nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒04‒10
five papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Assessing agglomeration economies in the Yangzi River Delta, China : a bayesian spatial econometric approach By Hashiguchi, Yoshihiro; Chen, Kuang-hui
  2. An input-output based methodology to estimate the economic role of a port: the case of the port system of the Friuli Venezia Giulia Region, Italy. By Romeo Danielis; Romeo Danielis
  3. What Drives the Urban Wage Premium? Evidence along the Wage Distribution By Alessia Matano; Paolo Naticchioni
  4. Do New Sports Facilities Revitalize Urban Neighborhoods? Evidence from Residential Mortgage Applications By Huang, Haifang; Humphreys, Brad
  5. Price patterns resulting from different producer behavior in spatial equilibrium. By Mathiesen, Lars

  1. By: Hashiguchi, Yoshihiro; Chen, Kuang-hui
    Abstract: This paper estimates the magnitude of agglomeration economies in the Yangzi River Delta, China, by using the empirical model proposed by Chen and Hashiguchi (2010). The model is an extension of the Ciccone-Hall model (Ciccone and Hall 1996), and enables us to take into account both the endogeneity problem and spatial autocorrelation without instrumental variables in the estimation. County-level data for Shanghai, Jiangsu, and Zhejiang in 2009 and Bayesian methods are used to estimate the model. As a result, the magnitude is found to be insignificant. This indicates that the effect of agglomeration economies is very weak in this area, and so regional development policies for enhancing the interaction among firms and the linkage between industries are required to increase the benefit of agglomeration.
    Keywords: China, Local economy, Econometric model, Agglomeration economies, Spatial autocorrelation, Endogeneity, Bayesian estimation
    JEL: C21 C51 R10 R11 R15
    Date: 2012–03
  2. By: Romeo Danielis (Dipartimento di Scienze Economiche, Aziendali, Matematiche e Statistiche, Università degli Studi di Trieste); Romeo Danielis (Dipartimento di Scienze Economiche, Aziendali, Matematiche e Statistiche, Università degli Studi di Trieste)
    Abstract: The paper illustrates the results of a research project aimed at identifying the main economic and industrial characteristics of the port system of the Friuli Venezia Giulia Region, Italy, and the role it plays within the economy. Combing a top-down and bottom-up approach, based on interviews and detailed data at firm level, a bi-regional input-output table is built with a special disaggregation of the 12 port-related sectors of the Friuli Venezia Giulia region. The input-output table provides the basis for the estimation of a bi-regional input-output model. Drawing from the input-output literature, the paper also implements two methodologies to estimate: a) the level of self-sufficiency of the port system and b) its degree of substitutability, that is, what would happen if the Friuli Venezia Giulia port system closes down, completely or partially.
    Keywords: Transport, economics estimation, port development, port, regional economics, regional developments
    Date: 2012
  3. By: Alessia Matano; Paolo Naticchioni (Sapienza University of Rome Italy.)
    Abstract: This paper aims at disentangling the role played by different theoretical explanations in accounting for the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from low-to-high-density areas in Italy, using quantile regression and individual panel data to control for the sorting of workers. The results show that skilled workers enjoy a higher wage premium when they migrate (wage level effect), in line with the agglomeration externalities explanation, while unskilled workers benefit more from a wage premium accruing over time (wage growth effect). Further, investigating the determinants of the wage growth effect in greater depth, we find that for unskilled workers the wage growth is mainly due to human capital accumulation over time, consistently with the “learning” hypothesis, while for skilled workers it is the “coordination” hypothesis that matters.
    Keywords: Urban Wage Premium, Human Capital, Spatial Sorting, Wage Distribution, Quantile Fixed Effects
    JEL: J31 J61 R23
    Date: 2012
  4. By: Huang, Haifang (University of Alberta, Department of Economics); Humphreys, Brad (University of Alberta, Department of Economics)
    Abstract: Using data from 56 professional sports facilities opened between 1995 and 2008, we find what at first appears to be a substantial neighborhood revitalization effect: the opening of a facility is associated with an increase in mortgage applications to purchase homes located in the neighborhood of about 20%, compared to those in the rest of the metropolitan area. A closer examination shows that much of the differential is due to the non-randomness of facility location. The new facilities locate in poor urban areas, which grew faster over the sample period even if they were not near a new facility, perhaps because of increasing access to mortgage credit by low-income urban populations. Based on a series of regressions using census-tract level data, we find that conditioning on local income and poverty rates, under which poorer census tracts grow faster regardless of their locations, reduces the “revitalization” effect by more than a half, suggesting that characteristics of locations drive much the increase on mortgage applications associated with new sports facilities.
    Keywords: sports facilities; urban redevelopment; residential mortgage applications
    JEL: L83 O18 R21 R23 R38
    Date: 2012–03–20
  5. By: Mathiesen, Lars (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We are concerned with economic analyses of markets from the perspective of supporting a decision maker selling in the market. The competitive pressure and the price formation are central issues. The goal of this paper is to highlight the remarkably different price patterns obtained from different modes of seller behavior in a spatial market. This is exemplified by models of price taking versus the oligopolistic Cournot mode of behavior. Although a particular market, namely the European market for natural gas is used for illustration, the insights from this exercise apply to any industry where suppliers have market power, their locations differ, and their costs of supplying individual segments of the market are non-negligible and differ. When market power is present and one seeks insight into competition and price formation, details in other dimensions cannot compensate for not modeling the exertion of market power.
    Keywords: Price formation; Spatial market; Market power.
    JEL: C68 D41 D43 L11 L13
    Date: 2012–04–02

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