nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒08‒28
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Cities ad Inequality By Alessandra Michelangeli; Eugenio Peluso
  2. Towards a Smart Specialization Strategy for Haifa, Israel By Benner, Maximilian; Bieringer, Lukas; Knaupp, Matthias; Wittemaier, Jana; Wruck, Adrian
  3. The Housing Market Impacts of Constraining Second Home Investments By Christian A. L. Hilber; Olivier Schöni
  4. Traffic Externalities and Housing Prices: Evidence from the London Congestion Charge By Cheng Keat Tang
  5. On the effectiveness of EU structural funds during the Great Recession: Estimates from a heterogeneous local average treatment effects framework By Julia Bachtrögler
  6. Policy capacities for new regional industrial path development – The case of new media and biogas in southern Sweden By Martin, Hanna; Martin, Roman
  7. Flood risk and housing prices: evidence from Hungary By Gabor Bekes; Aron Horvath; Zoltan Sapi
  8. Crecimiento municipal en Colombia: El papel de las externalidades espaciales, el capital humano y el capital físico. By Luis Armando Galvis-Aponte.; Lucas Wilfried Hahn-De-Castro.
  9. Encadenamientos regionales en Colombia 2004 - 2012. By Lucas Wilfried Hahn-De-Castro.

  1. By: Alessandra Michelangeli (University of Milano-Bicocca, DEMS, Piazza Ateneo Nuovo 1, Milan I-20126, Italy); Eugenio Peluso (Department of Economics (University of Verona))
    Abstract: We propose an innovative methodology to measure inequality between cities. If an even distribution of amenities across cities is assumed to increase the average well-being in a given country, inequality between cities can be evaluated through a multidimensional index of the Atkinson (1970) type. This index is shown to be decomposabe into the sum of inequality indices computed on the marginal distributions of the amenities across cities, plus a residual term accounting for their correlation. We apply this methodology to assess inequality between Italian cities in terms of the distribution of public infrastructures, local services, economic and environmental conditions.
    Keywords: Inequality, inequality aversion, social welfare, city
    JEL: R11 R12 R23
    Date: 2016–08
  2. By: Benner, Maximilian; Bieringer, Lukas; Knaupp, Matthias; Wittemaier, Jana; Wruck, Adrian
    Abstract: The notion of smart specialization has gained considerable prominence in the international discourse on regional development. The idea of directing the attention of regional policy towards strengths and opportunities in a region’s knowledge base, and of developing regional economic and innovation strategies in a participatory public-private entrepreneurial process of discovery has unfolded policy relevance especially in countries of the European Union and its neighborhood. Nevertheless, the concept of smart specialization can be applied to regional economies in other countries, too. The present study does so for the city of Haifa, Israel. It provides a profile of the Haifa regional economy, examines regional policies in the framework of the Israeli economic and political context, and identifies possibilities for regional policy to focus on in the coming years. Drawing on the idea of an entrepreneurial process of discovery on the regional level which is a critical component of the smart specialization concept, the study suggests how such an entrepreneurial process of discovery could be organized in the case of Haifa. Conclusions drawn from this study can inform the elaboration of smart specialization strategies in other regions, too.
    Keywords: smart specialization; smart specialisation; clusters; regional development; regional policy; Haifa; Israel
    JEL: O18 R11 R12 R58
    Date: 2016–08–24
  3. By: Christian A. L. Hilber; Olivier Schöni
    Abstract: We investigate how political backlash against wealthy second home investors in high-amenity places - tourist areas or superstar cities - affects local residents. We develop a general equilibrium model and exploit a quasi-natural experiment -the 'Swiss Second Home Initiative' (SHI) -to test the key predictions of the model. Consistent with theory, we find that the SHI, which banned the construction of new second homes in desirable tourist locations, lowered transaction prices of primary homes in affected areas by around 12 percent but did not adversely affect prices of second homes. Our findings suggest that the negative effect on local economies dominated positive amenity-preservation effects. We conclude that constraining second home investments may reinforce rather than reduce wealth inequality.
    Keywords: second homes, wealth inequality, land use regulation, house prices, homeownership, real estate investments
    JEL: D63 G12 R11 R21 R31 R52
    Date: 2016–08
  4. By: Cheng Keat Tang
    Abstract: This study exploits the introduction of the London Congestion Charge (CC) that greatly improves traffic conditions in Central London to provide new evidence on the capitalization of traffic externalities onto housing values. The Congestion Charge restricts traffic into the cordoned area by imposing a flat fee on drivers whenever they enter during charging periods. I show that the introduction of the CC in the Western Extension Zone (WEZ) increases home prices by 3.68\% relative to untreated housing units within 1 kilometre away from the CC boundary. These estimates, which measures the marginal willingness to pay to avoid negative traffic externalities, are robust to many changes in specifications, suggesting that homeowners pay to avoid traffic so as to reduce commuting time, to enjoy better air quality and less traffic noise, and to travel on safer roads.
    Keywords: housing prices, capitalization effects, congestion charge, traffic externalities, marginal willingness to pay, difference-in-difference
    JEL: R21 R31 R38 R41 Q25
    Date: 2016–08
  5. By: Julia Bachtrögler (Department of Economics, Vienna University of Economics and Business)
    Abstract: This study investigates the heterogeneity of European NUTS-2 regions with regard to their ability to take advantage of European Union (EU) structural funds aimed at convergence. It considers a concept of absorptive capacity based on regional policy design, and additionally accounts for the programming period 2007-2013 in the empirical analysis. A fuzzy regression discontinuity design allowing for heterogeneous treatment effects is applied to evaluate convergence funds in 250 NUTS-2 regions from 2000 (and 1989) to 2013. The main results suggest a positive conditional impact of funds payments on regional GDP per capita growth. However, based on a time-varying treatment effects model, we are able to identify a deterioration in the effectiveness of convergence funds during the programming period 2007-2013. Furthermore, the analysis reveals an inverted U-shaped relationship between the share of committed funds paid out and GDP per capita growth. The latter finding indicates that the marginal benefits from EU convergence funds might be decreasing.
