nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒05‒16
twenty-one papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Modelling the folk theorem of spatial economics: a heterogeneous regional growth model By Torben Klarl
  2. Land Use Change: A Spatial Multinomial Choice Analysis By Carrion-Flores, Carmen E.; Flores-Lagunes, Alfonso; Guci, Ledia
  3. The distributional effects of NAFTA in Mexico: evidence from a panel of municipalities By Baylis, Kathy; Garduno-Rivera, Rafael; Piras, Gianfranco
  4. Agglomeration Economies in the Netherlands By Joeri Gorter; Suzanne Kok
  5. Poisson Indices of Segregation By Angelo, Mele
  6. Geography and Economic Transition: Global Spatial Analysis at the Grid Cell Level By Motamed, Mesbah; Florax, Raymond J.G.M.; Masters, Will
  7. Explaining the size distribution of cities: x-treme economies By Berliant, Marcus; Watanabe, Hiroki
  8. Employment Growth and Income Inequality: Accounting for Spatial and Sectoral Differences By Pede, Valerien O.; Florax, Raymond J.G.M.; Partridge, Mark D.
  9. Firm Birth and Death in U.S. Manufacturing: A Regional Adjustment Model By Brown, Jason P.; Lambert, Dayton M.; Florax, Raymond J.G.M.
  10. Directional Spatial Dependence and Its Implications for Modeling Systemic Yield Risk By Zhu, Ying; Ghosh, Sujit K.; Goodwin, Barry K.
  11. Heterogenous Skills and Homogeneous Land: Segmentation and Agglomeration By Matthias Wrede
  12. Impact of Economic Growth on Income Inequality: A Regional Perspective By Majumdar, Shibalee; Partridge, Mark D.
  13. Obesity in Urban Food Markets: Evidence from Geo-referenced Micro Data By Chen, Susan E.; Florax, Rayond J.G.M.; Snyder, Samantha D.
  14. The Spatial Effect of Ethanol Biorefinery Locations on Local Corn Prices By Katchova, Ani L.
  15. OLS Estimator for a Mixed Regressive, Spatial Autoregressive Model: Extended Version By Mynbaev, Kairat
  16. The Agglomeration Vickrey Auction for the promotion of spatially contiguous habitat management: Theoretical foundations and numerical illustrations By Banerjee, Simanti; Shortle, James S.; Kwasnica, Anthony M.
  17. The Importance of Income and Housing Wealth Constraints for Future Residential Mobility By Wolter Hassink; Michiel van Leuvensteijn
  18. Groundwater Pumping and Spatial Externalities in Agriculture By Pfeiffer, Lisa; Lin, C.-Y. Cynthia
  19. The impact of large-lot zoning and open space acquisition on home building in rural communities By Gottlieb, Paul D.; O'Donnell, Anthony; Rudel, Thomas; O'Neill, Karen; McDermott, Melanie
  20. Entry, Ownership Form, and Spatial Location: An Analysis of the Hotel Industry By Helmers, Claes Gustav; Connor, John M.; Florax, Raymond J.G.M.; Vroom, Govert
  21. Spatial Analysis of Market Linkages in North Carolina Using Threshold Autoregression Models with Variable Transaction Costs By Bekkerman, Anton; Goodwin, Barry D.; Piggott, Nicholas E.

  1. By: Torben Klarl (University of Augsburg, Department of Economics)
    Abstract: During the last year, the research field of spatial economic has rapidly increased. There is consensus that the economic performance of a region depends not only on its own potential, but also on the development of their neighbouring regions. Knowledge spillovers, which are non constant over space, should influence the evolution of the region specific productivity. The so called "folk theorem of spatial economics" states, that increasing returns to scale are essential for explaining the uneven economic distribution of specific economic activity, which implies that knowledge spillover, agglomeration and distribution of per capita productivity are closely linked. Thus, the aim of this paper is, to introduce a spatial regional growth model, which links first time knowledge spillover, agglomeration, distribution of per capita productivity and the grasp of spillovers. Further, it is shown in a simulation study, how different regimes of returns to scale and grasps of knowledge affect agglomeration and distribution of per capita productivity. One of key findings is, that grasp of knowledge affects dynamic distribution of per capita productivity. Moreover, the simulation study particularly finds support for the "folk theorem of spatial economics".
