AGGLOMERATION AND REGIONAL COSTS OF LIVING*

ABSTRACT Standard models of the new economic geography predict that costs of living are lower in the core than in the periphery. But in reality they tend to be higher in agglomeration areas, mainly because of regional differences in housing costs. In this paper, we add a home goods sector to the seminal NEG model of Krugman (1991) . We show that a core–periphery structure can endogenously emerge in which the core is the more expensive area. This result has an important normative implication. Since higher costs of living imply falling real wages if there is no nominal wage premium, it is not desirable for everybody to live in the core region.     

THE EFFECTS OF AGGLOMERATION ON WAGES: EVIDENCE FROM THE MICRO‐LEVEL

This paper estimates individual wage equations to test two rival non‐nested theories of economic agglomeration, namely New Economic Geography (NEG), as represented by the NEG wage equation and urban economic (UE) theory, in which wages relate to employment density. In the U.K. context, we find that for male respondents, there is no significant evidence that wage levels are an outcome of the mechanisms suggested by NEG or UE theory, but this is not the case for female respondents. We speculate on the reasons for the gender difference.     

AGGLOMERATION EFFECTS IN COLOMBIA

I estimate an elasticity of wages with respect to city population of about 5 percent for Colombian cities. This finding is robust to a number of econometric concerns. The second main finding is a negative effect of market access on wages. Third main finding regards stronger agglomeration effects in the informal sector. In turn, this explains a range of other negative findings, including only weak evidence in favor of human capital externalities, no evidence of a complementarity between cities and skills, and an absence of learning effects. I do not find measurable effects of roads or amenities on wages either.     

The spatial extent of agglomeration economies across the wage earnings distribution

We investigate the spatial extent of agglomeration economies across the wage earnings distribution using economic mass (total employment) in four distance bands around each individual’s establishment in a quantile regression framework. We control for observable and unobservable individual and establishment characteristics. Remaining endogeneity in the model is assessed with a set of instrumental variables. Results indicate a positive effect of economic mass on wage earnings up to 25 km away from the establishment. The spatial extent of agglomeration economies is similar across the wage earnings distribution. However, increases in economic mass shift the wage earnings distribution in a nonsymmetric way.     

The Spatial Distribution of Wages: Estimating the Helpman‐Hanson Model for Germany

Abstract.  Using German district data we estimate the structural parameters of a new economic geography model as developed by Helpman (1998) and Hanson (1998 , 2001a ). The advantage of the Helpman‐Hanson model is that it incorporates the fact that agglomeration of economic activity increases the prices of local (nontradable) services, like housing. This model thereby provides an intuitively appealing spreading force that allows for less extreme agglomeration patterns than predicted by the bulk of new economic geography models. Generalizing the Helpman‐Hanson model, we also analyze the implications for the spatial distribution of wages once the assumption of real wage equalization is dropped. If we no longer assume real wage equalization we find support for a spatial wage structure as well as for the relevance of the structural parameters of the theoretical model.     

DISTANCE FROM URBAN AGGLOMERATION ECONOMIES AND RURAL POVERTY*

ABSTRACT Despite strong national economic growth and significant poverty reduction during the late 1990s, high poverty persisted in remote rural areas. This study uses a geographical information system county database to examine the nexus between rural U.S. poverty and remoteness. We find that poverty rates increase with greater rural distances from successively larger metropolitan areas (MAs). We explain this outcome as arising from the attenuation of urban agglomeration effects at greater distances and incomplete commuting and migration responses to lower labor demand in rural areas. One implication is that remote areas may particularly experience greater reductions in poverty from place‐based economic development policies.     

Associations between coastal proximity and children’s mental health in Australia

Limited research has explored associations between blue spaces and mental health, specifically in children. This study assessed links between coastal proximity and depression and anxiety among children in Australia and tested whether duration of residency at current address moderated associations. It also explored associations between within-individual changes in coastal proximity and changes in depression and anxiety. Data were from 2400 children aged 11–12 years in Wave 5 (2012) and aged 14–15 years in Wave 6 (2014) of the national Longitudinal Study of Australian Children. Outcomes were children’s self-reported symptoms of depression and anxiety. Exposure was coastal proximity (<2, 2–<5, 5–<10, 10–<20, 20–<50, and ≥50 km). Linear models were fitted to examine cross-sectional associations and fixed effects models for within-individual associations. After adjustment for potential confounders, findings suggested that those living close to the coast (<2 km) had lower levels of depression than those living the furthest from the coast (≥50 km) during childhood (Wave 5) but not adolescence (Wave 6). No associations were observed with anxiety. There was weak evidence to suggest residency duration moderated associations. No associations were observed for within-individual changes. Further research is needed to understand whether and what characteristics of coastal environments may benefit children’s mental health.     

