nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒01‒16
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Accounting for Neighboring Effects in Measures of Spatial Concentration By Paulo Guimarães; Octávio Figueiredo; Douglas Woodward
  2. Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions By Pouliakas, Konstantinos; Roberts, Deborah; Balamou, Eudokia; Psaltopoulos, Demetrios
  3. The Spatial Variability of Vehicle Densities as Determinant of Urban Network Capacity By Amin Mazloumian; Nikolas Geroliminis; Dirk Helbing
  4. Density and disasters: economics of urban hazard risk By Lall, Somik V.; Deichmann, Uwe
  5. Essays on Regional Differences in Time Preferences and Attachment to Place By Yi, Dale
  6. Locational signaling and agglomeration By Berliant, Marcus; Yu, Chia-Ming
  7. The economics of of 'Radiator Springs:' Industry dynamics, sunk costs, and spatial demand shifts By Jeffrey R. Campbell; Thomas N. Hubbard
  8. Decentralization and local public services in Ghana: Do geography and ethnic diversity matter? By Akramov, Kamiljon T.; Asante, Felix Ankomah
  9. A third sector in the core-periphery model: non-tradable goods By Vasco Leite; Sofia B.S.D. Castro; João Correia-da-Silva

  1. By: Paulo Guimarães (University of South Carolina and CEMPRE); Octávio Figueiredo (CEMPRE and Faculdade de Economia, Universidade do Porto); Douglas Woodward (University of South Carolina)
    Abstract: A common problem with spatial economic concentration measures (e.g. Gini, Herfindhal, entropy and Ellison-Glaeser indices) is accounting for the position of regions in space. While they purport to measure spatial clustering, these statistics are confined to calculations within individual areal units. They are insensitive to the proximity of regions - to neighboring effects. Clearly, economic clusters may cross the boundaries of the regions. Yet with current measures, any industrial agglomeration that traverses boundaries will be chopped into two or more pieces. Activity in adjacent spatial units is treated in exactly the same way as activity in far-flung, non-adjacent areas. This paper shows how some popular measures of spatial concentration relying on areal data can be modified to account for neighboring effects and spatial autocorrelation. With a U.S. application, we also show that the new instruments we propose are useful and easy to implement.
    Keywords: Measures of Agglomeration, Spatial Concentration
    JEL: R12 R39 C49
    Date: 2009–12
  2. By: Pouliakas, Konstantinos (University of Aberdeen); Roberts, Deborah (University of Aberdeen); Balamou, Eudokia (University of Patras); Psaltopoulos, Demetrios (University of Patras)
    Abstract: The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.
    Keywords: immigration, CGE, skills, wage inequality, brain-drain, regional economies
    JEL: D33 D58 R13 R23
    Date: 2009–12
  3. By: Amin Mazloumian; Nikolas Geroliminis; Dirk Helbing
    Abstract: Due to the complexity of the traffic flow dynamics in urban road networks, most quantitative descriptions of city traffic so far are based on computer simulations. This contribution pursues a macroscopic (fluid-dynamic) simulation approach, which facilitates a simple simulation of congestion spreading in cities. First, we show that a quantization of the macroscopic turning flows into units of single vehicles is necessary to obtain realistic fluctuations in the traffic variables, and how this can be implemented in a fluid-dynamic model. Then, we propose a new method to simulate destination flows without the requirement of individual route assignments. Combining both methods allows us to study a variety of different simulation scenarios. These reveal fundamental relationships between the average flow, the average density, and the variability of the vehicle densities. Considering the inhomogeneity of traffic as an independent variable can eliminate the scattering of congested flow measurements. The variability also turns out to be a key variable of urban traffic performance. Our results can be explained through the number of full links of the road network, and approximated by a simple analytical formula.
    Keywords: Urban traffic, network dynamics, congestion spreading, macroscopic traffic model, fundamental diagram
    Date: 2009–11–19
  4. By: Lall, Somik V.; Deichmann, Uwe
    Abstract: Today, 370 million people live in cities in earthquake prone areas and 310 million in cities with high probability of tropical cyclones. By 2050, these numbers are likely to more than double. Mortality risk therefore is highly concentrated in many of the world’s cities and economic risk even more so. This paper discusses what sets hazard risk in urban areas apart, provides estimates of valuation of hazard risk, and discusses implications for individual mitigation and public policy. The main conclusions are that urban agglomeration economies change the cost-benefit calculation of hazard mitigation, that good hazard management is first and foremost good general urban management, and that the public sector must perform better in generating and disseminating credible information on hazard risk in cities.