    Keywords: Spatial Economics, Agglomeration, Spatial knowledge spillovers, New economic geography, Regional growth
    JEL: R11 R12 F43
    Date: 2009–05
  2. By: Carrion-Flores, Carmen E.; Flores-Lagunes, Alfonso; Guci, Ledia
    Abstract: Urban decentralization and dispersion trends have led to increased conversion of rural lands in many urban peripheries and exurban regions of the U.S. The growth of the exurban areas has outpaced growth in urban and suburban areas, resulting in growth pressures at the urban-rural fringe. A thorough analysis of land use change patterns and the ability to predict these changes are necessary for the effective design of regional environmental, growth, and development policies. We estimate a multinomial discrete choice model with spatial dependence using parcel-level data from Medina County, Ohio. Accounting for spatial dependence should result in improved statistical inference about land use changes. Our spatial model extends the binary choice âlinearized logitâ model of Klier and McMillen (2008) to a multinomial setting. A small Monte Carlo simulation indicates that this estimator performs reasonably well. Preliminary results suggest that the location of new urban development is guided by a preference over lower density areas, yet in proximity to current urban development. In addition, we find significant evidence of spatial dependence in land use decisions.
    Keywords: Land Use Change, Multinomial Logit, Spatial Dependence, Community/Rural/Urban Development, Land Economics/Use, Research Methods/ Statistical Methods, R14, C21, C25,
    Date: 2009
  3. By: Baylis, Kathy; Garduno-Rivera, Rafael; Piras, Gianfranco
    Abstract: This paper studies the regional distribution of the benets from trade in Mexico after NAFTA. Specically, we ask whether or not NAFTA has increased the concentration of economic activity in Mexico. Unlike previous work which uses state-level data, we identify the eect of NAFTA on economic activity at the municipal level allowing us to observe detailed growth patterns across space. Further, to explicitly identify the eect of the trade agreement, we compare results for growth in traded and non-traded sectors. Given the spatial nature of these data, we make explicit use of spatial econometrics methods. We find that NAFTA caused the wealthy regions nearest to the border to grow faster than others, increasing regional disparity. Second, we find that larger municipalities experienced greater per-capita economic benefits from NAFTA. This effect is particularly noticeable in the north. Somewhat surprisingly, we nd that regions with a less literate workforce and worse infrastructure grew faster than other areas after the trade agreement, decreasing regional disparity. We notice these redistributive eects occur primarily in the non-traded sectors.
    Keywords: Regional Disparities, Trade Liberalization, Agglomeration Economies, Economic Growth, Mexico, Transport Cost, Spatial econometrics, Community/Rural/Urban Development, International Development, International Relations/Trade,
    Date: 2009
  4. By: Joeri Gorter; Suzanne Kok
    Abstract: The drift to the city has been going on for hundreds of years. As a result, most economic activity is concentrated in small geographical areas. The advantages of proximity of people and firms go under the name ‘agglomeration economies’. In this paper, we measure their strength on the basis of Dutch regional data. We regress regional labour productivity on a set of agglomeration indices, and find evidence for a productivity effect of concentration of production with a malus for industrial variety. Thus, the evidence supports Marschall-Arrow- Romer economies. The evidence does not support, however, Jacobs economies, nor variants of the Creative Class Hypothesis.
