nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒04‒16
four papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Bifurcation theory of a square lattice economy: Racetrack economy analogy in an economic geography model By Ikeda, Kiyohrio; Onda, Mikihisa; Takayama, Yuki
  2. Productivity gains from agglomeration and migration in Chinese cities over 2002-2013 By Pierre-Philippe Combes; Sylvie Démurger; Shi Li
  3. When Hotelling meets Vickrey Service timing and spatial asymmetry in the airline industry. By André De Palma; Carlos Criado; L Randrianarisoa
  4. Homeowner Preferences after September 11th, a Microdata Approach By Adam Nowak; Juan Sayago-Gomez

  1. By: Ikeda, Kiyohrio; Onda, Mikihisa; Takayama, Yuki
    Abstract: Bifurcation theory for an economic agglomeration in a square lattice economy is presented in comparison with that in a racetrack economy. The existence of a series of equilibria with characteristic agglomeration patterns is elucidated. A spatial period doubling bifurcation cascade between these equilibria is advanced as a common mechanism to engender fewer and larger agglomerations in both economies. Analytical formulas for a break point, at which the uniformity is broken under reduced transport costs, are proposed for an economic geography model by synthetically encompassing both economies.
    Keywords: Bifurcation, Economic geography model, Group theory, Replicator dynamics, Spatial period doubling
    JEL: C19
    Date: 2017–02–17
  2. By: Pierre-Philippe Combes (ECON - Département d'économie - Sciences Po, GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Sylvie Démurger (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Shi Li (Beijing Normal University)
    Abstract: We evaluate the evolution of productivity gains from Chinese cities over time, from 2002 to 2013. In 2002, rural migrants were exerting a strong positive externality on natives' earnings, which were also higher when access to foreign markets through access to sea was higher. In 2007 and then further in 2013, city size (employment density but also land area) has become the crucial determinant of productivity whereas market access, internal or external, plays no direct role. Rural migrants still enhance natives' earnings, though the effect is more than hal f lower than in 2002. Urban gains, and their evolution over time, are very similar on total and per hour earnings. Skilled workers and females seem to gain slightly more from cities than unskilled workers and males.
    Keywords: urban development,agglomeration economies,wage disparities,migration
    Date: 2017
  3. By: André De Palma (ENS Cachan - École normale supérieure - Cachan); Carlos Criado (Department of Economics, Université Laval - Université Laval); L Randrianarisoa (Sauder - Sauder School of Business [British Columbia] - UBC - University of British Columbia)
    Abstract: This paper analyzes rivalry between transport facilities in a model that includes two sources of horizontal differentiation: geographical space and departure time. We explore how both sources influence facility fees and the price of the service offered by downstream carriers. Travellers' costs include a fare, a transportation cost to the facility and a schedule delay cost, which captures the monetary cost of departing earlier or later than desired. One carrier operates at each facility and schedules a single departure time. The interactions in the facility-carrier model are represented as a sequential three-stage game in fees, times and fares with simultaneous choices at each stage. We find that duopolis-tic competition leads to an identical departure time across carriers when their operational cost does not vary with the time of day, but generally leads to distinct service times when this cost is time dependent. When a facility possesses a location advantage, it can set a higher fee and its downstream carrier can charge a higher fare. Departure time differentiation allows the facilities and their carrier to compete along an additional differentiation dimension that can reduce or strengthen the advantage in location. By incorporating the downstream carriers into the analysis, we also find that a higher per passenger commercial revenue at one facility induces a lower fee charged by both facilities to their carrier and a lower fare charged by both carriers at their departure facility, while a lower marginal operational cost for one carrier implies a higher fee at its departure facility, a lower fee at the other facility served by the rival carrier and a lower fare at both facilities. JEL Classification: D43, L13, L22, L93, R4
    Keywords: Spatial asymmetry,Horizontal differentiation,Location model,Airline and facility competition,Service timing
    Date: 2017–01–27
  4. By: Adam Nowak (West Virginia University, Department of Economics); Juan Sayago-Gomez (West Virginia University, Department of Economics)
    Abstract: The existence of homeowner preferences - specifically homeowners' preferences for neighbors - is fundamental to economic models of sorting. This paper investigates whether or not the terrorist attacks of September 11, 2001 (9/11) impacted on local preferences for Arab neighbors. We test for changes in preferences using a differences-in-differences framework in a hedonic pricing model. Relative to sales before 9/11, we find properties within 0.1 miles of an Arab homeowner sold at a 1.5% discount in the 180 days after 9/11. The results are robust to a number of specifications including time horizon, event date, distance, alternative ethnic groups, and the presence of nearby mosques. Previous research has shown price effects at neighborhood levels but has not identified effects at the micro or individual property level, and for good reason: most transaction level data sets do not include ethnic identifiers. Applying methods from the machine learning and biostatistics literature, we develop a binomial classifier using a supervised learning algorithm and identify Arab homeowners based on the name of the buyer. We train the binomial classifier using names from Summer Olympic Rosters for 221 countries during the years 1948-2012. We demonstrate the exibility of our methodology and perform an interesting counterfactual by identifying Hispanic and Asian homeowners in the data; unlike the statistically significant results for Arab homeowners, we find no meaningful results for Hispanic and Asian homeowners following 9/11.
    Keywords: house prices, ethnicity, homeowner preferences, terrorism, September 11th
    JEL: R21 R23 R31 J15
    Date: 2017–04

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