nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒10‒12
twenty papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Rise (and Fall) of Tech Clusters By Sergey Kichko; Wen-Jung Liang; Chao-Cheng Mai; Jacques-Francois Thisse; Ping Wang
  2. Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge By Bruno de Borger; Ismir Mulalic; Jan Rouwendal
  3. Unleashing Innovative Power. Solving cognitive, social and geographic distance issues with informal institutional proximity By Cathrin Sollner; Dirk Fornahl;
  4. Regional labour migration - Stylized facts for Germany By Mark Trede; Michael Zimmermann
  5. Regional Variations in the Brexit Vote: Causes and Potential Consequences By David Blackaby; Stephen Drinkwater; Catherine Robinson
  6. Place-Based Policies and Spatial Disparities across European Cities By Maximilian v. Ehrlich, Henry G. Overman
  7. The persistent consequences of adverse shocks: how the 1970s shaped UK regional inequality By Patricia Rice; Anthony Venables
  8. Institutional design and spatial (in)equality: The Janus face of economic integration By Ott, Ingrid; Soretz, Susanne
  9. Regional resilience in China: The response of the provinces to the growth slowdown By Anping Chen; Nicolaas Groenewold
  10. Do Capabilities Reside in Firms or in Regions? Analysis of Related Diversification in Chinese Knowledge Production By Yiou Zhang; David L. Rigby;
  11. (De) industrialization in the Von Thünen’s economy By José Pedro Pontes; Armando J. Garcia Pires
  12. The Emergence of Knowledge Production in New Places By Christopher R. Esposito; ;
  13. One transition story does not fit them all: Initial regional conditions and new business formation after socialism By Michael Fritsch; Maria Kristalova; Michael Wyrwich
  14. "In knowledge we trust: learning-by-interacting and the productivity of inventors" By Matteo Tubiana; Ernest Miguelez; Rosina Moreno
  15. Bridging Technologies in the Regional Knowledge Space: Measurement and Evolution By Stefano Basilico; Holger Graf
  16. A Provincial View of Consumption Risk Sharing: Asset Classes as Shock Absorbers By Victor Pontines
  17. How resilient are the European regions? Evidence from the societal response to the 2008 financial crisis By Benczur, Peter; Joossens, Elisabeth; Manca, Anna Rita; Menyhert, Balint; Zec, Slavica
  18. Redrawing of a Housing Market: Insurance Payouts and Housing Market Recovery in the Wake of the Christchurch Earthquake of 2011 By Cuong Nguyen; Ilan Noy; Dag Einar Sommervoll; Fang Yao
  19. Expanding the Measurement of Culture with a Sample of Two Billion Humans By Obradovich, Nick; Özak, Ömer; Martín, Ignacio; Awad, Edmond; Cebrián, Manuel; Cuevas, Rubén; Desmet, Klaus; Rahwan, Iyad; Cuevas, Ángel
  20. Measuring Geographical Disparities in England at the Time of COVID-19: Results Using a Composite Indicator of Population Vulnerability By Nicodemo, Catia; Barzin, Samira; Lasserson, Daniel S.; Moscone, Francesco; Redding, Stuart; Shaikh, Mujaheed; Cavalli, Nicolò

  1. By: Sergey Kichko; Wen-Jung Liang; Chao-Cheng Mai; Jacques-Francois Thisse; Ping Wang
    Abstract: Tech clusters play a growing role in knowledge-based economies by accommodating high-tech firms and providing an environment that fosters location-dependent knowledge spillovers and promote R&D investments by .rms. Yet, not much is known about the economic conditions under which such entities may form in equilibrium without government interventions. This paper develops a spatial equilibrium model with a competitive final sector and a monopolistically competitive intermediate sector, which allows us to determine necessary and sufficient conditions for a tech cluster to emerge as an equilibrium outcome. We show that strongly localized knowledge spillovers, skilled labor abundance, and low commuting costs are key drivers for a tech cluster to form. Not only is the productivity of the final sector higher when intermediate firms cluster, but a tech cluster hosts more intermediate firms and more R&D and production activities, and yields greater worker welfare, compared to what a dispersed pattern would generate. With continual improvements in infrastructure and communication technology that lowers coordination costs, tech clusters will eventually be fragmented.
