A PRACTICAL NOTE ON THE NEOCLASSICAL ECONOMIC-BASE MARGINAL MULTIPLIER*

Computation and usage of my neoclassical economic-base marginal multiplier formula (Merrifield, 1987) is simplified. The note points out the economic parameters that must be estimated with some care and for which rough approximations suffice. It also indicates when the size of the multiplier will be significantly affected by the source of the exogenous stimulus (factor- or output-price change). The traditional bifurcation effort must be supplemented with careful estimates of only a small subset of the other parameters. For most of the simulated parameter combinations, the multiplier based on exogenous factor-price changes differed from the multiplier based on output-price changes by less than 10 percent.     

ON THE BIAS OF MULTIPLIER ESTIMATES*

ABSTRACT. This paper considers the bias of the matrix of multipliers when the underlying data are random. The traditional approach is to specify the stochastic nature of the input coefficients directly. It is shown that this approach implies a transactions table which is biased in a most unbalanced way. Next the practitioner's point of view, i.e., taking the transactions table as the source of random errors, is adopted. One of the results states that, within each row of the multiplier matrix, either the biases are zero, or positive biases are canceled out by negative biases in the sense that their weighted average is zero. The conditions are based on the idea that information on aggregates is more exact than information on their details. The usual asumptions of independence and unbiasedness of the individual errors are avoided. The results are shown to have a direct interpretation in connection with the RAS-updating procedure.     

TECHNIQUES FOR INVESTIGATING THE ECONOMIC BASE OF CITIES

Economic-base analysis is applied to 15 small towns of Vologda Oblast in northern European Russia in an attempt to analyze the provision of services in these urban places. The employment structure of the town of Kadnikov, based on a “firm-by-firm” approach, is used as the standard to prorate total employment into basic and nonbasic components. The Kadnikov standard is then applied to the other towns and any excess in employment beyond the nonbasic Kadnikov standard is allocated to the basic sector. The higher proportion of basic employment in some of the study towns is interpreted as reflecting inadequate development of service activities. The analysis suggests that the small towns of Vologda Oblast are relatively well served by education, public health and retail trade-at any rate they are no worse off than the standard town, Kadnikov-but lag in the provision of housing and repair services. Economic-base concepts developed by J. W. Alexander and G. Alexandersson in the 1950s are used as a point of departure.     

A NEOCLASSICAL MODEL OF HOUSING QUALITY GROWTH AN INTERPRETATION*

The paper interprets a neoclassical model of quality growth in relation to housing technology, reinvestment choice, growth of the stock of shelter, growth with and without architectural design progress, and analyses of the golden rule of quality accumulation in the housing sector.     

A NOTE ON THE GENERAL MATHEMATICAL EQUIVALENCY OF ECONOMIC BASE AND AGGREGATE INPUT-OUTPUT MULTIPLIERS: FACT OR FICTION*

ABSTRACT A longstanding inconsistency in the definition of basic and nonbasic economic activity is resolved. When indirect exports are included in the basic, rather than the nonbasic sector, and the model is closed with respect to households, economic base and aggregate input-output mulitpliers constructed with the same data and definitions will be mathematically identical.     

THE EMPIRICS OF NEW ECONOMIC GEOGRAPHY*

ABSTRACT Although a rich and extensive body of theoretical research on new economic geography has emerged, empirical research remains comparatively less well developed. This paper reviews the existing empirical literature on the predictions of new economic geography models for the distribution of income and production across space. The discussion highlights connections with other research in regional and urban economics, identification issues, potential alternative explanations, and possible areas for further research.     

THE BEHAVIORAL COSTS OF ECONOMIC INSTABILITY*

This paper reviews the literature reporting a connection between economic change and behavioral disorder. The literature is separated into individual and aggregate based research and the methodological issues raised by each approach are described. The implications of the research findings for illness prevention, remedial services and economic policy making are discussed. The authors argue that the social costs of mobile capital should be accounted and internalized because social justice as well as Economic and Psychological theory assume that an individual should bear the costs of his or her behavior.     

LEAST SQUARES ESTIMATES OF THE REGIONAL EMPLOYMENT MULTIPLIER: AN APPRAISAL*

Basically, we have attempted to show the following in the course of setting out the algebra of regression analysis of selected regional employment multiplier models: (1) When the basic features of the model are shaped by the assumption of an unlagged response of local employment to changes in export employment, the least squares estimates of the multipliers are highly sensitive to the export coefficients vector A, given the sample observation matrix X. In a completely disaggregated model such as Equation (21), the multipliers are solely determined by the export coefficients and thus are entirely independent of sample observations. However, this independence does not hold in the case of a partially disaggregated model. The identity relation is also destroyed when a lag relationship is introduced into a completely disaggregated model. (2) A simple lag model produces results bascially different from those obtained by an unlagged model if the overall differences between current and lagged observations are significant. (3) Given a matrix of sample observations on employment, it is possible to estimate the upper limits of a least-squares aggregate multiplier and its variance simply from knowledge of the export coefficients (4) The export coefficients vector has also an important bearing upon the correlation coefficient. The correlation is unity if and only if the export coefficients vector is proportional to the local employment coefficients vector, while it is zero if and only if the export coefficients vector is a vector all of whose elements are one. Also, the correlation coefficient is equal to one when a completely disaggregated model is used. There is finally the question of what these results mean in terms of the formulation of a multiplier model. First of all, in view of the crucial importance of the export coefficients and the difficulties of estimating them, most of the existing models do not seem to offer promising results. Furthermore, all the models examined here have made some simplifying assumption with respect to the constancy of the export coefficients. It remains highly uncertain whether these coefficients are reasonably stable over time. Of course, it would be theoretically more acceptable to relax the assumption of the invariance of export coefficients and to obtain such coefficients at different points of time for each industry. However, this would be accomplished only at the cost of increased difficulties of estimating larger numbers of export coefficients. In addition, there is some doubt as to the validity of the assumption that export employment is proportional to export sales. Since a lag relationship is important not only in terms of attempts to formulate multiplier models more realistically, but also in terms of its significant effect on the multiplier values obtained, the nature and the form of a lagged response and its estimation problems need to be investigated in depth. Finally, problems of least squares bias and efficiency, inference, and prediction which may arise in the context of various models presented here remain to be investigated. A detailed analysis of such problems must be the subject of further investigation.     

THE ESTABLISHMENT OF A DATA BASE OF NEUTRON ACTIVATION ANALYSES OF WHITE MARBLE*

The establishment of a data base of trace element analysis results obtained by neutron activation analysis of 183 marble samples, each weighing about 200 mg, from eight different quarrying localities for use in provenance studies is described and a summary of the results presented. The problems of sampling museum artefacts are discussed, and details of tests of the reproducibility of the technique are given together with those obtained from multiple-samples from single museum objects. Replicate analyses of a marble standard are also discussed. Thus these data are a measure of the accuracy and precision of the technique, as well as allowing an assessment of the variation in trace element composition within quarry sources and single blocks of marble, as used for artefacts.