nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒07‒30
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. What Can Be Learned from Spatial Economics? By Stef Proost; Jacques-Francois Thisse
  2. The Agglomeration of American Research and Development Labs By Buzard, Kristy; Carlino, Gerald A.; Hunt, Robert M.; Carr, Jake; Smith, Tony E.
  3. The Geography of Consumption By Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
  4. Location of the Software & Videogames Industry: an insight into the case of Barcelona using microgeographic data By Méndez Ortega, Carlos
  5. Is It Who You Are or Where You Live? Residential Segregation and Racial Gaps in Childhood Asthma By Diane Alexander; Janet Currie
  6. Towards an East German Wage Curve: NUTS Boundaries, Labour Market Regions and Unemployment Spillovers By Kosfeld, Reinhold; Dreger, Christian
  7. Regional Heterogeneity and Monetary Policy By Joseph Vavra; Erik Hurst; Andreas Fuster; Martin Beraja
  8. Stability of functional labour market regions By Kropp, Per; Schwengler, Barbara
  9. Exploring health outcomes by stochastic multi-objective acceptability analysis: an application to Italian regions. By Raffaele Lagravinese; Paolo Liberati; Giuliano Resce
  10. Why Has Regional Income Convergence in the U.S. Declined? By Peter Ganong; Daniel W. Shoag
  11. The Role of the Housing Market in Workers' Resilience to Job Displacement after Firm Bankruptcy By Meekes, Jordy; Hassink, Wolter
  12. Labor Market Effects of Urban Riots: an Experimental Assessment By Emmanuel DUGUET; David GRAY; Yannick L’HORTY; Loïc du PARQUET; Pascale PETIT
  13. Firm Heterogeneity, Technological Adoption, and Urbanization: Theory and Measurement By Alex Chernoff
  14. Cooperation between higher education institutions and companies from a spatial perspective: An empirical analysis of Germany using Bayesian logistic multilevel models By Warnecke, Christian; Weller, Daniel

  1. By: Stef Proost (National Research University Higher School of Economics); Jacques-Francois Thisse (National Research University Higher School of Economics)
    Abstract: Spatial economics aims to explain the location of economic activity. While the importance of the proximity to natural resources has declined considerably, distance and location have not disappeared from economic life. Recent work in spatial economics indicates that new forces, hitherto outweighed by natural factors, are shaping an economic landscape that, with its many barriers and large inequalities, is anything but flat. The location of economic activity is the outcome of a trade-off between different types of scale economies and costs generated by the transfer of people, goods, and information. This trade-off is used as a guide in our survey of the main developments in regional and urban economics, which refer to different spatial scales. The role of transport is discussed for each subfield. We briefly survey the ingredients that could be useful for a synthesis of regional and urban economics and conclude with general policy insights.
    Keywords: location, region, city, transport, land, agglomeration.
    JEL: F12 F20 F61 L13 R12 R14
    Date: 2017
  2. By: Buzard, Kristy (Maxwell School, Syracuse University, Syracuse, NY); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (Geography Department, The Ohio State University, Columbus OH); Smith, Tony E. (Department of Electrical and Systems Engineering, University of Pennsylvania, Philadelphia, PA)
    Abstract: We employ a unique data set to examine the spatial clustering of about 1,700 private research and development (R&D) labs in California and across the Northeast corridor of the United States. Using these data, which contain the R&D labs’ complete addresses, we are able to more precisely locate innovative activity than with patent data, which only contain zip codes for inventors’ residential addresses. We avoid the problems of scale and borders associated with using fixed spatial boundaries, such as zip codes, by developing a new point pattern procedure. Our multiscale core-cluster approach identifies the location and size of significant R&D clusters at various scales, such as a half mile, one mile, five miles, and more. Our analysis identifies four major clusters in the Northeast corridor (one each in Boston, New York–Northern New Jersey, Philadelphia–Wilmington, and Washington, D.C.) and three major clusters in California (one each in the Bay Area, Los Angeles, and San Diego).