    Keywords: high-tech city, knowledge spillovers, intermediate firm clustering, land use, commuting, R&D
    JEL: D51 L22 O33 R13
    Date: 2020
  2. By: Bruno de Borger (University of Antwerp); Ismir Mulalic (Technical University of Denmark); Jan Rouwendal (Vrije Universiteit Amsterdam)
    Abstract: Most studies of the effects of transport infrastructure on the performance of individual firms have focused on marginal expansions of the rail or highway network over time. In this paper, we study the short-run effects of a large discrete shock in the quality of transport infrastructure, viz. the opening of the Great Belt bridge connecting the Copenhagen area with a neighboring island and the mainland of Denmark. We analyse the effect of the opening of the bridge on the productivity of firms throughout the country using a two-step approach: we estimate firm- and year-specific productivity for a large panel of individual firms, using the approaches developed by Levinsohn and Petrin (2003) and De Loecker (2011). Then, controlling for firm-fixed effects, we relate productivity to a calculated measure of accessibility that captures the effect of the opening of the bridge. We find large productivity effects for firms located in the regions near the bridge, especially for relatively small firms in the construction and retail industry. Estimation results further suggest statistically significant but small positive wage effects throughout the country, even in regions far from the bridge. Finally, there is some evidence that the bridge has stimulated new activities in the Copenhagen region at the expense of firms disappearing on the neighboring island Funen.
    Keywords: production functions, productivity, accessibility, agglomeration, transport infrastructure
    JEL: R12 H54 O18
    Date: 2019–09–13
  3. By: Cathrin Sollner; Dirk Fornahl;
    Abstract: Literature nowadays claims that innovation is no longer an only ‘one-organization-show’ but that more and more organizations conduct innovative activities in collaboration. To collaborate successfully, cognitive, social, geographic and institutional distances have to be bridged. Especially interesting is the moderating impact of informal institutions, as being at the basis of every human interaction. However, an extensive investigation is still missing. Therefore, the present research makes a first step in closing this research gap, revealing that informal institutional distances are like a diverse puzzle not to be underestimated, as each of the dimensions has different effects on different forms of distances.
    Keywords: research collaboration; informal institutional distance; proximity interactions; patent quality
    JEL: D91 R11 R12
    Date: 2020–09
  4. By: Mark Trede; Michael Zimmermann
    Abstract: We present stylized facts of the local German labour markets in a systematic way. Using a large German administrative dataset and newly available regional price level data, we study workers' biographies at the local level. Huge regional variation is documented in: unemployment rates and nominal as well as real wages. The distinction between urban and rural areas plays a substantial role. We show that the real wage gap between East and West Germany still persists 30 years after reunification whereas unemployment rates tend to converge. We investigate monthly worker flows across 328 regions (roughly equivalent to NUTS 3 regions or "Landkreise"). Unemployed workers in depressed regions are less likely to move to a new working place in another region than unemployed workers in prosperous regions. The most (and increasingly) mobile group are unemployed workers in dense and active regions. Employed workers are less willing to move and have procyclical fluctuations in their moving rates.
