romero-Barrutieta; Eric V. Clifton
  12. Controlling for geographic dispersion when estimating the Japanese Phillips curve By Hiroshi Fujiki; Howard J. Wall
  13. Using a discontinuous grant rule to identify the effect of grants on local taxes and spending By Dahlberg, Matz; Mörk, Eva; Rattso, Jorn; Ågren, Hanna
  14. Regensburger Diskussionsbeiträge zur Wirtschaftswissenschaft; Nr. 419: Traffic congestion and accidents By Schrage, Andrea
  15. Did Changing Rents Explain Changing House Prices During the 1990s? By Richard K. Green; Amy Crews Cutts; Yan Chang

  1. By: Nuno Crespo; Maria Paula Fontoura
    Abstract: It has been shown that countries located further from global economic activity will have lower levels of per capita income and human capital. We evaluate, for the Portuguese case, the validity of the positive relationship of economic centrality with per capita income and with human capital at the regional level (275 regions). Results show that more central regions - in terms of proximity to the location of the economic activity - appear to have higher levels of per capita income and human capital. Some regions suffer a permanent penalty resulting from their disadvantage as regards the relative geographical position.
    Keywords: economic centrality; economic geography; income per capita; human capital.
    JEL: O10 O18
  2. By: Nestor Duch Brown (Universitat de Barcelona)
    Abstract: The New Economic Geography literature allows detailed analysis of the factors that determine the location decisions of firms in integrated markets. However, the competitive process is modelled in a rather rudimentary way, and the empirical evidence has usually been obtained from reduced-form econometric specifications. This study describes a structural model that takes into account strategic interactions between firms. We investigate the relationship between the degree of perceived competition not only from local firms but from firms in other regions and geographic concentration. The preliminary results indicate that, in aggregate terms, local firms present stronger competition than firms in other regions. Moreover, it is confirmed that greater geographical concentration of production reduces market power, due to the intensification of local competition; however, its impact on production costs is unclear.
    Keywords: agglomeration, conjectural variations, spatial competition
    JEL: F15 L11 L22 L23 L60 R15 R32
    Date: 2006
  3. By: Polasek, Wolfgang (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria); Schwarzbauer, Wolfgang (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria)
    Abstract: In this paper we describe the EAR (regional economic accessibility) model to investigate the impact of the improvement of railroad infrastructure on regional GDP, population and firms growth in 99 Austrian regions. We evaluate the impact of four potential railroad infrastructure investment projects on the accessibility of Austrian regions, which is used to forecast future growth of these regions. Regional performance is measured by four variables, gross regional product, number of firms, population size, and employment. Eventually a ranking of these four projects is carried out for the first ten years of operation of the four potential investment projects. We show that the improvement of train accessibility has different impacts on regions with high and low overall performance.
    Keywords: Evaluation of infrastructure projects, Long-term regional forecasts, Accessibility and traffic analysis, Ranking
    JEL: R1 R41 L92 C21 C23
    Date: 2006–11
  4. By: Edward M. Bergman
    Date: 2006
  5. By: Reinhold Kosfeld (Department of Economics, University of Kassel)
    Abstract: When job search takes place across labour markets, the standard flow approach to labour market analysis fails to uncover the effectiveness at which workers are matched to available jobs. A spatially augmented matching function is backed by a spatial search model with endogenous search intensity. Recent studies deal with the issue of spatial externalities by assuming the process of job matching to be homogenous across space. This study shows that this supposition is not valid for the unified Germany. Particularly differences in labour mobility give reason for the existence of West-East regimes of the matching process. Spatial heterogeneity is additionally found on the level of German macroregions. Though matching efficiency is affected by labour market characteristics, its cyclical pattern is closely related to business cycle fluctuations. Variation of regional mismatch over the business cycle can only explain a relatively small fraction of matching inefficiency.
    Keywords: Matching function, regional mismatch, spatial spillovers, spatial heterogeneity
    JEL: C21 C23 E24 J23
    Date: 2006–10
  6. By: Christopher H. Wheeler; Elizabeth A. La Jeunesse
    Abstract: Human capital tends to have significant external effects within local markets, increasing the average income of individuals within the same metropolitan area. However, evidence on both human capital spillovers and peer effects in neighborhoods suggests that these effects may be confined to relatively small areas. Hence, the distribution of income gains from average levels of human capital should depend on how that human capital is distributed throughout a city. This paper explores this issue by documenting the extent to which college graduates are residentially segregated across more than 165000 block groups in 359 U.S. metropolitan areas over the period 1980-2000. Using three different metrics, we find that the segregation of college graduates rose between 1980 and 2000. We also find that cities which experienced larger increases in their levels of segregation also experienced larger increases in income inequality, although our results suggest that inequality and segregation likely influence each other.
