nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒12‒17
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The local impact and multiplier effect of universities in Lower Saxony on the labour market By Stöver, Britta
  2. The production function for housing: evidence from France By Pierre-Philippe Combes; Gilles Duranton; Laurent Gobillon
  3. The Rise of Megaregions: Delineating a new scale of economic geography By OECD
  4. On the Origin of the German East-West Population Gap By Christoph Eder; Martin Halla
  5. How Small are Small Markets? Location Choice and Geographical Market Size for Child Care Services By Astrid Pennerstorfer; Dieter Pennerstorfer
  6. Decomposing the impact of immigration on house prices By Rosa Sanchis-Guarner
  7. Measuring sovereign risk spillovers and assessing the role of transmission channels: A spatial econometrics approach By Nicolas Debarsy; Cyrille Dossougoin; Cem Ertur; Jean-Yves Gnabo
  8. A Threshold Model of Urban Development By Alberto Vesperoni; Paul Schweinzer
  9. Spatial Inequality in Mortality in France over the Past Two Centuries By Florian Bonnet; Hippolyte D'Albis
  10. Intangible Capital Distribution in China By Qing Li; Long H. Vo; Yanrui Wu
  11. Accessibility, local pollution and housing prices. Evidence from Nantes Métropole, France By Dorothée Brécard; Rémy Le Boennec; Frédéric Salladarré

  1. By: Stöver, Britta
    Abstract: This paper quantifies and compares the direct and indirect effects of labour demand generated by each university location in Lower Saxony. The results are classified in order to identify regional patterns. The applied method is based on three components: the importance, the dynamics and the interdependence of the university related labour market in relation to the other economic sectors. The importance of the university locations for their respective local economy and in comparison with each other is assessed by an indicator. The dynamic and change of the importance of the different university locations is shown using a shift-share analysis. Both measures can be applied for a classification and spatial clustering of different types of university locations. Additionally, input-output-based employment multipliers are estimated to display the interaction of the university locations with the local economy. The results can be summarised in the identification of three differing regions. The south-east of Lower Saxony is characterised by big, established, well integrated university locations with low dynamics. Adjacent, smaller university locations have difficulties to emerge of the shadows of the dominant locations. In the western part of Lower Saxony can be found small to big university locations with growing importance and continuous development potential. The university locations in the north east are small to medium sized and rather unimportant for the local as well as the total labour market.
    Keywords: Regional Input-Output table; employment multiplier; spatial analysis; classification; (in)direct employment effects; universities
    JEL: I23 J48 R12 R15
    Date: 2018–12
  2. By: Pierre-Philippe Combes (Univ Lyon & CNRS & GATE-LSE UMR 5824 & Sciences Po & Centre for Economic Policy Research); Gilles Duranton (Wharton School, University of Pennsylvania & Center for Economic Policy Research, the Spatial Economic Centre at the LSE, and the Rimini Centre for Economic Analysis); Laurent Gobillon (PSE-CNRS & Centre for Economic Policy Research & Institute for the Study of Labor (IZA))
    Abstract: We propose a new nonparametric approach to estimate the production function for housing. Our estimation treats output as a latent variable and relies on the firstorder condition for profit maximisation with respect to nonland inputs by competitive house builders. For parcels of a given size, we compute housing by summing across the marginal products of nonland inputs. Differences in nonland inputs are caused by differences in land prices that reflect differences in the demand for housing across locations. We implement our methodology on newlybuilt singlefamily homes in France. We find that the production function for housing is reasonably well, though not perfectly, approximated by a CobbDouglas function and close to constant returns after correcting for differences in user costs between land and nonland inputs and taking care of some estimation concerns. We estimate an elasticity of housing production with respect to nonland inputs of about 0.80.
    Keywords: Housing, production function
    JEL: R14 R31 R32
    Date: 2017
  3. By: OECD
    Abstract: The concept of megaregions is increasingly put forward among academics and policy makers as a new scale of economic co-ordination and social organisation. A megaregion is most commonly understood as an economic unit that comprises an agglomeration of cities and its less dense hinterlands, which are linked through infrastructure, economic connections, settlement patterns and land use, topography, an environmental system or a shared culture and history that together shape a common interest for the wider region. While there is an extensive literature on the potential benefits of a megaregion, work has been more limited in terms of identifying megaregions in an international context. This paper introduces an approach to delineate potential megaregions in the OECD.
