nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒03‒01
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Real estate market and the relevance of local features in a hedonic prices quantil-spatial analysis – the case of Belo Horizonte – Brazil By FURTADO, BERNARDO
  2. Cities and Quality of Life-Should We Monitor Pakistani Cities? By Hasan, Lubna
  3. Foreign direct investment and regional growth: An analysis of the Spanish case By Oscar Bajo-Rubio; Carmen Díaz-Mora; Carmen Díaz-Roldán
  4. Location Attributes and Start-Ups in Knowledge Intensive Business Services By Andersson, Martin; Hellerstedt, Karin
  5. Economics of discontinuous urban development (In French) By Guillaume POUYANNE (GREThA-GRES)
  6. Valuing Environmental Quality: A Space-Based Strategy By David E. Clark
  7. The spatial range of public goods revealed through referendum voting By Robert Deacon; Felix Schläpfer
  8. When Worlds Collide: Different Comparative Static Predictions of Continuous and Discrete Agent Models with Land By Berliant, Marcus; Sabarwal, Tarun
  9. The Relevance of Heterogeneity in a Congested Route Network with Tolls: An Analysis of Two Experiments Using Actual Waiting Times and Monetized Time Costs By John Hartman

    Abstract: The main motivation of this paper is to identify how relevant the localization of a specific estate is in its market value. Furthermore, it aims to understand better how economic aspects influence and are influenced by urban space. In order to do so, a myriad of concepts is drawn from a variety of fields of science: from geography to architecture, from urbanism to economics, as well as methodologies, which are borrowed from statistics, econometrics and geoprocessing. The proposal of the paper follows the hedonic prices function literature, but suggests that a synthesis of the perception of urban amenities can be expressed by the element of the neighbourhood (as proposed by Lynch, 1997). A number of models are presented, tested and commented. The one with the best fit is the spatial error-lag (Anselin, 1988) specified with a ranking of neighbourhood income. A quantil analysis adds considerably to the understanding of the model.
    Keywords: real estate market; neighbourhoods; spatial econometrics; quantil analysis; Belo Horizonte
    JEL: L85 R20 C21
    Date: 2007–07
  2. By: Hasan, Lubna
    Abstract: Around the world, national governments as well as international organization measure and monitor performance of large cities and the Quality of Life (QoL) of urban residents, to gain insights into the well-being of the citizens and the state of various amenities at city level and make informed policy decisions. There is a need to develop a system of measuring and monitoring QoL and city performance in the large urban areas of Pakistan. The paper suggests a framework for measuring quality of life in Pakistani cities
    Keywords: Quality of Life; Pakistan; Cities
    JEL: R10 O18
    Date: 2007
  3. By: Oscar Bajo-Rubio (Universidad de Castilla-La Mancha and Instituto de Estudios Fiscales); Carmen Díaz-Mora (Universidad de Castilla-La Mancha); Carmen Díaz-Roldán (Universidad de Castilla-La Mancha)
    Abstract: The massive increase in foreign direct investment (FDI) inflows following the Spanish integration with the now European Union (EU) in 1986, has been one of the most important features shaping the behaviour of the Spanish economy in the last twenty years. In this paper we will try to assess the impact of FDI on regional economic growth following Spain’s entry into the EU, using data for the 17 Spanish regions. The results support the important role played by FDI in promoting productivity growth, for those regions that received higher FDI inflows over the period analyzed.
    Keywords: Economic growth, Foreign direct investment, Regions
    JEL: F21 O40 R58
    Date: 2007–12
  4. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Hellerstedt, Karin (JIBS and Centre for Innovation Systems, Entrepreneurship and Growth (CISEG))
    Abstract: We study start-ups in Knowledge Intensive Business Services (KIBS) across regions in Sweden by individuals with a formally recognized capacity to produce and develop advanced business services. The empirical analysis is based on a theoretical framework which emphasizes both supply- and demand-side factors. Supply-side variables pertain to accessibility to knowledge and information upon which a new firm can be established. Demand-side variables refer to market-size and pertain to the ability to recover fixed start-up costs and economize on costs associated with face-to-face interaction. 78 percent of the KIBS founders have prior work experience from business services, suggesting that KIBS start-ups are more frequent in regions where the KIBS sector is already large. Controlling for the stock of potential entrepreneurs and the stock KIBS firms, we show that both supply- and demand-side factors influence KIBS start-up activity. Results are consistent with that KIBS start-ups are stimulated by the simultaneous presence of (i) knowledge resources conducive for the generation and diffusion of knowledge and ideas upon which new firms can be established and (ii) a large market. The findings suggest that the geography of KIBS is shaped in cumulative and self-reinforcing processes, and can explain the tendency of KIBS firms to agglomerate in large city-regions.