    Keywords: spatial clustering; geographic concentration; R&D labs; innovation
    JEL: O31 R12
    Date: 2017–07–18
  3. By: Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
    Abstract: We use detailed information from U.S. consumers' credit card purchases to provide the first large-scale description of the geography of consumption. We find that consumers' mobility is quite limited and document significant heterogeneity in the importance of gravity across sectors. We develop a simple model of consumer behavior, emphasizing the role of the durability/storability of products, to organize the main stylized facts. Heterogeneity in the storability of products across sectors generates a positive correlation between the strength of gravity and the frequency of transactions at the sector level; this correlation is a clear feature of the data. Using daily rain precipitation from thousands of weather stations in U.S., we show that shocks to travel costs change the spatial distribution of expenditure, and they do so differentially across sectors: hence, the level and heterogeneity of travel costs shape the level and elasticity of any merchant's demand. This evidence suggests that incorporating the demand-side is essential to analyzing the distributional consequences of local and aggregate shocks across regions. These results also suggest the demand-side is critical to understanding the location of firms and employment in the large and understudied service sector.
    JEL: F1 F14 L8 R1 R2
    Date: 2017–07
  4. By: Méndez Ortega, Carlos
    Abstract: This paper analyses location patterns of Software and Videogames industries in the Metropolitan Area of Barcelona using microgeographic data. These industries benefit from agglomeration economies, skilled labour and, generally speaking, spillover effects, and tend to cluster in larger metropolitan areas, but less is known about their detailed location patterns inside these areas. We contribute to the empirical literature by identifying how Software and Videogames industries firms are concentrated in some core areas of the metropolitan area. Our empirical application includes using the Nearest Neighbour Index (NNI) and M-functions, as well as local spatial autocorrelation indicators. JEL Codes: R12, C60, L86 Keywords: Software Industry, Videogames Industry, microgeographic data, spatial location patterns, Barcelona
    Keywords: Programari -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Videojocs -- Indústria i comerç -- Barcelona (Catalunya : Àrea metropolitana), Localització industrial -- Barcelona (Catalunya : Àrea metropolitana), 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2017
  5. By: Diane Alexander; Janet Currie
    Abstract: Higher asthma rates are one of the more obvious ways that health inequalities between African American and other children are manifested beginning in early childhood. In 2010, black asthma rates were double non-black rates. Some but not all of this difference can be explained by factors such as a higher incidence of low birth weight (LBW) among blacks; however, even conditional on LBW, blacks have a higher incidence of asthma than others. Using a unique data set based on the health records of all children born in New Jersey between 2006 and 2010, we show that when we split the data by whether or not children live in a “black” zip code, this racial difference in the incidence of asthma among LBW children entirely disappears. All LBW children in these zip codes, regardless of race, have a higher incidence of asthma. Our results point to the importance of residential segregation and neighborhoods in explaining persistent racial health disparities.
    JEL: I14 R23
    Date: 2017–07
  6. By: Kosfeld, Reinhold (University of Kassel); Dreger, Christian (DIW Berlin)
    Abstract: The relevance of spatial effects in the wage curve can be rationalized by the model of monopsonistic competition in regional labour markets. However, distortions in extracting the regional unemployment effects arise in standard regional (i.e. NUTS) classifications as they fail to adequately capture spatial processes. In addition, the nonstationarity of wages and unemployment is often ignored. Both issues are particularly important in high unemployment regimes like East Germany where a wage curve is difficult to establish. In this paper, labour market regions defined by economic criteria are used to examine the existence of an East German wage curve. Due to the nonstationarity of spatial data, a global panel cointegration approach is adopted. By specifying a spatial error correction model (SpECM), equilibrium adjustments are investigated in time and space. The analysis gives evidence on a locally but not a spatially cointegrated wage curve for East Germany.
