nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒08‒27
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Quantifying the effect of labor market size on learning externalities By Peters, Jan Cornelius
  2. The Geography of Consumption By Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
  3. Communication Costs and the Internal Organization of Multi-Plant Businesses: Evidence from the Impact of the French High-Speed Rail By P. Charnoz; C. Lelarge; C. Trevien
  4. The Political Economy of Transportation Investment By Edward L. Glaeser; Giacomo A.M. Ponzetto
  5. Regional regulators in healthcare service under quality competition: A game theoretical model By Bisceglia, Michele; Cellini, Roberto; Grilli, Luca
  6. Fundamentos de Econometría Espacial Aplicada By Herrera Gómez, Marcos

  1. By: Peters, Jan Cornelius
    Abstract: This paper provides empirical evidence that individual labor productivity significantly depends on the size of the local labor market in which a worker previously acquired work experience. The analysis uses German micro data from the Institute for Employment Research (IAB) on transitions to employment within the period 2005 to 2011 and individual employment biographies from 1975 onwards. Analyzing the wages associated with the newly established employment relationships, suggests that dynamic agglomeration economies in general, and learning externalities in particular, play an important role in explaining individual labor productivity. Workers receive a significantly higher wage after acquiring experience in urban than in non-urban labor markets. Doubling local employment in all labor markets in which experience was acquired, increases the productivity of a worker with two years of work experience by more than 0.7 percent. After 10 years of experience the corresponding gain amounts to about three percent, after 30 years to about four percent.
    Keywords: Agglomeration economies,Human capital externalities,Learning,Regional disparities,Urban wage growth premium,Transition to employment
    JEL: R10 R23 J31
    Date: 2017
  2. By: Sumit Agarwal (Georgetown University); J. Bradford Jensen (Georgetown University); Ferdinando Monte (Georgetown University)
    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.
    Keywords: consumer demand, geographic mobility, spatial distribution of expenditures
    JEL: R10 R20 F10 F14 L80
    Date: 2017–08
  3. By: P. Charnoz; C. Lelarge; C. Trevien
    Abstract: We document the impact of travel time between headquarters and affiliates of geographically dispersed corporate groups on the management of such business organizations. Theory suggests that the easier circulation of managers might facilitate the transmission of information between production plants and headquarters, thus fostering growth and functional specialization (on production activities) at remote affiliates and decreasing operational costs at the group level. We test these predictions on the population of French corporate groups, using the expansion of the High Speed Rail network as a shock on internal travel times. We estimate that HSR induced the creation of one production job for the average affiliate in the service industries (against 0.2 job in retail, trade or manufacturing industries), and the shift of around one managerial job from affiliate to HQ. At the group level, descriptive regressions suggest that the impact on the operational profit margin is around 0.5 percentage points in most industries.
    Keywords: Communication costs, headquarters, firm organization, public infrastructure, highspeed rail.
    JEL: R30 L22 R40
    Date: 2017
  4. By: Edward L. Glaeser; Giacomo A.M. Ponzetto
    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.
    JEL: D72 D82 H54 H76 R42 R53
    Date: 2017–08
  5. By: Bisceglia, Michele; Cellini, Roberto; Grilli, Luca
    Abstract: In several countries, healthcare services are provided by public and/or private subjects, and they are reimbursed by the Government, on the basis of regulated prices. Thus, providers take prices as given and compete on quality to attract patients. In some countries, regulated prices differ across regions. This paper focuses on the interdependence between regional regulators within a country: it proposes a model of spatial competition to study how price-setters of different regions interact, in a simple but realistic framework. We show that the decentralisation of price regulation implies higher expenditure, but higher patients' welfare.
    Keywords: Healthcare Services; Diagnosis Related Group; 2-Stage Non Cooperative Game; Quality Competition.
    JEL: H42 I11 L13 R12 R38
    Date: 2017–07–10
  6. By: Herrera Gómez, Marcos
    Abstract: The growing availability of Geo-referenced information needs particular econometric tools such as those developed by Spatial Econometrics. This econometric branch is dedicated to the analysis of heterogeneity and spatial dependence in regression models. In this paper, I review the most consolidated developments in the area related to the specification and interpretation of spatial dependence in cross-section and panel data. The work is completed with two classic empirical examples.
    Keywords: Modelos espacio-temporales; Dependencia espacial; Matriz espacial.
    JEL: C12 C21 C23
    Date: 2017

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