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on Economic Geography |
| By: | Koster, Hans R.A.; Pasidis, Ilias; van Ommeren, Jos |
| Abstract: | Why do shops cluster in shopping streets? According to theory, retail firms benefit from shopping externalities. We identify these externalities for the main shopping streets in the Netherlands by estimating the effect of footfall - the number of pedestrians that pass by - on store owner's rental income, which is a composite of the effects of footfall on shop rent and on vacancy rates. We address endogeneity issues by exploiting spatial variation between intersecting streets. Our estimates imply an elasticity of rental income with respect to footfall of 0.25. We find that a shop's marginal benefit of a passing pedestrian is € 0.005. It follows that subsidies to retail firms that increase with the levels of footfall generated by these shops are welfare improving. The optimal subsidy to store owners is, on average, 10 percent of the rent, but is higher for retail firms that generate high levels of footfall. Although explicit subsidies are controversial and difficult to implement, our results seem to justify current policy practices which cluster shops by pedestrianisation of shopping streets or by providing subsidised parking for shoppers. |
| Keywords: | agglomeration economies; footfall.; rents; retail; shopping externalities; Vacancies |
| JEL: | R30 R33 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12216&r=geo |
| By: | Lorenzo Caliendo; Luca David Opromolla; Fernando Parro; Alessandro Sforza |
| Abstract: | The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equilibrium model with trade in goods and labor mobility across countries to study and quantify the economic effects of trade and labor market integration. In our model trade is costly and features households of different skills and nationalities facing costly forward-looking relocation decisions. We use the EU Labour Force Survey to construct migration flows by skill and nationality across 17 countries for the period 2002-2007. We then exploit the timing variation of the 2004 EU enlargement to estimate the elasticity of migration flows to labor mobility costs, and to identify the change in labor mobility costs associated to the actual change in policy. We apply our model and use these estimates, as well as the observed changes in tariffs, to quantify the effects from the EU enlargement. We find that new member state countries are the largest winners from the EU enlargement, and in particular unskilled labor. We find smaller welfare gains for EU-15 countries. However, in the absence of changes to trade policy, the EU-15 would have been worse off after the enlargement. We study even further the interaction effects between trade and migration policies and the role of different mechanisms in shaping our results. Our results highlight the importance of trade for the quantification of the welfare and migration effects from labor market integration. |
| Keywords: | international trade, factor mobility, market integration, EU enlargement, welfare |
| JEL: | F16 F22 F13 J61 R13 E24 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1494&r=geo |
| By: | Glaeser, Edward L; Ponzetto, Giacomo AM |
| Abstract: | Will politics lead to over-building or under-building of transportation projects? In this paper, we develop a model of infrastructure policy in which politicians overdo things that have hidden costs and underperform tasks whose costs voters readily perceive. Consequently, national funding of transportation leads to overspending, since voters more readily perceive the upside of new projects than the future taxes that will be paid for distant highways. Yet when local voters are well-informed, the highly salient nuisances of local construction, including land taking and noise, lead to under-building. This framework explains the decline of urban mega-projects in the US (Altshuler and Luberoff 2003) as the result of increasingly educated and organized urban voters. Our framework also predicts more per capita transportation spending in low-density and less educated areas, which seems to be empirically correct. |
| Keywords: | elections; imperfect information; infrastructure; Nuisance mitigation; political economy; Transportation investment |
| JEL: | D72 D82 H54 H76 R42 R53 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12207&r=geo |
| By: | Cho, Cheol-Joo |
| Abstract: | In this paper, two migratory impact-assessment schemes are constructed within the framework of Ghoshian and Leontief input-output analysis. These schemes are designed to estimate the rural-to-urban migration-induced and the urban-to-rural migration-induced effects on interurban migration, where the former effect is termed the replacement effect, while the latter the attraction effect. The established input-output schemes are empirically applied to the 2012 data on interregional migration in Korea. The results show that an arrival of migrants to and/or a departure of residents from the 20 largest cities in Korea induce direct and indirect ripples of population flow between those cities. A combination of the displacement and the attraction effects yields a classification of cities by which the 20 largest cities are grouped into four different types. |
| Keywords: | interregional migration,displacement effect,attraction effect,input-output schemes,classification of cities,largest cities in Korea |
| JEL: | D57 R15 R23 R58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201749&r=geo |