    Keywords: Agglomeration externalities; labour productivity; industrial concentration
    JEL: O18 R11 R12
    Date: 2009–04
  5. By: Angelo, Mele
    Abstract: Existing indices of residential segregation are based on an arbitrary partition of the city in neighborhoods: given a spatial distribution of racial groups, the index provides different levels of segregation for different partitions. This paper proposes a method in which individual locations are mapped to aggregate levels of segregation, avoiding arbitrary partitions. Assuming a simple spatial process driving the locations of different racial groups, I define a location-specific segregation index and measure the city-level segregation as average of the individual index. After deriving several distributional results for this family of indices, I apply the idea to US Census data, using nonparametric estimation techniques. This approach provides different levels and rankings of cities' segregation than traditional indices. I show that high aggregate levels of spatial separation are the result of very few locations with extremely high local segregation. I replicate the study of Cutler and Glaeser (1997) showing that their results change when segregation is measured using my approach. These findings potentially challenge the robustness of previous studies about the impact of segregation on socioeconomic outcomes.
    Keywords: spatial segregation; spatial processes; nonparametric estimation
    JEL: C14 J15 C21
    Date: 2009–02–07
  6. By: Motamed, Mesbah; Florax, Raymond J.G.M.; Masters, Will
    Abstract: This paper addresses the timing of historical transition from rural to urban activity. In our model, rural production has constant returns and meets subsistence needs, while urban production has scale economies and meets the demands of higher-income consumers. Urbanization occurs sooner when rural or urban productivity is higher or transport costs are lower. We test the model on worldwide data that divides the earth's surface at half-degree intervals into over 60,000 cells. From an independent estimate of each cell's rural and urban population history, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for country fixed effects and neighbors' urbanization using spatial techniques, we find that the date at which each cell passes each urbanization threshold is positively associated with its suitability for cultivation, having seasonal frosts, more access to navigable waterways and lower elevation. Aggregating cells into countries, an earlier urbanization date is linked to higher per capita income today.
    Keywords: economic growth, economic geography, urbanization, agriculture, Community/Rural/Urban Development, Research Methods/ Statistical Methods, C21, N50, O11, O18, R1,
    Date: 2009
  7. By: Berliant, Marcus; Watanabe, Hiroki
    Abstract: We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move, generating a Fréchet distribution of city sizes that is empirically competitive with other models.
    Keywords: Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory
    JEL: R12
    Date: 2009–05–12
  8. By: Pede, Valerien O.; Florax, Raymond J.G.M.; Partridge, Mark D.
    Abstract: This paper revisits the inequality-growth relationship accounting for sectoral differences and focusing on US counties. For 8 two-digit industries of the NAICS classification, we estimated a conditional growth model where employment growth depends on regional income inequality and a number of control variables. Spatial econometrics techniques are used to account for spatial dependence. Results indicate that there is no association between employment growth and family income inequality for the Agriculture, Forestry, Fishing and Hunting sector and the Real Estate, Rental and Leasing sector. However, income inequality consistently shows a negative impact on employment growth in the construction sector, and results are mixed for other sectors such as: Manufacturing; Retail Trade; Professional Scientific and Technical Services; Accommodation and Food Services; Educational Services. In several sectors, mixed results were obtained when differentiation is made between urban and rural samples.
    Keywords: employment growth, inequality, spatial dependence, Community/Rural/Urban Development, R0, R11, O15, D30,
    Date: 2009–05–01
  9. By: Brown, Jason P.; Lambert, Dayton M.; Florax, Raymond J.G.M.
    Abstract: Attracting manufacturing investment is a frequently used rural development policy. Previous research in the location literature has informed policymakers which factors are most important for attracting new firm investment. Far less is known about the interaction of birth and death of establishments. A conceptual model of county-level investment in the U.S. manufacturing sector is developed from location theory and subsequent literature. Specifically, we test the relative importance of location factors influencing firm investment, and if these factors influence firm birth and death differently. Local factors include agglomeration due to localization, urbanization, and internal economies, market structure, labor quality, availability, and cost, market conditions, , infrastructure, and fiscal policy. This study covers the time period 2000 to 2004 for U.S. counties in the lower 48 states. Counts of establishments are from the U.S. Census Bureauâs Dynamic Firm Data Series, which links establishments across space and time. Negative binomial models containing spatially lagged endogenous variables are estimated in a regional adjustment framework to show how ceteris paribus changes in location factors affect the conditional number of establishment births and deaths in a county.