    Keywords: Human capital ; Income distribution
    Date: 2006
  7. By: Harvey Schwartz (Department of Economics, York University)
    Abstract: This paper is concerned with two questions. What are the major problems facing Canadian cities in the 21st century? (The City of Toronto is used as an example). Are large amalgamated cities or decentralized cities better suited to compete in the 21st century? From 1995 to 2003 the Ontario government made a number of major changes in the way that municipalities were governed and financed. Some municipalities were forced to amalgamate despite the opposition of their residents. The government also redistributed the responsibilities of the province and the municipalities through the Local Service Realignment Programme (LSRP). This process is called ?disentanglement?. Since the LSRP lead to the cost of many of the shared-cost programmes being shifted to the cities, the programme is also called ?downloading?. Other major changes include the use of market value for property tax assessment and the transfer of education funding for the local school boards to the provincial government.
    Date: 2005–10
  8. By: Giorgio Brunello (University of Padua); Maria De Paola (University of Calabria)
    Abstract: In this paper we use a search and matching model to investigate the economic relationship between training and local economic conditions. We identify two aspects of this relationship going in opposite directions: on the one hand, the complementarity between local knowledge spillovers and training generates a positive correlation between training and local density; on the other hand, higher wages and labor turnover in denser areas reduce training. Overall the relationship can be either positive or negative, depending on the relative strength of these two effects. Our empirical analysis, based on a sample of Italian firms, shows that training is lower in provinces with higher labor market density, measured as the number of employees per squared kilometer.
    Keywords: training, local labor markets, Italy
    JEL: J24 R12
    Date: 2006–11
  9. By: Michael T. Owyang; Jeremy M. Piger; Howard J. Wall; Christopher H. Wheeler
    Abstract: This paper examines the determinants of employment growth rates in metro areas. To obtain growth rates, we use a Markov-switching model that separates a city's growth path into two distinct phases (recession and expansion), each with its own growth rate. The simple average growth rate over some period is, therefore, the weighted average of the recession and expansion growth rates, with the weight being the frequency of recession. We estimate the effects of a variety of factors separately for the recession and expansion growth rates, along with the frequency of recession. We find that growth in expansion is related to human capital, industry mix, and average firm size. In contrast, we find that recession growth rates are mostly related to industry mix, specifically, the relative importance of manufacturing. Finally, the frequency of recession appears to be related to the level of non-education human capital, but to none of the other variables. Overall, our results strongly reject the notion that city-level characteristics influence employment growth equally across recession and expansion.
    Keywords: Business cycles ; Cities and towns
    Date: 2006
  10. By: Richard K. Green (The George Washington University School of Business)
    Date: 2006–03
  11. By: Alma Romero-Barrutieta; Eric V. Clifton
    Abstract: Empirical studies of the impact of geography and institutions on growth and development at the international level have become common place, but the high degree of abstraction at that level has led to calls for subnational studies. This paper examines these issues for a region of the United States, Appalachia, where the specific factors at play are identified and measured thus obviating the need for instrumental variable techniques. The evidence suggests that initial conditions, including both geography and institutions, are very important for economic development, having significant effects lasting hundreds of years.
    Keywords: Economic growth , poverty , institutions , geography , Appalachia , Economic growth , United States , Poverty , Income ,
    Date: 2006–07–25
  12. By: Hiroshi Fujiki; Howard J. Wall
    Abstract: This paper argues that estimation of the Phillips curve for Japan should take account of the geographic dispersion of labor-market conditions. We find evidence that the relationship between wage inflation and the unemployment rate is convex. With such convexity, wage inflation can occur when unemployment rates across regions become more disperse, even if the aggregate unemployment rate is unchanged. We show that controlling for the geographic dispersion of unemployment rates yields a flatter Phillips curve and a higher natural rate of unemployment.
    Keywords: Phillips curve ; Japan ; Labor market
    Date: 2006
  13. By: Dahlberg, Matz (Department of Economics); Mörk, Eva (Department of Economics); Rattso, Jorn (Department of Economics); Ågren, Hanna (Department of Economics)
    Abstract: When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this paper we make use of a discontinuity in the Swedish grant system in order to estimate the causal effects of general intergovernmental grants on local spending and local tax rates. The formula for the distribution of funds is used as an exclusion restriction in an IV-estimation. We find evidence of crowding-in, where federal grants are shifted to more local spending, but not to reduced local tax rates. Our results thus confirm a flypaper effect for Sweden.
    Keywords: Fiscal federalism; grants; flypaper effect: local taxation; local government expenditure; causal effects
    JEL: H21 H71 H77 R51
    Date: 2006–11–06
  14. By: Schrage, Andrea
    Abstract: Obstructions caused by accidents can trigger or exacerbate traffic congestion. This paper derives the efficient traffic pattern for a rush hour with congestion and accidents and the corresponding road toll. Compared to the model without accidents, where the toll equals external costs imposed on drivers using the road at the same time, a new insight arises: An optimal toll also internalizes the expected increase in future congestion costs. Since accidents affect more drivers if traffic volumes are rising than when they are declining, the efficient charge depends upon the demand for road use during the rest of the peak period.
    JEL: H23 D62 R48 R41
    Date: 2006–11–20
  15. By: Richard K. Green (The George Washington University School of Business); Amy Crews Cutts (Freddie Mac); Yan Chang (Freddie Mac)
    Date: 2005–04

This nep-geo issue is ©2006 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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