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on Economic Geography |
| By: | Luis Bauluz; Pawel Bukowski; Mark Fransham; Annie Lee; Margarita Lopez-Forero; Filip Novokmet; Sebastien Breau; Neil Lee; Clément Malgouyres; Moritz Schularick; Gregory Verdugo |
| Abstract: | Working Paper Series no. 957. The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities. We create cross-country comparable measures of spatial wage disparities between and within similarly-defined local labour market areas (LLMAs) for Canada, France, (West) Germany, the UK and the US from the 1970s to 2010s, and assess their contribution to national inequality. By the end of the 2010s, spatial inequalities in LLMA average primary wages are similar in Canada, France, Germany and the UK; the US exhibits the highest degree of spatial inequality. Over the study period, spatial inequalities have nearly doubled in all countries, except for France where spatial inequalities have fallen back to 1970s levels, after an increase in the 1990s. Due to a concomitant increase in within-place inequality, the contribution of places in explaining national wage inequality has remained fairly constant over the 40-year study period, except in the UK where we document a significant increase. Whilst common global social, economic and technological shocks are important drivers of spatial inequality, this variation in levels and trends of spatial inequality opens the way to comparative research exploring the role of national institutions in mediating how global shocks translate into economic disparities between places. |
| Keywords: | Regional Inequality, Wage Inequality, Local Labour Markets |
| JEL: | J3 R1 R23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:957 |
| By: | Irving G\'omez-M\'endez; Chainarong Amornbunchornvej |
| Abstract: | Poverty is a serious issue that harms humanity progression. The simplest solution is to use one-shirt-size policy to alleviate it. Nevertheless, each region has its unique issues, which require a unique solution to solve them. In the aspect of spatial analysis, neighbor regions can provide useful information to analyze issues of a given region. In this work, we proposed inferred boundaries of regions of Thailand that can explain better the poverty dynamics, instead of the usual government administrative regions. The proposed regions maximize a trade-off between poverty-related features and geographical coherence. We use a spatial analysis together with Moran's cluster algorithms and Bayesian hierarchical regression models, with the potential of assist the implementation of the right policy to alleviate the poverty phenomenon. We found that all variables considered show a positive spatial autocorrelation. The results of analysis illustrate that 1) Northern, Northeastern Thailand, and in less extend Northcentral Thailand are the regions that require more attention in the aspect of poverty issues, 2) Northcentral, Northeastern, Northern and Southern Thailand present dramatically low levels of education, income and amount of savings contrasted with large cities such as Bangkok-Pattaya and Central Thailand, and 3) Bangkok-Pattaya is the only region whose average years of education is above 12 years, which corresponds (approx.) with a complete senior high school. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.09760 |
| By: | Krantz, Sebastian |
| Abstract: | This paper characterizes economically optimal investments into Africa's road network in partial and general equilibrium - based on a detailed topography of the network, road construction costs, frictions in cross-border trading, and economic geography. Drawing from data on 144 million trans-continental routes, it first assesses local and global network efficiency and market access. It then derives a large network connecting 447 cities and 52 ports along the fastest routes, devises an algorithm to propose new links, analyzes the quality of existing links, and estimates link-level construction/upgrading costs. Subsequently, it computes market-access-maximizing investments in partial equilibrium and conducts cost-benefit analysis for individual links and several investment packages. Using a spatial economic model and global optimization over the space of networks, it finally elicits welfare-maximizing investments in spatial equilibrium. Findings imply that cross-border frictions and trade elasticities significantly shape optimal road investments. Reducing frictions yields the greatest benefits, followed by road upgrades and new construction. Sequencing matters, as reduced frictions generally increase investment returns. Returns to upgrading key links are large, even under frictions. |
| Keywords: | African roads, spatially optimal investments, big data, PE and GE analysis |
| JEL: | O18 R42 R10 O10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:302186 |
| By: | Bhattacharjee, A.; Ditzen, J.,; Holly, S. |
| Abstract: | The literature on panel models has made considerable progress in the last few decades, integrating non-stationary data both in the time and spatial domain. However, there remains a gap in the literature that simultaneously models non-stationarity and cointegration in both the time and spatial dimensions. This paper develops Granger representation theorems for spatial and spatio-temporal dynamics. In a panel setting, this provides a way to represent both spatial and temporal equilibria and dynamics as error correction models. This requires potentially two different processes for modelling spatial (or network) dynamics, both of which can be expressed in terms of spatial weights matrices. The first captures strong cross-sectional dependence, so that a spatial difference, suitably defined, is weakly cross-section dependent (granular) but can be nonstationary. The second is a conventional weights matrix that captures short-run spatio-temporal dynamics as stationary and granular processes. In large samples, cross-section averages serve the first purpose and we propose the mean group, common correlated effects estimator together with multiple testing of cross-correlations to provide the short-run spatial weights. We apply this model to house prices in the 375 MSAs of the US. We show that our approach is useful for capturing both weak and strong cross-section dependence, and partial adjustment to two long-run equilibrium relationships in terms of time and space. |
| Keywords: | Spatio-temporal dynamics, Error Correction Models, Weak and strong cross sectional dependence, US house prices, Spatial Weight matrices, Common Correlated Effects Estimator. |
| JEL: | C21 C22 C23 R3 |
| Date: | 2024–08–19 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2447 |
| By: | Michiel Gerritse (Erasmus University Rotterdam); Zhiling Wang (Erasmus University Rotterdam); Frank van Oort (Erasmus University Rotterdam) |
| Abstract: | China’s Industrial Transfer Policy (ITP) is a novel place-based development policy of unprecedented scale. The policy targets a set of inland cities aiming to i) grow them in size and ii) restructure them into manufacturing hubs. These cities would eventually relieve pressure in China’s coastal manufacturing hubs. We use a detailed migrant survey to estimate the impact of ITP on targeted cities by matching cities on policy assignment propensities. The ITP status led to a rapid but short-lived growth of migrant inflows up to 60%, representing 2 to 7 million internal migrations. Migrants in manufacturing and from coastal origins show stronger migration and wage responses. However, high skilled migrants respond less elastically, and migrant employment in manufacturing is offset by the exit of native workers. Additionally, manufacturing industries in targeted cities show no development in terms of output, pollution or production strategies. The ITP expands the population of targeted cities, but the evidence for a restructuring of the cities is weak. |
| Keywords: | migration, urbanization, development, wage, place-based policy, China |
| JEL: | R58 H50 O20 P25 J38 |
| Date: | 2024–03–22 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240020 |
| By: | Lin, Yatang; McDermott, Thomas K.J.; Michaels, Guy |
| Abstract: | Construction on low elevation coastal zones is risky for both residents and taxpayers who bail them out. To investigate this construction, we analyze spatially disaggregated data covering the entire US Atlantic and Gulf coasts. We find that the 1990 housing stock reflects historical avoidance of locations prone to sea level rise (SLR) and flooding, but net new construction from 1990-2010 was similar in SLR-prone locations and safer ones; and within densely built coastal areas, net new construction was higher in SLR-prone locations. These findings are difficult to rationalize as mere products of moral hazard or imperfect information, suggesting that people build on risky locations to benefit from nearby urban agglomerations. To explain our findings, we develop a simple model of a monocentric coastal city, which we use to explore the consequences of sea level rise. This model helps explain cities’ role in expanding flood risks, and how future sea level rise may reshape coastal cities, creating significant challenges for policymakers. |
| Keywords: | cities; climate change; sea level rise; Elsevier deal |
| JEL: | R11 Q54 R14 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124101 |