    Keywords: location determinants, manufacturing, count models, Community/Rural/Urban Development, Research Methods/ Statistical Methods, L60, R11, R12,
    Date: 2009–05
  10. By: Zhu, Ying; Ghosh, Sujit K.; Goodwin, Barry K.
    Abstract: The objective of this study is to evaluate and model the spatial dependence of systemic yield risk. Various spatial autoregressive models are explored to account for county level dependence of crop yields. The results show that the time trend parameters of yields are correlated across spaces and the spatial correlations are changing with time. In addition, the spatial correlation of neighborhood in west/east direction is stronger than that of north/south direction. The information of the spatial dependence of yield risk will help the construction of better risk management programs for protecting producers from systemic yield risks.
    Keywords: Spatial Autoregressive Model, Spatial Dependence, Risk and Uncertainty,
    Date: 2009
  11. By: Matthias Wrede (University of Marburg and CESifo, 35032 Marburg, Germany)
    Abstract: This paper analyzes the impact of skill heterogeneity on regional patterns of production and housing in the presence of pecuniary externalities within a general-equilibrium framework assuming monopolistic competition at intermediate good markets. It shows that the interplay of heterogeneous skills and relatively homogeneous land demand triggers skill segmentation and agglomeration. The core region, being more attractive to high skilled workers, has a disproportionately large share of production at all levels of the supply chain. The paper studies the effects on segmentation and agglomeration of interregional trade in intermediate goods, attachment to home, the presence of immobile unskilled workers, various conditions at local land markets, and federal taxation.
    Keywords: Agglomeration, Skill heterogeneity, land use, segmentation, agglomeration
    JEL: R12 R13 R14
    Date: 2009
  12. By: Majumdar, Shibalee; Partridge, Mark D.
    Abstract: Impact of Economic Growth on Income Inequality: A Regional Perspective Shibalee Majumdar and Mark Partridge Egalitarianism refers to the doctrine of the equality of mankind and the desirability of political, economic and social equality. In this paper, we are going to refer to the concept of economic equality. Theory shows that income inequality is a condition that prevails along with economic growth. According to the utilitarian view, income inequality must exist along with economic growth in order to maximize social welfare. This is in sharp contrast to the egalitarian view according to which, all members of the society should have equal access to all economic resources in terms of economic power, wealth and contribution. Kuznets (1955) introduced the inverted U-shaped Kuznets curve that showed that in an economic system, at the initial level of low economic growth, income inequality is low and as growth occurs, income inequality increases till a threshold, after which, income inequality decreases with increased economic growth. In the United States, income inequality remained stable till the 1970s but then began to increase as earnings increased. This has been called the great U-turn by Harris, et. al (1986). Partridge et. al (1996) notes that while Kuznets held the manufacturing sector as the main driver of the economic growth, the current economic growth is being spearheaded by the services sector. While one school of research shows how income inequality might harm economic growth, empirical studies show that in the United States, a positive linkage between economic growth and income inequality has existed since the 1970s. The causality between economic growth and income inequality is an important one. The relationship may differ depending on regions or size of an economy. Fallah and Partridge (2007) show that the impact of inequality on economic growth is opposite in rural and urban settings. Most of the research dealing with the inequality-growth relationship has either looked at the impact of inequality on economic growth (Fallah and Partridge, 2007) or the impact of various socio-economic variables on inequality. Though there has been some research on finding out the causality between economic growth and wage inequality, research assessing whether economic growth affects income inequality, and that too whether the degree of the impact varies between rural and urban regions, are few. The aim of this paper is to see how economic growth affects income inequality. Does improved economic growth lead to a more redistributive system of social welfare or does the polarization become more acute? Does the impact of economic growth on income inequality differ between metropolitan and non-metropolitan areas? Does inequality vary depending on the nature of the agglomeration or the demographic composition of a region? The empirical equation is: ginicsy = gcsy-1 + educsy + popcsy + lcsy + ethcsy + immigcsy + strcsy + Ïcs + Ïy + ε where, gini denotes the