THE SPATIAL MONOPSONY: A THEORETICAL ANALYSIS*

ABSTRACT. In this paper some of the most important properties of the behavior of a spatial monopsonist are derived. Many results are mirror images of corresponding results for the spatial monopolist. A few results are, however, genuinely new. A lot of effort is spent in comparing the properties of the profit function under three different pricing policies, f.o.b. (mill)-pricing, uniform delivered pricing, and spatial price discrimination. It is shown, for example, how the profitability and welfare consequences of the different policies are related to the shapes of the supply and demand functions. It is argued that the theory may have important applications in economic analyses of renewable natural resources such as forests, where total transportation costs are nonnegligible.     

TRANSPORTATION RATES AND LOCATION OF THE FIRM: A COMPARATIVE STATIC ANALYSIS*

ABSTRACT This paper examines the role of the structure of transportation rates in the Weber-Moses triangle model. It shows that, in Zeigler's analysis, the appearance of the price elasticities of demand for inputs actually vanish by a simple application of the envelope theorem. Applying comparative statics analysis, we show when transportation rates are a function of quantity and distance, the assumptions that the production function is homogeneous of degree one and the transportation rates elasticities with respect to quantity and distance are constant are not sufficient to insure that the optimum location is independent of the level of output. This result is significantly different from that obtained by either Miller and Jensen or Zeigler.     

A FRAMEWORK FOR REGIONAL MODELING AND IMPACT ANALYSIS: AN ANALYSIS OF THE DEMAND FOR ELECTRICITY BY LARGE MUNICIPALITIES IN ONTARIO,CANADA*

ABSTRACT. We propose a mixed fixed and random coefficients framework for regional modeling. The framework allows the presence of both the region-specific effects and commonality of responses across regions. Bayes solutions for estimating parameters of interest and for generating predictions are derived. Within a Bayesian framework a predictive density approach to evaluate the impact of changes is suggested. We apply the methodology to evaluate the impact of new rate structures on Ontario regional demand for electricity.     

MONOPSONY AND PLANT LOCATION IN A THÜNEN LAND USE MODEL*

ABSTRACT. Previous work has developed a method for studying noninfinitesimal operational units, called “plantations,” with the Thüen model. In that model, increasing returns to scale generate large operational units, but the potential market power conferred by the scale economies is sidestepped as an issue. The present work introduces finite supply elasticities and examines their locational impacts. The profit-maximizing monopsonistic plantation is smaller, and the shipment distance for its processed output is shorter, than for a comparable competitive plantation. The present approach does not involve spatial competition strategies.     

HEDONIC PRICES,IDENTIFICATION, AND THE DEMAND FOR PUBLIC SAFETY*

In this paper, we use a two-stage intercity hedonic model to estimate household demand for public safety. This approach is shown to readily address the identification problem inherent in the hedonic model. Data from the 1980 Public Use Microdata Sample are used to estimate a willingness-to-pay function for the public-safety good. Income is found to be the primary determinant of willingness to pay. Indeed, the influence of income outweighs the combined impact of family life-cycle considerations.     

LOCATION‐SPECIFIC HUMAN CAPITAL,LOCATION CHOICE AND AMENITY DEMAND*

ABSTRACT The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location‐specific. This specificity—along with a period of exogenous location—increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model.     

HIGHWAY INFRASTRUCTURE INVESTMENT AND COUNTY EMPLOYMENT GROWTH: A DYNAMIC PANEL REGRESSION ANALYSIS*

ABSTRACT This paper uses recent advances in dynamic panel econometrics to examine the impact of highway infrastructure on aggregate county‐level employment using data for all 100 North Carolina counties from 1985 through 1997. Results are compared to models that do not take endogeneity of highway investment and dynamics of employment adjustment into account. Fully specified dynamic models are found to give insignificant results compared to these other models. Thus, when these issues are properly modeled, the results show that improvements in highways have no discernible impact on employment.     

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.     

人口的区位过程与城市的分形形态——关于城市生长的一个理论探讨

基于中心地假设,从城市人口分布的Sherratt模型和Naroll Bertalanffy的城乡人口异速生长关系出发导出关于人口分布空间动力学和城市扩展时空过程的数学模型,然后借助Batty等关于城市生长的DLA -DBM模拟结果证明人口的区位选择过程与城市的分形形态存在着内在关系。文章提出了关于区域人口运动和城市形态演化的三个基本原理:信息火商增原理、异速生长原理和Logistic发展原理。     

INVESTMENT RISK AND THE TRANSITION INTO HOMEOWNERSHIP*

ABSTRACT This paper investigates the extent to which house–price uncertainty affects the transition of renter households into homeownership. Using a 14‐year household panel from the Panel Study of Income Dynamics during the years 1984–1997 and measures of the time‐varying risk and return to owner‐occupied housing, we estimate a Cox proportional hazard model of the effect of house–price volatility on the transition into homeownership. Results indicate that house–price uncertainty has a negative and dramatic impact on transitions into homeownership. In addition, we find that the low‐wealth renters are particularly sensitive to house–price risk.     

HOUSEHOLD INCOME AND EXPENDITURE IN EXTENDED INPUT-OUTPUT MODELS: A COMPARATIVE THEORETICAL AND EMPIRICAL ANALYSIS*

ABSTRACT At the regional level in-migrant and indigenous workers are likely to have different income levels and consumption propensities. The effects that these differences have upon a local economy are explored within an extended input-output modeling framework. Two iterative input-output models, due to Miernyk et al. and Blackwell, are recast as systems of simultaneous equations and are shown to produce identical results. A detailed analysis is made of model structure and a method is outlined for the decomposition of income multipliers. Empirical versions of the two models, for Boulder and Cork, are reconstructed with data from the original studies and are used to make comparisons of the two local economies.     

LOCATION THEORY AND THE MULTI-PLANT FIRM: A FRAMEWORK FOR EMPIRICAL STUDIES

A model is presented to provide for the optimum distribution of manufacturing plants for a multi-plant firm in a market-oriented industry. Independent variables are production costs, transport costs, and density of demand; dependent variables are optimum plant size and market area. It is argued that the model provides a suitable framework for analysing changes over time in the distribution of a firm's plants. The applicability of the model is illustrated with short studies of spatial changes in the fluid milk industry in southern Ontario and the auto assembly industry in the United States.
Nous présentons ici un modèle fournissant la répartition optimale des manufactures pour une entreprise à usines multiples dans une industrie orientée sur les marchés. Nos variables indépendantes sont les coûts de production, les frais de transport, et la densité de la demande; nos variables dépendantes sont les marchés et la grandeur optimale des usines. Nous soutenons que ce modèle foumit un cadre d'analyse acceptable pour étudier les changements dans le temps dans la répartition des usines d'une entreprise. Pour illustrer Fapplicabilité du modèle, nous nous servons de brèves études de changements spatiaux dans l'industrie sud-Ontarienne du lait liquide et 1'industrie de montage des automobiles aux États-Unis.