GENERAL EQUILIBRIUM OF SPATIAL PRODUCT AND LABOR MARKETS*

ABSTRACT A simple general equilibrium model relates spatial product markets and spatial labor markets. The firm is treated as being a spatial monopolist or as a Löschian competitor in the output market and as a spatial monopsonist in the labor market. Derived free spatial demand and free regional labor supply are defined, and their properties examined. The model provides the framework for analyzing the impact of a technological improvement in labor productivity on the structure of the spatial markets. The impact of entry on spatial labor supply is an important determinant of whether or not entry lowers wages and raises output prices. Unlike the spaceless competitive paradigm, zero-profit long-run equilibrium can occur in a space economy under conditions of increasing returns to scale.     

Information Availability and Market Power in Export Competition: The Case of Regional Health Care Markets

In this paper I analyze the spatial-economic determinants of export competition. I develop a competing central place spatial interaction model to analyze the spatial availability of information, market power, distance, demand threshold, and interregional market variables. Model estimates are based on national data from The Dartmouth Atlas of Health Care, and I examine Medicare health exports from the Seattle hospital market to markets throughout the Pacific Northwest. Information availability and market power for the Seattle export hospitals have a significant effect on export sales of hospital Medicare services. Intra and interregional competition with other major hospital markets are significant determinants of export competition. Distance to the Seattle market has a strong, negative effect on export sales and on patient migration from other markets.     

Estimating Spatial Models Within A Disequilibrium Framework

Modeling demand in a spatial context requires careful handling of regional interactions. In situations where there are constraints in some markets that lead to spillovers to others it is useful to build this explicitly into the model. In this paper I present a theoretical model that is related to the disequilibrium and the spatial econometric literature. Under certain conditions the model may be estimable and an appropriate estimation technique that uses the EM algorithm, is put forward. A data set from the U.K. market for secondary school places provides a test for the procedure.     

MARKET DEFINITION AND ASSESSING THE COMPETITIVE RELATIONSHIP BETWEEN RAIL AND TRUCK TRANSPORTATION*

ABSTRACT. In this paper we develop a method for establishing market definition in studies of intermodal competition. We employ the proposed method in a transportation model that yields estimates of the substitutability between truck and rail services for the transport of fresh fruits and vegetables. The model includes the produce being shipped as an input into the production of delivered produce. Our results demonstrate that fairly disaggregate market definitions are required to characterize adequately the intermodal substitution possibilities of interest. While disaggregate data are required for econometric estimation of the cost function, it is essential that elasticities be calculated at a disaggregate level as well. The elasticities reported are larger than reported in earlier work and provide strong evidence of vigorous intermodal competition in produce transportation markets.     

EXPLORING LOCATIONAL EQUILIBRIA IN A COMPETITIVE BROADBAND ACCESS MARKET: THEORETICAL MODELING APPROACH

ABSTRACT Due to strong local competition in the broadband access market, strategic locational planning is very important for service providers. In this paper, we explore locational equilibria in a competitive broadband market under several situations: with and without customer loyalty and under different initial market conditions. To do this, we propose a competitive broadband location model based on probabilistic patronage behavior, explicitly considering the characteristics of the broadband market and competitive structures. Also, we suggest iterative algorithms to identify spatial equilibria. We show that competing location strategies may lead to a stable spatial configuration of market share.     

URBAN UNEMPLOYMENT AND THE SPATIAL STRUCTURE OF LABOR MARKETS: AN EXAMINATION OF THE “TODARO PARADOX” IN A SPATIAL CONTEXT*

ABSTRACT The Todaro paradox and the effects of job creation in urban areas will be re-examined in our spatial model in which the radius of the labor market is endogenously determined by the rational choices of workers. The travel cost of workers plays a crucial role in the choice between two different types of response, migration or commuting. By considering travel costs, we find that the Todaro paradox can be applied to developed, as well as developing, countries. Job creation in urban areas can produce a paradoxical increase in urban unemployment in developed countries, because the low marginal cost of travel will significantly increase the radius of the urban labor market and create new labor supply without migration.     

ON THE IMPACT OF LABOR MARKET MATCHING ON REGIONAL DISPARITIES*

ABSTRACT We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.     