    Keywords: labour mobility; business cycle fluctuations; regional disparities
    JEL: R23 J61 J63 C55
    Date: 2020–09
  5. By: David Blackaby (Swansea University and WISERD); Stephen Drinkwater (University of Roehampton, London CReAM (UCL), IZA Bonn and WISERD); Catherine Robinson (University of Kent and WISERD)
    Abstract: There were large regional differentials in the Brexit vote. Most notably, the percentage voting to leave the EU ranged from 38% in Scotland and 40% in London to 59% in the East and West Midlands. Turnout also varied across Britain, from a low of 67% in Scotland to 77% in the South East and South West. Existing empirical studies have tended to focus on the demographic composition of geographical areas to identify the key socio-economic characteristics in explaining spatial and other variations in the leave vote - with age and education found to be important drivers. We use the British Social Attitudes Survey to provide a more nuanced picture of regional differences in the Brexit vote by examining in particular the role that national identity and attitudes towards immigration played. In addition to education, we find that national identity exerted a strong influence on the probability voting leave in several English regions, including the East, North East, London and South East. Whereas, over and above this, concerns about immigration had a quantitatively large and highly significant impact in all regions bar London, and the East to a lesser extent. Differences by country of birth are also explored, with national identity and concerns about immigration having a larger impact for the English-born. Our findings are then discussed in the light of changes that have affected regional economies during the process of increased globalisation, austerity, the current Covid-19 crisis and recent UK government announcements to rebalance the economy.
    Keywords: Brexit; Regional Economies; Globalisation; Immigration
    JEL: D72 R11 F60 J61
    Date: 2020–08
  6. By: Maximilian v. Ehrlich, Henry G. Overman
    Abstract: Spatial disparities in income levels and worklessness in the European Union are profound, persistent and may be widening. We describe disparities across metropolitan regions and discuss theories and empirical evidence that help us understand what causes these disparities. Increases in the productivity benefits of cities, the clustering of highly educated workers and increases in their wage premium all play a role. Europe has a long-standing tradition of using capital subsidies, enterprise zones, transport investments and other place-based policies to address these disparities. The evidence suggests these policies may have partially offset increasing disparities but are not sufficient to fully offset the economic forces at work.
    Date: 2020–07
  7. By: Patricia Rice; Anthony Venables
    Abstract: The economic shocks experienced by the UK economy in the 1970s brought major changes in the spatial distribution of employment rates in the UK. This paper traces out the long run implications of these changes, suggesting that they were highly persistent and to a large extent shape current UK regional disparities. Most of the Local Authority Districts that experienced large negative shocks in the 1970s have high deprivation rates in 2015, and they constitute two-thirds of all districts with the highest deprivation rates. We conclude that neither economic adjustment processes nor policy measures have acted to reverse the effect of negative shocks incurred nearly half a century ago.
    Keywords: Regional inequality, de-industrialisation, employment
    JEL: R11 R12 O47 O50
    Date: 2020–09–28
  8. By: Ott, Ingrid; Soretz, Susanne
    Abstract: This paper analyzes within a spatial endogenous growth setting the impact of public policy coordination on agglomeration. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to integration. Micro-foundation of governmental behavior is based on three different coordination schemes: autarky, full or partial coordination. Scale effects act as agglomeration force and in addition to private capital agglomeration increase the concentration of the public input. Integration promotes dispersion forces with respect to the distribution of physical capital which are based on decreasing private returns. However, within the governments' decision on the concentration of the public input, increasing integration reinforces agglomeration because it promotes the interregional productive use of the public input. Taking feedback effects between the private and the public sector into account leads to mutual reinforcement, hence agglomeration forces almost always dominate and the spreading equilibrium becomes unstable. If convergence is a separate (additional) political objective, it needs sustained additional political effort.