The spatial scope of agglomeration economies in Brazil

This paper provides evidence about location and colocation patterns of manufacturing entrepreneurship and spatial scope of agglomeration economies in the context of a developing country. Using microgeographic data for all Brazilian manufacturing activities and distance-based measures, we find clear patterns of colocalization between entrants and existing establishments, and that these patterns occur mainly at short distances. For activities presenting colocalization between entrants and existing establishments, our results also indicate that a greater number of incumbent establishments in a given location positively affects the number of entrant establishments that decide to locate there, an effect that attenuates rapidly with distance (generally disappearing after 5 km). This pattern of attenuation is robust to both the inclusion of a comprehensive set of controls for observable and unobservable local characteristics and the use of instrumental variables to address remaining endogeneity concerns.     

Elastic labor supply and agglomeration

This study analyzes the interplay between the agglomeration of economic activities and interregional differences in working hours, which are typically longer in large cities, as they are normally more developed than small cities. For this purpose, we develop a two‐region model with endogenous labor supply. Although we assume a symmetric distribution of immobile workers, the symmetric equilibrium breaks in the sense that firms may agglomerate when trade costs are intermediate and labor supply is elastic. We also show that the price index is always lower, while labor supply, per capita income, real wages, and welfare are always higher in the more agglomerated region.     

Agricultural structure and the rise of the Nazi Party reconsidered

There is widespread agreement within academic literature that the NSDAP systematically and effectively targeted the rural areas beginning with the Agrarian Crisis in 1927/8. However, one issue is left unresolved: were specific levels of agricultural strata differently attracted to the Nazis, and if so, how? In light of the economic and political incentives offered to German peasants with differing farm sizes, we expect that regions characterized by middle peasants were most likely to have electorally swung in a distinct, asymmetric and relevant way towards the Nazis. In order to test this hypothesis, we have used a country-wide data set, which includes the original categories of ‘parcel peasants’ (0–2 ha), ‘small-sized’ (2–5 ha) and ‘medium-sized’ farmers (5–20 ha). These specific classifications were introduced and behaviorally legitimated by the Statistical Office of the Weimar Republic at that time. We present the first analysis applying generalized additive models (GAM) for the assessment of ecological relations. In order to account for the construction of political spaces – and therefore of spatial dependencies, we offer a new mechanism based on stipulations of the electoral system. Even after controlling for pre-established impact factors (Protestantism, urbanization, etc.) and for spatial effects, we identify a clear impact of the agrarian middle classes (5–20 ha) on the Nazi vote beginning with the election in July 1932.     

Genetic analysis of wheat landraces enables the location of the first agricultural sites in Italy to be identified

We typed five microsatellite loci in 52 landraces of Italian emmer wheat to determine if genetic analysis of cereals can provide information relevant to the spread of agriculture. Each of the five loci was polymorphic with 43 allele combinations identified in the 52 landraces. The allele combinations fell into two groups. Group 1 comprised 27 genotypes found in 42 landraces and Group 2 comprised 15 genotypes found in 10 landraces. The landraces with Group 1 genotypes showed a strong correlation between geographical and genetic distances (r = 0.601, p < 0.001) but those with Group 2 genotypes did not (r = 0.116, p = 0.244). We inferred that the Group 1 landraces might therefore retain a phylogeographical structure that reflects ancient events. We present a phylogeographical model for the spread of agriculture that enables the point of origin of crop cultivation to be predicted by comparison between the genetic and geographical distances between landraces. We applied this model to the Group 1 landraces by positioning 131 hypothetical points of origin around the coastline and northern border of Italy. The highest correlation coefficients between genetic and geographical distances were seen for hypothetical points of origin located on the coast of northern Puglia. We repeated the analysis with 1040 hypothetical points of origin located within the Italian peninsula. Again, the highest correlation coefficients were located in northern Puglia. These predicted points of origin correspond with the location of the earliest agricultural sites in Italy. The results show that plant genetics can be used to study the spread of agriculture.     