    Keywords: wage curve, labour market regions, global cointegration, spatial error-correction model
    JEL: J30 J60 C33 R15
    Date: 2017–07
  7. By: Joseph Vavra (University of Chicago); Erik Hurst (University of Chicago); Andreas Fuster (Federal Reserve Bank of New York); Martin Beraja (MIT and Princeton University)
    Abstract: We argue that the time-varying regional distribution of housing equity shapes the aggregate consequences of monetary policy through its influence on mortgage refinancing. Using detailed loan-level data, we begin by showing that: (i) the refinancing response to interest rate cuts is strongly affected by regional differences in housing equity, and (ii) both regional differences in refinancing and overall refinancing vary over time with changes in the regional distribution of house price growth and unemployment. Then, we build a heterogeneous household model of refinancing in order to derive aggregate implications of monetary policy from our regional evidence. We find that the 2008 equity distribution made spending in depressed regions less responsive to interest rate cuts, thus dampening aggregate stimulus and increasing regional consumption inequality, whereas the opposite occurred in some earlier recessions. Taken together, our results strongly suggest that monetary policy makers should track the regional distribution of equity over time.
    Date: 2017
  8. By: Kropp, Per (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schwengler, Barbara (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The number of commuters and the distances of home-to-work travel have increased in recent decades. Based on a previous study that proposed a new approach for delineating functional labour market regions, this paper focuses on the temporal stability of delineations of labour market regions in Germany. In a comparison of the best delineations among pooled groups of three years beginning in 1993, regions are classified as core regions, related regions or overlapping regions. The main finding is that regions surrounding important labour market centres form stable labour markets. Over time, most employees belong to the same labour market region or parts of it." (Author's abstract, IAB-Doku) ((en))
    JEL: D85 J61 R23
    Date: 2017–07–19
  9. By: Raffaele Lagravinese; Paolo Liberati; Giuliano Resce
    Abstract: This paper introduces the Stochastic Multi-Objective Acceptability Analysis (SMAA) in order to investigate the evolution of mortality rates in the Italian regions over the period 1990-2013. We propose to explore the overall outcome of health care by a Composite Index (CI) of mortality based on the combination of standardized mortality rates for seventeen different diseases. From a methodological standpoint, we propose to overcome the arbitrary of the weighting process, by using the SMAA, which is a methodology that allows to rank regions considering the whole set of possible vectors of weights. Moreover, we explore the spatial segregation in health using the multidimensional generalization of the Gini index, and introducing the multidimensional generalization of ANOGI. The unprecedented use of SMAA in health sector allows to explore regional multidimensional paths beyond the order of importance given to the single dimensions. Our analysis shows that in the 24 years considered there has been no convergence path in terms of health care outcome in Italy, neither between nor within regions.
    Keywords: Stochastic Multi-Objective Acceptability Analysis; Composite Indicators;Health; Spatial Inequality; ANOGI
    JEL: H75 I14 C44
    Date: 2017–07
  10. By: Peter Ganong; Daniel W. Shoag
    Abstract: The past thirty years have seen a dramatic decline in the rate of income convergence across states and in population flows to high-income places. These changes coincide with a disproportionate increase in housing prices in high-income places, a divergence in the skill-specific returns to moving to high-income places, and a redirection of low-skill migration away from high-income places. We develop a model in which rising housing prices in high-income areas deter low-skill migration and slow income convergence. Using a new panel measure of housing supply regulations, we demonstrate the importance of this channel in the data.
    JEL: E24 J23 J24 R14 R23 R52
    Date: 2017–07
  11. By: Meekes, Jordy (Utrecht University); Hassink, Wolter (Utrecht University)
    Abstract: We examine the role of the housing market in workers' adjustment to job displacement. Dutch administrative data were used and analysed with a quasi-experimental design involving job displacement. The empirical design eliminates the potential of endogenous selection into labour turnover. The estimates show that displaced workers experience, in addition to substantial losses in employment and wage, an increase in the commuting distance and a decrease in the probability of moving home. These patterns change over the worker's post-displacement period – the negative displacement effect on wages becomes more pronounced, whereas the increase in the commuting distance diminishes. Also, we examine the role of workers' housing tenure in the displacement effects. Compared with displaced tenants and outright owners, we find that more leveraged displaced owners are more rapidly re-employed and experience a smaller increase in the commuting distance, but experience also a higher loss in wage.
