nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒05‒22
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Impact techniques of modelling next-gen infrastructure investment projects to redress regional disparities using multi-regional input-output model By Darlington Agbonifi
  2. Towards regenerative regional development in responsible value chains: An agentic response to recent crises By Markus Grillitsch; Bjørn T. Asheim
  3. The Creation and Diffusion of Knowledge: Evidence from the Jet Age By Stefan Pauly; Fernando Stipanicic
  4. Covid and Cities, Thus Far By Gilles Duranton; Jessie Handbury
  5. The Push of Big City Prices and the Pull of Small Town Amenities By Heidi Artigue; Jeffrey Brinkman; Svyatoslav Karnasevych
  6. Freeway Revolts! The Quality of Life Effects of Highways By Jeffrey Brinkman; Jeffrey Lin
  7. The dynamics of redistribution, inequality and growth across China’s regions By Yang, Xiaoliang; Barros, Lucy; Matthews, Kent; Meenagh, David
  8. A Statistical Learning Approach to Land Valuation: Optimizing the Use of External Information By David Albouy; Minchul Shin
  9. Has COVID Reversed Gentrification in Major U.S. Cities? An Empirical Examination of Residential Mobility in Gentrifying Neighborhoods During the COVID-19 Crisis By Lei Ding; Jackelyn Hwang
  10. An optimal control problem with state constraints in a spatio-temporal economic growth model on networks By Alessandro Calvia; Fausto Gozzi; Marta Leocata; Georgios I. Papayiannis; Anastasios Xepapadeas; Athanasios N. Yannacopoulos
  11. The Labor Market Effects of Place-Based Policies: Evidence from England’s Neighbourhood Renewal Fund By Robert Calvert Jump; Adam Scavette
  12. Propositions pour construire un système informationnel guidant une politique régionale d’innovation By Marina FLAMAND; Vincent FRIGANT; Deivyd VELASQUEZ

  1. By: Darlington Agbonifi (Department of Economics (University of Verona))
    Abstract: This paper estimates the socio-economic impact of infrastructure recovery investments and resilience plan related to the Institutional Development Contract (CIS) for the city of Taranto on different categories of households, labor markets (skilled and unskilled), and private enterprises in Italy. It does so by implementing a multi-regional input-output (MRIO) model with inter-regional trade at the level of Apulia region, to estimate the intra-regional impact, and, at the national level, to estimate the inter-regional and inter-sectoral supply chain linkages and spillover effects through trade. The intra-regional effects are almost two times the inter-regional effects. Almost 51% of the inter-regional impact on value-added accrues to northern regions, 22% at the centre, while about 27% is captured by the regions in southern Italy. This evidence clearly shows a good degree of connection of the Apulia local economy with the macro region of northern Italy, while it is quite weak with the macro south in Italy. The considerable share of inter-regional spillover effects in terms of value-added, which is transferred outside the southern macro-region, over 73% reflects the persisting regional disparities in Italy, where the productive northern-regions mostly benefit from the national development policies made in the most marginal areas in southern Italy.
    Keywords: multiregional input-output (MRIO) model, local-NGEU investment projects, interregional trade flows, regional disparities, Taranto, Apulia, Italy
    JEL: C67 D57 F14 Q58 R13
    Date: 2023–04
  2. By: Markus Grillitsch; Bjørn T. Asheim
    Abstract: In this paper, we empirically and theoretically present regenerative regional development in responsible value chains as an alternative to the prevailing traditional, neoliberal economic rationale of globalization. We develop the argument on the back of a longitudinal in-depth case study on actors’ engagement in the recurring crises in the maritime industry in Sunnmøre/Norway. The alternative perspective is an agentic response from the business community in the wake of recent crises. It builds on advanced manufacturing capabilities, automation, and precision technologies, which promise local economic regeneration while reducing the reliance on low-cost labor, substantially cuts emissions through reduced long-haul transport, use of green energy, and more energy-efficient production processes. To succeed, however, it calls for policies that promote the building of local capabilities and penalize practices causing environmental and social harm in global value chains, making it possible to move towards responsible and shorter value chains.