gini coefficient, g denotes per capita income, edu denotes educational attainment, pop denotes population density, l denotes labour market size, eth denotes ethnic diversity, immig denotes international immigration, str denotes the structural change index, Ïcs denotes state fixed effects and Ïy denotes time fixed effects. The subscripts c, s and y denotes county, state and year, respectively. A lagged value of the per capita income is used in order to avoid any endogeneity issues. The analysis for this paper will be done at the county-level. For the dependant variable and all explanatory variables except the per capita income, a panel will be constructed using county-level data for two decades, 1990 and 2000. The gini coefficient will be calculated using the income data from the U.S. Census Bureau. Data on per capita income, educational attainment, population density and international migration can be obtained from the U.S. Census Bureau. The ethnic diversity measure will be calculated using the population data from the U.S. Census Bureau. The structural change index will be calculated by using data from the Bureau of Economic Analysis, Regional Economic Information System. The aim of the paper is to find out whether per capita income (representing economic growth) has an impact on the gini coefficient (representing income inequality), and to show whether this impact varies between rural and urban areas. The expected results are as follows. Economic growth may have a negative impact on income inequality since economic growth is often positively associated with higher investments, higher employment-generating processes and higher employment, hence giving greater access to jobs and income to a larger number of people. The degree of the impact may vary between rural and urban areas because of the following reasons. A higher population density in the urban area may lead to greater job competition and hence lead to lower access to jobs than in rural areas. International immigration is usually higher in urban areas than in rural areas. The greater influx of immigrants, as well as often seen, the willingness of the immigrants to work at lower wages may lead to lower access to jobs for the locals. This should hold true for the low-skilled jobs. For the high-skilled jobs on the other hand, educational attainment of the people will play a more important role on their ability to get jobs in the urban areas than in the rural areas. However, growth may reduce income inequality in the urban areas because higher population density results in more personal contacts, better networking and access to information, and hence more opportunities to access more and better jobs. If the results show that economic growth has a negative impact on income inequality, it will be possible to comment on the causality of the inequality-growth relationship. More so, if it is seen that economic growth has a stronger impact in decreasing income inequality in the urban areas than in the rural areas, it will show that the higher wages and more diverse job opportunities in the urban areas have a greater spillover effect than in the rural areas. The policy implication such a result may have is that higher investments will have to be made in educational and vocational training in order to generate a stream of skilled labourers, which in turn will add to economic growth and thus will lead to lower income inequality and better social cohesion.
    Keywords: Regional development, income inequality, spatial relation, Community/Rural/Urban Development,
    Date: 2009
  13. By: Chen, Susan E.; Florax, Rayond J.G.M.; Snyder, Samantha D.
    Abstract: This paper provides quantitative estimates of the effect of proximity to fast food restaurants and grocery stores on obesity in urban food markets. Our empirical model combined georeferenced micro data on access to fast food restaurants and grocery stores with data about salient personal characteristics, individual behaviors, and neighborhood characteristics. We defned a "local food environment" for every individual utilizing 0.5-mile buffers around a person's home address. Local food landscapes are potentially endogenous due to spatial sorting of the population and food outlets, and the body mass index (BMI) values for individuals living close to each other are likely to be spatially correlated because of observed and unobserved individual and neighborhood effects. The potential biases associated with endogeneity and spatial correlation were handled using spatial econometric estimation techniques. Our policy simulations for Indianapolis, Indiana, focused on the importance of reducing the density of fast food restaurants or increasing access to grocery stores. We accounted for spatial heterogeneity in both the policy instruments and individual neighborhoods, and consistently found small but statistically signifcant effects for the hypothesized relationships between individual BMI values and the densities of fast food restaurants and grocery stores.
