nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒08‒18
eleven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The role of landscape amenities in regional development: a survey of migration, regional economic and hedonic pricing studies By Felix Schlaepfer
  2. Conditional Beta- and Sigma-Convergence in Space: A Maximum Likelihood Approach By Michael Pfaffermayr
  3. Adjustment in Local Labour and Housing Markets By Arthur Grimes; David C. Maré; Melanie Morten
  4. Skill-Biased Agglomeration Effects and Amenities: Theory with an Application to Italian Cities By Alberto Dalmazzo; Guido De Blasio
  5. Spatial Determinants of Land Prices in Auckland:Does the Metropolitan Urban Limit Have an Effect? By Arthur Grimes; Yun Liang
  6. Foreign direct investments in the Italian regions: The role of organized crime and infrastructures By Daniele, Vittorio
  7. Regionförstoring - idé, mätproblem och framtidsutsikter By Amcoff, Jan
  8. Where have (almost) all the wealthy gone? Spatial decomposition of wealth trends in France, 1820-1939 By BOURDIEU Jérôme; MENENDEZ Martha; POSTEL-VINAY Gilles; SUWA-EISENMANN Akiko
  9. The effectiveness of regional policies for innovation: an empirical investigation By Martina Cioni; Davide Conforti
  10. Gender and the Automobile – An Analysis of Non-work Service Trips By Colin Vance; Rich Iovanna
  11. Why Should a Firm Choose to Limit the Size of its Market Area? By Marco Alderighi; Claudio A. Piga

  1. By: Felix Schlaepfer (Socioeconomic Institute, University of Zurich)
    Abstract: Quality of life factors continue to gain importance in residential location decisions as well as location decisions of firms. One such factor is an attractive local landscape. The aim of this paper is to provide a survey of the empirical literature on the role of landscape amenities in local economic change. Following common amenity definitions, we define landscape amenities as landscape features that are location-specific, latent non-market input goods that directly enter residents’ utility functions. Using this definition we identify thirty-nine relevant studies that use either migration or regional economic models or hedonic pricing techniques. One result from the analysis of migration and regional economic studies is that intra-country migrants were attracted by amenities about as frequently as by a low tax burden. Effects of amenities on employment and income are less well established. However, many of these studies used rather limited amenity variables. The results from hedonic studies show that a wide variety of local amenity attributes are partly capitalized in housing prices and that studies on a larger geographic scale are more likely to identify a significant a role of amenities. Newly available land cover datasets and spatial analysis tools have the potential to overcome important data limitations of many earlier studies. Future research may thus contribute to a better understanding of the role of landscape amenities in economic change and to a better coordination of regional and environmental policies.
    Keywords: landscape amenities, migration, local development, hedonic models, environmental valuation, regional economic modeling, land use
    JEL: Q26 Q51 R11 R23
    Date: 2007–08
  2. By: Michael Pfaffermayr
    Abstract: Empirical work on regional growth under spatial spillovers uses two workhorse models: the spatial Solow model and Verdoorn's model. This paper contrasts these two views on regional growth processes and demonstrates that in a spatial setting the speed of convergence is heterogenous in both considered models, depending on the remoteness and the income gap of all regions. Furthermore, the paper introduces Wald tests for conditional spatial sigma-convergence based on a spatial maximum likelihood approach. Empirical estimates for 212 European regions covering the period 1980-2002 reveal a slow speed of convergence of about 0.7 percent per year under both models. However, pronounced heterogeneity in the convergence speed is evident. The Wald tests indicate significant conditional spatial sigma-convergence of about 2 percent per year under the spatial Solow model. Verdoorn's specification points to a smaller and insignificant variance reduction during the considered period.