    Keywords: mean-shift algorithm, Megaregions, new economic geography, urban geography
    JEL: O18 R10 R12
    Date: 2018–12–13
  4. By: Christoph Eder; Martin Halla
    Abstract: The East-West gap in the German population is believed to originate from migrants escaping the socialist regime in the German Democratic Republic (GDR). We use newly collected regional data and the combination of a regression discontinuity design in space with a difference-in-differences approach to document that the largest part of this gap is due to a massive internal migration wave 3 years prior to the establishment of the GDR. The timing and spatial pattern of this migration movement suggest that the dominant motive was escaping physical assault by the Soviet army and not avoiding the socialist regime. The gap in population has remained remarkably sharp in space and is growing.
    Keywords: Institutions, wartime violence against civilians, regional migration, World War II, Germany, spatial distribution, regional economic activity
    JEL: N44 N94 R23 R11 R12 J61
    Date: 2018–11
  5. By: Astrid Pennerstorfer; Dieter Pennerstorfer
    Abstract: In this article we propose an innovative way of delineating geographical markets based on easily accessible data. We apply this concept for the day care industry and investigate providers’ location choices relative to local market characteristics to evaluate the widespread presumption that local markets for child care services are geographically very small. Using a panel of all day care centers for the metropolitan region of Vienna, Austria, for nearly a decade, as well as geographically extremely disaggregated data on the spatial distribution of children under the age of six at the 250m × 250m grid cell level, we find that the location of children and day care centers are strongly related, but this relationship diminishes as soon as the distance between a child’s place of residence and the day care center’s location increases. We conclude that geographical markets for day care services in metropolitan regions are indeed very small (about 500m or 550 yards).
    Keywords: spatial market definition, location choice, market entry, child care, grid data
    JEL: R30 R53 L10 H44
    Date: 2018–10
  6. By: Rosa Sanchis-Guarner (Centre for Economic Performance at the London School of Economics & the CESifo Research Network)
    Abstract: An inflow of immigrants into a region impacts house prices in three ways. For a fixed level of local population, housing demand rises due to the increase in foreign-born population. In addition, immigrants can influence native location decisions and induce additional shifts in demand. Finally, changes in housing supply conditions can in turn affect prices. Existing reduced form estimates of the effect of immigration on house prices capture the sum of all these effects. In this paper I propose a methodology to identify the different channels driving the total effect. I show that, conditional on supply, total changes in housing demand can be decomposed into the sum of direct immigrant demand and indirect demand changes from relocated population. The size and sign of the indirect demand effect depends on the impact of immigration on native mobility. I use Spanish data during the period 2001-2012 to estimate the different elements of the decomposition, applying an instrumental variables strategy to obtain consistent coefficients. The results show that overlooking the impact of immigration on native location induces a sizeable difference between the total and the immigrant demand effects, affecting the interpretation of the estimates.
    Keywords: Immigration, housing, Spain, instrumental variables
    JEL: J61 R12 R21
    Date: 2017
  7. By: Nicolas Debarsy (CERPE - Centre de Recherches en Economie Régionale et Politique Economique - Facultés Universitaires Notre Dame de la Paix (FUNDP) - Namur, LEM - Lille - Economie et Management - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Cyrille Dossougoin (UCL - Université Catholique de Louvain); Cem Ertur (LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - Université de Tours - CNRS - Centre National de la Recherche Scientifique); Jean-Yves Gnabo (CeReFiM - Center for Research in Finance and Management - Université de Namur [Namur])
    Abstract: We contribute to the literature on international risk spillovers by developing a unified framework based on spatial econometrics that enables us to address the following questions: (i) what are the effective transmission channels – real linkages and informational channels – of international risk spillovers across countries and/or regions, (ii) what are the most dominant ones, and (iii) which countries are most at risk for their environment and which are suffering the most from international exposure. Our analysis, based on 41 advanced and emerging economies from 2008Q1 to 2012Q4, shows that among the considered channels for explaining international spillovers of sovereign bond spreads, the informational channel is of utmost importance. Our results challenge previous findings from the literature in which the empirical strategy did not accommodate altogether important features of country spillovers, such as the co-existence of multiple transmission channels in the presence of contemporaneous and time-lagged interactions. Ultimately, our stress-testing analysis reveals important insights on countries prone either to international spillovers, international exposure or both at the regional and the worldwide level.