Sources of Archaeological Obsidian on Sakhalin Island (Russian Far East)

Instrumental neutron activation analysis was performed on 79 obsidian tools and flakes from 35 sites on Sakhalin Island dating from Upper Paleolithic (c. 19,000 bp ) to Early Iron Age (c. 2000–800 bp ). Due to the absence of volcanic glass on Sakhalin Island, raw materials from the nearest obsidian sources on Hokkaido Island, such as Oketo, Shirataki, Tokachi-Mitsumata, and Akaigawa, were also analysed. A strong correlation between the chemical compositions of obsidian artefacts from Sakhalin and volcanic glass sources from Hokkaido was discovered. In particular, the Oketo and Shirataki sources were used for tool manufacturing throughout all of Sakhalin Island's prehistory. The distances between sources and archaeological sites range from 200–1000 km. The intensive exchange of raw materials continued and even intensified after the appearance of the La Pérouse (Soya) Strait between Hokkaido and Sakhalin about 10,000–8000 bp. The Sakhalin Island populations were deeply involved in the obsidian exchange network centered on Hokkaido.     

European Corridors as Carriers of Dynamic Agglomeration Externalities?

Transport corridors are viewed as a promising way forward in European Union (EU) transport policy, assumed to contribute positively to regional economic development. However, the validity of this assumption is not evident. The aim of this paper is to empirically test whether agglomeration economies in European transport corridor regions are positively related to indicators of regional economic development compared to regions outside the scope of corridors. The results build on the notion that the type of agglomeration economy in combination with the structure of the economy matters for prospects of structural economic growth in different regions. In this way, the analysis not only contributes to enhancing the empirical scrutiny of the corridor concept in EU transport policy, but also provides new insights into how corridors contribute to regional economic growth. We find only limited evidence for a corridor effect across European regions on productivity and employment growth externalities. Instead, we find a large degree of spatial heterogeneity interacting with corridors—a heterogeneity that has been little recognized in EU policies. We suggest that recent attention to place-based development strategies may accord well with the kinds of agglomeration effects related to corridor development observed in this study.     

1820年代华亭-娄县地区各行业工资研究

The issue of wages has been ignored in previous studies of economic history in late imperial China. Focusing on Huating County and Lou County (today’s Songjiang County of Shanghai), this article explores the wages in agricultural, industrial, commercial, and service occupations of this area in the 1820s. The findings, though primary, are helpful to our understanding of incomes in early-nineteenth-century China. Translated by Yang Kai-chien from Qingshi Yanjiu 清史研究 (Studies in Qing History), 2008, (1): 5–20     

Reconstructing prehistoric hunter–gatherer foraging radii: a case study from California's southern Sierra Nevada

The concept of the foraging radius is essential to understanding hunter–gatherer settlement, subsistence, and sociocultural complexity yet is notoriously difficult to reconstruct archaeologically. Late prehistoric Western Mono foraging radii in the southern Sierra Nevada were reconstructed using GIS analysis of least-cost path distances between dispersed caching features and centralized residential features. Mean distances from settlements to caches exhibit a bimodal distribution, with peaks between 0.5 and 5.0 km, and 6.0 and 8.5 km, the former representing a caching limit and the latter a foraging limit around major settlements. Combined, these data demarcate a two-part foraging radius predicated not only on sustaining winter group aggregations but also on facilitating spring and summer residential moves. These results show the efficacy of using features and simple GIS-based spatial analyses to reconstruct prehistoric foraging radii and provide the means to model the energetics of different foraging behaviors, these speaking strongly to the social and economic factors conditioning the development of complex hunter–gatherer societies.     