    Keywords: Conditional spatial Beta- and Sigma-convergence; Spatial Solow model; Verdoorn's model; Spatial maximum likelihood estimates; European regions
    JEL: R11 C21 O47
    Date: 2007–08
  3. By: Arthur Grimes (Motu Economic and Public Policy Research); David C. Maré (Motu Economic and Public Policy Research); Melanie Morten (Motu Economic and Public Policy Research)
    Abstract: This paper analyses local labour and hosuing market adjustment in New Zealand from 1989 to 2006. We use a VAR approach to examine the adjustment of employment, employment rate, participation rate, wages, and house prices in response to employment shocks. Migration is a major adjustment response at both a national and regional level. Nationally, a 1% positive employment shock leads to a long-run level of employment 1.3% higher, with half of the extra jobs filled by migrants. A 1% region-specific employment shock raises the long-run regional share of employment by 0.5 percentage points, due entirely to in-migration. House price responses differ at different spatial scales. Nationally, house prices are very responsive to employment shocks: a 1% employment shock raising long run house prices by 6% , as may be expected with an upward sloping housing supply curve. Paradoxically, this relationship does not hold at the regional level.
    Keywords: Regional Labour Market Adjustment; Internal Migration; House Prices; Vector Autoregression
    JEL: R23 J61 C33
    Date: 2007–08
  4. By: Alberto Dalmazzo; Guido De Blasio
    Abstract: We provide a spatial equilibrium model with skill heterogeneity and then bring the model to data on workers living in Italian cities. Theoretically, we postulate that agglomeration to affect both production and consumption. Moreover, we allow the evaluation of urban amenities to vary across skill-groups. Empirically, we find evidence of a substantial urban rent premium, while we fail to find support for the urban wage premium. These results apply more dramatically to higheducated individuals, who care about the consumption effects of agglomeration disproportionately more than their lesseducated counterparts. We show that urban skilled workers benefit from jobs of higher quality (better working environment; higher consideration received by others) and valuate amenities more (local public goods, such as transportation, health and schooling services; shopping possibilities, and the cultural consumption potentials made possible by the location of cinemas, theaters, and museums).
    Keywords: agglomeration, cities.
    JEL: R0
    Date: 2007–04
  5. By: Arthur Grimes (Motu Economic and Public Policy Research); Yun Liang (Motu Economic and Public Policy Research)
    Abstract: Land prices within monocentric cities typically decline from the centre to the urban periphery. More complex patterns are observed in polycentric and coastal cities; discrete jumps in value can occur across zoning boundaries. Information on these patterns within Auckland is important to understand: (a) the nature of Auckland's development, including the impact of infrastructure investments; and (b) the effects of regulation in causing discrete land valuation changes. One such regulation in Auckland is the metropolitan urban limit (MUL); we specifically examine whether the existence of this growth limit affects land prices. We do so in the context of a model of all Auckland land values over a twelve-year period, finding a strong zoning boundary effect on land prices.
    Keywords: growth limits; zoning restrictions; boundary effects; land value gradients
    JEL: R14 R38 R52
    Date: 2007–08
  6. By: Daniele, Vittorio
    Abstract: In Italy, as in other European Countries, FDI inflows show an high degree of spatial concentration. For instance, in the period 2000-05, the all eight Northern Italian regions received about the 75% of total FDI inflows; on the contrary, the all eight Southern ones, included in the Mezzogiorno area, attracted less than the 1% of FDI inflows in Italy. What are the causes of a such high degree of territorial concentration of FDI? Why the attractiveness of the Mezzogiorno area is so low? Several empirical studies show as the main determinants of FDI in the Italian regions concern with the market potential dimension. At the regional level, other factors, as the presence of “marshallian” agglomeration economies, and the previous localization of foreign enterprises, seem to play an important role in the attraction of FDI. The Mezzogiorno regions benefited of some localization factors that could potentially incentive the localization of foreign investments. In the Mezzogiorno, there are financial grants for investments provided by European, National and Regional funds; the labour cost is, on average, lower than in the North; not congested industrial areas are available. Nevertheless, these factors seem not able to provide some competitive advantages to these regions. Objective of this paper is to examine the impact of some “competitive disadvantages” of the Mezzogiorno. In particular, the analysis focuses on the role of organized crime and infrastructural endowment. The main interpretative hypothesis is based on the idea that a lack in some fundamental public goods – such as legality and public infrastructures – can substantially reduce the effect of policies for promoting and supporting FDI. The empirical analysis – based on OLS e WLS regressions – show as the presence of organized crime has a strong negative effect on FDI inflows in Italian provinces. The inclusions of the provinces in the Objective 1 of the EU has a weak negative effect; the infrastructural endowment influences positively – but not significantly – FDI.