    Keywords: knowledge intensive business services; knowledge spillovers; start-ups; entrepreneurship; location
    JEL: L26 L84 R12
    Date: 2008–02–27
  5. By: Guillaume POUYANNE (GREThA-GRES)
    Abstract: Although it is frequent, discontinuous (leapfrog) development has rarely been addressed by the literature, because traditional models are unable to conceive diverse urban forms. This article is a survey of theoretical explanations of discontinuous development. It follows two parts. First, taking in account uncertainty on future returns drives to include an option value in land prices. Landlords speculate on the future value of the land and may leave vacant their plot in order to take advantage of high future returns. Second, discontinuous development is the product of a preference for open space. Natural amenities are included in land prices and provoke a dispersion of developed lots. These mechanisms are reinforced by a vote “against growth” by the inhabitants, which drives to a severe control of new developments.
    Keywords: discontinuous development, leapfrog development, speculation, amenities, urban sprawl, urban form
    JEL: R14 R21 R31
    Date: 2008
  6. By: David E. Clark (Department of Economics, Marquette University; U.S. Department of Hoursing and Urban Development)
    Abstract: This paper develops and applies a space-based strategy for overcoming the general problem of getting at the demand for non-market goods. It focuses specifically on evaluating one form of environmental quality, distance from EPA designated environmental hazards, via the single-family housing market in the Puget Sound region of Washington State. A spatial two stage hedonic price analysis is used to: (1) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (2) estimate a series of demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents a major step forward in the valuation of environmental quality, reveals that the information needed to identify second-stage demand functions is hidden right in plain site — hanging in the aether of the regional housing market.
    Keywords: Environmental Quality, Hedonic Price Analysis
    JEL: Q53 R21
    Date: 2007–02
  7. By: Robert Deacon (University of California, Santa Barbara); Felix Schläpfer (Socioeconomic Institute, University of Zurich, Switzerland)
    Abstract: Billions of dollars are now spent annually in the United States and Europe for spatially delineated environmental services such as agricultural landscape management and river restoration programs, yet little is known about the spatial distribution of the benefits from these policies. This paper develops a framework for recovering information on this question from the spatial pattern of votes cast for referenda on the provision of spatially delineated public goods. We specify a model linking voter support for environmental improvement to the distance at which such improvements are expected to occur. The empirical application is to a river restoration referendum in the Swiss canton of Bern. Our results indicate that the benefits from river restoration have a strong local component, sufficiently strong that voter approval would not occur if only canton-wide benefits were at stake. Surprisingly, support of river restoration is no greater, and in some specifications is actually lower, in locations where rivers are a prominent feature in the environment.
    Keywords: voting, local public goods, valuation,
    Date: 2007–08–01
  8. By: Berliant, Marcus; Sabarwal, Tarun
    Abstract: This paper presents a difference in the comparative statics of general equilibrium models with land when there are finitely many agents, and when there is a continuum of agents. Restricting attention to quasi-linear and Cobb-Douglas utility, it is shown that with finitely many agents, an increase in the (marginal) commuting cost increases land rent per unit (that is, land rent averaged over the consumer's equilibrium parcel) paid by the consumer located at each fixed distance from the central business district. In contrast, with a continuum of agents, average land rent goes up for consumers at each fixed distance close to the central business district, is constant at some intermediate distance, and decreases for locations farther away. Therefore, there is a qualitative difference between the two types of models, and this difference is potentially testable.
    Keywords: Large Urban Economies; Comparative Statics; Continuous and Discrete Agent Models
    JEL: R13 D51 R14
    Date: 2008–02–22
  9. By: John Hartman (University of California Santa Barbara)
    Abstract: Heterogeneity is important in some settings. One such instance involves congested networks with tolls, since people trade time for money at different rates. This paper reports results from two experiments that examine these issues. In both experiments, subjects choose between traveling on an indirect route that does not congest and a direct toll route that congests as more subjects travel on it. In the first experiment, values of time are assigned to subjects. Subjects generally sort themselves with high value-of-time subjects choosing the toll route. I also find that as the cost of deviating from the equilibrium prediction increases, subjects are more likely to make choices consistent with equilibrium. In other words, coordination problems diminish as value-of-time heterogeneity increases. The second experiment simulates a boring commute in which subjects must wait after the experimental rounds are finished. Subjects can give up money for reduced waiting time in this experiment by traveling on the toll route. In this experiment, some subjects travel the toll route frequently, giving up some of their payout in order to reduce their waiting time after the experiment. These choices are likely based on individuals' values of time, since aggregate behavior differs by session. There is also evidence that subjects with time constraints travel the toll route more often than other subjects.
    Keywords: congestion, Pigou-Knight-Downs paradox, experiment, toll, value of time, externalities, heterogeneity,
    Date: 2007–11–01

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