    Keywords: income convergence,integration,micro foundation of public policy,policy coordination,productive public input,multiple equilibria,bifurcation,spatial economic growth,stability of spatial equilibrium,global public input
    JEL: H10 E60 O40 R50
    Date: 2020
  9. By: Anping Chen (School of Economics, Jinan University); Nicolaas Groenewold (Economics Discipline, Business School, University of Western Australia)
    Abstract: Since 2007 China’s real GDP growth rate has slowed from a level of over 10% per annum to below 7%. Given China’s regional diversity, an important aspect of the slowdown is the possible spatial variation in its experience. This is the issue we consider in this paper and we analyse this question in the context of the regional economic resilience framework. We proceed in two stages. In the first we analyse a measure of provincial slowdown (a sensitivity index) and of the variability of the slowdown based just on growth rates and examine the correlation of these measure with a number of commonly-used provincial characteristics. In the second stage we decompose regional growth rates into national and province-specific components using a VAR model and argue that since resilience concerns the response of provinces to a national shock, it is properly analysed using just the national component of the growth rate rather than the growth rate as such. We therefore analyse a sensitivity index and a variability index based just on the national component of growth and find that this extension is important both for ranking provinces according to resilience and for correlations of resilience with determinants capturing provincial characteristics. Generally we find that provinces close to the coast with new- rather than old-industry structures are less resilient and tended to suffered greater variability in growth during the slowdown.
    Keywords: China, growth, provincial growth, provincial response, regional resilience
    JEL: E37 O47 O53 R12 R15
    Date: 2020
  10. By: Yiou Zhang; David L. Rigby;
    Abstract: Do capabilities reside in firms, in regions, or in both? Most models of related diversification, building on the early work of Hidalgo et al. (2007), examine how the structure of economic activity within a region conditions the trajectory of diversification. Inter-regional flows are sometimes added to these models. The logic here is that capabilities are largely built-up within regions and sometimes shared between them. We challenge that logic, exploring whether capabilities are more likely to be built within the firm and to flow across spatial boundaries than they are to be built within the region flowing across firm boundaries. Analysis focuses on Chinese patent data spanning 286 cities over the period 1991 to 2015. We develop standard models of related diversification before examining how the branches of multi-locational firms diversify their knowledge portfolios. Evidence shows that the knowledge structure of firms is more important than the knowledge structure of regions in shaping branch diversification. We show that the influence of the firm and the region on diversification vary significantly between headquarters (HQ) branches and non-HQ branches of firms, and between the non-HQ branches of firms that are located in core and peripheral cities of China.
    Keywords: Related diversification; Patents; Capabilities; China
    Date: 2020–09
  11. By: José Pedro Pontes; Armando J. Garcia Pires
    Abstract: In the Von Thunen (1826)'s economy, manufacturing decentralization is viewed as the refining of an agricultural commodity near the cultivation site, which substitutes for its transport to an industrial mill located in the Town. As Friedrich List (1841) added, this substitution is economically feasible only if the savings in transport costs following from in site refining cover the increase in fixed costs associated with a second industrial plant. In market equilibrium terms, this happens when the decentralized machine is provided collectively by the landowners, who fund it through the proceeds of the rise in total land rent following from the industrial investment. This condition will be satisfied more likely in a large economy with high average transport costs and where manufacturing specializes in relatively weight losing activities. If industrial decentralization is feasible, then the new factories will prefer to locate outside the Town, in formely rural areas endowed with an intermediate degree of centrality. Their distance to the Town will be directly related with the intensity of input refining that they are able to carry out. This model appears to account for main stylized trends of manufacturing relocation nowadays, which are jointly labeled as "(de)industrialization".
    Keywords: Von Thunen, Manufacturing Location, Industrialization, External Economies of Scale
    JEL: O12 O14 R12 B20
    Date: 2020–09
  12. By: Christopher R. Esposito; ;
    Abstract: This article studies how new locations emerge as advantageous places for the creation of ideas. Analysis of a novel patent-based dataset that traces the flow of knowledge between inventions and across time reveals that inventors initiate knowledge production in new places through a three-stage process. In the first stage, about 50 years before knowledge production in a region reaches an appreciable volume, local inventors begin to experiment with a few promising ideas developed in other places. In the second stage, inventors use the promising ideas developed elsewhere to create a large number of highly impactful inventions locally. In the third stage, inventors source high-impact ideas from their local environs and produce an even larger number of inventions, albeit of lower quality. Overall knowledge production in regions peaks in this third stage, but novelty and the potential for future knowledge growth decline.