    Keywords: FDI; Italy; Italian Mezzogiorno; Organized crime; Regional Competitiveness
    JEL: F23 R30 R38
    Date: 2006–10
  7. By: Amcoff, Jan (Institute for Futures Studies)
    Abstract: Since the early 2000s regional enlargement (“regionförstoring”) has become an important objective in the Swedish regional policy. Smaller regions are intended to be functionally integrated into larger neighbours through intensified commuting. This strive is facilitated by the fact that the coveted process seems self-propelled and already running. The number of functional regions is reported to have halved during the three last decades of the 20th century and are expected to half again until 2030. However, it has been difficult to confirm this fast development in other data. In this paper a set of explanations to this seemingly contradictory condition are suggested. The conclusion is that the Swedish regional enlargement partly might be fictitious, an effect of flaws and errors in the data and the way used to measure the process. The unfortunate message is that regional enlargement might not be such an easily practicable way to regional development it seems to be and that the assumption of a future Sweden of only 55-60 functional regions might have defective grounds.
    Keywords: regional; enlargement
    JEL: R00 R23
    Date: 2007–06
    Abstract: This paper uses a unique database of individual estates to explore the geographical dimension in the historical evolution of the wealth distribution in France since 1820 onwards. We use inequality index decomposition techniques and micro-simulations of wealth distributions to stress the differences in economic growth and wealth accumulation between rural areas, provincial towns and Paris.
    Keywords: wealth distribution, decomposition, dualism.
    JEL: C14 J11 H20 O18
    Date: 2007–07
  9. By: Martina Cioni; Davide Conforti
    Abstract: This paper provides the outcomes following an evaluation analysis of a public intervention aimed to support innovation within small and medium firms (azione 3.2 under Council Regulation EEC 2081/93, Docup Ob. 2 1997-1999). We gathered the data through an ad hoc survey of firms which applied for granting, whether successfully or not. We carried on an impact evaluation of the intervention on the basis of specific indicators pertaining both to performance and to innovation capability. According to our outcomes, the intervention had a (quite limited) effect on the economic performance of beneficiary firms, though without having any particular impact both on occupation and on long-term innovation capability.
    Keywords: Public Subsidies, Regional aid, Industrial Policy, Innovation capability
    JEL: D2 H2 L25 O31
    Date: 2007–07
  10. By: Colin Vance; Rich Iovanna
    Abstract: Focusing on individual motorists in car-owning households in Germany, this analysis econometrically investigates the determinants of automobile travel for non-work service activities against the backdrop of two questions: 1) Does gender play a role in determining the probability of car use and the distance driven? 2) If so, how is this role mitigated or exacerbated by other socioeconomic attributes of the individual and the household in which they reside? Drawing on a panel of data collected between 1996 and 2003, we specify Heckman’s sample selection model to control for biases that could otherwise arise from the existence of unobservable variables that determine both the discrete and continuous choices pertaining to car use.The results indicate that although women,on average, undertake more non-work travel than men, they undertake less of such travel by car, implying a greater reliance on other modes. Moreover, employment status, age, the number of children, automobile availability, and the proximity to public transit are all found to have significantly different effects on the probability of non-work car travel between men and women, but – with the exception of automobile availability – not on the distance driven.Taken together, these results suggest that policies targeted at reducing automobile dependency and associated negative externalities such as congestion are unlikely to have uniform effects across the sexes, findings having implications for both policy evaluation as well as travel demand forecasting.
    Keywords: Automobile travel, gender, Heckman model, Monte Carlo simulation
    JEL: R21 R41
    Date: 2007–05
  11. By: Marco Alderighi (University of Valle d'Aosta, Italy.); Claudio A. Piga (Dept of Economics, Loughborough University)
    Abstract: We study when a monopolistically-competitive firm may optimally choose to limit the size of its market. This may be the case when the cost of serving the market with geographically dispersed customers is increasing in size. We also investigate the incentives faced by a firm to limit the reach of its market, when it adopts different pricing schemes. We show that under certain assumptions the derived equilibria are constrained socially optimal.
    Keywords: Monopolistic competition; Transport costs; Endogenous fixed costs; Overlapping market areas
    JEL: D21 D43 F12 L13 R12
    Date: 2007–08

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