nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒05‒24
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Agglomeration Spillover Effects in German Land and House Prices at the City and County Levels By Gabriel S. Lee; Stefanie Braun
  2. Urban Agglomeration and Firm Innovation: Evidence from Asia By Chen, Liming; Hasan, Rana; Jiang, Yi
  3. Spatial Dynamics and Driving Forces of Asian Cities By Jiang, Yi
  4. Urban economics in a historical perspective: Recovering data with machine learning By Combes, Pierre-Philippe; Gobillon, Laurent; Zylberberg, Yanos
  5. Regional Inequalities and the West-East Divide in Turkey since 1880 By Asik, Günes; Karakoç, Ulas; Pamuk, Sevket
  6. Suburbanization in the United States 1970-2010 By Stephen J. Redding
  7. China's Dazzling Transport-infrastructure Growth: Measurement and Effects By Egger, Peter; Loumeau, Gabriel; Loumeau, Nicole
  8. The Aggregate and Distributional Effects of Spatial Frictions By Sebastian Heise; Tommaso Porzio
  9. Persistence â?? Myth and Mystery By Voth, Hans-Joachim
  10. Are the Spatial Concentrations of Core-City and Suburban Poverty Converging in the Rust Belt? By Scott W. Hegerty
  11. Group-theoretic analysis of a scalar field on a square lattice By Kogure, Yosuke; Ikeda, Kiyohiro

  1. By: Gabriel S. Lee; Stefanie Braun
    Abstract: We estimate spatial German land price e ects using the county-level residential land prices from 2014 to 2018. We show that county-level spatial agglomeration effects play a large and significant role in explaining the cross-county variations in land prices. For example, a 1 % increase in the median income has an increase of 3.45 % in land prices, whereas a 1 % increase in the population density accounts for an increase of 5.47 % increase in land prices. We find that similar empirical patterns also hold for house prices but less so for the seven major German cities. Moreover, housing supply factors such as the available land to build and housing stocks are crucial factors in explaining land and house prices. Furthermore, we show that the land price spillover effects are among the dominating factors in the formation of regional house prices. These results suggest that changes in agglomeration variables such as median income (productivity) and population density cannot completely explain disparate local land and house prices. Lastly, estimating two different land price measurements for Germany shows that direct and indirect agglomeration spillover effects can explain more variation in residential land prices than vacant land prices.
    Keywords: German Land prices; Land values; German Housing prices; Housing values; Spatial Effects.
    JEL: R0 R11 R14 R21
    Date: 2021–05
  2. By: Chen, Liming (Asian Development Bank); Hasan, Rana (Asian Development Bank); Jiang, Yi (Asian Development Bank)
    Abstract: This paper presents evidence on the spatial distribution and effects of urban agglomeration on firm innovation. It uses a unique dataset that consistently defines city boundaries and identifies firms’ innovation-related activities across 25 developing countries in Asia. We find firm innovation to be highly concentrated at the city level. We also find substantial gains from increases in city population in terms of firms’ propensity to introduce process and product innovations and undertake research and development (R&D) activities. These gains remain even after addressing concerns regarding endogeneity through the use of historical population data as instruments. In addition, we present evidence that knowledge spillovers are an important channel through which agglomeration effects occur, specifically through the presence of top-tier universities in a given city and by raising the effectiveness of firms’ R&D efforts. These findings confirm the existence and significance of urban economies of scale in augmenting the knowledge flows that generate innovation.
    Keywords: agglomeration economies; innovation; knowledge spillovers
    JEL: O10 O30 R11
    Date: 2020–07–10
  3. By: Jiang, Yi (Asian Development Bank)
    Abstract: This paper introduces a new city-level panel dataset constructed using satellite nighttime light imagery and grid population data. The dataset contains over 1,500 cities covering 43 economies of Asia and the Pacific from 1992 to 2016. With the dataset, we perform a variety of analyses for Asia and the Pacific as a whole as well as five individual countries in the region. The exercise produces some novel evidence on several interrelated topics including urbanization status and patterns, relations between urbanization and economic growth, evolution of urban systems, primate cities, testing Zipf’s law and Gibrat’s law, the drivers of city growth, and emergence of city clusters.