    Keywords: Regional development, innovation, knowledge transmission, agglomeration
    JEL: O33 R12
    Date: 2020–09
  13. By: Michael Fritsch (Friedrich Schiller University Jenam and Halle Institute for Economic Research (IWH)); Maria Kristalova (Friedrich Schiller University Jena); Michael Wyrwich (University of Groningen, and Friedrich Schiller University Jena)
    Abstract: We investigate the reasons for the pronounced regional differences of new business formation after the transformation from a socialist planned system to a market economy in East Germany. Relatively high start-up rates are found in regions that had a well-qualified workforce and a relatively high share of remaining self-employed at the end of the socialist period. This also holds for high-tech manufacturing start-ups. Based on our conclusion that policy should account for these initial regional conditions, we use two criteria to introduce a classification of regions.
    Keywords: Entrepreneurship, new business formation, regional conditions, transformation, East Germany
    JEL: L26 R11 N94 P25
    Date: 2020–09–18
  14. By: Matteo Tubiana (University of Bergamo); Ernest Miguelez (GREThA UMR CNRS 5113 - Université de Bordeaux); Rosina Moreno (AQR-IREA Research Group, University of Barcelona. Department of Econometrics, Statistics and Applied Economics. Av. Diagonal 690, 08034 Barcelona, Spain)
    Abstract: Innovation rarely happens through the actions of a single person. Innovators source their ideas while interacting with their peers, at different levels and with different intensities. In this paper, we exploit a dataset of disambiguated inventors in European cities to assess the influence of their interactions with co-workers, organizations’ colleagues, and geographically co-located peers, to understand if the different levels of interaction influence their productivity. Following inventors’ productivity over time and adding a large number of fixed effects to control for unobserved heterogeneity, we uncover critical facts, such as the importance of city knowledge stocks for inventors’ productivity, with firm knowledge stocks and network knowledge stocks being of smaller importance. However, when the complexity and quality of knowledge is accounted for, the picture changes upside down and closer interactions (individuals’ co-workers and firms’ colleagues) become way more important.
    Keywords: Inventors, Productivity, Stock of knowledge, Interactions. JEL classification: O18, O31, O33, O52, R12.
    Date: 2020–09
  15. By: Stefano Basilico (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Holger Graf (Friedrich Schiller University Jena, Faculty of Economics and Business Administration)
    Abstract: The concept of Bridging Technologies (BTs) refers to technologies which are important for the regional knowledge base by connecting different fields and thereby enabling technological development. We provide analytical tools to identify BTs and study their evolution over time. We apply these tools on several levels. Our findings indicate that large patenting regions are not necessarily the ones that embed most new technologies in their Knowledge Space (KS). Our findings reveal that the German KS became less dependent on important technologies, such as transport, machinery and chemicals over the period 1995-2015. Changes in the German KS in terms of the development of new BTs are due to a regionally dispersed process rather than driven by single regions.
    Keywords: Knowledge Spaces, Network Analysis, Bridging Technology, Revealed Relatedness, GPT, Centrality
    JEL: O33 O34 R11
    Date: 2020–09–10
  16. By: Victor Pontines (The SEACEN Centre)
    Abstract: Using a unique data on provincial net factor income flows disaggregated across the three asset classes of debt, equity and FDI reinvested earnings in Korea, we investigated how these asset channels impacted consumption risk sharing during the Global Financial Crisis and the European sovereign debt crisis. Adopting spatial panel methods, this study found that net receipts of debt, equity and FDI retained earnings have all contributed favorably to consumption risk sharing during these crises episodes, with FDI retained earnings robustly positive in its contribution in buffering shocks to consumption. We also found suggestive evidence that net equity receipts rather than net debt receipts contributed more to risk sharing during these episodes. Overall, our results indicate that different asset channels can provide the insurance needed to cushion the economy against adverse shocks.
