nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒06‒13
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Creative destruction and economic welfare in Swedish regions: Spatial dimensions of structural change, growth and employment By Karl-Johan Lundquist; Lars-Olof Olander; Martin Svensson Henning
  2. Cities and Growth: In Situ Versus Migratory Human Capital Growth By Beckstead, Desmond; Brown, W. Mark; Newbold, Bruce
  3. Job accessibility and employment probability By Anna Matas Prats; José Luís Raymond Bara; José Luís Raymond Bara
  4. Validation of the Regional Authority Index By SCHAKEL , ARJAN H.
  5. A Spatiotemporal Autoregressive Price Index for the Paris Office Property Market By Nappi-Choulet, Ingrid; Maury, Tristan-Pierre
  6. Is the Growing Skill Premium a Purely Metropolitan Issue? By Chul Chung; Jeremy Clark; Bonggeun Kim
  7. London: a Cultural Audit By Freeman, Alan
  8. Measuring Housing Affordability: Looking Beyond the Median By Quan Gan; Robert J. Hill
  9. Constant-Quality House Price Indexes for Switzerland By Steven C. BOURASSA; Martin HOESLI; Donato SCOGNAMIGLIO; Philippe SORMANI
  10. EU cohesion policy and “conditional” effectiveness: What do cross-section regressions tell us? By John Bradley; Gerhard Untiedt

  1. By: Karl-Johan Lundquist; Lars-Olof Olander; Martin Svensson Henning
    Date: 2008
  2. By: Beckstead, Desmond; Brown, W. Mark; Newbold, Bruce
    Abstract: University degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas. This relatively high rate of growth stems from net migratory flows and/or higher rates of degree attainment in cities. Using data from the 1996 and 2001 Censuses, this paper tests the relative importance of these two sources of human capital growth by decomposing degree-holder growth across cities into net migratory flows (domestic and foreign) and in situ growth: that is, growth resulting from higher rates of degree attainment among the resident populations of cities. We find that both sources are important, with in situ growth being the more dominant force. Hence, it is less the ability of cities to attract human capital than their ability to generate it that underlies the high rates of degree attainment we observe across city populations.
    Keywords: Education, training and learning, Business performance and ownership, Population and demography, Educational attainment, Regional and urban profiles, Mobility and migration
    Date: 2008–06–02
  3. By: Anna Matas Prats (GEAP, Universitat Autònoma de Barcelona (SPAIN).); José Luís Raymond Bara (GEAP, Universitat Autònoma de Barcelona (SPAIN).); José Luís Raymond Bara (GEAP, Universitat Autònoma de Barcelona (SPAIN).)
    Abstract: The objective of this paper is to estimate the impact of residential job accessibility on female employment probability in the metropolitan areas of Barcelona and Madrid. Following a “spatial mismatch” framework, we estimate a female employment probability equation where variables controlling for personal characteristics, residential segregation and employment potential on public transport network are included. Data used come from Microcensus 2001 of INE (National Institute of Statistics). The research focuses on the treatment of endogeneity problems and the measurement of accessibility variables. Our results show that low job accessibility in public transport negatively affects employment probability. The intensity of this effect tends to decrease with individual’s educational attainment. A higher degree of residential segregation also reduces job probability in a significant way..
    Date: 2008–05
    Abstract: This article validates the Regional Authority Index with seven widely used decentralization indices in the literature. A principal axis analysis reveals a common structure. The major source of disagreement between the Regional Authority Index and the other indices stems from the fact that the Regional Authority Index does not include local governance whereas most other indices do. Two other sources of disagreement concern the treatment of federal versus non-federal countries, and countries which have recently regionalized and/or have asymmetrical regions, whereby the more fine-grained Regional Authority index captures greater variation. The second part discusses content validity of fiscal indicators.
    Keywords: federalism;decentralization;regional authority; fiscal indicators
    JEL: A12 G18 H72 H71
    Date: 2008–02
  5. By: Nappi-Choulet, Ingrid (ESSEC Business School); Maury, Tristan-Pierre (ESSEC Business School)
    Abstract: This paper applies the spatiotemporal hedonic approach to analysis of office transaction prices in the Paris property market (i.e. central Paris and its inner suburbs). The analysis focuses primarily on the market’s two main business districts (the CBD and the La Defense District). We find that spatial and temporal dependence effects are strongly present in these submarkets. Additionally, we propose a hybrid method for incorporating a temporal regime into the spatiotemporal autoregressive model proposed by Pace, Barry, Clapp and Rodriguez (1998). Regime switching around 1997 (i.e. in the presence of temporal heterogeneity) substantially affects the significance of spatial and temporal dependences. Finally, we build a new price index that incorporates both spatiotemporal dependences and temporal heterogeneity. This index differs strongly from the usual hedonic price index
    Keywords: Hedonic Prices; Paris Office Property Market; Spatiotemporal Autoregressive Price Index; Temporal Heterogeneity
    JEL: C51 D40 R33
    Date: 2008–04
  6. By: Chul Chung; Jeremy Clark (University of Canterbury); Bonggeun Kim
    Abstract: This paper documents that virtually all of the growth in the skilled wage premium over the 1980’s in the United States was confined to metropolitan areas. Explanations for the growth in the skilled wage premium will therefore need to take location into account.