    Keywords: Regional resilience, sustainability transformation, human agency, global value chains, automation and industry 4.0, innovation, industrial and innovation policy
    JEL: R10 R11 R50 R58 O30
    Date: 2023–04
  3. By: Stefan Pauly (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Fernando Stipanicic (UC Berkeley - University of California [Berkeley] - UC - University of California)
    Abstract: Click here for the latest version This paper provides new causal evidence of the impact of air travel time on the creation and diffusion of knowledge. We exploit the beginning of the Jet Age as a quasi-natural experiment. We digitize airlines' historical flight schedules and construct a novel data set of the flight network in the United States. Between 1951 and 1966, travel time between locations more than 2, 000 km apart decreased on average by 41%. The reduction in travel time explains 33% of the increase in knowledge diffusion as measured by patent citations. The increase in knowledge diffusion further caused an increase in the creation of new knowledge. The results provide evidence that jet airplanes led to innovation convergence across locations and contributed to the shift in innovation activity towards the South and the West of the United States.
    Date: 2022–10–21
  4. By: Gilles Duranton; Jessie Handbury
    Abstract: A key reason for the existence of cities are the externalities created when people cluster together in close proximity. During Covid, such interactions came with health risks and people found other ways to interact. We document how cities changed during Covid and consider how the persistence of new ways of interacting, particularly remote work, will shape the development of cities in the future. We first summarize evidence showing how residential and commercial prices and activity adjusted at different distances from dense city centers during and since the pandemic. We use a textbook monocentric city model to demonstrate that two adjustments associated with remote work—reduced commuting times and increased housing demand—generate the patterns observed in the data. We then consider how these effects might be magnified by changes in urban amenities and agglomeration forces, and what such forces might mean for the future of cities.
    JEL: R12 R21 R31
    Date: 2023–04
  5. By: Heidi Artigue; Jeffrey Brinkman; Svyatoslav Karnasevych
    Abstract: As house prices continue to rise in large, supply-constrained cities, what are the implications for other places that have room to grow? Recent literature suggests that amenities that improve quality of life are becoming increasingly important in location decisions. In this paper, we explore how location amenities have differentially driven population and price dynamics in small towns versus big cities, with a focus on the role of housing supply. We provide theory and evidence that demand for high-amenity locations has increased in recent decades. High-amenity counties in large metropolitan areas have experienced relatively higher price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. This divergence in population dynamics between big cities and small towns was driven by domestic migration, with high-amenity small towns and rural areas experiencing significant domestic in-migration.
    Keywords: housing supply; amenities; population dynamics; domestic migration
    JEL: R11 R31 R23
    Date: 2022–12–21
  6. By: Jeffrey Brinkman; Jeffrey Lin
    Abstract: Why do freeways affect spatial structure? We identify and quantify the local disamenity effects of freeways. Freeways cause slower growth in central neighborhoods (where local disamenities exceed regional accessibility benefits) compared with outlying neighborhoods (where access benefits exceed disamenities). A quantitative model calibrated to Chicago attributes one-third of the effect of freeways on central-city decline to reduced quality of life. Barrier effects are a major factor in the disamenity value of a freeway. Local disamenities from freeways, as opposed to their regional accessibility benefits, had large effects on the spatial structure of cities, suburbanization, and welfare.
    Keywords: amenities; central cities; commuting costs; highways; suburbanization; quality of life
    JEL: N72 N92 O18 Q51 R14 R23 R41 R42
    Date: 2022–08–24
  7. By: Yang, Xiaoliang; Barros, Lucy (Swansea University); Matthews, Kent (Cardiff Business School); Meenagh, David (Cardiff Business School)
    Abstract: China’s fast growth has been accompanied by rising regional inequality, triggering debate over a policy trade-off between aggregate growth and equity. We set out a three-region model of China in which local government behavior affects local TFP dynamics, and regional inequality itself generates more regional productivity divergence. These dynamics can also be affected by central government transfers to regions. Two kinds of fiscal transfers are investigated: equalization transfers and the tax rebate. We estimate and test the model by indirect inference, and explore transfer policy reforms. The results suggest that transfer policies pursued since 1994 have prevented a 15% rise in regional inequality, though at an 8% cost to aggregate GDP.
    Keywords: Regional inequality, China, Fiscal decentralization, Redistribution, Local Government, Growth
    JEL: E60 H30 H70 O40
    Date: 2023–05
  8. By: David Albouy; Minchul Shin
    Abstract: We develop a statistical learning model to estimate the value of vacant land for any parcel, regardless of improvements. Rooted in economic theory, the model optimizes how to combine common improved property sales with rare, but more informative, vacant land sales. It estimates how land values change with geography and other features and determines how much information either vacant or improved sales provide to nearby areas through spatial correlation. For most census tracts, incorporating improved sales often doubles the certainty of land value estimates.