    Keywords: Consumption Risk Sharing, Consumption Smoothing, Factor Income Flows, Spatial Panel
    JEL: E21 E25 F21 R12
    Date: 2019–02
  17. By: Benczur, Peter (European Commission - JRC); Joossens, Elisabeth (European Commission - JRC); Manca, Anna Rita (European Commission - JRC); Menyhert, Balint (European Commission - JRC); Zec, Slavica (European Commission - JRC)
    Abstract: This report proposes a new approach for measuring regional resilience that goes beyond the assessment of traditional economic dimensions. It defines resilience as the societal ability to preserve and generate well-being in the presence of shocks and persistent structural changes in a sustainable manner, without hindering the wellbeing of future generations. The empirical exercise concentrates on the 2008 financial and economic crisis and the subsequent overall response of EU regions to the economic shock. We implement a three-step methodology:(i) select an extensive list of economic and non-economic variables that span the entire production process of societal wellbeing; (ii) compute regional resilience indicators based on the joint dynamic response of these variables to the crisis; (iii) identify those pre-crisis characteristics that differentiate resilient regions from the non-resilient ones. Our analysis reveals substantial heterogeneity in resilience across the European regions. It confirms the importance of expanding the measurement strategy to a broader list of subjective and objective well-being measures (like social inclusion, social capital, and quality of life). We show that observed resilience performance is highly dependent on the time horizon: resilience rankings of European regions are markedly different in the short and long run. The analysis of the recovery time provides additional information on the strength and weaknesses of regions, and it is largely dependent on the specific dimensions (variables) considered. Finally, our results highlight that certain country-level and regional characteristics, such as private sector credit flows and the gender employment gap, are strong predictors of resilient regional behaviour after the crisis.
    Keywords: regional resilience, societal well-being, impact, recovery, medium run, bounce forward, financial and economic crisis, absorption, adaptation, transformation
    JEL: C50 I31 R11
    Date: 2020–09
  18. By: Cuong Nguyen; Ilan Noy; Dag Einar Sommervoll; Fang Yao
    Abstract: On the 22nd of February 2011, much of the residential housing stock in the city of Christchurch, New Zealand, was damaged by an unusually destructive earthquake. Almost all of the houses were insured. We ask whether insurance was able to mitigate the damage adequately, or whether the damage from the earthquake, and the associated insurance payments, led to a spatial re-ordering of the housing market in the city. We find a negative correlation between insurance pay-outs and house prices at the local level. We also uncover evidence that suggests that the mechanism behind this result is that in some cases houses were not fixed (i.e., owners having pocketed the payments) - indeed, insurance claims that were actively repaired (rather than paid directly) did not lead to any relative deterioration in prices. We use a genetic machine-learning algorithm which aims to improve on a standard hedonic model, and identify the dynamics of the housing market in the city, and three data sets: All housing market transactions, all earthquake insurance claims submitted to the public insurer, and all of the local authority’s building-consents data. Our results are important not only because the utility of catastrophe insurance is often questioned, but also because understanding what happens to property markets after disasters should be part of the overall assessment of the impact of the disaster itself. Without a quantification of these impacts, it is difficult to design policies that will optimally try to prevent or ameliorate disaster impacts.