Injection‐induced seismicity in Carbon and Emery Counties,central Utah

Utah is one of the top producers of oil and natural gas in the United States. Over the past 18 years, more than 4.2 billion gallons of wastewater from the petroleum industry has been injected into the Navajo Sandstone, Kayenta Formation, and Wingate Sandstone in Carbon and Emery Counties, central Utah, where seismicity has increased during the same period. Previous studies have attributed this seismicity to coal mining. Here, we present evidence for wastewater injection being a major cause of the increased seismicity. We show that, in the coal mining area, seismicity rate increased significantly 1–5 years following the wastewater injection, and the earthquakes, mostly with magnitudes <3.0, are concentrated in areas seismically active prior to the injection. Using simple analytical and numerical models, we show that the injection in central Utah can sufficiently raise pore pressure to trigger seismicity within 10–20 km of the injection wells, and the time needed for the diffusion of pore pressure may explain the observed lag of seismicity increase behind the commencement of injection. The b‐value of these earthquakes increased following the wastewater injection, which is consistent with these events being injection‐induced. We conclude that the marked increase in seismicity rate in central Utah is induced by both mining activity and wastewater injection, which raised pore pressure along preexisting faults.     

High‐speed railroads and economic geography: Evidence from Japan

Our study shows that high‐speed railroads (HSR) can either polarize or diffuse economic geography based on the sector and distance between cities. Economic activities could agglomerate from distant to core areas, while disperse from core toward its periphery at the same time. Empirical evidence from the 1982 introduction of two major HSRs in Japan, which halved intercity transit time, support this. Noncore areas lost 3–6 percent population; service employment declined 7 percent, whereas manufacturing employment increased by 21 percent. Municipalities within approximately 150 km of Tokyo expanded, while the distant ones contracted. The net result is that the Tokyo metropolitan area agglomerates because of HSR.     

Regional perspectives on Wari state influence in Cusco,Peru (c. AD 600–1000)

The archaeological reconstruction of ancient states requires consistent regional measures of state-directed power and influence. This paper presents data from a series of systematic archaeological surveys in the Cusco region of highland Peru to evaluate patterns of influence by the Wari state during a period of colonization from ca. AD 600–1000. We discuss interpretive debates over the nature and intensity of Wari social power, suggesting that site-based studies can be contextualized meaningfully using our large-scale dataset, which offers settlement patterns at varying distances (0–70 km) from Pikillacta, a Wari administrative center. We discuss local settlement patterns before and during Wari colonization, as well as the distribution of Wari pottery and local Wari-influenced wares. We then use a geographic information systems analysis of travel time from key sites to evaluate the broad regional distribution patterns of local and Wari ceramic styles. Although the regional survey data do not inform us reliably about all kinds of social power, we conclude that the Wari cultural, economic, and political influence over the Cusco region was limited and discontinuous—an example of colonization that resembles the practices of other early states.     

Increasing returns to scale in the towns of early Tudor England

Abstract

Urban agglomeration economies make cities central to theories of modern economic growth. There is historical evidence for the presence of Smithian growth and agglomeration effects in English towns c.1450-1670, but seminal assessments deny the presence of agglomeration effects and productivity gains to Early Modern English towns. This study evaluates the presence of increasing returns to scale (IRS) in aggregate urban economic outputs—the empirical signature of feedbacks between Smithian growth and agglomeration effects—among the towns of 16th century England. To do so, we test a model from settlement scaling theory against the 1524/5 Lay Subsidy returns. Analysis of these data indicates that Tudor towns exhibited IRS—a finding that is robust to alternative interpretations of the data. IRS holds even for the smallest towns in our sample, suggesting the absence of town size thresholds for the emergence of agglomeration effects. Spatial patterning of scaling residuals further suggests regional demand-side interactions with Smithian-agglomeration feedbacks. These findings suggest the presence of agglomeration effects and Smithian growth in pre-industrial English towns. This begs us to reconsider the economic performance of Early Modern English towns, and suggests that the qualitative economic dynamics of contemporary cities may be applicable to premodern settlements in general.     

Probabilistic Seismic Hazard Model of West Bengal,India

We deliver a next-generation Probabilistic Seismic Hazard model of West Bengal based on improved seismogenic source characterization considering both the Layered Polygonal sources & Tectonic sources in the hypocentral depth range of 0–25 km & 25–70 km, seismic local-specific site condition, and adaption of appropriate region specific ground motion prediction equations in a logic tree framework. The surface consistent Probabilistic seismic hazard distribution in terms of Peak Ground Acceleration (PGA) & 5% damped Pseudo Spectral Acceleration (PSA) at different time periods for 10% probability of exceedance in 50 years have been generated and the design response spectra computed.