    Keywords: land values; hierarchical modeling; spatial data; Bayesian estimation
    JEL: C11 C43 R1 R3
    Date: 2022–11–14
  9. By: Lei Ding; Jackelyn Hwang
    Abstract: This paper examines whether neighborhoods that had been gentrifying lost their appeal during the pandemic because of COVID-induced health risks and increased work-from-home arrangements. By following the mobility pattern of residents in gentrifying neighborhoods in 39 major U.S. cities, we note a larger increase of 1.2 percentage points in the outmigration rate from gentrifying neighborhoods by the end of 2021, relative to nongentrifying ones, with out-of-city moves accounting for over 71 percent of the increased flight. The share of out-of-city moves into gentrifying neighborhoods also decreased significantly during the pandemic. Residents with high credit scores, younger residents, and probable homeowners were more likely to leave gentrifying neighborhoods and their respective cities. Gentrifying neighborhoods closer to city centers, with higher density or higher housing costs, or in cities that are more vulnerable to the pandemic were hit harder by COVID-induced adjustments. The results are consistent with the contention that the pandemic has slowed the pace of gentrification in many major U.S. cities. This slowed gentrification has important policy implications for local government public finance, as well as the long-term future of cities.
    Keywords: Gentrification; Mobility; COVID-19; Work-from-home; Spatial Dynamics
    JEL: R11 I18 H11 H2
    Date: 2022–08–17
  10. By: Alessandro Calvia; Fausto Gozzi; Marta Leocata; Georgios I. Papayiannis; Anastasios Xepapadeas; Athanasios N. Yannacopoulos
    Abstract: We introduce a spatial economic growth model where space is described as a network of interconnected geographic locations and we study a corresponding finite-dimensional optimal control problem on a graph with state constraints. Economic growth models on networks are motivated by the nature of spatial economic data, which naturally possess a graph-like structure: this fact makes these models well-suited for numerical implementation and calibration. The network setting is different from the one adopted in the related literature, where space is modeled as a subset of a Euclidean space, which gives rise to infinite dimensional optimal control problems. After introducing the model and the related control problem, we prove existence and uniqueness of an optimal control and a regularity result for the value function, which sets up the basis for a deeper study of the optimal strategies. Then, we focus on specific cases where it is possible to find, under suitable assumptions, an explicit solution of the control problem. Finally, we discuss the cases of networks of two and three geographic locations.
    Date: 2023–04
  11. By: Robert Calvert Jump; Adam Scavette
    Abstract: Neighborhood renewal programs are a type of place-based policy that aim to revive underperforming localities. The literature on place-based policies has found mixed results regarding their effects on local labor market outcomes, but there are relatively few studies of policies that aim to improve local labor supply. In this paper, we examine the labor market effects of the Neighbourhood Renewal Fund, which targeted eighty-eight of the most deprived areas in England during the early 2000s as part of the Labour Government's National Strategy for Neighbourhood Renewal. The fund disbursed almost £3 billion for spending on community safety, education, health care and worklessness, with supply-side interventions making up the bulk of the program's spending on worklessness. Using a difference-in-differences approach, we find statistically significant impacts on local employment and out-of-work benefit claimants. Our results suggest that policy interventions to improve local labor supply can be a successful strategy for neighborhood renewal.
    Keywords: Place-Based Policies; Urban Economics; Labor Supply; Employment
    JEL: J21 J22 J48 R10 R58
    Date: 2022–03–23
  12. By: Marina FLAMAND; Vincent FRIGANT; Deivyd VELASQUEZ
    Abstract: TIn order to implement a regional innovation policy, regional decision-makers need an efficient information system that enables them to characterise their territory in detail and identify relevant development opportunities. In this article, we propose a methodological framework for developing such an information system, emphasising two dimensions whose complementarity is often neglected: on the one hand, the type of information required, and on the other hand, the characteristics of the data to be collected. Considering that the Regional Innovation Systems approach constitutes a relevant theoretical reference for characterising the first dimension, we mobilise the key principles of informational decision support approaches to identify the desirable characteristics of the data. The last section uses the example of research laboratories to show the heuristic potential of the proposed framework.
    Keywords: Technological Intelligence, Regional Policy, Innovation Policy, Informational System, Regional Innovation Systems.
    JEL: R58 L52 M15
    Date: 2023

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