    Keywords: Structural Funds, Heterogeneous Treatment Effects, Regional Heterogeneity, Absorptive Capacity, Cohesion, European Union
    JEL: C21 F35 H77 R11 R58
    Date: 2016–08
  6. By: Martin, Hanna (CIRCLE, Lund University); Martin, Roman (University of Gothenburg)
    Abstract: Over the past few years, a growing body of work in economic geography and innovation studies has enhanced our understanding of forms and determinants of regional industrial path development. The importance of policy, however, has received limited attention and accordingly, the role of policy for the emergence and development of new regional industrial growth paths remains largely unexplored. This paper takes an institutional perspective and suggests that the regional innovation system (RIS) approach can contribute to conceptualizing and analysing the role of policy for new regional industrial path development. We argue that in order to turn regional preconditions into new growth paths, RIS require strong policy capacities, consisting of formal and governance capacities. In the empirical part, we analyse the emergence and further development of two new growth paths in the region of Scania in southern Sweden, namely biogas and new media. Based on personal interviews with policy makers, representatives from knowledge and supporting organizations and firms as well as a document analysis, we investigate how policy interventions have influenced the rise and evolution of these two industries. We show that in both cases policy-led initiatives have played an important role in enabling new path development. We find that policy can play multiple roles in nurturing and maintaining new growth paths and that these are closely interlinked with particular policy capacities of RIS.
    Keywords: new path development; regional policy; regional innovation system; capacity building
    JEL: O10 O30 O38 R11 R58
    Date: 2016–08–23
  7. By: Gabor Bekes (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Aron Horvath (Institute of Economics - Centre for Economic and Regional Studies Hungarian Academy of Sciences and ELTINGA Centre for Real Estate Research); Zoltan Sapi (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTINGA Centre for Real Estate Research)
    Abstract: This study employs the hedonic property price method to analyze the flood risk effect on a rich set of data. The analysis is carried out on Hungary, but as the control variables are extremely elaborated, our results have general importance. The paper finds a significant reduction in housing prices accounted to ZIP code level flood risk even after controlling for a wide range of geographical and socio-economic features. This paper finds that flood risk reduces housing prices substantially. It turns out that the average elasticity is driven by being in close proximity of major rivers. While riverside areas have an overall price premium in Hungary, risky areas loose this advantage to flood risk. In ZIP code areas where the inundation depths are 10% higher, housing prices tend to be 1% lower on average plus another 1% lower along the major rivers.
    Keywords: housing, hedonic pricing, flood risk, geography
    JEL: Q51 Q54 R30 R31
    Date: 2016–06
  8. By: Luis Armando Galvis-Aponte.; Lucas Wilfried Hahn-De-Castro.
    Abstract: En el presente trabajo se realiza un análisis del crecimiento económico municipal en el período 1993-2012. El objetivo es evaluar la existencia de convergencia teniendo en cuenta las externalidades del capital humano y el capital físico. Siguiendo el análisis propuesto por Mankiw et al. (1992)1, se estiman las ecuaciones de convergencia aumentadas con capital humano. Se realizan pruebas de autocorrelación espacial, y dado que este fenómeno puede afectar los resultados de las estimaciones, se incorporan dichos efectos en las ecuaciones de convergencia. Para ello se sigue la propuesta de Ertur y Koch (2006; 2007), quienes incluyen las externalidades tecnológicas en el análisis del modelo que considera solamente el capital físico (Solow, 1956), y en el modelo aumentado con el capital humano (MRW, 1992). Los resultados indican que cuando no se tienen en cuenta los efectos de los spillovers, existe evidencia de convergencia. Esta, sin embargo, desaparece cuando dichos efectos son añadidos al modelo. Classification JEL:C31, O47, O54, R11.
    Keywords: crecimiento económico, convergencia, externalidades espaciales.
    Date: 2015–02
  9. By: Lucas Wilfried Hahn-De-Castro.
    Abstract: Este trabajo analiza las relaciones económicas que existen entre los departamentos colombianos bajo un enfoque regional y sectorial. Se realiza para los años 2004 y 2012, períodos para los cuales existe una base de datos en formato insumo producto configurada durante el proceso de creación y posterior actualización del modelo multirregional CEER. Se utilizan dos metodologías: los indicadores obtenidos de la matriz inversa de Leontief y los indicadores de encadenamiento puro propuestos por Sonis et al. (1995). Los principales hallazgos del trabajo son 1) Las regiones desarrolladas de Colombia muestran altos encadenamientos intrarregionales e interregionales hacia adelante, derivados de la matriz inversa de Leontief; 2) Los sectores de industria y servicios, a pesar de haber perdido importancia, se mantienen como los de mayores encadenamientos productivos; 3) Construcción y administración pública fueron los sectores de mayores incrementos; y 4) En el agregado, los encadenamientos departamentales no sufrieron cambios significativos. Classification JR12, R15.
    Keywords: Encadenamientos regionales, encadenamiento puro, matriz inversa de Leontief, Modelo CEER.
    Date: 2016–01

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