THE SCOPE FOR PURE PROFITS IN A STANDARD LOCATION MODEL*

ABSTRACT. This paper examines the possibility of sustaining a collusive equilibrium in a standard location model. Drawing on recent developments in game theory, it is suggested that collusion is only feasible if market areas lie within a certain range. When market areas are large the threat of entry is likely to undermine any collusive agreement. In contrast when market areas are small, defection from the cartel is shown to be profitable. Thus collusion is shown to be feasible only when market areas and demand lie within certain bounds. More generally, this result appears to be consistent with the somewhat ambiguous empirical evidence which suggests that competitive pricing behavior is likely to prevail in periods of excessively high demand and during recessions.     

A REGIONAL CONSUMER DEMAND MODEL FOR NEW ZEALAND*

ABSTRACT. This paper discusses the formulation and estimation of sets of demand systems for six New Zealand regions. The chosen model is based on the Linear Expenditure System, constrained in various ways to take account of interregional differences in consumer behaviour. Our results suggest that income and price elasticities of demand vary significantly between regions, suggesting that regional employment and output patterns are likely to differ in their responses to changes in aggregate demand.     

FIRE IN THE BRAZILIAN AMAZON: A SPATIALLY EXPLICIT MODEL FOR POLICY IMPACT ANALYSIS*

ABSTRACT.  This article implements a spatially explicit model to estimate the probability of forest and agricultural fires in the Brazilian Amazon. We innovate by using variables that reflect farm-gate prices of beef and soy, and also provide a conceptual model of field management and deforestation fires to simulate the impact of road-paving, cattle exports, and conservation area designation on the occurrence of fire. Our analysis shows that fire is positively correlated with the price of beef and soy, and that the creation of new conservation units may offset the negative environmental impacts caused by the increasing number of fire events associated with early stages of frontier development.     

A NODAL STRUCTURE FOR A SET OF CANADIAN CITIES USING GRAPH THEORY AND NEWSPAPER DATELINES*

The relative importance and the spheres of influence of the urban centres within some specified region, such as a country, are intriguing topics of investigation. Webber (1964) indicated that the ordering of centres within a country is not possible, since “the spatial extent of each [urban] realm is ambiguous, shifting instantaneously as participants in the realm's many interest-communities make new contacts, trade with different friends, or read different publications.’ We suspect, however, that there is considerable order in the communication links among the larger centres within a country. For example, Canada's leaders in business, governments, and the arts tend to move through a hierarchy of centres to end up in Toronto, Ottawa, Montreal, Vancouver, or some other large city, depending upon the particular field in which they work. All urban centres are linked to Ottawa, which is at the apex of political power, and to large urban centres, such as Toronto and Montreal, which predominate in the economic realm. The major purpose of this paper is to derive a nodal structure for seventeen major Canadian cities, based on newspaper datelines. By utilizing these particular information flows, the analyses also shed light on possible differences between the anglophone and francophone communications networks.     

SPATIAL DISCONTINUITY FOR THE IMPACT ASSESSMENT OF THE EU REGIONAL POLICY: THE CASE OF ITALIAN OBJECTIVE 1 REGIONS*

The economic impact of the Regional Policy of the European Union is still controversial. This paper exploits administrative boundaries as spatial discontinuity to estimate the causal effect of this policy on the Italian Objective 1 regions’ employment. The analysis, developed both in a border strategy framework (municipalities contiguous to the policy‐change boundary) and with more traditional RDD models balanced by spatial forcing variables (centroids’ distance and coordinates), shows that the EU Regional Policy produced a positive impact on employment levels, without any displacement of economic activities away from nontreated regions and a concentration of the impact in key economic sectors.