    Keywords: city cluster; city growth; Gibrat’s law; nighttime lights; primate city; Zipf’s law
    JEL: O18 R11 R12
    Date: 2020–08–11
  4. By: Combes, Pierre-Philippe; Gobillon, Laurent; Zylberberg, Yanos
    Abstract: A recent literature has used a historical perspective to better understand fundamental questions of urban economics. However, a wide range of historical documents of exceptional quality remain underutilised: their use has been hampered by their original format or by the massive amount of information to be recovered. In this paper, we describe how and when the flexibility and predictive power of machine learning can help researchers exploit the potential of these historical documents. We first discuss how important questions of urban economics rely on the analysis of historical data sources and the challenges associated with transcription and harmonisation of such data. We then explain how machine learning approaches may address some of these challenges and we discuss possible applications.
    Keywords: History; Machine Learning; Urban Economics
    JEL: C45 C81 N90 R11 R12 R14
    Date: 2020–09
  5. By: Asik, Günes; Karakoç, Ulas; Pamuk, Sevket
    Abstract: This study examines the evolution of regional income inequalities and its causes within present day borders of Turkey since 1880. We construct indices for value added per capita for agriculture, industry and services as well as GDP per capita for each of the 58 administrative units for about one dozen benchmark years. For the recent period since 1987, we make use of the official series for the same 58 units. We find that the overall trend from the 1910's to the present has been convergence for the country as a whole. We also find an inverse U shaped pattern for the regional disparities in Turkey since 1880. While all other regions began to move towards country averages, the differences between the East and the rest of the country persisted and even increased. Our comparisons also suggest that regional disparities in Turkey have been and are still larger than those in European countries of similar size such as Italy, France and Spain. Problems of endogeneity make it difficult to establish causality at this stage of the research. Nonetheless, we are able to offer an interpretation consistent with our empirical findings. We argue that not a single cause but a combination of causes led by geography, structural change, industrialization and agglomeration economies, and ethnic conflict and demographic movements are behind this pattern for the country as a whole and for the fact that the East has continued to lag behind.
    Keywords: Ethnic Conflict; Industrialization; Ottoman Empire; Regional Development; Regional inequalities; Turkey
    JEL: N14 N15 N94 N95 O18 O53 O54 R12
    Date: 2020–09
  6. By: Stephen J. Redding
    Abstract: The second half of the twentieth century saw large-scale suburbanization in the United States, with the median share of residents who work in the same county where they live falling from 87 to 71 percent between 1970 and 2000. We introduce a new methodology for discriminating between the three leading explanations for this suburbanization (workplace attractiveness, residence attractiveness and bilateral commuting frictions). This methodology holds in the class of spatial models that are characterized by a structural gravity equation for commuting. We show that the increased openness of counties to commuting is mainly explained by reductions in bilateral commuting frictions, consistent with the expansion of the interstate highway network and the falling real cost of car ownership. We find that changes in workplace attractiveness and residence attractiveness are more important in explaining the observed shift in employment by workplace and employment by residence towards lower densities over time.
    Keywords: economic geography, suburbanization, transportation
    JEL: R12 R30 R40
    Date: 2021–05
  7. By: Egger, Peter; Loumeau, Gabriel; Loumeau, Nicole
    Abstract: We document an unprecedented change in the size and the quality of China's transport-infrastructure network between 2000 and 2013. This documentation is based on hand-collected and digitized data on roads and railways. The changes are summarized and portrayed as shortest-possible transport times of people and goods between 330 prefectures of mainland China. A quantitative model of China's prefectures and a Rest of the World, featuring both goods trade and migration, suggests that the long-run consequences of the transport-infrastructure changes induce regional convergence of lagging-behind prefectures in terms of population density and, to a lesser extent, in terms of real per-capita income. Not only changes in highway and high-speed-railway networks but also ones in lower-level road and railway networks are quantitatively important. Key drivers behind the effects are the facilitation of goods transport as well as technology diffusion, while the reduction of mobility costs and the diffusion of amenities appear less important.