    Keywords: obesity, fast food, grocery store, spatial econometrics, micro data, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Public Economics, Research Methods/ Statistical Methods, C31, D12, I12, I18,
    Date: 2009–03
  14. By: Katchova, Ani L.
    Abstract: This study examines whether the local competition for corn to produce ethanol has lead to significantly higher prices for farmers located close to ethanol plants. If any, such price premiums for spatial closeness would be in addition to the general level of corn price changes experienced by farmers throughout the U.S. The difference-in-differences estimation method is used to account for both time and location differences in order to measure the interaction of time and location effects. Using the USDAâs ARMS data, the results show that while prices in real terms have risen over time, farmers located close to ethanol plants have not received significantly higher prices than farmers living farther away from plants. These findings indicate that there is a lack of evidence for price premiums due to the spatial closeness to ethanol plants.
    Keywords: corn prices, ethanol, ethanol plant location, difference-in-differences., Agribusiness, Marketing, Q13,
    Date: 2009–07
  15. By: Mynbaev, Kairat
    Abstract: We find the asymptotic distribution of the OLS estimator of the parameters $% \beta$ and $\rho$ in the mixed spatial model with exogenous regressors $% Y_n=X_n\beta+\rho W_nY_n+V_n$. The exogenous regressors may be bounded or growing, like polynomial trends. The assumption about the spatial matrix $W_n $ is appropriate for the situation when each economic agent is influenced by many others. The error term is a short-memory linear process. The key finding is that in general the asymptotic distribution contains both linear and quadratic forms in standard normal variables and is not normal.
    Keywords: $L_p$-approximability; mixed spatial model; OLS asymptotics
    JEL: C02 C31 C01
    Date: 2009–05–10
  16. By: Banerjee, Simanti; Shortle, James S.; Kwasnica, Anthony M.
    Abstract: There is much interest among economists and policy makers in the use of reverse auctions to purchase habitat conservation on private lands as a mechanism for minimizing public expenditures to achieve desired conservation outcomes. Examples are the Conservation Reserve Program (US) and Environmental Stewardship Scheme (UK). An important limitation of these auctions as implemented to date is that there is no explicit consideration of the spatial pattern of participation in the evaluation of bids. In this study we present the structure of a simple auction â the Agglomeration Vickrey Auction that implements a Vickrey-Clarke-Groves mechanism. The auction is designed to attain conservation goals through specific spatial patterns of land management while minimizing the total budgetary cost. We present the theoretical structure of the AVA and provide simple numerical examples to illustrate the effectiveness of the mechanism. We conclude with a section documenting the experiments that are to be conducted as a part of the future research on this study.
    Keywords: auctions, environmental conservation, spatial, Environmental Economics and Policy, Land Economics/Use,
    Date: 2009
  17. By: Wolter Hassink; Michiel van Leuvensteijn
    Abstract: We investigate the size of the mark-up on the lending rate for endowment mortgages, due to expected prepayment by the borrower. For this type of mortgage, prepayment is mostly the result of mobility in the housing market. We control for the risk of default by using a unique data set of Dutch borrowers insured against default. The estimates indicate that households with a higher liquidity constraint are less likely to prepay, as they have a lower mark-up on the lending rate. In contrast, the collateral constraint has a very limited influence on the mark-up. We explain this result as follows. Usually, income constraints are generated at the household level, whereas constraints on housing wealth pertain to the regional level. Hence, income changes may improve the relative position of households in the housing market, but an increase in homeowners. housing wealth does not improve their relative position in the housing market.
    Keywords: Mortgage market, Prepayment, Lending rate, Liquidity constraint, Collateral constraint, Residential mobility
    JEL: D40 D80 E43
    Date: 2009–04
  18. By: Pfeiffer, Lisa; Lin, C.-Y. Cynthia
    Abstract: The objective of this paper is to investigate the behavior of farmers who share a common pool resource; in this case, an underground aquifer. In the case where seepage may occur, this seepage renders the resource non-exclusive, giving rise to a spatial externality whereby pumping by one user affects the extraction cost and total amount that is available to other nearby users. Theoretically, these externalities are potentially important causes of welfare loss. Using a unique data set of groundwater users in western Kansas, augmented with spatial hydrological data, we are able to empirically measure the physical and behavioral effects of groundwater pumping by a farmer's neighbors. To address the endogeneity of neighbors' pumping, we use the neighbors' permitted water allocation as an instrument for their pumping. We find that one thousand acre-feet pumped by one's neighbors can lower the water table by about 1.5 feet, on average. We also find that one thousand acre-feet of pumping by one's neighbors will cause an increase in own pumping of about ten acre-feet. We estimate that about two percent of the total amount of groundwater extracted each year in western Kansas is over-extraction due to the effect of spatial externalities.