    Keywords: Banks&Banking Reform,Environmental Economics&Policies,Hazard Risk Management,Urban Housing,Labor Policies
    Date: 2009–12–01
  5. By: Yi, Dale
    Abstract: Data from a national telephone survey of working-aged adults in the continental US is combined with US Census 2000 data to explore the determinants of attachment to place and time preferences for jobs, natural amenities, and financial assets. Five regions in the US were delineated so that regional differences in the determinants of the dependent variables of interest could be parsed out. The regions are the Great Plains, Borderlands, Appalachia, the Plantation Belt, and the rest of the continental US. The first essay that explores time preferences for jobs, natural amenities, and money. Each was embedded with a ten percent rate of return. In aggregate, the nation as a whole demonstrated that the discount rate for jobs, natural amenities, and financial assets were each very different. The second essay explores the determinants of attachment to place by asking respondents how much money it would take to convince them to move to another community. Regional differences were detected both for time preferences and attachment to place. In addition to the independent variables classically used to explore our dependent variables of interest, these regional variables and their interactive expansions were observed to have a significant effect.
    Keywords: Great Plains, migration, time preference, survey, community attachment, social capital, natural amenity, economic development, community, census, zip code, policy, Native American, Community/Rural/Urban Development, Resource /Energy Economics and Policy, R11, R23, R53, R58, Q51, Q52, O13, O15,
    Date: 2009
  6. By: Berliant, Marcus; Yu, Chia-Ming
    Abstract: Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at a location. When workers’ price elasticity of demand for housing is negatively correlated with their productivity, skill-biased technological change causes a core-periphery bifurcation where the agglomeration of high-skill workers eventually constitutes a unique stable equilibrium. When workers’ price elasticity of demand for housing and their productivity are positively correlated, skill-biased technological improvements will never result in a core periphery equilibrium. This paper claims that location can at best be an approximate rather than a precise sieve for high-skill workers.
    Keywords: Agglomeration; Adverse Selection; Asymmetric Information; Locational Signaling
    JEL: R13 D82 D51
    Date: 2009–12–19
  7. By: Jeffrey R. Campbell; Thomas N. Hubbard
    Abstract: We measure industry evolution following permanent changes in the level and location of demand for gasoline in hundreds of counties during the time surrounding the completion of Interstate Highway segments. We find that the timing and margin of adjustment depends on whether the new highway is located close to or far from the old route. When the new highway is close to the old one, there is no evidence that the number of stations changes around the time it opens. However, average station size increases by 6% before the highway is completed. When the new highway is far from the old one (say, 5-10 miles), the number of stations increases by 8% and average station size remains unchanged. Unlike the station size adjustment when the new highway is close, the entire increase takes place after construction. These results provide evidence on how this industry, which is characterized by high location-specific sunk costs, adjusts to demand changes. Our results are consistent with theories in which firms have strategic investment incentives to preempt competitors.
    Date: 2009
  8. By: Akramov, Kamiljon T.; Asante, Felix Ankomah
    Abstract: "This paper explores disparities in local public service provision between decentralized districts in Ghana using district- and household-level data. The empirical results show that districts' geographic locations play a major role in shaping disparities in access to local public services in Ghana. Most importantly, the findings suggest that ethnic diversity has significant negative impact in determining access to local public services, including drinking water. This negative impact is significantly higher in rural areas. However, the negative impact of ethnic diversity in access to local public services (drinking water) decreases as average literacy level increases. The paper relates the results to literature and discusses policy implications of main findings." from authors' abstract
    Keywords: Decentralization, Access to public services, Ethnic diversity, Geography, Development strategies,
    Date: 2009
  9. By: Vasco Leite (Faculdade de Economia, Universidade do Porto); Sofia B.S.D. Castro (CMUP and Faculdade de Economia, Universidade do Porto); João Correia-da-Silva (CEF.UP and Faculdade de Economia, Universidade do Porto)
    Abstract: We extend an analytically solvable core-periphery model by introducing a monopolistically competitive sector of non-tradable goods. We study how trade costs affect the spatial distribution of economic activity. Trade costs have no effect when the elasticity of substitution among non-tradable goods is low. In this case, concentration of all production (of tradable and non-tradable goods) is the unique equilibrium. When the elasticity of substitution among non-tradable goods is high, we find two equilibrium configurations: symmetric dispersion of the production of tradable and non-tradable goods, if trade costs are high; and concentration of production of tradable goods with asymmetric dispersion of production of non-tradable goods, if trade costs are low.
    Keywords: New economic geography, Core-periphery model, Footloose entrepreneur, Nontradable goods
    JEL: F12 R12
    Date: 2009–12

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