nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒07‒20
four papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Impact of Mergers on Regional Systems - The Case of North Carolina By Anna Glaser
  2. Wage Premia in Employment Clusters: Agglomeration Economies or Worker Heterogeneity? By Shihe Fu; Stephen L. Ross
  3. A Compact City and a Better Balance: New Flexibility in Dutch Planning Provides a Model for Balanced Development By Ladd Schiess

  1. By: Anna Glaser
    Date: 2007–07–13
  2. By: Shihe Fu (Southwestern University of Finance and Economics (China)); Stephen L. Ross (University of Connecticut)
    Abstract: The correlation between wage premia and concentrations of firm activity may arise due to agglomeration economies or workers sorting by unobserved productivity. A worker's residential location is used as a proxy for their unobservable productivity attributes in order to test whether estimated work location wage premia are robust to the inclusion of these controls. Further, in a locational equilibrium, identical workers must receive equivalent compensation so that after controlling for residential location (housing prices) and commutes workers must be paid the same wages and only wage premia arising from unobserved productivity differences should remain unexplained. The models in this paper are estimated using a sample of male workers residing in 33 large metropolitan areas drawn from the 5% Public Use Microdata Sample (PUMS) from the 2000 U.S. Decennial Census. We find that wages are higher when an individual works in a location that has more workers or a greater density of workers. These agglomeration effects are robust to the inclusion of residential location controls and disappear with the inclusion of commute time suggesting that the effects are not caused by unobserved differences in worker productivity. Extended model specifications suggest that wages increase with the education level of nearby workers and the concentration of workers in an individual's own industry or occupation.
    Keywords: Agglomeration, Wages, Sorting, Locational Equilibrium, Human Capital
    JEL: R13 R30 J24 J31
    Date: 2007–06
  3. By: Ladd Schiess
    Date: 2007–06–22
  4. By: Zhang, Yi; Shing, Hui-Fai
    Abstract: Congestion charging in London was introduced in February 2003 to reduce traffic levels in the centre of London. Postcode sector level property prices for sectors both inside and outside the zone are investigated under the premise that the benefits of transport innovation can be captured by property prices. If housing markets are efficient, residential property prices should capture all the benefits and costs to commuters that a location offers. The aim of this investigation is to firstly compare property prices inside and outside the congestion charging zone, and secondly to measure the sensitivity of house prices to distance from the zone boundary both inside and outside the zone. The main analysis is based on the quasi-experimental differences-in-differences approach. It is found that the gap between property price inside and outside the zone has actually reduced as a result of congestion charging. Also, after the implementation of the congestion charge, the sensitivity of house prices with respect to distance from the boundary has fallen for sectors inside the zone relative to sectors outside the zone.
    Keywords: Congestion Charging; Property Prices; Difference in differences; Transport Innovations
    JEL: R31 R41 R48
    Date: 2006–08

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