PRICING POLICY REACTIONS TO AGGLOMERATION IN A MARKET WITH SPATIAL SEARCH*

ABSTRACT. Price dispersion (variation) and agglomeration are common characteristics of spatial markets, in particular, markets with imperfect consumer information and search. However, pricing and location strategies in these markets are not well analyzed since spatial search is difficult to model without restricting the spatial dimension of the problem. This paper analyzes pricing and location strategies in a market with spatid search using a probabilistic modeling strategy that does not restrict search patterns in the plane. Specifically, the analysis considers the pricing strategy of an isolated firm in response to the agglomeration of competing firms. Results indicate that spatial and temporal price dispersion are effective responses to competitors'agglomeration. However, the relative effectiveness of these strategies varies with market conditions. In addition, agglomeration can have some counterintuitive effects. This paper also provides insights into existing theories of spatial search and spatial competition in spatially-restricted (linear and circular) markets.     

A Spatial Price Determination Model for Multi‐Market Heterogeneously Distributed Resources: An Application to Forestry Markets in Sweden

The spatial dimension is a key paradigm in price determination, as attested by recent studies in the literature that highlighted the differential in market behavior between spatial and non‐spatial pricing settings. In this paper, we develop a model of spatial pricing for multi‐market heterogeneously distributed resources, with an application to the Swedish forestry sector. The focus of the model is to estimate the impact of spatial interaction on the demand for resources in terms of resource allocation, competition, and pricing. In its core, the pricing mechanism relies on a supply–demand framework. Using disaggregated data at the gridcell level for forest feedstock supply and harvesting costs in Sweden, we construct regional supply curves for each gridcell assuming a maximum transportation distance to delimit the potential market. Demand nodes are exogenously determined and are adjusted using a distance‐decay model to assess demand pressure across locations. We apply the model empirically to assess the impact on forest feedstock prices of a 20 TWh increase in biofuel production.     

TESTING THE NEW ECONOMIC GEOGRAPHY: MIGRATIONS AND INDUSTRIAL AGGLOMERATIONS IN SPAIN*

ABSTRACT This paper examines whether access to markets had a significant influence on migration choices of Spanish internal migrants in the interwar years. In it we perform a structural contrast of a New Economic Geography model that focuses on the forward linkage that links workers location choice with the geography of industrial production. The results prove the existence of a direct relation between workers' localization decisions and the market potential of the host regions. This could help to explain the apparently low intensity of internal migrations in Spain until the 1920s as well as its geography.     

Classical Central Places as Protected Thresholds

Previous research efforts demonstrate the use of location covering in the spatial structuring of central places within a single-good context. In a multilevel context, this paper similarly develops a mathematical programming approach to the siting of central places based on the “protection” of inner (or threshold) markets. The objective function maximizes both market coverage of demand and market overlap, subject to an upper bound on market overlap; this allows the formation of different market structures consistent with the various K-valued central place systems of Christaller and Lösch. Siting examples serve to illustrate the working of the protected threshold model in isotropic settings. Furthermore, ways in which the present model might be extended for other situations are examined.     

COMPETITIVE LOCATION UNDER UNCERTAINTY OF COSTS

ABSTRACT. In this paper, we study the centroid problem from competitive location theory for a linear market with uniform demand, assuming that the leader has imperfect information about the follower's fixed and marginal costs. It is shown that the general version of this problem can be formulated as a nonlinear programming problem and the exact solution can be obtained analytically in a special case. A simple strategy is also given for the general problem, and it is proven that this strategy has a guaranteed error bound. It is demonstrated that uncertainty of costs might lead to market failure in the centroid problem, but this disappears if the game is repeated and the firms learn from observing each other's moves. It is also shown that it is possible for the leader to obtain optimal expected profit at a low perceived risk, with only sufficient, and not necessarily perfect, information. These two observations lead to our primary conclusion from the study that although cost uncertainty is a realistic feature of most competitive location models, there are very effective ways of dealing with it.     

ECONOMIES OF SCALE AND ENTRY IN SPATIAL MARKETS

For the purposes of simplicity, short-run cost functions are widely used in spatial markets literature, even when the long-run effects of entry are in question. In this paper, I show that if a long-run cost function is incorporated into a Löschian model, counter-intuitive and novel performance characteristics can result. Under some circumstances welfare per area can decrease as cost levels decrease.     

MILL PRICING AND SPATIAL PRICE DISCRIMINATION MONOPOLY PERFORMANCE AND LOCATION WITH SPATIAL RETAIL MARKETS*

ABSTRACT. Most of the monopoly spatial price discrimination literature explicitly assumes uniform population density over space. It also implicitly assumes that firms (plants) are spatially isolated from each other with production and retail points that coincide in location. While departures from these assumptions have been explored separately in the literature, it remains to examine performance and location when these assumptions are relaxed simultaneously. What emerges in this paper is a model where density functions approximate a pair of cities isolated from other cities. Each city has its own retail market, while the location of a single production or wholesale point is determined by characteristics of the two markets. Comparisons of mill pricing and spatial price discrimination found in the spatial monopoly literature can be interpreted as special cases of the more general framework provided here.     