    Keywords: Spillover analysis,Spatial dynamic panel data,Sovereign risk,Transmission channels
    Date: 2018
  8. By: Alberto Vesperoni; Paul Schweinzer
    Abstract: We propose a simple model of distribution of economic activity across cities of endogenous size and number determined by individual incentives in the tradition of threshold models of social interaction. The individuals populating our model are endowed with idiosyncratic entrepreneurial creativity the realization of which requires urban agglomeration linked to a crowding cost. As the latter is higher in cities of larger size, this leads to a trade-off between productivity and congestion. While our focus on distributive aspects comes at the cost of highly stylized behavior, we aim to provide a tractable framework to think about the interlinkages between various measures of urban development which became increasingly available through accessible data sets. Our predictions include an U-shaped relationship between the well-known measures of urbanization and urban primacy, a hypothesis that we test empirically using World Bank data.
    Keywords: agglomeration, urbanization, development
    JEL: C70 D71 O18 Q56
    Date: 2018
  9. By: Florian Bonnet (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics); Hippolyte D'Albis (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article analyzes the evolution of spatial inequalities in mortality across 90 French territorial units since 1806. Using a new database, we identify a period from 1881 to 1980 when inequalities rapidly shrank while life expectancy rose. This century of convergence across territories was mainly due to the fall in infant mortality. Since 1980, spatial inequalities have levelled out or occasionally widened, due mainly to differences in life expectancy among the elderly. The geography of mortality also changed radically during the century of convergence. Whereas in the 19th century high mortality occurred mainly in larger cities and along a line from North-west to South-east France, it is now concentrated in the North, and Paris and Lyon currently enjoy an urban advantage.
    Date: 2018–11
  10. By: Qing Li (Business School, The University of Western Australia); Long H. Vo (Business School, The University of Western Australia); Yanrui Wu (Business School, The University of Western Australia)
    Abstract: Our main argument in this paper is that conventional growth convergence analysis in China is incomplete without considering intangible investment. We first document the unbalanced investment of intangible capital across Chinese regions. A few mega cities invest heavily in intangible capital, while the majority of regions have below-average investment levels. In addition, long-term convergence clusters is an important feature of intangible capital distribution: High levels of investment tend to be persistently concentrated in the few coastal regions while investment in poorer regions is projected to be low, leading to a long-run distribution with probability mass located at levels much lower than the national average. External shocks such as the global financial crisis can exert an adverse effect: The level to which most regions converge based on the post-crisis transition dynamics is lower than that based on the pre-crisis dynamics. Finally, we document that poorer regions have less difficulty in converging to the average level of their neighbouring regions, suggesting that knowledge spill-overs is an important mechanism that help mitigate the level of unbalance in the context of intangible economy.
    Keywords: Economic growth convergence; Intangible capital; Distribution dynamics
    JEL: O10 R11 C14
    Date: 2018
  11. By: Dorothée Brécard (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon); Rémy Le Boennec (VeDeCom - VEhicule DEcarboné et COmmuniquant et sa Mobilité, LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec); Frédéric Salladarré (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UN - Université de Nantes - ECN - École Centrale de Nantes - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this empirical article, we analyze the extent to which accessibility and environmental variables are capitalized in apartment prices in Nantes Métropole, France. Using a sample of 5,590 transactions in 2002, 2006, 2008 from the Perval database, we estimate a spatial hedonic price model that takes into account spatial autocorrelation and spatial heterogeneity. Special attention is also paid to the construction of environmental quality variables (noise exposure , air pollution). We find that apartment prices depend positively on proximity to Nantes city centre but that the public transport network (urban or non-urban) has no significant influence. Noise reduction is valued, but only at low or marginal levels of significance. Last, air quality does not significantly influence apartment prices. These results can be related to good accessibility and environmental quality in Nantes Métropole which probably makes households less sensitive to these issues than in other geographical contexts. This seems to provide little support for sustainable urban mobility plans favoring better accessibility, unless public authorities also target the greater awareness of the use of virtuous modes of transport.
    Keywords: noise exposure,air quality,spatial econometrics,hedonic price model,accessibility
    Date: 2018–10

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