    Keywords: General-equilibrium models; migration; regional economics; structural estimation; Transport Infrastructure; Transportation problem
    JEL: F14 R13 R41
    Date: 2020–10
  8. By: Sebastian Heise; Tommaso Porzio
    Abstract: We develop a general equilibrium model of frictional labor reallocation across firms and regions, and use it to quantify the aggregate and distributional effects of spatial frictions that hinder worker mobility across regions in Germany. The model leverages matched employer-employee data to unpack spatial frictions into different types while isolating them from labor market frictions that operate also within region. The estimated model shows sizable spatial frictions between East and West Germany, especially due to the limited ability of workers to obtain job offers from more distant regions. Despite the large real wage gap between East and West of Germany, removing the spatial frictions leads, in equilibrium, to only a small increase in aggregate productivity and it mostly affects the within-region allocation of labor to firms rather than the between-region allocation. However, spatial frictions have large distributional consequences, as their removal drastically reduces the gap in lifetime earnings between East and West Germans.
    JEL: J6 O1 R1
    Date: 2021–05
  9. By: Voth, Hans-Joachim
    Abstract: Is long-term economic persistence a myth? In this survey, I examine what has been learned from the wave of articles examining the persistence of economic phenomena. The article clarifies some of the concepts, distinguishes different strands of the literature, and questions the validity of recent critiques of persistence papers. While challenges in the form of misattribution and p-hacking abound, this survey concludes that persistence is real, and that future research should focus on mechanisms and the conditions under which persistence breaks down.
    Keywords: Culture; Economic Geography; Long-run persistence; spatial correlation
    Date: 2020–10
  10. By: Scott W. Hegerty
    Abstract: Decades of deindustrialization have led to economic decline and population loss throughout the U.S. Midwest, with the highest national poverty rates found in Detroit, Cleveland, and Buffalo. This poverty is often confined to core cities themselves, however, as many of their surrounding suburbs continue to prosper. Poverty can therefore be highly concentrated at the MSA level, but more evenly distributed within the borders of the city proper. One result of this disparity is that if suburbanites consider poverty to be confined to the central city, they might be less willing to devote resources to alleviate it. But due to recent increases in suburban poverty, particularly since the 2008 recession, such urban-suburban gaps might be shrinking. Using Census tract-level data, this study quantifies poverty concentrations for four "Rust Belt" MSAs, comparing core-city and suburban concentrations in 2000, 2010, and 2015. There is evidence of a large gap between core cities and outlying areas, which is closing in the three highest-poverty cities, but not in Milwaukee. A set of four comparison cities show a smaller, more stable city-suburban divide in the U.S. "Sunbelt," while Chicago resembles a "Rust Belt" metro.
    Date: 2021–05
  11. By: Kogure, Yosuke; Ikeda, Kiyohiro
    Abstract: In this paper, we offer group-theoretic bifurcation theory to elucidate the mechanism of the self-organization of square patterns in economic agglomerations. First, we consider a scalar field on a square lattice that has the symmetry described by the group $\textrm{D}_{4} \ltimes \mathbb{Z}_{n} \times \mathbb{Z}_{n})$ and investigate steady-state bifurcation of the spatially uniform equilibrium to steady planforms periodic on the square lattice. To be specific, we derive the irreducible representations of the group $\textrm{D}_{4} \ltimes (\mathbb{Z}_{n} \times \mathbb{Z}_{n})$ and show the existence of bifurcating solutions expressing square patterns by two different mathematical ways: (i) using the equivariant branching lemma and (ii) solving the bifurcation equation. Second, we apply such a group-theoretic methodology to a spatial economic model with the replicator dynamics on the square lattice and demonstrate the emergence of the square patterns. We furthermore focus on a special feature of the replicator dynamics: the existence of invariant patterns that retain their spatial distribution when the value of the bifurcation parameter changes. We numerically show the connectivity between the uniform equilibrium and invariant patterns through the bifurcation. The square lattice is one of the promising spatial platforms for spatial economic models in new economic geography. A knowledge elucidated in this paper would contribute to theoretical investigation and practical applications of economic agglomerations.
    Keywords: bifurcation; group-theoretic bifurcation theory; invariant pattern; new economic geography; replicator dynamics; self-organization; spatial economic model; square lattice
    JEL: R10 R12
    Date: 2021–05–14

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