nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒08‒01
five papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Agglomeration Economies and Productivity Growth: U.S. Cities, 1880-1930 By Alexander Klein; Nicholas Crafts
  2. How important is spatial correlation in randomized controlled trials? By Baylis, Kathy; Ham, Andres
  3. Congestion Pricing in Urban Polycentric Networks with Distorted Labor Markets: A Spatial General Equilibrium Model for the Area Randstad By Ioannis Tikoudis
  4. Customer discrimination and employment outcomes: Theory and evidence from the French labor market By Pierre-Philippe Combes; Bruno Decreuse; Morgane Laouénan; Alain Trannoy
  5. Long-Run Equilibrium Shift and Short-Run Dynamics of U.S. Home Price Tiers during the Housing Bubble By Damianov, Damian S; Escobari, Diego

  1. By: Alexander Klein; Nicholas Crafts
    Abstract: WWe investigate the role of industrial structure in labor productivity growth in U.S. cities between 1880 and 1930 using a new dataset constructed from the Census of Manufactures. We find that increases in specialization were associated with faster productivity growth but that diversity only had positive effects on productivity performance in large cities. We interpret our results as providing strong support for the importance of Marshallian externalities. Industrial specialization increased considerably in U.S. cities in the early 20th century, probably as a result of improved transportation, and we estimate that this resulted in significant gains in labor productivity.
    Keywords: agglomeration economies; Jacobian externalities; manufacturing productivity; Marshallian externalities; industrial structure
    JEL: N91 N92 R32
    Date: 2015–06
  2. By: Baylis, Kathy; Ham, Andres
    Abstract: Randomized controlled trials have become the gold standard for impact evaluation since they provide unbiased estimates of causal effects. This paper studies randomized settings where treatment is assigned over geographical units. We analyze how omitting spatial correlation in outcomes or unobservables affects treatment effect estimates. First, we study spatial dependence in Mexico's Progresa program. Second, we conduct Monte Carlo simulations to generalize our results. Findings reveal that spatial correlation is more relevant than the literature suggests, and may affect both the precision of the estimate and the estimate itself. Existing spatial econometric methods may provide solutions to mitigate the consequences of omitting spatial correlation.
    Keywords: randomization, spatial correlation, treatment effects, estimation, inference, International Development, Research Methods/ Statistical Methods, C15, I38, R58,
    Date: 2015–05
  3. By: Ioannis Tikoudis (VU University Amsterdam, the Netherlands)
    Abstract: The paper presents a polycentric general equilibrium model with congestion externalities and distortionary labor taxation calibrated to fit the key empirical regularities of the regional economy and transport system of Randstad conglomeration. In line with more stylized models, marginal external cost pricing (i.e. a quasi first-best Pigouvian toll that ignores the pre-existing taxation in the labor market) is shown to generate considerable welfare losses. Surprisingly, the quasi first-best Pigouvian toll is welfare decreasing even when the road tax revenue is used to finance labor tax cuts. This is due to the large deviation of marginal external costs from the optimal toll levels, as the latter are found to be negative in many of the network links. Approximations of the key double-dividend effects show that, in those links, the tax interaction effect is strong enough to outweigh both the revenue-recycling and the Pigouvian effect.
    Keywords: applied general equilibrium; network; road pricing; commuting; polycentricity; environmental taxation; double-dividend
    JEL: D58 H21 H23 C63 R13 R40
    Date: 2015–07–23
  4. By: Pierre-Philippe Combes (Groupement de Recherche en Économie Quantitative d'Aix-Marseille); Bruno Decreuse (Groupement de Recherche en Économie Quantitative d'Aix-Marseille); Morgane Laouénan (Sciences Po LIEPP); Alain Trannoy (Aix-Marseille School of Economics)
    Abstract: The paper investigates the link between the over-exposure of African immigrants to unemployment in France and their under-representation in jobs in contact with customers. We build a two-sector matching model with ethnic sector-specific preferences, economy-wide employer discrimination, and customer discrimination in jobs in contact with customers. The outcomes of the model allow us to build a test of ethnic discrimination in general and customer discrimination in particular. We run the test on French individual data in a cross-section of local labor markets (Employment Areas). Our results show that there is both ethnic and customer discrimination in the French labor market.
    Keywords: Discrimination; Matching Frictions; Jobs in Contact; Ethnic Unemployment; Local Labor Markets
    JEL: J15 J61 R23
    Date: 2014–04
  5. By: Damianov, Damian S; Escobari, Diego
    Abstract: We use vector error correction models to examine the interdependence between the high and the low price tiers during the latest housing market boom and bust. For 118 of the 364 US statistical areas analyzed, the tiered price indexes are bound by a long-run relationship. In general, low tier homes appreciated more than high tier homes in the past two decades. In contrast to previous periods of high volatility, however, low tier homes appreciated more during the boom and lost more value during the bust of the market. We find a shift in the long-run equilibrium during the bubble -the cointegration parameter that ties the tiers together is greater in absolute value during the bubble period compared to the periods of more moderate appreciation and depreciation rates. Moreover, the shift in the long-run equilibrium can be explained by differences in subprime originations across housing markets. We also find that short run price dynamics is driven by momentum in both segments of the market.
    Keywords: Residential real estate markets, Housing Price Tiers
    JEL: C3 C32 R3 R30 R32
    Date: 2015–07–21

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