    Keywords: Skilled wage premium; Metropolitan areas
    JEL: J31 R23 F16
    Date: 2008–01–05
  7. By: Freeman, Alan
    Abstract: This report is a pre-final version of a report published by the Greater London Authority and the London Development Agency in March 2008. It benchmarks London’s cultural offer against four other world cities: Paris,  New York, Tokyo and Shanghai and is the first comprehensive such undertaking compiled according to international standards. The final printed version can be downloaded from The printed version includes full acknowledgement to the several contributors to research into this project, without whom it would not have been possible
    Keywords: cultural economics; creative industries; London; World Cities
    JEL: Z1 O18
    Date: 2008–03–19
  8. By: Quan Gan (School of Economics, University of New South Wales); Robert J. Hill (School of Economics, University of New South Wales)
    Abstract: We draw a distinction between the concepts of purchase affordability (whether a household is able to borrow enough funds to purchase a house) and repayment affordability (the burden imposed on a household of repaying the mortgage). We operationalize this distinction in the context of a new methodology for constructing affordability measures that draws on the value-at-risk concept and takes account of the whole distribution of household income and house prices rather than just the median. Empirically we find that the distinction between purchase and repayment affordability can be pronounced. In the Sydney prime mortgage market over the period 1996 to 2006, repayment affordability deteriorated very significantly while purchase affordability remained quite stable. This difference can be attributed to the loosening of credit constraints in the mortgage market which it seems has carried through primarily into higher house prices. We also consider how median house-price-to-income ratio measures of affordability can be extended to take account of the whole distribution of income and house prices. We propose a new quantile based measure which indicates that the housing affordability problem may be systematically worse than suggested by standard median measures.
    Keywords: Housing affordability; Affordability at risk; Affordable limit; Mortgage market; Price-to-income ratio
    JEL: C43 E25 E64 R31
    Date: 2008–05
  9. By: Steven C. BOURASSA (University of Louisville, CEREBEM, BEM Management School); Martin HOESLI (University of Geneva, University of Aberdeen, CEREBEM, BEM Management School and Swiss Finance Institute); Donato SCOGNAMIGLIO (IAZI / CIFI); Philippe SORMANI (IAZI / CIFI)
    Abstract: The measurement of house price movements is a vital topic from both academic and practical perspectives and hence has been the focus of much research. There is almost unanimous consensus in the literature that house price indexes should control for the quality of properties; the most widely used methods to attain this aim are the hedonic and repeat sales approaches. The objective of this paper is to compare the Swiss house prices indexes published by the Swiss National Bank (SNB), which are constructed using medians of list prices as published in newspapers and on the internet, to hedonic indexes based on sale prices for the period 1985 to 2006. We find that the list price indexes exhibit quite a different price path than the hedonic indexes during the period. In particular, they appear to overstate price changes in housing markets. We attribute this, at least in part, to changes over time in the composition of the sample of properties on the market.
    Keywords: house price indexes, hedonic method, Switzerland
    JEL: E31 R31
    Date: 2008–05
  10. By: John Bradley (EMDS - Economic Modelling and Development Strategies); Gerhard Untiedt (GEFRA - Gesellschaft fuer Finanz- und Regionalanalysen)
    Abstract: About one third of total EU budgetary resources are spent on implementing cohesion policy. Therefore, it is understandable that the European Commission and especially donor states (acting for the taxpayers) need to be reassured that their contributions are spent wisely and are being used effectively in achieving their stated goal of promoting growth and thereby reducing welfare differences throughout the Union. Different evaluation methods have been proposed to look at the likely impact of Structural Funds interventions ranging from macroeconometric models to case studies. Recently, evaluation results based on enhanced growth rate regressions with panel data have received wide interest. Ederveen et al. (2006, 2002) are two widely cited works that address the evaluation of the effectiveness of cohesion policy using the single equation, panel dataset approach. The results support a serious critique of cohesion policy, asserting that its effectiveness is conditional on country characteristics that may be in short supply in many poorer member states (e.g., the quality of public institutions), and that cohesion policies should not be implemented in the new member states unless the institutional capacities are installed. This paper takes a closer look at the Ederveen et al. results, mainly from three directions. Firstly, we discuss some issues concerning the general set-up of the database and the time period that was used, secondly show that their preferred regression seems mis-specified and instable concerning the countries included and the time period used and thirdly discuss in more general terms that the use of this methodology in the whole area of policy evaluation has been shown to be deeply flawed and to tell us nothing about the effectiveness of public policy. Our analysis of the methodology and results of Ederveen et al. drive us to the conclusions that the policy recommendations derived from this work are unsound, unwise and without merit. In particular, the recommendations concerning the new EU member states should not be based on an appeal to the cross-section regressions that are presented in their 2006 paper. In contrast, we propose two other approaches – the macroeconometric modelling approach and the microeconomic approach - which, if developed together, hold out the possibility of more robust and insightful analysis and conclusions. Only by looking deeper into the manner in which EU Cohesion Policy is actually designed and implemented, the manner in which national governments operate parallel regional policies with no reference to Brussels, and by making use of more searching and holistic models is it likely to be possible to deliver verdicts on whether or not the EU has a role in this important area of integration, and if the answer is “yes”, how that policy can be modified in light of the recent enlargements. Dogmatic conclusions reached in the literature, mainly negative, but the point also applies to supportive conclusions, are premature and almost certainly wrong.
    Date: 2008–05

This nep-geo issue is ©2008 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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