    Keywords: house price prediction, machine learning, genetic algorithm, spatial aggregation
    JEL: G22 Q54 R11 R31
    Date: 2020
  19. By: Obradovich, Nick (Max Planck Institute for Human Development); Özak, Ömer (Southern Methodist University); Martín, Ignacio (Universidad Carlos III de Madrid); Awad, Edmond (University of Exeter); Cebrián, Manuel (Max Planck Institute for Human Development); Cuevas, Rubén (Universidad Carlos III de Madrid); Desmet, Klaus (Southern Methodist University); Rahwan, Iyad (Max Planck Institute for Human Development); Cuevas, Ángel (Universidad Carlos III de Madrid)
    Abstract: Culture has played a pivotal role in human evolution. Yet, the ability of social scientists to study culture is limited by the currently available measurement instruments. Scholars of culture must regularly choose between scalable but sparse survey-based methods or restricted but rich ethnographic methods. Here, we demonstrate that massive online social networks can advance the study of human culture by providing quantitative, scalable, and high-resolution measurement of behaviorally revealed cultural values and preferences. We employ publicly available data across nearly 60,000 topic dimensions drawn from two billion Facebook users across 225 countries and territories. We first validate that cultural distances calculated from this measurement instrument correspond to traditional survey-based and objective measures of cross-national cultural differences. We then demonstrate that this expanded measure enables rich insight into the cultural landscape globally at previously impossible resolution. We analyze the importance of national borders in shaping culture, explore unique cultural markers that identify subnational population groups, and compare subnational divisiveness to gender divisiveness across countries. The global collection of massive data on human behavior provides a high-dimensional complement to traditional cultural metrics. Further, the granularity of the measure presents enormous promise to advance scholars' understanding of additional fundamental questions in the social sciences. The measure enables detailed investigation into the geopolitical stability of countries, social cleavages within both small and large-scale human groups, the integration of migrant populations, and the disaffection of certain population groups from the political process, among myriad other potential future applications.
    Keywords: gender differences, regional culture, identity, cultural distance, culture
    JEL: C80 F1 J1 O10 R10 Z10
    Date: 2020–09
  20. By: Nicodemo, Catia (University of Oxford); Barzin, Samira (Oxford University Press); Lasserson, Daniel S. (University of Birmingham); Moscone, Francesco (Brunel University); Redding, Stuart (University of Oxford); Shaikh, Mujaheed (Hertie School of Governance); Cavalli, Nicolò (Nuffield College, Oxford)
    Abstract: Objectives – The growth of COVID-19 infections in England raises questions about system vulnerability. Several factors that vary across geographies, such as age, existing disease prevalence, medical resource availability, and deprivation, can trigger adverse effects on the National Health System during a pandemic. In this paper, we present data on these factors and combine them to create an index to show which areas are more exposed. This technique can help policy makers to moderate the impact of similar pandemics. Design – We combine several sources of data, which describe specific risk factors linked with the outbreak of a respiratory pathogen, that could leave local areas vulnerable to the harmful consequences of large-scale outbreaks of contagious diseases. We combine these measures to generate an index of community-level vulnerability. Setting – 191 Clinical Commissioning Groups (CCGs) in England. Main outcome measures – We merge 15 measures spatially to generate an index of community-level vulnerability. These measures cover prevalence rates of high-risk diseases; proxies for the at-risk population density; availability of staff and quality of healthcare facilities. Results – We find that 80% of CCGs that score in the highest quartile of vulnerability are located in the North of England (24 out of 30). Here, vulnerability stems from a faster rate of population ageing and from the widespread presence of underlying at-risk diseases. These same areas, especially the North-East Coast areas of Lancashire, also appear vulnerable to adverse shocks to healthcare supply due to tighter labour markets for healthcare personnel. Importantly, our Index correlates with a measure of social deprivation, indicating that these communities suffer from long-standing lack of economic opportunities and are characterised by low public and private resource endowments. Conclusions – Evidence-based policy is crucial to mitigate the health impact of pandemics such as COVID-19. While current attention focuses on curbing rates of contagion, we introduce a vulnerability index combining data that can help policy makers identify the most vulnerable communities. We find that this index is positively correlated with COVID-19 deaths and it can thus be used to guide targeted capacity building. These results suggest that a stronger focus on deprived and vulnerable communities is needed to tackle future threats from emerging and re-emerging infectious disease.
    Keywords: index of vulnerability, emergency preparedness, pandemic, geographical disparity, health inequalities, COVID-19
    JEL: C55 J61 J28 I1
    Date: 2020–09

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