    Keywords: commuting distance, geographic mobility, housing tenure, employment, wages
    JEL: J31 J32 J63 J65 R21 R23
    Date: 2017–07
  12. By: Emmanuel DUGUET (Université Paris-Est Créteil, France); David GRAY (University of Ottawa, ON, Canada); Yannick L’HORTY (Université Paris-Est Marne la Vallée, France); Loïc du PARQUET (Université du Maine, France); Pascale PETIT (Université Paris-Est Marne la Vallée, France)
    Abstract: We propose to measure the effects of urban riots on the labour market prospects of workers residing in affected areas through the channel of labour market discrimination based on locality. We investigate the case of the French riots of 2007, which were very geographically concentrated. The town of Villiers-le-Bel is selected as the treatment unit because it received a uniquely high degree of unfavourable exposure in the media. Two other towns serve control groups: i) Sarcelles, which is contiguous to Villiers-le-Bel, has a similar socio-economic-demographic profile, and did experience some rioting activity, and ii) Enghien-les-Bains, which is considered to be economically advantaged and did not experience rioting activity. Using the technique of correspondence testing, we are able to discern disparities in call-back rates for fictitious candidates who respond to actual job postings over four dimensions: gender, ethnic origin, locality of residence (advantaged vs. disadvantaged), and the degree of media exposure during the riots. We propose a new empirical approach to measure discrimination across several dimensions that integrates a set of relevant parameters into one unified system of equations with a compact and tidy structure. We decomposed the probability of receiving a callback for any candidate of given characteristics as a function of several parameters that are evaluated through difference-in-differences estimators. We find statistically significant negative effects of a pure media exposure effect. All other factors held constant, people residing in the area which received negative publicity were 3.2 percentage points less likely to receive a callback. The group of workers who tend to be the most associated with the riots, i.e. men of North African origin (at least in terms of perceptions), are the least affected by potential discrimination by region of residence, while women of French origin are the most affected.
    Keywords: Labour market discrimination, Call-back rates, Discrimination, Urban riots
    JEL: C93 J71 R23
    Date: 2017
  13. By: Alex Chernoff
    Abstract: This paper develops a model of firm heterogeneity, technological adoption, and urbanization. In the model, welfare is measured by household real income, and urbanization is measured by population density. I use the model to derive statistics that measure the effect of a new technology on productivity, welfare, and urbanization. The empirical application of the paper estimates these effects using nineteenth-century firmlevel data on mechanical steam power in the Canadian manufacturing sector, and townshiplevel population data. The results indicate that the introduction of steam power increased productivity by 22.8 percent, and welfare by 6.0 percent. By comparing the model predicted change in urbanization to observed population density growth, I find that the introduction of mechanical steam power accounts for approximately 6.2 percent of the observed variation in urbanization during this period.
    Keywords: Economic models; Productivity; Regional economic developments
    JEL: O14 R13 N61
    Date: 2017
  14. By: Warnecke, Christian; Weller, Daniel
    Abstract: This research paper aims at highlighting factors which influence the spatial focus of interactions between higher education institutions (HEIs) and the economic system in Germany. In the pursuit of this goal, our research work employs a Bayesian statistical analysis of empirical data gathered from a German-wide online survey of professors (7,500 participants) focused on the extent of knowledge diffusion with respect to their institutions of origin. The results provided by our statistical analysis indicate that some fields of research are favourable in facilitating cooperation between companies and University professors in the region, while others are more prone to cooperate supraregional. In the case of professors at Universities of Applied Sciences (UAS), the results reveal only a low influence concerning the research discipline. These findings are not surprising because of the narrow spectrum of research disciplines at UAS. Beyond these results, the time budget allocated for research poses as a major factor of influence for the cooperation activities of professors at UAS. These findings have been expected since UAS professors have less allocated time for research leading to a more regional focus of cooperation with companies. Surprisingly across all models, only a very few categories in total are credible for the "Application relevance of research" and the "Cooperation intensity".
    Keywords: university-industry links,knowledge transfer,collaborative research,Bayesian multilevel analysis,spatial analysis,German-wide survey
    JEL: I23 I25 O32 O31 O33 R12
    Date: 2017

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