竞争性区域主义与区域建构研究展望

随着全球化的不断深入,竞争性区域主义开始盛行于全球各地,并掀起区域建构的热潮。本研究对西方学术界的竞争性区域主义和区域建构理论进行了系统综述,内容涉及社会建构的区域、空间规划在区域建构中的作用、区域建构的阶段和区域建构中利益相关者的冲突与博弈等方面。在此基础上,对我国城市竞争和空间规划等相关研究进行了综述,对我国竞争性区域主义与区域建构研究进行了展望。     

Accounting for Temporal Demand Variations in Retail Location Models

This article develops and calibrates a spatial interaction model (SIM) incorporating additional temporal characteristics of consumer demand for the U.K. grocery market. SIMs have been routinely used by the retail sector for location modeling and revenue prediction and have a good record of success, especially in the supermarket/hypermarket sector. However, greater planning controls and a more competitive trading environment in recent years has forced retailers to look to new markets. This has meant a greater focus on the convenience market which creates new challenges for retail location models. In this article, we present a custom built SIM for the grocery market in West Yorkshire incorporating trading and consumer data provided by a major U.K. retailer. We show that this model works well for supermarkets and hypermarkets but poorly for convenience stores. We then build a series of new demand layers taking into account the spatial distributions of demand at the time of day that consumers are likely to use grocery stores. These new demand layers include workplace populations, university student populations and secondary school children. When these demand layers are added to the models, we see a very promising increase in the accuracy of the revenue forecasts.     

Geographies of temporary markets: an anatomy of the Canton Fair

While recent research on temporary clusters and temporary markets has emphasized the knowledge generation processes associated with trade fairs, little is known about the knowledge exchanges that are embedded in market relations at these events. This paper uses the case of the Canton Fair in Guangzhou, the largest trade fair in China, to illustrate that such events do not operate as a single market, but that they generate multiple dynamic market configurations, which entail different flows of knowledge, goods and people. In a typical case study, four types of market configurations are identified that simultaneously develop at this event. The findings contribute to a more comprehensive understanding of the dynamics of market relations, knowledge and transactions in temporary spatial settings.     

Property Sector Financialization: The Case of Swiss Pension Funds (1992–2005)

Financialization is a major trend in Western economies. This paper shows, on the one hand, how it changes the management criteria and, on the other hand, the limits to financialization in the property sector. Between 1992 and 2004, about 15% of Swiss pension funds' wealth was invested in property. As far as their investment policy is concerned, pension funds have two choices. First, they can directly own, and have management responsibility for, the properties in their portfolios. Alternatively, they can buy shares in mainly Zurich-based investment vehicles. In the first case, pension funds require staff with the relevant expertise along with the knowledge of property markets. Investments have a regional focus and are assessed internally by the funds. In the second case, pension funds are merely investors and investment appraisals and comparisons are made on the basis of market criteria such as yield, diversification in relation to risk and liquidity. In this case, property investments focus solely on the country's main urban areas.     

中国民用机场竞争优势的空间分布特征

经过近20年的高速发展,我国民用机场业的整体竞争实力得以提高,但伴随繁荣发展的却是机场竞争优势的区域空间分布非均衡性矛盾的突出。无论是机场数量、机场等级、机场业务量、机场业务结构,还是机场的产权结构、经营模式和经营业绩,东部都占有绝对优势。基于机场竞争优势的空间非均衡性,也形成了非均衡发展的航空运输网络,这在一定程度上加剧了区域经济发展的非均衡性。因此,为了缩小地区机场竞争实力差距,提高中西部地区机场的竞争优势,各级政府应制定相关政策,加快中西部机场发展。增建中西部新机场,提高大中型机场等级,制定相应政策,加快中西部机场产权和经营模式改革,拓宽机场的融资渠道,开拓货邮市场,吸引和引导民营资本和外国资本注入中西部机场,为中西部机场提供高效运营、不断提高竞争实力的平台。     

THE SPATIAL STRUCTURE OF HIERARCHICAL INTER-URBAN SYSTEMS: EQUILIBRIUM AND OPTIMUM*

In this paper, I model a simple hierarchical inter-urban system in which the location of business firms is considered together with the determination of residential land-use patterns. By supposing a spatial externality between the business firms and all the residents of the region, three spatial structures are obtained: monocentricity, multicentricity, and a separate pattern where cities are spatially split with an agricultural land existing between them. It is also shown that the spatial structures of monocentric and multicentric patterns formed by the market principle tend to be more concentrated than the optimum.