    Keywords: spatial externalities, water resources, spatial econometrics, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q25,
    Date: 2009–05–01
  19. By: Gottlieb, Paul D.; O'Donnell, Anthony; Rudel, Thomas; O'Neill, Karen; McDermott, Melanie
    Abstract: Local governments in the United States use a wide range of tools to preserve rural landscapes. Some of these tools, like the purchase or transfer of development rights, are generally welcomed by farmers and other large landowners. Other tools, like increasing the minimum lot size in a townâs agricultural zone, are more controversial because they are believed to have negative effects on landowner wealth. In this contentious policy environment, it would be useful to know which land use tools actually work to control residential growth, thus achieving the consensual objective of rural preservation. It is reasonable to suppose that large-lot zoning and open space preservation will both reduce the number of homes in a community when it is fully developed. The short and medium-term effects of these policies, however, are less certain. Indeed, there is some evidence that permanently-preserved open space increases short-run home building through an âamenity magnetâ effect. Similarly, an increase in minimum lot size could trigger the immediate development of agricultural land by reducing the option value of waiting. This study uses data on 83 communities in the Highlands region of New Jersey to help answer these questions about the unintended consequences of these two rural conservation tools. The dataset includes GIS-based information on developable land, open space inventory, and minimum lot size zoning for the period 1995 to 2002. The study concludes that the relationship between minimum lot size and homebuilding in a community can be described as a concave quadratic. The pace of homebuilding rises to a maximum at a weighted average minimum lot size of 4.15, and then starts to fall. The percentage of a community that is permanently-preserved open space was found to have no significant effect on homebuilding, other things equal.
    Keywords: Land use, Farmland preservation, Zoning, Housing, Community/Rural/Urban Development, Land Economics/Use, R52, R14, R31,
    Date: 2009
  20. By: Helmers, Claes Gustav; Connor, John M.; Florax, Raymond J.G.M.; Vroom, Govert
    Abstract: This paper analyses the impact of ownership type on the locating behavior and capacity choice of prospective entrant hotels. An important aspect which has often been neglected in the entry literature is the relevance of the ownership that defines an establishment. A hotel outlet can be company-owned, franchised, or independently owned. As this is an important driver of the incentive structure for a firm as well as a strategic indicator for its (prospective) competitors, this paper argues that ownership form is a necessary explanatory factor in market conduct analysis. We show using a spatial lag model that a disaggregated analysis provide a good understanding of market interaction among hotels.
    Keywords: Marketing,
    Date: 2009
  21. By: Bekkerman, Anton; Goodwin, Barry D.; Piggott, Nicholas E.
    Abstract: In North Carolina, where soybeans and corn are the two primary crops, the recent increase in the demand for U.S. corn has triggered a shift of farm acreage from soybeans to corn, leading to a rapid rise in prices of both commodities. However, the rate of the price changes, as well as the price level, is significantly different in markets that are located in different parts of the state. This study extends the literature that examines linkages between spatially separated markets by using a threshold autoregressive model with a less restrictive assumption for estimating the transaction cost neutral band -- the band within which trade is not profitable. This generalization allows the neutral band of transactions costs to change according to various external factors, including fuel costs and seasonality. The estimation results indicate that for longer time series data, variable thresholds models statistically outperform the constant thresholds specification, and may provide a better representation of corn and soybean price data. Additionally, impulse response functions that use the asymmetric variable threshold model parameters indicate that the magnitude of the shock as well as the time-to-price-parity-equilibrium in the linked markets may be underestimated if a constant thresholds specification is implemented.
    Keywords: threshold autoregression, spatially separated markets, impulse response, neutral band, Demand and Price Analysis, Marketing, Q11, Q13,
    Date: 2009

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